26th Parliament · 1st Session
The PRESIDENT (Senator the Hon. Sir Alister McMuIIin) took the chair at 10.30 a.m., and read prayers.
page 2241
– 1 direct a question to the Minister representing the Minister for Trade and Industry, is the Minister aware of the proposals announced during the past few days by overseas shipping companies to increase freight rates on apples and pears exported to European markets? In view of the fact that a further increase of freight rates might well sound the death knell of this valuable export industry, particularly in its present uncertain state, will the Minister prevail upon his colleagues, the Minister for Trade and Industry and the Minister for Primary Industry, to intercede vigorously on behalf of the fruit industry and to resist any further increase? Does the Minister not agree that shipping freight rates for Australian apples and pears are even now higher than freight rates charged for any other Australian export commodity?
– Freight rates are watched very closely by the Department of Trade and Industry. A committee, the members of which are representative of the Department of Trade and Industry, the Department of Primary Industry and the exporters, confers with the shipping companies before any increase in freight rates is agreed upon. I have noticed statements by the Minister for Trade and Industry concerning, proposed increases in freight rates, and I will bring the honourable senator’s question to his attention, bearing in mind the heavy burden which freight rates already impose upon the fruit industry, particularly in Tasmania.
page 2241
– I direct a question to the Minister representing the Minister for External Affairs. With reference to the reported approval of a resolution at the United Nations General Assembly demanding that Britain use force ‘to bring an effective and speedy end’ to the Smith Rhodesian Government I ask: Is the report substantially correct and, if so, how did Australia’s representative vote on this issue?
– ] understand that the report about the passage of the resolution is substantially correct. The Australian representative abstained from voting on the resolution as a whole. He pointed out that Australia supported Britain’s stand as to the legal situation in relation to the Smith regime in Rhodesia but that Australia could definitely not support the use of force against that regime.
page 2241
– I address a question to the Minister representing the Minister for Primary Industry. Is the Minister aware that drought stricken farmers in Victoria who desire to purchase wheat from the Australian Wheat Board for fodder are required to pay cash in advance before purchases can be made? Will the Minister use his good offices to persuade the Australian Wheat Board to grant credit to farmers in drought areas for the purchase of such wheat or alternatively provide Government finance to enable credit to be given?
– 1 was not aware of the situation outlined by the honourable senator but I do know that those who suffered from drought conditions in New South Wales 18 months to 2 years ago were faced with a similar position and that as a result of representations then made that position was eased. 1 am sorry that I cannot recall just what decision was then arrived at but I will certainly pass on the question to the Minister for Primary Industry to see whether some relief can be granted as suggested.
page 2241
– My question is directed to the Minister representing the Minister for Health. Has the Minister’s attention been drawn to Press reports that 20,000 head of stock have been slaughtered in the English countries of Cheshire, Staffordshire and Shropshire in an endeavour to control the spread of foot and mouth disease? Will the Minister ask the Minister for Health to have his staff redouble their efforts to check the footwear and clothing of people entering Australia who have been in this part of rural England recently?
– I shall be glad to bring the question to the notice of my colleague, the Minister for Health.
page 2242
– I address a question to the Minister representing the Minister for Primary Industry. Has the Minister received representations recently from Renmark fruit growers urging emergency action to stop the flow of saline water into the Murray River, including the suggestion of diversion or pumping at an estimated cost of $20,000? If so, what action is contemplated? Has the Minister’s attention been drawn to statements of growers’ associations that under-tree spraying by converted sprinklers is proving of great benefit in this serious situation? Is the Minister in a position to answer my previous questions concerning the conversion of sprinkler systems on the war settlement blocks in the Upper Murray area?
– I will refer the the honourable senator’s question to the Minister for Primary Industry and again remind his Department that the answers outstanding to questions asked by Senator Bishop should be forwarded as soon as possible.
page 2242
– I address my question to the Minister representing the Minister for Trade and Industry. In view of the apparent difficulty that the United Kingdom is having in being accepted as a member of the European Economic Community will the Minister take steps to endeavour to build a stronger trading association between members of the Commonwealth?
– I am sorry that I cannot oblige the honourable senator by answering a question without notice which involves a matter of policy. His one course appears to be to put the question on notice.
page 2242
– Is the Minister representing the Minister for Civil Aviation in a position now to answer my question of 20th October in which I requested that the
Minister for Civil Aviation meet representatives of the Australian Federation of Air Pilots regarding flying conditions associated with the ten deaths by accident this year of agricultural pilots? I remind the Minister that his reply to my question indicated that he would personally seek the answer and let me know it. I wish to add that never on any occasion has the Australian Federation of Air Pilots had an opportunity to discuss this matter with the Minister or any of his officers. The Federation eagerly seeks enforcement of air navigation orders to protect lives of agricultural crop dusting pilots.
– I will take up the honourable senator’s question personally with the Minister for Civil Aviation tomorrow and try to obtain the information requested in his question of 20th October. If I am in a position to do so I will give the honourable senator at question time tomorrow the information he seeks. If that is not possible, I will forward the information to him.
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– Is the Minister representing the Minister for Works aware that most of the beach front of Botany Bay has suffered severe erosion as a result of the dredging of the bay by the Commonwealth to extend the Mascot (Kingsford-Smith) airstrip to 8,500 feet? Is the Minister also aware that despite the second lot of dredging, which the Commonwealth claimed would restore the beach front, the beach in fact is disappearing at an even faster rate? Will the Minister give an assurance that before the Commonwealth takes action to extend the airstrip to 12,000 feet to accommodate Jumbo >ets, it will confer with the Rockdale and Kogarah Muncipal Councils to ensure that the interests of local residents are protected and the topography of the area is preserved as much as is humanly possible?
– It is true that erosion has occurred on the shores of Botany Bay, along the whole eastern seaboard, as a result of phenomenal weather conditions. However, it is also true that the extension of the Mascot runway into Botany Bay has been a matter of negotiation and a commitment to carry out certain additional work by the Department of Civil Aviation, or by the Department of Works as its agent. The honourable senator asks me to foretell the future. I. can only say that the Department of Works will do everything possible to ensure thai no bad consequences result from future extensions of the runway into Botany Bay. Beyond that 1 can only put the honourable senator’s question to the Minister for Works.
page 2243
– Can the Minister representing the Minister for Territories inform the Parliament whether the Commonwealth Government has entered into contracts with overseas companies, particularly companies based in Japan, for the sale of large quantities of Northern Territory timber to be exported to manufacturers of paper and similar products? If the Minister does not have that information, can he advise whether contracts have been negotiated with private individuals or companies and whether they were entered into with the knowledge of the Government? Will the Minister name the companies involved in the contracts?
– I do not have any information on this matter. If I have interpreted the honourable senator’s question correctly he has asked whether the Government or private industry in the Northern Territory has sold timber for export to Japan. Is that the question?
– Yes, for paper making.
– I am not sure. I would not have any knowledge of whether Northern Territory has sold timber for export, but I will endeavour to find out from the Department of Territories.
page 2243
– Has the attention of the Minister representing the Minister for Labour and National Service been directed to the unemployment statistics for Australia and those of like countries in the last financial year? Is the Minister aware that the unemployment rate in Australia has fallen by 25%, and that the unemployment rate in the United Kingdom under a Socialist Government has risen by about 80%? Is the Minister also aware that in Australia the percentage of unemployment at 30th June 1967 was 1.5%, while it was 4.6% in the United States, 3.7% in Canada and 2.2% in the United Kingdom? Is the Minister able to inform the Senate whether the rate of employment in Australia at 30th June last has continued?
– I think everyone realises and understands that the percentage of unemployment in Australia is one of the lowest of any country and undoubtedly compares very favourably with such countries as the honourable senator mentioned. I have no doubt myself, from the general feeling in the market place, in business and in all branches of activity, that this trend and this situation are continuing. If I wanted any further buttressing of my belief it would come from the fact - one which would be very noticeable to all honourable senators - that for a long time there have been no questions or criticisms from members of the Opposition as to the rate of unemployment in Australia.
– Might I suggest, Mr President, with great respect, that the Leader of the Government have the last question and answer printed so that they could be distributed widely before the Senate election?
– May I say, Mr President, that as Hansard is in operation, the suggestion by the honourable senator seems entirely unnecessary.
page 2243
– I direct my question to the Minister representing the Minister for Shipping and Transport. In view of the continued number of incidents involving negligence by masters of foreign ships in regard to oil .spillage, has the Government yet formed any definite preventative policy, particularly following the earlier conference that it had with United Kingdom authorities about the oil catastrophe suffered by that country?
– There are prescribed regulations to deal with this matter. I can only add that I will bring the question asked by the honourable senator to the notice of the Minister for Shipping and Transport.
page 2243
– My question again is directed to the Minister representing the
Minister for Territories. I preface my remarks by reminding the Minister that Groote Eylandt, which comes under the control of the Department of Territories, has a population of almost 1,200 people but that the nearest qualified medical officer is 450 miles away. Will the Minister undertake to make available immediately a full time medical officer to be stationed permanently at Groote Eylandt?
– The honourable senator must be perfectly aware that I cannot undertake to do anything of the kind. 1 represent the Minister for Territories in the Senate.I suggest that the proper way to put such a question would be to say that a certain situation exists and then ask: Why does it exist; is there any reason and will the Minister responsible consider the matter? All I can do is to bring to the notice of the Minister responsible the remarks made by the honourable senator.
page 2244
– I address a question to the Minister representing the PostmasterGeneral. Can he tell me of the action that has been taken to improve television reception in the Upper Murray and Eyre Peninsula areas of South Australia?
– I recall answering this general inquiry during the debate on the estimates for the PostmasterGeneral’s Department, when Senator Laught asked me a question about the Eyre Peninsula. Investigations are being made into the possibility of establishing a translator station to provide a service for Port Lincoln. However, as everyone appreciates, there are real problems in the area. The range of a television station is only about 60 miles and in a huge, sparsely settled area the economic and technical problems become a real factor in the considerations of the Department. However, as I said, the situation is now being considered. Speaking generally, it is perhaps fair to remind the Senate that television services reach about 95.5% of the people but cover only 15% of the total area of Australia. Those figures show the peculiar problem that we face in providing television services in these areas.
page 2244
(Question No. 391)
asked the Minister representing the Minister for the Navy, upon notice:
– The Minister for the Navy has supplied the following answer:
In response to a request from the Department of Shipping and Transport, a naval clearance diving team was sent to investigate a report of a sunken submarine in Disaster Bay, New South Wales, on 19th October. The report had been made by an abalone fisherman named Lester. On arrival at Disaster Bay the naval team was unable to contact Mr Lester, whose whereabouts have remained unknown ever since. Searches were made by the team in the area in which Mr Lester had allegedly seen the wreck, with no result. In the absence of precise information as to its location, the team was withdrawn until such time as Mr Lester could direct Navy divers to the location of the reported wreck. Until more precise information is received no further investigation will be conducted nor can an assessment be made.
page 2244
– Yesterday Senator Keeffe asked me a question in two parts. I undertook to obtain a reply for him. The first part of his question is as follows:
Can the Minister for Supply inform the Parliament whether his Department has cut departmental spending in Queensland by approximately 381/2%?
The answer to that part is:
No. Expenditure incurred in Queensland by my Department from its appropriations and trust funds in the financial years 1964-65 to 1966-67 is as fallows: 1964- 65 $2.5m 1965- 66 $2.8m 1966- 67 $3.8m
Present indications are that the level of such expenditure in 1967-68 will be of the same order as in 1966-67.
The second part of his question reads as follows:
Can he also advise whether it is true that as a result of the economy drive departmental motor vehicles which no longer have a useful life are being withdrawn from sale and returned to service after minor mechanical repairs are effected?
The reply to this part is as follows:
No. However, in order to meet increased demands for transport some vehicles have been given minor attention and kept in use for a short time beyond the stage at which they would normally be offered for disposal
That is in the region of 60,000 miles.
page 2245
– I present the following paper:
Statement for the year 1966-67 of Heads of Expenditure and the amounts charged thereto pursuant to section 36a of the Audit Act 1901- 1966 (Advance to the Treasurer).
Thoi consideration of the statement in Committee of the whole bc made an order of the day for a later hour of the day.
page 2245
– Recently the Attorney-General (Mr Bowen) made a statement in the House of Representatives concerning certain adjustments that the Government has decided to make with regard to the baselines from which the breadth of the 3-mile belt of territorial sea around Australia and the external Territories will henceforth be measured. With the concurrence of honourable senators, 1 incorporate the statement in Hansard.
I wish to inform the House of certain adjustments that the Government has decided to make with regard to the baselines from which the breadth of the 3-mile belt of territorial sea around Australia and the external Territories will henceforth be measured. The adjusted baselines will also bc used for the measurement of the breadth of the 12-mile exclusive fisheries zone which is the subject of a Bill now before the House. The changes accord with current rules of International law and are specifically authorised by the International Convention on the Territorial Sea and the Contiguous Zone, to which Australia and other countries, including Britain and the United States, are parties.
The general international rule that has hitherto applied, and that continues to apply under the Convention, is that the baseline for the measurement of the territorial sea follows the low water line along the coast. However, it has long been recognised that straight baselines may be drawn across bays. The waters on the landward side of these baselines are technically known as ‘internal waters’ and, in Australia’s case, they form part of the State or Territory to which they are adjacent.
Under Australia’s present policy, the straight baselines drawn across bays do not exceed 10 miles in length. The Convention authorises the drawing of straight baselines up to 24 miles in length across bays that meet the criteria specified in the Convention, and the Government has decided to apply this principle, wherever relevant, around the coasts of Australia and of the Territories.
Three deep indentations around the Australian coast - Shark Bay, St Vincent Gulf and Spencer Gulf - all of which are ‘bays’ under the criteria specified in the Convention, would not be completely enclosed by baselines 24 miles in length. Shark Bay. at least, is probably already under Australian sovereignty as an ‘historic’ bay. But in any event the Convention authorises the drawing of straight baselines exceeding 24 miles in length where a coastline is deeply indented or cut into, provided that no appreciable departure from the general direction of the coast is involved. Straight baselines will accordingly be drawn across the entrances to Shark Bay and the two South Australian gulfs.
Mr Speaker, I have given the House a statement of the general principles. The Government plans in due course to publish a map, or series of maps, in order to inform the public of the effect of the application of these principles.
page 2245
– A statement was made by the Prime Minister (Mr Harold Holt) in the House of Representatives regarding certain decisions by the Government in the field of cultural activities. With the concurrence of honourable senators I incorporate it in Hansard.
I wish to inform the House of two decisions by the Government and a number of other developments in the field of cultural activities. The Government, for some time, has been actively considering ways to increase, at national level, Commonwealth patronage of the arts without creating a monolithic structure which could inhibit the free play of our cultural interests and enthusiasms at all levels. For some years now government encouragement for the arts in general has been increasing and we feel that financial aid properly directed on the best advice is one significant area where the Commonwealth Government can provide material assistance. We need to ensure that we have a system for giving financial assistance which takes full account of the important role played, not only by State governments, but by municipal governments and a host of professional and amateur organisations throughout the country.
With this in mind the Government, in its first decision on cultural activities, has decided to establish an Australian Council for the Arts to be its financial agent and adviser on the performing arts and other activities connected with the arts in general.
The Council will co-operate closely with the Elizabethan Theatre Trust and with existing Commonwealth Government agencies responsible for music, painting and literature. At this stage the Council will be concerned primarily with the performing arts but it should not be assumed that the concept of an all-embracing Council, which 1 know has many advocates in this country, has been rejected. The Council we propose to set up could conveniently be enlarged to perform such a function if experience showed the need.
This decision means that government financial assistance for the arts in general will in future be given through two main channels: Firstly, the new Council, which will be concerned with the theatre arts - drama, opera and ballet - and film making for television with an educational and cultural emphasis. Secondly, existing agencies, that is the Australian Broadcasting Commission, the recently formed Music Board, the Commonwealth Art Advisory Board and the Commonwealth Literary Fund.
I The Council will also advise the Govern ment on special requests for aid in cultural activities not already covered by government agencies and which, in the past, have been dealt with on an ad hoc basis.
I should add here that the inclusion of film making for television in the activities to be covered by the new Council is not a substitute for full consideration by the Government of submissions it has received for the establishment of a film corporation to assist the film industry at large. The intention to give further aid to film making for television is part of the Government’s continuing effort to help in increasing the Australian content of television programmes in this country. The question of a film corporation, or some similar organisation, is a separate proposition which needs more study.
The new Council will not, as a normal practice, finance capital works for the arts in the States because this is not considered to be within the sphere of Commonwealth responsibility. The Elizabethan Theatre Trust will remain as a servicing organisation and entrepreneur and will continue its fund raising activities in the States. The Council will distribute financial aid for the. performing arts primarily, but not exclusively, through the Trust. Both the Council and the Trust will be supported by advisory committees in all States.
Before deciding to establish this two channel system of aid for the arts a close study was made of the foundations and councils for the arts in the United States, the United Kingdom and Canada. The names of the Chairman, members of the Council and the Director will be announced in due course. The Council will be associated with the Prime Minister’s Department.
The Commonwealth Government has also studied the work of its existing agencies, and as I have already indicated they will continue to function broadly in the same way as they have in the past, and the level of any increase in financial assistance will be considered in the Budget context, as will the grant to be made available to the new Council. There will be of course a close liaison between the new Council and the existing agencies. I might mention here that the Government already has under consideration increased assistance to writers in Australia as a result of recent discussions between the Advisory Board of the Commonwealth Literary Fund and the Fund’s Parliamentary Committee.
The House will also recall that we recently set up a Music Board specifically for the purpose of advising the Commonwealth Government on assistance to Australian composers. This Board has been active since its inception and has just had approval for a new project designed to promote the work of Australian composers, nationally and internationally, and to attempt to remedy the lack of knowledge of our own music. The details of this project will be the subject of a statement by me publicly later.
I turn now to the second important decision the Government has taken to encourage the arts in Australia. The House will recall that my predecessor Sir Robert Menzies, and his Administration decided that a national art gallery should be established in Canberra and in 1965 appointed a committee of inquiry to consider what form it should take, what its function should be and how it should be controlled. This committee, under the distinguished chairmanship of Sir Daryl Lindsay, completed its work last year and I would like to acknowledge here how comprehensive the report is and how valuable it has been to the Government. It has contributed significantly to the Government’s latest decision on the art gallery and is tabled in this Parliament for the information of honourable members.
The Government has decided that work on the establishment of this national gallery will begin immediately. The National Capital Development Commission expects the planning, design and costing stage to take about two years. A site for the gallery is being considered. The gallery will house the national collection which at present consists of nearly 2,000 works of art. Future acquisitions will include Australian art past and present, art of the Asian and Pacific areas and art on a world-wide basis, beginning with the 20th century.
The Government believes the new gallery will add significantly to the cultural life of Australia and the national capital. It is hoped that this will be an added incentive to owners of art collections to consider bequeathing their collections to the Commonwealth. The Commonwealth has been active in recent years in acquiring new works for the national collection. It is also developing an exchange of art exhibitions with other countries. The existence of an art gallery in Canberra will add materially to the display opportunities for visiting exhibitions and also for exhibitions from the galleries in the various states.
The gallery will be named The Australian National Gallery and will be controlled by a council, with a full-time director. The council itself will be associated with the Prime Minister’s Department. The council members and the director will be appointed in due course. These decisions will, I am sure, give encouragement to those who have for so long given their time and energy to advancing our own distinctive cultural activities. I also hope that the growing public recognition of what our actors, our artists, our writers, our musicians and others in a varied field of cultural interest are seeking to do will add much to what the Government is doing.
In the leaner years of the past, in the face of hardship and little encouragement young Australians have risen to fame and brought distinction to their country over a wide range of cultural activity. Given the support of governments, Federal and State, and the backing of the people, I am sure the talent is there for us to rise to new heights and give our people a growing pleasure and satisfaction.
page 2247
Motion (by Senator Gorton) agreed to:
That standing order 68 be suspended during the remainder of the present period of sittings to enable new business to be commenced after halfpast ten o’clock at night.
page 2247
Motion (by Senator Gorton) - by leave - agreed to:
That, in accordance with the provisions of the Australian Institute of Aboriginal Studies Act 1964, the Senate elects Senators Cormack and Keeffe to be members of the Council of the Australian Institute of Aboriginal Studies and to continue as members for three years from this date.
page 2247
The PRESIDENT (Senator the Hon. Sir Alister McMuIlin) - Honourable senators, I have now received from the Deputy of the Governor of South Australia formal communication confirming the telegraphic advice that Senator Condor Louis Laucke was chosen by the Parliament of South
Australia to fill the vacancy in the representation of that State caused by the death of Senator Hannaford. The communication reads:
Sir, 1 have the honour to inform Your Excellency that the President of The Legislative Council in this State reports that, in accordance with Section 21 of the Constitution of the Commonwealth of Australia, a Joint Sitting of the Houses of Parliament was held on the 2nd November 1967, and Mr Condor Louis Laucke was duly chosen to be a Senator to fill the vacancy in the representation of South Australia in the Senate of The Commonwealth.
page 2248
Debate resumed from 6 November (vide page 2237), on motion by Senator Henry:
That the Bill be now read a second time.
Upon which Senator Murphy had moved by way of amendment:
That all words after ‘That be omitted with a view to inserting the following words in place thereof: ‘the Bill be referred to a Select Committee of the Senate and that the Committee be empowered to consider also the six associated Bills relating to offshore petroleum’.
Senator LAWRIE (Queensland [10.59]- Mr President, when the Senate adjourned last night, I had mentioned that if the Agreement contained in the seven Bills now being considered by the Senate was not ratified there could be chaos with each State going its own way. The oil companies could play one State against another State. Ratification of this multilateral Agreement means adequate control of our oil reserves or of possible oil discoveries on our continental shelf. This is a sound government measure. It provides sound oil titles for oil prospecting leases. By this means capital and knowhow which we do not possess ourselves will be attracted from overseas. Costly floating rigs are involved in this search. As a matter of fact, there was a Press report that one such rig arrived off Gladstone the day before yesterday from the United States of America under its own power. After a health clearance for the crew, drilling will start almost immediately about 100 miles east of Rockhampton.
The principle that the continental shelf is under the control of the countries adjacent to it is,I believe, the thin edge of the wedge for the purpose of fisheries and many other things, including defence. I point out that the 3-mile limit which has been mentioned so many times and about which we hear so often is not even mentioned in the 1958 Geneva Convention relating to sea lands adjacent to the various countries. The position in relation to Queensland’s maritime boundaries is involved and complicated. Many islands and many reefs, which are part of metropolitan Queensland, could have oil under them and would not come within the provisions of the Bills. These islands and reefs are not just territories or dependencies of the State of Queensland; they are part of Queensland, the same as Kangaroo Island is part of South Australia and King Island and Flinders Island are part of Tasmania.I shall now quote an interesting extract from Triumph in the Tropics’ by Sir Raphael Cilento, because Queensland’s maritime boundaries are affected by the Bills. The quotation is as follows:
When Queensland was separated from New South Wales in 1859 her rights were not clearly defined regarding the islands off the coast. Letters patent dated 6th June 1859 and letters patent dated 13th March . 1862 transferred to Queensland ‘all and every adjacent islands, etc.,’ but, what was ‘adjacent?’
In 1865, the Governor of New South Wales granted a lease of Raine Islands (lat. 1 1 degrees 35 S; long. 144 degrees 1 E), which is on the outer edge of the Barrier Reef and about 60 miles from the coast of Queensland.
On 30th May 1872, the Governor of Queensland was appointed Governor of all islands within 60 miles of the coast and these islands were transferred to Queensland by G.G. 1872. Vol. 1, pp. 1325-6.
By letters patent date 10th October 1878, Queensland was authorised to. annex by Proclamation the islands beyond the 60 mile limit. By G.G. 1879, Vol. 1, pp. 1379-80; and G.G. 1879, Vol. 11, pp. 143, the boundaries of Queensland were extended to include all islands of the Great Barrier Reef, Torres Straits and the Gulf of Carpentaria.
The passing of the Imperial ‘Commonwealth of Australia Constitution Act’ of 1901 rendered it necessary to issuea new Commission to the Governor of Queensland. Letters patent dated 29th October 1900 did not confirm those letters patent dated 10th October 1878. To place the matter beyond doubt, a fresh Commission was issued to the Governor of Queensland on 10th June 1925.
I emphasise how recent that date is. The passage continues:
The result is: The maritime boundary of Queensland is the coastline from Point Danger to the 138th meridian in the Gulf of Carpentaria, together with all islands within the outer edge of the Barrier Reef and within a line drawn from the north-western point of the Reef to the 138th meridian.
The point I want to emphasise is that the boundary that I have just quoted is not simply one claimed by Queensland, but is one that has been proclaimed by Acts executed by the Imperial Government, by the Governor in Council and other authorities in the United Kingdom. The point has been made quite clearly that these many thousands of islands are part of the State. That being so, this legislation complicates matters. Many of the islands quite easily could have oil underneath them but they do not come within the provisions of the Bills. The passage that I have just quoted indicates that Queensland’s boundary comes within approximately 5 miles of the Territory of Papua and New Guinea and includes all the many islands in Torres Strait. The Agreement which has been arrived at between the seven Governments is all the more commendable because of these and other complications which have entered into the negotiations.
– No, not that 1 know of. 1 am concerned about one other point in relation to these Bills. As has been pointed out, drilling for oil under the sea is comparatively new. Neither the Bill granting oil search leases nor the Bill granting the right to operate pipelines appears to contain any provision making the company concerned responsible in the event of an accident, such as the breaking of a pipeline or a gusher getting out of control during drilling operations. We saw what happened off the coast of the United Kingdom recently when the ‘Torrey Canyon’ went aground and spread oil everywhere. lt is not beyond the bounds of possibility that during drilling operations a bore could get away - I think that is the term that is used - and many millions of gallons of oil could escape into the sea off our coast until the bore was brought under control. Alternatively, by an accident or just by natural causes, such as erosion, a pipeline under the sea could spring a leak and large quantities of oil could leak into the sea. I can see no provision in these Bills to make the company responsible in any way for damage caused by such pollution of the sea. Aggrieved parties would probably have common law remedies against the company concerned. I understand that at the present time a conference is being held somewhere overseas on pollution of the sea, in the light of the ‘Torrey Canyon’ disaster. I believe that in this case action should be taken to provide for the companies taking out a bond or some form of insurance so that any litigation would be against not the company concerned but an insurance company or a trust.
We might consider the effect that escaping oil could have on our fishing industry, our oyster beds, the Great Barrier Reef and some of our seaside resorts at holiday time. It is not difficult to imagine that in the event of such an accident affecting a seaside resort on the coast the result would be disastrous for the area involved. People could suffer severe financial loss through no fault of their own. Let me instance a few of the people who could be in that position: Owners of hotels, motels, guest houses, flats, shops and other businesses and people renting flats or houses for their holidays. Everything would be completely spoiled. They could suffer considerable financial loss. It is all right to say that they have redress at common law. Perhaps they could prove that the company had been careless. But they might not be able to prove that it had been careless; the escape of oil may have been just an accident.
The point that I am making is that the position would be hopeless if all of these people - many of whom would be private individuals or people in business in a small way - had to sue individually or even collectively. I should like to see included in these Bills, either now or after the conference on the pollution of the sea presents some findings, some provision to overcome this problem. The people who are drilling under the sea and taking the risk of a gusher getting away or of a pipeline breaking should be compelled to take out some sort of bond or some substantial insurance cover in order to make money available for the protection of the interests of people affected by this conceivable calamity of oil polluting much of our coast.
This technique of boring for oil under the sea is not something that has been with us always. As has been pointed out, it is a very recent development, having commenced only in the last 10 or 20 years. The only thing I can see wrong with the legislation is that it contains no provision to cover pollution of the sea and coastline by oil as a result of these operations. In all other respects I commend the legislation to the Parliament. I hope it will have a speedy passage because it will put on a businesslike basis an undertaking that we all welcome. I think the representatives of the seven governments, two of them Labor governments, who have been conducting negotiations must be commended for their remarkable achievement after 3 years of work. I support the Bills and I oppose the amendment.
– All members of this Senate are endeavouring to bring their minds to bear on the extremely important issue that is before us, and all of them, I hope, have as the dominating thought in their minds the preservation of the highest interests of this country and its people. We are dealing now, I would say, with the most important piece of legislation - certainly in the economic sense - ever to come before this Parliament. The decisions that we make now will have repercussions for years, for decades, into the future, and will have a profound effect on every aspect of life in this country. What we do now may well dictate the course of our future development as a nation and may well have a significant bearing on our future relationships with other countries.
We have heard some valuable contributions to this debate from both sides of the Senate. It seems to me that there is a large area of agreement between the various parties. There is disagreement as to how we can fulfil the ultimate objective of the preservation of the highest interests of this country in a matter of such importance, but it appears to me that we of the Australian Labor Party, the official Opposition, are in agreement, to a large degree, with some of the submissions that have been made by Senator Wright during the course of his very valuable contribution, and also, although perhaps to a somewhat lesser degree, with some qf the statements of Senator McManus, who put the view of- the Australian Democratic Labour Party.
Our nation has a history extending over a period of 180 years. We have come a long way in that time. Our early settlers came here, cleared the bush, ploughed the land, garnered the harvests, constructed our roads and bridges and developed our other communication systems. They went into the wild and inhospitable places to seek mineral deposits and their success in doing so brought us quite a long way in our development as a nation. We are yet a small country and very largely an under-developed one. We have a population of only eleven million people in a land mass of three million square miles. This is by no means a high population density. We lack technological know-how and we lack experience in many fields, but we do not, as a nation, lack enthusiasm. This has been proved over and over again in our 180 years of history. It strikes me as rather odd, therefore, that in a matter of such importance as this, a matter which can affect the future of this country to such a marked degree in the years to come, we are bent upon a course so precipitate that we cannot pause long enough to make a thorough examination of all the aspects of this legislation. It is not a question of a few million dollars; it is a question of billions of dollars. The discovery of oil and its use in its many forms is the most important thing that we have yet had to consider in Australia. lt behoves us all - lacking as we do the knowledge of what takes place when oil discoveries are made, lacking technical skills and conscious of our shortcomings in areas of technology - to pause a moment and to make sure that in our concern for the future welfare of Australia the decisions we make now are correct. This is a question which transcends political considerations.
I see no validity whatever in the argument which is being put forward during the course of this debate that we are bound, for certain reasons, to ensure that the legislation passes through the Parliament with all expedition. It is too important a matter for this. Time should be among the last things to be considered in relation to a matter of such tremendous consequence, yet it has been argued by the Government that because a number of companies are engaged upon oil search in our offshore areas we should take cognisance of the fact that they have committed themselves substantially financially and we should proceed to pass the legislation as early as possible. I do not think that this is a primary consideration. It should not be dominating our thoughts to the extent that apparently it is doing. As a Parliament we have a responsibility to preserve the best interests of the people and the nation. This is our primary concern and it is of the greatest magnitude. The other factors are somewhere in the picture, but they should not be in a dominant situation.
