Page 4973 - Week 17 - Tuesday, 11 December 1990

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(b) the acquisition of shares in a company;

(d) the lending of money on the security of shares in a company.".

This is a further amendment to clause 13, which is to introduce a new clause 13A which prohibits the acquiring of subsidiaries, as defined by the Corporations Act, by Territory owned corporations where those subsidiaries are anything other than 100 per cent wholly owned by the Territory.

MS FOLLETT (Leader of the Opposition) (8.34): I have had a look at this amendment proposed by Mr Kaine and at the so-called supplementary explanatory memorandum. The first thing I have to say is that I have listened carefully to Mr Kaine's comments in the in-principle debate on this Bill. I still do not understand why it is that the amendment that is being moved prevents Territory owned corporations from undertaking fairly standard business practices of obtaining subsidiaries with less than 100 per cent ownership.

I think Mr Kaine mentioned something about Commonwealth legislation applying or restraining his hand in some way. It is not contained anywhere in the material that we have been presented with on the Bill, or in the supplementary material provided on the amendments. I would ask Mr Kaine to do the house the courtesy of making an explanation as to why it is that he seeks to do this. It is, in fact, an artificial restriction that he is seeking to place on Territory owned corporations which does not apply to private sector companies. In my view, if your objective, through corporatisation, is to increase efficiency and put these businesses on a better footing, then you are placing a restriction on them that could, in fact, do quite the reverse.

I would be grateful for an explanation of the reason for this amendment. The explanatory memorandum is really no more than a reiteration of the amendment itself and gives no background or reasons for it at all.

MR KAINE (Chief Minister) (8.36): The essence of this amendment really is in the first paragraph of the proposed clause 13A, where it states: "... if, as a result of the transaction, a company would or could become a partially owned subsidiary". I have already pointed out that in accordance with the self-government Act itself, and the regulations passed under it by the Commonwealth to allow us to move into Territory owned corporations, we can deal only with wholly owned Territory corporations. If it is only partially owned, then it would become illegal under the Act. This simply prescribes that the Territory owned corporation may not perform transactions which would have the effect of making it less than a fully owned corporation. It is pretty straightforward to me.

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