House of Representatives
22 May 1940

15th Parliament · 2nd Session

Mr. Speaker (Hon.G. J. Bell) took the chair at 3 p.m., and readprayers.

page 1082


Prime Minister · Kooyong · UAP

byleave-Honorable members are acquainted with the latest developments in Europe. As British people, we have reached a stage of emergency without precedent in the history of the Empire. There must be no ambiguity about the attitude of Australia. We pledge continued and lasting support to Great Britain.We shall defend ourselves and the Empire with everything that we are, or have.

I am to-day announcing a series of most important decisions. I make it clear, however, that these decisions possess no sort of finality. The Government and the people of Australia will set no limits to their efforts. Whatever is industrially practicable, we will do; whatever our resources of man-power can produce, we shall produce. There need be no thought in any other country that Australia is prepared to play a passive part in the greatest struggle in the history of our Empire. That Great Britain will defend itself with success we cannot, and do not, doubt; that France will rally in the next few days, and ultimately defeat the invader, we do not doubt; that Australia is prepared, as quickly as possible, to play its part in a world war, and to defend itself, if necessary, to the very limits of endurance, we proudly assert.

We must be prepared to sink all differences. We must be prepared to match the enemy’s courage, with greater courage; his equipment, with better equipment ; his self-sacrificing organization, with better organization; his will to victory, with a greater will to victory - greater because it has its roots in honest soil and is nourished by a good cause.

What I am going to say to you to-day will indicate that on behalf of the Government I am making a great and urgent appeal that petty differences should bo abolished, that the making of. clever debating points and partisan strife should end. We need the full co-operation of State governments; we need the active co-operation of the great trade union movement; we need the willingness of great employers of labour to adjust themselves and their affairs to war industries and war needs; we need the utmost enthusiasm on the part of Australian men in order that what we are to do shall be done promptly. “He gives twice who gives quickly” runs the old proverb To-day we may make it read - “ He serves twice who serves quickly “.

The responsibility for the conduct of the war belongs to theCommonwealth Government. It is a heavy responsibility which cannot be abdicated. At the same time, matters arise from time to time in which a frank exchange of views with the Premiers ofthe States may well lead to more effective co-operation in the field of defence, and a better mobilization of our financial, including our borrowing, resources for the winning of the war. I therefore propose to ask the Premiers of the States to meet me in consultation at regular intervals, say, every month or six weeks, as may be arranged. These regular meetings, which will be purely between Prime Minister and Premiers, should, I think, be productive of great good, even though the purpose of the meetings will naturally be consultative rather than executive.

There has been a good deal of criticism of our munitions production. Doubtless, it proceeds from a natural desire to achieve the greatest possible defence provision. Atthe same time, it is fair to say that first-class work has been done in circumstances of great pressure. Honorable members will recall that my first act upon assuming office was to constitute a Supply Department as a separate entity and to place it under the control of a separate minister. That department and its successive ministers have done good work.

Nevertheless, the Government has decided to make drastic changes, in order to secure an even greater acceleration of the programme in the immediate future. This involves no real criticism of the existing organization, and, in particular, of the existing Controller-General, but is merely another proof of thefact that an instrument forged in time of peace may prove to be inadequate in time of war, and particularly in time of crisis during war. It is, Ithink, true to say that our output of guns, small arms, ammunition and clothing, and of equipment generally, governs our wholewar effort. It certainly conditions the number of men we can raise and train. Having regard to the events of the last ten days, it has a most important bearing upon our capacity to defend ourselves and to send fully equipped troops to fight in overseas theatres of war.

In the view of the Government it is necessary to adopt new and unofficial and drastic methods of increasing production. We must call into aid first-class men of business, who are accustomed to securing production on a large scale, and use them not merely as advisers or consultants but as responsible controllers and executive officers. With this object, the Government has decided to re-organize the work of munitions supply in Australia by appointing a Director-General of Munitions Supply who will be freed from all hampering regulations and given the utmost authority not only to get things done with the existing government machinery, but also to press into service civil factories, or all, or any, of the mechanical resources of those factories. That this may well constitute a wholesale invasion of the settled routine of industrial production, I have no doubt, but it is preferable to a wholesale invasion of the British Empire, and of Australia in particular. The Director-General will have direct contact with myself, as the head of theWar Cabinet, and will attend meetings of the War Cabinet in the same way as do the chiefs of staff. He will be able to subdivide the work of munitions production. We have, for example, explosives and ammunition factories which might well makeone group; small arms factories, including not only small arms but also the Vickers and Bren gun factories, whirl might make a second group ; and we have the ordnance factory, which is principally concerned with the production of field and anti-aircraft artillery. The Director-General will immediately confer with the Government as to the possibility of putting in charge of one or more of those groups some prominent industrialist of energy and drive, with instructions that every programme must be accelerated, and that production must be increased by every means humanly possible.

I am glad to be able to inform honorable members that we have securedthe whole-time services, as Director-General of Munitions Supply, of Mr. Essington Lewis, at present managing director of the Broken Hill Proprietary Company Limited. He has an unequalled reputation in Australia as a man of skill and determination with a capacity for getting great things well done. He will not fail for any want of backing by the Government.

Meanwhile, on the recommendation of the Defence Committee, large additional expenditure has been approved for further plant and equipment and reserves of material for munitions production. In many instances, and where possible, machine tools will be issued to industry in order to enable it to play a more effective part in the manufacture of muni tions. The allocation to the United Kingdom of a larger output of various types of munitions from the Australian factories has also been authorized.

A third division of the Australian Imperial Force is to be raised for service abroad. That means that the Australian Army Corps which was envisaged only two months ago will be increased from an army corps of two divisions to an army corps of three divisions, each troop of which will itself be numerically greater than a division. Should the situation so deteriorate as to require the temporary retention of this new division or of any other expeditionary forces in Australia, such forces will be a valuable adjunct to the Militia Forces for local defence. Indeed,having regard to the Empire air training scheme and the presence in camp of many thousands of members of the Australian Imperial Force and of militiamen,it can be said truly that the local defences of Australia have never been as strong at any previous time in our history.

Recruiting for the Air Force has been proceeding under the guidance of a director, Sir Donald Cameron, who has had the help of powerful committees, and it is meeting with a very satisfactory degree of success. On the Army side, recruiting for the Seventh Division has received a great impetus, though the response from the Militia has been disappointing. But time is of the essence of the contract. It has been decided, therefore, to establish a special army recruiting organization under the central direction of Brigadier-General H. W. Lloyd, C.B., C.M.G., D.S.O., whose qualifications will, I am sure, at once commend themselves to honorable members. The Government invites all lord mayors and mayors of municipalities and presidents of shire councils to establish local committees in co-operation with the director. What we need and need most urgently is an ample and steady flow of recruits so that the training of various units can begin promptly and proceed continuously, to the end that our contribution to the defence of the Empire, wherever and whenever it is to be made, may be made swiftly and effectively.

Following the consideration of proposals designed to increase the Australian contribution to the Empire’s naval war measures, the Government has approved of the following: -

  1. That the ten local defence vessels now being constructed in Australia for the Admiralty shall be manned by theRoyal Australian Navy, in addition to the seven local defence vessels on order for the Commonwealth Government;
  2. That the personnel of His Majesty’s Australian destroyers now abroad should be made available, augmented as necessary, to man new destroyers, the Commonwealth Government continuing to maintain the old Australian destroyers, manned by Royal Australian Naval personnel; and
  3. That anti-submarine officers and ratings shall be entered and trained for service in the Royal Navy, up to the maximum numbers possible, having regard to the training facilities available.

The additional personnel to be raised will

In mentioning these numbers, I should, perhaps, point out to honorable members that the extension proposed, though it may seem numerically small, represents avery substantial proportion of the total numbers of the Royal Australian Navy before war broke out. It also represents the maximum expansion in personnel which the Naval Board considers to be practicable within the next twelve months.

The Royal Australian Navy possesses sufficient minesweeping units to clear moored mines from Australian waters at short notice. The magnetic mine is, however, a new and very effective weapon. the possible use of which in Australian waters cannot be excluded. The Admiralty has employed all of its resources ina search for means of combating it. Satisfactory methods of sweeping have been evolved and the details have been made available to the Naval Board. In view of the possibility of magnetic mines being laid in Australian waters, steps have been taken to prepare and perfect an organization and equipmentcapable of dealing with them. The demagnetizing of ships was authorized some time ago. An additional boom defence vessel, costing £145,000 and making four in all, has been approved for the Darwin defences.

A dry dock of a larger size than any in Australia has become an important strategic consideration since the size of capital ships has increased so greatly. I do not need to elaborate the great value to Australia of a dock capable of accommodating not only the largest warships but also merchant ships of great tonnage. The possession of such a dock would make Australia a fit base for a powerful fleet and would, in certain contingencies, enable naval operations to be conducted in Australian waters without the necessity for ships to travel 4,000 miles to Singapore for purposes of refit or repair.

In February of last year the Government then in office considered the. matter and decided to obtain the services of an expert consulting engineer to visit Australia and report on the most suitable locality for such a dock. Accordingy, Sir Leopold Savile, of the world-famous firm of Alexander Gibb & Partners, visited Australia, and his report has recently been received. I shall to-day lay the report upon the Table of the House. It will indicate to honorable members that many alternative sites in various parts of Australia were carefully examined and that, in the final result, after a special consideration of two sites at Sydney and one at Adelaide, Sir Leopold Savile definitely recommended a site at Sydney between Garden Island and Potts Point, below the bridge. The other site at Sydney which was considered was above the bridge. It is estimated that three years will be occupied in the construction of the dock. The estimated cost of the dock on the selected site is, in Australian currency, £2,997,000, compared with £3,039,000 for the other Sydney site, and £3,839,000 for the Adelaide site.

The Government has decided to accept the recommendation, and the work will be put in hand at the earliest possible moment. The dock will have a total length from the inner caisson of 1,050 feet, a width of entrance at the coping level of 137 feet, and a depth of water over the keel blocks at mean high water springtide of 45 feet. The expenditure of approximately £3,000,000 is subdivided as follows

It is estimated that an average of 1,600 unskilled labourers will be employed for two years, with 2,500 men during the concluding twelve months of the work, and that from 250 to 500 skilled men will be needed. These totals do not include the many men who will be indirectly employed m providing such materials as cement and steel.

As I indicated in the House a few days ago, the Government attaches great importance, for the avoidance of unnecessary industrial disputes and the securing of a full joint effort in relation to its war programme, to the constitution of a thoroughly representative trade unions advisory panel, with which it could confer regularly, and which, given a co-operative spirit, could give valuable advice at the right time.

After consultation with the Leader of the Opposition (Mr. Curtin), I have communicated with the secretary of -the Australasian Council of Trade Unions, and expect shortly to confer with that body in Canberra on this matter.

Grossly unfair and ill-informed statements are being made in some quarters to the effect that there are serious delays in the Empire air scheme, and that there is a very large and presumably unnecessary waiting li3t of applicants. I regret that such statements should be made. They are without foundation, and they unjusti- fiably disturb the public mind at a time when our real difficulties are great enough, and when, therefore, the creation of imaginary difficulties is dangerous.

The facts are that at Ottawa my colleague, the Minister for Air (Mr. Fairbairn), undertook to start _ our share of the Empire air training scheme two months earlier than was suggested . in the original proposal put forward by the United Kingdom Air Mission. . The Royal Australian Air Force has started its accelerated schedule of training to the day, and there has been absolutely no delay.

It must be emphasized that the Empire air training scheme is not a proposal to train an unlimited number of air crews at random, but is a scheme carefully synchronized to produce air crews to keep pace with British and American aircraft production, and .to produce them by an ordered process of elementary, intermediate and advanced training in a series of training schools. Honorable members will scarcely need to be told that the present events in Europe, are not calculated to facilitate the delivery of aircraft from the United Kingdom; but we have been in urgent communication with the British Government, and our most recent cables indicate that deliveries will come to hand fast enough for our purposes. In case, however, delays occur in such deliveries, the possibility of doing additional training on Wirraways, or of obtaining other aircraft, is being carefully investigated. The point that I want to emphasize is that the scheme is a carefully planned programme, and that it is completely undesirable that any particular part of the programme should get out of step with the whole. If men are to be fitted into this programme of progressive training, all of those who are recruited at any one time cannot immediately be trained, but in order that an adequate supply of trainees may be maintained over a period it is obviously necessary that recruiting should constantly run ahead of immediate requirements. This means that a waiting list is inevitable.

I urge that enthusiasm should be accompanied by patience, and that those young men who are suited for and desirous of air service, and who have offered themselves, should not become discouraged and drift off into other units.

Finally, letme say that, in respect of all of these matters, we want help. I appeal for that help.I appeal not only for loyalty to our country, but also for generous loyalty to the Government, whose grave, whose terrible responsibility it is, to endeavour to guide the people of this nation at its time of greatest possible trial and testing.

Mr Curtin:

– I ask the right honorable gentleman if he will table the statement he has just read, move that it be printed, consent to an adjournment of the debate until, say, the next day of sitting, and then allow tie subject-matter to be considered by the House ? I ask him if he will - I am sure that he will - readily recognize the importance of the Parliament deliberating upon what has just been said.


– I agree with that proposal. I lay on the table the following paper: -

Australia’s Increased War Effort - Ministerial Statement, and move -

That the paper be printed .

Debate (on motion by Mr.Curtin) adjourned.

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– In view of the situation which confronts this country at the moment, does the Prime Minister consider it desirable that this Parliament should in any circumstances go into recess? Does the right honorable gentleman not think that it is absolutely essential that the Parliament should remain in session, even though it may meet on only one day or two days a week, in order that the opportunity may be afforded to watch developments very closely?


– I can say nothing at present about the possibility of the House adjourning at any particular date in the future, but I do say quite frankly to the honorable gentleman and to all other honorable members - and I say it with a very acute experience of such matters - that in some circumstances it becomes a perfect nightmare to have to proceed with the urgent and important business of administration in a time of war like the present, and concurrently to attend regularly to a series of routine parliamentary duties. Whilst I attach the greatest possible importance to parliamentary discussion, which I think it will be admitted I have not stifled-

Mr Beasley:

– But the House of Commons remains in session.


– Fortunately, the House of Commons has a greater reserve of Ministers than has this Parliament. The British Cabinet, in point of number, is a far greater Cabinet than is the Australian Cabinet. British Ministers have parliamentary under-secretaries, parliamentary private secretaries, and a host of under-ministers - if I may so describe them - who can carry on the business in Parliament. We are not so fortunately placed.

Mr Beasley:

– There is no need to adhere to a system that is not suitable.


– If the honorable member could provide me with a larger Ministry, I should be delighted. Meanwhile, I simply say with the utmost frankness that the making of decisions, the study of problems before those decisions are made, and seeing that they are given effect by the swiftest possible means, today represent the prime responsibility of the Government, and we cannot endeavour to discharge that responsibility to the best of our ability, nor can we reconcile it as best we may, by debate in Parliament. I could not undertake to keep Parliament continuously in session because, candidly, I do not believe that that would serve any public function which would provide adequate compensation for the interference that it would produce with the urgent business of administration.

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Bill brought up by Mr. Menzies, and read a first time.

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Second Reading

Treasurer · Warringah · UAP

– I move -

That the bill be now read a second time.

The bill is to approve the sugar agreement made on the 18th April, 1940. between the Commonwealth Government and the Government of Queensland, under which the prohibition of imports of foreign sugar into Australia is to continue for a period of five years from the 1st September, 1941, except as to types of sugar not manufactured in Australia which may be required for special manufacturing purposes, and small quantities of foreign sugar needed for scientific research. In consideration of this extended prohibition of sugar imports, the Queensland Government accepts, on its own behalf and on behalf of the sugar industry, numerous obligations, the chief of which are -

  1. To refrain during the period from 1st September, 1941, until 31st August, 1940, from exceeding specified maximum prices at all State capital cities, Darwin, Fremantle and Launceston, in respect of refined sugar, raw sugar, mill sugar, golden syrup and treacle sold to manufacturers, wholesale merchants and retail grocers - such maximum selling prices being the same as those which have operated since 5th January, 1933.
  2. To administer the wholesale discount on sugar on certain new terms prescribed by the agreement to operate as from the 1st September, 1940.
  3. To contribute £216,000 per annum to theFruit Industry Sugar Concession Committee for disbursement by that committee in the following manner: -

    1. payments to fruit processors of domestic and export sugar rebates;
    2. payments of export bounties;
    3. contributions to scientific research for the express purpose of increasing the yield per acre of fresh marketable fruits required for manufactured fruit products; and
    4. the fixation by the committee of reasonable prices to be paid to growers for fruit purchased and used in manufactured fruit products.

The sum of £216,000 will be supplemented each year by a substantial payment by the sugar industry which will vary according to the quantity of jam exported each year.

  1. To pay export sugar rebates in respect of all goods other than manufactured fruit products, the latter products being similarly provided for from the £216,000 per annum,so that the net cost of Australian sugar contained in such goods, when exported, shall be the Australian equivalent of the world’s sugar parity price.
  2. To ensure adequate supplies of sugar in Hobart, at which State capital city there is no refinery.
  3. To accept full responsibility for any loss arising from the export of surplus cane-sugar from Australia; and
  4. To take such action as is necessary from time to time to control effectively the total production of raw canesugar in Australia.

The agreement also provides, as in various bounty acts, that employees in the cane-sugar industry shall at all times during the period of the agreement be entitled to have their rates of wages and conditions of employment determined by conciliation or arbitration, and, if they cannot be settled by agreement, that a tribunal may be established to determine such matters.

The sugar agreement method of protecting the Australian sugar industry has existed since July, 1915. The agreement covered by the bill is the tenth of its kind. A quarter of a century of experience has demonstrated the special suitability of the sugar agreement as an effective means to protect the sugar industry, and to give adequate consideration to the reasonable needs of manufacturers, distributors, or domestic consumers of sugar. Commonwealth and State Governments of every political complexion have, since 1915, been parties to various renewals of the agreement. It has indeed become a nonparty matter. Australia led the way in this regard. Many other nations have since adopted similar or equivalent methods, to such a degree that most of the sugar-producing countries of the world now exercise a more or less extensive control of sugar production and distribution. Moreover, under the International Sugar Agreement of 1935, 22 nations, including Australia and all other large sugarproducing countries, each agreed to control its production and/or exports within specified limited formulae, and, where possible or appropriate, to stimulate its domestic consumption. I mention these facts merely to demonstrate that there is nothing unusual, in principle, in the bill.

When the present sugar agreement was being considered by Parliament in

October, 1935, the then Minister for Trade and Customs, the honorable member for Balaclava (Mr. White), claimed that it constituted a good bargain for consumers, seeing that it restricted sugar prices for another five years to a level 33 per cent, above the usual pre-war amount of 3d. per lb., that is to 4d. per lb., whereas the average retail price of other foods and groceries and basic wages might vise beyond the 42 per cent, and 45 per cent, respectively at which they then stood above the 1911 index figures. At present the average retail price of foods and groceries generally is 66 per cent, above the 1911 level, and the average of Commonwealth and State basic wages has risen by 68 per cent. Consequently, the Government seems entitled to claim credit from consumers for renewing the agreement at wholesale prices which cannot contribute to any increase of the present cost of living, and compare so very favorably with the prices of other foods and of wages. Despite, the favorable domestic sugar prices which I have just revealed, the Government gave consideration as to whether some recent improvement in the export returns of sugar producers could be utilized for a reduction of domestic prices. The war has resulted in an increase of approximately £1 17s. a ton in export returns, but 75 per cent, of this benefit to sugar producers has already been absorbed by their increased costs for fertilizers, bags for raw sugar, sacks for refined sugar, interstate freights, employees’ wages, and so on. Moreover, production costs will probably rise by larger amounts in future. It is evident that there is no possible justification for reducing the domestic returns of sugar producers. The last available annual report of the Queensland Commissioner of Taxes records that, only 19 per cent, of all Queensland sugarcanegrowers had a net taxable income sufficiently high to render them liable to pay income tax. The sugar industry has accepted the new sugar agreement with some misgiving as to the limitation of prices to prevailing amounts in view of recent and future increases of production costs, but with gratification at the further period of stability and security which the agreement affords for a probably difficult and hazardous future. From a consumer’s point of view it is worth mentioning that a special survey, made by the Government six weeks ago, showed that the average of retail prices of sugar in the 41 principal countries of the world was then 5 1/2d. per Lb., expressed in terms of Australian currency, as against only 4d. per lb- in Australian capital cities. Very few countries now enjoy a lower retail price than Australia, although practically all other sugar is produced by very cheap native or peasant labour.

Our present exports of raw sugar are valued at about £6,000,000 per annum, thus providing equivalent export credits of considerable value to Australia, especially under present conditions. i marked fall of these exports, which would result from a reduction of producers’ returns sufficient to give a practical benefit to domestic consumers, would reduce our export credits similarly. The resultant smaller sugar income would equivalently reduce sugar producers’ purchases of a comprehensive range of Australian products, which are obtained very largely from the southern States. Moreover, some thousands of cane-growers and workers, engaged in farms, mills and transport, would lose their present livelihood and thus intensify the unemployment problem.

The estimated average return for all raw sugar of standard quality during the last four seasons has ranged- from £15 2s. 2d. to £15 14s. 3d. a ton, as against, an average of £15 6s. Od. for 1913 and 1914, when wage rates and other costs were far less than at present. The return was £30 6s. 8d. a ton from 1920 to 1922 ; then £27 0s. Od. and £26 0s. Od. for the next two years ; and, in subsequent years, owing to increasing export surpluses being produced, from £24. 0s. Od. down to £15 14s. 3d. for 1939.

The sugar industry is able to carry on with reasonable success under these conditions because of the remarkable improvement of its efficiency. The acreage yield in terms of raw sugar is nearly three time’s greater than it was in 1900 and twice that of 3 918.. Australians may well be proud that their sugar industry ranks in efficiency with the highest results achieved elsewhere in the world.

In the new sugar agreement provision has been made, as usual, for the principle of uniform sugar prices in State capital cities, and Fremantle and Launceston. The principle will be extended as from the 1st September, 1941, to Darwin, as the capital city of the Northern Territory. The Government recently became aware that Darwin retail grocers were charging an extravagant gross profit on their landed .costs equal to three times as much as retailers receive in State capitals. Under the new sugar agreement, Darwin retailers will receive sugar from brisbane or Sydney as from the 1st September, 1941, at the prices charged to retailers in State capital cities, and they have undertaken to reduce the retail price in due proportion. Apart from this, it is hoped that some reduction of the present retail price at Darwin will be effected in the near future.