We are being persuaded to pass the Bill through the Parliament. We are being persuaded against our course of insisting on a Senate select committee examination of this matter as a pre-requisite to determining the fate of the Bill because a number of oil search companies are engaged in the area or will shortly be so engaged and because they have committed themselves to the expenditure of substantial sums in providing all the necessary equipment and in financing the work as it proceeds. I regard highly the work that is going on in the areas off our shores. I commend what has been done in this field. I agree with those honourable senators from both sides of the chamber who have said that we lack the financial resources with which to carry out work of this magnitude. As I have already mentioned, we do not have the equipment and, in many respects, we lack the technical ability, know-how and skill to carry on work of this kind.
We must have capital and we realise that we need to attract overseas interests to these ventures. But I come back to the point that notwithstanding our recognition of those factors we ought to be giving a lot more consideration than appears to be the case to the preservation of our national interests. The suggestion was made some time ago that the type of investment coming into Australia could well be given a different slant. For instance, the Commonwealth Government could offer guarantees to induce overseas capital to invest here. It could guarantee interest bearing capital for use in the development of our great national resources. Only in recent times have we moved into the area of development of our vast natural resources on a real scale. AH along the line it appears that we are too inclined to regard ourselves as knowing nothing and too inclined to regard other countries as knowing all the answers and having all the means to develop our natural resources. In view of our geographic situation and present world conditions I do not think we can sustain any longer that idea of our being a backward country.
We have to get moving. By some means or other, by hook or by crook, we have to acquire the technical skills and abilities necessary to exploit for ourselves our own national resources. We must use the God given means for our concerted development.
– Mexico managed to do it.
– Other countries of the world have already shown the way. Senator Mulvihill has cited the example of Mexico.
– What did Mexico do?
– Mexico shed a lot of ils dependence on the United States of America in respect of its oil industry.
– The Mexicans endeavoured to learn for themselves the necessary skills to develop their own resources. I think we are doing that to a degree, but we are not consious enough of the need for a great deal more action in that direction. I do not think any honourable senator would disagree that our primary responsibility as the legislative representatives of the people in the National Parliament is to ensure the proper development of this country in an economic and social sense. Any action we can take towards achieving that objective is the right and proper thing for us to do. In so many fields the Government seems oriented to the view that we are not capable of our own development and must seek overseas aid.
I agree that the risk capital, as it is called, the vast sum of money necessary to exploit our natural resources, is not readily available here. By some means we have to encourage the inflow of overseas capital. We have reached the stage where difficulties arise in attracting overseas capital and in determining how to use it to the best advantage. I believe that if the Government were to offer guarantees it would attract the inflow of money to be serviced on an interest basis in the same manner that loans and such investments are serviced. This method seems preferable to the implementation of equity investment capital which earns substantial dividends of the order of 50% return on capital, as has been suggested in relation to the projects we are debating today. Because of our limited resources I do not think Australia can provide a return of the order of 50% on imported capital. I do not think we have the resources to do this. It reminds me of the milk that we get from the dairy; when you skim off the cream the product remaining is obviously inferior. If we are to have in Australia the type of investment which requires heavy servicing commitments in repayments and dividends overseas, then surely we are going to delay the development of this nation. We need to develop Australia. Our geographic situation demands that we develop with the utmost speed. It demands that we supply inducements for people to come from other countries to populate this land and so develop it as we would like. 1 mentioned that there was an area of accord between the Opposition and at least Senator Wright in relation to some of the misgivings that we have about the operations of this legislation and what is likely to happen in the future. As I said by way of interjection to Senator McManus last night when he proposed that a Senate select committee be set up after the passage of this Bill, that suggestion reminded me greatly of the old saying about shutting the stable door after the horse had escaped. I still maintain that that is the situation. After 180 years of development in Australia, another 12 months is not going to make that much difference in a matter which is of such tremendous importance to us. I want to see the oil and gas resources of Australia developed with all due expedition. But I do not want to see this done at the expense of Australia and the Australian people. This is one of the reasons why I am so strongly in agreement with the proposition which has been put on our behalf by the Leader of the Opposition (Senator Murphy) - that we ought to have a Senate select committee established to examine the pros and cons of this measure so that we can be satisfied ourselves, as legislators and as representatives of the people, that what we have done is right and is in the interests of Australia. We could then satisfy ourselves that what we have done in this legislation will ensure the preservation of the things we enjoy in Australia and which we propose to extend for the benefit of all who live in this land.
Not only are my interests centred in Australia itself, or in what the development of resources of this nature will mean to us as a country. This development will give us far greater ability to provide, and will put in our hands the means to provide, assistance to less developed countries around us. I believe we have an obligation in this regard to be conscious at all times of the great difficulties and tremendous problems which beset the countries around us. Having become self sufficient in oil and having been able to place at the disposal of industry and domestic consumers the natural gas which flows from these fields, I believe Australia can become a stronger country and that we will be able to discharge our responsibilities to other nations, particularly those close to us, to a far greater degree than we are able to do now.
Mr Deputy President, this morning honourable senators received a copy of a notice of motion to be moved at a later stage by Senator Wright. I looked at that notice of motion and, after making a quick analysis of it. I found that Senator Wright had taken into account matters relating to our constitutional position and the administrative arrangement so far as this oil and gas in Australia is concerned. He mentioned in it the question of the Constitution in relation to trade and commerce between the States. He raised the question of the necessity for a good look at the matter of royalties. He mentioned the subject of the areas under the control of various organisations and, finally, he dealt with the matter of the renewal of licences. In other words, Senator Wright has dealt with the whole area of the legislation. He has made the very point that the Australian Labor Party made in the first place. It would seem that the only difference between our position and his is that we believe that a select committee should be set up and do its work before we agree to the legislation. Senator Wright says we should wait until after the legislation has been passed and then see how it is working. I do not know whether a matter of such importance to the country has ever been dealt with in this way before. Perhaps honourable senators will enlighten me at some stage.
My attention has been drawn to some observations made in another place by the honourable member for Mackellar (Mr Wentworth). I will take the opportunity to read some remarks he made on the subject of the area under the control of the various exploration organisations. On 26th October be said:
In these immense areas rights are to be exclusive,
I invite the Senate to take note of the various points; made by the honourable member. He went on:
If you are given an exploration permit nobody else can come into your area while you hold that permit. These are big areas, giant areas, mammoth areas, and there is an absolute right for a permittee to renew, lt is perfectly true that there are certain relinquishment requirements. After 6 years half has to be released and after another 5 years another half has to be released. But the basis of which this is calculated excludes the producing areas for which producing licences are taken up, and really it means very little because a company can always discard those parts which it feels are least likely to be productive. Of course if a company is wise and properly administered it will do just that, and it will be IS or 20 years before good areas come up for allocation to other companies, or perhaps they will never come up, unless, of course, areas are found to be so bad that their present holders voluntarily relinquish them.
I want to contrast this with the position in the North Sca, for example, where there has been a similar situation of exploring for offshore oil.
The DEPUTY PRESIDENT (Senator Drake-Brockman) - Order! I do not want to curtail the debate, but I remind the honourable senator of the provision in Standing Orders that no senator shall allude to a current debate in another place. I have allowed some latitude to the honourable senator, but I suggest that he conclude that part of his speech.
– Thank you, Mr Deputy President. I am somewhat at a loss, because what 1 have done was done yesterday in the course of the debate. Observations that were made on the Bill in another place bear largely on this debate. However, I bow to your ruling. The honourable member for Mackellar made the point that we have been over-generous in the allocation of areas, in the manner in which we have returned areas to the market and so on. He believes and I believe that we could have made a far better bargain if we had given a good deal more thought to the subject than we have. I make the point again that we are at a substantial disadvantage in Australia in attempting to meet the demands of the situation. We are, after all, a small nation and somewhat remote from the activities in Europe and the United States. Countries in those areas have the advantage of being close to the scene of developments. I think it is reasonable to suggest that to a degree we are out on a limb. We have a great future and a tremendous destiny. We have a background of development of which we can be extremely proud. The dominant thought in my mind at the moment is that we could very easily go wrong and do something that would put us at a considerable disadvantage. The remarks of the honourable member for Mackellar which I have just quoted suggest to me that my apprehensions are not without some substance. I have a good deal of regard for many of the observations made from time to time by the honourable gentleman on matters of fundamental importance to this country.
I want for a moment to deal with the position of the States. Among the six States are two that are dependent for their proper development on the handouts from the Commonwealth. All the States have for some time complained that they lack the necessary financial resources to develop their industries and their areas as they want to develop them. I know that this is the position in Tasmania. Certainly it is the position in Victoria, which is even considering the introduction of stamp duty on wages. There is some doubt as to the constitutional right of the State of Victoria to impose a tax of this kind. The States undoubtedly will gain a benefit from the royalties that will be paid on oil and gas discoveries. Would it not be natural, therefore, for them to proceed with haste and expedition to accept the legislation if agreement on a reasonable proposition can be reached? They would then be able to look to the funds that’ would flow to them from the production of oil and gas so that they could proceed with the tremendous task of developing their natural resources and their industries.
I would not say that our objection to some of the provisions of the Bill showed any disregard for the work done, for instance, by the Premier of Tasmania or the Premier of South Australia. It is playing with words to suggest, as Senator McManus did yesterday, that we are reflecting on the State Premiers. The Premiers of the States no doubt feel very much bound to the financial workings of the Commonwealth. This has been their position for many years. Although they may feel that they could gain more by making further submissions to the Commonwealth, undoubtedly they believe that in the circumstances of the moment they would do better to accept the proposition that they get 6% of the 10% that is payable as royalty and hope that in the future negotiations may enable them to obtain a higher return. I have been concerned that so much of the fruits of the development of oil and natural gas in Australia will go overseas.
I gave some study to a publication which came from the Minister for Trade and Industry (Mr McEwen). It was titled Directory of Overseas Investment in Australian Manufacturing Industry’. I was rather startled when I saw the level of control of Australian manufacturing industries by overseas entrepreneurs. It is a startling and a very revealing figure. By this legislation I believe that we are attempting to perpetuate something which should be looked at before action is taken.
– What is the figure?
– It varies as between industries. Figures were presented for the oil industry, the chemical industry, the motor vehicle industry and even in relation to food, cordials, cigarettes, sweets, and so on. Heaven only knows what the figure would be for the whole range of Australian industry. But one is startled to find a level of equity control equalling 50% and above of Australian manufacturing industries. This obviously means a tremendous drain of our financial reserves. It was estimated 3 or 4 years ago - perhaps it may have been a little longer - that the return on servicing capital inflow from overseas was getting to the stage of running parallel with the level of overseas capital inflow into Australia. We were reaching the stage where no net gain was achieved, yet it was absolutely essential that there should be an inflow of capital to maintain the status quo, as it were. Here we are engaging upon an act the result of which will be to cause a greater outflow of money from this country.
I have already dealt with the fact that we need overseas investment in Australia. We need the technological knowhow, the highly developed machinery and so on that is necessary to carry out an operation as difficult as the exploration of underwater areas in searching for these resources. I think that we have been rather precipitate in our approach to this Bill. It has been put to me that the provisions of the Bill are sickening because of the extent to which they allow such a tremendous degree of overseas control to be exercised over a most vital industry. I think that Australia could drive a much harder bargain than it is doing and has done in the past in these areas. I would think that one of the reasons why we might oppose the passage of the legislation at this stage is to allow us to have a look at just what this Bill contains concerning the future of Australia.
The aspect that worries me perhaps more than any other aspect of this Bill is the fact that we are delivering into the hand of overseas entrepreneurs such a great area of natural wealth. Australia as an oil producing country - I hope that the time is not far distant when we are completely self sufficient in this regard - will improve tremendously its position regarding defence. We are obliged so much at present to overseas companies for the supply of oil which is an essential ingredient particularly in the prosecution of a war. If we can become self reliant and self sufficient by the provision of oil in Australia we will relieve the demands upon shipping in the event that we become involved in an international dispute. We will be much more self supporting. We will be much more able to determine the course of our own affairs and to develop our industries with an availability of natural gas. We will be much more able to provide the sinews of war if it should be necessary for us to make provision in this way. Who knows what the future holds in that direction? It may even be - this is one of the other matters that concern me - that we will find ourselves in a position where we do not have total control of the oil and gas resources of Australia. It is conceivable that there is such a level of control of these things by overseas interests as vitally to affect decisions which we may be called upon to make in the interests of Australia.
– Is the honourable senator suggesting that that would happen in wartime?
– I am suggesting that it conceivably could happen. The proposition has been put forward that the level of overseas control might be such as vitally to affect decisions that we are called upon to make. I draw the attention of the Minister for Supply (Senator Henty) to the position that arose, not in war time but in peace time, between the United States of America and Canada regarding the operations of Canadian industries. The outside control of Canadian industries by the United States was of such a level that when a slight recession took place in the United States the Canadian industries were closed down but not those in the United States. For months on end large numbers of people were queuing up at the soup kitchens and so on in Canada. I put this to the Senate as one of the factors which have to be taken into account here. It is a very important one. The control of the destiny of this country should be in our hands. Any thought that there should be such a level of outside interference or influence in the development and progress of Australian industries is completely repugnant to me. I say that the decision is ours. It rests with us. Notwithstanding our treaty obligations and the commitments that we have to other countries, ultimately and finally the control of the destiny of this country is in our hands.
I say with all seriousness that there is very little difference between the approach of the Australian Labor Party to this matter and that which has been proposed by Senator Wright. Firstly, we say that a Senate select committee should be appointed to examine this legislation before the cheque is signed. Senator Wright says that we should sign the cheque, pass the Bil] and then make the examination. There is not a great deal of difference, I suppose, in the ultimate analysis of the two positions we take on this matter. On the one hand, if we accept the proposal from Senator Wright, we commit ourselves to go ahead and to proceed in accordance with the terms of the Bill notwithstanding the fact that there is the suggestion in what Senator Wright says that some of those terms need closer examination. Surely that is implied in the motion of which he gave notice. On the other hand, the Opposition says that a Senate select committee should be appointed to inquire into this legislation. After all, I year in the 180 years of the development of this country is not so long particularly when we relate it to the tremendous importance of this industry to Australia and to the fact that thousands of millions of dollars may well be earned from the exploitation of oil and gas reserves in Australia. Surely it is not too much to ask that the Senate agree to the proposition which has been put before it by the Leader of the Opposition in the Senate, Senator Murphy, to appoint a Senate select committee which in a period of a year could carry out an examination of the very thing to which Senator Wright has referred. If such a committee were set up, it could proceed with its work in the terms of the motion intimated by Senator Wright. In due course it would report to the Senate. We could proceed to pass this legislation with a great deal more assurance than we have at the present time and so get on with the search for and exploitation of the oil and gas reserves of Australia.
– I want to say a few words regarding this more than generous handout - I suppose we could call it a sellout - of Australian resources to other countries. We can rationalise anything, of course. It seems to me that we are rationalising this legislation by saying that we have to get it through the Parliament because somebody is committed to getting it through. I do not believe that at all. I think that no reason for haste exists whatsoever. Sir Henry Bolte has already said that he could not care less what the Federal Parliament is going to do about this Bill. He is going ahead. The passage of this legislation will not stop or delay any process as far as Victoria is concerned, in which case there is no need for us to rush this legislation through.
What is happening today emphasises one of the absurdities of Parliament. I do not think it can be stressed too often that it is absurd that on the last day of a parliamentary session an important Bill concerned with the future of Australia should be rushed through the Parliament and that members of the Parliament should be forced to look at it in a few minutes, literally. I wish to support the amendment that has been moved by the Leader of the Opposition (Senator Murphy). Because Sir Henry Bolte is not worried about the passage of this legislation, I think that we should not be worried about its speedy passage. We should take a little time off to study the legislation. I do not believe that the investigation would take a year. A report could be made within 6 months at the most. The Bills could be reintroduced on the last day of the autumn session; they certainly would not be reintroduced at the beginning of the session. The Bills could be looked at again then. I believe that if this step were taken the faults in the Bills would be ascertained. Most of us are lay people who know very little about the Bills. 1 doubt whether more than four or five people in this chamber have read the Bills. I certainly have not. Information has been given to us, but nobody knows how true it is. The only way to ascertain the truth of the information is to appoint a select committee.
I believe that Senator Wright had had his arm twisted a little when he suggested that instead of a select committee being appointed now it should be appointed after the Bills were passed. Will the Australian Government be prepared to face up to defaulting on this legislation? That is what Senator Wright’s proposed amendment will mean. The honourable senator says: ‘A select committee can investigate the matters, find the faults and correct them after the legislation has been passed.’ How can the faults be corrected then? After the legislation is passed today the leases will have been granted and effect will have been given to the terms of the Bills. In a year’s time will the Government turn around and say to the companies: ‘As a result of the report of the select committee we intend (o take away from you the very things we gave you*? Senator Wright’s proposed select committee will not affect the people already affected by the provisions contained in these Bills. Nevertheless the appointment of such a committee is better than nothing, and should Senator Murphy’s amendment be defeated Senator Wright’s amendment should be supported.
I cannot help thinking that the introduction of these Bills at this late stage is another absurdity of the Parliament. No-one would run a business on these lines. Would anyone sign a contract and say: ‘We will have a look at it and sec whether we can alter it in a year’s time’? Such action is so preposterous that no businessman would sign such a contract. This is not the way in which the Australian Government should carry on its business. Someone is in a hurry - not Sir Henry Bolte, but someone who has a large interest in this industry. It seems that the legislation must be rushed through. Then, in a year’s time the Government will try to alter it. ls it suggested that the big generous companies who have been given the leases will say: ‘If you do not like what we have done we will hand back what you gave us’? How absurd can the Government get? The Government only brings ridicule on this Parliament by the way that it conducts its business. To appoint a select committee after the passing of the Bills is monstrous and preposterous. All it will do will be to ascertain information that should have been ascertained beforehand. A few faults may bc rectified.
A suggestion was given to me by my son, who listened to the debate on these Bills last night. Incidentally he was not overimpressed with the financial acumen of the speakers. He pointed out to me a simple way of eliminating one of the problems that arises. The suggestion was that any company which is granted a lease must be incorporated in the Australian Capital Territory. I do not know very much about company law. From what I can gather, the company law of the Territory could be altered without going to the bother of having agreement between all six States and the Commonwealth. I do not know whether that suggestion has any merit in it. but the matter should be looked into. If the position is as I have stated, then the companies should be brought under Territory law. Here again such information will be verified or otherwise after the event. But that is too late.
These Bills emphasise the need for a national development bank, as was suggested by the Deputy Prime Minister (Mr McEwen). The tragedy is that because one man suggests something somebody else opposes it, not because the suggestion is bacl but because of political bias or personality. Here was a real genius of an idea. Because the Department of Trade and Industry was involved in the idea the Department of the Treasury pooh-poohed it immediately. Obtaining finance and looking after our own mineral and oil resources can be done in Australia by the establishment of a bank such as the one envisaged by Mr McEwen. But because the idea emanated from the Australian Country Party, the Liberal Party decided that we must have another organisation. Because the Department of Trade and Industry had the idea, the Treasury decided that it must have another. What a stupid idea was put forward by the Treasury. It will not bring any capital into Australia. All it is doing is to make a consortium of the private banks and to let them make more money more easily. What was needed, as suggested by Mr McEwen, was a national development bank which would have been able to obtain money and make sure that the people engaged in this industry were shareholders and not the owners of Australia. Surely that should be the basis of the present legislation. If Australia had such a bank at least we could hold our heads up high and say: ‘We own this land. You can make a profit from it. We are quite happy for you to make a profit from it. but we own it.’ But Australia has not done that; it has given the land away. No matter what Senator Wright’s proposed committee m:iv find, once the legislation is passed the position cannot be altered.
– I would have thought that my approach reflects an attitude that is just the reverse of the attitude that the honourable senator is adopting. I do not object to the legislation just because it comes from somebody else, but let us examine it fully.
– I do not object to the suggestion because it comes from Senator Wright. I have more regard for it because it comes from the honourable senator. I am sorry to have to say that to my opponent on the eve of an election. Nevertheless, the committee should not be appointed after the passing of the legislation. A select committee must be appointed. I propose to support Senator Wright’s amendment if Senator Murphy’s amendment is defeated. I believe that Australia should finance such ventures itself. Australia has the population and could obtain more money and capital if required, but Australians arc scared of financing such ventures. Do not say that the scheme is too hig for Australia. It is not too big. Australia could run these schemes and have outside capital as well. ] am not one who believes that outside capital should not make profits. Large profits should be made by companies which undertake a risky venture such as the search for oil in submerged lands. An example of Australians being scared of investing is to be found in the establishment of General MotorsHolden’s Ltd. When Australian capital was needed to build motor cars here it could not be obtained. American investors obliged. Good luck to them. They are on a huge bonanza and are making huge profits which Australians resent. Let us not forget that the establishment of a national development bank would change the position completely. 1 support the amendment moved by Senator Murphy because I believe that is the only sensible way to consider these Bills. The other way only brings ridicule on the Parliament. I. hope that the Senate will agree to Senator Murphy’s amendment so that the details of the Bills may bc looked at. The suggestion that the Bills have to be introduced hastily has been disposed of because, as I pointed Out, Sir Henry Bolte is quite happy about the position; he is not worried if the legislation is deferred for a year. If he is happy we all should be happy and should defer it for a year.
– I support the amendment moved by Senator Murphy for the appointment of a select committee before the Committee stage is reached so that the Senate, the Parliament and the people of Australia will be properly informed as to the ramifications of this dramatic piece of legislation relating to offshore oil and its exploitation. The legislation can affect the destiny of this nation for as far into the future as we can see. The excuse given by the Government over the years when criticised for selling out our various natural resources to foreign investors has been that Australia lacks the capital to develop these areas itself. We have confronting us one of the greatest potential methods that we have ever known for increasing the availability of capita! in this country. Yet this legislation is being rushed through this chamber without an opportunity to give thorough consideration to its implications. The people of Australia are being doublecrossed by this Government in the haste that it is showing to have this legislation signed, sealed and delivered.
I agree with Senator Wright when he says that many aspects of this matter should be examined. He has outlined them in the motion of which he has given notice. They go to the very basis of this matter. They include the constitutional rights of the oil companies and the States in relation to the vast oil deposits which are becoming known and which are already known to exist in the offshore areas of this continent, and the setting up of an administration to deal with money in amounts that Australia has never had before. I was impressed by a figure that was quoted by Senator Cotton last night. He referred to the imposition of a levy of $1 every 6 years on each 25 square miles of permit area. He complained that that would be unfair. He said that it would cost the permit holders $22,000m, which is four times the size of Australia’s annual Budget. So what is the amount of money that eventually will be involved in this operation that we are discussing?
It is a retrograde step for any modern nation to repeat the mistakes that have been made in the past by the many countries that have allowed the exploitation of their resources by the international cartels. The implications of such exploitation absolutely defy the imagination. As we know, the main organisation involved with the Broken Hill Pty Co. Ltd, which is an Australian company, is the Standard Oil Company, which is notorious for its vast ramifications and the setting up of empires. At the present time the whole of the Middle East could be considered to be under the influence of the international oil combines. Even the waging of wars between nations is not outside the scope of oil companies of the size and influence of the Standard Oil Company. It is rather interesting that this company should be in at the kill and that it should have been able to obtain the advice that enabled it to be the first company to drill in the areas in which there has been such success.
– Who invited that company to join BHP?
– It was quite an obvious move. BHP is the most powerful accumulation of capital in this country.
– Yet it was unable to finance this operation. It had to go outside Australia and ask other people to come and join it. There is the answer.
– That is not the answer at all. BHP has been able to salt away its profits into its own reserves. It is now reaching the stage where it is able to make these big investments and to take risks with its surplus capital.
– That is not quite right, lt has not salted away its profits into its capital.
– It has grown from a small organisation-
– Thousands of Australian shareholders have received the benefit; it has not salted away its profits.
– Its profits have been salted away into assets. The asset backing of the company more than offsets the investment of the Australian shareholders in it. I am not certain of the ratio between the two. However, that is getting away from the point. The biggest private company in Australia is now married to one of the largest international oil companies. The whole point is that the profit margin of the international oil companies will be so large that there is no doubt that BHP, with all its ramifications, and any other Australian organisation that comes into the complex that usually follows the discovery of assets such as these, will come under the control of the international oil companies. We on this side of the chamber believe that that is the crux of the whole matter. The details of the dividing up of the continental shelf, the availability of blocks and the arrangements for surrounding blocks are the trivia of this legislation. This is an example of. people moving in when crumbs from the table are to be obtained.
The State governments are not legally entitled to obtain royalties, but they have been able to co-operate with the Federal Government in order to obtain them. This is a windfall for the State governments. They have been brought into the picture but not in relation to the details of where the oil will come from. The international oil companies will get the oil anyway, wherever it comes from, and will take the cream of whatever profit is made. This is quite in line with the philosophy of this Government. It supports so-called private enterprise. But this is not private enterprise at all. The Government is prepared to wed Australia’s financial interests to the strength, but in so doing it is selling out this great asset. That can only be to the detriment of not only the present generation but also future generations of Australians.
This operation can be compared with the Snowy Mountains scheme, which is a national asset. It is not likely that any overseas company would have invested in that scheme because the obligation was to supply water to Australian farmers. But if the way was open now and if a levy could be imposed on every thousand gallons of water or every acre-foot of water that flowed down the rivers, the overseas companies would be rushing in as fast as they could. That is supposed to be private enterprise.
– Private enterprise did every bit of the construction work on the Snowy Mountains scheme under contract.
– Private enterprise certainly came in to do the work; I am not saying that it did not do that. But the workers were the ones who actually did the work. The companies tendered for the various jobs. If overseas interests could come in now, buy out the Snowy Mountains Authority and put a levy on every unit of electricity being distributed through the grids and every thousand gallons of water flowing down the rivers, they would be into that scheme as fast as they are into the oil business. I wish to draw attention to a point that was made by Senator Cotton. He said:
We are not the only country in the world which has oil or the prospects of oil. Tn a situation of a world oil surplus-
I emphasise those words - the explorers for oil are nol obliged io come here. They do not love us that much. They are actuated by motives designed t» advance their own case.
In the September issue of ‘Petroleum Gazette’ we read:
The oil industry has invested up to $6,700m in offshore operations in the free world, and current spending is of the order of $900m annually. . . . Obviously there are good reasons for investments of such magnitude. . . The reasons are quite simple - the need to find more oil and natural gas, and the extent of the reserves believed to lie under the seas. The world’s demand for oil is increasing at the rate of 2.5 million barrels per day, that is 18% more than the 1966 requirements of Japan, the third largest world consumer, or 4% more than the 1966 production of Saudi Arabia, the fourth largest producer. Proved reserves of oil, about 390 million barrels, represent 33 years supply at current production rates, and for this ratio to be maintained will require a tremendous exploration effort in the face of forecasts of future oil requirements. -
This completely contradicts Senator Cotton’s proposition about a world oil surplus facing oil producers. It shows that a strong incentive exists and it indicates that there are very important reasons why Standard Oil and the other oil companies have been granted practically monopoly rights for exploration off the Australian coast. Similar developments are apparent, as I have pointed out, in the cases of other Australian natural resources, such as iron ore, bauxite and other minerals. All along the line we see the monopolistic overseas investors skimming the cream. The Australian people are being placed in the situation of quarrymen who do the hard work while those with vast accumulations of capital reap the benefits.
Many criticisms have been expressed from this side of the Senate of the method of granting exploration permits. It is fair to say that the granting of permits over such vast areas to single operators precludes competition, which is the very thing that the Government said was its objective. Companies which have obtained early information about possible prospects have been able to take up huge leases, and this legislation condones the avarice of these companies which have been well advised by experts who have had 10 or 20 years experience of offshore drilling. Senator Murphy said:
The discoveries are important. The exploitation of them will be more important. The consequences will affect Australia’s defences, its balance of payments and its destiny. These resources, if exploited properly in the interests of our people, will enable us to build up a great population, a prosperous nation, and enable us to grow rapidly and to be one of the great countries of the world.
Yet by fixing royalties at from 10% to 124% and charging high prices for the product we are depriving the Australian nation of the great benefits that it could enjoy from the discovery and exploitation of these resources.
This subject has been very well covered during the debate, which has been a most interesting one. The discussion has brought forward some of the issues that should be examined by a select committee. There is no doubt that the Parliament and the people of Australia should be thoroughly informed, and neither the Parliament nor the people have had a proper opportunity to examine the subject in all its ramifications. This Government will be condemned by later generations for alienating this great national asset. The Government had an historic opportunity to move the country out of the rut, and to avoid the difficulties that other countries have encountered and which have caused so much litigation. The Government had an excellent opportunity to show that the old order of the private entrepreneur must be replaced by a planned economy. Our economy could be greatly stimulated by further planning, lt is being planned, to a degree, at. the present time, but the Government has neglected an opportunity to develop further its own planning policy. ] believe that, when the people of Australia realise fully the implications of the Government’s action they will record their objection in the only way possible - by putting this Government out of power. 1 hope the day is not far distant when the States can be brought together under the terms of the Agreement. They are not good terms in any case because they provide, amongst other things, that the Agreement itself shall not be capable of being varied or revoked or determined except by agreement between all the governments for the time being parties thereto. What kind of hamstringing is this of future governments? We are all aware of the history of CommonwealthState relationships. We all know the difficulties that the States are facing. We know they cannot afford to pass up any crumbs. The Commonwealth has placed them practically in the position of beggars for funds. The States cannot afford to pass up the opportunities that are available to them as a result of this sell-out of our natural resources.
I support the amendment for the setting up forthwith of a select committee. As to the proposition of Senator Wright, even though the Government has the numbers to carry this legislation, a thorough inquiry should be made into all aspects of this petroleum legislation. There should be an investigation of the permittees who are being given these huge areas for exploitation and development. There should be an investigation of the by-products that will be forthcoming from these operations and possible monopolistic tie-ups in the petrochemical industry, with particular regard to the operations of Imperial Chemical Industries of Australia and New Zealand Ltd. AH these and many other aspects of the matter should be investigated by a select committee, and I hope the Senate will be wise enough to support the proposal for the setting up of such a committee so that the people will be fully informed, or certainly much better informed than they will be by this legislation which is being rushed through in the dying hours of this sessional period.
