26th Parliament · 1st Session
The PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at 2.30 p.m., and read prayers.
– I direct a question to the Minister representing the Minister for Health. Is it proposed to take any action against the master and owners of the Formosan fishing trawler ‘Nam Wai’ for several alleged breaches of Australian health laws, including failing to obtain an Australian health clearance for the crew and landing without authority on Green Island off Cairns for water?
– Because of the publicity given to this matter in Queensland newspapers, I have some information on it from my colleague the Minister for Health. I give this information in reply to the honourable senator’s question: Concerning the unauthorised landing of fishermen from a vessel from Taiwan on Green Island off Cairns, it is advised that attention has been given to the action which should be taken in the present instance and the measures needed to prevent similar occurrences. In the present instance it is considered that, in view of the possible plea of distress from shortage of water and the difficulties in dealing with the vessel which may not be within Australian territorial waters, no action in the way of prosecution can be confidently undertaken. The matter will be discussed with the Department of External Affairs with a view to requesting disciplinary action by the Taiwan Government.
An officer of the Department of Health travelled to the vessel on Saturday last, 4th November, and examined and acquainted himself with the health conditions on board. He has reported that there were no signs of quarantinable disease. This officer informed the master and others on board that landings on the mainland of Australia or on islands under Australian control without a prior clearance through quarantine were illegal and must not be made. He told them also that the nearest place for this to be carried out would, be at Cairns. In addition he informed them that no landings were to be made at river mouths or coastal creeks or on islands for the purpose of obtaining water, without clearance through quarantine.
– My question is addressed to the Minister representing the Prime Minister. Did the Prime Minister, as claimed by the Premier of of South Australia in the Adelaide ‘Advertiser’ of last Friday, give the last Premiers Conference an undertaking that no special grants beyond the loan works programme would be made without the concurrence of all Premiers on the order of priorities? Were the grants for the Ord River scheme and the Emerald irrigation project in breach of the undertaking given? Had the Premier of South Australia asked the Prime Minister, by way of correspondence last June, to commence new post office buildings in Waymouth and Gouger Streets, Adelaide? Should the public announcement by the Postmaster-General last Wednesday that such buildings would be proceeded with be accepted as a reply to the South Australian Premier’s letter?
– I have not seen a statement by the Postmaster:General that the post offices referred to would be proceeded with. I take it that the honourable senator is implying that the statement was that they would be proceeded with at a more rapid rate than it was previously thought they would be proceeded with. If that statement was made it would undoubtedly be because of representations that the building industry in South Australia needed an uplift and that uplift could be given if the Commonwealth Government gave assistance by accelerating public works in that State. I do not know this of my own knowledge but I am sure that this would be the explanation for a statement that buildings in South Australia were to be proceeded with more quickly than had been originally planned. I should have thought this would have been accepted with some gratitude by the South Australian Government and South Australians generally. As to alleged statements by the Prime Minister about special grants, that part of the question ought to be placed on the notice paper so that the Prime Minister him- self may supply an answer. But I point out that the . Emerald Dam project at any rate is a work for which this Parliament has already appropriated money. The money will come from the $50m which has been appropriated for water conservation works. That is my understanding of the position.
– My question is directed to the Minister representing the Minister for Works. Will the Minister inform the Parliament of the reason for the reduction in staff of the Department of Works in Queensland? Will he also give details of the number of employees to be dismissed in Queensland during the next few days?
– The Minister representing the Minister for Works is away from the Senate at the moment in accordance with an agreement made with the Opposition. Therefore the question should go on the notice paper.
– I address a question to the Minister representing the Minister for Primary Industry. A fortnight or 3 weeks ago the Minister for Trade and Industry said that he thought the Minister for Primary Industry would engage in discussions with the Attorney-General to consider the enforcement of marine insurance provisions with regard to fruit shipments trapped in the Suez Canal. I ask the Minister whether he is in a position to report any progress in the enforcement of claims which growers have in respect of that matter.
– I will find out from the Minister for Primary Industry whether, in fact, there is any progress to report on this front. I do not myself know of any, but I will discover the position and let the honourable senator know.
– I address a question to the Minister representing the Minister for National Development. Has the Minister’s attention been drawn to a statement attributed to the President of the Australian Automobile Chamber of Commerce that wholesale petrol prices are being maintained at an unrealistically high level and that oil companies are about to seek another major petrol price increase, which will be the third this year? In view of the Commonwealth Government’s attitude earlier this year at the basic wage hearing by the Commonwealth Conciliation and Arbitration Commission that the Government wanted 1967 to be a year of wage and price stability, what action can the Government take, and what action does it intend to take, to see that Australian industry and the Australian public are not charged excessive’ prices for petrol7
– The matter to which the honourable senator refers is one that comes within the ambit of the State governments which have power to control prices. I understand that in South Australia the price of this particular commodity is, in fact, controlled. The matter is one for the State governments and the honourable senator should direct his question to the Premier of the State he represents.
– Has the Minister for Education and Science seen a report that science teachers in New South Wales at the weekend demanded the withdrawal of the new senior science syllabus and other science textbooks? In view of the heavy Commonwealth involvement in science teaching, has the Minister’s Department any degree of authority in respect of the standards of teaching used or the quality of .textbooks, particularly as some of these books have . been described as badly written, hard to. read, erroneous in parts and completely unsuitable? I ask the Minister: Are there any avenues of consultation between his Department and State Departments of Education whereby science teaching programmes . may be worked out in order to ensure that the best use will be made of Commonwealth money?
– The Commonwealth Government has no jurisdiction over and no association with the science textbooks referred to by the honourable senator. These are textbooks which have been prepared by an organisation in New South Wales and which have, been approved by the New South Wales Department of Education for science teaching in their schools. We do not in any way come into that field.
We have indicated to the State governments generally that should a number of them engage upon some activity such as the Nuffield Foundation is engaging on in the United Kingdom or as various United States foundations are engaging on to seek to develop a common course syllabus we will be open to suggestions that we might follow along such lines. We do not have any authority to enter into the provision of textbooks within a State or to influence the selection of textbooks to be used within a State.
– I direct a question to the Minister representing the Minister for Social Services. In view of the latest gallup poll on pensions which indicates that 91% of electors favour an increase in pensions and that the majority are in favour of pensions of at least $18 a week will the Government, even at this late stage, grant substantial increases in pensions to comply with the wishes of an overwhelming majority of the Australian people?
– This question is, T feel, a matter of Government policy and therefore should not be answered at question time.
– I ask the Leader of the Government in the Senate whether his attention has been drawn to Press reports that growers in the Upper Murray area are expressing concern at the high salinity of water coming down from the upper reaches of the Murray. Have the grower associations urged Commonwealth intervention to take preventive action? Will the Minister confer with the South Australian Government and grower interests in connection with this problem?
– 1 have not seen any of the Press reports to which the honourable senator referred. 1 have heard - I have forgotten the exact source - that the salinity of the Murray River was becoming quite high, particularly around Loxton, because of the movement down the river of a slug - or something of that nature - of salt water- which had not mixed properly with the fresh water of the Murray River.
I do not know of any protests made to the Commonwealth Government about this matter and it is not quite clear what the Commonwealth Government could do if it were approached about it.
– The Minister representing the Treasurer will recall that last week the Treasurer made in another place a long statement explaining the principal provisions of the amendments proposed to be made to the Defence Forces Retirement Benefits Act. Ir is not possible to introduce the amendments during this sessional period. The amendments particularly concern the incorporation in this superannuation scheme of national servicemen and their dependants, which will have the effect of giving annuity insurance to dependants of war caused casualties, national servicemen or otherwise. I have found that in the country there is considerable lack of knowledge of the proposed amendments. Will the Minister representing the Treasurer consider communicating the Treasurer’s statement to all branches of servicemen’s associations?
– I think the honourable senator’s idea has great merit. I think the information and the reasons why we are unable at this stage to complete the amendments to the defence forces retirement benefits fund legislation should be known to as many people as possible. I am sure all honourable senators are disappointed that the amendments cannot be introduced at this stage. In case any misunderstanding has arisen I think the information should be circulated in the manner suggested by the honourable senator. I thank the honourable senator for his suggestion and I shall see that it is carried out.
– I direct my question to the Minister representing the Minister for Health. In view of a statement at the weekend by the Secretary of the Australian Medical Association in which he claimed that a review of the pensioner medical service by the Government would enlarge the ambit of free medical treatment’ for pensioners, can the Minister indicate whether such a review is contemplated by the Government?
– I saw the report to which the honourable senator has referred. I cannot give him an answer to bis question at the moment. I will convey his inquiry to the Minister for Health and get a reply for him.
– Can the Minister for Supply inform the Parliament whether his Department has cut departmental spending in Queensland by approximately 38i%? Can he also advise whether it is true that as a result of the economy drive departmental motor vehicles which no longer have a useful life are being withdrawn from sale and returned to service after minor mechanical repairs are effected?
– I am not aware at the moment of the details to which the honourable senator has referred. I shall obtain an answer for him tomorrow.
– My question, which J direct to the Leader of the Government in the Senate, follows on that asked by Senator Bishop about the salinity of the River Murray in South Australia. I recall that the Minister told Senator Bishop that he did not know quite what could be done by the Commonwealth about this matter. I ask the Leader of the Government in the Senate whether the Commonwealth would consider placing feeder streams, such as the Loddon River and others which are responsible for a considerable degree of the salinity which flows into the River Murray, under the control of the River Murray Commission as advocated by some of the fruit grower organisations.
– 1 think this question clearly would need a good deal of legal study. Certainly I could not answer right now whether or not the Commonwealth could place other streams which are within the boundaries of a particular State under the control of the River Murray Commission. I doubt whether the Commonwealth has that authority but I am not sure because I do not know enough about the legal situation.
– I direct my question to the Leader of the Government in the Senate in the absence of the Minister representing the Minister for Air. 1 refer to a report in today’s ‘Australian’ newspaper stating that the Royal Australian Air Force is aware, of the final price of the FI 1 1 aircraft but that the Government is unlikely to disclose this before the Senate election because, it is alleged, the information would be ammunition for the Opposition. Tn view of the public importance of this subject, will the Government make–
– Senator McClelland asked the same question.’
– Senator McClelland did not ask this question. In view of the public importance of this question, will the Government make a frank statement on the expected final cost of the FI 1 J aircraft before the Senate rises for the recess?
– 1 think the honourable senator should not be misled into assuming that because a- newspaper states that the Government knows something, that is necessarily so. I think his question was based on the assumption that what was in the newspaper report was true. I cannot tell the honourable senator whether it is right. Frankly, I have not heard anything along those lines myself. I think that the question should go on. notice so that it can be answered.
– I address my question to the Minister for Supply. Is he aware that the Government Aircraft Factory served dismissal notices on twenty-two skilled and unskilled workers employed at Avalon in Victoria? Are these dismissals associated with a slowing down in the production of the Mirage aircraft? If so, are there any plans for further defence projects which will gainfully employ the skilled labour now available in the aircraft industry in Australia?
– As the honourable senator said, there has been some slight reduction in staff at the Factory following the completion, to the jig stage, of the. Mirage aircraft production programme. Meanwhile, the Department of Supply is searching for additional work in this area of operations. Every effort will be made to maintain the staff if we can find additional work. Manufacture of the Mirage has been completed to the jig stage and therefore there has been some slight recession in that area.
– My question is directed to the Minister representing the Postmaster-General. Has the PostmasterGeneral received notification of a decision of the Federal Parliamentary Country Party strongly criticising the Government over the conversion of country telephone exchanges from manual operations to automatic operations? Does this criticism by the smaller group in the coalition against the Government action indicate a break in the coalition?
– This question is asked in the absence of the Minister representing the Postmaster-General and therefor, insofar as it seeks information, it ought to go on notice. Insofar as the question expresses a pious hope that there may be some rift in the coalition, I can assure the honourable senator that this is a pious hope which is unlikely to be realised.
– by leave - In the absence pf Senator Anderson, I inform the Senate that this morning in New Guinea a Beech Baron aircraft crashed on take off at Goroka and seven people on board were killed. The aircraft was operated by Territory Airlines Pty Ltd and was engaged on a charter flight to Madang. The cause of the crash is at present unknown. The Department of Civil Aviation has sent two senior air safety investigators from Melbourne to investigate the accident.
Debate resumed from 3 November (vide page 2155), on motion by Senator Henty:
That the Bill be now read a second time.
– We are dealing with the Petroleum (Submerged Lands) Bill and the six associated Bills. In relation to the first Bill, I move:
As I understand it, that would be a convenient way of expressing the motion so that it will cover all seven Bills. We are dealing with perhaps the most important economic measure -to come before the Parliament of Australia. It concerns the most valuable of our natural resources discovered to date. The discoveries have been exciting, the wealth of them is such as to surpass any of the descriptions so far used that the value is worth a king’s ransom. If one were to put together all the kings who were ever captured in our history, the value would exceed a reasonable ransom for them all. It is apparent, even on the basis of conservative estimates - though the estimates of the value of these discoveries, like other estimates, could be wrong - that we are dealing with natural resources worth billions, in the sense of thousands of millions, and not only billions but tens of billions and perhaps thousands of billions of dollars. The estimates would not be far fetched if they went beyond even thousands of billions. We are dealing with an asset of tremendous magnitude. It has been there for many millions of years. It is the result of natural processes and, perhaps, of the decomposition of former living matter and of other natural changes which have taken place. Here we have in 1967 this continent with the small population of 12 million people, with this vast treasure under the submerged lands surrounding the continent.
By international agreement expressed in the Convention on the Continental Shelf, which has been referred to in the First Schedule to the Bill, Article 2 states:
The coastal State- meaning in this instance Australia:
That Convention sets out the extent of the continental shelf and the rights that Australia has in respect of these great resources. There is little doubt - in fact, for the Opposition there is no doubt whatever - that these resources are an asset of the Commonwealth of Australia. They belong to the people and are vested by international law in the Commonwealth of Australia. They are our collective asset.
The discoveries are important. The exploitation of them will be more important. The consequences will affect Australia’s defences, its balance of payments and its destiny. These resources, if exploited properly in the interests of our people, will enable us to build up a great population, a prosperous nation and enable us to grow rapidly and to be one of the great countries of the world. If there is one criterion of the strength and the standard of living of any country it is the consumption of energy per head of population. A list of nations drawn up in ‘ the order of consumption of energy per head of population would show the greatest nations at the head of the list and in the precise order of their strength, prosperity and standard of living.
We in Australia have lacked water. We have lacked also sources cif abundant energy that could enable us to transform this continent, to populate it and to have the capital which would enable us to build up a great nation. Now at last we have these sources. Along with our other sources of fossil energy, we have these great resources of natural gas and associated petroleum. What are we to do with these sources? Are we going to exploit them in the interests of our own people? Are we going to see to it that the resources are developed in such a way that the maximum benefit will flow to the people of Australia? Or are we going to allow the benefits to flow into the hands of the international oil corporations? Will this country get the dribs and the crumbs, or whatever honourable senators may call them,, of these, great discoveries while the riches and. the profits are diverted and the great benefit flows to others? That is the simple question which faces the Senate. The Opposition’s view is that this resource must be developed for the benefit of Australia.
An example of how the development of natural gas and oil resources has been carried out is . to be found, in Italy where a public instrumentality, the Ente Nazionale Idrocarburi, carried out such development. Honourable senators may. recall that the ENI was set up only a few years ago and was one of the main factors responsible for the transformation of the Italian economy - the Italian miracle, as it has been called. On 27th October last year 1 read to the Senate a statement in relation to the economic miracle in Italy. I would like to recall to the Senate again what I read then. I said: ‘ ‘
An outstanding contribution to the quite exceptional growth of the country’s ‘economic activities both at home and abroad, to the rising standard of living, and to the so-called ‘Italian miracle’, has been, and continues to be, given by the companies of the ENI Croup.
They, by assiduous exploration both in Italy and abroad, have placed large amounts of natural gas and oil at the country’s disposal, supplying Italian industry with energy on conditions which are, for the first time, better than* those obtained by its European competitors’.’ They have also helped to build up powerful refining and manufacturing industries to convert the oil and gas discovered into a wide range of motor fuels, fuel oils, liquefied gas fertilisers, synthetic rubber and plastics. By their bold intervention and price policies they have managed to break up certain oligopolistic combines barring the way to the growth of consumption. They have- become the prime movers of new projects, in less industriallydeveloped areas … ….
From the very, beginning -AN1C has offered nitrogenous fertilisers at a unified price for the whole country and this price is’, 15% lower than the average price previously prevailing on the market which had been -ruled by a strong oligopolistic concentration. The handicap which the southern parts of the country used to suffer because of the heavier transport charges arising from their remoteness from production centres was thus removed.
That is an example of what was done by a modern industrial country which, discovered natural gas resources. The - ENI is a public instrumentality. , : .
– What was ‘ the name of the country?
– Italy., The ENI is the instrumentality which carried out this work. Perhaps the Minister for Supply will be interested to know that the instrumentality has tendered .for. the construction qf a pipeline in this country. I am open to correction, but I think, its. tender was successful. An Italian Socialist instrumentality - that is what it is; a public instrumentality - has succeeded not only in transforming the industry of its own country by the exploitation of natural gas and oil resources but is assisting in the development of Australia’s resources. One may think that such an example would be a very good one for this country to follow, at least partly, in the development of its natural gas and oil resources.
The Opposition’s stand is that Australia ought to be developing these resources cither through a public instrumentality such as the one set up in Italy, or by Australian private firms or companies, or by some combination or partnership of both. Let the development of these resources proceed by means of public instrumentalities in some areas, by private companies in other areas, and sometimes by a combination of both, but lel the development be predominantly in Australian hands. If this country is to overcome its lack of capital there is only one way in which it can do that; that is by making profits in the system under which it is operating. How can this country ever make the profits that will enable it to have the capital to develop other resources if every time a resource is discovered the control and development of it fall into foreign hands and the great profits to be made out of it go substantially into foreign hands? It is said that we do not have capital. If we pursue the course that we have pursued to date and the course that is intended to be pursued in this instance, we will never be able to obtain the capital to develop our resources.
After the Second World War this country, with a population of about seven million, was able to undertake the development of the Snowy Mountains hydro-electric scheme - an undertaking that required the expenditure of about $!,000m over a period of years. Now we have a population of about twelve million. We say that it is not beyond this nation’s capacity now to mobilise its resources and to undertake itself the exploitation and development of this resource in the interests of its people. Why should we take the defeatist attitude that collectively we are unable to develop this resource? If the private persons in this country are unable to do that, surely the solution is that it be done by us together through the instruments that we have, and especially through the
Commonwealth Government. Why should not we set up under the Commonwealth Government agencies to develop these resources in the interests of the people?
If we do not do this it is inevitable that, when the great profits that will be made out of the development of this resource are made, one of two things will happen: Either those profits will be transmitted overseas by way of dividends and other payments, in which event we will continue to have balance of payment difficulties and a lack of capital; or the profits will be reinvested in Australia in other industries, which will mean an accumulation of the process in which the resources and industries of Australia fall into foreign hands. There has been no sign whatever of any policy on the part of this Government that would give us some hope that Australian resources or industries will not stay in foreign hands forever. One could understand a policy that said: ‘Let there be a temporary period during which foreign corporations will control our industries and resources, but that will come to an end. Here are our policies, our programmes and our techniques for ensuring that Australian resources and industries will go back into foreign hands’. There has been no hint of such a policy. In respect of the greatest asset that we have had to date, the policy is to allow it to fall into foreign hands on a scale that is extreme, overgenerous and beyond the limits of reason.
As far as can be ascertained, tremendous areas already have been assigned to foreign corporations. The Australian interest has been extremely small. The terms upon which these areas have been handed over by means of exploration permits are such as to raise the real fear that the corporations will use the benefits that they will derive under this legislation, if it is passed, to take the course that they wish to take in the development of our resources. If they want to find the oil and if they want to produce it, they will so so. If they do not want to do so, they may hang off. Naturally they will act in accordance with their own interests. If their interests happen to coincide with ours, well and good; they will act in accordance with our interests because they happen to be their own. If their interests do not coinside with ours, they have no duty, to us - their duty is to themselves and to their own shareholders - and they will act in accordance with their own interests. Why should this country have been put in the position of handing over to foreign hands the effective control of the development of these resources?
The Opposition wishes to have a select committee set up to investigate and report upon these Bills because of the complexity and magnitude of the problems with which we are faced. Problems arise in relation to sovereignty. It seems quite clear to us that, in respect of the areas beyond territorial waters, as far as the continental shelf extends and in the other areas that are mentioned in the Convention on the Continental Shelf, there is no doubt that the Commonwealth has complete control and the complete disposition of the minerals, including petroleum, that might be found in those areas. They are in every sense an asset of the Commonwealth. In respect of the other areas within territorial waters, there may be questions that should be settled, and settled now. That is a matter that should be investigated and reported upon by the select committee.
The select committee should also be able to report upon the history of the matter, including the attempts by Victoria to arrogate to itself rights to issue permits, rights to control the disposition of the oil, rights to determine what prices will be paid for the natural gas not only in Victoria but also in other States and rights to control pipelines that might go across Victorian territory into other States. All of these purported rights of Victoria should be investigated by a select committee in order that there will not arise in this country the situation that has been indicated by the Premier of Victoria, namely, one in which he would endeavour to place other States at some disadvantage in relation to Victoria or, at all events, to see that the natural gas was not sold at its lowest economic price. We want to see that the use of natural gas is not held back in order to protect other industries, such as the brown coal industry. We must act on a national scale. In dealing with the resources of the Commonwealth we should adopt an Australian approach, not a New South Wales approach, or a Victorian approach or a South Australian or any other approach. It is the duty of the Commonwealth and of this Parliament to see that this resource is developed in the interests of the nation as a whole as well as of the States, of the local authorities and of the people.
– Like the coking coal of New South Wales. That State exercised a monopoly over coking coal.
– If the honourable senator is referring to any parochial attitude which might have been adopted by New South Wales or any other State, whether in relation to coking coal or cement or any other product - and I remind the honourable senator of the fruit which is being kept out of States for alleged quarantine reasons which are not in fact valid - then I say that all such attitudes should be swept aside in this Parliament. We are brought here to represent the nation as a whole. We come here representing component parts of the Commonwealth but we are brought together in order that we may adopt a national approach. Here we have a series of hotchpotch Bills which are intended to bring together the various approaches which have been made by the States to put some gloss over what has been done, and in which the last consideration seems to have been the development of this resource in the interests of the nation. It is our duty and our function to see that the legislation is considered with due deliberation and in the interests of the nation, and I ask the Senate to bear this in mind when considering the amendment I have proposed for the appointment of a select committee of the Senate to investigate and report upon the Bills.
The States have entered into an Agreement with the Commonwealth and the questions have been asked: Should not the Commonwealth carry out this Agreement? Is not the Parliament in some way morally bound to give effect to this Agreement? The answer that the Opposition would give, at least until we have had the advantage of the report of a select committee, is that no government can, by entering into agreements with other governments, tie the hands of this Parliament. There are in the Agreement some extraordinary provisions which apparently aim at tying the hands of the Parliament. I refer to the Agreement dealt with by the Minister in his second reading speech and titled ‘Agreement relating to the Exploration for, and the Exploitation of, the Petroleum Resources, and certain other
Resources, of the Continental Shelf of Australia and of certain Territories of the Commonwealth and of certain other Submerged Land’. Most honourable senators, I suspect, would not have had time to read this Agreement at all. I would be amazed if any but a small proportion of honourable senators have had a chance to read the Agreement, because the Agreement, the Bills and the second reading speech have been presented to us at such a time and in such circumstances that it has been virtually impossible for the Senate to give proper consideration to the issues involved in the legislation. How could any senator, except by taking extraordinary trouble and practically sacrificing his consideration of the other measures before the Senate, have been able to investigate the Bills properly and to study properly the second reading speech and associated material, do the necessary research and come forth with a proper judgment on the matters involved, when those who have been engaged in putting this material together have been doing so for years?
I would like to direct the attention of the Senate to clause 25 of the Agreement. It says: (1.) This Agreement shall not be capable of being varied or revoked or of being determined by any Government except by agreement between all of the Governments for the time being parties thereto. (2.) The last, preceding sub-clause shall not prejudice the right of any Government to determine this Agreement in relation to a Government that is in default thereunder.
