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Wednesday, 20 August 1980
Page: 551

Mr HOWARD (Bennelong) (Treasurer) - I move:

That the Bill be now read a second time.

As foreshadowed in Budget Statement No. 3 and also in the statement I made to the House today on the report from the House of Representatives Standing Committee on Expenditure into the Australian Industry Development Corporation, the Government proposes, with the approval of the Board of AIDC, to amend the Australian Industry Development Corporation Act 1970 to increase the Corporation's maximum gearing ratio from 5:1 to 8:1. This means in essence that the Corporation's borrowings, other than borrowings for temporary purposes, would be allowed to total up to eight times instead of five times the sum of its paid capital and reserves. The higher gearing ratio will permit the AIDC to finance its lending and other commitments to Australian industry for the time being without a call for additional capital from the Budget.

The directors of AIDC consider that the original conservative gearing ratio of 5:1 is no longer necessary or even appropriate for AIDC. At the same time, I wish to make it clear to honourable members that, although the proposed gearing increase is not inconsistent with the recommendation on this matter of the report on the Corporation of the House of Representatives Standing Committee on Expenditure, it does not in any way prejudice consideration of the recommendations of that Committee on this or other matters. As I have said in the ministerial statement concerning the Committee's report, its recommendations will be considered together with the recommendations on AIDC of the Committee of Inquiry into the Australian Financial System.

The opportunity has also been taken in the Bill to amend the provisions relating to disclosure of precuniary. interest in the Act to bring them into line with standard provisions which are being incorporated in statutory authority legislation to give effect to the Government's adoption of the relevant recommendations of the Committee of Inquiry into Public Duty and Private Interest, otherwise known as the Bowen Committee. A number of formal amendments are also included. I commend the Bill to honourable members.

Debate (on motion by Mr West) adjourned.

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