26th Parliament · 2nd Session
The PRESIDENT (Senator the Mon. Sir Alister McMullin) took the chair at 3 p.m., and read prayers.
– I direct my question to the Leader of the Government in the Senate, lt arises out of the debate yesterday on the detention of young Townsend, and 1 feel that the Senate has some sympathy for the Labor case. Would it be possible for the Government to examine the general laws regarding detention in the Army? In my view it is probably just as important that the ordinary civilian soldier, if I may call him that-
– Order! The honourable senator must ask his question.
– It is probably just as important that the ordinary soldier be given protection from the sort of treatment that Townsend received, and I think we should have a bit of humanity spread throughout the Army.
– Order! The honourable senator may only ask a question.
– Yesterday at question time, as distinct from the debate on the motion for the adjournment of the Senate, it was made clear that the matter had been referred by the Minister for the Army to the Military Board. I understood and accepted that to mean that this question would be referred to the Military Board and that it would incorporate any circumstances relating to the person concerned.
– Can the Minister for Supply advise what progress has been made with the investigations into the use of the laser beam as a navigation aid for shipping and aviation?
- Senator Heatley indicated to me that he proposed to ask this question. As it deals with a rather technical matter I have had some notes prepared and, since they are informative, with the concurrence of the Senate I should like to give the information to honourable sena tors using my notes when 1 feel disposed to do so. First of all, a laser beam needs some explanation, lt is a ray of light. If I may give an interesting description of it that has been given to me by the Department, it is that around us we have ordinary incoherent light; in contrast, a laser beam of light is coherent. The ideal way to compare ordinary light with laser tight is to compare a crowd of people emerging from a football match through one gate - they are of all shapes and sizes, as honourable senators will agree - scattered, and in no set order as they come out of the gate, and a platoon of soldiers marching in step in a straight line, who are orderly and in a precise formation. This gives an idea of the difference in the beams. When lasers are focused, different kinds of communication processes are possible with them.
Exploratory research work has been under way for about 5 years in our development laboratories on the properties and use of the various types of lasers. Although aid to navigation has not been a specific object of this work, some of the tests undertaken suggest that particular applications of lasers could be developed for that purpose. The tests I have in mind, which strictly are concerned more with surveying than with navigation, are three in number. Firstly, tests have been carried out using vertical beams, as a surveyor’s pole. Secondly, work is proceeding to assess the effectiveness of using photo-electric cells for detection of vertical laser beams. The beams can be difficult to locate with the naked eye. Thirdly, work is proceeding in collaboration with the Department of National Development on the development of an air-borne laser terrain profiler. This device is intended to be fitted to an aircraft to provide vertical recording of the profile of the land being traversed. This is achieved by using a vertical laser beam reflected from the ground surface. To sum up quickly: The three tests T have described are appropriate to illustrate my understanding that it seems probable that particular applications of lasers will be developed in future to provide aids to both surveyors and navigators.
– I direct a question to the Leader of the Government in the Senate. I refer to questions asked in the
Senate yesterday concerning the. treatment of Simon Townsend at Holsworthy and to answers given to them by the Minister representing the Minister for the Army and by the Leader himself. I ask the Leader: Was he or the Minister representing the Minister for the Army aware that prior to these answers being given in the Senate the Minister for the Army had himself stated in the other place that the Military Board had already discontinued half-hourly checks of prisoners? If either he or the Minister representing the Minister for the Army was aware of this fact, why was the Senate not informed so that members of this chamber might share the information with their colleagues in another place and with the listening public? If he and the other Minister were not aware of this fact, will he take steps to ensure that in future Senate Ministers are kept up to date and senators are not kept in the dark on matters of such public importance?
– I think the question has to be considered against the background of the fact that the Senate meets a little later than the House of Representatives and that question time in the other place overlaps question time in the Senate. As this period is devoted to questions without notice, whilst a certain degree of co-operation exists between Ministers here and the Ministers that they represent, it is not in the nature of things for Ministers in this place to know the precise terms in which Ministers in another place have answered questions. If the honourable senator will recall, both I and Senator McKellar indicated that the Minister for the Army had referred this matter to the Military Board. This was in part, if not in substance, the answer that was given by the Minister for. the Army. The last sentence of his answer, as it is recorded in Hansard, stated that in fact, the procedure referred to by Senator Cohen had ceased. I was not aware of that at the time. I had been informed, and I presume Senator McKellar had been informed, that the Minister had indicated that he had raised the matter with the Military Board. That was the information I had at that particular time.
– I direct to the Leader of the’ Government in the Senate a question which relates to the question asked by the Acting Leader of the Opposition. In view of the fact that it appears that Ministers in the Senate are to be publicly censured by the Opposition if they do not know the full facts about the departments of the Ministers that they represent in the Senate, would it not be better and fairer to all concerned if all questions concerning the administration of Ministers who are in another place were placed on the notice paper?
– The matter of questions without notice directed to Ministers who represent other Ministers is a very difficult one. As we all know here - bur it may not be known to people who listen to broadcasts of proceedings- a Minister, in addition to being responsible for his own ministry, represents four or five other Ministers. In the circumstances there has to bc some understanding in .relation to that. We ask that questions be put on the notice paper when we . have not. the . required information available to us. It is inevitable that more questions concerning other portfolios are placed on notice than the Minister is able to answer, because honourable senators, having a highly developed political sense, ask very complicated questions about all departments. ‘ I think that Senator Marriott’s point has some substance because in this matter we operate on a nonparty basis. I acknowledged yesterday that there are matters which the leaders of the political parties, the- Presiding Officer and the Clerk of the Senate could examine on a non-party basis - perhaps- through the Standing Orders Committee when we are out of session - to see’- whether we can improve the procedures which are used in this chamber.
– I ask the Minister representing the Prime Minister a question. Will the Government ..take the necessary steps to ensure that making a person sleep on a concrete floor with only a groundsheet or giving a person a diet of bread and water will never be. resorted to as a form of punishment . for any person who under ‘ Commonwealth law is subject to penalty?
– The question of disciplinary procedure in relation to the armed forces-
– I am not referring to the armed forces.
– The question of disciplinary procedure in relation to any Service in any circumstance is not a matter within the complete domain of the Commonwealth. We have a Federal system. Prison procedures, punishment procedures or disciplinary procedures are matters for the States in their sovereign spheres. As regards the Commonwealth, I shall refer the matter to the Attorney-General for consideration.
– Will the Minister representing the Minister for Labour and National Service make available to all honourable senators, firstly, the articles which he said yesterday Simon Townsend had written stating that national service must be accepted; and, secondly, the text of the decisions given by two magistrates and two judges stating their reasons for rejecting his claim to be accepted as a conscientious objector?
– lt will be recalled that I stated that the records show that this man Townsend was the subject of four judicial decisions - two by magistrates and two by judges - and that they were all adverse to his claim that he was a conscientious objector. 1 have no certain knowledge whether the articles that were adduced in evidence as articles written by Townsend are within the records of the Department of Labour and National Service, but I should expect that they are. I shall make every endeavour to see that the terms of the decisions and the articles are placed before honourable senators at the earliest possible opportunity.
– Can the Minister representing the Postmaster-General advise as to the Department’s policy in relation to the removal of public telephone booths from areas . in which they have been attacked and damaged by vandals? ls the Minister aware that there is considerable concern in the community, not only among private individuals but also among municipal authorities, who consider that the removal of public telephone booths in many areas greatly inconveniences local residents?
-^1 am aware of the very real damage which is done by vandals in destroying this equipment, which provides a most necessary service for the community. One greatly deplores this sort of action. I shall place the honourable senator’s question before the Postmaster-General and get an answer for him.
– I address a question to the Minister representing the Minister for the Army. Has the Minister seen a report that the Australian citizen now held in a military prison, Simon Townsend, is t’o face another charge for breach of military discipline to be heard by the commandant of the prison and that it is probable that the charge will be heard today? Can the Minister supply the Senate with details of the further charge, and can he say whether Townsend has yet appeared on the charge, whether he has been acquitted or convicted and, if convicted, what penalty was imposed? if Townsend has not yet come before the commandant of the prison, will the Minister assure the Senate that full details of the charge and the penalty will be made public as soon as they are known?
– The answer to all of the questions asked with the exception of the last one is no. As to the last question asked of me, 1 will see whether these particulars can be obtained for the honourable senator. 1 have some additional information which may be of interest to Senator McClelland. It is to this effect: At the original medical examination of this man Townsend, he indicated a disability which he had suffered earlier in his life. The competent military medical authorities at the time considered that this did not militate against his serving in the Army, lt will be remembered that first of all he was a conscientious objector. That was knocked out, and he was called up. Now he says he has a disability. In the interests of the soldier, the additional precaution was taken of having him examined by a specialist following his solitary confinement. This was done, and, in the opinion of the specialist, he is perfectly fit to serve. He has been medically examined on several occasions: On 16th May on enlistment; on 22nd May prior to a court martial; and on 23rd May. He had another medical examination on 27th May in the 1st Camp hospital at Holsworthy and on 28th May by a Macquarie Street specialist. I am sure the honourable senator is interested in this additional information.
– 1 address a question to the Minister for Supply and by way of preface refer to the question I submitted to him on 16th May in which I asked what action his Department had taken following criticism of the standard of Australian manufactured’ sunglasses. I understood the Minister to say that he hoped to have an answer for me within a few days. 1 am wondering whether his Department has yet provided an answer.
– I am sorry. 1 have not gol an answer but perhaps before we finish our sitting today 1 shall have one available for the honourable senator.
– I address a question to the Minister representing the Attorney-General. The Minister may remember that some weeks ago Senator Sim asked a question which I repeated a week or so later as to the truth of allegations that the Australian Security Intelligence Organisation had approached a student at the University of Western Australia asking him to inform on the political activities of members of the staff of the University and his fellow students. The Minister undertook to investigate the matter. Has this matter been investigated? If so, can the Minister inform the Senate of the results of the investigation? If not, what is the reason for the delay in investigating a matter which is causing very serious concern to a great many people?
– The particular matter was not regarded as of any special significance.
– By whom?
– By me. I would add that the Attorney-General has only recently returned from an international conference in Teheran-
– On human rights?
– On human rights. Since then he has attended a conference of law officers which discussed legal matters in New Zealand. For some days he has been indisposed. These constitute reasons why the matter referred to has not yet proceeded to finality.
– Is the Minister representing the Minister for National Development aware of an advertisement which appeared in most of the leading newspapers in Australia on the 1 1 th of this month and which related to the recruitment of civil engineers for the Snowy Mountains Hydro-electric Authority? ls he aware of the wording of the advertisement, which stated, among other things, that the work to be carried out would be for the Authority and other organisations and that the Commonwealth Government’s intention was to retain the investigation, design and laboratory section of the Authority as a continuing organisation after the completion of the Snowy Mountains scheme? ls he aware that the advertisement stated that the selected applicants would therefore have prospects of long term employment? ls it the desire of the Government thai the Authority enter gradually into competition with Australian professional consultants?
– 1 must say that I did not see the advertisement to which the honourable senator has referred. But I know that it is the intention of the Commonwealth Government to keep a certain section of the Snowy Mountains Hydroelectric Authority in force so that it can carry out investigation and design work within the Commonwealth, its Territories and South East Asia. In fact the Authority is doing such work at the moment. Yesterday I informed the honourable senator that a number of projects were being examined at present and that they would bring revenue of about $50m a year to Australia. The honourable senator also asked whether the Authority would compete with private architects and/or engineers in this field. 1 will refer that point to the Minister for National Development and obtain a reply on it for the honourable senator.
– My question, which is directed to the Minister representing the Attorney-General, follows the one that was asked by Senator McManus. Will the Minister also make available to the Senate the full transcript of the hearing of each of the applications made by Simon Townsend for exemption from national service on the ground that he is a conscientious objector?
– I shall make every effort to comply with the honourable senator’s request.
– My question is directed to the Minister representing the Attorney-General. When, how and by whom was the yardstick for calculating degrees of conscience, such as in conscientious objection, evolved? ls not the conscience the part of man that differentiates him from the animal? If it is, is not the shabby attempt, made for politicomilitary purposes, to classify degrees of conscience an assault on man’s most sacred possession?
– The very phraseology of the honourable senator’s question indicates a rather frayed and tattered conception of the idea of conscientious objection. It is quite specifically provided in the existing national service legislation that a person who is called up for national service may receive exemption if he has a conscientious objection to military service, lt is specifically provided that that conscientious objection will be considered a proper conscientious objection where it is based upon tenets of religion or constitutes any part of a religious belief or is based upon a general philosophy of conscience in relation to the subject of war. That has been the recognised ambit of conscientious objection, and it has been disputed only recently.
– I preface my question to the Minister representing the Treasurer by reminding him that persons living in capital cities and adjacent areas are required to pay sales tax only on the wholesale price of goods whereas residents in remote areas are required to pay sales tax on the wholesale price plus the freight, and in some instances unscrupulous traders are exploiting this practice to their financial advantage. Will the Minister ascertain whether the Treasurer will consider altering the sales tax structure so that freight charges will not be taken into account when sales tax is being assessed on goods consigned to north Queensland and other remote areas of Australia?
– I shall direct the honourable senator’s question to the Treasurer, and if a reply is not available to me by the time we rise I will arrange for it to be directed to the honourable senator at his home address.
– My question to the Leader of the Government follows those asked of him by Senator Cohen and Senator Marriott. Can he inform the Senate why he and the Minister representing the Minister for the Army were unable ro explain a matter concerning Private Townsend half an hour after it had been explained by the Minister for the Army in another place? Having regard to the great public interest in this case, why were not the Leader of the Government and the Minister representing the Minister for the Army apprised of the position relating to Private Townsend so that the information that was given to members of the House of Representatives would have been available to the Senate?
– 1 have not very much to add to what I have said already. Question time is a time for asking questions without notice, and even though the House of Representatives may meet half an hour before we do, question time does overlap. I. can assure the honourable senator that Ministers do not sit for that half hour listening to questions and answers in the other place.
– Has the Minister representing the Minister for Health rend comments by medical authorities in Australia to the- effect that -the shortage of general practitioners is a serious threat ro domiciliary medical services within Australia?
– Yes, I did read a comment in the Press concerning this matter.
– My question is directed to the Minister representing the Minister for the Army. Does Army regulation 35 make it an offence for Army personnel to illtreat a horse? Will the Minister extend the provisions of that regulation to human beings in the Army?
– I do not know the regulation concerned and 1 do not intend to apprise myself of it.
– ls the Minister representing the Postmaster-General aware that a considerable number of people in the metropolitan area of Perth are finding it extremely difficult to have a telephone service connected to their homes, in particular in the area between Trigg and Sorrento? ls she aware that people have been waiting for up to 8 months for the installation of a telephone and that the position at the present time is such that the PostmasterGeneral’s Department will not accept deposits from people making application for a telephone service? I appreciate that the Minister would not be carrying this information in her head. Will she ask the Department to make some investigations into the matter and inform the Senate at a later stage of the Department’s intentions?
– Order! I must once again direct attention to the fact that it is impossible for a Minister in this place to reply to a question of that kind. I have been asking for a number of years for questions such as this to be put on the notice paper so that the Minister concerned can supply an answer.
– As the honourable senator is aware, I do not have that information with me but I will be pleased to put his question before the Postmaster-General and wil’l endeavour to get a reply as soon as possible.
– I ask the Minister representing the Treasurer whether the Government is aware of the grave concern of many Canberra parents because the system instituted by the Government some years ago of paying the interest on loans for the construction of private and independent schools erected in Canberra has almost broken down as the banks state that they are unable to finance further loans required for such purposes. Will the Treasurer inquire into this situation and advise what action can be taken to ensure the continued dual development of Canberra’s education facilities?
– Yes. I am surprised to learn that this very wonderful system that the Commonwealth instituted, of giving assistance in this way in the field of education, is being prejudiced by the fact that the institutions themselves cannot get assistance to finance further loans from banking institutions.
– My question is directed to the Minister for Works. Having regard to the continued existence of the Snowy Mountains Hydro-electric Authority after the completion of the project for which it was formed, is it intended to incorporate the Authority as an integral part of the Department of Works? As the Snowy Mountains project was introduced . as a defence project, will it not be necessary to justify the continuance of the Authority under defence powers?
– In answer to the first question asked by the honourable senator, I inform him that it is not intended to incorporate the Snowy Mountains Authority as an integral part of the Department of Works. In answer to his second question, I would suggest that the position is that the Authority may be continued on the basis of not only the defence power but any. other constitutional power possessed by this Parliament.
– I ask the Minister representing the Minister for the Army whether he is aware that regulation 609f of the Australian Military Regulations states that officers of the Australian Army Psychology Corps may be assigned to duty with units and staffs of the Australian Military Forces. Is it a fact that there is no trained psychologist on the staff at the Holsworthy military prison? In view of the type of punishment meted out to persons undergoing solitary confinement, will the Minister, as a matter of urgency, request that a psychologist be appointed to the Holsworthy military prison establishment?
– 1 am not aware of the regulation quoted by the honourable senator and I do not intend to represent to the Minister for the Army that as a matter of urgency a psychologist should be appointed to Holsworthy.
– And the Mersey River.
– Then what did the Minister say?
asked the Minister representing the Postmaster-General, upon notice:
Australian Broadcasting Commission for the production of fa) dramatic and (b) variety programmes for television, in each ofthe States for this Financial year?
– The Postmaster-General has supplied the following answer:
asked the Minister representing the PostmasterGeneral, upon notice:
– The Postmaster-General has supplied the following answers:
asked the Minister representing the PostmasterGeneral, upon notice:
How many Australians in the undermentioned categories have been engaged on a contractual basis by the Australian Broadcasting Commission for television programmes between 1st November 1967 and the present date - (a) actors; (b) writers; (c) musicians; (d) singers; and (e) dancers?
– The Postmaster-General has supplied the following answer:
During the 5-month period from November 1967 to March 1968, the ABC has engaged for its television productions on the basis of cither short term contracts for individual programmes or continuing contracts for scries of programmes, the following number of Australian artists, i.e. in the definition of section 114 (3.) of the Broadcasting and Television Act 1942-1967, artists who were born or arc ordinarily resident in Australia:
An estimated 280 writers (excluding contributors of mere programme ideas).
742 musicians (excluding members of the Commission’s permanent orchestras).
asked the Minister representing the Postmaster-General, upon notice:
– The Postmaster-General has supplied the following answers:
Minister representing the PostmasterGeneral, upon notice:
(Question No. 20)
– The Postmaster-General has supplied the following answers:
Southam, amounting to $10,146.88 and the New South Wales Department of Lands, from whom Mr and Mrs Southam held a western lands lease of crown land, was paid $180.
asked the Minister representing the PostmasterGeneral, upon notice:
– The Postmaster-General has suppliedthe following answers:
asked the Minister representing the Postmaster-General, upon notice:
– The Postmaster-General has supplied the following answers:
asked the Minister representing the Minister for the Navy, upon notice:
Senator McKELLAR - The Minister for the Navy has supplied the followinganswers:
Of the Navy’s twenty patrol boats building in Queensland yards, six have been delivered and are in service. Two of these are based in the Darwin area, two in the New Guinea area and two are working up in the Sydney area. It is expected that a further eleven boats will be delivered by the end of this calendar year, and the remaining three by April 1969.
asked the Minister representing the Minister for Primary Industry, upon notice:
Are wool growers with flocks of approximately 4,000 sheep considered to be in straitened circumstances? If so, has the Government any plans to relieve this situation?
Senator McKELLAR- The Acting Minister for Primary Industry has supplied the following answer to the honourable senator’s question:
There is a very wide variation in the financial results achieved by individual wool growers. This variation is due to many factors such as the geographical location of properties, environmental and seasonal conditions, income from other farm enterprises, management efficiency, etc. Accordingly, one wool grower with 4,000 sheep may be in financial difficulties while another may be receiving a reasonable income.
This is not to say that the wool growing industry, like certain other rural industries, has no problems. The Government acknowledges this and has decided that the Minister for Primary Industry should conduct a special inquiry into the fundamental problems of rural industries and bring specificproposals before Cabinet.I would not wish at this stage to attempt to anticipate the outcome of these studies but the honourable senator can be assured that the problems of the wool industry will receive the fullest consideration.
asked the Minis ter representing the Minister for Air, upon notice:
Senator McKELLAR - The answers to the honourable senator’s questions are:
asked the Minister representing the Minister for Primary Industry, upon notice:
Senator McKELLAR - The Acting Minister for Primary Industry has supplied thefollowing answers:
asked the Minister representing the Minister for Defence, upon notice:
In the event of the gradual withdrawal of American troops from Vietnam, will the Minister give an assurance that Australian troops will be withdrawn at the same lime on a pro rata basis?
Senator ANDERSON - The Minister for Defence has supplied me with the following answer to the honourable senator’s question:
The allies, including Australia, have stated frequently that their forces would be withdrawn from South Vietnam as aggression against that country ceases. One such occasion was the joint communique issued following the Manila Summit Conference in October 1966 under the section headed ‘The Search for Peace’. The precise timing and manner of withdrawal would take into account many considerations including the security requirements in South Vietnam.
asked the Minister representing the Minister for Labour and National Service, upon notice:
Senator WRIGHT- The Minister for Labour and National Service has supplied the following answer: 1 and 2. In Queensland the number of persons registered for employment always reaches a seasonal peak in the first months of the year, mainly because of the cessation of activities in the export meat and sugar cane industries. At the end of April 1968 the number of registrants with the Commonwealth Employment Service was 13,347, compared with 14,648 at the end of April 1967.
With increases in activity in the State’s rural industries, and the high level of labour demand experienced at present in manufacturing and building industries, and in line with previous experience, further reductions in persons registered can be expected in the months to come.
asked the Minister representing the Minister for the Navy, upon notice:
With reference to the recently enacted legislation forbidding unlicensed foreign fishing craft from operating in territorial waters within 12 miles of the Australian coastline, has any naval vessel been used to police this law; if so, where and when have they been used, and with what result?
Senator MCKELLAR- The Minister for the Navy has supplied the following answer:
See answer given to paragraph 1. of question No. 67. A recent example of the way in which naval vessels assist in this activity was the diversion of the patrol boat HMAS ‘Samarai’, en route to Manus, to investigate a reported sighting off Cairns on 11th April last. The area was thoroughly searched, but only two Australian fishing vessels were found.
asked the Minister representing the Postmaster-General, upon notice:
Is the allegation correct that in recent weeks in a radio session from the Port Moresby Australian Broadcasting Commission station, entitled ‘United Nations Report’, (a) two speakers demanded war against South Africa, and (b) a pro-Zimbabwe group speaker demanded war against Rhodesia; if so, whatever the situation in Africa, is it in tha interests of peaceful co-operation between Australians and native New Guineans in the area that propaganda calling for inter-racial war be broadcast to primitive people, especially in the name of an organisation dedicated to world peace?
