8th Parliament · 1st Session
Mr. Speaker (Hon. W. Elliot Johnson) took the chair at 11 a.m., and read prayers.
Basic Living Wage
– In view of the ex pressed intention of the Prime Minister to recommend to Cabinet the proposal to increase the remuneration of members of Parliament by an amount which will add between £40,000 and £45,000 per annum to the cost of governing the Commonwealth, I ask the right honorable gentleman if he will also recommend that all employees of the Commonwealth shall receive at least the recognised basic living wage ?
– I am under the impression that almost without exception they already receive that wage; but I shall be glad to call the attention of the Prime Minister to the honorable member’s question.
Distribution of Moneys
– Last week I asked if the Government, because of the delay in settling the accounts of the “A” and “ B “ Wheat Pools, would make representations with a view to having distributed as speedily as possible any money to the credit of those Pools which is available for distribution, and it was promised that an inquiry should be made. I wish to know if anything has been done in the matter, and, if not, whether somethingmay not be done as soon as possible?
– I have no information at hand yet, but I shall look into the matter again and endeavour to obtain it.
– Can the Minister for the Navy, as Acting Treasurer, let us know on Tuesday the actual position of the credits in Australia of the Wheat and Wool Pools? Can he tell us briefly what the total credits are? This would simplify matters when we deal with the Supply Bill, which must come before us shortly.
– I shall be glad to furnish the honorable member with’ the information for which he asks.
– In view of the reduction in the purchasing power of money of late years, will the Government, in the interests of the workers, take into consideration the advisability of increasing the income tax exemption from £156 to £250 per annum?
– I am afraid that I shall have to take the matter of exemptions, and other aspects of our income tax legislation, into consideration in view of the many commitments of the Government.
– Will the Prime Minister have a return prepared showing the rates charged in Great Britain for the carriage of newspapers by post, and giving an estimate of the loss to the Commonwealth from the carriage of newspapers in this country at lower rates? Will he have a comparison made which will show the extent to which the newspaper proprietors of this country are receiving charitable aid from the Government ?
– I think that is an urgent question, and, as I have no inherent bias against what is proposed, I shall certainly do what is asked.
asked the Minister for Trade and Customs, upon notice -
– The information is being obtained.
asked the PostmasterGeneral, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Minister for Home and Territories, upon notice -
For the convenience of readers, will he have the statistical returns in connexion with the elections of senators and members of the House of Representatives made up into book form instead of the inconvenient form now in use?
– The returns relating to the voting within each Division are given in the most compact possible form. The question of printing in more concise form the returns showing the voting within each State, and the summaries relating to previous elections, will be considered in connexion with future elections.
Employment of Soldier Artisans
asked the Minister representing the Minister for Repatriation, upon notice -
– The Commissioner advises as follows: -
Western Australia. - West Subiaco and North Perth groups.
Tasmania. - Harbroes’ group.
Allegation of Disloyalty
asked the Prime Minister, upon notice -
– Inquiry will be made.
– The Address-in-Reply to the Speech delivered by His Excellency the Governor-General on the occasion of the opening of Parliament, will be presented to him at Government House, at 3.30 o’clock p.m. on the afternoon of Tuesday next.
Motion (by Mr. Hughes) agreed to -
That the House, at its rising, adjourn until Tuesday next, at 3 p.m.
Debate resumed from 11th May (vide page 1976), on motion by Mr. Hughes -
That this Bill be now read a second tune.
. - Like most other honorable members, I desire the discovery of oil in this country. We have done our best to find oil in Papua and in other parts of the Commonwealth, and I still ‘have great hopes of success ; but, until that success has been obtained, we shall be in the clutches of those who at present supply this community with oil, that is, unless we can make some arrangement which may free us from them. At the present time, the Vacuum Oil Company, and other oil companies, have a complete monopoly of this market. They could, if they liked, stop our supplies ; and they could also increase the price of oil. We are entirely dependent upon them. The Government, how ever, have invited the Anglo-Persian Oil Company to erect refineries here for the treatment of the crude oil which they will import. Personally, I do not object to this arrangement. In my opinion, to establish refineries here is a step in the right direction, no matter by whom taken. I would, of course, prefer to see the refineries erected by the Government, but the agreement that we are discussing creates a partnership ‘between the Commonwealth and the Anglo-Persian Oil Company ; and, ultimately, if we desire to take over these refineries, we shall be able to do so. As we have not yet found oil in this country, crude oil must be imported for treatment. I should like to know why provision is being made for the refining of only 200,000 tons of crude oil per annum, seeing that the Commonwealth needs nearly double that quantity. Is- the company prepared to erect refineries which eventually will be capable of wholly supplying our needs ? If it or the Government will do that, I shall be very pleased. The objection has been raised that, by making this agreement, we are playing into the hands of a monopoly. But, even if that be so, the monopoly will not be so dangerous as that which at present exists. We are really entering into a partnership with the British Government and the AngloPeTsian Oil Company, and are at worst choosing the lesser of two evils. Having read the evidence given by officials of the Vacuum Oil Company before Boards of Inquiry and the Inter-State Commission, to justify applications for permission to increase the price of oil, I am astonished that some of these men are not now behind the *bars of a gaol. According to Judge Edmunds, of New South Wales, they have made statements which are untrue, and have falsified their books. On the last occasion when the Vacuum Oil Company applied for permission to make an increase in the price of kerosene, the Judge said he would not hear tho case. His mind was made up that tho Vacuum Oil Company had so misled the Court, and so falsified its books, that he would not hear the case at all. He was prejudiced against the concern. When Judge Rolin was appointed to inquire into the matter of kerosene supply, he made certain very strong remarks. It is interesting to know how this company has extended its operations and interests. The report of the Inter-State Commission dealing with kerosene, benzine, oils, &c, contains highly entertaining statistics. The Vacuum Oil Company, by the way, has seven-eighths of its interests in America, while only one share is held in Australia. I invite honorable members’ to study these figures: -
It will be noted that the capital of the company in 1915 had reached £800,000 - which was purely a book entry - and that in 1917 the paid-up capital amounted to £1,600,000. According to the remarks of the Judge that, also, was a book entry. The figures above reveal at a glance the enormous profits made by the “Vacuum Oil Company within a very brief period. While the public was called upon to pay prices which were soaring rapidly higher and higher, this company was piling up enormous returns. It had made its own arrangements, of course, and there was no competition. Since August, 1914, the price of kerosene has risen from 6s. lid. to 14s. 6d. per case - an increase of more than 100 per cent. The price of benzine since that same year has risen from 13s. 4d. to 23s. 8d. per case - an increase representing more than 77 per cent. “We are consumers of oil in this country to the extent of about £4,000,000 per annum. “Wc can realize what our position will shortly become if we are compelled to continue to pay the increased rates demanded by the monopoly. The. Government are endeavouring to bring into the Australian market another competitor. The Vacuum Oil Company has taken good care to pass every risk on to the consumer . During 1915 and 1916, on a capital and reserves averaging £1,500,000, the company made a net profit of £981,000. Honorable members will be impressed with these particulars -
It will be noted- that in two years the profit per case on both kerosene and benzine increased by about 150 per cent. The Inter-State Commission, in summing up, stated that the transactions of the Vacuum Oil Company constituted profiteering. While we have been paying enormously high prices for our oil commodities, the same, precisely, have been sold in the United States of America at considerably less. Without the shadow of doubt, we are in the hands of a complete monopoly, and we are justified in trying to secure resources of our own. In entering into th s contract with the AngloPersian Oil Company, we are to have a controlling number of shares. Activities will not be carried on in some far part of the world, but within our own borders. We shall have our own representatives upon the directorship, and we shall know everything that is taking place. The honorable member for Capricornia (Mr. Higgs) proposes an amendment; to insure that the Government shall insist that so many thousand pounds per annum shall be expended in developing our own resources, with the object of securing raw crude oil from some part or another of Australia. I have had the pleasure of visiting STew Guinea for about six weeks, and from what I saw and learned, I should say that there are good prospects of commercial oil being discovered there.1 It does not matter how much money the Government may spend in trying to discover and develop oil prospects nowadays there appears to be some influence at work to militate against success. Whether it is purely fortuitous, or whether it may bedue to the influence of the Vacuum Oil’. Company, or- some other company, withthe object of stifling competition, I do not know; but there is certainly some malign influence at work to prevent this country from investigating and develop-‘ ing its’ own resources. I hail with pleasure, therefore, the establishment of a company, backed by the British and Com-1 monwealth Governments, and having its expert knowledge and appliances availablein our interests. I would like to see the Government control the whole concern, thus making of it a national monopoly. But when we have reached the stage of producing our own oil requirements - as I hope we shall do ere long - we shall be in the position of partners in the refining process ; and it will then be open for Parliament to take over the whole activity, if so desired, and to run it entirely in the interests of the people.
I trust that a Select Committee will be appointed to make exhaustive investigation. If refineries are to be erected, the most suitable sites should be chosen - centres where there is abundance of coal and adequate shipping facilities, and which will not be unreasonably far from the sources of oil supply. The refineries should be erected in various localities rather than that the whole work should be concentrated in one spot. They should not necessarily be established either in Melbourne or in Sydney, if the inquiries of the Select Committee can show that there are more suitable sites in other parts of the Commonwealth.
What is the outcome of thebonus which the Commonwealth pays for the production of crude oil? When the Act came into force, we were hopeful that it would have the effect of relieving the pressure in the matter of Australia’s oil requirements. To-day, oil is being produced from shale; but what good is that to the Commonwealth ?
– What will be the position of the shale oil industry under this agreement?
– That is onequestion which might well be considered by a Select Committee. We are not refining into kerosene the crude oil upon which we pay a bonus to-day; we are not securing any of its by-products. Messrs. John Fell and Company are supplying their crude product to the North Sydney and Sydney Gasworks, and to the Auckland and Christchurch Gasworks. The Commonwealth is paying a bonus to John Fell and Company, but the firm is selling its product to gas companies which could well afford to buy coal for the production of their gas. Meanwhile, despite the bonus, we are neglecting to develop our oil resources.
– The matter of the oil bonus was very similar to the present position respecting this agreement: we do not know too much about it.
– We know that our bonus is not bavins the effect of developing the Australian oil industry. Before we enter into an agreement to bind the Commonwealth over for fifteen years, and involve ourselves in the outlay of a large sum of money, there should be the fullest possible inquiry. I welcome the agreement itself, and I welcome the prospect of the erection of refineries. I trust, however, that the Government will not object to the appointment of a Select Committee, so that the agreement may be made most acceptable to the people of Australia.
.- The agreement has been very carefully considered by the Government, and, although I am not prepared to accept it precisely as it stands, I do not think there is any necessity for the appointment of a Select Committee. Nobody who has carefully read the agreement can say that it contains anything to suggest that the Anglo-Persian Oil Company is endeavouring to trick the Commonwealth Government. I consider that the agreement requires a little tightening up at some points. Rather more definition and clarity are desirable in certain respects; for example, in the matter of insuring thai the company shall draw its supplies, if and when available, from Papua, instead of seeking to carry on refining activities with crude oil imported from other parts of the world. In regard to capital, the agreement itself provides that an increase may be made at any time, and that the Commonwealth authority, no matter what changes may take place, shall still retain the ‘balance of interest in the whole concern. I do not think a Select Committee is required to ascertain exactly what capital the business should begin with. In discussing the measure in Committee, the Prime Minister, no doubt, will be able to present such information upon that head as should satisfy honorable members; and necessary amendments can, of course, be made. It must be remembered, however, that whatever amendments may be decided upon must be submitted to the Anglo-Persian Company, seeing that it is a partner with the Commonwealth. I do not think there is any reason to suggest mala fides on the part of the company. I am satisfied that it will try to meetus upon all points.
I am very glad that this is an all-British agreement. It is time that the Empire became, in respect of one or two essentials, a little more self-supporting. In Australia, for instance, our iron resources need to be developed. The Government should do what they can to encourage the founding of an iron industry in Australia. The war has taught us that oil is a basic requirement, and we should do the best we can to obtain a proper oil supply within the Commonwealth. I hope that, before long, Australia will be supplying this company with oil, and that we shall have it refined here. Some people seem to think that the Government have practically handed over to this company the oil business of the Commonwealth. It is suggested that, under this agreement, we shall be practically in the grip of the company, which will be placed in the position of a monopoly. I cannot prophesy what may be the consequences of the agreement, but there is certainly nothing in it to suggest that it will lead to the establishment of a monopoly. It is open to any other company to come along to the Commonwealth with an oil proposition.
