9th Parliament · 2nd Session
Mr. SPEAKER (Rt. Hon. W. A. Watt) took the chair at 2:30 p.m., and read prayers.
– Has the Prime Minister been advised of the result of the vote in the House of Commons on the Imperial Conference resolutions? Has he anything to say on the suggestion of Mr. Baldwin that the British Government should purchase Australian produce, and sell it at cost price for distribution in Britain ?
– I have received no notification of the result of the vote in the House of Commons on the Imperial Conference resolutions, nor as to Mr. Bald win’s suggestion.
– (By leave.) - I wish for the information of the House to make a statement on the subject of the taxation of Crown leaseholds. On the 17th June, I received the following communication from the Commissioner of Taxation in connexion with the collection of tax on leasehold estates in Crown lands. He says -
The Land Tax Assessment Act 1914, imposed land tax for the first time on the unimproved value of leasehold estates in all leases of Crown lands, except perpetual leases, without revaluation of rent and lenses, with a right ofpurchase. These two latter classes had always been taxable.
The law laid down the method of valuing the lessees’ estate. (Sections 27 and 28 of the Land Tax Assessment Act 1910-1921.)
The method required the Department to ascertain the price which the owner of the land (the State in thiscase) might expect to realize for the fee-simple of the land if the land were offered for sale on such reasonable terms and conditions as a bona fide seller would require, assuming the improvements, if any, an the land had notbeen made.
The Department sought to ascertain this probable sale price by comparing each particular leasehold property with freehold lands in the district, or the State, whichwere of similar character, and put to similar use, and which had been the subject of’ sale. In this comparison ‘allowance was made, as far as possible, for all disadvantages from which the subject land suffered in comparison with the basic sale land.
The result of this comparison, and modification as required, resulted in unimproved values which the departmental valuation experts regarded as the fair prices which the land could have been sold for by the State Government, if the lands had been offered for sale in the open market.
The values of the lessees’ estates in these subject lands were then calculated in accordance with thelaw as follows: -
The economic rent which the land should bring is fixed by law at 41/2 per cent of the price which the fee-simple of the land might be expected to realize if offered for sale.
From the economic rent there is deducted the rent reserved under the lease.
If there is any difference between the economic and reserved rents, the law requires that the difference should be capitalized for the unexpired period of the lease according to tables of calculation based on 41/2 per cent, compound interest. This rate of capitalization was fixed in the first instance after ascertaining from the Commonwealth Statistician the aver age percentage of interest earned by investments throughout Australia over a period of about twenty years.
The lessees’ estates calculated as above were strongly objected to by many lessees, the objection beingto the fee-simple value attributed to the lands.The Government then appointed a Royal Commission, presided over by Mr. 6. H. Knibbs (now Sir GeorgeKnibbs), to inquire into and report upon the incidence of the land tax on Crown leases, and also suspended payment ofthe tax.
The Commissioner of Taxation gave evidence before that Commission, and recommended that the rate of capitalization of the difference between economic and reserved rents should be on the basis of 8 per cent. tables of calculation instead of 41/2 per cent. tables. The reason for this recommendation was that the Commissioner of Taxation considered the consequential reduction in the values of lessees’ estates might thus provide more or less adequately for many factors in the valuation of Crown leases on the freehold basis, which might not, or could not, readily be taken into consideration in the method which hud been followed in arriving at the probable (selling price of the fee-simple of the lands.
The Royal Commission reported in favour of the continuance of the tax on Crown leases, subject to a number of modifications in the law, and recommended 8 per cent. tables of calculationshould be substituted for the 41/2 per cent. tables then in force. -
The Commissioner of Taxation, instead of amending the regulations himself to provide for the application of 8 per cent. tables of calculation inplace of 44 per cent. tables, submitted the matter for the consideration of the Government in view of the great importance of the question at issue.
The Government did not take any action in the matter except finally to refer the whole of the subject of the taxation of Crown leases to the- Royal Commission on Taxation, which was appointed on 10th September. 1920.
In the meantime the Commissioner of Taxation attempted to solve the question along other lines. Experience had shownthe impracticability of ascertaining the true value of the fee-simple of some freehold lands, and of most of the leasehold land by taking sale prices of the freehold lands as a basis. This was more particularly the case when great distances separated the sold lands from the subject lands, and great variation existed in climatic influences.
Therefore, in November, 1920, the Commissioner introduced an additional basis of valuation for such lands, viz., the capitalization of net returns of the subject lands at the percentages which the average net returns from the sold lands tore to the capital in the sold lands.
Deputy Commissioners wore instructed in February, 1921, to apply that method of valuation to the classes of lands referred to. Experience of its working indicated from time to time the necessity for amplification of it.
No revaluations of the fee-simple values of Crown leaseholds were undertaken by the Department during the period of suspension of payment of the tax, because it was not known what decision Parliament would come to in regard to the continuance or discontinuance of the tax on these properties. It was considered improper in the circumstances to incur heavy expenditure on this work.
During this period frequent discussions between the Commissioner and the various Deputy Commissioners and senior valuers concerned took . place in regard to the details of valuation of Crown leases in the event of Parliament deciding to retain the tax.
A consolidation of the existing rulings regarding valuation was issued in booklet form to valuers in July, 1922. It was also submitted for the information of theRoyal Commission on Taxation, which was appointed in 1620, and which reported on land tax in November, 1,022.
The Royal Commission did not make any report upon the principles of valuation adopted by the Commissioner of Taxation, andexpressed in the booklet.
In practice valuation by capitalization of net returns of a subject property by reference to the average percentage which the net returns of sold properties bore to the capital invested in them was found to involve considerable difficulty on account of the variations of the percentages in the case of the sold properties.
The Commissioner of Taxation considered that one uniform percentage for the purpose should be adopted for all cases, and, after inquiry and much consideration, he decided during the first quarter of the calendar year 1923 to adopt 8 per cent-
Capitalization of average net returns on an 8 per cent. basis was adopted for two reasons: -
The Commissioner of Taxation then decided that if the average of the actual annual net profits were taken for a period of years which would include typically adverse seasons as well as good and moderate seasons, and were regarded as representing an annual profit of 8 per cent. on a total amount of capital invested in the subject pastoral property, the total amount of that capital would be ascertained. By multiplying the average of the net returns for the period by 12), the total capital sum thus obtained would represent the capital which could be invested in the -
By a process of elimination the amount which could be given for the fee simple of the land, after providing for all possible contingencies, could thus be calculated.
Immediately Parliament decided in August, 1923, that the tax should be collected for past years, the Commissioner directed Deputy Commissioners to review valuations of Crown leases on the basis of the capitalization of average net returns at8 per cent. simple interest.
Shortly afterwards, however, three Deputy Commissioners reported that examination of the average net returns to invested capital over the period 19.11 to 1915, inclusive, in the cases of several freehold properties in their States indicated an average annual net return of from 9 per cent. to 10 per cent. on invested capital.
These cases wereminutely analysed by the Commissioner and the Senior Valuers, New South Wales, Victoria, Queensland and South Australia, respectively. The results showed that net returns ought to he regarded as an average of 10 per cent. on invested capital for that period.
The Commissioner of Taxation then decided that that period was the most reasonable one to adopt to ascertain average net returns for purposes of all subsequent valuations of Crown leaseholds. It was also the period for which reliable data was available.
It may be mentioned that the Chief Justice of the Supreme Court of South Australia, in the appeal of Curnamona Pastoral Company v. Deputy Commissioner of Taxation, Adelaide, in October,’ 1918, expressed the view in his judgment, which favoured the appellant company, that the average net returns of pastoral properties should be regarded as 10 per cent. on capital invested. The Judge expressed himself as follows: - “ This question depends on the return he would require for his money. It is unreasonable to suppose that in country of so hazardous a nature he would risk his capital for a small rate of interest. “ A few bad seasons at the outset might involve his ruin. The majority of the witnesses think, for the respondent, he should have 10 per cent. No one suggested less. Mr. Kelly and Mr. Richardson would give him 10 per cent. to 15 per cent., probably the latter are more nearly right, but for a reason which I shall explain later, I shall take the smaller rate. “ In conclusion, I may say that the most critical question on the whole inquiry is what rate of interest a prudent purchaser would expect on his investment. The smaller the rate; the more he could pay for the land. I have given him 10 per cent., which I consider to be the absolute minimum, but it is doubtful whether he would be satisfied with that rate, as the risks are very great, if, as might easily happen, he fail to make any profit the first year, he would require 20 per cent. in the second, and if he only made 5 per cent. in that year, he must have 25 per cent. in the following year, and so on. What has mainly lead me to decide on 10 per cent. is that I regard the carrying capacity I have determined on, while not too low, is reasonably safe. If I had accepted the evidence for the respondent I should have increased the rate to at least 121/2 per cent., because it is clear that there would be greater difficulty in maintaining an average of 40 sheep to the mile, than 33, and more uncertainty in making 5s. per head net profit than 4s.8d.”
The Commissioner of Taxation decided in May, 1924, to capitalize average net returns on a 10 per cent. basis, instead of8 per cent.
It is to be noted that this basis of capitalizationhas no relation whatever to the 8 per cent. or41/2 per cent. tables of calculation, and that it is adopted for quite a different purpose than that served by tables.’
The foregong method of valuing the fee simple value of the hinds renders unnecessary any substitution of8 per cent. tables of calculation for the existing 41/2 per cent. tables. That substitution was suggested only to try to provide in some way for the unknown contingencies affecting the leasehold lands, which could, not be adequately measured by the comparative system of valuation formerly adopted. These unknown contingencies are, however, fully’ reflected in the average net returns from the properties over a period of years.
The retention of the 41/2 per cent. tables of calculation is necessary because the economic rent of the leased land is deemed by the law tobe 41/2 per cent. of the value of the land, and also because 41/2 per cent. compound interest (which is the fundamental basis of the tables) represents the ‘average rate of compound interest earned in Australia during the past 30 years. Lessees are not now prejudiced by the adoption of 41/2 per cent. tables of calculation. The Royal Commission on Taxation reported adversely to an alteration of the tables of calculation from 41/2 per cent.
The new method of ascertaining the fee simple value of the land has resulted in substantial reductions in the former Departmental valuations of Crown leaseholds. In the caw of one lessee holding many leases, the total reduction in former valuations is approximately £350x000. This lessee objected to his assessments for each year, and is entitled to be re-assessed for all past years on the reduced values. He did not pay any tax on his leasehold estate for any year.
In a number of cases of “ out-back “ pastoral leases, the reduced fee simple value when used in the calculation of the lessee’s estate, in accordance with the law, yields an economic rental at 4-J per cent., which does not exceed the rent reserved under the lease. There is, therefore, no taxable value to the lessee’s estate in such cases, and the existing assessments in those cases should be cancelled for all past years.
The point now remaining for decision is the policy to be followed by the Commissioner of Taxation in dealing with revisions of past assessments, that is to say. whether all past assessments of all lessees are to be revised, or whether revision is to he limited to those particular assessments to which lessees objected, and have not reached a settlement with the Department. In any case revision of valuations in all cases will be necessary for all years subsequent to that when the Treasurer suspended payment of the tax.
It is probable that some of the lessees who agreed upon values with the Department, or who paid tax on the original Departmental valuations, would be entitled to reductions in their assessments by the application of the new basis of valuation. Equity requires that they should be treated in like manner to those who objected and disobeyed the law by neglecting to pay the tax notwithstanding the objections, and who are now securing reductions in assessments.
Revision of nil past assessments would’, it is considered, leave a fairly substantial amount of the paid tax with the Treasury. It would also treat all lessees alike, and would prevent any of them suffering any sense of injustice.
It is accordingly recommended that the Government should authorize the expense necessary for the revision of all past assessments of all Crown leases.
This statement is dated the 17th June, and I have brought it before the House at the earliest possible moment, because the collection of the tax on Grown leaseholds is a matter that Parliament itself has decided should be done. The outstanding feature is that assessments have been issued on three different bases. The first method adopted was to take 4^ per cent, simple interest as the basis for determining the economic rent, and capitalizing the difference, if any, between 4£ per cent, on the unimproved value, and the rent reserved under the lease. Secondly, assessments have been issued on a basis of an 8 per cent, return on capital invested. Other assessments have been based on a 10 ‘ per cent, return upon capital invested. As 7>r. Earle Page some of these taxes have not been paid’ from the very first, a very inequitable position will arise unless something is done. I take it that every . honorable member is anxious that equity and justice shall prevail, and that there shall be uniform treatment of every one. As the matter is extremely involved, I shall briefly summarize what has already taken place. There are two- bases provided by the law for the valuation of a leasehold estate. First of all it is necessary to ascertain the unimproved value of the land on a freehold; basis, and secondly, it is necessary to ascertain the capitalization of the difference, if any, between 4£ per cent, on the unimproved value and the rent reserved under the lease. The Department of Taxation has experienced great difficulty in ascertaining the unimproved value of the land on a freehold basis. The first Commissioner of Taxation - Mr. McKay - originally attempted to find the unimproved value by capitalizing net returns from the land at 4^ per cent., simple interest, but that process was not continued, as 4-^ per cent, on the capital invested was considered an insufficient annual income. The Department then tried to deduce the unimproved value on a freehold basis by comparison of leasehold properties to be valued with freehold lands of similar character, and put to similar use, which had been the subject of sale, allowance, being made for all disadvantages from which the leasehold land suffered when compared with the basic sale land. Allowances for disadvantages could not be fully calculated, and high freehold values for the leased land resulted from the comparison with the basic sales. The first Royal Commission on Crown leases attempted to rectify this in part by recommending that 8 per cent, tables of calculation should be substituted for the existing 4J per cent, tables of calculation which are used to capitalize the difference between the rent reserved under the lease and the economic rent, which is -4£ per cent, of the assumed unimproved freehold value. The Treasurer of the day, the Hon. A. Poynton, in his Budget speech, 1919-20, which is reported on page 20 of the Hansard record, announced that the Government had decided to give effect to the Royal Commission’s recommendation on this point, but that was not done. In November, 1922, the present Commissioner of Taxation decided to attempt to find the unimproved value of the leased lands on a freehold basis by capitalizing the average annual net returns for a period, on the assumption that those returns represented S per cent, on the invested capital. This course was adopted after many consultations with the deputy commissioners and senior valuers of the States affected. In May, 1924, the Commissioner, after’ further consultations with his officers, and an analysis of pastoralists’ returns of income, and in the light of the judgment of the South Australian Supreme Court in another case, was forced to the conclusion that the average net return should be regarded as being 10 per cent, on capital investment, and he thereupon decided to ascertain the unimproved values of the leased lands on a freehold basis- by capitalizing tho average net return at 10 per cent. Thus it will be seen how difficult it has been throughout tho whole period of these assessments to determine a proper basis. Some assessments have been issued on the basis of unimproved values calculated by capitalizing the average net return at 8 per cent, simple interest; some have been issued on the basis of unimproved values calculated by capitalizing the average net return at 10 per cent, simple interest, and others have been issued on the original basis of 4$ per cent., but in .all cases, no matter what subsequent basis was arrived at, whether original or amended, the value of the lessee’s estate based upon the difference between his lease rent and the rack rent of 4$ per cent, on the unimproved value of the land on a freehold basis has been calculated by reference to 4A per cent, tables of calculation. Eight per cent, tables of calculation have not been used in any case, notwithstanding the recommendation of the first Royal Commission on Crown leaseholds and tho Treasurer’s announcement in the 1919-20 Budget speech that those tables would be used. The necessity for uniformity in this matter is evident to all, and in order to secure equity to the taxpayers and bring about that uniformity the Government have decided to place the whole matter in the hands of the members of the Royal Com mission who reported in favour of a continuance of the tax, and ask them to decide what basis of valuation should be adopted to give effect to the decision of Parliament that the tax on Crown leaseholds, shall be collected. This morning, therefore, Mr. “Warren Kerr, Mr. Jolley, and Mr. Duffy have been approached and asked to sit as a Royal Commission to investigate the matter and determine a basis of valuation, so that both uniformity and equity may be assured.
– I desire to say a few words in reply to the Treasurer, and I ask leave to do so.
– It is a somewhat unusual course, but if it is the pleasure of the House, the honorable member may do so.
– It is most unusual for a Minister to ask leave to make a statement upon a subject of such far -reaching importance as the taxation of Crown leaseholds. Parliament has already determined that the £1,300,000 owing by the leaseholders must be collected, although immediately after that decision was reached one frequently heard the statement that the money owing would never be collected.
– A great portion of it never will. The courts will decide that.
-Evidently in order to give effect to what the honorable member has just intimated by interjection, something had to be brought forward by Ministers to justify their action. It was a matter of surprise to me that the leaseholders should pay the tax for a considerable time, and that an instruction should suddenly be given by the Taxation Department that the tax was no longer to be collected from them. We know that when the matter was brought before the House an endeavour was made to give a Bill a retrospective effect so that the taxation owed by these leaseholders should not be collected, but the wisdom of the House decided’ that the Bill should not be made retrospective, and that whatever taxation was owing by these leaseholders should be paid. The Treasurer asks us to deal with the matter from the> standpoint of equity, but I remind him that if it had been a poor man who had neglected to pay a small amount of income tax he would have been prosecuted long ago.
– The Government have taken this action to enable the money owing to be collected.
– The Government have taken this action to enable the amount owing to be cut down as much as possible.
– I am putting my view now, because if I do not do so I may be told later on that I allowed the matter to go without taking exception to it, as I have been told in relation to other matters. The plain duty of the Government and the officials of the Taxation Department is to collect the money owing. Three Royal Commissions have already dealt with this question, and in every instance have reported in favour of collecting the tax. That fact stands out clearly. It would appear now that, because of certain “ inequalities,” this matter must be referred back to Commissioners, to see whether the rate should be 10 per cent, or 4^- per cent. The effect of that will be to wipe out the tax, or at least a great proportion of it. In view of the determined effort of the Government to make the Bill retrospective, so as to avoid the collection of. this tax, and of the opposition of the House to that course, are honorable members prepared to allow this matter to be dealt with in the manner proposed by the honorable the Treasurer ? His object is to evade the determination of this House.
– The matter must come back to the House.
– This question has already been dealt with by this House, as well as by three Commissions. Finality should have been Reached. But there is no finality where the big rich pastoralists of this country are concerned. Almost every piece of legislation passed by this House of late has been in the interests of the wealthy people of this country. That is not only the opinion of’ members on this side, but is common talk among the public. If Parliament permits this sort of thing, then Parliament no longer controls the destinies of the country. That control is now in the hands of the wealthy few. When Parliament decrees that a certain thing shall be done, for the Cabinet to devise means to escape that decision is a serious matter. In this case the Government want to refer the question, of the value that should be placed upon these leaseholds for the purpose oftaxation to a Commission, in the hope that they will agree with a South Australian judge that it should be 10 per cent. I ask the Treasurer whether an estimate has been made of the reduction in the indebtedness of these lessees of the Crown that will follow if the rate is fixed at 10 per cent.
– Nobody can tell that.
– It would mean a considerable sum. I protest against this manner of doing business after the House has decided the question. What is proposed is only an excuse to relieve the Government of the necessity of collecting the money due.
– I desire to make some observations regarding the procedure adopted by both the Treasurer and the Leader of the Opposition. I, perhaps, might not have done so had not the same procedure been followed yesterday by a Minister and a private member in relation to another matter. The indulgence of the House to make a statement of public interest is, I think, invariably granted, according to parliamentary practice, but that is only on the supposition -that information of importance will be given to, the House. It is not usual for controversial matters, involving debate, and possibly high feeling, to be submitted in this way. I feel it my duty to direct the attention of both sides of the House to the fact that an irregular practice may easily grow out of this procedure. Parliament has decided that no matter may be discussed unless there is a motion before the House. In this case, there was no motion. I think it would be better if Ministers, and members generally, would indicate to the House, before asking for leave to make a statement, the nature of the subjectmatter about which they desired to speak.
– I ask you, Mr. Speaker, for direction as to the best way in which the honorable the Treasurer could have been prevented from proceeding with a course of action which is quite novel, and not in accordance with parliamentary practice.
– The honorable member has asked a perfectly pertinent question. The leave of the House was granted to the Treasurer. Any one member, by objecting, could have caused its refusal.