Why should that provision have been inserted in the Agreement? Why, at virtually the beginning, before we know the full extent of these resources, before we know all the problems that will confront this nation, should an agreement have been entered into which contains a provision that the Agreement is not capable of being varied or revoked or of being determined - being ended - by any Government except by agreement of all the governments for the time being parties to it? Why should such an indefinite and irrevocable - except in the case of a breach - agreement have been entered into in relation to this resource? If it is true, as the Government puts it and as we accept, that the development and exploitation of this resource will profoundly affect the destiny of this nation, how can we enter into an agreement at this time to bind ourselves and to say that such agreement cannot be varied or revoked or ended, except for breach and then in relation only to the Government that is in breach, unless all the governments agree - every single one of them?
This is an abdication of responsibility. It would be so even if it were not so clear that the offshore resources covered by the continental shelf, which is dealt with by the International Convention, come within the sovereign rights of the Commonwealth. Even if this were not so clear, even if there were mixed up questions involving legislative authority of the States, it would appear to me utterly wrong for the Government of the Commonwealth to tie its hands in I h is way. When it is so clear that under the Convention the rights are in the Commonwealth, how can we enter into an agreement with the States tying our hands in such a way that we cannot get out of it without the consent of every single State?
The background to this is, of course, that it was plain to the States that they had no rights at all in respect of areas covered by the International Convention, and so they entered into agreements giving nothing away but under which they were getting something. That is the answer if anyone raises the question in this chamber. If it is said: What are you complaining about? The two Labor Governments in the States signed this Agreement’, then 1 reply that everyone knows the situation of the States. The Slates are under extreme financial pressure. Here is a matter in which the States had no rights. Why should they not sign an Agreement under which they are giving nothing away but are getting some 6% in royalties? Why would they not do that? They are faced with a problem. I suppose their duty is to their people in providing for the essential services which they cannot provide under the financial arrangements between the Commonwealth and the States. The States, whether rightly or wrongly - and views may differ on this - have entered into an agreement giving a cover under which the Commonwealth has substantially given away its own rights, given away its own asset,, to predominantly foreign owned corporations. This is what it amounts to. It has given- away its asset for a pittance of a return. How different has been the approach of the Australian Government to that of the Italian .Government where the decision was made to develop the resources in the interests of the people. That decision has been brilliantly executed to the advantage of the people of Italy. Here the decision has been to give away the resources to foreign owned corporations, and no doubt it will be also brilliantly carried out to the benefit of the foreign corporations.
We are concerned about a great many matters. There is the graticular principle adverted to by the Minister of National Development (Mr Fairbairn) in November 1965. The principle then was that the bolder of the permit would give up four out of the nine blocks that he would have under the scheme, which provided for the nomination of nine blocks. These four blocks would be submitted to public tender and the benefit would go back to the Government. That principle has now been altered so that in substance the holder of the exploration permit - the body which nominates the nine blocks - may, in effect, retain the blocks for the payment of an extra overriding royalty of 1%.
– Why 1%?
– 1 thank the Minister for the correction. It could be as low as 1%, but it could be for a royalty of from 1% to 2i%. The system has been altered to do away with public tenders. I am not going to deal in detail with the various qualifications to this, but there has been a great alteration in principle and it has been worked out by others that this may mean that in a typical case a benefit of some S 1,000m may be given away for a return of $25m, based on the 1% royalty, or $62im if the maximum royalty of 2i% were imposed. Of course, these are tremendous sums, and we are speaking of only one small area involving a few square miles when the areas involved extend to hundreds of thousands of square miles. No-one knows how many of these may be valuable, but what we are dealing with is the potential, and we ought to be providing for the potential. Why was this alteration made to a scheme which was already extremely generous to the exploring companies and the producing companies? The select committee ought to be able to look into these questions.
Why should the original graticular principle be abandoned for a set. up which, on the face of it, is even more generous to the oil companies? The select committee would also be able to look into the question of the amount of foreign capital invested in any company, partnership or consortium holding any permit licence or lease relating to exploration, drilling or production of petroleum in the continental shelf. It could look into the question of what legislative provisions are desirable to ensure expeditious action to meet the petroleum consumption needs of Australia. On that question it could consider that the need for products derived from petroleum may call for very much increased consumption as it did in Italy. The by-products of petroleum extend to the nitrogenous fertilisers, to the plastics, to the rubber industry and to a whole host of products which are needed in an expanding society. The select committee could also consider the question of the export from Australia not only of fuels which may be derived from the hydro-carbons but also of chemicals and other by-products. The select committee could ‘also investigate the need and the desirability for the construction and operation by public authority of interstate pipelines for the transport of petroleum. Mr President, I have exceeded the time that I intended to speak. I have done so tacitly and I hope that the Minister does not mind.
– No, this is a big Bill.
– Honourable senators might recall that the policy of the Opposition was announced by me earlier this year and then, because of the importance of the subject, it was indicated by me on 18th May 1967 that it was a tentative policy being put forward for consideration, correction and public examination. The Opposition was not prepared to be dogmatic. It was putting forward what it considered to be important statements on policy in relation to the utilisation of natural gas, and the Government did. not see fit, except for some short discussion, to debate the issues in the Parliament. We were, we think, fair to the Government and fair to the nation in stating what we considered to be our tentative policy. I should like to refer again to some of the major points in that policy to which we still adhere.
Our policy is that there be formulated, enacted and administered by a federal ministry of fuel and power a national fuel and energy policy so that in co-operation with the States natural gas and derivatives will be used for the welfare of the nation as a whole as well as for the States and localities. Such a policy would be to use and distribute from a national viewpoint and on an. integrated basis coal, fuel, oil, natural gas and all. other Australian sources of heat and energy. It would plan long term production, patterns, avoid overproduction, uneconomic competition, uneconomic development and minimise imports. In addition it would provide for the planned distribution by pipelines, sea, road, rail or power grids of the various types of fuel or energy available. In particular it would define a policy for the use of Australian oil and natural gas.
– Would the honourable senator call that body a national fuel board?
– We would call this a national fuel and energy policy to be administered by a federal ministry of fuel and power. In view of the importance to Australia of these resources, the people would expect nothing less than that a Minister be concerned with the utilisation of all our fuel resources. It is apparent that the discoveries and development of natural gas will have great impact on other industries. Surely the coal gas industry is entitled to some consideration. Surely the producers of black and brown coal must be considered. Surely the people concerned with the use of imported oil are entitled to some consideration. They wish to know where the nation is going and what ‘ is the national policy. What is to be done by an industry now setting up plant? Is it to use imported oil, coal, or gas? Everyone is entitled to know from the point of view of economy and efficiency what is to happen and which path the nation is to take- in its utilisation .not only of natural gas but of the other sources of energy. Anything less than full knowledge would not be facing up to the requirements of the situation.
The discovery of natural gas is a great benefit to the nation but it may also involve a drastic re-appraisal in other industries. It is only proper that there should be a national fuel and energy policy. It is a disgrace to the Holt Government that a policy has not yet been formulated. The Government is prepared through this legislation to throw most of the question over to the international oil corporations,, for the most part. I have not forgotten thal a largely Australian owned company has a small share in the total venture, but on the whole the international oil corporations will be given control of the effective development of this resource. No doubt they will act to their own advantage. We also believe that the Government should review the period, area and royalties of Australian production permits for the continental shelf to ensure that they conform with modern overseas standards. It has been said before that those people who have been active ‘ and have undertaken permits should b’e treated fairly and reasonably. No-one would dissent from that proposition. Discussion should not be clouded by any thoughts of unfair or unreasonable treatment of : those persons who have taken up permits under invalid legislation or have gone ahead and spent moneys, irrespective of whether they were getting a legal, entitlement. .1 think all honourable senators want to see fair and reasonable treatment.
We believe that a national pipeline commission should be established to act as an interstate, common carrier of natural gas, crude oil or hydrocarbons in any form. We believe that every means : should be used to ensure that future prospecting permits and production licences, are . issued solely to government agencies, and/ or. Australian interests. By ‘Australian interests’ I mean Australian citizens, or companies, firms or ventures which are predominantly and substantially and in reality owned and controlled by Australian citizens. .We believe that natural gas and Australian crude oil should be used to replace . imported crude oil derivitives as feedstock for the Australian petro-chemical, industry. I use the word ‘Australian’ in that . context because the industry is located here ‘and not to indicate that it is owned or controlled by Australians. The. tragedy is that iri speaking of the oil industry, as well , as .other industries the term ‘Australian’ is used simply to indicate location and not the .ownership, control or nationality of the beneficiaries of the industries.
We believe that the price of natural gas ought to be regulated by a public authority. lt ought not to be left to the State Premiers to determine what will be paid for natural gas by other States. The experience has been in the past that the States are often too anxious either to advance their own causes or positively to retard the development of other States, because of interstate jealousy. It might well be that the interstate commission envisaged by the Constitution ought to be revised and that that body or a similar body should be constituted to ensure that natural gas and its by-products are available generally throughout the community on fair terms and on a basis fromwhich interstate rivalries and jealousies are removed.
Any honourable senator who followed the debate on this legislation in the other chamber will be aware that many questions arise under these Bills. The Opposition is concerned to see that such questions are properly considered. There is no hope that they will be properly considered in the circumstances of the introduction of this legislation. The question of the extent to which this Parliament should give any colour of authority to an agreement which purported to tie the hands of the Commonwealth Government irrevocably is of the highest constitutional importance. I would not like to see such a matter disposed of in a few hours in this chamber in a situation where the Government seems to want simply to rush the legislation through, irrespective of future consequences. It seems to me, notwithstanding arguments on reasonable endeavours to put this legislation through, that here is an attempt to bind, the hands of this Parliament or of a future Parliament so that it will refrain from exercising ils undoubted right and duty to enact such legislation as is for the welfare of the - people and will refrain, because of some supposed moral duty, from acting contrary to the Agreement which was entered into with the States.
The Opposition believes that it is the duty of the Parliament to enact legislation which is for the welfare and good government of the people of the Commonwealth. The people have vested us with the power to do so in relation to the matters which are the subject of these Bills. I for one, irrespective of whether this legislation is passed, will never accept the principle, whether it is involved directly or indirectly, that this Parliament is not entitled to pass or amend legislation in such a way as will be conducive to good government and public welfare. If there is anything in this Agreement or in these Bills that would suggest that in the future we would be morally bound, if not legally bound, to refrain from altering such legislation it will never be accepted by the Opposition.
I say plainly now that whether or not this legislation is passed, let no-one suggest that the Australian Labor Party is party to such an obnoxious principle which would destroy the very meaning of Parliament. This is a continuing institution with a continuing right and a continuing duty to oppose legislation which it at any time considers should be opposed if it feels this is necessary for the welfare of the people. No parliament can tie the hands of any future parliament. No government ought to have entered into an agreement which would suggest that the Federal Government should have its hands tied, and presumably the Parliament of the Commonwealth should have its hands tied by requiring the Government not to act inconsistently with any such agreement.
– Is the Leader of the Opposition forecasting unilateral abrogation of agreements undertaken if these Bills are passed?
– The answer to that interjection is that the Commonwealth Government had no right to enter into an agreement-
– That is not the question I asked.
– I will answer the question in this way: The Commonwealth Government had no right to enter into any such agreement that it would not alter such an arrangement except with the consent of all the States. The next thing I want to say to the honourable senator is that it is the duty of this Parliament at any time to enact the legislation which it considers is in the interests of the people. Any attempt to derogate from that principle is striking at the institution of parliament. It is contrary to the Constitution. I say that as far as I am concerned I will uphold the Constitution. At any time this Parliament has the right to introduce or to alter legislation in a manner consistent with the welfare of this country and irrespective of what agreement has been entered into. There is no doubt about that at all. If the honourable senator is suggesting that he would do otherwise, he is undermining the Constitution of this Commonwealth which requires him, as a member of this Parliament, to participate in the making of such legislation as will be for the welfare of the people and not to tie his hands. He cannot tie his hands, nor can I or any other member of this Parliament, in such a way that he will not be prepared to enact legislation which is for the welfare of the people at any given time. No parliament has ever accepted that principle and I hope that it will not be accepted. True it seems that this principle is not being departed from in such a way as to require that the Parliament will not depart from this Agreement or this legislation; but it is being’ done in an indirect way in that governments have agreed not to alter this Agreement except by unanimous agreement.
Of course, the governments concerned are subject to the control of the parliaments; and the first duty of this Government is to carry out the laws made by this Parliament. No government should enter into an arrangement which would purport to tie the hands of Parliament in such a way that it could not alter arrangements in such great matters. In the case of small matters, there is no doubt that a parliament would take the view that a government might have to enter into day-to-day arrangements and that it was important that the arrangements entered into be carried out faithfully. Everyone understands . that and would accept that principle. But where the destiny of the nation is concerned - and everyone agrees, this affects that destiny - where the exploitation and the continued development of our resources so profoundly affects the future of Australia, and will go on doing so for many coming decades, thenI think that the. Government has no right to make this agreement; and the Parliament certainly has no right to abdicate its authority and cannot abdicate its authority. Let no-one think that we are suggesting or participating in any supposed abdication of the Parliament’s authority.
Mr President, this Bill, when one considers the magnitude of the amounts involved, is not only the greatest sell-out in Australia’s history but probably the greatest sell-out in the history of the world. One cannot recall previously a resource of such tremendous potential simply being given away by a sovereign government which has undoubted authority over and ownership of the asset. Leave aside any questions about territorial waters, considering only the question of the natural gas and the deposits covered by the International Convention on the Continental Shelf, the amounts involved are fabulous. The Government, by entering into this purported Agreement with the States, has given some benefit to the States in order to be able to confer colossal wealth upon the international corporations. If this Bill is allowed to become law, we will have an irrevocable scheme so far as the Agreement is concerned which will confer some small benefit on the Federal and State governments, but the vast profit, and the wealth and the effective control of this asset will be in the hands of foreign corporations.
So, Mr President, the Opposition asks the Senate to refer the Bill to a select committee of the Senate for investigation of the extremely important matters which arise in connection with it and the six other Bills. I trust that the Senate will take this action in order that every honourable senator may become aware, with accuracy and complete understanding, of the principles involved in this Bill and of the alternatives so that the nation may have the maximum benefit of this asset. I think all honourable senators would agree that the real test is the interest of the nation. Why should not this Senate, when dealing with so great a matter, have the opportunity not only to’ understand fully what is in. the legislation but also to understand fully the alternative legislation? The legal questions, the administrative questions and the economic questions are such that if the legislation were passed and made law we would expect them to determine the course of events for many years, We suggest that the reasonable course is that a select committee of this
Senate look at the Bill. No-one is suggesting that the select committee should be made up of a majority of Opposition members. The select committee would be one appointed by a subsequent resolution of this Senate. I think that the Senate has complete confidence in its own members properly to investigate the matters and properly to report on those matters. Therefore I ask the Senate to support the Opposition amendment.
– When would the suggested select committee report back to the Senate?
– Order! The honourable senator’s time has expired.
– I have been asked a question, Mr President, and I should like to answer it, if I may. As to the question asked by Senator Scott, that is a matter which might be determined by the subsequent Senate resolution. If that point would really affect the honourable senator at this time, we would be happy to entertain any proposals that he may make for an alteration to the amendment I have moved so as to add a date by which the report should be made.
– I am very glad that the Senate is considering in a deliberative way a measure that not only is of the highest importance to the welfare and wealth of the nation but also of direct importance to its security. I have heard various references made to the character of the legislation, but it seems to me that it arises in the Commonwealth sphere because we recognise that the mineral exploration of the land mass of Australia is subject to the laws for mining granted by the States. However, the evolution of the doctrine of the continental shelf in the last two decades has added to the land mass a submerged land mass of about one-third the extent of our previous total area. The area of Australia is approximately 3 million square miles and the submerged land mass of the continental shelf has been estimated at 1 million square miles. The Bill comes into the Commonwealth sphere because of the accretion to our authority as a nation of that area of. 1 million square miles.
We should first understand the unique feature of this area. It presents itself to my mind in this way: Hitherto the States conceived that they had the authority - not the ownership, although some claimed that - over minerals, pearls and fisheries in the territorial waters to the extent of the 3-mile limit. By the acceptance of the doctrine of the continental shelf, Australia as a nation has acquired authority over the remainder of the 1 million square miles. We have been told that the States have been asserting jurisdiction over this new submerged and hitherto unrecognised area and the Commonwealth has also claimed that it has authority, so far as is relevant to’ the Bill, over the oil and gas in the area.- 1 shall show in a moment in my own’ way that the Bill deserves examination from the point of view of the constitutional concept behind it.
Before I devote myself to that and other matters, I want to say a word or two about Senator Murphy’s submissions. He seems to be wedded to the idea that these resources can be developed to the advantage of Australia only through a government commission. He has used Italy as an example. A government commission is well capable of doing good work, but this does, not necessarily mean that, in our circumstances of development, it would be the appropriate method to exploit this wealth in Australia. Senator Murphy also claims for his Party a fuel and energy policy. But it was the present Government, when it came into power in 1949, that announced the establishment of the new Department of National Development under the administration of a specific Minister. If I had to find a person in the Commonwealth fitted to guide the destinies of national development in Australia, I could not go further than the present- Minister, Mr David Fairbairn. I want to make that clear at the outset because I will engage in some criticism of this measure later. By my criticism is in no sense a detraction from the value of hia guidance or from his unique ability.
This Ministry of National Development solved the coal problem that bedevilled Australia. It has given initiative to a national water, policy. It has enabled untold riches to flow steadily from the development Qf iron ore- resources, with a consequent expansion of our export income in the next 2 or 3 years. I have sat in this Senate for 15 years and have heard the Opposition criticise the Government for not stimulating oil development. We have, by the grant of subsidies, encouraged the search for oil on the land mass. Now the Government has proved itself to be far in advance of the Opposition in putting before the Parliament a proposition for the co-ordinated development of the oil resources of the submerged lands. So I cannot see how, from the viewpoint of party politics, it can be claimed that the achievements of the Australian Labor Party .in the development of our coal, water, iron and oil resources are superior to those of the Government. Let me deal with one or two aspects of the Bill. It is an irony that I have 30 minutes to put my views before the Senate.
– No, the honourable senator has not.
– Thank you. I have a limited time to put before the Parliament my views on this very important Bill. The constitutional conception of the Bill must be examined. It is a land Bill - a Bill that deals with not dry land but submerged land. The exploration of the mineral deposits of the dry land is admittedly within State authority. But when we federated we did so to create a nation that would deal with issues that transcend State boundaries such as interstate trade, defence and external affairs. But 50 or 60 years after federation we find that the new doctrine of the continental shelf has meant the accretion to our authority of a submerged area of land equivalent in size to about one-third of the previous dry land mass. This presents a problem in determining which authority, Commonwealth, or State or a combination of both, should make the laws that will encourage the exploration for and production of the riches of oil and gas, the utilisation of which can be of such advantage to this nation. The States claim authority not merely to the 3-mile limit but beyond. My own State, Tasmania, was the first of the States to make legislative enactments that actually asserted property over the minerals in that area. The Act was passed in 1962 and Western Australia, South Australia, Queensland, Victoria and New South Wales followed with their Acts in 1963.
In considering which Parliament, Commonwealth or State, has authority to make laws for the exploitation of minerals and oils in the continental shelf, I find that the Minister for Supply (Senator Henty) in his second reading speech said that, in the United States of America, from which we copied our Constitution in a large measure, the Federal Government was held by the Supreme Court to have full and paramount authority over both the outer continental shelf and the territorial seabed, meaning within the 3-mile limit. The band of 3-mile limit around the coastline of Australia represents from 3% to 5% of this continental shelf. When I remind you, Mr Acting Deputy President, that some of the most promising areas of the continental shelf, from a prospecting point of view, extend to the west of Western Australia and up into Indonesian waters, the prospect of wealth from this seabed and its effect upon the national interest is tremendous.
The techniques that have been developed in the last 8 or 10 years make it of the highest national importance that this Parliament should consider its true responsibilities in the national interest, regarding the best constitutional . method, to encourage properly the mining of the oil in the seabed. I have read repeatedly that in this respect this legislation is epoch-making and historic. In no way detracting from the great credit that is due to the architects of the legislation for their industry, skill, perseverance and diplomacy in producing’ an agreement between what, for the last 20 years, have been most dissident bodies- the States and the Commonwealth - I am bound to say in all humility that in my own humble opinion the constitutional consideration underlying this scheme is progress in reverse.
The heart of this scheme, -we are told, is the Agreement which has been put to us. Agreement is a misnomer. The document expressly states that, having been signed by the six States and the Commonwealth, the Agreement is not intended ‘ to create legal relations and is not justiciable in any court. The appropriate term for this document is a treaty. It is a treaty between the six States, inter se, and the Commonwealth. This is the form of constitutional action that is appropriate to foreign -conventions. It was in the 1870s, I think, that the Australian States confederated. It was in 1901 that they federated. After they federated, the nation placed upon this Parliament the inalienable responsibility of developing the nation’s resources and defending the nation. In matters that concerned localised interests the States retained authority. But the process of treaty making is appropriate to times not more recent than 100 years ago. In this context it is certainly against the proper Constitution of this country and against the trend even in international affairs today.
The European communities have been at loggerheads for years regarding the development of nuclear energy. But they were capable of setting up EURATOM, a fully constituted supra-State. Wishing to develop the European economy and the European Economic Community, the European communities set up a supra-State with its court, its executive and the possibility of a parliament. But here we have a treaty between the Australian States and the Commonwealth which to my way of thinking is appropriate to an order of a different kind altogether. It is inappropriate to the events I have mentioned in Europe. In former days when we wanted to get an agreement between the States and the Commonwealth, and to make it integrated with the federated Constitution, I recall that Sir Earle Page achieved an agreement. The Financial Agreement constituted an Australian Loan Council and of course made it quite clear that until it was accepted by the people as an amendment to the Constitution it was not law. But then it did become law, and Federal law.
I find myself in this situation: This treaty affects the rights of no-one, State, Commonwealth, company or individual. A State, the Commonwealth, a company or an individual could tomorrow, when this Agreement and this legislation are passed, go to the High Court for a declaration of rights which would be based upon the Constitution and in no way affected by anything that is mentioned in this treaty. Therefore, this treaty has the effect only of quieting doubts and stilling disputes at the will of any one party to it, and so long as no company or citizen invokes the constitutional right to dispute it. The right of a citizen or company to acquire these minerals in the continental shelf can come from one of two sources only. One is the State source and the other is the Federal source, if the relevant State and the Commonwealth had passed legislation for governing the exploitation of these rights, and if an individual or a company invalidated one of those rights, he would be caught up in the other. But the whole basis of the legislation and the stability of it depend upon the continued acceptance of every one of the seven governments at the will of those governments. When any one of those governments seeks to enforce its constitutional rights, the security of these titles is put in jeopardy. So far from securing titles and giving that assurance which is said to lie at the basis of encouragement of discovery and exploitation, to me it creates an overburden upon the whole complex system and postpones and does not resolve that which those who are to engage in the industry are entitled to have resolved now.
I find myself very much persuaded to the view that that constitutional question should be determined by the only agency in the country entitled to determine it, the High Court. When we. remember that a similar fundamental question, and probably a much more fundamental question, concerning uniform taxation, was assayed in the blackest year of the war and determined with .finality, it seems to me that this device is not a statesmanlike proposition in accord with constitutional government in Australia. Secondly, I find myself ‘ very disquieted by the fact that the Minister himself has based his adherence to this viewpoint in a statement that he made when speaking in reply to the debate on the second reading of this Bill in another place. He said that he was of the view that probably the States had no authority beyond the 3-mile limit. I would have thought that this was fairly clear. The Minister went on to state that he was of the view that within the 3-mile limit the authority of the States would probably be upheld. That is contrary to the case of the State of California versus the United ° States of America in which the Supreme Court pointed out - I speak from memory, without the text, but this was very graphic to me - that in a matter such as this of external affairs it was imperial authority that vested in the national parliament, not’ dominion authority and not ownership; and that that authority was not divided by a 3-mile line. Therefore, in my view, the Minister for National Development probably has conceded a degree of claim to the - States that was not in the national interest. I reinforce my own view by reflecting upon the fact that when any Commonwealth power over the area beyond the 3-mile limit was sought to be delimited the Constitution was found to be capable of doing so. In relation to fisheries, the Constitution expressly gives power to the Commonwealth beyond the territorial limits only.
Thirdly, I express my dismay at the acceptance of a scheme whereby any future amendment or variation of this Common Mining Code can be achieved only by the unanimous consent of seven Parliaments. The Agreement is that the seven Parliaments will confer. No agency such as the Australian Loan Council is to be set up to give to a centra] authority a determining agency. Seven Parliaments have to be unanimous before an amendment can be made. The honourable member for Mackellar (Mr Wentworth), whose speech I had the great advantage of hearing a week or so ago, properly stated that a Security Council type of situation is being set up in which any of the seven Parliaments will have the right to veto. My idea of national expansion and progress is that no advantage accrues in a complex situation like that.