– Not under this Bill.
– The best expert in Australia is opposed to the view of the honorable member for Wilmot (Mr. Atkinson).
– I care not what experts may say. I have read the agreement, and am placing my own interpretation, upon it. There is nothing in it to prevent the Government .from helping any other company in Australia that has an oil proposition to submit. If I thought that by ratifying this agreement we should found a monopoly - if I thought we should be putting ourselves in fetters, and handing ourselves over body and soul to a monopoly - I would’ oppose the scheme.
– We shall kill the oil industry of Australia.
– At the present time we have no Australian industry in oil.
– We hope to have.
– The Bill will stimulate the development of oil production here. I fail to see why we should prevent any one from doing the very bestto produce oil and refine it in the Commonwealth. So far as I can see, there is nothing in the agreement that would have that effect. There is in the Bill a clause designed to protect the company from dumping. To that I take no exception. Under it, if the Standard Oil Company, or any other concern, enters into unfair competition with this company, the Government will come to the assistance of the local industry by means of the Customs or other Government agencies that it may need to employ. There is nothing wrong about that. Surely this Parliament will see that the Government protect the people in the matter of the price at which the oil shall be sold.
– Why stop at oil in that respect?
– This Bill deals only with oil, and when I address the House I try to confine my remarks to the matter before the Chair. I see no danger in the provisions of the Bill relating to dumping. If this company helps to found the oil industry of Australia, and enables us to supply our own requirements, it will do good service. We must have some source of supply upon which we ‘may rely, especially in time of war. Apart from the requirements of the Navy, the industrial world is daily increasing its demands for fuel and lubricating oils. Without this company we cannot at present supply our own wants. Even now we are in the hands of monopolies. The companies which supply us from abroad can make any arrangement they please between themselves. The honorable member for South Sydney (Mr. Riley) has quoted figures showing that in the United States of America petrol, benzine, and other oils have been very much cheaper than in Australia. The prices here are steadily rising, and there seems to be no limit to the price that kerosene may reach.
This agreement is of special interest to me, and I have scanned it carefully to see that it leaves the way open to other companies in Australia to secure governmental assistance if they can show that they are able to supply oils at cheaper rates. I am not at all satisfied with the way in which the Navy Department has been treating a Tasmanian oil company. There is in my own electorate a deposit of shale which, according to excellent authority, will produce 40 gallons of oil to the ton. The oil has been proved to be very strong and pure, and suitable for naval purposes. In Papua, we have found a very valuable oil, but it is not suitable for naval purposes. We have been importing oil for the Navy, and have been paying for it from £6 to £7 per ton. The latest figures supplied to me by the Navy Department show that it is now landing oil in Melbourne, in its own oil-tank steamer, at £5 0s. 5d. per ton. I dare say that, if these figures were carefully analyzed, it would be found that the cost is considerably more. Doubtless, no allowance is made for interest on the money invested in the oiltank steamer and for other incidental expenses, which should be included in a proper business calculation. The company which owns the Tasmanian shale deposits, to which I have referred, has offered the Government a contract for the supply of oil at £4 10s. per ton. The Commonwealth Government did, , on one occasion, agree with the State Government of Tasmania to accept 8,000 tons of this oil at £3 15s. per ton, but it has not been able to secure a renewal of that agreement even at £4 10s. per ton. Certain objections have been raised by the Navy Department. The company is prepared to try to meet them, and the Minister for the Navy (Sir Joseph Cook) told the Naval Board, in my presence, to prepare a contract and send it to the company in Tasmania, with the object of endeavouring to come to terms. The Naval Board, however, has done nothing. It continues to play with the company and its offer. The deposit of shale is a very large one, and we should do our best to encourage those who wish to develop it. The company are not asking for money. They say that if the Government would enter into a contract with them for the supply of oil, they would be able at once to raise sufficient capital to develop the industry.
– When Mr. Jensen was Minister for Trade and Customs, did he not make the Tasmanian company an offer?
– While he was Minister, the Tasmanian Government, which would have taken over the concern but for the action of the Upper House in rejecting the proposal, bad a contract with the Commonwealth to supply 8,000 tons of oil at a certain price. The company, as I have said, is now asking the Government to enter into another contract. It musthave some protection. Is it reasonable that it should be expected to go on the market and ask for more capital when, as soon as it started work, it would be open to the Standard Oil Company, or other foreign corporations, to enter into competition with it? The Standard Oil Company could afford to give oil away here for a year or two in order to defeat the local industry. By slightly increasing its prices in other countries it would not be out of pocket. Even if it were, it would not mind as long as it succeeded in strangling our industry. If we do mot come to the assistance of a local industry such as this, we shall fail in our duty.
– This Bill will not help the Tasmanian venture.
– No; but I see no danger in this Bill as long as the Government will do what they ought to do with regard to the Tasmanian company.
– The Commonwealth Government is its only customer.
– It merely asks the Government to enter into a contract with it for the supply of oil.
– That is practically what every one wants. No one asks for more.
– Not at all. Many companies approach the Government with requests for monetary -assistance for their ventures. We have reached a stage in our history when, in order to develop Australian industries, and so to improve our financial position, we must be prepared to take business risks. While it is our duty to see that the public funds are not foolishly expended, we must at the same time display business enterprise, since we need fresh sources of revenue to balance our accounts. Unless we develop the latent resources of Australia, we shall not balance the ledger. We have great possibilities of development - we have tremendous resources as yet untouched - and the war has piled up on us a war debt which, for a population of 5,000,000 to confront, is almost appalling. But, if twenty-five years hence we could show that we had developed Australia’s national assets to the extent of £1,000,000,000, our balance-sheet would look very well. The history of industrial expansion in the United . States of America shows that such development is by no means impossible. Acountry is different from an individual. When an individual dies, his’ assets are distributed in accordance with the terms of his will. A country, however, goes on for ail time developing its assets, and so adding to the general wealth of the community. The development of our latent resources is our great hope. Our industries must be expanded if the country is to carry a larger population and meet its heavy financial obligations.
I shall support the Bill, provided that satisfactory amendments are made in Committee. I believe that the Govern- ment willbe prepared to accept any reasonable amendment of the agreement, and I do not think there will be any difficulty in inducing the other parties to the agreement to accept such amendments made by us. I regret that the Minister for the Navy is not now present, because I wish to impress upon him the necessity of giving a little more encouragement to the Tasmanian company of which I have spoken. If it were asking for monetary assistance, I should appreciate some shyness on the part of the Government or the Naval Board. As it is, it merely asks the Commonwealth to enter into a contract with it for the supply of oil. It is said that if such a contract were entered into it would be able, within an hour, to raise in Melbourne the necessary capital for the development of its shale deposits. Even if this agreementbe adopted the refinery will not be in operation for about two years. I recollect the management of this Tasmanian shale company saying that if the Commonwealth would give a satisfactory contract the company could raise £150,000 immediately, and could be supplying fuel oil to the Navy within twelve months.
– Surely the present prices of oil are sufficient inducement to any company to start work at once.
– That would be true under ordinary conditions. But if anybody asked the honorable member to take shares in an oil venture in Australia he would immediately ask what protection the venture would have against the competition of the Standard Oil Company and other big trusts. And if he were told that there was no such protection he would withhold his capital. That is the position of this Tasmanian company, and indeed of every Australian oil venture at the present time. Unless the Government give assistance in the manner I have suggested they will not be able to found the oil industry in Australia in the face of the terrible competition of big overseas trusts. The Government would take no monetary risk in giving the contract that is asked for; if the company does not supply oil it will receive no money. If the Government found that by any such contract they were tieing their hands in regard to the obtaining of oil supplies for the Navy they could cancel the contract if at the end of six months it appeared that the company could not fulfil its part of the bargain. The Government have not done their duty to this company; they have not made sufficient effort to foster the oil industry in Australia.I hope that the Government will not regard this agreement as representing all that they need to do to foster our oil industry. The agreement is a very good arrangement so far as it goes. But the Government must keep clearly in mind that other people in Australia have oil propositions that are quite worthy of the closest investigation by the Commonwealth.
– We are dealing with an exceedingly important question. A scientist said recently, “ We are now passing through the coal and steel age. The immediate future will be the era of oil and cement.” We know what oil means to Australia, because, as has been pointed out by other honorable members, this country has suffered seriously through the operations of a monopoly which, second only to the shipping trust, is the greatest monopoly in existence. I intend to vote to refer this Bill to a Select Committee, because the one thing needed in dealing with this agreement is expert evidence.
– The honorable member will get his expert evidence from the Standard Oil Company and the Vacuum Oil Company.
– The expert evidence I require is not as to the oil, but as to the constitution of the Anglo-Persian Oil Company, and the extent to which Australia is being pledged under this agreement. An interjection made by the Prime Minister when the Leader of the Opposition (Mr. Tudor) was speaking, shows the serious necessity for further consideration of this agreement. The Prime Minister said that because under this agreement the Commonwealth will hold a majority of the shares it will therefore have the controlling influence. The agreement itself deprives the Commonwealth of that control for the whole period of its operation, because one paragraph reads -
That of the total number of directors of the Refinery Company ( including the managing director; if he has a vote), three-sevenths in number shall be nominated by and represent the Commonwealth, and four-sevenths shall be nominated by and represent the company.
Therefore, the Prime Minister’s interjection placed the position in a misleading light. As four-sevenths of the directors will be nominated by the company, the company will have the predominating influence.
– The Commonwealth will always retain the right of veto.
– That has nothing at all to do with the point I am now making. This matter must be considered in the light of the agreement itself. If we agree to give the company predominating control it will be impossible to alter or escape from that agreement. It is absurd for the Minister to interject that we can veto the conditions of our agreement.
What is the position in regard to Papua? We have known for some years that oil deposits exist in Papua, especially in German New Guinea. About eighteen months ago I introduced to the Minister a gentleman who had just returned from New Guinea, and who offered to select an area of land, float a company, and work the- oil deposits, paying the Government any fair and reasonable royalty that they might care’ to impose. That offer was rejected on the ground that the Government intended to retain for themselves the whole of the oil-bearing lands of New Guinea. Then an agreement was entered into between the British and Australian Governments that each should contribute £50,000 towards the cost of prospecting for oil there. The prospecting operations were placed in the hands of the Anglo-Persian Oil Company, but so far the reports to date show that company has not discovered any payable deposits.
– The company has only just commenced operations.
– They have been on the job for six months.
– They have mot been on it for two weeks.
– How much money has the Commonwealth spent under that agreement with the Imperial Government?
– Not any.
– The company which has been appointed to prospect for oil in New Guinea is the company with which the Commonwealth is now proposing to enter into a second agreement. I placed the agreement which is contained in this Bill before a Melbourne man, who has, perhaps, as wide a knowledge of company flotation as has any m,an in Victoria, and he told me that he is by no means certain that under this arrangement the company will not dominate the whole of the oil production of the Commonwealth; certainly it will dominate the whole of the oil production in New Guinea.
– We could let any other company start there to-morrow.
– But it could not bring oil to Australia to be refined.
– That is the point. If any other company found oil in Papua, it would be precluded by this agreement from bringing the oil to Australia to be refined.
– Of course it could send the oil to Australia.
– The dumping clause of the agreement would prevent that.
– Dumping against ourselves ?
– If there is one article in respect of which we could stand a little dumping at the present time, it is oil. When discussing the Tariff on one occasion, I said that I had never been able to discover that any dumping had taken place in this country; certainly, no evidence of it has ever been adduced. However, having regard to the honest difference of opinion in this House, and between experts to whom I have referred the matter - men who have spent all their lives in the promoting and formation of companies - and bearing in mind the greatness of the issue at stake, we should not pass a Bill of this character until we thoroughly understand it.
– The statements the honorable member has made are rub-, bish, no matter who is his authority.