– Has the Commissioner of Taxation been asked to explain why the difficulty connected with the collection of land tax arose only in 1917, whereas the Department was able to collect £690,000 for the previous three years, principally on the owners’ own valuations?
– The honorable member has evidently forgotten that in a considerable number- of cases the tax has never been collected since it was first imposed. There was, therefore, necesSity for- the action of the Government in asking that some equitable basis should be introduced. ‘
– Did the Treasurer issue instructions to the Commissioner of Taxation to prepare the statement he has read, or did the Commissioner prepare it on his own initiative? If instructions were issued, what was the date?
– No instruction was issued to the Commissioner of Taxation to prepare the statement. I asked him what progress had been made, and he then informed me of the difficulty that had arisen because of the fact that there were three different bases of assessments. The Commissioner asked the Government to determine the policy which should be adopted.
– Will the Treasurer inform the House how it is that, although’ the Land Tax Assessment Actprovides, in section 9, that an annual report by the Commissioner shall be presented to Parliament, no report has been presented since 1921 ?
– If the honorable member will refresh his memory, he will remember that these reports are always somewhat late, because of the intricate nature of the figures which have to be prepared.
– In view of the urgency of the matter, will the Treasurer let the Premier of Tasmania know t-he intention of the Commonwealth Government respecting the request of Tasmania for financial assistance?
– The Premier of Tasmania has already been informed of the procedure which the Government intends to adopt in this connexion.
Ikon Trade Dispute
– In view of the serious position which confronts the* iron trade of Australia because of a case which has’ been cited before the Arbitration Court,’ can the Attorney-General inform the House whether that case will be heard and. finalized before the Court’s next vacation ?
– I have already given that information. Since doing so I have heard nothing which would necessitate an alteration of what I then said. If the honorable member has any doubt regarding the matter, I shall take steps to confirm my previous answer:
– I should be glad if the Minister would do so.
-On the 9th May I asked the Prime Minster to lay upon the table of the House the file of papers and correspondence in connexion with the claim made upon the Commonwealth Government by the Central Wool Committee, in satisfaction of which the Government subsequently paid, an amount of £275,000. The- right honorable gentleman replied that the matter was under consideration. Has he finished considering the matter ? If so, will he make the file available?!
– I shall ascertain whether we are now in a position to decide that the papers contain nothing which cannot be disclosed without detriment to the! public interest.
– Will the’ Prime Minister consult with the Treasurer as to the advisability of making arrangements this year to relieve unemployment by allocating, as was done last year, money to the State Governments for the construction of main roads, thus providing work for many men, including returned soldiers?
– The relief of unemployment comes within the functions of the States, but last year the Government, holding that the development of main roads was partly a Commonwealth obligation, made available to the States a certain sum of money for that purpose. In donnexion with the preparation of its financial programme for the next year the Government is again considering the question of a main roads grant, and an announcement on this subject will be made in due course.
Increments - Reclassification
asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Prime Minister, upon notice -
When will the first section of the reclassification of the Public Service be gazetted?
– The first section of the classification appears in a special Gazette of the 18th June, 1924.
Complaints by Wanimo Natives - Civil Service Grievances - Dismissal of G. K. Freeman.
asked the Minister representing the Minister for Home and Territories, upon notice -
– The answers to the honorable member’s questions are as follow : - 1 and 2. The file referred to is not in the possession of the Melbourne office of the Home and Territories Department, but it will be obtained from Rabaul and consideration will then be given to the honorable member’s request.
asked the Minister representing the Minister for Home and Territories, upon notice -
– The answers to the honorable member’s questions are as follow : -
I desire to inform you that I have given careful consideration to the representations made by the members of your association who waited upon Senator the Hon. T. W. Crawford, at Rabaul and Mokerang, in September last.
With regard to the request of members of the deputation at Rabaul that an inquiry bo made into General Wisdom’s administration of the Territory, I am of opinion that justification for such an inquiry has not been established, and it is not, therefore, proposed to take any action in the direction indicated.
My Department fully appreciates the inconvenience to which the married members of the Service are subjected by reason of the fact that there are not at present sufficient bungalows available to enable every married man to bring his wife to the Territory. The provision of the additional accommodation required is a. matter which has engaged the serious attention of the Administrator, who has applied to the Commonwealth Treasury for loan funds for the purpose. It is, however, regretted that the ‘Treasurer has been unable to make available the full amount asked for, but it is hoped that it will be possible in the near future to effect a measure of relief.
The question of the allocation of bungalows is one which comes strictly within the jurisdiction of the local authorities, and I cannot sec my way to intervene in the matter.
The deputation asked that free medical attention and medicines be granted to officers of the- Service. This request cannot bo approved. It is considered that the recently reduced scale of fees and charges is reasonable, and that further concessions are not justified.
Your request that leave should be granted as a right, and not at .the discretion of the Administrator, cannot lie entertained. The practice in force in the Territory in regard to the granting of leave conforms with that in force in Australia and all the Territories of the Commonwealth, and the circumstances of New Guinea are not such as to justify preferential treatment in respect of this matter.
The members of your association at Manus asked that accommodation be provided at Rabaul for officers proceeding on leave or awaiting transfer. It is understood that the Administrator has already made the necessary arrangements in regard to this matter.
The Administrator, while in Melbourne recently, conferred with the Commonwealth Superannuation Board with regard to the institution of a scheme of superannuation for the Territory. When particulars of the scheme are received from the Administrator the matter will receive prompt and, if possible, favorable consideration.
My Department is in communication with the Administrator in regard to the application by the medical assistants for an increase in salary, and the suggestion that Messrs. Burns, Philp, and Company should reserve a certain number of berths by each vessel for officers of the Territory proceeding on leave.
Your association’s requests that free passages should be provided for officers proceeding on leave, that local leave should be granted in addition to the leave already prescribed, and that free quarters should be available for officers, cannot be approved.
With reference to your letter of the 3rd January, I desire to inform you that I am not prepared to accept communications from your association direct. All such communications must be forwarded through the Administrator.
Yours faithful! v, (Sgd.) G. F. PEARCE
asked the Prime Minister, upon notice -
Is it a fact that Mr. G. K. Freeman was employed on the patrol service in the Mandated Territory of New G uinea, and that subsequently his services were dispensed with ?
– The answers to the honorable member’s questions are as follow :–
The Home and Territories Department has no information on this point, but is making inquiry of the Administrator.
Commission - Perusal of Piles - Cost of Houses - Incorrect Departmental Information
Mi-. R. GREEN asked the Treasurer, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Treasurer, upon notice -
– The answers to the honorable member’s questions are as follow : -
Department, arrangements are made for a re-, sponsible officer to discuss fully the contents of the file with him. 2. See answer to No. 1.
asked die Minister for Works and Railways, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Treasurer, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Prime Minister, upon notice -
With regard to the Island of Nauru -
What is the minimum wage paid to Chinese labourers?
What is the number of hours worked per week?
What is the total number of the [a) Chinese population, (b) native population, (c) white population, (d) Malay population, (e) Chinese women?
For what period was the present Administrator employed?
What salary is being paid to him?
How many other officials are on the island, and what is the total cost per annum in salaries paid to them?
What is the value of the imports and exports ?
What are the total tonnage and value of ‘ phosphates shipped respectively to England and -Australia annually? .Mr. BRUCE. - The answers to the honorable member’s questions are as follow : -
Thirty-two shillings per month; but, in addition to this, a bonus of 4s. per month is paid, and free food, housing,” and clothing are provided.
Chinese coolies and kanakas, 54 hours; Chinese mechanics, 49£ hours; Europeans, average 47 hours. Many Chinese labourers are employed on task work in the” fields, which they usually complete in six to seven hours per day. Chinese and kanaka boatmen working on dayshift work nine hours per day, and on nightshift eight hours per day. These men change week about.
Chinese - 598 men, 1 woman, 4 children; total, 603. Nauruans - 337 men, 342 ‘women. 500 children; total, 1,179. Whites- 59 men, 26 women, 25 children; total, 110. Malays - nil. Chinese woman - 1.
One thousand five hundred pounds per annum.
Value of imports for year ending 31st December, 1923, was £53,684 19s. lid. Phosphate and copra to the value of £278,415 was shipped from Nauru for the year ending 31st December, 1923.
Total tonnage and value for the past four years have been: -
Effect on “Western Australian Industries - Duty on Shovels.
asked the Minister for Trade and Customs, upon notice -
– The answer to each question is “ Yes.”
asked the Prime Minister, upon notice -
Whether, in view of the fact, as reported by the Department of Trade and Customs, that after the imposition of heavy duties on the Imports of shovels to Australia, for some years, only fifteen men are engaged in their manufacture, he will favorably consider the granting of a pension to these fifteen workmen, and, by removing the duty on this tool of trade, enable tho rest of the people to purchase cheaper shovels ?
– The suggestion of the honorable gentleman will receive consideration.
asked the Minister representing the Minister for- Home and Territories, upon notice -
– The answers to the honorable member’s questions are as follow: -
Examinations for Promotion - Salaries of General Division - Postmen’s Rounds in Melbourne.
asked the Minister representing the Postmaster-General, upon notice- -
– The Commonwealth Public Service Board has furnished the following information: -
asked the Minister representing the Postmaster-General, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Minister for Health, upon notice -
– The staff, with equipment, is proceeding to Port Pirie next week, and the laboratory will be ready for use as soon as the equipment is installed, which, ifc is hoped, will be before the 1st July.
asked the Treasurer, upon notice -
– The desired information is being prepared, and will be furnished to the honorable member later.
asked the Prime Minister, upon notice -
– The- answers to the honorable member’s questions are as follow : -
Crude oil put into process, 6,230 tons. Products made - Fuel oil, 957,457 gallons: benzine, 295,821 gallons: kerosene, 66,250 gallons.
asked the Minister for Trade and Customs, upon notice -
Whether he will assist in opening up new Eastern markets, which cannot be exploited owing .to lack of regular shipping, by advertising for offers for a monthly shipping service, with refrigerated space, from Australian ports to Shanghai and Hong Kong, at freight rates not exceeding those ruling between America or Great Britain and China?
– Much attention has recently- been given to this matter by the Board of Trade and the Department. Whilst the most sympathetic view has been taken, it is doubtful whether under the present conditions any possible lack of shipping will prejudice the development of trade from Australia to Shanghai and Hong Kong. I would assure the honorable member, however, that it is recognized by the Government and the Department that the development of track generally from Australia to the East is desirable, and the matter is having sympathetic attention.
The following paper was presented: -
Defence - Australian Military Forces - Report for the Inspector-General by Lieut-General Sir H. G. Chauvel. G.C.M.G., K.C.B. (Chief of the General Staff), Part I., 31st May, 1024. .Ordered to be printed.
– I desire to ask Question 12 on the notice-paper.
– The honorable member is too late.
Bill returned from the Senate without amendment.
– I move -
That, in accordance with the provisions of the Commonwealth Public Works Committee Act 1913-21, it is expedient to carry out the following work : - The establishment of an Aircraft Depot, with accessory services, at Laverton, Victoria, which work was referred to the Parliamentary Standing Committee on Public Works and on which the Committee has duly reported to this House the result of its investigations.
This is a very important work. It is proposed to establish at Laverton, Victoria, an aircraft depot, . comprising stores, workshops, hangars, living quarters for officers and men, and- landing grounds for machines. In addition, provision will be made for the training of a Service Squadron. The purposes for which the depot is required are - (a.) A store for housing mobilization equip ment, and for the storage of all reserve working equipment for training purposes in peace time. lb) A receiving depot for all stores received from overseas and local contractors.
An aircraft depot is necessary to house large quantities of valuable aircraft equipment, worth £1,000,000, now accommodated in unsuitable temporary hangars and buildings at Point Cook and Spotswood. The proposed site has an area of 160 acres adjoining the MelbourneGeelong railway, and extending to the Melbourne-Geelong road, about half a mile from Laverton railway station. The projected buildings are simply designed. The workshop and store buildings were intended to be of brick, and the residential barrack and messing accommodation of hardwood framing covered with weatherboard, the whole to be roofed with iron. As far as practicable, materials not required at the existing barracks at Williamstown will be used. Attention will be given to theCommittee’s recommendations regarding the use of concrete in the construction of depot buildings and cottages. In addition to1 necessary services, such as water supply, sewerage, electric supply, fire protection, roads, &c, provision has been made to connect the depot with the main Melbourne-Geelong railway by a siding with facilities for handling heavy goods. The construction of the depot will be spread over four years, and the total estimate of cost, to which must be added £3,528 paid for the acquisition of the site, is -
The proposal has been fully inquired into and reported upon by departmental officers, and their report is available to honorable members.
Question resolved in the affirmative.
Debate resumed from 18th June (vide page 1366), on motion by Mr. Bruce -
That the Bill be now read a second time.
.- I protest very strongly against the action of the Prime Minister in connexion with this measure. Yesterday the first reading of the Bill was taken, and the motion for the second reading was moved. It was not until the Prime Minister had finished his speech, in moving the second reading, that honorable members were given an opportunity to learn what the Bill meant. I askedwhat it meant, and was told that it was for the purpose of increasing capital in order to purchase oil. Until the Prime Minister had explained the provisions of the Bill, honorable members had no idea of what it contained. After” the second reading ofa Bill has been moved, a certain time is allowed to elapse in order to permit honorable members to learn just what the measure contains. The second reading of this Bill was moved only yesterday, and the debate is resumed to-day. I protest against that. I do not think that the Prime Minister is treating honorable members, and especially the Opposition, with the courtesy with which members of the Opposition treat him.
– The honorable member will recognize that there is only one purpose sought to be effected by the Bill, and, therefore, it should not take long to grasp what it contains.
Mr.E. Riley. - But there is a.long historybehind it.
– No doubt, the Prime Ministerwould like to hurry measures of this type through quickly, in order that honorable members may not be fully seised of what is behind them, and what they really mean. When this particular matter was brought before the House in 1920, the then Prime Minister (Mr. Hughes) gave a long dissertation upon oil. He spoke like a mining prospectus. May I say that, in his capacity as a private member, the present Prime Minister spoke, on the same occasion,no less like a mining prospectus. He stated yesterday that he had offered several objections to the original Bill with regard to freights and other minor matters; but the fact remains that the right honorable gentleman gave that measure his blessing.
– With certain alterations, as the honorable member will, no doubt, remember.
– I have already said that, with certain minor alterations, he gave it his blessing. He stated, amongst other things, that it was obvious that the Anglo-Persian Oil Company, whose officers were in Papua endeavouring to find oil on behalf of the Commonwealth, would lose their job as oilsellers from their Persian wells immediately they discovered oil in Papua. I shall deal later with the maladministration that has taken place in Papua. The right honorable gentleman went on to say that he was quite satisfied with the commercial morality of that very respectable company, and, so far as he was concerned, he gave the agreement with the company his blessing. The oil agreement owes its origin to a visit to London made by the ex-Prime Minister (Mr. Hughes) and Sir Joseph Cook. In 1918 they began to negotiate with the Admiralty with regard to oil supplies, or the discovery of oil in Papua. After a good deal of negotiation, an agreement was ultimately arrived at under which the Commonwealth Government was to put in £50,000, and the British Government a similar sum. The £100,000 was for the purpose of oil prospecting in Papua. At the time that arrangement was entered into I questioned the necessity of the Commonwealth Government going cap in hand to the British Government for a paltry £50,000 in order to carry out what was obviously its duty, and not the duty of the British Government. But, apparently, that was only the forerunner of a set of circumstances which followed each other closely. The culmination, of course, was the establishment of a practical monopoly of oilrefining and distribution in Australia by the Anglo-Persian Oil Company. The history of the operations of the officers of this company in Papua warrants a very strict investigation into the great loss of money there. It is exceedingly difficult to obtain information with regard to this particular scandal - for scandal it is. When honorable members ask questions in this House about these operations, they are invariably put off the track. I do ‘not blame the Prime Minister for that. I blame the people in charge who are supposed to be in the pay of the Commonwealth Government, but who are first of all representatives of the AngloPersian Oil Company. The fact remains that when information is asked for it cannot be obtained. I want to deal with the clause of the oil agreement which provides that the Anglo-Persian Oil Company shall provide 200,000 tons’ of oil per annum to the Oil Refinery Company, of which the Commonwealth Government is a half shareholder. Immediately the officers of the Anglo-Persian Oil Company discovered oil in Papua, that would mean that they would not continue to sell the oil from their Persian wells. The information now in my possession, which was not available when I last moved in regard to this matter, justifies every statement I made with regard to the operations of the Anglo-Persian Oil Company in. Papua. Before going into that, I propose to prove that there is oil in Papua; that it was discovered by the Germans in’ 1913 in German New Guinea, and in 1911, in Papua, by the Commonwealth Government : that immediately the AngloPersian Oil Company officers went to Papua and German New Guinea they kept religiously away from the known oil seepage; that they wilfully kept information about it from the Commonwealth Government; that everything ‘possible was done by these people to prevent oil being discovered j that gallons of oil of a rich quality have been brought to Melbourne; that when reports were sent in by the Anglo-Persian Oil Company officials they wilfully kept back information with regard to the seepages; and that they ordered several of the geologists not to go near any of the seepages. These are fairly strong charges. But they are the same charges as I made when the last Government took action in connexion with this matter. I have been on the oil track for something like eight years, but it has been only recently that I have been able to secure information as to what has been taking place. .Geologists were sent from Germany in 1913 to report upon oil prospects in German New Guinea. They thoroughly mapped out the country from a geological point of view, marking certain areas in black and white, as can be seen to day. Extensive plans were laid down for pipe lines, quarters for workmen, and so on. An expensive plant was ordered, and up-ta-da.te and modern buildings and plant were sketched out. The outbreak of the war, of course, prevented any further work being done by the Germans. Early in 1916, under the Australian regime, after the Commonwealth Government took over the Territory, a party was sent out in charge of a Captain Mcintosh to report upon oil occurrences in NorthWest German New Guinea, to prepare a geological map of the areas and so forth. Seepages of oil were located about 5 miles inland from Smean but’ the strata in this case was quite impossible from an “oilboring stand-point, being entirely volcanic. The party then proceeded to Matapau a village approximately 50 miles from the Government station at Etape. Inland from Matapau on the Waiki River, and approximately 2 miles up the river, the smell of petroleum was distinctly noticeable 250 yards away from the seepages. When the pools were disturbed with sticks, the oil gas was very much more noticeable and the smell much stronger. In the opinion of competent geologists who have been there, as many have, including the whole of the AngloPersian Oil Company’s men, there is sufficient, power in the gas which comes from the seepage to work the necessary machinery for the oil wells. This party in 19.16 had no difficulty whatever in collecting many gallons of rich oil. They did so by scooping it off the top of the pools with coconut shells. Half a mile down, the stream large oil globules are to be seen to-day. They were seen by the Anglo-Persian Oil Company’s officials, but were not even mentioned in their reports. Kerosene tins were filled with oil obtained at this particular seepage, and some of it, as I have already stated, was brought to Melbourne. In addition to, the main seepages, many others have been discovered over an area of about 100 square yards. Near these particular seepages there are evidences of the German camp still to be seen, as are the areas marked in black and white from time to time by the Germans.
– The Germans did not make any attempt to bore.
– They were quite satisfied that oil was there. They made extensive plans; they proposed to get expensive machinery and plant and had made all necessary preparations, even going so far as to station a guard of native police over the seepages with instructions that neither blacks nor whites were to be allowed to go near them.
– Were there any evidences of boring for oil? c
– They were about to bore when war was declared. The Commonwealth Government took over the Territory shortly afterwards - in 1916. The Prime Minister only this afternoon made reference to these particular seepages. The honorable member for Capricornia (Mr. Forde) asked for certain information, and his question was replied to by the Minister representing the Minister for Home and Territories. Generally speaking, the answers given by Ministers to questions put this afternoon did not coincide with the statements made by Mr. Hood, a resident of the Mandated Territory of New Guinea. The honorable member for Capricornia will deal with that particular phase of the matter. I intend to refer to other seepages, and while I do not ask honorable members to accept everything I say, I hope that when E have concluded my speech they will be sufficiently convinced to agree that a Royal Commission should be appointed to go thoroughly into the operations of the Anglo-Persian Oil Company in Papua, and the operations under the present oilagreement, for the continuation of which the Bill now under consideration is intended to provide further capital. Competent geologists have stated that seepages have already been discovered, out of which oil is bubbling into the water, and that they could be profitably worked on a small scale. The Anglo-Persian Oil Company did not recognize the value of these reports, and have wilfully refused to give any information to either this or the preceding Government.