The Government has received many requests from Federal and State retail grocers’ associations, and from individual retailers, that the present retail price of 4cl. per lb. in capital cities should be increased to 4£d. per lb. In this regard, it is necessary to remark that the sugar agreement is a document which relates only to peace-time conditions, and is based on the normal powers of the Commonwealth. That being the case, the Government is precluded by the Commonwealth Constitution from fixing, in such a document, the prices to be charged for sugar by retail grocers to domestic consumers. Price-fixing powers are normally reserved to the States. The retail price of sugar is, therefore, not relevant to this bill. In times of national emergency such as war, the Commonwealth, however, can fix or control selling prices by legislation based on section 5.1 (vi) of the .Commonwealth Constitution. Such power has been taken during the present war under the National Security Act and regulations. The Government, therefore, referred to the Commonwealth Prices Commissioner all requests by retailers. The Commonwealth Prices Commissioner, Professor Copland, announced last week that, as the sugar agreement was being continued without any improvement of the remuneration of sugar-growers and wholesalers, and the scope of the wholesale discount was being widened, the commission did not consider it desirable at this stage to vary the cash price of sugar to consumers.

I have already mentioned that the new terms for the wholesale discount on sugar will operate as from the 1st September, 1940. When the present sugar agreement was under consideration in 1935, the Government attempted to restore, as nearly as possible and by means of special conditions in the agreement, fair and equal conditions of trade amongst all wholesalers and all retailers respectively. Nevertheless, such fair and equal conditions of trade .have not been maintained in all States during the period of the current sugar agreement. Some chain stores and many individual retail grocers are receiving concessions from certain wholesalers, and are thus buying sugar at less than the price paid by all other retailers, and are hence receiving larger gross profits than the general body of retailers. Moreover, an anomalous position exists whereunder a few retailer-wholesalers and co-operative farmers’ associations or companies, that receive wholesale discounts on almost all commodities except sugar, arc excluded from the sugar discount, whilst exactly similar or nearly similar concerns have been receiving the sugar discount for many years, or have been added to the wholesale list during the last few years. The Commonwealth and Queensland Governments have had this difficult problem under frequent review during the last three years,- especially since the new sugar policy wa3 announced recently. Both governments consider that the prevention of undesirable trade practices in regard to sugar should bc the affair of wholesalers themselves or of their associations, as it is in respect of most other groceries. The Commonwealth Government considers that the wholesale trade is an essential and important factor in the distribution of sugar and other groceries, especially in view of the great degree to which country storekeepers are dependent upon wholesale merchants for credit, in many cases where banks and other financial institutions are unwilling to render financial aid. ‘ It is not the proper function of governments, however, to continue to take the exceptional legislative and administrative measures contained in the present sugar agreement in order to prevent internal troubles in the wholesale trade. The governments believe that a clause should be provided in .the next sugar agreement for defining the basic functions of wholesale merchants and for enabling the few existing anomalies to be adjusted. The Commonwealth and Queensland Governments have, therefore, decided that, as from the 1st September, 1940, the wholesale discount of 2 per cent. on sugar shall be payable monthly to any person, firm or corporation who or which, in the opinion of the Queens land Sugar Board -

  1. provides reasonable credit facilities for retailers on a comprehensive range of groceries ;
  2. keeps reasonable stocks of such groceries for resale to retailers; and
  3. buys not, less than £1,500 worth a calendar month of sugar and other sugar products.

The remaining item of importance in the new sugar agreement is the provision by the sugar industry of funds for assisting the manufactured fruits industry. In the new agreement itself, the annual amount provided is the same as in the present sugar agreement, namely, £216,000. In addition, seeing that exports of canned fruits are expected to increase during the next five years, the Government has secured a guarantee by the Queensland Government, on behalf of the sugar industry, that the industry will contribute each year a sum equal to the export sugar rebate payable on exported jams containing sugar in excess of 500 tons. This additional contribution will, of course, vary as jam exports fluctuate, and will probably average at least £45,000 per annum. The additional guaranteed payment in respect of excess jam exports represents a definite improvement for the fruit industry. A similar payment has been voluntarily made by the sugar industry during the last three years, but it was optional for eachyear and could have been stopped at any time. These funds and the fixation of minimum prices for all factory fruits are administered by the Fruit Industry Sugar Concession Committee, which is composed of one representative each of the -

Commonwealth Government (as chairman) ;

Queensland Sugar Board (as deputy chairman) ;

Growers of canning fruits;

Growers of non-canning fruits ;

Co-operative and State manufacturers of fruit products;

Proprietary manufacturers of fruit products.

Representations have been made to the Government, on behalf of one fruitgrowers’ association and the fruit canners and manufacturers’ associations, to the effect that the total funds already mentioned may be insufficient to meet all requirements. In particular, these bodies requested that “ the original £110,000 per annum of 1931 for export assistance on manufactured fruit products” should be restored as a separate contribution, in addition to whatever payments may bo necessary from time to time for domestic and export sugar rebates. The Government carefully considered the position in all its aspects before the new sugar agreement was signed. It found that a sum of £110,000 for export assistance was recommended in the majority report of the Commonwealth Sugar Inquiry Committee of 1931, but only “ for the time being “ and “ as a facile means of giving relief to the fruit industry, pending it; substantial recovery from prevailing difficulties.” The special representative of fruit-growers signed this report.

The prevailing difficulties mentioned by the Sugar Inquiry Committee were the extremely inadequate prices of mostly £5 a ton paid by factories to growers that year - 1931 - for apricots, peaches and pears for canning, -and the fact that a large portion of the available peaches’ was not even purchased at all. The Fruit Industry Sugar Concession Committee functioned for the first time during the 1932 season. It fixed minimum factory prices of £10 a ton for apricots and. pears, and £12 a ton for peaches, and arranged for factories to purchase all fruit available. Prices for 1933 were £12 for all these fruits, and again all the fruit was taken and all surplus canned fruits were exported without loss to manufacturers owing to financial assistance thereon rendered by the committee. In 1932, the Commonwealth Government secured for the industry at the Ottawa Conference substantial tariff preferences from the United Kingdom and Canada on their future imports of Australian canned fruits. This fact alone greatly diminished the need for the original temporary £110,000 for export assistance.

By 1933, the canned fruits industry had fully recovered from “ the difficulties prevailing in 1931 “,and it has remained in that happy position ever since. Accordingly, under the 1933-36 sugar agreement, the idea of a separate £110,000 was discarded and the sum of £200,000 per annum was provided to cover all kinds of assistance needed by the fruit industry. Exactly the same thing occurred under the 1936-41 agreement, wherein the total contribution from the sugar industry was fixed at £216,000 per annum.

The vital or only really significant factor in this matter is : Will the renewed fund of £216,000, plus an average of £45,000 per annum for excess jam exports, meet the reasonable needs of fruitgrowers and manufacturers for the period of the new agreement? The Government believes that the new aggregate funds will achieve such a result for the following reasons : -

  1. A similar position has existed for three of the four years of the present sugar agreement, during which three successive record annual exports of canned fruit have been successfully financed by the Fruit Industry Sugar Concession Committee with less funds than will be available under the new sugar agreement;
  2. During the war, there will probably be no need for export bounties on canned fruits, jams or berry fruit pulps, so that the committee’s present surplus funds should be considerably augmented, thus being available during the next sugar agreement period, in addition to the amounts provided as stated, viz., £216,000, plus an average of £45,000 per annum.
  3. Ever since 1931, except for one year for certain fruits, the committee has been able to award profitable minimum prices for fresh fruits, as is clearly proved by the fact that the production of canned fruits has more than doubled, and exports have trebled ;
  4. Ever since 1931, proprietary canneries and most co-operative canners have made substantial profits; all growers’ cooperative canners have made substantial profits, sometimes very large, during the last five years.

The various circumstances which. I have related indicate that both sections of the manufactured fruits industry have achieved and maintained a sound basis of prosperity, with the aid of the funds contributed by the sugar industry. No satisfying evidence has been brought to the Government’s notice in justification of still further assistance being given to the fruit industry.

In conclusion, I draw the attention of honorable members to the favoured position now enjoyed by Australia, as compared with the last war period, in regard to sugar supplies. During the last war, Australia produced approximately only two-thirds of its requirements of sugar, and had to import the balance from foreign countries. The Australian producers’ price for raw sugar was limited by the Commonwealth Government to amounts of £18 and £21 a ton from 1915 to 19 19. During the whole of that period, imported raw sugar cost the Government considerably more than was paid to Australian producers.In 1919 and 1920, Australia had to import some 220,000 tons of raw sugar, the average landed cost of which was over £52 a ton, or substantially more than twice the price paid to Australian producers. Moreover, on several occasions Australian consumers were rationed as to their supplies, and some of the foreign sugar was of very inferior quality.

The sugar industry was encouraged by the far-sighted policy of the Commonwealth Government in 1920 fully to produce Australia’s requirements of sugar. For that purpose, a special price for raw sugar of £30 6s. 8d. a ton was awarded for three years, but that amount has been considerably reduced since 1922, and producers are now receiving an average return of £15 14s, 3d. a ton. The final result is that Australia is now producing from 850,000 tons to 900,000 tons of raw sugar each year, of which 365,000 tons are required for refining for home-consumption, and the balance is exported, creating credits overseas worth at the present time about £6,000,000 a year. Australia is in no possible danger of a sugar shortage during the present war. I, therefore, commend to the House this bill for the approval of the new sugar agreement, believing that all honorable members will agree that it provides equitable treatment for all sections of the community concerned.

Mr.Prowse. - Does the agreement provide for a flat rate at Albany?


– No.

Debate (on motion by Mr. Forms) adjourned.

page 1093


Motion (by Mr. Spender) - by leave - agreed to -

That he have leave to bring in a bill for an act to approve an agreement between the Government of the Commonwealth of Australia and the Government of the Kingdom of Greece.

Bill brought up, and read a first time.

Second Reading

Trea surer · Warringah · UAP

by leave - I move -

That the bill be now read a second time.

The notes exchanged between the Minister for Trade and Customs and the Consul-General of Greece with regard to this trade agreement are the result of negotiations that have been in progress for some years. Although the abnormal circumstances at present obtaining may affect the benefits to be anticipated from the agreement, I do not consider that that fact should prevent its being formally approved. I shall deal briefly with the provisions of the agreement and the reasons leading to its conclusion. The agreement may be described as a simple most-favoured-nation agreement, that is, it does not provide for specific tariff concessions, but merely guarantees that Australian goods entering Greece and Greek goods entering Australia will receive treatment not less favorable than that granted to goods from any other foreign country.

Greece has a double-columned tariff of minimum and maximum duties. The minimum duties are levied on goods from countries with which Greece has concluded commercial agreements providing for specific tariff concessions, or mostfavourednation treatment. As a general rule, goods from non-treaty countries including Australia, are charged with ten times the maximum duty. To illustrate the difference in treatment, I draw attention to the approximate equivalents in Australian currency of the duties, inclusive of surcharges, on wheat and wool, the principal Australian exports to Greece : -

In the past, Australian wheat and wool have at timesbeen admitted by decree at the minimum duties. Such concessions were dictated by economic necessity, and have necessarily been of a temporary nature. The present agreement will guarantee the continued application of the minimum duties, not only to wool and wheat, but also to all other Australian products. In return, Australia will extend to Greek goods the benefit of the operative section of the Australian intermediate tariff, which is at present withheld because of the discriminatory treatment applied to Australian products in Greece.

For the last five years the balance of trade between the two countries has been in favour of Australia. During the year ended the 30th June, 1939, the value of the total imports into Australia from Greece amounted to approximately £15,000, Australian currency, the principal items consisting of capers and olives, hides and skins, olive oil, sponges and magnesium oxide, none of which are large items. The extension of the intermediate tariff will benefit trade worth approximately £3,000, representing about 20 per cent. of the value of Greek exports to Australia. Australian exports to Greece during the same year were valued at approximately £307,000, of which wheat accounted for £238,000 and wool £61,000.

The agreement contains the usual stipulation by which preferences granted by Australia to British countries are to be maintained. The agreement is for a period of one year, and will continue thereafter, subject to three months’ prior notice of denunciation by either Government. Honorable members will observe that the agreement is to come into force on a date to he fixed by mutual arrangement. This provision was incorporated in order that the agreement would not become effective until after approval by Parliament. I therefore submit the bill to the House with every confidence that it will meet with the approval of honorable members.

Debate (on motion by Mr. Forde) adjourned. incometaxassessmentbill 1940.

Second Reading

Debate resumed from the 8th May, 1940 (vide page 598), on motion by Mr. Spender) -

That the bill be now read a second time.


.- This Income Tax Assessment Bill is not, in my opinion, a controversial measure, although an amendment of the Income Tax Assessment Act does open up consideration of a number of general principles. The most important clause in the bill is that which provides for the taxation of undistributed profits. This is to be an extra tax of1s. in the £1 over and above the present tax of 2s. in the £1 on the company rate, with an exemption of 25 per cent. Another provision is that there will be no rebate of the tax when the reserves are distributed as dividends, which is a departure from present practice. Thus, the principle of double taxation, so-called, as a warrant for making rebates goes by the board. I prophesy that it will not be very long, in spite of his assertions the other day, before the Treasurer (Mr. Spender) will be after the £2,000,000 which is nowthe subject of rebates. It does not seem right that the Treasurer should be collecting money with one hand, and giving it back with the other, and not even doing it equitably.

The bill also provides that the statutory exemption will diminish £1 for £1 over £250; instead of £1 for £2 as at present. In times like these we cannot quarrel with that. Last year, legislation was passed providing that oil prospecting companies were to be exempt from taxation until their returns equalled their capital outlay. It is now proposed to extend this provision to dividends distributed from profits; that is, to dividends in the hands of individual shareholders. I agree with what is being done in that respect.

It has always been recognized that, when there is discrimination between sections of the community in taxation matters, discontent is engendered. For instance, it has been argued in respect of the contract made with bondholders who converted their bonds in 1931, that if they are exempt from present income tax increases, other taxpayers will be discontented. As bonds are property, it has been suggested that if the extra tax has to be paid on income from other property, it is not right that income from bonds should be in a more favorable position. The Treasurer replied to this argument by saying that it would be a breach of contract to make the increased rates apply in that case, but I maintain that there is, in fact, no discrimination at present in favour of bondholders. Take, for example, an income from property of £3,000, which is a fair figure. It is neither the highest nor the lowest, but an average income, as good incomes go. In 1931-32, ordinary income tax on such an income was about 3s. 3d. in the £1. At that time, there was also a super tax of 2s. in the £1 on property income, which brought the total tax up to 5s. 3d. However, income from bonds did not come under the 2s. super tax rate. The rate on bond income was approximately 3s. in the £1, and that was not increased to 3s. 3d. Thus, the tax on ordinary property income was 3s. 3d. in the £1, plus 2s., or a total of5s. 3d., while on bond income it was 3s. But, the bondholders suffered a cut in interest rate of 22½ per cent., equal to 4s. 6d. in the £1, so that they were losing 3s. tax, and 4s. 6d. in reduced interest, a total of 7s. 6d. in the £1.

Mr McHugh:

– That does not apply now.


– Yes, it does.

Mr McHugh:

– Interest rates are lower now.


-That does not affect those whose bonds have not yet matured. But for the interest cut, they would still be receiving their 6 per cent. In return for the special disability they suffered in 1931, they were given a contract that they would nothave imposed upon them any future increases of income tax on the interest from bonds. The present proposal for increased taxation on incomes of £3,000 will bring the rate up to 3s.10d. in the £1. The super tax of 2s. in the £1 has been abolished. Thus, whereas a propertyowner was paying 5s. 3d. in the £1 on his income in 1931-32, he willpay only 3s.10d. in the £1 even after this schedule comes into force. Therefore, I cannot see that any advantage has been given to the bondholders as the result of the 1931-32 contract.

Reference was made by the Treasurer to what undoubtedly works a grave injustice to many taxpayers, namely, the disparity between the rates of tax imposed in the various States. I said, speaking the other day, that, in compiling the rates, the Government had paid too much attention to this factor. I didnot say that it should not pay any attention to it. I admit that if the Government were to disregard it al together, and go on imposing taxation on the higher incomes according to a fixed scale, it might eventually reach a point when it would be demanding more than 20s. in the £1. It has been suggested that there should be a uniform rate of tax throughout the whole of Australia, and I agree that that would be a very desirable thing. My own opinion is that we should have one taxing authority, but that brings us to the big general question of one paramount Parliament. Almost every difficulty with which Australia is now faced is related in some way to the need for constitutional reform. But even without unification, one taxing authority would unquestionably be of great advantage to the people of Australia. Even at present there is a certain amount of uniformity in taxation returns. I do not know how many of the States have come into line in this regard, but in Victoria there is one income tax return for the Commonwealth and for the State, which is a great convenience and leads to a groat saving in administrative costs. One taxing authority could be brought about by allowing the Commonwealth to be the only collector of income tax, even if some of the proceeds were subsequently distributed to the States. In a recent issue of the Bulletin there was a very interesting suggestion that the Commonwealth should take over control of education throughout Australia, and by way of compensation should also take over all income tax, as the two items were very nearly equal. Other suggestions contained in the same publication are even more interesting, one of them being that under its war legislation the Commonwealth could tax incomes 100 per cent., keep what was necessary for Commonwealth purposes, make a distribution to the States, and, presumably, refund the remainder to the taxpayers. I can imagine what an uproar would be created by a proposal such as that. I do not believe in forcing the States into unification by means of financial proposals; unification should be brought about by means of a referendum, and as the result of a readiness on the part of the people to accept it. To a certain degree there is unification to-day in the financial arrangements of the Commonwealth and the States. For instance, State and Commonwealth borrowing was co-ordinated by the creation of the Loan Council, and now all moneys borrowed carry the same rate of interest. That unification has eliminated the system described by the late Mr. Alfred Deakin as “ beggar thy neighbour “, under which the Commonwealth and State governments competed on the loan market.

Mr Paterson:

– A problem is still presented by the activities of local governing bodies on the loan market.


– That is so. These bodies constitute a great menace, but if an agreement cannot be reached in this regard, action could be taken by the Commonwealth under the National Security Act.

Mr Jolly:

– The semi-governmental bodies must seek the approval of the Loan Council before they can float loans.


– “We want not only unified rates, but also, so far as possible, a unified basis of assessment. That is an important matter which will have to be tully considered if an agreement is to be arrived at.

I have one suggestion to make to the Treasurer; I have not elaborated it at very great length in my own mind, but [ think it is an idea that is worthy of examination. First of all I should like to say that if increased taxes are to be imposed, then, in spite of whatever taxes are levied by the States, the Commonwealth should take more from those cn higher ranges of income. That could be done without any grave injustice. I point out that in Queensland - the State in which the highest taxation is imposed on large incomes - no tax is imposed on dividends. Of course, company profits are taxed and the rate of tax rises with the rate of profit in relation to capital. There is no reason -why the Commonwealth, in framing its taxation proposals, should take into consideration the fact that in Queensland the tax on certain high incomes is higher than it is in the other States. It is certainly not higher in the ease of residents of Queensland whose incomes are derived from dividends, they do not pay income tax on dividends. Admittedly, shareholders pay a certain amount of taxation indirectly by means of the companies tax.

Mr Fadden:

– Actually, the shareholder pays the tax indirectly. It is taken into consideration in arriving at his rate. He is not totally exempt.


– I refer the Assistant Treasurer (Mr. Fadden) to a speech made by the Treasurer (Mr. Spender) last year in which he quoted a House of Lords judgment on that question. He made a very interesting statement, with most of which I agree. I do not deny, and I never have denied, that if a company pays tax, that tax must come out of the funds which eventually are distributed to shareholders as dividends and so, in effect, the shareholders pay the tax indirectly. But the judgment to which the Treasurer referred was to the effect that company profits and company dividends are two separate funds for taxation purposes. There should be no differentiation between a man drawing £2,000 or £3,000 a year in dividends from a company, and another man drawing the same amount -of taxable income from land or property, because in both cases the income is not derived from personal exertion; it is derived from property. But we could impose a very different rate of tax on income from, say, rents than we do on income from dividends, because in the case of the latter we allow a rebate of 2s. in the £1. There lies the discrimination. Take, for instance, the case of a man who lives in a State where dividends are taxed, and another man who lives in Queensland, where dividends are not taxed. In the first instance, the man pays his share of the company tax and also pays tax on the dividends, whereas, in the second case tax is not paid on dividends. Since the highest-taxed State has been used as an argument against the imposition by the Commonwealth of an increased rate on higher income, let u.» examine the position of a man on » higher income in Queensland. Although a man is living in one of the highesttaxed States in the Commonwealth so far as income tax is concerned, if he has an income from dividends he pays no individual income tax, although admittedly those dividends have been previously subject to the company tax.

Mr Fadden:

– He is not totally exempt from taxation on those dividends, because they are taken into consideration in fixing his rate.


– It affects to some degree the rate which he pays on his other income.

Mr Fadden:

– That is so.

YARRA, VICTORIA · ALP; FLP from 1931; ALP from 1936

– Even taking thai into consideration, it will probably be found that the people who live in this socalled higher-taxed State and derive an income largely from dividends, and in some cases totally from dividends, are not paying as much as they would be if they lived in the lower-taxed States. I suggest that an examination of that anomaly will enable the Commonwealth to devise means of overcoming it. Even though State taxation is high, the Commonwealth, without doing any injustice, could impose an extra rate of income tax on income derived from dividends. I do not think there is anything wrong in treating one section against another, so long as taxation is equitable.

Mr Spender:

– If is necessary to treat any one class’ uniformly throughout the Commonwealth.


– That is so. No discrimination can be made between the States or parts of the States, although such discrimination would be quite legal to-day under the Commonwealth’s war power*. I am not, however, suggesting that that should be done.

Mr Spender:

– I doubt if it could be done.


– The Government can do anything under its war powers.

Mr Spender:

– The High Court did not say that the Government had power to override the Constitution.


– The Treasurer has urged that the Government could not impose an increase of taxation for war purposes on incomes in the higher range, because certain of the States have already levied higher rates of tax upon those incomes. The honorable gentleman says that there is a limit beyond which the Commonwealth cannot go. I assert that incomes derived from dividends do not come anywhere within the limit fixed in the schedule of the bill, [t would be a good thing, of course, if the States could be persuaded to come more into line- with the Commonwealth in the field of taxation. I do not, however, suggest the use by the Government pf its war powers to overcome the difficulty if the States cannot be brought into line. I dislike using special war powers for any purposes other than those for which they are intended. I would disregard existing State taxation to a much greater degree than the Commonwealth Government is doing at the present time. State taxation is not the responsibility of the Commonwealth. It would be the responsibility of the States to effect an adjustment if the imposition of what the Commonwealth regards as a fair contribution from certain grades of incomes towards the extraordinary expenses of war caused hardship to individuals because of the high total of both Commonwealth and State assessments. I qualify that statement by saying that I would not disregard such hardships to the degree of leaving a man- “ without a feather to fly with “. “Without doubt, the way in which high incomes are exempted from a great deal of special war taxation has created much discontent. Men in receipt of high incomes have expressed to me the view that individuals enjoying the higher incomes should not benefit by these exemptions to the degree to which they do at present. Four State governments do not tax dividends in the hands of the taxpayer. The Treasurer has given figures showing the aggregate of taxes paid to both Commonwealth and State governments in past years. That tax burden was imposed in peace-time. This is a time of war. This bill has been made necessary by war conditions. I believe that persons in receipt of high incomes should bear their full share of the extra, penalty necessitated by war. Some of the rates suggested in the bill that is to come before the House later do not represent anything like a reasonable contribution to the special demands ‘ of war expenditure.