I will not refer to the specific provisions of clause 25 of the Agreement, which was read by Senator Murphy. It provides that the Act and the regulations shall not be altered except by agreement. That is made clear in clauses 6 and 7 of the Agreement. Clause 6 states: (I.) Except in accordance with an agreement between the Commonwealth Government and the State Governments, a Government will not submit to ils Parliament a Bill for an Act that would cither -
Clause 7 contains a similar provision relating to regulations.
Fourthly, I ask myself: How sound is the scheme for administrative purposes? The Senate has been told that under the general and conjoint Agreement administration will be in the hands of the States, but. the Minister for National Development says that Commonwealth interests will be safeguarded at essential points through consultation and agreement by the States and that in appropriate areas of Commonwealth constitutional responsibility effect will be given to any request for decision by the Commonwealth. The dignitary who is to have the administration of this legislation in relation to submerged areas adjacent to the States is to be the Minister for Mines in the State concerned. The Commonwealth interest is guarded, we are told, by clause 1 1 of the Agreement, which states: . . a State government will consult the Commonwealth Government:
The clause then specifies that the Commonwealth Government must take into account certain heads of power arid that when giving a decision on the reference it must disclose its reasons. Iri that circumstance the dominant expression in the clause is this:
A State Government will accept, and will ensure that effect is given to, a decision of the Commonwealth Government with respect to a responsibility of the Commonwealth taken into account as aforesaid.
Quite clearly the States have . agreed to lay their expressions of limitation before the Commonwealth’s consideration, they want the Commonwealth’s reasons for its decision, and they reserve the right to dispute that decision if the reasons are. inappropriate or are claimed to extend beyond the proper constitutional ambit. I do not find those to be sufficient safeguards for the Commonwealth’s interests when, under the Constitution by which the nation was to be set up and developed, Commonwealth law in its proper field was given paramountcy over State law. Therefore I find the Agreement to be deficient in providing that the administration of actual titles, their original grant, their transfer and their variation shall be in the hands of a State Minister for Mines who can claim to be able to dispute the Commonwealth’s decision.
Fifthly, I find that with regard to the utilisation of oils and gas interstate some most remarkable notions are expressed in the Agreement. When Australia was bedevilled with the possibility of preference and discrimination in regard to State railways and other matters affecting interstate trade, the statesmen of 1900 saw the necessity for an interstate commission, which has gone into discard since a decision given in 1915, although an attempt was made to revive it in a Bill that was before the Senate in 1937. Such a commission, even on the original constitutional basis, is capable of most purposeful work. The Memorandum of Understanding, which is an annexure to the Agreement, and not a term of it, states that the parties have had more general discussions and that they are agreed that, they will encourage and will not restrict any trade and with that in view will confer from time to time as any of them requests. They declare their, common intention not to discriminate against any such trade. I regret that the Commonwealth is asked to rely upon anything as cobwebby as that as a substitute for section 92 of the Constitution and without the aid of an agency such as an interstate commission. In this respect I am dismayed. Representing as I do the people of a State and its welfare - not as a delegate of the Government and not as an appointee of this Parliament - I believe that Tasmania has a right to expect that the national interest in this industry shall be properly taken in hand by the National Parliament so that all States with the proper facility for freedom of interstate trade shall enjoy such trade and that the results of discovery will not be a bonanza for one State where perhaps a good strike can be made, leaving the others bereft and without any advantage whatever because a pipeline cannot be driven through to the advantage of those neighbouring States.
Sixthly, I hope that all parties represented in the Parliament and the whole country observe the significance of clause 24 of the treaty. We have heard Senator Murphy - I believe without advantage - proclaiming the exclusive benefits of public ownership. Let us note that the two Labor Premiers suggested, and the other four State Premiers and the Commonwealth agreed to, the utilisation of these resources by the Commonwealth or any State directly or by any commission or agency appointed by them. Sub-clause (4.) of that clause refers to’ the antithesis between State utilisation of the resources and utilisation by private producers. So it should be recognised that the treaty leaves the door open for the Commonwealth Government, after a change of government, or a State government to move in directly and to exploit the riches of the continental shelf.
Seventhly, I draw attention to what seems to me to be a very . cogent argument. It was advanced to the House of Representatives by the honourable member for Mackellar (Mr Wentworth). He pointed out that the original prospecting areas that have been given right around the Australian coastline by State authority are being confirmed for at least 6 years by this ‘ agreement. He pointed out that some of ‘ the areas were immense. I have noted that the West Australian Petroleum Pty Ltd area to the west of Western Australia : is 123,000 square miles- an ‘area more than one and a half times the area of Victoria-arid that the Woodside-BOC-Shell area is 140,000 square miles - an area about twice’ the size of Victoria. That causes me great anxiety. When the honourable member points to the fact that oil is in surplus production and that we are admitting to these titles companies with great foreign interests, I begin to think that there might well be attempts to sit on these large areas and to sterilise these oil resources rather than, bring them to the surface for utilisation.
On the. other hand we have adopted the principle that for 6 years these titles shall remain and, when renewed, shall be automatically reduced to ,the . extent of half of each area. As I understand the position, every single 10,000 square mile segment of an area shall be cut in half.. If I were left to my own opinion . at .the . present time. I would not be satisfied .that it was reasonable to let such large areas continue under a title for a space of 6, years and then continue by renewals, successively reducing the area by half, over a period ‘of 5 years. 1 hasten to say that I have no experience in the oil industry. With great humility 1 will express any judgment that occurs to me on such a practical matter.
The next matter to which 1 wish to refer is the financial situation and the royalties. We are asking a 10%. royalty on the value of the oil at the well head, with the possibility of an override surcharge of anything from 1% to 2i%. 1 have seen that it has been said iri the debates on this matter that the Commonwealth need have no concern because it will receive 50% of the proceeds in the form of taxation plus royalties. That is a complete fallacy and I want to dispel it. The Commonwealth receives 4% of the original 10% royalty; the State receives the other 6%. If there is any override royalty, the State receives - that. The Slate receives all the stamp duty. The only money that the Commonwealth receives in addition to its royalty is income tax, presently at the rate of 42%, not on the proceeds of the oil at the well head but on the net profit of the company on its Australian business operations. That is an entirely different matter. Those are the matters which I have considered and which 1 wish to bring before the Senate in my speech in the second reading debate. 1 have referred to them specifically because I believe that each of them is a principal plank in the substratum of this scheme.
Several weeks ago I engaged in conversations and discussions on the suggested appropriateness of the appointment of a select committee ‘ to consider all these matters. 1 noted with interest that this proposal was advanced by the Opposition in the House of Representatives. I have been assured that the prompt passage of this legislation is a matter of national interest. I believe that it is’ the function of the Senate, as it is discharging its duties today, to make the most searching examination of this legislation that it possibly can. In the circumstances to which I have referred I cannot go along with the idea of the appointment of a select committee which would have the effect of postponing the passage of this legislation. In my view any examination by a select committee would require at least 6 months. Therefore I find myself, as a matter of judgment, unable to support the proposal that this legislation be referred to a select committee before it is passed. However, in order to show that the Senate has an obligation of continuing review and an obligation to take up these fundamental matters at the earliest opportunity and before this legislation is cemented into permanency, I propose to move tomorrow for the appointment of a Senate select committee to examine these general propositions under the authority of the legislation and after the passage of it.
I know that this course deprives me - and also, perhaps, members of the Opposition, unless their proposal for the appointment of a select committee succeeds - of some prominence. One can make great play, if he wishes to proceed in this place without restraint and without a sense of responsibility as to the exercise of powers, by bucking authority and becoming what some people call a rebel. I have always maintained that a vote in this place must be exercised with a great sense of responsibility. It is in that spirit that I say that the Senate’s function is properly performed by allowing this legislation to pass and then immediately showing a will to work on the examination of it in order to bring before the Senate within 12 months, after proper consideration, any proposals in the form of committee recommendations that a thoroughgoing examination would reveal.
– Why this urgency that the honourable senator mentioned?
– I am not able to say why it is urgent except that there is in the course of prosecution at the present time a vigorous programme of work by the gil companies which have their permits and which have brought to the coastline of Australia, or will have by Christmas, no fewer than six or eight rigs. If one were to thwart the unanimous will of seven governments and interrupt a programme of the dimensions now being engaged in, such action would be quite disproportionate to the responsibility that I as an individual am required to shoulder. It is in this sense that I accept the proposition that the passage of the legislation is urgent,’ and I am quite prepared to accept the role of the obscure reviewer and- come - again in 12 months time and decide,’ after having had the benefit of contact with the industry and with the various governments and with the legal experts who will give the committee the benefit of their views, either that this scheme deserves complete approval or that it requires -substantial amendments. On this basis I support the Bill.
– I support the amendment proposed by Senator Murphy. First I want to refer to the final remarks of Senator Wright who finds himself unable to support the amendment but suggests that tomorrow he will move for a select committee to inquire into the legislation. After these measures are placed on the statute book of the Commonwealth and the six States it will require, as Senator Wright has said, unanimous approval before an amendment can be made. The Commonwealth and each of the States separately will be capable of vetoing any amendment. I would have liked Senator Wright to explain, in this context, the value of a select committee after legislation is passed..
– Its value stems from the fact that the Agreement has no legal effect whatever.
– No, but the legislation will be operating.
– But we cannot bind ourselves not to amend.
– This is a tortuous process. We having passed the legislation and having established the select Committee, the first thing the select committee would have to do in order to have any amendments that it recommended placed on the statute book would be to challenge the legislation in the High Court of Australia. In what other way could’ it have the legislation declared ultra vires? It is certainly not deemed ultra vires merely on the statement of a senator in this place. The High Court would have to decide whether the legislation came within the ambit of the seven governments concerned. I should regard a select committee appointed to inquire into this legislation after it is passed as somewhat futile.
I do not wish to canvass too thoroughly the question of Commonwealth and State authority in this field. I thank Senator Wright for the way in which he handled this aspect of the subject. What I do want to criticise is the action of this Government over the years in allowing the States to exercise authority over submerged lands to which they have no title. If one looks at the preamble to. the Bill one finds that the Commonwealth became a party to the International Convention on the Continental Shelf on 29th April 1958. That is the Convention that defined the continental shelf, in general, as being all the submerged land to a depth of 200 .metres or 650 feet. In 1962 not a great deal of these submerged lands had been alienated by the States. I have here a map published in 1962, after the Commonwealth had become a party to the Convention, which I will show to the Senate. I have also another map published in 1965 from which honourable senators can see the great progress, that has been made in the alienation of submerged land on the Australian continental shelf. The Commonwealth Government, despite the fact that it had become a party to this Convention, continued to -allow the States to erode its authority.
I am not going to stand’ in this place and say that, the States ‘ having given a measure of security to the operating companies in respect of their activities in these areas, we should now put the licences or permits of the companies in jeopardy. Nor do I think that the Commonwealth should abandon its authority over these- areas to the extent that it has done in Victoria, for instance. I am not the least bit impressed when the Minister tells me . that, the overriding royalty can be anything from 1% to 2i%. The fact is that in the major basin on the continental shelf of’ Australia the overriding royalty has been fixed at 1% by the Bolte Government. By this very act the people of Australia have had alienated from them some of the richest land in the world. We have no concept of what this land may hold. After all, only about eight or ten holes have been drilled in the Victorian basin as yet. In Western Australia, despite the fact that the offshore land mass is held under licence from Albany in the south, to Wyndham in the north, along a coastline of 4,000 miles,’ hardly a single hole has been drilled - and. gas and oil have been found in these areas. Yet at Barrow Island, where there is a natural gas and oil field, the royalty was fixed at 5% by the State Government. A further 5% was added when West Australian Petroleum Ltd was allowed to take up the other 100 square miles of its declared area. Most of this area in Western Australia is held by WAPET and it is freely admitted, even by the oil interests themselves, that when companies or individuals are allowed to hold over-large areas there is a tendency to suppress the declarations of holdings. This is a matter that could be the subject of inquiry by a select committee. Such committee could inquire into the Commonwealth authority and the State authority in such areas, and the size of the areas involved in the permits that ‘ have been granted.
Why was the graticular measurement of areas abandoned after having been announced in November 1965 by the Minister for National Development (Mr Fairbairn)? The Parliament has not been told why the proposal that four-ninths of an area should, in right, revert to the people has now been abandoned. In other words, 100 square miles of every 225 square miles had to revert to the people when the declaration of a commercial find was made. We have not been given any reason for the abandonment of this principle.
– It only had to revert if no competitor outbid the’ holder.
– The area reverted to the Government and was then put up for auction and was made available to the highest bidder.
– Yes, if a competitor outbid the holder.
– The State could outbid the holder. I suggest that there should be an inquiry into the well head price of the natural resources. What do we find now? The Gas and Fuel Corporation of Victoria made an offer to buy natural gas for 1.5c per thermal unit but Esso-BHP offered to sell it for 7c per thermal unit. There is a continued shortage of money in the States. The Commonwealth constantly keeps the States starved of money to carry out their normal functions of government, so is it not logical that the States would press for the highest amount they could possibly get from royalties on the oil or gas? The Victorian Government entered into an agreement to pay 3c per thermal unit for the gas while the average price per thermal unit throughout the world is 1.8c. Australia will not be able to take advantage of a cheap fuel because a State government, in the interests of its own State, wanted a higher royalty. Surely this is a matter that a select committee could inquire into with great value to the Senate.
I believe we are only on the edge of discovering the natural resources that will be found in Australia within the next two or three decades. Another matter that should be inquired into by a select committee is the extent to which Australia owns these natural resources. We know that WAPET, which has the largest oil field in Australia at Barrow Island, is owned only one-seventh by Australians, or by an Australian company. This does not necessarily mean that all of the shareholders in that company are Australians or that Australia Owns oneseventh of the huge resources of Barrow Island where at present they are only extracting oil from what is known as the Windalia sands and where they have not attempted to exploit the Jurassic sands or the natural gas that is there. It seems to me that the natural resources in all the States and Territories of Australia are in thehands of large overseas companies or corporations. This is one of the things we should be looking at very closely, and a select com mi Mee is an appropriate body to look at it.
Because of the price that will be paid in Victoria for natural gas the price of nitrogenous fertilisers may be increased. This should interest members of the Australian Country Party. Whether it will be possible to use natural gas at the agreed price for the production of nitrogenous fertilisers is something to be inquired into. If the price of nitrogenous fertilisers is to be increased, this will be an added impost on primary industry in Australia. Looking at it overall, looking at the hand-outs that are being given to the States, looking at the hand-outs that are being given to overseas corporations, looking at the high cost of natural gas per thermal unit and looking at the primary industries which could benefit so much from the economic use of natural gas, I am of opinion that it needs a select committee before and not after the legislation is passed.
Senator Wright seems to be somewhat disturbed that if the legislation were not passed it would create some instability in the companies that have been granted leases. All I can say to Senator Wright is that if this is so, this instability has existed all along. It has existed since 1958 when the Commonwealth Government entered into the Convention. The mere fact that the instability would continue for another 6 months or 12 months while a Senate select committee inquired into the ramifications of this legislation ‘ would not alter the position one little bit. If a select committee was set up after the legislation was passed and it recommended drastic or even minor alterations to the legislation, the instability in respect of permit holders would still exist. I say to Senator Wright that unless proper means were available for the Senate, after recommendations, to have recommended amendments put on to the statute books, the work of a select committee after the passing of the legislation would be of little value. Senator Wright knows as well as I do the value of information that can be brought into the Senate by a select committee. I cannot see for the life of me why it would make any difference for this legislation to be delayed for 6 months while a select committee inquired into the grounds referred to by Senator Wright, Senator Murphy and myself so that the Australian people and the nation could get the greatest benefit from this huge natural resource.
Senator CORMACK (Victoria) [5.2J- 1 am interested in the way that this debate has begun to develop. It is proper that the debate should begin to enlarge its quality and terms as it proceeds. When 1 agreed to speak in this debate I thought I would be involved in speaking to the motion of the Leader of the Opposition in the Senate (Senator Murphy) that a select committee should be appointed to examine the whole problem that this legislation presents to the Senate. In fact, as the debate has proceeded, it has become a debate in part on the second reading speech, because the substantive matter of the six Bills before the Senate is being debated in addition to arguments being put forward to support* the appointment of a select committee. The opening of the debate by the Leader of the Opposition was in a manner that might have been expected, because he is the Leader of a. Party that subscribes to the objective of the socialisation of the means of production, distribution and exchange. It was to be expected that he would oppose the legislation in the form, in which it is before the Senate at present, because it does not relate to the socialisation of the means of production, distribution and exchange of offshore oil and gas.
The next matter .that interested the Leader of the Opposition in the Senate was, in the event of it not being possible to prevent the flow of this legislation through the Senate by the use of voting numbers, that a device should be used of appointing a select committee of the. Senate to examine its validity or otherwise in order that the Bills should not be passed; in other words, that they should be deferred by this device until the political wheel had turned and another government, df a Socialist hue, could then begin to use the Commonwealth jurisdiction in order to establish the socialisation of Australia’s offshore oil and gas. The argument as to .whether oil and gas should be socialised is not–
– How would it oe socialised? -
– The arguments that have been advanced, already by Senator Murphy and Senator Cant indicate that the Commonwealth power should be used for socialisation, by setting up,, as ..mentioned .by Senator. Wright- … .,.
– -Iri the national interest..
– But that is always said when attempts are .made to socialise the. means of production’ distribution and exchange. It is always said that it is in the national interest, but that is .not necessarily true. There has been such a demonstration of attempts to nationalise the means of production, distribution and exchange in Australia that the Australian people have had - if I may use an expression’ that might be considered ungracious- or unparliamentary - a- bellyful of it.- Australia has not been developed by the nationalisation or socialisation of the means of production, distribution and .exchange. It has been developed., simply by the. .capacity, of . the energy of the people, operating as freely as governments permit .them to develop Australia. The arguments advanced by Senator Murphy this afternoon are exactly the same arguments as advanced by Governor Bourke of New South Wales in 1830 that no-one should occupy vacant Victorian land and that it should be reserved for planned development. If Governor Bourke and his colonial advisers had had their way in 1830 there would be no State of Victoria today. It would still be a poverty stricken appendage of the State of New South Wales.
Our argument is quite simple: Providing the wellbeing of the community is protected, the expertise, capacity and drive of the private sector should be allowed to enter into these lands’ in order to extract the maximum amount of oil through the most efficient and least costly processes devised for the benefit of the people ofAustralia. I reject the proposition advanced by Senator Murphy and supported by Senator Cant. I have no shame in doing so because I believe that this is a fundamental issue. I wish to direct the minds of honourable senators back over the long years to 1952 when the debate on the Japanese Peace Treaty took place in the Senate. I then drew the attention of honourable senators, rather to the amusement of the President of the Senate, to the claim by the Commonwealth to pursue the Truman proclamation of jurisdiction to seaward. The normally accepted concept of those days was that territorial rights extended to the edge of the continental shelf. I doubted very much whether the Commonwealth power and territorial limits extended to that area. At that time it was a dubious proposition in respect of Commonwealth power. The then Acting Leader of the Government in the Senate postponed the debate on the legislation to a later hour that day when honourable senators were tired and the Bill went through without further comment. Honourable senators may recall the circumstances in which I made a last despairing comment that the Senate would hear more of the continental shelf as the years went by. Indeed, we are discovering the truth of that statement this afternoon.
I would also like to recall for my own amusement and interest that in 1962 the then Minister for National Development introduced in the Senate a statement relating to national . development. I then drew the attention of honourable senators to the fact that corporations providing venture capital to explore the sea bed in search of oil and gas would be wise to remember that there was a clouded title to the offshore sea bed; in other words, that the States themselves had an interest in submerged lands. I went on to say that the Commonwealth was at that stage announcing a preemptive doctrine that all submerged lands to seaward were within the Commonwealth jurisdiction. That is the basis of the problem we are discussing in the Senate this afternoon because the States do not agree that the Commonwealth jurisdiction over submerged lands extends totally from high or low water mark.
The States claim that they have inherited certain territorial waters and the submerged lands beneath them from the mother country. Notwithstanding the decision of the Supreme Court of the United States of America in the case, the United States versus the State of California, this is not binding on Australian constitutional practice; in other words, there is a great area of dispute involved in the area between the low water mark and the edge of the continental shelf. The States believe and claim that they have a sovereign right to part of the submerged lands therein. The Commonwealth takes the point of view that the States have no right to these submerged lands. Notwithstanding anything that the Leader of the Opposition said this afternoon, to the effect that there is an undoubted Commonwealth right to these lands, the Commonwealth has not an undoubted right to these submerged areas. There is a vast body of constitutional and legal opinion which says that the States have some right to these submerged lands. I believe that this is true.
I will illustrate this for the benefit of my friend opposite, Senator Toohey. In 1875 an action was taken in the Supreme Court of South Australia to discover where the jurisdiction of the State of South Australia extended. It was the decision of tha Supreme Court of the State of South Australia that, for example, Spencer Gulf and -St Vincents Gulf and the straits adjoining these two -areas north of Kangaroo Island, were inland .waters for the State of South Australia. So there is the first clear illustration that . the Commonwealth’s jurisdiction to seaward is not paramount because
South Australia acceded to the Commonwealth, taking with it its rights to territorial waters.
– The honourable senator is not suggesting that I said that they were the Commonwealth waters, is he?
– No, I am just using the honourable senator’s State of South Australia to illustrate that the Commonwealth’s power over the area to seaward from the beach is not an exclusive right; that the State of South Australia claims as territorial waters Spencer Gulf and St Vincent’s Gulf, and if oil were discovered there South Australia would not accord, if it was pressed, the right to ‘he Commonwealth to participate in that oil.
– I thank the honourable senator for giving me the privilege of this information.
– Government senators are always free with their information. A second illustration of what might be described as the clouding of the Commonwealth title is that the State of Queensland also proclaimed jurisdiction to seaward. The Commonwealth says that under its foreign power an accession to a declaration of jurisdiction to seaward supervenes. But the State of Queensland does not believe this. That State believes that it has jurisdiction to seaward from the Queensland coast. I will give my third, and last, illustration. I refer to the jurisdiction of the State of Queensland in the area north of Queensland. This jurisdiction was acknowledged because it was mentioned in the second reading speech made by the Minister for National Development (Mr Fairbairn) in another place when he said that the State of Queensland had agreed to forgo some of its jurisdiction in the interests of the Territory of Papua. So the Commonwealth clearly understands that there is not a total capacity in the Commonwealth on the submerged lands off the Australian coast. The Commonwealth has a qualified right, and the States well understand this.
It is all very well for honourable senators opposite to declare, as they do declare, that while the Government is entering into agreements with the States, and the Commonwealth and the States by arrangement are entering into agreement with corporate structures which are investing their capital in exploration, there are vast mineral rights involved. But the point is that there was no understanding that there were vast mineral deposits in these areas when the agreements were entered into. It was important, in the first instance, that there should be a clear title to these areas in order to attract, for example, a domestic company, the Broken Hill Pty Co. Ltd, into exploration in the Bass Strait area.
– Does not the honourable senator think that the Government ought to establish this before it passes this legislation?
– At the time that BHP and its partner entered into exploration in the Bass Strait, the title was clouded. There was a caveat. The question was: Who owned the submerged land? BHP and its partner were not sure when they sank their first well in the Bass Strait that it would not be in Victorian territory. lt turned out that in fact it was undoubtedly in Commonwealth territorial waters. But surely these explorers - and that is what they are - had to have some guarantee that they would be able to get a return on their investment before they sank their first hole; they had to be sure that the State Government would not come in at that stage and say: ‘No, this is our territory’, or that the Commonwealth would not come in at that stage and say: ‘No, this is our territory’. If that happened they would have found that they had no clear title to their exploration permit. That is why we find in the Agreement, which Senator Wright described as a treaty, the words ‘Agreement relating to the Exploration for, and the Exploitation of, the Petroleum Resources . . .’. Clause 16 deals with the problem of what is known as unit development. It is possible that in the Otway Basin, in South Australia, where a company is exploring at the present moment, those concerned may strike oil off Guichen Bay, Robe, in South Australian territory - or in what the South Australian Government believes is its territory.