– Did Dr. Wade report on these seepages?
– He did certain work in Papua, much of which was condemned. It is extremely difficult for one who has hot been there to say whether he was’ incompetent or whether he found himself opposed by the Anglo-Persian Oil Company’s interests. He has recently been re-engaged by the Commonwealth
Government as a consulting geologist. Surveying further inland from Matapu it was found that the strata, which form what is geologically termed an anticline, gave valuable indications of oil. Unless these anticlines show sufficient depression to hold oil they are not of much value, for oil, being fluid, cannot be held if there has been volcanic action in the strata. Broken strata allow the oil to escape. The expedition led by Captain Macintosh found that for 15 miles inland from Matapu the geological structure was good. When Dr. Wade was in Papua he sank several “ dud “ bores, but the history of his venture is extremely interesting.. I dealt fully with it when I previously discussed this matter in the House, and I do not propose to go over that ground again. I shall content myself with saying that extraordinary breakages occurred in his inferior plant; that mud troubles occurred which could have been coped with easily by a competent driller, and that machinery troubles were frequent. For months on end his operations were suspended. Captain Macintosh brought back to Melbourne a certain quantity of crude oil, which I dare say is still in the office of the Home and Territories Department.
– I have seen it there.
– On account of the capture of Captain Macintosh by the Germans on the Matunga no further action was taken with regard to his expedition. We now come to the point at which the Anglo-Persian Oil Company began operations. Under the agreement between the Anglo-Persian Oil Company and the Commonwealth Government, several well qualified geologists were brought to Australia, and ultimately sent to Papua. The Government, of course, paid for their upkeep. At the time the agreement was made a gentleman named Langford was appointed Government overseer of the operations in Papua. He resigned soon afterwards, and was then appointed to the staff of the Anglo-Persian Oil Company. Since that time the Commonwealth Government has had no representative in Papua to watch its interests. I do not know whether the Minister for Home and Territories is taking any interest in the Papuan operations of the company, but apart from four or five reports which have been issued, absolutely no information on the matter has been made available to Parliament. I have mot heard of a fresh report in the last eighteen months. A veil of mystery seems to cover everything. The Commonwealth Government must have spent over £400,000 in searching for oil in Papua, and all that it has to show for the expenditure i3 four or five reports and a few gallons of oil, which were obtained prior to the advent of the AngloPersian Oil Company. It is easy to understand the attitude that is being adopted by the company. In a newspaper, called The Petroleum World, which is published in London, and is devoted entirely to oil interests, a report appears of the last annual meeting of the shareholders of the Anglo-Persian Oil Company. Sir C. Greenaway, a brother of the chairman of the Commonwealth Oil Refineries Limited, presided. The report states that the amount available for disbursement and dividends was £5,000,000, and that a dividend equivalent to 20 per cent, would be paid to holders of ordinary shares. Sir C. Greenaway, in addressing -the meeting, said -
We have one well in Persia with an output of 2,000 tons of crude per day, and the well is not yet giving its full yield, being partially shut down. We have many more wells in Persia equally us good.
In the light of that statement it is not difficult to understand why the company does not wish to find oil in Papua. If it has found oil there, the fact has not been disclosed.
– Is prospecting for oil left entirely to the company?
– It is. The company has complete control of all the operations in Papua. A memorandum on Papuan oil resources is published in volume 3 of Parliamentary Papers, 1920- 21, which states that advantage was taken of the presence in London of the then Prime Minister (Mr. W. M. Hughes) and Sir Joseph Cook, in 191S, to open up negotiations with this company. After some preliminaries the British and Australian Governments agreed to contribute £50,000 each for the purpose of exploring for oil in Papua. The memorandum contains the following sentence: -
The company merely does the work on behalf of the G overnments, and derives no other benefit for its services, receiving only its actual out-of-pocket -expenses.
How generous and magnanimous this company is ! It is quite prepared to send competent geologists to Papua to attempt to find oil, the finding of which will probably result in it losing one of its best customers, namely, the .Commonwealth Government, and in return for such consideration it is to receive only its outofpocket expenses. But it very carefully protected its own interests, for the following paragraph appears . in the agreement which is appended to the memorandum -
The agents shall send out a fully-equipped geological expedition or expeditions as soon a? reasonably possible to explore the Territory of Papua for petroleum, and during the currency of the agreement shall take the full direction and control of such geological expedition or expeditions, and shall select suitable areas for the purpose of test drilling, conduct and superior tend the boring operations, and generally bring the work to a development stage.
That shows clearly that the company has absolute control in every respect. Subsequently a party of geologists went to Papua. They included Mr. Lister James, a geologist of repute, who succeeded Dr. Wade as manager for the company; Messrs, H. T. Mayo, M.A., chief geologist; W. Gray, J. .R. Bourchier, J. N. Montgomery, de Vertueil, and Haynes, all of whom were more or less competent geologists. With such a staff one might have expected that a good deal of valuable work would be accomplished. Mr. James soon condemned the work that Dr. Wade had done, which meant that the Government had no useful results for the many thousands of pounds it had expended on that work. It was pointed out that eight wells had been sunk at enormous costs in an area of a little over 1 square mile. Not anything like that number of bores should have been sunk in a small area like that, and one wonders why they were sunk. Reports that I have show clearly that those geologists were not expected to find oil in Papua. So good Were to be the conditions under which they proposed to undertake exploratory, work that Messrs. Mayo and Montgomery intended to take their wives with them when they went into German New Guinea. It was only after some one had described the dangers of the journey that they decided to leave their wives behind. Several of them visited the oil seepages to. which I have referred, and then returned to Port Moresby. Soon afterwards some of them were withdrawn from the Territory altogether. A party then went to Smein, where an .anticline had been located on the Liniock River,
One looks in vain in the reports of the Anglo-Persian Oil Company’s officials for any remarks with regard to this anticline, oilier than those of a condemnatory nature. The reports were always directly against those particular areas in which oil had been discovered or produced. Nevertheless, oil will no doubt be won there, because the strata are favor.:1 bio. This position has the advantage’ of being within easy reach of Suein village. ‘ The party then removed to another village, where valuable fossil evidence was obtained. The next area visited was the village of Ulau where oil conditions were favorable. An inland survey was then decided upon. This was an important and valuable expedition, because no white man had ever succeeded in penetrating more than a few miles from the coast. This inland survey lasted two months. Oil indications were favorable practically throughout the survey, and the country showed consistent oil horizons. After accurately mapping the country, and penetrating some 50 miles inland, the party returned by ‘another route, and eventually reached the village of Suei n This terminated the survey for the time being. The party then returned to Rabaul. Maps and reports were prepared, and, as previously stated, an unfavorable report was submitted to the Government, with the recommendation that further surveys be undertaken. I have with me that report and the accompanying maps. No further work has been done in that particular locality. Notwithstanding that several honorable members, including myself, in this Chamber and in the Senate, asked the Government to take charge of the operations of the Anglo-Persian Oil Company’s officials, nothing was clone, Ministers apparently being quite content to leave these officials an work, and pay out large sums of money for absolutely no .return. Recently I asked the Prime Minister (Mr. Bruce) if it was a fact that the Government were not satisfied with the reports of the officials of the Anglo-Persian Oil Company, and he informed me that the Government were quite satisfied with their operations. I do not know that the Government are aware that for several /months past, Commonwealth officers have been making inquiries of various persons in Papua and
German New Guinea, apparently eudeavouring to secure information which the officials of the Anglo-Persian Oil Company will not furnish. I must accept the Prime Minister’s assurance that Ministers are quite satisfied with the operations of the Anglo-Persian Oil Company, but I am not, and, most certainly, many other honorable members are not. Nothing but a searching investigation of the operations of the company in Papua and German New Guinea will satisfy me that the charges I have made have no foundation. The fact that Mr. Langford, whom I have already mentioned as being’ the representative of the Commonwealth Government in Papua, is now in the pay of the AngloPersian Oil Company, and no longer represents the Commonwealth Government, calls for explanation. I have finished now with the Papuan phase of the question. Briefly, my charge1 is that there is undoubted evidence that- oil was discovered in Papua and German New Guinea, and that the Commonwealth Government have been wilfully and maliciously misled by officials of the AngloPersian Oil Company in the pay of the ‘Government, to prevent oil being discovered in Papua.
– Those are very serious charges.
– They are serious.; so serious that I would not make them unless I was pretty sure of the reliability of them. A little while ago the Commonwealth Government decided to depart from its policy, under which no permits were issued to private companies to prospect for oil in. Papua and German New Guinea, and permits to prospect in those Territories were granted, with the result that private companies are now operating under permit on the very area on which the Commonwealth Government found oil. I am informed that within six months after the commencement of operations on those oil seepages, oil will be produced by private syndicates in payable quantities. Of course, that remains to be seen; but if it is proved by time, and if the Commonwealth Government, after spending nearly £500,000 in purchasing the expensive outfit used by the Anglo-Persian Company’s officials for testing that portion of our Territory, have handed over this area to the control of syndicates, it will be a scandal that it will take a great deal to explain away.
– It would not speak very much for Government enterprise.
– It is not a question of the failure of Government enterprise. The trouble is that a colossal oil trust has extended its tentacles to secure a grip on oil in Australia, and has been given by the Commonwealth Government complete power to prevent the discovery of oil in Papua and German New Guinea. That great benevolent institution, the Anglo-Persian Oil Company, was described yesterday by the Prime Minister. The British Government, having . 5,000,000 shares in the company, has a majority of the voting strength. The Burma Oil Company holds something like 2,500,000 shares, and other parcels of shares are held by one or two private estates; but, generally speaking, in share capital and voting strength, the British Government controls the company. The treatment received by the Anglo-Persian Oil Company, which is really the Burma Oil Company, from the British Government when the latter took control, was similar to that given to it by the Commonwealth Government in 1920 : and just as the Scottish Company is a pup of the Anglo-Persian Oil Company, so is the Commonwealth Oil Refineries Limited, with this difference, that it pays the Anglo-Persian Oil Company tohave a limited interest in its operations in Australia, because already the company has unlimited power in the Commonwealth. The Prime Minister says that there can be no question of a monopoly of oil products in Australia, but according to the Oil Agreement Act that depends upon the Government in power.
– The honorable member does not mean that I claim that the company can secure a monopoly?
– No ; the right honorable gentleman said that there could be no monopoly so far as Australia is concerned, but I am contesting that statement. Section 13a’ of the Oil Agreement Act provides -
The Refinery Company shall sell its oil products at such prices as are fair and reasonable.
The Prime Minister answered certain questions to-day in regard to the sale of these products, but it may be taken as granted that so far as petrol and kerosene are concerned, the Commonwealth
Oil Refineries Limited will work hand in hand with the Standard Oil Company. In 1922 the Anglo-Persian Oil Company attempted to buy out the holdings of the British Government, so that it might, in conjunction with the Shell and Royal Dutch Group, form a huge group for the Persian, Burman, and Dutch wells, which would make it indeed a formidable institution, to which the Commonwealth would be bound for fifteen years as the result of what has already been done by the Commonwealth Government. It is true that the agreement was signed by another Prime Minister, but no one was more zealous or enthusiastic in putting through this particular scheme than was the present Prime Minister. Section 14 provides -
In order to ensure 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, butnot further or otherwise -
exercise or cause to be exercised such statutory and administrative powers as itdeems advisable to prevent dumping and unfair competition by importers of refined oil from other countries.
It only remains for a Government representing vested interests, possibly those of the Burma Oil ompany, to declare that some overseas oil company is dumping oil into the Commonwealth, and that importation will at once cease.
That means that a rebate will be given to. the Commonwealth Oil Refineries Limited -
Although some Government capital is invested in the company, it is still a huge private concern. If a Government subservient to its wishes were in power, that company would have a complete monopoly of the distribution of oil in- Australia. The Prime Minister contests that statement. It, however, all depends upon the Government and its administration . If Ministers were friendly to the AngloPersian Oil Company, they could very easily make a close preserve for them. The Anglo-Persian Oil Company, the parent company, has sixteen directors, two of whom represent the British Government. The strange thing is’ that one of the representatives of the British Government is Lord Inchcape, who is the head of a great shipping trust. When the Prime Minister replies, I should like to have information as to the constitution of the company which recently brought two shipments of oil to Australia. Did the company which owned the British Rose and the other vessel conveying the oil belong to Lord Inchcape’ s Combine? I am informed that the Inchcape Combine has carried, and will continue to carry, the whole of the oil from Persia to the Commonwealth Oil Refineries Ltd. I should be glad if the Prime Minister, when he replies, would state whether that is correct.
– It would be in the interests of Lord Inchcape for oil not to be discovered in Australia. Its discovery would affect his shipping interests.
– Immediately oil is found in Papua his profits from the shipping of oil to Australia will come to an end. In 1922 negotiations were opened up with the Burmah Oil Company and the Royal Dutch Shell Group for the purchase of the British Government’s interest. At one stage, on the 10th of November, 1923, the London Times said that the sale of the shares had practically been decided on. On the 13 th 08 November the Daily News stated that official confirmation of the Government’s intention was still lacking, but that there were reasons for believing that it had been decided to sell the British Government’s holdings in the Anglo-Persian Oil Company. When the late Prime Minister (Mr. Hughes) introduced the original Bill, he laid particular stress on the fact that the people of the Commonwealth would be protected because the British Government controlled the Anglo-Persian Oil Company. The pre sent Prime Minister (Mr. Bruce) also dealt with that phase of the question.
– The British Government still control it.
– Yes, but it is only an accident that they do.
– The last British Government refused to sell, as did the present Ramsay MacDonald Government.
– The honorable member is not right in that statement. The fact remains that one of the chief arguments used to get a highly critical Chamber to agree to the original Oil Agreement Bill was that the British Government would protect the interests of the people of Australia. There was nothing in the agreement to the effect that if the Commonwealth Government sold its interest, the agreement would be null and void. Apparently it was only after the oil company had been formed in Australia that the negotiations for the sale of the British Government’s shares commenced. When the Baldwin Government was defeated no doubt the Burmah Company and the Royal Dutch Shell Group were very disappointed. The British Labour party convened a special meeting to deal with this matter. A resolution was adopted requesting Mr. Ramsay MacDonald to inform Mr. Baldwin that the sale of the Anglo-Persian Oil Company’s shares by the Baldwin Government after its defeat would be improper. Mr. Baldwin, therefore, took no further action. But had a Labour Government not : .’succeeded to office in England, those shares would have been sold.
– That is only an assumption.
– The honorable member knows that he has only quoted certain rumours.
– I have quoted authoritative statements. I have given the statement of Mr. C. de Lisle Burns in the Labour Magazine, the official organ of the British Labour party, in September, 1923. Clause 6 of the original oil agreement provided that the refinery company should forthwith, after registration, erect, equip, and operate in Australia a modern refinery. But when it came to the question when were they to operate, no information was forthcoming. Since 1920 I have asked questions, almost monthly, regarding the operations of this, company. The oil agreement was assented to on the 29th May, 1920. It is now June, 1924, and only recently, after nearly four years have passed, has the company started to operate in Australia. They have had trouble with their tanks, one tank of oil has burst, and leakages have occurred from time to time. Apparently, the same maladministration or incompetence has taken place in connexion with ‘the refinery at Kororoit’ Creek as at Papua. I realize that I have made a strong statement in levelling charges against the officers of the AngloPersian Oil Company. I have charged them with having wilfully withheld information from the Commonwealth Government, with having received money under false pretences, and with having taken every possible step to prevent oil being found in Papua. On a previous occasion I moved- that a Royal Commission should be appointed to inquire into the position, and I propose to adopt a similar course to-day. I do that because I believe that a scandal exists, and that money has been wasted. We have nothing to show for an expenditure of over £400,000. I move-
That all the words after “ That “ lie left out, with ii view to inserting in lieu thereof the words “ the Bill be withdrawn, and that a , Royal Commission bo appointed to inquire into and report upon the operations of the AngloPersian Oil Company in New Guinea and the Commonwealth oil agreement.1’
– I congratulate the honorable member for Darling (Mr. Blakeley) upon the lucid manner in which he has dealt with this important subject. We owe him a debt of gratitude for the information he has given to the House. No question concerns the future of the Commonwealth more than that of adequate oil supplies. We are living in an oil age. We have oil-driven machinery on our farms, and in other directions the fact is made clear to us that any country which desires to progress must adapt itself to the use of oil-driven machinery. Throughout the civilized world there is a demand for oil. It is to be regretted that the supply of oil is in the hands of six or seven large companies, who are able to regulate the price to suit themselves. These companies are becoming stronger each year. When the original Bill was introduced four years ago by the then Prime Minister (Mr. Hughes), I was hopeful that some relief would be given to the Commonwealth. I was simple enough to believe that this country would be protected from the oil combines. But what has been the result ? We have simply been marking time and wasting money. Notwithstanding the great capital put into the AngloPersian Oil Company, no refined oil has yet been placed on the market by it. In connexion with the installation of an oil plant at Williamstown, we have had repeated in Australia what has occurred in Papua and the United States of America. Mr. Hughes told us, four years ago, that within two years Australia would be refining her own oil. That was very encouraging, but four years have elapsed and no oil has been refined and placed on the market by the company. On the directorate the Commonwealth is represented by Sir Robert Garran, Sir Robert Gibson, an engineer, and Mr. Lockyer, a former public servant. Each of these gentlemen draws £300 per annum in fees, not an excessive amount if the company were functioning properly. The company looked about for a refining plant, and found one at Hamilton, New South Wales, which had successfully refined oil, but was then idle. It bought that plant, and transferred it to Laverton, “Victoria. I have seen the prospectus of the company that established the refinery at Hamilton, and it sets out that a complete plant would cost £58,000. I am informed that the Commonwealth Oil Refineries Limited paid nearly £100,000 for the plant second-hand .
– Is the honorable member’s information reliable ?
M.* E. RILEY.- I have sought official information from the Prime Minister, but I have been unable to get it. No doubt my questions were forwarded to the directors, but they have side-stepped the inquiries. A Royal Commission should be appointed to get that information. The plant at Hamilton had actually refined oil, but although four years have elapsed since the Commonweath entered into this agreement with the Anglo-Persian Oil Company, and the plant is now established at Laverton, it is placing no oil on the market. I have read that a British refinery, three or four times as large as that at Laverton. was completed and in operation within two years. Yet a company in the Commonwealth that is sup-, posed to understand the oil business has been engaged in preparations for four years, and to date has refined no oil. There must be some motive for this delay. Is it that while the Anglo -Persian Oil Company is able to profitably sell’ imported oil it is not anxious to engage in local refining J
– It pays the company better to import oil than to refine it in the Commonwealth.
– That is so. If ever there was a transaction that required investigation it is this. The Commonwealth has not received a fair deal; yet we are now asked to invest another £125,000 in this concern. The Government says that the money is necessary in order to facilitate distribution. I understood that the original capital included provision for dis.tribution as well as for refining. The company promised to refine and supply oil to the community within two years, but that is not being done. The refinery is still idle, and what is the result ? In 1910 the price of oil was £3 5s. per ton, and in 1920, £9 10s. per ton. That increase represented an extra cost to the Commonwealth of £200,000 for oil fuel for the Navy alone. Surely this matter is important enough to warrant inquiry by a Royal Commission. I asked the Prime Minister whether the Oil Refinery Company had acquired a second-hand plant at Hamilton, and, if so, whether a valuation had been made, and what was the report of the valuator and the purchase price. The right honorable gentleman replied that the company was a private concern, and he had no authority to supply the information. All the doings of the company are shrouded in mystery, and I cannot agree to vote a further contribution towards it while the present unsatisfactory management continues. Not one of the Commonwealth representatives on the directorate knows anything about oil. The Commonwealth is supposed to hold the predominating share interest, but the Anglo-Persian Oil Company has four directors on the Board and the Commonwealth only three. The first report of the company that I read showed that it banked with the Commonwealth Bank. The next report mentioned the English, Scottish, and Australian Bank as handling the company’s business. A large amount of Commonwealth money is in vested in the company, and yet it has removed its business from the Commonwealth Bank to a private institution. I asked the Prime Minister for information on that subject, and he could not supply it; but surely an’ explanation is necessary. I can see no justification for making more money available to the company until we have .a. full statement of what has been done with the money already advanced. I understood that the company would refine all shale oil produced in the Commonwealth. Whether or not there have been any developments of that kind I do not know, but it is a fact that the refinery has been removed from a district in which shale oil was produced and re-erected in a State in which there is no shale oil.