.- I shall not oppose the bill, but I ask the Treasurer (Mr. Spender) to reconsider the rates proposed to be levied on the higher incomes. When incomes reach a very high level the rate of tax imposed upon them should be increased.

Mr Spender:

– Does the honorable member refer to high incomes irrespective of the return upon investment?


– Yes. Another matter to which I direct attention is the exemption of incomes up to £250 a year. At present a married man with a family pays the same amount of tax as a single man having the same income.

Mr Fadden:

– That is not correct. There is an allowable deduction for wives and children.


– Are not single men in receipt of £250 a year or less exempt from taxation?

Mr Fadden:

– Yes.


– I contend that they should pay something towards Commonwealth revenue. A recent issue of The Round Table magazine- gave some interesting statistics in relation to taxation in Germany to-day. If Australians were aware of these high figures they would be willing to make acomparable contribution towards our war effort. TheRound Table stated -

Wages are firmly controlled. And from those wages; however low, income tax and other taxes must be paid. To illustrate the incidence of taxation, the cases may be taken of a working man earning 50 marks a week as a bachelor, of a married man without children; and of a married man with two children. They have to pay (1) income ( wages ) tax, plus a 50 per cent. war increase, (2) municipal tax, (3) “Winter Help” contribution, (4) insurance (health, unemployment, old age), (5) Nazi party subscription, (6) A.R.P. charge. These impositions, with other minor items, mean that the three men arc taxed roughly 480.00 marks, 288.00 marks, and 192.00 marks per annumon a total income of 2,500 marks.

The Commonwealth Government should demand atleast a small contribution from unmarried men without dependants and having an income of not less than £204 a year.

Mr Jennings:

– The honorable member referred to working men in Germany earning 50 marks a week. What is that sumworth ?


– A mark was worth approximately1s., but it is difficult to make an exact computation of its present value. When I was in Germany in 1935 I received 20 marks for every £1 sterling up to a certain amount; after I had exhausted the sum fixed, Iwas obliged to accept only 12 marks for £1 sterling. English currency was not regarded with much favour in Germany at that time.


– I suggest that the Treasurer (Mr. Spender) should make clear the meaning of clause 13 of the bill, which states -

  1. The amendments effected by this act, other than that effected by section twelve of this act, shall apply to all assessments for the financial year beginning on the first day of July, One thousand nine hundred and forty, and all subsequent years.

I am amazed at the number of people who apparently believe that that provision applies to the trading year, when, as a matter of fact, it applies to the Government’s financial year; in other words, it applies to income tax returns for the year ended the 30th June, 1940.

Mr Spender:

– That is so.


– That should be made clear.Many people, including men whose job is to handle income tax returns, have remarked to me that they had no need to worry much about these amendments, because they would apply only as from the beginning of thetrading year on the 1st July, 1940.

Mr Spender:

– I shall see that the true position is made clear.


– I now wish to refer to some comments made by the right honorable member for Yarra (Mr. Scullin) with respect to dividends paid by companies. So far as Queensland is concerned, the right honorable gentleman was not correct in his statement because the tax on the profits of companies is imposed at the source, and not in the hands of shareholders. Actually the shareholders do pay the tax, because dividends are declared only after the tax has been paid by the company. I regard that argument as unanswerable. It is the same argument as the right honorable gentleman himself used when he said that bondholders contribute towards the income tax.

Mr Scullin:

– There is a slight difference.


– In some of the States dividends are declared by the companies without regard to the tax, and shareholders pay income tax on the dividends that they receive.

Mr Scullin:

– That is not the point which I stressed. Would the honorable gentleman say that a man in Queensland with a large income from dividends would pay as much as if his income were derived from other sources?


– By and large he would do so, because he would already have made his contribution to the income tax when it was paid by the company. In Queensland dividends are taken into consideration when arriving at the rate of tax.

Mr Paterson:

– A man with an income of £5,000 a year from dividends would pay tax at the same rate as a man whose income from that source was only £100.


– That is a matter which would have to be gone into, but this is not the time for it.

The right honorable member for Yarra also referred to the position of the State governments. I have a great deal of sympathy with them in regard to taxation matters. It must not be forgotten that hitherto the Commonwealth Government has operated chiefly in the field of indirect taxation. It is correct to say that the amount which it receives as direct taxes is paid to the States by means of grants. We must, however, have regard to the responsibility of the States. Some time ago I urged that there should be a conference between the Commonwealth and State Governments with the object of reviewing the incidence of income tax. I agree with the right honorable gentleman that the time has arrived to review our system of government in this country. If we do not do so voluntarily, I am convinced that before long the financial responsibilities of the Commonwealth and State Governments will force that issue on us. In the future, the Commonwealth is likely to trespass upon the field of direct taxation to a greater degree than in the past, so that we must not overlook the claims of the States in regard to direct taxes. They have their responsibilities and obligations which we ought not lightly to set aside. As to the bill before us, I can only say that the people of this country will be indeed fortunate if the burden placed upon them will be no heavier than it imposes.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 and 2 agreed to.

Clause 3 -

  1. Section twenty-three of the principal act is amended by adding at the end thereof the following paragraph: - “ (s) in the case of any person enlisted in or appointed to the Naval, Military or Air Forces of the Commonwealth or any part of the King’s dominions or of any Ally of Great Britain! for service outside Australia during the present war between His Majesty the King and Germany - the pay and allowances earned by him as a member of those forces during the period commencing on the third day of September, One thousand nine hundred and thirty-nine or on the date of his enlistment or appointment (whichever is the later date) and terminating on the date of his discharge or the termination of his appointment.”

Section proposed tobe amended -

The followingincome shall be exempt from income tax: -

Treasurer · War ringah · UAP

– I move -

That after sub-clause 1 the following proviso be inserted - “ Provided that this paragraph shall not apply to any pay or allowances so earned during the year of income by a member of the forces who does not at any time during the period commencing on the third day of September, One thousand nine hundred and thirtynine and terminating one year after the close of that year of income -

in the case of a member of the Naval Forces of the Commonwealth - serve in a sea-going ship; or .

in the case of a member of the Military or Air Forces of the Commonwealth - embark for service outside Australia.”.

The test for exemption in, the bill is enlistment for service outside Australia. Whilst that test is suitable for forces enlisted specifically for service outside Australia, such as the Australian Imperial Force, it is not entirely appropriate for forces, especially permanent forces, which, although technically liable for service outside Australia, may never, in respect of the Navy, serve in a sea-going ship, or, in respect of the Air Force, embark for service outside Australia. Such persons are, apart from the liability for service overseas, in the same category as permanent military forces to whom the exemption is not granted. In order to remove this anomaly, it is proposed to couple the test of enlistment for service overseas with a condition of embarkation for service overseas in respect of the military and air forces, and of service in a sea-going ship in respect of the naval forces, within twelve months from the close of the year of income. Thus, in respect of the income year ended the 30th June, 1940, the taxpayer has until the 30th June, 1941, to embark. If he enlisted in September, 1939, he has twentyone months to fulfil the condition, whilst if he enlists in June, 1940, he has twelve months to embark. The period mentioned is considered ample to cover persons enlisting specifically for service overseas, whilst it will deny exemption to persons remaining indefinitely in Australia, even if enlisted for service outside Australia. Even where exemption is not granted in respect of one or more income years, the exemption will commence to operate in respect of a later income year if the taxpayer embarks within twelve months after the close of the last-mentioned income year.

Amendment agreed to.

Clause, as amended, agreed to.

Clauses 4 to 13 agreed to.

Title agreed to.

Bill reported with an amendment; report - by leave - adopted.

Bill - by leave - read a third time.

page 1100


In Committee of Ways and Means:

Consideration resumed from the 8th

May (vide page 608), on motion by Mr. Spender -

That a tax be imposed upon incomes at the following rates - . . . (vide page602).


.- I realize that there may besome difficulty in arranging for the payment of income tax by instalments, but has the Treasurer (Mr. Spender) taken into consideration the suggestion, which I made recently, that Commonwealth and State assessments be staggered so that they will be spread over the year? On a previous occasion I pointed out that business people in Queensland are called upon to pay State and Federal income tax in succeeding mouths. Their businesses are interfered with more than they would be if the payments were spread over a longer period.

Mr Spender:

– I promised to discuss the honorable member’s suggestion with the commissioners. I am not yet ina position to make a definite statement.


– If something along the line suggested could be done, it would be of great assistance to taxpayers.

Question resolved in the affirmative.

Resolution reported.

Standing Orders suspended ; resolution adopted.

Ordered -

That Mr. Spender andMr. Nock do prepare and bring ina bill to carry out the foregoing resolution.

Bill brought up by Mr. Spender, and passed through all stages without amendment or debate.

page 1100


Second Reading

Debate resumed from the 21st May (vide page 1072), on motion by Mr. Nock -

That the bill be now read a second time.


.- Although this bill is small in its dimensions and simple in its purpose it deals with a subject of great importance to Australia in peace-time and of even greater importance in war-time. It is a deplorable fact that flow oil has not yet been discovered in commercial quantities within the Commonwealth or within any of the islands under Commonwealth control. I regret that the speech of the Assistant Minister (Mr. Nock) in moving the second reading of the bill was so brief. The honorable gentleman failed, in my opinion, to explain the real reason why the measure has been introduced. For the last six years the Commonwealth Government has been doing a little scout drilling in conjunction with certain State governments. A total amount of £16,000 has been expended in this connexion. Of this sum £10,000 was obtained under the provisions of the Petroleum Prospecting Acts of 1926, 1927 and 1928, each of which made money available for the purpose. The fund established under those measures has now been exhausted, and between £5,000 and £6,000 over and above the £10,000 so provided has been advanced by the Commonwealth Treasury. Scout drilling of the kind engaged in by the Commonwealth and State Governments did not fall within the provisions of the Petroleum Oil Search Act of 1936. The purpose of this scout drilling is to discover the various formations of oil, and to test the limits of various fields, such as that at Lakes Entrance, Victoria, in which the honorable member for Gippsland (Mr. Paterson) has been greatly interested. It will be seen, therefore, that the purpose of this bill is not new. Actually the measure is intended to permit a continuation of work which the Government has been inadequately doing for the last few years. I should like to see very much more work of this kind undertaken, and much greater assistance provided for State governments and private companies to enable them to intensify the search for oil. Under the Petroleum Oil Search Act of 1936, £250,000 was made available to assist private companies to search for oil. Of this amount only about £50,000 remains unexpended, so that not much of the original fund is left to enable either private companies or governments to continue present activities, or to engage in new scout drilling operations. This is to be regretted, for such work is of the utmost importance to the Commonwealth. If by any chance our present sources of supply of imported oil should be cut off we should be in a very serious position. Consequently, T advocate that the Government should engage in the search for oil with greater enthusiasm than hitherto and should make available larger sums for the purpose of engaging in scientific investigations and research in relation to oil.

The latter part of the Assistant Ministar’s brief speech in introducing this bill was ambiguous. I understand that under the 1936 act the Government could purchase plants which it could then hire out to private companies, but it could not purchase portions of plants. One object of this bill is to amend the relevant seclion of the principal act in order to permit the purchase of portions of plants as well as of complete plants. I should like the Assistant Minister to intimate whether it is proposed to hire out portions of plants that may be purchased under the provisions of this bill.

The subject of oil supplies has been discussed in great detail in Australia for many years. The deep interest that has been shown in the subject, and the large sums of money amounting to £6,000,000 per annum which Australia pays for imported petrol and oil emphasize the transcendent importance of the whole matter. In my opinion the Government has acted somewhat parsimoniously in regard to the whole question.

Mr Prowse:

– There is need to police all boring operations.


– I agree with the honorable member. I recollect a speech made in this Parliament by the then honorable member for Wentworth, Mr. Marks, in 1923, in the course of which he referred to sabotage activities of certain foreign interests in respect of work undertaken in this country to find oil. He mentioned an occasion when those engaged in the search for oil and also geologists with knowledge of the subject, considered that oil would very soon be struck at a certain bore. He said that at that point a bit was dropped down the bore, the extraction of which involved a delay of about six months, the expenditure of the whole of the capital which the company had, and, consequently, the abandonment of the project.

Mr Harrison:

– The honorable member is doubtless aware that under the existing scheme cores of the bores’ must be sent’ periodically to the Commonwealth authorities.


– That is so, and it is a good provision. I have, however, heard some complaint that the necessity to send cores for every ten feet by which a boret is sunk involves delay and impedes opera-: tions ; but in my opinion, the Government, is wise in requiring that these cores, shall be sent forward for examination by’ those who have expert knowledge of the. geological formations in which oil is likely to be discovered. There is now no mystery about this aspect, of the whole subject. The Government acted wisely, also, some years ago, when it sent the Commonwealth Geological Adviser, Dr. Woolnough, to the United States of America for six or nine months to examine bores and to confer with the authorities there who were, familiar with the geological formation of, oil-bearing country. Dr. Woolnough also inquired into the most expeditious methods of boring for oil.

Mr Harrison:

– I take it that the honorable member realizes that our field engineers are informed on all boring operations, and satisfy themselves that the work is being properly done?


– That is’ so, hut evidently our supervision was not sufficient, years a.go, to prevent a bit from being dropped down a bore at an important stage in boring operations. The former honorable member for Wentworth, to whom I have already referred, made a stirring speech in this Parliament when he mentioned that incident. He directed particular attention to the obstructive methods adopted by certain interests to hinder the operations of those engaged in sinking wells in south-western Queensland. Some of the honorable gentleman’s constituents were financially interested in the project and were almost ruined by what was then done at the instigation, so it was said, of certain interests which did not desire competition in the local oil market. I have no first-hand information on that aspect of the subject. I refer to it to emphasize the necessity .to police all oil-searching operations.

Prior to the passing of the Petroleum Oil Search Act in 1936 the Commonwealth Government had expended about £578,000 in the search for oil. It is amazing, therefore, that despite all the indications of the presence of oil that have been discovered in various parts of the Commonwealth and in Papua, oil in commercial quantities has not yet been found. This becomes more deplorable still in view of the present grave international crisis and of the possible interruption of our supplies of oil from islands lying between 400 miles and 500 miles north-west of Australia. Practically every mechanical means of transport in use to-day is driven by oil. In 1938-39 Australia imported 360,000,000 gallons of crude petroleum, petroleum and shale spirit valued at £5,500,000 and also 111,000,000 gallons of residue oils valued at £750,000. Our importations have increased steadily year by year. It is not very long ago since we were importing only about 200,000,000 gallons of oil a year. If we could strike flow oil here we should revolutionize transport costs. This would be a wonderful thing for the primary producers, who are to-day heavily burdened by production costs, particularly in relation to petrol and power kerosene, which are increasingly important to production. If the cost of oil could be decreased substantially by the discovery of local supplies of oil, our primary produce could he marketed at a lower figure and still leave the producers in a better position than they are in to-day.

I desire ito make some passing reference to the Lakes Entrance oil-fields in Victoria. The Commonwealth Oil Advisory Committee stated in its recent report that, on a conservative estimate, the total oil .contents of the sands of the area in that locality which contain the oilbearing bore-holes is not less than 150,000,000 gallons. This is equivalent to 156 tons or 1,000 barrels of oil a year for ten years. The committee, I understand, estimated that an expenditure of between £55,000 and £80,000 would be justified in this work. I believe that very little assistance has hitherto been given to the companies engaged in the exploitation of these fields. I do not blame the honorablemember for Gippsland for this lack of assistance for I know that he has referred in Parliament on a number of occasions to the need for additional help. I do not view this subject parochially. Though I come from Queensland I strongly advocate .that every possible assistance should be given to the companies searching for oil at Lakes Entrance. I am glad that the Government of Queensland has taken and is taking a very active interest in the search for oil. It has recently made an arrangement with the Shell Oil Company to spend a substantial sum in scientific investigations into the possibility of striking oil in the .territory running from Jericho, in central Queensland, down towards the south-western areas of the State. Although the details of the agreement are not known to me I am informed that the company has agreed to make a substantial outlay of money in this search over a period of years. For some years it has been considered that oil would be struck in Queensland somewhere between Rolleston, in central Queensland, and Roma and Chinchilla. If such should be the case great developments would follow in these mountainous and tableland areas. Hitherto the investigation has been of a somewhat superficial character. The Mines Department of Queensland is supervising further extensive surveys, and is also assisting in the adoption of the latest methods of boring for oil with a view to proving whether commercial quantities of oil actually exist in that locality. Twenty or thirty years ago, it was thought that oil would be struck at Roma, in south-western Queensland. From a number of bores there was a tremendous pressure of gas, which accidentally caught on fire and sent out a flame 50 or 60 feet high for several months. It was believed that the operators were on the eve of striking oil, but subsequent geological investigations proved that the oil supply was at some distance from the Roma district and that there was a seepage from that supply to the Roma district which caused the hig pressure qf gas that was encountered. This field, and the country farther north, is to be further investigated. If the Commonwealth Go- vernment can do anything to assist the Queensland Government,which has the matter well in hand and is taking a very keen interest in it, not only I, but I believe all other honorable members also, will be pleased. The Melbourne Argus, on the 4th November last, stated that it was amazing to find that so little assistance had been given to some of these prospective oil wells in Australia, where it was believed that oil could be discovered. The writer of the article singled out the Lakes Entrance field as one of the notable examples of great work having been done by private enterprise and of governmental assistance having been meted out in a very niggardly way; and he went on to say that the Austral Oil Drilling Syndicate had been granted about £1,400, but that the subsidy had been stopped before the full amount had been received.

The story of the search for oil in Australia and the Mandated Territories is not a very creditable one. In view of the national importance of this commodity, I consider that the Commonwealth Government is under the obligation to see that in every instance where a field shows any prospect of developing into an oil-producing field, it should not only have a thorough investigation made, but also provide all of the necessary monetary assistance, with ample safeguards to protect Australia and its people.

Debate (on motion by Mr. Spender) adjourned.

page 1103


Customs Tariff Amendment (No. 2) ; Customs Tariff (Canadian Preference) Amendment (No. 1) ; Customs Tariff (New Zealand Preference) Amendment (No. 1) ; Customs Tariff (Exchange Adjustment) Amendment (No. 1)

In Committee of Ways and Means:

Treasurer · Warringah · UAP

– I move - [Customs Tariff Amendment (No. 2).]