– There is such a difference of opinion regarding the agreement, that I believe it would have a quicker passage through Parliament if we had a brief reference to a Select Committee, which in a few days could take expert evidence, than it will have without such a reference, and if the House is called upon to consider the amendments which I hope will be moved to safeguard our interests in several respects.
Mr.Corser. -What sort of expert evidence does the honorable member desire to get?
– I desire to have the agreement interpreted by business men. This House has passed several agreements, and our experience in connexion with them has been decidedly unfortunate. Practically all the commercial agreements which were drawn by the Crown Law officers have let the Commonwealth down badly when they have been put to the test. The shipping agreement is a case in point. I am not prepared to take the responsibility of passing a measure which may involve tens of millions of pounds until I know more about it. I am not hostile to the Bill; I welcome it.
– Why discuss tens of millions of pounds? The Bill involves only half-a-niillion pounds.
– The Commonwealth is only to find £500,000 in connexion with this agreement, but how many millions of pounds may be represented by oil discoveries, which will be affected by the agreement?
– Nothing can be done without the authority of Parliament.
– Why did not the honorable member move yesterday to refer to a Select Committee the question of increasing honorable members’ salaries?
– When the Bill to increase the salaries of members comes before this House, I shall have something to say on that matter.
– A reduction of the pre-, sent £600?
– I was one of those who opposed the increase from £400 to £600.
– The honorable member will not “ scab “ on his mates ?
– Order! The honorable member for Franklin is (not in order in discussing that matter on this question.
– The interjection made by the Minister for Home and Territories (Mr. Poynton) is quite up to the standard of his intelligence. I shall support the proposal to refer the
Bill to a Select Committee. If a press report is correct an interjection made by the Prime Minister (Mr. Hughes) in reply to the Leader of the Opposition (Mr. Tudor) shows distinctly that the right honorable gentleman does not understand the power given to this company. He said that because the Commonwealth had a predominance in voting power it controlled the directors of the company.
– No. The Prime Minister said that the Commonwealth had a controlling number of shareholders.
– What does that mean?
– It. means a good deal when a question of policy arises.
– It means nothing when by this agreement we allow the Anglo-Persian Oil Company four directors to our three. The only power the shareholders will have is in electing their own proportion of directors. The Anglo-Persian Oil Company elects its four and we elect our three.
– That is only for the commercial running of the company.
– If the commercial aspect is taken out of it there is nothing left in the agreement.
– Who could handle the distribution and sales as well as the company could?
– That is an entirely different aspect of the question. Let us face the matter clearly. It is proposed to hand over to the AngloPersian Oil Company the control of the directorate. That is to say, we hand over the whole control of the refinery company - the commercial aspect, the only thing that matters one iota to Australia.
– What does the honorable member mean by the commercial aspect ?
– What the company will get out of it, and what the Commonwealth will get out of it.
– Does the honorable member contend that the Commonwealth are handing over that aspect to the company?
– Yes. We are handing over to the Anglo-Persian Oil Company the sole control of all commercial arrangements, and allowing them 10 per cent. for doing so. I claim that the Government do not understand the agreement.
– Does the honorable member contend that the directorate will control the price of oil in Australia ?
– No; but it will control the sale of all oils outside Australia, and if it suits the Anglo-Persian Oil Company it will not seek to discover oil in Papua.
– That is too farfetched.
– If my information is correct, namely, that the control of this refinery company is to be exercised by Lord Inchcape, who has been appointed as representative of the British Government, I would point out that he is already the chairman of the big shipping Combine which is crushing the life out of Australia.
– He will have no interest in this except as a director.
– Of course, he is only one director of a majority.
– He is one of the British representatives.
– I do not care whom he represents, but it makes me cautious when I see that Lord Inchcape, thechairman of the biggest shipping Combine the world has ever seen, which is charging monstrous freights all over the world, is one of the four men who will command this industry.
– But he will be bound by the terms of the agreement
– The oil will not be brought here in his vessels. They belong to the Anglo-Persian Oil Company.
– My information is that practically the whole of the ships running to Australia to-day, except those owned by the Commonwealth, are more or less under the control of the Inchcape Shipping Combine.
It is the duty of every honorable member to place his views before the House on a question such as this. The honorable member for Wilmot (Mr. Atkinson) has already pointed out that, for nearly three years, the Latrobe Shale Company have been seeking a contract to supply the Naval Board with oil at £4 10s. per ton.
– They have not done anything of the kind.
– Yes, they have.
– I maintain thatthe honorable member for Wilmot is correct, and that the price asked was £4 10s. per ton. I have spoken to a gentleman who came over to Melbourne as one of a deputation which the honorable member . for Wilmot introduced to the Naval Board when the Minister for the Navy was absent in London.
– But they have seen me since then, and I have not heard of any such price being asked.
– They submitted an offer at £4 10s. per ton.
– They did not.
– I was there when they made the offer. They are still prepared to submit it.
– These interjections bear out what I am saying, that the House has not the information it ought to have. Here was a company prepared to enter into a contract with the Naval Board to supply oil at £4 10s. per ton, at a time when the Navy were paying a very much higher price. They asked for no additional financial assistance. If a contract was available they were prepared to start a company, get to work, and provide Australia with oil.
– The deputation which interviewed me stipulated for a price of £6 15s. per ton plus some other things.
– They did not.
– I am certain the honorable member for Wilmot is right, and that the offer these gentlemen made was infinitely better than the Minister indicates.If the Naval Board had given the contract, Australia would have been supplied with its own oil long before now. There seems to have been some influence preventing it.
– What does the honorable member mean by that statement?
– I do not know what reason prevented the offer being accepted. No reason has been given for refusing this contract. If it had been entered into Australia would have been supplied with oil from its own works.
I would not allow a Select Committee more than three weeks inwhich to bring in a report. TheSelect Committee which has been inquiring into the sea carriage of goods, a much wider subject, has been able to submit a report within four weeks of its appointment. The progress of the measure will be expedited, and be made easier by referring it to a Select Committee. With the guidance of the report of such a Committee, honorable members would be in an infinitely better position to give consideration to the agreement, which I candidly admit I do not understand. When I went across to Tasmania I read it on the boat, and I read it over and over again while I was away. I also referred it to men to whose opinion I defer, but I cannot tell now what will be the position of the company in regard to discoveries of oil made by other persons in Australia. That is a point which ought to be cleared up. For the reasons I have advanced I shall vote to refer the Bill to a Select Committee, and I would limit the time the Committee would have for bringing up its report to three weeks. If we adopt this method of dealing with the Bill we shall make better progress than if honorable members are compelled to go outside to seek for information, and if we are obliged to examine the agreement clause by clause, as we shall be compelled to do, if the Government do not agree to the appointment of a Select Committee.
– The greater portion of my constituents are large consumers of kerosene and petrol. The Prime Minister (Mr. Hughes) was right in saying that we have reached a new era by reason of the extended use of oil and petrol. I want to be sure that the people of Australia get, not cheap oil, but oil at a fair price, while the people who control the commodity also get a fair profit. Many years ago we were anxious to establish the oil industry in Australia. I can speak feelingly .on the point, because the prospects of doing so looked so fair at one time that I thought I would die a millionaire. The honorable member for Capricornia (Mr. Higgs) persuaded me, in a frail moment of mine, to purchase shares in a company formed for the purpose of boring for oil at Roma, in Queensland, and everything in the garden was lovely. At one time, when the Tariff was under consideration, a director of the Standard Oil Company, who was watching our proceedings on behalf of his corporation, raised my hopes very much indeed by telling me that if I had only one-tenth of one share in the company at Roma, and its bore proved a success, which he doubted very much, I would die a very rich man indeed. However, our hopes were not consummated. After spending a lot of money the company had to go into liquidation, and foi my shares in it I was paid 12s.
– You were lucky to get that !
– I was, but I cannot say I regret, spending the money, though I do not think we, as a company, got a square deal. By some unforeseen circumstances, at a time when the hopes of everybody concerned were raised very high, the gas took fire, and the heat was so great as to melt some of the casings. After several weeks of blazing, the fire was put out with a ‘bonnet, and we resumed boring, only to meet with a serious accident when we had gone down a little further. The whole of the tools were left in the ground, and, after spending the balance of our money in trying to get them out, the company went “ bung.” The Queensland Government - that is, the Denham Government - came to our assistance, and, satisfied that oil was there, they took the enterprise over and made it a State monopoly. The Government proceeded with the sinking, and are sinking yet, but have had the same ill-sue: cess that we experienced. Drillers had to be brought from America ; and it is most peculiar that trouble started when they got down to where the gas was to be tapped, at 3,500 feet. I may say that 3,500 feet is not the deepest bore in Queensland, for there are water-bores much deeper, sunk by private enterprise.
I am satisfied that there are many districts in Queensland, where there is seepage, and where oil will be found in the near future. My anxiety is for the people of Queensland and for the people of Australia. We are told that this agreement will not interfere with the oil or shale deposits of Australia. I am not an expert, and I do not pro ess to be one, but I have common sense, and when I see a sheep I know that it grows wool on iia back. There are some deposits of kerosene oil in the Moreton electorate, quite near to Brisbane; there must be oil there, for it is coming out of the ground, and practically asking us to dig for it. I have in my hand a telegram from a shale oil company which is doing business in Queensland, the company, I believe, receiving the bonus for the production of oil. This telegram was sent to the honorable member for Macquarie (Mr. Nicholls), but as that gentleman is unavoidably absent, I intend to make use of it for the benefit of honorable members, who may take it for what it is worth. The telegram sounds a note of suspicion, and that is why I am anxious for a . Select Committee. We have been told that the only expert evidence obtainable is from the Standard Oil Company or the Vacuum Oil Company, but if that be so, the evidence will be very tainted indeed.
– Why should we not have that evidence?
– One reason for my suspicion is that these companies are the biggest monopoly in the world, and if it was thought we were going to create a competitor, we would not get the information we desire - it would be “ giving the show away.”
– According to the speech of the Prime Minister (Mr. Hughes), this Anglo-PersianCompany may “ be in “ with those two companies.
-.- I did not so interpret the speech of the Prime Minister.
– This Anglo-Persian Company was formed to fight the others.
– I do not care whether the Anglo-Persian Company is part and parcel of the great monopoly, because, sooner or later, we shall have to fight all monopolies, and we ought to be very careful if there is danger of our creating another. The appointment of a Select Committee could surely do no harm, if it did no good. The telegram to which I refer is from Messrs. John Pell and Company, of Sydney. If men are engaged in an industry, and have expended all their money and energy in developing it, they naturally become anxious when a great company like this is given a practical monopoly, although we are told by . the Minister for the Navy (Sir Joseph Cook) that it is not a monopoly. It is a fact, however, that they are the only people in Australia who would have a refinery, for no one else is to be allowed to erect one. If crude oil is discovered on any of the Pacific Islands or in Papua outside the ramifications of this company, the oil will have to be sent elsewhere to be refined. However, the telegram is as follows: -
Regarding Anglo-Persian oil agreement, we regard it as imperative for the protection of the shale-oil resources of this country that the Bill under discussion should be held up pending a complete investigation. The measure, if passed, will automatically close the shale-oil industry of the Commonwealth. Shale is our natural source of oil supply, and if closed we will be dependent on oversea sources. To protect these sources, a Navy and fortifications will have to be maintained for all time. Papua is especially vulnerable. Part of this money could be spent to better advantage in. protecting and developing our natural resources with white labour. In the event of war with Japan or the United States of America, these ‘ oversea routes cannot be protected, and the whole source of oversea oil supplies for the Commonwealth would be cut off and complete isolation result. It would be criminal to leave the shale-oil industry unprotected, and to place this country in such a position, besides allowing foreign imports to strangle our natural resources. The Scotch shale industry was of vital importance to Great Britain during the late war. Great Britain and United States of America, recognising the necessity of developing their shale resources, are at present giving the question the gravest consideration. Mr. Fell is proceeding to Melbourne, and will interview you. Our information should be of value.
Regarding shale oil, under reasonable circumstances present output can be enormously increased.
