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Thursday, 30 September 1971
Page: 1771

Mr HOLTEN (Indi) (Minister for Repatriation and Minister Assisting the Minister for Trade and Industry) - I want to make a few brief comments on the Bill in my capacity as Minister Assisting the Minister for Trade and Industry (Mr Anthony). The honourable member for Mitchell (Mr Irwin) who has just resumed his seat stressed 2 very important points. He said first of all that the Bill was breaking new ground, that there was a need for Australia to be brave and that this was an indication that we were. This is good. The second point he made, which is very important, related to the necessity to cooperate with financial institutions rather than to coerce or force them into taking any financial action.

The comments made by the honourable member for Melbourne Ports (Mr Crean) showed a sensible approach to the legislation. One or two of the points that he raised may give the wrong impression as far as the comparison between Australian and British exports are concerned. The honourable member referred to the high proportion of United Kingdom trade covered by the Exports Credits Guarantee Department in Britain. He said that it covered a third of Britain's total exports and that a lower proportion of Australian exports were covered by the similar body here. But, of course, Britain is a more substantial exporter of manufactured products than is Australia.

Mr Crean - I said that.

Mr HOLTEN - I am sorry. I did not pick it up. I just wanted to place the situation on record. The honourable member for Melbourne Ports said that the measure was a venturesome approach to increasing our exports which we need to take for the good of Australia. The honourable member for Isaacs (Mr Hamer) made one particular point on which I should comment. He called for an early statement on the future of export incentives after 30th June 1973. I want to assure the honourable member for Isaacs that the Government is fully aware of the need for an early statement on the future of export incentives and that the matter is at present being studied closely by the relevant departments. The subject is under review by the Export Development Council.

The honourable member for Riverina (Mr Grassby) made a few points on which 1 should comment. He concluded by saying, quite correctly, that the Minister for Trade and Industry was not present in the chamber. I am representing the Minister as his Assistant Minister. It is impossible for the Minister to be here because he has to attend to other Ministerial duties at the present time. Anyway, he has already done his job, fundamentally, by promoting and introducing this very important and very progressive piece of legislation. The honourable member for Riverina said that primary exports were not covered by the legislation. I will comment on that later. He went on to say that in Australia 71 per cent of mining companies are foreign controlled. Whenever I hear the honourable member for Riverina mention this matter of foreign control of Australia's assets am always reminded of the fact that quite some years ago a New South Wales Labor Government set up an office in New York for the express purpose of attracting overseas capital to Australia.

I do not know whether the honourable member when he was in the State House fought for the closure of that office to prevent it from attracting overseas capital to Australia. It is also well to remember that the Western Australian Labor Government was the first to open up the Esperance project in Western Australia and it received a lot of United States capital to develop that area. The honourable member said that the Commissioner was being hobbled. It is not correct to say that the criteria laid down for action by the Commissioner is of a strait-jacket nature. It is impossible for the Government to legislate to meet all possible commercial situations. The Minister has a discretionary authority on request from the Export Payments Insurance Corporation. Neither the Commissioner nor the Corporation is hobbled at all under the terms laid down in the legislation. In fact the whole nature of the scheme was discussed in detail with the Commissioner of EPIC. The eligibility criteria and operational procedures were decided upon in the light of the Export Payments Insurance Corporation's recommendations based on its experience and the experience of overseas credit insurance organisations. Therefore it is not correct that the Commissioner or the Corporation is hobbled by either these provisions or other provisions of the legislation.

The honourable member for Riverina mentioned also New Zealand credit facilities, implying that buyers credit was available for the sale of wool in New Zealand whereas it was not available here. This once again is not correct. The New Zealand wool industry, the New Zealand Government or any other New Zealand organisation has no buyers credit scheme. Suppliers terms in New Zealand are not as good as those available in Australia. Regarding general assistance to primary producers, which is one of the main themes of the honourable member's arguments, considerable assistance is given to primary producers through the EPIC organisation. Buyers credit as against suppliers credit is to be limited to capital goods under this legislation and is not to be available in respect of primary products. The situation is that there is virtually no demand for buyers credit in respect of primary products. Since this legislation has been on the table of the House and known to the public, to my knowledge no requests from primary producer organisations, groups of primary producers or other people connected with primary products have been made to receive buyers credit under this legislation. That is the fact as I understand it. One of the reasons why buyers credit is probably not in demand is that primary products normally are sold for cash or on short term credit usually of about 180 days, the main exception being credit for wheat sales, which is up to 3 years.

I think it is worth placing on record very briefly the performance last year of EPIC in relation to suppliers credit, which is deemed to be more suitable and which is available. In 1970-71 EPIC insured $95m worth of wheat sales through both the Australian Wheat Board and private traders,$63m worth of wool sales through wool exporters, and$49m worthof processed food stuff sales through food exporters. So the assistance to the wool industry in terms of suppliers credit totalled, in round figures, $112m;$41m was made available to food exporters for processed foodstuffs; $28m was made available for dairy products through the Australian Dairy Produce Board in the main, and $14m was made available to meat exporters. So the problem that is intended to be removed by buyers credit under this legislation is not encountered to any extent by the exporters of primary products. It is in the capital goods field where we have a combination ef high value investment and long term credit that buyers credit is needed. Of course, the amount of credit varies. Under this legislation it may be $200,000 or more. As the honourable member for Melbourne Ports pointed out, some discretion could be needed to decide special cases if the transaction is a little less.

To summarise this situation, it should be made quite clear that suppliers credit is not in demand by exporters of primary products. This legislation is aimed at high value capital goods sold on long term credit which can involve a great deal of money and a great deal of risk for the people who are exporting them. If the provisions of this legislation were not available Australia would miss out on very valuable export income. As was pointed out in the case of Bougainville, Australia earned something like $26m in export income because of the insurance facilities that were available. The provisions of this Bill relate to capital goods which have the combination of high value and long term credit up to 10 years. The Bill is designed to meet world competition by overseas exporters which our primary producers do not face as do the manufacturers in particular. This is the case, especially in less-developed countries. The Government, even though it has introduced this legislation and thinks it is very satisfactory, is not content to rest on its laurels. As I have already said in answer to the query from the honourable member for Isaacs, the export incentive scheme is under review and it is hopeful that some action in this area may be taken in the future.

Question resolved in the affirmative.

Bill read a second time.

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