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Thursday, 28 September 1972
Page: 2188

Mr ANTHONY (Richmond) (Minister for Trade and Industry) - I am pleased to participate in this debate. I believe that this statement made on Tuesday night last by the Prime Minister (Mr McMahon) has been well received through out the nation as showing a determination by the Government to do something about the volume of capital inflow into Australia, and also the Government's concern about increasing overseas ownership of Australian enterprises and resources. The debate on overseas investment has been with us for a long time. I have little doubt that it will be with us for a long time yet, no matter what decisions are taken by governments. Even if the Australian Labor Party proposals were adopted the debate would still continue.

One of the main reasons why it would continue is that many opponents of overseas investment are afflicted with xenophobia - a morbid dislike of foreigners. This is the first point I make in response to the sentiments expressed by the Opposition. Underlying much of the Labor Party's thinking on this subject seems to me to be a large element of xenophobia. There is a distrust of foreign investment just because it is foreign; a willingness to do without the benefits of investment if it is foreign - to cut off the nose to spite the face; a disposition to see foreign investors as being engaged in a Machiavellian plot to subvert Australia. This sort of highly charged emotional thinking should have no part in the formation of the policies of a responsible Australian Government. One of the ideas which the Leader of the Opposition (Mr Whitlam) put forward is the proposition that the Government should take the initiative and ensure that Australian-owned companies get preferred treatment in purchasing, whether by government or by private businessmen.

Mr Les Johnson (HUGHES, NEW SOUTH WALES) - Mr Deputy Speaker, I think it is a tragedy that the Minister has only one Liberal member in the House. I ask you to consider the idea of calling for a quorum.

Mr ANTHONY - A large number of my Country Party colleagues are present. (Quorum formed). I can see that this sort of policy would be very attractive to some people. But it is not self-evident that it is in the real interests of Australia as a whole. It seems to me that Australian owned companies would get preference merely because they are Australian, not because they are more efficient, more competitive or offer better product or service. I suggest that the Labor Party should think hard before it advocates policies which would have the effect of giving business to firms regardless of their competitive ability.

The third point I make about the Labor Party programme is that it just is not possible to come up with policies on overseas investment at the drop of a hat as the Labor Party has done. Its proposals are an incredibly ill assorted and ill digested programme. They provide clear evidence that the ALP does not understand the way in which business operates or the way in which government operates. The ALP seems to believe that the solution to every problem is to set up government authorities. We have at least half a dozen in this latest programme of the ALP in addition to the Government departments. The end result must be a system of happy bureaucrats but unhappy businessmen who would find their valuable time taken up in doing the rounds of Government institutions to get approvals instead of devoting their energies to the real task of developing Australia through increased efficiency, productivity and exports.

The issues involved in this matter of overseas ownership and capital inflow are very complex. They involve difficult and subtle economic inter-relationships which are not easy to analyse. They involve sensitive judgments as to future probabilities and the actions of overseas industrialists and financiers. They involve the desire of us all to preserve our Australian entity and yet obtain the benefits we can derive from partnership with overseas skills and resources. Let me make it quite clear that 1 share the concern of all Australians that our ability to control our own destinies is not thwarted by the aspirations of overseas investors but, as the Prime Minister has said, we must be sensible about this. For many years we have held the view that broadly speaking the benefits of overseas investment in terms of adding to our economic strength have outweighed the costs involved. The benefits have been great. The record of growth and development we have achieved in the past 20 years just would not have been possible without foreign investment.

This very growth, however, has meant that Australia's economic circumstances are quite different from what they were a few years ago. So it has become appropriate to look again at our policies for this reason. Moreover, the high level of capital inflow which we have experienced in recent years has raised a new problem for economic management. It just does not make economic sense to perpetuate a system of large net capital inflows and rapidly rising currency reserves. It is the rapid growth of our reserves, due largely to the net capital inflow, that has given rise to the suggestion that the Australian dollar should be revalued. The Leader of the Opposition, of course, has added fuel to the flames by his irresponsible act of throwing the value of the Australian dollar into the area of political speculation. I note that other, wiser members of his Party have rejected his policy, but he keeps on repeating it. The Government has firmly rejected any suggestion that revaluation is appropriate to our current economic circumstances. The decisions announced by the Prime Minister are appropriate to the problems we face. There is a need to act, and to act decisively, and this we have done. The prohibition on short term borrowings overseas, the abolition of borrowing guidelines and the relaxation of restrictions on portfolio investment overseas should help to moderate net capital inflow. The control of foreign takeovers will also help here.

The other problem - overseas ownership and control - is not, however, capable of being solved so easily. We have announced a screening mechanism for foreign takeovers. This is an important new initiative. We have clearly set out our objectives. In contrast to the ALP proposals we have clearly laid down for all to see the criteria against which the Government will be judging foreign takeover proposals. We believe these to be reasonable and practical criteria which will enable the national interest to be served with the minimum practicable interference in the business community and the rights of shareholders. It should be clearly understood that this new policy will not mean that all overseas takeovers of Australian companies will be stopped. Those that will benefit us will be allowed to proceed and they will be welcomed by this Government.

However we have adopted a new approach. The fundamental question we will be posing is not whether the takeover will be against our national interest. The question will be whether it will help promote the national interest. It is the strength of our economy - the growth that has occurred with the aid of overseas investors - that enables us now to make this quite fundamental change.

We will be continuing our examination of the wider issues involved in overseas investment and control of our industries. This is not an easy task. The Government must ensure that any policies it introduces are administratively practical and that they will not endanger the confidence of investors that they will be treated fairly and equitably. We must be quite sure that our proposals will achieve our objectives without endangering our other policies and our overall economic well-being.

I do not want to anticipate the results of our full review. There are many questions on which we will need to reach a sensitive judgment. But it will be obvious to everyone in this House that we will be considering the question of what guidelines, if any, should be formulated for other forms of direct foreign investment in Australia which serve to increase overseas ownership and control. We will not be approaching this task in any parochial or xenophobic way. We want the benefits of overseas investment and whatever measures we propose will be consistent with this objective.

The Leader of the Opposition (Mr Whitlam) would have us believe that this Government sees the answer to the problems of overseas investment solely in restrictive controls. This is a quaint charge to lay against a Liberal-Country Party government. It is under our policies, and with or support, that the Australian capital market has grown to a fair measure of maturity and ability to serve Australian companies' financial requirements. It was with our support that the Australian Resources Development Bank was established. We ourselves set up the Australian Industry Development Corporation which in the short time it has been established has already demonstrated its value to the economy.

The full review of our policies the Prime Minister has referred to will be encompassing what further steps we might take to help the mobilisation of Australian capital for Australian owned companies. But we realise, as the Opposition evidently does not, that we are dealing in all these questions with some of the key elements in our economic structure and management. It is easy for an Opposition with no experience of government to say what it would do. Those with experience of government know that the task of formulating policies and carrying them out is not easy. Only when we are satisfied that we have sound policies will we announce them.

The steps the Prime Minister has announced are responsible, they are needed and they are practical. They serve notice on those who would speculate on the value of the Australian currency that they will not be permitted to dictate the course of events. They relax, where appropriate, some of the restrictions which have been placed on Australian companies and investors in recent years. They strike a fair balance between our national aspirations for an Australian Australia and our desire to work in partnership with overseas investors who have so much to offer us in promoting our national economic growth. (Extension of time granted). Partnership - real and effective partnership - with overseas interests in the development of Australia is our aim. I commend these proposals that the Prime Minister has announced to the House.

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