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Tuesday, 9 May 1972
Page: 1439

Senator CANT (Western Australia) - Generally, when Senator Webster speaks in this place his words contain some value, but I am afraid that today he has rather disappointed us all. He did not understand the subject about which he was talking. He did not understand the processes that have taken place over the years with respect to it. I want to leave that for a moment, but I will come back to it. I want to look at the matter of urgency that has been raised by the Australian Democratic Labor Party. It commences by placing chains on governments in respect of takeovers - not foreign investment. It deals with takeovers, amalgamations, mergers - call them what you will. The belief seems to be that 7 governments will be able to agree on uniform legislation. They cannot even agree on the time of day. They do not know what daylight saving is from one State to another. How can they be expected to agree on a matter of this nature?

If the terms of the matter of urgency are agreed to - I suspect that they will be - it will take 3 or 4 years for Government inquiries and negotiations between governments before any legislation comes forward. This is one thing that is wrong with the suggestions contained in the matter of urgency. The Australian Democratic Labor Party thought that it was putting the Government on the spot in this matter when it said that such takeovers were not to take place until after the Select Committee on Foreign Ownership and Control has brought down its report. I, along with Senator Withers, do not know when that report may be issued. The matter of urgency goes on to state:

.   . until the Government has announced the terms on which and the conditions under which equity in Australian public companies may be acquired by non-Australian interests.

This is a complete climb-down. The members of the DLP know that a White Paper on this subject will be presented before the Parliament rises. That will - I do not say that it will lay down guidelines - discuss the Government's attitude or, at least, the Treasury's attitude to foreign investment. As soon as that happens the DLP will be off the hook. But, in the meantime, it has all the publicity.

Senator Withers - Isn't it a shame?

Senator CANT - Isn't it a shame? After all, this is nothing more than a whitewash. The members of the DLP have come into the Senate day after day complaining about amalgamations and mergers of trade unions to create better organisations within the trade union movement. Finding that this policy is not popular with the community, they now turn to this matter to try to say that they are consistent. It is only a whitewash for their activities against the trade union movement. They are doing nothing more and nothing less than whitewashing themselves. I take with a grain of salt the idea that there is anything genuine in the proposition put forward by the Australian Democratic Labor Party.

In 1963 a report on overseas investment in Australia commissioned by the Government was presented. 1 venture to say that very few members in either House of the Parliament have read that report. It was found at that stage that 25 per cent of Australian industry was owned overseas and 40 per cent of Australian industry was controlled from overseas. Nothing was done. Sir Robert Menzeies laid down some loose guidelines that did not mean anything. In 1965 the Vernon Committee, again commissioned by the Government, brought down a report on overseas investment, mergers, takeovers and amalgamations. The members of that Committee were brushed aside as being a team of technocrats, and nothing followed from that Committee's report. In 1969, John Gorton, as Prime Minister of Australia, laid down a set of guidelines in relation to mergers and takeovers and what he would like to see happen. Nothing happened. Industry generally just went on its merry way. If J remember correctly, in March 1966 Mr Holt brought down some guidelines on overseas investment. This is the loose way in which the Government has tried to operate its policy with respect to overseas investment.

Senator Webster asked whether the Government could have said over the past 10 years that there shall be no further overseas investment in Australia. By implication, he said that the Australian Labor Party would adopt that policy. I say to Senator Webster that the ALP has never said that it is opposed to overseas investment. Its policy at the present time is not opposition to overseas investment. Its policy is to have controlled overseas investment. We want to know from where the money comes and where it goes, whether it is in the national interest that it should come into Australia and whether the purpose for which it is to be used is in the national interest of Australia. We do not want the position to be, as it is now, one in which no-one knows what is happening to it. We have the case of the International Telephone and Telegraph Corporation trying to take over Frozen Food Industries Ltd. That Corporation is not bringing any money into Australia. It wants to raise the money for the takeover through a merchant bank in Australia. No inquiry is made by the Government.

Senator Websteralso said that there should be no interference with private enterprise. Let him go back to Victoria and tell Sir Henry Bolte that there should be no interference with private enterprise and see what sort of an answer he will be given. When the takeover bid was being made by Thomas Nationwide Transport Ltd for Ansett Transport Industries Ltd the Prime Minister (Mr McMahon) said that the Commonwealth Government would not interfere. It would have allowed it to go on. But it did not suit Sir Henry Bolte for that takeover bid to go on. So he took action to save ATI from being swallowed up by the other giant, TNT. I do not recommend anything with respect to ATI or TNT. I do not believe that ATI has been the nice, clean, white baby it has been said to be over the years. I ask honourable senators to look at what happened to Butler Airways in New South Wales, MacRobertson-Miller Airline Services and Guinea Airways. The man who took over those companies flies to the Government for protection when a bigger bird wants to pick him up. I have no brief for any of these people. Senator Webster needs to be fully conversant with these important subjects when he talks about them in the Senate. We are not dealing with dairy farms and the socialist milk board in Victoria to which he has access which guarantees that his farm will be profitable. Mention has been made of socialism. If the honourable senator dislikes socialism so much he should get out of the socialist enterprise in which he is making his living. Senator Webster also says that over the past 10 years overseas investment in Australia has represented on average, about 11 per cent of the total investment in Australia. Some economists would disagree with him. I think the figure most of them would come down on the side of is about 16 per cent. But it is not correct to compare 16 per cent and 100 per cent. The correct comparison to be made in determining where the investment is involves the fact that out of 84 per cent of investment in Australia, 35 per cent is in housing. Do the overseas investors want to put money into housing here? Of course not. They want to invest in multi-storey buildings in the main streets of every city in Australia but not in housing. Therefore it is important to examine where the money goes to, not simply how much of the resources of this country is being farmed out overseas.