– The Postmaster-General has supplied the following answer:
The programme ‘United Nations Report’ is prepared from material supplied by the United Nations Information Centre and is broadcast weekly from Port Moresby as part of the Australian Broadcasting Commission’s responsibility, particularly in trust territory, of informing listeners on United Nations affairs. The particular programme referred to - that on 26th March - contained news on the activities of the Food and Agriculture Organisation and a factual report of proceedings before the Security Council of the United Nations and the Decolonisation Committee of the United Nations. The Commission does not feel that it can ignore these matters.
askedthe Minister representing the Minister for Defence, upon notice:
Senator ANDERSON- The Minister for Defence has provided the following answers to the honourable senator’s questions:
asked the Minister representing the Minister for Civil Aviation, upon notice:
Senator SCOTT- The Minister for Civil Aviation has supplied the following answers:
asked the Minister representing the Minister for Air, upon notice:
Was the agreement entered into between the United Kingdom and America for the purchase of F111 aircraft negotiated on the basis of a fixed price; if so, why was the agreement which Australia entered into with America so markedly different from that entered into by the United Kingdom?
Senator McKELLAR - The Minister for Air has supplied the following answer:
It is understood that the agreement between the United Kingdom and the United States for the purchase of F111 aircraft was based upon the same price formula as that contained in the agreement between Australia and the United States of America for this aircraft; but, in addition, it included a ceiling price for the fly-away aircraft of $US5.95m. This ceiling price was subject to escalation of the costs of labour and materials after 1965, the cost of modifications requested by the United Kingdom Government and the cost of any modifications proposed by the United States and accepted by the United Kingdom in excess of $US 100,000.
The agreement between Australia and the United States was negotiated during the research and development stage of this aircraft, whilst the agreement between the United Kingdom and the United States was arranged well after the aircraft had flown and during production of the aircraft when more accurate production cost data would have been available. The arrangements between Australia and the United States have since been amended so that the Australian agreement is now in this respect similar to the agreement between the United Kingdom and the United Stales governments.
asked the Minister representing the Minister for Primary Inddustry, upon notice:
What was the weight and value of kangaroo meat exported during 1967 and the first quarter of 1968?
Senator McKELLAR- The Acting Minister for Primary Industry has supplied the following figures in answer to the honourable senator’s question: 5,31 1,329 lb of kangaroo meat valued at $764,1.92 were exported during 1967 and 705,840 lb valued at $102,333 were exported during the first quarter of 1968.
asked the Minister representing the Minister for Civil Aviation, upon notice:
With reference to a question asked by Senator Devitt on 30th April and that part of the Minister’s reply thereto of 9th May that ‘Investigations and planning works for a number of other airports have been completed or are in progress’, are either or both of the main airports of Wynyard and Devonport in the north west of Tasmania included in thenumber of other airports?
Senator SCOTT - The Minister has supplied the following reply:
Yes. Investigations are proceeding on possible developments at both Devonport and Wynyard. This involves both the expected traffic growth at the airports and the types of aircraft which may be operated to them. Decisions made in respect of these airports will be related to these factors.
-(South Australia)-I present the report from the Select Committee on the Metric System of Weights and Measures, together with minutes of evidence and appendices.
Ordered that the report be printed.
– I seek leave to propose a motion in connection with the report.
The DEPUTY PRESIDENT (Senator Drake-Brockman) - Is leave granted? There being no objection, leave is granted.
– I have received from Senator Cant an intimation, that he desires to move the adjournment of the Senate for the purpose of discussing a .matter of urgency, namely:
Iiic prospect of progressive increases in the price of petrol and petroleum products as more Australian crude oil is used for them
Is the proposed motion supported? (More than the number of senators required by the Standing Orders .having risen in their places) .
– The honourable senator’s party did not object to this assistance being given in the past.
– Senator Greenwood fs not so old as to have reached the stage of stability; he is young enough to be progressive, and he will understand that there has been a progressive difference in the position of oil in Australia from 1965, when the incentive price was fixed, to 1968, with the discoveries in Bass Strait. The honourable senator is smart enough to know that it is necessary to compare like with like. The taxpayer is aware that some of the exploration companies that have been operating in Australia over many years have spent large amounts of capital. Many of these companies have spent their money on fruitless projects. I have a very high regard for the company that has been operating in Western Australia, West Australian Petroleum Pty Ltd, because it: has stuck to its guns in that Slate since 1953, and it is now paying off, with the discovery of one oil field, lt. will more than double its capital outlay on exploration in Western Australia from the one small oil field at Barrow Island. I do not begrudge it this, but is that the position with Esso-BHP? Does not this create a completely new picture which the Government should be looking at, or does the Government propose to sit back and allow the people of Australia to be exploited for several hundred million dollars until 1970 when the Tariff Board decision starts to run out? Will the Government institute another Tariff Board inquiry and continue an incentive price for Australian oil?
Again I say that when the man in the street considers this sort of thing he wonders why we want to find oil in Australia at all. He wonders whether the policy of massive assistance will ever bear any fruit for him. He is quite aware that ‘extremely large profits will be made from this national asset, because this information is published in the Press every day. He is aware also that much of the profit will go overseas to the world oil monopolists, ft is not sufficient to say that we should look for the indirect benefit that will flow to Australia from a rectification of the balance of payments because we will not have to import so much oil. I noticed, when reading the debate on a similar question to this in another place, that this was in substance what the Minister for National Development (Mr Fairbairn) said in reply to the honourable member for Cunningham (Mr Connor) who initiated the debate on behalf of the Labor Party. The Minister said that if the finding of oil in Australia would have the indirect benefit of allowing us to have a better balance of payments, the people of Australia should be willing to pay more for their petrol. This, briefly, is what the Minister for National Development said.
– If the honourable senator reads Hansard he will find that is what he said.
– Read it again.
– I do not want to argue, but read it again. I read it twice previously and again this morning, and in substance that is what the Minister for National Development said, but it will not hoodwink the public. It might be all . very well for propaganda purposes to tell the public that, if we find certain quantities of oil in. Australia, we will not have to import oil into this country and therefore our imports bill will be reduced. It might be valid to say that in these circumstances we may be able to balance our- current account, but the current account does not end the balance of payments. When one studies the ownership of oil fields in Australia one’ finds that all of them have a majority overseas shareholding, and it is obvious that, though Australia might not have to import the quantities of oil that are now imported to this country at today’s cost, in the long run the servicing of the overseas money that is invested here might cost more than is saved on the imports bill. It is not sufficient’ for the Minister for National Development to say that this is the position. To- analyse these things one must go a little deeper into them.
I agree that the imports bill would come down, but on the other hand the cost of servicing the, overseas investment would go up. Having referred to the fact that all of the proved oil fields in Australia have a majority overseas shareholding, perhaps it is- unnecessary for me to refer -to the Queensland field, in which there is only a 14% holding by Australian Oil and Gas Corporation Ltd. The rest ‘ is overseas owned. It is unnecessary for me to refer to Barrow Island, which is divided into seven parts of which Ampol Exploration Ltd owns one-seventh. 1 do not know to what extent the 14% holding by Australian Oil and Gas Corporation Ltd and the oneseventh share of Barrow Island held by Ampol Exploration Ltd would be reduced by overseas shareholdings.
When we consider the Bass Strait enterprise we find that 50% of the shares are held by Esso Standard Oil (Aust.) Ltd, which is a subsidiary of the largest oil company - perhaps the largest company - in the world, the Standard Oil Company, and 50% of the shares are held by Broken Hill Pty Co. Ltd. The story does not end there, of course, because 16% of the shares of BHP are owned overseas and approximately 81% are owned by nominee shareholders - not even BHP knows who they arc. Since the finding of gas in Bass Strait the nominee shareholding in BHP has increased from 6.2% to 8.3%. lt is logical to assume that a fair part of this shareholding would be by overseas shareholder. Otherwise, why would they want to hide behind nominee shareholders?
– No. I have not worked it out. Whatever the profits arc, if we use simple arithmetic - which I am arguing at the moment is not the correct approach - 50% of the Bass Strait enterprise is owned by Esso and 50% is owned by BHP, so 50% of the profits, less what is reinvested in development or exploration, will flow to Esso and through to Standard Oil.
– I hope the Minister is not thinking that we would retain a certain part of it in taxation. 1 would remind him that there is a double taxation agreement, and if Esso-BHP makes $ 2m- Sim for BHP and $lm for Esso- BHP will pay 42-1 % on its share and Esso will pay only- 15% on Its share. This is where investment from overseas gets us. These- are the things that the Government should look at. These are the things that the Australian public is looking at. Instead of the Bass Strait oil being 50% Australian owned it is closer to being 40% Australian owned and 60% overseas owned. There can be collaboration between the overseas shareholders that can in fact take control of the Bass Strait oil out of Australian hands. I do not know what the articles of association provide, but it is not beyond the bounds of possibility that they provide for this.
– I suppose it can happen with any company if the shares are on the market, but has the honourable senator seen Standard Oil shares on the Australian market?
– I am talking about letting us buy in a bit more. Can we buy into the Standard Oil Company? Can we buy into Esso? They are not listed here for us to buy into them, but they can buy us up at any time and they have the means and the opportunity to do it. This is the picture as the Australian man in the street secs it and as the Australian Labor Party sees it. To what extent costs will be affected by increases in other products from crude oil only time will tell. As the lighter Australian oils are produced in greater quantities so will freights, fares and power supplies increase in price, because there are less of the heavy residuals in Australian oil. This is why the companies want to continue importing from the Middle East. The markets that they have built up for heavy fuel oils have allowed them to make additional profits from these imports.
The Minister, in his reply in another place, referred to the fact that when Moonie and Alton first came on stream no-one wanted to buy the oil from’ Queensland. This is true, of course, because all the refineries .in. Australia were geared to refining a lower grade product than the Australian oil. and it would cost them money to convert their refineries to the efficient use of the higher grade Australian oil. But not all of the cost of the changeover would have fallen on the shoulders of the refining companies. There is an investment allowance for taxation purposes, so the Australian public would have subsidised the conversion of the plants to enable them to treat Australian oil. The real reason Why no-one wanted to buy this oil was that the refineries were nol geared to use it. They had to be forced to use it.
During the 1950s and 1960s we have seen a mad scramble throughout Australia for distribution points. Retail oil companies have been prepared to pay enormous prices for what they call choice sites for the distribution of their petrol. We can see these on every corner. While this country was short of housing for its people, houses on corner blocks were being bought and smashed down so that service stations could be erected. The companies were not concerned about the prices they were paying for the sites for petroleum distribution points. The prices they paid increased their capital investment.
– It is the Government that is under attack, and the honourable senator, as Minister representing the Minister for National Development in the Senate, will have to answer - not I. The simple fact is that as a result of this mad scramble for distribution points there has been a terrifically high - excessive - capital investment in the distribution industry. Now the distribution companies want to charge the Australian people a higher price for petrol so that they can get a greater return on their invested capital, which is inflated investment capital. The capital structure is higher than it should be but the motorists, the taxpayers, the people who use power and light, the farmers who have to transport their goods from the country to the city and the other producers who want to ship their goods around the coast of Australia will have to pay more because the heavier fuel oils will be very much dearer. This is the sort of picture that we look at, and we put right on the Government the onus of rectifying the position.
Over the last few weeks it has been interesting to note the returns of some of the oil companies which have been’ published in financial magazines. In 1966 the Shell Co. of Australia Ltd had a profit of $2.377m, and in 1967 it had a profit of $J5.477m. It must be remembered that the Shell company has a two-sevenths interest in the Barrow Island oilfield and, in the main, this is where the profits come from. We find the same position in regard to Ampol Petroleum Ltd. That company has a 60% interest in Ampol Exploration Ltd, and because Ampol Exploration has a oneseventh interest in the Barrow Island field, Ampol Petroleum Ltd has increased its profit from approximately $2m in 1966 to about $5m in 1967. But at the same time as these profits are being made, the people are being told that they will have to pay more for petrol.
– The crayfish in Western Australia are better than those in Tasmania.
The ACTING DEPUTY PRESIDENT (Senator Cormack) - Order! The honourable senator’s time has expired.
– The Minister is reading someone else’s’ speech.
– These facts are in ‘ a record of evidence, which is available for anyone to check.
– lt is available and if the honourable senator wants to read it he can ask for if. The Labor Government was not able to encourage any overseas companies to come to Australia to search for oil, because they would not have a bar of Labor administration. Then, in 1947, it decided to buy its own oil rig. We know the story about that. It is rather interesting. In 1949 the rig was still in its greaseproof paper. In 1950 the Australian people realised that a Socialistic party was in office and they decided to throw it out and put in parties which adopted a responsible attitude towards the development of the nation.
The first thing that the Liberal Country Party Government did in 1950 was to sell the oil rig to WAPET. I shall trace the story through because it is a very interesting one. WAPET searched for oil in Western Australia, and the first flow of oil occurred at Rough Range in October 1953.
– 1 shall come to that. Oil was discovered in Australia for the first time, and oil shares boomed. But by 1957, although WAPET had drilled additional wells around the first site, it was not able to find a commercial oilfield. In 1957 there was a slowing down in the search for oil. The Government came to the assistance of the searching companies. In order to encourage the search for oil in Australia the Government decided that it would pay a drilling subsidy amounting to 50% of the cost of drilling on an approved site anywhere in Australia. The site had to be approved by the Bureau of Mineral Resources. In 1957 the Government extended the subsidy to cover stratigraphic wells and geophysical surveys. In 1959 the Government extended the subsidy further to include seismographic work throughout Australia. As a result, in 1960 the first oil well that would produce sixty barrels a day was discovered at Cabawin. In 1961 oil was discovered at Moonie, and in later years this field was proved to be able to produce up to 10,000 barrels a day. But although the Australian Oil and Gas Corporation Ltd was able to produce up to 10,000 barrels a day at. Moonie, it found that it could not sell the oil in Australia lo Australian refineries. The company approached the Government for assistance. The Minister for Trade and Industry (Mr McEwen) placed the problem before the Tariff Board. The terms of reference arc well known to all honourable senators. The Tariff Board recommended, firstly, that the price of crude in Australia should be $2.25 per barrel with an incentive payment of 25c, and, secondly, that if the oil companies did not include a certain percentage of Australian crude in the crude oil being refined in Australia by them, they would have to pay customs duty on the importation of crudes from overseas.
The Government had a. further look at the matter and decided that the incentive payment of 25c per barrel was not sufficient to encourage oil exploration as quickly as was required, lt increased the incentive payment by 50c per barrel, making a total price for oil of $3.50 per barrel. This action has resulted in oil companies going out and searching for oil in Austrafia with greater intensity. We now find that oil fields have been discovered on the continental shelf adjacent to Gippsland, in Victoria. When the Government announced that for a period of 5 years from September 1965 to September 1970 it was prepared to guarantee a price of $3.50 a barrel for oil produced in Australia, there was no outcry at all from the members of the Opposition. Not one voice was raised in opposition to that proposal.
– People throughout Australia, including members of the Labor Party, commended the Government for its action at that time. Now that we have discovered enough oil to lead us to believe that between 1971 and 1974 we will be producing enough oil to meet over 60% of Australia’s requirements as a result of this incentive scheme, we -find members of the Opposition here and in another place criticising the Government for the action it has? taken to encourage the search for oil. Every member of the Opposition must have known in 1965 that if additional oil fields were discovered in Australia and the oil refineries were to be required to pay a minimum of S3. SO a barrel for that oil until September 1970, the result must be an increase in the price of the final product. 1 believe it is understood by all people in Australia that if we want to become selfsufficient in oil production we have to encourage the search for oil in Australia. Even the Labor Party demonstrated that it was keen to search for oil because it bought a rig. On the other hand, if we do not want to produce our own oil we can buy cheaper crude oil from the Middle East oil fields for $2 a barrel landed in Australia. I do not think anybody in the Government knew how big our oil discoveries were going to be. But, we have the oil and I am sure that the members of the Opposition arc just as proud as wc are of the fact that, because we shall be producing 60% of our oil requirements by the early 1970s, this will mean a saving to Australia of over S400m a year in foreign exchange.
The Opposition has not an answer to this fact. Ve made public in 1965 a promise that as from September of that year until September 1970 the price of $3.50 a barrel would bc guaranteed to any oil search companies that discovered oil in Australia. I think it can truly be stated now that if the Government had not adopted the Tariff Hoard’s recommendations-
– Yes, we did. We adopted the Tariff Board’s recommendation and added 50c. 1 think the Tariff Board recommended $3 a barrel, which included an incentive of 25c. We decided to increase the incentive by 50c, making the total price $3.50 a barrel for this period of 5 years.
– In the early 1970s, the saving in foreign exchange will be 5400m a year. This is not allowing for any increase in the price of oil or in the consumption of oil. It is estimated that the savings by the early 1970s will bc $400m a year. At the present time the figure is something like $340m a year, but it is increasing each year. It is estimated that the gross return from the huge quantities of oil discovered on the Gippsland shelf will be something in excess of $2,400m over the next 10 years. The return to the Australian people by way of royalties and by way of company tax will be approximately 50%. Hie other 50% will go to the companies concerned. After all, that is not a bad return to the Australian people especially when we realise that they have not had to find huge sums of money. This is especially so with the activities of the Esso group. I believe that the Esso group will be raising most of its money from overseas. Some will be raised in Australia. The BHP organisation will be finding most of its money in Australia. In view of the fact that the total amount of money which will be spent by these two companies to bring this field into production will run into hundreds of millions of dollars, 1 do not think it can be argued that the price we are paying is at all excessive. I emphasise that it is because we have agreed to pay $3.50 a barrel for the next 5 years that these companies have been encouraged to go ahead with their scheme of rapidly harnessing the wells of the area, whether they be gas or oil, so that they can be brought into commercial production quickly.
I remind the Senate, that, having found gas and oil in large quantities in the Gippsland area, BHP has already negotiated a sale overseas of liquid gas amounting to about 1 million tons which will bring in a gross revenue of over SI 8m to Australia. This is the first export income we will have from this source.
– And I spoke the truth. The fact is that, having negotiated this sale, BHP will be applying tor a licence to export. I told the honourable senator yesterday that if the Minister for National Development recommended the granting of a licence then I, as Minister for Customs and Excise, would recommend to the Government that the licence be granted. I have spoken to the Minister for National Development and he assures me of these facts. But that is only the first part of the business. The wells have not really been brought into production yet. Yet, a contract which will return us $18m has been signed or is about to be signed.
I am firmly convinced that the incentive of $3.50 a barrel which we are giving will encourage further oil exploration in Australia. For example, the Australian Oil and Gas Corporation Ltd is searching for oil off the coast of Queensland. Another company - the Woodside Company - has drilled a hole in the Ashmore Reef to 12,000 feet in the hope of finding oil. That organisation intends to drill its next hole at a spot about 120 miles north of Roebourne in Western Australia, adjacent to the Barrow oil field.
– That is a silly question. I have no money in any company. WAPET has a rig and will be drilling offshore adjacent to Barrow Island. I am confident that, because of the encouragement we are giving to oil exploration, we shall be producing not 60% of our requirements but something in excess of our total requirements by the mid-1970s. Those are not. the only oil fields that will be discovered. Others will be discovered quite quickly. We can say quite honestly and without skiting that it has been largely the policies that have been announced by the Government from time to time to encourage companies to search for oil in Australia that have brought about this success.
– No, there is not. In addition, to encourage Australians to invest in oil search companies operating in Australia the Government introduced a plan under which Australians could obtain an income tax deduction in respect of the total amount that they put into oil search companies in the form of application, allotment and call moneys in the year in which they subscribed to those companies. That encouraged large amounts of Australian capital into the companies that were searching for oil in Australia. So the Government’s actions have produced definite results. Had we not given these encouragements to people to search for oil, we might still be buying all our oil requirements. As was said earlier, we can buy oil much more cheaply from the Middle East because the fields there are large. I hope that in the near future we will discover fields which will be equally as big as, if not bigger than, those fields and which will produce about the same quantities of oil. If we do, then we will be able to have oil as cheap as that which is produced from the fields in the Middle East.
The price of $3.50 a barrel was introduced by the Government because of the difficulty experienced by the Australian Oil and Gas Corporation Ltd in getting oil to the market. I do not believe that any responsible government, having encouraged a company to search for and find oil, would be playing its part if it allowed that company’s oil not to be marketed. The only way that we could get it marketed was by referring the matter to the Tariff Board and giving an incentive to ensure that the oil that was produced at Moonie and Barrow Island was marketed. The Government has always been determined that if oil was to be found in Australia it should be found as quickly as possible. Consequently, although oil was first discovered only in the early 1960s, in the very near future we will be producing more than 60% of our requirements.
Senator Cant complained about the taxation problems of the companies. He mentioned that an overseas company, EssoBHP
– He mentioned that Esso-BHP was owned partially by overseas capital. I think he was confusing the tax on profits with the tax on dividends. The fact is that any company that operates in Australia, whether resident or not, pays the normal company tax at the rate of 42i% on profits. The rate of 15% applies to dividends transmitted from Australia to the United States of America. Senator Cant said that the Esso company would not be paying company tax at the rate of 421% but would be paying only 15% because of the double taxation agreement with the United States. But the facts are that this company is registered in Australia and therefore pays company tax at the rate of 42i% on its net profit, and when it remits its share of the profit to the United States it must pay additional tax at the rate of 15% on the amount remitted. So, bearing in mind the 10% royalty that is paid and the 121% that is paid if the whole of the graticular area is taken up, the Esso company which with BHP has discovered oil in Australia, will be paying more than 50% of its net profit in Australian tax.
I believe that this is a wonderful achievement. All that the Government has had to do to encourage this development has been to say to the companies: ‘From 1965 to 1970 you will receive $3.50 for every barrel of oil that you produce’, ls that too high a price to pay? The search for oil has not cost to Australian taxpayers anything. Senator Cant said this afternoon that almost half of the money that has been spent on the search for oil in Australia has been found by the Government. He went on to say: ‘The Government is not us; it is the taxpayers who have found that money’. I have some figures which I am sure will interest the Senate. Senator Cant mentioned a figure of $90m. The facts are that up to the end of April this year 623 geophysical operations and 432 drilling projects had been approved for subsidy; $64,868,000 - not $90m - had been paid in subsidies; and $76,355,000 had been committed on approved projects. The total cost of oil exploration in Australia up to the present is in excess of $460m. So, for every $6 or $7 that has been spent, the Government has found $1. Those are the figures that have been supplied to me. I understand that they are correct. They show the price that we have had to pay to find oil in Australia.
– Of course the price of petrol and oil will rise. But the interesting point is that the first oil from off the Gippsland coast will not be produced until April or May 1969, if everything runs according to program. .ie, and then it will be produced only at the rate of 10,000 to 15,000 barrels a day. It will be the end of 1969 before the output exceeds 100,000 barrels a day and March or April 1970 before it reaches 290,000 barrels a day. That time will be within 6 months of the date of expiration of the agreement that the Government has entered into with the oil companies. The Government has stated that we will be paying the additional sum for 6 months and then if we wish, depending on whether the incentive of an increased price is needed, we will be able to negotiate further agreement to encourage the search for oil.
In another place an honourable member mentioned that we could produce oil in Australia for $1.20 a barrel.
The ACTING DEPUTY PRESIDENT (Senator Dame Ivy Wedgwood) - Order! The Minister’s time has expired.
– Transport charges are also involved.
