DANGERS SEEN IN TAKE-OVER BILL

Press, Volume CIII, Issue 30512, 6 August 1964, Page 3

DANGERS SEEN IN TAKE-OVER BILL

(From Our Parliamentary Reporter)

WELLINGTON, August 5.

Out of discussion of the Take-over and Monopolies Bill introduced to Parliament by Mr M. A. Connelly (Opp., Riccarton) would come acceptance of the need to proceed very cautiously’ in this field, the Minister of Justice (Mr Hanan) told Parliament tonight.

Mr Hanan said that such a bill, with drastic powers for an authority’ to oversee foreign investment in New Zealand, could lead to retaliatory’ legislation in other countries for example, Australia —could discourage overseas investment which brought many benefits, and would give the authority power over the economy independent of Parliament or the wishes of the people.

Mr Connelly said that one of the purposes of his bill i was to encourage the flow of overseas capital to New Zealand in the nation’s interest. It proposed incentives for foreign investment. “There is no fear of turning foreign investment away if New Zealand can offer a better return than that offered in other countries,” he said. It had many attractions to foreign investors—a stable democracy, a highly-educated population, a skilled and adaptable labour force, scientists, technicians and engineers.

“The Labour Party approach shows the difference between the parties,” said Mr Connelly. “We consider such investment good if it produces export earnings to pay for the costs of investment. The Government has no fixed approach and has permitted the indiscriminate flow of foreign investment.” Finance Corporation If the Government had established an industrial finance corporation, as proposed in 1962. New Zealand would have had access to foreign capital. Now. to get overseas capital, the Government had to establish industry, guarantee private interests, obtain a loan from the International Finance Corporation or let overseas concerns step in.

Mr Connelly said the Opposition felt the control of take-overs and monopolies should be free of political interference and control.

He compared this with the attempted take-over of the “Dominion,” when, he said, the Government had to make threats to licence the press of New Zealand—a form of news dissemination favourable to the National Party. Licensing of the press was an instrument of the totalitarian state, he said. Was it Hitler or Holyoake?

Mr Connelly withdrew the last remark after a point of order was raised by the Minister of Agriculture (Mr Taiboys). Records Compared Mr Hanan replied that Mr Connelly under-estimated the benefits of overseas investment. During the three years of the last Labour Government, overseas investment, including retained profits, was £20.7 million. In the three years of the National Government overseas investment had totalled £93.8 million.

Foreign investment had increased the opportunity for private investment in New Zealand. It brought new techniques to help the economy. Evidence of the dan-1 ger of a go-it-alone policy j had been apparent in the early stages of the Whangarei glass industry. New Zealanders owned about £2OO million worth of shares in Australian companies today, said Mr Hanan. It would be bad if legislation here provoked retaliatory legislation in other countries. He said he was opposed to [legislative control over newspapers. In France, anyone having a part in the ownership of a newspaper had to [be a French national. “I do [not think we want to have that kind of thing.”

“After all the fire and smoke over the ‘Dominion’ take-over affair, the all-im-portant fact is that the ‘Dominion’ remained under the control of New Zealand shareholders,” he said. The Leader of the Opposition (Mr Nordmeyer): What is happening to the 27 per cent Mr Murdoch has? “Honourable Agreement” Mr Hanan said Mr Murdoch had acquired 12) per cent of the shares of the “Dominion” in accordance with the law’s of the country and had then agreed with the

directors he would purchase no more.

Lord Thomson had come in with another bid for “Dominion” shares at a greatly increased price. “Rather than let the shares go to Lord Thomson, Mr Murdoch said he would buy more shares and hold them in trust for the directors for sale when they required.” The directors, at the end of five years, could require Mr Murdoch to sell these additional shares, regardless of the loss to him.

“It is an honourable agreement, honourably kept, without legislation,” said Mr Hanan.

Sir Basil Arthur (Opp., Timaru), said considerable changes were taking place in the structure of the economy of New Zealand. It was necessary to rationalise the introduction and direction of overseas capital. It should be guided where it was most needed and to the benefit of New Zealand. Investigator’s Progress

The Minister of Finance (Mr Lake) said the Government had gone a long way towards setting up an industrial finance corporation. The proposal was referred to the Tariff and Development Board (which said such a corporation should be set up) and was now being discussed by departmental officers, insurance companies, banks, and other interested parties. He hoped to be able to announce the details soon, Mr Lake said.

Mr D. J. Riddiford (Govt.. Wellington Central) said that the position was serious. Thirty per cent of profits in New Zealand went to firms which had 20 per cent or more of their shares owned by overseas interests. He thought, however, that the present bill was not the answer.