– Oil refining at Hamilton could not have been a payable proposition.
– I do not know whether it was or not; we have been given no reasons for the transfer. We have not been told what price was paid for the plant, the reasons for the delay in starting, or whether -the company intends to erect refineries in other States. Our policy should be to establish refineries in each State. An ever-increasing proportion of the ships visiting these shores is using fuel oil, and there should be in every State facilities for refining oil. S6 far, the company’s operations have been concentrated at Laverton. Like the honorable member for Darling (Mr. Blakeley), I am suspicious of the company. I believe that oil could have been produced earlier had the Anglo-Persian Oil Company so desired ; but so long as it can make profits out of imported oil it has no inducement to facilitate local production. Yet the discovery and refining of oil is essential to the welfare of the primary and secondary industries, and even to the defence, of the Commonwealth. In the circumstances, I hope that the House will delay this measure and appoint a. Royal Commission to elicit the information that we are entitled to have.
.- I support the amendment moved by the honorable member for Darling (Mr. Blakeley). The conduct of the Government in entering into an agreement with the AngloPersian Oil Company without first _ob- tabling the sanction of. this Parliament is on a par with its conduct in paying money to Bawra without parliamentary approval. I, too, protest against the Government agreeing to pay a large sum of money to a company controlled by oversea interests. The honorable member for Darling has pointed out that as Lord Inchcape represents the Imperial Government on the board of the AngloPersian Oil Company, Australian interests are likely to suffer. A good case has been made out for inquiry by a Royal Commission into the failure of the company to delevop the oil resources of Papua. While the honorable member for Darling was speaking, the Prime Minister interjected that his statement that the last British Government was negotiating to sell its interests in the Anglo-Persian Oil Company was only a rumour. I direct the attention of honorable members to the fact that on the 17th January last the British Tory Government, of which Mr. Baldwin was Prime Minister, admitted, in answer to a question in the House of Commons, that the question of disposing of the Government’s shares in the AngloPersian Oil Company was under consideration, and that the Government were being urged to that course by various oil interests. I was surprised to learn that this gigantic corporation, which has entered into partnership with the Commonwealth for the refining of oil. is in need of further financial assistance. I find, on reference to the official report of the House of Commons debates, that on the 8th May, 1923, Mr. Baldwin, in answer to a question, stated that the net profits of the company for the years in question, after providing for home charges, debenture interest, income tax, royalty, and depreciation, were as follows : -
It is evident from those figures that the company is making huge profits. The decrease in the profits for 1922 as compared with those for 1921 was clearly due to the fall in the world’s price of oil. There was a reduction of price not only in Australia, but in every other country.
To sum up, it seems to me that Australia, up to the present time, has not benefited by holding an interest of £250,001 in this company, and is not likely to benefit, seeing that as the company’s oil interests lie in Persia and elsewhere, it has no desire to find oil in any of the dependencies of Australia. A book entitled Oil and Anglo-American Relations, was issued on this ; subject last year by Messrs. Davenport and Cook, who point out that the AngloPersian Oil Company is associated with the Shell Royal Dutch combine. The Prime Minister (Mr. Bruce), in his speech yesterday, said that one object of the arrangement with the Anglo-Persian Oil Company was to combat the great Standard Oil and Royal Dutch combines, but in the book to which I have referred it is clearly pointed out that the Royal Dutch Company and the Anglo-Persian Company are virtually inter-related. From that stand-point we are the victims of a world-wide Trust. Reference is also made in the book to the fact that Australia has entered into an agreement with the Anglo-Persian Company, and has given it certain concessions for exploration purposes in Papua and New Guinea. It is suggested .that the company will make no effort to discover oil, and that it has entered into the agreement in order still further to strengthen its grip in its world fight with the Standard Oil interests of America. The book also points out that oil exploration in Canada has materially increased since an “opendoor” policy was adopted in the matter of oil concessions and oil development. I know little of the international aspect of this matter, but I have given it some consideration since it was brought before the House recently, and I submit that, in the first place, Parliament should be consulted before agreements involving the expenditure of large sums of money are entered into ; and that, secondly, it is not desirable in the interests of Australia that we should take up shares in a company that is controlled from oyerseas, and has undoubtedly a world-wide monopoly. An honorable member in the corner has suggested that to oppose the agreement is equivalent to opposing Government ownership of public utilities. It i? not a question, however, of Government ownership, for although we control a majority of the shares, we certainly do not control the policy of the company. We merely have a right of veto in certain respects only. The control of the policy of the company is vested in a majority of the directors, who represent a minority of the shareholders. On questions of this kind, the Labour party will not agree to the Government participating in capitalistic concerns. We stand uncompromisingly for Government ownership and complete Government control, but an arrangement of this kind is a “ piebald “ control, and is likely to create corruption and to operate disadvantageous^’ to the people of Australia.
.- I support the amendment moved by the honorable -member for Darling (Mr. Blakeley), who should be commended for his speech. He occupied the whole of the time allowed to him, and I believe he could have continued for much longer in giving us valuable information regarding the oil business. Honorable members ou this side of the House contend that there is something very suspicious about the agreement with the Anglo-Persian Oil Company. In the face of the information given by the honorable member, and substantiated by him, we cannot give the Government authority to put more money into this company until we have been furnished with complete information, and that information can be elicited from an oyster-like company and the Government only by a Royal Commission. While the honorable member for Darling was competently stating his case, supporters of the Government were not in the House, but when the division bells ring they will troop in and give a blind vote.
– What about me?
– The honorable member is in his place, and I do not complain of him. The Bill involves the linking up of this country with a company whose reputation for predatory tactics is world-wide, but very few .supporters of the Government are present. Not having heard any of the debate, and not knowing what they are voting for, they will, upon the ringing of the bells, line up behind the Prime Minister and vote as he directs them. Such a condition of affairs is deplorable. Another disquieting thing has been seen in this Parliament on several occasions lately.
When the interests of big companies are concerned, when public funds are proposed to be used in their interests, their representatives crowd the galleries of the House. Not as much as twopence, of course, can be given from the public purse to assist- industrial organizations, however hard up they may be, but public funds may be given freely and openly to assist a combine like the Anglo-Persian Oil Company. Later, I presume, some excuse will be found for not interfering any longer with private enterprise, and the business will be handed over entirely to the company. Representatives of the big pastoral interests concerned were in the House when the Northern Territory Crown Lands Bill was discussed. The chairman of directors of the Commonwealth Oil Refining Company was here when a Bill dealing with that company was under consideration, and now the brother of the chairman of the AngloPersian Oil Company is in an honoured place behind the Speaker’s chair. He is. there to advise Ministers and to direct them what to do. Ministers go backwards and forwards to consult him. This practice has grown to such an extent that Parliament is being subjected to the contempt and ridicule of the man in the street. The Primes Minister has said that he is quite satisfied with the commercial morality and respectability of the company as a trading concern. Of course he is. He is also quite satisfied that it has discharged its obligation, that it will do everything in its power to find oil in Papua, and that we are safe in its hands. He is so satisfied with the company that he has not even sent a representative of the Government to inspect its operations. There is no supervision over the company by the Government. I am satisfied that the company will look after only one interest - the interest of itself - and that, as far as it is concerned, the public of Australia can “go hang.” There is no public morality in such a commercial concern. Can any honorable member show me where any large commercial concern has had dealings with the Government and has refrained from extracting everything possible from the taxpayer? Where is the company which, having been assisted by the taxpayers’ money, has shown the least consideration for them ? Indifference to the interests of the public is characteristic of all companies, including the Anglo-Persian Oil Company. Although the Commonwealth Government holds a majority of the shares in the Commonwealth Oil Refining Company, the interests of the four directors who control it are not identical with the interests of the Government. Their interests are the interests of the Anglo-Persian Oil Company. A consideration of the effect of increasing the price of fuel oil by Id. per gallon will show what opportunities are given to these gentlemen. No one would take much notice of an increase of Id. per gallon, but it would produce, in thirteen months, £250,000. In two years, the directors would receive from it more than the total amount of money put by them into the company, but would they be satisfied with Id. a gallon when they could get 3d.? Was ever big business known to be satisfied with a reasonable return when it .could get a larger one? Such companies consider only one tiling, and that is how much can they charge without causing the public to make- so much noise that their tactics will be noticed. I wonder how much of his own money the Prime Minister would put into this company, which he trusts so much, without having a representative of his own to watch his interests. I wonder how much money any honorable member supporting the Government would sink in a company in Papua if he had no one to look after his interests there. The Prime Minister’s opinion of business morality is such that I believe he would not invest 2d. in such circumstances. Still, he trusts these people so much that he even refuses to give information which is necessary to enable honorable members to judge of the merits of this Bill. He refused to give the honorable member for Darling information for which he asked, on the ground that tho company is engaged in competitive business. Of course it is. They are all engaged in competitive business. But I remind the right honorable gentleman that the people of the Commonwealth hold a majority of the shares in this company, and they are, therefore, entitled to know everything about its operations. It is, to me, astounding that the Government should invest £400,000 of the people’s money in prospecting for oil, through the officials of this company, when they know that it is not in the interests of the company to find oil in Papua, and that they will never find oil there while it is in their interests not to do so. But the childish trust of the Prime .Minister in the company is so great that ho permits the prospecting to go on without having one individual to look after the interests of the Commonwealth. If a big concern in which he was personally interested attempted anything of the kind, he would be the first to withdraw his capital, or to see that his interests were safeguarded. I mark the contrast between the attitude of big business gentlemen in the management of their private affairs, and their attitude where it is a question of the expenditure of public money. Their personal interests must be carefully safeguarded, but where public funds are at stake,, it does not matter a hang. In view of the statements made by the honorable member for Darling, not only is an in quiry- by a Royal Commission justifiable, but very severe punishment should be meted out to some one. The honorable member said, and I believe it is a fact, that when these people discovered oilbearing country, they left it and went on spending the money of the Commonwealth in prospecting areas in which they knew they would not find oil. The honorable member backed up his statements by evidence and reports, but we know that some evidence can be obtained by a Royal Commission which cannot be secured in any other way. For the sake of the reputation of this national Parliament, there should be an inquiry into these matters by a Royal Commission. Any honorable member who votes for this measure without further information will be doing something calculated to injure parliamentary institutions, and will take upon himself a responsibility that I would not care to accept. It is interesting to note that the Inchcape combine comes into this matter, as it does into so many others. Lord Inchcape is the representative of the British Government in this oil business. I hope he will not occupy the position very much longer I suppose the agreement was put through in Great Britain, as it was here, in the dying days of the Government responsible for it. The writing is’ on the wall, and the fate of Mr. Smuts awaits the present Prime Minister of, the Commonwealth, as sure as the sun will rise to-morrow morning.
– The honorable member does not seem to be very pleased about it.
– I am very pleased about it, and I want to prevent the passing of this measure before the fall of the Government. Lord Inchcape, in the vessels under his control, carries the AngloPersian Company’s oil to this country. Ordinarily one may make up with the razzle-dazzle what one loses with the merry-go-round, but, in t this case, the Inchcape Company makes a profit on freights going and coming. We must be really as innocent as children if the Prime Minister can put this business over by prating about the morality of the Anglo-Persian Oil Company. I remember the ex-Prime Minister (Mr. Hughes) stating very definitely that the right to prospect for oil was to be given solely to this company, and we have since spent nearly £400,000 of public money in the work of prospecting. We have not very much cash for the payment of oldage pensions, and we have no money at all for the unemployed, or in fact for anything but big interests. The big interests concerned in this matter would appear to have carried the joke far enough, and evidently are not now very much concerned about oil being discovered in Papua. The £400,000 we have spent on prospecting goes by the board, and there are projectors in Papua now who have guaranteed to find oil within a very short period of time. We know that the gamble for oil is an international gamble. I refer to this in order to remind honorable members that, the Government and its supporters talk a lot about the defence of Australia. I hope that it will not be necessary to defend this country. I trust that with the forces of democracy gathering, as they are in Great Britain, South Africa, and Australia, the day is not far distant when we shall be able to do away entirely with the hellish thing called war. But while reactionary governments, such as that we have here, exist, there will always be a danger of war. The Government by assisting a monopoly to prevent the discovery of oil in a crude form in Australia, or close to Australia, has been guilty not only of a dishonest act, but also of an act of treachery to this country of the basest kind. The honorable member for Darling is to be commended for the time he has given to the examination of this question. I do not attempt to follow its intricacies. I have addressed myself briefly to the broad principles underlying the measure before us. I emphasize my protest against the class prejudice of the Government that legislates for one section only. The representatives of big interests are often to be found behind the Speaker’s chair, where Ministers can confer with them. If a Labour Government were in office, and a representative of a trade union were behind the chair whilst an industrial measure was being considered, I can imagine the righteous indignation in which the Prime Minister, if he were in opposition, would protest against such a thing.
– He will not be in opposition.
– He will be in opposition very soon. He may, of course, refuse to lead an Opposition, but he will not have the opportunity to lead the Government very much longer. Where the interests of their friends are concerned the whole -of the machinery of Parliament is placed at their disposal by the Government. In contrast to this I may mention that I attended with a deputation of industrialists upon the Prime Minister in Sydney. At that deputation the right honorable gentleman was given evidence of the existence of starving women, of women in such a condition that they were unable to give birth to children, and other information of a harrowing nature. He coldly sympathized with them, but said that trade could not be diverted from its natural channels, and that the Government could not do anything in the matter, which was an economic question and nothing -else. That is the attitude of the Government on a matter of life and death, and the putting of bread into the mouths of hungry children, but when it comes to dealing with big business, political and every other kind of morality may be set aside so long as its interests are satisfied. The funds of the public must go to assise private enterprise in subsidies and bonuses, while the people who really keep the nation going, and but for whom the Commonwealth could not continue to exist, may starve or remain out of employment.
.- The honorable member for Darling made out a very strong case for the inquiry for which he asks before the House is called upon to pass this Bill. The charges made by the honorable member, which the Prime Minister cannot very well disregard, are surely sufficiently plain. If they are true they certainly deserve the consideration of this House. As one who has occupied a position in public life for a good many years I am always very sceptical in accepting information from persons who make charges against officials and others acting with the Government. Charges of such a character must be couched in most definite terms before honorable members can be expected to support them. Those made by the honorable member for Darling have been so stated, and the Prime Minister can hardly sweep them lightly aside. His charges are - (1) that over £400,000 of public money has been wasted, chiefly by the Anglo-Persian Oil Company, in oil exploration in New Guinea; (2) that the Anglo-Persian Oil Company’s officials deliberately misled the Commonwealth Government with regard to known crude oil seepages, and deliberately refrained from prospecting them; and (3) that the Government -is not sufficiently protected by the agreement with the company. Those are very serious allegations, expressed in simple and emphatic language. The request made by the honorable member, that Parliament should defer agreeing to the expenditure of another £125,000 of public money to provide additional capital for the company until full inquiry has been made into the proposal, is reasonable. The Prime Minister has not told us that the matter is urgent, and unless he does so we shall certainly act unwisely in hurriedly passing the Bill. Careful consideration should be given to the circumstances of every case in which public moneys and those of private persons are mixed. I am quite willing to admit that the Government is acting in ‘ what it believes to be the public interest, and in a patriotic manner. It may consider that it is assisting the oil consumers in Australia. But that does not relieve it of the responsibility to safeguard the public funds in every possible way. A duty rests upon it either to refute the charges made or to have full inquiry madeinto them. No honorable member whohas had as much experience of public life as the mover of the amendment would make the statements that he has made unless^ he was confident that they could be proved. If they are proved to be incorrect the honorable member knows that’ a certain amount of discredit will rest upon him.
– Hear, hear!
– The honorable member shows by his interjection that he realizes the position in which he has placed himself. It is well known that big private financial interests always protect themselves in any transactions they have with governments. . The history of Federal and State Governments in Australia and elsewhere shows” that they are never slow to accept an opportunity to enrich themselves at the public expense. They do not consider it to be a crime to do so. The Government is a good milch cow every time. We should be specially careful about agreeing to this proposed expenditure, for public money does not seem to be available to relieve many cases of distress in the community. A few pounds would be of great benefit to many returned soldiers, who have appealed to the Government for help to save themselves and their families from starvation, but it is not obtainable. Frequently the men are not fit to follow their pre-war occupations, but because the Repatriation Department rules that their disabilities are not consequent upon their war service, they are unable to get the help that they so sorely need. Direct appeals to the Government for help always elicit the reply that no money is available. This is an additional reason why We should hesitate to invest another £125s000 in this company. In any case, careful” inquiry should be made to ascertain whether the company is acting fairly by the Government and the country. The Prime Minister will do credit to himself and his Government if he accepts the amendment. The only justifiable reason for not accepting it, so far as I can see, is that the matter is urgent, and, if that is so, the Prime Minister should have told the House. A3 the matter stands I shall support the amendment, because I believe it to be in the interests of the public.
.- I support the amendment of the honorable member for Darling. The House should not agree to the Government paying an additional ?125,000 of public money towards the capital of the Commonwealth Oil Refineries Limited until the fullest investigation has been made. Grave suspicion has arisen as to whether the country really benefits from the operations of this company. We were told by the ex-Prime Minister (Mr. Hughes), in 1920, that, if Parliament authorized the Government to invest ?250,000 in the Commonwealth Oil Refineries Limited in addition to the ?249,966 invested by the Anglo-Persian Oil Company, sufficient funds would be available for it to carry out its developmental programme. It is strange, therefore, that we should now be asked to agree to vote another ?125,000 to increase the company’s capital. Mr. Hughes induced honorable members to accept the original agreement by telling them that it was absolutely imperative in the interests of the Navy that the Government should become a shareholder in this new company. His remarks on page 1884 of the 1920 Hansard are interesting. He said -
We depend here for our existence as a nation on oil for fuel for our Navy.
He went on to show how the price of oil fuel had increased. He said that, in 1910, the Australian Navy paid from ?3 5s. to ?3 10s. per ton for its oil; that in 1914, the price rose to ?4 5s. and ?4 10s.; and, in 1920, it was ?9 10s. to ?10. In describing the resources of the Anglo-Persian Oil Company on that occasion he said -
It has a fleet and oil wells which make it perfectly independent of .all shipping rings and corporations. It is willing to make an arrangement with the Commonwealth Government to erect a refinery here, and to supply this country with 200,000 tons of crude oil per annum at current rates until such time as we find oil in Australia! or its territories. When we find it, and in proportion to the quantity in which we find it, the company’s oil will be retired, and our oil will be refined at the refinery. In this refinery, the capital of which is set down in the schedule at ?500,000, we arc to take up ?1 more than half of the shares, in order that we may exercise exactly the same control as that which is enjoyed by the British Government. We shall be entitled to half the profits accruing from the enterprise, we shall bo assured of ample supplies of fuel oil for our Navy, and we shall give employment to very large numbers of men, cither immediately or in the immediate future. We shall also be able .to refine our own oil when it is found. From this 200,000 tons of crude oil it is estimated that we shall get, per annum, 40,000 tons of benzine, 33,300 tons of kerosene, 0,045 tons of lubricating oil. 72,000 tons of fuel oils, 4,500 tons of wax) 0,000 tons of pitch.
That statement induced honorable members to agree to the Bill for the ratification of the agreement. They expected that refineries would be erected immediately he Bill wa* passed, and that should have been done, for clause 6 of the Oil Agreement Bill read -
The refinery company shall forthwith, after registration, erect, equip, and operate in Australia a modern refinery.