– Yes. It will be reflected also in the price of the shirts we wear and in the price of textiles, stockings and even the bread on the table. By 1970 when our own oil fields come into full production oil will be costing tens of millions of dollars more than it does now. The thing that the man in the street cannot understand is this: Some 60% or 70% of our oil will be produced here by 1970. It w m come from the Bass Strait fields and perhaps in smaller quantities or equal quantities from the million square miles of off-shore areas not yet explored. Yet we, the Parliament and the people of Australia, are being asked to accept the prospect of an increase in the price of fuel. The cost of the fuel from the refineries which will handle this oil will have an effect on motorists and the users of gas, electricity, aviation spirit - and therefore the cost of running airlines - and oil1 for domestic heating.
The third highest users of oil in Australia are the bakeries, breweries and cigarette manufacturers. Oil is used also by sawmillers, newspaper publishers, soap manufacturers and the textile industry. By 1970 all those industries and the users of oil products will be facing higher costs. It is no wonder that the Prime Minister (Mr Gorton), as one of his last acts before leaving for the United States of America, ordered a complete inquiry into the Government’s oil policy. The Minister for Customs and Excise said earlier that of course everyone knew that, by the Government’s action in offering this incentive, the cost of petrol and petroleum products would increase. I am certain that no-one in Australia knew that costs would increase as a result of the exploration for and discovery of oil in this country.
– That is the point. The Government made what 1 believe was a bloomer in giving such a generous amount by way of royalty without providing for any flexibility in the scheme. When the Moonie field was discovered and negotiations were under way to get Moonie oil into the refineries, we saw the oil companies trying to stand over the operators of a small oil field. Of course, now the Government is dealing with the giants among the oil companies. A great discovery has been made in Australia but look at the amount of money that the Commonwealth has already put into oil search. The Minister for Customs and Excise spoke of the various types of surveys that were made - the seismic surveys and the aeromagnetic surveys. These were carried out by the Bureau of Mineral Resources in the early days of exploration and were handed over to Esso-BHP, or to BHP in the first place. The American adviser, Mr Weeks, who came to Australia, knew of this oil bearing area in Bass Strait. Because of their sophisticated techniques, most people interested in oil knew of the Bass Strait area. Our oil legislation and oil agreement with the States were formulated with the knowledge that the Bass Strait area was one of the most likely places in the Commonwealth to undertake oil exploration. That is what these people are so annoyed about. But we are having a post mortem on a fait accompli. Our oil legislation, presented by this Government to the Australian public, has taken on the nature of a national scandal, instead of this great discovery being used in the national interest in every possible way, the profits are being diverted as far as possible by the policies of this Government to private enterprise - even to the international oil monopoly interests.
The Minister for Customs and Excise cannot convince me that the international oil company Esso would pay 434% taxation in Australia and another 15% when the capital goes overseas. The company would be better off if there were no taxation agreement between the United States and Australia because it would not be worth while paying 481%. The Minister was putting forward a gimmick.
– The point is that the taxation agreement between Australia and the United States has been of definite benefit to Esso in view of this bonanza that it is handling at the present time. Getting back to the main argument of the Opposition, I claim that the Government has not done the right thing by the Australian people. The Government has not ensured that the benefits from the discovery of oil will flow to the Australian public, the Australian taxpayers. The Government has made concessions without allowing for any flexibility in the light of circumstances. The circumstances have changed dramatically since the discovery of oil at Moonie and the arrangements made as a result of the deliberations of the Tariff Board. In view of the material available even at that time about the new technique for off-shore exploration, no explanation has ever been given for the increase from 25c incentive bonus, as recommended by the Tariff Board, to the incentive bonus of 75c that eventually was to be paid. We on this side of the chamber believe that the increase in the price of petrol and petroleum products is not warranted and should not be permitted.
The ACTING DEPUTY PRESIDENT (Senator Bull) - Order! The honourable senator’s time has expired.
– What about the Minister for Customs and Excise?
– 1 am at present talking about Senator Cant. We are discussing a rise in the price of petroleum products and 1 said that the Opposition had not been too truthful in what it put forward. Indeed, little of the facts has appeared in the newspapers to enable this matter to be put into proper perspective. But it is a most important matter for the average person. I imagine that, in this wonderfully advanced country of ours today, there is not an individual who is not affected by the price of petroleum products. Of course, a scare has been promoted by the Opposition on this occasion, as on so many other occasions about other matters. If the Opposition can ever get a feather to fly with, as it were, it is anxious to cause a flurry in the community about the activities of this Government.
In recent years this Government by its encouragement of the search for and production of oil has earned the admiration of countries throughout the world. I congratulate it upon the action it has taken. I admit that there is a basis to the query raised by the Opposition, and it should be answered. Mr Balfour, the Victorian Minister for Fuel and Power, was one of the first Ministers to speak on this subject. He put the matter very correctly when he said that it was up to the Commonwealth to examine its oil incentive payments scheme, by which at present locally produced crude oil is delivered to refineries at about $1 a barrel more than the cost of imported crude oil. He went on to say that it would be very bad for Victoria and Australia if our own oil is to cost much more than the oil we can import. He said that he believed that the Commonwealth Government would have to look at that matter within the next 12 to 18 months. Mr Balfour made that statement earlier this year.
There is evidence to show that the prospective prices of Australian oil are arousing public interest at the moment. I was interested by the stand that the Opposition seems to take on this matter, lt always hits out at the investor. Hardly a sentence spoken by honourable senators opposite in this debate did not contain a criticism of the oil companies and of the profits they expect to make. But if those private enterprise companies were not willing to pour millions of dollars into the boring of holes in the ground in the hope of finding oil, the future for Australia and Australians would not be as bright as it is at present.
Let us examine the points raised in relation to the price of oil. The first Tariff Board report on Australian oil was issued when Australian oil was first coming on to the market. Mr McEwen, the Deputy Prime Minister, had given broad scope to the Tariff Board in its inquiries. 1 do not have time to read his comments now, but I refer honourable senators to page 23 of the Tariff Board’s report. Mr McEwen said that the Government had encouraged the search for oil and now Australian oil had been found, the Government was determined that local refineries would use all the crude oil produced in Australia provided that it could be regarded as existing in commercial quantities, having regard to its location.
Mr McEwen went on to say that the considerations he had asked the Tariff Board to take into account included the interests of consumers and of refineries and the implications for the marketing of Australian crude oil having regard to affiliations between Australian and overseas interests in the oil industry. He thus showed the great interest of the Federal Government in this matter. It is well known that the Tariff Board reported that incentive and encouragement should be given to refineries to use Australian produced oil. Australian crude oil is much purer in quality, as I understand it, than imported oil, and an economic question is involved. I understand that in the future it will not be a more profitable operation for the refineries in Australia to use Australian oil than to bring in heavy black oil from overseas. This has yet to be fully considered. We are not yet using great quantities of Australian oil.
The Opposition waves a flag and claims that costs will be very high. The Minister for National Development (Mr Fairbairn) has adequately dealt with that point. He pointed out that the Tariff Board recommended an incentive payment of 25c a barrel. The Government felt this to be insufficient and raised the payment to US75 cents a barrel. This rate is to apply for 5 years. If honourable senators opposite were honest they would say: ‘We are waving a red flag as to what is likely to happen before 1970.’ The Government has promised the oil industry that the payment will apply until 1970. Any discussion on what the price of Australian petroleum products will be involves necessarily the period from now to 1970, because in that year the arrangement is to be reviewed. I have documents here containing the opinions of some experts that the rise in price could be as high as 5%. It is interesting to note that the Minister for National Development in answering a question on 7th May made the point that the Gippsland shelf will not start to produce oil until April 1969. So it is clear that it will not be until April 1969 that we discover the effect of Australian crude oil on the market.
The Minister said that in the period of 18 months from April 1969 to September 1970 the increase in petrol prices if related to the price of crude oil could be about 1.7 cents a gallon. We are dealing with a very short period. There is every opportunity for the Government to examine this matter. If the Government feels that it can save the public money, it will do so. An assurance has been given. Let us not be bluffed. If the Government had taken other action in respect of payments of incentives or bonuses the money would still come from money paid to the Treasury out of the pockets of the taxpayers. Setting aside the benefits of better quality crude oil, taking the price structure as it is today it is possible that there will be an increase of 1 .7 cents a gallon over a period of 18 months.
– If the honourable senator had followed the debates he would understand why it is necessary to encourage the production and use of Australian oil. It is in the interests of the.Australian public that our own oil should be sold. The Go vernment has spent about $16m in subsidies for off-shore oil search, and about $75m on oil search throughout Australia. The present problem is capable of solution by the Government. It has taken the excellent action of getting an investigation under way immediately. The Treasury and the Departments of Trade and Industry, National Development and Customs and Excise are involved in an investigation. Dr Frankel, an expert from Great Britain, has been called in to give advice. I look forward to reading his reports. Every opportunity should be taken to find export markets for our crude oil if we are to avoid the necessity of Australians paying an extra $1 a barrel for the products of Australian crude oil. If we were to import our needs until 1970 and export all our local production we would not have to pay a penny extra to that paid at this time. The revenue collected by the Government on petroleum products through customs and excise duties is about $249m a year. If the Government has any trouble in finding a solution to this matter, it would do well to credit some of the annual revenue of about $240,443,000 that it collects from the excise duty on petroleum products.
Sitting suspended from 6 to 8 p.m.
– I conclude by saying that I believe that the Commonwealth Government has demonstrated its ability, in legislation, to control off-shore petroleum exploration. Dr C. M. Isbister, the Deputy Minister of Canada’s Department of Energy, Mines and Resources, said that Australia led the world in adopting uniform laws to deal with the development of offshore natural gas and oil resources. As that legislation is another mark of achievement for this Government, I am confident that the measures already instituted and in operation will ensure that Australian petroleum products reach the home market of Australia at the best possible price.
– Order! The honourable senator’s time has expired.
– Can the honourable senator qualify his reference to Australia’s being 60% self sufficient in oil? What is the measuring stick?
– If Senator Devitt wants to take this matter further, I refer him to an article by Sir Harold Raggatt which appeared in the ‘Canberra Times’ of 24th May this year. It is estimated that in 1970 the production of crude oil in Australia will meet 60% of our needs, But unless there are further discoveries of oil by 1976, then at the expected rate of consumption Australia will have only 30% self sufficiency in oil in that year. Therefore, we have not won the battle. It will still be necessary for us to explore and to discover further oil resources. There is an argument for the incentive payments scheme to be continued so that we will not lose the advantages which we have gained from the discoveries already made.
Senator Cant advanced the argument that we will be able to save ourselves a substantial amount. As the Minister lor National Development (Mr Fairbairn) said, in this financial year the imports of crude oil total $340m. That is only half the story. Senator Cant pointed out that there will have to be a debit because we have to service the overseas capital which has come into Australia. He did not give any figures to indicate what that amount is likely to be. 1 think it is positively misleading to suggest that this factor should be taken into account without giving some indication whether the amount required to service this capital approximates the amount which will be saved on imports. It has been estimated that the gross value to Esso-BHP of the oil resources which that group has discovered in Bass Strait will amount to some $6,000m. Over the period it will take to exhaust those resources BHP will receive, after taxation, a net profit of some $500m and Esso will receive a similar amount. On the basis of what might be assumed to be the usual amount which is paid by overseas companies in Australia in the form of dividends to shareholders overseas, it is estimated that the dividends to be paid out of that net profit will be some $120m. That will occur over a period which it is estimated will be 14 to 15 years. Therefore it is misleading to suggest that that is really a significant factor which would offset the saving to Australia’s balance of payments as a result of oil discoveries. The Opposition raises the great bogy about the extent to which overseas capital is taking the benefit of the resources which we are discovering. It should not be forgotten that unless these overseas companies had been prepared to come to Australia and invest their money here, these resources would not have been discovered. The companies ought to be entitled to some reward, some profit, for what they have invested in Australia. The Australian community, by way of royalties and taxation, takes a fair share.
In conclusion I shall outline what happened with regard to Mount Isa Mines Ltd. That company has a 53% overseas holding. In the period of the mine’s existence - some 40 years - the company’s profits have totalled S442m. The amount which has gone overseas to the 53% shareholding is $46m. That is the general pattern. Anyone who is prepared to examine the way in which American capital in other overseas countries has been rewarded will sec the relatively small amount of profit that has gone out of the country in which the money has been, invested. I say that we have every cause to be satisfied with what the Government has done to encourage the exploration for oil. It is something which I think, when explained to the Australian people, will justify an increase in price, but we do hope that in the efforts which the Government is making we will be able to even avoid that. I think it is a fair price to pay for the overall benefit to Australia.
– The Minister himself said that.
– He is not an expert. The honourable senator surely is not telling me that the Minister is an expert. The oil refineries are the ones who will be paying the price, they will be selling the petrol and they will pass the cost on to the consumer. There is already conflict between the oil companies as a result of the Government’s proposal.
We say there is a comparatively simple way to encourage the oil companies. We agree that enterprise and ingenuity should be rewarded and that a tribute should be paid to initiative; but we say that this can be done by way of a special taxation schedule. We suggest that there should be a differential rate of subsidy. After all, by its proposal, the Government is going to help only the few companies which have really rich wells and which are in absolutely no need whatever of help from the ordinary people.
It is interesting to remember that the Government owes its return to office in no small measure to its promise to eliminate petrol rationing at the time when the Labor Government said that petrol rationing was necessary. It is interesting also to speculate on whether the Government will go out of office as a result of fleecing the public in order to pay huge sums to certain very wealthy oil companies. What is the attitude of the Government to the ordinary people who have t’o pay large sums by way of taxation? These people also contribute heavily to State revenues and they are required to pay a petrol tax, only portion of which is used to provide better facilities for the motorist. I remind honourable senators that Australian roads are not the best. It is because of their poor condition that they contribute in no small measure to the accidents that occur. They contribute also to the heavy running costs of motor vehicles because they are inadequate and because insufficient money is spent on them by the Commonwealth Government. Quite a large proportion of the petrol tax paid by motorists finds its way into Consolidated Revenue.
The Government’s proposal represents an extra tax levied upon a particular section of the people. These people are entitled to squeal if you place another heavy tax burden on them. The Government has adopted a discriminatory approach. It has been stated repeatedly that the payment of the subsidy will mean a saving to Australia in overseas exchange. If the nation is going to benefit and there will be a saving for all the people, then let all the people pay for it. Do not ask only one section of the people to bear the cost. Such an approach is not fair. I repeat that if this means a saving in overseas expenditure, it is not only the motorist who will benefit but the nation and its people in general. That being so, all the people, not just the motorists, should bear the cost. Do not let us have this discriminatory approach by the Government.
Does the Government think it will get away with this scheme? It certainly will not. The motorists are squealing already, and squealing to some effect. All this proves that the Government has not given very careful consideration to the problem at all when it suggests that the scheme should be continued as being the best way in which to encourage discovery of oil deposits in Australia.
The Australian Labor Party does not quarrel with the idea of subsidies. As a matter of fact, Labor quarrelled with the proposal to reduce the subsidy from 50% to 30%. There were squeals from this side side of the Senate when Senator Sir William Spooner, as Minister for National Development, introduced the legislation designed to bring about that reduction. I can recall the occasion only too vividly. I was probably one of those who squealed most.
Do not forget, when the Government made this subsidy available, there was no comeback; there was only a mere refund. The Government had no equity in an enterprise if it discovered oil. The only money it got back was the money advanced by way of subsidy. Today, however, people investing in oil exploration companies have the benefit of tax deductions for their calls, and those deductions are not inconsiderable. There are practically no oil shares selling on the market at less than a premium today. Even the shares in wildcat companies are selling at a premium. It is idle, therefore, to suggest that people are not interested in oil exploration or that the companies cannot get money for this particular purpose at the present time.
We say that it is iniquitous to think of subsidising the production of oil to the extent of $1 a barrel especially when it is realised that one particular group is going to produce over 200,000 barrels a day and therefore will have something in the vicinity of $50m or $60m added to its profit each year. It is to enjoy this benefit for no other reason than that it has been fortunate enough to discover a very profitable oil field. We say that if the Government had given serious consideration to the matter, if it had realised the importance of oil to Australia, if it had appreciated properly how the burden should be placed, it would have devised a much more equitable scheme to assist those who find oil and so contribute to the financial welfare of Australia. We suggest that it would have decided upon a measure of tax incentive, a special tax allowance, or a system of differential rates of subsidy. In other words, we say that those who have wells that are not quite as remunerative as other wells should be paid a subsidy while those companies which have highly profitable wells should not receive any subsidy at all because they do not really need it. It is as simple as that. Labor is concerned to know what the future holds for the motorists of Australia so far as the price of petrol is concerned.
The whole of our transport system is tied up with crude oil. There is not a State railway system running on coal today. Practically all of the railway systems have been converted to diesel oil. We as a nation have a tremendous responsibility in this field. I will admit that we have a responsibility to reduce overseas spending to the extent that that lies within our power. But we also have a responsibility to ensure that the people receive at a reasonable price a product that comes from the natural endowment of their country. We say that anyone is entitled to a fair return in relation to the risk that he has taken in the investment of capital, the ability that he has shown in exploration and the initiative that he has displayed. But he is not entitled to an extraordinary return. That is the whole issue.
We just wish to make it clear to the Government that we are concerned about this. We are not indulging in cheap political propaganda, as Senator Greenwood said we were. It would be far from us to do that. Let us be quite frank and fair. We should pay so much, bearing in mind the benefit that accrues to Australia; but we should not overpay. The Government should give careful consideration to this matter. It should approach it from the viewpoint of the interests of the people, not the interests of a particular group. What will happen when the oil comes to be distributed among the various refineries? What sort of arguments will there be between the companies that have not payable oil wells and the companies, such as the Esso company and the Broken Hill Pty Co. Ltd, that have payable oil wells? There will be no end of conflict. The Government must realise that. How long the Government will survive once the oil companies start to fight among themselves I do not know. That may be one thing that will take from the present Government parties the control of the Treasury bench, which would be all to the good of Australia. I am sure that no-one on this side of the chamber would dispute that.
The solution to the problem is to adopt a differential approach in relation to the type of company that will be subsidised or in relation to taxation, so that the future of a company can be guaranteed in some measure, but not at the expense of a particular section of Australia, namely the motorists. The motorists have the right to be protected to a certain extent because at the present time they are paying more than they should be paying for the facilities and amenities that are provided for them. We say that they should be given a fair go. They are entitled to that. They have been kicked for long enough. They have been overtaxed for years. They are overpaying in respect of insurance at present. It is of no use to say that the price of petrol in France is 80c a gallon and in Denmark or somewhere else 60c a gallon. Members of the public are entitled to the cheapest petrol that can be provided. That is why we ask the Government to give them a go, to let them have petrol as cheaply as it. can be provided and, at the same time, if it wants to, to find a more equitable way of providing a fair return for exploration companies.
– We should not mention oil either, should we?
– Oil is most important. It is the topic of this urgency debate. Oil is most important to Australia and we should strive to find more and more of it. Unfortunately members of the Opposition seem to have the idea that what we have now is enough. Opposition senators say that we should use what we have and pay only what is necessary. The Opposition has no intention of paying an incentive in order to stimulate further development.
Another comment made during this debate related to the big oil companies. The Minister explained how these big companies paid taxation. I think what the Minister said surely squashed and belittled any ideas that members of the Opposition may have had of making political capital out of this, in my opinion, most stupid urgency debate. Let us consider this matter. What was the alternative to the operations of the big companies? Was it nationalisation? I think this is what is at the back of the minds of members of the Opposition. If the oil industry were nationalised I do not think many people in Australia would be interested in oil exploration. Nationalisation would stop exploration completely.
I want now to deal with the topic of this matter of urgency as it affects, as Senator Cant said, the man in the street, the consumer. He is the person who uses this product. If honourable senators look through their notes they will find that the average consumption per head for petroleum products in Australia is 154 gallons per year. This information is included in the notes from which members of the Opposition have quoted. I am quoting from the same booklet. In 1965-66 the average consumption per head was 152 gallons. In 1966-67 it was 156 gallons. The additional cost of 5c or 7c per gallon for 156 gallons per year - the average used by the man in the street - is infinitesimal compared with what would be spent on cigarettes, beer and so on. Do not let us pretend that the man on the street is screaming that he cannot afford to pay a higher price over a very short period for petrol. Let us face it: The oil fields in Bass Strait will1 not be producing until about 1969, 1 understand, and, after refining, the quantity of petrol produced will be very small compared with Australia’s consumption. So the argument about the opinion of the man in the street does not wash with me.
– lt is very valuable to him. All sorts of figures have been quoted on the national basis but I have brought the matter back to what it will cost the average man in the street. It will cost him an extra 5c a gallon over the short period from when the Gippsland fields come into production until the subsidy comes up for review. This is a very small price to pay for what we need in Australia. Let us consider why we wanted to find oil here. Do honourable senators remember when we dealt with the Bill, following the Tariff Board report, which raised (he incentive payment from 25c to 75c? Do honourable senators remember the state of the world at that time? Do they remember what was happening not far to our north east, in Indonesia, and what was happening in our shipping lanes? I think what was happening then might’ have been the reason for the Opposition not opposing incentive payments, no matter what the amount was. For defence reasons we wanted to be independent and I hope we want independence in the future. 1 think the incentive payment introduced by the Government then was an expeditious move because of our defence needs. 1 think that was the main reason behind the. decision to increase the payment of 25c recommended by the Tariff Board to 75c.
There has been some talk in this debate about the subsidies paid to the big oil companies. Let us re-examine this matter. I understand that the subsidies are returnable when a field is proved to be economic and a licence is granted on that’ basis. That is my understanding of the situation. Honourable senators should not think for a moment that the big companies which have been referred to are working wholly and solely in order to receive subsidy payments. Royalties were mentioned. Surely we are not to use in debates in this chamber information gained through the privilege of a Senate select committee. Royalties have been discussed by the Senate Select Committee inquiring into the ramifications of our off-shore oil legislation. How far can a debate go on a motion such as this? 1 am a member of the Committee inquiring into all aspects of off-shore oil legislation. I would not attempt at any stage to divulge information I have gained as a member of that Committee. If the question of royalties had not been considered time and time again by the Committee, it should have been. It was one of the prime reasons for setting up the Committee. To bring into this debate the evidence it has taken is, I think, completely unnecessary and unprincipled. 1 turn now to what the Minister has said about the price of petrol and petroleum products. He has said that it is completely essential to the national interest that we try to be independent in respect of oil supplies. He has said that we should strive to attain an export quota to assist our overseas earnings. The Government has striven and will continue to strive to that end. In 1970 meetings will be held between the Federal Government and the exploration companies. I have no doubt that those companies will have no hesitation at all in saying: ‘We will meet you. We want to find oil. It will benefit us and it will also benefit the Australian nation’.
There is need of a national viewpoint on this subject instead of a partisan and higgledy-piggledy attitude. We should be determined to find oil sufficient for our requirements for the rest of time, not just for the next 14 years. If for 5 years we must pay a higher price for petroleum products we should be prepared to do so. Let us not quibble about it. Let us pay an extra Se a gallon on the petrol that is purchased at the rate of about 152 gallons a year for each person in Australia. Let us look at this on a national basis and not on a party basis. Let us adopt a national outlook.