Suppose that they do strike oil there - and I hope they do, and I think every honourable senator would agree with me. Who is then to decide how this pool of petroleum is to be economically developed? Half, a quarter or a third of this pool may be under dry land above the high water mark. One third may be out in what the South Australian Government describes as South Australian territory; another third may be within what is normally accepted as the territorial limit. There must be an exploitation of this reserve of petroleum as a unit and there must not be a quarrel between the States and the Commonwealth as to who has jurisdiction. So in order to assist the discoverers, the explorers who are venturing millions and millions of dollars and who are also making available techniques that we do not possess in Australia, agreement was entered into between the Commonwealth and the States in order that there should be a uniform approach to the development of petroleum or hydrocarbon resources in submerged lands.
– But this legislation does not include land discoveries. There would still be that problem in connection with land discoveries.
– 1 am not talking about land discoveries. For the purpose of my argument, let me use my reference to the area off Guichen Bay in Senator Cavanagh’s State of South Australia, lt may or may not be that oil will be discovered - and let me repeat that I hope that it is discovered - and that part of this hydrocarbon reserve, gas or oil, may be under the land belonging to the State of South Australia.
– If they bore on the land for that petroleum it will not come under this legislation.
– That is right.
– Who. is entitled to the royalty?
– Yes, who is entitled to the royalty? This is a matter which the Opposition will not face. We reject the Socialist approach to this matter altogether. But let us consider the technical arguments being adduced by the Opposition. I am arguing in order to demonstrate to the Senate as conclusively as I can that unless we have an agreement of this nature to provide unclouded titles we cannot beging to develop these offshore petroleum and mineral resources that we believe to exist. This is a pragmatic illustration of the Anglo-Saxon mind operating against the pure Latin legalisms. Honourable senators opposite may laugh and sneer as much as they like; but the essence of the AngloSaxon mind of the English speaking people is the pragmatism with which it tries to solve problems which seem intractable. This legislation is the method by which the Australian Government and the State Governments have proceeded to solve a problem which seemed intractable. It is a problem which has not yet been solved by any federation or confederation in the world. As has been mentioned in another place, the problem of the jurisdiction over submerged lands in the United States has not been solved, notwithstanding the judgment of the Supreme Court of that country against the State of California.
– It is not of much use solving the problem if you do not have the credit that is needed.
– I am quite prepared to admit that the Government’s answer is not the answer that a party committed to the socialisation of the means of production, distribution and exchange will accept, but it is a solution we on this side accept.
– That does not come into it.
– It comes into it very clearly. Let me deal now with the proposal to appoint a select committee. From what source does the Senate in which we sit derive a substantial part of its power? A substantial part of its power was accorded to it by the States when they entered the Federation in 1900. The Senate is charged with a dual responsibility. It is true that it is charged with a national responsibility, but it is also charged legally with the duty to protect the interests of the States. When an honourable senator takes his place here, he is charged with that responsibility. If there are gaps in the law, there are several methods by which they can he closed. The Commonwealth can legislate, but under the judgment of the High Court it cannot argue its way into powers that it does not possess. I hope I have demonstrated this afternoon that it is doubtful whether the Commonwealth has the powers mentioned in this legislation. The Commonwealth may obtain additional power by a reference of power from the States to the central government. This reference may be obtained in one of two ways. It may be obtained by a vote of the people at a referendum or by a reference from the State Parliaments to the Commonwealth. In essence, of course, the Agreement mentioned in this legislation is a reference of power from the States to the Commonwealth.
I listened to Senator Wright both inside and outside the House. He has given us the benefit of his great legal knowledge. I want to use the argument that he adduced this afternoon as it relates to the great legal knowledge held by a body that was in reality a select committee. It was a committee which embraced the Solicitors-General of the States or their equivalent, the AttorneysGeneral of the States, and the Parliamentary Draftsman of each State. Participating in the proceedings of the committee was the Attorney-General of the Commonwealth and his distinguished and learned officers.
– Did it take evidence from interested parties?
– It is not a matter of taking evidence from interested parties. These people were dealing with a juridical problem. Here was a galaxy of the greatest legal talent in Australia and it spent years trying to find a solution to the problem. It came up with an agreement on which is based this consortium of Bills that we have before us now. Senator Murphy argues that we should impose on top of that committee a select committee of the Parliament. But it will not be a select committee; it will be the examiner of the most select committee it was possible to obtain in Australia. Who can anticipate decisions of the distinguished judges who sit in the High Court of Australia? It may be that the legislative powers that are sought to be embodied in these Bills, with the concurrence of the States, may be upset by the distinguished bench of the High Court. It is open to any citizen to challenge in the High Court the. validity of the Commonwealth legislation and the complementary legislation of the States. It may be that the High Court will rule against the possession of these powers or that it will rule that the Commonwealth has- qualified powers. In the meantime, what will happen to the exploration for mineral resources in Australia? We should attract venture capital into Australia for this purpose. But this is not capital solely in terms of money but capital in terms of knowhow of one kind or another. If we wish to allow development by the use of this capital, we must give the clearest title we can. That is what these Bills and the Agreement are about.
I want to turn my attention for one brief moment to the claim that overseas companies will exploit us if they discover oil. If we ask any oil companies with interests in the Middle East how they are getting on with the Arabs, for instance, they will say: The Arabs are bleeding us to death’. The average take of the Arab states from the oil companies that have developed the huge oil deposits in the Arabian Peninsula is about 50% of the total production. If honourable senators look carefully at the Agreement entered into between the States and the mining companies, they will see that the companies will be bled of about 50%, not only in royalties but also in taxes. The Australian public’s share in the end will be about 50% of the value of the oil produced. I reject the proposal for a select committee and I support the Bill.
– J support the amendment moved by the Leader of the Opposition (Senator Murphy), calling for the appointment of a select committee. Many of the honourable senators who have already spoken have concerned themselves mainly with the legal aspects, but I want to consider the legislation from the point of view of the consumers and the work force in the industry, particularly employees’ who are engaged in the production of gas. Some honourable senators have already dealt with the question of what is a fair return for private capital. I suppose if this were such a Utopian world that everybody had a high sense of fair play, we would not need any government regulations at all. One honourable senator referred to socialism. Our attitude, in the words of G. H. D. Cole, is a little for many rather than a lot for a few. Esso-BHP clearly falls into the category of a lot for the few. Originally, five-ninths of the discovery remained with the company and tenders were to be called for the other four-ninths. Then, when royalties were raised from 10% to 11%, the companies virtually took the lot. It is fitting, that Senator Cormack should refer to the Arabs bleeding the oil companies white. On this aspect, I refer to a passage in the second reading speech of the Minister for Supply (Senator Henty). He said:
However, the governments have not felt bound to follow slavishly particular features in any overseas country.
– That is right.
– I will tell the honourable senator why I say that. We say this in the best of times or the worst of times. We are give.n brochures showing these oil rigs. We are told that production of natural gas will be wonderful for the nation. But is there any guarantee that natural gas will be cheaper to the consumers than manufactured gas is now? We have no assurance of this at all. Honourable senators opposite claim that my proposal for higher royalties will increase the retail price of natural gas, but they cannot have it both ways. If the price to the retailer is not to go down, obviously we are entitled to skim off additional royalties . for the Government to use for the common good. I have quoted the cases of Great Britain and the United States of America only.
I wish to come back to the reference by Senator Cormack to the Arab States bleeding these overseas oil companies. There is an important point about this matter. If we accept his argument that the Arab States are bleeding these companies white or if we adopt the attitude that oil in South America is being developed with American capital, we should recognise that if the commodity is worth producing the oil. companies will accept the terms put forward by the country that owns the land from which the oil or gas is obtained. My basic argument is that if we had said to the oil companies that we would not accept their terms and that we wanted 16$% royalty - forgetting for a moment that in Venezuela the percentage is a lot higher - these companies would still have come to the party and Australia as a whole and the Treasury in particular would have had a great many more millions coming in. Regarding this idea of frightening away investors; we must concede that, we have a stable economy in the sense that governments change in a democratic fashion - we have not the revolutions . that occur in South America - but at the same time we must remember that in certain South American countries when governments far to the left of the Australian Labor Party, take office do they not frighten away investors. If the commodity is worth going after, companies will go after it. Whatever may be our views regarding a higher royalty, it is wrong to say that industry would contract out of this field. It would not do so.
Let me take this matter a little further. I turn to the battle of the , giants. The Australian Gas Light Co. has joined forces with the Bank of New South , Wales and other groups to seek alternative deposits of natural gas within New South. Wales.’ Fair enough. But what will happen in this power play? Notwithstanding the all-sites committee which will deal with the legal side of this matter, the very, purpose of the inquiry carried out by a Senate select committee, the appointment of which the Opposition seeks by its amendment, would be to bring before that committee- evidence from the best engineering, scientific and commercial operators. Their, evidence would be evaluated. After all, what is our purpose? It is. to do the best for the good of the people as a whole. Do honourable senators opposite mean to tell me that Esso-BHP is very worried about what services will be provided to the consumers in this field? The gas industry is squealing at the moment. It has some justification for doing so. Regarding the manufacture of gas we find that once upon a, time the gas industry was using the horizontal retort for gas making. It changed to the vertical retort for gas making. The industry received a better return as far as gas was concerned and, of course, the quality pf the coke deteriorated. But the price of coke did not come down. The idea of applying the parable of the Good Samaritan to these companies and to the industry just does not wash.
It is for this very reason that we argue that the role of the Government is to observe, to insist upon the best standards and to be the supreme arbiter. Honourable senators opposite surely would not expect that scientists from the Department of National Development, about whom earlier speakers rightly waxed eloquent, when testifying before the proposed Senate select committee would have an axe to grind. We must look at the bargaining that went on with Sir Henry Bolte and other people. It is a well known fact that the Gas and Fuel Corporation of Victoria was far from happy about the final agreement that Sir Henry Bolte was able to wangle when he dealt with these people. I think that the Senate should look into the interests of the nation as a whole. In effect Sir Henry Bolte, with the connivance of the Prime Minister (Mr Harold Holt) is going to argue about various rival companies with pipelines. Whatever amount he arrives at as the price of a thermal unit, it will mean that he has fixed the price at such a level that when the cost of bringing the natural gas by pipeline into New South Wales is added, the people will be very lucky if the price of natural gas does not equal the present price of making gas.
Do not forget also that when this natural gas is produced certain calorific properties will be removed from it so that the firm involved will get the advantage all the way. It will be able to skim off the by-products. It will be able to get around the idea embodied in this Agreement whereby it more or less has to surrender four-ninths of its deposits. It will be keeping all of that for an extra 1%. I suppose that would run into an outlay of approximately $2Sm to get another $120m. It is a completely lopsided Agreement. As I have said, the community would not be affected if it were to be delayed for further inquiry.
I wish to go a little further in relation to this Agreement. After all, we are talking about our present society. Senator Cormack went back to the days of Governor Bourke. AH I can say is that it was as a result of the views of Governor Bourke that orderly planning was possible in Canberra. If
Melbourne, Sydney and every other Australian capital city had developed with the planning that has taken place in Canberra, at least we would not have had some of the present-day difficulties related to lack of sufficient recreational and playing fields and things of that sort. But let me go beyond that point. It is amazing that with these new industrial techniques very little thought is given to the dispossessed workers who go from one industry to another. It may be that this is not so difficult for some of the younger workers. But a different situation exists in relation to the older workers. I have had in my possession a copy of The Torch’ which is the journal of the Gas Employees Union. With the concurrence of honourable senators, I incorporate in Hansard the following extract from that journal:
This action will enrich Esso-BHP whilst it will mean a loss of market by the suppliers of raw materials to the gas industry as well as the loss of jobs to workers in the employ of those suppliers.
Of course this tendency in many facets of industry and commerce in this country is put down as ‘progress’, with the dictum that no one can stand in the way of progress. Some such changes may well be progressive, but many of them are merely developmental and are entirely used to make privileged sections of the community more privileged, more powerful and richer. Workers are discarded as being ‘redundant’ and are left to fend for themselves as best they can.
All this change, all this development, all this progress goes on unabated without any plan to conduct orderly changes or to make provision in a proper disciplined and orderly manner wilh benefits to the working peoples. Workers are regarded as being so many ‘bodies’ to take on or to be discarded as the situation demands.
Let me explain why I have incorporated that extract in Hansard. The Minister for Supply (Senator Henty) will reply to this debate. The point I am making is that latent fears exist about automation and how workers in this industry are to be treated. These fears are personified in the extract that I have incorporated in Hansard. The general impression gained is that these fears are involved in - to quote one word from the extract I have used - ‘progress’. What is the question regarding progress? Progress might mean a lovely edifice or a particular building. People may be able to point to statistics but they do not look at the other side of the picture - the human factor. Digressing from the matter under consideration at the moment, I point out that plenty of miners working on contract rates are now employed as tradesmen’s assistants with Broken Hill Pty Co. Ltd in Newcastle. They are not unemployed but their standards are lower. These are things that cannot be controlled completely.
These high pressure board room negotiations go on. I believe sincerely that the people who made these decisions should have to face up to a Senate inquiry and justify their decisions. If it is good enough at the arbitration level for the Commonwealth Conciliation and Arbitration Commission to assess the amount of butter a wage earner may eat and what is regarded as a reasonable living standard, I believe that it is good enough for these barons of the fuel world to do the same. I refer to a matter that I have mentioned in the Senate previously regarding the attitude of some of these people. Mr Wilson - not the Prime Minister of Great Britain, but the Secretary of Defence in the United States of America during the Eisenhower era - was a big shot of the General Motors Corporation. He said: ‘What is good for General Motors is good for the USA.’ The then President had to tick him off about that statement. I apply that illustration to Australia. I say that what Esso-BHP or the Australian Gas Light Co. wants is not necessarily the best for the community at large. This brings me back to my recurring theme: An inquiry such as. is visualised by the Leader of my Party in the Senate would ensure that maximum publicity was given to the various motives of these organisations.
Australia is a federation of States. One of my colleagues - I think I am right in saying that it was Senator Poyser - interjected during the debate today that the. Prime Minister virtually holds the trumps in this kind of situation, so far as finance is concerned. No doubt exists that when the Prime Minister allied himself with the Premier of Victoria, Sir Henry Bolte, the other States had to come along. I repeat that it would not matter how protracted was the delay before agreement was reachedfor the next 6 months or longer. Even if the companies finally accepted a royalty of 164%, they would still be doing very well out of it ultimately. We should be quite realistic about the matter. Nobody is denying to these people the right to prosper. At the same time, this is our Australian heritage. When one of these organisations makes a strike, that does not mean we should get down on our feet, kowtow to it, and say: ‘You are a public benefactor. You will have everything given to you on a plate.’ If the living standard is X dollars and the margin being earned by certain people is such that they can buy a few Cadillacs and other luxuries, they are doing all right for themselves. Once people start amassing millions and channels those funds away, such action is not for’ the common good.
Honourable senators opposite say that the Opposition has an ideological complex. When certain Ministers talk about national development, to top public servants, who are highly qualified technically, do those Ministers sincerely believe that they are justified in making comparisons with the. United States of America and Great Britain? I refer particularly to the United States, the. home of private enterprise, which has curbed excesses of capitalism. That . is something which this Government is not doing, whether it be through Sherman anti trust, type laws or through the payment of royalties. It is significant that the Opposition is raising in the Senate the matter of royalties. I invite honourable senators opposite to browse through the happenings in the United States Senate during the last 50. years, Senators who came from States dominated by copper or coal interests fought the same battles that the Opposition is fighting here. Senator La Follette, Senator Walsh, Senator Borah and Senator Wheeler were the people who took up these battles. They said that the more royalties that Washington could collect the more money could be farmed out to the people. I believe that the endowments to the Commonwealth Scientific and - Industrial Research Organisation should be commensurate with the profits made by Esso-BHP. The company makes only a paltry donation to scholarships and bequests. It is not a matter of having a particular phobia. Neither organisation will budge, whether it be the Australian Gas Light Company or the Esso-BHP interests. Unless the Government lays down much more stringent regulations than are envisaged in this legislation, the companies will go their own merry way.
I refer again to the basic question. The State governments, I know, have had problems with redundant employees. The New South Wales Labor Government was fortunate that the Electricity Commission, by forcing employees to take long service leave at middle age instead of in their 60s, was able to avoid outright dismissals. The same thing happened in certain areas of the coal mining industry. No guarantee is given that this can and will happen in the gas industry.
On the 14th and 15th November, a seminar on natural gas in Australia will be held at the Grand United Order of Oddfellows Building, Castlereagh Street, Sydney. People from all facets of industry will be prepared to gather there to discuss the subject. The Government is simply rubber stamping this legislation. 1 know that Senator Wright has some fears that all may not be well. I am dealing with the psychological angle. If the industrial giants see that the Parliament is not happy about certain- things, it is surprising how they come back with a bland look on their faces and with all their plausible arguments and say: ‘We have had another look at the proposal and we are prepared to do this or that’. I am prepared to wager Government senators that if an inquiry was undertaken by a select committee and if nothing else was achieved, Esso-BHP would be quite happy to raise the bid so far as royalties arc concerned and in the next year or two the Commonwealth Treasurer would be a very happy man.
A much more informed type of person exists in the community today. To speak about Communism or Socialism in relation to national interest is not washing like it used to. People realise that national interest is a normal trait of patriotism. That is borne out by the statement made by the late President Kennedy on his inauguration as President of the United States of America.. He said that it was not a question as to what the United States could do for people but what they could do for it. My basic criticism of the Bill is that all that is being done is being done for Esso-BHP and not one jot is being done for Australia. lt is on that basis that I believe - I am open to other points of view - that if the amendment for the establishment of a Senate committee is carried and if the committee meets very rapidly and within 6 months brings down an interim report, the very least that would come out of such a report would bc a considerably higher royalty. What is equally important to me, the consumers in the States other than Victoria would not be held to ransom by Sir Henry Bolte. Ways and means could be found of implementing the go-go suggestion contained in a glossy publication entitled ‘Australian Gas Journal’ of September-October 1967 that natural gas will reduce the housewife’s bill. I hope natural gas will reduce the housewife’s bill. If it does it will be in spite of Sir Henry Bolte; let us have no illusions about that. I make a plea for the appointment of a Senate committee. I make it on behalf of the gas consumers of New South Wales and other States and on behalf of members of the Gas Employees Union, which, has been a very responsible union, its members have included men such as Mr C. Crofts, one of the founders of the Australian Council of Trade Unions, Mr George Callen, and its present federal secretary, Mr Len Thompson. Those men have held responsible positions in the trade union movement. They are anxious to see that men employed in the gas industry are protected. It will not be much good later if somebody says that men in the gas industry have been dismissed because of progress. We can be a little academic in this chamber, but when redundant gas employees or coal miners who are in their 40s or are older have to look for other work they find it is a little bit cold outside. I do not engage in any sob stories, as honourable senators know. I believe in being practical.
I bow to Senator Wright’s legal knowledge. I know that the honourable senator has distinct reservations about this legislation. I believe that the honourable senator and I could go forward in double harness and have a look at the legal problems that he visualises, which when solved might enable the householders to get a better deal. And last but not least the members of the Gas Employees Union in New South Wales would feel that their employment equity was protected.
– The Senate is debating the seven petroleum Bills which are providing the legislative framework for exploration and exploitation of petroleum resources of submerged lands adjacent to Australia. The States -and the Commonwealth have taken from 21 to 3 years to prepare this- very important legislation. Today the Leader of the Opposition (Senator Murphy) told the Senate that a select committee of the Senate should be established to inquire into all aspects of the seven Bills for a length of time - the time was not stated - and that the committee should then report back to the Senate. On the other hand Senator Wright has proposed that because of the importance of this legislation the Senate should pass it forthwith and then appoint a select committee to inquire into all aspects of these Bills and to report back to the Senate at its convenience. The Labor Party’s proposal would deny the States and the Commonwealth this very important legislation forthwith. Senator Wright’s proposal would grant the States and the Commonwealth this important legislation, and then the select committee, at its leisure, would go through the legislation with a fine tooth comb, find out whether any amendments were necessary and make recommendations to the Senate on such amendments.
As this is a States House and as the States have had the best brains at their disposal working with the best brains at the disposal of the Commonwealth in helping to prepare this legislation, it would be very difficult for us, while we are debating it, to find out all the weaknesses that are in it, if there are any. Therefore I believe that in adopting Senator Wright’s proposal the Senate would be acting as it should. I do not believe that we are entitled to hold up this very important legislation. About 12 months would probably be needed to make a comprehensive survey of it. While that was being done people would be actively engaged in the search for oil.
We are informed that seven rigs will be operating in the offshore search for oil early in the new year. Each of them costs not less than $25,000 a day to operate. The total capital expenditure involved is about $8m. The companies operating those rigs would not know where they stood if we appointed a select committee now. I believe that it is our duty to let them know where they stand and to let them know that we propose to appoint a select committee to examine the legislation carefully and that certain recommendations may come from the select committee for consideration by the Senate, and the House of Representatives.
Several Opposition speakers have come forward with the old story that the Socialist way of finding oil is the right way and the only way. They say that we are not charging the private companies enough; that we should have increased the royalty from 10% to at least 16$%. They say that if that had been done th’ey would have played ball. I remind Senator Mulvihill, who was the last speaker, that Socialism does not always produce the goods; in fact, only on very rare occasions does it do so.
Recently I was in Indonesia. Under the pro-Communist Sukarno regime the royalty paid by the Shell oil company was increased from 30% to 50%. Then the regime decided to take the lot. It took over the company. The result was that the search for and production of oil in Indonesia diminished to such an extent that the new regime has invited oil search companies to come back and to exploit Indonesia’s oil resources. Let us consider another mining industry in Indonesia. The pro-Communist regime took over the tin fields. They were producing about 30,000 tons of tin a year prior to that regime. Within 4 years the production dropped to less than 6,000 tons a year. At the moment the. Suharto Administration is inviting Australian industry to go back to Indonesia and to exploit .the mineral wealth of that country, including the tin resources. So we see what happened under the Sukarno regime. Socialism does not always produce results.
The Australian Labor Party, when it was in office, did not have any oil discovered. But the moment there is a smell of oil or oil gas in Australia the Socialist Labor Party wants to nationalise the whole setup. It says that it wants to do that for the people. But just because the Labor Party says that it would nationalise the oil industry in the interests of the people of Australia, that does not mean that the people of Australia would benefit; it simply means that they would have to dip further into their pockets to cover the losses, such as those that have always accrued when a Labor government has adopted Socialistic policies.
I know that it grieves honourable senators opposite to think that the Government does not intend to nationalise the oil industry. The reason why we do not intend to do that is that we want to obtain the maximum results from oil and gas for the Australian users. We also want to make the maximum amount of money out of the oil and gas when it is found. I inform honourable senators opposite that more than 50% of every $1 of net income earned by the oil companies in searching for, finding and exploiting oil in Australia will be returned to the Australian taxpayers.
– Where will the rest go?
– The other 50% will go to the companies. Do not let honourable senators opposite forget that the 50% that will be returned to the Australian taxpayers is more than they have ever obtained from any industry that they have ever established on their own. I invite them to name one industry out of which they made more than 50%.
– There are plenty of them.
– All honourable senators opposite have to do is name the industries. They could not name one. I suppose they will tell me that the Australian people received more than 50% of the net profit of the shale oil industry at Glen Davis in New South Wales. The cost of the oil produced there was more than 5s a gallon - this was 20 years ago - the industry ran at a loss and the taxpayers of Australia had to put their hands in their pockets and meet the loss.
Sitting suspended from 6 to 8 p.m.
– Prior to the suspension of the sitting, I was referring to Senator Murphy’s proposal to move for the appointment of a select committee to inquire into the Bills now before the Senate and to report back to the Parliament. Senator Wright has stated that in view of the importance of this legislation the Senate should pass the Bills but that a select committee should be appointed to inquire into all of the ramifications of the legislation. After studying the legislation, the select committee should report its findings to the Parliament. Senator Wright has foreshadowed an amendment to this effect. I congratulate Senator Wright. This Senate, acting as a States’ House, has the right to set up select committees to inquire into controversial subjects, such as this legislation. If appointed the committee could, over the next 12 months, examine thoroughly the legislation before making its report.