That the Schedule to the Customs Tariff 1933-1939, as proposed to be amended by Customs Tariff Proposals introduced into the House of Representatives on the second day of May, One thousand nine hundred and forty, be further amended as hereinafter set out, and that, on and after the twenty-third day of May, One thousand nine hundred and forty, at nine o'clock in the forenoon, reckoned according to standard time in the Australian Capital Territory, Duties of Customs be collected in pursuance of the Customs Tariff 1933-1939 as so amended. [Customs Tariff (Canadian Preference) Amendment (No. 1).] That the Schedule to the Customs Tariff (Canadian Preference) 1934-1939 be amended as hereinafter set out, and that on and after the twenty-third day of May, One thousand nine hundred and forty, at nine o'clock in the forenoon, reckoned according to standard time in the Australian Capital Territory, Duties of Customs be collected in pursuance of the Customs Tariff (Canadian Preference) 1934-1939 as so amended. [Customs Tariff (New Zealand Preference ) Amendment (No. 1).] That the Schedule to the Customs Tariff (New Zealand Preference) 1933-1934 be amended as hereinafter set out and that, on and after the twenty-third day of May, One thousand nine hundred and forty, at nine o'clock in the forenoon, reckoned according to standard time in the Australian Capital Territory, Duties of Customs be collected in accordance with 'the Customs Tariff (New Zealand Preference) 1933-1934 as so amended. [Customs Tariff (Exchange Adjustment) Amendment (No. 1).] That on and after the twenty-third day of May, Onethousand nine hundred and forty, at nine o'clock in the forenoon, reckoned according to standard time in the Australian Capital Territory, the Schedule to the Customs Tariff (Exchange Adjustment) Act 1933-1939 be amended as follows: - by omitting "130(a)" and "130(b) (1) (b)"; by omitting" 289(a)". Those tariff proposals include new amendments and, in addition, amendments whichwere first introduced by tariff proposals in December last. Increases of duty are made on dates, gum chicle and other gums for the manufacture of chewing gum, and on chewing gum itself, files, wristlet watches, and wristlet watch movements. Reductions of duty are provided in respect of unexposed film for use in home kinematographs, and sparklers. A new tariffitem, has been inserted, providing for the admission free of duty of goods for the official use of the High Commissioner for Canada. The amendments in respect of dates, gum chicle, and wristlet watch movements, result from the consideration given by the Government some weeks ago to the restriction of imports from non-sterling coun tries. In these three instances, the Government considered that conservation of foreign exchange could be achieved by means of substantial revenue duties rather than by the usual quantitative restrictions, whilst at the same time additional revenue slightly in excess of £100,000 per annum would be obtained. The duty on dates is increased by 2d. per lb., making the new rate 4d. A duty of 9d. per lb. has been imposed on gumchicle and on similar gums used jn making chewing gum. These gums were previously mainly free of duty. The duty on chewing gum itself has been increased to compensate for the increased duty on the raw material. The duty on foreign wristlet watch movements will now be 50 per cent. ad valorem; hitherto they were admitted under customs by-laws, either duty free or at the rate of 15 per cent. In order to safeguard the local watch case-making industry, a duty of 50 per cent. will be imposed on the value of the movement contained in the imported watch. The duty on the movement portion will be additional to the existing duties oh imported watches, but will not take effect untilthe 1st July, 1940, in order that overseas wristlet watch exporters may have an opportunity to show on their invoices separate values for the movementportion of the complete watch. Theduty increaseon files, from free Britishpreferential tariff and 15 per cent. general tariff to 7½ per cent. British preferential tariff and 22½ per cent. generaltariff, follows upon a recent report ofthe Tariff Board. A reduction from1d. a lineal foot to ¼d. a lineal foot is made on unexposed film for use in home kinematographs. This film is imported in much narrower widths than the film used for theatre purposes, and the duty of1d. a foot imposed lastSeptember has been found tobear disproportionately on the narrower film. The items originally amended last December have been marked with an asterisk in the explanatory document that has been circulated. They include cotton tyre cord and fabric, canvas and duck, twist drills, lifting jacks, cylinder sleeves for tractors, spring hinges, cooking stoves of special types, glycerine and barometers. The amendments made last December were validated for a period of six months, but it is necessary that they be re-introduced to permit of discussion by Parliament. The. proposed amendments of the Canadian Preference Tariff, New Zealand preference, and exchange adjustment, are consequential to the main customs tariff proposal. {:#subdebate-7-2} #### Progressreported {: .page-start } page 1110 {:#debate-8} ### PETROLEUM OIL SEARCH BILL 1940 {:#subdebate-8-0} #### Second Reading Debate resumed from page 1103. {: #subdebate-8-0-s0 .speaker-KXT} ##### Mr PATERSON:
GIPPSLAND, VICTORIA · CP from 1922; ST CP from 1937; LCP from 1940 .- I support this bill to amend the Petroleum Oil Search Act. Its principal purpose appears to be to enable part of the fund established under the act to be used to provide the Commonwealth subsidy to the State of Victoria - or, for that matter, to any otherState - for scout drilling operations. For some considerable time, the Commonwealth Government and the government of the State of Victoria have been conducting scout-drilling operations in the Gippsland area. I believe that the money for these operations has been obtained from sources other than the fund for which provision was made by the Petroleum Oil Search Act; but it seems quite reasonable that this fund should be used for the purpose now intended, because it is part of a campaign that is devoted to the search for oil. I agree, however, with the expression of hope, by the Deputy Leader of the Opposition **(Mr. Forde),** that the fund will be replenished by the Government, in view of the fact that the amount of £250,000 originally provided under the principal act is becoming depleted. The first amendment mentioned in the bill reminds one of the significance of a single letter. Recently in this House we had a long discussion of the significance of the letter " A ". "We find in this bill that the significance of the letter " S " is quite considerable, because its excision from the word " plants ", with the object of making the provision refer to the purchase of drilling plant instead of drilling plants, will give the Government much greater freedom in respect of what it may do under this legislation; because it will be enabled to purchase any part of a plant under the amendment which reduces the reference to the singular form, the plural form apparently having been interpreted to mean that only complete plants could be purchased. Whilst entirely agreeing with the amendments which are the principal purpose of the bill, I now give notice thatat a later stage it is my intention to move a further amendment which I believe would make the bill more complete. Within the last year or two, I have been forced to the conclusion that the assistance given to oil search - and I emphasize the word " search " - has stopped short of what has been required, not merely in respect of the amount of money provided but also in the scope of its action. When legislation in respect of the matter was brought down in 1936, the theory was held that when oil was found the job would be completed ; that so much interest would be immediately taken in the discovery of oil in any district, that the capital for the development of the field in which it had been found would be readily available. The history of events since the principal act was brought down' has proved that it sometimes happens that when oil has definitely been found, and a moderate quantity has been secured by small-scale methods, such doubt exists as to whether or not there is a sufficient quantity to warrant expenditure upon large-scale recovery operations that difficulty is experienced in raising the necessary capital, if it has been possible to raise it at all. Whilst the major companies would not he troubled or embarrassed by a situation of this kind arising in a district in which they were interested, I believe that small companies with slender capital resources would find that the failure to obtain some financial assistance in the initial stage of development, as distinct from being able to secure it only when they were conducting what is known as a search for oil, would make all the difference in the world to them between launching out on a commercial scale of production and being compelled to remain on a more or less experimental basis. It is very difficult to say just when the search for oil has been completed and the actual production of the oil in a commercial sense has been begun. There is a stage which is between those two, and it is reached when oil is discovered but doubt exists as to whether or not the quantity available is sufficient to warrant considerable expenditure. Something should be done to bridge that gap, in order to encourage small companies to remain in the field, engaged in work that may prove of tremendous value to Australia. {: .speaker-JPT} ##### Mr Blain: -- On the same bore, or on another bore? {: #subdebate-8-0-s1 .speaker-KXT} ##### Mr PATERSON: -- Probably on new bores. Assistance of this kind would enable proof to be furnished in reasonable time, as to whether or not such quantities of oil existed as would justify substantial expenditure. At present, the Government should do everything possible to encourage the production of oil in Australia. The Deputy Leader of the Opposition **(Mr. Forde),** who said that practically no oil has been discovered in Australia in commercial quantities, must be unaware that 150,000 gallons of crude oil have been produced in the Lakes Entrance district in Victoria. Evidence is available that that quantity is infinitesimal in comparison with that which might be produced in that locality if large-scale equipment were available. {: .speaker-KVU} ##### Mr Thompson: -- Is it a commercial commodity? {: .speaker-KXT} ##### Mr PATERSON: -- Yes, every gallon produced has been sold in its crude state at 6d. a gallon, and the Country Roads Board of Victoria is willing to , take, I believe, 500,000 gallons annually for 'use in connexion with road construction. The oil, which contains about 15 per cent, of bitumen, is evidently very suitable for road-making purposes. The product consists of approximately 40 per cent, of diesel oil and 45 per cent, of excellent lubricating oil, the remaining 15 per cent, being bitumen eminently suitable for road-making purposes. The " Imray " bore, one of the most recently sunk in the Gippsland district, which was drilled a depth of 1,270 feet and plugged to prevent the ingress of water, has been allowed to remain in its present condition to see to what height the oil will rise under its own pressure. Oil has now risen to 800 feet from the point of ingress at the bottom of the bore, which means that the oil is entering, slowly it is true, against a pressure of about 340 lb. a square inch. A column of oil 800 feet high and .a few inches in diameter, standing on a very small space at the bottom, produces a pressure over 340 lb. a square inch, which, I believe, is 50 per cent, greater than the steam pressure in an ordinary railway locomotive. With oil entering, although only slowly, against such a pressure, there must be a substantial quantity available and the area is not altogether without natural pressure. The field has been described by the Oil Advisory Committee as " dead " because there is insufficient gas pressure to force the oil to the surface. Another interesting feature in that area has been disclosed only recently in connexion with a misinterpretation by many of the reports of **Mr.** Croll, Bachelor of Science, of the Victorian Mines Department. **Mr. Croll** analysed in his laboratory some old cores taken from a bore several years ago to ascertain the degree of porosity and of oil saturation of the samples. He found that the porosity was about 14 per cent. Inother words, 14 per cent, of the cubic area of the material consisted of voids capable of holding oil. He also estimated that the oil saturation was equal to 1 per cent, by weight of the total volume of the glauconite. I have been informed within the last few days that it is commonly understood by those engaged in the oil industry that, when the degree of saturation is spoken of, it is the percentage which actually exists in the void, and not. the percentage by weight of saturation to the total weight of the glauconite The mistake has thus been made by many people of assuming that the voids contain only 1 per cent, whereas the 1 per cent, referred to in **Mr.** Croll's report is the proportion of the oil by weight to the total weight of the glauconite which is more than 7 per cent, saturation of the oilbearing part of the glauconite area. It will be recognized that 7 per cent, saturation in one-seventh of the - area would be more readily recoverable than if the total quantity were diffused over the whole area. If a bucket of water were emptied on a small nonabsorbent area it would be much more readily recovered than if it were distributed over a large area. I have learned recently that oil is being recovered on some of the most improved fields in France and Germany, not by sinking bores as is usually done in America, but by sinking shafts about 5 feet by 4 feet which, when oil is reached, are widened to a chamber about 16 feet square from which horizontal bores are drilled into the surrounding oil sands. Consideration is being given to this system by the Austral Oil Company Limited in Gippsland. There is a considerable degree of similarity between the oil found *in* the Lakes Entrance field, both with respect to its composition and the fact that it is somewhat lacking in pressure, and those in France and Germany. In those countries they have been very successful in obtaining large quantities of oil by sinking shafts. In these circumstances, I hope that the Government will be prepared to assist those who may undertake pioneering work of this kind in Australia. We have been informed by no less an authority than **Sir John** Cadman that at the present rate of consumption there is only about twenty years' supply of oil in sight in the world to-day. Whatever degree of truth or imagination there may be in the allegations that the major oil companies have tried to prevent the discovery of oil iu Australia, it is safe to assume that if there is only twenty years' supply of oil in sight no company would be foolish enough to neglect any opportunity to increase supplies. As I have already mentioned, I propose at a later stage to move to add at the end of subclause 1 the following sub-paragraph: " (e) for the purpose of advances to persons engaged in the initial stages of the production of petroleum." I believe that the Government will accept such an amendment. The bill provides that assistance may he given in the search for oil, but, as I have pointed out, the stage between the actual search for oil and proof that there is sufficient oil available to warrant, heavy expenditure should be covered. In order to bridge the gap, provision should be made in the bill to enable the Minister to make advances not only to assist in the search for oil, but also to make such advances to those engaged in the initial stage of producing oil. It could be provided that any such advance should be a first charge on the profits of a company obtaining it. I am very glad that the Government has agreed to give further assistance on a £1 for £1 basis to the Austral Oil Company Limited to drill another bore. I understand that the company is very appreciative of the Government's help in that respect. The measure would be improved tremendously by the' acceptance of the amendment which. I have forecast. {: #subdebate-8-0-s2 .speaker-KVU} ##### Mr THOMPSON:
New England -- I do not intend to oppose this measure, but I take this opportunity to question the Government's whole policy under which £250,000 was appropriated by Parliament for distribution amongst companies or enterprises engaged in searching for oil in Australia. Instead of a pettifogging bill such as this, a comprehensive measure dealing with the whole of the oil position in Australia should have been introduced. Faced as we are with a great international crisis, the fuel supplies of the nation are of paramount importance. We can assume, from the limited information at our disposal, that the position at the moment is comparatively safe, but we do not know what the immediate future may bring forth. It may not be long before Australia is faced with an acute and irreparable shortage of fuel oil. The policy, which has been applied for the last three or four years in Australia, of doling out funds to companies or other private enterprises to induce them to search for oil in Australia, has come to nothing. The Assistant Minister **(Mr. Nock)** has introduced an amending measure, which, according to the honorable member for Gippsland **(Mr. Paterson),** is likely to be useful in the State of Victoria and also acceptable to the State of Queensland, but that measure is not likely to affect the general oil position of Australia. It does not offer any new hope that the Government is taking this matter seriously or that outside interests engaged in the search for oil are likely to produce any more valuable results than they have produced so far. It is time that the Government gave serious consideration to the position. The sooner the £250,000 which is provided in the principal act as assistance in the search for flow oil is exhausted the better, because we shall then have opportunity to reconsider the whole position. The Government has encouraged those people who are searching for oil to have a settled understanding that the present policy will be applied for an indefinite period, but when the £250,000 is exhausted the Government will have to face the question of whether it will abandon the search for oil in Australia or will tackle the job on a much more comprehensive and nation-wide basis. We cannot get away from the fact that the money so far spent has been wasted ; we still have no oil in Australia. I am intensely interested in the oil development at Lakes Entrance. From the statement of the honorable member for Gippsland it would appear that we have a proposition there which should be developed on a much more extensive scale. The honorable gentleman mentioned a total production of 150,000 gallons of commercial oil, which was retailed at 6d. a gallon. The Commonwealth Government should be more interested in that activity and not leave it entirely to the Government of Victoria or to private interests, because I believe that it represents the first tangible sign of a flow oil industry in Australia. I know that there has been some development in Roma, Queensland, but we have not heard anything about it for a very long time. Further propositions have been talked about, and there have been company flotations; but, beyond the oil mentioned by the honorable member for Gippsland, we are no further towards solving the great Australian mystery: Have we petroleum in this country? I submit, particularly to the Assistant Minister, that the present procedure of the Government merely plays with perhaps the most vital issue that concerns the future of this country. The war raging to-day is based upon the mobility of vast armies. The great question amongst the warring nations is : Can they maintain their supplies of fuel oil? We have seen for months past elaborate calculations by economists and statisticians proving that Germany cannot last very long, because its oil supplies will disappear within a given period, and we have been led to believe that the Allies must win because they have at their disposal inexhaustible supplies of fuel oil. Australia is dependent on imported supplies for internal transport and for its ability to prepare its own defences; oil is the very lifeblood of its industrial activities and development, yet there is no flow oil in Australia. It is true that we can obtain oil from other sources such as shale and, in a limited way, from coal. Although we have for some years been playing around with encouraging private enterprise to look for flow oil, we may easily be wasting our time; we may easily be working on entirely wrong lines and deluding ourselves as to the possibilities of procuring flow oil in this country. I ask the Assistant Minister fo place before the Government without delay this question: Is it not urgent, in view of the present world situation, that some decision be reached as to whether the immediate prospects of obtaining oil in Australia justify the Government in continuing to encourage private enterprise to search for flow oil, or whether the Government itself should go into an entirely new field of exploration in order to supplement or guarantee our oil supplies for some years to come? I trust that I have made myself plain. I mean that the Government should immediately tackle the question of whether we have not reached the stage at which we should look other than below the ground for supplies of oil. To support my view that wc are running a great risk in wasting time - we have wasted time on this search for oil in Australia - I quote from an interesting booklet sent to me by the Vacuum Oil Company Proprietary Limited, *I'he Search for Oil.* Here is an arresting paragraph - >Vacuum Oil Company Proprietary Limited holds a large financial interest in Australasian Petroleum Company Proprietary Limited, Island Exploration Company Proprietary Limited and New Zealand Petroleum Company Limited. These three oil prospecting companies have been actively operating for mora than a year, but already have allotted share capital amounting to £1,980,000,, of which £1,316,270 has been subscribed. Vacuum Oil Company Proprietary Limited's contribution towards this latter amount was £575,884. If wc add to this the expenses involved prior to the formation of these three oil prospecting companies, a very conservative figure f°r Vacuum Oil Company Proprietary Limited's expenses in respect of search for oil in this part of the world would be not less than three quarters of a million pounds. One of the great oil companies of the world puts its cards on the table and says that in the last few years it has expended £750,000 in searching for oil in Australia, New Zealand and New Guinea, but has not found any. This company has been searching for oil in Australia since 1917. It has the world's best experts at its disposal, and the finance to provide all necessary modern oil search plant. Yet after some 23 years it has to confess it is still searching in Australia, New Zealand and New Guinea. I have also taken from this pamphlet a couple of interesting points to bring under the notice of honorable members. One deals with the high cost of searching for oil. I have indicated what this company has expended, but as a generalization the company says that well over £1,000,000 may be expended without locating oil. In addition to the tremendous amounts of capital available to the oil companies which are looking for oil in Australia and in other parts of the world, they have other auxiliaries, and, perhaps, the most valuable is the modern scientist. It is stated in this booklet that the geophysicist is a great boon that the oil searcher in the old days did not have available to him. The geophysicist has revolutionized searching for oil, but still he has not been able to help the oil companies to find fuel oil in Australia. I submit to the Assistant Minister that in view of these interesting facts, which are authentic because they are taken from the official pamphlet of the Vacuum Oil Company Proprietary Limited, the Government should carefully consider whether the policy which it has been applying is tinkering at the greatest issue that confronts the people of Australia to-day, apart from our actual defence activities. We have a country without oil, dependent on outside sources for it. Where are we *going to get* it?' The legislation now before this chamber deals with the distribution of £250,000. to assist in the search for oil, but on the figures quoted by) the Vacuum Oil Company Proprietary Limited £250,000 is a mere bagatelle and is not likely to produce oil in Australia, because oil companies have spent millions of pounds and have not yet found oil. This is a serious matter, not lightly to be passed over by this Parliament. Within a few weeks, or a few months at the most, we may be faced with the problem of obtaining fuel oil from other sources. We have no reliable information as to what resources we possess, but we are told that they are believed to be sufficient. There is, however, general *alarm* throughout Australia at the prospect of rationing of petrol, and the imminent possibility of our being forced to close down industries and halt our defence preparations, simply because we have not made preparations, against being cut off from overseas sources of supply. Has the Government given any consideration to this problem at all? We have had statements from Ministers from time to time that the position is being watched. Is it being watched? If so, to what degree? What is the character of the watching? Is one Minister charged with the responsibility of seeing that supplies do not become, depleted before a warning is issued, or is any active move being made to ensure that we get supplies, either from outside or within Australia ? I state emphatically that my reading of the position is that there is no flow oil in Australia of any value, nothing on which we can depend, and I give in the honorable member for Gippslands Lakes Entrance proposition. We know, however, that there are in Australia vast natural resources of oil close to 'the surface. These comprise shale oil and coal. What are we doing to make use of these natural resources of oil ? We have made a start at Newnes in a' small way, but there are other places which could bc opened up and developed. At Murrurundi, to the south, "-of Tamworth, there are eight miles of shale yielding from 40 to 70 gallons a ton. An English-Scottish company retorted good shale there before the last war. It expended £750,000 and employed more than 200 men. The works were closed -down soon after that war started because of the additional capital required, the raising of which was made difficult by war exigencies. Since then the works have been sold and dismantled, leaving only a mournful heap of bricks and cement. The possibilities of development are still there, however, and Australian companies are prepared to undertake that development if the Commonwealth Government will give to them assistance similar to that which it is giving in the development of the Newnes shale-field. In the dumps at Murrurundi shale-mine, there are 200,000 tons of shale residue, representing probably 10,000,000 gallons of oil. This oil was sold throughout Australia. I have been told that it was first-class- oil for motor vehicles, and also that it: would burn all day in an oil lamp, with a clear white light without the slightest; trace of, soot or smoke. In spite of these facts, the venture has not attracted the attention of the Government. Iii view of the world situation, and the threatened shortage of supplies of fuel oil from overseas, we should face up to the position immediately. The Government now has 25 hoards of different kinds at work, and I think that it should have appointed a board of experts to. deal in a practical way with the fuel oil position. {: .speaker-KXT} ##### Mr Paterson: -- We have the Commonwealth Oil Advisory Committee. {: .speaker-KVU} ##### Mr THOMPSON: -- Yes ; but, being an advisory body, it can only make recommendations to the Government. We should examine the possibility of discovering flow oil in Australia within a reasonable period, and, in the event of the prospects in that direction being no brighter than they appear to be at the present time, we should look to other sources of supply in the near future. For oyer 25 years the search for flow oil has been in progress, but we have no guarantee that it will be found within the next 25 years, or even the next 125 years. The people are being deluded by the statement that flow oil may he discovered in Australia at any time. We cannot take the risk of relying on such a fanciful expectation. We should try to increase our supplies of fuel oil from our natural resources. I refer to our coal and shale, and, principally, to the latter. Immediate attention should be given .to the development of the extensive deposits of oil shale to be. found throughout Australia. This country has the richest oil shale deposits in the world. The Standard Oil Company is investigating the possibilities in this direction at Baerami. Then we have extensive deposits of shale at Newnes. I consider that the Government acted unwisely in refusing to expend an additional £300,000 at Newnes in order to increase the annual output of oil from that field from 10,000,000 to 30,000,000 gallons. That was a colossal blunder. There are extensive deposits of oil shale in Queensland and New South Wales, and I believe that there are some in Victoria also. There is a shale-field 15 miles long in the Mareeba district, and it comprises some of the richest shale in the world. .'The development of this field would -result- in a tremendous- addition to. Australia's stocks of fuel oil. .= -r - v , : {: #subdebate-8-0-s3 .speaker-JOS} ##### Mr SPEAKER (Hon G J Bell:
DARWIN, TASMANIA -- I remind the honorable member that, in discussing the production of shale oil, he is going beyond the scope of the bill. {: .speaker-KVU} ##### Mr THOMPSON: -- I am suggesting to the Government that, if it is satisfied that there is no prospect of obtaining flow oil in Australia in the near future, it should consider the development of our oil shale deposits. {: #subdebate-8-0-s4 .speaker-10000} ##### Mr SPEAKER: -- A passing reference to that matter is permissible. {: .speaker-KVU} ##### Mr THOMPSON: -- No doubt there are a dozen areas in Australia where shale oil could be produced, instead of wasting our time and money in the search for flow oil. I am satisfied that the Government is adopting . a dangerous policy in depending on the search for flow oil. I ask the Assistant Minister, in the interests of the nation, to place before his colleagues the remarks made during this debate, in order to induce the Government to bring forward a measure to deal with the fuel oil problem in a more national and comprehensive way than is done by this bill. {: #subdebate-8-0-s5 .speaker-KLL} ##### Mr MAKIN:
Hindmarsh .- I desire to know whether the arrangements made with the Anglo-Persian Oil Company Limited in the early stages of the search for flow oil, by which the services of the company's experts were to be made available to the Commonwealth Government, still stand. Some years ago I was a member of a committee that investigated the possibility of discovering flow oil, and our inquiries took us as far afield as Papua. There, owing to the change of policy adopted by the government of the day, the experts of the Anglo-Persian Oil Company Limited were, called upon for expert advice, but they discouraged the Government from pursuing certain boring work in Papua which **Dr. Wade** had regarded as having been undertaken in a suitable locality. Flow oil had actually been discovered at that spot in sufficient quantities to give encouragement to the belief that large reservoirs of oil might be found there. It will be remembered that the AngloPersian Oil Company Limited co-operated with the Commonwealth Government in the formation of the Commonwealth Oil Refineries Limited, and offered the services of its experts to assist the Govern ment in its exploratory work. The company made it clear that it did not expect to be compensated for the services of its experts, provided that their ordinary expenses were met by the Government; but. the agreement entered into at that time provided that, in the event of flow oil being discovered in Australia or any of its territories, the quantity of oil so obtained was to be deducted from the quantity that the Commonwealth Government was obliged to take from the company. Consequently it would have been of decided disadvantage to the company if its experts had discovered any oil. I ask honorable members whether the experts could have been expected to do anything that would have proved detrimental to the best interests of their own company. It seemed to me that that was not quite the. best arrangement that could have been made. We should have experts of our own. and pay them ourselves, so that they will be responsible only to us. When we went to Papua we were shown a site that had been recommended by **Dr. Wade,** where prospecting had been undertaken on his advice. Oil had actually been found there, though not in commercial quantities. The AngloPersian Oil Company expert advised that the location did not give sufficient promise to justify further operations, with the result that boring was stopped, and the plant was moved further inland. We visited this site, and found that, although boring operations had been carried on there for some time - with the usual experience of lost tools that had to be fished out of the bore again, thus causing serious delay - no indication of oil had been found. In the meantime certain areas in Papua had been opened up for prospecting by orivate interests, and the very spot which had been recommended by **Dr. Wade,** but which had been abandoned on the advice of the Anglo-Persian Oil Company's expert, was selected for prospecting by two men, one of whom was a former employee of the, Anglo-Persian Oil Company. In the course of our investigation, we found him the most unsatisfactory witness of all whomwe examined. We never succeeded in getting a straight answer from him to any question we put, and we gained the impression that there was a great deal more behind the business than we were ever told. I should like the Assistant Minister **(Mr. Nock)** to tell honorable members what are the arrangements between the Commonwealth Government and the AngloPersian Oil Company Limited regarding the services of that company's experts. I t is most important that attempts to discover oil in commercial quantities should not be sabotaged or delayed by any one. {: #subdebate-8-0-s6 .speaker-JPT} ##### Mr BLAIN:
Northern Territory . -When the original bill was first brought down I opposed it vigorously. I do not think that it would ever have had any chance of getting through had not the companies been able to count upon the influence of a number of gullible members of this House. I was surprised to learn that this amending bill was being brought down at a time when I thought we might have adopted a new policy in regard to the search for oil. Unfortunately, the old method is to be given a further trial. It is evident that certain unfinancial prospecting companies are able to pull the legs of members of this Parliament to induce them to support the making of further grants for uneconomic prospecting operations. The honorable member for Gippsland **(Mr. Paterson)** gave notice of his intention to move an amendment, and he treated us to dissertation studded with technical terms in support of his proposed amendment. I oppose his proposal. I am acquainted with most of the State geologists, and I have obtained from qualified men in regard to the boring operations at Lakes Entrance opinions which are the exact reverse of what has been told to us by the honorable member for Gippsland. Of course, the honorable member is doing the best he can for his district. {: .speaker-KXT} ##### Mr Paterson: -- This bill deals with operations throughout the whole of Australia, and not only with those at Lakes Entrance. {: .speaker-JPT} ##### Mr BLAIN: -- If it is passed it will give a fresh lease, of life to a company that has no prospect of success. {: .speaker-KXT} ##### Mr Paterson: -- That is not fair. {: .speaker-JPT} ##### Mr BLAIN: -- I ha ve the benefit of the advice of an eminent geologist, and it is quiteclear to me that the honorable member for Gippsland has had his leg pulled regarding the Lakes Entrance venture. I am in favour of scout boring. At Lakes Entrance, they put the bore down until they encountered a treacly substance. When honorable members make an inspection of the bore, the whole thing is usually rigged. A tap is turned on, and the oil runs for five minutes or so, but they know very well when to turn it off. No petrol has been produced. They have obtained only a viscid material suitable for the production of bitumen and crude oil. I have it on the advice of a geologist that Lakes Entrance can produce neither the quantity nor quality required. I do not, however, believe thatwe should abandon the idea of discovering oil in Australia. For instance, in the Northern Territory, at Mataranka, distinct oil may be seen on the surface of the ground, oozing from hot springs. I say that the bores at Lakes Entrance should be abandoned, and an attempt should be made somewhere else to find oil. We should obtain the advice of all of the State geologists in order to check the opinion of the Oil Advisory Committee. Some technicians are apt to confuse beliefs with facts, and because, in years gone by, they received fees from certain companies, they feel that their technical reputations are in danger if they do not recommend thecontinuation of the operations. That, I suppose, is only human. Before we spend anothershilling on this work, we should obtain the separate reports of all of the State geologists in Australia. As I have said. I have had the benefit of the advice of a very well-qualified man. {: .speaker-KXY} ##### Mr Perkins: -- Give us his name. {: .speaker-JPT} ##### Mr BLAIN: -- I shall do nothing of the kind. We should not be so gullible as to allow our legs to be pulled by those who may have their own interests to serve. {: .speaker-F4U} ##### Mr Forde: -- The honorable member does not suggest that the honorable member for Gippsland has had his leg pulled? {: .speaker-JPT} ##### Mr BLAIN: -- I have said as much, but I do not regard that as a slur on the honorable member. I have had the benefit of technical information which I do not think the honorable member could translate, even if it were placed in his possession. I know that the honorable member is sincere; he would not know how to be anything else. Before we agree to the expenditure of hundreds of thousands of pounds, we should follow the advice of the honorable member for New England **(Mr. Thompson),** and have a complete survey made, not only of our ability to produce power alcohol, but also of our shale deposits. There are shale deposits at intervals throughout the whole of the eastern sea-board of the continent, including the Expedition Range, near Emerald, and at Dalby. I have deposits in my own paddocks in the Bunya Mountains. The shale is there for any one to see. There are deposits inthe Walloon Basin, which dip again in southern Queensland, and come out at Baerami. These are facts with which all geologists are familiar. We should investigate these possibilities instead of allowing our legs to be, pulled by company officials, who are only anxious to keep their jobs even when they know that they are not on oil from whichpetrol could be distilled but on a little black treacly substance. *Sitting suspended from 6.15 to 8 p.m.* {: #subdebate-8-0-s7 .speaker-KJQ} ##### Mr JAMES:
Hunter .- When the Petroleum Oil Search Bill was before honorable members in 1936 I said that despite the many geophysical surveys which were being carried out, it was extremely doubtful that flow oil would be discovered in payable quantities in this country. Flow oil is a mineral product; I emphasize that fact. When £250,000 was made available by the Commonwealth under the original legislation, provision was made in section 5, sub-section 3b, for payment for boring expenses, salaries and allowances, and other remuneration to persons employed by the Minister under the act. This bill seeks to eliminate that paragraph to insert in lieu thereof - " (b) in the purchase of drilling plant for use in connexion with such search;"; and The bill also proposes to add at the end of that sub-section the following paragraph " ; and (d) towards the cost of any geological survey or scout drilling operations conducted by the Commonwealth in conjunction with a State in connexion with such search.". {: type="1" start="2"} 0. The amendments effected by sub-section (1) of thissection shall be deemed to have come intooperation on the day on whichthe Petroleum Oil Search Act (No. 2) 1936 came into operation That Petroleum Oil Search Act came into force on the 7th December, 1936. The effect of sub-clause 2 is to provide for retrospective payments to companies in order to compensate them for expenditure on tools, boring plant or parts of boring plant, which they have purchased. That seems to bear out the opinion which I expressed that oil would not be found in payable quantities, because now the friends of the Government who have been engaged in the search are to be compensated for the money they have expended during the last four years. Compensation was paid to the companies, and rightly so, for labour costs in connexion with boring operations, but now apparently it is proposed to compensate them for machinery which they have purchased. {: .speaker-K4X} ##### Mr Nock: -- This relates only to machinery purchased by the Government. {: .speaker-KJQ} ##### Mr JAMES: -- The act provides for expenditure by the Government and persons engaged in drilling operations. Can the Assistant Minister **(Mr. Nock)** give an assurance that no company will be compensated for money which it has expended on plant, parts of plant, or tools of trade? {: .speaker-K4X} ##### Mr Nock: -- The Government purchased the plant and hired it out to companies. {: .speaker-KJQ} ##### Mr JAMES: -Then compensation will not be paid to any private company in respect of expenditure on machinery? {: .speaker-K4X} ##### Mr Nock: -- That is so. {: .speaker-KJQ} ##### Mr JAMES: -- I accept the Assistant Minister's assurance in that regard and will not pursue the matter further. When speaking on the original measure I urged that the Government should endeavour to encourage the production of other mineral oils. . The Petroleum Oil Search Act covered mineral oil obtained from hydrocarbons. I claim that oil which is known to exist in large quantities in certain domes is no different from oilwhich is in a solid form. It cannot be denied that flow oil has not been discovered in this country in anything like the quantity in which it is known to exist in solid minerals, such as shale. Drilling operations have been proceeding in Gippsland for years, butdespite all the encouragementgiven to this enterprise which; no doubt, enjoyed full participation in the Commonwealth grant, the production of flow oil has not exceeded, say, 100 barrels a week. That is almost the only place in Australia where well oil of any kind has been found. I point out that even flow oil has to be distilled in order to obtain petrol. I do not wish to introduce subjects which cannot be discussed within the limits of this debate, but I should like to emphasize that the bounty should be paid on machinery used in. the distillation of any mineral oil, whether it be flow oil or oil obtained from solids. No valid argument can be raised against that. Both oils have to be distilled or, in other words, refined. In a certain part of New South Wales, fairly substantial quantities of oil are now being extracted from a solid mineral, namely shale, and I suggest that the production of that oil should be placed on the same basis as the production of any other mineral oil. From my own mining experience, I know that at Baerami there are much greater quantities of oil in solid form than at Newnes. Admittedly the oil content of the shale at Newnes is greater than at Baerami, but this is offset by a vast disparity in mining costs. **Mr. SPEAKER** (Hon.G. J. Bell).I think that the honorable member for Hunter **(Mr. James)** was in the chamber when the honorable member for New England **(Mr. Thompson)** was told that he could not discuss shale oil under this bill. This measure provides for assistance to the companies engaged in the search for petroleum oil and specifically excludes oil from distilled rocks or mineral. As I told the honorable member for New England, some reference to that matter might be allowed, but it cannot be debated at length. The honorable member for Hunter must observe that ruling. {: .speaker-KJQ} ##### Mr JAMES: -- I have no desire to dissent from your ruling, **Mr. Speaker,** but I ask does not oil obtained from solid minerals come within the category of petroleum ? {: .speaker-10000} ##### Mr SPEAKER: -- The Chair is not called upon to tell the honorable member the meaning of the term " petroleum ". I think that honorable members understand well what is intended in this bill, and to what branch of the industry this assistance is intended to apply. A detailed explanation is not called for. {: .speaker-KJQ} ##### Mr JAMES: -- Section 2 of the original act says that petroleum means " naturally occurring solid liquid or gaseous hydrocarbons . . . " Is hot shale a solid which can he converted into a liquid, just as crude oil is converted into petrol? Crude oil cannot be used in the usual internal combustion engines. If you say that I am still out of order in referring to shale oil, **Mr. Speaker,** I shall not continue my remarks. {: .speaker-10000} ##### Mr SPEAKER: -- The Chair has ruled out of order discussion of the production of oil from shale. {: #subdebate-8-0-s8 .speaker-KMW} ##### Sir CHARLES MARR:
PARKES, NEW SOUTH WALES · NAT; UAP from 1931 . In the light of the information which the Assistant Minister **(Mr. Nock)** has supplied, the purpose of the bill can be clearly understood. I remind the House that in 1928 the Petroleum Prospecting Bill which I, as Minister for Home and Territories in the Bruce-Page Government, had the privilege of introducing, provided for the payment of £50,000 to a petroleum trust account which was to be used to encourage the discovery of flow oil in the Commonwealth. Honorable members will understand readily that if a company or an individual had discovered flow oil in payable quantities payment of that £50,000 reward would be more than offset by the great advantages accruing to the Commonwealth. The Parliament supported the Government's proposal on that occasion and passed the bill. The honorable member for Hunter **(Mr. James)** has read into this bill some meaning which is not intended. He said that it was not fair to assist projects for the distilling of flow oil, and to withhold assistance from schemes' for the distilling of residual oil from shale or coal. This bill does not provide for a subsidy for distillation; its purpose is to give financial assistance to companies or individuals engaged in a search for flow oil. {: .speaker-KJQ} ##### Mr James: -- The Assistant Minister said that that was not so; otherwise I would have continued my remarks. {: #subdebate-8-0-s9 .speaker-KMW} ##### Sir CHARLES MARR:
PARKES, NEW SOUTH WALES -- The honorable member asked if the bill was intended to make retrospective payments to certain interests. {: .speaker-KJQ} ##### Mr James: -- To companies. {: .speaker-K4X} ##### Mr Nock: -- The honorable member asked if the Government intended to provide money to recoup to companies money expended by them on plant since 1936. I replied that the bill applied to expenditure on plant purchased by the Government and hired out to companies. {: .speaker-KMW} ##### Sir CHARLES MARR: -- I think the honorable member for Hunter asked whether the bill would compensate the companies for the time and money which they had expended in the search for oil, and he received from the Assistant Minister an assurance in the negative. The measure does not provide for compensation to any companies for their operations in recent years. The act prescribed that companies or individuals could be compensated on a footage basis for expenditure incurred in boring in approved areas. Companies have been carrying out such work in Gippsland for several years. {: .speaker-JPT} ##### Mr Blain: -Solely under State control. {: .speaker-KMW} ##### Sir CHARLES MARR: -- Yes. The companies concerned have been working on the advice of the Victorian Mines Department. They have done good work there, but we cannot yet say whether oil has been discovered in payable quantities. We do know, however, that there are oil seepages in the locality of the bores, and that a considerable quantity of oil has been obtained. {: .speaker-KVU} ##### Mr Thompson: -- The honorable member for Gippsland said that 150,000 barrels of oil had been obtained in Gippsland. {: .speaker-KMW} ##### Sir CHARLES MARR: -- That may be so, but no gushers have been discovered there. I approve of the Government's intention to give the companies operating in Gippsland a better chance to ascertain whether oil exists there in commercial quantities. The Commonwealth Government should take to itself the power to use a portion of the money set aside for prospecting to co-operate with the Victorian Government in using modern plant to put down test bores in Gippsland. That is a fair proposition. Such action should decide definitely whether or not flow oil exists in that area. The bill will empower the Government to appropriate some of the money set aside for the assistance of oil prospectors for the purpose of providing modern plant for the use of companies engaged in the drilling of bores. Up to the present time the Commonwealth Government has bought four boring plants, which it has hired out to companies searching for oil. All honorable members must realize that the discovery of oil in Australia would be of inestimable value to the nation; therefore they must agree that the Government's proposal is sound. I understand that the plant will be hired on a 10 per cent. basis and that the search will be carried out under the direct control and supervision of the Commonwealth Geological Advisor. This bill will ratify the agreement which the Commonwealth Government is making with the Government of Victoria for the expenditure of certain money on the drilling of bores by a company operating in Gippsland. The proposal is quite simple, and the short speech with which the Assistant Minister introduced it gave an adequate explanation of the whole procedure. Honorable members should agree to the second reading now, and, when the bill is in committee, consider the amendment circulated by the honorable member for Gippsland. Unfortunately I did not hear all of the remarks made by the honorable member for Gippsland, but I am prepared to listen to his claims and I shall support them if they are reasonable. {: #subdebate-8-0-s10 .speaker-KHL} ##### Mr HOLLOWAY:
Melbourne Ports -- It is obvious that the majority of honorable members are in favour of this measure, and if I understand their view, they desire the Government to increase the amount of assistance now given to companies and individuals engaged in the search for oil. I had hoped that long before now the Government would have taken more notice of the reports of many geological experts regarding the most suitable places in which to search for flow oil. Some of us became very enthusiastic about one report which stated that the north of Australia, from east to west, was in what has been described as the zone of flow oil fields, and that oil should be found there in large quantities. But it appears that no effort has been made to examine that part of the continent by means of scout-boring. It has been, alleged that Japanese have taken small boatloads of oil from islands not far from Darwin, and I have seen mineral outcrops which experts describe as sure indications of the presence of flow oil. Many such outcrops may be seen on the shores of islands not far from Darwin. Although . I am disappointed that the Government has not encouraged a more intensive search in that area, I am pleased that it has now introduced this measure in order to facilitate the distribution of financial assistance to oil searchers. I shall support the measure. The most important requirement in the search for oil is modern boring plant. Those who know anything about oil production agree that it is useless to carry onwithout efficient modern equipment, which, of course, is expensive. Attempts have been made with obsolete equipment to locate oil deposits, but they have not been successful. The most logical course open to the Government is the purchase of modern American plant. It is not yet clear whether the plant already purchased by the Government and loaned to prospectors, and the plant which will be bought to assist future operations, will finally revert tothe Government if those engaged in the work become tired of the pursuit and cease their activities. Mr.Nock. - All of the plant will be owned by the Government. {: #subdebate-8-0-s11 .speaker-KHL} ##### Mr HOLLOWAY:
MELBOURNE, VICTORIA · FLP; ALP from 1936 -- Statements that oil has been found in Gippsland have been ridiculed. I have seen oil there, although it has been of very poor quality and in small quantities. Its existence justifies the belief that the use of proper equipment may result in the discovery of large deposits near Lakes Entrance and elsewhere. The necessity for the discovery of oil supplies within Australia is so urgent that the Government should neglect no opportunity. I urge the Ministry to give more liberal financial aid to oil prospectors. If this subject had no connexion wih defence, the Government could logically say that it could not afford to expend large sums of money on this work in view of the necessity for conserving finance in the interests of defence: but that objection could not now be urged, because the discovery of oil would be of the greatest assistance to its defence programme. The Government could easily justify a proposal to set aside £1,000,000 to finance an intensive search for flow oil. Not one penny of the money already spent on the search for oil has been wasted, and it would not be wasteful to increase Commonwealth expenditure on this work. The expenditure of as much as £500,000 or £600,000 in one area would be of value even if the search were unproductive, because the result would show that further operations in that district would be useless. The Government should not only carry out the projects proposed in this bill but should also increase continually the amount of money provided for the work, so that these companies and individuals who are prepared to engage in the search for flow oil may be supplied with proper equipment. They cannot be expected to pay for modern plant out of their own funds. Time is of the essence of the contract, and the sooner we find flow oil in Australia, the better it will be for the nation. {: #subdebate-8-0-s12 .speaker-KYH} ##### Mr PRICE:
Boothby .- For many years companies have been searching for flow oil and other kinds of oil in Australia, but they have been unsuccessful up to the present time. Unfortunately many of the Australian public have invested thousands of pounds in companies engaged in the search for oil. The Government should give those people a lead by engaging the services of experts capable of telling them where there are good chances of locating oil. I am glad that the Ministry proposes to buy extra boring plant. I understand that it has decided to purchase four sets of equipment which can be hired on a, 10 per cent. basis by any company or person engaged in the search for oil. The plants will he under the control of the Commonwealth Geological Adviser, who should be active and able to give expert advice to the Government. I am told that **Mr. Rogers,** an oil expert who was in the employ of the Government, is now at Glen Davis. If that be so, the Government should appoint a thoroughly qualified successor to him. Such an appointment would be of benefit to the Government, as well as a protection to investors, who frequently are gulled into putting their money into ventures which have no hope of success. {: #subdebate-8-0-s13 .speaker-L07} ##### Mr LAZZARINI:
Werriwa .- I hope that a successful search for oil in this country will not result in a bitter fight for the control of the oil wells, leading to antagonisms and. even wars, as lias, happened in other parts of the world. If the Government is to provide funds for the search for oil, it should take steps to ensure that no assisted company shall make undue profits out of the oil that may be discovered. Should any such attempt be made, I hope that the Government will exercise its powers under the National Security Act to prevent profiteering in oil. {: .speaker-KMW} ##### Sir Charles Marr: -- That was provided for in the old act- {: .speaker-L07} ##### Mr LAZZARINI: -- That is not so. There was no provision that the money advanced by the Government should1 be refunded in the event of the search for oil being successful. {: .speaker-K4X} ##### Mr Nock: -- The money is repayable under certain conditions. {: .speaker-L07} ##### Mr LAZZARINI: -- There is nothing to ensure that the Government will get any refund of advances made to companies which may make huge profits. Honorable members know the history of the search for oil throughout the world. I hope that if public money is to be expended to discover oil in Australia, precautions will be taken to ensure that what has happened in other countries shall not occur here. I do not want to see the fair name of Australia besmirched by such occurrences. I should like to have an assurance from the Government that in the event of the search for oil being successful, the provisions of the National Security Act will be invoked to prevent profiteering in a commodity obtained by the use of public funds. {: #subdebate-8-0-s14 .speaker-KQ8} ##### Mr SCHOLFIELD:
Wannon -- I commend the Government for the introduction of this bill, which I believe is the culmination of representations made in this House from time to time. The Government should, however, give more practical assistance to those who are searching for oil in Australia. It should bring to this country an undoubted expert in the selection of sites, who also knows how to bring the oil to the surface when it is found. At present there is in Australia no person properly qualified to do this work. Several companies which are engaged in the search for oil are likely to be. successful. There is un doubted evidence of oil in ' Gippsland ; oil comes to the surface under its own pressure. In this connexion, I wish to correct the false impression that the oil that is obtained there cannot be disposed of. at a payable price. The Country Roads Board of Victoria is prepared to take for road purposes 500,000 gallons each year at 6d. a gallon, and refiners of oil will take all that can be supplied to them. I support the amendment of .the honorable member for Gippsland **(Mr. Paterson).** For some time there has been power to grant assistance to- companies engaged in the search for oil, but it was almost impossible for companies other than .those which were strong financially, to get that assistance from the Government. The amendment of the honorable member will provide funds for the initial stages of the search. That is necessary, because otherwise only financially strong companies could reach the position which would enable them to claim assistance from the Government. I am pleased also that the Government is prepared to grant assistance in respect of parts of plants, as well as whole plants. In my electorate, a company has put down two bores, one of which has reached a depth of about 2,000. feet, and the coTe now shows definite signs of oil. I think that before long additional equipment will be needed by that company. Most of the companies which are operating cannot afford to send to other parts of the world for the equipment that is necessary to drill to great depths. Some of the existing bores may have to go much deeper before oil. is reached, and therefore I am glad that the Government is prepared to grant some assistance to the companies concerned. I emphasize the need for engaging experts who have been connected with the production of oil in other countries and know their job. {: #subdebate-8-0-s15 .speaker-K2A} ##### Mr RANKIN:
Bendigo .- 1 support the amendment moved by the honorable member for Gippsland **(Mr. Paterson).** Having visited east Gippsland, I can say of my own knowledge that there is a great quantity of oil there. I have not a great deal of faith in the Oil Advisory Committee, because its reports are so contradictory that no one can rely on them. In one report, that body said that there was sufficient oil in east Gippsland to meet Australia's requirements for a great many years. Later, however, it reduced its estimate by about 50 per cent. One wonders whathappened in the meantime. In my opinion, the Commonwealth Government has not given sufficient support to the search for oil in Gippsland. It is true that it has expended £200,000 on the search for oil in Australia and New Guinea, but of that amount only ab out £1,200 has been expended in Gippsland, notwithstanding that thatis the only district that has produced oil in payable quantities. Any area which can. produce oil in commercial quantities, even though the supply may be far below that of the wells of Sumatra, Mexico or the United States of America, would be a great asset to Australia in view of world conditions to-day. Some of the oil-boring plant in use in this country is so old that it might almost have been designed in the time of Noah. I understand that there is only one up-to-date boring plant in this country. There is great need for the latest machinery and the employment of uptodate methods, for I believe that oil exists in Australia in large quantities. At the present time it is particularly important that every encouragement should be given to the search for oil, in order to meet the situation which would arise should our supplies of oil fuel be cut off. I believe that the seepage of oil in Gippsland is evidence of large supplies of oil, and that eventually those supplies will be tapped. Should that occur, Australia will no longer be dependent on the major oil companies of the world which, like a great octopus, have practically a stranglehold on many nations. The very people who condemn great monopolies squeal most when it is suggested that money be voted for the purpose of searching for oil, the discovery of which would be a great step in the direction of the economic independence of this country. {: #subdebate-8-0-s16 .speaker-KLC} ##### Mr MAHONEY:
Denison .- I listened carefully to those members of the Country party who desire to get money from the Commonwealth Government in order to benefit company promoters who have sunk bores and claim that the prospects of finding oil are most hopeful. Generally, these companies tell prospective investors that they have reached a depth of, say, 1,500 feet, and expect to strike oil within another 100 feet. By the issue of alluring prospectuses, they obtain money from credulous people, notwithstanding that in some instances there is little or no prospect of success. It is time that the Government sent an inspector into the areas where these companies are operating in order to examine the cores brought up by the drills. It is our duty to protect the public. If oil exists in this country, we can rest assured that sufficient money will be forthcoming without government assistance to exploit the deposits. The oil wreckers went boring at Thurlston, in Tasmania, some years ago. They put a bore down 1,500 feet and said that oil would be struck at 1,800 feet. Investigations were then made by representatives of *Smith's Weekly* and the *Bulletin* with the result that it was proved conclusively that the company was simply exploiting the public, for it was boring in limestone country where there was not even a chance of obtaining oil. The public should be protected from that sort of thing. Mr.Rankin. - It has been proved that oil is present at Lakes Entrance. {: .speaker-KLC} ##### Mr MAHONEY: -- If it had been really proved, public investors would put their money into the proposition and Government assistance would not be needed. We have had too many wild-cat oil prospecting companies in Australia. We were told years ago that oil would be discovered in north Queensland, and large sums of money were expended there in the prospecting operations. In the end, the whole plant was blown up at one place because it was feared that investors would discover that they were being exploited. I am totally against the adoption of any policy which would, permit oil sharks to rob the public. The Government should take control of all boring operations. I remember one oil prospecting company which issued a prospectus, but was ultimately discovered to be proposing boring operations in the middle of a river. If the claim put forward bythe honorable member for Wannon **(Mr. Scholfield)** can be substantiated, private investors will gladly support the proposition. Government money will not be needed. We should bring oil experts to this country, if they can be obtained, in order to advise lis, although, as the honorable member for Hindmarsh **(Mr. Ma kin)** said this afternoon, we should first satisfy ourselves that those selected are not in league with the major oil companies. My purpose in making these remarks is to protect the public. A proper survey of all promising areas should be made by theCommonwealth Government. If the reports of competent geologists are favorable, financial assistance should be granted to genuine companies. In the past, hundreds of thousands of pounds have been invested in companies which had no chance of ever finding oil. I recognize the necessity to discover oil in this country if possible, but I am totally opposed to the granting of money, almost indiscriminately, to private interests. In the past, large amounts of public money have been wasted in this way. {: .speaker-K2A} ##### Mr Rankin: -- Is the honorable member aware that the Common wealth Oil Advisory Committee has stated that up to 150,000,000 gallons of oil may be obtained from the Gippsland area? {: .speaker-KLC} ##### Mr MAHONEY: -- If that is so, there is little need for government money to be invested in the project, for private investors may be relied upon to provide all that is needed. Any operating company could be quite certain that the Commonwealth Government would purchase the whole of its output. The trouble is that, while there is a large quantity of " tung oil " in this country, there is very little lubricating oil for our machines. I protest against the effort that is being made to boost certain companies to the detriment of the genera] public. I am prepared to make reasonable facilities available for bona fide prospectors, but I am not agreeable to drawing upon the financial resources of the country in order to help companies which, in my opinion, are simply endeavouring to exploit the people. {: #subdebate-8-0-s17 .speaker-KF9} ##### Mr GREEN:
Kalgoorlie .- I shall support the bill. The fact that oil has not been discovered in Australia hitherto should not bo taken to indicate that it willnever be discovered here. It was said at one time that oil would never be discovered in California. When I was there years ago, I was told by some of the old Dutch Pennsylvanians who had worked on the Pennsylvanian oil-fields years before that oil would never be found in California. They said quite definitely that the geological formations of California were totally unsuited for the production of oil; yet to-day, we know that large quantities of oil are produced annually near Hollywood. The United States of America as a whole now produces 170,000,000 metric tons of oil per annum out of a world production of 283,000,000 metric tons. I direct the attention of the honorable member for Denison **(Mr. Mahoney)** to the latest issue of the Commonwealth Year-Book 1939, in which he will find a statement to the effect that natural oil exists in parts of Australia and that the conditions are favorable for the accumulation in commercial quantities of large quantities of it in certain parts of Queensland, Western Australia, Victoria and New South Wales. Although large sums of money have been invested in oil companies prospecting in the Roma district of Queensland without oil having been obtained in commercial quantities hitherto, it is quite likely that it will be found there eventually. The Commonwealth Geological Adviser, **Dr. Woolnough,** has assured me that there is every chance of oil being discovered in that area. Prospecting for oil is a very different proposition from prospecting for gold. Gold may be found in small or large quantities over scattered areas of a large territory. Oil, on the other hand, will be found in large quantities in one area. Once a reservoir of oil has been discovered, we may rest assured that hundreds of derricks will immediately he erected in that locality, and that millions of gallons of oil will be obtained there. Seeing that Australia is spending £5,500,000 per annum on petrols and £750,000 per annum on crude oil, both of which a re imported, it is of the utmost importance that we should endeavour to find local supplies. It is not difficult to envisage circumstances under which our present sources of supply may become closed to us. We may complain about the price we have to pay for oil at present, but under certain conditions it may become impossible to obtain it at any price. It would be a wonderful thing for our country and also for our personal safety if we could discover oil. A Western Australian company is being assisted by the Government of that State to bore for oil in the Kimberleys. It has not yet been successful, but if its efforts be rewarded the news will be flashed round the world. The investment of money in oil prospecting companies is, of course, a risky venture. There are many go-getters. Yet the investment of even a few shillings in a company that ultimately achieves success will win a fortune for the lucky shareholders. No other speculation brings such great returns. I have been assured that one of the most likely places for the discovery of oil in Australia is in the Wooramel River basin in Western Australia. Geophysical surveys in the area have shown that the anticlines are such as to give a reasonable prospect of success. But the presence of favorable anticlines will not ensure the discovery of oil any more than the presence of auriferous country will ensure the discovery of gold. There is only one thing for it, and that is a continual search. In my opinion, New Guinea offers as favorable a field for investigation as any other to which Australia has access. Tho peculiar formation of the country is suitable for the discovery of oil. In fact, the area through the Dutch East Indies and Sumatra to New Guinea, including Papua, Ls all favorable territory. A report in the Sydney *Daily Telegraph* last month stated that oil had actually been discovered in Dutch New Guinea. Two comparatively shallow wells of 500 feet had been sunk, from each of which 300 tons of oil a day was being drawn. Dutch New Guinea lias only recently become accessible for exploration. An American party went into the area twelve or eighteen months ago and did some effective work by aeroplane. It seems that British, Dutch and American interests naturally come together when oil is the prize. If the prospects in Dutch New Guinea are favorable they also should be attractive in the Mandated Territory of New Guinea and in Papua. I understand that the Australasian Petroleum Company, which is already conducting operations in the Gulf country in Papua, near the Valaila River, is expending £200,000 in boring for oil, and that there is a reasonable chance of obtaining supplies in payable quantities. In view of the present international situation, possibly the Commonwealth Government could enter into an arrangement with the Governor-General of the Dutch East Indies, who is now in control there, to secure rights over some of the existing oil-wells or to search for oil. Action in that direction should bc taken before an unfriendly power secures a footing in that territory. When a Labour government was in office some years ago it sent **Dr. Woolnough** to the United States of America to obtain some information concerning the conditions under which oil was being produced in that country, particularly at Tulsa, Oklahoma. Later, he sought, and was granted, permission to proceed to South America in order to ascertain the conditions under which oil had been discovered in fairly large quantities in Argentina. He ascertained that in consequence of its discovery the American oil interests had reduced the price of imported oils to one-half of that charged previously, which in conjunction with local production of one-half of Argentina's requirements, resulted in the people of Argentina procuring their requirements at one-fourth of the price which they had originally paid. The Government should study this subject in close co-operation with the States which control the land, because without their co-operation effective search is impracticable. {: #subdebate-8-0-s18 .speaker-KCM} ##### Mr DRAKEFORD:
Maribymong -- The opinion is held firmly in many quarters that the Government has shown a lack of enterprise in dealing with the existing natural oil supplies in Australia. Years ago oil was discovered in certain parts of Gippsland, which, in company with other honorable members who have expressed grave doubts as to the existence of oil in any part of Australia, I have visited on several occasions. Although oil is being produced in that locality, it is not flowing under pressure, and is not available in large quantities. Opinions expressed from time to time were not regarded as authoritative, but we have since been informed by the Oil Advisory Committee that 150,000,000 gallons of oil exists in the basins in the vicinity of Lakes Entrance, where some bores have already been sunk. There seemed to me to be a strong suspicion in that locality, particularly amongst those who have undertaken pioneering work, that the major oil companies have prevented the development of the oil wells there. As there is no question now that oil has been discovered, even if repressuring is necessary to bring it to the point of commercial production, the Government should prevent monopolistic control, which would deprive the Australian people of a valuable asset. A bill should be passed to restrict the activities of financial interests in that respect and to prevent the Australian people from being deprived of resources to which they are justly entitled. I intend to support the amendment foreshadowed by the honorable member for Gippsland **(Mr. Paterson)** to provide that financial assistance may be afforded during the initial stages of oil production. Although it has been said that the oil discovered in Gippsland is very low in petrol content and is not of much commercial value because the " cracking " process, which would have to be employed, is costly, the product is being used for lubricating purposes, and has been on the market for years. It is also used by the Victorian Country Roads Board in connexion with road construction, and there is no doubt of its petrol content, if the plant to treat it is provided. Some time ago the Victorian Government passed a measure under which a small area of land was made available to certain companies wishing to search for oil, but as the area provided was small, as the major oil interests observed, no practical interest was shown by them. Unfortunately the major oil companies have been getting a substantial rake-off for a long period from the importation of petrol and oil into Australia, and it would appear that no development has taken place merely because it is thought that their representatives are the only persons likely to know where oil may be found. Such companies have exercised too much influence on the Government in the past, but it is gratifying to realize that it is now proposed to afford financial help during the initial stages of production. I remind the honorable mem ber for Gippsland that very little was done in the direction which he now advocates by the government of which he was a Minister. Had greater activity been displayed by preceding governments, Australia would not now be in its present unsatisfactory position. I trust that the Government will explore every avenue and assist wherever practicable in the search for, and development of, a product which is so essential to any country, particularly when it is at war. {: #subdebate-8-0-s19 .speaker-K4X} ##### Mr NOCK:
Assistant Minister · Riverina · CP -- *in reply* - The debate on this bill indicates quite clearly that it has the support of honorable members; but there are several points to which I should like to reply. The Deputy Leader of the Opposition. (Mr.Forde) complained that my speech was too short, but I remind the House that this is a short bill, containing one effective clause, and only three features. The first is to delete the letter " s " from the word " plants ", the second is to provide the power to use in cooperation with the States some of the money appropriated in the act of 1936, and the third is to make it retrospective so that £4,000 already advanced will be covered by this measure. {: .speaker-F4U} ##### Mr Forde: -What was the £4,000 advance for? {: .speaker-K4X} ##### Mr NOCK: -- For work done in cooperation with the State of Victoria. The sum of £11,000 has been paid out, £7,500 of which is covered by another act; but an additional £4,000 had been expended for which there is no statutory authority. {: .speaker-F4U} ##### Mr FORDE:
CAPRICORNIA, QUEENSLAND · ALP; FLP from 1931; ALP from 1936 -- Where did Victoria expend the money? {: .speaker-K4X} ##### Mr NOCK: -- In scout drilling in the Gippsland district. Had I so desired, I could have dealt with the Government's recent efforts to assist to discover oil by providing financial assistance in New Guinea, in Papua and at Newnes. I also could have shown how £110,000 had been distributed, that £90,000 had been expended in the provision of four up-to-date drilling plants. I also could have recited the provisions of the original act, and said that in connexion with drilling operations the Government had provided assistance on a £1 for £1 basis for drilling operations, on a basis of £1 to £2 for survey and search, and that the charge for hiring drilling plants is 10 per cent. on their cost. I thought it unnecessary to go into those details, merely to obtain the approval of a measure covering only the three points I have mentioned. The honorable member for Gippsland **(Mr. Paterson)** has foreshadowed an amendment to provide that some of the money which has been made available may be used to assist those engaged in the initial stages of producing oil. The Government is prepared to accept that amendment, and the security of money so advanced will be the oil produced. In the past assistance has been provided on the advice of the Oil Advisory Committee, and unless a recommendation be made by that committee the subsidy was not available. The Government recognizes that the search for oil is one of the biggest and most expensive gambles upon which a company can embark. In New Guinea nearly £500,000 has been expended in searching for oil under expert advice. The company at present operating in Papua has expended £400,000 on surface and aerial surveys, and £200,000 on plant, which has yet to be transported to the boring site. As the honorable member for New England **(Mr. Thompson)** stated, a considerable sum has been expended by the Vacuum Oil Company, and although exploratory work may be undertaken more effectively by companies with a strong financial backing, I realize that some of the most valuable mineral deposits in Australia had been discovered, not by companies which are financially strong, but by the individual prospectors. It is quite possible that fuel oil may be discovered in commercial quantities by individuals, and that is why a measure to provide for the payment of subsidies was passed in 1936. The honorable member for Hindmarsh **(Mr. Makin)** asked whether the AngloIranian Oil Company is still the Government's adviser. That company has not acted in an advisory capacity to the Government for many years. The honorable member for the Northern Territory **(Mr. Blain)** asserted that the representatives of some of the major oil companies are " pulling the legs " of honorable members in order to obtain financial assistance; but I repeat that assistance has only been made available on the recommendation of our expert advisers. The honorable member for Melbourne Ports **(Mr. Holloway)** asked if the drilling plants remain the property of the Government. The answer is " Yes ". A plant is hired to a company under agreement that it will be returned in first-class order and condition. {: .speaker-L08} ##### Mr ROSEVEAR:
DALLEY, NEW SOUTH WALES · LANG LAB; ALP from 1936; ALP (N-C) from 1940; ALP from 1941 -- What security has the Government for the money advanced? {: .speaker-K4X} ##### Mr NOCK: -- Payable oil is the only security. A condition of the agreement is that, if oil be struck in payable quantities, the money has to be repaid. If oil is not struck the money cannot be repaid. {: .speaker-KVU} ##### Mr Thompson: -- The security is the oil. {: .speaker-K4X} ##### Mr NOCK: -- Yes. The security for the money advanced to the company at Lakes Entrance mentioned by the honorable member for Gippsland **(Mr. Paterson)** would be the oil produced. I know that the House is in favour of these amendments and I ask it to carry the bill. Question resolved in the affirmative. Bill read a second time and committed *pro forma.* Progress reported. {: .page-start } page 1127 {:#debate-9} ### MOTOR VEHICLES AGREEMENT BILL 1940 {:#subdebate-9-0} #### Second Reading {: #subdebate-9-0-s0 .speaker-N76} ##### Mr MENZIES:
Prime Minister · Kooyong · UAP -- I move - That the bill be now read a second time. This is a bill for an act to approve the execution of an agreement between the Commonwealth and Australian Consolidated Industries Limited, with respect to the manufacture of motor vehicles and for other purposes. I propose to say something a little later about the history of the negotiations between the Commonwealth Government and this company, and about the reasons underlying the decision which the then government made in relation to the matter ; but I first direct the attention of honorable members to the fact that this is a bill, not to ratify an agreement made in due form, but to authorize the making of a contract in the terms, or substantially in the terms, which are set out in the schedule. There are technical reasons for that. I need not go into them, but the effect of the form that the bill takes is that the House has three, instead of two, courses open to it. If this were a bill to ratify an agreement already made, the House would have either to accept or reject the agreement. In the form that this bill takes, the House has the opportunity, of which [ hope that it will avail itself; to pass the bill as it stands, thereby authorizing the making of the contract in the terms which appear in the schedule. That is the first choice The House has the choice, of course, of rejecting the bill, but it has a third choice and that is to pass the second reading and, in committee, direct its attention to the various provisions of the schedule and, if it thinks fit, make such alteration of the terms as represents its view. {: .speaker-JSC} ##### Mr Brennan: -- A schedule embodying an agreement is usually taken *in globo.* {: .speaker-N76} ##### Mr MENZIES: -- Yes; I hope it will be taken *in, globo* on this occasion, but 1 am directing the attention of the House, as I think I am bound to do, to the fact that on this occasion the schedule is amendable. {: .speaker-L08} ##### Mr Rosevear: -- And if it is amended will it be acceptable to the other party? {: .speaker-N76} ##### Mr MENZIES: -- I do not know. The committee might make some amendment of the schedule, which would still leave the proposal acceptable to the intending manufacturer. If so, well and good. But it might choose to make some amendment, which would make the proposal unacceptable to the company. In that circum- stance, no doubt, the whole project would he abandoned, and we should continue to go without the manufacture of motor car engines in Australia. Having said that by way of preliminary, I propose to say something about the history - as briefly as I can - of these proposals to establish the manufacture of motor cars in Australia, because that history, although it is relatively short, has .been more than chequered. In 1936 the Lyons Government made a pronouncement through the honorable member for Henty **(Sir Henry Gullett)'** that it intended to put forward every effort to establish the manufacture of motor car engines and chassis in Australia. That decision was stated to this Parliament by the honorable member in May, 1936, and the pronouncement was made in terms which indicated that a bounty of £30 on each engine unit would be paid by the Government, and that tariff protection would be granted on chassis parts which might have to be manufactured. {: .speaker-KHL} ##### Mr Holloway: -- The pronouncement met with very great approval. {: .speaker-N76} ##### Mr MENZIES: -- -Yes, approval which was warmly manifested on the honorable gentleman's side of the House until a recent by-election. {: .speaker-K9A} ##### Mr Gander: -- That was when stones were thrown at the driver. {: .speaker-N76} ##### Mr MENZIES: -- Yes, indeed. They did not hit the driver, but they hit the car very hard. {: .speaker-F4U} ##### Mr Forde: -- We have never changed our attitude on the principle of manufacturing complete motor vehicles in Australia, but we objected to the granting of a .monopoly. {: .speaker-N76} ##### Mr MENZIES: -- Well, some day the honorable gentleman might explain to me exactly what was the significance of his party's campaign at Corio. On this, no doubt, we shall hear an enthusiastic speech from the honorable member for Corio **(Mr. Dedman),** supporting the Australian manufacture of cars, whatever the Ford company may say. I shall await that speech with interest. In the meantime, I remind honorable members that the proposal was made in May, 1936, and, indeed, provision was made for a special tax on imported chassis in order to provide a fund from which the bounty was to be paid. That was. four years ago, and throughout the whole of the succeeding years, there was a great silence over the land. We listened to learn whether anybody was going to accept this offer of a bounty, but we found no acceptor. It is quite true that one or two people made partial proposals to the Government, but it is completely true that no motor car organizations, which might have been expected to be interested in the manufacture of engines in Australia, came forward with a proposal to embark on the industry. Attempts were made to interest English manufacturers - I remember having contact with some of them in England in 1938 - and at least one of them had a sympathetic attitude towards the matter. But. he made it quite clear, in the course of the discussions, that he would not be prepared to engage in manufacture in Australia, unless he .had some guarantee that the interests of his company would be protected against similar manufacture, or other developments on the part of large foreign corporations. He was intending to come to Australia, but was unable to proceed with the idea, because re-armament assumed tremendous proportions and he became deeply involved in the production of aircraft. Subsequently, there was further discussion in this House and the matter was submitted to the Tariff Board, which conducted an investigation. The board, no doubt, did the best that it could. I have the greatest regard for the Tariff Board, as, I believe, all honorable members have, and I am sure that, reconducted an honest investigation as ably as it could. But honorable members will realize that its investigation was conducted in very great difficulties, since there was nobody engaged in the business of motorcar assembly and distribution who was prepared to sponsor the manufacture in Australia of motor-car engines; consequently the evidence tended to be all one way. There were plenty of people to say that it could not be done, but there were none who could speak with authority to say that it could be done. Various estimates were given by motorcar importing interests as to what was required by way of a bounty or other assistance to establish the industry in Australia. If honorable members look at the details of the evidence, they will find that gentlemen who gave evidence on behalf of those interests estimated that the difference between the cost of an American engine and the same engine produced in Australia was so great that, unless there was a bounty of colossal proportions, something nearer £100 than £30, it would be impossible to establish the industry here. {: .speaker-F4U} ##### Mr Forde: -- - One witness mentioned £135 as the required bounty. {: .speaker-N76} ##### Mr MENZIES: -- Yes. Yet I remember hearing from the public platform and in a private interview just over two months ago a gentleman saying, in effect, " But you have given these people, the Australian Consolidated Industries, a bounty of £30! Why, you are going to drive us out of business. It is quite true that we once thought that a bounty of three times that size would not be sufficient to equalize costs., but we now realize that a bounty of £30, falling to £25, and later to £20, will put us out of business ". The honorable member for Capricornia **(Mr. Forde),** tried campaigner as he is, will remember vividly how gentlemen engaged at the Ford Motor Company's works at Geelong were told that, if the Government's candidate at Corio were elected, the Ford works would be closed on the Monday. I say no more about that. I believe that, when one touches a wounded conscience, one should touch it delicately. That is all I do. So I pass from that. In September, 1938, when the Tariff Board had reported that the motor car industry should, in its view, he established by a step by step process and not in one stroke, the then government, through the then Minister for Trade and Customs **(Mr. White),** publicly invited prospective manufacturers to submit plans for the establishment of the industry, either of the whole or of such portion as they thought fit to undertake. The time was to expire in March, 1939. A great number of proposals emerged from that invitation. Some of them indicated that the sponsors were prepared to undertake the manufacture of motor-car engines, if capital were provided by the Government. Some hinted delicately at substantial and recurring loans by the Government, but, though others were extremely optimistic, they were sponsored by people who had no real capital backing. Others indicated no desire or proposal to establish the manufacture of motor-car engines, but showed that the sponsors were prepared to start on other matters and, gradually, in the sweet by and by, reach the propulsive organ of the car. That I think is not an unfair description of the proposal that was put forward by one of the great importing companies. I shall not mention its name, because I do not want to refer again to that delicate subject to which I alluded a moment ago. That was the position in March, 1939. We were still offering, still expectant, but still disappointed. Then I became Prime Minister, and shortly afterwards I indicated in a statement to this House what the policy of the Government I was leading would be. On the. 17th May of last year I said - {: type="1" start="1"} 0. The Commonwealth Government has definitely decided that motor vehicle engines and chassis are to be manufactured in Australia and that there should be no undue delay in establishing the industry. 1. Defence preparedness, industrial expansion, conservation of overseas funds, immigration, employment and the utilization of Australian raw materials are among the principal reasons underlying this decision. 2. The Commonwealth Government is not able to grant a manufacturing monopoly to any single company. 3. The Commonwealth Government desires that any company formed to undertake manufacture should be Australian in character and policy. 4. The Commonwealth Government considers it essential that the prices of motor vehicles to be manufactured in Australia must be reasonable, and the public interest in this respect will bo protected. The Commonwealth Government has not made any decision as to what its desires would be on the subject of the proportion of the capital of any company formed which should be Australian subscribed. Then I went on to describe possible groupings of capital that mightbe satisfactory. {: .speaker-KHL} ##### Mr HOLLOWAY:
MELBOURNE, VICTORIA · FLP; ALP from 1936 -- After that, the right honorable gentleman wentwrong. {: .speaker-N76} ##### Mr MENZIES: -- No doubt, the honorable member will be with me, because I suspect that at heart he is a protectionist, and would like to see this industry established. I merely pause to direct attention to one clause in the statement that I have just read, and that is, " The Commonwealth Government is not able to grant a manufacturing monopoly to any single company". {: .speaker-L08} ##### Mr Rosevear: -- I suspect that that will be thrown at the right honorable gentleman. {: .speaker-N76} ##### Mr MENZIES: -- It has been. That is why I refer to it, but it is a perfectly accurate statement. It was made when this Government had no war-time powers whatever. There was no war on then, and the Government was not able to grant anything in the nature of special advantages to one manufacturer. The only capacity it has to give special rights to one manufacturer as against any other intending manufacturer is by exercising the special powers acquired when the war began. In order to endeavour to meet the real difficulty to which that statement referred, I met, shortly after that, the Premiers of the States at a conference of Commonwealth and State Ministers. That was in June, 1939, and at that meeting I pointed out to the Premiers of the States that we were anxious to get on with the business of motor-car manufacture. I said quite plainly that we believed that the industry could never be established in Australia effectively if three, four, five, or six people were competing for the amount of business that would be available, because, under those conditions, the undertaking of every one of them would be rendered completely uneconomic. Therefore, I said to the Premiers, "I ask you in your own Parliaments to refer to the Commonwealth power to set up some form of licensing for the manufacture of motor cars, so that we may limit the number of persons who may engage in the work". We had an agreeable discussion about the matter, as one always does in such circumstances, but nothing happened. No State referred its power to the Commonwealth, which, therefore, continued to have none until later, when the war began and the National Security Act was passed. The Commonwealth Government was then in a position to exercise power in such a way as to give special protection to the person or persons prepared to undertake the manufacture of motor cars in Australia. {: .speaker-KYI} ##### Mr Prowse: -- The power was never intended to be used for that purpose. {: .speaker-KFE} ##### Mr Gregory: -- The agreement was an abuse of the power. {: .speaker-N76} ##### Mr MENZIES: -- He will be a wise man who can state categorically the purposes for which wartime powers are given. I am prepared to defend this position, that if, in the view of a government, the establishment of an industry has real defensive value, and real value for the purpose of post-war reconstruction, its establishment is a matter which may appropriately be regarded as an exercise of war-time powers. The next step was that, in July of last year, the Department of Trade and Customs approached the managing director of Australian Consolidated Industries Limited,Mr. W, J. Smith being then in discussion with him about other matters which concerned the department, and said to him, in effect, " You are a great industrialist with a capacity for getting things done. What about you making a motor car? What about you tackling the job of producing a motor engine in Australia? Nobody else will". He considered the matter, and, to his credit, I say, and to the credit of his company, he ultimately replied, "I am prepared to go into this matter. I am prepared to form my views and to make a proposal to the Government as to the terms upon which I am wiling to engage in the manufacture of engines for motor cars ". The result of that conversation, as honorable members will see if they look at the copies of the letters which have been circulated to them, was that, on the 22nd November, **Mr. Smith** wrote a long letter containing a highly elaborate proposal to the then Minister for Trade and Customs, the honorable member for Macquarie **(Mr. John Lawson),** and that letter came before Cabinet. In view of certain things that have been said, I may as well indicate briefly the order of events. The letter of the 22nd November was brought before Cabinet by the then Minister for Trade and Customs, and was carefully considered. I may say that it was considered with particular interest, because it was the first real proposition that we had had put to us. For the first time it appeared to the Government that its declaration of policy in regard to the manufacture of motor-car engines might be translated into actual performance. The Government's consideration ended on the 1st December, and the decision of Cabinet was related to two things in particular. In the first place, it decided that a- bounty bill should be introduced into Parliament, so that any proposal that we might have to make to anybody should have the backing of the authority of Parliament in relation to the amount of bounty to he paid. As honorable members will recall, that bounty bill was introduced on the 6th December. The second portion of the Government's decision was that the bounty to be paid should be £30 for the first two years, and that subsequent assistance should he determined after investigation by the Tariff Board. Honorable members will see that what Cabinet was at that stage prepared to do was a long way apart from what **Mr. Smith** was offering to do, because what he had said in his letter of the 22nd November was, " I will require for the first 30,000 chassis a bounty of £30 an engine; for the second 30,000 chassis a bounty of £25 an engine; and for the third 30,000 chassis a bounty of £20 an engine ". That was a programme which would obviously extend over a much longer period than two years. The then Minister for Trade and Customs informed **Mr. Smith** of the decision of Cabinet, and the result was that on Saturday morning, the 2nd December, **Mr. Smith** indicated that the decision was unsatisfactory, and that, so far as he was concerned, he could see no prospect of continuing the discussion. He confirmed that interview by a letter dated Monday, 4th December, which honorable members have before them in tho file of correspondence. As they will see, **Mr. Smith** said - ' At that interview I had no hesitation in Baying that the proposal of Cabinet, as submitted by you, was, in my opinion, so totally inadequate as to ensure nothing but certain failure for any organization that attempted the task under the terms laid down. That was **Mr. Smith's** view on the Saturday. It was confirmed on the Monday, and he ended up his letter with words which indicated that, so far as he was concerned, the negotiations had come to an end. On the 6th December, the Motor Vehicle Engine Bounty Bill was introduced into Parliament, and it passed this House. The rates of bounty were approved. There was a short but sharp debate on the merits of establishing tho industry in Australia. I remind honorable members that that debate and that decision took place after the beginning of the war. After that date, tho then Minister for Trade and Customs once more got into touch with **Mr. Smith.** The matter had been dead. The bill had gone through Parliament, and Parliament had approved of rates of bounty, mark you, which were based not on a term of two years, but on quantities. The bill provided that, in respect of the first 20,000 engines produced, the bounty should be £30 an engine ; in respect of the second 20,000 engines, £25 an engine, and in respect of the third 20,000 engines, £20 an engine. The quantities were very much smaller than those indicated in **Mr. Smith's** offer, but they were substantial. Then my colleague, who had conducted these negotiations, once more got into touch with **Mr. Smith,** and once more, no doubt, said to him, " Here is the bill. It has been passed by Parliament. There is complete authorization of this matter of the bounty. Can we not once more make an attempt at securing some basis of manufacture?" Because my then colleague was naturally anxious to have this industry established in Australia - and it is all to his credit that he did not die in his tracks because he had had one failure - he once more got into negotiations with **Mr. Smith.** {: .speaker-KX7} ##### Mr Ward: -- One race-horse has died in his tracks already. {: .speaker-JSC} ##### Mr Brennan: -- Smith was no doubt waiting for the letter. {: .speaker-N76} ##### Mr MENZIES: -- I think that the reputation of the honorable member for Macquarie will survive any of the aspersions of the honorable member for East Sydney **(Mr. Ward).** It is not uncommon in this world that some people do the work, as my then colleague did, and others make insinuations. {: .speaker-KX7} ##### Mr Ward: -- " You scratch my back and I'll scratch yours." {: .speaker-N76} ##### Mr MENZIES: -- I would not take the risk of scratching the honorable member's back. As a result of these further negotiations, the matter came once more before Cabinet, and the consequence of further Cabinet discussion was that, on the 19th December, which is the date of the last letter on the file, a letter was sent over my own signature to **Mr. Smith** setting out the terms and conditions which the Government was prepared to approve. As honorable members will see, they provide for a reduced number of units, and in certain other respects they differed from the original proposal made by **Mr. Smith.** There was a very material difference in respect of the number of chassis entitled to bounty, the number being reduced from 90,000 to 60,000 and from 30,000 in each class to 20,000 in each class. **Mr. Smith** had originally proposed that there should be excluded from the bounty provision any company formed in Australia in which the Minister was satisfied that a foreign-controlled company had any financial interest. The bill did not go anything like so far as that, but provided that bounty should be payable only to a company of whose capital 66 per cent. was held by Australian shareholders. Again, **Mr. Smith** asked, in general terms, and without limit in point of time, that all Commonwealth Government departments requiring vehicles of the class supposed to be manufactured should purchase a substantial proportion of their requirements from his company. We limited that provision to five years, and put in a proviso regarding the efficiency and quality of the vehicles, and also in regard to the price. I mention these matters as an illustration of the kind of changes effected. After the announcement to the press of the fact that an agreement had been arrived at or an arrangement made with Australian Consolidated Industries Limited for the manufacture of motor engines, a good deal of public discussion' arose, and much was said about monopolies. Consequent upon that public discussion, and when attention had been directed to the monopoly clause, I had an interview with **Mr. W.** J. Smith in Melbourne. I said that I would like to see him, and at the interview I told him of the nature of the public discussion that was going on. Reference was also made to the fears that had been expressed in South Australia regarding the possible effect of the scheme uponthe South Australian motor bodybuilding industry. I am bound to say that I thought **Mr. Smith's** reaction was extremely fair. It is just that I should put that on record. It was the first time that I had ever talked with him, and 1 found his attitude thoroughly fair. He made a statement to me, which he authorized me to have published in the press. This is the report as it subsequently appeared in the newspapers - > **Mr. Menzies** added that, having regard to the objection that has been taken, he had discussed the matter with **Mr. Smith. Mr. Smith** has authorized him to say that if any Australian organization with financial competence to satisfy the Government, and which could produce the necessary capital, was even now prepared to undertake the manufacture of motor engines of the indicated class without any exclusive rights, Australian Consolidated Industries would be prepared to relinquish its agreement with the Government. {: .speaker-KRH} ##### Mr McHugh: -- The South Australian motor body building company could not comply with the conditions because there is foreign capital in it. {: .speaker-N76} ##### Mr MENZIES: -- Am I to understand that the only company that had any intention at that time of considering the manufacture of cars was the South Australian company in which foreign capital was invested? After all, one could scarcely blame **Mr. Smith** for saying, in effect, to Parliament, " Enforce your own law, which provides that bounty shall be paid only to a company of which 66 per cent. of the shares are owned by Australian shareholders ". What **Mr. Smith** said was, " If you can find any other company that answers to that description, and is prepared to do this job without exclusive rights, bring it along, and I will drop my arrangement ". {: .speaker-JLZ} ##### Mr Anthony: -- Did the Prime Minister suggest that any other company should be given the same opportunity to enjoy a monopoly as had been given to this company ? {: .speaker-N76} ##### Mr MENZIES: -- I want to make the position quite clear. We were talking about the alleged monopoly, and **Mr. Smith's** response was, " All right, if you can produce a financially competent Australian company prepared to undertake this work with a bounty, but without a monopoly, then I will tear up the letter I received from you ". I thought that nothing could he fairer. {: .speaker-JPN} ##### Mr Blackburn: -- But he asked for more than a monopoly in regard to engines and chassis, I understand. Was he not asking also for a monopoly in regard to complete cars and trucks? {: .speaker-N76} ##### Mr MENZIES: -- Whatever the form of the monopoly, he was prepared to forgo it, and tear up the agreement, if any other Australian company was prepared to do the job without a monopoly. Mr.Rosevear. - But was he prepared to tear up the agreement if the other company were given the same terms as he was receiving? {: .speaker-N76} ##### Mr MENZIES: -- That is whatI understood. So far as he was concerned, any other company could have the same terms as had been offered him, but without a monopoly. {: .speaker-JLZ} ##### Mr Anthony: -- That is not the same thing. {: .speaker-N76} ##### Mr MENZIES: -- No other firm came forward. No one was prepared to accept the challenge; no one was prepared to undertake the job without a monopoly. Consequently, the only conclusion we could come to was that, unless a monopoly were granted, it would be impossible to get motor-car engines built here at all. Everything that has happened in this connexion during the last four years indicates how right we were in holding that opinion. {: .speaker-JPN} ##### Mr Blackburn: -- Will the Prime Minister say why clause 12 is inserted extending the benefits of the agreement beyond chassis and engines to complete motor cars and trucks of 15 horse-power and over? {: .speaker-N76} ##### Mr MENZIES: -- It is inserted in the bill because it was in my letter, and this bill purports to reproduce in slightly different form the obligations set out in my letter of the 19th December. The Government, in framing the bill, was not at liberty to depart from the proposalsset out in its own correspondence. I wish now to say something about the allegation that the monopoly provision inthis agreement vitiates it. " Monopoly " is a fine mouth-filling word. It chimes nicely on the ear. All you have to do is to stand up and denounce monopolies, and people think you have attained the acme of statesmanship.I received one deputation which offered to tell me that the granting of a monopoly was contrary to fundamental democratic principle. I replied to it, as I say now to honorable members, that if a monopoly is contrary to fundamental democratic principle, why have we under patent law been granting monopolies for the last 300 years? Why do we grant a monopoly to a man who invents something? Because we say that a man who evolves some mechanical invention for the good of the community is entitled to a period of protection within which to enjoy the benefit of his idea. There is nothing contrary to the democratic principle in that. {: .speaker-KRH} ##### Mr McHugh: -- This was not an idea evolved by Smith. {: .speaker-N76} ##### Mr MENZIES: -- If it was not a novel idea I am surprised. It was an idea that presented itself to no one else in the course of four years. **Mr. Smith** was the one person in the course of four years, or of 40 years, so far as I know, who presented a practical scheme under which he was prepared to invest his capital in the manufacture of motor cars in Australia. I regard this as a test of the sincerity of honorable members who say that they desire to have motor cars manufactured here. Does any honorable member sitting on the other side of the House really believe that manufacturers are to be found in Australia prepared to invest their money in this new and hazardous undertaking? Because it is a hazardous one, involving as it does the establishment of an industry in the teeth of the most powerful competition in the world. {: .speaker-KRH} ##### Mr McHugh: -- Why does not the Government make the cars? {: .speaker-N76} ##### Mr MENZIES: -- Because this is not a socialist government. I sometimes wonder how true that is, but I am not prepared yet formally to admit that we are a socialist government. We stand for the manufacture of commodities of this kind by private enterprise. I challenge any one on the other side of the House to produce to me any sort of evidence that there was any other competent manufacturer in Australia prepared to undertake this task. Yet honorable members say that it was all right for the Government to offer a bounty, but it should not give a manufacturer special protection against the competitive powers of the great importing corporations. {: .speaker-KLL} ##### Mr Makin: -- Was not Richard's in South Australia prepared to consider the scheme? {: .speaker-N76} ##### Mr MENZIES: -- At the time we made this agreement, Richard's had given no indication of being ready to make motor cars. It is true that, after the arrangement was made, there was a nebulous indication that that firm was interested, but to this moment I am not aware of any concrete proposals for the manufacture of motor-car engines having been submitted by Richard's of Adelaide. {: .speaker-KCF} ##### Mr Dedman: -- If no one else was interested, why was it necessary to give this company a monopoly? {: .speaker-N76} ##### Mr MENZIES: -- The honorable member must be very simple, indeed, if he believes that no one else was interested. Certainly there were others interested, but no other Australian manufacturer was interested. General MotorsHoldens Limited was interested, and so was the Ford Motor Company. But in what were they interested? Did they want to encourage the production of motor cars here, or to prevent it? The honorable member for Capricornia, who has had a long experience of endeavouring to encourage Australian industries, does not need to be told by me that if you are to establish an industry of this kind in Australia in the teeth of powerful organizations, backed by hundreds of millions of pounds, you can do it only by affording ample and determined protection to the infant industry. Yet, because we say that for five years, while the new industry is getting over its teething troubles, we shall protect it against such competition, we are told that we are encouraging a monopoly. There is a very plain choice confronting honorable members in regard to this matter : They can either have a monopoly by an Australian manufacturer for five years or a monopoly by American manufacturers for 50 years. I should like to refer to certain points which have presented themselves recently by way of criticism of this scheme. i have been told that the establishment of the manufacture of motor-car engines in Australia to-day would involve an unnecessary drain on our dollar exchange. All I ask is that honorable members should consider whether it would be better to have one single drain on the dollar exchange for the purpose of the capital establishment of this industry, or to go on, year by year, importing a great portion of our motor car requirements, necessitating, in their turn, the use of dollars. If we establish a motor-car .manufacturing industry in Australia we shall reduce the demand that this country has for dollars, just as we shall reduce the demand it has for overseas exchange of all kinds. Then it is said that the establishment of the motor-car industry would necessitate a great and dangerous subtraction of skilled labour from our war effort. There are two answers to that : One is that the number of skilled men, in the true sense, required for the establishment of this industry would he very small because a great majority of the employees in industries of this kind are process workers. Secondly, how are we to train workers in Australia except in our own industries? Does any one believe that the training of skilled mechanics and craftsmen is merely a matter of theoretical instruction in a school ? Of course it is not. The skilled craftsman is a product of a skilled and improving industry. Consequently, the establishment of an industry of this kind will be of enormous value to Australia because it will result in the production of the very kind of technician or semitechnician whom we require. {: .speaker-KRH} ##### Mr McHugh: -- We do not dispute that. {: .speaker-N76} ##### Mr MENZIES: -- The honorable member must understand that he is not alone in this matter; he does not dispute this point, but he disputed the last point. Similarly, somebody who did not dispute the last point may dispute this one. My task is to cope with them all. It has also been said that for various reasons the establishment of this industry ought to be postponed. I beg honorable members to realize that when this war is finished, victoriously as we believe, the people of this country and of other countries will be confronted with the problem pf post-war reconstruction; we shall require to find some place in civil life for the men who have been fighting for us. On this occasion we cannot do as we did at the end of the last war - buy up large holdings, subdivide them, and put men on blocks in closer settlement or irrigation areas. We must realize now that the hope of better post-war conditions in Australia must rest very largely on the development of our resources, and the employment of our people in industries of this kind. Therefore, this proposal is of most vital significance to us in our planning for the post-war period. {: .speaker-F4U} ##### Mr Forde: -- Will the Prime Minister reply to the Ford company's objection to clause 6 c which the company claims would prevent it from buying engines from an Australian manufacturer? {: .speaker-N76} ##### Mr MENZIES: -- I shall be glad to deal with that point in the committee stage. The point was put to me by the Ford company, and it seemed to me to have some form but no substance. If by some formal amendment it can be made perfectly clear that there is no substance in. that point, I am perfectly prepared to discuss the matter with the honorable member. For the moment I am concerned with the general principle and not with individual forms and words. Tho only other observation I wish to make is this: It has been said that this is not a. war industry, and that we must concentrate on war industries only. I have already stressed that need in this House to-day, but who will tell me that the manufacture in Australia of internal combustion engines is not a war industry? Only two days ago I said to somebody something about making tanks in Australia - surely there can be no illusions as to the significance of tanks in modern warfare - and the reply was most appropriate to this discussion : " Let me remind you that before Hitler made tanks he made motor cars ". Had Hitler not made motor cars he would never have made tanks. Tanks do not proceed of their own momentum; they must have some propulsive instrument. If we are to produce in Australia from our own resources tanks, armoured cars and motor transport to carry our armies over large distances - that point has a great significance for us in Australia - we must set about the business of making internal combustion engines. {: .speaker-L07} ##### Mr Lazzarini: -- Nearly all the German tanks are fitted with diesel engines. {: .speaker-N76} ##### Mr MENZIES: -- I do not wish to discuss whether tank engines are diesels or any other type. No doubt if we were to establish the manufacture of diesel engines on a large scale in this country, we would be met with the same hoary arguments that are now being advanced against this proposal. {: .speaker-KMW} ##### Sir Charles Marr: -- In any case diesel engines are internal combustion engines. {: .speaker-N76} ##### Mr MENZIES: -- Of course they are; but I am not prepared to discuss whether or not one type is better than another for any particular purpose. Unless internal combustion engines be made here as soon as possible, when the time of trial comes in our own country we shall find that for too long we have relied on the outsider. If we are to defend ourselves we must see that our own resources are in proper shape. This project in its original form proceeded from my colleague, the Minister for Information **(Sir Henry Gullett),** who literally for years laboured to secure some result from the proposal t hat the manufacture of motor-car engines should be established in Australia. The work was subsequently taken up by the honorable gentleman's successor, the former Minister for Trade and Customs, **Mr. T.** W. White. Then, during the particularly vital period in which this agreement was made negotiations were conducted by the honorable member for Macquarie **(Mr. John Lawson).** A good deal of dispute has surrounded the name of that honorable gentleman in connexion with this matter. In the course of these negotiations he fell into an error into which many thousands of honest men might have fallen. All sorts of people then proceeded to build it up in order to use it as a means of casting a murky atmosphere about this transaction. I have occupied a considerable amount of time to-night in discussing the history and merits of this matter, because I wanted to make it abundantly clear that every step taken in relation to the establishment of the motor industry, and every negotiation conducted by the honorable gentleman, had the full knowledge and approval of the Government, and of myself as its leader. I have nothingbut admiration for the patience and skill with which he handled this business, and for the endurance that he displayed in hanging on to it when many people would have dropped it. I want to say that, if as the result of the passing of this legislation, the motor-car manufacturing industry becomes established in Australia, the honorable member for Macquarie will he entitled to the supreme credit. I say that in justice to an honorable man of great ability and great industry, who at one stage at least of this transaction was maligned and occasionally is still traduced by whisperers in corners. He is to be given the fullest credit for the work that he has done in endeavouring to establish in this country an industry which it must have some day, if it is to enjoy real independence for any length of time in the future; and an industry that I am quite sure it will have if honorable members vote on the principle of its establishment as they voted so recently as December last. Debate (on motion by **Mr. Forde)** adjourned. {: .page-start } page 1136 {:#debate-10} ### PETROLEUM OIL SEARCH BILL 1940 Messages reported recommending appropriations for the purposes of thisbill, and for the purposes of an amendment to be moved by the Assistant Minister. *In Committee of Supply:* Motions (by **Mr. Nock)** agreed to - >That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to amend the Petroleum Oil Search Acts 1936. > >That it is expedient that an appropriation of revenue be made for the purposes of an amendment to be moved by the Assistant Minister to a bill for an act to amend the Petroleum Oil Search Acts 1936. Resolutions reported and - *by leave -* adopted. {: .page-start } page 1136 {:#debate-11} ### QUESTION {:#subdebate-11-0} #### WAR IN EUROPE Recapture of Arras by Allied Forces. {: #subdebate-11-0-s0 .speaker-N76} ##### Mr MENZIES:
Prime Minister · Kooyong · UAP -- *by leave* - I have been informed by my secretary that the British Broadcasting Corporation has just announced officially that the Allied Forces have recaptured Arras. Honorable Members. - Hear, hear! {: .page-start } page 1136 {:#debate-12} ### PETROLEUM OIL SEARCH BILL 1940 *In. committee:* Consideration resumed from page 1127. Clause 1 agreed to. Clause 2 - >Section 5 of the Principal Act is amended - > >by omitting paragraph (5) of subsection (3.) and inserting in its stead the following paragraph: - > >in the purchase of drilling plant for use in connexion with such search; and > > *Section proposed to be amended -* > > *For the purposes of this act, there shall be a PetroleumOil Search Trust Account . . .* > > *Subject to thisact, the Minister may apply the moneys standing to the credit of that Trust Account -* > > *in the purchase of drilling plants for use inconnectionwithsuch search; and* {: #debate-12-s0 .speaker-K4X} ##### Mr NOCK:
Assistant Minister · Riverina · CP -- The honorable member for Gippsland **(Mr. Paterson)** has given notice of an amendment to this clause.I understand, however, that it is necessary. that the amendment be moved by a Minister in order to comply with the appropriation message. I therefore move - >Thatat the end of sub-clause 1 the following paragraph be added: - "; and (e) for the purpose of advances to persons engaged in the initial stages of the production of petroleum.". {: #debate-12-s1 .speaker-F4U} ##### Mr FORDE:
Deputy Leader of the Opposition · Capricornia -- The Opposition will not oppose the amendment, which will improve the measure; but I ask the Assistant Minister **(Mr. Nock)** what authority will approve of advances to individual prospectors or small companies? Will it be the Oil Advisory Committee, the State Departments of Mines, or some authority in the Department of the Interior? {: #debate-12-s2 .speaker-K4X} ##### Mr NOCK:
Assistant Minister · Riverina · CP .- The Commonwealth Oil Advisory Committee is not now in existence. . **Dr. Woolnough** is the Commonwealth Geological Adviser, but authority for advances to drilling companies will be given by the Minister for the Interior. He would secure such reports as he considered necessary. The security for such advances would be the oil itself as produced. As soon as it is sold, the amount of the advance would be repayable. {: #debate-12-s3 .speaker-F4U} ##### Mr FORDE:
Deputy Leader of the Opposition · Capricornia -- Applications are frequently made by residents of remote parts of Australia, and if the granting of assistance is dependent upon inspection and report by the Commonwealth Geological Adviser in each ease, considerable delay will be involved in the consideration of many of the applications. Does the Minister intend to make use of the State Departments of Mines, which have under their control competent geologists ? These officials may be much closer to the scene of operations of the applicants than the Commonwealth Geological Adviser, and thus may be able to make reports to him within two or three weeks. This would enable him to examine the reports and determine whether visits would be justified to the localities specified. Otherwise he might have to travel to northern Queensland, the Northern Territory, or Western Australia without sufficient cause. {: #debate-12-s4 .speaker-JPT} ##### Mr BLAIN:
Northern Territory -- I am glad to notice that the Deputy Leader of the Opposition **(Mr.** Forde) has supported remarks which I made earlier this evening in regard to this proposed amendment. Simple as it may appear, I see in it a means of doing something gravely prejudicial to Australia's finances. Although the Commonwealth has already expended nearly £250,000 on the search for oil, it has achieved very little. The Government is even more gullible than I thought it was. ft proposes that the Minister for the Interior shall give or withhold approval for this extra expenditure to assist prospectors. The time has come for the Government to shut down on the " pup " companies, which have proved themselves to be nothing more than money spenders. They do not possess plant adequate for the work which they undertake. The Government might as well forget that it has already spent an enormous sum in fostering the activities of the smaller companies, because that expenditure has been wasted. It should now take a more active part in the control of the search for oil. In view of the fact that the Commonwealth Oil Advisory Committee has been disbanded, as the Assistant Minister has just informed the Deputy Leader of the Opposition, I am amazed that he has not proposed the establishment of some other advisory organization of geologists to take its place. Therefore, I am justified in asking that the State geologists be consulted. I am communicating with the Victorian Minister for Mines by telegram, and asking him to reply by to-morrow, stating whether or not his government is supporting the proposal. I fear that the honorable member for Gippsland **(Mr. Paterson)** has unwittingly erred in bringing this proposal before the committee. I trust that it will not be entertained. *[Quorum formed.]* {: #debate-12-s5 .speaker-K4X} ##### Mr NOCK:
Assistant Minister · Riverina · CP .- The Deputy Leader of the Opposition **(Mr. Forde)** said that there would probably be a considerable number of applications for this assistance, but, so far as I am aware, only one company in Australia is producing oil. I am gratified to find the honorable member so optimistic, but I think that he is wrong in expecting so many applications for assistance. As to the allocation of the money by the Minister, I point out that it is usual for the Minister to seek advice in such matters. Reference has been made to the difficulty of checking the oil produced. In distant places the local policeman could obtain samples and measure the quantity of oil produced. If necessary an inspector could be sent, or the oil could be sent to market. There would be ample means of checking the quantity and the quality of the oil, so that there are no grounds for fear of exploitation or abuse. Amendment agreed to. Clause, as amended, agreed to. Title agreed to. Bill reported with an amendment; report - *by leave* - adopted. Bill - *by leave* - read a third time. {: .page-start } page 1138 {:#debate-13} ### IMMIGRATION BILL 1940 {:#subdebate-13-0} #### Second Reading {: #subdebate-13-0-s0 .speaker-K4X} ##### Mr NOCK:
Assistant Minister · Riverina · CP .- I move- >That the bill be now read a second time. No change of policy is involved in this measure. In clause 7, increased power is sought to deport certain classes of undesirable aliens; but otherwise the object of the proposed amendment is to bring the act up to date for administrative purposes, and to remedy certain weaknesses which experience has shown to exist in the present law. I shall now explain briefly the various provisions of the bill. For some years alien immigration into Australia has been controlled by. a landing permit system. Every alien must obtain permission, usually in the form of a landing permit issued by the Department of the Interior, before he is admitted into the Commonwealth for permanent residence. The act provides in section 3, paragraph *gre,* that any alien may be prohibited from entering Australia if, on demand by an officer, he fails to satisfy the officer that he is the holder of a landing permit, or that his admission to Australia has been authorized by or on behalf of the Minister. It is usual, in respect of alien immigrants, other than dependent relatives of persons already settled in Australia, to stipulate certain conditions of admission, such as possession of valid passports, landing money, Aic. Paragraph *ge* of section 3, in its present form, does not indicate clearly that the landing permit relates to admission to Australia, nor does it stipulate that the holder of the permit must comply with the conditions specified therein. There are, of course, other means of prohibiting entry if an alien holder of a landing permit cannot comply with the conditions of his admission, such as the effective application of a dictation test, but it is desirable that the necessity for' him to comply with such conditions should be definitely stated as set forth in the proposed amendment of paragraph *ge.* Included in the classes of prohibited immigrants specified in section 3 of the Immigration Act is any person who has been deported from the Commonwealth in pursuance of any act. Cases have arisen from time to time in which it would be reasonable, and even desirable, to re-admit to Australia a person who had previously been deported, not for a criminal offence, but because he had become temporarily a charge on the community, or had deserted his ship. The Minister should have power to consider each of such cases on its merits, and to authorize re-admission where circumstances fully warrant such action. It is, therefore, proposed that paragraph gg of section 3 of the principal act, which prohibits the re-entry of a deportee, should be amended to read : " Any person who has been deported in pursuance of any act unless his re-entry into the Commonwealth has been authorized by the Minister ". Clause 4, which relates to certificates of exemption, is largely a repetition of the existing section 4 of the principal act; but that section does not specify the classes of persons to whom certificates of exemption, entitling the holder to reside temporarily in Australia, may be issued. The purpose of the proposed amending clause is to make it clear that the Minister, or an officer authorized by him in writing, may issue a certificate of exemption in the prescribed form authorizing any person, who, unless he possesses such a certificate, is liable to be prohibited under the act from entering or remaining in Australia, to enter for temporary residence, or if he is already here, but not eligible to remain indefinitely, to remain during the currency of the certificate without being subject to any of the provisions of the act restricting entry into or residence in the Commonwealth. This provision is mainly used in connexion with the temporary admission of non-Europeans who visit Australia for business or pleasure. It is also used for the temporary admission of white persons who would be liable to restriction on account of illness or other reasons. There is power under the existing section 4 to deport the holder of a certificate of exemption on the expiration or cancellation of his certificate. This new provision provides for giving notice to the person concerned to leave within a specified period before action to deport is taken. There are many instances in which persons are admitted temporarily under certificate of exemption in the first place, and are permitted to remain permanently. The question depends mainly on whether they would be eligible for permanent admission except for a temporary disability such as illness. Clause 5 does not call for any comment at present. Section 7aa referred to in clause 6 provides that where a person has been convicted on a charge of being a prohibited immigrant and is sentenced to a term of imprisonment pending deportation, the imprisonment shall cease for the purposes of deportation or, subject to authority being granted by the Minister, if the offender finds two approved sureties each in the sum of £100 for his leaving the Commonwealth within one month. Front time to time it is found that convicted persons have business or property interests to dispose of, and,' in some instances, it is reasonable that, if they find the necessary sureties, they should be allowed longer than one month. The Minister is to be the judge, in the light of special circumstances submitted for his consideration. It is therefore proposed to add after the words " one month " in section 7aa the words "or within' such extended period as is authorized by the Minister ". Clause. 7 necessitates some special observations. Section 8 of the act provides for the deportation of. an alien convicted of a crime of violence against the person; or- of any attempt to commit such a crime at any time after his arrival in Australia. From time to time aliens, particularly in north Queensland, extort money or attempt to do so, mainly from their own countrymen, by methods which cannot be tolerated; but no actual violence against a person is involved. For example, they may threaten to burn down a home or cane crop. Some years ago action was taken to deport several aliens who had been convicted of crimes of violence against the person, and this had a deterrent effect; but it will be a greater deterrent if aliens are made to realize that they -will be liable to deportation if convicted of any crime of extorting or of attempting to extort by force or threat money or property from any resident of Australia. Recently an order was issued for the deportation of an alien who had been convicted at Townsville of demanding money by threats. In that case-it was possible to issue the order under section 8a of the Immigration Act, because the offender had been resident in Australia for less than five years, and had been convicted of a criminal offence punishable by imprisonment for one year or longer. It is very desirable that aliens should not be allowed to believe that they are free to indulge in such crimes once they have passed the five-year period of residence in Australia. For this reason., it is considered necessary to extend the scope of section 8 a3 proposed, for at present it does not put a limit to the period within which action may be taken against alien offenders. As particular reference has been made to aliens in north Queensland, I point out that the great majority of such persons are law-abiding, peaceful and industrious. Only a few have given any trouble, and it is desired to prevent anything in the nature of a "black hand " gang from raising its ugly head again in this country. It is proposed to strengthen section 8 further by providing for the deportation of aliens who are convicted of criminal offences other than those to which I have just referred, and who have been sentenced to imprisonment for one year or longer. Section Se provides that where the Minister has made an order under the Immigration Act for the deportation of any person, that person shall be deported accordingly. Occasionally circumstances come to light, after the issue of a deportation order, which make it undesirable to put the order into effect, and the Minister, who has power to make such an order, should also have discretionary power to withhold its enforcement if such action is warranted. If the section is amended as proposed in clause8, it would read - >Where the Minister has made an order under this act for the deportation of any person that person shall, unless the Minister otherwise directs, be deported accordingly . . . Clause 9 does not call for winch comment. Numerous maintenance guarantees have been obtained in connexion with the admission of aliens to Australia. These usually provide that for a specified period the guarantors shall ensure that their nominees are not allowed to become a charge upon public funds. Immigration regulation No. 6 provides that where any person in respect of whom a maintenance guarantee has been given becomes, within five years from the date of his arrival in the Commonwealth, a charge upon State funds, or upon any public or charitable institution, the cost of his maintenance may be recovered, in any court of competent jurisdiction, from the person who guaranteed his maintenance. Fortunately, very few cases have occurred in which the department has been called upon to take action to enforce the guarantees, and, so far, no court proceedings have been necessary. It. is desirable, however, that the regulation referred to should be supported by statutory power to make regulations relating to the obtaining and enforcing of maintenance guarantees. In conclusion, I may say that the aliens now in Australia have come from various European countries. To them the Government says that so long as they obey the laws of Australia they will be assured of all the privileges and freedom to which residence under the British flag entitles them. However, if they are not prepared to observe our laws and become good Australians, as we desire them to do, there is no room for them in this country. Debate (on motion by **Mr. Forde)** adjourned. {: .page-start } page 1140 {:#debate-14} ### PAPERS The following papers were pre sented : - National Security Act - National Security ( General ) Regulations - Orders - Protected area. Use of land. House adjourned at 10.37 p.m. {: .page-start } page 1140 {:#debate-15} ### ANSWERS TO QUESTIONS *The following answers to questions* *were circulated : -* {:#subdebate-15-0} #### Classified Sections of Telephone Directories {: #subdebate-15-0-s0 .speaker-KLM} ##### Dr Maloney:
MELBOURNE, VICTORIA y asked the PostmasterGeneral, *upon notice -* {: type="1" start="1"} 0. Is the classified section of the *Telephone Directory,* known as the pink pages, let to an advertising contractor? 1. If so, what is the price paid by him to the Government? 2. Is there any return of receipts from telephone users made to the Government? 3. What is the amount received by the Government in the various States? 4. In the case of any telephone user ceasing to pay the extra sum, is his name taken out of the indexed list as a punishment for so doing? {: #subdebate-15-0-s1 .speaker-KWC} ##### Mr Thorby:
Minister for Health · CALARE, NEW SOUTH WALES · CP -- The answers to the honorable member's questions are as follows : - {: type="1" start="1"} 0. The classified section in the Sydney and Melbourne *Telephone Directories* includes free of cost to the subscribers concerned an entry printed in ordinary type in respect of each business service connected to an exchange in the metropolitan network. Subscribers who wish to give prominence to their activities arrange direct with the advertising contractor to obtain additional listings under alternative trade or professional headings, block type or display advertisements. In the other metropolitan directories the entries and display advertisements in the classified section are limited to those inserted on behalf of subscribers who make the necessary arrangements direct with the advertising contractor. 1. The rights in respect of the classified sections of the metropolitan directories are covered in contracts which have been entered into by the. department with the contractors Following on the invitation of public tenders relating to the advertising rights for the telephone directories as a whole. During 1039, the revenue derived by the department from this source totalled £32,310. 3 and 4. See answer to No. 2. 2. The free entries in the classified sections in the Sydney and Melbourne directories are not affected by any failure to pay the advertising contractorfor alternative entries or additional matter published therein. australianconsolidatedindustries Limited. {: #subdebate-15-0-s2 .speaker-JVR} ##### Mr Nairn:
PERTH, WESTERN AUSTRALIA n asked the Minister representing the Minister for Trade and Customs, *upon notice -* {: type="1" start="1"} 0. Is an inquiry being conducted by bis department into the operations of Australian Consolidated Industries Limited? 2; If so, when were investigations commenced? 1. Is it expected that any results of the investigations will be available to Parliament upon its consideration of the proposed agreement with that company for the manufacture of motor cars? {: #subdebate-15-0-s3 .speaker-KUG} ##### Mr Spender:
UAP -- The Minister for Trade and Customs has supplied the following answers : - {: type="1" start="1"} 0. Yes. 1. The 12th February, 1940. 3.No. {:#subdebate-15-1} #### Sulphuric Acid {: #subdebate-15-1-s0 .speaker-KFE} ##### Mr Gregory: y asked the Minister representing the Minister for Trade and Customs, *upon notice -* {: type="1" start="1"} 0. What have been the average prices charged by the makers of sulphuric acid during each of the years 1937, 1938 and 1930. and what is the present price? 1. In view of the bounty paid on production, what has been the reason for the increase? 2. In how many States has sulphuric acid been sold in any reasonable quantity for the manufacture of superphosphates? {: #subdebate-15-1-s1 .speaker-KUG} ##### Mr Spender:
UAP -- The answers to the honorable member's questions are as follows : - {: type="1" start="1"} 0. The information is being obtained. 1. The landed cost of imported brimstone has risen. Approximately two-thirds of Australian requirements of sulphuric acid are produced from imported brimstone. The Sulphur Bounty Act 1939 provides for the paymentof bounty on sulphuric acid manufactured from. Australian materials. The rate of bounty is on a sliding scale according to the cost of imported sulphur, the bounty ceasing when such cost reaches £7 7s. a ton. As the cost of imported sulphur has exceeded £7 7s. a ton from the date of- operation of the Sulphur Bounty Act 1939, viz., the 24th October, 1939, no bounty has been paid on sulphuric acid produced on and after that date. 2. Sulphuric acid for manufacture of superphosphates is produced in New South Wales, victoria, South Australia and' Tasmania. {:#subdebate-15-2} #### Colonial Sugar Refining Company Limited {: #subdebate-15-2-s0 .speaker-JVR} ##### Mr Nairn: n asked the Treasurer, *upon notice -* >Of the declared profit of the Colonial Sugar Refining Company Limited for its year ended the 31st March, 1940. whatis the estimated additional lax that the company will have to pay pursuant to the War-time (Company) Tax Act 1940? {: #subdebate-15-2-s1 .speaker-KUG} ##### Mr Spender:
UAP -- It is not possible to give any estimate of the additional tax, if any, which the Colonial 'Sugar Refining Company Limited would have to pay under the War-time (Company) Tax Bill. The determination of taxable profit for the purposes of that bill is dependent upon the taxable income for income tax purposes which, in individual cases, varies considerably from declared profits. What the taxable income and taxable profit of this company wouldbe could not be determined until, in due course, the return of the company is lodged and examined by the department. In any case, the supplying of this information would amount to divulging the affairs of the company by officers of the department. The bill, when it becomes law, will prohibit this and it is not considered to be proper that what would be a punishable offence under the bill when it becomes law should now be done while the bill is before Parliament. Treaty with Greece. {: #subdebate-15-2-s2 .speaker-KHL} ##### Mr HOLLOWAY:
MELBOURNE, VICTORIA · FLP; ALP from 1936 y asked the Minister representing the Minister for Trade and Customs, *upon notice -* >When will thenecessary legislation be introduced to ratify the treaty entered into between the Commonwealth Government andthe Government of Greece? {: #subdebate-15-2-s3 .speaker-KUG} ##### Mr Spender:
UAP -- The Minister for Trade and Customs has supplied the following answer : - >Abill to approveof an agreement between the Commonwealth Government and the Greek Government will be introduced during the current session. {:#subdebate-15-3} #### Oil Fuel Prices {: #subdebate-15-3-s0 .speaker-KFE} ##### Mr Gregory: y asked the Minister repre senting the Minister for Trade and Customs, *upon notice -* {: type="1" start="1"} 0. Is it a fact that in England the oil companies supply, at uniform, prices kerosene and petrol in twenty -gallon lots delivered in any part of the United Kingdom, except the north of Scotland? 1. As the Minister has control of prices, will he endeavour to arrange with the oil companies for a uniform price for petrol and kerosene in Australia for city and country buyers on somewhat similar lines as far as is economically possible? {: #subdebate-15-3-s1 .speaker-KUG} ##### Mr Spender:
UAP -- The Minister for Trade and Customs has supplied the following answers: - 1.Information is not available regarding drum prices in England, but a uniform price of petrol now existsex pumps in England, Wales and south Scotland. There is one grade of petrol, pool petrol, and it is marketed at1s.11d. per gallonex pumps. In the Isle of Man and north of Scotland the price is 1s.11d.ex pumps and in the Orkneys and Shetland Islands 2s. per gallon. The increase of price in the latter places is due to distribution costs. {: type="1" start="2"} 0. The proposal to fix uniform prices all over the Commonwealth would involve a radical alteration of existing marketing arrangements and might result in a disruption which' would more than offset possible advantages. Since the introduction of price control greater price uniformity has been secured and the Commonwealth Prices Commissioner will consider its' extension in the direction suggested. MarginalWheat Lands. Mr.Wilson asked the Minister for Commerce, *upon notice -* {: type="1" start="1"} 0. Did he fix the 29th April as the date for the conference with State Ministers for agriculture to consider the allocation of £500,000 to remove wheat-growers from marginal areas? 1. Did he insist on the conference being held on the 29th April? 2. Did he leave the conference shortly after it met on that day and go to Sydney to attend a banquet? 3. If so, for what reason did he leave the conference and go to Sydney? 4. How many of the settlers included in the South Australian Government's claim for marginalarea relief are in his electorate? **Mr. Archie** Cameron The answers to the honorable member's questions are as follows: - 1 and 2. I was prepared to allocate the sum of £500,000 to the States on receipt of their written submission. The Ministers of Agriculture in South Australia and Western Australia were prepared to leave the matter to me. I had no advice of the wishes of the Minister of Agriculture in Victoria, but the Ministerof Agriculture in New South Wales desired a conference so that the Ministers in the different States might, if possible, come to agreement. On the 18th April, I invited the Ministers of Agriculture to come to' Canberra on the 29th April to discuss the matter. The Ministers of Agriculture in New. South Wales, South Australia, and Western Australia all intimated their intention of being present. When the Minister of Agriculture in Victoria advised that the 29th April was unsuitable to him, I informed him that, as the other Minis- ters of Agriculture had submitted proposals, . and had signified their intention of being present, I proposed to proceed' with the meeting. 3 and 4. I left the meeting soon after it assembled in order to- attend a War Cabinet meeting. I left for Sydney that afternoon and returned next morning. The problem to be solved was how the money was to be divided between the States, and the State Ministers were unable to agree on this point. The reasons for my visit to Sydney are not relevant. 5.I do not know. The report of the Marginal Lands Committee of South Australia, October, 1939, is a public document. Defence Annexes. {: #subdebate-15-3-s2 .speaker-KV7} ##### Sir Frederick Stewart:
Minister for Social Services · PARRAMATTA, NEW SOUTH WALES · UAP -- On the 21st May the honorable member forWest Sydney **(Mr. Beasley)** asked whether I had any knowledge of, or any statement to make about, the machinery installed at the annexe of the Colonial Sugar Refining Company Limited, the bearings of which seized when the machinery was put on a trialtun, thus proving that the installation of the plant was most unsatisfactory. I am now in a position to inform the honorable member that during the overhaul, to which all imported machinery purchased by the Government is subjected on its arrival and before starting up, certain relatively minor defects were discovered. These were rectified, and since the machinery has been started no troubles have been experienced.

Cite as: Australia, House of Representatives, Debates, 22 May 1940, viewed 22 October 2017, <>.