This company is in operation) in a big way in New South Wales, but it is not the first company that has worked these deposits, for enormous sums of money have been lost in efforts to develop this industry. This firm, which is specially interested, asks, for delay in order that there may be further investigation. This is not an industry in its infancy, but one that has been tried. The latter part of the telegram’ tells us. that the present output of shale oil could be enormously increased, and surely that is a matter into which a Select Committee could inquire. If this Parliament will not protect Australian industries, where are the industries to find protection?
The scheme proposed looks very nice on paper - a scheme to bring crude oil from the Persian Gulf to Fremantle. The gentlemen interested have been busy for some considerable time in the matter. In the West Australian of 3rd October, 1919, the first announcement of the AngloPersian Company appeared, as follows : -
The Anglo-Persian Oil Company Limited’s Act 1919 : Power to the Anglo-Persian Oil Company Limited, to erect reservoirs for the storage of oil and supply of same; compulsory use of roads, &c. ; power to lay down pipes, &c, in streets, under railways, and in Government lands, and along wharfs, and exercise other powers.
Notice is hereby given that application is intended to be made to Parliament in the present session for leave to bring in a Bill for effecting all or some of the purposes following, that is to say: -
To empower the Anglo-Persian Oil Company Limited (hereinafter called “the company”) upon all or any lands and premises now or hereafter to be acquired by it, or any part thereof respectively, to construct, erect, and maintain a reservoir or reservoirs for the storage . of oil with all necessary engines, plant, machinery, works, buildings, appliances, apparatus, and conveniences for storing and distributing oil within the area comprised in -
The district of the Fremantle Municipal Council;
The lands vested in the Fremantle Harbor Trust Commissioners; and
Such of the lands vested in the Honorable the Minister forRailways on behalf of His Majesty as are comprised in, abut on, adjoin, or are contiguous to the district- - and lands beforementioried, or any of them, or any part or parts thereof respectively.
To empower the company to open, break up and interfere with streets, roads, public places, ways, footpaths, railways, tramways, rivers, bridges, culverts, sewers, drains, pipes, telegraphic and telephonic tubes, wires, and apparatus, and to lay down’, set up, maintain, renew, or remove either above or underground pipes, tubes, troughs, inspection chambers and boxes, and other works, matters, and things for conveying oil, water, and materials to or from its reservoirs, situated on Fremantle town lots Nos. 1186 to 1192, 1197 to 1199, 1200, 1207, 1208, 1213 to 1216, and 1224 to 1227 (all inclusive),, or on some parts thereof respectively from or to the Victoria Wharf, or other wharfs of the Fremantle Harbor Trust Commissioners, in, under, and along such wharfs, lands, streets, roads, public places, ways, footpaths, railways, tramways, &c., as aforesaid, situate within the area beforementioned as may be defined on the plans and sections to be deposited as hereinafter mentioned, or as may be provided by. the Bill.
To empower the company to acquire compulsorily, or by agreement, easements in respect of the lands adjoining or contiguous to the property to he acquired by the company.
To vary or extinguish all or any rights andprivileges inconsistent with, or which would or might interfere with the objects of the intended Bill, and to confer other rights and privileges.
And notice is hereby further given that on or before the 11th day of October, 1919, duplicate plans and sections showing the lines, situa tions and levels of the intended works, with a book of reference of such plans, -and a copy of this notice, as published in the Government Gazette, will be deposited for public inspection with the Clerk of the Legislative Assembly; and that on or before the 18th day of October, 1019, a copy of so much of the said plans, sections, and book of reference as relates to the area comprised in the district of the Fremantle Municipal Council, in which any of the intended works will be made, together with a copy of this notice as published in the Government Gazette, will be deposited with the Clerk of the said Fremantle Municipal Council.
Copies of the intended Bill will be deposited in the office of the Clerk of the Legislative Assembly, on or before the 11th day of November, 1919.
Dated this 2nd day of October, 1919.
– What do you think is the meaning of all that ?
– I take it that the company is to exercise greater rights in putting up this reservoir than the Western Australian Government itself could exercise. The Commonwealth Government could not do what these people are asking the Western Australian Government to permit them to do, and what the State Government is prepared to grant.
– The company cannot exercise those rights unless the Western Australian Government give them the power. . What is all the argument about?
– The AngloPersian Company “ owns the earth “ so far as Persia is concerned’, and it wants to “ own the earth “. in Western Australia, which is part and parcel of the Commonwealth.
– Does the honorable member know what all this is designed for ? It is to enable the port of Fremantle to be equipped for giving oil supplies to any oil-driven vessels. “ Mr. JAMES PAGE.- Is that all? I am very much obliged for the information; but why should not the matter have been put in plain English, simply saying that what is required is provision so that ships may take oil back after bringing it over here?
– That is twisting.
– Not at all. The clauses setting forth the desired powers seem to annoy honorable members opposite.
– Those are the ordinary clauses.
– Under these clauses the Anglo-Persian Oil Company could acquire compulsorily the property of the Standard Oil Company. I am told that it would not do that. But the agreement empowers the company to do it. I do not wish any monopoly to have a footing in this country, unless it he a Government monopoly, and I am not an advocate for the standard Oil Company, the Vacuum Oil Company, or any other. But when I have approached the Shell Oil Company, that is the British Imperial Company, in the interests of my constituents, they have done what they could. Only a fortnight ago I went to the Government for help, and was told that they were powerless to assist me, having no oil in reserve. I then, in fear and trembling, approached this great British Imperial Oil Company, but I came away in a very different state of mind. They promised to do all that they could to assist the men out in the back parts of Queensland! to get petrol to drive their pumps and engines and do other industrial work. They depleted their reserves in Brisbane and hurried down a boat from Singapore, to do this.
– They kept their supplies for industrial use, and stopped joyriding.
– Yes. I did not make application for assistance to any particular town or place; I asked’ for help for the pastoral, agricultural, and viticultural interests of Queensland, which needed oil for industrial purposes.
– Oil was not made available in my district.
– Perhaps the honorable member did not go the right way to get it. If you want anything, you must hustle and bustle.
– Is the honorable member speaking of something that occurred before the Bill was introduced ?
– Yes. I went to the company on two other occasions when there was a shortage of petrol out west, and each time the company did its best for me. I would remind honorable members that the House of Commons passed a resolution of thanks to the British Imperial Oil Company for what it did during tie war. It supplied 80 per cent, of the products that make up T.N.T., as is stated in a booklet issued by the company, on the cover of which is printed “ The Shell that hit Germany the hardest.” I advise honorable members to read that publication to see what the company has done for the Empire. I know of nothing that it has done detrimental to the interests of Australia.
– You will admit that the price of petrol in Australia is tremendously high.
– The only countries in which it is lower are those in which oil is produced. Petrol costs more in South Africa and in some of the States of South America than it costs in Australia.
– But not more than it costs in Great Britain, where it is not produced .
– Is the honorable member supporting a monopoly?
– That is an amusing interjection to come from a member representing the sugar districts of Queensland, who is the greatest advocate of Australia’s greatest monopoly, the Colonial Sugar Refining Company.
– Would not the honorable member rather support an Australian monopoly than an American one?
– I do not support any monopoly. Let those flag-wagging patriots, of which the honorable member is one, listen to this: -
During the critical year of 1915, “ Shell’s “ Porti shead Distillery produced approximately 80 per cent, of Britain’s total output of toluol, the basic ingredient of the high explosive T.N.T. (tri-nitro-toluol), so extensively used for shells, bombs, and mines.
Addressing the Institute of Petroleum Technologists, at their annual dinner some months after the armistice, Sir Frederick W. Black, K.C.B., referred to the “ Shell “ group as having given us that valuable product toluol, from Borneo petroleum, without which we could not have defeated the enemy.
Under the agreement companies other than the Anglo-Persian Oil Company will be prevented from trading in Australia. The agreement says -
That the Refinery company shall not enter into or be in any way concerned in or a party to or act in concert with any commercial Trust or Combine, but shall always be and remain an independent British business.
The firm of Walkers Limited, in Queensland, can make any machinery that it may be asked for. Nearly all the intricate machinery used in the sugar mills of Northern Queensland was made in its’ works, and against open competition the firm has gained a contract for supplying the South Australian and Commonwealth Governments with locomotives, which are some of the finest to be seen anywhere.
Why should we not require the AngloAustralian Persian Oil Company to use Australian machinery? But the . agreement says: -
That other things being equal, the Refinery Company shall give preference to goods manufactured in the Commonwealth when purchasing machinery, plant, and supplies.
I think that the Refinery Company should, under allcircumstances, give preference to goods manufactured in Australia. Then, again, it is stipulated that the Anglo-Persian Oil Company shall have full commercial and technical control. Where does the Commonwealth come in under that arrangement?
– It is a partner with the company.
– I would not like to enter into such a partnership. The clause respecting freights should be explained. “Current rates” ‘are to be charged. The other night the honorable member for Flinders (Mr. Bruce) gave us a dissertation on. the Bill which was one of the finest I have heard in this chamber. He convinced me that there are certain matters in the agreement which should be rectified. For instance, no. one can say what are the current rates of freight between Australia and this port in the Persian Gulf from which crude oil is to be brought, because there are no vessels trading regularly between the two places, and no back loading.
– “ Current rates “ means the rates at which shipping could be got.
– But there would be no competition.
– American vessels would be ready to compete.
– -It is the transport of crude oil that I am speaking about, and I remind the honorable member that the Anglo-Persian Oil Company have their own boats for this purpose.
– Under the agreement we could employ the vessels of other companies if they offered cheaper freights.
– I have my doubts about that, and I should very much like to have a clear definition of what is meant by “ current rates.” On the question of dumping I may say that personally I should like to see the dumping of oil and petrol in Australia start to-morrow, because it would benefit our people if they were able to secure cheaper petrol and kerosene, since the prices- which have to be paid at present in Australia for both these commodities are exorbitant.
– Dumping would wipe out any local industry, and we should then have to pay the piper.
– What would be the difference between dumping by other companies and by the Anglo-Persian Company? The honorable member for Wide Bay (Mr. Corser) is a red-hot patriot. He is willing that the AngloPersian Company should be given a monopoly in the supply of petrol and kerosene required in Australia. He does not mind dumping by that company at the expense of those engaged in the production of oil in the Commonwealth. He has nothing to say about, possibly, thousands of men engaged in the industry in New South Wales being put out of employment. The telegram I have read shows clearly what might happen in the matter of dumping by the Anglo-Persian Oil Company, but all the honorable member is concerned about is to prevent the introduction into Australia from overseas of cheap oil and petrol supplied by other companies.
I ask honorable members to say whether they consider that under paragraph c of clause 14 of the agreement a fair proposal is submitted? It provides. -that -
In order to insure the full success and development of the oil refining industry in Australia, the Commonwealth will, so long as the prices charged by the Refinery Company for products of refining are considered by the Commonwealth fair and reasonable -
Cause to be introduced into the Parliament of the Commonwealth, and supported as a Government measure, a Bill providing for the imposition of Customs duties on crude mineral oil whenever, in. its opinion, such action is necessary or advisable to prevent unfair competition with the products of crude oil refined in Australia by the Refinery Company.
– This Parliament will have a say in that matter.
– They will have little say in Tasmania, and the honorable member in supporting this proposal will be cutting his own State’s throat.
– He will be doing nothing of the kind.
– The dumping the honorable member would like to see would cut the Tasmanian industry out.
– The honorable member for Wide Bay (Mr. Corser) has dumping on the brain. The people about whom the honorable member for Wilmot (Mr. Atkinson) is concerned have been nibbling at this bait for years. Dumping would not do them much harm, and has r.ot done them any harm so far.
– Yes, it has.
– The honorable member is afraid that if the agreement is not ratified the Standard Oil Company and the Vacuum Oil Company are going to kill the one little ewe lamb of the oil industry in Tasmania. The competition of the Tasmanian company would be to the companies to which I have referred like a fly kicking a horse.
– The management of the Tasmanian concern evidently think differently from, the honorable member.
– The honorable member’s hopes for the Tasmanian industry are very high.
– They complain of the influence already exerted against them.
– Of course, because they must give some reason for not going on with their proposal. The Standard Oil Company would think nothing of the Tasmanian concern. I suppose we could buy up the whole lot for about ten “quid.”.
– If the honorable member will read clause 14 of the agreement again he will see that the legislation referred to is to be passed only if in the opinion of the Commonwealth Parliament it is necessary. If there is dumping we should have the power to deal with it.
