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Thursday, 25 November 1971
Page: 3640

Mr O'KEEFE (PATERSON, NEW SOUTH WALES) - I desire to direct my question to the Treasurer. Have foreign investments in Australia assumed considerable proportions? Are investments from Great Britain given any preferential consideration over investments from other countries? Is the Government examining the position carefully and can the Minister state whether regulations and precautions are being taken to control the position?

Mr SNEDDEN (BRUCE, VICTORIA) (Treasurer) - Overseas investment in Australia has now reached considerable proportions. Over the last decade the inflow of capital into Australia has been $7.9 billion. This $7.9 billion represents about 12 per cent of the total investment in Australia. In Australia we have very high savings rates by world standards, but even though we have high savings for investment in Australia they have not been sufficient to open up all the resources that are available to us for the use of the Australian people, so that the inflow of capital has augmented our own savings and therefore enabled a stronger growth economically and in development terms. The present rate of inflow is quite high. Last financial year it was about $1.5 billion. This year it is flowing at a higher rate.

Capital inflow essentially has 2 elements. One is direct investment in Australia by overseas companies and the other is borrowings within Australia from overseas for long-term developmental projects relating very predominantly to the development of our natural resources. I must say to the House that I believe that this capital inflow into Australia, put to use in Australia's economic development, has been to the benefit of the Australian people. There is no preferential treatment for the United Kingdom. We do not discriminate between source countries. Of course, the investment in Australia by the United Kingdom is of a high order simply because of the long history of our association with that country. 1 should add in relation to the third part of the question that we are concerned to keep under close observation the nature of the capital inflow, lt is not easy to do this, because once the money comes in it gels disseminated and it is not possible always to know the ultimate destination of that money. But insofar as we are able, through the Reserve Bank and the Commonwealth Statistician, we do what we can.

We are satisfied that there is no evidence to suggest that there is a large inflow of what might be called 'hot money'. Our general attitude is that we want the capital inflow lo be put to the advantage of the Australian economy and also we want to preserve Australian equity participation in the development of Australia. We have adopted a number of different methods of doing what we can to ensure this. For instance, we have adopted a borrowing guideline policy which is designed to encourage companies with overseas ownership to offer Australian equity. We have the Australian Resources Development Bank. There has been a takeover code developed by the States and the Territories. There are a number of ways in which we have encouraged Australian equity. I can assure the honourable member that not only are we receiving benefits from this but also we will continue to keep it under examination to make sure that Australian national interest is not offended. If Austraiian national interest is offended, we will stand ready to intervene as on occasions we have done.

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