– Order! The time allowed for consideration of this motion under standing order 64 having expired, the Senate will now proceed to other business.
-(New South Wales - Minister for Supply) - by leave - I present the report of the Commonwealth Actuary on the third quinquennial investigation of the Defence Forces Retirement Benefits Fund, together with a minute addressed to the Treasurer (Mr McMahon) by the Defence Forces Retirement Benefits Board when forwarding the Actuary’s report. I also want to outline the Government’s decisions on the issues raised by the report. The Actuary’s investigation was in respect of the 5-year period from 1st July 1959 to 30th June 1964. ft is of special significance because it is the first full-scale actuarial review of the Fund since the basis of the scheme was revised following the Allison Committee report of 1959 and some particularly complex issues have been thrown up.
The Actuary’s valuation of the Fund as at 30th June 1964 showed the following results:
A surplus of $4,465,770 in respect of members who entered the Fund before 14th December 1959:
A deficiency of $3,260,000 in respect of members who entered the Fund after 14th December 1959.
Subsequently I will refer to the two classes of members as the pre- 1959 and the post-1959 entrants. The distinction between them is due to the different bases on which they contribute. Those who entered before 14th December 1959 contribute on much the same basis as Superannuation Fund contributors - that is, they purchase units of benefit commensurate to their age and rate of pay. Those who entered after 14th December 1959 contribute a percentage of salary which applies to each member during service regardless of salary changes. At present the percentage is normally 5% but it increases to 12% for higher ages of entry.
Honourable senators will appreciate that a result showing a surplus in one part of the Fund and a deficiency in another immediately raises an important issue. Added to this, the DFRB Board did not agree in all respects with the recommendations made by the Actuary concerning the action that should be taken as a consequence of the latter’s findings. These and other considerations have necessitated intensive examination by the Government of the whole of the issues involved.
The first possibility that had to be considered was whether the deficiency should be offset against the surplus. We have decided against this because the two groups of members contribute on different bases and it would be inequitable to use the surplus of one group to make good the deficiency of the other. Moreover, this action would not remove the causes of the deficiency in respect of the post-1959 entrants because these entrants will steadily become a bigger proportion of the membership of the Fund and further deficits in relation to them would accumulate.
We have also rejected the possibility of using the surplus in respect of pre- 1959 entrants to increase the benefits payable on retirement to those entrants and, correspondingly, of liquidating the deficiency in respect of post-1959 entrants by reducing the benefits payable to them on retirement. The existing scale of benefits has been established in relation to the pay and conditions of the defence forces and the Government would consider it wrong in principle that there should be two different scales of benefits for those who became members of the Fund before 14th December 1959 and those who became members after that time.
It is therefore necessary to deal separately with the surplus and the deficiency. Taking the pre- 1959 entrants first, there is on the Actuary’s calculations a surplus of $4,465,770 as at 30th June 1964 for disposal. Various courses of action have been proposed. The Actuary pointed out in his report the complexities that arise from the contribution basis of the pre- 1959 entrants, and proposed that the surplus be used, in part, to rationalise the contribution structure of this group, any surplus remaining to be refunded in cash. The DFRB Board, however, while endorsing the Actuary’s recommendations for a rationalisation of the contribution basis, recommended that the whole of the surplus, with interest, be distributed in cash.
The Government has decided to adopt the Board’s recommendation. It is accordingly intended that there will be a cash refund of the surplus, with interest from 1st July 1964, to eligible pensioners and contributors in the pre- 1959 group. I emphasise the word ‘eligible* because not all current pensioners will receive a payment and the amount of the payment to individuals will vary according to circumstances. The distribution will be made on a basis to bc determined by the Treasurer after receiving the advice of the Actuary. The aim will be to devise the simplest possible basis commensurate with the essential requirement that each person concerned will receive his fair share. However, there are many thousands of contributors’ records to be consulted and many thousands of calculations to be made. I emphasise at this stage, therefore, that appreciable delays before payments are made will probably prove to be unavoidable. It is intended that priority will be given to the making of payments to pensioners.
In regard to the contribution basis of pre- 1 959 entrants, the Government has been impressed with the Actuary’s emphasis on the need for rationalisation and also by the many complaints that have been made about the complexities of the existing basis. We have accordingly decided to put in hand a general review of the contribution basis of pre-1959 entrants with a view particularly to ascertaining whether it would be practicable to convert the basis to a percentage of salary as in the case of post- 1 959 contributors. This review will be made in the first instance by the Treasury in consultation with the Commonwealth Actuary and the DFRB Board. The review will inevitably be a complex exercise and will take some time to complete. Whether it will result in a simplified basis of contributions for pre- 1959 entrants I am unable at this stage to forecast. Pending the results of the review there will be no change in the contribution rates payable by pre-1959 entrants. Consistent with the decision we have taken in the case of post- 1959 entrants to which I shall refer later, and subject to an important qualification I shall also refer to later, we have decided to adopt an overall proportion of 20% as the Fund’s share of benefits payable to pre-1959 entrants. At present the Fund’s share of such benefits is 15% of entitlements taken up before 14th December 1959 and 221% of entitlements taken up subsequently.
I turn now to the post-1959 entrants where we have had to consider the action to be taken to deal with the deficiency of §3,260,000 as at 30th June 1964 reported by the Actuary. There is one point I should mention first of all. Since the Actuary’s investigation was completed, provision has been made for the Commonwealth to meet charges on the Fund that ensue from the participation of DFRB contributors in active service operations. The Actuary has advised that this development, which has particular relevance to the post-1959 section of the Fund, has operated to reduce the deficiency by an estimated $200,000.
Essentially, there are three possible ways of dealing with the deficiency: First, by reducing benefits; second, by increasing contributions; and third, by reducing the proportion of benefits met by the Fund and consequently increasing the proportion met by the Commonwealth. 1 have already indicated that the Government considers a reduction in benefits for post-1959 entrants to be wrong in principle. This means that we have had to seek a solution in terms of an increase in contributions or a reduction in the proportion of benefits met by the Fund, or a combination of these two methods. We have decided that the appropriate course is such a combination.
An increase in contributions is, of course, the traditional method of meeting a deficiency, and there are many examples of superannuation funds based on percentage of salary contributions which have been obliged to increase their contribution rates to meet the problem of rising salaries and benefits. In the case of the Defence Forces Retirement Benefits Fund, there is also the important consideration that increases in benefits were granted in 1962 and 1963 without any increase in contributions. I wish to recall what the former Treasurer said in his second reading speech on the 1963 Bill. He stated that no change would then be made to the contribution scale adopted in 1959 but that the increased entitlements being provided might, call for some adjustment in contributions following the actuarial investigation as at 30th June 1964. The actuarial investigation has indicated that contribution rates are not adequate to support the existing scale of benefits.
The amount of increase in the rate of contributions payable by post-1959 entrants will be 0.5% of salary. This will mean that a member now contributing 5% of salary will in future contribute 5.5% of salary, while a member now contributing, say, 8% of salary will in future contribute 8.5%. In the case of a private, group 1, the increase will be from $4.38 to $4.82 a fortnight at present rates of pay. In the case of a colonel currently contributing $16.67 a fortnight, the new rate of contribution will be $18.34 a fortnight. The increase will not be retrospective and will apply from the first pay day after the date of amending legislation.
Concurrently with this increase in contributions, there will be a reduction from 22.5% to 20% in the proportion of benefits to post- 1959 entrants payable by the Fund. This means, of course, that the proportion of such benefits payable by the Commonwealth will be increased from 77.5% to 80%. The Actuary has estimated that the combined effect of these decisions will be to restore the solvency of the Fund in respect of post-1 959 entrants.
The important stipulation is made that the increases in the proportion of benefits payable by the Commonwealth, in respect of both pre-1959 and post-1959 entrants, should not of themselves lead to future surpluses in the Fund which would be regarded as available for distribution. It is therefore a firm decision of the Government that any future surpluses in the Fund will not be available for distribution except to the extent, if any, that they are in excess of the amount required from 1st July 1964 to meet the proportions of benefits at present payable by the Fund.
Legislation will be introduced in the Budget session to authorise the distribution of the surplus to eligible pre-1959 entrants. The legislation will also provide for the revised basis of financing benefits and for the contribution increase for post-1959 entrants, both of these to apply from the first appropriate pay day after the amending legislation receives royal assent.
I present the following paper:
Defence Forces Retirement Benefit Fund - Report by the Commonwealth Actuary on the Third Quinquennial Investigation into the Fund as at 30 June 1964 - and move:
That the Senatetake note of the paper.
Debate (on motion by Senator Bishop) adjourned.
– The honourable senator is dealing with the wrong Bill.
– I was under the impression that we were discussing all the Bills together.
– The amendment moved by Senator Cohen has direct relation to financial arrangements. For that reason, I took it that I could debate this particular Bill. Could the matter be made clear? If I am restricted in the discussion, I shall confine my remarks to the relevant Bill.
– As I said earlier, I believe that the time is not yet ripe for the establishment of a corporation. 1 believe that there should be a progressive move towards autonomy for the Post Office, but as I indicated in my earlier remarks, the need for development in Australia, with its vast area, calls for a continuation of the present system for the time being. I would like to see the Post Office enjoying the benefits which would accrue to it if it were permitted to operate under a more businesslike charter. I should like to see it have a trust account into which to pay its revenues. It should then seek from the Government its requirement for capital works and so on and it should be able to budget in its own right from year to year.
When one notes that at the present time the Post Office has to make application to the Treasury for certain appropriations for particular purposes and that it must use the moneys so appropriated for those particular purposes, one cannot help but feel that there is a certain amount of hamstringing of the efficient conduct of the organisation. This system also requires the keeping of two sets of accountancy figures, one for Treasury requirements and one for commercial needs within the organisation itself. We want to get the best from the staff in the Post Office and the removal of unnecessary red tape is certainly very desirable. If we can give the good officers of the Post Office the knowledge that they are running a business organisation in the way in which businesses generally other than public activities are run, then I am convinced they will feel that they are working constructively and not being handicapped by the unnecessary duplication of facts and figures which is not in the interests of their contentment within their jobs, the efficiency of the Post Office or the general wellbeing of the State.
– The British Post Office has been the subject of inquiry for many years. It is only now that firm decisions have been made to set up a statutory body to conduct the affairs of the Post Office in the United Kingdom. In 1932, the Bridgeman Committee was appointed to inquire into and report upon whether any changes in the constitution, status or system of organisation of the Post Office would be in the public interest. The report recognised the special case of the Post Office as a commercial organisation but did not favour a change in its status to that of a statutory authority, either wholly or in part.
Then, 23 years later, in October 1955, a report was presented to the British Parliament. That report reviewed the development and finances of the Post Office. The Government then agreed that the Post Office should be responsible for its own income and expenditure and should be encouraged to conduct its business as a commercial enterprise. In 1960 a Bill to amend the Post Office Act 1953 was passed by the Parliament. It came into operation on 1st April 1961. The main features of that Bill were the separation of Post Office finances from the Exchequer, the abolition of the annual parliamentary estimate procedure and the Treasury control that goes with it, and its replacement by an effective but nevertheless flexible parliamentary control. Another feature was that the Post Office staff should remain civil servants. In 1966 the Government carried out a further review of the Post Office and announced in August 1966 that a public corporation would be established. A White Paper providing for the Post Office to become a corporation was presented in March 1967. The corporation was to be established by April 1969, but so far the enabling legislation for this has not been brought down. So that, a compact country, where the population density is quite different from ours, has taken very many years to come to a decision to establish a statutory corporation to conduct the affairs of the Post Office.
Were we to apply to our Post Office the conditions which I understand the United Kingdom Government expects to apply to its Post Office, conditions such as the payment of interest on money due and the making of a profit on both the postal and telecommunications sides, together with the payment of sales tax, payroll tax, and so on, we would be placing a very burdensome charge indeed upon our organisation. Furthermore, we would be removing the Post Office from what I feel is its necessary role for the time being - the continuing development of telecommunications and postal services generally which are so necessary to a developing country. With the Post Office paying its revenue into its trust account and then working out a schedule for the year to cover its requirements for capital and running expenses, there would be a single line appropriation to meet its needs. Each year we would have a much simplified process of the Post Office seeking an amount of money that would be itemised in a White Paper which would be presented to the Treasurer and then to the Parliament and which would set out its capital requirements and the balance as between operating costs and revenue.
Let me take as an example the year 1966-67. In that year the capital works of the Post Office cost $205. lm; the operating expenditure was $404.5m; and the total expenditure was $609. 6m. The revenue was $430.7m. That would necessitate an appropriation of $178.9m in the Budget. There is a precise and clearly defined amount of money that would be required. The administration of the Post Office could work out its requirements for succeeding years. It could have greater flexibility in its finances. It would be able to do things without constant recourse to the Government or the Parliament for various appropriations. All of this adds up to an unnecessary amount of work arid frustration for the officers of the Department. 1 believe that from every angle the proposal to give this business charter to the Post Office is good. 1 have no doubt that it comes like a breath of fresh air to those who seek to run the affairs of the Post Office in a more businesslike manner while still being able to do those things that are necessary in the interests of the development of the nation. I have pleasure in supporting the Bill.
– We do not seek a select committee of the Senate to inquire into this. The amendment refers to a joint select committee.
– Well, my views are the same with respect to a joint select committee. I base my views on these brief facts. Firstly, the Post Office is one of the important organisations which are helping the rapid growth of a very large nation. The Post Office is not a money earner; it is not expected to make profits. The Post Office has to be subsidised because it has, for various reasons, to perform uneconomic functions to aid the development of Australia. Equipment used by the Post Office is not like equipment used in trading concerns which is only replaced when worn out. In this modern age, equipment used by the Post Office to maintain efficient and fast communications has to be replaced as new equipment comes on to the market. Therefore the proposition that we should try to make the Post Office a money earner for the taxpayer cannot be considered. The Post Office has to be run efficiently but it has to play its part in developing Australia.
While we are at this stage in our history it is important also that the PostmasterGeneral’s Department should have close affinity with the Parliament and the Executive. I believe it is advantageous to the
Department to be closely linked with Parliament. 1 am certain, as a senator, that it is advantageous to the electors whom my colleagues from Tasmania and 1 represent for us to have a close affinity with officers of the Department in order to help solve some of our electors’ communications problems. This is an important factor in our present way of life and will be so for at least the next decade. I would hate to think that any action by this Parliament would allow the Postal Department to develop into an organisation such as Qantas Airways Ltd, the Commonwealth Trading Bank or Trans-Australia Airlines. In saying that, T have no criticism to offer of any one of those three business undertakings; but they are in a completely different category from the Post Office in respect of the life and development of Australia. Ordinary members of Parliament and Ministers have practically no authority over, and very little access to, a statutory body once it is set up.
The Government has shown in this legislation its strength of purpose in respect of the Postal Department. If the Parliament will allow the financial set-up of the Post Office to be changed in the way provided for in the legislation, so that a form of control will gradually develop, perhaps when Australia is a fully developed country there will be an opportunity to alter the position where the Post Office, as now, has such a close affinity, as I believe it must have, with the Parliament of Australia.
The change of control of the United Kingdom Post Office has been referred to in this debate, but we do not have to go all the way with the old UK at this juncture. We can follow the example of the United Kingdom and gradually develop a power of control and administration of our Postal Department in line with what has proved to be a success in England. England is a small and fully developed country, and the situation there is totally different from the situation in Australia. 1 understand that the Bill we are debating will be passed tonight. I hope that the Labor Party will not press its amendment providing for the appointment of a select committee. 1 sincerely believe that no good could come to the Postal Department from that move or, what is more important, to the taxpayers of Australia. I oppose the amendment.
– We can have both because, if the amendment is carried, the Bill is not destroyed.
– That is true. That is why I am proposing to vote against the amendment.
– Whichever way I vote I get abuse from one side of the chamber or the other. I am used to that treatment.
– My term has another 6 years to run, so I can still exercise an independent mind on the matter. I was finally influenced not to support the appointment of a select committee because there has been no opposition to the Bill or to the advice given by the Postal Department. I believe that the proposals contained in the legislation should be supported. If at the end of 2 or 3 years it is clear that the proposals have failed, I will be only too happy to support the Opposition in demanding the appointment of a. corporation.
– But the same principle is there.
– lt does not work.
– It does not work. It is an improvement but it is not the complete remedy for the ills of the post and telegraph services as I understand them. I can be corrected, of course, by those who have infinitely greater knowledge and experience of this matter than I have.
– I take notice of anyone who intelligently presents a case, just as I take notice of Mr O’Grady, the former Director-General of Posts and Telegraphs. I take notice of those in the United Kingdom who have seen the need for these improvements. What is more, it is not limited to Great Britain. Honourable senators might recollect that on a previous occasion I read to the Senate some remarks of the Chief Postmaster in the United States of America. Addressing a big congress of business people in that country, he said with no ambiguity at all that the time was long overdue for the postal services to have a. facelift and for them to be brought up to date and given a greater measure of autonomy than they had. Of course, private enterprise conducts all the telecommunication services in the United States.
Those people who turn up their eyes at (lie suggestion that the post and telegraph services here should be made a statutory authority overlook the fact that an allied service, the Overseas Telecommunications Commission, is a public authority, not under the direction of the post and telegraph services, lt is a statutory authority, and very successful financially. What more evidence do honourable senators need to be convinced of the necessity of at least having an inquiry into the matter. That is all that has been asked, nothing more, nothing less, yet there is opposition to it. The Minister and the Government should be very grateful that somebody is endeavouring to help them out of their dilemma, because there is not any question that, of recent years particularly, the administration of the post and telegraph services has been anything but satisfactory. When I refer to the administration of the post and telegraph services I am not reflecting on those charged with their administration; I am saying that the general working of the Department is anything . but satisfactory. There is internal dissention and trouble.There is industrial unrest and there are public complaints about delays in services and about rising costs which mean that, because of the lack of an efficient financial structure, the present subscribers are being required to pay to provide a service for the applicants for a similar service. T have heard the Postmaster-General in another place deal with this question, and I will say that from his point of view he put up a plausible case. One would think that the system of borrowings and the expenditure of loan money for (he expansion of post and telegraph services posed a problem that was insurmountable and that it could never work. We have State electricity commissions which go onto the public market from time to time lo raise money on their own account. They do very well indeed. In Queensland the State Electricity Commission has done excellently. I can see no difficulty about similar operations by the PostmasterGeneral’s Department if it were given the same opportunity and the same powers.
I have not very much time to develop my ideas on this matter and I do not think it warrants my saying much more. I have dealt with it on previous occasions. 1 think that we could agree to this amendment with advantage, and probably with a great measure of profit to the Department and to the Government itself. I should like to read the statement by the United States Postmaster-General, Mr Lawrence F. O’Brien.
– I do not know whether or not he is and i am not much concerned.
– If 1 am, 1 am entitled to my views, as the honourable senator is entitled to his.
– No, 1 am a Gair man, first, second and third. Speaking to the Magazine Publishers Association and the American Society of Magazine Editors al the Shoreham Hotel, Washington, DC, on 3rd April 1967- comparatively recently - Mr O’Brien said:
The reason for this painful and difficult progress is rooted not merely in volume, but more in the restrictive jungle of legislation and custom that has grown up around the Post Office Department in the 138 years since it joined Andrew Jackson’s Cabinet. … 1 have concluded that there are so many existing and formidable barriers to efficient management that the ultimate solution to the problems of the postal service lies in taking the Department out of its present context entirely.
He said a great deal more which, having regard to the time, I do not propose to read. But I appeal to honourable senators to vote for this amendment and give a joint committee an opportunity to examine the pros and cons. That is all that has been asked for. I am confident that a great deal of valuable information and knowledge can be obtained as a. result of the exercise. It will not damage the prestige of any individual associated with the present administration. It will not impede any development that is likely to take place in the Department. Rather, it could have the effect of assisting those people who are charged with its administration in difficult circumstances. The establishment of a trust fund is, I think, a step in the right direction, but it is only one step.
This is my personal opinion. We must go further than that and remove the Department from the influence of the Public Service Board, allowing the Director-General of Posts and Telegraphs and his executive officers to run their department in the way in which they desire to run it and as they should know how to run it, particularly in the matter of staffing and the appointment of people to important and responsible positions.
Senator Dame ANNABELLE RANKIN (Queensland - Minister for Housing) [10.54] - in reply - I rise to reply on behalf of the Postmaster-General (Mr Hulme) to the debate on the Post and Telegraph Bill which is now before the Senate. Speaking to the amendment, which we oppose, let me refer to comments made by the PostmasterGeneral in another place when this Bill was before that chamber. He made it very clear that he has not a closed mind on the matter of the best form of organisation for the Post Office. But there are many problems. Some of these problems do not apply to the United Kingdom situation - which, of course, has been the subject of much of this debate - because there, all parties have for a number of years accepted the concept of nationalised industries which make quite substantial profits repaying upwards of 8% on their investment, with these profits being ploughed back into further development of such nationalised industries. For many years the Opposition has strongly opposed the payment of interest by the Post Office. Inevitably a select committee, if it in any way followed the approach normal in respect of statutory corporations would consider what profits should be made by the Post Office and hold that it should pay interest. If we had a select committee, the Opposition would simply sa.y that there should be no interest or profits, whereas, of course, the Government would take the opposite view. So with the philosophy of the Opposition so completely opposed to the payment of interest - let alone profits - I see no purpose in a select committee whose members would take such diametrically opposed stands on basic issues.
The British Post “Office is required to earn 2% on its expenses on the postal side and 8.5% on funds invested in telecommunications. Analysis of the 1966-67 accounts of the Australian Post Office shows that its charges would have had to be increased by about $72m to achieve the British Post Office target. Furthermore, as a statutory corporation the Post Office could be required to pay sales tax, customs and excise duties, payroll tax and other taxes amounting to many millions of dollars yearly. These are points that must be considered in this discussion.
I should like to make some comment upon one or two points that have been made in this debate. Senator Cohen spoke of borrowings and control over spending. There have been suggestions that the Post Office should borrow on the outside market, if this were so it would be competing with Commonwealth loans, taking away loan funds from the States and also competing with Stale authorities and boards, electricity commissions and the like, in a market which at present cannot meet the collective demands of these State instrumentalities. Moreover, the British PostOffice is limited, and even under the proposed corporation arrangements will be limited, to borrowing through the Exchequer. There must be Government control over such huge public borrowing and the determination of upper spending and borrowing limits must continue to be oversighted by the Government and Parliament.
Senator Bishop raised several points which might well have been considered at the Committee stage but I believe that it is right that I should endeavour to reply to them now, because I know they are matters on which he has held strong views and about which he has desired some reassurance. He raised a number of points affecting the Bill as it concerns the carriage of mail and the protection of departmental plant. As he intimated, the PostmasterGeneral in another place answered a number of the points that had been raised by the Opposition following, in particular, comments from the Australian Council of Trade Unions.
– I want to reiterate the point made by the Postmaster-General in another place, that the changes that have been proposed in regard to the carriage of mail have not been influenced by industrial considerations. They are designed entirely to ensure the smoothflow of mail. I believe that that is of paramount importance. I should also explain the purpose of the changes, particularly as one of them introduces the provision for detention of a vessel where it is apparent that the master of the ship does not intend to meet his responsibility for the transportation of mail. Proposed new Part II of the principal Act deals with two separate aspects of the carriage of mail - its arrival and its dispatch. There is no change in the principle that mail shallbe delivered up by the master of a ship. This principle which is to be given effect in proposed new section 66. has been in the Act since its inception, in sections 67 and 68. In fact, the existing provisions were drawn from the original State Acts.