– I remind the honorable member that the clause referred to provides that the Bill is to be introduced as a Government measureno matter what Government may be in power at the time any demand is made to give effect to clause 14 of the agreement. My honorable friends opposite are not going to stop where they are for ever and ever. They will have to get out, and that perhaps much sooner than they expect. Directly we on this side replace them we shall be confronted with the AngloPersian Oil Company demanding that we shall give them a monopoly of the supply of oil in Australia.
– Only if the Government at the time think that would be a proper thing to do:
– I do not think that it would be fair. The clause provides that in the circumstances stated the Commonwealth shall - cause to be introduced into the Parliament of the Commonwealth, and supported as a Government measure, a Bill providing for the imposition of Customs duties on crude mineral oil whenever, in its opinion, such action is necessary -
– Order! A discussion of the clauses of the agreement in detail is not in order.
– I required to refer to the clause to complete my argument. All that I am concerned about is that people engaged in promoting the production of oil in Australia, no matter in what State, shall ibe protected, and that the consumers shall obtain the oil and petrol they require at a fair price, giving a fair profit to the vendors. It is said that competition is the life of trade.
– It would be impossible to establish any new industry in Australia on that principle.
– By way of answer to the honorable member, I would ask him: How did the great business of Walkers Limited get a start in Maryborough, Queensland?
– It had Protection through the Customs.
– Until Federation was accomplished–
– Walkers Limited had Protection before that.
– The business of Walkers Limited was, before Federation, a comparatively poor and dwindling one.
– No; all the machinery for the Gympie mines was supplied by Walkers Limited.
– I am aware that the bulk of the mining and sugar machinery used in Queensland was made in the Maryborough factory of Walkers Limited, and I know also that their locally-manufactured article is, in Northern Queensland, to-day standing the test of use very much better than similar machinery imported from abroad.
I ask honorable members to amend the Bill in such a way as to provide that it shall be imperative that all machinery required for the proposed refinery shall be made in Australia. In a letter which I received from the manager of Walkers
Limited, he says that Australian workmen oan do anything that any other workmen in the world can do, and they can do it as well,- if not better.
– And as cheaply?
– Yes, and as cheaply.
– Even if it were a little dearer we should not mind.
– That is so. Even if we required to pay a little more, it would be better for us to employ our own people.
– We shall have Australian monopolies yet.
– I would give a monopoly to any Australian company as against the outside world, particularly a company developing the iron industry. I have for many years had a great admira- tion for Walkers Limited, of Maryborough, and I would advise honorable members who may pay a visit to Queens-, land to look through the workshops of that company.
– If the honorable member were to visit Tasmania, he would also have a great admiration for that country.
– It might be better for the honorable member to prevent me from going to Tasmania. It would be possible to lose the whole State of Tasmania in Bowen Downs station, in central Queensland, which is only one station in the electorate I represent. I agree that the shale deposits of Tasmania should be protected, even though they are small.
– They are not small.
– I do not think that .the Government have anything to fear from the appointment of the proposed Select Committee. Its inquiry would satisfy the mind of many people that the proposal is fair and above-board. There are some ugly rumours afloat regarding this company.
– There are some ugly rumours about the Standard Oil Company.
– Some ugly statements are made about the gentleman who represents the Imperial Government on the Anglo-Persian Oil Company. We know” that he is fighting our Commonwealth ships to-day. I do not blame the Imperial Government for putting Lord
Inchcape on the directorate of the AngloPersian Oil Company, because I regard him as one of the keenest and smartest business men in the world. If the Imperial Government desired that their- interests should be protected, they would be fools not to put him on the directorate of the company if they could secure his services. When the honorable member for Bass (Mr. Jackson) reminds me that there are ugly rumours about the Standard Oil Company, I reply that there are some very ugly rumours about the Shipping Combine, in which Lord Inchcape is interested, and that its action is possibly more detrimental to Tasmania than to any other State of the Commonwealth.
My one desire is that oil should be discovered in Australia, which would make us independent of any foreign country or company. I am anxious that the consumer should be able to obtain a cheap and reliable article, and the vendor get a fair profit from its. sale. I hope that the Government, even at the eleventh hour, will consent to the appointment of the Select Committee. It would give satisfaction, to many honorable members who are not unfavorable to the agreement, and it would certainly give satisfaction to the people outside.
– I wish to make a personal explanation. There were some contradictions uttered across the chamber a little while ago, when the honorable member for Franklin was speaking.
– I rise to a point of order. Is it possible for an honorable member to make a personal explanation when ho has not made a speech on the question before the Chair? As interjections are disorderly, is it possible for an honorable member to make a personal explanation in reply to an interjection?
– I did not understand that the Minister for the Navy desired to make a personal explanation in reply to an interjection, but with regard to a certain statement made in a speech by the honorable member for Franklin, in which the honorable member who desires to make a personal explanation was misrepresented. In that case he is certainly in order. He would, in any case, have the right to speak on the motion.
– I shall not occupy more than two minutes. I am not in the habit of bandying irresponsible statements about the chamber in the way that the honorable member for Franklin (Mr. Mcwilliams) accused me of doing just now. For that reason, I wish to tell the House the facts about the proposal from Tasmania with regard to the supply of shale oil. The price is as stated by the honorable member for Franklin, but he told the House only half the facts. The offer of the company is to supply oil for 90s. per ton, plus the bounty of 45s. per ton, which brings the price up to the figure stated by me, namely, 135s. per ton. The payment of the oil bounty will run out at about the same time as the proposed contract was to begin. The proposal of the Tasmanian company, therefore, means that we should enter into a fresh undertaking to offer a bounty of 45s. per ton for ten years for the production of oil to supplement the price of 90s. per ton at which they are prepared to supply oil. It was specifically provided that, failing the renewal of the bounty, the price was to be 135s. for ten years.
– Let the Minister state all the facts. Is that not an extension of the existing bounty that is asked for?
– I am saying that it is.
– Then the Tasmanian people are not asking for anything that the Commonwealth is not giving now.
– I have said so. I have said that the oil bounty will cease to be payable at about the time when operations under the contract provided for in the Bill are supposed to begin, and the Tasmanian proposal is, therefore, that the oil bounty shall be renewed for ten years. This would bring the total price of the Tasmanian oil up to the figure I stated - 135s. per ton.
– We are paying 195s. now.
– We are paying now on oils we secure for ourselves £5 0s. 5d. per ton.
– The Prime Minister (Mr. Hughes) spoke of a price of 190s. per ton.
– I hope the honorable member will listen to what I have to say. Both statements are correct. For oil we are compelled to obtain outside our contracts, we are paying £9 10s. per ton.: I hope that is clear enough. I shall have something to say about these things -a little later on. I am concerned now only as to. the correctness of statements made regarding the offer from Tasmania. It can do the Tasmanian people no good to have the facts incorrectly stated. I wish to guard myself against any statement I make in connexion with these matters being construed as unfriendly to the Tasmanian project. I have shown my friendliness to Tasmania during a period of nineteen years in this House. I think that the Tasmanian project is worth looking into on its merits, but it cannot assist its consideration, to state only half the facts. I repeat that the fact is that the price proposed by the company is 135s. per ton for oil supplied into tanks, which the Commonwealth Government are asked to erect on the coast of Tasmania, for the’ purpose of receiving the oil.
Sitting suspended from 1.5 to 2.15 p.m.
– I desire to make a personal explanation. I interjected in answer to the Minister for the Navy (Sir Joseph Cook)-
– Order! I cannot allow the honorable member to make a personal explanation with respect to an interjection which, in itself, was disorderly, and in view of the fact that the explanation in reference to the original matter itself was not in order, either-
– I just wish to explain my remark to the Minister.
-Order! The honorable member should be familiar with the fact that he cannot make a personal explanation except in relation to some matter in whichhe has been, or has deemed himself to . have been, misrepresented in the course ‘ of debate in this Chamber, or to clarify some statement not previously made clear in the course of his speech.
– I desire also to make a personal explanation. According to this morning’s press, referring to a question which I asked yesterday, it would appear that expressions were employed in this Chamber to the effect that I was guilty of dirty electioneering tactics. I desire to say that I was not out electioneering, but that if that had been my purpose I could have availed myself of the opportunity yesterday afternoon.’
– Order! I am afraid the honorable member also is not in order.
– It is a matter of urgency, and-
– Order ! The honorable member is not in order in interrupting the Speaker. I point out that he is seeking to make a personal explanation in circumstances which the Standing Orders do. not permit.
– Yes, sir; but these interjections
– The honorable member has frequently heard me complain that interjections are disorderly, and that they should neither be made nor taken notice of. 1 repeat, for his benefit, that a personal explanation can only relate to a matter in which an honorable member has been misrepresented in the course of debate in this House. I suggest to the honorable member that he will be in order, at the adjournment stage, in referring to the subject which he has in mind. He will then be able to deal with the matter in a regular way.
.- This is one of the most important measures calling for the attention of Parliament to-day. It affects not only the present industries. of the Commonwealth, but those which, we hope, will be established after the Tariff has been considered. It vitally affects also the welfare of our Navy. It is important for the manufacturing interests of Australia - in being, aud to be - that we should be in a position to supply industries with necessary motive power adequately, and with certainty. Some honorable members have stressed the necessity for appointing a Select Committee. I could quite appreciate that if the Committee could call upon expert evidence; but we have not expert experience and information at our disposal in Australia. It is all very well to say that the Committee could examine commercial men representing oil concerns; but it is not usual for business men to go to their mercantile’ opponents , to secure technical information. Surely we have in the Ministry and their advisers men who are as good as those whom we could call upon from private commercial sources. Time is the essence of this contract; we have no time to lose. I congratulate the Government upon having entered into the agreement. It should be remembered that it will be two years before the refinery can be completed. Meanwhile, there are prospects of large crude oil supplies being struck in Australian Territories. What will be the value of crude oil discoveries if ‘there is no refinery available to deal with the product? I know of two companies, working to-day in Queensland, which are very hopeful of getting oil within a brief period. One man interested has told me that he feels sure he will be . able to get oil within the next three months. It is believed that in Queensland alone there is no less an area than 20,000 square miles of oil country. The best encouragement we can give these prospectors is, first to offer to reward them for making a discovery in payable quantities; and, secondly, to re-assure them that, when oil has been discovered, there will be a ready purchaser who will refine it. The buyer to whom they should look to receive the highest value from their supplies should be the Commonwealth refinery. I do not consider the AngloPersian Oil Company in any degree a foreign concern. Seeing that more than half of its shares are held by the Imperial Government, and that the Commonwealth will hold half of the interests in the refinery to be erected here,, it means that practically three-fourths of the total interests will be in the hands of the British and Commonwealth authorities. We should give the Imperial Government credit for being shrewd. When they entered into an. agreement with the Anglo-Persian Oil Company, they knew what they were about. When they appointed to the directorate as their representative a man of such knowledge and experience as Lord Inchcape, who was not a shareholder, they knew what they were doing. Their purpose was to secure the benefit of his world-wide acquaintance, with business management. If the British authorities considered it safe that they should be represented by only two out of fourteen members of the directorate, they must have recognised that their nominees were men of specially wide experience, and that the remainder, who were experts, would not be hostile to Imperial interests. If we in Australia take the precaution of appointing three out of the seven directors as Government representatives, it should be sufficient to insure that those three shall be men of considerable mercantile experience, and that the four remaining directors shall be oil experts. The fact that Lord Inchcape is largely associated with a shipping combine has no bearing in this instance, and it is absurd to raise the point. The AngloPersian Oil Company has tank steamers of its own - sufficient, I understand, to make the concern independent of any outside shipping combine. Lord Inchcape cannot hope or expect to control or wield influence along those lines. So far as Australia is concerned, it is obviously advantageous that we should be associated with a company which has its own shipping available to bring to us requisite supplies of crude oil for refining here, until we have our own. We will not be dependent upon other shipping sources.