Four years have passed, and absolutely nothing has been done. The refinery was not opened until the 1st May last, and only 8,000 tons of oil have been treated, and yet we are asked to- pay away an additional ?125,000 of the people’s money at a time when it is necessary for Australia to economize and exercise the very best judgment in the expenditure of money. In face of these facts, and after the very lucid speech delivered this afternoon by the honorable member for’ Darling (Mr. Blakeley), showing that the Anglo-Persian Oil Company has not acted honestly in its dealings with the Commonwealth Government, particularly in connexion with explorations in Papua and New Guinea, I am of opinion that the Commonwealth is not sufficiently protected under the oil agreement in respect of the price of oil or in respect of freights upon the- crude oil coming to Australia to be refined. The Federal Government is not protected against a withdrawal of the British Government from the AngloPersian Oil Company, which would leave us at the mercy of the huge combine that could then be formed. The Government is also not sufficiently protected by reason of its inadequate representation on the Board of the Commonwealth Oil Refineries Limited. Despite the fact that the Commonwealth holds 250,001. shares in the company, as against 249,996 shares held by the company, the Commonwealth’s representatives on the Board are three as against four directors who represent the Anglo-Persian Oil Company. Confidential reports received from Papua show that the prospecting for oil carried on there by the Anglo-Persian Oil Company’s officials was a farce, no serious attempt being made to discover oil. Of course, the Anglo-Persian Oil Company is now making a substantial profit on the sale of 200,000 tons of crude oil to the Commonwealth Government, on the freights it charges for conveying the oil brought to Australia to be refined, and on the refined products; and as it has a preponderance of voting power on the board of directors, it could ‘ increase the price of oil. An increase of Id. a gallon would in two years recoup it for all its expenditure on the Commonwealth Oil Refineries Limited. Yesterday the Prime Minister (Mr. Bruce), by inference, suggested the need for greatly extending in Australia the bunkering facilities already provided at Sydney, Melbourne, and Fremantle. Mr. Hughes, when presenting the original Bill to ratify the agreement between the Commonwealth and the Anglo-Persian Oil Company, stated that one of the chief objects was to provide fuel oil for our Navy. I have it on the most reliable information, given by one who is in a position to know the truth, that the tanks and bunkering facilities already provided have not been paid for, and are not owned by the Commonwealth Oil Refineries Limited, but have been installed and are owned and controlled by the Anglo-Persian Oil Company, to which company any profits which may accrue will belong. Therefore, it is held by those in a position to have reliable information, that no extra capital is required by the Commonwealth Oil Refineries Limited for the building of tanks for bunkering purposes. It is well that the Government should be absolutely honest with the House, and allow the fullest investigation before binding itself further to the Anglo-Persian Oil Company. Yesterday the Prime Minister remarked that for the first time in Australia the price of motor spirit had been substantially reduced compared with the rates ruling in Great Britain, and that this had happened just when the Commonwealth Oil Refineries Limited was ready to distribute. That statement was absolutely contrary to fact, and I hope that when the right honorable gentleman replies he will have something more to say on the point. In January, 1921, the price of first-grade motor spirit in Australia was 32s. Cd. a case; but, owing to the reduction in the first cost of goods, freight, &c, the ruling price on the 4th of October, 1923 - seven months prior to the 1st of May, 1924, the date upon which the Commonwealth Oil Refineries Limited opened up its refinery - was 17s. 8d. a case. The price advanced to 19s. per case on the 7th of April, 1924. We “ were told that if the Commonwealth invested ?250,000 in the Commonwealth Oil Refineries Limited there would be a reductionin the price of oil. The contrary has proved to be the case. Although the Prime Minister remarks that it was significant that the price of motor spirit in Australia was substantially reduced just when the Commonwealth Oil Refineries Limited was ready to distribute, the real fact is that the price of this spirit had advanced by Is. 4d. a case about 24 days before the Commonwealth Oil Refineries Limited was ready to distribute its refined products, and the latter company charges now just the same as the Combine. In reply to the following question submitted to-day by the honorable member for Darling (Mr. Blakeley) -
How do the refinery prices compare with the products of other companies?
The Prime Minister said -
The initial prices for motor spirit and kerosene are the same as those of other companies. The price of fuel oil is considerably lower.
Yesterday the Prime Minister said that the prices of motor spirit had been reduced by reason of the competition of Commonwealth Oil Refineries Limited. That is not so. In spite of the assurance given by Mr. Hughes in 1920, and the later assurance of the present Prime Minister (Mr. Bruce) that the establishment of this refinery would lead to a reduction in the price of motor spirit, the price of that spirit actually advanced from 17s. 8d. per case to 19s. per case just about when the Refinery was opened. Therefore the Commonwealth should pause before committing itself to a further expenditure of ?125,000, and the Government should accede to the request of the honorable member for Darling for the appointment of a Royal Commission. We know what influences are at work, particularly those which have caused the failure to effectively1 prospect, not only Papua and New Guinea, but also the different States. It does not suit the Anglo-Persian Oil Company to have oil discovered in Australia or in any of the Territories. On the prospecting which is supposed to have been going on in Papua for some years past, the Commonwealth has spent £50,000, in addition to a like sum of money paid by the British Government; yet nothing serious has been done by the Anglo-Persian Oil Company to find oil in that Territory. In fact, the company’s operations are not even being supervised by the Commonwealth Government. The following appeared in the Melbourne Herald on the 14th of June last : -
Oil seepages- exist at Smein, in the Eitape district. The fuel could be gathered in buckets. When the mission steamer from Alexishaven visited the village its crew always visited the seepages with kerosene tins and obtained oil for use in the ship’s crude oil engines. Oil deposits had been found 10 miles inland from Astrolabe Bay, while oil seepages have been found in New Guinea.
When I was in the’ Territory, many people told me that the way in which the oil seepages were allowed to go uninvestigated while the Anglo-Persian Oil Company was drawing a substantial payment from the Australian and British Governments to carry out prospecting work, was a scandal. The fullest investigation should be made into these oil seepages which are alleged to exist in the Territories. When it was thought that oil was about to be struck in a bore at Roma, in Queensland, it was significant that an American expert who was brought out was alleged to have bungled operations. At the opportune’ moment for some one a bit broke and fell to the bottom, causing operations to be abandoned. As Australia is such an extensive user of oil, it suits the big oil corporations to put every obstacle in the way of the discovery of oil in Australia. The great increase in the Commonwealth’s oil consumption shows what wonderful possibilities there are for those who may succeed in discovering oil in Australia. The consumption of residual and refined oils, which was 25,725,000 gallons in 1910, increased to 43,000,000 gallons in 1914-15, to 51,000,000 in 1918-19, and to 66,000,000 in 1922-23. The Government is not playing its part in the endeavour to strike oil in Papua. Ministers have not been sufficiently vigilant in respect of the expenditure of the £50,000 paid to the Anglo-Persian Oil Company, whose agents are operating in Papua and New Guinea without Commonwealth supervision. Of course, we realize that if oil is found in Australia, the agreement under which the AngloPersian Oil Company is to supply 200,000 tons of crude oil every year to Australia will be modified to the extent of diminishing the quantity imported in proportion to Australia’s output. The honorable member for Darling has brought forward sufficient evidence to show that the oil transactions contain all the elements of a scandal, and that a Royal Commission should thoroughly investigate them. It is impossible without a Royal Commission to get people to state on oath what they are willing to say privately and confidentially to honorable members. At any rate, before honorable members agree to pay away £125,000, they should be sure that they will get something in return for the expenditure. The honorable member for Darling has rendered a valuable service to the House and the country in asking for this Commission, and I feel sure that if the Government have nothing to fear, and if their friends have nothing to lose, they will not refuse his request.
.- I am pleased that I am in this House and have the opportunity, along with the honorable member for Darling (Mr. Blakeley), to try to frustrate what would be an unfortunate business deal for the Commonwealth. The first thing we have to consider is what action the AngloPersian Oil Company has taken in the past. It is a peculiar thing that in connexion with the discovery and the marketing of oil, and in the formation of companies for its distribution, fraudulent 6 practices have crept in to a greater extent than in connexion with any other commodity. It is well known that in an endeavour to obtain control of the world’s oil supplies, nations are practically at one another’s throats. Even the United States of America and Great Britain, whose aims are largely akin, and whose people speak the same language, are strenuously opposed to each other when it comes to the question of oil supplies. The Government of the United States of America- was greatly concerned as to the relative British and American shares in the oil supplies of Mesopotamia. Similar competition exists also between -the various companies engaged in the oil industry. The late Prime Minister, when introducing the original Bill four years ago, said that, although there- was no written agrement between the American Standard Oil Company and the Dutch Shell Company and the Texaco Oil Company, he believed there was a “ gentleman’s agreement,” which did not require any signature. I do not say that the Anglo-Persian Oil Company is worse than any other big business concern. It is but natural that people with great industrial and political power should try to retain it. In Australia we have had the experience of one man usurping great political power. Lord Inchcape, who probably is the greatest British shipping magnate, caused us in Australia to have very grave fears concerning the future of the Commonwealth Government Shipping Line, yet that gentleman is at present on the Board of the company with which this Government is attempting to bargain. He occupies an anomalous and impossible position for any man who is determined to do his best for the British Government, but a. position which would be exceedingly useful to one who was afraid that the British Government’s interests might clash with his own. By this agreement we are asked to concur in additional expenditure, yet the Auditor-General has no access to the books of . the company. It is true that we have on the Board an estimable and able gentleman in the person of Sir Robert Garran. T maintain, however, that if this company has nothing to hide, and if the Government has gone into this business in the thorough-going manner which the? Prime Minister would expect of a private individual, a Government auditor should have access to the books of the company. It is unfortunate that when Government money is to be spent, the precautions which would be adopted in our private affairs are not taken. The ex-Prime Minister (Mr. Hughes), when introducing the original Bill, said that £500,000 would be quite sufficient capital, and that within two years we would have an oil refinery established in Australia. But it was only last month, four years later, that the company began to fulfil its obligations in that respect, and started to refine crude oil.
– And during that time one tank burst, and another one caught fire.
– The Commonwealth’s money engaged in the business has been locked up for four years> without interest or any other benefit accruing to Australia. That is not good business. I repeat that throughout the world the oil industry has lent itself to scandals and frauds to a greater extent than any other industry. In the great Republic of America, some of the highest officials have been charged with being connected with oil scandals. I do not suggest that anything of the kind has taken place here. I do not believe that it has. But we need to be careful that in these business arrangements all our actions shall bear the closest scrutiny. Itis strange that since this company, which; was to conserve the interests of Australia,, has commenced operations, the price of petrol has increased in the Commonwealth. An explanation of that state of affairs is required, not because we consider it to be a reflection on the Government; but in order to satisfy ourselves that this company is doing all that it should do. The amendment of the honorable member for Darling (Mr. Blakeley) should receive the support of every honorable member. My reading has led me to the conclusion that even if the Anglo-Persian Oil Company were to do its best .to obtain supplies of crude oil for Australia, the small proportion of the world’s oil supplies held by British interests makes the position of Australia unsafe. Great Britain controls a very small proportion of the world’s oil production. From truly British territory not one gallon of oil is obtained. Great Britain has had to obtain supplies from Burma, and to take a friendly interest in Mesopotamia and Borneo, in order to get into the oil business. The total oil supply of the world in 1911 was 21,000,000,000 gallons. In 1919 the output had increased by 4,000,000,000 gallons. That would indicate that the world’s supply of oil could go on for ever. Out of that large quantity the United States of America contributed 8,400,000,000 gallons, or nearly 50 per cent. Since that time, through obtaining control of oil-field? in Mexico and elsewhere, the United States of America controls 14/20ths of the world’s total oil supply. The oil deposits in the United States of America represent a total of 520,000,000,000,000 gallons. If the world’s consumption of oil remained as at present, that supply would be sufficient for 60,000 years. Notwithstanding that geologists have reported that that is the total proved supply of oil in America, the oil magnates of that country claim that they have sufficient for eighteen years only. In the territory of Oklahoma, the production of oil is 7,350,000 gallons daily. The upper layers of the oil-bearing sand in Burmah - the richest under British control - are almost exhausted, and it has been found necessary to re-drill to a greater depth. It is rather disquieting to know that, whilst in some instances redrilling has produced further supplies of oil, in other instances oil has not been found. And in every case the oil secured at the greater depth has been less in quantity than in the oil-bearing sands nearer the surface. In Burma some of the wells have reached a depth of 2,600 feet. The British people throughout the world cannot expect to get sufficient oil for their requirements. This money, the expenditure of which we are asked to authorize, should be used in other directions which would help Australia with her oil problem. It has been pointed out that vessels using oil fuel have been introduced into the navies of the world, and that the naval requirements of the different nations almost immediately will equal 8,400,000,000 gallons per annum. In addition, commercial vessels are now using oil for fuel to a very great extent, and it is computed that they will use as much oil as will the navies of the world - that is to say, four-fifths of the present annual output of. the world will be used by the navies and the mercantile marine. That will necessitate the doubling of the present annual output. One” of the disadvantages of motor spirit is its rapid increase in price.- Whilst that is to some extent due to the “ gentlemen’s agreements “ or “ honorable understandings,” it is also the result of higher working costs owing to the oil having to be procured at greater depths, and increased economic costs in every department of the industry. Apart from the use of oil in motor vehicles, the domestic consumption in the United States has risen considerably. In late years a very much improved gasoline stove has been evolved, and the people in the American country districts are using these stoves in very much the same way as people in our metropolitan and urban areas use gas stoves. In five years the
Mr. A. Green. consumption of petrol in gasoline stoves in America rose from 14,000,000 to 50,000,000 gallons, an increase of over 300 per cent.
– Usually increased consumption means reduced costs, but the price has risen in spite of increased output.
– That is so. The Labour party advocates that the natural wealth, including oil, shall be controlled by the people, and if the people of America a few years ago had had to face the problems that confront us in Australia to-day, and a democratic Government had been in power, the oil resources of the United States would have been controlled by the State, and the present difficulty would have been avoided. To-day the refineries cannot meet the demands for motor spirit. Consumption is close upon the heels of refining, which is the most costly step in the process of motor -spirit production. Benzol has been suggested as a possible alternative, but! this is only a by-product of the manufacture of coke, and can never supply one-fiftieth of the requirements of Australia. In Great Britain a good deal of attention has been paid to the manufacture of coal oil, and some people are very optimistic regarding its future. It is found that one ton of “ cannel “ coal produces 50 gallons of crude oil, which in the process of refinement yields 14 gallons of motor spirit, 32 lb. of paraffin wax, and 40 lb. of pitch, and from the residue sulphate of ammonia is extracted in payable quantities. One optimist has predicted that coal oil will be a successful competitor with motor spirit, and he claims that it can be produced for ltd. per gallon. But the author I have consulted says that the evolution of a simple and profitable process for distilling oil from coal remains an unsolved problem to science, and certain difficulties have yet to be overcome. The Del Monte process has overcome a number of those difficulties, and if the process can be perfected to enable the utilization of British coal that at the present time is unsaleable, Great Britain will be rendered independent of the petroleum-producing countries of the world.
– Does the honorable member know the difference between the characteristics of oil, coal, and petrol spirit ?
– Yes, and the advantage lies with coal oil.
– I have not gone into that matter. The problem of distilling oil from coal has not yet been solved, but if chemists could solve it, they would confer a great advantage upon British industry, because Great Britain would be enabled to use the inferior classes of coal for which at present there is no market.
– Coal oil is being produced profitably in Newcastle now.
– Coal oil and petrol spirit are two entirely different products.
– The honorable member for Newcastle realizes, no doubt, that coal oil is not yet a competitor with petrol spirit. Another product that has been exercising the minds of the world’s chemists is power alcohol. I believe there are lines of research that might well be explored by the Commonwealth Government, and inquiry by a Royal Commission might show that it would be more advisable to subsidize the development of power alcohol than to hand over further money to the Anglo-Persian Oil Company, which so far has produced no oil in this country and has done nothing to solve the motor spirit problem.
– What has the Institute of Science and Industry done?
– Bulletin No. 20, issued by the Institute of Science and Industry in 1.921, went fairly exhaustively into the subject of power alcohol, and later I shall refer briefly to one of its conclusions, and endeavour to show that instead of paying further sums to the Anglo-Persian Oil Company, which is seeking “ big business,” the money could be more profitably employed in encouraging the production of power alcohol. The authority I have been reading states that oil refiners are unanimous that power alcohol will constitute the motor fuel of the future. It is more abundant, and can be extracted more easily and cheaply from raw materials than its equivalent can be derived from petroleum.
– Prom what is the honorable member quoting?
– Prom The Oil COn-guest of the World, by F. A. Talbot. The author says that there is no limit to the supply of essential raw materials because the vegetable world is prolific in its yield of alcohol. That book was written about 1917, and in science, what may have been the last word a few years ago is not necessarily’ the last word to-day. However, Mr. Talbot’s remarks are substantiated by the findings of a Committee appointed by a Government of which the present Prime Minister was a member’, to report upon this question, but so far its suggestions have hot been acted upon. Talbot claims that potatoes, beet, and other vegetable products containing a high percentage of alcohol would be extremely remunerative ; not only would their cultivation help to solve the motor spirit. problem, but it also would make possible a vast expansion of agriculture. I commend this subject to the members of the Country party, only two of whom are now in the Chamber. The chemists of to-day are engaged in seeking a denaturizing agent, so that power alcohol will not be consumed as an alcoholic beverage. Cheap power alcohol, unless denaturized, might prove a great source of trouble in the community, becoming a veritable Frankenstein’s: monster. One writer has pointed out that power alcohol can be produced at one-eighth of the cost of petroleum spirit. I have shown that the world’s oil resources are largely controlled by America. Notwithstanding the bounty offered by this Parliament, the production of shale oil » has not been proved to be a commercial proposition in Australia. As a matter of fact, even in Scotland, where a good deal of shale oil was produced a few years ago, a majority of the companies have gone out of business, and those still operating are comparatively small. Because benzol is dependent upon the coke market, we cannot expect it to be an appreciable contribution to the world’s requirements of motor spirit. I have mentioned that in the production of coal oil there are difficulties yet to be surmounted. Power alcohol thus becomes the most promising alternative. I shall quote statistics to show how small a share the British Empire has in the control of the world’s petroleum production, and I urge that as a greater reason for inquiry’ along the lines I am suggesting. In 1918 the world’s production of petroleum was 70,000,000 tons, while the total production of the British Empire was 2.080,000 tons, or very little more than one thirty-fifth of the total. The production of Persia was 1,500,000 tons, and the writer whom I quote naively says that the total production of the British Empire and Persia is 3,5SO,000 tons. He counts Persia in with the British Empire. While we are coquetting with a company that had its genesis in Irak and Persia, we are likely to involve ourselves at any time in international complications. Our American cousins spoke very plainly to the British Government regarding the shares the British Government could have in Mesopotamia. It said that the people in a country should be allowed- to run their own affairs, a principle to which members of the Australian Labour party heartily subscribe. The United States of America produces fourteen-twentieths of the world’s .supply of oil, and twotwentieths of the production of Mexico is controlled by American interests, so that sixteen-twentieths, or 80 per cent, of the world’s production, is controlled by America. To the shame of the American people, be it said, a large quantity of American petrol is used for joy-riding, for we find that in 1917 there were 7,600,000 motor cars in America, and only 191,000 petrol-propelled vehicles for commercial purposes, which clearly shows that joy-riding is even more popular in America than it is with the members of the Commonwealth Government. Let me quote “Bulletin No. 20” of the Institute of Science and Industry on proposals for the production of power alcohol and for its utilization in Australia. It was published under the authority of the executive committee of the Advisory Council of the Institute, and it says -
The outstanding feature of the above figures (relating to the thermal efficiency and fuel cost of power), in so far as the present inquiry is concerned, is that they show that the cost of fuel (according to Melbourne prices in July, .1017) is no greater in a properly designed alcohol engine than in existing types of petrol engines. These results are computed on the basis of prices in Melbourne in July, 1917, but since that date the price of petrol has further advanced, and in January, 1918. was 3s. 2d. per gallon. On this basis, with alcohol at 2s. 6d. ner gallon, the cost per horse-power hour would be only 3d. for alcohol, compared with 3rd for petrol.
Dealing with the advantages of alcohol as a fuel, the Bulletin states -
In addition to the advantage of higher thermal efficiency, the following a.re the main factors which contribute to making alcohol a more desirable and, possibly, a more economical fuel than petrol or kerosene, viz.: -
Absence of carbonization.
Absence of unpleasant exhaust..
Greater safety from fire, owing to miscibility with water, which results in cheaper insurance Costs and safe bulk handling.
– Neither the motion nor the amendment entitles the honorable member to discuss all fuel powers. The honorable member must connect his remarks with the Bill.
– I am unfortunate enough not to have made myself clear.
– That is not the point. The honorable member’s remarks were too wide of the Bill to be applicable to it.
