On the section I want to ascertain from the Minister what method is adopted for scheduling the assets which the State may hold in commercial undertakings. I raised this question with some difficulty on the Second Stage of the Finance Bill. When I look at the Schedule to the 1925 Finance Accounts, I see there set out most of the advances which I know the Government made to a number of undertakings or businesses of a commercial character. We have set out there the advances made to the Alcohol Company, to the Shipping Company and to the different aviation companies. I can find no mention whatever of the advances made to the Minerals Company which would appear to me to be in the same category as those other companies. I think this is an important matter because it raises the principle of setting out these assets as well as the prices set against them. I notice that is done in the case of the Alcohol Company, the shares in which are of a very doubtful value. In the case of the Minerals Company, the fact that no particulars are set out would seem to be an admission that there are no assets there. I think something should be set out to show the assets and their realisable value. We know now from this section of the Bill that the assets are very much below their actual cost. I would be glad if the Minister would deal generally with this point. I think it is important, in view of the extending ramifications of the Government's participation in commercial enterprises.
Minerals Company Bill, 1947—Committee and Final Stages.
I could not deal with the general question which the Senator has raised. So far as I know, it is the practice to record in the Finance Accounts advances made to companies of this kind as Exchequer assets at their nominal value. In this particular case, because of the circumstances under which the company had to conduct its operations during the war, and because it was known that these operations were involving the company in losses, losses which were being met by renewed advances from the Exchequer, the advances were not recorded as assets, and for that reason were excluded from the Finance Accounts. The fact that this Bill is being introduced now for the purpose of wiping out these losses, thereby releasing the company from the obligation of repaying advances, justifies that course. When the company commences its operations on the new basis, and when all these past advances have been written down to the present value of its assets, then it will be for consideration whether these assets, so determined, of the company will be recorded in the Finance Accounts as Exchequer assets.
The answer to the Senator's question concerning this company is that, it being known that the company was making losses and was unlikely ever to repay the advances, or even to pay interest on the advances, they were not reckoned as assets to be included in the Finance Accounts.
I am not really satisfied with the Minister's answer. According to his answer, it seems to be entirely arbitrary as to what shall be included in Table 20 of the Finance Accounts and what shall not be set out. Apparently, if I understand the Minister aright, advances made for producing commodities during the war which did not seem likely to realise their value were to be excluded. I think that this matter should be handled by the Government on a clearer basis than that. That procedure would seem to leave it entirely to the Minister for Finance as to what should be included. We ought to know whether all advances made are to be included in our assets, and if they are not why not. We ought to be told about the matter. Merely to be told that advances made during the emergency are to be excluded, and that advances made before that are to be included, seems to me to be entirely unbusinesslike. That is a point that I have been dealing with for a long time ——the absence of business methods in all these commercial activities in which the Government has embarked, and is embarking on to an increasing extent. I do not see that any purpose would be served by pursuing the matter further, but I do hope that, at some time, the Government will examine deliberately this method of making advances to such undertakings as this.
There are two points on which I should like to correct the Senator. I did not draw a distinction between advances made by the State to companies before the emergency and during the emergency. I made a distinction between the advances made to this company and to other companies. This company was engaged in operations which necessarily involved it in losses. If it was working on commercial principles it would, as I told the Senate on the Second Reading of the Bill, have suspended work until the war was over, because it could not get either equipment or skilled workers or any of the facilities it required for proper commercial working. It was told by the Government to go on working, even in the difficult position in which it found itself, because of the necessity of getting the products in which it was interested. It was told to go on producing, irrespective of financial considerations. The Minister for Finance knowing that that was the situation, and knowing that these advances were really made to meet the day-to-day losses of the company, and knowing, further, that the company was unlikely at any time to repay these advances, or even the interest on them, did not reckon them as assets.
In the case of all the other companies to which the Senator has referred, the repayment of the advances has been made as arranged, and the interest is paid on them as it falls due, and, therefore, it is proper for the Minister for Finance to reckon them as Exchequer assets. His decision in this particular case is justified in the event. Now we are wiping out these losses. It is the only practical course to take. The new company will have no earning power at all. It will be engaged in exploration work and could not possibly hope to make a profit out of its future working which would enable us to recover its past losses.
I think the point raised by Senator Sir John Keane is one of some importance, even though I think the Minister's statement has made the position perfectly clear. I think the matter is one that requires consideration. In this case, I think that from the commercial point of view, the assets might have been put down and marked as having no estimated value. I certainly think they should appear as long as they were a legal liability. I imagine they are so until this Bill becomes law. I do not think that the point is of very great importance in this particular case. There is, however, a principle involved which might very well be looked into.
I again draw the Minister's attention to what I said on the Second Reading of this Bill. I referred then to the statement which was made by his predecessor when speaking on the original Bill that was passed to develop the Slievardagh collieries. The Minister's predecessor then said:—
"These facts in themselves do not, of course, make certain that large returns in the way of dividends may be expected for any money invested in the establishment of the colliery at Slievardagh. All they do is provide sufficient justification for saying that there is a very good chance that the undertaking can be made self-supporting in a reasonably short time."
On that basis, the taking of these assets into the Finance Accounts would surely seem to have been justified. The Minister now says that the advances had to be made in order to meet the situation created by the emergency. There is a distinct conflict between the hopes then expressed by the Minister's predecessor and what the present Minister says was in the mind of his Department. I do not intend to pursue the matter further.
There is another matter of principle that I want to raise in this section. I know that the section deals only with the prospecting activities of the company which, I agree, should not be published. I feel that I am in order in referring to what was prescribed in the Principal Act passed in 1941. Under Section 14 of that Act, there was to be furnished by the company a profit and loss account and balance sheet, and after a period of 90 days the accounts were to be laid on the Table of the two Houses. Failure to do so imposed certain statutory penalties on the directors. So far as I can ascertain, the last accounts furnished by the company relate to 1945. I can find nothing later than that, even though the company carried on operations in 1946 and 1947. Perhaps the Minister would be able to explain that.
My information is that the accounts were presented within the statutory period each year. I would have to make inquiries as to why the Senator was unable to obtain a copy of the accounts.
The last accounts that I could get in the Library were for 1945. I shall make further inquiries.