Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Full Day's HansardDownload Full Day's Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Thursday, 7 October 1971
Page: 2065

Mr DUTHIE (Wilmot) - I want to speak about Japan, its investment in and trade with Australia. The Japanese nation today is an economic colossus. Its gross national product is now the third largest in the world behind the United States of America and the Soviet Union. Is the investment by Japan in Australia a menace? Can we refuse it? Japan's investment can be a menace only if she is allowed to gain majority control or support in Australia. However, a partnership arrangement can greatly reduce and control any potentially adverse influence.

Japan is now our largest trading partner and Australia is Japan's second largest trading partner after the United States. Twenty years ago Great Britain was taking over 50 per cent of our products; today she is talking about 12 per cent. Japan has replaced Great Britain and today takes 25 per cent of our total exports. She takes 54 per cent of our total mineral and metal exports which are now worth about $ 1,000m a year. Japan's total investment in Australia at the present time is only 2 per cent of all direct investment in Australia so, at this stage anyhow, there is no worry about Japan being a menace.

The flow of trade between Australia and Japan is greatly in our favour. We bought |573m worth of goods from Japan in the last 12 months and have sold to Japan $1,1 88m worth, giving us a credit balance of $615m. Amazingly, this almost matches our trading deficit with the United States of America. In the last 12 months we sold to the United States $524m worth of goods and bought back $ 1,042m worth of goods, a deficit of $528m.

I want to sound a warning, however. This Government has failed to control foreign investment. Already 24 per cent of industry in Australia is foreign controlled, and when we look at Canada which has 60 per cent of her industry under foreign control we can see what a menace uncontrolled investment could be to any country, for Canada's economy is virtually in the hands of foreigners. This is disastrous for any country. Japan's investment programme in Australia is to treble its present level in the next 2 years. This may sound frightening but let us have a look at the facts that I have been able to secure. Japanese companies plan to invest about $300m in Australian mining, agricultural and manufacturing ventures over the next 2 years. The programme will be the first phase of an investment boom. It will almost treble current. Japanese investment in Australia which is now about $120m. About $260m will go into big raw material ventures such as iron ore, bauxite, and alumina, coking coal and industrial salt projects. But the investment will reach into almost every profit-making field in Australia, from exploration and mining to the manufacture of ball bearings and microwave equipment.

The 1,100 Japanese expatriates in Sydney opened a school with 88 pupils in a church hall some time ago. It moved into a $500,000 new building for 180 pupils at Terrey Hills in September. Japanese companies are ploughing at least $20m into major beef cattle and coarse grain projects in Queensland, Western Australia and New South Wales. They are also investigating plans to enter steel making, steel fabrication, machinery and manufacturing industries on a large scale. Already they have involved themselves in the manufacture of zippers, ball bearings, microwave equipment, matches and television sets locally. They are very sensitive to governmental and public opinion. The managing director of Mitsui and Co. (Aust.) Ltd, which plans to invest $120m in the next 2 years, said:

Australia doesn't want to be just a quarry.

We can all say 'Hear, hear!' to that sentiment for that is what we are rapidly becoming. He went on:

It is our moral responsibility, as we are involved in a great share of Australian raw materials, to manufacture here in areas welcomed by Australia.

I believe that to manufacture here using our own raw materials is the ideal set-up rather than exporting them to be manufactured and then brought back. They will be employing thousands of Australians in their projects and we would favour this.

Mitsui has a 30 per cent stake in the $260m Robe River iron ore project in Western Australia and with C. Itoh a 10 per cent holding in the $296m Mount Newman project in Western Australia. Japan's biggest single investment may well be in steel making. Nippon Steel is considering an offer to join the American Armco consortium which hopes to build a $900m steel works at Jervis Bay. Sumitomi Shoji (Aust.) Pty Ltd is investigating a wide range of investment opportunities. With Showa Denko, it has a 37.5 per cent stake in the 300m bauxite and alumina project in the Kimberleys on which work will soon begin. The Japanese have a huge stake in the Savage River Mines iron ore project in my State exporting pellets to Japan.

Japanese companies are planning to invest several million dollars in rural industries in order to supply their home market with coarse grains and prime beef. C. Itoh is involved in a 4-million acre coarse grain and beef cattle project in the Kimberleys with the Australian Land and Cattle Co. C. Itoh may take up a 25 to 30 per cent equity in the project which will cost at least SI Om in the next 5 years. Sumitomi will invest $300,000 - giving it a 10 per cent share - in the 200-square mile Lakeland Downs project at Cooktown, Queensland, for beef and coarse grain production. To quote a senior trade official: "The Japanese make ideal investors. They prefer to enter projects here on a 50-50 basis with Australian companies because it lessens their risks and gives Australians a stake.'

I believe that this Government should at every opportunity encourage partnership investments, especially in manufacturing processes, with the Australian Government, if it enters the project, having a 51 per cent share of the interest. This set up should also apply where foreign investors join with an Australian company so that a controlling influence can be ensured. Otherwise it will get right out of hand as it has done in Canada. The tragedy of foreign investment in Canada should be an everlasting warning to the Australian Government.

I want to make one final suggestion. I think we will have to investigate the possibility soon of creating an Asian common market with Australia, New Zealand and Japan the key figures in such a market and with China, the Philippines, Taiwan, Hong Kong, Malaysia and Indonesia forming the other partnerships, for we now have to face the big trade blocs throughout the world. We have the United States in isolation, the European Economic Community coming up and the Soviet bloc and we need an Asian common market bloc to safeguard ourselves against the power punches from these other great blocs that have been set up. This is economic realism. I believe that we should counter these forces in this way in the Asian area. They are interrelated and work together in many ways but we have to be strong enough to counter them otherwise we will be crushed out of existence. This is a suggestion upon which I think the Government should take action in the next year or so for I feel that out economic survival might depend on a partnership with the Asian nations in a kind of Asian common market.

Suggest corrections