Senator Bishop also referred to the requirements that vessels take on mail. This is not a new requirement. It. has been laid down in Australian legislation since before federation. Nevertheless, it has been necessary to introduce an authority which is designed to ensure that the objective of the existing legislation, as well asthe arrangements which have been made with the shipping companies, are carried out. The legislation sets out the specific responsibilities of the Post Office to have mail available at an. agreed time and place. The time and place are arranged in advance through the shipping agencies. The detention provision is not applicable where safely is involved. A particular order would be valid for only 24 hours.
Senator Bishop referred also to the Department’s right to have an officer board a vessel.I should point out that a vessel may be boarded only where a detention order is applicable, and this will apply only to ships intended to pick up mails going out from the port. Proposed new section 68 (2.) contains a provision which is designed to ensure that a detention direction is carried out. A further point made by Senator Bishop concerned the protection of plant, which is covered in the Bill that is before us. 1 appreciate most sincerely the concern expressed by the honourable senator. He said that there must be co-operation between the various authorities in minimising public inconvenience as a result of works performed on public roadways and thoroughfares. The Post Office has actively promoted co-operation with the various governmental authorities involved in public works. This co-operation is at all levels and occurs in both planning and the actual carrying out of works. The Bill will encourage this co-operation by providing a defence in proceedings for the recovery of compensation for damage incurred to Post Office plant, if the person concerned has co-operated with the Post Office. Provision concerning the recovery of compensation is made in proposed new section 139b (2.) and proposed new section 139c (2.).
Senator Bishop referred also to the situation of an employee who does work for a principal as a result of which damage to Post Office equipment is caused. This is covered in the Bill, which makes it clear that where damage occurs as a result of work performed by a person, whether by himself or by his servant, responsibility for payment rests with the principal. Proposed new section 139c retains a principle, which has existed until now in section 85 (2.) of the Act. concerning the statutory liability of municipal councils and other authorities to meet the cost of rearrangement of plant and equipment caused by their road widening and associated activities. The purpose is to ensure that these authorities, and indeed any person who does work in the vicinity of Post Office property. meet th? cost of any consequential work that has to be carried out by the Post Office. A number of the matters about which Senator B:shop expressed concern have already been referred to in another place by the Postmaster-General. However. I give the honourable senator an added assurance regarding the matters he has raised.
Senator Poyser raised a number of questions relating to the conversion of telephone services to automatic working in country areas. I am given to understand that the honourable senator has made representations concerning this matter to the Postmaster-General, who will be communicating with him within the next few days. Senator Gair referred to the Overseas Telecommunications Commission (Australia) in relation to the Post Office. The OTC serves only a comparatively small section of the Australian community. The Post Office supplies a public service throughout the nation, and provides developmental services. As we all recognise, the Post Office makes an impact on the daily lives of everyone in the community. It deals with many people and it embraces a wide range of activities. I have endeavoured to reply to the points raised by honourable senators who have spoken in the debate. I thank them for their interesting and thoughtful contributions. I again inform the Senate that the Government opposes the amendment moved by the Deputy Leader of the Opposition (Senator Cohen).
That the words proposed to he added (Senator Cohen’s amendment) be added.
– Is leave granted?
– Leave is not granted.
– Then I will read them out. The document is headed ‘Stuart - Mount Isa’ and it reads:
– Whether or not it has anything to do with the Commonwealth Government, it is a matter of humanity. If the Commonwealth is subsidising the Queensland Government which in turn is subsidising the shipping lines, then the Commonwealth should be careful about where the taxpayers’ money goes. If Senator Cormack is not interested in where it goes, many other people are. His political life will be short if he adopts that attitude. I respectfully suggest that these matters be considered and that in future some sort of forward planning be undertaken to ensure that these circumstances do not occur again to further inconvenience the people who live in the remote areas of this country-
Senator MULVIHILL (New South Wales) [ll.26 - My mission tonight is a unique one. I find myself rising to defend the Minister for National Development (Mr Fairbairn) and his Department against a vicious attack by the New South Wales Minister for Mines, Mr Wal Fife. The reason is simply this: On a previous occasion 1 exhibited in this chamber a production by the Bureau of Mineral Resources of the Department of National Development, namely, ‘Bulletin No. 72’. which deals with limestone. I furnished copies of that bulletin to a number of groups in New South Wales which have been concerned about certain cement interests which have been trying to mine limestone in the Colong Caves area of New South Wales.
A lengthy statement by Mr Fife was published in the ‘Sydney Morning Herald’ of 21st May. Amongst other things, Mr Fife was endeavouring to refute a statement made by a Mr Milo Dunphy, who is prominent in the conservation field and who had used material from the Commonwealth publication to which I have referred, which stated in effect that there were numerous alternative sites for limestone in New South Wales. Amongst other things. Mr Fife made this claim in his statement:
Other than the deposits now being worked and the Colong deposit, these occurrences are of no economic significance at the present time for cement manufacture because of quality, size or location.
I ask honourable senators to ponder on those words and, by way of contrast, to look at the following statement on page 354 of the Bureau of Mineral Resources bulletin:
Limestone is of widespread occurrence in New South Wales. . . .
I also ask honourable senators to look at the table on page 357 of that bulletin, which sets out that the reserves in some deposits are practically unlimited and in others are 1,000 million tons. Strange as it may seem, no statement has been made by Mr Fairbairn in defence of the officers who produced this bulletin. Yet the New South Wales Minister for Mines says, in effect, that it is an inaccurate document. The Government cannot have it both ways. The officers attached to the Bureau of Mineral Resources go out to various parts of Australia and make surveys without any particular basis or favouritism. 1 cannot say that about the New South Wales Department of Mines.
This is the situation: On 2 1st May the New South Wales Minister for Mines said more or less that this Commonwealth document was untrue. Yet the Commonwealth Minister for National Development is sitting on the sideline and doing nothing. What makes the matter even more serious is that I have received a letter from Alderman Douglas Sutherland of the Metropolitan Water, Sewerage and Drainage Board in which he says that the Board has indicated to the New South Wales Government that in the Colong Caves area, which is part of one of the Board’s catchment areas, if wants very strict safeguards to ensure that the limestone sludge does not contaminate the Sydney water supply. This is one of those issues on which there is a considerable amount of agitation. In case Senator Scott, who is the Minister representing the Minister for National Development, believes that this is nol a matter for Commonwealth intervention. I point out to him that such powerful bodies as the New South Wales Division of the National Trust of Australia, the Nature Conservation Council of New South Wales, the New South Chapter of the Royal Australian Institute of Architects, the Wildlife Preservation Society of Australia and the National Parks Association of New South Wales are all standing four square behind the statement that I have made and behind this publication which has the imprimatur of a Commonwealth Minister on it. They are throwing back in the teeth of the New South Wales Minister for Mines his cavalier attitude to the whole situation. I am simply amazed that Mr Fairbairn has done nothing to refute the statement made by Mr Fife.
Like my colleague, Senator Keeffe, I do not want to delay the Senate unduly, so with the concurrence of honourable senators I incorporate in Hansard the editorial in the ‘Sydney Morning Herald’ of Saturday 25th May 1968 which carries the heading The Wilderness’.
Man’s conquest of his natural environment - the opening up of frontiers, the taming of rivers, the cultivation of the soil - was for centuries the hallmark of his progress; even, perhaps, the measure of his civilisation. But now that cities are sprawling and populations are growing apace, the emphasis has shifted. It is a mark of our modem civiliation that we want to preserve at least part of our environment from destruction. The motives for this are instinctive and aesthetic, and to oppose them with arguments of economics, of industrial efficiency, is for the conservationist a vulgarity. The conservationist understands that for man to remain a sane and reverent creature, aware of his place in a natural order, he must keep some parts of the world unspoiled, knowing that within his reach there are mountains and streams, tracts of wild country, animals, plants and birds that have always been and will always remain as they are.
But it is nol only the conservationist ‘crank’ who believes that our environment and its exploitation must be kept in a delicate balance. For some scientists, not only our sentimental links with the past but our future survival as a species depends on the way we treat our natural surroundings. In Judith Wright’s words: ‘lt may be late in our history for man to recognise himself as the most destructive animal ever known, but the knowledge may enable us to take steps to save ourselves from the worst consequences of the past.’ Gradually we have come to accept this new emphasis, and Governments in New South Wales have generally been enlightened in doing so. The present Government earned credit for its legislation on national parks and wildlife preservation. But now that it faces the first real test of its sincerity, the indications are that it will fail.
The Minister for Mines, Mr Fife, in his statement this week on the Colong dispute, justified the mining of limestone in the Colong Reserve on economic grounds alone, lt may well be true - though many people do not accept this - that the only economic reserves of limestone within easy reach of the Commonwealth Portland Cement Company’s works at Maldon are in the Colong area. But the economic arguments, even if true, are beside the point. It is precisely to protect areas from economic exploitation that we declare them natural reserves. If economic interests are paramount there is no point in having national parks at all. In a sense the Government must recognise this, for Mr Fife has been at pains to tell us that the company’s lease lies outside the proposed boundaries of the Kanangra-Boyd National Park, lt lies outside them because the Government has lopped 3,000 acres from the park in order to make way for it.
Colong is of special importance to Sydney people, for in a decade or so it may well be the last region of natural wilderness within reach of the metropolis. That it is no more than a wilderness is the chief reason for keeping it that way - not the justification for cutting it up. Already we can see in the dwindling fertility of the soil, the increasing destructiveness of floods, droughts, deforestation and the extinction of exploited species, the stripping of plant and forest cover from the land, the pollution of air, lakes and rivers by industrial and human waste, the consequences of centuries of uncontrolled exploitation. If the Government can be brought to see that the issue at Colong runs deeper than the price of cement, the dispute may not have been in vain. -
I conclude with a very brief quotation from the late President Kennedy which 1 think supports the point I am making. I hope that Senator Scott in replying to me now, or Mr Fairbairn in another place in a reply to me later, will refute Mr Fife’s illconsidered defence of the action taken by the New South Wales Government. This is what the late President Kennedy had to say on the subject of conservation:
Conservation . . . can be defined as the wise use of our natural environment: it is, in the final analysis, the highest form of national thrift - the prevention of waste and despoilment while preserving, improving and renewing the quality and usefulness of all our resources. 1 commend that text to the Government and await with interest Senator Scott’s defence of the inactivity of the Minister for National Development.
– Minister for Housing) [11.41] - I will place the honourable senator’s comments before the PostmasterGeneral (Mr Hulme). It is true that two questions were asked. I understand that answers to them are being prepared, but they have not yet reached me.
I propose this motion with the utmost confidence. Honourable senators may recall that on 5th April 1967 the Senate agreed on terms of reference for the Committee. The Committee was constituted on 1 1th April 1967, and by 20th April the personnel of the Committee had been determined. The first meeting of the Committee was held on 20th April, and for the past 13 months constant application to their duty has been the order of the day for members of the Committee. I should like to pay a tribute to members of the Committee, to the Usher of the Black Rod and the Deputy Usher of the Black Rod who were clerk and assistant clerk respectively of the Committee and also to the Committee’s technical consultant, Mr Alan Harper, of the Commonwealth Scientific and Industrial Research Organisation, for their diligence and for the tremendous effort they put forward.
The Committee held 28 public hearings. We visited every State capital, some more than once. There were 39 deliberative sessions and a small delegation of the Committee visited the Territory of Papua and New Guinea. In all 141 witnesses testified before the Committee and we received 54 written submissions from persons and organisations. It should be remembered that our Committee work was additional to our normal electorate and Senate duties.
I have in my hand the Committee’s report. I invite the attention of honourable senators to page1 which contains a summary of conclusions and recommendations. I stress that the report is unanimous. It commences in this way:
Following a full inquiry and a thorough examination of the evidence and other matter placed before it the Committee is of the unanimous opinion that it is practicable and desirable for Australia to adopt the metric system of weights and measures at an early date and recommends accordingly.
The main considerations which led the Committee to this conclusion are set out, and for the benefit of honourable senators I think I should mention some of them. We received submissions from individual citizens, Commonwealth Ministers and departments, State governments and departments, Commonwealth and State instrumentalities, and organisations. They overwhelmingly supported an early change to the sole use of the metric system and clearly indicated that there would be no insuperable difficulties in effecting such a change.
We were told, and truly believe, that the metric system was already in use in over 90% of the countries of the world and that the United Kingdom was actively converting to the metric system and expected to be predominantly metric by 1975. Approximately 75% of world trade is carried on in metric measurements, and already 70% of Australia’s export trade is to metric countries or to countries converting to the metric system. Of course this proportion can be expected to increase as our trade with South East Asia grows. In fact, some countries, including Japan, have made the use of the metric system mandatory for some of their import trade. Almost without exception education authorities favour the early adoption of the metric system. It should be remembered also that there is a cost advantage in the purchase of imported materials from the broadening metric system market rather than from the shrinking market using the imperial system.
We must remember the great success of the conversion to decimal currency. The full advantages of decimal currency, however, will not be experienced until the decimal system of weights and measures is being used also. It should be remembered that the decimal system is the basis of the metric system of weights and measures. Looking ahead, one must realise that in the sophisticated environment in which we are now living industrial standards specifications play an important part in the basis of industrial practice - in the International Organisation for Standardisation and in the Internationa) Electro-Technical Commission. Also, standards in British areas are being expressed increasingly in metric units. I would draw the attention of the Senate, as the attention of the Committee was drawn, to the use at present being made in Australia of the metric system. The whole of the pharmaceutical industry is now based on the metric system and a good many of our sporting events are determined according to metric measurements. Increasingly, we are becoming aware in Australia of the advantages of the metric system. Why, over a million migrants have come to this country and the majority of those people came from countries in Europe which use the metric system. Already many of our citizens, in the most active stages of their lives, are using the metric system. Therefore the Committee felt that, were we to change to this system, we would have a ready-made section of the population, the migrants, to assist in its assimilation.
There was no doubt in the minds of Committee members that Australia would gain great advantages from conversion. Of course the question of the cost of conver sion was ever present in our minds. No accurate evidence was given that we felt would have meaning for the Senate. The cost is a matter for the Government to consider. But to our way of thinking there was clear evidence that the ultimate adoption of the metric system in Australia was inevitable and that the cost of conversion was increasing substantially each year. It follows logically that conversion should be commenced with the minimum of delay.
The Committee went on to recommend certain steps which it thought the Government should take. It was mindful of the fact that we live under a Federal system. It spelt out in its report that it considered that the Prime Minister (Mr Gorton) should convene an early conference with the Premiers of the States. It considered that a Commonwealth Minister of State should be the Minister to co-ordinate and facilitate the change. Conscious of the great success of the Decimal Currency Board the Committee felt that a metric change board or a metric conversion board should be established by the Government. Of course the Committee is very much aware of the important part that education at the primary, secondary and tertiary levels would be called upon to play in a change to metrics. So it is with confidence that I bring these thoughts - a distillation, as it were, of the 137 pages of the Report - to the Senate. I hope honourable senators will read the Report most carefully. They will see that it is far-reaching; that it is a report in depth. I look forward to. the resumption of this debate after honourable senators have read the Report. I hope that they will come forward with suggestions and criticism.
In conclusion I would like to take the opportunity to refer to the value of committee work. Until quite recently there were comparatively few select committees of the Senate. But in the present Parliament there has been an acceptance by the Government and by all parties in the Senate of the need for development of the committee system. This development follows the trend in many parliaments overseas which have found that increasing government responsibilities and the inadequacy of time and opportunity on the floor of the parliament have made necessary the delegation to committees of certain of the inquiry work of a parliament. These committees are becoming the workshops of parliaments. They provide a long heeded opportunity for the representatives of industry, commerce, trade and other organisations to put their views fully before the legislature in a way which would be quite impossible under other parliamentary procedures. This can only make for better government.
In addition, committee work results in an informed body of senators who, because of the specialist knowledge gained by them through listening to the evidence of experts, are able to make more useful contributions to debates in the Parliament. The establishment of the committee system in the Australian Senate is one Of the most significant developments in the modern approach to the role and functioning of Parliament, lt is a trend which, I am sure, will make an important contribution to improving the working methods of Parliament. 1 think the Senate should consider seriously the provision of additional staff to service Senate committees. The present officers, while they are quite expert, have not the time to do their normal Senate work and to serve on more than one committee. Already there are several Senate committees in existence. I would like personally to acknowledge the privilege of interviewing and interrogating a large cross section of the Australian populace.” The witnesses who appeared before the Committee proved to be willing, courteous and helpful. It was a great pleasure to work with other members of the Committee, the Senate staff and Mr Harper, the Committee’s consultant, on the collation of the results of these investigations. I think the work of this Committee has shown that there is great value and a great deal ‘ of co-operation to be gained from all-party or perhaps non-party Senate select committees.
I hope that this Report will not gather dust, for reasons set out in it and, above all, because of the added cost to the nation for every year of delay in putting the recommendations of this Committee into effect. New Zealand is watching what . the Government does about this matter. Papua and New Guinea is anxiously awaiting, some guidance from the Government. I understand that Japan, the United Kingdom and South Africa are all very interested in what Australia will do as a result of this Report. Even large concerns in the
United States of America and Canada are not unmindful of the advances of a change to metric system. The United States and Canada are using the metric system notwithstanding the fact that there is no law in the United States providing for its use. I recommend that honourable senators give close attention to the report. I hope that when the debate is resumed they will present their .suggestions, criticism and support of this matter, which is of tremendous importance to Australia.
Debate (on motion by Senator Poyser) adjourned.
Formal Motion for Adjournment
– T formally move:
That the Senate, at its rising, adjourn until 10.30 a.m. on Thursday, 30th May 1968. 1 do nol think that a more urgent matter . Ot public, interest than that which the Australian Labor Party brings before the Senate today could be envisaged. It is of direct interest to. over 3 million private motor vehicle owners and over 1 . million . commercial motor vehicle owners. Its .impact upon the nation does not end there, because the residual production from, crude oil will affect every form of transport throughout the nation by its influence on fares and freights.. Its effect will be felt in every household because of changes in power and light charges. For these reasons this subject is exercising the minds of all sections of the community. Of course, it is also exercising the minds of the. people who will make a very large profit . out of the oil industry, to the extent that they are thinking of how they wiM be able to exploit the nation by the use of our indigenous oil.
As an indication of how this subject is exercising the minds of people 1 have here a rile of Press cuttings compiled between 8th and 24th May. It is by no means an exhaustive collection, but it gives an indication of the tremendous public interest surrounding this question. The man in the street is asking why it is that when we find our own oil we have to pay more for our own petrol. He asks: ‘Why then do we need our own oil?’ This is a valid question for the man in the street to ask. it is a natural and necessary question to be asked. The onus is on the Government to provide an answer, because it has the power, if. it wishes to use it, to rectify the position. The public is well aware of the massive assistance that is given for oil exploration. The Government has ensured that the fullest publicity possible has been given to its oil search subsidy policy. But the general taxpayer, not the Government, pays the subsidy. lt does not come out of the pockets of the Government. It is the bloke in the street who will pay more for petrol, and it is he who provides the means for the Government to pay the oil search subsidy.
The public is aware that under the legislation it has contributed over $90m. It is also aware that shareholders in the exploration companies have received large taxation concessions on their investments. Only a couple of years ago Senator Scott asked that the Government give more publicity to the advantages that flowed from investment in oil exploration companies so that the general public might be encouraged to invest more money in oil exploration. The simple result is that whilst concessions are given to people who invest in oil exploration companies, the taxation of the general public must be that much higher so that the Government can gather in the funds necessary to run the country. Every taxation concession has that effect. That is the second subsidy that the man in the street - the general wage earner - provides for oil exploration in Australia.
The man in the street is also aware that the price of our indigenous oil is loaded by a production incentive of US75c a barrel. Of course, that does not go towards assisting oil exploration. It goes to the people who have been fortunate enough to find oil in this country, to assist them to produce more oil. But the battlers who are out looking for oil, doing the spadework in an attempt to find oil, the people who are in fact using risk money in an attempt to make Australia self-supporting in oil supplies, do not receive any of the production incentive. As the production incentive of US75c a barrel flows through into the price of petrol, the man in the street will have to pay for it.
The general public may not be aware, but honourable senators and other people who are vitally interested in the oil industry will be aware, that an amount of about 25c a barrel is added to the price of Australian oil as a quality differential. That step is taken because Australian oil is of a better quality than oil previously imported and the oil that generally is being refined in Australia. In 1965 the Tariff Board ruled that included in the cost structure should be a quality differential of about 25c a barrel. I think it is 27c a barrel, but I have used the round figure of 25c. This means that the price of our indigenous oil is about $1 a barre] higher than the imported or posted price of imported oil, depending on the market on which that oil is purchased. When the man in the street takes this factor into consideration he is bewildered. When he is told that the price of petrol will probably increase by 5c to 7c a gallon, he wants to know whether Australia really wants this oil. It is valid to say that if the Australian taxpayer is to provide the various subsidies, in the main to overseas companies, to come here and exploit the natural wealth of this country, with the oil search subsidy alone amounting to about 25% of the cost of oil exploration, he will be paying about 33% of the cost of oil exploration. Having over the years assisted the oil companies so generously - to help Australia, certainly - the person who uses the oil has to pay more for it, and the person who makes use of the products that are carried by road transport or hauled by oil-fired locomotives has to pay more.
– Can the honourable senator verify that the Minister said thai?
– I do not think the honourable senator can verify that the Minister said that was why people should pay more for their petrol.
– I have it in front of me.
– Have you worked out what the servicing of those shareholdings would amount to?
– No. you are wrong. I am sorry.
– That can happen on the stock market at any point of time with any Australian public company, can it not?
– You were talking about the Australian content.
– Tell us how Labor would find oil and, if it did find it, what it would do with it.
– The honourable senator would still be catching crayfish at Barrow Island if he had his way.
– Mr Acting Deputy President. I suppose it is easy, as a member of the Opposition, to attack the Government. But when I, by interjection. ‘ asked what the Australian Labor Party would do to produce oil in Australia and, if oil was found, how members of that Party would sell it, there was no answer. Because of the encouragement given by this Government, oil exploration in Australia has been carried on for almost 1 8 years. If we look at the record of what has happened since the Liberal-Australian Country Party Government came into office, we can trace the search for oil arid the success or otherwise of that search from a time a little before this Government took office up to the present time. ‘
It is well known to all people who have an understanding of this matter that under a Labor administration Sir William Walkley! the Chairman of Directors of Ampol Exploration Ltd, of West Australian Petroleum Ltd and of Ampol.. Petroleum Ltd, endeavoured, in the latter .part of the 1940s, to encourage overseas companies to come to Australia and search, for . oil. He almost had one overseas company interested in coming to Australia to search for oil for WAPET. But when that overseas company found that the Labor Government wanted to nationalise the airlines.and. the banking institutions, it said that it would nol- have a bar of the Labor Party:,, and it did not come to Australia. !