The debate has disclosed that the Government and the Australian Labor Party are opposed to each other on the subject of oil exploration in Australia. Labor still clings to its oppressive socialist approach to the search for oil, whereas we on this side of the chamber believe that by encouraging companies with the necessary know-how to search for oil and gas we will obtain the best possible results for the Australian people. I have already pointed out that with companies paying company tax at 42½%, a royalty of between 10% and 121% and withholding tax of up to 30% on dividends sent out of the country, the Australian people are receiving more than 55% of the net profits on oil discoveries in this country. The exploration companies are meeting the cost of exploration and taking all the risks; we are taking more than 50% of the profits. This is excellent business. 1 do not have time to discuss fully this controversial legislation, but I propose to refer to the history of offshore drilling and to the terrific impetus over the last decade or so in the search for oil in coastal waters. In 1949 there was only one drilling rig in the world capable of drilling to a depth of 20 feet. Today there are more than 150 drilling rigs capable of drilling to depths of up to 1,000 feet. There are three varieties of rig. There is the submersible type which is towed to the search area and sunk where the drilling operations are to be carried out. This kind of drill was introduced in 1949. The second variety is known as the jack up type. It can search for oil to depths of 300 feet. Rigs of this type were brought into use in 1954. Then we have floating oil rigs, which mostly are built on converted ships. These have been in operation since 1963. We must realise, Mr President, that drilling for oil offshore is a very expensive business, which costs in excess of $25,000 a day. Since 1949 the oil industry has spent something like $6, 700m on offshore operations in the free world alone, and the free world is currently spending on these activities at the rate of $900m a year. It is estimated that over the next 10 years something like $22,000m will be spent on operations off the coasts of some 100 countries. It is interesting to note that because of the policies that have been adopted by our Government, in 1968 we in Australia will have some seven drilling rigs searching for oil in our coastal waters.
– Who will own them?
– Some of them will be owned by Australian companies, but most of them by overseas companies. However, my Socialistic friend must realise that the drills owned by overseas companies will be operated by companies registered in Australia and that we in Australia will receive 55% of any net profits of oil if found. I believe that this is a far better return than can be obtained by a Communist regime under Sukarno or a Socialist regime under Whitlam. It remains to be seen what the ejectors will decide about this, but I am sure that they will make the right decision. In 1968, seven offshore drilling rigs out of a total of 150 in the free world will be operating off the shores of Australia. In other words, one in about every twenty-two drilling rigs operating in the coastal waters of the free world will be operating in Australian waters. The operating companies have been encouraged to bring these rigs to Australian waters by an Australian Government that believes in free enterprise and not in the system of Socialism.
The present proposal is that there shall be a two-stage system of titles. This proposition has been adopted by the States. Title No. 1 will be a permit that will cover all stages of operations including drilling operations. This will authorise the bolder to explore for petroleum, etc., and the maximum area of any permit will be 400 blocks, which is equal to 10,000 square miles. This is somewhat smaller than some areas for which permits have already been granted, but there will be no limit on the number of permit’s. The minimum area will be 16 blocks, or 400 square miles. But the designated authority constituted under the terms of this legislation, at his discretion, will be able to authorise and issue a permit for an even smaller number of blocks in special circumstances.
We ought to look carefully at this system, because many people in Australia, and even some who support this Government, are of the opinion that the Government is issuing to single companies permits for areas that are too large. I would like to point out that at the end of the sixth year, a permit for 400 blocks will be subject to a reduction of the number of blocks to 200. At the end of the 11th year those 200 blocks again will be reduced to 100 blocks; at the end of the 16th year they will be reduced to 50 blocks, and at the end of the 21st year they will be reduced to 25 blocks. Those blocks can be advertised or sold to other companies as the designated authorities from the States and/or the Commonwealth decide. Then if the company - the permittee - finds oil in any of those blocks it can take out what we call a production licence. This is the system over which there has been so much controversy both in the Senate and in another place. Under the graticule system there are 9 blocks each of which is roughly 5 miles by 5 miles in area. In effect there are 3 blocks of 5 miles by 5 miles at the top, 3 blocks of 5 miles by 5 miles in the centre and 3 blocks of 5 miles by 5 miles at the bottom, making a total area of some 225 square miles in the 9 blocks.
The company - the permittee - which discovers the oil may elect to take up 5 of the 9 blocks and pay the minimum royalty of 10% to the designated authority and the Commonwealth. Out of the 10%, 6% will go to the State and 4% to the Commonwealth. But if the five blocks are not sufficient to cover the anomaly or the oil field as found by the permittee, the permittee may decide to increase the number of blocks by anything up to 4 and take the whole nine subject to paying in increased royalty of from 1% to 2i% to the State concerned. In that case, if the permittee is allowed to take up, and elects to take up, the 9 blocks he may, after consultation with the designated authority, agree to pay a total of 12i% by way of royalty on all the oil produced from the nine blocks in his field. In that event the State Government will receive 8i% and the Commonwealth 4%.
Assuming that an oil search company finds a large anomaly or oil field, that company may take out an additional production licence to cover the whole of the oil field. In view of the fact that some oil fields in the world cover areas in excess of 300 or 400 square miles, it may be necessary in certain circumstances here for an oil search company to take out one or two production licences to cover the oil field. So they are catered for pretty well. There has been some controversy over the fact that we should be selling-
– The honourable senator has exceeded his time by 1 0 minutes.
– Go easy.
– The agreement that we should speak for only 20 minutes is off, is it?
– The agreement was for 30 minutes and I will stop when I have spoken for 30 minutes. I had spoken for 11 minutes before the suspension of the sitting and I have now spoken for another 15 minutes, which makes a total of 26 minutes. If the honourable senator has had enough he should keep quiet and allow me to finish. I should like to explain the facts of life to him. I have been talking about the problem associated with graticules and have pointed out that additional areas may be needed. Controversy has arisen because we as a Government have allowed the oil search companies to take up, if they have so desired, the whole of the nine blocks. An oil search company may find an oil field which may or may not extend beyond the five blocks which are available to the company under the graticular system. But would not that company, after spending hundreds of millions of dollars on its oil search programme, be entitled to recover all the oil from any find that it may locate? This is in effect what honourable senators opposite are denying to a company, in opposing this provision.
On the mine fields of Australia we all recognise that a mining company can take out sufficient mineral claims, if it wishes to do so, to cover an ore body that it has discovered. I felt that I should explain this point to the Senate quite clearly because there has been much controversy about it. In doing so, I have been deprived of an opportunity to deal with many other items that I had proposed to raise. One point that should be mentioned is that the Australian Labor Party, as a political party, whenever it sees a bubble of gas, says that it wants a national fuel policy and would set up a ministry of fuel to control that gas. This point was made again by Senator Murphy who referred the Senate to his speech on 1.8th May this year when he had made a similar statement. I remember that on that occasion I replied to Senator Murphy’s suggestion that Labor would set up a ministry of fuel. He said also that in his view a pipeline should be built from Mereenie to Adelaide and other places. He mentioned that under a Labor government a ministry of fuel would build a pipeline from Barrow Island to Perth as part of Labor’s fuel policy. How stupid can one get? There has not been enough gas located on Barrow Island to justify this action. Merely because some gas is found on Barrow Island, Labor proposes to build a pipeline for 1,000 miles to carry that gas. This is ridiculous. As I understand the situation, two problems ‘ face the Senate: One is whether we will go ahead with a policy of free enterprise under which we as a Government have already developed Australia into a nation.. The other is whether we will stagnate with a policy such as that outlined by the Leader of the Opposition.
– The Senate is debating some very important legislation contained in seven petroleum Bills which are the product of several years wo-k, negotiations and agreement. We are asked to deal wilh this legislation in the dying hours qf this session of the Parliament. We have made our protest against that. Because we believe that so many features of this legislation are unsatisfactory, we have proposed in an amendment moved by the Leader of the Opposition (Senator Murphy) that the Senate should not deal with it finally now but should refer it to an all-party select committee of the Senate, according to the usual practice/ The matters that we have been debating all afternoon and that we will continue to debate for some time could then be examined in a- more leisurely fashion and the important principles which are at stake in the legislation could be canvassed and some sensible resolution reached. It is perfectly plain from the way in which Senator Scott dealt with this matter that he regards attack as the best form of defence.
During the afternoon the Leader of the Opposition mentioned the vast importance of the subject which the Senate is now discussing. He dealt with the Australian Labor Party’s policy for a national approach to the problem of fuel and, very properly I would suggest, he said that he wanted to put the present legislation into some wider context. He mentioned also that there is some basic disagreement between the Government and the Opposition on these approaches. But if ever it were made plain that some supporters, at any rate, of the Government are opposed to any form of national enterprise, it was during the last two speeches on behalf of the Government. Senator Cormack and Senator Scott both evinced what, without any disrespect to them, I might suggest was a somewhat pathological dislike of planned development of the nation’s rich resources. They obviously hate planning like the plague. They are anxious to avoid any suggestion that public enterprise has a reasonable role to play in the development of our great resources.
In these Bills we are concerned with resources of gigantic dimensions, particularly great reserves of oil and natural gas off the Victorian coast. In their potential they dwarf the imagination because this form of fuel today has come to the stage where it supplies a great deal of the fuel requirements of various advanced countries. 1 understand that in the United States of America where there has been over a generation of sales and development of natural gas, it now supplies 30% to 35% pf the total energy requirements of that great country and that it is supplying about 36 million consumers through pipelines and mains that extend over 700,000 miles in length. In Canada natural gas now supplies 15% of the total energy demand compared with 3% 15 years ago.
It is no good saying, as honourable senators opposite who have spoken in this debate have said, that people will benefit from the exploitation of these vast resources by the Esso-BHP complex. Of course, we will be better off if we have these rich resources developed than if we do not have them developed at all. But that is not the question. The question is whether under the arrangements that have been made the people of Australia are getting as good a deal as they should get. In other words, when one examines fundamental questions like royalties and the price of gas, are the people getting by way of royalties what they ought to be getting? Why is it that we are paid the lowest royalty of any of the countries?
When it comes to the price of natural gas, why is it that we are paying double what people are paying in the United States? It seems to me that these are important questions. They are searching questions and they ought to be answered. They are not answered by turning round on the Opposition and saying: ‘The Labor Party believes in Socialism; it believes in national enterprises, and we do not. We are all the way with Standard Oil. We believe in an unfettered free enterprise system. Therefore, there is a clash, and the Labor Party is talking nonsense and- we are not.’ That kind of answer avoids the very real question that arises for discussion.
– Did the honourable senator say that we are paid the lowest royalties of all the countries?
– That is right. I ask the Minister for Supply to tell me which country is getting a lower royalty.
– Canada receives 5%.
– No, Canada, I believe, receives 12-J%, the United States receives 16i% and the Arab countries receive between 25% and 50%. Senator Cormack was terribly worried that the Arab countries were getting 50% royalties, as if they were bleeding the oil companies to death. That is the very expression that he used before the suspension of the sitting. They cried all the way to the bank, to use the old expression. I have not heard of any of the great oil companies wanting to pull out of the rich Arab lands because they were being bled to death in that part of the world. It is absolute nonsense to take this nineteenth century approach to the problem of the organisation of our resources and then to try to rubbish those who want to see some planned approach to the development of the nation’s great natural wealth. We are not here in this Parliament to rubber stamp an agreement made between the Victorian Premier and the foreign oil companies which hands over to the control of private companies the development of our great resources. What we are anxious to see is that the people of Australia get the best deal they can. The problem that the country faces is to transform these great resources, this great wealth off the Australian coast, into practical things such as better schools, better hospitals, and better essential community services - all things for which we are crying out now and of which the whole community is starved.
I say quite deliberately that if these resources are to be developed by the oil companies then the terms should be no less favourable than if the job were done by an Australian public corporation. This is where we part company, as far as we understand these matters, with the Government and with what has been done so ‘far. What the Opposition seeks is a proper study, a proper exploration of the issues implicit in this legislation. Senator Wright was at considerable pains this afternoon, in what I thought was a very interesting speech, to tear this legislation limb from limb.
– The honourable senator could do it just as well.
– 1 may bc able to do it well, but I thought he did it particularly well. T thought he made a very strong case against this legislation. He attacked the Bill, first of all, on the basis of the unsound, or, at any rate, questionable jurisprudential basis of the agreement’. Secondly, he attacked several important principles upon which the Bill proceeds. He brought into question from his point of view everything but the sincerity of the Minister for National Development’ (Mr Fairbairn), a.nd when he was challenged, he found it impossible to suggest a compelling reason why the Bill should be regarded as urgent. Nevertheless, he said he would support it. This being the eve of the Melbourne Cup, he allowed himself a saver - that he would support the Bill but he would also support the motion of a select committee, not before the Bill was passed, but after it was passed, so that, the matter having passed into legislative form, the Senate could then proceed to discuss the principles in a leisurely, unhurried way. I hope 1 am not doing the honourable senator an injustice.
– But what is the relevance of the Melbourne Cup?
– I am simply saying that I do not understand a proposition which suggests that the Bill should go through the Parliament and begin to operate and that then we can in a leisurely way, examine the principles on which it is based. 1 regret to say that’ for the moment I cannot find that to bc a procedure which could have any influence whatever upon the course of events. If the Senate were to adopt the motion moved by the Leader of the Opposition, plainly we would have an opportunity t’o explore these matters before the Bill passed into law.
– And we would get no oil or gas for the next two years.
– I do not know about that. If I read the Melbourne ‘Herald’ correctly, Sir Henry Bolte said today that no matter what is said in the Senate he is going ahead; that he regards anything that happens up here as being concerned with political questions.
– My point is that in 12 months time that attitude will probably have come right to the surface.
– Perhaps, but is seems to me that if we are to do our job as a national Parliament then, when we are dealing with legislation which has so many inherent unresolved difficulties and in which there are so many inconsistencies and so many unsatisfactory features, it is our responsibility to cope with it while it is before us and not after it has passed through our hands arid become part of the law of the land. That is a point of view. “I ‘do not question the honourable senator’s right to put the other point of view. But it seems to me, as at present advised, that it does not hold out much promise for any fruitful dealing with the Bill. I hope I have put the point of view temperately. I do not suggest that the honourable senator put his point of view intemperately. However, I fail to follow it as a helpful suggestion in connection with the problem which the Senate is discussing. Obviously the situation in which the Victorian Premier found himself was that he was on extremely questionable legal ground in dealing with the exploring interests as though he was speaking for a sovereign State. I suppose if is possible for everyone to frame a legal argument to meet a particular proposition. But I- should have thought that the Commonwealth was in an unassailable position legally, here.
– That may have been so after the first oil and gas was discovered. But when the permit was asked for they may have drilled a mile offshore. Who has territorial jurisdiction in that case?
– Article 2 of the Geneva Convention of April 1958 in regard to the continental shelf states:
The coastal State exercises over the continental shelf sovereign rights for the purpose of exploring lt and exploiting its natural resources.
Australia ratified that convention. It was not ratified by Victoria, New South Wales or Queensland.
– What are the territorial waters of a State?
– We are not dealing with territorial waters here. We are dealing with the continental shelf.
– Where does the continental shelf begin and end?
– The honourable senator is entitled to hold the view that the Commonwealth has not an unquestioned right. I take a different view. I believe that the Commonwealth in this case has abandoned a very strong position that it had vis a vis the States and vis a vis the control of these waters and of the continental shelf and has permitted itself to rubber stamp an agreement that had been made between Victoria and Esso-BHP. The Commonwealth need not have done that. No doubt the Premier of Victoria felt the best bargain he could drive quickly would be the best in the long run because later on there would be questions on his constitutional right to make a bargain. From his point of view that may have been a good political tactic. But it does not absolve us of the responsibility of examining the legislation and to see whether it does in fact produce the best deal that could be obtained for the Australian people.
What Senator Murphy’s motion does is to ask the Senate to have a look at all these matters in the light of criticisms that have been made. It is obvious from the price that was eventually agreed upon that this is not the lowest price that could be obtained. The price of 3c per therm at the well head was higher than the price recommended by Dr Hetherington, the expert who was brought out to advise the Victorian Government. It was twice the price that was suggested by the Victorian Gas and Fuel Corporation which was the body doing the negotiating with the oil exploring interests. Are not these serious questions? Is one a doctrinaire socialist to ask these questions? This was rather suggested by Senator Scott and I think by Senator Cormack. We would be recreant to our trust if we did not think these were important questions to ask. When it comes to the question of royalties are we to remain silent when the Commonwealth abandons the established nine-block graticular system? We are told it does not matter about the last four out of the nine blocks. The Government takes the view that the oil companies can have them as long as altogether another 1% is paid in royalty.
– One to two and a half.
– Yes, a 1% to 21% overriding royalty. But the Commonwealth gets none of that as Senator Wright pointed out this afternoon. The Commonwealth gets 4% out of the 10% royalty and receives no overriding royalty. So, from a position of immense constitutional and financial strength, the Commonwealth allows itself to be put in a position of getting merely a 4% royalty out of all this. I am saying that that seems to me to be not much of a deal. One would not have to be a genius to pull off a deal like that.
These are very serious questions that honourable senators are entitled to ask without being rubbished. They are questions that we ought to have examined by a select committee. I do not think there is really any answer to that and it is not of much good to throw one’s hands in the air and talk as though public enterprise cannot do this job when it is called upon. Basically, we believe that the best way to approach this problem is to let Australia - that is, the Government - control these great resources. In Holland, where oil is being discovered, the Government has in its legislation the right to acquire up to a 50% interest in any commercial discovery. I do not say that that is the only approach but surely it is an approach that is apparently working successfully. Senator Cormack did not like Senator Murphy’s reference to the successful Italian scheme - the ENI, a public corporation. He preferred what he called the pragmatic Anglo-Saxon line rather than Latin legalisms.
– What is the royalty in Italy?
– I have not the figure with me.
– It is 8% for oil and 5% for gas.
– In Italy these things are developed by ENI, a public corporation. 1 want to tell the Senate what the objectives of this great public enterprise are and what is generally regarded as the result of its work. Its aims are: to provide Italian industry with ample and cheap sources of energy; by entering new sectors, such as petrochemicals, to diversify Italian industry; to assist economic progress by the modernising of Italy’s industrial structure and techniques - and that is just what it is doing. Nowhere is this problem better summed up than in the report of ENI, this public corporation of Italy, in these words:
The Italian experience has shown that the industrialisation process depends less on having the necessary capital than on the political willpower to overcome obstacles and to plan and control the exploitation of material and human resources.
That is a very proper statement, I would suggest, of the functions and the achievement of this public corporation. We are not saying that this is the only way to do this, but any way of doing it which takes a quick settlement with overseas oil interests to meet a momentary political situation in order to get out of the problem of having insufficient funds to go ahead with some other approach is not facing up to the problem at all.
Do not think that even in Victoria there is unanimity on the Government side about this problem. Back in 1966 the Deputy Premier of Victoria, Mr Rylah, had something to say about the problem of pipelines. He was under no illusions that out of a number of choices that confronted the’ Victorian Government probably the best way to handle the problem of pipelining was by what he called a semi-governmental authority. He said:
As for the pipeline, it could be controlled by a private company under franchise, or by a partnership between government and private capital, or by a semi-government authority.
The Melbourne ‘Age’, commenting on 16th June 1966 on Mr Rylah’s discussion of the matter, stated:
The important thing is that the benefit should be spread as widely as possible, and with this in mind it would seem that the last alternative, a semi-government authority, should be preferred. Organisations of this kind have been highly successful in running Victoria’s public utilities.
This was obviously referring to the Gas and Fuel Corporation of Victoria and the State Electricity Commission of Victoria. The Age’ went on:
If private capital is found to be necessary, then partnership between government and private investors would be the next’ best thing. The State has a bonanza, and should administer it for the benefit of the people.
I support Senator Murphy’s proposal to refer these Bills to a select committee, because this seems to us to be imperative if the Senate is to give proper consideration to this important legislation. We do not want to be dogmatic about principles. On our side we have formulated the basis of a national fuel policy and it has been reiterated many times. Senator Murphy dealt with it again this afternoon in proposing our motion. What we are absolutely convinced about is that there must be a national fuel policy and that this should be administered by a federal ministry of fuel and power and, in co-operation with the States, used for the welfare of the nation as a whole. These petroleum enterprises off the coast of Victoria are very important resources. They are immensely rich and we do not think that it is a good enough answer to the Opposition’s case to say that the people will get benefits out of the development of such great resources.’ We know that they must get some benefit. What we are anxious to see is that they should not be short changed about the matter. If that happens, the Government will have to answer not only to -this generation but also to unborn Australians- who are being deprived of their heritage by being sold out by this generation, being sold out cheaply. That is what this problem is all about, as we see it. I invite the Senate to give careful consideration to Senator Murphy’s amendment. I trust that the Senate will carry the amendment because this would be in the best interests of good government and ultimately in the best interests of the Australian people.
– Every good Australian wants the search for oil and natural gas in Australia to be a success. We need our. own oil for defence and economic purposes. We are an island continent and when our, oil has to be brought from overseas we are always facing the risk that perhaps in war our lines of communication may be cut. Perhaps even in a time of what is peace for us there may be some form of crisis abroad which cuts the flow of oil to Australia. Apart altogether from that, it is important that we have our own oil because of the tremendous difference it would make to our overseas balances. We pay overseas every year many millions of dollars. If we had our own oil, those payments would not be necessary. For that reason, for quite a few years Australians have been watching the search for oil in this country, full of hope that it would be successful. But it has not been an easy programme to follow out. Oil exploration, of course, is a tremendously expensive business, so expensive that it is questionable whether we can fully carry on the search for oil out of our own resources. It is obvious that we must get assistance from overseas capita).
Let us look at some of the costs that are involved in the search for oil, which in Australia is only peanuts compared with what is being spent in other countries. In a recent statement on its costs the Broken Hill Pty Co. Ltd, which is regarded as a reputable company of our own, has this to say:
In two years when the Barracouta and Martin fields are in production, the companies will have spent a total of $100m to $150m. Substantial additional capital investment will be necessary subsequently, at a rate determined by the build-up of markets. Exploration expenditure will also continue beyond that time.
Explaining what is meant by additional expenditure above that of $150m and what it will cost fully to explore the area in which the company is at present interested, the company stated:
It is not possible to give a firm answer to this question. Based on present geological knowledge of the areas and currentoffshore drilling techniques, it will take many rig years to explore the areas fully. Further knowledge obtained from drilling can increase the amount of subsequent drilling required to test an area thoroughly, and bearing in mind current world-wide demand for offshore equipment, it seems very likely that B.H.P.- Esso will be drilling in the area for many years.
Then the significant point is made:
The present cost of operating floating drilling rigs is in the range of approximately $6m to $9m per unit per year.
We are a small country with limited resources. 1 have heard it suggested today that we should do these things ourselves; we should keep everything in our own hands. I am not averse to that. I rather like the idea, if we could do it, but can we do it? Where are we to get the money for oil exploration when we are at present involved in an expenditure of millions of dollars on mineral exploration and all kinds of other development in this country? There is a limit to what we can do with our own resources. The plain fact that we must recognise is that we must rely to a very considerable extent on overseas capital. To get overseas capital it appears to me that legislation of this character is required.
Let us look at some of the costs involved in oil exploration. About a year ago the Acting Minister for National Development said that oil exploration and development in Australia and Papua-New Guinea up to the end of 1965 - we have done a lot since then - had cost Australian governments and private industry $370m. He said that total expenditure in 1965 amounted to $70. 8m, of which $55.9m was contributed by industry and $ 14.9m by various governments. I remind the Senate that we are probably spending a tot more now. Looking at those figures and bearing in mind that people are crying out for millions for education, millions for pensioners, millions for this and millions for that, if we are to do a proper job of oil exploration we must get overseas capital. Overseas companies will not come here for peanuts. They will not come here because they love us; they will not come here for fun. We must give them an inducement to come here. A couple of years ago their interests sagged because they were not sure what the Australian Government’s attitude was to be. If they were to invest money here they wanted to know where they stood. Let us examine the situation which existed when their interest sagged - when it appeared that our Government might not be inclined to give them an inducement. The statement issued in July 1965 by the Australian Petroleum Exploration Association was pretty dismal. It read:
That is how things were only two years ago. The statement continued:
The Australian Associated Group, which last year-
That is, in 1964 - drilled 40% of the footage in Australia, had recently announced that it had been compelled to halve its exploration programme despite a splendid record of success and the announcement that a gas line would be built from Roma to Brisbane.
Alliance Petroleum N.L. had recently publicly auctioned 672,522 forfeited shares at a reserve of 6d. per share, and 363,322 shares had been passed in.
Associated Continental Petroleum N.L. shareholders had watched their equity vanish when the company made a call of 6d. a share
Oil exploration is a tremendously competitive and costly business. You will not get people to put money into it for fun. Australia will not be able to put in the amount of money needed at a time when money is being sought all over the country for all kinds of developmental purposes. If Australia wants people to get on with the job of exploration it has to offer them an inducement. It seems to me that we should take the word of the expert people who have inquired into this business for three years and who have said that this legislation is the way to offer such an inducement. I am rather surprised at the low opinion some members of the Opposition have of al least two strong personalities in the Labor Party. The Agreement is supported, I understand, by the six State governments.
– Not supported; signed by the Premiers under duress.