– These seven Bills are of vital importance to the Australian nation. Not only do they affect the exploration for and exploitation of the petrol resources of Australia; they affect every facet of Australian community life. They will certainly affect the Australian economy. They will have a profound effect on our trade and commerce. Because of the overwhelming importance of this legislation I cannot for the life of me understand why the Government is so insistent that it be dealt with in the dying stages of this sessional period. The importance of the legislation, from all points of view of the Australian community, cannot be overstressed or exaggerated. For instance, one of the Bills - and there are seven all told - and its annexures comprises 1.06 pages. The Minister’s second reading speech contained 55 quarto pages, lt has been impossible for me to look closely - even to look cursorily - at the vital matters contained in the legislation. In the time available I have been trying to wade through the great mass of material contained in the Bills and in the second reading explanation and to conduct some research, but it has been impossible to give adequate attention to a matter of great importance to the Australian community. I doubt whether any honourable senator has been able, in the time available, to read the second reading explanation, the Bills and their schedules and to carry out reasonable research. I am reminded, too, that when the second reading explanation was presented some 40 pages of the Minister’s speech were incorporated in Hansard without being read.
It is unfair not only to the Parliament but more importantly to the Australian people that legislation so vital to all f«r.«t« of the community should be dealt with expeditiously and in the manner it is being dealt with at present. The legislation is too vital to be treated as though this was just another mundane piece of legislation to be included in our statutes. We are dealing wilh legislation relating to the exploration for and the exploitation of the petroleum resources of the continental shelf of Australia and of certain Territories of the Commonwealth and certain other submerged land. What is involved in all of this, quite apart from the exploration for and exploitation of these resources? Much has been said about who will reap the benefits of the accretions from this exploitation - I will not say more about that - but let us look at how it will affect ordinary community and industrial life in Australia.
The main constituent of natural gas is methane, which is identical with fire damp found in coal. I understand it has roughly twice the heating value of the ordinary town gas now distributed throughout Australia. Therefore natural gas may be used in place of coal or oil in the generation of electricity. It may be used as an industrial fuel or as a town gas. Since it has twice the heating value of town gas and is diverse in its physical properties it is not compatible with the town gas currently reticulated in Australia. Domestic and commercial gas appliances will require modification to be able to accept this form of natural gus and this modification could cost on the average about $20 per appliance. Honourable senators can see that ordinary town gas supplies, the generation of electricity, the use of natural gas in industrial areas, all facets of Australian economy and all aspects of the industrial life of Australian workers are very much wrapped up in this legislation.
I am given to understand that natural gas has advantages that are not possessed by other fuels. It is clean and non-toxic. lt is free of asb and moisture. It is easy to handle industrially because it needs no storage on the consumer’s premises and the use of refined gaseous fuels in industry helps to reduce maintenance costs. In special cases, such as glass, manufacturing, the product is improved considerably by the absence of fuel contaminants. One can obviously see that a great body of the Australian work force will be vitally affected industrially when a flow of natural gas is made available to town, commercial and community life. So quite apart from the question of control of these natural resources by the Australian Government, by State governments or by overseas oil companies, one can readily see that this legislation will have far reaching effects on the overall Australian economy and on the community way of life. The whole industrial complex of the nation could well be revolutionised by matters essentially interwoven in the legislation. Because of all of these matters, one can reasonably ask: Why this haste in rushing through the legislation? Surely it is our duty to pause, to think about it.
An examination of the Minister’s second reading speech reveals that negotiations for the drafting of this legislation have been proceeding since November 1965. It has takes the Commonwealth, the States and those interested some 2 years to draw up and agree on legislation and yet the Senate, in the dying hours of the Parliament, with a great number of other Bills having been considered in the last week and a great number yet to be considered, is expected to give 2 days consideration to this legislation. Undoubtedly a Senate select committee should be appointed to inquire into and report upon all aspects.
Let me now raise one or two other matters. I have already said that the legislation could have a great effect on the whole complex of Australian trade resources. According to a pamphlet put out by the Petroleum Information Bureau (Australia) last year, in 1965 imports of crude oil and petroleum products to Australia amounted to 4,736 million gallons - 3,000 million gallons odd coming from the Middle East, about U million gallons from the Far East and 61.9 million gallons from the Western Hemisphere. And if we refer to an article in the Australian ‘Financial Review’ of 3rd January under the heading ‘Oil Gas and Guesswork’ we can see why it is essential that the Parliament give more and detailed consideration to this legislation than it is intended by the Government should be given to it. The article stated, among other things:
A hundred years or so ago, ‘special conditions’ said to be applying in Australia - the contrasting size of the country and its population in particular - were among the justifications for different railway gauges between the States. Similar ‘special conditions’ were also argued against unlocking the big landed estates. After our long history of special conditions’, it might have been hoped that they would be analysed with rather more care than in the past when applied to the new oil and gas discoveries.
Organisations such as the Bureau of Mineral Resources - which devised the ‘graticular’ system for auctioning oft part of successful offshore exploration leases - and the Gas and Fuel Corporation of Victoria, which negotiated the recent price deal with Esso-BHP for natural gas, appear to have put a welcome intellectual effort into deciding exactly how ‘special’ Australian conditions now are . . .
The oil and gas exploration industry did not do too badly under the original ‘graticular’ system. The 10 per cent royalty they were to pay was low by international standards and the proposal that four-ninths of exploration leases be auctioned off when a production licence was sought was also not ungenerous.
Tn Britain and the US, 12i per cent royalties apply and in some countries royalties are much higher - in the United Arab Republic, for example, 25 per cent, while some Persian Gulf governments earn up to 60 per cent from their oil under partnership arrangements. The principle that successful explorers should relinquish about half of their exploration licence area is also wellestablished internationally, often accompanied by offshore exploration areas much smaller than the huge Australian expenses.
I believe that the matters referred to in the article I have quoted should be considered seriously by the Senate before it gives assent to this legislation. On 28th July 1965 the Deputy Prime Minister and the Leader of the Australian Country Party, the Right Honourable John McEwen, addressed the annual conference of the Australian Country Party in Western Australia. For the benefit of my friends in the Australian Country Party I quote from a report of that speech which appeared in the Sydney Morning Herald’ of 28th July 1965, under the heading ‘McEwen is “unhappy” on oil rights’. The article stated: lt is not good enough for this country to live by selling a bit of its heritage every year,’ he said. ‘We do not want to see Australia unduly have its industries in foreign hands, particularly the country’s natural resources.’ On oil search rights Mr McEwen said: ‘This is the kind of thing which should be constantly in the minds of all Australians. Surely there is some reasonable compromise. I do not believe that foreign capitalists investing here would be insensible to the point that investment in such a stable country should carry opportunities for partnership by Australians. This point is not being put by the authorities responsible.’
– A great deal has been achieved in partnership in the last few years.
– -That might well be, I do not say that it is, but the fact remains that we must always take into account that Australia could be getting the raw end of the pineapple in respect of its natural resources. That is the impression 1 have gained from a quick perusal of this legislation. Australia no longer can afford to sell its heritage in any manner at all. We must take all necessary steps to ensure that the interests of this great nation at all times remain paramount and are protected over and above the interests of any overseas investors or financiers.
Hurried consideration of legislation of this nature is just not good enough and is certainly not in the interests of the Australian people. A Senate select committee should be established so that expert witnesses connected with exploration, exploitation and distribution of oil and natural gas could put their views before it. Only recently members of this Parliament received a deputation of country mayors of New South Wales municipalities. The Mayor of Wagga, Alderman Harris, put forward a proposal that natura] gas should be piped from Victoria to the Sydney metropolitan area through Shepparton, Wagga, Canberra and Goulburn, and from Sydney should be piped down the coast. This matter could well be considered by a Senate select committee in the light of the need for decentralisation and its effect on the Australian economy. On matters of such vital importance to Australia we cannot afford to take risks. Every aspect of this legislation should be considered. I therefore support the amendment that the matter be referred to a Senate select committee.
– I wish briefly to support the amendment moved by the Leader of the Opposition (Senator Murphy) requesting that a Senate select committee examine all aspects of this legislation. I have listened to previous speakers in this debate. I am in the same position as Senator McClelland in that for reasons of other business, with members of another place, we have not had sufficient time to investigate thoroughly the purpose and ramifications of this legislation. Many members of this Parliament have given illustrations of their concern about the quality of this legislation and the prospects it involves for Australians. Unless the Government can properly answer the questions that have been asked I believe it should agree to set up a Senate select committee to inquire into them.
The legislation has been introduced somewhat hurriedly. Government supporters have argued that it has to be put into effect because we have nearly reached the end of this sessional period. Senator Wright has indicated, I think it is fair to say, that he is not happy wilh this measure. When the legislation is passed he proposes to move that a Senate select committee be established to examine it. To members of the Opposition that seems to be a wrong position. If we are not confident about these Bills and fear that Australian interests might be sold out to overseas interests or that Australian equity in any undertakings may not be given proper consideration, we should go steadily and quietly. Let us make sure that in the future the Australian economy will not be unbalanced by the effects of this legislation. Contracts are being negotiated. In another place the honorable member for Mackellar (Mr Wentworth) in referring to Australian interests said:
There are roughly 550,000 square miles of territory allocated in offshore leases . . . Virtually the whole offshore territory has gone, and of that 550,000 square miles, in 22,000 square miles only, by some lucky chance, the Broken Hill Pty Co. Ltd, an Australian company, has a half interest. In respect of practically the whole of the remainder, the Australian interest is minimal - 10% to .15%, or something of that order. It is all gone under leases granted by the States and which we propose to recognise under this legislation.
– The same honourable member had a letter printed in the Sydney Morning Herald’ yesterday.
– Yes, that was yesterday. He finished that part of his speech by saying:
No Australian need apply.
Now, that is a very strong statement. To me it is strong enough to feel that every member of Parliament ought to take heed of what is being done in a hurry in order to get this legislation on the statute book. These Bills relate to an agreement between the Commonwealth- and the States. We have to decide important matters. Senator Toohey referred to this situation last night. The legislation could be canvassed by the appropriate method of appointing a select committee. The State governments were faced with a fait accompli in respect of the Victorian arrangements. Each of the State Premiers, including the Labor Premiers, rushed in to approve the arrangements in accordance with the advice which the Commonwealth offered to them.
– The State governments have been considering this matter for 6 years.
– Of course they have. As Senator Toohey said last night the legislative processes in relation to the great legal questions have been canvassed here and in another place. In the past the Commonwealth Attorney-General took a different point of view. He took what might be called the Commonwealth point of view but the then State governments did not agree with him. We have heard these legal questions argued. I certainly am not competent to go into them and do not offer any contribution. I think every honourable senator should be in the position to say that at least a select committee should investigate these great constitutional questions. That committee would summarise the great issues involved. It would highlight and illuminate those matters and then the legislature would be in a position to do something about them. As to the legalities of the arrangement, this situation has not been determined. Better brains than mine have said this. I have noticed in this debate and in the debates in the other place that important members of the legal profession who are also members of this Parliament do not agree that the issues have been resolved.
– Do you ever find legal men who do agree?
– No. Therefore we all can agree that there are still some important matters to be settled in respect of these petroleum measures. I am confident that if Senator Wright makes a contribution during the Committee stage of the debate he will agree with my remarks. But the urgency of this legislation is the question which overrides the politics and economics that we are concerned with. The Government argues that this is urgent legislation. Senator McManus, on behalf of the Australian Democratic Labor Party, also said that the issues were urgent. He put to the Senate a point of view which does have merit. He referred to the fact that we do not have the technique, the equipment or the money to tap Australian resources; to do the tests which have to be carried out and to obtain the very expensive and sophisticated equipment used for exploration. We are learning about these things now. The Minister for National Development (Mr Fairbairn) referred to the fact that we do not have these things. Therefore we have to hand over entirely the control of this development and, at some time in the future, Australia’s economy and Australia itself might be - to use the words of Senator Turnbull - sold out. Senator Turnbull said that this legislation represents a sellout of Australia’s interest. 1 certainly would like to be a member of the proposed Senate select committee which should be appointed to find the answers to these questions. Looking at the whole matter and taking into consideration the restricted opportunities that we have, it seems to me that there is a strongly supported body of opinion in this Parliament and in the community that in this legislation we are giving away something which we ought not to give away, that we ought to ensure that the important reserves of oil and gas and other things should be reserved for the Australian people. What is wrong with this approach? This is an important consideration because whenever this Government brings down a Budget it balances its domestic propositions against its balance of payments overseas. The Government restricts the amount of pension payments, repatriation benefits and its developmental programme - except just prior to elections. The Government says it worries about how the country can pay for the debts incurred overseas yet it is asking us to pass this important piece of legislation which will add to the liabilities of our dependants who will have to run the country in years to come.
There is another thing which concerns me. lt is always surprising to me to find that the Commonwealth can readily arrange conferences with the State governments on some matters but not on others. For example, the Opposition has asked each year that the Government arrange a conference on equal pay for women. Annually we have put to the Government that if it does not wish to apply the International
Labor Organisation Convention on equal pay then it ought to consult with the States in order to do something about this matter. What does the Government say about our request and what does it say to the unions? It say, firstly, that’ it will not do this and, secondly, that it will not discuss the matter with the States. We on this side of the Parliament have talked about the need for price control in Australia in order to temper the escalation of the cost of living.
Sitting suspended from 12.46 to 2 p.m.
– Before the suspension of the sitting I was making the point that, whilst the Government has been able to confer with the States on this important subject, it has not been able to do so on other major matters that the Opposition has put to it. One such subject that 1 have in mind is price control. The absence of price control has impeded the progress of the country and has thrown a large burden on the workers. They obtain a share of the national product by submitting a case to the Commonwealth Conciliation and Arbitration Commission. But as soon as the Commission gives its decision, costs escalate. The Opposition has asked the Government on previous occasions to adopt some form of price control. We have suggested that, if it will not accept the responsibility, it should confer with the States in an effort to agree on some uniform method of price control. But on all these occasions, whether the subject has been price control or some other matter, the Government has said that it is not prepared to follow this course.
– The States have been left to do it.
– As Senator Toohey says, the States, in bits and pieces, have tried to apply their own standards to price control but they have been frustrated because a uniform method has not been applied throughout Australia. This causes us to worry about, the future of the nation’s fabulous wealth, with which we are dealing now. The Government has come along with an agreement. Certainly it has been reached over many years. The Government has had many opportunities to inform the Senate and the other place of the progress that has been made in negotiations. It has not done so. Instead in the dying hours of the sessional period, it has come along and said: ‘Here is the hie. lt is closed. We have stamped it “ Finished “.’ The pattern has been set by one State government and the Commonwealth Government.
– And it was not a good pattern.
– That is right. As Senator Toohey says, it was not a pattern that would enable the Australian consumers or even the States to obtain the best possible deal. We have merely followed that pattern and subsequently other States have said that they will make an arrangement which will in certain circumstances give, them an increased amount of royalty. This matter causes concern to the Opposition.
I have been impressed by the contributions made in another place by the honourable member for Mackellar (Mr Wentworth). He is an important member of the Government Parties and he has, in his own words, stated his objections to the legislation. He was so concerned about what had been done in a hurry that finally he refused to vote on the issue. Let me repeat some of his premises. He said:
A proper oil policy for the Commonwealth should, i think, have four main objectives. 1 list them in order of importance: Firstly it should maximise oil and gas production in Australia as soon as possible to serve our local markets and 10 have a surplus available for export. Speed, here, is the first requisite for a country like Australia which is so dependent on imported oil.
No-one would disagree with that approach. He continued:
Secondly, there should be a substantial Australian participation in the ownership of these resources.
This is probably the most important aspect. It is certainly the one that attracts the attention of the Opposition. I and other honourable senators have previously expressed our concern about this aspect. We have a substantial responsibility. It is our responsibility to ensure that the wealth within Australia is developed for the good of the nation, that Australians participate in the extraction of the wealth and that the Slates and the Commonwealth have a proper share in the wealth.
We are not satisfied with the statements that have been made on behalf of the Government. Over the years we have not been satisfied with the Government’s approach to these great national questions. We have seen progressively in almost every sec’.or of the economy the right of the Australian nation to the benefit of its own wealth being whittled away little by little because of a state of inertia. But the Government resents any suggestion that we make, it constantly contends that our propositions are based on socialisation. When we say that the Australian citizens should have a share of the nation’s wealth, the Government contends that this must be Socialism because we want some planning to be done. But this subject is of vital importance. We must be guided by a consideration of what will happen in the future. We know that the mass of the Australian people support our approach. We know that there is a growing consciousness in the community about the dangers of overseas investment. The public is becoming aware of the way in which, bit by bit, Australia’s resources are being purchased by overseas interests. We have seen how overseas interests have taken over in the service field. In recent months the activities of overseas interests have caused concern in the shipping world. The Australian National Line has asked why it cannot get into overseas trade. We do not know why the Australian shipping component cannot enter the Australian trade and adopt methods that will benefit the Australian producers and consumers. Australia’s entry into this field would reduce costs.
– The honourable senator knows that the Minister for Shipping and Transport in another place nas intimated that negotiations are taking place.
– I well know that, but I remind the honourable senator that a great deal of time has been taken to reach this point. Repeatedly, I and other honourable senators have raised this issue. We have raised it whenever we have received a report from the Australian National Line. We have asked to be told what the Minuter is doing about it and all sorts of long and protracted discussions have taken place. As far as I am aware, no formal report has been made and it is only now that we are told in public statements that the Government intends to do anything about this problem.
The Australian community generally is becoming more aware that Australia must get into the technical field. We must not only use the techniques that have been brought here from other countries but we must ensure that they are modified to mee* our requirements. This has been done in manufacturing industries. We now pay very little for licences to use overseas techniques, because we have adopted our own developments since the early 1920s when mass production was a feature in America. We now know that Australian industries can develop techniques at least as well as industries in other countries can. Why should we say for all time that Australian techniques cannot be substituted for overseas techniques? We should ensure that the benefits of techniques developed in Australia flow to the Australian community. This is our approach. The motor car industry was mentioned earlier in the debate. It was said that there is still some resentment in the community about the intrusion into Australia of one particular motor car manufacturer, even though this manufacturer is now putting large amounts of its profits back into Australia. I have already mentioned the other side of manufacturing. We are exporting some consumer goods that are manufactured in Australia. But in the motor car industry, the Government has legislated to ensure that the manufacturers use a growing proportion of Australian made components.
Largely we have a situation where even overseas organisations are turning profits back into Australia. A large overseas organisation operating in my State is turning back the whole of its profits into Australia. This, of course, is a good thing. It has been brought about not so much by pressures from governments as by a recognition of the potential and capacity of Australian workers to produce these things in the same way as they are produced overseas, and to use the best of techniques and the finest machines. The demand for these products has existed. Australian workers have the capacity to make the finest machines. We find that Australians are capable of making the necessary plant and equipment, and this has been done. The trend has been established.
I refer again to the basic Australian fear which is held not only on this side of the
Senate but also by members on the other side. I have mentioned this matter before and other honourable senators have mentioned it also. We want to be sure that quick action in this regard does not mean that we will find ourselves in a situation where the action we have taken embarrasses for all time the benefits that this country might receive in this field. I put it to the Senate, as I have mentioned before, that on every occasion and in every year when claims are made for expenditure on developments in the various States the Government says that it cannot afford to finance these proposals. The Minister for Repatriation (Senator McKellar) said recently when addressing a civilian widows group in South Australia that he could not increase repatriation pensions because the whole of the appropriation for his Department was used in the running of the Department and that increases in pensions could not bc granted. When the Opposition said to the Government during the Budget debate that pensions ought to be increased - and this is on record in Hansard - the Government replied that to increase pensions would cost approximately $S0m, and that we have not enough money to finance that proposal and war expenditure also.
– Yet we have untold wealth in minerals going out of the country.
– As Senator Poyser interjects, while this is going on great wealth is going out of the country. It is certainly not going to the Australian community to the extent that we would like. The Opposition is not talking about socialisation here. It is speaking more of Australia’s national interests. I say to the Government that this is a very important thing to consider. This is the question before us. But as far as I can see, in the dying stages of this debate the Government says: We have made a contract. We have in fact surrendered to the States some of the rights.’ Some honourable senators have argued that rights in respect of control, initiation, and the other matters concerned were responsibilities of the Commonwealth Government. The Com,monwealth Government has made a compromise. It has set the pattern. The Government says to us: ‘We bring the legislation before you. We have set the pattern. This is the Federal view. You can read and study what we have done. We ask you to put the rubber stamp on it.’
The Opposition is not satisfied with what is being clone. Nor in fact is Senator Wright satisfied. I was one who listened to his speech from the lime he started until he finished, lt was obvious that, when he approached the subject, he felt the same concern, hesitation and fear as we share on this side of the chamber. The address given by Senator Wright was a good one. Usually, when he studies a proposition, he make a very sound contribution and adds something to the debate because he has a very good legal brain. Most honourable senators on the Opposition side felt that in the concluding pari of his speech Senator Wright was going to support the proposition put forward by the Leader of the Opposition for the appointment of a select committee. He turned about. He said that he did not support the Opposition. I think that it was a turnabout. He now says that what has happened is that the file has been closed. But he wants to rescue something from the debris. Perhaps we can rescue something from this situation. But it seems to me that’ what Senator Wright has suggested to the Senate is not as good as the proposition put to the Senate by the Opposition. Nothing would be better than to have a Senate select committee which could evaluate all the things that we on this side of the Senate are worried about and provide answers to the questions that are worrying members on the other side of the Senate.
– Such as royalties.
– The matter of royallies is one question. Senator Toohey very satisfactorily explained to the Senate the position of the South Australian Government. Nobody can throw any stones at the State Government because the discussions were commenced-
– Does the honourable senator mean that it is not permissible to throw stones?
– Senator Cormack can try to do that but in fact we are in a situation, in a pattern and in a run of negotiations that began and finished when the Victorian Government made a contract with the Prime Minister (Mr Harold Holt). We have been advised that the contract was then made with the other State governments. But that was not the correct thing to do in the situation. Consideration should have been given to the matter on the basis of proper discussions and having regard to the threat to Australian interests which would arise from the automatic extension of the Government proposal. I suggest that most of the State governments, if the matter was put to them now, would on reflection change their attitude and would nol agree to the pro forma that has been established. Honourable senators opposite may if they wish argue that an increased royalty to the States would meet the objections of some people. But that is not sufficient so far as the Opposition is concerned.
– Will the Premier of South Australia now withdraw the legislation before the South Australian Parliament?
– I have never heard Senator Cormack support any of the contributions made by the Opposition. He has a great capacity regarding the operation of committees of this Parliament, but he also has played a political role consistently. His contribution to debates has usually been based on the attitude: ‘That is the action proposed by the Australian Labor Party. It is talking about socialisation.’
– How many times has the honourable senator voted for us?
– 1 do not know about voting for the Government, but I might do so if the Government decided to do the right thing. If the Government ever decides to bring in equal pay for the sexes, as we have asked the Government to do, we will support it. We say that the Opposition is mostly right in the policies that it puts up. It can be said that when a member of the Opposition rises to speak in the Senate he does not voice the policies of his party in respect of every question. We do not always say, for example, that we believe in socialisation although we do believe in socialisation as the ultimate. But we always are guilty of supporting the interests of Australia because, in the final analysis, although we are charged in this place to support the objectives of our own States we have an overriding responsibility to advance Australia.
This is what it really comes down to: Arc we in the circumstances of this legislation doing the best for the future of Australia? We do not think that the Government is doing so. We think that the Government is doing what it has done in other sectors. The Government has said all along that overseas investment in Australia is a good thing. The Government says that overseas investment creates wealth bit by bit throughout the nation. But the Government never faces up to the issue that some day it will have to pay for this overseas investment. I have shown the Government, as have other speakers in this debate, that Australia can do most of the things that are needed for its development today. Perhaps we cannot afford to do all of them now. We may not be able to finance the building of the great oil rigs that are required. But we can make them. The first or second rig has just been completed at Whyalla. Our workmen are making these rigs. Australian workmen can design better rigs. But if we cannot build all that wc require now, at least wc can make sure that whatever accrues from the exploitation of our gas and oil resources will come back to the Australian nation.
Debate (on motion by Senator Henty) adjourned.
page 2268
– by leave - In informing the Senate on 25th October of the agreement that Nauru should become an independent country, I said that the date for independence required consideration in the tight of the steps necessary to enable this change to be made, lt has been agreed now that Nauru Independence Day will be 31st January 1968.
Silting suspended from 2.22 to 3 p.m.
page 2268
Debate resumed.
– in reply - I have never had greater pleasure in introducing a measure into this chamber than I have in introducing this very important legislation. I congratulate the Minister for National
Development (Mr Fairbairn) and all of the people who, over the last 2i years, have been associated with bringing to a rational and sensible conclusion this legislation which represents a political compromise in the interests of the whole of the Commonwealth. This legislation is of great importance and will bc of immense benefit to Hie people of Australia.
I wish to reply to some of the points that have been raised by honourable senators opposite in the course of this debate. One point that emerges clearly from the debate is that in opposition members of the Australian Labor Party are without question the greatest advocates of centralism and a central government in Canberra of all time. They are prepared to make their advOCaCy in direct opposition to the State governments and the State Premiers. Only last week a conference was held in Adelaide at which the Labor Party purported to find ways and means of providing additional finance for the State governments. Although it was an abortive conference in my view, with it scarcely finished members of the Labor Party come here and oppose a measure which will bring great practical and financial benefits to the State governments, which is supported by every State Premier and every State government and which has been drawn up by the State Attorneys-General and Ministers for Mines and their staffs, working with the Commonwealth, over a period of 21 years.
I was interested in the examples used, particularly by the Leader of the Opposition (Senator Murphy), in opposing this legislation. He used the example of an instrumentality of the Italian Government. It is a Socialist government. That instrumentality is about the only example of a Socialist government instrumentality that he could find in this field. He suggested that we should follow the example of the Italian Government. He mentioned the plans that it had undertaken for the development of the Italian oil industry. But he did not go quite far enough. He did not give the facts and figures in respect of other methods and other fields.
– What about the royalties?
– I was about to refer to the basis of the royalties. I am very glad that the honourable senator raised that matter. He and all his colleagues were quite wrong in their assessment of the Australian royalty. Australia is charging a 10% royalty. If certain other blocks are taken up, the royalty will rise to between 11% and 12i%. That is the Australian Government’s proposal. The offshore royalty in Canada is 5% for the first 5 years and 10% thereafter. In Italy, about which we have heard so much, the royalty is 8% on oil and 5% on gas. In Nigeria it is 10% out to a depth of 60 feet, or the 10-fathom line, and 8% in outer areas. In Norway it is 10%. In the United Kingdom it is 121%, which is equal to our maximum royalty. Senator Mulvihill is nodding his head and smiling, but he will not nod his head and smile so much when 1 have finished. In the United Kingdom the royalty is 12i% for 40 years, and then the Government may make it any figure it wishes - higher or lower. In the Netherlands the royalty is on a sliding scale and rises to a maximum of 16%. In the United States it is 16J%, but only for the life of the field. Of all the countries that I have mentioned, in only one is the royalty higher than it is in Australia.
I point out that the Bills specifically contemplate a review of the Australian offshore royalty in respect of the period after 21 years. I quote the following from the second reading speech, in order to refresh the memory of honourable senators opposite:
During the first 21 year period of a production licence the standard royalty will be at the rate of 10% of the value at the well head of the production of petroleum as defined. The standard royalty to apply during the second 21 year period of a licence, or during any further extensions, will be fixed by the parliaments at or before the time of granting a renewal of a licence and the rate so determined will apply during that period. Tn the absence of parliamentary action to fix a new rate the 10% rate will continue to apply.
So after the first 21 years the matter is thrown back into the hands of the parliaments. In the United Kingdom, about which we hear so much, the royalty is fixed for 40 years. These are the matters that honourable senators opposite overlook.
The Snowy Mountains scheme was mentioned during the debate. In fact, the Leader of the Opposition gave it as a prime example of Socialist endeavour. He said: We carried out the Snowy Mountains scheme. Why cannot we carry out all the oil development in Australia?’ The Snowy
Mountains scheme has been going on for 18 years and is not finished yet. We want to see some oil and gas in Australia. We want to see oil and gas flowing into industry in Australia. Yet honourable senators opposite suggest that the oil industry should be developed as the Snowy Mountains scheme was developed. As I pointed out in the course of the debate, that scheme was constructed largely by private enterprise contractors, lt is not finished yet, but it is what the Opposition likes to term a ‘prime example of Socialist endeavour’. Both the Leader of the Opposition and the Deputy Leader of the Opposition (Senator Cohen) made the point that we should be developing the oil industry by public enterprise.
During the debate Senator O’Byrne mentioned the position of the Broken Hill Pty Co. Ltd in this context. He said there should be no difficulty in finding the capital and the know-how needed to undertake this vast development. This has been the constant theme of the Opposition: It should all be done in Australia; nobody outside Australia should be given an opportunity to invest in this great industry; the know-how and the capital should all be provided by Australians. If such a policy were at all possible of fulfilment there would be no greater advocates of it than the members of this Parliament on the Government side. But let us consider what the Broken Hill Pty Co. Ltd itself had to say on the subject. I. think that the officers of that company are pretty sensible, reliable and practical fellows. The company issued a publication in April 1967 called ‘Facts about Natural Gas and Oil’, in which were posed a series of questions of interest to the people of Australia. One question was: ‘How did the Broken Hill Pty Co. Ltd and Esso become involved?’ The reply was given in these terms:
On the basis of expert advice Broken Hill Pty made a decision in 1960 to take up the permits and licences to explore for petroleum in an area totalling 63,000 square miles of Bass Strait. Broken Hill Pty’s initial survey work indicated that further exploration was justified. Broken Hill Pty did not have the specialised and highly technical knowledge or the resources-
Here we have perhaps the greatest Australian company saying that it did not have the resources. It went on:
Broken Hill Pty did not have the specialised and highly technical knowledge or the resources to undertake the programme necessary. From the oil companies which were technically and financially capable and prepared to accept the risks involved in mounting a highly complex offshore exploration programme and undertake the necessary developments arising from any discoveries, Broken Hill Pty chose Esso.
This is how that overseas company came to be involved in this great discovery. The greatest of Australian companies said, itself: ‘We could not find the amount of risk capital necessary to undertake the venture. This was no certainty, we could not find the capital, so we invited what we believed to be the most expert company to come in and share with us on a 50-50 basis.’ That is how this great complex came about, to the lasting benefit of Australia, 1 believe, in view of the developments that have occurred already. Then another question was posed in this publication: ‘How much money are Broken Hill Pty and Esso spending on exploration in Bass Strait and on the Barracouta field and the Martin field production facilities?’ The answer was:
In two years, when the Barracouta and Marlin fields are in production, the companies will have spent a total of $100m to $150ni. Substantial additional capital investment will be necessary subsequently at a rate determined by the build-up of markets. Exploration expenditure will also continue beyond that time.
Here was a sum of between $!50m and $250m to be spent on exploration.
– On one field.