– What evidence?
– When will the Minister get on to the matter which I have raised?
– But there was plenty of commendation of it.
– But the - Government did nol adopt it.
– Did the Minister say a moment ago that the savings in foreign exchange would bc $400m, or S2,400m?
– But the Minister told me yesterday that BHP had not applied for a licence to export.
– Which company has the Minister got his money in?
– There is no doubt about that.
– Esso, not BHP.
– And to pay more for petrol.
– I am very disappointed with the case that has been put up by Senator Scott on behalf of the Government on this very important issue which is exercising the minds of the people of Australia. The Minister did not do himself credit by presenting a fatuous argument relating to what the Labor Party would have done in 1949. The fact remains that the first thing this Government did was to make certain that it received from our oil the least return that it possibly could in the long run, and then proceeded to sell the only floating rig that belonged to the Commonwealth.
The Minister attempted to paint a rosy picture of the present position but he omitted to tell the Senate that the ‘Ausralian’ of 22nd May carried an article by Alan Ramsey under the heading: ‘Gorton orders a full review of oil policy’. The article is in these terms:
The Prime Minister, Mr Gorton, has called for a full Cabinet review of the growing offshore oil controversy before he leaves for Washington tomorrow.
With the first of the Bass Strait oil wells coming into production next April motorists can expect to see petrol rise in price by at least 2c a gallon as the refineries pass the cost on to motorists.
The article concludes in this way:
Several senior Minister are known to feel strongly that a new policy should be announced immediately to take some of the heat out of the controversy.
Yet Senator Scott stands in his place and paints a rosy picture of the present situation. To give some idea of the magnitude of this matter let me say that the Halibut and Kingfish wells in Bass Strait are estimated to contain 1,200 million barrels of oil. On the basis of $3.50 a barrel mentioned by Senator Scott, which he claimed is a fair price, some $42, 000m is involved. The Minister referred to the large amount of capital that was being invested by the companies. It is very difficult to obtain any information from the companies relating to this matter because their affairs are so interlocked that it is impossible to separate the cost of their oil search activities from the fancy prices that they pay for a block of land on a street corner on which to erect a petrol station.
However, what we are attacking here is the prospect of progressive increases in the price of petrol and petroleum products as more Australian crude oil is used in them. Before proceeding to outline my own case let me direct the attention of the Senate to some of the points raised by Senator Scott. He told us that the Government will receive a great deal of money in the form of taxation and royalties. Granted that 50% of the profits will accrue to the Australian people, but the ordinary man in the street who owns one of the 5 million motor vehicles in Australia wiM be asked lo dig into his pocket and pay more for petrol, lt would not be so bad if we were desperate for oil and if the sources of overseas oil were inaccessible to us, but that is not the case. The Opposition’s argument is that the prospective cost of oil from Bass Strait and from our other wells has been inflated as a result of the Government’s policy.
We have come up against rather nebulous phrases such as ‘posted prices’. These posted prices are said to be the basis on which the Tariff Board made its recommendations. But that is only a phrase used to fool the people. I. am reminded of the electrical appliance stores which have in the window washing machines or radiograms with certain prices attached to them, but if you go inside and show interest in a washing machine the salesman will tell you: ‘We will reduce the price by $150 and allow you another $25 for your old machine if you buy a new one’. The posted price is fictitious because every oil company is making its own arrangements with its customers. Discounts are being granted but the figures are not available to the public. They are kept most private. The posted price of oil is just as fictitious as the advertised price of an electrical appliance and the price one pays for it at a discount house. The Government’s policy relating to oil companies is open to question.
Let me deal with this matter now from the point of view of its effect on the ordinary consumer and its influence on the whole Australian economy. Oil covers a much wider range than the petroleum pro duct used in motor vehicles. An increase in the cost of oil and petroleum products will have an impact throughout the community because it will be a component in the price of food, clothing, household equipment, and the basic commodities. There is more in this than Senator Scott’s argument that the Commonwealth will receive 50% of profits by way of taxation and royalties.
– The people expected the price to go down.
– I was talking about dividends going overseas.
– The Senate is debating a matter of urgency raised by Senator Cant. The subject is:
The prospect of progressive increases in tha price of petrol and petroleum products as more Australian crude oil is used for them.
I congratulate Senator Cant on his move to enable this subject to be debated at this time. It is a contentious matter indeed. As Senator Cant indicated, he had a great pile of clippings of current newspaper comment regarding this matter. I think it fair to say that generally the public would believe, following the articles by newspaper reporters and writers, that there may be an increase in the retail price of petrol of anything from lc to 5c. This certainly gives us an opportunity to put the true position and in doing so, to put it more truthfully than the Opposition has attemped to put it this afternoon.
The subject under discussion is only a very small part of an enormous field. Perhaps it is one of the largest fields that this Parliament has had to deal with in the last year or so. It always amazes me that, when the Opposition decides to discuss a subject such as this, a very small part of an enormous field - the price of petrol and petroleum products - it goes into such a wide area. If honourable senators can recall Senator Cant’s comments, they will remember that he traversed the field from the beginning of the search for oil in Australia, what the Australian people had done and what the Government had done to encourage exploration, and very nearly all the action taken.
– Should it not be less? It is oil found in our own country.
– I support the action of Senator Cant in moving that the Senate discuss as a matter of urgency the prospect of progressive increases in the price of petrol and petroleum products as more Australian crude oil is used for them. At the outset I want to make reference to the two previous speakers from the Government side. Senator Scott, when carrying the banner on behalf of the Government, referred to 1949. I trust he has also seen a recent newspaper report which said that one of the things that brought about the downfall of the Labor Government in that year was the refusal of the Government to take away petrol rationing and to allow a free go. The report said also that what brought the Government into power on that occasion might be the very thing that would bring about its downfall at a later date, because of the finding of oil in Australia. This could be true, because the Labor Government of the day had a very worthwhile reason for the retention of petrol rationing, in an effort to preserve our overseas trade balances.
We know now the sorry history when petrol was made available to everyone without any control in those very difficult times. The overseas balances were dissipated, and the Australian dollar today is not worth one cent of what it was in 1949. Senator Scott would do well to remember that particular point. Senator Webster could be described as a hostile witness. He started by congratulating Senator Cant on raising the subject in the Senate. He made many apologies for the Government’s attitude, and in the last minute of his speech after the suspension he proceeded to apologise for himself. So much for Senator Webster. lt is obvious that the oil industry must be a lucrative business, and it is significant that once it was known that there was oil to be found off-shore there was a tremendous rush for off-shore teases. 1 have here a table which sets out the leases that were taken up as at 30th June 1967, several months before this Government brought in its off-shore legislation. At 30th June 1967 the titles taken up off the shores of Australia and the Territory of Papua and New Guinea totalled 739,689 square miles. This was all off-shore, and was 34.6% of the total title area of 2,132,456 square miles. I refer particularly to my own State of Queensland, where no fewer than six titles had been taken up at 30th June 1967. One was held by Continental Oil Co. of Australia Ltd, Union Oil Development Corporation and Marathon Petroleum Australia Ltd, each of which had a one-third share in that lease. The second title was held by Pacific
American Oil Co., with which is associated Shell Development Australia Pty Ltd. The third was held by Tenneco Australia Incorporated and Signal (Australia) Petroleum Corporation, each with 50%. The fourth was held by Australian Oil and Gas Corporation Ltd, under farmout to Australian Gulf Oil. The fifth was held by Ampol Exploration (Queensland) Pty Ltd, and the sixth was held by Tenneco Australia Incorporated and Signal (Australia) Petroleum Corporation, each with 50%. These companies had a total of 172,645 square miles in which they could operate. Of the total area held under the first title, 90% was off-shore, and 80% was off-shore for the second title. The areas held by the next two were wholly off-shore. The area held under the fifth title was 75% off-shore, and the area held under the sixth title was 100% off-shore.
In Victoria a similar state of affairs is to be observed. Nine leases were held with a total area of 24,645 square miles. All of this was off-shore. Incidentally, EssoBHP has a total of 63,000 square miles, but. this includes some areas off the coast of South Australia and off the coast of Tasmania. A similar picture is presented in Western Australia, where at 30th June 1967 there were fifteen titles over 293,098 square miles. Almost all of this was offshore. Of course, some of these are joint titles. In the Northern Territory at the same date there were fourteen titles with a total area of 134,799 square miles. Almost all of this was off-shore, too.
If this is such a hazardous industry it is significant that there is no shortage of takers for leases or titles, over off-shore areas in particular, and on-shore, ux>. lt is obvious that, if these companies are so anxious to scramble for these titles they do not look forward to a period of bankruptcy. An interesting question is, should we have retained the original relinquishment system of titles, or did we do the right thing in adopting the graticular system as provided for under the legislation introduced by this Government tate last year? It is interesting to read a statement by Dr Alex Hunter, Senior Fellow of the Institute of Advanced Studies at the Australian National University, recently engaged by the Australian Automobile Association to make a study of the price of petrol, f quote from an article in the ‘Canberra Times’ of Friday, 10th May 1968, as follows:
Dr Hunter said the support price for the refining of Australian crude oil should disappear.
Referring to the 75c incentive, he said.
The incentive has never worked; all the known reserves in Australia now have been discovered without the benefit of exploration incentive*. . . The big exploration companies are here because they know Australia has very large sedimentary basins and 12,000 miles of continental shelf - the largest workable shelf in the world.
They already get 331 to 40% of their explorations paid for by government subsidy.’
On the company’s own estimate Esso-BHP would be getting a bonus of $244,000 a day - $87.6m a year - by 1971 from the Commonwealth Government’s support price.
The price on every barrel of crude brought by the refining companies was $3.50 and this was based on a landed price of imported crude in Australia of $2.50, plus 73c incentive bonus for the explorer company.
But the actual bonus worked out at more than $1 because the refining companies were able to import their own crude for as low as $2.10 in some cases - ‘so the 75c is phony’.
Under the present system the royalty in Australia works out at 10%. In addition, of course, there is an overriding royalty ranging from 1% to 21%, so a total of 121% may be paid. The ruling rale in the United States of America is 121%-. In the United Arab Republic it is 25%, and some of the Persian Gulf governments claim up to 60% as royalties. Therefore, if the claim is made that the royalty is too high and that this is bringing about, an increase in the price of petrol, it will not stand up to the light of day. There are ten refineries scattered throughout Australia. Two are in Brisbane, one is at Kurnell in New South Wales, one is at Kwinana in Western Australia, another is at Matraville in New South Wales, one is at Western Port, Victoria, one is at Altona, Victoria, one is in Adelaide, South Australia, and one is at Geelong, Victoria. The Shell Co, also has one of its bigger refineries at Clyde, New South Wales. So there are sufficient refineries to treat the whole of the requirements of Australia. I have so many figures here that in the limited time available to me I will not be able to cite them all. Tt is obvious that with the additional finds of natural gas, particularly in Victoria but also in South Australia and Queensland, within a short period of time, if everybody plays the game there will be sufficient natural gas to supply a large amount of our power. I believe that we shall have some problems in relation to the distribution of natural gas. The experts say that the dearest method of transporting oil is by ocean-going tankers. They are vulnerable in time of war and very costly in time of peace. According to the experts pipelines are a more economic means of transporting petroleum products and are more efficient over long distances than rail or road transport. So transport costs of crude oil in Australia have been reduced to a minimum because it will be pumped ashore from Bass Strait, and already in Queensland we have a line running from Moonie to Brisbane.
Let me cite figures from the publication entitled ‘Oil and Australia, The figures Behind the Facts 1967’, which was issued by the Petroleum Information Bureau. In that year Indonesia supplied Australia with 1,192,305,000 gallons, Saudi Arabia supplied 1,157,105,000 gallons, and total imports amounted to 4,954,028,000 gallons. It is estimated that the consumption of ail types of oils and spirits in 1968 will be over 4,645,000,000. Consumption is estimated to reach 5,195,000,000 gallons in 1972 and it is estimated to reach 6,504,900,000 gallons in 1976. These figures are as nearly accurate as can be estimated by the experts.
Let us look at the increases in price that have occurred without any problem having arisen from a content of Australian oil. The retail figures for 1966 and 1967 are worth citing. The price of high grade petrol in Sydney increased from 38.5c a gallon to 40.3c a gallon. In Perth the price rose from 39.2c to 40.6c and in Adelaide the price rose from 38.3c to 40c. These were the average prices paid. I have figures that are applicable to the other States. They are of more than passing interest. As this happened without taking bonus payments into consideration we may find in 2 or 3 years, as our authority, Dr Hunter, says, that when Australian production reaches 70% of requirements the price will rise by any amount between 1.7c and 6c per gallon.
Are these increases caused by overcapitalisation of the industry? In many of our cities and country towns we see one brand petrol stations within 50 yards of each other, sometimes even on adjoining blocks. We know that they are leased out to operators. When an enthusiastic operator takes over and increases his sales he finds that his rent is likely to go up al the end ot the financial year. As a result, this is developing into a slave industry. Frequently an operator has to employ members of his family including his wife and children.
I warn the Government that it might be on the verge of an oil scandal that will not only take it out of office but also will take this country down the drain. Is the Government to be controlled by the international oil cartel or is it to take a firm stand on this problem and say: ‘This is a reasonable cost of production.’? Will the Government suggest to the oil companies that they tell it sincerely what their production costs are, or will the Government let the companies pass increases on to the consumer so that we will find ourselves in the awful situation in which not the Government but an outside organisation based on the oil companies is running Australia? Some people including one of the organisations of motorists have called for a royal commission into the industry.
– The Senate is discussing the prospect of progressive increases in the price of petrol and petroleum products as more Australian crude oil is used. One might be excused, after hearing what Senator Keeffe has said, for supposing that the Opposition is using this occasion more as an opportunity to express a few doctrinaire attitudes and a few epithets against traditional enemies than really to discuss the matter which it has raised. The question that Senator Cant posed at the outset - and I think it is a question that, we could well examine - is: Why, when we find our own petrol, do we have to pay more? I think it is a fair question and I think it can be simply answered. The Opposition has not attempted to answer it simply. The answer is that we pay more, or we are likely to pay more, because it costs more to produce our own oil than it does to import oil. It costs us $2.50 per barrel to import oil and it costs us $3.50 to produce it. Therefore petrol from locally produced crude oil will cost more than petrol from imported oil.
That in itself should not occasion any great curiosity. There are many products which we could import more cheaply than we can produce them here, and there have been occasions on which the national interest has demanded, with the approval of the Australian people, that in the interests of our own producers we pay more for something than we would have to pay if we imported it. It may be asked, of course, why we should produce it if it costs more. There are two very good reasons why we should regard it as reasonable to produce our own crude oil and petroleum products even though the Australian community has to pay what has been estimated to be 1.7c per gallon more for us petrol. Those two reasons are these: First, it will remove our dependence upon sources of supply in other parts of the world, which are notoriously liable to dislocation. The second reason is that as a result of our own discoveries of crude oil we will be able to reduce in our balance of payments the cost of our imports by an amount which is estimated to reach $2,400m over the next 10 years. This will represent a tremendous saving in our imports from overseas.
I should like to refer to what was said by the spokesman for the Australian Labor Party on this subject in this chamber in 1957 when the Government first introduced a subsidy to promote the search for petroleum. It is interesting to see that the attitude which the Labor Party adopted then is totally different from the attitude which it now adopts. On 3rd December 1957 Senator Armstrong, who led for the Opposition in the debate on the first Petroleum Search Subsidy Bill, said:
The discovery of oil would be of amazing benefit to Australia . . . The importation of oil involves a serious drain of Australia’s overseas resources. During the last few years, great refineries have been built in this country, and our economy has benefited by millions of pounds through the reduction of petrol imports. But even now, although we have oil refineries in almost every Stats, oil imports cost £120m a year. Until such time as we are able to develop power from nuclear fission, oil will continue to be most important to our modern way of life . . . The need to expend £l20m a year on oil imports will, of course, disappear if we can discover oil in payable quantities in this country.
On the occasions when the Government granted subsidies in order to promote the discovery of oil in this country, the Opposition said: ‘You are not giving enough’. It was accepted that we needed oil in Australia but the Opposition was saying that we were not doing enough about it. Now, when we have discovered oil, the Opposition says: ‘You have done it the wron.2 way.
What you have done will mean an increase in petrol prices’. This point was not raised by the Opposition until the present time when it has seized an opportunity to make some cheap political propaganda out of the matter.
If we can obtain independence by relying on our own oil resources and if we can reduce the amount which we have to pay overseas for what is the largest single item in our list of imports, the Australian community will appreciate the position and it will be prepared to pay an extra 1.7c per gallon for petrol. It ought to be recognised that 10 years ago oil had been discovered in Australia only at Rough Range in Western Australia, where resources had been found in 1953. The Government decided - and the Opposition did not disagree - that we should spend money on paying incentives and subsidies in order to promote the discovery of oil in Australia. Those payments have resulted in the discovery of oil. Incentives have been given to private entrepreneurs which have been prepared to spend their own money, with the aid of government assistance, in order to discover oil.
Over the last 10 years the Government has spent approximately $90m on the search for oil in Australia, and over the period during which oil has been sought in Australia, private companies have spent approximately $450m. The Esso-BHP group, which has the major find in Bass Strait, might still have to spend approximately $300m in order to get its finds into production. I think it is fair that the companies which have been prepared to outlay this money should be given some incentive so that they will be able to sell what they produce. Of course, the refineries which would buy Australian crude can buy crude overseas at $2.50 per barrel. The Government took the view - I think it was the obvious one to take, and the Opposition did not disagree with it at the time - that as an incentive to oil development the local refineries should be compelled to pay $3.50 per barrel for supplies from local sources. That is the present arrangement.
The Government, when it instituted these incentive payments in 1965, said that the scheme would last for 5 years. It will expire in September 1970. Then the Government will have to decide whether this incentive payment of an extra $1 per barrel should be continued. It is only right that until then the Government should honour its undertaking and provide these incentive payments. They have helped in the discovery of the resources which are already available. We hope that these incentive payments will result in even greater quantities of oil being discovered in the future. In 1970, when the present incentive payments scheme expires, the Government will have the advantage of the researches which it has instituted over the past few months. The Government has appointed Dr Frankel, a world wide authority, to advise on petroleum prices. It has set up an interdepartmental committee composed of representatives of all departments which have an interest in this matter, to advise it on this question. Naturally the Government wants to avoid, if it can, any increase in the price of petrol. But until 1970 we are bound by the terms of the incentive payments scheme which was introduced in 1965.
It should also be borne in mind that the oil resources which have been discovered do not give us complete self sufficiency in oil. It has been estimated that in 1970 we will be 60% self sufficient in oil. Whether that 60% self sufficiency will be maintained will depend upon further oil discoveries and the growth thereafter of the rate of production which it is assumed will be the rate of production achieved in 1970.
– I listened with interest to Senator Greenwood, but I do not think he did himself justice tonight. He looked upon this motion as a piece of cheap political propaganda emanating from the Labor Party. That is very far divorced from the truth. Anyone reading the motion must appreciate that it is submitted in a spirit of fairness to the Government, lt seeks merely to draw attention to the prospect of likely increases in the price of petrol. Surely nothing could be fairer than the way in which we have drawn the Government’s attention to what is likely to happen if it extends this benefit any further. I repeat that the proposal is very far divorced from cheap political propaganda.
My Party does not deny a fair financial return to anybody for ingenuity, initiative and enterprise. The Labor Party has never denied people that right. Mount isa Mines Ltd has been mentioned. I give all credit to that American smelting and refining company for its enterprise and the contribution that it has made to prolonging the life of the Mount Isa mine and in helping it through its difficult days. But honourable senators would do well to remember that when that company was in particularly difficult circumstances in 1935 it was a Labor Government which guaranteed it to the tune of £500,000 to enable it to carry on. In any case, a return of $42m on the company’s investment of something over £2m, even it it is spread over 40 years is not bad. I also remind the Senate that this company’s two million shares are probably worth the best part of $80m today. So the company has not done too badly out of its investment. Nor has it been denied an adequate return. Furthermore, it is going to receive magnificent returns in the future.
What we object to is the rather indefinite way in which the proposed subsidy is being provided. Even the oil companies are arguing amongst themselves about the distribution of this money. Amongst the oil companies, there are two groups - the haves and the have nots. Firstly, we have the Moonie company producing oil in a small way. Then we have the Esso-BHP group which is likely to be producing in a big way. We have also the Caltex company which is producing in a small way, and there is the Ampol Company in Western Australia. Then there are the Shell Co. of Australia Ltd and the Vacuum Oil Co. Pty Ltd which have no producing wells at all. The two last named companies are not particularly happy about the thought that certain of their competitors are to receive subsidies. This is understandable when we realise that with production at something over 200,000 barrels of oil a day, the EssoBHP group will attract a subsidy of $100,000 a day. all of which will be added to its profits. So that group will not be doing too badly out of the Government’s proposal.
Senator Greenwood referred to an increase of 1.7c a gallon to the consuming public. I do not know where he got that figure. I have never seen it mentioned by anybody, including the experts.
– Senator Dittmer suggests that John Citizen derives very little benefit from the great wealth that is now being taken and will be taken from our newly found oil wells. J point out to the honourable senator that the taxes which are paid by the oil producing organisations - they pay company tax at the rate of $42.50 in every $100 and withholding tax, as well as various indirect taxes - and which flow into the Federal Treasury surely must have a beneficial effect on the way of living of every man, woman and child in Australia. We are prone to overlook the fact that when there is success in an industry - whether it be the oil, the motor car manufacturing or any other industry - the Government very definitely stands to gain, and when the Government gains the people gain, in the provision of educational facilities, hospitals, roads and every other aspect of national development. I believe that often recognition is not given to the benefits that accrue to a nation through a healthy, buoyant and profitable economy.
The so-called matter of urgency that is now before the Senate - ‘namely, the pros pect of progressive increases in the price of petrol and petroleum products as more Australian crude oil is used in their manufacture - pales into relative insignificance when the national asset respesented by a crude oil supply in our own right is considered. We must get values into perspective in this matter. Oil and natural gas are major sources of energy throughout the world. In Australia more than 46% of our energy requirements is supplied by petroleum products. For many years we were in the extremely dangerous situation of relying on outside sources for practically all of our petroleum supplies.
When we consider this matter from the standpoint of defence and bear in mind the fact that since World War II there have been disruptions of the supply of crude oil from the Middle East and Indonesia and the possibility of our supplies being chopped off, we realise how vitally important it is that we aim to achieving self-sufficiency in petroleum supplies. From the economic standpoint, supplying our oil requirements causes a huge drain on our overseas funds. The necessary money has to be found from exports. This certainly presents a problem in maintaining our balance of payments. We have very big bills to meet as a result of the importation of petroleum. The prospect, of having our own supplies in itself denotes a future buoyancy in our economy, I believe hitherto unthought of.
I consider that the Government’s policies in. respect of oil search subsidies have been completely vindicated. Were it not for the success story of oil search and discovery we would not be debating here tonight this matter of urgency raised by Senator Cant. Instead we could be discussing, with a very much greater degree of urgency, the concern of the whole nation at our dependence on overseas supplies of oil. It is always easy to be wise after the event. If the Government had not been generous in its oil search subsidies and had not given a real incentive to encourage people to really apply themselves to oil search, I have no doubt that we would still be in the doldrums in regard to indigenous supplies of oil.