– I shall endeavour to show the relationship between my remarks and the amendment.
– The honorable member’s speech is less applicable to the amendment than to the Bill. The amendment deals with a definite company, and a definite agreement.
– I was endeavouring to show the scope of the inquiry which the proposed Royal Commission, if appointed, should hold. I have contended that any further expenditure of money on the Anglo-Persian Oil Company would be unwise; that there are other, methods by which power fuel could be produced in Australia; and that the British proportion of the world’s supply of oil was very small; and I have tried to render a service to my country, in my humble capacity, by showing that one way in which the proposed Royal Commission could assist Australia is by supplying it with power alcohol.
– Had the subject of the amendment been as wide as the honorable member suggests it is, his remarks would be in order. The amendment proposes to appoint a Royal Commission to inquire into the operations of the AngloPersian Oil Company, and to investigate the facts connected with the Commonwealth oil agreement. It is not competent for the honorable member to discuss fuel oils, scientifically or historically, in connexion with such an amendment. I do not wish to restrict him unnecessarily, but must impose some limitation upon him.
– I shall proceed to state why, in my opinion, the proposed sum of ?125,000 should not be handed to the company. The money -would be better devoted, in my opinion, to encouraging the production of power alcohol in Australia. The executive committee of the Institute of Science and Industry has’ made an important inquiry into the sources of production, but with that I shall not delay the House. In a summary of its recommendations the committee says -
The world’s supply of liquid mineral fuels is not sufficient to meet the demand, which is rapidly increasing, and prices have consequently risen enormously. During the financial years 1915-16 and 1916-17, the imports of petrol into Australia increased from 16f million gallons to nearly 20J million gallons, while the price of petrol in Australia increased from Is. per gallon, in 1908, to 3s. 2d., in January, 1918.
Enterprises for the production of mineral oils in Australia have not so far proved successful. Climatic conditions in this country are, however, favorable for the growth of plants containing sugars and starches from which alcohol can be manufactured. Alcohol is in every way suitable for use as a liquid fuel, and possesses certain advantages over petrol. The calorific value of alcohol is 11.000 B.T.U. per lb., compared with 18,500 B.T.TJ. for petrol. But, owing to the greater degree of compression that can be used with alcohol without pre-ignition, the thermal efficiency of 30 per cent, can readily be obtained in a properly designed alcohol engine, as against 20 per cent, in a petrol engine. The result is that the cost of fuel in an alcohol engine, with spirit at 2s. Od. per gallon, is only 3d. per B.H.P. hour, compared with 3id. per B.H.P. hour in a petrol engine with petrol at its present price, viz., 3s. 2d. per gallon in January, 1918.
I direct the attention of members of the Country party particularly to the statement regarding the suitability of the climate of this country for growing plants for the manufacture of alcohol, and I stress the fact that the men who made this inquiry were not interested in promoting the use of power alcohol as against petrol. Apart from the molasses of Queensland, which, instead of going to waste, could be used entirely for the manufacture of power alcohol, the committee regards sorghum as the most suitable vegetable product for Australia. Only a small portion of the spirit required in Australia could be produced from Queensland molasses. On this point the committee says -
Sorghum grain in particular is a very suitable crop for cultivation in Australia, as it will flourish in districts and under conditions fatal to the successful cultivation of . other cereals now grown in this country. As the crops mentioned above are either not grown at all, or are grown only on a small scale, in the Commonwealth at the present time, it is not practicable to state definitely whether they can be cultivated profitably as a raw material for the manufacture of alcohol. If some stimulus or inducement were offered for the manufacture of alcohol it appears that there is a favorable opportunity for the establishment of a new and important industry in the Commonwealth.
The development of the cultivation of crops for the manufacture of power alcohol is likely to play an important or even essential part in a complete agricultural policy. It may lead to the cultivation of areas unsuited for other crops, and may assist in the “ diversification “ of the agricultural industry. Certain crops grown as a raw material for the manufacture of alcohol could be used as stock feed in times of drought. The importance of developing the industry on a co-operative basis must not be overlooked.
I cannot see my way to agree to the Government paying ?125,000 to a company that has already wasted two useful years, during which our money has been locked up. I have endeavoured to show that the quantity of petrol available in the world is limited. Though in the Kimberleys in Western Australia, according to Professor David, is the most likely district in Australia for the finding of oil, as the rocks there are very similar to those in the islands of the Dutch East Indies, at no great distance. In a certain portion of my electorate farmers are growing wheat near the “ dry line,” and, we are now assured by the authorities of the Institute of Science and Industry that sorghum grain can be grown there. I see the possibility of an extension of the farming industry in a direction not previously contemplated. I intend to have the speech I have just delivered printed as a pamphlet to circulate amongst my farmer constituents, and I doubt not that they will appreciate the useful work I have done this afternoon in opposing what, to my mind, is an unwise proposal, and in endeavouring to divert the proposed expenditure to help the farming community of this country.
Sitting suspended from 6.S0 to 8 p.m.
-Corio [8.0].- The discussion on the Bill before the House, and the amendment moved by the honorable member for Darling (Mr. Blakeley) has unfortunately been similar to the discussion on most of the Bills submitted during this session. In the circumstances
I can quite understand the frame of mind to which the honorable member for Fremantle (Mr. Watson) confessed, coming a3 he did into this House with absolutely no previous knowledge of the way in which debates are conducted here. If any honorable member on this side or in the Ministerial corner states his agreement with any measure introduced by the Government his honesty is at once questioned. Unfortunately the honesty and integrity of honorable members on this side has again been called into question during the debate on this Bill.
– They are most certainly behind some very suspicious deals.
– Before I can accept that statement the honorable member will have to adduce much stronger arguments in support of it than those which he has put forward in opposing this Bill. I admit that the charges which he made, if true, are serious and should be inquired into, but unfortunately for him they were supported by statements which I shall not say were untrue, but were certainly very much exaggerated.
– To what statements does the honorable member refer?
– Some of the statements, for instance, alleging waste and extravagance in the operations of the company in connexion with the “expenditure of money for the erection of the oil refinery and other works carried out under agreement with the Commonwealth Government.
– Did not the company’s oil tank burst
– That may be so, but I do not know that the Government are to blame for that.
– The officers of the company are to blame Does the honorable member mean to say that the tank was properly erected or that proper material was used in its erection?
– I have had people from New Guinea and Papua coming to me with the statement that oil is undoubtedly to be found there. I believe that to be true. But there may be seepages, such as those to which the honorable member for Darling has referred, all over the Territory, and yet after investigation it may not be considered that they are sufficiently promising to justify the expenditure of considerable sums in their development.. If the selfishness of this com pany is half as great as it is reputed to be I cannot for a moment understand how it is that it has not acquired leases over portions of New Guinea.
– Does the honorable member not know that there are six companies operating there?
– I understand from what the honorable member has said, that that is so; but my point is that if thisavaricious company, after careful investigation by its experts, does not consider it necessary to exploit the Territory by exploration for oil there can be very little justification for the charges made here to-day.
– The honorable member is showing an absolute ignorance of the subject.
– Order ! The honorable member for Darling is not justified in further interjecting.
– I listened to the honorable member with great attention, for over an hour. I do not propose now to set a bad example by detaining theHouse very long.
– We know that the honorable member is only “ stonewalling “ for the Prime Minister.
– I am not doing anything of the sort. The honorable member is aware that I intended to say a few words before the dinner adjournment, but some of his friends occupying the time, I was prevented from doing so. I am not put up to “stone-wall” anything, but as the oil refinery is located in the electorate I have the honour to represent, it is only right that I should make somereference to it, especially in view of the statements that have been made during this debate. While the honorable member for Darling was speaking I referred to the fact that the British Government did not sell its interests in the Anglo-Persian Oil Company. The honorable member met my interjection by saying that I had not quite accurately stated the position, because the Baldwin Government had been considering the advisability of disposing of the British Government’s interests. Many proposals are submitted to a Government which are not proceeded with. It does not necessarily follow that because a Government has a proposition under consideration it will agree to it. Honorable members would not argue that a Government is bound to accept a proposition merely because it is submitted to it. The fact remains that the Baldwin Government did not sell the British Government’s interests in this concern, nor has the present Labour Government of Great Britain done so. I know that the desire of honorable members opposite is to make capital out of this matter. I have no wish to impute motives to them ; but the whole tenor of their remarks has led me to that conclusion.
– We have been disappointed with the honorable member’s attitude. We made sure of him. He always comes over to this side, and we thought he would do so on this occasion.
– No, I vote according to the dictates of my conscience, which is more than the honorable member does. I want to show that there is no ground for the charge of waste and extravagance by the company in carrying out the agreement with the Commonwealth. This House passed a measure authorizing the advance of several hundred thousand pounds on certain conditions. Those conditions have been complied with. Some honorable members have said that there has been unnecessary delay in the carrying out of the work under the agreement; but the fact remains that the refinery has been completed, is at present in operation, and is turning out an article which it has for sale, and a great deal of which it has already sold.
– How many gallons are turned out a day ?
– I cannot tell the honorable member. I understand that the refinery has been in operation for only five or six weeks, and up to the present it has dealt with 1,660,000 gallons, or 6,240 tons of crude oil. The total fuel oil produced has been 958,000 gallons, or 3,840 tons; motor spirit, 296,000 gallons, or 957 tons; kerosene, 67,000 gallons, or 236 tons.
– Does the honorable member mean to say that this was all refined ?
– It has been refined in this place up to the present, and is for sale. Some of it has been sold.
– At the same price as that charged by the Standard Oil Trust?
– I am not talking now “of prices. I am dealing with the statement that the company has done nothing; that the Government has sunk so much money in this concern, and have received no benefit from the expenditure. Experience teaches us, if we are willing to be taught, that there are very few enterprises that in their developmental stages do not require additional capital to enable them to carry on. The charge has been made to-day that in this business £400,000 has been wasted. That statement is not true. I am referring to the money granted by the Government Under the agreement ratified by the House. and I propose to show how the bulk of that money has been spent.
– The trouble is that the honorable member is confusing two expendituresone at Papua, and the other near Melbourne.
– I am dealing with the operations of the company in Australia, not in Papua.
– But the honorable member is quoting the expenditure in Papua.
– I am not. The fact remains that £360,000 has been spent in the erection of the refinery, a wharf, railways and sidings, offices, and other buildings necessary for carrying out the work of the company, and the acquisition of land.
– Where did the honorable member get his figures ?
– Prom a very reliable source. In addition to the expenditure on the works I have referred to considerable sums of money have been spent in the. establishment of depots in various partsof Australia. Honorable members will recognize the need for depots in the several States. Depots have been established at Melbourne for Victoria, at Sydney and. Newcastle for New South Wales.
– They took the depot away from Newcastle.
– There is a depot now in Newcastle. Depots have also Been established at Brisbane for Queensland, and’ at Adelaide for South Australia. It is. proposed to erect another depot in Fremantle for Western Australia. Becauseof the magnitude of the work it has under-; taken the company has come practically to the end of its financial resources. It is, therefore, asking the Government toadvance an additional sum of money, on the condition that it contributes an equal: sum, for the purpose of the distribution of its products. The company must havemore money to carry on, and I remind honorable members that, according to the agreement, the Commonwealth Government has the right to hold the majority of the shares in the business. They will recognize the necessity for this. There is every justification for honorable members consenting to the Government providing the money required. I shall not traverse all the arguments used by honorable members opposite to support the amendment moved by the honorable member for Darling, but I must admit that I was interested in the statements made by the honorable member for Capricornia (Mr. Forde) concerning oil exploration in Queensland. Efforts to find oil in that State have been made for some years, but so far without success, notwithstanding that considerable sums of money have been expended. In one locality where a bore was put down a part of the boring plant fell to the bottom of the shaft, and it was impossible to bring it to the surface. Consequently, a” new bore had to be sunk alongside the old one, and new machinery had to be obtained for the purpose.
– Did not one bore catch fire?
– Yes, that happened to a bore at Roma. If the reason for nonsuccess is that foreigners have been engaged in the work, why has not the Queensland Labour Government, which has been in office for nine years, undertaken the work with Australian labour ? That Government, as .a matter of fact, sent to America for experts.
– There are American experts exploring in Queensland now.
– And I suppose that when their bore gets well down “the plant will fail as it did in the case to which I have already referred. Surely there are men in Australia sufficiently capable to undertake work of this kind. If the Queensland Labour Government is so certain that oil will be found in Queensland, it is very strange to me that it has not thoroughly explored the country. We should show no hesitation in authorizing the Government to provide the additional capital required by the Commonwealth Oil Refineries Limited for the reasons that I have stated, and particularly because such action will enable it to maintain a controlling interest in the company.
– I do not think it is necessary for me to detain honorable members long in replying to the speeches that have been made. This Bill is to provide for an increase of £250,000 in the capital of the Commonwealth Oil Refineries Limited, of which the Commonwealth Government is to subscribe half. That proposal has scarcely been referred to during the debate. The honorable member for Darling (Mr. Blakeley) made a spirited attack upon the Anglo-Persian Oil Company, but we are accustomed to such attacks on the company by him, and with all respect I say that I do not think he is well informed of the facts. We have heard him attack the company on other occasions with considerably more dash. To-day he confined himself to the subject of the explorations for oil in Papua and mandated New Guinea, and attempted to show that the company had behaved in such a disgraceful and scandalous way that it was quite impossible for honorable members even to contemplate permitting the Government to make any further adventure with it. He said, indeed, that we should cancel the existing agreement. The honorable member descended into such murky depths that those who listened to him must have been appalled. He did not hesitate to make very serious charges, but he produced not a scintilla of evidence to support them. It is lamentable that an honorable member should launch charges of such a character in this House without in any way substantiating them. Such conduct causes wonder at the honorable member’s way of looking at things. It is sad that an honorable member can so easily suspect people of being guilty of the conduct he has imputed to the AngloPersian Oil Company. That company is one of considerable magnitude. Its capital is £20,000,000, and the British Government is its largest shareholder. Even that fact did not deter the honorable member from stating that the Commonwealth Government should not enter into an agreement with the company; nor did .he in any way hesitate to say that it had deliberately failed in its duty under the existing agreement. He stated that, in the prosecution of its sinister designs, it had secured the services of a number of oil experts of considerable standing and repute, and persuaded them to come to Australia, and proceed to Papua and the Mandated Territories. He then said that when they got there the presence of oil in the country was quite obvious to them, but they deliberately refused to make investigations in the most likely localities, and gave all their attention to other parts.
– That is the truth.
– The honorable member shows no hesitation in repeating his statements.
– Unfortunately, they are true.
– The reason given by the honorable member for the failure of the Anglo-Persian Oil Company to discharge its duty in this matter was that it had a contract to supply 200,000 tons of crude oil annually to the Australian Government until indigenous oil was discovered. He said that the company had deliberately betrayed its trust to the Government, and had refrained from giving information to the proper authorities. He concluded his charges by asserting that its officials had wilfully and maliciously misled the Government.
– That is true.
– Those are serious charges, and an honorable member should hesitate to make them until he is in a position to prove them. The honorable member, in producing his evidence, said that when this House was asked to ratify the existing agreement with the AngloPersian Oil Company, the last Prime Minister (Mr. Hughes) made a speech which read very much like the prospectus of an oil company, and that I, being then a private member, followed with an equally admirable speech of the same nature. The honorable ‘ member was wrong in both cases. But when he proceeded to indicate how the company had wilfully and maliciously misled the Government, his remarks reminded one of a wild-cat oil prospectus. He told us of men going round the Territory with a coco-nut shell scooping up oil. I have no doubt that a. quantity of oil could be obtained in that way, but that is a very different thing from finding oil in commercial quantities. Most honorable members know that there are innumerable places in Papua and German New Guinea where kerosene tins can be filled, but it does not follow that oil is present in those places in payable quantities. The honorable member, however, painted so alluring a picture of the possibilities of oil finds that T certainly think that any one wishing to promote an oil company would be well advised to invoke his assistance in preparing the prospectus. The trouble I had when listening to his speech was to understand the true significance of his remarks. He tried to suggest that the Anglo-Persian Oil Company had obtained some amazing advantage under the existing agreement. The real facts of the case are that when the Commonwealth Government, in conjunction with the British Government, originally agreed to employ the Anglo-Persian Oil Company’s experts to explore for oil in Papua and the Mandated Territory, it was hoped that oil would be found there. Since that time, however, the authorities have become somewhat doubtful of it, and, therefore, instead of treating these Territories as an oil reservation the Government has thrown them open, except for an area of 1,000 square miles, which is, roughly, a tract of land 30 miles by 30 miles, to any company or individuals who may obtain a licence to prospect for oil. Notwithstanding the alluring picture which the honorable member for Darling painted, and the facilities which the Government has given for exploration, no payable quantities of oil have yet been discovered. There is not the slightest force in the contention of the honorable member in regard to the oil exploration monopoly which he supposes the company to possess, because the territories concerned! have, except for the area I have just mentioned, for some time been open to any licensed oil prospectors to explore. It is ridiculous to suggest that a company of the . magnitude and importance of the Anglo-Persian Oil Company would be guilty of the acts suggested by the honorable member for Darling for the sake of retaining a contract to supply 200,000 tons of crude oil per annum to this Government. Yet, according to the honorable member for Darling, that contract is of such vital importance to them that they will descend to any unscrupulous practice to keep it, although their annual sales of oil amount to 4,000,000 tons. I ask honorable members to use their common sense in this matter. Even if the Anglo-Persian Oil Company were not controlled by persons whose repute is beyond question, would it be worth their while with an annual sale of 4,000,000 tons of oil to descend to the tactics suggested by the honorable member so that they should not lose an infinitesimal part of their business - the sale of 200,000 tons annually to t]]e Commonwealth Oil Refineries Limited? The suggestion is absurd. The honorable member also saw something sinister and malign in the fact that Lord Inchcape is on the Board of Directors of the AngloPersian Oil Company. The truth is that Lord Inchcape is on the Board as one of the nominees of the British Government, and it is his duty to guard the interests of that Government, and to exercise with his fellow nominee the power of veto retained by it. Yet Lord Inchcape’s position on the Board is represented as another of those instances ‘in which the great interests of which he is the head, with all their ramifications, are engaged in an endeavour to strangle the unfortunate people of Australia. , With Lord Inchcape’s name the honorable member linked up the fact that crude oil must be conveyed from the Persian Gulf to Australia, necessitating the employment of tank steamers. Does the honorable member claim that all the tank steamers in the world are owned by Lord Inchcape, and that Lord Inchcape will see that he is not deprived of the fabulous profits to be derived from conveying 200,000 tons of crude oil each year to Australia? The honorable member, if he made that assertion, would be met with the statement that this crude oil is being conveyed to Australia in tank steamers owned by a company which is a subsidiary company of the Auglo-Persian Oil Company and with which Lord Inchcape has no connexion. Questions were asked to-day about two consignments of oil which have recently arrived in Australia. With great astuteness the honorable member asked for the names of the ships and what quantities of oil they brought. The ships were the British Rose and the British Chancellor both of which are owned by the subsidiary company of the AngloPersian Oil Company. It is by such vessels that crude oil will ordinarily be brought to Australia when the freight is arranged by the Anglo-Persian Oil Company, and when the Commonwealth Government does not exercise the power it possesses to arrange for its own freight independent of the company. The side of his case upon which the honorable member laid most stress was that the Anglo-Persian Oil Company, which has been conducting exploration operations for the Commonwealth Government in Papua and New Guinea, has been deli- berately and maliciously withholding information, ‘inasmuch as its experts have really found oil there, but will not tell the Commonwealth Government anything about it. If the honorable member rests his case upon that basis it is not one of his happiest efforts to indicate that the Government have done something to merit the censure of the House. Eventually the honorable member’s remarks drifted towards the agreement set out in the Bill, but as that did not offer him any scope for his undoubted abilities he swung back to the original agreement, which has been in operation for three years, and which, before it came into operation, received scathing criticism from him, some of which he has repeated to-day. The only point he could make about the original agreement was in reference to the anti-dumping provision, section 14, which is concerning him tremendously at the present moment, though I can imagine him arguing on this provision from either side; To-day he happened to be on a side which did not suit him as well as the other side would have done if he had been called upon to put a case from the point of view which is due to his natural abhorrence of such horrible things as the Standard Oil Company or the Dutch Combine are to him. Section 14 was inserted so that if any corporation was found to be landing oil in Australia at a dumping price the Government could take the necessary action to stop the dumping and thus prevent the new company from being blotted out of existence. The honorable member claims that it was inserted so that the Government, by the exercise of its anti-dumping powers, could strangle the competition of other very respectable companies, such as the Standard Oil Trust, of which he is so fond. I am not sure that the honorable member really dislikes the agreement, but as it was his task to attack the Government on this oil business, he was obliged to make use of this anti-dumping provision. The case he made out was that the Government would get the Commonwealth Oil Refineries Limited going and then say, “By exercising the antidumping powers given in the Act we shall stop the Standard Oil Trust from competing with our own private monopoly, the Anglo-Persian Oil Company.” His case was perfectly absurd, because he knows that the section was adopted in order that the great combines which have held the world in a stranglehold so far as the supply of oil and the refined productsof oil is concerned, should not be in a position to kill it as a dangerous competitor, likely to keep the prices of oil and its refined products at a reasonable level. If that provision is the only one with which the honorable member can quarrel, I suggest that he should take up another subject upon which to attack the Government. Honorable members will see that no reason has been stated by the honorable member for Darling for appointing aRoyal Commission to investigate the matters to which he has referred. I am certain that they will agree that it is eminently desirable that the Commonwealth Oil Refineries Limited, half of whose shares are held by the Commonwealth Government, shall have sufficient capital to do its own distribution, and shall not be compelled to arrange for that distribution through the agency possibly of competitors. I am equally certain that the House will pass the second reading of the Bill without further delay.