– Yes. On one field. Yet the Opposition has adopted the attitude consistently throughout this debate that this is work that the Australian Government should have done - that this industry should have been socialised. Just let me remind honourable senators of the developmental work we have before us at the present time. Wc have to develop resources of oil, gas, iron ore, nickel, bauxite. We have to clear brigalow country and we have to build beef roads. We have to complete the Ord River scheme and we have to undertake the Emerald irrigation project. All these enormous works are being or are to be carried out, some by government enterprise and some by private enterprise. Oil exploration is a highly speculative undertaking. Anybody acquainted with oil search will tell you that it is accompanied by far more failures than successes. Yet the only proposition the Opposition can put forward is that we should make the royalties situation so unattractive that no overseas company would spend the money to undertake this development which, as I have said repeatedly, will be to the great benefit of Australia. Nobody would deny the proposition that the more independent we can make ourselves of other countries for our requirements of oil, and the more natural gas we can find in Australia, the greater will be the benefits flowing to this country.
I was interested to note that senators representing various States in this States House were prepared to quibble at the amount the State Governments are going to get from these royalties. It has been agreed that the Commonwealth Government will take 4% and the State Governments 6%. Yet in this States House there are senators on the other side who would follow a line completely opposite of that followed by the Governments of their States. I could understand Senator Wright contending, perhaps, that there are some constitutional issues involved.
– There is no assurance that all States will share.
– No, that is quite true, and this, I think, is the basis of opposition from New South Wales senators. Anyone would think that what is involved here is something new. Let me remind the Senate of what was done quite a long time ago when a Commonwealth Labor Government and the then New South Wales Government initiated the Joint Coal Board. This is what the Minister for Reconstruction and Development, Mr Dedman, said at that time:
Co-operation between the Commonwealth and State Governments is therefore necessary and the present Bill has been drafted only after careful discussion wilh the New South. Wales Premier and other Ministers, and on the definite understanding that a substantially identical Bill will be introduced into the New South Wales Parliament. In this way powers within the legislative competence of each Parliament will be conferred.
What the Government is doing now is simply an extension of the system of the Joint Coal Board which was initiated by a Labor Government.
– It was a completely different situation.
– But let me- tell the honourable senator one thing: when the two Governments at that time negotiated this little agreement in respect of coal there was no talk of a uniform price for coal throughout Australia. New South Wales had a monopoly and it made the other States pay. Do not make any mistake about that. Now New South Wales does not have oil or natural gas and it is a fair thing for New South Wales to pay a fair price for them in return for the tremendous wealth that it reaped by making little States like Tasmania pay for coking coal. This is the real nub of the situation. New South Wales senators know that the system is a good one. They know that it was developed in New South Wales and that it is still working in New South Wales. They know full well - and this is what they are worried about-
– This is an instrument of revenge, is it?
– It is not an instrument of revenge, but it is a very interesting coincidence that the honourable senator is now talking about a uniform price for gas because he has not any gas - at least not any of the kind that burns in factories - although neither he nor any other New South Wales senator raised this question when New South Wales had a monopoly over coking coal and sold its coal to the other States. New South Wales got the benefit at that time. Now some other States will get a benefit. We hope that all States will benefit as offshore operations extend. Deposits of oil and gas may be found off the coast of every State, and if this does occur every State will benefit, and this will be a very good thing.
I want now to comment on a legal matter that I thought the Opposition was prepared to accept quite lightly, although it is not as simple as was suggested. I refer to pipeline distribution in Australia. The Bill derives its support from external powers, through Australia’s signature of the Convention. There is nothing in the Convention about ownership or distribution of the product. The Commonwealth has no constitutional power over the distribution of goods within a State. The Commonwealth could engage in interstate trade subject to constitutional limitations, such as section 92. However, this would be quite outside the scheme. Probably not enough is known yet about the location and extent of discoveries to enable any worthwhile decision to be made. Any distribution interstate is outside the present Commonwealth-State agreement and should therefore be the subject, if it is ever to be a subject at all, of an entirely separate measure.
Those senators who commented that we should have a Commonwealth and State owned pipeline for distribution within a State and throughout the States seem to accept the constitutional position as being quite clear, and believe that this could be done. I point out that it is not quite as simple as honourable senators make out. There are constitutional difficulties in all the matters to which they have lightly referred, and they have failed to take the constitutional situation into account.
I do not want to traverse territory that has been covered already, but it is interesting to refer to the area of the continental shelf. It involves 1 million square miles. The territorial waters occupy an area of 50,000 square miles. This is the area in which the States are interested. The outer continental shelf is greater than the territorial seabed by a factor of 20 times. It has been argued that the Commonwealth should have left the States with the administration of the territorial seabed and taken exclusively for the Commonwealth the continental shelf. Let us look at this argument because it poses some interesting problems. Any such arrangement would have relationship to the 3 mile limit and it is not easy to actually define a 3 mile limit on the seabed off the Australian coast. If the Commonwealth were to undertake the administration of the continental shelf it would be necessary to set up a whole new administration, whereas by the present scheme the administration, including inspection, is carried out by the State Departments of Mines. This is good legislation because it overcomes the type of duplication we so often see in administration in those fields where both the Commonwealth and the States are operating. The most efficient method of administering this particular aspect is through the State Departments of Mines. Any arrangement involving carving up the seabed on the basis of the territorial limits of the States rather overlooks the confusion that would result if at some future time the extent of territorial limits were changed. This could well be as the result of the development of international law or because of a conscious policy decision by the Commonwealth Government. At present Australia maintains a 3 mile limit but other countries have extended their territorial limits well beyond that distance.
– It would not be suggested that that would extend State jurisdiction through, surely.
– That may or may not be. That is a point of law on which the honourable senator would be far better versed than I, so I do not propose to argue it with him. People more qualified that I may do so. Once wells are down and producing, if the boundaries were changed a well could be brought within another area, and this could pose a problem. Clause 21 of the Bill provides that a permit shall not bc issued for more than 400 blocks - roughly 10,000 square miles. Several permits issued by the States exceed 50,000 square miles and one covers 140,000 square miles. These permits were issued prior to this scheme. In future no offshore permit issued under the joint legislation will be for more than 400 blocks or 10,000 square miles. The existing permits will be honoured by the issue of a series of 10,000 square mile size permits under the joint legislation, so the 140,000 square mile area will become 14 licences of 10,000 square miles each. The important point to note is that in the case of all permits issued under the joint legislation, half of the area must be surrendered at the end of 6 years. This is a condition precedent to the retention by a permittee of the other half of an area. A further point is that under the new offshore legislation each individual permit will carry its own work obligations tailored to suit the particular circumstances. This will undoubtedly accelerate the exploration of Australia’s continental shelf.
In short, under the joint legislation half the existing area under permit will revert to the Crown within 6 years and will be available for re-allocation. A further point to be noted is that the Bill does not say that all permits must be of 10,000 square miles. Rather is that the maximum size which may be included in any one permit. The initiative as to how big a permit will be in future rests with the Government. Clause 20 clearly leaves it in the hands of the designated authority as to how many blocks he advertises as being available for permit.
– There is no limit to the number of permits, is there?
– No. lt is worth noting that there are a great number of existing permits which are of less than 10,000 square miles. Of the 57 titles mentioned in the statement circulated with the second reading speech, no less than 43 are already smaller than the 10,000 square mile permit. We have covered a lot of ground in this debate, which has been one of the most interesting I have ever listened to, because while we are entitled to hold conflicting points of view it is always worth listening to what others have to say on a topic like this, lt has been suggested that this is giveaway legislation. It is not give-away legislation by any means, lt gives certain incentives which are very necessary if we are to attract those who are going to take the immense risk involved in oil search. Members opposite are prone to seize on something when it is a success but they quite blithely overlook the vast sums expended and lost in finding a field, if the legislation did not offer incentives, we would not attract investors. One of the great successes of the proposed legislation is that the companies have taken the governments on trust when the governments have said: ‘This is the legislation that is going to be brought in by the State governments and the Commonwealth Government’. The companies have gone ahead spending millions of dollars on trust. Very shortly seven rigs will bc working in Australia in developing offshore leases which will be of such vital importance to Australia.
Of all the matters raised in this debate, I think the most important is Senator Wright’s proposal that a Senate select committee be established after this legislation has been passed. Honourable senators opposite have said that the measure should bc delayed while a Senate select committee is appointed to inquire into all its ramifications and facets and the views of all sources are heard. I can well understand why honourable senators opposite want that delaying action. Of course they want delaying action. They do not want this legislation at all. They have made that quite clear. If the legislation were delayed as honourable senators opposite wish, do they believe that the operating companies would be interested to continue their activities in the face of opposition by the Australian Labor Party? Do not honourable senators opposite think that they would be doing the greatest possible disservice to Australia?
In practice and in fact we want oil and gas for Australia at the earliest possible moment and that is why Senator Wright’s proposal is such a cracking one. He said: Let us go ahead and pass this legislation.’ It has been approved by all the States. Three State governments have passed the necessary legislation and in the other three States it is expected that the legislation will be passed in the current sessional period. The State Premiers have spoken very favourably of this measure. I have here a copy of the South Australian Hansard report of 24th to 26th October in which the present Premier of South Australia is reported to have said about the Agreement:
The consequences of failing to agree could have been utterly disastrous for this State. 1 have read in the Hansard report of another place the remarks of a Tasmanian representative, the honourable member for Wilmot (Mr Duthie). He said that the Tasmanian Government had been trapped into agreeing and had signed under duress. 1 have spoken to a member of the Tasmanian Government about that statement and he firmly contradicted it. He said that no such situation arose in the Tasmanian Parliament. Mr Fagan, the Tasmanian Attorney-General, had spoken at great length on the part he played in the production of the Agreement and in the provision for royalties. He took great credit for it. Anybody who suggests that Mr Fagan was trapped into anything does not know the Mr Fagan I know. He is a competent and hard-headed man and nobody could trap him into anything. 1 think that Senator Wright’s proposal brings us the best of both worlds. It gets us on with the job of bringing oil and gas to the people of Australia as quickly as possible and provides for private enterprise an opportunity to produce the goods. We do not want to wait as we have done for 18 years for the Snowy Mountains scheme, which is not yet finished. We do not want to wait that long to get gas and oil for the country by the Socialist method. We want to get on with the job and that is made possible by this legislation.
If Senator Wright’s proposal is adopted the Senate will give an opportunity to a select committee for 12 months or 18 months thoroughly to investigate the ramifications of this measure and report back to the Senate. I believe it is a compromise which offers the best of both worlds to the people of Australia. 1 congratulate the honourable senator on his proposal. I have covered most of the matters raised during this debate. I commenced my remarks by saying that I was proud to introduce this legislation and to represent the Minister for National Development. 1 again congratulate him, the State Attorneys-General and Ministers for Mines in arriving at the Agreement: They have done a good job for Australia. I believe unnecessary litigation will be avoided. We have seen trouble arise in other countries and delay after delay has been incurred. Through this measure the rewards go to the people who are rightfully entitled to them. I believe that this measure produces a solution for the six States and the Commonwealth which will overcome all the pitfalls we have seen occur in other countries. 1 have great pleasure in recommending this measure to the Senate.
Question put:
That the words proposed to be left out (Senator Murphy’s amendment) be left out.
The Senate divided. (The President - Senator Sir Alister McMullin)
AYES: 20
NOES: 21
Majority . . . .1
AYES
NOES
Question so resolved in the negative.
Amendment negatived.
Question put:
That the Bill be now read a second time.
The Senate divided. (The President - Senator Sir Alister McMullin)
AYES: 21
NOES: 20
Majority . . . . 1
AYES
NOES
Question so resolved in the affirmative.
Bill read a second time.
In Committee
Clause 1 agreed to.
Clauses 2 to 4 - by leave - taken together.
– I have a question about clause 2 of the Bill which states:
Subject to the next succeeding section, this Act shall come into operation on the day on which it receives the Royal Assent.
Could the Minister for Supply (Senator Henty) tell me when it is expected that this Bill will receive the royal assent? There was a suggestion made in another place that it would be some months before the complementary legislation would be passed in the States. Could some indication be given as to whether this is so and whether the royal assent will await the passage of similar legislation in the States? In any event, when is it expected that the royal assent will be given?
– Royal assent will be given within a few days after the legislation has passed both Houses of this Parliament. We will not be waiting for complementary legislation to be passed by the States.
– When is it expected that the complementary legislation will be passed by the States?
– Within a matter of a few weeks. It is before three State Parliaments now.
Clauses agreed to.
Clause 5 (Interpretation).
– Clause 5 lacks a definition of designated authority’. I would like to know who is to be a ‘designated authority’. As I understand the Agreement, it is suggested that in the States the designated authority is to be the Minister for Mines. In the Commonwealth I understand it is to be the Minister for Territories. 1 point out that we are not being asked to adopt the Agreement - or, as Senator Wright termed it, the treaty - between the Commonwealth and the States; we are being asked to adopt a Bill to govern the conduct of these particular activities in the area under Commonwealth control.
I am most concerned about this matter because clauses 14 and15of the Bill refer to a ‘designated authority’. Those clauses state that the Governor-General shall consult with the Governors o fthe States about these designated authorities and I understand that in relation to Commonwealth Territories the Minister for Territories will be recognised as the ‘designated authority’. Of course, whoever is appointed in the States, the Governor-General and the Governors of the States may delegate those powers to someone else and we may not know Who that person is. As I said in my second reading speech, obviously the designated authority’ has unlimited powers. To my mind, clauses 14 and 15 do not give us an interpretation or a definition of who this designated authority is to be. I think we should discuss these clauses to ascertain the identity of this ‘designated authority’ who is to have this power. I wonder whether we should put this clearly in the definition clause so that we can readily ascertain who this individual is, if he is an individual, or what the position of the designated authority’ is. The other point I want to raise was mentioned by Senator Webster in his speech during the second reading stage.
– I intend to raise it myself.
– Then I am just a few jumps ahead of Senator Webster. That, of course, is consistent with the achievements of the Party 1 represent. The Government derives its power for this legislation from an international convention which is mentioned in the preamble to the Bill, lt states:
Whereas in accordance with international law Australia as a coastal stale has sovereign rights over the continental shelf beyond the limits of Australian territorial waters for the purpose of exploring it and exploiting its natural resources.
asked: What are our limits? Leaving aside the argument about who has power over territorial waters, obviously we have control over all the natural resources that occur at least from the area of territorial waters to the 200 metres depth of water. The Bill provides for that power to be used to explore for petroleum products.
The Minister referred us to clause 9 of the Bill, which deals with the application of laws. The question I ask is why we should limit the operations of the Bill to petroleum products when we have power to apply it to products other than petroleum products. Should we not have a definition of natural resources so that we can, if we wish, apply the legislation to resources other than petroleum products? Clause 9 (2.) of the Bill provides:
The provisions referred to in the last preceding sub-section apply to and in relation to all acts, matters, circumstances and things touching, concerning, arising out of or connected with the exploration of the sea-bed or subsoil of the adjacent area for petroleum and the exploitation of the natural resources, being petroleum . . .
I see a limitation there. It cannot be doubted that we have a power in this area that extends beyond petroleum. It may be that during the Committee stage we will decide to use this power. Apparently Senator Webster has some interest in other natural resources. Should we not therefore include in the definition clause a definition of ‘natural resources’?
– The Bill, of course, is confined to petroleum. That is the subject with which the Agreement deals, lt does not in any way interfere with the power to legislate in respect of other types of natural resources. However, the mining for other types of minerals or other natural resources in this area may call for a different type of legislation altogether. If we seek to control the search for some other type of natural resource, legislation for that purpose would be introduced. It was decided, I think very wisely, that to get agreement with the States the Bill should be confined to petroleum.
– Where is that restriction to be found in the Bill?
– Clause 5 confines the Bill to petroleum.
– Clause 5 is only the definition clause. That cannot control the operation of the Bill.
– The definition of designated authority is given in this clause at page 5 of the printed Bill. The States have agreed to appoint their Ministers for Mines and we have agreed to nominate the Ministers for Mines as the designated authority in the States. In the Territory of Papua and New Guinea the designated authority will be the Commonwealth Minister for Territories. Senator Webster asked me for a definition of ‘petroleum’. I think I answered him.
– I sought a definition of other resources’. The Minister gave me the definition of ‘petroleum’.
– Clause 5 gives the definition in this way:
– That is a definition of petroleum.
– And that is all this refers to.
– I raised the query yesterday, as Senator Cavanagh said, in relation to the wording of the Convention and the wording of the Bill. The Bill states that it relates to the exploitation of petroleum resources and certain other resources. Yesterday the Minister for Supply (Senator Henty) gave me a definition of petroleum. He gave me the definition that is contained in clause 5 (1.). That definition in no way makes clear the meaning of ‘certain other resources’. I believe that clause 5 should contain a definition of ‘certain other resources’.
– Definitions are not included in a long title to a Bill. The title to this Bill refers to ‘petroleum and certain other petroleum resources’.
– No, it does not say that.
– It refers to ‘certain other resources’ which are defined in clause 5 (1.) as:
Any naturally occurring mixture of one or more hydrocarbons whether in a gaseous, liquid or solid stale, and one or more of the following, that is to say. hydrogen sulphide, nitrogen, helium and carbon dioxide.
– The point that Senator Webster makes is that the Minister for Supply has read a definition of petroleum, which is one of the products for which we can make regulations. But it is only one such product and the Bill is using only a small part of the extended powers over natural resources that have been conferred by the Convention. The claim is that the Bill should contain a definition of natural resources. If this Bill does not cover that matter, what should any subsequent Bill seek to cover in this regard? Listening to Senator Webster, I do not know that there is not a big future in other natural resources under the seabed that could provide a profitable investment in the future. Therefore, we want some legislation on this point. I accept the statement by the Minister that we need separate legislation for the other resources at this stage. But we cannot accept that the definition of petroleum covers our power over those resources. Another Bill may be necessary to do this. In all humility I ask Senator Wright whether in the motion of which he has given notice he has considered the potentialities of the seabed and whether his motion covers the areas that may not be covered by this Bill. This matter can be discussed when that question is being considered.
I am grateful to the Minister for pointing out that the definition of ‘the designated authority’ is to be found under the letter t’. I did not think to look there. In the definition of ‘the designated authority’ the Bill states: the Designated Authority’, in relation to -
an act, matter, circumstance or thing touching, concerning, arising out of or connected with -
petroleum recovered in an adjacent area, means the designated authority in respect of that adjacent area. 1 do not think that the Bill spells out in detail who is to be a designated authority. That is what I am trying to find out. AsI have said, the argument is more applicable to the clause that provides for the appointment of a designated authority. We cannot argue at this stage the question of who should be a designated authority. I think that we should state in more detail than is defined in the Bill at present who is to be a designated authority.
- Mr Chairman, I make my point again in relation to this matter. The title of the Bill that we are dealing with undoubtedly sets out the subject matter that we are discussing. The short title of the Bill is the Petroleum (Submerged Lands) Bill 1967. So, we are dealing with petroleum and submerged lands. But in the long title we read that this is:
A Bill for an Act relating to the Exploration for, and the Exploitation of, the Petroleum Resources,-
These petroleum resources are defined, as the Minister stated in clause 3. The following definition appears: petroleum’ means -
Paragraphs (b) and (c) are as the Minister read them out. These are the petroleum resources. But the Bill, in its long title, goes on to state:
I do not believe that the Minister has explained to me what the certain other resources are or where one can find the definition of them.
– The advice that I have on this point does not agree with the argument put forward by Senator Webster. The Bill applies to petroleum and to petroleum only. The long title of the Bill refers to petroleum resources and certain other resources allied to petroleum. These are nominated in the Bill. They are those which go with petroleum. This Bill does not refer to anything but petroleum.
– I think the Committee is indebted to those honourable senators who have raised this matter because it does not seem to me to he satisfactorily explained. The Bill in the long title is defined as:
A Bill for an Act Relating to the Exploration for, and the Exploitation of, the Petroleum Resources, and certain other Resources . . .
But if we look at the definition of petroleum there docs not seem to be any reason at all for the inclusion of the words ‘and certain other Resources’ in the long title. If the Bill applies to petroleum and to petroleum only, as the Minister has stated, why is not that said in the long title in such a way that the words ‘and certain other Resources’ are not necessary? Otherwise, the suspicion arises that this Bill might be used in the future as a vehicle for covering other resources in somewhat the same form by some amendment of the Bill to include other Parts and perhaps to deal in a similar way with the other resources which might be on the seabed. As the Committee realises, we on this side consider it completely objectionable. If the Bill, as the Minister says, is restricted to petroleum and to petroleum only - we understand what petroleum means from the definition in the Bill - it seems to us that no reason exists for the other words. Perhaps there may be a good reason for altering the long title of the Bill.
– The definition includes nitrogen, helium and carbon dioxide.
– If the honourable senator is referring to the definition which has been read out, petroleum is defined as including those substances. For the purposes of this Bill, they are petroleum.
– And are other resources.
– For the purposes of the Bill they are petroleum. The long title would sufficiently explain the Bill if it dealt with the exploration for and the exploitation of the petroleum resources. That would cover the various hydrocarbons and mixtures of them in the other resources. But the expression ‘and certain other Resources’ is used, and nowhere in the Bill does there appear to be any definition of what those other resources are; nor does there appear to be in the Bill any operative laws concerning those resources. I think the matter is not sufficiently explained.
Mr Chairman, might I have a word on this matter. With respect, I confess that I do not see either the difficulty or the significance of it, butI will add my understanding of it in case it needs correction. The Bill commences by christening itself with a long title. At that stage it declares that it is concerned with: the Exploration for, and the Exploitation of, the Petroleum Resources, and certain other Resources . . .
When it comes to the operative part, the Bill uses the ordinary function of definition so that the word ‘petroleum’, when used as a noun, means those things which are set out in (a), (b) and (c) of clause 5. We find that paragraph (c) of that definition reads: any naturally occurring mixture of one or more hydrocarbons, whether in a gaseous, liquid or solid slate, and one or more of the following, that is to say, hydrogen sulphide, nitrogen, helium and carbon dioxide.
I suggest that it is quite clear that to adopt the word ‘petroleum’ as meaning petroleum resources as defined in paragraphs (a) and (b) and to include other resources as defined in paragraph (c) enables us throughout the text of the Bill to use the one word petroleum’ to indicate the subject matter stated in the long title of the Bill and referred to not merely as petroleum but Petroleum Resources, and certain other Resources’. I should have thought that that was the function of definition and that it is simply a very careful way of stating, in the long title of the Bill, for the benefit of those who have chemical knowledge, that the Bill extends not merely to petroleum resources but also to certain other resources that are included in the definition of petroleum’ that I have read.
– With all due respect to Senator Wright, he has confused rather than clarified the issue. I question whether the honourable senator’s interpretation of the items mentioned in the definition of petroleum’ is correct. Under the Convention on the Continental Shelf the Government has power over all natural resources in a particular area. Senator Webster said that the Bill is designed purely to cover petroleum resources. The Minister for Supply said that the Bill is designed to cover petroleum resources and things incidental thereto. The title of the Bill covers petroleum resources and certain other resources. The term ‘certain other resources’ does not include all the natural resources in relation to which the Government has power under the Convention. Senator Wright has submitted that there are certain other resources that are named in the definition of ‘petroleum’.
– I believe that I have the answer.
– If Senator Murphy has the answer, then it is one of the few occasions on which correct legal advice is given without obligation. If the honourable senator gives me the answer, I will be indebted to him. The question that I pose and which Senator Murphy has posed is this: Will this Bill be a vehicle for extending our powers over mineral resources under the seabed in the future? As I have said, time has not permitted a detailed study of the Bill. I draw the Committee’s attention to the designated authority that is to be set up by the Bill.
The designated authority will have power to give or to refuse to give a permit to operate a pipeline, a water line, a pumping station or a valve station. In the exploration for certain other resources water is essential, and it may be one of the things that are incidental to the exploration for oil. I do not know whether the term ‘certain other resources’ will cover incidental things such as water. If these other matters are subjects for separate legislation in relation to which there is no need for haste and in regard to which a select committee could be appointed before the legislation was passed and not after it, it may well be that the title of this Bill should be altered to include the certain other resources which are incidental to the main object of the Bill.
– I would like to add some information before the Minister for Supply replies. I refer to clause 1.57, sub-clause (2.), which states:
In particular, but without limiting the generality of the last preceding sub-section, the regulations may make provision for securing regulating, controlling or restricting all or any of the following matters:
conserving, and preventing the waste of, the natural resources, whether petroleum or otherwise, of the continental shelf;
Sub-clause (1.) refers to the power of the Governor-General to make regulations. Clause 157 may refer to the Barrier Reef off the coast of Queensland, which is causing some concern to many people in Queensland, and may provide a reason for including the reference to certain other resources in the long title.
– Surely that clause is a contradiction of the long title.
– No.
– Clause 157 (2.) (c) refers to conserving. The title refers to exploitation.
– The title refers to the exploration for, and the exploitation of, the petroleum resources, and certain other resources. The conserving of natural resources could relate to the exploration for and exploitation of certain other resources. In other words, the Bill contemplates - 1 hope this is all it would contemplate - conservation by way of preventing the exploitation of or even exploration for certain other resources, especially if the exploitation or exploration was carried out in a wasteful manner. I take it that the Bill, other than in the most incidental way, is not intended to provide a vehicle for the exploitation of certain other resources. I would like an assurance from the Minister that the Bill is not intended to permit the making of regulations or the taking of any action which would permit interference with the Great Barrier Reef, assuming that is within the scope of the submerged lands referred to, or for the exploitation of other mineral resources. I would like an assurance that the Bill is designed to cover the exploitation of petroleum resources and certain other resources as defined and that any other action would be merely incidental to and not in any real way concerned with the exploitation of resources other than to prevent the waste of such resources and to ensure their conservation.
– Sub-clauses (3.) and (4.) of clause 15 refer to ‘natural resources (being petroleum)’.
– I noticed that, but it seemed to me that the only reference to resources other than petroleum resources was in clause 157 (2.) (c). I have not noticed the expression elsewhere in a quick look through the Bill.
– I can give the Leader of the Opposition the assurances sought.
Clause agreed to.
Clauses 6 to 8 - by leave - taken together, and agreed to.
Clause 9 (Application of laws in areas adjacent to States).
– Initially I seek some information on clause 9 (1.), which states:
Subject to this Act, the provisions of the laws in force in a State, whether written or unwritten, and as in force from time to time, and the provisions of any instrument made under any of those laws, apply in the adjacent area.
That is very clear. Clause 9 (2.) states:
The provisions referred to in the last preceding sub-section apply to and in relation to all acts, matters, circumstances and things touching concerning, arising out of or connected with the exploration of the sea bed or subsoil of the adjacent area for petroleum and the exploitation of natural resources, being petroleum, of that sea bed or subsoil, and not otherwise,, and so apply as if that area were part of that State and of the Commonwealth.
The clause applies to the exploitation of natural resources, toeing petroleum. Exceptions are set out in sub-clause (3.) which reads:
This section does not - (a) extend to the provisions of any law or instrument -
in so far as they apply to or in relation to exploration for, or operations for the recovery of, petroleum;
in so far as they apply to or in relation to the construction or operation of pipelines;
in so far as they are incapable of application in the adjacent area; or
in so far as they are expressed not to extend to or apply in the adjacent area; or
affect the operation that any law has apart from this section;
apply to the provisions of any law or instrument that is not within the authority of the Parliament or Government of the Commonwealth; and so it goes on. This is what I am concerned about: The laws of the State apply even outside the area in which the State has jurisdiction. There is no doubt that beyond the continental shelf the State has no jurisdiction. But by virtue of this Bill the laws of the State apply in areas adjacent to the State, except in relation to the matters that are mentioned in sub-clause (3.). I do not know the real implications of all of the exceptions. But paragraph (c) says that the section does not apply to the provisions of any law or instrument that is not within the authority of the Parliament or Government of the Commonwealth. When there is a need for a law in an area in which the State has no jurisdiction and in which the Commonwealth has no jurisdiction under its constitutional powers, what law operates?
I think the Minister stated in his second reading speech that State laws affecting workmen cannot apply on a rig site in an area outside the continental shelf, but they can be extended to apply by virtue of this Bill, although only insofar as they are within the constitutional powers of the Commonwealth. I ask whether the Commonwealth has power to make laws governing workmen’s compensation for other than its own employees. These people would not be its own employees. Where will we get an Act to cover workmen’s compensation?
The State Acts do not apply unless the Commonwealth has power. Where is the Commonwealth’s power to decide industrial disputes and wages? Under the Constitution it has power to set up a tribunal to set wages and conditions when there is an interstate dispute. There will be no interstate dispute here, so the Commonwealth will not have power. The State will not have power either. Although we extend State powers under this Bill, we exclude that power because the Commonwealth Government has no constitutional power in respect of this matter. 1 am concerned about what industrial relations laws will apply in areas in which the State has no power by virtue of this Bill and in which the Commonwealth has no constitutional power.
Senator HENTY (Tasmania - Minister for Supply) I4.24J - I am advised that the laws of both the State and the Commonwealth apply in this field, just as they do on land. They apply in this field under the external affairs power of the Commonwealth.
– 1 think Senator Cavanagh’s question might be answered a little more fully, lt seems to me that the scheme of the legislation is that the Commonwealth is able, as an incident of ils exercise of the external affairs power, to exercise the power to provide for industrial legislation in these areas in the same way as it would be able to provide for industrial legislation in respect of other matters of external affairs. There is little doubt that the Commonwealth would be able to provide laws for operations being conducted in Antarctica and provide a code of law as incidental to its exercise of authority under the external affairs power. In doing so it can provide whatever code of law it wants to in any of these fields. lt could make its own new law, it could take the Roman-Dutch law of the sixteenth century in South Africa; or it could take the laws of the States of Australia. The third alternative is what it is doing here. It happens to be taking the laws of the adjacent States and saying: ‘By virtue not of the State authority but of our authority we will make those laws apply in these areas’.
The criticism should be that the Commonwealth should have made a uniform code of law of its own to apply to all of these areas, lt is all very well to say that we will avoid problems about the area between a 3-mile limit and the edge of the continental shelf. That problem may not exist if what Senator Wright has put is correct. But now we will have problems about the area where the line drawn between States extends out into the sea. Different laws will apply according to the side of the line on which an accident or other incident occurs. It might have been much better if the Commonwealth had said that wherever certain things take place on the continental shelf one law will apply all around Australia. If we have the authority, that is what we would expect of the Commonwealth. We would expect the National Parliament to act in a national way in respect of these areas over which authority is given to Australia as a nation. Why should not the Commonwealth act in a uniform way rather than split up the laws that it is making and, in effect, make a number of different laws covering various parts of the submerged lands around the continent?
– I never cease to have my mind engaged by the acumen that Senator Cavanagh displays in debates in Committee. I suggest that before we become too far immersed in this immensely complicated clause we should consider the task that we will set for ourselves in this debate in Committee. I was encouraged by various statements (hat were made from both sides of the chamber during the second reading debate to think that honourable senators would agree to set up the select committee that I advocated. Ifsuch a select committee is to be set up, I. suggest that it would be more profitable for us to spend our effort on these intricate matters in that committee rather than in this chamber.
