EMBARGO 7.30p. m. 18-9-70
" THIS DAY TONIGHrT"
TELEVI SION INTERVIEW GIVEN BY THE
PRIME MINISTER ON ABC TELEVISION NETWORK
Interviewer Philip Koch 113 SEPTEMBER 1970
Q. Prime Minister, your decision. last night has been roundly applauded
but there is criticism that while you have protected an Australian company from
any possible foreign takeover, you have not laid down a policy to embrace all
minerals and developments. How do you answer this?
P. M. Well, I would first of all repeat what I said in the statement of
Government policy on the 16 September last year that's a year ago if I
can quote our objectives:
" As we see it, the central aim of policy must be to provide
on terms which are fair, as between overseas investors and
the Australian people, the conditions under which investment
will be attracted here. But we do not believe that we can or
should seek to legislate in such a complex field."
Now you have suggested one might lay down policy to apply to all minerals and
all developments. I don't think anybody could lay down such a p-olicy. don't
think they should, and I think if they tried to, they would find so much variety,
so many different circumstances that they would be seeking to apply a completely
inflexible policy to a whole series of problems all of which vary the one from
the other.
Q. Could I ask you about one circumstance that could arise in that it
could have been just as easy for a foreigner, an overseas compay to have found
this particular uranium strike, reportedly the richest in the world. Now if
that had happened, what would you have done?
P. M. Well, we would have not in any way have interfered with the company
which had such a discovery any more than we interfered with ESSO-BHP when
they discovered oil. Because we think that if overseas investors -risk their
capital here preferably in conjunction with Australians but if they risk it,
then they are entitled to the rewards for the risks that they have taken. B-t
this is quite a different concept you are approaching here. We are not seeking
to protect this particular discovery in order to prevent profits going out of
Australia, or something of that kind. After all, we get half of the profitc from
any discovery. But this is not the point. The point is that if this field is, as
it is claimed to be, the richest in the world, and so much richer taQn aliy other
field, then overseas people, theoretically, havbig uranium interests ailroad,
could buy up shares and control this field and not put it into operation 2
because by putting it into operation and by selling it at the price at which it could
be sold, they could damage their own overseas investments. Now this is
clearly quite a possibility. Also if it is as rich as it is claimed to be, then
consumer countries seeking uranium might well be tempted to seek to buy shares
to control the company and sell to themselves at a very low price the uranium
which can be produced here at such a low price. So it is really designed to see
that this is used for the greatest benefit of Australia that we have taken this
action. But I do want to say one thing. I don't endorse the claims for the
richness of this field. But claims have been made and I think we need to take
notice of them.
Q. But you would agree, Prime Minister, that it is very fortunate that it
has been found by an Australian company?
P. M. Very fortunate.
Q. Could I ask you why there are differences in the amounts of foreign
holdings allowed in Australian companies following your announcement last
night. Now, in the case of uranium depositr, you propose to legislate for
a maximum 15 per cent holding. Now under the M. L. C. legislation, the
maximum foreign holding was set at 40 per cent, and under the BroadcaDting
and Television Act, foreign shareholding was limited to 20 per cent. Now
why are there these gradings?
P. M. Well, I can't tell you why the Broadcasting Control Act which was
brought in in 1942 or something of that kind was set at 20 per ce:. t. It must
have been considered at the time that 20 per cent wasn't a controlling
interest, I suppose. But I don't know. It's a long time ago. In the case o the
M. L. it was set, as you say, at 40 per cent, and 21 per cent in the hands
of any one individual owner. Now this was set because at the time at which
we acted, that was the shareholding which overseas interests had acquired, and
it didn't seem right or proper to move in an divest them of shares which they
had bought in good faith. So we took the level at which it existed and said that
level cannot be increased, and indeed, if in the future a foreign shareholder
sells shares to another foreign shareholder, those shares will lose their voting
right. That was why it was set at 40 per cent because that was the holdings
which overseas people had bought in good faith. We have now moved to
per cent in line with the guidelines for company takeovers which I
announced in the House last year, a year ago, in which we said, amongst a
number of other things, about first-come-first-served offers and so on, that
control would be regarded as 15 per cent of a company's shares rather than
the 33-1 3 per cent which had previously been considered to be control. That
was announced a year ago. 3
Q. Prime Minister, just one other point or, the uranium find. You were
able to act quicdy to protect the uranium deposits from possible . oreign
control because the two companies involved are registered in the Australian
Capital Territory, and of course come under Commonwealth ordinance-. Now
would you agree you could not have given this protection had the compa: iez been
registered in one of the States?
P. M. I believe that is so. I am not prepared to give a legal opinion that that
is certainly so. But this is generally believed to be true and for the pur__ oses
of this discussion, let us say it is true. Certainly, the fact that they were
incorporated not registered incorporated in the A. C. T. was a fact vi-ich
enabled us to take swift and immediate action. And had they been incorporated
in the States, I don't think we could have taken such swift and immediate action.
Q. Well this brings up the point that if the need arose of a company in one
of the States, would you expect that the State would follow your guidelines and
would in the national interest, do the same thing? Would you have any
guarantee of that'i
P. M. No, we are a Federal system and the States are sovereign States. They
did agree at the Attorneys-General level last year to legislate under the
Uniform Company Act for takeover codes for companies so that
nominees owning more than 10 per cent had to disclose the beneficial interest,
so that there must be a period of time between takeover offers and acceptance
by shareholders, so that 15 per cent would be regarded as a controlling iterest
in the company, and a number of other matters. They have not yet legislated
along these lines. For that matter, neither have we because we have beelwaiting
and hoping for uniform legislation, but we may have to move without
it. But I can't guarantee what a State would do. I imagine that, if they were
sensible, they would do what we do.
Prime Minister, thank you very much.