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, 18 October 1973
Page: 2346

Mr MCMAHON (Lowe) - I intended, when I rose to speak on this and other clauses of the National Investment Fund Bill, to compliment the Minister for Overseas Trade (Dr J. F. Cairns) on the statement he made yesterday, namely, that he understood the difficulties involved in the presentation of Opposition views. He admitted that it was not the desire of the Government to have clause 5 inserted.

Dr JT F Cairns - I did not say that. I said that it did not come from me.

Mr McMAHON - But the Minister did not want nationalisation under it.

Dr L F Cairns - That is right.

Mr McMAHON - He stated quite clearly that he did not want that. I welcome that statement because I think it showed a willing disposition to act in a way in which all honourable members would want a Minister responsible for a Bill to act - that is, to give careful consideration to any recommendations or suggestions made by the Opposition. I assure the Minister that a tremendous amount of attention has been given, particularly by the Deputy Leader of the Opposition (Mr Lynch) and myself, to this Bill and to the accompanying Bill - the Australian Industry Development Corporation Bill.

Dr J F Cairns - I agree. What you have done does you credit.

Mr McMAHON - Thank you. Firstly, 1 want to clarify two of the assumptions on which the Minister has made his recommendations or put these provisions in the Bill. He says that he wants to make the AIDC what Sir John McEwen wanted it to be. I can state emphatically that Sir John McEwen did not want it to move in the direction that is proposed in the Bill that was before the House yesterday and the day before. The Australian Industry Development Corporation Bill, followed toy the 1970 Bill, was drafted in a way that would be to the best advantage of the Australian people, would not cause dislocation in the money market and would not cause the misappropriation or misallocation of resources, which in turn would reduce productivity and affect the standards of living of the Australian people. Secondly, he made it abundantly clear that he does not know much about the structure of assurance in Australia. Most of the big assurance corporations are mutual assistance corporations which are not run for profit. The Australian Mutual Provident Society, for example, is not run for profit. Of course part of the Mutual Life and Citizens' Assurance Co. Ltd is run for profit, but there are few organisations of that kind. The policy holders in corporations like the

AMP do notionally and legally elect the persons who will be responsible for the proper investment of their funds and such investment is done fairly well.

I turn now to the question of whether this legislation is necessary. I do not believe it is, because there is no gap in the existing system. Not only is there no gap, but I believe the Australian life offices have achieved a degree of efficiency that is at least the equal of any other group of corporations of which I am aware.

Finally I believe that the establishment of a national investment fund will be an interference on such a grand scale that it will affect the proper appropriation of resources. I think it will do it in a discriminatory and totally unfair way. I believe that the Minister for Overseas Trade must ensure that the 30-20 rule would be changed in favour of the existing life offices if they were to lose business to the Australian Industry Development Corporation. If the AIDC is to get this power - I hope it does not do so - I trust that the Corporation also will be subject to the 30-20 rule or any changes of that rule which requires that there should be a diversion of life office funds to governments.

I must concede that I agree with the Treasury view that the 30-20 rule was not good. It was introduced not at Treasury's request or Treasury's will but against its will, at a time a supervisory economic group had been established in the Prime Minister's Department. That group brought the proposals to Cabinet and had them accepted. I wish I had been a little more influential on that occasion. I think I would have done something to correct the market and make it more competitive than it was.

Not only will the National Investment Fund be entering a world where it is not wanted and where there is no public demand for it but also it will be producing a degree of competition, spreading the work load, increasing the capital costs of maintaining and running organisations and bringing no benefit to anyone. I believe it will be discriminating unfairly and savagely against the existing life offices.

I put these points against the background that yesterday the Opposition voted against both the second and third readings of the Australian Industry Development Corporation Bill. We could not honestly have voted against that Bill unless we vote also against the second and third readings of this Bill 'because they are so closely interlocked in their functions. Clause 6 of this Bill relates to the terms and conditions of issue and sale of investment bonds. Powers are conferred upon the Australian Industry Development Corporation which can invest funds in various projects. One cannot really distinguish between the 2 Bills. For these reasons I favour the deletion of sub-paragraph (ii) from paragraph (a) of sub-clause (3). This sub-paragraph reads: -a contributor to a superannuation or retirement scheme or savings scheme maintained by the corporation;

Similarly I support the deletion of subparagraph (ii) of paragraph (b) of sub-clause (3). It reads: a contributor to any superannuation or retirement scheme or savings scheme in relation to which that Division is maintained.

I also agree with the proposition that paragraph (b) of sub-clause (4) be deleted. This is the effect of the Opposition's amendment. I am certain that Australia will be better off if the management of these affairs is left in the hands of the Australian life offices that have performed a remarkable job and had no complaints against them that I am aware of. There were none when I was Treasurer or Prime Minister. It seems alarming to me that without any will on the part of the Australian people seeking this change this legislation should be introduced and the National Investment Fund established in an unfair and competitive way, to the detriment of contributors to the Australian life offices.

Suggest corrections