In deference to what Senator Cavanagh has said, let me put before him some views that I have formed on this clause, even if only tentatively. Sub-clause (1.) states that the provisions of the laws in force in a Slate, whether written or unwritten, and as in force from time to time, and the provisions of any instrument made under any of those laws, apply in the adjacent area. That is not equivalent to saying merely that State laws apply. If means that the laws in force whether of the Commonwealth or of the State, apply.
– Or the common law.
– Or the common law, certainly. I. come now to the next question. Sub-clause (3.) reads:
This section does not -
extend to the provisions of any law or instrument -
insofar as they apply to or in relation to exploration for, or operations for the recovery of, petroleum. 1 understand that to be intended to apply the provisions of this legislation in substitution for the laws that already exist in the adjacent area on that subject. The paragraph of the sub-clause continues:
insofar as they apply to or in relation to the construction or operation of pipelines;
insofar as they are incapable of application in the adjacent area; or
insofar as they arc expressed not 10 extend to or apply in the adjacent area . . .
J have read those provisions because of the observation that Senator Cavanagh made as to their intendment. I find very difficult paragraph (b) of sub-clause (3.), which provides that the section does not affect the operation that any law has apart from this section. How that is reconcilable with sub-clause (1.) I do not know. The next paragraph provides that the section does not apply to the provisions of any law or instrument that is not within the authority of the Parliament or Government of the Commonwealth. 1 take it that that provision is made so as to avoid an accusation against this legislation that it may be ultra vires in whole or in part.
I have dealt only very inadequately with that matter but now let me turn to clause 150 to indicate the differences in my mind, lt provides: lt is the intention of this Act not to affect the operation of any law of a Stale or Territory in the adjacent area.
How that is reconcilable with clause 9 (3.) (a) (i) and (ii) 1 do not know. Then, coming nearer to Senator Cavanagh’s real concern in this matter, I refer to clause 97. Here is a question with which I do not want to complicate too much the Minister’s consideration of the Bill. I am very interested in the terms of clause 97(1.) which provides:
A permitee or licensee shall carry out all petroleum exploration operations and operations for the recovery of petroleum in the permit area or licence area in a proper and workmanlike manner and in accordance with good oil-field practice . . .
These are the words that I wish to emphasise: . . and shall secure the safety, health and welfare of persons engaged in those operations in or about the permit area or licence area.
In the event of accidents to employees and to third parties in relation to those operations, is the operator liable for damages in compensation for personal injury only if there is negligence, that is, one might: say, failure to carry out his job in a proper and workmanlike manner? Or is he under absolute liability and required to ‘secure the safety, health and welfare of persons’? The question is whether he has an absolute obligation to secure the safety, health and welfare of persons engaged in these operations in or about the permit area, thus being absolutely liable for damage io them or injury to them, irrespective of negligence. Let nic refer also to sub-clause (3.), where the same expression is used in respect of a pipeline licensee and to sub-clause (5.), at the end of which the same words appear. Sub-clause (6.) provides: lt is a defence if a person charged with failing to comply with a provision of this section, or a defendent in an action arising out of a failure by the defendent to comply with a provision of this section, proves that he took all reasonable steps to comply with that provision.
So the onus is on him to prove a defence but the defence consists of proof that he took all reasonable steps, and so is a qualification of the otherwise absolute liability that seems to me to be primarily imposed. Some people, rather spurn the idea of discussion of matters of law in these precincts, but I remind members of the Committee that our function is to make the law in a country where the law should govern. 1 have endeavoured to expound in a very preliminary and tentative way what consideration of the Bill has implanted in my mind only because of what I know is the concern of people for industrial injuries that may occur in these perilous and rather unique operations which, in my opinion, present a new concept of civil liability, imposing in the first instance an absolute liability but enabling the defendant to take advantage of a defence if he proves that all reasonable steps to comply with the provisions were taken.
I know that I have spoken so long as to complicate further what was already complicated in clause 9, but by referring to clause 150 and clause 97 I suggest that I have driven one nail further into the wood for the purpose of persuading us all to give this Bill thorough select committee consideration.
– Referring to clause 9, I am advised that some Commonwealth laws are extra-territorial and they apply in this area in any case. That being the position we would not want to disturb them.
– What -are they? Do they include workmen’s compensation and wage fixing laws?
– Many laws are extraterritorial. I feel that Senator Wright’s advice in this field is very wise. It would be better to proceed with some of these matters constitutionally. They affect very grave and deep constitutional matters which would never be settled here. They would be better settled before a select committee. This is practical advice, following the practical advice given by Senator Wright to set up a select committee.
– The Government’s support for the appointment of a select committee makes me suspicious.
– Do not forget the numbers.
– The Government will have them. When one hears the Minister for Supply (Senator Henty) say that all problems can be solved by appointing a select committee it would make one who seeks safeguards in this legislation suspicious of what the select committee might do. As a result of our discussion here it is now clear that the Commonwealth has power to extend its laws to cover these extra territorial areas. We are told further that the Commonwealth already has laws operating in these areas. But when we ask what laws they are, we are simply told that there are many laws.
– Navigation would be one.
– We are told that there are many. There would be more than navigation, although that would be one of them. I have the greatest admiration for the law. I would not try to denigrate it, but there is something more important involved here. Workmen will be going to a field and I want to know whether they will be covered against injury. Is one of the many laws which the Commonwealth has in this instance a law relating to workmen’s compensation? Does another relate to wage fixation? Are there any laws governing safety? It is of no use to say that there are many laws in which the necessary power exists. The measure that I am interested in at present is the one that is before us now. The Government cannot expect the Opposition to support this clause, if as it stands, it means that workmen will be sent out to work in the interests of foreign monopoly oil companies without any protection. Senator Murphy has said that we can adopt any laws we like and that if there is no law we can adopt one that we decide is appropriate. But are we doing it here? This is something that we have to do before the men are sent out to work for the oil companies. It is not sufficient to say that provision is made in some other legislation. Does it exist here? That is the only question that I am asking now.
– It is here. I understand that one of the main objectives of the Government in the preparation of this Bill was to extend the State industrial compensation laws to this area.
– I am only trying to find out.
– I am only trying to answer the honourable senator.
– I would expect the Minister, as the Minister piloting the legislation through this chamber, to say that he understands that the necessary power is contained in this Bill. Let him show me where it is. The point in which I am interested is where it is. On a previous occasion in the Senate, the Minister responsible for a particular Bill, which related to housing, gave me certain assurances that could not be carried out within the terms of its provisions. I do not want any mere weighty assurance that the Minister understands that the necessary power is given in this Bill. I ask him to show me where it is specified, for I have not a legal brain trained in definition in these matters. I rely on those in this chamber who, whether or not they are directly concerned in the particular matter, can at least interpret the Bill and say whether it makes the provision that I am concerned to have made. We gather from Senator Wright that under the terms of sub-clause (1.) of clause 9 the laws in force in a State do apply except, as he mentioned, for the matters set out in subclause (3.). That sub-clause provides that the laws of a State do not apply if they are not within the authority of the Parliament or the Government of the Commonwealth.
– As that sub-clause indicates, they do not apply by virtue of the terms of this clause.
– They do not apply by virtue of the terms of this clause. The laws that are in force in a State, whether they be State or Federal laws, do not apply to the offshore areas over which we have jurisdiction if they are not within the authority of the Parliament or the Government of the Commonwealth. In that case, State laws cannot apply. What I am submitting is that, therefore, compensation provisions, other than for employees of the Commonwealth, can have no application. In respect of wage fixation, the Commonwealth has no constitutional power except the power to establish a tribunal to settle interstate disputes. I know of no constitutional power that gives the Commonwealth authority in questions of safety, especially safety on oil rigs.
– If the power is there under the external affairs power, this would be an incidental to it.
– The Commonwealth has power to make laws relating to external affairs, but this is not a law under the external affairs power in force in the States. I do not think that the external affairs power can be extended to show that the Commonwealth can cover employees who are working on oil rigs in waters of 150 metres depth over which the Commonwealth has authority.
– Why not?
– If Senator Murphy or, more particularly, the Minister can show me where the power is contained, and the legal mind of this Committee is satisfied that there is covering power-
– I am not saying that covering power is plainly given there. 1 am saying that it is possible to make these industrial provisions.
– 1 accept, on the statement of the honourable senator and the Minister, that the Commonwealth has power to make laws in this matter, but before we pass a law giving oil companies the right to exploit a great natural resource, we should safeguard the workmen working for the oil companies in their exploitation of this natural resource. The workmen should be protected even before the oil is discovered. Rather than say ‘I believe that they are’, or ‘I am assured that they are’, tell me where these arguments are covered and I will go quietly on this aspect.
– I knew that I had read either in the Bill or in the second reading speech an express reference to workmen’s compensation. 1 have had the assistance of a departmental officer who has indicated to me that the reference is on page 13 of the blue covered booklet containing the second reading speech. This is what it says:
This scheme has a dual purpose. First, it permits Australia to take advantage of the provisions of the Convention regarding exploitability. As technology advances, and exploitation in greater depths becomes possible, the outer limits of the shelf for the purposes of this Bill are automatically adjusted.
Secondly, it is essential in these adjacent areas where petroleum operations are undertaken, to have applying a general body of law such as an appropriate criminal code, provision for workers compensation, for navigational safety and the like. It will be noted that Part II of the Bill deals specifically with this question of application of laws.
With that in mind it is quite clear that clause 9 is intended to apply the workers compensation statute which applies, say, in Victoria, to areas adjacent to Victoria.
– The Bill does not state that it applies to them.
– I would think that it does without any doubt. The only question in my mind was whether the view I have just put was inhibited by sub-clause (3.) (c) because I would say that the Commonwealth, but for its external affairs power, could not apply the Victorian Workers Compensation Act to workers generally in this field. But here, when we are extending it into an adjacent area by virtue of the Commonwealth’s power in external affairs, it appears to me that sub-clause (3.) (c) does not in any way nullify or abrogate the extension made under sub-clause (1.).
– Then the State Act would apply?
– Yes.
– Outside Slate territory.
– Yes. It already applies within State territory so we now have a complete coverage.
– It is not very plainly staled. It could have been more clearly stated.
– This is a matter of great complexity.
– Yes, but surely it would have been simple to quieten the fears of Senator Cavanagh and others by stating plainly, in a matter of such great importance, that in the adjacent areas the State law relating to workers compensation and other matters will apply. The industrial provisions were sufficiently important to have been given specific treatment. A plain statement of the law should have been made and we would not have had the confusion which now exists.
Senator Wright referred to clause 97. That is a very important section because it sets out rights which, on the face of them, would seem to make ample provision in common law for injured workers or the dependants of workers who may be killed in these operations. He referred in some detail to those provisions. I should think that anyone with the interests of the workers at heart would be concerned about those provisions so far as they involve common law actions.
– They extend and strengthen the protection afforded the worker, do they not?
– They appear to do so. They appear to provide a statutory right, the defence to which Senator Wright referred, but being a statutory right in most of the States there would be no question of contributory negligence. But even if there were some contributory negligence this would not defeat the action. I refer Senator Wright to clause 99 which states:
The last two proceeding sections have effect subject to -
any other provision of this Act;
the regulations;
a direction under section 101 of this Act; and
any other law.
– ‘Any other law’, which is a complete enigma.
– What that would have to do with it I do not know. I suppose that instead of referring to Roman Dutch law I should have referred to double Dutch law. It is most unfortunate that with all the time that has been spent on preparing this legislation there could not have been some relatively plain statement of the law to cover the industrial affairs of employees. The Minister may be right in what he said. I do not intend to quarrel with what he said because I am not in a position to do so at this stage. In these circumstances there is no hope of anyone being able to give a sensible opinion about how all these clauses will work out. It is a great pity there is not a plain statement. I should think there will be many legal quarrels over how all this will work out.
– May I, having done my best to allay anxiety on the matter referred to by Senator Murphy, express some anguish that occurs to me from another aspect of clause 9? I refer to sub-clauses (4.) and (5.). Sub-clause (4.) states:
The regulations may provide that any provisions referred to in sub-section (1.) of this section that are specified in the regulations donot apply by reason of this section or apply with prescribed modifications only.
This will reverberate in your mind, Mr Deputy Chairman, as a memory of Henry VIII to whom you affectionately referred on a former occasion. Here we see a halfhearted attempt to inject a Henry VIII clause which enables the administrator at his desk to pen a regulation, to get a Minister’s signature and, in company with another Minister, with the formal signature of the Governor-General, modify or exclude any law that Parliament has said otherwise should apply. I am not going to delay the Committee to discuss this now, but I do ask for a little indulgence to
Indicate that I have not been sleeping on the Bill through all the debate. Clause 101 provides a very interesting conception in the same way. If honourable senators turn to that clause they will see in sub-clause (1.):
The Designated Authority may, by instrument in writing served on a person, being a permittee, licensee, pipeline licensee or the holder of a special prospecting authority or access authority, give to that person a direction as to any matter with respect to which regulations may be made under section 1S7 of this Act.
The scope of that provision is tremendous. Then sub-clause (2.) states:
A direction under the last preceding sub-section has effect and shall be complied with not withstanding anything in the regulations and, to the extent to which the regulations are inconsistent with the direction, the person to whom the direction is given is not obliged to comply with the regulations.
Having regard to all the discussion that has taken place in this chamber as to instruments in writing and regulations and their proper function as subordinate to the Act and so on, those two sub-clauses arc prongs of almost barbed contact to me. However, it would be quite impossible here, consistent with the scheme of this Bin, to put forward an amendment which would bring the regulations into proper form. I bring this matter to the attention of honourable senators only for the purpose of showing what a fertile field there is for an examination by a special committee, as 1 have suggested.
– Some of the applied laws may be difficult of application in the offshore areas. It would be impossible to go through all the Commonwealth and State laws in advance and modify them. This will have to be done as experience shows what is necessary.
– The Minister’s remarks which relate to Senator Wright’s point regarding clause 101 and the regulations referred to therein deal with an entirely different subject from that which we are considering under clause 9.
– Except that they are of a similar nature to the matters referred to in sub-clauses (4.) and (5.) of clause 9.
– No. Under clause 9 we are dealing with the application of laws. Clause 101 refers to regulations that may be made in the direction of the carrying out of the petroleum drilling work. 1 ask the Minister whether under clause 9 the laws in force in an adjoining State and in the Commonwealth apply as from the date of passing of this Bill. I believe that the wording of clause 9 makes it clear it is intended that there should be a loophole in the application of the laws either of the Commonwealth or of the Slate. I am pleased to see some honourable senators shaking their heads. In that case I hope they will be able to inform me what the wording of the various clauses means.
Clause 9 (1 .) provides: the provisions of the laws in force in a State, whether written or unwritten, and as in force from time to time, and the provisions of any instrument made under any of those laws, apply in the adjacent area.
There is no question that the laws do apply. That is made clear by the wording in subclause (2.), which states:
The provisions referred to in the last preceding sub-section apply to and in relation to all acts, . . and so apply as if that area were part of that State and of the Commonwealth.
I believe that what the Minister said is clearly expressed in that sub-clause. But sub-clause (3.) states:
This section does not -
extend to the provisions of any law or instrument - and we have the first exception stated, and I believe that it is particularly important -
in so far as they apply to or in relation to exploration for, or operations for the recovery of, petroleum;
In my view those are the acts that are to be carried out under the Bill. Further, I believe that we have the complete exoneration, as I read it, in paragraph (c) of subclause (3.) of clause 9, which states:
This section does not - apply to the provisions of any law or instrument that is not within the authority of the Parliament or Government of the Commonwealth;
Of course, in actual fact all State laws are not within the authority of the Parliament or the Government of the Commonwealth.
– I conclude my contribution to the debate on clause 9 by saying that, because the provision lacks clarity, I have in my mind the picture of litigation in a court at some time for the purpose of deciding whether someone is. covered by a particular (aw. I have sufficient confidence in the $3,000 worth of legal opinion that I have received free this afternoon to say that that person is covered by the law. Some day I hope to refer the Hansard report of this debate to counsel for the defendant - and I hope it is the defendant - to prove that there is a number of opinions on this question. I do not take the matter any further at this stage in view of the assurances I have been given, but at the same time I make no promise that it will not emerge again when we consider clause 97.
– The constitutional basis of the law and the corresponding State laws has been deeply considered by the Commonwealth and State law officers and by the Commonwealth Attorney-General and the Attorneys-General of the States. Their views as to the proper constitutional application of the legislation should not be lightly disregarded at this stage.
– I do not know what that means, but I do know that this is a shocking piece of legislation. The draftsmen are not to be blamed because, when one starts upon a course which is wrong, these are the difficulties into which one gets. Instead of having a simple piece of Commonwealth legislation to cover a situation which was under the authority of the Commonwealth, instead of having a simple piece of legislation providing the Commonwealth law to deal directly with these matters, the Government has tried to piece together the laws and authorities - or purported authorities - of the various States and has endeavoured to extend these out in a patchwork to cover the various points.
Senator Wright has said that this shows the necessity for the select committee that he has suggested. I say to him that the references he has made to the Henry VIII clause and to other offensive principles in this law show that he is wrong in not insisting that these matters are cleaned up before the Bill has been passed. To take the line that we should allow these offensive matters to become law and then look at the anomalies afterwards is not good enough for us. I think both Senator Wright and the Senate should take the attitude that where fundamental principles of legislation, as we conceive them, are being broken, we should not allow a proposal to become law. We ought to stop the measure now instead of allowing all these offensive principles to go into the law. We have fought for years to prevent some of these principles from creeping into the law, yet here, at the end of a sessional period, we have objectionable legislation being rushed through. Although we have not had time to consider the Bill properly, we have been able to examine them sufficiently to see that they include highly objectionable provisions. Great constitutional issues have been raised and in our view dealt with wrongly. Other specific provisions elsewhere throughout the Bill are also completely offensive to what we have fought for and hitherto maintained. I regret very much that Senator Wright has taken the attitude that he has.
– The purpose and intention of paragraph (a) of sub-clause (3.) of clause 9 is to exclude from the applied provisions the petroleum mining legislation of the States and to replace it with the Common Mining Code, which is Part III of the principal Bill, and is contained in the mirror State Bills.
Clause agreed to.
Clauses 10 to 14 agreed to.
Clause 15. (1.) The Governor-General may make an arrangement with the Governor of a State with respect to one or more of the following matters: -
the delegation to a person holding office in the State of all or any of those powers or functions (except the power of delegtion), either generally or otherwise as provided in the arrangement -
may, in accordance with the arrangement -
– by leave - I move:
In substance, the Committee will observe that these amendments are designed to limit the power to delegate the authority which is conferred on the designated authority. Senator Wright a few moments ago referred to the great authority held by the designated authority to make direc tions even including directions which were inconsistent with the regulations. The position here is: We set up the designated authority and we give him the power to give, by simple instrument in writing, a direction which is to be observed contrary to the requirements otherwise of the law. So although the law says to someone, through the regulation: ‘You must do so and so’, the designated authority can simply tell them, by his own little piece of paper: You are not to do it’, and the person must obey his direction and not what would otherwise be the law. Of course, the designated authority has many other vast powers under the legislation. One only has to look at the provisions of the following clauses to see this. For instance, in clause 20 the designated authority may, by instrument published in the Gazette, invite applications for permits in respect of the block specified and may specify a period in which applications may be made. Also the designated authority can exercise various discretions in regard to the advertising of blocks. He may, for reasons that he thinks sufficient, upon request in writing served on him, direct that various sections and sub-sections of the Act do not apply. He may extend various periods. Under clause 23, where licences or permits are surrendered or cancelled he may, by instrument publish in the Gazette, invite applications for the grant of a permit in respect of that block or such of those blocks as are specified or specify a period in which the applications may be made. He may do all sorts of things. He may grant a request for a permit in respect of advertised blocks all through this Bill. One can find vast powers vested in the designated authority. Those powers are exercisable in relation to permits and production licences and so on which may involve literally billions of dollars. One might question that but it is obvious that we are up around the billion mark. If the continental shelf proves as productive as we hope it will, untold billions of dollars will be involved, and all of these powers may be exercised by the designated authority. His decision in a single case may involve literally hundreds of millions of dollars. His decision to extend a time or not to extend a time may mean that one person or the other or no-one may get a benefit running into hundreds of millions of dollars. These are very vast powers. The governments have considered, apparently, that they should be vested in such a person. He is given power, not only to make great decisions but, in effect, to vary the law and exercise his discretion in these great matters as between various persons on a scale, I suppose, that has never been vested in a person before.
I am not saying that there is not under mining legislation power in such an authority to do such things, but here we have novel legislation, we have new and difficult problems, and we have fabulous amounts of money involved. If the designated authority is to exercise those powers, very well. But should those powers be able to be exercised by lesser persons to whom they would be delegated? The designated authorities would be the State Ministers for Mines or the Minister for National Development or, in the case of the Territories, the Minister for Territories. But ought those powers be able to be delegated so that persons much lower down the line may exercise even the greatest of those powers through a delegated authority? We take the view that they should noi and that a limit ought to be placed upon the delegation.
As the Committee will observe, the amendments are aimed at reducing this area of authority so that in substance the powers to be exercised would remain in the Designated Authority and not in the other persons, for instance, not in persons acting for or on behalf of the holder of that office and not in various other persons. That is the substance of the amendments that we seek and wc would like some elucidation of this matter: Why is it that these powers are able to be delegated in this way so that we will have, perhaps, minor officials dealing with these vast matters? One could understand it if there were careful delineation so that quite minor matters might be dealt with by minor officials. Matters of substance which involve considerable sums of money ought to bc dealt with by the designated authority who would then be responsible to the Parliament and able to be directly questioned tin his actions so that he would bc answerable right in the Parliament. We have had experience in recent times of questions arising on what has been clone in relation to various matters and the Government has taken the attitude that only the Minister ought to be answerable for what happens and one should not ask subordinate officials to say what has taken place and to give their explanations. If that is the attitude to be taken, surely in great matters the Minister himself ought to be the designated authority and the important powers ought not to be delegated.
– The proposition by the Opposition is to delete paragraphs (b), (c) and (d) of sub-clause (1.). The effect of this would be to limit the Governor-General and the Governor of a State in making an arrangement for the exercise of the powers of a designated authority, and to delete the provision relating to delegations of those powers. The effect of the amendments would be to require every detail of offshore administration to be dealt, with personally by the designated authority, which, in the case of the States would be the State Minister for Mines. Their names appear in the State Bills. It would not be administratively practicable for every detail to be dealt with by the designated authority. The present arrangement gives administrative flexibility. I think this is very necessary, lt is common practice in land mining administration that matters of lesser importance be dealt with by officers such as directors of mines, inspectors or mining wardens. It should also be noted that under clause 15 the Commonwealth is in full control of the powers that may be delegated by the designated authority and the matter of their delegation. No arrangement can be made except in accord with an agreement between the Governor-General and the Governor of a Stale.
– I support the amendments. This is one of the questions that I raised in the second reading debate and in relation to clause 5. First I queried who was to be the designated authority. We are told that it is to be the Minister for Mines in the Stale and that this is stated in the Agreement. I do not know why it is not specified in the Bill. Clause 16 provides that the Minister for Territories will be the designated authority in relation to the Territories. That clause provides that he may delegate all or any of his powers to another person. I have been mostly concerned wilh the powers that are delegated. This provision cuts across arguments that have been expressed in this chamber in the past 12 months and is contrary to decisions taken in that period. I refer to sub-clause (3.) (b) of clause 16 which provides that a power or function delegated by the Minister may be exercised or performed by the delegate: if the exercise of the power or the performance of the function is dependent upon the opinion, belief or state of mind of the Designated Authority in relation to a matter - upon the opinion, belief or state of mind of the delegate in relation to that matter.
This particular individual, whoever he is, has to form an opinion. It is not a question of whether something is in conformity with the legislation. It is a question of whether in his opinion, in his belief, according to his state of mind, he should do certain things. We have argued for a long, long time, against jurisdiction being in the hands of one person who has the right to differentiate between individuals. The designated authority has power to grant permits, refuse permits and decide between two applicants. It is not a question of a person getting a permit if he complies with certain conditions. If two persons apply for an advertised block the designated authority for his delegate decides the issue upon his opinion, his belief, or his state of mind. Is not this the same question as we argued in relation to sub-division of Australian Capital Territory freehold lands, when we pointed out that no lines had been set down to show where we should go in the matter? Was that not the reason why we rejected the regulation in question?
An application is lodged and the matter is left to the designated authority, who decides the matter according to his stale of mind. But his power goes much further than that. When petroleum has been found an application is made for a licence. The applicant must state what royalty he is prepared to pay and must deposit with his application 10% of the royalty he is prepared to pay. The designated authority decides how much will be refunded to the unsuccessful applicants. The designated authority has tremendous power. He may issue instructions to speed up the flow of oil. He decides what rate of royalty shall be paid between 11% and I2i%. This is not Parliament making a decision: it is the designated authority. The decision he makes can vary as between one company and another. A difference of 0.5% in the rate of royalty could amount to, as Senator Murphy pointed out, millions of dollars. He decides whether refunds shall be made; he decides where applicants shall explore. He may grant one application and reject another. There is provision for the designated authority to allow payment of a licence fee after discovery of oil to be made on a time payment basis. He then decides what rate of interest below 6% shall be paid. He decides whether a rate lower than 6% shall be paid. His decision is made on the basis of an opinion, a belief or a state of mind. Such an opinion may involve an oil company in millions of dollars. There is an old saying that every man has his price. The difference between the sincere, conscientious and loyal man and the opportunist is a difference of price.
– But the honourable senator does not agree with (hat, does he?
– I have not been offered my price. 1 have not been of value to oil companies which can talk in terms of Sim. But I still believe that there may be something in the old saying, lt may not be a matter of conscious bribery of officials. However, we cannot claim that any occupation or profession is immune to this business. We have known it to happen on occasions with Cabinet Ministers. Out of the goodness of its heart a company may be in a position to give the designated authority a Mercedes as a Christmas present. The designated authority may feel that such a company is more likeable and deserving of greater consideration than a company which gave him only a cigar for Christmas. There is too much room for corruption here. The legislation should set down the lines to be followed so that an applicant for a licence may know that his application will be reviewed justly. As matters stand it is left to one man to decide whether an application should be granted or rejected. The designated authority does not have to show reasonable cause for rejecting an application. If he did an applicant should have the right of appeal to a court because the designated authority acted unreasonably. The designated authority has the sole right to reject an application. If there were a right of appeal, an applicant could go before a judicial body if he thought that the designated authority had acted capriciously in rejecting his application. But there is no right of appeal; the designated authority is the final arbiter.
Is not the point now being argued the same as that which we argued for weeks in the Senate in relation to instruments in writing and the right of a Minister to decide a matter? ls it not the same point as was involved in the Australian Capital Territory regulation relating to the subdivision of land? I think it is. This power should not be conferred on one person. When we dealt with the Australian Capital Territory regulation we were told that we were delaying development of the national capital, but the rights of the individual are more important than development. It is wrong to give to an authority the right to decide as between applicant A and applicant B according to his state of mind. The rights of a citizen are more important than anything else. The amendments seek to limit the power of the designated authority. I hope that consistent with the principles we have followed, they will be carried.
– Constitutionally, the designated authority could not be nominated in the Commonwealth legislation. Only the States can nominate their State Ministers as designated authorities. I point out that these laws have operated in the on-shore mining world for many years and have operated satisfactorily. I put to Senator Murphy one point which perhaps he has overlooked. We must have this delegation of power. If you do not have it you destroy any possibility of administration. Take the case of an inspector who goes out to an offshore rig. He gets off the boat and onto the rig and sees what he considers is an unsafe practice which could imperil workmen. If he has no delegated authority he cannot deal with the matter. What he has under this legislation is the power to say that the practice must cease. He can issue a direction at once. But if he does not have that delegated authority he must return to the shore, telephone the Minister for Mines, if he can contact him, and report that such a practice is going on. He must suggest that the Minister put an end to the practice because only the Minister has authority to do this. In the meantime anything might happen to good, honest men working on the offshore rig. Although I understand the point which the honourable senator has made, I stress that in this field the inspector must have authority to deal with an unsafe practice on the spot. This is a principle of long standing in the mining world. The honourable senator’s amendments would destroy this principle. They cannot be accepted by the Government.
- Mr Temporary Chairman, if I thought that the amendment now before us raised the points that Senator Cavanagh discussed, I would give it much more consideration. 1 submit that it is misconceived if it is directed to the end that Senator Cavanagh envisages. The amendment seeks the deletion of paragraphs (b), (c) and (d) of sub-clause (1.), which authorises the Governor-General to make arrangements with the Governor of a State with respect to (a) the exercise of the powers and the performance of the functions of the designated authority under the terms of this measure; (b) the exercise of those powers and the performance of those functions by a person for the time being performing the duties, or acting for or on behalf of the holder, of a specified office - that is to say, not John Smith, Minister for Mines, but the person for the time being occupying the position of Minister for Mines in the State; (c) the delegation to a person holding office in the State of all or any of those powers, either generally or otherwise; and (d) the exercise of the powers and the performance of functions by a delegate in accordance with the instrument of delegation. Delegation of authority in this fashion is common in most of the big departments of the Commonwealth. Take the Taxation Branch of the Treasury, for instance. There, we have to depend on Commissioners of the Branch and on deputy commissioners in the States. Delegated authority may have to be given even below the level of deputy commissioner in the States. For the purpose instanced by the Minister, it is quite impracticable to suppose that at this stage we could carry on administration at all efficiently by insisting on the powers and functions conferred under the terms of this Bill being exercised by one person, he being the designated authority. Therefore, the Governor-General should have authority to arrange with the Governor of a State for the multiplication of subordinate delegates so that the administration of this measure may be carried on in a practical manner. Senator Cavanagh referred to sub-clause (5.) (b), and dealt with the very principle that is of concern to us in this chamber. He illustrated his argument by reference to clause 58 (3.), which provides:
Where petroleum is being recovered in a licence area, the Designated Authority may, for reasons that he thinks sufficient, by instrument in writing served on the licensee, direct the licensee to take all necessary and practicable steps to increase or reduce the rate at which the petroleum is being recovered to such rate as the Designated Authority specifies in the instrument.
There, the absolutism of the discretion vested in the designated authority is emphasised. That provision does not simply provide that he may do something if in his opinion a certain situation exists. It provides that he may act for reasons that he thinks sufficient. It reposes in him the beginning, the end and the whole content of reasons that should actuate his exercise of that power. Later, I shall have something specific to say about the substance of clause 32, sub-clause (7.) of which provides:
Where a permittee makes an application for the renewal of a permit, the Designated Authority
shall, if the permittee has complied with the conditions to which the permit is subject and with the provisions of this part and of the regulations; or
may, if the permittee has not so complied and the Designated Authority is satisfied that, although the permittee has not so complied, special circumstances exist that justify the granting of the renewal of the permit, inform the permittee . . .
that he is prepared to grant to him the renewal of the permit; . . .