Question - That the words proposed to be omitted (Mr. Blakeley’s amendment) stand part of the question - put. The House divided.
Majority . . . . 11
Question so resolved in the affirmative.
Original question resolved in the affirmative.
Bill read a second time.
Clause 1 agreed to.
Clause 2 -
Theagreement made between His Majesty’s Government of the Commonwealth of Australia and the Anglo-Persian Oil Company Limited (a copy of which agreement is set forth in the schedule to this Act) is approved.
.- The clause approves of the schedule. The increase in the capital of the company by £250,000 is said to be required for the purpose of distribution, bunkering, and so on. I would like the Prime Minister (Mr. Bruce) to give the Committee some information concerning the present bunkering facilities in and about Australia. The extraordinary thing about the Anglo-Persian Oil Company is that it has two strings to its bow. Not only does it act in co-operation and conjunction with the Commonwealth Government, through the Commonwealth Oil Refinery, but it also operates as the Anglo-Persian Oil Company, in direct opposition to the semi-public company of which it is a shareholder. In its private capacity the Anglo-Persian Oil Company is already in business in Australia, and quite a number of facilities now being used by the Commonwealth Oil Refineries Limited are owned exclusively by the AngloPersian Oil Company. For these the Commonwealth Oil’ Refineries Limited is paying. There are tanks and bunkering facilities which have been installed and are. owned by the Anglo-Persian Oil Company, the profits from which go to that company, and not to the Commonwealth Oil Refineries Limited. It has been put forward in some quarters that, in view of the fact that the Anglo-Persian Oil Company has certain bunkering facilities in Australia, there is no necessity for additional capital to make further provision in this direction. The Prime Minister asks why a great company like the AngloPersian Oil Company, which handles something like 4,000,000’ tons of oil each year, should trouble itself about the paltry 200,000 tons which come to Australia. Yesterday the right honorable gentleman laid it down rather dogmatically that the establishment of the Commonwealth Oil Refineries Limited was a blessing in disguise to the people of Australia. For four years the Prime
Minister, in either his private or his Ministerial capacity, has been telling us of the great benefits which are to accrue to the people of Australia from this great benevolent institution, which would establish works for the refining of our oil, and generally, would play a kind of Father Christmas part towards the people of Australia. Contrary, however, to the Prime Minister’s assertion that there would be a drop in the price of oil because of the establishment of the Commonwealth Oil Refineries Limited, there has been an increase. The Prime Minister yesterday said that it was noticeable that, for the. first time, the price of motor spirit had been reduced in Australia to a price substantially the same as that ruling in Great Britain, and that that had occurred at the time when the Commonwealth Oil Refineries Limited was almost ready to distribute oil. As a matter of fact, the difference between the Anglo-Persian Oil Company price in London and the Commonwealth Oil Refineries Limited price in Australia is very great. In January, 1921, the price of petrol in Australia was 32s. 6d. a case. In October, 1923, seven months before the Commonwealth Oil Refineries Limited commenced operations, the price was reduced to 17s. 8d. per case. The refinery was opened on the 1st May of this year. On the 7th April the price to the consumer in Australia was increased by Is. 4d. per case. That is the reduction in the price of motor spirit about which the Prime Minister has boasted. Does that indicate that, because of the oil-refining operations in Australia by the Anglo-Persian Oil Company, through- the Commonwealth Oil Refineries Limited, there will be no increase to the consumers in Australia? The Commonwealth Oil Refineries Limited is not different in respect of prices from the Standard Oil Trust, which in some guise or other is operating many of the subsidiary companies Mr. Blakeley. in Australia. There are only twomain groups of companies controlling the supply and distribution of oil throughout, the world. There is the Burmah Oil Company, which is interested in the AngloPersian Oil Company, and also the Shell. Royal Dutch group, acting in conjunction with the Burmah group and the Standard. Oil Company. The price of oil in Australia is fixed by the Standard Oil Company. That company, in conjunction, with the Commonwealth Oil Refineries Limited, decided to increase the price of petrol by Is. 4d. per case. The Commonwealth Oil Refineries Limited - this benevolent institution which was brought into being by the ex-Prime Minister (Mr. Hughes), the present Prime Minister (Mr. Bruce), the Anglo-Persian Oi! Company, Lord Inchcape, and a few more people, who, because of theirbenevolent attitude towards the people of Australia, desired that they should reapthe benefits arising from the colossal operations’ of this great company - is nodifferent from other oil combines. That is proved by the fact that when the Oil Combine raised the price of oil and petrol the consumers had to pay just as much tothis semi-public company, in which the Commonwealth Government is interested to the extent of £250,000, and will have an interest close on £400,000 if this Bill is passed as to other companies. Does Parliament exist for the special benefit of the oil companies of the world, ‘or are we here in the interests of the people of Australia? We are assured that because of the operations of this company oil would be available in Australia at a reasonable price. Honorable members will recollect the beautifully-rounded phrases of the exPrime Minister when he told us that the oil age had arrived, and that the only way to preserve our country and the Empire, and even to keep alive at all, was to obtain a share in the oil supplies of the world. He painted beautiful pictures of the Anglo-Persian Oil Company blessing: Australia with its crude oil, and its wonderfully organized machinery for refining and distribution. That was the chief bait held out to recalcitrant members on the Government side of the House - and honorable members will remember that the Bill had quite a stormy passage. Yet a few weeks before the Commonwealth Oil Refineries started operations, petrol went up Is. 4d. per case.
– There was no oil “available then.
– The refinery was opened on 1st May this year. On 7th April the price of motor spirit was advanced from 17s. 8d. per case to 19s. per case. The price paid by the consumer to the Commonwealth Oil Refineries Limited was precisely the same as that paid to the Texaco, the Shell, or other combines for their oil. And despite the Prime Minister’s assertion that petrol is cheaper in Australia in consequence of the operations of the Commonwealth Oil Refinery, the fact remains- that the price of oil has risen since the company commenced its operations. The Prime Minister airily dismissed certain of my statements by saying that I could not prove them, but he cannot, in that supercilious way, silence the ugly rumours that are in circulation in regard to the Anglo-Persian Oil Company’s actions in Papua. Oil was discovered there, and immediately prospecting licences were granted by the Government several companies applied for them, and commenced operations. I am assured by one geologist that within six months he will land in Australia oil from his area. Whether his anticipations will be realized or not, I do not know.
– I certainly hope they will.
– The Commonwealth has spent huge sums of money in Papua, nominally for the development of its oil resources, but actually to prevent their development, and now private enterprise has been allowed to come in and obtain the oil which as far back as 1916 was known to exist.
– The Prime Minister was not in the chamber this afternoon when I stated that the Oil Refinery Company had bought for £100,000 a plant which was in existence at Hamilton, New South Wales, and which, according to the original company’s prospectus, had cost only £58,000. Pour years have been occupied in dismantling that plant and re-erecting it in Victoria. When the original agreement was made with the Anglo-Persian Oil Company, we were told that within two years the company would be refining oil in Australia, but, so far as we are aware, oil is not being refined yet.
– Yes, oil is being refined in Victoria.
– At any rate, the operations are not yet sufficiently large to influence the market. I asked the Prime Minister, upon notice, certain questions regarding the purchase and transfer of the Hamilton plant, and I was told that as the company was a private concern he could not supply the information. The Commonwealth is represented on the board of directors by Sir Robert Garran, Sir Robert Gibson, and Mr. Lockyer ; and surely Parliament is entitled to know what the company is doing. I also asked for the reasons why the company had removed its account from the Commonwealth Bank to a private bank, and I could get no reply. Unless the Government is prepared to take Parliament more into its confidence, we should refuse to make further contributions to this company. We were told that the original capital of the refinery company would be sufficient to enable the company to start the refining and distribution of oil in the; Commonwealth. Now we are told that all the money has been expended, and that more is required to establish a distribution system. Is it the intention of the company to start refineries in other parts of the Commonwealth? We can get no information of what is intended. I do hot blame the Prime Minister for that; probably he forwards to the directors the questions that are asked, and does not receive any reply. I hope that, in future, Parliament will be able to secure the information to which it is entitled.
.- I trust that the discussion which has taken place to-day will be a lesson to the Prime Minister to keep the Government from interfering in private enterprise. Half a million has been expended upon the establishment of an oil refinery, and now. we are asked to vote another £125,000. Who knows but that in a few years another quarter of a million will be required ? Honorable members opposite, who are always fighting strenuously for Government control of industry, are to-day making an outcry because the Government is a half partner in this industry. It is a pity that the Government interferes in these concerns. What does any honorable- member in this
House know about the treatment of oil ? Surely we can safely leave oil refining and other forms of trading to private enterprise. Members of the Opposition are only too happy to tax the people of Australia in order to enable the Commonwealth to enter into wild-cat schemes, of which they have not the slightest knowledge, and afterwards they level against everybody concerned charges of corruption and evil of all sorts. I hope the Prime Minister will take heed of. what has been said to-day, and in future refrain from committing the Government to partnership in trading enterprises.
– The honorable member for Swan (Mr. Gregory) was unfortunate in selecting this Bill as the text of a sermon to honorable members on this side. The protests that have come from us on this and other occasions have been in criticism, not of Government control, but of the lack of Government control. The Labour party has never favoured the Government entering into partnership with Combines and Trusts, but the honorable member for Swan has always supported such proposals. We protested against the wireless agreement, and held the matter up until an inquiry was held. When we challenged the Hughes Government on the subject we could not get support from the honorable member or- any other member of the Country party to prevent the agreement being ratified. When Labour controls Government affairs there is no charge of corruption, because there is nothing to warrant it; only when this Government links itself with Trusts and Combines, and lends public money to subsidize these concerns, do these troubles arise. When the original agreement was before this House the strongest possible protest was made by our then Leader, the late Mr. Tudor. He opposed the proposal because, as a thinking man, he realized that whilst the object of government control should be to protect the people and not to fleece them. Bodies like the Anglo-Persian Oil Company, the Burmah Oil Company, and the wireless Combine enter into partnership with Governments for no’ other purpose than to get a monopoly to the detriment of the people. I agree with the honorable member for Swan (Mr. Gregory) that it is a bad policy for. the Government to enter into partnership with private enterprise, but it is sound policy for the Government to take control of these public utilities, which, if left in the hands of private enterprise, develop into dangerous monopolies. The Bill before the Committee is for the purpose of voting £125,000 of the people’s money to purchase shares in a concern the profits of which will go in a large measure to a private monopoly. The clause following that we are now discussing authorizes the Government to borrow money for the purchase of those shares, although the Treasury has a surplus of probably £8,000,000 or £10,000,000. We do not desire to unduly delay the passage of the Bill, but the honorable member for Swan cannot be allowed to lecture the Labour party upon its policy. We stand by that policy, and believe in Government control untrammeled by private monopoly.
– I congratulate the honorable member for Darling (Mr. Blakeley) upon having been able in Committee to make an excellent second-reading speech. The honorable member stated that the AngloPersian Oil Company is taking the profits of the bunkering business, but that is not so. The CommonwealthOil Refineries Limited is paying a small charge for the facilities for the storage of its oil that are given by the AngloPersian Oil Company. The honorable member also contradicted my statements regarding the reduction in the’ price of petrol. I produce for the honorable member’s perusal graphs showing the prices of petrol in America, England, and Australia over a considerable number. of years. The honorable member for South Sydney (Mr. E. Riley) mentioned the refinery at Hamilton, New South Wales. It was purchased by the Anglo-Persian Oil Company, but the company never intended to conduct it as a refinery. Its object was to obtain certain materials from it to build the refinery that is now being completed. The honorable member has obtained certain information to show that the purchase was bad business, and a mistake, but I have counter information that it was good business, and the wisest possible thing to do. Therefore, we should not get very far by discussing that matter. The clause under discussion embodies the whole of the agreement, and I again point out that the question involved is whether the company shall do its own distributing or get some one else to do it. If it does its own distributing, it must have an increase of capital.
Clause agreed to.
Clause 3 agreed to.
Schedule and title agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
In Committee (Consideration resumed from 18th June, vide page 1387) :
Clause 58 - (1.) The Minister shall, on the request of a lessee, made at least two years before any date of resumption, in lieu of resuming any lands held under a lease, permit the lessee to subdivide, for closer pastoral settlement purposes -
an area included in the lease approved by the Board as being equivalent to that which the Minister would be entitled to resume; and
any further area. (2.) The lessee may transfer the subdivisions to persons approved by the Minister for the remainder of the term, and subject to the terms and conditions (other than resumption) of the original lease. (3.) The Minister shall issue leases in re spect of the subdivisions transferred and thereupon the area included in the original lease shall be reduced accordingly and the lessee shall no longer be liable to the Minister for the payment of rentals in respect of the subdivisions transferred. (4.) The rentals payable for the subdivided lands shall be the same as those which would have been payable if the land had not been subdivided.
.- I move-
That sub-clauses 1 and 2 be omitted, and that in sub-clause 3 all the words after the word “ shall “ be omitted with a view to insert in lieu thereof the words “ in regard to expiring leases, make the land available in living areas, subject to a ballot of applicants.”
I regard the clause under discussion as the main clause in the Bill, for on the passage or rejection of it will depend the future development of the Northern Territory. Again I impress upon honorable members the fact that they are dealing, in the Northern Territory, with abnormally large holdings, of 10,000 or 12,000 square miles each. The Treasurer (Dr. Earle Page) has stated very definitely that the present lessees hold the best land in the Territory. With that statement I agree. It is an established fact that the large lessees, some of whom control up to 20,000 square miles of country, have taken the pick of the Territory. Under the provisions of this clause, when the time for resumption arrives in 1935, and for a subsequent resumption in 1945, a lessee will be able to nominate his successor for onefourth of the area to be resumed. As the best land in the Territory is being dealt with, and as it is contemplated to spend millions of pounds in the provision there of railways and other public utilities, it is only fair that the public should be allowed to take advantage of the resumption clause, and given a fighting chance: of getting some of the land. Let us take, for example, a station with an area of 12,000 square miles. In 1935 3,000 square miles, and in 1945 another 3,000 square miles, making 6,000 square miles in all, would be resumed. If the station happens to be on the Barkly Tableland, an area of 100 square miles would be ample for a holding for raising sheep, for the Tableland includes some of the best sheep country in the Territory. Such a holding may be possible if my amendment is accepted, but under the Ordinance as it stands? it will be impossible, because the present lessee can nominate his successor for the one-fourth of his area to be resumed. I admit that the Minister is given some discretionary power, because the nominee of the lessee must be approved by him. Assuming that the owner of one of the big leases said to his manager, “I want you to take up the one-fourth of my area to be resumed. I will give two years’ notice of my intention to surrender, and we shall create a company, which you can manage. You will be the nominal holder of the new lease with a guarantee of the management.” In such a case it would be very difficult for the Minister to refuse to approve of the nominee, because the man would be an accredited pastoralist with great knowledge of the industry, and in every respect a suitable holder of the area. Such an arrangement would, however, exclude the possibility of any outsider getting any portion of the 6,000 square miles that might be resumed from the original holder. We have to look ahead in this matter. The great question of the distribution of British populations requires to be considered. There is a surplus population in England of between 15,000,000 and 20,000,000, and the British Government are spending approximately £1,500,000 per week to keep that surplus population from starvation. If we are to maintain the Empire we must tackle the problem of the re-adjustment of the Empire’s surplus population, and upon land settlement alone depends the success of any scheme for its re-adjustment. The Government will not be justified in spending millions of money in the Northern Territory unless it makes provision to secure that land shall be available for new settlement. In the terms of my proposal, on the expiring of the existing leases land must be made available in living areas subject to a ballot of applicants. It is quite wrong to suggest that I am out merely to get a kick at the big man, because if the Minister will accept a modification of my amendment, making it apply to areas of not less than 1,000 square miles, I shall be quite satisfied. We shall be dealing in the Northern Territory with areas of 10,000, 12,000, and up to 20,000 square miles, and the portions which could be resumed from such areas would create an opening for the settlement of hundreds of families, to be engaged in an industry which it has been proved can be carried on successfully in the Northern Territory. All that would then be necessary to ensure success would be the provision of railway facilities. If these are afforded, we shall have an industry established that will not be coming to this Parliament for subsidies, but will be able to stand on its own from the start, and will eventually bring the world’s buyers to our doors. In support of what I am proposing I should like to quote the words of a man who is managing one of the big areas of which I speak. In the Northern Territory Times and Gazette of the 25th January of this year, in an article referring to the possibility of raising sheep in the Northern Territory, I find the following : -
One of these, Mr. W. A. Coleman, of Brunette Downs, refers in a recent letter to the Australasian to the magnificent country awaiting the sheep settler and closer settlement generally on the Barkly Tableland, 700 to 1,000 feet above sea level, with a climate equal to anything in Australia. There, he contends, sheep will thrive as well as they do on the Mitchell grass country in Queensland, where he spenttwentyyears of his life inpastoral pursuits. There is no fever in that part of the Territory, and stock are particularly healthy and robust. Eight hundred big-framed well-fleeced sheep on the place he manages now bear testimony to the resources of the soil, which is capable of carrying thousands of profit-producing people. The rainfall is better on the average than that of the Queensland Downs, and droughts are practically unknown. There are also inexhaustible supplies of subartesian waters at shallow depths, and there is no reason to doubt the existence of artesian supplies. The country in question starts near Camooweal on the border, and includes Avon Downs, Rocklands, Alexandria, Brunette Downs, on to Newcastle Waters. The whole area represented by millions of acres can be improved to carry sheep if transport facilities are afforded, and Mr. Coleman, who has lived there for the last twelve years, clamours loudly for this consideration, and the establishment of a port at Borroloola as well. Captain Bishop, Chief Veterinary Surgeon, in his recent report on the same country, confirms to all intents and purposes the statements made by Mr. Coleman, and the time for this great inheritance should be close at hand.
I quote that because the authority for the statements made is the manager of Brunette Downs, one of the biggest stations on the Barkly Tableland. He says that there are millions of acres there awaiting the settlement of thousands of people. I claim that if the Ordinance goes through in its present form there will be no opportunity for the settlement of thousands of people, or the raising of stock, which this station manager speaks of, after 20 years’ experience in the western district of Queensland, and twelve years’ experience in the Northern Territory. The Minister may contend that if my amendment is accepted the holders of large holdings will hot come under this Ordinance. I do not know that it would be such a very great misfortune if they did not, because about half of the leases in the Northern Territory at the present time are held under Commonwealth laws, which make provision for resumptions at any time on giving the lessees two years’ notice. The balance of the leases held under South Australian laws have a maximum of 21 years to run, and if they are brought under this Ordinance the leases will be extended to 42 years. Without the extension of these leases up to 1965, coupled with the fact that if they are not brought under this Ordinance they will naturally decrease in value as the time for their expiration approaches, should be a sufficient inducement to the lessees to bring their holdings under the Ordinance. The clause under consideration provides that on application the Minister shall permit the lessee to divide his holding for closer pastoral settlement purposes. How much further will that take us, from a new settlement point of view ? There is no provision for improvements under this Ordinance.
