It was established by the Gorton government in 1971 as a pet project of deputy prime minister John McEwen, tasked with helping develop Australia's resources industry.

Most of its operations were spun off into AIDC Ltd, which listed on the Australian Securities Exchange (ASX), and its assets were progressively sold down by the Keating and Howard governments in the 1990s.

Gorton, an economic nationalist like McEwen, agreed to his suggestion and the pair put forward a joint cabinet proposal in January 1970 for an IDC that would borrow funds overseas and on-lend them to companies in the resources and manufacturing industries.

[8] Following the Black Monday stock crash of 1987, the AIDC was left with a number of bad loans, but unlike traditional banks had no buffer of household mortgages to fall back on.

In the following year, the company reportedly had "significant exposure to the commercial property sector" and had lost significant sums from the failure of investments, including Perth-based property developers Tower Corp and Dayton group, plastics group Sabco and hardware retailer McEwans Holdings.