We are still not out of the woods by any means in seeking to achieve selfsufficiency in oil. The Gippsland shelf is expected to provide about 24% of the nation’s needs for the next 20 years, lt is expected that the Gippsland shelf will provide oil flow as from April next year, from the Martin field, the Halibut field as from September 1969 and the Kingfish field as from towards the end of that year. Over the period from April 1969 to September 1970 the increase in the price of petrol in relation to the price of crude oil will be about 1.7c a gallon. What a small insurance premium that is to have to pay in order to have oil supplies in our own right. Everything that has been done by the Government - first of all, giving assistance to encourage the search for oil, in the form of drilling subsidies and so on, and then back in 1965 making a firm offer, not of the 25c that the Tariff Board had recommended, but of the US75c that the Government decided on in its wisdom - has given a real incentive to the people who have been exploring for oil.
We must continue to follow the policies that we have followed thus far if we are to achieve the measure of success that we must achieve before we become completely independent of overseas supplies. Compared with the national good, the slight increase in the price of certain products that we will have to bear temporarily is an infinitesimal consideration. I have no doubt that the time will come when we will achieve an economic stature that we would never have been able to achieve without the implementation of the Government’s policy in relation to oil search and oil discoveries and without the great wealth that will flow to us as a result of our oil finds. I do not support the proposal contained in the Opposition’s motion. I congratulate the Government on a most purposeful, constructive and successful programme in the search for oil in Australia.
– I have listened with considerable interest to the arguments that have been put forward by honourable senators on both sides of the chamber. I concede that honourable senators on the Government side stated their case very plausibly but I will not concede that they have convinced the people of Australia of the necessity to increase the price of oil products every time there is a new oil strike. I do not think the people will be prepared to accept the necessity for increased prices simply on the basis that the oil companies are paying large sums by way of taxation into the Treasury coffers, and I do not think they will understand the economic aspect sufficiently to realise that by using Australian oil we are saving our overseas credits. The point that will concern the Australian consumer of petrol and petroleum products is that he will have to pay more for them.
I can remember that when I first started driving a car - this is going back a long time now - we were able to buy petrol very cheaply. Even then the people in the United States were driving large cars. In fact the trend in America has always been towards large cars because petrol can be purchased in the United States for half the Australian price. In those days the reason given for that was that they had their own oil wells. I am sure the people of Australia believe that if we have our own oil wells we should be able to run our cars more cheaply than is the case at present.
Let me recall to honourable senators our first oil strikes at Moonie and Roma. Those strikes were exciting but nothing came of them. Then there were strikes of oil in Western Australia but again, although we were enthusiastic about the prospects, they did’ not receive the publicity that would have led us to believe that they would be of tremendous value to Australia. We were given to understand that the oil strikes were only minor. At that time - some 10 years ago - I remember hearing a talk given by a member of the Western Australian Parliament who had just returned from a visit to the north west of the State. After applying a good deal of pressure he was permitted to bring back a small sample bottle of oil. The impression was that the company did not have more than two or three bottles of oil.
He told us that he was not impressed by the reticence of oil companies to admit oil strikes because he had seen evidence of satisfactory strikes. Whenever a company puts down a well and obtains evidence to show that it is worth considering as a useful proposition, it seals off the well with what is called in the trade a Christmas tree. In fact it is a pipe with a number of other pipes coming off it and it gives the appearance of a tree. That is how one tells whether a strike is satisfactory and worth following up. But the companies do not follow them up. They just cease operations at that site. The member of Parliament to whom I have referred was impressed with the number of strikes in the north west of Western Australia at that time.
There was very little activity until the Government announced that it would subsidise drilling operations. Then the game was really on. The Ampol and Wapet organisations and other oil companies went into the drilling business because they were being subsidised on the basis of the length of footage drilled. But they were not using the oil; they were only drilling and were being paid for it. When the Government went further and announced a subsidy on each barrel of oil produced, the companies started to make use of the oil.
A couple of months ago 1 asked the Minister to tell me the proportion of gas which was being wasted from oil wells, particularly in the Barrow Island area, because 1 had it on pretty good authority from a geologist friend of mine that the ratio of gas to oil was higher than was considered generally to be economical, lt is sound practice to return gas to the earth because it can bc used to maintain pressure on the oil and, when that is no longer necessary, it can be burned as gas. Once the gas is released and burned that is the end of it. In reply to my question Senator Scott told me that there was nothing really inefficient about the companies’ operations because the gas could not be used in the area and Barrow Island was too far from the metropolitan area or any large centre where it could be used. lt seems to me that the oil companies are exploiting the subsidy on drilling and the subsidy on each barrel of oil produced. The purpose of the Opposition’s motion is to bring to the notice of the people of Australia that we as a Senate and as a Parliament are concerned about what is going on. I have heard it said two of three times that in 1970 the price of petrol will rise by an estimated 4c a gallon but an economist wrote in the Press a couple of weeks ago that he believed the increase would be 8c a gallon despite the fact that Australia by them would be producing something like 80% of its requirements of oil.
We should ask ourselves where the Government is heading. We should consider seriously what the Government is doing to control any likely increase in the price of petrol. 1 believe it is wrong that the return obtained from one or two successful oil wells should be used to offset losses incurred in unsuccessful drilling operations elsewhere. The Bass Strait and the Barrow Island oil wells are being required to carry the load. 1 conclude by supporting what has been put forward by Senator Cant in this urgency debate. I think it is very important that we have discussed this topic today. I think it important that the public realise we have a sense of responsibility about this matter. I trust that as a result of this debate the Government will realise the necessity for some restrictive measures to ensure that the situation does not get any further out of hand.
– This has been a very interesting discussion so far but 1 would like to refer to some of the previous comments before I get to the basis of what 1 have to say. Firstly I want to refer to what the Minister for Customs and Excise (Senator Scott) said about the reaction by the Opposition when the incentive payment of 75c was introduced. I concur in the Minister’s remarks. Never at any stage was there any opposition to that move. In fact it was only with the march of time, when we found that we did have some oil off the Australian coast, that we heard this sort of criticism. We saw headlines in the Press stating that if we found oil we would have to pay more for petroleum products. This criticism has never been raised before by the Opposition and it is strange that honourable senators opposite should raise it now.
There was criticism of the Bill passed by this Parliament which granted the graticular system. I do not think that matter should have been raised in this discussion. After all, we have a Senate select committee investigating the legislation in that respect. I do not think the matter should have been mentioned during this debate.
– The Australian production is very valuable to the man in the street.
– As it is likely that I will be the last speaker in this debate it might be appropriate for me to restate the reasons why the Senate is discussing this matter. It originated because the Opposition is very much concerned about progressive increases in the prices of petrol and petroleum products as more Australian crude oil is used. I think sufficient has been said in this debate to justify the motion to discuss a matter of urgency put forward by the Australian Labor Party in the Senate today. 1 suppose it would be a reasonable expectation on an issue such as this that the Government would argue that the Labor Party was partisan in its attitude to the question of the discovery and the price of oil in Australia. I suppose it would be logical for the Opposition to take whatever advantage it could find in whatever way the debate presented an advantage.
That is part of the cut and thrust of politics both in this House and in another place.
I think the real test of merit in what the Opposition is putting forward in this debate is based not so much on what I will say this evening or what I will claim or contend when I deal with whatever deficiencies I think the Government is displaying in this case, but on what other people are thinking. I refer to people who are totally unconnected with this Parliament or with politics but who are profoundly interested, as are honourable senators, in the development of this country and its resources and the way in which the Government carries out the business of this nation, as it is entrusted by the people to do. That is the real issue, and it is on that point that we invite Government supporters to judge the issue.
There is validity in the argument that the Opposition is partisan. It is the job of an opposition to be partisan, and I do not deny that. Possibly Government supporters could argue validly that there is partisanship in whatever statements I make in support of the motion moved by the Opposition. Criticism may be offered that my statements are partisan in the extreme, but that cannot properly be said about people outside this Parliament. It cannot be said fairly about the ordinary man in the street, to whom Senator Heatley referred at such length, although he did not give great weight to what the man in the street might be thinking. The criticism cannot be levelled fairly at people who occupy high positions in the academic life of this nation or who occupy important positions in industry. Those people cannot be accused fairly of partisanship and I intend to devote the major part of my speech tonight to what such people are thinking.
Before I do so I wish to mention that the question of exploitation of our oil resources by foreign companies is not just a matter that has been conjured up in the minds of the Opposition. It is a recognised fact of life in this country. It is known that we have about 1 million square miles of continental shelf of which about 750,000 miles - or three-quarters - has been earmarked for exploratory licences issued by the States. That is an indication of the great interest taken by the major oil combines of the world in the bonanza opening up for them in this country.
The point has correctly been made that most of the participating companies are foreign controlled, lt is common knowledge that Esso-BHP, which has taken most of the limelight, has a strong element of foreign ownership, because more than 50% of the Esso half of the partnership is owned abroad. One can readily imagine that out of the astronomical sums of money to be gained from the exploitation of the oil found in this country great amounts will be sent out of this country. When oil was first discovered in vast quantities here, Australians were elated. The man in the street believed that a new era was opening up in which he would be able to avail himself at last of cheap motoring costs and would not any longer be at the mercy of foreign combines which would determine the price he would pay for petrol. He believed that the price would now be in the hands of local people and that here at last was the mi.lenium for motorists. Similarly, the people in our industries believed that they would be able to purchase great quantities of cheap oil to run their industries. But of what use is it to the motorists and to our industries if as a consequence of the discoveries and the opening up of vast Australian oilfields all motorists must pay more for their petrol and people in industry must pay more for the crude oil which is so essential to the conduct of our heavy industries?
I was interested in the remark of Senator Greenwood that in 1957 - 11 years ago - members of the Labor Party Opposition had not opposed the granting of a subsidy to oil exploration companies. I do not know what relevance that statement has. 1 suppose it was a suggestion by Senator Greenwood that we had changed our minds since then. Senator Greenwood failed to appreciate (hat the situation in 1968 differs greatly from the situation which existed in 1957. 1 think it is true to say that not one honourable senator - certainly not myself - on this side of the chamber ever dreamt that we would see a sequence of events which would lead to utter capitulation to the foreign oil companies of the world in respect of the great oil resources which have been discovered in Australia since that time. As I said, I cannot see the relevance of the statement by Senator Greenwood.
I return to what I said at the beginning of my speech, that the validity of the argument in support of the Opposition’s case tonight will rest not so much upon the partisan spirit that we might inject into it as on what people of substance are thinking outside this chamber. With the Senate’s forbearance 1 want to read a few extracts which show what people outside are thinking. I refer first to an article in the ‘Sydney Morning Herald’ of 18th May this year under the headline ‘Oil controversy grows: attack by legal expert’. It refers to a scathing attack by Professor Geoffrey Sawer, who said (hat the Commonwealth had abdicated all responsibility for the national interest and its own authority. Included in this article is also a statement by (he President of the Australian Automobile Chamber of Commerce. Mr John Collins, who said that the oil companies were exploiting the public to the tune of $50m a year by grossly inflating their wholesale prices. In the same article Professor Sawer, Professor of Law in the Institute of Advanced Studies at the Australian National University and one of Australia’s leading constitutional authorities, was reported as saying (hat the Commonwealth’s powers to act on off-shore oil operations were, ludicrously narrow. He said also:
By tying itself to this precious bit of narrow gutted constitutional pedantics, the Commonwealth is abandoning its responsibility to the Australian nation as a whole. . . The scheme now operating is in my opinion grossly inconsistent with adequate protection of the national interest and with the clear principle of ministerial responsibility to Parliament.
. There is indeed a great deal to be said for Commonwealth control of every aspect of oil exploration, production and processing.
At the very least, the Commonwealth should have seized on the fortunate accident that offshore oil and gas promises to be so large a component of the whole industry and pushed its bargaining strength in thai field to the utmost.
This is not a statement of a partisan senator representing the Opposition and trying to embarrass the Government in respect of the exploration for oil and the price of oil in this country, or in respect of the relationship between government and industry in exploration and development in this field. This is a statement by a person who is remote from this chamber, is of some consequence in the community and has made a fairly close study of the question.
He has strongly expressed his belief that this Government is not doing the right thing by the Australian people in respect of the development, of oil resources in this country. Though the Government can, perhaps quite rightly, accuse me of partisanship, 1 do not think it can accuse Professor Sawer of a similar degree of political partisanship.
Dr Alex Hunter, who is another expert in this field, has been referred to more than once in this debate, and it is interesting to read what he has had to say about this question. Among other things, he said:
Hie hig exploration companies are here because they know Australia has very large sedimentary basins and 12,000 miles of continental shelf - the largest workable shelf in the world.
They already gel 331- to 40% of their explorations paid for by government subsidy.
The article in which Dr Hunter’s remarks are reported then proceeds:
On the company’s own estimate, Esso-BHP would be getting a bonus of $244,000 a day - $87.6 million a year - by 1971 from the Commonwealth Government’s support price.
The price on every barrel of crude bought by the refining companies was $3.50 and this was based on a landed price of imported crude in Australia of $2.50. plus 75c incentive bonus for the explorer company.
Bui the actual bonus worked out at more than $1 because the refining companies were able to import their own crude for as low as S2.10 in some cases.
Dr Hunter’s comment then was, ‘So the 75c is phoney’. This gives an indication of what is happening. 1 have quoted the remarks of three people remote from this debate and from political contentions, who believe, just as we of the Opposition believe, (hat there is something wrong with the administering of oil exploration and development in this country. Surely it is the duly of the Opposition to take every step possible, apart from this question of political partisanship which at least I have been fair enough to put in its proper perspective tonight, and if the man in the street is thinking these things, what the Opposition thinks becomes far more important if it is thinking along the same lines as he. Regardless of what Senator Heatley said about the man in the street, the man in the street is thinking about these things, and it is useless for any senator on the Government side to say that the motorist is not acutely aware of how much he pays for petrol. He is under the impression that he will pay 5c a gallon more for petrol between now and 1971 as a consequence of the opening up of the vast oil resources of this country. As Senator Devitt has mentioned, this is $91m a year. These are the things that the man in the street is thinking, and we as an Opposition have a duty in this Senate to pinpoint this fact and to ask the Government to pay heed also to what the man in the street is thinking about oil exploration in Australia.
– In the few minutes at my disposal I wish to indicate that the subject of this debate, the prospect of progressive increases in the price of petrol and petroleum products as more Australian crude oil is used for them, should have the immediate and closest scrutiny of the Government. Its impact on the community life of this country could be tremendous. Its effect on the individual motorist will he tremendous, lt will have a great effect on Australia’s secondary industry and primary industry, and on the economy generally following any consequent increase in the cost of living. In 1965 or thereabouts when the Tariff Board examined this matter it was conscious of the fact that our crude oil had been overpriced compared with the imported product. The agreement under which we are operating at present in regard to incentive is to be reviewed, I think, in 1970. A great change has taken place since that decision was made. It is so marked as to merit consideration by the Government, or by some competent people, of a review of the whole structure of oil prices. I am one who believes in providing incentives and encouragement to people to develop the natural resources of this country but 1 do not think that we are justified at any time when doing this in over playing our hand at the expense of the individual and the commercial and industrial life of this country.
Reports on Items
Senator SCOTT (Western AustraliaMinister for Customs and Excise) - I present the report of the Tariff Board on the following subject:
Ceramic tableware, etc.
I present also the following report by the Tariff Board which does not call for any legislative action:
Sisal baler twine (Dumping and Subsidies Act).
Debate resumed from 28 May (vide page 1163). on motion by Senator Dame Annabelle Rankin:
That the Bill be now read a second time.
Upon which Senator Cohen had moved by way of amendment:
At the end of the motion add - ‘, but the Senate is of opinion that a Joint Select Committee should be appointed to inquire into the desirability and practicability of removing the Australian Post Office from the administrative influence of the Public Service Board and of establishing a public corporation to control the business of the Post Office’.
– In the few moments for which I spoke yesterday I commented that we had three very interesting Bills before us, each dealing with the affairs of the Post Office. The Post and Telegraph Bill is essentially a machinery measure. Its purpose, amongst other things, is to bring certain provisions of the Post and Telegraph Act up to date in respect of present day conditions and practices concerning the carriage of mail by sea and its receipt in this country by an authorised officer, and the requirement that vessels must carry mails from our ports. The Bill also clarifies the question of liability for the cost of repairs to departmental assets. In this respect I appreciate the merits of proposed section 139b, the purpose of which is to encourage cooperation with the Post Office to ensure minimal damage to the Department’s costly cables and installations in road making activities. The statutory liability for damage incurred is qualified if the person in authority undertaking the road repair work informs the Department of the work to be done and allows the authorising officer of the Department to be present when the work is being carried out. I welcome and support this spirit of co-operation. We should see more of it as between departments and the public and in interdepartmental relations in planning generally.
The Deputy Leader of the Opposition (Senator Cohen) has moved an amendment to add at the end of the motion, ‘That this Bill be now read a second time’, the words: but the Senate is of opinion that a Joint Select Committee should be appointed to inquire into the desirability and practicability of removing the Australian Post Office from the administrative influence of the Public Service Board and of establishing a public corporation to control the business of the Post Office.
The amendment brings us immediately to a consideration of the provisions of the Bill relating to the finances of the Post Office. As one who firmly believes in a free enterprise system, my spontaneous reaction to Senator Cohen’s amendment was favourable. However, on considering the matter more deeply I have come to believe that the time is not yet ripe for the establishment of a public corporation to control the business of. the Post Office. At this stage in the development of our huge continent, services must continue to be provided in the national interest and, in many instances, uneconomically from a commercial point of view.
Yesterday afternoon Senator Poyser, who supported the amendment, referred to the disability being suffered by many rural telephone subscribers because of the high cost involved in the installation of rural automatic exchanges. I feel that the Post Office has a developmental obligation to provide services in country areas, and I do not think that a corporation would do as much as the Post Office is doing now. The Post Office is under the direct control of the PostmasterGeneral, who has a direct responsibility to the Parliament. Members of the Parliament can lay before the Postmaster-General, or before the Minister who represents him in this chamber, matters of real concern in respect of requirements for Post Office facilities throughout Australia.
The growth of the Post Office has been remarkable. The demand for improved and extended facilities continues to grow constantly. In the last 12 years the number of telephone services in operation has almost doubled to 2.3 million. Local and trunk calls also have doubled in number during that period. They now number approximately 2,350 million annually. The annual Post Office revenues have doubled over the last 8 years to $43 1m in 1966-67 and Treasury accounts record a 100% increase in expenditure on capital works in the last 5 years to a level of $205m in the year 1966-67. It is indeed a mammoth business and one which requires every assistance to ensure application of the maximum business-like approach and techniques to the running of its affairs. In the financial provisions of the Bill to which I refer, it is provided that there shall be a trust account into which the revenues of the Post Office will be paid. Under the system now applying, the revenues of the Post Office are paid into Consolidated Revenue.
– I also was under that impression.
– The honourable senator was talking about a corporation.
– Has the honourable senator examined the system applying to the British Post Office?
– 1 listened with interest to Senator Laucke’s remarks on this Bill. 1 believe that he would not need very much persuading by us to change sides and support our amendment. He is about 75% of the way already. We would not have to say very much to persuade him that the idea of a select committee is perfectly reasonable and valid. I appreciate his problem in having three Bills relating to post and telegraph presented at the same time, lt would be reasonable to assume that our amendment was in respect of the one that dealt with the finances of the Post Office. But, of course, an amendment seeking the appointment of a select committee to inquire into the desirability and practicability of removing the Australian Post Office from the administrative influence of the Public Service Board - that is the purpose of our amendment - can be moved only in respect of a Bill that amends the Post and Telegraph Act. That is why our amendment has been moved in respect of this Bill.
This Bill itself is perfectly acceptable to the Opposition. I do not want to discuss any of the matters with which it deals. They only bring up to date provisions as to the conveyance of mails and matters contingent thereon, so that there will be no anomalies in the way the original Act should be implemented in view of the change in methods of transport. I wish to concern myself only with the amendment. I propose to discuss the reasons why it is desirable to set up a select committee. As I mentioned on a previous occasion, I have had a long and close association with the Post Office, particularly with the planning depart ment of the Engineering Branch. 1 found at many turns the problems that faced us through not being able to control our own finances.
Such matters as the limitation of manpower and the difficulty of forward planning are directly attributable to the lack of finance. We were unable to see sufficiently far into the future to plan adequately. Much of what Senator Laucke said in this regard is perfectly correct. The PostmasterGeneral’s Department is unable to look ahead. It is a composite department. It deals with mail services, telegraph services, telephone services and the transmitters of the national broadcasting and television stations. I do not propose to go into detail on whether any of those functions should be removed from the control of the Post Office as a whole. All that I am trying to do is to present a case for an inquiry to be undertaken by a select committee.
I will deal particularly with the engineering side. I believe that my references to it will be sufficient to show the validity of the amendment that we have moved. There are two situations in regard to telephones - the telephones in city areas and the telephones in country areas. In city areas the problem is confined to the provision of exchanges, cables and subscribers’ instruments. This is of a pretty general nature. The cost is basic for any person in a metropolitan area. Expansion in metropolitan areas is limited by lack of finance, of course. We cannot have the cables we want at the time we want them. We cannot plan ahead for the requirements of the Post Office. We cannot have the exchanges. We have not the manpower to install them when we get them.
The Post Office has been forced into a situation in which it lets contracts for the installation of exchanges. That was never done in Australia prior to about 8 years ago. When exchanges were first installed by private contractors, we discovered that a tremendous amount of readjustment work had to be done before the exchanges were satisfactory. With our better trained technicians, we could always turn out an exchange of better quality than an exchange that was installed by a private contractor. That is not the position now. The contractors are doing quite a good job. But the Department is not doing the work that originally it was intended to do.
In country areas the problem is much different. Because of the scattered locations of the subscribers, the cost of lines becomes very important. When Senator Poyser was speaking in this debate just over a week ago, he referred to the tremendous costs of which he had become aware in a number of installations for subscribers in Victoria. I have not come across any as costly as those mentioned by Senator Poyser but in Western Australia I have come across other matters which are of considerable importance. Although the amount involved in the case to which I am about to refer does not compare with that mentioned by Senator Poyser, it is of some consequence. A subscriber who would be only M miles from the telephone exchange was told by the Department that it would cost something like $160 to install a service when sufficient switches were available to increase the size of the exchange.
Another case which really disturbed the people in the area occurred in the farming area known as Orchid Valley which is not very far from Kojonup. Not long ago the telephone exchange was open for business every day. That was quite satisfactory having regard to the size of the community and the amount of business that was made available. Now, after 24 years, and after the area has expanded tremendously, the exchange closes down at lunchtime on Saturday for the weekend. If the Monday is a holiday the telephone is useless from lunchtime on Saturday until 8 o’clock on Tuesday morning. If a person becomes ill or if a problem arises on a farm the subscriber has to travel in his car to Kojonup, a mutter of 22 miles, to make his telephone call. Talbot Creek, another small district which has a non-official post office, also has its problems which arise because the Department tries to give service when an automatic exchange is not available because of lack of funds. The non-official postmistress at Talbot Creek has decided that a telephone service will be provided from S a.m. until 1 p.m. each day except on Sunday when no service is provided. That is a retrograde step.