The designated authority may apply a procedure that will give the permittee renewal of a very valuable permit. The effect is that if the permittee has not complied with the conditions in paragraph (a), the designated authority is entitled to satisfy himself that special circumstances exist. That illustrates a case in which, if the designated authority is of a certain opinion, belief or state of mind, it is that designated authority who may exercise the discretion.
The alarming thing about this Bill is that, unlike the mining legislation of the States with which 1 am familiar, which provides that matters such as these are reviewable by courts of mines, this measure, on my perusal of it, will not constitute any court of mines to which recourse may be had by any dissatisfied applicant for renewal of a permit or by a licensee who considers that the designated authority, under the terms of clause 58 (3.), has given an unwise direction that he increase or reduce the rate at which petroleum is being recovered. I am informed that in mining practice this matter is very important for the proper operation of a petroleum pool and that an imprudent direction by the designated authority may do to a pool great damage that the proprietor would wish to prevent. I mention this point only because Senator Cavanagh invoked it as part of his argument. I submit that it is quite irrelevant to the question of whether we approve the provision under which the Governor-General may make arrangements with the Governors of States concerning designated authorities. In respect of the other two clauses that I have mentioned, two things could be done. First, the discretions could be made examinable by some tribunal, or, secondly, the discretions could be expressed in less absolute form. However, I submit that those considerations are not relevant to the amendment at present before us.
– Mr Temporary Chairman, I dealt with this matter at the second reading stage, and I stated then that what is being done in this clause is wrong and that I was seeking a solution to the problem. However, I have not had the capacity to find a solution though I believe that I have approached the question in a way somewhat different, perhaps, from the approach of Senator Wright or that of Senator Murphy, as indicated by his amendment.
Let me say first that the Minister was pathetic. He sought to justify this clause as it stands by reference to the point that I made in relation to safety when we were dealing with clause 9. The Minister failed to realise, however, that the designated authority does not interfere in matters of safety. They are dealt with under State laws, which provide for the appointment of safety officers. The designated authority will not go on to the job and, seeing that some unsafe condition exists, rectify it. He will sit in his office and deal with applications. Safety provisions are dealt with by officers appointed under State laws, which, under the terms of this Bill, we are extending to the field of offshore oil drilling. State officers will decide whether unsafe conditions exist. So the Minister had no justification for dragging in safety in relation to the designated authority, and he has no basis for his point of view.
I realise the dangers of giving a designated authority unlimited power, and I accept the Minister’s indication that, under the terms of the Agreement, the designated authority will be the Minister for Mines of a State. I accept that the Commonwealth may not have power to appoint the State authority, but he will be a Minister who will be responsible to his own Parliament for every action that he takes. Senator Murphy seeks to permit that authority to remain in the person who is responsible to an elected body. He had an answer to every question that was raised. He has moved an amendment for the purpose of taking authority away from any person who is not responsible to the Parliament.
I approach the matter from this point: Appoint whom you like but give him guide lines as to how he must act. Senator Wright approached it from another point. His view was: If he acts unreasonably there should be some right: of appeal to a court of mines or some other authority. It appears that we all agree on this matter but we have approached it from different angles.
Senator Wright has said that there are some guide lines so that the designated authority cannot act without good reason and that he has power under the Act to reject an application for reasons that be thinks are sufficient. That is the very thing J am trying to avoid. It must be remembered that under this Act there could be ten designated authorities including one for each State, one for the Northern Territory, one for Papua and New Guinea and one for the islands. A reason that the designated authority in South Australia might think is sufficient might not be accepted as sufficient by the designated authority in Victoria. Let us take the caseI have mentioned. Would it be sufficient reason if one company gave the designated authority a Mercedes car as a Christmas box? Would it be sufficient reason if the manager of one company was a Roman Catholic whereas the manager of another was a Methodist? We would not accept those reasons as being sufficient’.
– It would have to be proved that those reasons actuated him. That could not be proved.
– I would say that it could have an influence.
– But it could not be proved.
– I think the onus of proof is upon the unsuccessful applicant.
– I am agreeing with the honourable senator.
– Inability to prove would be endorsement of what the designated authority had done.
– That is the difficulty. It cannot be proved, as I have said.
– Surely that state of affairs cannot be accepted as being right. If applicant A gets a licence and applicant B does not get a licence it might be said by the designated authority that applicant B did not comply with this or with that regulation. But the designated authority does not have to say that. An applicant can be denied a licence for reasons which the designated authority thinks are sufficient. This is the problem I was seeking to overcome by inserting guidelines.
Senator Murphy’s proposed amendments, if accepted, will permit the granting of a licence by someone who is responsible to an elected parliament. The authority should not be extended any further than that.
Now we come to the other suggestion about a court to review these things. I forgo my solution because possibly it would create too many problems. Instead, I support the solution proposed by the Leader of the Opposition. If his proposed amendments are not accepted 1 hope that we will have an opportunity to support Senator Wright’s suggestion that there be a right of appeal against the action of the designated authority.
Question put:
That the amendments (Senator Murphy’s) be agreed to.
The Committee divided. (The Chairman - Senator T. C. DrakeBrockman)
AYES: 20
NOES: 21
Majority . . . . 1
AYES
NOES
Question so resolved in the negative.
Clause agreed to.
Clauses 16 to 18 - by leave - taken together, and agreed to.
Clauses 19 and 20 - by leave - taken together.
-I think the remainder of my opposition to the Bill can be summed up in a discussion on these two clauses. Clause 19 states:
A person shall not explore for petroleum in an adjacent area -
except under and in pursuance of a permit; or
except as otherwise provided by this Parliament.
However,I am more concerned about the provision the purpose of which is to prevent a person from exploring for petroleum and this is covered more by clause 20, which states: (I.) The Designated Authority may. by instrument published in the Gazette -
after consideration of the applications, a permit -
I have read those sub-clauses to show honourable senators the conditions on which the designated authority may grant or refuse a permit. But the pertinent provision is sub-clause (5.) which states:
The Designated Authority may, for reasons that he thinks sufficient, upon request in writing served on him, direct that sub-section (2.) or (3.) of the next succeeding section does not apply, or that both of those sub-sections do not apply to or in relation to an application made under subsection (3.) of this section.
I remind the Committee that sub-clauses (2.) and (3.) refer to the number of blocks in respect of which a permit may be issued. We have already had discussions as to the number of blocks for which a permit may be issued to an applicant and it seems that the limit is 16 blocks. In discussing these clauses 1 refer to a matter raised by Senator Wright and Senator Murphy in respect of an earlier provision - the power of the designated authority. I raise that question in speaking to these clauses only because these are the first provisions which enable this subject to be raised. Although the provisions of clauses . 19 and 20 may not be the most important in themselves, they enable us to discuss the powers of the designated authority and to see the principle upon which it is proposed that the designated authority should work. This does become important. If the designated authority is a Minister of Mines who is answerable to the Parliament he can be given some latitude, but when he is a person appointed by the Minister of Mines we must consider to what degree we should restrict his power. Where do we find prescribed the guidelines upon which he must act? The clause provides that he may act for reasons that he thinks sufficient’.
– Where are those words?
– In clause 20, sub-clause (5.) which states:
The Designated Authority may, for reasons that he thinks sufficient, upon request in writing . . .
There is no provision which says that he shall decide in the way the Act determines or that he shall act in accordance with some regulation; he may act ‘for reasons that he thinks sufficient’. I realise that this subclause enables the designated authority to make decisions only in respect of subclauses (2.) and (3.) of clause 21, which are not of themselves of very great significance in deciding whether the designated authority has power or not. They have more to do with the granting or withholding of a permit; which of two applicants shall receive a permit; whether a deposit will be refunded; how much of a deposit will be refunded; or what interest will be charged on instalments. They are vital questions. As I said earlier, I raise this matter now because it is the first opportunity in the Committee stage that I have had to deal with the power of the designated authority or his appointee to act ‘for reasons that he thinks sufficient’. I do not believe that we should give any one authority power to decide between two individuals for reasons that he thinks sufficient. As a Parliament we should accept our responsibility, decide what is sufficient reason and lay down provisions accordingly. The designated authority should be a clerk who registers an application or rejects an application in accordance with the law of the land.
– I am quite alarmed to find the provisions contained in sub-clause (2.) of clause 20. I rise merely to seek an explanation of its real meaning. It states:
The Designated Authority may, for reasons that he thinks sufficient, in an instrument under the last preceding sub-section, direct that subsection (2.) or (3.) of the next succeeding section does not apply, or that both of those sub-sections do not apply,’ to or in relation to the applications.
Sub-clauses (2.) and (3.) of clause 21 which are referred to in clause 20 relate to the number of blocks specified in the application for a permit for exploration. Clause 21 (2.) provides:
The number of blocks specified in the application -
if sixteen blocks or more are available - shall not be less than sixteen; or
if less than sixteen blocks are available - shall be the number available.
Then sub-clause (3.) provides:
The blocks specified in the application shall be blocks that are constituted by graticular sections that-
I had been proceeding on the basis that sub-clauses (2.) and (3.) of clause 21 were essential and vital to the Bill. I am quite surprised to find sub-clause (2.) of clause 20 giving the designated authority an absolute right to direct that a company need not apply. I should be most obliged if the Minister would explain to me the substantial reason for that provision before we form an opinion on the reference made by Senator Cavanagh to the extent of the authority of the designated authority.
– Again I refer to the designated authority’s rights to grant applications for permits. Where in the Bill do we see the application of clause 1 1 of the Agreement? I remind the Minister that that clause relates to consultations between the Commonwealth and a State.
Sitting suspended from 6 to 8 p.m.
– I should like to deal with the two matters which were under review before the suspension of the sitting. I have an answer’ to the question which Senator Wright asked. I hope that information is adequate for the purposes for which he sought it. I understood him to refer to the provisions of sub-clauses (2.) and (5.) of clause 20, which provide for the designated authority to declare that sub-sections (2.) and (3.) of proposed section 21 do not apply in certain cases. Clause 21 deals with the application for a permit and covers amongst other things the upper and lower sides of the permits. The upper limit in clause 21 (1.) (c) is 400 blocks. This cannot be waived or dispensed with in any circumstance. The lower limit is normally sixteen blocks and this will be generally adhered to in the early stages of the scheme. However, as half of the permit area is to be surrendered at the end of the first permit period and later after successive periods of 5 years it may well be that it will not be convenient or in some cases practicable always to grant a single area of sixteen blocks. There just may not be that number of blocks available in a single area. It is to cope with those circumstances that discretion is given to the designated authority in clause 20.
Senator Cavanagh raised a question concerning clause 11 of the Agreement. He asked where was this provision to be found in the Bill. I point out to him that it is not in the Bill. The Bill makes provision for application for permits. The Agreement provides that these permits will not be granted until after consultation with the Commonwealth and with the States agreeing to give effect to Commonwealth decisions. The Agreement is an undertaking solemnly given between seven Australian governments - the Commonwealth and the six State governments. 1 referred to this mutter in the second reading speech when I said:
The Commonwealth-State Agreement and the Annex thereto are at the very heart of the administrative arrangements entered into by the several governments. The Bills, when enacted, will provide thu statutory framework and guidelines for the whole offshore scheme and the Agreement covers the intergovernmental arrangements as to just how the administration will be carried out.
Clauses agreed to.
Clauses 21 to 31 - by leave - taken together, and agreed to.
Clause 32. (1.) Where a permittee makes an application for the renewal of a permit, the Designated Authority -
– I move:
In sub-clause (1.), paragraph (a), after ‘regulations’ insert ‘and if the permittee, during the currency of the immediately expiring term of his permit has expended a sum (excluding any subventions from a State or the Commonwealth) in exploring and developing petroleum of not less than one million dollars per block (or such greater sum as may have been prescribed by the Designated Authority under such expiring permit) upon the whole number of blocks included in such expiring permit and upon blocks included in a production licence over an area or areas included in such expiring permit during such currency’.
This amendment was moved in the House of Representatives by the honourable member for Mackellar (Mr Wentworth) and it was supported by the Opposition in that House. I therefore move it here. The purpose of the amendment is to induce those who seek renewals of permits to spend substantial sums of money on the work in the blocks which they have. It does not necessarily require that they expend the money in exploring. It could be spent on production. The word ‘developing’ is used. The intention of the amendment is to spur the companies on to produce. If they produce and spend this money that will satisfy the requirement.
Although the amount of Sim may sound a lot of money if applied to other fields, it it not a lot in the light of the sums that are involved in this subject. We have heard it said - and it has not been contradicted - it may well be that the value of petroleum in an area of 1 square mile would be of the order of $300m. The blocks, on the average, consist of approximately 25 square miles. So there are great amounts involved.
– Four hundred blocks is the maximum number permitted in one area.
– I thank Senator Wright for that observation. As he says, the maximum number of blocks in a permitted area is 400. So 400 x 25 means that on the average there is a maximum of 10,000 square miles in an area which is subject to one permit. Of course, there is no limit on the number of permits which may be granted to a single person or company or other entity. Extraordinary sums of mineral wealth are involved. No-one can be certain, but the potential wealth is extraordinary. The amendment suggests that a substantial sum should be expended, and those in the Esso-BHP group have already complied with such a requirement. They have expended far more than that. There should not be any difficulty.
The object of the amendment is to avoid a situation with which we could well be faced. There is a glut of petroleum products in the world now, and the corporations which have been granted permits and others who may be granted permits in the future may want to hold back the production of petroleum products in Australia.
– One of the members of the honourable senator’s Party told us last night that there was not a glut.
– If he has said that, that is his view. I am putting it that there is a glut. I suggest that the Committee may well take the view that there may be a glut. In any event, it is in Australia’s interest to see that petroleum is produced as quickly as possible and to meet our needs. We want all the petroleum we can get for our own purposes to use directly, to use for byproducts and to fulfil our export needs either of direct petroleum or of by-products. lt is to our interest to see to it that petroleum is produced. We do not want these fields to lie fallow until the companies that have been given control of them find it convenient in their own interests to work them. We want to require that they shall do the work so that, as quickly as possible, we will know the extent of the wealth that is there, and decide how we should go about utilising it to the best advantage. It is a reasonable proposition to require that this sum should be expended. I do not think anyone would say that it is too much. Nor do I think anyone would suggest that these great interests would be hurt by the expenditure of such sums. We are dealing mostly with multi-million dollar or multi-billion dollar corporations. There is vast wealth here and we ought to protect ourselves as far as possible. By any man’s standards we have given the oil companies a tremendous benefit in allowing them to come over here and gain this advantage in the exploration for and exploitation of our offshore petroleum. Surely it is only reasonable that they should be required to spend such a sum in developing these resources.
I remind the Senate that the proposed expenditure is only Sim a block. I do not think anyone could object to that sum. Indeed, I do not think anybody has suggested that it is unreasonable. If a company wants a permit, why should it not be required to spend money on its blocks? If a company finds it inconvenient to spend the money, then why should the land be tied up? We are suggesting that if a company has not spent this money by the time it seeks renewal of its permit, it should get out and let in somebody else who is prepared to spend it. There is not much advantage to Australia in simply having land tied up for lengthy periods without a very substantial sum of money being spent on it.
– The Leader of the Opposition (Senator Murphy) is suggesting that we place an imposition, if I might term it that, on exploration companies. He is suggesting that they be required to spend an amount of $lm a block in exploring for oil as a condition for the renewal of a permit. It is of vital importance to the Senate and to the Australian Parliament that we do not do anything that will hinder the search for oil in Australia. The total area of submerged lands on the continental shelf adjacent to Australia is estimated to be 1 million square miles. We are requiring that after the initial period of 6 years the holders of permits shall relinquish half of the area they hold. This means that 500,000 square miles could be retained by the holders of permits. If we take each block as being 5 miles square, or 25 square miles, and divide that into 500,000 we find that the original permittees will be retaining 20,000 blocks in the submerged lands adjacent to Australia. It is suggested that we require that any person who holds any one of those blocks shall spend at least Sim on that block. A simple calculation discloses that it is suggested that this Parliament require the people who are exploring offshore for oil to spend $20,000m over a period of 5 years. The first 6 years having gone, the requirement is that this money shall be spent in the next 5 years.
– My amendment refers to the expiring term - the first 6 years.
– The first permit is for 6 years. At the end of those 6 years, the person who holds the permit and has carried out exploration work will have his permit renewed for a further 5 years provided he fulfils certain conditions.
– Provided he has spent $lm in the previous 6 years.
– That is not the honourable senator’s suggestion.
– That is the purpose of my amendment and that was the amendment proposed in the other place also.
– That only makes the position worse. It is now suggested that in addition to requiring these companies to spend $20,000m in the ensuing 5 years, they be required to have spent at least Sim on each block in the previous 6 years. Therefore, the Parliament is asked to require them to spend $40,000m.
When I spoke last night I referred to the fact that in the whole of the free world oil exploration companies are spending at the rate of $900m a year, and that it is estimated that over the next decade they will be spending something like $22, 000m. The Opposition suggests that after companies have been spending money on exploring for oil for 6 years, they be required to spend a further Sim on each block measuring 5 miles by 5 miles before their permits will be renewed for a further 5 years. The effect of this would be that no searching for oil would be done by private companies in Australia other than those working near areas where oil had already been found and where there would be almost an even money chance of discovering more oil. Surely what we as a Government want is to see the maximum amount of offshore oil search work carried out in the minimum length of time. That is the reason why I cannot support this ridiculous amendment.
– It is a curious way to approach the problem to say that if we take this large area, divide it into so many blocks and multiply that by Sim we arrive at a sum which obviously will not be spent. Of course it will not be spent. The answer to Senator Scott is that we should not allow such large areas to be controlled by people who obviously are not going to spend substantial sums of money on them. Let us look at the proposition in another way. We have here blocks of 10,000 square miles. The suggestion is that Sim should be spent on the 10,000 square miles over 6 years. That means that $100 will be spent for each square mile over 6 years. In order to have exclusive rights, $16 a square mile has to be spent over such an area. Is it unreasonable to say to these people: ‘If you really want the exclusive rights to explore over these areas then you should be prepared to spend $16 a year for every square mile for which you ask the exclusive right to explore!
– Does the honourable senator base his arithmetic on Sim over 400 blocks or on $1 per block?
– It is Sim per block.
– 1 think the honourable senator’s arithmetic is a bit wrong.
– If my arithmetic is wrong it is because I have not had a chance to check my calculations. I am very grateful to the honourable senator for correcting me if I am wrong. I will generously concede that I could be wrong in my arithmetic because as I said I have not had a chance to check the figures while I am on my feet. Of course, if what I am saying is right then it is only a pitifully small amount. Even if we multiply that by 400 it is still a relatively small amount of money. Suppose Senator Henty is right and it is 400 times 16 which amounts to 6,400. Surely $6,400 on a square mile is not too much to say that a company should spend.
– That would be $10 an acre.
– As Senator Laught has said this would be $10 an acre for the exclusive right over this area. Everyone else will be kept out during the year that the permits are to be renewed. This simply means that companies can hold on to vast areas and not spend anything on them. The companies might concentrate on some tiny portion within the area. The intention of the amendment is to require that substantial sums be spent. The honourable member for Mackellar (Mr Wentworth) who moved this amendment in the other place is a man with vast mining experience and, as I understand it, has a vast knowledge of these matters, perhaps equal to any experience which is held in this House.
– No-one has ever accused him of being a Socialist.
– As the honourable senator says, no-one could accuse him of being a Socialist. The honourable member for Mackellar has suggested that these sums are fair and reasonable sums. He would not be suggesting something which would be excessive for expenditure in these areas. Why should not we say that a substantial sum will be spent. If the companies are not prepared to spend this money they should not bc allowed to hold up these areas. If this situation were avoided it would mean that people who are prepared to spend money would have the opportunity to come in to explore or carry out production. Some companies such as Esso-BHP have completely complied with these conditions and they would ‘be in no difficulty at all. Why should not these conditions be extended to the others? Are we going to say that companies, with no real expenditure of money, may tie up 1 million square miles around the Australian coast which apparently the companies are optimistic enough to think holds vast wealth? As I have said, the honourable member for Mackellar is one person who thinks that this is a fair thing. He has an intimate knowledge of this matter. He thinks that we must have something like this to prevent companies from simply holding permits over these areas, doing some kind of token work and tying up areas year after year, until they find it convenient to do something substantial. When the markets of the world suit them they will move in and do some work. Otherwise these companies will let. their areas lie fallow. I press the amendment.
– This clause deals with the conditions of renewal of a permit and the amendment contemplates the requirement of an expenditure of not less than $lm per block of 25 square miles during the period of the permit. This will be 6 years in the case of an initial permit and every 5 years thereafter. Let me traverse the situation that follows from the permit. After 6 years half of these 400 blocks revert at once. The company loses half of its area. My arithmetic was somewhat modest in this connection. I based my calculations on a permit for 200 blocks held after a company had lost half of 400 ‘blocks. An area of 200 blocks is half the maximum size contemplated by the legislation. This would mean spending $200m. In other words, this would be more than the expenditure to launch the Hamersley iron mining operation.
– Has not Esso-BHP spent $50m already without having had a valid title?
– I will deal with that in a moment. An amount of $150m has been spent on the Hamersley iron operation. This amount covers the mine, the railway, the port and township. Moreover, the Hamersley operation was to develop a discovered and proved deposit. This is the difference. We can get this type of money when a company already has discovered and proved deposits. The amendment proposes a greater rate of expenditure for exploration for something which may not be found. I ask how many companies could face this sort of expenditure? Particularly, how many Australian companies could face this sort of exploration expenditure?
Exploration covers three major phases: Aeromatic surveys, seismic surveys and drilling. The costs of these are increasing in order of magnitude. If we set a figure that would be suitable for the aeromatic work it would be quite unreal when the time came for drilling. Likewise, a realistic figure for drilling would involve over expenditure at the point of exploration, involving aeromatic survey. For this reason the Governments, both Commonwealth and States, after consideration decided the effective way to deal with the work programmes and expenditure programmes - because we all have it in mind that we do not want this area sat on - was to make provision in the legislation enabling these to be tailored to suit each particular permit. That is provided for in clause 33.
Senator Murphy referred to the expenditure of Esso-BHP as being substantial. It has been substantial but the heavy expenditure was at the licence stage after this organisation had discovered oil. This is quite a different, matter from the exploration. lt is out of the question altogether to spend this sort of money at the permit stage when no-one knows what is there. I suggest to the honourable senator quite frankly that this would put any Australian company out of the field altogether.
– The amendment covers the production stage.
– J think this would put them out. In any event, the Government could not accept the amendment.
– This is a most important clause, lt is a matter of the gravest concern to anyone who has Australia’s interests at heart to read the forceful words of the honourable member for Mackellar (Mr Wentworth) on this clause uttered in another place. The situation that we have to assess for ourselves is this: That the Slates have been sporadically granting these permits over the entire continental shelf so that their permits already issued cover all or practically all of the utilisa’ble area of the continental shelf. It is true thai of the fifty-seven existing permits forty-two are less than the maximum authorised under this Bill - that is to say, 10,000 square miles. But there are fifteen with areas in excess of 10,000 square miles and one with an area as great as 140,000 square miles. Those permit areas are being confirmed by this Bill for the next 6 years. The clause that we are dealing with authorises a renewal of permits in respect of half of those areas at the end of 6 years, provided the permittee has complied with the conditions to which the permit is subject and the provisions of the Act and regulations. lt is important to notice that the c hi use requires that the designated authority shall grant a renewal for a further 5 years of a permit over half the original area if the permittee has complied with the conditions of the licence in the previous 6 years. The effect of Senator Murphy’s amendment is to impose a condition of a minimum expenditure by the permittee over those 6 years of $lm per block, that is to say, per block of 25 square miles on the average. So for the maximum area of 10,000 square miles permitted under this Bill the total expenditure required, if Senator Murphy’s amendment is accepted, would be $400m. It is important, though, not to look at it entirely from the point of view that Senator Henty and Senator Scott have put to the Committee. The purpose of imposing such a condition is to ensure that at the end of 6 years the permit area will be reduced, not merely to the half required by this Bill but to the proper size, the size which is appropriate for the management of the permittee, the size which is appropriate to his capacity, as tested by the extent to which he has been prepared to expend money over that period.
So it is not a case where this condition would require the expenditure. It is a case where a Parliament says the permittee shall not be entitled to an absolute right of renewal if he has not made an expenditure of that amount. The mere fact that it is greater than the Hamersley investment and greater than other figures to which we are accustomed, and the mere fact that it represents $400m for an area of 10,000 square miles, should not be considered from the point of view of actual expenditure, because the purpose of it is to impose a condition by compliance with which alone the permittee will have this absolute right of renewal. The whole purpose is to induce him voluntarily to relinquish an area which is surplus to his capacity.
– Does this apply anywhere else in the world?
– I am coming to that in a minute. I only want to get the actual issue in my mind and before the Committee for judgment. It is not a case where we should be dismayed by the immensity of ihe figure if the objective to reduce these areas at the end of 6 years to utilisable areas is correct. I should like to cite a passage from the speech of the honourable member for Mackellar in another place at the Committee stage, in which he illustrates what may take place, if we figure on an area of 10,000 square miles, which involves 400 blocks. He said:
Let us suppose that the permit is taken out early next year, in 1968, in a few months’ time. In such circumstances the area would remain at 10,000 square miles until 1974; at 5,008 square miles until 1980; at 2,500 square miles to 1985; and by 1990 - a fair time ahead - it will still be 1,250 square miles.
It is one of the objectives that seems reasonable to me to so frame this legislation as to ensure that within a reasonable period ahead these large areas that have been prodigally granted by the States heretofore shall be reduced to dimensions which will ensure that everybody who is prepared to come onto the Australian coast and explore for oil will have an area in relation to which he may have a permit. Having said that, let me say that I have read also what has been said by Dr Mackay, whose knowledge of mining seems to be quite considerable. I have listened to Senator Scott, who has had great experience in connection with mining, as I understand it, and I have listened to Mr Fairbairn, the Minister in another place, who says that these figures arc fantastic. I have listened also to Senator Murphy tonight. He will permit me to say with great respect that he does not put forward any experience of his own or any evidence upon which to base a judgment as to the appropriateness of this figure, and that is my position.
I have been impressed, not only on this occasion but many times in this Parliament, by the experience, knowledge and understanding of Mr Wentworth, but to endorse that as against what has been said by Mr Fairbairn, Dr Mackay and Senator Scott, without really contacting the industry and judging the experience, seems to me to ask the Committee on insufficient material to come to a judgment on a practical matter. Therefore, I do suggest that the appropriate thing is nol to accept the amendment in the present state of information. That is why I would have much preferred to have a select committee before this Bill became law. I repeat that I am not’ - and I adhere to my judgment - prepared to withstand the legislation that the Government calls for, supported unanimously by the governments of the six States, with the possibility of dislocating or depressing a most important exploratory programme in this industry of vital national interest. lt is in that spirit that I rose to put before the Committee my view that possibly this requirement is in the right direction and quite proper, for the purpose not of requiring companies to spend this amount but of ensuring that they do not have an absolute right of renewal of permits over these excessive areas at the end of 6 years if they have not spent this amount. To say that it is a practical proposition to adopt this figure in our present state of information is a course that, with all due respect, I am unable to adopt. I hope that in rejecting my view at this stage the Government wm not on mature consideration think that it is not the proper view because I trust that the Committee, instead of hoping to get finality at this stage, will support me in seeking the appointment of a select committee to inquire into the Bill. Such a select committee’s report will not be pigeonholed. The select committee would bring before the Senate a properly reasoned report on all these matters in a short time, having regard to the measurable history of this industry.
– 1 was pleased to hear what Senator Wright had to say. Of course, he is correct when he says that’ proper argument and the viewpoint originally advanced by Mr Wentworth in another place, not supported by evidence and material from the mining spheres, cannot be accepted by the Senate in the present circumstances. The Government is railroading this legislation through the Parliament. We are unable properly to consider it. I think Senator Wright was sincere when he said that his failure to oppose this clause does not mean that he will not press for a report by the select committee and insist that that report is not pigeonholed. The answer to Senator Wright is that the Senate now has a chance to set up a select committee before the Bill is passed. We could then insist that these things be investigated. We could insist that the Bill be put right and that the law be as it’ should be.
The moment this Bill becomes law we can do nothing to upset it. The select committee may make its report, but the Government need not act on that report. Once the Bill becomes law our view will be as nothing unless both Houses agree; we will be impotent to correct these measures. This is the tragedy of the position. I think Senator Wright has advanced his views in all sincerity, but experience shows that the reports of select committees tend to be pigeonholed. I have no doubt that public pressure can move governments - even oil companies - but it would be far better if the Senate were to act before the Bill became law. If we do not it will be a great tragedy, because it will be very difficult to change these provisions once they become law.
The oil interests all over the world have been ruthless in their dealings with governments. They have figured in the making and breaking of governments all over the world. They have virtually stopped at nothing to see that their operations were not hampered. It is true, as Senator Wright has said, that we have not had an opportunity to put forward certain material. There is some material which all honourable senators have had a chance to read. I refer to the powerful arguments advanced by Mr Wentworth as to the smallness of the sums involved. I see Senator Wright’s point. Any examination of the legislation will be helpful but we will be attempting to close the stable door after the horse has escaped.
Nobody is asking the companies to spend vast sums of money. The position is that the companies have asked for areas. No one has compelled them to take up tremendous areas. If they are not prepared to spend $lm on exploration or development for each 25 miles, then the areas should be reduced so as to correspond with the amount’s which they are prepared to spend. This is a reasonable proposal. I think somebody has calculated - it may have been Mr Wentworth or Dr Mackay - that it takes $2m to drill a hole. That figure was accepted. This would mean that there would be one hole for every 50 square miles, is this too much to ask of people who are seeking an exclusive right? Nobody is forcing these companies to take up areas. If they cannot do better than this all they are asked to do is to relinquish the area and let somebody else have a go who is prepared to spend the money, sink the holes and explore. When vast sums of money cannot be spent, vast areas should not be held in the exclusive right of these people and to the exclusion of other people. That is the proposition. Unless the Government is prepared to say that some other figure is a proper figure to be spent, we will persist with the amendment.
Question put:
That the words proposed to be inserted (Senator Murphy’s amendment) be inserted.
The Committee divided. (The Chairman- Senator T. C. DrakeBrockman)
AYES: 19
NOES: 20
Majority . . . . 1
AYES
NOES
Question so resolved in the negative.
Clause agreed to.
Clauses 33 to 41 - by leave - taken together, and agreed to.
Clause 42. (1.) Where an application for a primary licence has been made and, before or after the grant of the primary licence, the applicant makes an application for a secondary licence, the Designated Authority shall determine a rate at which royalty is to be payable in respect of petroleum recovered, whether under the primary licence or under the secondary licence, being a rate that is not less than eleven per centum nor more than twelve and one-half per centum of the value at the wellhead of that petroleum.
– I move:
Sub-clause (1.) of this clause states:
Where an application for a primary licence has been made and, before or after the grant of the primary licence, the applicant makes an application for a secondary licence, the Designated Authority shall determine a rate at which royalty is to be payable in respect of petroleum recovered, whether under the primary licence or under the secondary licence, being a rate that is not less than eleven per centum nor more than twelve and one-half per centum of the value at the well-head of that petroleum.