The Prime Minister (Mr. Hughes) has informed me personally that ample protection will be afforded to producers of oil in Australia, in the matter of their securing fair value for the Australian product. He has told me, further, that they will be given preference. I trust the Prime Minister will take the opportunity, when this measure is being dealt with in Committee, to place those safeguards in the Bill itself. We have a continent which is larger than the United States of America, and I look forward to the day when discoveries of valuable oil deposits will have been made somewhere in Australia. We should- see that, having a national refinery, the discoverers are given not merely a fair, but a preferential opportunity of having their crude oil refined and placed upon the market. It is essential that the Commonwealth should be fully protected against the possibility of dumping. In my experience as an importer I have seen a good deal of that- evil. And there is always the danger that, as soon as one has established an industry, the large foreign interests already operating may so reduce the price of their commodities as to crush the local infant rival. What consideration would the loss from a temporary reduction in the price of oil supplies to the Commonwealth be to the foreign oil companies which carry such huge interests at the present time? The honorable member for Maranoa (Mr. Page) said there was no fear of dumping in Australia, but I remind him that prior to the war there was a .considerable amount of dumping on the part of German houses, shipping freights, Germany to Australia, being offered at 12s. 6d. per ton, as compared with our coastal rate of 35s. In candles, for instance, dumping was particularly notice* able. British firms at that time supplying mining companies’ requirements were under agreement between themselves not to sell at below a certain price in London, but some of them shipped enormous quantities to Australia on consignment, and drew upon their agents for 90 pex cent, of value, and the’re was an understanding, I believe, that the agents were not expected to pay any more. As a result, British firms were able to compete very effectively with Australian manufacturers who were then becoming established.
I think I was instrumental in inducing the Government to offer the reward’ of £10,000 for the discovery of payable oil in Australia, but I believe now that that amount is not sufficient. I hope the Government will see their way clear to increase it. What would £100,000 mean to the Commonwealth if, as a return for this reward, payable oil in large quantities was found in some part of the Commonwealth ? In Queensland the practice of the State Government, who have an oil monopoly, is to issue a licence for prospecting over an area of 2,000 acres, and to grant a lease for 60 acres only, but the prospector -will get 2-J per cent, on all oil taken out of the balance of the area of 2,000 acres. This inducement is not sufficient to encourage prospecting.
If the agreement with the British Government is considered a fair and workable one, surely after investigation it ought to be good enough for us to establish a refinery in conjunction with the Anglo-Persian Oil Company. If we do not take advantage of this opportunity, where are. we likely to get experts and the machinery to carry out the work ourselves, and what would become of our crude oil? I have not heard any honorable member suggest an alternative.
– If the agreement is adopted, will any other firm be unable to erect refineries in Australia?
– No; there is nothing to prevent them.
– Yes; Customs provision 14b will prevent them.
– That provision is necessary to prevent any Combine dumping oil in this country in order to destroy an Australian industry.
– Dumping at unfair prices.
– Of course. If any outside firms compete on fair terms, nobody should object, and the Government will not object. There is a general belief that payable oil exists in Western and South Australia and Queensland, and there is every reason, therefore, why refineries should be established without undue delay, so that we may be able to deal with oil when found. I should like to emphasize the fact that the Anglo-Persian Oil Company controls a larger area of oil lands than all the companies in the United States of America, and, therefore, it should be to our advantage to be associated with the corporation commanding such huge supplies of crude oil, and which, moreover, is not dependent upon any other organization for transport. The agreement also contains a safeguard in that, if the Anglo-Persian Oil Company attempts to charge unfair transport charges, there is nothing to prevent our chartering other vessels for the conveyance of this crude oil to Australia, the price fixed being f.o.b. port of shipment. This means that the oil becomes our property when it is put on board ship, such ship tobe named by us, so we are free to choose our own vessels for its conveyance to Australia; but the Anglo-Persian Company undertakes to carry it at a reasonable price. I trust the agreement will be ratified with as little delay as possible, so that, with an adequate supply of fuel oil at reasonable prices guaranteed, our manufacturing industries may be increased and developed satisfactorily.
– I agree with many other honorable members who have spoken during this debate, that a considerable amount of time might be saved if the agreement is referred to a Select Committee of the House, because if it is to be taken seriatim the debate is likely to be very protracted. If, however, it is referred to a Committee, and a report is presented to the House in three weeks’ time, it is quite likely that, with the information then available to honorable members, the Bill will be agreed to unanimously. In all these great financial transactions we might very well follow the example of the House of Commons, which refers all proposals entailing a considerable expenditure of money to Committees. In connexion with the Profiteering Act of 1919, Select Committees were appointed, at the instigation of Mr. McCurdy, a member of the British Cabinet, and as the Profiteering Act dealt with a variety of subjects and industries, one Committee investigated the shipping side of the problem, and another inquired into the question of oil supplies in Great Britain.- The latter Committee submitted a brief report, which appears in the London Times, and for the information of honorable members I shall quote the conclusions arrived at after an exhaustive investigation. The report stated -
We find that-
After analyzing the present and potential oil supplies of the world, the Committee arrived at that very important conclusion. It went on to report that -
– Surely we need not have any investigation as to power alcohol. The matter has already been investigated here.
– But since the British Government thought it worth while to investigate these matters, surely we should have an inquiry before we enter into an agreement of this kind. We have had quite recently a concrete illustration of the expedition with which a Committee can report. The Select Committee appointed only four weeks ago to inquire intothe question of sea carriage has already presented to the House a progress report of a very valuable character. In order that the House may be supplied with the fullest information, and so placed in a position to arrive at a proper conclusion in regard to this agreement, we should have an inquiry. This proposal for a Select Committee is entirely non-party. Surely the mere fact that it has emanated from the Leader of the Opposition (Mr. Tudor) should not give to it a party tinge? A Select Committee would be able to analyze the agreement, obtain further information, and report to us within three or four weeks.
This agreement will bind us to the company for the next fifteen years. What will be our position at the end of that period 1 Are we to remain at a stand-still in the matter of the invention and discovery of motor power ? Already we have power alcohol, benzol, and a new product known as natalite competing with petrol. Fifteen years hence, in the matter of power, our position will be very different from what it is to-day. I believe that oil fuel will have competitors that will push it right out of the market. All over the world chemists and other experts are at work looking for substitutes for petrol, because we are faced with a famine in respect of motive power, and fifteen years certainly seems to be a long time to be bound to one company. The Public Accounts Committee conducted an inquiry into the Papuan oil fields, and examined Dr. Wade, who is the only expert representing the Australian Government. -Itreported that -
The opinion of one experienced witness was to the effect that the prospects of obtaining oil in Papua are distinctly good. At the same time, he added, “ we have to remember that oil, being liquid, and able to migrate, its accumulation comes under very different laws from those applying to any other mineral; it is the biggest gamble on earth. The thing is to be able to locate the place where the geological conditions are suitable for the accumulation of oil in the pools, and then to bore for it. But in one of those places some little accident in the geological structure underground may have led up to the escape of the oil and its migration elsewhere.”
For this reason the witness thought that “ there ought to be as many people as possible trying to get oil. The more people there are in New Guinea putting down bores and trying to develop the field, the more likely is it to hit the place for a big supply.”
I should like the production and distribution of oil in Australia to be a Govern ment monopoly. The distribution of petrol, and also kerosene, I think, has been made a Government monopoly in France, and is yielding a revenue of something like £2,000,000 per annum. The majority of honorable members, apparently, are averse to the carrying on of this industry wholly and solely by the Government, and are determined to give the Anglo-Persian Oil Company an opportunity to develop our oil resources in Papua. Why not allow other great oil concerns to step in? I admit that we have not made very much progress in Papua during the seven years in which we have been engaged in oil development there. We have expended £21,000 on the work, and the Anglo-Persian Oil Company is going to benefit by that expenditure, which was largely incurred in clearing the country. We have cleared the way for this company to step in and take advantage of the spade work done by the Commonwealth. As the result of our outlay, it will be able to secure a profitable output sooner than would otherwise have been possible. In that respect alone, we are giving the company a great concession.
– What concession are we giving the’ company ? It is merely to be our agent, andwe shall pay it for the work done. It will not participate in any discovery made.
– Oil has already been discovered in Papua. Two . men who were non-experts were the first to make the discovery, and their dependants have got very little out of it. The presence of oil has been located over a number of square miles in Papua, and any company now entering into the industry has only to further explore the fields already discovered. Dr. Wade is the only expert representing the Commonwealth Government, and we ought surely to be prepared to take his advice. He has said that if we intend to allow private enterprise to enter these oil-fields, then the greater the number of persons, that we have boring for oil the better. Since the Government have determined to depart from the policy that has been followed for some years, and to allow private enterprise to step in, we ought to say to every company, “ You can come in under conditions similar to those which we are laying down in respect of the Anglo-Persian Company, and bore for oil in Papua and Australia,” The greater the number of experts we have at work the sooner shall we have an adequate supply of oil. Why limit this undertaking to one company, especially when we know that its antecedents are, in some respects, no better than those of some of the biggest combines in Australia? Something has been said as to the guarantee we have in the presence of Lord Inchcape as a representative of the British Government on the company’s board. The Minister for Home and. Territories (Mr. Poynton), who is now in charge of the Bill, not long since pointed out in this House the serious competition to which the Commonwealth line of steamers was subjected. I would ask him who was the man he had in mind when he made that statement? He was able to inform the House that, under the chairmanship of Lord Inchcape, a great shipping concern had obtained control of practically half our British bottoms, and it has since swallowed up many more small shipping companies. The honorable member for Flinders (Mr. Bruce), in ‘dealing with this Bill, said that, so far as he could see, the only profit that the Anglo-Persian Oil Company would make under this agreement would be by carrying crude oil from Persia to Australia, and refining it here. It will obtain two profits - a profit on the production, of the crude oil and a profit on its carriage from Persia to Australia. Having taken these two big bites out of the profitable cherry, it will allow the Commonwealth to take a small bite out of the remaining piece. If the Government are going to change their policy in regard to oil development, let them throw . open our oil-fields to the world.
With the decline in the production of gold in Australia, we shall have to look more and more to our primary industries, and particularly to the pastoral and agricultural industries, for our development. Power alcohol is coming into the field more largely than ever. It is said that this is a petrol age, but we know that Germany during “the war was cut off from her supplies of petrol, and by resorting to the production of power alcohol, was able to carry on much of her transport operations. Think of the number of vegetable products from which power alcohol can be produced. It is extracted from molasses, sugar-cane, sorghum, wheat, oats, barley, maize, kaffir corn, potatoes, sweet potatoes, beet, sawdust, wood, prickly pear, fruit, vegetables, honey, and palm trees. Any plant which produces starch or sugar can be used for the manufacture of natalite; in other words, anything which contains starch and sugar will produce power alcohol.
– Practically it can be obtained from everything that grows.
– Yes. I know that a good deal of alcohol is used for internal combustion, but it is the wrong kind of internal combustion. I am aware, too, that if alcohol be used for power purposes there are some persons who will not hesitate to consume it even in its raw state. In Germany, to prevent that being done, nauseous ingredients have been introduced into it. That country also imposes a severe penalty upon any person convicted of consuming alcohol which is intended to be used only for power purposes. France is about to follow her example. In connexion with this Bill we have to consider not . merely power alcohol, but many other articles, such as benzol. Our gas companies, for example, are operating under an old Act, which compels them to provide gas possessing a standard of illumination, whereas, if they were obliged to provide gas possessing a calorific value they would .be able to extract benzol from their coal, and thus supply a substitute for petrol. These are the lines upon which it is suggested that the British Government should act. Whilst I am in favour of referring this Bill to a Select Committee, I ‘am also in favour of doing all that we can to develop our oil resources. En fact, the report presented by the Finance Committee recommended that the Ministry should go ahead with a more vigorous development of the oil industry, either from shale or crude oil. The Government might reasonably adopt the amendment of the Leader of the Opposition, and appoint a Select Committee to inquire into this matter. By that means the passage of the Bill would be expedited, and the public suspicion that everything is not quite above board would be dissipated. To me it is nothing that the British Government, in their agreement with the Anglo-Persian Company, asked for only two directors out of a total of fourteen. I do not wish to be hard upon the Imperial authorities, but I believe the British Governments and
British, parliamentarians are far more susceptible to outside influences than are Australian parliamentarians.
– That is a very serious reflection to make.
