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WEDNESDAY, JULY 21, 1976
LOANS SCHEME FOR SMALL FACTORIES TO BE DISCONTINUED
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A LOANS SCHEME, DESIGNED TO HELP SMALL FACTORIES INCREASE THE IR PRODUCTIVITY, IS TO BE DISCONTINUED DUE TO LACK OF RESPONSE FROM INDUSTRIAL ISTS.
THIS WAS ANNOUNCED IN LEGISLATIVE COUNCIL TODAY (WEDNESDAY) BY THE ACTING DIRECTOR OF COMMERCE AND INDUSTRY, MR, BILL DORWARD, WHO SAID THAT BOTH THE LOANS FOR SMALL INDUSTRY COMMITTEE AND THE TRADE AND INDUSTRY ADVISORY BOARD HAD BEEN CONSULTED ON THE MATTER.
THE SCHEME, CALLED THE LOANS FOR SMALL INDUSTRY SCHEME, WAS INSTITUTED IN 1972 FOR AN INITIAL TRIAL PERIOD OF THREE YEARS, ITS OBJECTIVE WAS TO ASSIST SMALL INDUSTRIAL ENTERPRISES, DEFINED ORIGINALLY AS BEING FACTORIES EMPLOYING NOT MORE THAN 200 WORKERS AND HAVING NOT MORE THAN $600,000 IN PROPRIETORS' FUNDS, TO INCREASE THEIR PRODUCTIVITY BY THE PURCHASE OF MODERN MACHINERY AND EQUIPMENT.
MR. DORWARD POINTED OUT THAT DESPITE EXTENSIVE PUBLICITY AND TWO MAJOR MODIFICATIONS, INVOLVING AN INCREASE BOTH IN THE LOAN CEILING AND MAXIMUM PROPRIETORS' FUNDS, THE SCHEME HAD BEEN LITTLE USED.
HE ADDED: +DURING THE ORIGINAL THREE YEAR TRIAL PERIOD AND A ONE YEAR EXTENSION, ONLY 10 LOANS HAD BEEN APPROVED, TOTALLING $1.4 MILLION AGAINST THE PERMISSIBLE COMMITMENT OF $30 MILLION.+
THE SCHEME WAS EFFECTIVELY A JOINT VENTURE BETWEEN THE
MEDIUM TERM LOANS AT REASONABLE GOVERNMENT AND THE BANKING SYSTEM. INTEREST RATES WERE MADE THROUGH COMMERCIAL BANKS, AND THESE, MR. DORWARD EXPLAINED, WERE UNDERWRITTEN BY THE GOVERNMENT TO THE EXTENT OF 50 PER CENT, SUBJECT TO A MAXIMUM COMMITMENT OF $30 MILLION.
MR. DORWARD ALSO POINTED OUT THAT FROM THE OUTSET OPINICK HAD BEEN DIVIDED ON THE NEED FOR SUCH A SCHEME. THERE WERE THOSE, HE SAID, WHO MAINTAINED THAT SMALL INDUSTRIALISTS WERE SOMETIMES UNABLE TO OBTAIN MEDIUM TERM LOANS DUE TO COLLATERAL SECURITY.
+BANKING OPINION, ON THE OTHER HAND, WAS THAT THE EXISTING
EXPERIENCE INDICATES THAT THE SYSTEM PROVIDED ADEQUATE FACILITIES. LATTER VIEW WAS PROBABLY CORRECT,+ MR. DORWARD SAID.
MR. DORWARD ADDED THAT HE HAD BEEN ASSURED BY BANKING CIRCLES THAT ADEQUATE FACILITIES WOULD CONTINUE TO ES AVAILABLE TO MEET THE KIND OF NEEDS THE SCHEME WAS ORIGINALLY DESIGNED TO SERVE.
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