The purpose of the amendment is to increase the rates of royalty that would be payable, because it is considered that the rates prescribed are not sufficient for the governments that will be receiving them. Indeed, the provision is over-generous to the companies that will be engaged in exploration for and subsequently in the production of petroleum. Here again is a situation in which the Government has advanced very little information. The Minister, when he replied this afternoon in the second reading debate, suggested that in some places the royalties payable were less than or about the level specified in the clause. In effect, he said: ‘The level specified is reasonable’. We take the view that higher royalties should be paid. Surely no-one would suggest that higher royalties than this are not obtainable in other parts of the world.
Here in Australia, we have almost virgin areas and oil companies from all over the world are thrusting to begin operations in them. Why should we be content with royalties at rates less than could be obtained, especially when the Government is rushing in to let out all our offshore exploration areas? I could, understand it if we were considering operations in some special area and were wanting to give some special inducement to encourage the utmost expedition on the part of the oil companies. We have a much bigger continental shelf than exists in the rest of the world. I could understand the rates of royalty that have been prescribed if the Government were picking out a small area - say, 10,000 square miles - that seemed to be favourable and were asking only a small royalty so as to encourage an oil company to undertake exploration in that area, the object being to get oil production going. In those circumstances, I could understand it if the Government were to offer extremely generous terms and were to keep the rates of royalty low. This might be a way to get operations going if the circumstances were such as I have described. I do not think that anybody would say that the Opposition’s approach has been to say to the Government: ‘You are not to start off in an experimental way or to spurn the help of interests outside Australia’. Our objection to what the Government proposes is that it is giving everything away at favourable terms instead of picking out only small sectors for that treatment, if it is necessary and if the Government itself is not prepared to do what is needed through the medium of a public instrumentality. We do not object to its getting help from private sources, but these should preferably be Australian. This is what we want. If the job cannot be done by Australian companies and overseas companies have to do it, give them generous terms, if necessary, but only in relation to small areas and not over the entire continental shelf. What the Government proposes, however, is to give away all our resources at once at very low rates of royalty.
I do not claim to be an expert in these matters. Honourable senators are well aware of that. I have no expertise in mining. There may be one or two persons in this chamber who have, and there are members of the other chamber who have. We should not be asked to consider these measures without the benefit of any expert advice. We ought to have had the benefit of an inquiry by a select committee which could have been told by the best experts in Australia and throughout the world what the situation is in these matters. But the Government is so determined to get this legislation through as quickly as possible as to refuse to adopt that course. It has rushed these measures into this chamber at the end of a sessional period, throwing a large mass of printed material at us and leaving us to deal with it as best we can. We are doing our best to cope with that situation, but we are not satisfied with the manner in which these measures are being dealt with here. A certain amount of information has been collated by members of the Australian Labor Party, and some of the material that we have obtained suggests that in many other parts of the world, royalties are in excess even of 161%, a figure that the oil companies are accustomed to paying. In the Arabian states, extremely high royalties have been paid, ranging, I understand, up to 50% and in some instances even higher. We ought to be getting the maximum royalties that we can for the Australian people. It is tragic that the whole of the continental shelf should have been thrown open in the fashion adopted by the Government and that operations thereon will be subject only to extremely low royalties. We ask that the Committee agree to the level of royalties proposed in the amendment, as it is more in line with prevailing world rates, according to the information supplied to the Labor Party.
Question put:
That the words proposed to be left out (Senator Murphy’s amendment) be left out.
The Committee divided. (The Chairman - Senator T. C. Drake-Brockman)
AYES: 18
NOES: 19
Majority . . . . 1
AYES
NOES
Question so resolved in the negative.
Amendment negatived.
Clause agreed to.
Clause 43. (1.) Where an application for the grant of a licence has been made under section 40 of this Act and the applicant has furnished any further information required by the Designated Authority under sub-section (2.) of section 41 of this Act, the Designated Authority, by instrument in writing served on the applicant -
– by leave - I move:
At the end of sub-clause (1.) add the following paragraph:
At the end of the clause add the following sub-clause: (3.) No licence shall be granted to any applicant who is the holder of a production licence or licences in respect of an area or areas exceeding in aggregate forty graticular sections.’.
The purpose of the second part of this proposed amendment is to apply a restriction to the areas which may be held. If this proposal is accepted the areas will be restricted to 40 graticular sections. According to the mathematical experts here, a graticular section averages 5 miles by 5 miles, although the size varies from north to south because the boundaries are 5 minutes of longitude on two sides and 5 minutes of latitude on the other two sides. Naturally, there is a variation in the area but on the average each section is about 25 square miles. The proposal to restrict the number that may be held is in line with the Opposition’s argument that the areas which have been leased are unreasonably large. Without this restriction unlimited areas may be held. We believe that to be unreasonable. If there is to be fairly rapid development of these resources there must be some restriction on the areas which are permitted to. be held otherwise companies will simply hold on to their leases and not concern themselves much with development until some pressure is applied to them. If the areas are restricted there will be an opportunity for more persons or companies to become interested, there will be more competition and, in the ordinary course of events, there will be quicker development.
The purpose of the first part of the proposed amendment is to ensure Australian ownership of the asset. The idea is that a licence will be cancelled unless satisfactory proof is given that at least one-half of the beneficial ownership - that means the true and real ownership - is in the hands of bona fide residents of Australia within 12 months after the granting of the licence, and that the Australian ownership will continue. The words ‘beneficial ownership’ are used to ensure that there will not be any device such as putting the shares in the hands of an Australian person but establishing a trust in favour of, say, a foreign corporation. Such a device would not be permissible under the proposed amendment. The intention is that there should be actual and real Australian ownership. The provision is designed to bring the ownership of these resources and the benefits of them back into Australian hands. It is an extremely important amendment. It is in line with what I suggested during my remarks on the second reading, that there must be some programme and some techniques evolved to ensure that our resources shall come back into Australian hands.
We are in the situation where our vast mineral resources are principally in the hands of foreign corporations. It has been shown by those who have investigated the situation that most of our great industries, with few exceptions, are Australian in name only; they belong to foreign corporations. We must commence a programme of bringing them back into Australian hands, whether public or private. This is one technique which might well and reasonably be used to bring these resources back into the ownership and control of Australians. I commend my proposal to the Senate.
– I oppose Senator Murphy’s amendment. I suppose it could be said that the Party which I represent has been to the fore in saying that there should be Australian participation in projects such as the one we are now discussing. I have heard members of the Opposition on many occasions quoting the Leader of the Country Party (Mr McEwen) in relation to selling part of the farm.
– Does the honourable Senator agree with him?
– Yes, to a great extent. However, the difficulty is to bring about some of these things. Let us consider the wording of the amendment. It is surprising that Senator Murphy should advance a proposition such as this which would be impossible to bring about. I would not have expected from a lawyer a proposition that a person must demonstrate a bona fide Australian resident interest to the order of 50%. This would be most difficult to secure in all instances. I remind the honourable senator that Australian residents are not always particularly interested in some of these projects. Indeed, Australian residents have shown some reticence to enter into some of the risky capital propositions which are available in many mining concerns. Further, I think it is impossible to say when a 50% Australian ownership has been achieved. Senator Murphy used the expression ‘bona fide residents of Australia’. If what is sought by the honourable senator is that we shall interest Australian companies such as Broken Hill Pty Co. Ltd in these ventures he should be reminded that we cannot claim that they have a bona fide resident interest in Australia. BHP is a corporate body and it is that corporate body which owns the shares in the BHP-Esso company. How would a corporate body establish residence? The proposition advanced by Senator Murphy could create difficulties.
One has only to register a company in Australia for it to become an Australian company, irrespective of whether it is owned by foreign interests. I think what we should be aiming to achieve is that much of the work performed in Australia is done by Australian workmen. We should be endeavouring to see that work performed by architects, surveyors, engineers and consulting engineers is done by Australians, whether it be by Australian companies or Australian partnerships. We could have a situation in which a foreign company could come here and register an Australian company. Nobody could suggest that that would not be an Australian company. Consequently I suggest to Senator Murphy that although his proposition is quite reasonable it would not achieve that which he seeks to achieve. Surely he would realise that an application of his suggestion would be impossible to achieve. The Federal Government has made known its wish for Australian participation in some of these ventures pursued by overseas companies. Surely that is a better way to proceed. We see an example of this at Hamersley where a definite step has been taken by a foreign company to ensure Australian participation. Last week when the Senate rose I travelled on an aeroplane with an individual who was anxious to tell me that his Australian company had bought out entirely one of the biggest automotive parts companies in New South Wales’. His Australian company had taken over entirely from an American company. I suggest that the proposition put forward by Senator Murphy is impossible to achieve and that he knows it is impossible to achieve.
– The Opposition has proposed the inclusion of a provision that a licence will be subject to cancellation unless the company licensed maintains a situation in which at )east 50% of the beneficial ownership is vested in bona fide residents of Australia. I should like to say to the Leader of the Opposition (Senator Murphy) that this amendment cuts across a long standing Government policy not to discriminate against overseas capital. The Government has an outstanding record in attracting overseas capital to Australia. If the search for offshore petroleum continues to be successful it is an open question whether Australian investors would be willing to provide the enormous sums necessary to ensure that 50% of the beneficial ownership in any production activities is held by Australian interests. Nonetheless, it is fair to make the point that the Government will give a particularly warm welcome to capital in a partnership’ between Australian and overseas companies, whether the partnership is in equity capital or in management. For that reason 1 cannot accept the amendment.
– Senator Webster has said that what I have proposed cannot be done and the Minister has said that he does not think we should do it.
I had the pleasant experience of meeting some members of the Japanese delegation who came to Australia recently with the Prime Minister of Japan and some who had come before that. I talked to them about the economic affairs of their country and asked them how it was that they came so rapidly to a position of power and strength. I asked how they were able to become so strong economically that they are now able, not only to dominate the Pacific, but are able also to invade the American markets and start to take over American firms. Strangely, one of the things that they said to me was that they had insisted on a policy that no foreign interest was to have control of any Japanese concern or resource. In no circumstances would they permit anyone to have a more than 50% control of any Japanese resource or any Japanese concern. They regarded this as one of the most important matters in preserving the integrity of their own industries and in building up their own strength, and they have done this. They have risen extremely rapidly to a position of dominance in Asia. I should think that most people would agree that Japan is probably the third most powerful nation on earth and that it has come up into this position rapidly. It would be agreed also that one of the reasons for th is rise is that the Japanese have retained control of their own resources and their own industries.
What nonsense it is to say that we could not devise laws and see to it that our own resources and our own industries remain, at least as to half, in the control of our own people. What a defeatist attitude has been put forward in the Senate. How are we going to build a great nation in Australia if this is the attitude to be taken by the Government? How can we build up this country if the Government is going to say: Let there be an open slather. Let anybody come in and take over our resources. Let us keep on crying like little children that we have not sufficient capital and that we need others to come in and invest here so that they can make the profits. We must have their capital to develop these great resources.’ We have the resources. We have the treasures that the whole of the rest of the world wants. We have the materials that we can turn into capital so that ours can be one of the richest countries on earth.
All that the Government is doing is pursuing a policy of handing these resources over to others so that they will come in, use their capital, get control of these resources and make vast profits. We will always be short of capital because we have not been got control of our own treasures which are in our lands and beneath the submerged lands around our coastline. It is a policy of complete defeatism. The Government is selling out its own country. It is giving away the heritage of our young people and the people who will follow us. It is disgraceful that the Government is not even prepared to advance any proposition, any amendment or anything else to see that Australians get some control of these resources in their own land.
Senator O’BYRNE (Tasmania) [9.21)- The amendment contains a very reasonable proposition, namely, that we should insist that 50% of the potential ownership in these ventures should come to Australian investors and to Australian companies. Perhaps Senator Murphy was a bit optimistic when he expected this Government to be as progressive as the Japanese. After all, the Japanese have been able to establish themselves after total defeat in war, whereas this legislation proves conclusively that the policy of this Government is making Australia the last bastion of conservatism. This is the last refuge of monopoly capitalism - a retreat from the searchlight of reason, equity and justice.
Other countries are pushing the exploiters out because they know that those people have exploited them for centuries. Those people have sucked everything they can out of other countries. They are coming to Australia now. It is a bonanza for them. They are finding a receptive government which is saying: ‘Come in here. You are our rich friends. Come in and help us and look after our party affairs in the meantime.’ That is the reason why these people are coming in here. They know that their friends here in government will ensure the continuation in perpetuity of the injustices of exploitation that are occurring. The oil companies would never have been able to create these empires or this vast accumulation of capital unless they were able to do one of two things: To exploit the people in whose country they were operating or to overcharge the people who had to buy their commodities. This is how the oil companies have made this vast accumulation of capital. They are on the run everywhere else because history has caught up with them but we are giving them a new lease of life.
By our amendment we are putting the simple proposition of the old game: ‘Go you halves.’ This Government will not even see the wisdom and justice of that. I believe there is every merit in the amendment. I cannot understand the Australian people taking any notice of a government which will not follow along these lines and give us equity in these ventures instead of selling us down the drain. This is a shocking piece of legislation.
– I do not want to indulge in a philosophical debate on this matter with the Leader of the Opposition (Senator Murphy) or Senator O’Byrne. 1 only want to point out at this stage that perhaps the strongest country in the world commercially is the United States of America, lt has developed along the very lines that we are pursuing here. The United States asked overseas investment to come in to develop its resources. Eventually the ventures were owned by Americans. The other night 1 pointed out to the Leader of the Opposition one or two instances in which great industries in this country started entirely with overseas capital but today are very solidly held by Australians - between 80% and 90% of the investment is now Australian owned.
This has happened with the effluxion of time and with the development of our country. It has taken place in an enormous country with a population of only 12 million people. We have to be realistic about these matters. If we were to insert this amendment in the Bill and make it mandatory to find 50% Australian ownership, and if Australian investment was not interested or did not have the capital, these offshore petroleum resources would lie idle. The proposition of the Leader of the Opposition does not stand up to analysis. I have already said that I believe the amendment would not be workable. Great development is taking place in this field of oil search because of the very successful policies which we have pursued. This Government has brought about this oil search and the development in this field, of which it can be justly proud. In view of that we are not prepared to depart from the policies which we have laid down. We cannot accept the amendment.
– The suggestion that the Minister has made about the United States of America is not valid. As a matter of history, most of the oil in the United States was developed by American citizens. The Texans who developed the oil wells in Texas and the billionaires who came out of Texas were not operating with British capital. Many other industries in America were rescued only by reason of the fact that Britain was involved in two world wars and had to sell up a great deal of her assets to pay for the First World War and was forced by America to sell up her American assets al the beginning of the Second World War.
– That does not affect the validity of the argument.
– lt docs affect the validity of the argument. But for the occasion of the two World Wars, America may have suffered for a very long time from the ownership by Great Britain of many of her great assets. As to the acquisition and control of the assets, one of the reasons for the War of Independence was British control over American industry. The control and development of these industries were the real cause of the war, not the other reasons which are often assigned to it. It docs concern us that foreign oil companies have such control over these resources.
– The only real one that has been discovered is 50% Australian - the Esso-BHP group.
– There must be a pretty good slush fund somewhere.
– The Minister says that, but unfortunately, as Senator O’Byrne reminds us - and I think it is fair to say it in this place - we have a notorious shadow over this whole debate and over this whole legislation. There is no doubt about it. The Liberal Party for one receives, undoubtedly, funds from the oil companies. Let not honourable senators interject and say: ‘You know’. Once before that was said in this place. I would ask the Minister who is here-
– How much is Russia sending to the Labor Party?
– Nothing.
– We are not getting anything, either. You should not be so dirty. That is as low as you can get. Go and get some help from your Communist mates.
– Senator Scott becomes very concerned about this. It is notorious that’ in the past moneys have flowed from the oil companies into the Liberal Party. Whatever has happened in the past, in view of this legislation it is at least a requirement of decency in public affairs that that should not happen in the future. If legislation is to be dealt with, which on a great scale affects the interests of the oil companies, at the least it should be expected that these moneys should not be accepted by any party in the future. No party in this Parliament should be in receipt of moneys from companies which have such vast sums as stake and which are so profoundly affected by the legislation and amendments which pass through this Parliament. 1 am not putting it on any basis other than that, lt follows from what is being done here that there ought to bc legislation in this Parliament to see to it that contributions to parties and - -
– The Leader of the Opposition is not suggesting that legislation has been introduced because of his allegations?
– I am suggesting that in view of the profound effect that’ the legislation has on bodies which have contributed to political parties and to the Liberal Party-
– Can you prove this?
– There is no question about it. If the honourable senator wants to provide the vehicle for establishing proof, it can certainly be proved. If there is no denial from honourable senators opposite that these amounts are paid, the public is at least entitled to bc assured that no further funds will be accepted from the oil companies, or, if they are to be accepted, that their acceptance shall be made a matter of public record. There ought to be public records of this sort of thing. Records are kept in other countries. Honourable senators opposite are acting as though I am suggesting something extraordinary. Contributions to party funds by interests which are profoundly affected by the legislation which passes through this Parliament ought to be a matter of simple public record. Everybody ought to know what the position is. If the Minister denies that moneys have been received by this Party from the oil companies, I shall be interested to hear his denial. But I would like him to say that in future no moneys will be accepted, either directly or indirectly.
– The Leader of the Opposition (Senator Murphy) departed from discussing the merits of his amendment to make a political attack which he cannot sustain. He has not the slightest ground for the attack. Nor has he the slightest proof of anything he has said. But I do know that it has been said in this place over and over again that the Australian Labor Party receives funds from the Communist Party.
– The Minister knows that is childish.
– At one stage a member of the Labor Party itself suggested that the Party obtained funds from the Communist Party and from Communist controlled unions. I do not think we should get down to this level in trying to decide a simple amendment and I am sorry that the Leader of the Opposition was prepared to introduce this very low note. I thought that we would deal with the amendment on its merits. The suggestion by the Leader of the Opposition as to the motive for this legislation, which is of the utmost importance, is the lowest I have heard in this chamber. For him to deviate from a serious consideration of tremendously important legislation to the low type of attack in which be engaged does him no credit. Nor does it bring any credit to his Party. I do not think it is of any significance. If the honourable senator wishes to drag the debate down to such a low level, I would like him to deny in turn that his Party has accepted funds from the Communist Party and from Communist controlled unions.
– I wish to refer to an interjection which I made and which the Minister did not answer satisfactorily. The whole of the Government’s argument has been based on the premise that to adopt the rates of royalty which we have suggested would mean a virtual cessation of oil exploration - in effect the applying of sanctions by overseas interests. I should like to give two illustrations to refute that argument and I shall be very interested in the Minister’s reply. By way of interjection, 1 referred to the turbulent history of oil exploration in Mexico.
– Order! To which clause is the honourable senator referring?
– I am supporting Senator Murphy’s argument as to national interest being supreme in these matters. 1 am saying that there are excellent precedents for adopting the course suggested by Senator Murphy in this and earlier amendments. They are to be found in the attitude adopted by Venezuela in the post war period and by Mexico in the period before the war. The commercial relations of both of those countries with the United States of America have been and still are on a very high plane despite the fact that both countries have protected their national interests in a much stronger way than we are seeking to protect the interest of Australia by this legislation. The commercial relations between both countries and the United States have always remained cordial although their governments have adopted a much firmer stand in entering into agreements than we are suggesting should be taken here. I challenge the Minister to prove that the oil industries of Mexico and Venezuela have been retarded by the firm attitudes those countries have adopted in the past.
– I regret intensely the statements made by Senator Murphy about subscriptions to political parties and his implication that this Bill is influenced by contributions made by the oil companies to the funds of the Liberal Party. It is well known that the Liberal Party was formed on the basis that it would accept contributions from nobody other than individual persons in the community. If the honourable senator seeks to confront me with any questions as to the source of our funds, I can only tell him that no member of this Parliament, so far as I am aware, has any knowledge as to who contributes to the Liberal Party’s funds. So much for that.
Senator Murphy’s amendment proposes that a licence te produce oil should be held only by a company that has 50% bona fide Australian ownership within 12 months after the grant of the licence. This concerns a fundamental policy. It sounds very well. But anybody who listened to Senator McManus when we were debating the second reading of the Bill last night will have in mind the practicalities of this matter. Senator McManus referred to the millions of dollars that are being committed from Australian resources for the development of the country and to the services of the country. Australia’s capital is simply not sufficient to meet all the demands that development is making upon us at the present time. I have heard some reference to Japan. I have no doubt that Senator Murphy thoroughly believes what he says but I do not think that what he says as to Japanese interests is vouched for generally by official information about the base of Japanese industry. I suggest that this question of the development of the oil industry should be tested in this way: First we built refineries. Then we discovered oil. Now, we arc producing about 9% of our requirements within the country. Either Senator Poyser or Senator Keeffe quoted figures last night to prove that our oil requirements have, I think, quadrupled in the last 16 years. In the light of these facts, surely one of Australia’s national requirements is to get on urgently with the expansion of oil production in this country.
What is the risk? We will almost certainly consume within the country all the oil that we can produce over the next decade. If by that time we are producing such quantities as will enable us to export, we can then concern ourselves with the nationality of the capital that is producing it. As to natural gas, although I understand it is possible to export it, I believe that our requirements are such as to ensure that all that we can produce will be used within the country. I mention these things because they show that the arterial basis of the industry is under the legislative control of the Parliaments of Australia. We can impose the proper conditions as to royalty exactions upon the operating companies. We can also impose any necessary conditions, especially when acting in combination with the States, as regards the price of these commodities. Therefore, surely we are not so blind as to put our face steadfastly against the utilisation of foreign capital in this industry from which we are urgently requiring both products. So long as we have the ability to utilise both products and can control every step in the economic utilisation of the product’s, surely we should welcome capital from wherever it comes. This is on the condition that we take proper steps to see that overseas capital is not going to exploit this country but that it is going to work within this country on terms that will produce a commodity of benefit to our country. The other thing that ought’ to be borne in mind before we engage in a discussion as to any malafides affecting this Bill is that this Bill has been through the process of conferences with every State government and their responsible officials and AttorneysGeneral of every State Government and the Commonwealth Government for 2 years. Surely we ought not to put it to the country or the Senate that a Bill so produced has been affected or influenced in any way by malafides or association with the oil industry. It has been mentioned that the Premier of South Australia, Mr Dunstan, has been concerned in the concluding stages of the negotiations. He is a lawyer of repute and, I have no doubt, a gentleman of great integrity. Mr Fagan, the Acting Premier of Tasmania, is a lawyer of great experience and a man of the highest integrity. 1 am quite confident that we will best advantage our discussions here tonight by forgetting that there is any suggestion of malafides affecting this legislation.
– I feel compelled to enter the debate in support of the amendment moved by Senator Murphy. It is true, as Senator Wright has said, that last night I cited figures showing that our consumption of petroleum products has increased tremendously over the last 15 years. But this does not give this country or this Government the right to sell our heritage for a mess of pottage. This is precisely what the Government is doing. It is giving away the natural assets of this country to the big oil companies. Australia is already a quarry for overseas companies and overseas countries. We should take a quick look at some of the minerals that are going out of Australia at present. Our mineral sands are almost exclusively being exported.
Amongst the products that are culled from our mineral sands are minerals we are going to need in the years to come. Because there is a wholesale exportation of this resource we will not have it in large quantities when we require it. Our coal is going overseas, mostly to Japan, for a song. We are selling it at a few pence a ton. We think we are expanding the export trade of this country. Of course we are but this is being done at the cost of our own children and grandchildren. Our iron ore is going out of this country and we will need this mineral in the future as well. Not the least are our deposits of glass sands at Cape Flattery. Japan has the right to this mineral. Again, we are. going to need this in the future. Bauxite and copper are also being exported. I could go on and name a number of other minerals that are not being exploited to the benefit of this country but are being exploited to the benefit of companies in other countries.
The Government brought the legislation before us in a rush, as I said last night when I spoke in the second reading debate. Why was not the legislation brought in much earlier this year? The Government has produced documents to prove that over a long period of time the Government or its agents had been negotiating with these companies. But it leaves it to the last hours of this session to introduce the legislation in the hope that it will be able to bulldoze the legislation through without any amendments. The Government has been fairly successful in this regard. But this is not the way in which democracy works. If the Government has a controversial piece of legislation, it should at least bring it in at a time in the session when proper discussion can take place. But the Government would not do that. It is frightened to do it. It is frightened of public reaction. The Government hoped, in the tiredness that prevails at the end of a session, to introduce legislation of this nature and thought that there would be no resistance. The Government was shocked because the Labor Party put up such a resistance to the proposal.
I deplore the attack that was made on Senator Murphy when he mentioned that funds from the oil companies were going to the Liberal Party. I said this last night and I repeat it: The Liberal Party does draw a large share of its funds from oil com panies based in this country. The onus is not on Senator Murphy to prove that the statement he made was correct; the onus is on the Liberal Party to prove that it does not get funds from this source.
– I thought the onus was on an accuser.
– Senator Sim’s puerile interjections are not worth listening to. It is no use Senator Sim hoping for victory in Western Australia because his Senate team is going to come back one short.
– The honourable senator thinks that if a person keeps on repeating a lie somebody will believe it.
- Mr Deputy Chairman, will you tell the honourable senator to keep his voice down? I repeat again that I hope the Liberal Party is not going to get extra funds from the oil companies because the oil companies have stood over it to make sure that this legislation gets through. What was wrong with the Opposition’s original proposition of a select committee? Nothing at all except that the oil companies do not want it because the Government has already entered into contracts with the oil companies which are at this point of time probably gentlemen’s agreements which after this legislation is passed will be legal agreements. The oil companies are going to -bleed the Government white eventually and will bring about the downfall of the Government as sure as they have brought about the downfall of governments in other countries.
– The excuse has been presented to the Senate by the Government that Australia would not have sufficient capital to develop our natural offshore oil reserves. Of course it is quite easy to understand that Australia is now, perhaps, just getting her head above water. But we must realise that for 100 years Australia has been exporting our wool on ships from Britain and paying insurance and freights and the wool has been sold on the market through the British wool brokers, who have received the main benefit.
Order! Would the honourable senator please address his remarks to the clause at issue?
– I am addressing my remarks to the clause and to the amendment which is designed to allow the Australian investor to have a half share in these very rich oil fields particularly after the companies who are at present holding the leases have to reduce their holdings. I have a list of offshore petroleum titles which shows that in Tasmania the Hematite Petroleum Pty Ltd has an area of 35,325 square miles; Esso Exploration and Production Aust. lnc. has an area of 8,350 square miles; Electrolytic Zinc Australasia has an area of 8,000 square miles; and Magellan Petroleum Southern Pty Ltd has an area of 998 square miles and 3,620 square miles. The publication shows for the State of South Australia that Hematite Petroleum Pty Ltd has an area of 12,200 square miles and Outback Oil Co. N.L. has an area of 49,000 square miles. These are enormous areas. In- Western Australia, WoodsideBOCShell has an area of 140,000 square miles.
– Before the honourable senator leaves Tasmania I think he should mention that all the profits from the Savage mine are going to foreign corporations.
– Of course they are. The birthright of Australians is being sold in the same way as it is in other parts of Australia. The Government is taking the short term view and selling our birthright for a mess of pottage. When it uses the word ‘exploitation’ in this context it probably means development, but what it proposes is exploitation in the true sense of the word. We ask that Australian interests should have a just share in these resources. We in this country cannot become rich. The Australian worker, the family man, is being continuously impoverished by having, for instance, to subsidise the sale of sugar cheaply overseas.
– The same is true of butter.
– That is so. The amount of American money that comes here is an indication that Americans regard our country as a cheap country in which to shop. They even came here and bought the racehorse Tobin Bronze for $400,000 and took it away. Nowhere are they able to buy better than in Australia. The owner could not afford to retain the horse when such big money was dangled in front of him. The same may be said of our oil resources. They are being bought virtually for peanuts. The excuse put up by the Government is that the Australian people cannot afford to buy a share in these resources. If this Government were worth its bootlaces it would make sure that the Australian people retained a half share of these resources, especially on the second run. They have not a chance to get a half share now. The leases have already been granted over areas where there is any likelihood of oil or gas being found.
We are trying to provide for the time when some of these areas have to be surrendered. Under the legislation permittees will have to forgo some of the vast areas which will come up for reallocation. We ask that Australians should at that time have at least a half share. By that time the amount of royalties that these companies will have paid to the Commonwealth could quite easily finance the next phase of oil development. The Department of National Development has a magnificant staff of competent people, with know-how and experience in oil exploration. The Government could allocate to these people the responsibility for the use of the funds that will come from royalties to finance the whole of the secondary phase. We would not need private investment. The Commonwealth itself should take up this challenge. But there is no fear of that. The Government is selling to the highest bidder. It lives from hand to mouth and takes the short term view. Its policy is: Après nous le deluge. The Government is cashing in. It is dissipating our resources. As it gets royalties it exports the funds to buy armaments and to pay for our youth to go away to deprive under-privileged people of the opportunity to determine their own destiny. This is the stupidity of the Government’s policy. It should at least be investing in our own resources and our own future, but no, it is selling us down the drain.
This amendment should appeal to every decent thinking person. We should insist on a half interest for Australia in the secondary stage. That is the minimum for which we should be asking. I cannot understand why Government senators do not see the logic of it. I feel certain that when there is a review this change will be made. There must be a review. I believe that the select committee that will be set up will make a strong recommendation along the line that there should be a considerable Australian content in future investment in offshore oil fields. I hope that this will be one of the main matters that the select committee will investigate and that it will get economists and financial advisers to prepare an irrefutable case for a half Australian share in future development not only of oil fields but of all the great new discoveries.
One would think that this Government created the oil, gas and other mineral deposits. To hear its claims one would really believe that the Government had some divine right, that it was able to create these great deposits of iron ore, bauxite and oil. They have been there for millions of years. Locating them is a matter of having the technique, the know-how and the capital. Capital can be found if it is necessary. The Government tried to tell the people that the Australian Labor Party could not finance some of the propositions that it put up at the last election. The Government asked: Where would Labor get the money? The Government has no trouble whatever in financing a war. It can find as much money as it needs to kill people but it is cheeseparing and parsimonious about constructive, humane things, like raising the standard of living and improving the welfare of the Australian people. Here is an opportunity, the main chance. We are at a crisis in the economic history of Australia. After being virtually a colonial power for so long we have broken many of the ties with Europe and the centre of economic power in London. We have a chance to launch out on our own, but the Government is going headlong into the hands of a new economic imperialism, symbolised by the American dollar, which is buying up everything about the place, even our best racehorses.
Question put:
That the amendments (Senator Murphy’s) be agreed to.
The Committee divided. (The Chairman - Senator T. C. Drake-Brockman)
AYES: 19
NOES: 20
Majority . . . .1
AYES
NOES
Question so resolved in the negative.