– If the honorable member will refer to the history of persons who have taken a prominent part in Imperial politics, he will see that some of them who should have been relegated to obscurity have been appointed to very high positions. Take the Marconi scandals, with which a number of members of the British Cabinet were associated. One of those members, in particular, has since been appointed to one of the highest offices in the United Kingdom. Know ing that the3e things are taking place, the fact that Lord Inchcape represents the British Government in this matter is no inducement to me to vote for this Bill. That gentleman possesses great control, particularly over shipping, and is associated with a body of men who are neither fools nor philanthropists. They are out to make money, and if they can make it by establishing an oil refinery in Australia they will do so. In war time the British Government itself proved to be one of the greatest profiteers in the community. Under this Bill the AngloPersian Oil Company will supply Australia with only half its annual requirements in the way of products other than fuel oil. It will be two years before we get a drop of oil from the refinery which it is proposed to establish. What will happen to us in the meantime? We shall be dependent upon the very people whom honorable members opposite so vigorously denounce. What happened to Britain? Out of a total of 300,000,000 gallons of oil required by her annually, the American companies have supplied 200,000,000 gallons. In this connexion I desire to read a paragraph written by Professor Chester Lloyd Jones, of the University of Wisconsin, in which he says -
At present there can be no doubt that the most important economic development of this sort which has occurred to the south of the United States is in oil resources. The most important among these thus far are those in Mexico, a country which in 1001 produced but 10,345 barrels, which began exports a decade later, and which produced in 1917 55,292,770 barrels, a large share of which went to keep the fires burning in the ships of the Allies in their struggle against Germany. In 1918 there were shipped from Mexican ports 53,919,863 barrels. From producing practically nothing at the beginning of the war, Mexico has risen to what is probably second place among potential oil producers, for the oil marketed is now limited, not by the capacity of the wells, but by transportation facilities.
I shall vote against the second reading of the Bill; and shall support the motion of the Leader of the Opposition to refer the measure to a Select Committee, in order to remove the public suspicion with which this matter is surrounded.
.- Quite contrary to the honorable member who has just resumed his seat, the fact that the company with which the Government propose to enter into this agree-1 ment is a purely British one carries considerable weight with me. To my mind, especially in the matter of oil, it is essential that the British Empire shall protect its interests against the great Trusts of the United States. I have no desire to traverse the agreement, which is set out in the schedule to this Bill, and which appears to be, on the whole, a very acceptable one. But I wish to draw special attention to one remark made by the Prime Minister in discussing the measure. He stated that, in connexion with the future oil supplies of Australia, we should put shale upon one side and look only for well oil. Now, there are quite a number of really good shale propositions to be found throughout the Commonwealth. Some of them are of the most promising nature. Upon page 441 of the Official Year Book of the Commonwealth for 1914, I find the following:
Production on “ anything like a large scale commenced in 1868, when about 17,000 tons, valued at £48,000, were raised. The production in 1912 amounted to 86,018 tons, valued at £34,770, as compared with 75,104 tons, valued at £36,980, in 1911. Of the total raised in 1912, 40,185 tons were produced in the Northern District, and 45,833 in the Western District.
In addition to that there are deposits in Western Australia, the Northern Territory, and Queensland, any one of which might be well worth developing. Some of them certainly are. The Tear-Book further says -
During the year ended 30th June, 1913, the Commonwealth Oil Corporation at Hartley Vale, New South Wales, received bounty to the amount of £804 on kerosene, and £882 on refined paraffin wax, while the British Australian Oil Company received £1,988 on kerosene, and £86 on parafin wax.
That bounty ceased to exist at the end of 1913. When it ceased the British Australian Oil Company, - which had its works at Murrurundi, was compelled to close down, though a very small additional bonus would have enabled it to continue operations. It seems to me that the Government would be well advised not only to adopt this agreement with the Anglo-Persian Oil Company, but to do something in the direction of encouraging shale oil production in Australia. I know that a good deal of money has been lost, both in Scotland and Australia, in connexion with the production of shale oil. -But that was before oil was in such great demand as it is to-day. We must recollect that during the past three or four years the_ price of that commodity has increased by 200 per cent, or 300 per cent. Properties, therefore, which under former conditions required a good deal of assistance from the State ought not to need very much in the way of financial assistance in the future. I have not the slightest doubt that before many years we shall discover mineral well .oil in Australia. In this connexion the honorable member ‘ for Maranoa (Mr. James Page) told us to-day what happened in Queensland. All the oil experts in this country, and. certainly a great number of American experts, regard the experiment at Roma as convincing proof that, sooner or later, good, free oil will be discovered in Australia.
– Good oil has been discovered in South Australia.
– I do not think much of the results which have been achieved there, but I am satisfied that good oil will yet be obtained, both in New South Wales and Queensland. Until that time arrives, however, the Government will be well advised to give due encouragement to shale oil propositions.
.- I would not have taken part in this debate had it not been for the fact that the real intention of the honorable member for Yarra (Mr. Tudor) in advocating the appointment of a Select Committee has been entirely overlooked. The- honorable member for Yarra moved for the appointment of such a body so that full information could be furnished to honorable members at an early date. Under the agreement .we are virtually handing over to the Anglo-Persian Oil Company for a period of fifteen years the sole right to refine oil in Australia. The term is a very lengthy one, and I cannot recall an agreement of a similar character being arranged for such a number of years. Do honorable members realize that in supporting this Bill they are assisting in establishing a huge monopoly in the Commonwealth? The agreement embodied in the measure does not make any provision for exploring for oil, but simply ‘creates the necessary machinery for erecting a refinery in Australia. The crude oil .to be handled will have to be imported from other countries, and as the arrangement is for refining only, other companies should be given the opportunity of bringing crude oil to Australia. The agreement was drawn up in an atmosphere totally foreign to Australian sentiment, and entirely opposed to the best interests of the Commonwealth. ‘ Those gentlemen who were responsible for its drafting are doubtless past masters at the work, and when the document was submitted to the Prime Minister (Mr. Hughes) and the Minister for the Navy (Sir Joseph Cook) they apparently overlooked the fact that they were being influenced by such men as Lord Inchcape. I do not think it can be called an agreement, because such documents usually embody a mutual arrangement between the contracting parties; in this case ali of the benefits are on one side. It would be interesting to know how the honorable member for Flinders (Mr. Bruce) intends voting on this Bill, because he very critically analyzed many clauses in the agreement, and came to the conclusion that practically every one would have to be amended in Committee. Why does not the honorable member support the appointment of a Select Committee to enable the fullest possible information to be submitted to this Chamber ? When considering a proposal such as this we should know what developments are taking place in oilproducing centres, and what prospects there are of other corporations entering into a similar arrangement with the Commonwealth. When I was in New Guinea, in 1912, I was informed by men who had been engaged in exploratory work there that the principal difficulty in connexion with that field’ was in finding a means of transport between the oil deposits and the port cif shipment. That view was supported by the gentleman who represented the Commonwealth before Dr. Wade was appointed, and who had done boring operations in the oil-fields of Russia and’ America, and has a very extensive knowledge of the whole industry.
The other agreement entered into may be regarded as a deed of gift, as we have to provide £50,000 for exploratory work, and have absolutely no control. It is generally supposed that extensive oil deposits will not be discovered on the mainland, and that the chief source of supply will be in the Pacific Islands under the control of the Australian Government, but no provision has been made for bringing supplies from that source to an Australian refinery. The Prime Minister has stated that oil is one of the chief essentials in the industrial world, and absolutely necessary if Australia is to be selfcontained, and yet we are allowing a company to have absolute control. If there is to be a monopoly it should not be in the hands of a private company, and even at this stage the Government should consider the advisableness of erecting a refinery of their own to deal with supplies from outside sources. The agreement provides that the commercial and technical management shall be entirely in the hands of the company, and that a modern refinery shall be established in the Commonwealth. No mention is made of the size of the refinery, and it is quite competent for the company to erect a plant of very small dimensions. The honorable member for Kooyong (Sir Robert Best) referred to the expert knowledge possessed by the ‘representatives of the Anglo-Persian Oil Company, but so far as my knowledge goes I do not think much technical skill is required, as the principal operation is- that of distilling. When I was engaged in plumbing I frequently made stills of various kinds - I did not ask what they were for - and as they are very simple in construction, the work of distilling does not require great skill. I do’ not want to record’ my vote in such a way that we will be prevented from producing oil in Australia, because I know that supplies are urgently required if only for use hi connexion with combustion engines. It is- the duty of honorable members to indicate whether it is their intention to support or oppose this measure,, be-
Mr. West. cause the creation of such a monopoly may be the means of retarding the progress of the Commonwealth. The deliberations of a Select Committee need not be too long. Since this matter has been under- discussion I have been surprised to learn of the number of people in Australia endeavouring to get oil. Many people have been at work at Newnes for a long time past. They are producing oil in large quantities, and are able to dispose of all they get. Yesterday I received a letter conveying a very reasonable request from the Victorian lubricating oil trade. They have adopted the following resolution : -
That members of the House of Representatives be approached with a view of requesting their support in having the ratification of the agreement made between the Commonwealth of Australia and the Anglo-Persian Oil Company Limited held over until further information be secured on many points which appear in the agreement, and also until the lubricating oil trade in the other States have an opportunity of voicing their opinion on the said agreement.
We ought not to set up our opinions against those who have been producing and using oil.
Another grave objection against this Bill is the length of the agreement. It is too long, and long agreements are dangerous. The shorter an agreement is made the more we may be sure that the interests’ in it are mutual. If a legal gentleman produces a long document for one’s signature, we may be sure that it has purposely been made long so that there may be a chance of having it defeated. This is not a mutual agreement. Too much power is given to one side, and too little to the other. I have no objection to its being registered under the Victorian Companies Act. Honorable members generally prefer that it . should be registered under that Statute. But there are many omissions from the document. No provision is made for depreciation or for a profit and loss account, or as to what the size of the refinery will be, or as to bow much oil is to- be put through each year. I think the attitude of the Government is one of obstinacy. If they consider the agreement a perfect one, with which no fault can be- found, surely they should not be afraid to have it subjected to the light of day. As the Leader of the Opposition (Mr. Tudor) has pointed out, before this House- agreed to involve- the country in an expenditure under the Iron Bounty Bill, it decided to hear the evidence of experts. Yet here Ministers propose to involve the people of Australia in a big expenditure and create a monopoly for fifteen years in a commodity, which is most essential in our industrial life and for the transporting of our produce. We are very foolish if we agree to do so without a preliminary inquiry. We are ^anxious to do the right thing, but we cannot when the Government are determined to prevent us from knowing the full details of the step we are asked to take.
The Commonwealth has spent £120,920 to date in prospecting for and the production of oil in Papua, and at the last stock-taking in June, 1919, the realizable assets were valued at £24,500. I am quite willing to admit that, when a Government undertakes exploring work of this character, there are losses, and I do not condemn our Government in this respect, but under the agreement with the AngloPersian Oil Company and the British Government all our labour and expenditure in Papua is to be handed over to the oil company, and I am told that Lord Inchcape is connected with the concern. If Lord Inchcape were cut up into twentyfive pieces, he could not fill the chair in , half the propositions with which he is connected as director. But if his name is included in the directorate of any concern, we may he sure that it is one that is out to get an .advantage over the people. The Peninsular and Oriental Navigation Company now propose to establish banks at every comer of the world where their vessels touch, so that they can control monetary transactions as well as shipping, but if Australia allows it to be done here, the people are simpler creatures than I have always taken them to be. I maintain that this agreement is not an agreement, because it is not mutual in character, and that the Government have been very unwise in asking the House to agree to it.
.- As I understand that the Prime Minister desires to make a statement, I shall make my protest against this Trust by voting against the Bill, and reserving any remarks I intend to make until the motion to refer the Bill to a Select Committee, is before the House, when I under- stand full latitude will be given to honorable members to discuss the subject.
– I shall confine my remarks to dealing with the material points raised during the course of the debate by honorable members who for one reason or another do not entirely approve of the Bill. I wish to preface what I have to say by repeating in most emphatic and unambiguous language that the Anglo-Persian Oil Company has no connexion, direct or indirect, with any other great oil company. I have explained that the Burmah Company, which is to all intents and purposes part of the Anglo-Persian Oil Company, is in itself a British company. The Anglo-Persian Company has no relation to the .Standard Oil Company, the “Shell” group, or any American or foreign company. It is British in essence and origin, and owes its success to British enterprise and capital, and its control is now in the hands of the British Government.
