PRESS STATEMENT NO. 175
22 January 1974
AUSTRALIAN INVESTMENT OVERSEAS
The Prime minister, Mr Whitlan announced today a new
Australian Government policy for overseas investment, especially
in developing countries.
Mr Whitlam said that much Australian investment would take
place in any case in overseas countries and it was the intention of
the Australian Govwrnment to encourage investment which would meet the
type of criteria applied to investment in Australia.
It was the intention of the Australian Government to do all it
can to ensure that Australian investment in overseas countries will
benefit the people in those countries and will be favourable to
ownership and control of enterprises by people in the countries in
which it is made and will have advanced labour relations and
environmental policies. It is expected that all Australian investment
will be in accord with the policies of the governments of the countries
in which it is made.
Mr Whitlam said it was a major objective of the Australian
Government to strengthen its economic relations with developing
countries, particularly in its neighbouring regions. Many developing
countries in the Asian and Pacific regions have expressed a desire for
increased Australian private investment. The Australian Government
recognises the contribution that Australian private investment
accompanied by technical know-how and managerial skills can make to
the development and growth of such countries.
The Australian Government also fully appreciates the desire of
these countries to regulate foreign investment in accordance with their
own national aspirations and development plans. Consequently the
Australian Government was anxious to encourage private Australian
investment in developing countries on a joint venture basis in
accordance with those. countries' social and economic development plans
and their investment policies and procedures. The Australian Government
will use its best endeavours to interest and encourage Australian
enterprises to participate in those specific fields of development in
which it is indicated Australian investment would be particularly
welcomed and which would be in the joint interests of both countries.
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Mvr. Whit'am said that the Government would amend the Export
Payments In~ suran~ ce Corporation Act to broaden the scope and the
overseas investment insurance scheme, which at present restricts
the availability of insurance cover to those investments which
provide export benefits to Australia and assist in the production and
marketing of goods overseas. The Government proposes to broaden the
eligibility criteria to provide that all new worthwhile direct
investments which can assist in the economic and social development
of an overseas country will be eligible for insurance cover. Also, in
recognition of Papua New Guinea's expressed desire for increased
Australian investment to further its social and economic development
plans, it is proposed to extend the scope of the overseas investment
insurance scheme to cover new eligible investments in Papua New Guinea.
Mr. Whitlam said that the amending legislation would provide for
investments made between now and the enactment of the legislation
would be eligible for consideration under the expanded scheme.
In order to encourage partnership between Australian interests
and investors in the host country concerned, concessional premium
rates would continue to apply when the investment is a joint venture
with local interests.
in addition, Mr. Whitlam, said the Australian Government had
decided to establish an overseas investment feasibility fund of
$ 250,000 to assist Australian companies to meet the costs of preinvestment
feasibility studies in developing countries. The fund will
be administered by the Department of Overseas Trade.
The Australian Government also proposed, where appropriate to
negotiate bilateral investment guarantee agreements with overseas
countries. Mr. Whitlam said that, in view of the important interrelationship
between trade and investment, the Government was seeking
in official bilateral trade negotiations with neighbouring countries,
to have included in trade agreements, where mutually desired, a clause
related to investment.
Furthermore, Mr. Whitlam said the Australian Government would
give early consideration to acceding to the international convention
for the settlement of investment disputes.
Mr. Whitlam said these measures will complement existing measures
for promoting private direct Australian investment in developing
countries. Such investment is already facilitated in a number of ways
by the Government. Under existing policy, for example, exchange contro:
approval is readily given to all direct investments overseas which
include a significant measure of Australian managerial participation
and the expert of managerial and technical skill. Also, Australian
taxation legislation contains uftiilaterial provisions which protect
Australian residents against the possibility of double taxation on
revenue generated overseas.
In addition, Mr Whitlam said the Department of Overseas Trade
provides assistance to potential Australian investors in a variety of
ways, including the publication of investment climate studies, the
sponsoring of investment survey missions and the assistance of the
Trade Commissioner Service. An amount of $ 100,000 had been provided
in the 1973// 74 Budget to strengthen such services.
All of these measures, Mr. Whitlam said, clearly indicated the
Australian Government's desire to see increased flow of Australian
investments to developing countries in areas of activity welcomed
by those countries and in harmony with their economic and social goals.
CANBERRA. A. C. T