– What greater insult could Senator Cavanagh offer to Mr Dunstan, the Premier of his own State, and Mr Reece, Premier of Tasmania, than to say that they signed a document in which they did not believe? This suggestion of coercion amuses me. I have heard over the years from people in Tasmania that Mr Reece is a splendid type of Labor man. People have told me that he has been re-elected year after year because he is a man of strong opinions - a man who knows what he is after and who does a good job. Mr Dunstan is spoken of as the new Messiah in the Labor Party. I have never read such compliments about a young man in all my political career as those that have been made with regard to Mr Dunstan. But what does Senator Murphy say? He says that the Commonwealth threatened the Premiers with financial control. In other words, Senator Murphy says that Mr Dunstan and Mr Reece are moral cowards.
– That is it. The Opposition has said that Mr Dunstan and
Mr Reece were threatened and that they were cowards. How can they be anything but cowards if they do not believe in this Agreement - the Opposition has said they do not - yet signed the document? In other words, the Opposition makes the claim that these two Labor Premiers who, wilh the other four Premiers, signed the Agreement, were moral cowards. I do not believe this charge. 1 have more confidence in Mr Dunstan and Mr Reece than has the Opposition.
The Opposition said also that the Premiers signed the document because they had nothing to lose and they thought they might gain something out of it. In other words, _the Opposition alleges that the two Labor Premiers, as well as the other four Premiers, were little Australians; they were people whose sole interests were their own petty State affairs. The Opposition claims that they had no interest in the welfare of Australia; if they could see a few bob for South Australia or Tasmania they were prepared to sign anything. I would like to know what more disgraceful attack could be made on two Labor Premiers by members of their own Party. I do nol believe that Mr Reece and Mr Dunstan are moral cowards. 1 believe that they arc men of courage who looked at this Agreement and made up their own minds on the basis of what they believed was right. I do not believe for a moment that they are the sort of men who would say: ‘We shall sign anything if we can get a few bob for South Australia or Tasmania’. 1 believe that they are big enough Australians to look at the welfare of the whole of this country rather than to consider the wellbeing of only one State. All I can say is that I think it is deplorable that these two men, who have done a good job, should be attacked and denigrated in this Parliament by members of their own Party.
I have considered this Agreement as it affects my own State, Victoria, having already considered it from the standpoint of Australia as a whole. 1 believe that the Agreement is necessary. All of us would like to get more for our country, but we must be realistic. We have to strike a mean between what we can get for Australia and what we have to do to induce overseas interests to come here. I have made inquiries among experts and they have told me that the Agreement that has been made by Victoria is pretty satisfactory.
– For Victoria.
– Even Senator Cavanagh admits that the deal is pretty satisfactory for Victoria. It is; that is true. If Victoria can get a reasonable deal, surely the honourable senator and his colleagues do not doubt the ability of the other States to do as well. I have heard attacks on the Broken Hill Pty Co. Ltd and Esso Exploration Australia Incorporated by honourable senators on the Opposition side of the chamber. This means that they are attacking the Agreement between BHP-Esso and Victoria. But what are the facts? On the basis that BHP elects to take up a 5% working interest in all discoveries - which it has done - at least about 75% of all profits derived from the natura] gas and oil discoveries made by BHP-Esso will remain in Australia. This figure includes royalty and income tax paid to governments, and BHP’s profit after tax. Inasmuch as Esso will have to meet the cost of its continued exploration development and operating activities in Australia, it is likely that at least some of the other 25% also will be retained in Australia. That is the deal that Victoria is getting and, as a Victorian senator, 1 think it is a very reasonable deal.
Having examined the whole situation, I would like to say how I regard this Agreement. For about 3 years, legal and scientific experts employed by the six State governments and the Commonwealth have been looking into the subject. For 3 years, four non-Labor governments and two Labor governments as well as the Commonwealth Government have been engaged with those experts in working out what they believe will be a fair deal for Australia. The scientific and legal experts having worked on the matter for 3 years, and the conservative and Socialist Premiers - men on both sides of the political fence - having signed on the dotted line and said that they believe that this Agreement is as good as we could get, there would have to be a very serious reason put up to induce me to agree to a proposal that the passage of this legislation be delayed while the issues are inquired into by a select committee. Some say that such an inquiry would take 3 months, some say that it would take 6 months and others say that it would take 12 months. I am a member of the Senate Select Committee on the Metric System of Weights and Measures, and I believe that the inquiry into the possible introduction of the metric system is nowhere near as difficult as an inquiry into the petroleum situation would be. Yet it will take the Select Committee inquiring into the metric system at least 12 months to complete its work. On the basis of the difficulties and the important issues involved, I suggest that it would take at least 12 months and more likely up to 2 years for a committee to inquire into the petroleum situation. In these circumstances, I believe that there is a good deal to be said for Senator Wright’s suggestion that a committee of the Senate be established to watch oil developments in the future.
– That would be shutting the door after the horse has bolted.
– It is all very well for. Senator Devitt to suggest that that would merely be shutting the door after the horse had bolted.
– That is a pretty good analysis of the situation.
– That is one way of looking at it. Another way of looking at it is to take the view that the proposal for a select committee on this legislation would so bolt and bar the door as to prevent us from ever getting it open again.
– What does the United Slates of America do in Bolivia?
– The United States is a little different from Australia from the standpoint of the capital that she has to invest. She probably has a few dollars more than we have. But I am not so interested in what America does in Bolivia. What 1 am interested in is what American capital is prepared to do for this country on reasonable terms. I emphasise that. 1 do not believe in giving everything to the Americans. For the reasons that I have given, I support, these Bills. I support also Senator Wright’s proposal that we inquire further into the oil situation. I believe that we are entitled to keep it under review all the time. I am told that various amendments are to be proposed. I shall examine them and vote on them according to their merits. However, I want to make it perfectly clear that, having realised the competition that there is for capital throughout the world and the extent to which we in Australia need capital in this kind of industry, which is so costly, I shall have to be persuaded by very powerful arguments before I shall be prepared to support any proposal that could be interpreted as barring the door to overseas investment here. I am prepared to listen to all the arguments that some people may want to advance regarding the size of the areas to be alienated. I have already tried to inform my mind on this aspect of the subject by approaching officers of the Department of National Development, to whom I have directed a number of questions. They have satisfied me on a considerable number of matters. But I am prepared to listen to further argument.
Summing up, I say that I support this legislation. I shall support also Senator Wright’s proposal that a committee of the Senate be appointed to keep an eye on oil developments in the future. Finally, I say that I was not influenced by Senator Cormack’s argument that these Bills are based on Anglo-Saxon pragmatism. Two of my grandparents were Irish and two were Welsh. So I am entirely Celtic and I am not to be influenced by an appeal to AngloSaxon blood, of which I have none.
– Mr Acting Deputy President, this legislation is of vital importance to Australia and I believe that we should try to deal with it on its merits and on the basis of the interest that we should have in it as something that greatly affects Australia’s future rather than, as is normally done in debate on other occasions, try to reply to contributions such as we have just heard from Senator McManus, for his speech was so polluted with political bigotry, with a measure of clowning thrown in, that I think it does not justify recognition as a serious contribution to the consideration of these measures. In a frank discussion such as this should be, an honourable senator does not play the game when he puts his own interpretation on what someone else has said and then submits that his version is what was actually said, and does it for no better reason than that that is his interpretation.
It has been said that this legislation is some of the most important that has come before this Parliament, and I agree. First, I protest against the short time that we have had to consider it. It is said, of course, that it was before the other House for a considerable time. I do not know how long it was before the other place, but I first took serious cognisance of it when it was presented to the Senate last Friday and the second reading debate was adjourned so that we could review the measures over the weekend. I have had an opportunity to peruse them over the weekend, but let me add that I have been able only to peruse them and not to give them the kind of study that is really essential to a logical discussion of them. In addition to condemning the introduction of legislation such as this in the dying hours of a parliamentary session, I suggest that in order to avoid the making of hasty decisions the consideration of these Bills should be adjourned, at whatever cost, to allow us to consider them properly and to decide the issues after we have informed our minds on them. Even if the motion for the second reading of the Bill is passed, there still remains much in the legislation which to my mind needs criticism, amendment or investigation. We have heard talk about a delegation or surrender of power to State governments. My interpretation is that the Bill surrenders power to a designated authority. That designated authority, whoever he may be, will have the power of a dictator over oil leases.
I have had only a short time to consider this Bill. As I have said, I have read the Bill and the speeches of the AttorneyGeneral (Mr Bowen) and the honourable member for Cunningham (Mr Connor) which were said to be the most important contributions to the debate in the other place. They are members of the legal profession as are Senator Wright, Senator Murphy and Senator Cohen, whose speeches on the legislation we have heard today. I have come to the conclusion that there is nothing definite about who has jurisdiction over any part of the submerged lands of the continental shelf. I think it would be right to say that the consensus of the legal profession is that the States have some measure of control within the 3-mile limit. Today Senator Cormack referred us to a Supreme Court judgment which stated that
St Vincent Gulf and Spencer Gulf were within the control of South Australia. Senator Wright raised an argument, I think supported by a decision by a Californian court, that although the 3-mile limit includes what the Supreme Court has termed the inland waters of a State - I suppose on case law that would apply also to any gulf - they could not be classified as under the control of the State for the purposes of petroleum exploration and all those things necessary for the development or the defence of the country.
While there may be some solid ground for arguing that the sea bed within the 3- mile limit is within the province of the States for the purpose of exploration, and while there may be a difference of opinion as to who has jurisdiction over the remainder of the continental shelf beyond the 3-mile limit, there is no doubt in any legal mind that under the 1958 Convention on the Continental Shelf the Commonwealth has full power beyond the continental shelf over waters to a depth of 200 metres and, in certain cases, beyond that. Therefore we see that the Commonwealth has greater areas for development than have the States - that is, assuming the validity of State claims to jurisdiction over territorial waters. As has been stated here this is a question which should be submitted to the only authority which can interpret the constitutional rights of the Commonwealth and the States. However, it is beyond legal doubt that the Commonwealth has authority over a bigger area than have the States.
I noted with interest the remark of the Attorney-General that in view of the possibility that oil would be discovered in an area of doubtful or overlapping jurisdiction, with consequent appeals to the High Court, it was thought that a uniform oil exploration code was desirable. I noticed the comment made in the other House - it was repeated by Senator Wright today - that a form of United Nations veto is set up. But despite that, I am inclined to think that there is some value in having a uniform code so that whoever is working in an area will know he is governed by a law which will not be challenged. Although I support the intention that far, another consideration is uppermost in my mind. Firstly, I do not think that the exploitation of the natural resources of Australia, or of any other country, should be the exclusive right of that section of the community which, by accident of birth or by employment opportunities, happens to find itself living on a particular hill at the time the pocket of gold is discovered. I do not think it is the right of any individual to claim a portion of the natural resources of Australia simply because he happens to live in a certain area. Neither do I believe that it is the exclusive right of one generation, if it happens to find some natural resources, to exploit them to the utmost without recognising the inherent right of succeeding generations to share in those resources. Therefore we should be planning to use the profits gained from the exploitation of our resources to improve the standard of living in Australia and pass on that improved standard to the next and subsequent generations.
We could well find one State, within its parochial geographical boundary lines, living in idleness and luxury on royalties to the detriment and impoverishment of its neighbours - impoverishment contributed to by the high cost of the product on which the royalties are paid to the idle rich. The only way in which not only the community of today but also the generations which are to follow can share in our national wealth is for the Commonwealth to. distribute the profits from our resources on a Commonwealthwide basis rather than allow “one State only to benefit. It could, well be that, according to the order pf priorities, the Ord River project should be developed. But there is no oil on the Ord; it .is off the coast of Victoria. I believe that the profits earned from that oil should help the development of the north west because that would benefit the whole Australian community. Those are the problems in which the Commonwealth Government should interest itself. The distribution of royalties through the Commonwealth would ensure, equality among ali sections of the community. Assistance would be given where the need was greatest- We would also be developing and preserving something for future generations. If we have a legal right to Australia’s natural resources we should gain from them as much as we can to spend in other areas: to be decided by the Commonwealth.. We ; know that we have very little power in respect of discoveries of oil made in land masses which come within State boundaries, and consequently within State jurisdiction. But if the Commonwealth is able to establish by legal argument that it has an exclusive right to a land mass beyond the low water mark along the shores of a State, it should reap the benefit from discoveries made in that area and should channel any benefit to the various States in proportion to the need of each State.
It is not disputed that the Commonwealth has control over that area which extends from the continental shelf out to the line where the water is 200 metres deep, but if the Commonwealth can control a larger area to be exploited the possibility of greater discoveries increases because the area to be explored is larger. The Commonwealth should be capable of negotiating an agreement which bestows greater benefits on the Commonwealth than are available under the legislation that we are considering tonight. I agree with the suggestion which has been made that a unified code is essential because of different jurisdictions which will apply to various areas. Some doubt has been thrown on whether the Commonwealth has jurisdiction in various areas and, if so, to what extent. But I do not think that this is a matter to be debated here. Already we have heard differing legal opinions on this question, which is one which should be decided as soon as possible. Although we are not accusing the Premiers of South Australia and Queensland of anything, T feel that they would be letting down their States if they did not take advantage of any opportunity to benefit from the royalties which will flow from the discovery of oil. The Premier of South Australia is a Queen’s Counsel. He has a good legal knowledge and would have some idea of the complexities of the legal situation.
Bearing in mind all these questions, the main consideration for Australia is what will be the best legislation to enable the fields to be developed as quickly as possible or at a rate which will return most to Australia at any particular time. It is important that the benefit should come to Australia so that it can be distributed throughout the country to places where it is needed most. Although I have not figures to substantiate this suggestion, during the debate in the other place it was mentioned that as exploration rights are held at present
Australian interests will hold no more than 10% or 15% of future oil discoveries. I do not think it would be impossible to legislate to correct the situation which has arisen through exploration rights being granted by the States in the past, possibly in some cases illegally. These are all questions which must be decided. Athough possibly the legal considerations are beyond the understanding of the average layman, or even beyond the capabilities of individual lawyers, there is one authority which can decide on any matter which needs interpretation.
Senator McManus has said that we have not resources in Australia with which to provide adequate schools and other facilities. He said that before we discourage the entry into Australia of foreign capital we must have the resources within Australia to enable the Commonwealth to supply these things. But Senator Murphy has told us what sort of return can be expected from the investment that has been made in exploration for petroleum products off the Australian shore. Surely this is a matter for investigation. During the debate Senator Wright presented some very convincing arguments. He delivered one of the most devastating attacks that we have heard from him on any Bill. The honourable senator suggested that we should not readily accept this legislation without inquiring into it. But after making this devastating attack he turned round and said that he was prepared to support the Bill. For a man of such apparent honesty to attack the measure he must have had a good reason. I asked him his reasons and he said that he would support the measure because of the national urgency for it. I asked what the urgency was. He replied that certain developments are going on at the present time and that we must give companies involved in exploration work legislative authority so that they will know where they are going. I remind the honourable senator that there was exploration for gas and oil, that test borings were carried out and. discoveries were made offshore from Australia, without legislation such as the honourable senator now suggests is necessary. I remind him also that exploration has been carried out inland in Australia, at least in South Australia, without the company concerned having any guarantee of benefit from discoveries which were made.
– There is no doubt as to the title inland.
– Until the discovery was made at Gidgealpa the company had been sinking bores, aided by a subsidy from the Federal Government. When it discovered what it had set out to discover the company did not know how it would sell it, what legislation would be introduced or even what legislation would be necessary before the gas could bc piped and marketed. Legislation was introduced only after the gas had been discovered. There has been exploration in the seabed without the benefit of legislation which it is now suggested is essential. Senator Wright has enough knowledge of commercial affairs to know that if there is a pot of gold to be found someone will seek to discover it and will invest money to find it, but before doing so will ascertain the financial risk involved and be aware of the legislation that must bc complied with. But whatever legislation is in force that person will still be there to find that pot of gold.
There is no merit in the suggestion that the search for oil offshore or the development of oil discoveries will be held up because of our failure to pass this legislation. It could well bc that among some interests there is a desire for the legislation, which will give exclusive rights to a company to enable it to hold back production. lt has been suggested during the debate that there is a surplus of oil on the world market. The request for a speedy passage for the . legislation may not be due, as was suggested, to a desire to enable further exploration and development. A company which will gain exclusive rights to an area under the legislation may want to see the legislation passed so that it can follow a practice of non-development, thus avoiding an increase in the world’s surplus of oil.
I regret the attitude that some honourable senators opposite have adopted in this debate. On the whole the debate has been a good one. I think that everyone has a knowledge of the importance of the legislation. I think everyone knows that thousands of millions of dollars may be involved in the arrangement. The reward is great as also is the desire of overseas and Australian monopoly interests to capture this industry. Yet some honourable senators opposite, I regret to say, are still prepared to follow a party line. Some honourable senators who have contributed to the debate have followed a certain line merely because they know that the other party is opposed to the legislation. That is a wrong principle. We should be given an opportunity to have a frank discussion with all sections that are interested in this question. It may be beyond our capabilities to study every ramification that may be involved in the question. Therefore we should delay the passage of the legislation for the purpose of seeking advice from the experts who can give it to us.
As I have said, from the legal opinions that have been given l ean only conclude what might be the legal interpretation. Most of the legal opinions to which I have referred in the debate come from eminent legal counsel. As these opinions differ on the actual implications of the legislation, should we enter into an agreement with the States, giving them 7% of the royalties while we retain 4%, if. as has been stated, we have exclusive rights to this benefit? The Commonwealth could distribute the proceeds of this benefit in the direction in which the need was most urgent. Should we allow the particular State in which a successful find occurs to become wealthier? I do not know whether we have power to: do that. No-one - not even the Attorney-General - knows whether we have that power, how much power we - have or where’ our jurisdiction extends. We are entering into an agreement to share the spoils from these discoveries possibly to the detriment of- the development of Australia. We do not know where we are going or what are our obligations or entitlements. I submit, with all respect, that that is the wrong approach and that the question should be invesigated before the Bill is passed, not after it is passed.
– The Senate is debating a number of Bills related’ to the search for petroleum in the submerged lands around Australia. The principal Bill is the Petroleum (Submerged Lands) Bill 1967. There are six associated Bills. The debate has been quite interesting today, but I think it reflects the fact that these Bills which were introduced into the Senate only 3 days a’go are so voluminous and of such great importance that it has been impossible for the honourable senators who have spoken in this debate - and I now add myself to the number - fully to understand all the clauses in the Bills.
This afternoon the Government has advanced a view on what should be proposed for the private enterprise development of and reasearch into oil in the submerged lands around Australia. The Opposition has posed the view that this development should take place on some socialised basis. 1 firmly believe that, for sound reasons and as some years have been spent in research, we should encourage private enterprise development of these resources.
– Should the Government monitor its activities?
– The honourable senator will have to ask that question later. I am not certain of the point that he is trying to make. There is a most important issue that we must face. The Opposition is putting forward the view that the exploitation of the petroleum resources in the submerged lands should be a national investment and a national development. But no Opposition senators have laid any basis for the development of the industry. They hope to attract the best brains in the world that know this industry, but’ in view of the great interest that is being shown in the exploration of offshore oil and natural gas resources throughout the world today, they have not been able to tell us how they could attract those people here. Honourable senators opposite paint a golden picture. They declare that everybody in Australia should in some way share in the wealth to be derived from this great asset which has been discovered. It is very interesting to note that over the years the Australian Lahor Party has never proposed that we should engage upon the investigation and drilling of these offshore areas. It is only now, after oil has been found in them, that they say: ‘Let us take this wealth from those who have it and spread it amongst the rest of us.’ This is old Socialist policy that we find in nearly every proposition that Labor advances in relation to a business.
This is a most important issue. I believe that the Bills before us will prove to be the most significant that we will deal with in relation to national development in the next 20 years. I am- concerned that we are called on to understand fully a Bill that consists of some 100 pages. From my reading of the Bill within the time that has been available to me, I certainly am not able to understand fully all its implications. I, together with some other honourable senators, see some possibility of a fault arising from this situation. I align my opinion with the view that it would be well for the Senate, in its role as a House of review, to take on the work of looking into this legislation and its application in future. I firmly believe that the legislation should be passed at this time and that if the occasion arises we should appoint a select committee of this House to study the operation of the legislation.
– Does the honourable senator agree with Senator Wright on this point?
– Yes, and I think that many honourable senators agree that this is an ideal subject to which the Senate could put its mind. As I have already mentioned, the development of this industry will be one of the most important developments that Australia will see. We live in a modern, changing world. I remember that in the late 1940s the development and use of brown coal in Victoria were regarded as one of the great things in years to come not only for that State but for the whole of Australia. That has happened, too. But some 20 years later we do not attach such importance to the use of brown coal for fuel purposes as we did in the 1940s. Oils and gases are valuable as fuels today but I predict that within 20 years their value as such will be far outstripped by the use, more economically, of atomic fuel. It is of national importance that we immediately put into effect legislation which not only gives prospecting companies the right to do their work, but also allows them to proceed in the knowledge that they are protected quite adequately by this legislation.
I pay a great tribute to the Minister for National Development (Mr Fairbairn) and to the various State Ministers for Mines who have entered into this Agreement. I should imagine that for years we have been looking for agreement on the matter of fuel. We have finally discovered it through this most important area of oil exploration.
Here we are not discussing the type of legislation with which we normally deal; we are purely validating an agreement which has already been made between the Prime Minister and the various State Premiers. I was most surprised to hear members of the Opposition say that the Labor Premiers were placed at a disadvantage and were not able to put forward their views. On this side of the chamber both the Premier of Tasmania and the Premier of South Australia are held in very high esteem and I do not believe for one moment that their views were given any less consideration than those of the other Premiers.
We are dealing, in effect, with three documents. The first is the Convention on the Continental Shelf, which forms the First Schedule to the principal Bill. The second is the Agreement Relating to the Exploration for and the Exploitation of Petroleum Resources and certain other Resources of the Continental Shelf. This is an Agreement made between the Prime Minister and the Premiers of the various States. The third is the legislation itself which consists of 100- odd pages and relates to the exploration for and the exploitation of petroleum resources. I have some questions to raise in connection with the wording of these documents. First I draw the attention of the Senate to the fact that the wording used in the Convention appears to cover something more than is covered by the Bill under discussion. Clause 4 of Article 2 of the Convention reads:
The natural resources referred to in these articles consist of the mineral and other non-living resources of the sea-bed and subsoil together with living organisms belonging to the sedentary species, that is to say, organisms which, at the harvestable stage, either are immobile, on or under the sea-bed or are unable to move except in constant physical contact with the sea-bed or the subsoil.
This would appear to extend beyond petroleum resources. The Agreement between the Prime Minister and the Premiers . relates to petroleum and ‘certain other resources’. The principal Bill before us states in the preamble:
And whereas the exploration for and the exploitation of the petroleum resources of submerged lands adjacent to the Australian coast would be encouraged by the adoption of legislative measures applying uniformly to the continental shelf and to the sea-bed and subsoil beneath territorial waters.
The point I make is that, as I understand it, the Bill, although it refers to ‘certain other resources’ in the title, in actual fact deals solely with petroleum resources. Perhaps when we are in committee the Minister will explain why, although the Agreement refers to much more than petroleum, the Bill relates only to petroleum and its by-products. In my view, this is significant, because we are facing an age when harvesting from the sea is going to be of the utmost importance .throughout the world. The continental shelf about which we are speaking is an area extending out from the coast of any particular land mass to a depth of 600 feet. It is interesting to note that this area represents approximately 5.5% of the world’s surface and some 20% of the total world land surface. It is in this submerged land on the continental shelf that petroleum bearing sands are most likely to exist. I believe that in the future we shall be ha;.vesting many things from this part of the sca bed. Only recently we have seen use being made of our beach sands to recover important minerals. It will not be long before exploration extends to the submerged sands and what discoveries will be made no-one can say. Perhaps the wording of the Agreement has some relation to that matter, but the Bill apparently takes no account of the harvesting qf the’ riches’ of the sea bed other than petroleum. For instance the sea bed may well become the most important source of fertiliser for the agricultural industry. I should like some information from the Minister as to whether the licences to be issued under this legislation will relate only to the search for petroleum or whether they will cover other resources that might be discovered in submerged waters.
– They, will cover petroleum as denned by the Bill.
– Then no doubt the Minister will be able to explain the words and certain other resources’ in the title of the Bill.
– It. will give us greater powers if we need to exercise them.