Many reasons have been urged by honorable members as to why the agreement should not be ratified. I must confess to a feeling of disappointment at those which have been put forward by some honorable members. Some have urged that if the agreement is ratified it will create a monopoly in this country and place us- under the domination of the Anglo-Persian Oil Company, but this accusation comes strangely from the lips of men who have been absolutely silent under the complete domination of the Standard Oil Company and the “ Shell “ group for years and years. As soon as a British company, which is dominated by the British Government, and which is Imperial in essence, offers - making the Commonwealth a full partner with it - to erect a refinery in this country, members rise and say that this is a monopoly, and, for their part, they will not agree to it.. The .Shell? Yes. Standard Oil? Yes. But the Anglo-Persian, Great Britain, and . the Commonwealth ? No. I must confess that their attitude surprises me. What surprised me no less was to hear, for the first time in my life, that moderation was one. of the characteristics of the Standard Gil and Shell Companies, that they had not increased their prices, but had stopped. short of taking the last penny from the users of petrol/ benzine, lubricating oil, and fuel oil in Australia. We were told, in short, that those companies, which for years had been, as it were, the stalkinghorse of every Democrat, every syndicalist, and every demagogue, like myself, throughout the world, had suddenly become clothed in the shining garments of the philanthropist, and all the hosts of the archangels. As I looked at the re- presentatives of the Shell. and the titan.dard Oil in the gallery while these things were being said, I saw their faces shine like the faces of those who had found an abiding place in the bosom of Father Abraham. They surely did not recognise themselves in that description. The fact is that the Standard Oil, the Shell, and other foreign companies have done everything that lay in their power as commercial concerns, which are not immoral, but unmoral, whose only god was profit, and whose only purpose was to wring the last penny out of the consumers of this country, to serve their own purposes at our expense, even to threatening this country with an oil famine. When the Prices Commission declined to increase the price of oil, they said, “ If you do not increase the price, you will not have any oil.”
– Lord Inchcape said the same with the shipping.
– Have we’ come to this, that when it is proposed that the Commonwealth shall become a full partner in a great Imperial concern - because it is Imperial in the best sense of the word, since the British Government is a. full partner in it - we should refuse to take the opportunity to erect in Australia a refinery which would insure fuel oil for our Navy, without which we aTe undone, and for the British Navy, without whose co-operation we are also undone? I say deliberately that the China Fleet, as well as our own, cannot operate effectively in time of war unless there is ample oil storage round these coasts. On whom are we to rely, then? Is it on the American company and the Dutch companies, or on this company which is built on the rock of Britain itself? So I put these things to one side as being in themselves abundant proof of the excellence of this agreement, since no better arguments can be adduced against it.
I take the other points in the agreement against which criticism has been directed. It is said that we shall have no guarantee of getting crude oil at a fair price from the Anglo-Persian Company. I said when introducing the Bill that we would get it at a fair and reasonable price. It was pointed out that that was not in the agreement. I have had it put in. If honorable members ask, “ Who is to be the judge of a fair and reasonable price ?” I answer, “ The Commonwealth.” That, I submit, is a full and satisfactory answer. It has also been said, “ The company will make their money out of freights, for whichthey will charge us what they like.” My reply was that we would get freight at current rates. . One honorable member laughed at this, as if it was the most unusual thing in the world that prices should be regulated by supply and demand. We have always heard from the Ministerial Corner, in regard to wheat and wool, and from the Opposition Corner in regard to labour, that prices should be regulated by supply and demand, plus whatever pressure can be brought to bear on the market. Is that not the law which governs the world? However, in order to meet this objection, we have had that provision altered, and, if the freights charged by the Anglo-Persian Company for bringing their crude mineral oil are such as we consider unfair, we can get other freights, either our own or anybody else’s.
I think it was the Leader of the Opposition who said that the effect of the agreement would be that the consumer of oil would be sweated and bled. For all these years honorable members opposite have been silent. While we were under the domination of the Shell and the Standard Oil Companies, they cared nothing about the unfortunate consumer; but now they sweat with terror or apprehension at the prospect of the poor consumer being exploited by this company, in which the Commonwealth itself is to be the dominant partner. But what are the facts? For the first time since oil has been used in Australia, the interests of the consumer will be conserved. No longer will he be compelled to pay whatever Standard Oil likes to charge him. I have said that the price will be fair and reasonable. It- was contended that there was no guarantee of this, since no provision was made for it in the agreement. In order to meet this objection, I have had such a provision inserted. If I am asked, “ Who is to say what price is fair and reasonable ?” I say, “ The Commonwealth.” I ask honorable members who are capable of looking at anything that comes out of Judea - or is it Nazareth? - with an unjaundiced eye, what more do they want?
Further, the critics of the agreement complain that this company is going to be protected against the competition of the Shell and Standard Oil concerns, the two which I take as being the greatest of the foreign companies, by having a refund of duty on crude oil if those companies, as our competitors, wish to undersell the Anglo-Persian Company and destroy them, for the purpose of subsequently exploiting this country and resuming their monopoly of it. It is said “ You are going to give the AngloPersian Company an unfair advantage.” My answer is this : “ The established policy of this country is Protection. It is a good thing to have the oil refined here, in order to give employment to our people, and to have here supplies of oil, both in its raw and in its refined state. In order to do that, we must protect these industries in Australia by the same means as we employ to protect every other industry.” But we provide that, in order to prevent this company exploiting the people, none of the advantages set out in section 12 to safeguard the company against unfair competition by foreign companies shall be enforced unless the company sell their finished article at a fair and reasonable price. The. Commonwealth is to say what a fair and reasonable price is. If the company charge more, we lift the floodgates and allow the foreign oil of the dear friends of the critics of this Bill, the Shell and the Standard Oil Companies, to come in, and they can wallow in it to their heart’s content.
It is said that we shall have to pay a greater price for crude oil than is necessary. I have already said that one guarantee against this has been inserted in the Bill. But there is also another, and it is this: That in no circumstances is the price to be greater than the price paid by Britain to the Anglo-Persian Company for crude mineral oil. Surely it will be admitted that there is now a complete guarantee.
Honorable members have seen in this measure the shadow of a menace against exploration for oil in this country and in its Territories. They say, “ If we are to get 200,000 tons of crude oil from Persia, the Anglo-Persian experts will not be very keen on finding oil in Papua.” One honorable member said that the effect of this agreement would be to send up the price of Anglo-Persian shares. There is an old story about the three tailors of Tooley-street that might be applied here ; but all I will say is that when we speak of a company with £20,000,000 of capital, and remember that all we are asked to consider is a matter of £250,000, such a contention may be dismissed without more ado.
The best answer to those who fear that the effect of this agreement will be to retard development and the discovery of oil in Australia or in its Territories is the fact that there is an ample market for Anglo-Persian crude oil all over the world. We believe they will do their best to find oil in Papua. It is an Imperial venture, of which the British Government is paying half the cost. But I say, on behalf of the Government, in order to remove all apprehension, that we shall do two things. First, we shall increase the reward offered to those who find oil in payable quantities, either on the mainland or in New Guinea, or in German New Guinea when we begin to explore there, to the sum of £50,000. Then we shall offer every facility to experts, other than the Persian Oil Company’s experts, to explore the mainland - I mean Australia - Papua, and German New Guinea. Further, we shall do all things within our power to give breadth, scope, and life to a policy which will insure not only the discovery, but the development of oil when discovered in this great country of ours.
I think that what I have said covers most, if not all the ground that has been traversed by those who object, for amy reason, to tie Bill. It has been suggested that the Bill should be referred to a -Select Committee.. What is this Select Committee going to do? Who is going to compose it? Who is going to inform its mind ? To whom shall it look for inspiration? I speak not at all, of course, of those higher sources that are open to all poor mortals; but to whom below is the Committee to look? What do we know about oil? I speak as a chastened, humble being, and I say that I know nothing about oil. There are those in this Chamber who know everything, about all things, and I leave them to flounder in the wealth of their knowledge. I speak of ordinary men. If I were on such a Select Committee, I should have to inform my mind from reports of previous Committees on the subject, or to listen to evidence from the Anglo-Persian, the Standard, or other oil companies. The Cabinet has done its best to inform its mind, and it relies principallyon. the fact that -what is good enough for Britain is good enough for the Commonwealth. And we feel, above all things, that our present circumstances are such that we dare not go on as we are; we dare not, in the face of facts - in the face particularly of the. fact that, without fuel oil; our Navy is ‘ powerless - allow this country to remain- dependent for supplies of this thing, which is vital alike to our national safety and economic welfare, upon foreign companies. For that reason, I urge the House, to accept this proposal.
One other point before I sit down. It is said that this Bill will mean the deathknell of the shale-oil industry. I deny that utterly. It exposes the shale industry to no greater competition than at present, though it changes’ the nature of the competition. The shale industry will not be exposed to the American competition only ; it will be asked to face competition, partly in our midst and partly from overseas, but the volume of competition will remain the same. Since we have established’, by bonus and otherwise, the shale industry in this country, we shall not desert it merely because we pass this agreement. We shall encourage the shale industry; we . never know but the day may come when we shall have to fail back on shale oil, and we shall not . desert those men who have put their money and given their time to the establishment of the industry. Above all, we shall do everything we can to make ourselves independent of Anglo-Persian crude oil by finding oil on the continent of Australia or in our Territories.
Question - That the Bill be now read a second time - put. The House divided.
Majority . . . . 17
Question so resolved in- the affirmative.
Bill read a second time.
.- I move -
That the Bill be referred to a Select ‘Committee.
I ask leave to resume my remarks on a future occasion.
Leave, granted ; debateadjourned.
Message recommending appropriation reported.
The following paper was presented: -
Lands Acquisition Act - Land acquired under, at North Fitzroy, Victoria, for Defence purposes.
Motion (by Mr. Hughes) proposed -
That the House, do now adjourn.
.- During the debate on the Oil Agreement Bill, when the honorable member for Franklin (Mr. McWilliams) was speaking, the Minister for the Navy (Sir Joseph Cook) made an interjection which I apparently contradicted ; though mine was not a direct contradiction, because, the Minister and I were looking at the matter from different points of view. The actual offer, by the Tasmanian Oil Company was £4 10s. a ton; but, as the Minister explained afterwards, the company asked that the Government should continue the present bounty on oil. The honorable gentleman will remember that the company’s offer was set aside by his Department. ‘ Certain figures and facts, however, were put before him, and he stated that he thought that the Naval Board ought to send to the company the terms of an offer which, might be accepted. I should like the honorable gentleman to go into that matter again.
– The honorable member may not now revive a debate which is closed.’
– What I desire is that the Minister for the Navy shall look into this matter again. As far back as October last, he asked the Naval Board to send these terms to the company. I understand that something is. being done, but there has been too much delay. I believe that the company isready to make an offer, to which the Department must give the most careful consideration, because it is very anxious ‘to develop its property.
– I shall look into the matter.
Mr.KERBY (Ballarat) [4.15].- According to the press, the honorable member for Wannon (Mr. Rodgers) interjected yesterday, when I wished to ask a question without notice, that I was cast- ‘ ing a reflection on St. Xavier’s College. I had no intention of doing that, because I have the greatest admiration for that college In another newspaper it is reported that certain members on the Opposition side of the chamber interjected that I was adopting low-down electioneering tactics. I have no intention of adopting their methods of electioneering.
– The honorable member is now reflecting on certain honorable members, and I ask him not to do that.
– Then I withdraw what I said, and I should like them to withdraw their remarks of yesterday. Had I desired to pursue electioneering tactics I had a splendid opportunity last night, of which I did not avail myself. I asked my question because I think it of urgent public importance that disloyalists shall not be given a chance to instil their opinions into the minds of young Australians.
Question resolved inthe affirmative.
House adjourned at 4.17 p.m.
Cite as: Australia, House of Representatives, Debates, 14 May 1920, viewed 22 October 2017, <http://historichansard.net/hofreps/1920/19200514_reps_8_92/>.