Senator Greenwoodreferred to the mining industry in the north of Western Australia and asked whether it would have been developed without overseas investment. 1 do not think it would have been developed without overseas investments, but I am very mindful of the fact that when the Commonwealth Government on behalf of the Administration of Papua New Guinea allowed Conzinc Riotinto of Australia Ltd to develop the Bougainville copper industry, it insisted that 20 per cent of the shareholding be made available to the Administration at par.

This is the sort of action that should have been taken with respect to development works on the mainland of Australia. I am not married to a requirement of 20 per cent, 50 per cent or any other percentage, but some percentage should have been reserved for the Australian people. There is a possibility that some of these industries can be developed from within Australia. The Kambalda nickel mines cost about $1 70m to develop, and it was achieved by Australian interests - Western Mining Corporation Ltd. There is no overseas money in that enterprise. The money is available if the people concerned will go out and get it, but they are too anxious to sell the resources of this country to the highest overseas bidder.

I heard some talk about the Canadian position. Of course, it was quite different from the Australian position inasmuch as overseas investment in Australia comes mainly from 2 countries, Great Britain and the United States of America. Canada was faced with the might of the American giant right on its border. It was a different position there. Nevertheless, the Canadian Government has some down with a guideline. A committee has been set up to see what will happen. I suggest to the Government that it is quite easy for something to be done. The details can be worked out. A suitable policy could include a provision that a legal or equitable interest in or affecting Australian commerce, industry, resources or land is not capable of being created, assigned, effected, or dealt with whether directly or indirectly except with the authority of the Treasurer. The Treasurer can set up a committee to examine mergers and takeovers and can examine the purposes of overseas investment. Such an expert body would be working in the national interest to see that our policy was properly carried out. The Australian people would know whether overseas investment was being made for their benefit.

If that requirement is thought to be too restrictive, I remind honourable senators of the Canadian requirement concerning a $250,000 or $3m turnover within a company. Such restrictions can be imposed so that there is no interference with minor operations. Honourable senators opposite may raise difficulties but it is a datum peg to start from for a committee examining overseas investment. If the DLP had put forward such a suggestion it would have been acting constructively, instead of putting forward a motion with the intention of whitewashing itself in the eyes of the people - something to get the DLP off the hook with the working people of Australia whom they constantly oppose.

Senator JESSOP(South Australia) {5.39) - I always listen with interest to Senator Cant of the Opposition when he speaks on matters relating to foreign investment. I noticed tonight that he displays a certain amount of irritation towards the Australian Democratic Labor Party. He suggested that the DLP senators were trying to whitewash themselves because of their views on the amalgamation of certain trade unions. I think Senator Cant implied that they were trying to steal the limelight. I suggest that perhaps the superior political strategy has irritated the Labor Party as some of its members may believe that the Australian Labor Party should have put forward such a motion.

I invite honourable senators to look back to 10th November 1971 when the DLP introduced a similar subject to the Senate. On that occasion I paid tribute to the Democratic Labor Party for bringing the matter before the Senate at that time. I believe that DLP senators should derive some satisfaction from the fact that the Senate unanimously agreed to set up a select committee to examine foreign ownership in depth, under the capable chairmanship of Senator Withers. He has under him a very competent Committee that will look into this matter in great depth. It will take some time to do so.

I think all honourable senators will agree that we must show concern at the increasing interest in foreign capital in this country. We must study the areas in which foreign investors are becoming increasingly active to find out whether they are keeping Australian capital out. Going not too far back into our history it is clear that there are areas of Australia which could not have been developed purely and simply by Australian capital. The last time I spoke on this matter I referred to the Gove alumina project. When I visited Gove in 1968 I learned that the Australian Government had requested that 50 per cent of the capital in the project should be raised in Australia. I returned there last year and discovered that it was impossible to raise that amount of Australian capital. It was necessary to seek Swiss capital in order to make the project work. The enterprise has guaranteed work for several hundred people.

I turn to other areas in Australia where a similar situation has arisen. For instance, the Mount Newman venture took a long time to interest Australian capital. A similar position obtained at Robe River and at the Amex project in the Admiralty Gulf. Those projects could not have proceeded without an infusion of overseas capital.

Senator Webster - Does not the Premier of Western Australia go to Japan to try to encourage investment in Western Australia?

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