-^! submit that some weight is given to- my point when I mention that the exploration for petroleum resources in submerged land is one of the latest industries in the world. Whereas 10 years ago there were only five or six nations interested in drilling in submerged lands, today there are 75 nations promoting this work and there are twenty nations producing oil from submerged lands. The offshore industry has become a huge one. The first oil was produced from submerged lands as recently as 1947. So we are therefore dealing with one of the most modern industries in the world. Honourable senators will be interested to know that approximately 16% of the free world’s oil supplies is produced from submerged areas. Australia commenced work in this field only in the mid-1950s. My own State of Victoria issued its first exploration permit in 1959.
It can be said that the legislation now before us is unique. There is as yet no standard international legislation covering this type of exploration for either the Federal Government or the State governments to follow. I believe that an excellent job has been done in the drafting of this Bill. A very close study has been made of the practices and procedures covered by the United Kingdom legislation, the United States legislation and the Canadian legislation. But the base document as it relates to those other papers that I have mentioned is of great importance.
There are some aspects of the Bill which concern me. Of the 2,132,456 square miles of submerged lands that Australia controls, permits have already ‘been issued in respect of some 734,000 square miles. A little over one-third of the submerged land is already held by permit. I am pleased to say that Victoria has been most active in this field. 1 am pleased to say that following on the Barracouta and Marlin discoveries, the Petroleum (Barracouta and Marlin Fields Agreement) Act 1967 was passed. This enabled the granting of production licences covering these fields in terms very close to those which had been agreed between the Commonwealth and the States and it has been based on principles similar to those on which the legislation before the Senate is based. There are four production licences over the Victorian fields and these were granted on 1st April of this year. Since then contracts have been let for the construction of platforms at each field and the construction of pipelines to the shore from these platforms. Pipeline licences for the latter purpose were granted on 10th October of this year . under the terms of the Victorian Pipelines Submerged Land Act. Construction work has been undertaken at a large construction yard established at Barry’s Beach near Welshpool and the platform construction has now reached a very advanced stage. It is expected that placement of the Barracouta platform at its site on the Barracouta field will be commenced in early December.
All of the offshore work associated with the- Marlin and Barracouta fields is scheduled to be completed by early 1969. There is also the onshore work of construction of gas treatment plants and pipelines. A gas processing plant for the separation of liquids is to be constructed near Sale and the liquid, together with oil produced from the Marlin field, will be conveyed by pipeline to Long Island Point near Hastings where a fractionation plant and port are being established. Here the various fractions of the gas condensate liquids will be separated and stabilised crude oil will be produced for marketing. It is expected that some of the liquids will be exported. I pitt it to the Senate that my State of Victoria has been particularly active in this field since it has had the wisdom and the encouragement which has been given by this Federal Government to encourage some developers to go into that area. I believe that the Federal Government should congratulate itself on having taken action to bring about the search work that has been carried out by the. companies concerned.
I note that the Minister for National Development said quite recently that oil search subsidies now exceed $65m. All of this money has been allocated by this Government to encourage discovery of these oils and. gases. It has only been since 1957 that this work has been done. All of us should take, some pride in the fact that, the present Government has seen fit to bring about, probably, the most important increase in Australia’s strength that has been brought about by any measure which this Parliament has passed.
– The honourable senator does not believe that?
– A Senate inquiry could elicit that information from the people who are doing the work.
– I can see that the honourable senator is supporting Senator Wright’s move as well. I think that probably shows some wisdom on his part. I have some concern over some aspects of this Bill. Firstly, one could certainly congratulate the Minister for Supply (Senator Henty) on the second reading speech which he delivered. If I may say so, it was too long to be read in the Senate.
– It even exhausted me half way through.
– That is right. The honourable senator got half way through the second reading speech and broke down. However, it is certainly an excellent second reading speech of fifty-five pages. It contains much of the information which we need to follow the Bill. I have said that the Bill covers three areas - the Convention, the Agreement and the Bill itself. I have mentioned something of these other resources on which I hope the Minister will make some comment.
– If the honourable senator has the Bill he will find that on page 4 of the circulated copy reference is made to other resources such as hydrogen sulphide, nitrogen, helium and carbon dioxide.
– They are the only other resources?
– That is very pleasing to know. I can see that we will need legislation in the near future to cover the other operations that may be necessary in regard to the harvesting of the sea bed. In the short time that is available to me, I wish to put some points in relation to the Bill. Undoubtedly other senators would also like to put some points which time will prohibit them from putting. But some important aspects of this Bill have been dealt with by various speakers. One of the important aspects dealt with concerns clause 34 of the Bill which provides that the discovery of petroleum is to be notified. I imagine that, in their wisdom, the various Ministers and the Government have thought it fit to apply the penalty that is noted here. The Commonwealth has endeavoured to take an excellent piece of strength by saying: ‘We are not going to be controlled by some overseas company. If perhaps they tap various fields and find wells and decide to close them down, we will do something about it.’ Clause 34 (1.) reads:
Where petroleum is discovered in a permit area, the permittee - (a) shall forthwith inform the Designated Authority of the discovery;
I note here that the penalty for not doing this is $2,000. I would have a doubt whether that will mean anything to the individual who wishes to hide that knowledge from any authority. I note that in other areas of the Bill this particular wording does not occur. This particular clause just refers to a penalty of $2,000. But in certain other parts of the Bill the penalty is set out as $2,000 for every continuing day of the non-execution of the particular obligation, fibre, I would say it could be argued that no great wisdom is shown. As I see it, no continuing penalty is to be imposed on those who may have found the oil. This particular clause undoubtedly has been inserted because it is thought that someone may wish to hide what they have found. We find in clause 35 that directions by the designated authority on the discovery of petroleum must be made known. If a direction is flouted, this can cost $2,000. . This will mean very little to those who are spending millions of dollars, if they do not wish to follow the directions: It is not a continuing penalty. I believe that these are particularly important clauses. Let us compare them with clause 39 which relates to recovery of petroleum in an adjacent area. It provides:
A person shall not carry on operations for the recovery of petroleum in an adjacent area -
except under and in pursuance of a licence; or
except as otherwise provided by this Part. Penalty: Two thousand dollars for each day on which the offence occurs.
This is in line with one of the basic principles in the taxation and other fields. The penalty is not just a single’ amount. It is a continuing penalty and the amount builds up every day. The Minister might explain why the decision has been arrived at to apply a single penalty in the instances to which I have referred.
The discussions that have continued over several years in relation to this matter have finally brought about an agreement that reflects great credit upon this Federal Government. I believe that the interest that will be shown by overseas companies in coming to Australia to search for oil will fully justify the legislation. The Minister for National Development, in his pursuit of such an agreement over a number of years, has gained for himself great credit. One must have doubts about an agreement that can be varied only by agreement amongst six State governments and the Commonwealth Government. This is a matter of utmost importance. I have great pleasure in supporting the motion and I hope that the Senate will pass this legislation at the earliest opportunity.
– I do not share the pleasure that Senator Webster feels. I say in very clear terms that I support the amendment proposed by the Leader of the Opposition (Senator Murphy) in these words:
That all words after “That* be omitted with a view to inserting the following words in place thereof: ‘the Bill be referred to a Select Committee of the Senate . . .’
This is, of course, the obvious method and the only method by which, we can deal with this very important legislation. The argument that we have just heard from Senator Webster was undoubtedly political window dressing. One could almost form a mental picture of him digging around in the bottom paddock among the weevily wheat that he sells to mainland China, looking for oil and hoping that some company will come along and pay out huge sums of money for the mineral rights to the oil that he finds.
We see listed on the notice paper seven Bills, all of which deal with various aspects of the petroleum industry. It is significant that these Bills were introduced last Friday with the intention that this chamber should have only a few hours to debate this very important aspect of government policy. Why were they brought in in this way for this chamber to carry out what should be a full and searching examination of legislation that may have to last this country for 100 years? The Government brought them in at the last minute and hoped hat it could bulldoze them through so that they would become law overnight and the Government would fulfil its role. It is significant, of course, that this is not a new aspect of the Government’s methods iri producing legislation. It has a tendency every session to save controversial Bills until the end and to endeavour to conduct legislation by exhaustion instead of carrying out government as it ought to be carried out. On this occasion the Government was unfortunate. The Opposition would not go home and we are back here today’ to discuss this legislation and some other minor matters.
It is appropriate to examine some aspects of the oil and gas industry and the subsidiary chemical industry, not only so far as our own shores are concerned but also in relation to other countries. The gas, oil and subsidiary chemical industries in this country are comparatively infant industries. The first commercial’ gas’ and oil were discovered in the Roma area. The great finds associated with the Moonie field in particular are now history. It is equally significant that the early days of the successful oil search in Queensland were accompanied by all sorts of frustrations right from the time when oil was first being refined. Various refineries quibbled about the price that should be paid! The Commonwealth Government did not take any firm action. The Queensland Government took even less action. The next major find was at Barrow Island. This was followed by the Victorian offshore oil discoveries. In this country we heed great supplies’ of both gas and oil. Some oil is being piped but of the Barrow field. Moonie oil has for some years been piped to Brisbane. One might recall that some of the oil from Barrow Island was taken for refining to another country. This is recorded in debates that took place some months ago and are’ reported in Hansard.
T should like to give to. the Senate the official statistics in relation to the consumption of various types of oil products in Australia over the last few years. In 1950, which I take as the pilot year, our consumption of aviation gasoline was 34.6 million gallons. In 1965 this consumption had declined to 28.8 million gallons, because of the different types of aviation fuel being used. Consumption of motor spirit in 1950 amounted to 542.1 million gallons. In 1965 it was 1,705.4 . million gallons. Consumption of aviation turbine fuel, which was 0.2 million gallons in 1950, rose to 133.2 million gallons in 1965. In other words, consumption rose by 133 million gallons in those 15 years. The consumption of lighting kerosene, which was 35.3 million gallons in 1950, rose to 46.8 million gallons in 1965. Heating oil was not used in 1950; at least, there is no statistical record of its use. In 1965 we used 30.1 million gallons. Consumption of automotive distillate was 60.8 million gallons in 1950. In 1965 it had increased to 410.7 million gallons. Consumption of industrial diesel fuel rose from 184.7 million gallons in 1950 to 264.2 million gallons in 1965. Consumption of furnace oil was 251.4 million gallons in 1950. By 1965 it had risen to 1,073.3 million gallons. Consumption of other petroleum products rose from 114.9 million gallons in 1950 to 757-7 million gallons in 1965. Total consumption of all these items rose in the 15-year period from 1,224 million gallons to 4,450.2 million gallons. It will be seen that consumption really escalated during that period. If we look at the world picture we find that reserves of gas amount to 1,640,807,000 cubic feet. Gas reserves in North America amount to 332 million cubic feet. It is appropriate that I should give details of the known reserves in the Asian and Pacific area. The known reserves in Afghanistan are 2,400,000 cubic feet; Australia 5 million cubic feet; Brunei-Malaysia 500,000 cubic feet; Burma 150,000 cubic feet; India 756,000 cubic feet;. Indonesia 2,500,000 cubic feet; Japan 200,000 cubic feet; New Zealand 444,000 cubic feet; Pakistan 20,300,000 cubic feet; Taiwan 200,000 cubic feet. Known reserves in Western Europe are 88,582,000 cubic feet; the Middle East 215,600,000 cubic feet; Africa 157,625,600 cubic feet; Latin America and the Caribbean 64,550,000 cubic feet. If one cared to be facetious one could add a few thousand feet in respect of the gas we have heard escape from Government supporters here tonight.
The statistics for crude oil reserves also arc interesting. They highlight the fact that the search for other deposits of petroleum products must go on. Reserves of crude oil in the United States represent 9.8% of the world total; production represents 25.6%. Reserves of crude oil in Canada represent 2.1% of the world total; production represents 2.7%. In Latin America and the Caribbean reserves represent 7% of the world total and production 14.1%. These figures are interesting when compared with the figures relating to natural gas. Reserves of crude oil in Western Europe represent 0.5% of the world total; production represents 1.1%. Reserves in Africa represent 8.1% of the world total; production represents 8.2%. In the Middle East reserves of crude oil represent 60.8% of the world total; production represents 29.1%. In the Far East reserves represent 3% while production represents 2.2% of the world total. For the Soviet bloc and China the figures are 8.7% and 17% respectively. Those are interesting statistics and it is appropriate that they should be recorded in Hansard.
Government supporters have told us why they think it is appropriate that this legislation should be passed by the Senate, but it would appear that agreement was reached with the exploration companies before the Government brought down this legislation. Bearing in mind that a moment ago I said that I could not share Senator Webster’s pleasure over the legislation, it is appropriate that I should read part of the speech made by the Minister for Supply (Senator Henty) in introducing this legislation. He said: . . it is especially gratifying that the companies engaged in offshore operations have demonstrated their confidence in the successful outcome of these inter-governmental negotiations by engaging in a steadily expanding programme cif offshore exploration in advance of the passage through the several Parliaments of the legislation which is now being presented both to the Senate and to the Parliaments of the States, lt will be of interest to the Senate to know that since early 1964 when a meeting of State and Commonwealth Ministers, presided over by the late Sir William Spooner, agreed that a national solution for the problems of offshore oil exploration and exploitation was necessary, the companies engaged in offshore operations have spent of the order of $50m on offshore work. They have taken us on trust, relying on Australia’s reputation for stability and good faith.
That is rather hypocritical. The fact is that the Government has already entered into agreements with these companies. It is asking the Senate to apply a rubber stamp to the agreements which it has already made.
To support further my argument I propose to read from the correspondence between the Prime Minister (Mr Harold Holt) and Sir Henry Bolte, Premier of Victoria.
– Before the honourable senator does that, I point out that the basis was not an agreement. It was a public statement made in 1965.
– Let us call it a gentlemen’s agreement’. That is precisely what it is. I disagree with Senator Wright. It is my opinion and that of most Australians that an under-the-counter agreement was entered into between this Government and the oil companies. On 16th February 1967 the Prime Minister wrote to the Premier of Victoria in these terms:
Following the discussion we had regarding the disposal inter-State of natural gas from the discoveries of petroleum off the shore of Victoria, I believe we have come to the following understanding.
We are agreed that Victoria . should not be required to approve any transaction for the sale of natural gas inter-State which, would have the effect of putting Victoria at a disadvantage in relation to that inter-State purchaser, having regard to the following:
For your part, you agree that, subject to the conditions stated above being observed, Victoria will not withhold consent to any suchtransaction.
On the same date Sir Henry Bolte wrote to the Prime Minister in these terms:
Mr dear Prime Minister,
I am in receipt of your letter of 16 February 1967 regarding the disposal of natural gas from the discoveries of petroleum off the shore of Victoria, and agree with the understanding set out in your letter.
But that is not the last of the love letters between the Prime Minister and the Premier of Victoria, because on 21st February Sir Henry Bolte wrote to the Prime Minister in these terms:
I refer again to your letter of 16 February concerning inter-State sales of natural gas produced off-shore from Victoria and to my acceptance of what you outlined therein.
I want to assure you that I regard it as implicit in the agreement we reached on the subject that your Government will be fully informed of any negotiations which are entered into with the producers for sales to another State and that you will be acquainted of the details of any agreement arising therefrom before it is finalised.
Sir Henry did not sign the letter ‘Yours affectionately’ but ‘Yours sincerely’. On 23rd February, not to be outdone, the Prime Minister wrote to Sir Henry:
I am in receipt of your letter’ of 21 February about Natural Gas and I agree that what you say is implicit in the agreement we reached.It is, of, course, understood that the Commonwealth, when informed and acquainted of the matters you mention, will have full opportunity to discuss with you the terms of any proposed transaction.
I am attaching a copy of a statement which will be made by the Minister for National Development in the House setting out more fully the understanding reached between us. 1 will not bore the Senate with a recital of the statement made by the Minister for National Development (Mr Fairbairn). I submit that the letters which passed between the Prime Minister and the Premier of Victoria, which . 1 have quoted, together with that portion of the second reading speech to which I have referred, prove conclusively that there was a gentlemen’s agreement, ‘ if no other kind of agreement. This claim is supported by a couple of paragraphs in the annual report dated 31st December 1966 of the Australian Petroleum Exploration Association Limited. The report states:
We have the Prime Minister’s assurance (and there is none better) of an open door policy in the Federal Government, and of the strongest support and encouragement for the petroleum exploration industry. Our industry has established by practical negotiation an excellent accord with the various State Governments in discussing and developing modern petroleum laws and regulations.
Under the heading ‘Offshore Legislation’ this statement appears in the annual report:
At a recent meeting in Sydney between representatives of the Commonwealth and the States, proposals of the type which formed the basis of the arrangement between the Victorian and Common wealth Governmentsand Esso-BHP were ratified. It now remains to prepare legislation for a common code for all Stales and. both Territories. Without sighting the final draft it can be said the proposals are now more in line with industry views.
A few. minutes ago Senator Wright interjected to say that this did not take place. The report from which I have just read is for the year ended 31st December 1966. Today is 6th November 1967 and the Government is asking this Senate to apply the rubber stamp of approval to this legislation so that the Government may go ahead and sell out Australia’s natural assets to foreign companies. Much was said earlier this evening about the royalties that are paid. I heard Labor senators in particular being contradicted by Government senators on this matter. Britain and the United States of America exact royalties at the rate of 12i%. I heard someone say much earlier that the Arabs are demanding 50%. The member nations of the United Arab Republic exact royalties at the rate of 25%, and some of the governments of countries in the Persian Gulf region charge up to 60%.
Who owns the gas and oil fields and who owns the subsidiary industries? Because of the limitation of time, we can consider this point only briefly, Mr President. In the offshore drilling operations along the Victorian coast, the Broken Hill Pty Co. Ltd has a 50% interest and Esso Exploration Australia Incorporated has a 50% interest. But the story is not the same, in relation to most other exploration companies in Australia. Most are not owned by Australian capital, and any Australian interest that there may be is very limited. Some particulars are set out in black and white - or perhaps I should say in blue and white - in a report made by West Australian Petroleum Pty Ltd on the Barrow Island project for the year 1966-67. This pamphlet shows that the interest in the project is apportioned as follows: Ampol Exploration Ltd. one-seventh; California Asiatic Oil Co., two-sevenths; Shell Development (Australia) Pty Ltd, two-sevenths; and Texaco Overseas Petroleum Co., two-sevenths. Ampol Exploration Ltd, an Australian company, has only a one-seventh interest. The gas fields that we have found to date, with the exception of the southern ones off Victoria, which I mentioned a moment ago, are almost wholly controlled by overseas companies. The subsidiary chemical industry based on the natural gas finds in Queensland, in respect of which planning is now being undertaken for operations in a fairly large way, so far as one can judge from the indications at present, will be mostly overseas controlled, if not virtually completely overseas controlled, through the operating companies. Overall, the chemical industry has a foreign capital content of at least 55%.
I submit, Mr President, that this Government has been dictated to by foreign owned and controlled petroleum companies that have the power to make and break governments in this country or any other. I said at the outset of my contribution to this debate that the Government has encountered problems. It has been afraid that it might strike some obstacle with this legislation in the Senate, and therefore, in view of its controversial nature, it left it till almost last among the items of business that it wished to submit to this chamber in this sessional period. It has been bulldozed by the oil companies into proceeding with these measures. This sort of thing is happening in Queensland and other States, too, with respect to mineral sands. However, I speak with more local knowledge of what is happening in my State. The Queensland Government granted leases a long time ago for the mining of mineral sands, and it is now in a position in which it cannot repeal the legislation under which the leases were granted. It just has to allow the mining operations to go ahead. One of the areas that will suffer as a result of this situation is that known as the Coloured Sands, north of Noosa, on the Queensland coast. It appears that unless something drastic is done this very beautiful natural area will be destroyed in the interests of big business. How was this Government forced into its present situation? I make these accusations knowing full well what am saying. Was it forced into this position because the oil companies said that if it did not get this legislation through the Parliament before the termination of the current sessional period, the usual handsome donations from oil company funds to the funds of tha Liberal Party of Australia would be reduced? Was it offered some sort of an incentive by an assurance that if these measures went through during this sessional period, additional assistance would be given to the Liberal Party?
I was surprised at the attitude of the Australian Democratic Labor Party to this legislation. It is supposed always to be barracking for the little man, but during this sessional period and, indeed, during every other since it first gained representation in this chamber, its representatives have shown that they are prepared to support big business all the way, just as the members of the Liberal Party are prepared to do.
– We shall not walk out as the honourable senator did.
– I am not interested in the puerile interjections of the honourable senator. I thought that the Australian Country Party might have adopted a better attitude to these Bills, but, as Senator Webster has indicated, it is in the pie, too. What surprised me most of all, however, was Senator Wright’s attitude to this legislation. Normally, he takes a fairly calm look at measures that are before us and dissects them fairly. Today, however, though he apparently has some sympathy with the Opposition in its decision to propose an amendment, seeking the appointment of a select committee to investigate properly the issues involved - as I said earlier, if these Bills are passed, they may be the law of the land for 100 years to come - he adopted the attitude that we must give everything we have to the oil companies now, and after having done that we might appoint a committee to consider the issues. What good would a committee be afterwards? Action then will be too late. It will merely amount to putting up the rail after the horse has bolted out of the yard. I suggest that what Senator Wright will probably have to battle for later will be a royal commission to inquire into the activities of his friends in the Government in order to see whether they have frittered away the national resources of this country. If this is to be the attitude of Government senators, they deserve to fall flat on their faces for it. The assets along our coastline that the Government is giving away can never be recovered once they are gone. Honourable senators opposite are selling out the heritage of our children and our grandchildren, but they do not care. Finally, I say that they are doing this because they have been bought out by the oil companies. Indeed, they have no option but to do it in the situation in which the Government finds itself. However, I warn the Government that if it does not do something about the oil companies, they will break it as they have broken other governments throughout the world. . .
Senator COTTON (New South Wales) 110.211 - Mr President, tonight we are considering the Petroleum (Submerged Lands) Bill, and six associated Bills, and we have before us an amendment to the motion for the second reading which has been proposed on behalf of the Opposition by the Leader of the Opposition (Senator Murphy). With some notable exceptions, not the least of which has been the farrago of nonsense that we have just heard from Senator Keeffe, the contributions to this debate have been rewarding to listen to. I have heard most of this debate and I have enjoyed it. I think we all are agreed that - the subject with which these measures are concerned is extremely complex and, equally, a matter of much concern and one in which considerable care needs to be taken. I would like to consider some of the principles that are involved in these measures. I> do not wish to become over-involved in the law that applies. My own view, is that if I were forced to choose between the legal opinions of Senator Murphy and Senator Cohen on the one hand and on. the other those of Senator Wright and the -Solicitors-General of the Commonwealth and the States in association, I would opt for the opinions of the latter.
I believe that we are perfectly correct to take time to debate the issues that arise in the consideration of these measures and to consider what is happening. But certain points might well be made in this debate in the interests of the ‘ Australian people and, perhaps, in the interest of general lucidity. First, somebody might ‘ well ‘ give credit to the Federal Government for the very vigorous search . and find policy that has been adopted- over the. years. This policy has been promoted by an enterprise government, npt by a Socialist government, and I say. just, in passing, that. ii. would have been pleasant to hear some acknowledgment of this, from honourable senators on the opposite side of the chamber. So I suggest that perhaps, the first thing that we are looking for in this whole operation is the finding of oil. The first task is to , set out to find it. This Government has made the finding of it possible by encouraging people to look for it and ‘by making every endeavour to that, end worthwhile.
The next thing that I rather like about the current developments in oil exploration is that. once again we are. seeing a sensible pattern in the management of Australian resources , in our Federal, system. It is all very well for members of the Opposition to complain about the State Governments, to criticise them and, in some instances, perhaps, to condemn them. But we are all Australians in a Federal system. Certain powers are vested in the State Governments and certain powers are vested in the Commonwealth Government. I suggest that the sensible way for us to behave is to work together as a series of governments using all our combined resources in the interests of the Australian people. This is what they want. They are not at all interested in these nice arguments about whether Victoria is giving somebody a fair go or whether the Commonwealth is being a little hard. What really matters is whether the Australian people, using their combined operative powers, can discover oil. This joint approach in the discovery and management of an important national resource in the Federal system is in my view one of the most rewarding things about this legislation. There is here the joint work of the Commonwealth Government, the State governments and, as we have been reminded, industry itself. The legislation has been looked at critically and the whole problem has been examined since 1964 by the Commonwealth, the States and industry. There is unanimity. That is extremely unlikely in this kind of operation. If all the people involved, with their separate rights and interests, reach a point of conclusion and unanimity, one does not lightly disregard it. That is my next point. Having found oil the second thing is to learn how to manage it.