– I think there should be more than fifteen members present to hear the honorable member for the Northern Territory. [Quorum formed.’]
– I should like to refer honorable members to a speech made by the Minister for Home and Territories (Senator Pearce) in another place. He said -
Although the Government have the power of compulsory resumption we are encouraging lessees to subdivide their leases. If they do so, we shall, subject to the consent of the Minister, recognize them as leases under this Ordinance.
That supports my statement that these areaa will not be made available when the period for resumption arrives. The Minister for Home and Territories also said -
The Bill provides that the Minister shall permit lessees to subdivide the whole or portion of their leases for closer pastoral settlement, and transfer the subdivisions to persons approved by them.
Throughout the honorable senator’s speech it is perfectly clear that this clause is meant to be so applied that when the period for resumption comes there will in reality be no resumptions, and no land will be made available for new land-seekers. The Minister for Home and Territories went on to say -
Provision is also made for the holder of an existing lease to have preference in respect of a new lease, or portion of a lease, where such new lease is made available before the expiry of an existing lease, and also in respect of any block for which he elects to be given a preference if the existing lease is subdivided on expiry.
That supports my contention that when the year 1935 arrives the present holders of these huge areas will be able to nominate successors to carry on the leases until 1965, and they will also be given power to nominate the holders of the new leases which will then be issued. The Treasurer (Dr. Earle Page) said that this contention was absurd, but he made the same remark about my view with regard to “ the principal watering place.” The honorable member for Kooyong (Mr. Latham), who is a King’s Counsel, proved conclusively last night that I was right in regard to “ the principal watering place,” and I think it will be found that I am right in this matter, too. The Treasurer has not studied the Bill as closely as I have, and the printed reply to my contentions that he read is not sufficient to brush them aside. In parts of the Northern Territory, particularly in the western districts and on the Barkly Tableland, 100 square miles would be an ample holding for sheep. A man of considerable experience admitted to the Minister for Works and Railways during his recent tour of the Territory, that 20,000 acres was quite sufficient for a sheep holding in. some districts, provided that the Government made wire netting available at a reasonable price with repayments extending over a period of years. If such country could be used for the production of wool the expenditure of the Government on railways and other facilities would be more than justified, and the problem of settling the Northern Territory would be solved. Senator Guthrie stated in another place that 1,000 square miles of some parts of the Northern Territory was. ample for any man to hold, and I dare say that no honorable member of this Parliament can speak with greater authority than he. He has spent many thousands of pounds in the Northern. Territory. If the Minister is prepared to accept my amendment, with a provision that it shall not apply to holdings of less than 1,000 square miles, I shall be satisfied. The public should be given atleast a sporting chance in a ballot to secure some of the resumed land. It will not mean any sacrifice for the large land-holders to permit the Government to resume the area they hold in excess of 1,000 square miles. I have not moved my amendment for the purpose of injuring the interests of the big pastoralists, but simply to promote the development of the Northern Territory. The Minister for Works andRailways has published in one of our newspapers a report of his visit to the Northern Territory. Honorable members should read it to obtain some idea of the possibilities of the southern part of the Northern Territory. I believe that if the honorable gentleman had been asked after his visit to submit a policy for developing the Territory he would have presented something very different from the Bill we are now considering. The people in the
Northern Territory recognize that he is a practical man and that he has sympathy with them. I do not want to take advantage of the unfortunate position in which he finds himself in consequence of our party system of government, but I am sure that if he could address the Committee he would say that my contentions are not exaggerated. Clause 42 must surely remove any doubt about the right of a lessee to preferential treatment. It reads -
If a new pastoral lease of any lands is gazetted as open for application before the expiry of the existing lease of the said lands the Board shall, other things being equal, give preference in allotting the lease to the holder of the existing lease, whether that lease is under this Ordinance or under any Act or Ordinance previously in force in the Northern Territory, should he be an applicant for the new lease :
Provided that where the lands included in an existing lease are subdivided into several blocks and leases in respect of the several blocks are gazetted as open for application, the existing lessee shall be given the preference in respect of that block only for which he elects to be given preference.
The lessee obtains a preference both ways. I urge the Minister to give serious consideration to my amendment.
– The honorable member’s time has expired.
– The honorable member for the Northern Territory (Mr.’ Nelson) is quite wrong in stating that the lessee will have the right to nominate his successor. He will have no such right. When the land is subdivided, the incoming lessee must be a man approved -by the Minister and the Land Board, and surely they may be trusted to disallow any unfair practices. The honorable member has been allowed great latitude in discussing the clause. He has really made another secondreading speech. This is one of the most important clauses in the Bill, and its provisions are innovations in land legislation. The object of this measure is to promote closer settlement in the Territory, and to encourage the production of wool. In the ordinary way, many of the leases will not expire until 1935, and the purpose of this clause is to encourage a lessee to ‘subdivide his holding for closer settlement. If that is done, the land will be available for new settlers much earlier than will be the case if the lease is left to be resumed in the manner provided in the Bill. The effect of the honorable member’s amendment, if carried, would be that the Minister would have to make the land available in living areas by ballot on the expiry of the leases, and the whole purpose of the clause would be lost, for the right of the lessee to subdivide would be wiped out. Of course, I know what the honorable member has in mind. We are all desirous that when this good land becomes available for selection through subdivision, a number of bona fide settlers, who are not merely the nominees or dummies of existing lessees, shall be attracted to the pastoral areas. If land is considered desirable, and there is a rush for it, the lessee will subdivide in his own interest.
– Does the Minister think that he will do so?
– The Government have every reason to believe that he will do so, because we have assurances in this regard, and, as a matter of fact, some of the large holders are now in England trying to raise money with which to subdivide their holdings.
– One large holder is doing so.
– If one large holder makes a success of subdividing his holding, it will be an incentive to others to follow his example, and then we shall have that closer pastoral settlement we are seeking. If the lessee were given the right to subdivide by ballot it would play into his hands, because a big demand .would ensure to him the best prices. If the demand exists, and lessees are anxious to subdivide, surely they will have no trouble in getting rid of their holdings to the very people we want to get in the Territory. The clause itself is a new departure in policy, enabling the lessee, if he so desires, to subdivide at his own expense for closer pastoral settlement purposes. It says -
That is the one-quarter which may be resumed in 1935, in- the case of leases brought under the Ordinance -
Or (b) any further area.
If subdivision takes place in this way the Minister reserves the right to resume the difference between the area subdivided by the lessee and the area required to make up the quarter of the holding which he will be entitled to resume in 1935. We are not giving away anything in that respect. Our desire is to promote closer settlement as speedily as possible, and it will be an advantage, and save the Government a heavy expenditure, to have these areas subdivided by the lessees themselves.* I hope that the Committee will reject the amendment.
.- I am pleased that the Minister will not agree to the amendment. The Ordinance has been framed upon the best expert advice available, not only from lessees, but from others, and this clause is an attempt to bring about subdivision by a lessee who finds that he has more land than he can handle. Everything has to be approved by the Land Board. When an area is surrendered in the best part of the Territory there need be no fear .that the Board will permit another lessee to hold more than 500 square miles in one lease, provided it is regarded as a sufficient area to enable him to make a living. The Land Board, which .will determine this point, will be composed of men with expert knowledge, who have examined the country, and’ will not necessarily accept a recommendation from any lessee as to his successor. Although sub-clause 2 provides -
The lessee may transfer the subdivisions to persons approved by the Minister for the remainder of the term - the “ Minister “ really means the “ Land Board,” because, obviously, the Minister will not ‘ understand the conditions surrounding leases in such an extensive territory so remote from Melbourne, and must be guided by the recommendation of the Land Board as to the area of a subdivision. The other day I received a letter from a lessee who has spent 40 years in the Northern Territory, thanking me for my stand on this Bill. He has come away from the Territory not by any means a rich man. The letter deals with this Bill from beginning to end, and says that on the whole it is a good measure, or at any rate as good a measure as could be devised for subdividing the existing leases that are now tied up for many years to come, and for increasing settlement in the Northern Territory.
.- I disagree with the interpretation placed upon this clause by the Minister (Mr. Atkinson) and the honorable member for Wakefield (Mr. Foster). I think the amendment is very necessary.
– What would it mean if it were agreed to?
– It is clear that sub-clause 2 provides that the lessee may transfer his subdivisions to persons approved by the. Minister if he gives notice to the Minister at least two years before the expiration of his lease of his intention to subdivide. The Land Board would, only act in a case where a lessee subdivided at any’ other period.
– But paragraph a of subclause 1 requires that the area to be subdivided must be approved by the Board’ as being equivalent to that which the Minister would be entitled to resume.
– It is very plain that the Minister shall, on the request of a lessee made at least two years before the date of resumption, in lieu of resuming any lands held under lease, permit the lessee to subdivide for closer pastoral settlement purposes an area equivalent to that which the Government would be entitled to resume; but subclause 2 provides that the lessee may transfer the subdivisions to persons approved by the Minister for the remainder of the term, and subject to the terms and conditions of the original lease. The intention of that sub-clause is to permit the lessee who gives notice two. years before the expiry of his lease to nominate his successor.
– It must be two years before the date at which an area can be resumed. The idea is that subdivision may proceed immediately.
– But the point is whether it is in the best interests of the development of the Territory that a man who holds 15,000,000 acres of the best land should have. the right just when 25 per cent, of his holding is about to be resumed to subdivide it, and practically nominate who is to have the land.
– That is not correct.
– That is my interpretation of the provision. If I subdivide in the circumstances I have narrated, I can nominate the person who will get a particular subdivision.
– Not necessarily.
– I maintain that this provision has been framed for that purpose.
– Its purpose is to pro-‘ mote closer pastoral settlement.
– If we accept the amendment and provide that at the expiration of a lease it must be subdivided in living areas, will that not promote closer pastoral settlement ?
– The Land Board will decide what areas shall be held.
– Of course. I was surprised to hear the honorable member for the Northern Territory indicate that he was prepared to modify his amendment and make the area 1,000 square miles. That would be a tremendous holding.
– No one would be permitted to hold 1,000 square miles in the best country.
– I understand that some of the leases cover 20,000 square miles, an area which is quite too much for one lessee.
– The whole purpose of the Bill is to bring about subdivision.
– I am not disputing .that fact, and 25 per cent, of the existing leases will fall due in 1935. It is the subdivision of that quarter which we are now discussing If a lessee gives notice two years before the expiry of the lease, certain people can be nominated. What has been the experience of the States? In New South Wales there must be a ballot for all lands made available. That is the only way to deal with the question. Every citizen in Australia should have the right to obtain land if land is available. That is all the amendment asks.
– If the amendment is accepted, what land is there for anybody?
– The land which falls due from time to time.
– We get that under the other sections.
– We do not. This is a very important measure, as we are legislating for the future of the Northern Territory. We all hope to see that country properly developed, and a large number of people settled there. In no other way can we make a success of it. At present we have large areas of land held by a few people. The day must come when, in order to develop that country, railways will have to be built.
Are we to spend public money to enhance the value of these holdings for the benefit of a few ?
– Some of the lessees have volunteered to do what this Bill gives them the opportunity to do.
– There may be some land-holders who are prepared to subdivide their holdings, but in subdividing them they can make arrangements for their friends to get the land. There are no means by which genuine land-seekers can obtain the land. Under this Bill the value of the improvements on the leases will be determined by the Board.
– There are no improvements there.
– Then the lessees should be turned off the land. If the leases fall due, a value must be placed on the improvements/ The honorable member for Wakefield (Mr. Foster) said there were no improvements, but the Minister stated that this amendment would enhance the value of the holdings.
– I said that if the first part of the clause, as well as the ballot, were retained, it would play into the hands of the big men. But the first part of the clause , has gone.
– Surely the Minister does not contend that this Bill is based on equity when the. people now in possession of the land will not get the benefit of the improvements which they have effected? They should be compensated for those improvements. This amendment asks, in connexion with these areas, that when the leases expire, they shall be placed on the open market under the supervision of the Land Board. The language of the amendment is plain, and its meaning clear. The Land Board will define what is a living area, as is now done in every State.
– This Bill provides for a subdivision at an earlier period than otherwise.
– I do not agree with that. If we take clause 42 in conjunction with this clause, we shall see that a preference is given. Provision is made for a land-holder to have the right to an area, with the improvements and water thereon. A preference is also given. We want to give every genuine land seeker a chance to settle in the
Northern Territory, and not a favoured few only. The day will come when we shall see these things more plainly than we see them now. That has been the experience in every State; and we should be careful to avoid the mistakes of the past. In the States, preference is not given to particular individuals, but every person seeking land has an opportunity to obtain it. I hope the Minister will accept the amendment.
– I am sorry to have to continually refuse these amendments. If the honorable member for the Northern Territory (Mr. Nelson) wishes to effect his purpose, he should move to delete the whole of clause 58, because that will be the effect of this amendment, if carried. The Government is endeavouring to give to the present holders of leases in the Territory the right to subdivide the land at their own expense, without waiting until the Crown is in the position to resume it. The amendment would wipe out all that. The position would be that, when leases were about to expire, the Minister would have to put them up to ballot in living areas. That could be done under the Bill when leases expire. If the honorable member for the Northern Territory wants to get rid of the right of lessees to subdivide their own land he should move to strike the clause out altogether and insert in its place a new clause. I cannot accept his amendment, as, if agreed to, it would wipe out of existence the whole object of the clause.
.- The Minister has informed us that this clause will enable the Board to subdivide a lease many years before it could otherwise do so. That is not so. The clause enables the lessee to subdivide when the elate of resumption has been reached.
– It does not.
– The clause says “ the Minister shall, on the request of a lessee, made at least two years before any date of resumption.”
– Tt may be ten years before.
– The lessee may make that request immediately.
– If the lessee wishes to subdivide his land he can do so without the clause.
– I call attention to the state of the Committee. [Quorum formed.’]
– The words “ expiring leases,” defeat the object of the amendment. I agree with the Minister that if we could do nothing with those lands until the leases were about to expire, we would lose the advantages under this clause. When the date of resumption comes we want some better arrangement than one merely allowing the lessee to subdivide his land in his own way.
– He cannot do it then.
– By making application at any time within two years of the date of resumption, he would be in a position to subdivide. He might apply within two years of 1935, at which time the Board would under clause 53 have power to resume one-quarter of the lease. (During the two years prior to the date of resumption, the lessee could give notice to the Minister or to the Board, and they would have no option but to permit him to make his subdivision in his own way. In the year 1935, we want the Board to have the right to transfer one quarter of the lease to applicants for the land.
– The Board will do it immediately the lessee surrenders his lease.
– It cannot be done. I suggest to the honorable member for the Northern Territory that he alter his amendment by striking out the words “ in regard to expiring leases “ and inserting in their place the words “ in regard to the portion of the leases due for resumption.” Then all the benefits of the clauses will be retained.
– They will not be retained, as the amendment omits the right of lessees to subdivide.
– That is the fatal part of the clause.
– If the honorable member objects to the right to subdivide, why not move for the deletion of the clause? Mr. SCULLIN. - There is nothing in this Bill to prevent a lessee at any time from subdividing his property. It is quite obvious from the clause that in the year 1935 the Board can take over one quarter of the lease. At the time the Board has the right to resume the Government wishes to give the lessee the power to subdivide his laud, and put his dummies on it.
– I have prepared an amendment to prevent that.
– If the amendment is suitable well and good. If the honorable member for the Northern Territory accepts my suggestion, the position will be that in the year 1935 the Board can resume one-quarter of the leases, and throw them open to applicants after taking a ballot. This will prevent the land from being subdivided amongst members of the same family - what is commonly known as dummying. Any one familiar with land settlement in Australia knows the extent to which dummying has taken place. Go right through the western districts of Victoria and New South Wales, where there were school-houses and certain kinds of settlements, and one can still see the homes of the dummies on holdings comprising 30,000, 40,000, and 50,000 acres of splendid land, through which railways have been constructed.
– Dummying cannot exist under the Bill.
– It is absolutely provided for in the Bill.
– Dummying is provided against in the Bill by the control given to the Lands Board and the Minister.
– If the word “ may “ were used instead of “ shall,” I could understand the honorable member’s contention. The clause says that the Minister “ shall “ on the request of the lessee, made at least two years before the date of resumption, permit the lessee to subdivide.
– The clause says “ at least two years before,” and that means that the lessees may apply to-morrow.
– That is what we are expecting. They are anxious to subdivide.
– The Minister is trying to make the Committee believe that the lessees are bursting with a desire to subdivide their lands.
– They have been sending in applications for the last twelve months. - Mr. SCULLIN. - This is a proposal which, when the date of resumption arrives, will prevent the Board from subdividing, and allow the lessee to do it. If we permit that provision to pass, we shall be bestowing our blessing upon’ the dummying system.
– I support the amendment moved by the honorable member for the Northern
Territory. It is incomprehensible that the Government should desire to give away its rights in the land to the people who hold the leases. The Bill proposes to allow the lessees to subdivide and tlo up the land.
– They will have . no right to tie up the land. How can they tie it up if it is to be subdivided and other settlers placed upon it?
– The Minister speaks with all the assurance of ignorance. In the State land systems there were safeguards against dummying, and serious penalties were provided for an infringement of the law in that respect. It was thought that no person could even receive assistance from the original holder to take up land ; but notwithstanding that the New South Wales law provided a penalty of seven years’ imprisonment for dummying, in only one instance was the dummy brought to book, and then only because the squatter gave the showaway, because the dummy- would not surrender the land. The honorable member for Yarra (Mr, Scullin) has related how the aggregation of large estates has proceeded in the most bare-faced man-: ner. All safeguards and the provisions for the proper fencing of subdivisions were ignored. But in spite of that experience, the Government not only neglects those precautionary measures, but proposes to actually help the big squatter, the land monopolist - the greatest curse of this country - to appoint dummies to hold the land against new settlers.
– We are not proposing anything of the. sort.
– The Minister has a stock phrase for denying every statement that is made from this side. We should learn something from the experience of the States.
– So we have, and this Bill is based upon the latest and most approved methods.
– It may have the approval of the big squatters who meet at Scott’s Hotel. The honorable member for the Northern Territory asks that the land be subdivided into living areas. In such a country as Australia, which needs population, and the Government of which spends thousands of pounds per annum in bringing immigrants to. it, can any reasonable objection be offered to the land being cut into living areas? Why do not honorable members opposite say frankly that they do not believe in subdivision into living areas? This Bill certainly does not provide for that.
– The honorable member has not read the Bill.
– I have;’ but I do not expect the “ boodling “ supporters of a “ boodling “ Government to understand the Bill. It will not advance land settlement and develop the Northern Territory. Let me remind honorable members of the request made to the Minister for Works and Railways (Mr. Stewart) on the occasion of his recent visit to the Territory.
– What has that to do with this clause?
– A good deal. I understand that settlers in the Territory interviewed the Minister for Works and Railways recently and asked for the introduction of a proper system of closer settlement. On this point we have to bear in mind how the Bill in its present form is likely to affect those people. We have also to visualize the position in the Territory as the result of the expenditure of a large sum of money on the construction of railways. I am not one to saddle the taxpayers of the Commonwealth ‘with non-paying lines in the Northern Territory for the benefit of the few big land monopolists and squatters there, no matter what our feelings may be’ on the question of honouring a pledge which was supposed to have been given to South Australia in the early days of Federation. The taxpayers of the Commonwealth are carrying an immense load in taxation. It is almost up to breaking point, and 1 am not prepared to add to that burden with non-paying railway lines, built only to benefit land monopolists. When we find that ‘ the Bill contains no adequate provision to safeguard taxpayers from the greed of the land monopolist and dummying in land, it is time for us to put up a fight against the proposal.
– The safeguards which the honorable member is asking for are included in the Bill.
– With all due respect to the Minister, I insist that there is a consensus of opinion on this side that the safeguards are not included, and our opinion carries just as much weight as his. The Minister’s interpretation may be entirely wrong. Progress reported.
House adjourned at 10.50 p.m.
Cite as: Australia, House of Representatives, Debates, 19 June 1924, viewed 22 October 2017, <http://historichansard.net/hofreps/1924/19240619_reps_9_107/>.