Clause agreed to.
Clauses 44 to 55 -by leave - taken together, and agreed to.
Clause 56.
A licence may be granted subject to such conditions as Designated Authority thinks fit and specifies in the licence.
– ] move:
At the end of the clause add the following sub-clause: (2.) The Minister of State for the Territories may at any time add to any such licence, at the request of any person, corporation or statutory body not residing or functioning in the State adjoining the adjacent area, a condition setting the minimum proportion of the output of petroleum which must be offered for sale in any Stale other than such adjoining State’.
The effect of the amendment would be, for instance, that somebody not residing in, say, Victoria could ask that a condition be attached to a licence to explore or produce off the shores of Victoria which would require that some proportion of the output of petroleum must be offered for sale in a State other than Victoria. Of course, this provision would apply to the other States and it would mean that a minimum amount of the petroleum which was produced must be available for interstate trade. Under this provision a proportion would not be specified that would be deemed too high. It would be a matter for the discretion of the Minister of State for the Territories. It would moan that effective steps could be taken in the light of experience to see that some part of the production was made available to other States.
why he specified the Minister for Territories, but that is not a relevant point. The substantial point is that the Government’s policy and its political philosophy are to allow the law of supply and demand to apply. If there is any interference with the normal operation of the law of supply and demand, not only is there available the protection of section 92 of the Constitution but also in the annexe to the Agreement the Commonwealth has reserved all those powers. Further, one of the governments is a party to the annexe and has indicated its intention to encourage interstate trade.
Question put:
That the words proposed to be added (Senator Murphy’s amendment) be added.
The Committee divided. (The Chairman - Senator T. C. Drake-Brockman)
AYES: 19
NOES: 20
Majority . . . . 1
AYES
NOES
Question so resolved in the negative.
Clause agreed to.
Remainder of Bill - by leave - taken as a whole.
– Mr Chairman, I want to make just one observation concerning clause 57 and to direct attention to the fact that under the terms of that clause it will be a condition of a licence that in the first year of operations the licensee shall carry out approved works to the value of not less than the amount calculated by multiplying the sum of $100,000 by the number of blocks in respect of which the licence is in force. That is the indication that the framers of the Bill have given us concerning what will be regarded as being reasonable minimum expenditure when the production stage is reached. I want to state also that I am dismayed that this measure contains no provision for the establishment of a tribunal such as the Court of Mines in Tasmania to which parties in difference in any matter concerning a mining tenement may refer for an independent decision.I believe that the absence of provision for any tribunal of this sort is a grave defect in the Bill. This shows that in relation to this matter the Bill requires thorough consideration. I do not know what the law may be in States other than Tasmania, though I am told that in some States the mining legislation makes no provision for a tribunal such as the Court of Mines in Tasmania, which has very wide jurisdiction.
– There is a warden’s court in Victoria.
-I thank the honourable senator for that information. I repeat that I am completely dismayed at the absence of provision for any tribunal to which parties in dispute may refer for an independent decision. The need for such a tribunal is highlighted particularly by reference to some of the provisions that were discussed and others that were mentioned when earlier clauses were before the Committee, particularly in relation to the wide ambit of power, and especially discretionary power, that the designated authority may have. This is illustrated, as was pointed out shortly before the suspension of the sitting for dinner, by the provisions of clause 58 (3.), which provides that the designated authority may direct a licensee to increase or reduce the rate at which petroleum is being recovered. 1 simply place on record my view that this situation is not in accord with the philosophy that the Senate has sought to establish with regard to legislation. The designated authority will be a State Minister for Mines who will have no responsibility to this chamber and who, indeed, is constitutionally responsible exclusively to his own Parliament.I express keen disappointment at the absence of provision for a tribunal to which people may refer for the resolution of differences about their rights.
– Mr Chairman, we are now to consider more than 100 clauses of this Bill all at once. It is obvious that we cannot give them proper consideration. Indeed, no-one in this Parliament has been able to give them proper consideration because of the way in which the Government has dealt with this Bill. Some fantastic provisions are contained in these clauses. We could pick out a few of them at random, as we have done during the earlier consideration by this Committe. We have just had to try to do the best we could. Clause 101, for example, will allow a designated authority, contrary not only to regulations made under this measure but also contrary to the terms of the measure itself, to give directions in respect of any matter on which regulations may be made. Under the terms of that clause, a person who receives such directions will not be obliged to comply with the regulations. Not only that, but by reason of other provisions of this Bill, all sorts of minor officials to whom authority may be delegated will be able, in effect, to dispense with the law and give directions contrary to it. In the remaining clauses of this Bill, there is a host of provisions that run right across the established principles to which this Parliament has hitherto adhered and which it has endeavoured to maintain.
I sec honourable senators opposite nodding in agreement. It is unfortunate, but this is one of the worst pieces of legislation that we have ever enacted. Apparently the only redress that we shall have, if we agree to the Government’s request that we pass this legislation, will be an attempt afterwards to have some kind of post mortem on it so that we may see what is wrong with it and how the faults can be corrected. 1 suppose that we can do that; but we shall have to attempt this in the face of the Agreement that has been made, that Agreement being unalterable except with the consent of all the States. Common sense dictates that we can never expect to get the consent of all the States. I repeat that we of the Opposition do not accept that this legislation is unalterable. We do not function here according to the laws of the Medes and Persians. A law once made is not unalterable. This is the essence of our parliamentary system, which holds that any law is alterable. When the opportunity offers, we who are at present on the Opposition side of this Parliament will alter this law and make it conform to proper arid accepted standards. We have seen enough of it already to know that it does not conform to those standards. I believe that everyone is convinced that it has most objectionable features that should never have appeared in it. In fairness to Government senators, I acknowledge that they recognise that. However, no doubt for expediency, they have taken the view that it is in the interests of Australia that this legislation should be passed, and they accept the proposition that in some way we may afterwards endeavour to correct it, notwithstanding the Agreement that has been entered into. Let no-one say that by passing over the remaining clauses of this measure in this fashion the Opposition is tacitly giving approval to them. We do not approve them. We object not only to the form of this legislation and many of the principles embodied in it but also to the methods by which it has been steamrollered through the Parliament.
Remainder of Bill agreed to.
Bill reported without amendment: report adopted.
Bill (on motion by Senator Henry) read a third time.
page 2314
Motion (by Senator Henty) - by leaveproposed:
That so much of the Standing Orders be suspended as would prevent the questions with regard to the remaining stages for the passage through the Senate of six remaining petroleum
Bills being put in one motion at each stage and the consideration of all such Bills together in the Committee of the Whole and to enable the reading of the short titles only on each Order for the reading of the Bills.
– I do not want to speak at a subsequent stage so it may be convenient for me to say now that the Opposition is utterly opposed to all these Bills for the reasons that have already been advanced. They are part of the package which has been put before us. We will vote against them but it will be unnecessary to divide the Senate again. The numbers are apparent. It will be sufficient for us to indicate our complete opposition on the voices.
Question resolved in the affirmative.
page 2315
Motion (by Senator Henty) agreed to:
That the Bills be now read a second time.
Bills read a second time, and passed through their remaining stages without amendment or debate.
page 2315
Reference to Select Committee
– by leave - I move:
That, with respect to legislation relating to the exploration for, and the exploitation of, the petroleum resources of the continental shelf of Australia and of certain Territories of the Commonwealth and of certain other submerged land, a Select Committee of the Senate be appointed to inquire into and report upon:
It is apparent from the divisions that have been registered in the Senate yesterday and today that a grave responsibility rests upon every senator in this chamber. I remind myself of the lines:
O! it is excellent
To have a giant’s strength, but it is tyrannous To use it like a giant.
Therefore, recognising the immensity of the interests involved in this legislation and the fact that it stems not only from the Federal Government but also from all six State governments in unanimity, and recognising that urgency is required with regard to these Bills, I have indicated that I have deferred my judgment upon the validity of the legislation in substance and in detail. Instead, I have adopted the course of asking the Senate, now that the legislation has been enacted by the Parliament, to set up a
Select Committee because I believe that by that means the Senate can discharge its proper role of review.
I ask the Senate to be reminded that this is the first time since I have been in this chamber that a Bill has been referred in this way to a Select Committee. The importance of these measures should be sufficient indication of the magnitude of the work that any Committee the Senate sets up will have to discharge. That notwithstanding, having regard to the national interests that have been put before us by Mr Wentworth, the honourable member for Mackellar in another place, I feel it the bounden duty of our Senate to undertake this task. Hard work is before us, but even though the legislation has been passed 1 believe that it is only by hard work that parliamentarians can demand a say in the formulation of policy. It is in that spirit that I ask the Senate to constitute this Select Committee. Let us see whether, after a full examination of the legislation, we can produce a report which will contribute to the national interest in this immense industry.
– Order! Is the motion seconded?
– Yes.
– Although Senator Wright gave notice of his motion to the Senate this morning, he forwarded me a copy of it last night. The Opposition would like to consider this matter further tomorrow morning. There is the possibility of agreement; there is the possibility of disagreement; there is the possibility of proposed amendments. For that reason I would ask the Senate not to complete consideration of the proposal tonight. As we are certain to be here tomorrow. 1 ask leave to continue my remarks then.
Leave granted; debate adjourned.
page 2316
Debate resumed from 2 November (vide page 2048), on motion by Senator Gorton:
That the Bill be now read a second time.
– This Bill is one of three which have resulted from the wide area of agreement which was reached by the parties to the National Stevedoring Industry Conference, the general report of which was published in April 1967. In his second reading speech the Minister said:
It might truly be said that it was because of the 1965 legislation that it is now possible to place before the Semite these three present measures.
We want to put on record again that we opposed the 1965 legislation and supported the call of the President of the Australian Council of Trade Unions for an all-in conference of the parties concerned. That conference has since eventuated. Although 1 do not want to belittle in any way the commendation by the Minister at the beginning of his remarks of all who participated in the conference, I find as I read the report confirmation of the many proposals put forward by the Australian Council of Trade Unions over many years. For example, the redundancy scheme with its pattern of transfer allowances is a measure which is now in a practical form and which is long overdue. This is not to say that the provisions will meet the situation for all time. As is stated in paragraph 114 of the report, this scheme is intended to operate for 5 years. The Waterside Workers Federation at the end of that time wishes to reconsider the position of men recruited into the industry after 1st July 1967.
Another very important matter is the approach of the conference to the question of permanent employment which we have been urging since I960 or 1961. Members of the Opposition in both Houses have suggested that the casual nature of the employment has been the cause of many of the troubles which have developed over the years. So it is with some gratification that we have read in paragraph 13 of the report that the conference has recognised that many of the troubles which have dogged the industry in the past have arisen from the casual nature of waterfront employment. However, as I have mentioned, although we supported the call by the ACTU in 1965 for the sort of conference which has now successfully taken place, we must recognise that it was not until shortly after the legislation was passed that the then Prime Minister decided to meet the request of the ACTU, as a result of which we had the conference meeting. The attention of all parties concerned was directed to what was proposed for the waterfront. There is no question that the report is a fine one and that the recommendations are constructive. Fortunately, it meets the requirements of all sections of the industry. I noticed that the Minister referred in his statement to the unparalleled tranquility in the industry at present. He said in his second reading speech:
From a situation where the monthly average of man hours lost by industrial disputes was 1 17,000 - from January 1950 to September 1965 inclusive - over the 2 year period from October 1965, monthly losses have averaged, in round terms, 5,000 man hours.
Beyond the most sanguine hopes of many, the national conference produced agreement in principle over the whole range of matters before it . . .
He mentioned later the question of reorganisation. We know that the reorganisation of the industry has been occasioned largely by the changed needs of the industry. We have seen the march of mechanisation. We now have trends towards containerisation, the impact of which has resulted in new techniques being developed. There are new requirements in the industry. There are requirements for more skills among the work force. There are new methods of palletising, pre-slinging and handling unitised cargo containers. There are newly developed Skandia ships and other specialised ships, including container vessels which need more sophisticated shore equipment. Ship and shore cranes and other associated equipment are replacing slower and more hazardous means of shifting and unloading cargo. Developing with these new mechanical devices is the requirement of highly skilled operations which is now being met by waterfront labour. The Waterside Workers Federation has suffered in some respects as a result of these changes because fewer people are now employed in the ports and fewer ports are operating. In a recent publication the Federation said:
The number of waterside workers on the main register with the ASIB in June 1950 was 24,530. Whilst this was not the peak of the registrations (these were 26,286 in 1956), the fact is that registrations as of December 31, 1966, bad dropped to 19,225, plus permanents.
As perhaps an even better guide than numbers of registrations, the average number of waterside workers in all Australian ports employed daily in the year 1949-50 was 17,210.5; in the year ended 30.6.1956 this had risen to 17,914.5; and by 31.12.1966 it had dropped to 12,814.6.
So we have come to expect and to recognise what is a most urgent and basic requirement today, that is, permanent employment. Permanent employment becomes the basis of reorganisation. This will be introduced first in the six major ports of Sydney, Melbourne, Brisbane, Adelaide, Fremantle and Port Kembla, in those ports three-quarters of the total registered waterside workers are employed. In those places weekly hiring will replace the existing casual system, lt is recognised that Australia has to keep pace with the great changes which have long since been in operation in the great ports of the world. We recognise this. But whilst we are making these changes we must not forget that the workers in the industry must receive a progressively increased share as efficiency grows. There has been some mention of the need to develop better relationships within the industry. 1 should like to point out that there are plenty of examples of good relationships. Previous reports of the Australian Stevedoring Industry Authority have set out that in ali ports industrial relations committees have worked well. Regard must be had also for the agreement, to which the union was a party and which was organised mainly through the ACTU. New roll-on roll-off shipping and other modernised methods have been the basis of agreements contracted between the union and the employers. They involve very complex problems of demarcation. These are very good examples of the co-operation that has taken place in the industry in recent years. No doubt with the advances which have been made during the conference we can expect this sort of .co-operation to be extended. All that we of the Opposition hope for is that due regard will be paid to the part played by the workers and that there will be compensation for the great technical changes which have taken place in the industry.
I should like to refer also to pensions which were the second most important feature of the conference. This also relates to a scheme which has been proposed by the Opposition for a long time and which has been an aim of the trade union movement. Based on a sliding scale of contribution by each member according to age of entry, contributions will range from about 65c to about $1.70 per week. Part I of the scheme will apply to all registered workers in ‘A’ class ports. Members can elect to join the scheme. The retirement age will be 69 years for those who are in the industry at the time that permanent employment begins. The retirement age will be reduced to 68 years 1 year later, reduced further to 67 years 1 year later again and reduced to 65 years after a further year. In the case of total disablement or death where the waterside worker leaves dependants, the full benefit will be paid without any deduction being taken from it. The benefits under the second part of the pensions scheme will be paid entirely by the employers to the employees who have subscribed to part I of the scheme, to which I have referred. These payments will include $50 for each year of service in the industry since 1942 and with the commencement of the scheme payment will be made in the case of death, total disablement, redundancy or retirement.
A third and quite vital feature of the arrangements is that set out in the report, which I do not propose to read. The redundancy scheme is set out in Appendix G, which honourable senators have probably read. They have probably surveyed for themselves the very comprehensive approach of the conference to this problem. The appendix gives the precise formula which has been agreed to and which will be followed. I agree with the remarks made by the Leader of the Government at the conclusion of his second reading speech when he said:
If we lived in a perfect world a better scheme might have been developed. But when account is taken of the considerations to which I have referred, I believe that the greatest credit is duc to all who participated in the Conference. . . .
He then made particular reference to Mr Woodward, the chairman of the conference. J should like to add that in my opinion there is no doubt that Mr Woodward as chairman of the conference had the full endorsement of the union, but 1 have no doubt that we must give great credit also to the ACTU and the Waterside Workers Federation for their support of the proposals. I have in mind the recent declaration by the All Ports Conference of the Waterside Workers Federation. The members of this Conference as much as anybody else want these proposals to be adopted. This is what they said:
We therefore instruct Federal Office to proceed with the implementation of the National Stevedoring Industry Conference proposals with the utmost speed so that their efforts and the efforts of the National Stevedoring Industry Conference oan be turned as a matter of urgency to examining means of countering the effects of technological change and reduced work opportunities in affected ports, introducing permanent employment where, practicable and improving conditions to acceptable levels where not.
I want to refer briefly to another situation which causes the Opposition some concern. This matter was also mentioned in another place. I refer to the position resulting from the implementation of the proposals that we are discussing, as a result of which some 130 clerks employed by the ASIA are to be dismissed. Thirty of those employees will be retrenched in Sydney before the end of the month. We think that they should be given some compensation. The Opposition in another place advanced amendments to meet this situation. Apart from the factors of severance pay and the other matters to which I have referred, all employees who arc retrenched and who accept employment with the shipping interests will suffer a serious reduction in long service leave rights and the benefits of proposed pension schemes. The pension schemes under which they will be employed by the shipping interests will be on the basis of the employee and employer each subscribing 5% of salary and the scheme will be operated through a life assurance policy, which will be less beneficial than the arrangement they would have elsewhere. We are supporting the proposition for the payment of compensation to employees who have been led to believe that they could expect a lifetime of employment with the ASIA, subject to their good behaviour. Whilst it is true that in Sydney some of the clerks who will be retrenched are to be absorbed by the shipping interests. I suggest that they will be absorbed under worse conditions than at present apply.
With those brief comments 1 indicate that we certainly support what is proposed in the legislation. We think there is every good reason for the Government to canvass most actively the sort of problem which arises incidental to the one which has been solved. We recognise that the Waterside Workers Federation has diligently attended to its tasks as required by the conference. It was a most satisfactory conference. The reorganisation of the waterfront should lead to continued stability. These are good objectives, but because requirements of industry in these days entail that the work force shall be more productive, more skilled and more responsible, we believe that the employees should get something from the reorganisations. For the reasons I have given we support the legislation.
– I rise to voice my hope that the satisfaction that has been expressed with the proposals contained in this Bill will be merited by future performance. Anybody whose experience extends back to the Basten report, the Tait report, the vexed issues of the 1956 legislation and the vicissitudes of waterfront working activities since that time cannot but feel a measure of great satisfaction that the National Stevedoring Industry Conference was presided over so skilfully by Mr Woodward and that within the comparatively short space of 18 months it has produced an agreement. The factors with regard to that matter have been noted in the brief and graphic report of the Conference, which is in marked contrast to the voluminius and complex reports that preceded it.
The outstanding feature of the agreement was the recognition that the waterfront performance had been dogged by the failure of direct employer-employee relations. That, coupled with all the difficulties in operating a system of casual employment, had bedevilled performance. It is recognised that we have a scheme of permanent employment which involves weekly hire for all regular waterside workers in major ports; the employees being employed in some instances by operational stevedores, and the remainder by a holding company specially created for this purpose. We are told that the arrangement has inbuilt safeguards to ensure that there are, generally, comparable earnings as between the employees of the holding company and those of the operational stevedores.
Apart from the permanent employment question to which I have referred, the two features of this scheme that I wish to mention briefly are the pension scheme and the provision with regard to wages and conditions. The pension scheme provides for a retirement age of 65 years. The basic retirement benefit will be $240 for each full year of membership of the scheme. A guaranteed minimum is provided for persons who will not have completed the full period of employment in connection with this scheme. The real effect of the scheme can be summed up by saying that the lump sum benefit in the case of the average worker who spends most of his life in the industry will be of the order of $8,000. This will be capable of conversion at the option of the retiring member to provide a pension of about $14 a week or a lesser amount with provision for a reversionary widow’s pension. The scheme is being financed on a 60/40 basis of contributions from employer and employee.
The question of wages and conditions is of importance because this scheme provides that the wages shall be on a special basis. This immediately prompts the query: How will this reconcile with the general wage structure of the country. The wage of a permanent employee for a 40-hour week is to be $49.50. It should be understood that it is expressly stated in the Conference proposals that that permanent employment scheme will operate for a period of 5 years. But there is no such period in respect of which the wage standard is to operate. It will be subject to review as the result of decisions in the national wage cases, calling for variations in industry generally. The Waterside Workers Federation can also make wage claims based on changed circumstances in the stevedoring industry itself. So nobody should depart from this chamber with any idea that there is stability and the guaranteed acceptance of this wage rate for any period. As soon as this scheme comes into operation the Federation is free to assert its claim according to its historic militancy and according to all the opportunities that the industry’s wage structure affords.
But without any such urgings, 1 note, the cost of this scheme has been referred to in rather soft tones in a hesitating manner. No-one whom I have contacted will take the responsibility for making a firm estimate of the cost. It is said to be impossible to make a responsible estimate of the cost of this scheme. We have been told that the scheme is to be accompanied by a proposal to increase the present special wages tax on the waterfront. We are told that, in addition to the wage of $49.50 which the employer now pays, the sum of $17.55 per man week is to be levied by way of stevedoring industry charge, lt has been estimated that the expense that will bc imposed by that exaction over the period up to 30th June 1970 will be about $48m. That impost upon our trade will mean that freights wilt be increased and I suggest that no Minister with any responsibility in any government can contemplate the imposition of such a charge upon trade without also considering its effect upon individual industries and making some concessions to enable industries in distress to bear the extremely high exaction. 1 am here with a special responsibility for a trade that is of some importance to the Australian economy. I refer to the fresh fruit trade from the southern and northern ports of Tasmania. The freight on refrigerated fresh fruit to Europe is already prohibitive. Compared with freights in other trades, it is especially excessive. The Government must face up to the threat inherent in the incorporation of this exaction into shipping costs for the fresh fruit trade. There will have to be some contribution to the industry to enable it to continue bearing this extraordinary increase in shipping costs. I do not intend to keep the Senate any longer in this debate. If this proposal brings purposeful performance on the waterfront, if it develops skills which are capable of handling the new mechanised equipment on the waterfront, if it will resolve the problem of discrimination between workers, and if it will produce the discipline that is necessary to maintain continuity of performance, the additional cost, may be justified. I sincerely hope that it will be. But, for the immediate few years the cost will be so steep that the Government will have to give special consideration to those industries whose survival is threatened. With that reservation. I support the Bill.
– in reply - It is pleasing to hear that, for the most part, the Opposition agrees that this is an advance towards more efficiency on the waterfront and more rewards for those who work on the waterfront. I think I can do no more than repeat the words that were spoken in the second reading speech: It is a matter of the greatest importance and indeed satisfaction that all concerned in the industry, and in the Conference, faced the situation realistically - the situation being the requirement to make a transfer from casual hiring to permanent employment - and were prepared to work out arrangements that would cope with the clearly emerging problems. This, the industry has done in relation to the members of the Waterside Workers Federation, the men actually working on the wharves. They and their leaders have agreed to alter what has been a long standing tradition on the waterfront. I think that credit is due to them for seeing that this alteration is to the benefit of themselves, as I believe it will be, and of the nation, as I believe it will be.
The only worry that has been expressed on behalf of the Opposition in this matter is that the members of the staff of the Australian Stevedoring Industry Authority are not covered by the same arrangements as to retrenchment as are applied to the members of the Waterside Workers Federation. I point out that there are some differences between the traditions of employment and the terms of employment of members of the Waterside Workers Federation and those of the staff of the ASIA. For example, the members of the staff of the ASIA have been in permanent employment whereas the members of the Waterside Workers Federation have not. Again, the members of the Waterside Workers Federation have had these traditional methods of retrenchment and of having to be re-hired when the first opportunity occurred after retrenchment. This, in the long term, would have led to an ageing labour force without any new people coming in. The members of the Waterside Workers Federation have broken with those traditions whereas the members of the staff of the ASIA have been operating under conditions different from those which applied to the members of the Federation.
The members of the staff of the ASIA are Crown employees; they are permanent employees. While I understand the distress which the Opposition may voice at the fact that the provisions which apply to the members of the Waterside Workers Federation do not apply to the members of the staff of ASIA, I would point out that the members of the staff of the ASIA are but one section of Crown employees. The problem of what is to be done with such people can only be solved by considering the whole field of Crown employees. I am prepared lo say that the Government will press forward the examination, which has already begun, of the superannuation and furlough benefits to apply on retrenchment to all Crown employees, of whom the members of the staff of the ASIA would be some, with the intention of introducing legislation in the autumn session. Any legislation which is introduced will apply retrospectively to those members of the staff of the ASIA involved in redundancy as a consequence of the introduction of the permanent employment scheme. What the terms of that legislation will be, I cannot, of course, say :it this moment.
– lt will apply retrospectively to when?
– To whatever the relevant date is. I think this has been understood. 1 do not know what the exact date is at the moment, but 1 think it has been worked out. What the exact terms of such legislation will be I cannot, of course, say. I understand that it would be claimed that notwithstanding that the Government would be doing this, it would not prevent the members of the unions concerned from taking such action as they normally might take to gain whatever improvements in their benefits they might want.
Debate interrupted.
page 2321
The PRESIDENT (Senator the Hon. Sir Alister McMullin) - Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question:
That the Senate do now adjourn.
Question resolved in the negative.
page 2321
Debate resumed.
– All I wish to add is that the sort of action to which I have referred can always be taken. There is a recognition on all sides that the Australian Council of Trade Unions has agreed with the specific arrangements that have been made on behalf of the waterside workers.
The ACTU has agreed on behalf of the trade union movement that the specific arrangement for settling the problem in the waterfront industry will not be used as a bargaining point or lever in other fields where redundancy may occur. But this still leaves all other ordinary avenues open.
Question resolved in the affirmative.
Bill read a second time.
In Committee
The Bill.
– 1 would like to say in the light of what has been said by the Minister for Education and Science (Senator Gorton), in winding up the second reading debate, that the Opposition will not introduce any amendments in the Committee stage. I refer to the statement by the Minister that the Government will press forward its examination of the benefits in relation to superannuation and furlough to apply on retrenchment with the intention of introducing legislation in the autumn session, He also said that any legislation will apply retroactively to the staff of the Australian Stevedoring Industry Authority involved in redundancy as a consequence of the introduction of the permanent employment scheme. I would add that it is understood that this arrangement in no way inhibits the ACTU or the Federated Clerks Union of Australia from pursuing their claims.
Bill agreed to.
Bill reported without amendment; report adopted.
Bill (on motion by Senator Gorton) read a third time.
page 2321
Consideration resumed from 2 November (vide page 2048), on motion by Senator Gorton:
That the Bill be now read a second time.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without requests or debate.
page 2322
Consideration resumed from 2 November (vide page 2048), on motion by Senator Gorton:
That the Bill be now read a second time.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
page 2322
Motion (by Senator Gorton) proposed:
That the Senate do now adjourn.
– In the dying hours of the Senate this evening I wish to make some comments on an aspect of overseas trade. I do so because I am prompted to a large extent by a remark that Senator Webster made earlier this evening when he mentioned the role of the Minister for Trade and Industry (Mr McEwen) who is the Leader of the Australian Country Party in relation to the ramifications of overseas trade. I want to refer briefly to some misgivings that are held by some local X-ray apparatus manufacturers who are specifically in the industrial irradiating equipment field. The fact of the matter is that some strenuous efforts have been made by certain overseas interests - I have in mind Atomic Energy of Canada Ltd, Ottawa and Ontario, in this specific field. Whatever has happened in the last few days in the lengthy discussions we have had about national interests, I think we will appreciate that this Parliament will shortly be going into recess with the date of the autumn session uncertain. With all due respect to Tariff Board inquiries, I wish to ask at what stage the Government abdicates final responsibility in relation to tariffs.
I know the fears that are held by some local manufacturers. I particularly refer to Ray-Guard Handling Equipment of New South Wales. There is a fear that some of these big overseas industrial giants coming in at this stage could seriously affect a specialised industry. It is a rather minute industrial field. But in the next 5 years, with reasonable protection, the industry could stand on its feet. With some of our other industries becoming obsolete it is essential that this industry be given ample nutrition. As an illustration, a 1.0 curie cobalt 60 remote controlled unit was manufactured by the Chicago Bridge Lennox Pty Ltd and is being used for the Queensland Alumina Project at Gladstone.
I take the opportunity of raising this tonight because with all due respect to subordinate authorities, whether they be Tariff Boards or anything else, there is a final responsibility on governments. If Parliament were to meet in a month or so there would probably be certain redress available. I want to take this opportunity of impressing upon the Government that consideration should be given to some of these specialised industries that have only a very small work force. The owners of the small firm I refer to are men in the 30 to 40 years of age group and are in a very vital stage of their career. Honourable senators know that the Opposition has given credit to the Minister for Trade and Industry for some of his utterances on Australian industry. Whatever the outcome of the Tariff Board inquiry concerned, I ask the Government to evaluate any decision in the light of the particular wants and the expansion of those relatively new Australian organisations in the industrial irradiating equipment field.
I earnestly ask of the Minister for Education and Science (Senator Gorton) who is at the table and is a member of the Cabinet that if this matter requires consideration at the top level before the next session of Parliament the claims of this industry will be given due weight. I hope that in view of the sentiments that have been expressed, whatever the difference in detail of the approach of senators on each side of the chamber to national questions the Minister will look at this matter in the light of the nation’s good. One might get into a difficult argument about whether, when submissions are made to the Tariff Board, that should be the final battle ground. I was struck by a statement of the late Nye Bevan. From the time when he left the coal pits of Wales he was always looking for the cockpit of power. First of all, he went on to a local council but he did not find’ power there. Then he got into the higher realms of politics but when he got into the Cabinet room, he said, he did not know whether full power existed even there. As a result of my ventilating this matter quite deferentially in the Senate now, Ministers will be aware of the feelings of those in a small sector of the X-ray apparatus industry which in many fields, particularly in the industrial irradiating field, is only in its infancy.
– I think the honourable senator is referring to Tariff Board Circular No. 166/67.
– That is so.
-I point out that it is merely a notificationfrom the Board to the various interested parties that this is one of the requests that will be presented to the Board when the matter is being heard. This document is merely an information paper. What comes eventually from the Tariff Board, of course, is a decision made after hearing various types of representation, some seeking higher duties, some seeking lower duties, and some seeking an eradica tion of duties, depending upon where the interests lie. These people endeavour to put up cases for their own particular purposes. The Tariff Board listens to representations and reports on industries as it sees them. At this stage I can say no more than when the report comes from the Tariff Board - it may not be for a considerable time - irrespective of whether or not the Parliament is sitting, eventually it has to be considered by the Parliament. So the honourable senator will get his opportunity in the Parliament to raise any aspect even if the Tariff Board deals with the matters when the Parliament is not in session. The matter will not be determined for some time yet. I shall convey the honourable senator’s remarks to the Minister for Trade and Industry (Mr McEwen) and ask him to keep them before him when the matter of the adoption or otherwise of the Tariff Board’s report is considered by the Government.
Question resolved in the affirmative.
Senate adjourned at 11.14 p.m.
Cite as: Australia, Senate, Debates, 7 November 1967, viewed 22 October 2017, <http://historichansard.net/senate/1967/19671107_senate_26_s36/>.