Having done those two things, we then look to discover our reserves. In this process what do we do? We know very little ourselves. Do we go through the long process over the years of trying to learn from a very small beginning, or do we use people who have skill and know-how? We have done the latter. In this way we acquire knowledge of our reserves much more quickly. But we also acquire skills because our people work with those who know. We make technical improvements because we learn equipment methods and better equipment techniques. That is part of the general Australian resource of knowhow that we acquire from other people who have acquired it previously. We learn to drill at greater depths so that we extend our capacity to discover oil and reserves. We learn how to handle equipment and to provide the necessary technical facilities for oil discovery and management. That is the third point about this. Having gone through the first two stages, we look to discover our reserves and, in the process, acquire a set of new skills. That is extremely valuable for a country like Australia which has a lot to do in a short time.
Then we come to the stage with which we are all concerned - the protection of the interests of the Australian people. As I have suggested, this matter has gone through some fairly fine screens already in tha investigations conducted by the Commonwealth Government, the State governments and industry. So this matter has not been passed over lightly. Offshore rights which have been conferred on all countries by the Geneva Convention should be used, not for argument but for the discovery of our resources. That is what they have been used for by this enterprise Government. Let us remember also that there is a world oil surplus so that it would be technically sensible and strategically wise for us to transfer to Australia, if we possibly could, people with know-how, skill and equipment to teach us how to discover our reserves. In a situation of a world oil surplus these people need to be persuaded. They do not have to come here. They could go somewhere else. After all, we are fairly late into this kind of operation.
I am not sure whether it was Senator Cohen or Senator Murphy who made the rather fascinating comment that we should, own all these resources ourselves and develop them completely on our own; that this should be our job and that we should find the money ourselves. Senator McManus pointed out the folly of that. If that is what Opposition senators believe, why did wa have the interesting spectacle last week of their opposition to the formation of tha Australian Resources Development Bank which is designed to acquire resources to make it possible for the Australian people to do the very things that they want done? The point has been well made that defence and economic security are matters which should not be passed over lightly. The discovery of oil, the proving of our reserves, our learning how to manage them and to sell our products are matters of immense importance to this country and its people.
We have heard complaints from Opposition senators about Victoria’s attitude. This mystifies me: Why do people complain about some Australian States? Why complain about Victoria? 1 should have thought that Victoria was part of Australia and the people of Victoria were Australians and we could count upon them to work in the best interests of Australia. It does not matter much whether they work a little better for themselves; in the end the Australian people are the beneficiaries. The future is bright with promise. A tremendous amount of money may be involved but that is all speculation. It is something like watching a horse race and not being quite sure which horse will win and what the price will be. One cannot be sure. On paper, a tremendous amount of money is involved in our oil reserves. If that is the case, and we hope that it is, the Australian Government will benefit greatly. We are told that the Australian Government, by way of tax and royalty, will receive 511% of the profit. Questions have been asked about the accuracy of that percentage and I would be very happy to have further information on it because I have been told that, by world standards, it is an extremely high percentage. Comparisons have been made with the Middle East. That is a little misleading. The producers there do not pay tax on their profits. In addition, there is huge field, tremendous production and low costs. That makes a difference.
In the other place suggestions were made that permit holders should spend, 1 think, $lm every 6 years on each 25 square miles permit area. This would cost permit holders $22,000m. That is going into the area of the ridiculous. I suggest that some of this debate has moved into that area. It is ridiculous to suggest that people should pay $22,000m for their permits. That is something like four or five times the annual Australian Budget. The point could be made about how valuable the discovery is and what it means to us. With the seven offshore drilling rigs now operating at a cost of $20,000 a day, by January 1968 the companies concerned will be spending $35m a year on that one feature on a 250-day year basis. That is not a minor expenditure to be undertaken lightly. It is being expended to discover Australia’s oil reserves.
We are not unique. We are not the only country in the world which has oil or the prospects of oil. In a situation of a world oil surplus the explorers for oil are not obliged to come here. They do not love us that much. They are actuated by motives designed to advance their own case. Who would deny that? I think one company, Shell, has put down a number of oil-dry offshore holes. How much is that costing? They could go somewhere else with perhaps better prospects. Borneo is a notable case. Many countries are hoping to get oil drilling rigs to explore their offshore reserves. We have some advantages. We have been nimble in getting our reserves explored and developed. I think we have been very sensible to provide the Federal incentives which have been given. We have some attractions for the oil companies. We have a big market in Australia - a closed market in our own hands from the point of view of development. Always ‘bear in mind that one of the great controls we have against exploitation is the fact that this is our market and we are the people who dictate it. All these things have been developed by an enterprise system, not by a. Socialist system. This is the kind of thing we need to do if we want to develop our country in a short span of time.
I can understand the motives which actuate certain honourable senators opposite who talk about what they would like to see happen under Socialism. This kind of thing happens very rarely and it happens mainly because of the enterprise and sheer drive of human endeavour.
The legislation as it stands has those four facets. Firstly, there is the task of finding Australian oil, using new methods and the limits they set. Secondly, we must learn how to manage those discoveries in a Federal system, with divided responsibilities and authorities, but an overall Australian interest. Thirdly, we must prove our reserves and their limits and capacity; and fourthly, we must endeavour, as we are trying to do, to protect these reserves in the interest’s of the Australian public. Once again I suggest that this joint management in federation is extremely important, that it is not to be lightly passed over, that the unanimity so achieved has been achieved only by very great soul searching and very careful scrutiny. Honourable senators may be sure of that. So I would be very reluctant to sweep aside people who have much greater skill in all the facets of this legislation than I would ever hope to possess and who have been occupied with it for 3 years. 1 would not take the view that I knew more than these people. This is a part of joint legislation designed to protect the situation. I am disposed to accept it and the bona fides of those who bring it forward. I believe that it is a sensible way to behave. I support the Bill and honourable senators may be quite sure that I oppose the amendment moved on behalf of the Labor Party by Senator Murphy.
– 1 support the amendment moved by Senator Murphy. I begin by saying that the main parts of the Bill cover more than 100 pages. The Senate has been given to understand that the Government, with the help of its best legal and departmental officials, has been preparing this legislation for the last 3i years. The Senate is now expected in 16 hours - I want to stress this - to give its blessing to the legislation and to inform the people of Australia that in the 16 hours their interests have been adequately’ protected and their future has been secured by this type of consideration. I think that this is a point that the Senate cannot afford to ignore. It is because of this that I feel very strongly that the amendment moved by Senator Murphy has great validity. We on this side of the chamber are just not willy-nilly against this type of legislation. 1 cannot see any reason why it had to be the subject of an exercise oh Socialism by three Government supporters. I refer to Senator Cormack, Senator Scott and, surprisingly, Senator Cotton. There is nothing in the 100 pages of the Bill which mentions Socialism. I can see no reason why we should be side tracked into this exercise. Perhaps I should commend Senator Cormack in particular and, perhaps to a lesser degree, Senator Scott for their healthy interest in Socialism, but I submit that in confining their remarks almost exclusively to this point they were really ignoring the provisions of the Bill and were not doing justice to the submissions that they have made to the Senate.
I am prepared to say that whatever thoughts we might have on this subject, whether we are in agreement with the legislation as a whole or whether we oppose it, only a very bold or a very stupid man would be prepared to say that we could walk out of the Senate tomorrow, after a vote has been taken which will put into effect legislation which will have such a far-reaching effect on the future of this country, and say that we are satisfied that we have adequately protected the interests of the people of Australia. If honourable senators on the Government side feel that they can do that, that is their responsibility, but I am prepared to say as an individual - in doing so I think I can speak for every honourable senator on this side of the chamber - that we are not prepared to say at some time tomorrow when we conclude our deliberations on this Bill that we are satisfied that the best has been done for the people of Australia. There is no doubt in my mind about that.
I have listened very attentively to the debate today. I have heard most of it. I have not been able to stay in the chamber all day, but I have been here for most of it and I have been very interested in many of the contributions that have been made. 1 was interested, as I always am, in the contribution made by Senator Wright. Whether one agrees or disagrees with Senator Wright - and I disagree violently with him at times - one can always be sure that whatever contribution he makes to the Senate is a thoughtful one. As distant from the contributions made by some Government supporters, in Senator Wright’s contribution to the debate was an underlying note of disquiet. He felt that the time available to us to discuss the Bill was not sufficient. He gave the Senate very good seasons why we should not be hurried in dealing with this type of legislation. But then in the concluding stages of his address, after he had informed the Senate that he could not support the amendment moved by Senator Murphy, he again made clear his disquiet by foreshadowing an amendment to the effect that after the Bill had been passed a select committee of the Senate should be appointed for the purpose of examining its implications and possible imperfections. In no sense of hostility I suggest to the honourable senator that this action would be analogous to saying that we can open the stable door and catch the horse later. But that will not be very much help if there are serious weaknesses and imperfections in this legislation.
Without suggesting to the Senate that I have any legal knowledge, I should say that great problems will arise if these imperfections do manifest themselves. I shall be very surprised if some major imperfections do not manifest themselves very soon after legislation has been passed. I would be interested to find out just what steps a select committee could take at that time to correct any situation that had arisen. This is an important consideration. What we have to face up to is that once we have made our decision - it seems that we will make it tomorrow - there is little we can do to unscramble the egg after the legislation has been passed. Senator Cormack, in his contribution which to me seemed to be a mixture of very deep consideration of the Bill and, to, a certain extent, irresponsibility, suggested that the advancement of argument against the measure by the Opposition represented a Socialist opposition to the Bill. If one agreed with the amendment moved by Senator Murphy it was implied in some way that’ one was agreeing with Socialist principles. Was Senator Cormack suggesting that a Senate select committee, which would have its share of Government supporters, would go Socialist or that those honourable senators would adopt Socialist principles? This type of nonsense, I feel, does not do credit to Senator Cormack who, with the ability that he possesses, could do better in these debates. The same may be said of Senator Scott who said virtually the same as Senator Cormack.
While we are on this question of Socialist implications, I want to point out to the Senate that members of the Liberal Party in another place took the very opposite view to the one Government supporters in this chamber have taken on this matter. I refer to remarks made by the Honourable member for Mackellar (Mr Wentworth) who said:
Like Opposition members, I regret that there has not been more time to study these bills. It has not been possible to grasp their details in the time available. It to true that the general outlines, though not the details, were known some time ago. Until we had the measures in our hands, we could not turn our minds to the real situation. Another fact that I regret is that I cannot support these Bills.
So it is useless for Government supporters in the Senate to try to create the impression that it is only members of the Labor Party who are expressing disquiet at the fact that we have to make a decision on such a momentous matter in such a short period. It is useless to suggest that we are the only ones to advance this contention. I understand that the honourable member for Mackellar has taken a very deep interest in Australia’s oil reserves and that he by no means agrees with his colleagues in the case that they have presented to the Senate this evening. When dealing with the matter in Committee in another place he expressed his concern by saying:
I am worried about this Bill. I do not think that in its present form with its present framework it does justice to our natural resources. I do not think it is designed to give us the maximum results. Now it is virtually out of the hands of this House, unless the Senate sees fit to amend it.
It is obvious that the Senate will not amend it, and that the Government will not be concerned to any degree with the remarks made by the honourable member for Mackellar and to an extent echoed by Senator Wright. I think that Senator Wright when he made his contribution got to the heart of this question and virtually put the case for the Government. But he put it with a certain degree of reservation because he himself could see some of the implications that have been described by the honourable member for Mackellar. I do not think that I am doing him an injustice when I say he must have grave reservations. This is to be inferred from the amendment that he has foreshadowed. .
Senator Cormack had something to say about South Australia and Queensland. He was dealing with the legal position of the States. This question, in itself, opens up a grave cause for disquiet in respect of the passing of the Bill. According to Senator Cormack, Queensland contends that it has jurisdiction over oil rights off its coast but that has not yet been tested. He went on to refer to the position of the gulfs ‘ in South Australia and said that as inland waters they were fully under South Australian jurisdiction. I do not know exactly what the honourable senator was trying to prove in making these points.
– All inland waters are under State jurisdiction.
– I am not altogether sure that they are.
– Inland waters are not synonymous with territorial waters.
– I know, but that has not always been stated by legal authorities and it has not always been determined by legal authorities. Later in my address I shall refer to a statement which was made by Sir Garfield Barwick and which deals very importantly with the matters raised by Senator McManus regarding the position of the States.
– These were stated at the 1958 Convention.
– Yes, that is right. The point I make is that it has been stressed time and time again in this debate that, with the Commonwealth and the States reaching an agreement, such a favourable climate has been created but this overshadows every other consideration and covers every imperfection in this Bill. I want to cast grave doubts on whether this is a good thing. The fact that the States may be happy with the situation today does not mean that they will be satisfied with the situation tomorrow. Some considerable time ago the States thought that they would do extremely well out of the system of uniform taxation. Today they are having second thoughts on this matter. I suggest to those honourable senators opposite who have based their case almost exclusively on the fact that the States and the Commonwealth are in complete agreement on this matter at this point of time that this is a very shaky foundation for saying that this constitutes the major reason why the . Senate should pass the legislation. I am not saying that this is basically the case of the Government, but some honourable senators opposite have made it the basic plank in their submissions:
– It is important.
– It is important, but it is not so important that it overshadows all other considerations. This is the point that I make. I want to return now to the speech made by the honourable member for Mackellar because I think this is the most important question. He made what I consider is one of the key points in the debate. He said:
It is said that this legislation gets rid of legal difficulties. That may be so; but it may not be. I have heard eminent legal opinion in the last few hours to the effect that if this legislation is missed, eventually there will be challenges in the High Court on various aspects of it. 1 am not going to try to canvass the validity o£ .that opinion; all I. say is that it has been confidentially expressed, lt may or may not be correct.
These are matters towards which, we ought to be bending our thoughts. This question of legal consideration is dismissed so lightly simply because at one point of time the States agreed to concede certain rights in respect of oil exploration off their coasts. Legislation of a somewhat. similar character was enacted in the United States of America. Today there are hundreds of millions of dollars tied up in litigation between the Federal and State authorities in that country.
– The point that the Minister made is that the United States had not passed any legislation -similar to this.
– 1 am. sorry, but I understood that there had been agreement of a somewhat similar character between the various States of the United States and the Federal authority.
– I think the position was that after the Californian case the Federal authority for some reason or other enacted legislation passing the control of territorial waters back to the States.
– 1 did not know that. I understood that, originally at’ least, there had been agreement between the Federal authority and the States. We will leave that question in abeyance for the time being. I want to come back to Senator McManus’s remarks regarding the position of the Labor Premiers because 1 think certain misleading statements have been made. I. want to put before the - Senate what. I think is the position as it applies to South, Aust talia. Whilst I am relying to a large extent on my memory,- I think that I am’ noi far wrong.
The position as I understand it is that the South Australian Government did not agree without reservation’s to’ the terms of this Bill. I believe that when negotiations first commenced the then Attorney-General, Sir Garfield Barwick, expressed the view that the whole of the submerged lands belongs to the Commonwealth and that he quoted international legal precedents in support of this view. Because of the doubt created, the threat by the Commonwealth to assume ownership of the 3-mile limit as well as the 12-mile continental shelf and the fact that no oil company was prepared to start drilling operations until clear title was established - and these are important points - the South Australian Government felt it had no alternative but to submit to the Commonwealth’s pressure. At the same time the States agreed among themselves that no one of them would enter into agreement with the Commonwealth and the oil companies without prior consultation with the rest. All States, I believe, agreed that the particular system of compelling successful drillers to give up to, four-ninths of proven leases to public tender would be insisted on. Never at any stage was the South Australian Government willing to abandon the graticular rights in exchange for the additional 1% royalty. Indeed the South Australian Government was of the opinion - and still is - that the royalties should have been much higher in respect of oil and gas and that better safeguards should have been insisted on for the protection of consumers.
This position was nullified - and this is the important point - by the agreement entered into between Sir Henry Bolte, Mr Holt and BHP-Esso. Without warning or any advice as to their secret conference, they issued a public statement - this was the one to which reference was made earlier in this chamber - declaring that a firm undertaking in the terms of the present Act had been entered into. So South Australia and the other four States found themselves confronted with a fait accompli. There is no question of this. To suggest, as has been suggested in the Senate tonight, that the States willingly entered into the terms of this Agreement is not to state the true position or to give the Senate the facts. The States were faced with a fait accompli which had been produced as a result of discussions that had been entered into, without their knowledge, between one State and the Prime Minister.
– The honourable senator referred to a view given by Sir Garfield Barwick. He did not say when Sir Garfield Barwick expressed that view or give the source of the quotation. I am very interested In it.
– I said he expressed this view when he was Attorney-General for the Commonwealth. I am sorry that I cannot give the honourable senator the exact date, but I can assure him that Sir Garfield Barwick did make this statement. As I said, the South Australian Government and the other four States found themselves confronted with this fait accompli. I feel it is important that the Senate should understand the full implications of this matter. We should not accept, as it has been suggested we should, the proposal that, because an agreement has been reached between the six States and the Commonwealth with respect to offshore drilling for oil, that Agreement represents what the States wanted or indeed what they were entitled to. This is the important thing that we should direct our thoughts to this evening. In fact, no company was willing to commence drilling in the South Australian portion of the continental shelf until it obtained the same terms and title conditions as were agreed to between the State of Victoria and the Federal Government.
I again appeal to the Senate to support the amendment moved by Senator Murphy. As I said earlier this is not an exercise in Socialism. It is a matter that ought to receive much deeper consideration than the approximately 16 hours which this Senate can give it. I share the disquiet that has been expressed by Senator Wright. I also share the concern that was expressed in another place by the honourable member for Mackellar (Mr Wentworth) who agreed very little if at all with the submissions made by the Government. If the honourable member for Mackellar is right, then it means that the Government is wrong.
– He must be wrong.
– The honourable senator can tell him that. His views are recorded in Hansard. Earlier I referred to the United States of America. Senator Bishop has been good enough to hand me a Hansard containing a report of the debate in another place. In it appears this statement by the Attorney-General (Mr Bowen):
In the United States of America the Federal Government was held by the Supreme Court to have full and paramount authority over both tho outer continental shelf - by which I mean the continental shelf( beyond territorial waters - and over the territorial sea bed.
– Read on.
– It goes on:
In actual fact the United States Federal Government, acting under an express constitutional power to dispose of territory or property of the United States, subsequently transferred to the several sea board States its rights in the territorial sea bed.
But that does not alter the truth of my statement that a result of the original agreement which existed between the Federal authority in the United States and the various States there is still pending legal action in which sums amounting to millions of dollars are involved. If when the Senate concludes its deliberations tomorrow night, honourable senators can leave comfortable in the belief that by passing this Bill the Senate has protected the interests of the people of Australia, then they are easily satisfied.
– I support the seven Bills and oppose the amendment moved by the Leader of the Opposition (Senator Murphy). The seven Bills seek to ratify an Agreement between seven Governments. An agreement between seven governments is a remarkable achievement. It is something unique. It is something hard to come by. I understand it represents the results of over 3 years work, and it is a very wise decision. It is similar to the decision taken to federate. It is thinking on a national level. I think that the attitude taken by the Oppositon today is merely an attempt to stall for time. Two Labor Premiers support the Agreement despite pressure last weekend-
– Order! In conformity with the sessional order relating to the Senate, I formally put the question:
That the Senate do now adjourn.
Question resolved in the negative.
– If these agreements are not ratified, there can be chaos, each State going its own way.
I ask for leave to continue my remarks later.
Leave granted; debate adjourned.
Motion (by Senator. Gorton) agreed to:
That the Senate, at its rising, . adjourn till tomorrow at 10.30’ a.m.
Motion (by Senator Gorton) proposed:
That the Senate do now adjourn.
– If the Senate would be good enough to grant me its indulgence, I would like to refer for a few minutes to a matter of some considerable public interest. We have been dealing all day today with a matter df very great public interest, but this is in a quite different category altogether. 1 should like to take a few minutes to enable the records of the Senate to carry an appreciation of a report which was tabled in the Senate last week. I refer to the report of a committee called the Committee on Social Patterns which is a sub-committee of the Commonwealth Immigration Advisory Council. Honourable senators will remember that this report dealt with the departure movement of migrants. Because I am privileged to be associated with the Commonwealth Immigration Advisory Council as its chairman I should like to say’ one or two things about it and the report.
The Commonwealth Immigration Advisory Council is one of three councils supporting the Department of immigration. The other two are the Planning Council and the Publicity Council. The Advisory Council and the. Planning Council, are comprised of representatives of various bodies and have a. member of Parliament as Chairman. I think this is the first occasion in its very many years of existence that the Advisory Council has had a senator as its chairman. These councils, the Advisory Council in particular, deal with matters referred to them by the Minister. Because Of its representative value of some twenty-five or so people, the Advisory Council brings before the Minister a good deal of sound opinion reflecting community views and practical reactions. At its meeting early last year, the Council raised with the then Minister, Mr Opperman, this question of departing migrants. The Minister requested the Council to undertake an inquiry. He asked it to investigate and report upon the departure of settlers from Australia and to take into consideration a number of aspects. These included the rate of departure, the pattern of departure movement, the causes of return migration and applications for second assisted passengers. He also asked the Council to suggest any measures which might be taken to remove or relieve the situation revealed by the inquiry as contributing to the departure of settlers. So this subcommittee of the Advisory Council which is known as the Committee on Social Patterns, set to work. There were about twelve members in all on this Committee, with some officers of the Department. It had also three consultants. They were Dr R. T. Appleyard, then of the Department of Demography at the Australian National University, but now of the University of Western Australia, Dr C. A. Price, also of the Australian National University, and Dr Richardson, of the Department of Psychology in the University of Western Australia.
Last year, a progress report was presented, and the final report was tabled in the Senate the other day. That final report has been circulated, lt has been read and there has been Press comment on it and there is no need for me to recount its contents. But in a moment or so 1 would like to say two things about the report. Firstly, it is the product of a detailed survey - a survey that has been extensive and widespread. In the course of its inquiry the Committee carried out shipboard surveys and surveys at hostels; it examined departmental case records and it had discussions with the Good Neighbour Movement. Most important of all, it held consultations with the community throughout the several States. In those consultations many migrant people themselves were involved and therefore they brought a practical and realistic approach to the question. On page 43 of the report reasons are listed for the departure. I think it could be accurately said in summing up that the report reveals that many migrant departures stem from no one particular cause. A particular situation might dictate the actual move but behind it there are a series of causes. They may be of what are described as a phsycosocial nature. Indeed, some 58% of departures are related to one of the factors under this heading. Many also move because of what is called a ‘transientsituational’ cause. Another cause is of a domestic nature. Of course, there are the people who have a condition of indecision and have an inability to settle permanently. But in the main the causes for departure seem to be emotional rather than economic and the report sets them out in detail.
The other matter to note in this report concerns the conclusions and recommendations. The Minister for Immigration has said that he will carefully study the conclusions and recommendations, maybe with a view to implementing them where possible and where desirable. Because of the nature of the reasons related to departing migrants, a case cannot be made out for a simple straightout solution or copybook plan to stop people from leaving the country. Rather, I suggest that it is a case of ‘next steps’. After all, Australia has had an immigration programme of some size for very many years and we have in our community today a great number of very welcome settlers. Every one of these people is different and has a different outlook and a different background. If I can put this, as the Minister has, in a statistical context, 84% of migrants settle permanently. I think this can be regarded as a good record. But this does not necessarily absolve the Government and the community from giving this matter its continuing study. Those senators who have read the report may recall that it lays emphasis on such things as recognition of professional and trade qualifications. It makes some suggestions that perhaps there may be some better housing terms for settlers or some extension of information services and advisory services prior to their departure. I think one of the most interesting references relates to the significance of what the document called the ‘new world wide mobility’. All of these and other matters may depend on Government leads. But they are linked with a wide range of causes and matters in which the community is involved at a voluntary and a personal level because the problems in this regard are essentially human ones. Steps towards the removal of these problems are bound up with whatI think could be accurately described as the ‘Australian outlook’, the ‘Australian personality’ and the ‘Australian expression of human relations’. If we as Australian people are concerned with the importance of immigration, and if we are to help in regard to this problem and make a success of immigration then I suggest to the Senate that a study of this report will be of the greatest interest and assistance. I commend the report to which I have referred and express in the Senate appreciation to the Committee of Social Patterns of which Mr Justice Dovey is the Chairman, to the consultants who took part, and to the officers of the Department of Immigration.
Question resolved in the affirmative.
Senate adjourned at 11.8 p.m.
Cite as: Australia, Senate, Debates, 6 November 1967, viewed 22 October 2017, <http://historichansard.net/senate/1967/19671106_senate_26_s36/>.