NEW INCENTIVE FOR FOREIGN COMPANIES

Press, Volume CIX, Issue 32099, 22 September 1969, Page 18

NEW INCENTIVE FOR FOREIGN COMPANIES

a -4 : -(nz. Press AMOCiaflon—Copjlr(ght) . ’ CANBERRA, September 21. Overseas companies working in Australia which want to raise local capital will be given increasing incentives to offer shares to Australians under a comprehensive new policy on overseas investment announced by the Prime Minister (Mr Gorton).

InYdWnat int“d tTtegta late to restrict it. But he emphasised that the: Government wanted to encourage Australian partnership in, oversees enterprises In Australia. Generally, Mr Gorton said, companies would be allowed reasonable access to Australian borrowings tor financing normal requirements of working capital, bridging finance and continuing carry-on requirements. Ready approval would ne given to borrowings to finance export transactions. The base for new local borrowings to finance fixed assets in future would be the local borrowing approved as at June 30, 1969. LOCAL BORROWINGS Outlining the Government's! new proposals, Mr Gorton said: “Companies wholly overseas-owned and established in Australia for less than four years will be allowed ioeal borrowings of up to 2i per cent of the increase in funds employed for each year that they have been established. “Such companies will henceforth have a new base and a new percentage applied each year until they have been established here for four years. “From that time they will

ba allowed local borrowings’ of up to 10 per cent of sub-, sequent increases in funds! employed." ! The Prime Minister said that companies in which Australians had an equity would , be allowed additional borrowlogs and this would be deter- . mined by the share of the . total 'equity held by Australians. LACK OF INITIATIVE I 1 The Leader of the Opposition (Mr G. Wbitlam) told the ! House in reply that the Gov- ' eminent was seeking to intro- ! duce controls on foreign investment without encouraging local initiative. “We have too readily accepted the proposition that I there is nothing we can do • about our own resources as ■ Australian," he said. 1 “There is something very : wrong when our base metals and cattle industries are in foreign control. ;i “It will require a great deal i more initiative from the Com- ' • !

monwealth if we are not to. lose our resources.” I Mr Whitlam , said that Armco, which will establish a multi-miilfon dollar steel plant at Jervis Bay on the New South Wales coast, had announced it would offer he-i tween 15 and 20 per cent local' equity. I “Is there any other country ) in the world that would allow) between 80 and 85 per cent' control in a steel plant to be in overseas control?" he asked. Strikes Affect Newß.H.Net (K.Z Press Assn,— Copvrlght) LONDON, Sept. 19. Trading results for the first six months of the year had been adversely affected by substantially lower sales of concentrates, New Broken Hill Consolidated said in its half-yearly report released here today. This was a direct result of the industrial trouble experienced in 1968 which reduced the tonnage of concentrates available for realisation during the early months of 1969, but the drop was partly offset by higher prices realised for lead and zinc. The profit before royalty and taxation for the half-year to June 30 is £2.213,000, compared with £3,022,000 for the corresponding six months last year.

The interim dividend is on capital increased by a one-for-seven rights issue in June. The board said it intended to recommend a final dividend of not less than 18d (21d last year), making a total for the year of 30d (same).

i Equitable Lifts Interim The Equitable Building and investment Company of Wellington, Ltd, is raising its interim dividend from 3 per cent to 4 per cent. Last year a final dividend of 5J per cent made a total of 8j per cent for the year. The total yearly payment had been 7} per cent since it was raised from 6j per cent in 1966.

The directors say they consider the increase in interim dividend justified by improved results during the current trading period. Shares will be ex dividend on September 27.