Now let us consider the big farming area of Perenjori. For many years Perenjori has had a continuous service which has been provided by an ordinary manual type exchange. Although there is a non- official post office in the town, a large wealthy area which produces a good deal of wheat and wool has been served more or less adequately. The area is expanding. Recently the State Electricity Commission introduced power lines to the town and at almost the same time the post office ceased its Sunday service. The people of the area have been asking for an exchange for some years and the prospect is that it will be provided in about 3 years from now. All these difficulties arise because the Department has not sufficient funds to enable it to work into and develop the areas it wants to develop.
I asked Senator Laucke by way of interjection to refer to the British Post Office because 1 could see that his remarks were tending in that direction. The British Post Office has now handed over its engineering services to a corporation and the Minister no longer has direct control over them. Honourable senators probably would want to know the interesting things which have happened there because they show a new approach to the problems that arise. When it was decided to change the British Post Office into a corporation the commissioners said to the Government: ‘We must run the Post Office as a business enterprise and we must show a profit. The problem that faces us is that inland telegrams are a dead loss. It costs us 5s to start sending a telegram before it is even delivered, so it is obvious we cannot possibly meet that cost. We would like to keep the overseas cable service because that is profitable but we want to get out of the inland telegram business’. The Government said: ‘You cannot do that because this is a national service’. The commissioners replied: ‘Very well, if we cannot do it will you pay for this national service?’ 1 understand that the Government regards the inland telegram service as an extension of the Post Office which it wants to maintain so it is paying for the telegram traffic.
I do not want to discuss at length the British Post Office scene because I want vo deal with another scene which is. much more interesting from our point of view. I refer to the situation in Sweden. I selected Sweden for a number of reasons. Firstly, the number of subscribers there is nearly the same as the number in Australia. Sweden has slightly over 3 million subscribers whereas we have 2.3 million. Secondly, Sweden’s trunk line system is much the same as ours although of course it is much shorter. But the length of a trunk line is not the main consideration. In these days the important thing is the carrier equipment because the lines are used to maximum efficiency and can carry a large number of circuits.
Sweden has a number of facilities which we do not have. People who have trouble with telephone calls in Australia will be interested to know that in Sweden if you dial a number that is engaged you then dial another number and hang up. As soon as the first number is disengaged you are called automatically. Just think how wonderful that would be in Australia where we have to continue dialling until the other number is disengaged. That is one facility that telephone subscribers in Sweden have.
The cost factor is interesting. The cost to the subscriber in Sweden is approximately one-half the rental that is charged a subscriber in Australia. In addition, the call fee is about one-half what it is in Australia but I think the trunk line charges are about the same as ours. It may be said that these lower charges are possible because of lower wages and salaries. That is not so. Wages and salaries in Sweden are almost double what they are in Australia. In fairness I should point out that because of the modern equipment being used in Sweden the staff required to do a certain job is about onehalf what we would use in Australia.
How is this achieved? One of the very important things that the administration in Sweden does - it does this under grant from the Government - is to manufacture 50% of its requirements, so that it does not have to go into the commercial field to purchase its technical equipment. However, it is not permitted to manufacture more than 50% of its requirements. The remaining 50% must be purchased outside. That is the law. A few years ago we in Australia were manufacturing quite a lol of our own equipment. We were even manufacturing carrier equipment in the Post Office but that has now been discontinued. Now we purchase all the equipment we need, thus reducing our profits. I want to quote from an article entitled ‘Telecommunications in Sweden* written by Bertil Bjurel. This was a paper presented al the 1966 IEEE International Communications Conference. It deals with how the telecommunications concern in Sweden is financed. The author stated:
Although a State-owned corporation, the Telecommunications Administration has a rather free status. Its Board has, in general, full freedom in the allocation of its revenues for operational purposes, lt also enjoys a comparatively large measure of freedom in staff matters. On the other hand, the Administration is under the obligation of delivering to the State the annual net income from telecommunication operations, after coverage of its expenditure and depreciations. As a reasonable rate of return the Stale expects from the Administration an amount corresponding to the interest on the capital invested by the Stale in the operations of the Administration over the course of the years.
That is rather similar to what we do here but honourable senators will notice that there are differences. He continued:
In addition to a surplus corresponding to the interest, the Administration, in most years, delivers to the State extra profits as well.
I do not agree with this. I think that the Administration ought to be able to reinvest the extra profits.
As regards investment funds, the Administration is dependent on the State which, through the Riksdag (Parliament), decides the amount of investments and makes the necessary grants. Investment capital comes for the most part from the Administration’s own depreciations.-
I think this is a very important thing - to a lesser extent in the form of State loans.
When I read about what was happening in Sweden I thought the authorities were doing it mainly through Slate loans but they are not. They are doing it, as this article stales, from the Administration’s own depreciations. The author continued: lt should be mentioned here that all depreciations are based on the present day values and not on original purchase values. In the last 5 years an average of more than 80 per cent of the Administration’s investment funds has derived from depreciations. 1 think Sweden has a very interesting and intriguing set-up. But this is not the only communications organisation in Europe which operates on the same principle. There are many of them and they are all finding that this system is advantageous. But I think that possibly Sweden is the best example so far as costs are concerned and for the way it functions.
A number of concerns in Australia connected with the Post Office have been keen on the idea of it becoming a corporation or a commission. We find that practically all unions connected with the Post Office are in favour of a corporation or commission. The principal exception is the Administrative and Clerical Officers Association. I have read of its objections and I have discussed them with its federal president. In addition to the unions we find that some of the important bodies in Australia also are in favour of this idea. I have before me a statement by the Victorian Employers Federation. I am not sure of the date of this statement but it could not have been issued more than a couple of months ago. The statement is headed: ‘Turn P.M.G. Department into Corporation’. The statement reads:
The growth of the two major public utilities provided by the PMG - post and telecommunications - have built this Department into a vast organisation.
The Victorian Employers’ Federation has long advocated that trading operations of the scale now conducted by the PMG be managed on commercial lines if they are to be really efficient.
It should be the Government’s objective to create a Statutory Authority which will be responsible for developing the most efficient services possible at the lowest charges consistent with sound financial operations; carry on in a worthwhile manner the best tradition of service to the public; develop relations with its staff in a forwardlooking and progressive way.
The Federation concludes by stating:
A new basis for the PMG’s Department seems overdue and members have written to us supporting this view. lt could be of interest to all Australians to know why it is that in Australia internal communications are a matter for a Department of State, while the external communications are already operated by the OTC - a Statutory Authority?
Because of this evidence that I have presented I believe that what is suggested in the Opposition’s amendment is perfectly reasonable and rational. The Opposition asks, in view of the thoughts that its spokesmen have put to the Senate, that a joint select committee be appointed to inquire into the operations of the Post Office. We are not asking that the Post Office be turned over to the control of a commission. We are not asking that it be split up and that the postal services go to one side and the telephone and engineering services go to the other side. We are asking for an inquiry. It seems to me that we should look into the practicability and desirability of removing the Post Office from the direct control of the Postmaster-General as it is now. I think the Senate would be doing a service to the Australian public if it supported the amendment.
– The three Bills now under consideration have the support of all parties in the Senate. I do not propose to canvass the amendments that they will make to the various Acts because I believe they have been fully covered. I agree with Senator Wilkinson to the extent that the amendment moved on behalf of the Opposition, seeking a select committee to inquire into the Post Office with the view to setting it up as a statutory authority, can be classified by the Opposition as a reasonable amendment only in the current political season. I want to say quite calmly that 1 hope the Senate will not agree to this proposition. I do not believe that an inquiry by a Senate select committee into the Postmaster-General’s Department would achieve anything of benefit to the Australian people.
– I rise to speak in this debate only because last year 1 gave an indication that 1 believed that the setting up of a corporation to conduct the Post Office might be the best move for that institution. At that time I was firm in that belief. Since then 1 have wondered whether ministerial control is not slightly preferable. I have been influenced to that belief because the same arguments have been applied in Tasmania as to whether the Hydro-Electric Commission of Tasmania should be a ministerial department or a statutory body. It is now obvious that it should have been set up as a ministerial department. .Much can be said to support the argument that a select committee should be appointed to inquire into the whole procedure. I do not oppose select committees. I think they are a very good thing. However, in this debate not one argument has been advanced against the Bill. The main arguments have been addressed to the appointment of a select committee.
– Oh no.
– But there is always tomorrow.
– That is a different Bill.
– I do not believe that any honourable senator can raise any real objection to this legislation. It aims at tightening up regulations and providing new regulations to meet present-day conditions. It is purely an administrative Bill that provides for the improvement of the machinery of the Postal Department 1 have no criticism to offer of the Bill, but I would like to direct my remarks to the amendment moved by Senator Cohen, which states:
At end of motion add ‘, but the Senate is of opinion that a Joint Select Committee should be appointed to inquire into the desirability and practicability of removing the Australian Post Office from the administrative influence of the Public Service Board and of establishing a public corporation to control the business of the Post Office.’
I support the amendment. It will be remembered that about 12 months ago 1 endeavoured to have this matter discussed by raising it as a matter of urgency in the Senate, but the privilege of having a 3- hour discussion on this very important question was denied me. It is refreshing to know that the Australian Labor Party, the official Opposition in the Senate, has come to realise that my endeavours to at least have a discussion on the pros and cons of this matter had some merit. The Opposition has submitted an amendment which I believe has a good deal to commend it. None of us can be dogmatic about whether the establishment of a statutory authority to replace the Postal Department would prove to be more efficient than the present system. None of us can say with conviction that an examination by a select committee will do any harm, even if it does not do some good. The amendment proposes an examination of the present position and the practicability and desirability of transferring control from the Postal Department to a statutory authority.
Frequently we hear members of the public and members of Parliament say that the Post Office should be run as a business. That is also often said about the railways departments in the States. If the question is examined very closely it will be seen that all these departments are expected to be run on business lines and at the same time to provide services that we could never hope to get from private enterprise. They are regarded as public utilities on one day and on the next day they are expected to be run strictly on business lines.
Though this Department, the biggest under the Crown, is expected to be run as a business and is providing a most important public service, it is subject to the dictation of the Public Service Board. It has no autonomous power as far as staff or anything else is concerned and, what is more, until a second Bill that is soon to be discussed in the Senate is passed, its income is being put into Consolidated Revenue. As was said tonight by Senator Wilkinson, a former employee of the Department of many years standing, it is utterly impossible for the administrators of that Department to budget for any expansion of its services, because they are not in a position to know what finances are to be made available to them from revenue and loan accounts. It is a ridiculous position.
The Director-General of Posts and Telegraphs must find it very awkward and very difficult to administer the Department as he would wish to administer it, with the Public Service Board breathing down one side of his neck and the Treasury breathing down the other side. He cannot move unless he gets approval from the Treasury for the expenditure of the money that he needs to run the Post Office. Everything that is done in the matter of staffing has to have the approval of the Public Service Board, lt would not matter if the Director-General of Posts and Telegraphs believed that Tom Jones was the most suitable man for an important and responsible position in the Post Office; his recommendation would have little value if the Public Service Board believed that somebody in another department, without any previous experience at all in post and telegraph work, should get the promotion and the improved classification.
I am not alone in thinking about this matter. I have thought about it for some time, but 1 say guardedly that 1 am not dogmatic about it. I should like to see an examination of it. I have read all that has been published about the developments that have taken place in the United Kingdom, and I read some of those reports in this chamber last year. 1 have read also opinions expressed by a former Director-General of
Posts and Telegraphs. Mr O’Grady, who hail very long experience in the post and telegraph service in Australia and whose opinion cannot be disregarded. Indeed, his opinion must be considered favourably, because at least he must know the disabilities under which he was required to administer the big department of posts and telegraphs, and the advantages that would accrue to the administration from an alteration of the framework and the set-up of that department. Therefore, it is not of much use for those who arc opposed even to an examination of the position to say that while a reasonable amendment has been proposed by the Opposition they will vote against it in any case, because they believe the present position is all’ that we could desire.
No suggestion was made for the establishment of a trust fund for the post and telegraph services until 1 raised it in the Senate 12 months ago. Subsequently the Postmaster-General (Mr Hulme) decided to make this alteration. That is what happened in the United Kingdom. The first step taken there was the establishment of a trust fund, and it was then found that it was not sufficient.
– Would the honourable senator take any notice of them, though?
– He is campaigning for Senator Kennedy now.
– You are antiKennedy.
– Are you still a McCarthy man?
The PRESIDENT (Senator the Hon. Sir Alister McMullin) - Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question:
That the Senate do now adjourn.
Question resolved in the negative.
The Senate divided. (The President - Senator Sir Alister McMullin)
The PRESIDENT - There being 24 ayes and 24 noes, the question is resolved in the negative.
Original question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Floods In Queensland’ - Limestone Mining - Austraiian Broadcasting Commission
Motion (by Senator Anderson) proposed:
That the Senate do now adjourn.
– 1 shall not detain the Senate for any length of time, but 1 want to raise a matter of urgency. It relates to the need for co-ordination between the Commonwealth and the States in the setting up of some sort of relief service for north Queensland and western Queensland in .times of disaster. Last year those areas suffered severe flood damage. Again this year serious problems were caused by floods in western Queensland and some paris of north Queensland. It is my belief that in these cases responsibility rests with both the Commonwealth and State governments and that there ought to be co-ordination between the two authorities. In a few moments 1 shall be reading correspondence to prove that this co-ordination does not exist.
When disasters such as floods overtake us, the only well ordered body which is in a position to assist is the police force but if this organisation is unable to obtain Army ducks to get to people in distress, or if it has not got access to helicopters or to aeroplanes in cases where landing grounds are still clear of water, it is hampered to a very great extent indeed. In about February of 1968, the town of Cloncurry, and some of the other smaller towns on the railway line from Townsville to Mount Isa, were completely isolated for periods of up to 2 weeks. Railway services were not operating, and it was impossible to get to the towns by road. While some aerodromes were open and aircraft could land with mail and other supplies, it was impossible for people in Cloncurry to obtain fresh milk, fruit and other things necessary for the growing army of youngsters in the area. Certainly commercial aircraft could land, but the serious fact was that the high freights demanded by the commercial airlines were beyond the reach of the working people of the area. The severe hardship suffered by many was totally unnecessary in that it could have been overcome had certain action been taken by both the Commonwealth and State governments.
On 24th February, on the eve of the opening of his campaign in Higgins by the Prime Minister (Mr Gorton) I endeavoured to contact him by telephone with a view to obtaining some relief for the people of Cloncurry, Julia Creek and Richmond. With the aid of the dedicated switch girls at the Townsville telephone exchange, I was able to contact the Prime Minister’s Press Sec: retary, but nothing was done. A couple of days later, I sent this telegram:
Confirming my telephone conversation of Friday night re fresh food shortages at Cloncurry stop understand no relief supplies fresh milk, vegetables yet available stop commercial airline freights for aic lift completely beyond capacity to pay of local working people stop respectfully request you again examine matter and grant relief by way of RAAF air lift if possible
On 29th February, the Prime Minister’s Press Secretary wrote to me in these terms:
The Prime Minister directed me to follow up your representations on behalf of Cloncurry, and I discussed the situation with a variety of people, including ‘ the relevant State authorities.
You would fully appreciate the need for us to liaise closely with the Slate if we were to move in and take the sort of action you proposed.
The Queensland authorities agreed that there were some shortages in Cloncurry, but said there was no emergency justifying an RAAF air lift. IE the situation deteriorated, they assured us they would promptly seek RAAF assistance.
On 7th March, I wrote this letter to the Prime Minister:
I have now received a letter (dated 29th February 1968) from your Press Secretary advising why aid could not be given to the people of Cloncurry during the recent serious situation in that area caused by serious floods, and a break down of the railway system because of this factor.
I would like to express my disappointment that assistance was not given in view of the fact that an RAAF Base is situated at Townsville, and I ses no reason why the opportunity could not have been taken of providing air crew with flying practice at least by delivering essential foodstuffs to the Cloncurry, and possibly other areas where suitable aerodromes are situated.
It is true that the commercial airlines could have lifted food to these areas, but the freight rates are prohibitive and no ordinary worker could possibly have paid the additional freight without getting into serious debt.
It was not possible to get reliable information from the Railway Department regarding the date on which the line would again open, and, in fact, since my last communication to you the deviation line at Corella Creek has again been twice under water.
I can assure you that there were serious food shortages, particularly in relation to fresh milk, vegetables and fruit, and as there are many young children in these centres the affect on their health would only be adverse to say the least.
I can only hope, as do the people living in these isolated centres, that, in the future, such serious situations will not again be ignored by the Queensland Liberal Government and by your Government.
On 18th March, the Prime Minister replied:
Thank you for your letter of 7 March. I would like to assure you that your representations on behalf of the people of Cloncurry were fully examined, and discussed with the Queensland State authorities.
You will understand, 1 am sure, that we are bound to work closely with the State authorities in matters of this kind, and take account of the judgment of those directly responsible for the emergency arrangements.
Let me outline the facts to honourable senators. One of the bigger bridges on this line from Townsville to Mount Isa, that over Corella Creek, which was financed with a loan from the Commonwealth Government some years ago, could not withstand the pressure of the rising flood waters and both it and a train travelling over it fell into the creek. A deviation line was subsequently constructed, but the flood waters rose over it in two or three places and it was impossible to ascertain from the Railway Department when fresh fruit and milk would be going through to the west. In fact, even the city of Mount Isa was in serious difficulties for a few days.
I suggest that when this Government makes grants available to the Queensland
Government it should exercise some supervision over how the money is spent. I say that because of the number of problems that have arisen in connection with this railway line which was alleged to have been built to stand up to heavy loads and all sorts of flood conditions. I shall have something more to say about that in a moment. Members of the Government parties must be made aware in some way of the difficulties that people face in remote areas. During the recent floods and the floods last year there were serious problems in the Gulf country. Thebeef roads, which are supposed to take the traffic now that restrictions have been placed on shipping to places such as Burketown, go under water and sometimes arc nottrafficable for 3 or 4 weeks. The second rate shipping service that operates around Cape York to the Gulf ports can be anything up to 3 or 4 weeks late in delivering supplies. But nobody seems to be very concerned about these matters.
I have before me a Queensland Railways notice dated 9th November 1967. It shows how insecure the railway between Townsville and Mount Isa is even in a dry period. The notice is a warning and is in these terms:
The following speed restrictions are in operation, and the running staff must keep a sharp lookout for speed restrictions signal (vide Rules 261 and511) approaching the mileages indicated.
Then there is a whole page of speed restrictions. I ask for leave to have them incorporated in Hansard because I believe that they should be placed on permanent record.
I have read four of the restrictions. I do not want to keep everybody here until1 a.m
So I again ask for leave to have the document incorporated in Hansard.”
I hope that honourable senators opposite will examine those speed restrictions in detail. I am trying to show how some of the money that has been loaned to the Queensland Government has been spent. This railway line should be an all weather line. There should not be these difficulties.
Finally I suggest that during the wet season in north Queensland one, or perhaps two, helicopters be stationed at Townsville or some other northern centre. I know that it is not possible to have helicopters stationed there all the time because there are not the maintenance facilities to keep them operating continuously. But that should be considered for the future. I also suggest that Army ducks be sent to north Queensland prior to the wet season. All of this equipment could be utilised effectively in the training of Army and Air Force personnel. After all, the Government often says that flights by VIP aircraft that go out on sometimes doubtful missions provide training for Air Force personnel. It is much more important that something of the nature that I have suggested be done. Aircraft are stationed at Townsville and it is a suitable area in which to station helicopters.
I know that the honourable member for Kennedy (Mr Katter) said that he was doing something about this matter. But it is significant that during the recent flood period he appeared to be in Brisbane most of the time. He was a thousand miles away from the flood centre, engaging in a Press controversy about the number of magpies that attacked him the last time he was in Canberra. I suggest that, if subsidies are to be paid to the private shipping lines that operate in and out of the Gulf ports, then some sort of control or pressure should be applied to them to ensure that in times of emergency they carry essential foodstuffs and do not take 3 or 4 weeks to deliver them.
– This has nothing to do with the Commonwealth Government.
– This matter was raised last year by Senator Mulvihill and Senator Henty, who was then the Leader of the Government in the Senate, replied to him. Almost the same criteria apply today as applied then. This is peculiarly a matter for the Government of New South Wales. It is interesting to note that the Colong Caves limestone reserves are the best and closest reserves to Sydney, Wollongong and Newcastle. I have here a newspaper report of a statement made by the New South Wales Minister for Mines, Mr Fife, in which he stated that a lease to mine those reserves had been granted to the company concerned. He went on to say that the request of the State Opposition for a committee to inquire into this matter would have to be refused. The Press report goes on:
The Deputy Leader of the State Opposition, Mr P. D. Hills, said yesterday that the only proper way to settle the dispute over - the proposed mining was to refer the matter to a mining warden’s court.
Every conservationist had opposed the mining, including the American parks expert, Mr S. Weems, who had been seconded by the NSW Government to set up the new National Parks and Wildlife Service.
Mr Fife said that Mr Hills’ proposal for a mining warden’s court hearing was too late. The Government had already granted a lease and had no power to refer the matter at this stage to a warden’s court.
As has been stated previously, this is a State matter. The only new point raised by Senator Mulvihill is that certain statements were made in the Press in relation to other limestone deposits condemning the programme set out, and the detailed statements made, by the Minister for National Development or the Department of National Development. The Minister may or may not take up that matter. The fact is that certain safeguards have been placed on the mining of the deposits. Because they are the best and closest deposits to the thickly populated areas 1 have mentioned, they are the deposits that the State Minister for Mines has granted the company permission to mine.
– On 15th of this month two questions were asked in the Senate of the Minister representing the PostmasterGeneral relating to the conditions under which the Press was admitted to the State Executive meeting of the Australian Labor Party in Western Australia,, and also. to the question whether political censorship of the Australian Broadcasting Commission, whose representatives were present at that meeting, should be condoned. I would not have raised this matter tonight and would have awaited the Minister’s reply but for the fact that the next day similar questions were asked of the Postmaster-General (Mr Hulme) in another place. He replied to them immediately. This is what he said as recorded in Hansard of 16th May 1968:
The information given to me is that the Australian Labor Party meeting which, of course, was a private meeting but nevertheless of considerable public interest, did invite news media to be present but on the undemanding that any news report was to be approved by officers associated with the organisation. Most of the news media were not prepared to accept the invitation to be present on that basis. The ABC decided that its representatives would be present and that it would submit to the officers of the organisation a report of what it intended to say in its news services.
What it did submit was approved in toto and was used. So, the ABC was the only news medium which in fact used any information from this meeting.
I have risen to speak because of that reply. I was present at that meeting of the State Executive. The Australian Broadcasting Commission’s reporter was present, as he is at most meetings of the State Executive. At the beginning of the meeting a~ message was received that a reporter from the ‘West Australian’ was present, that he was prepared to accede to the conditions laid down by the ALP and that he requested permission to attend the meeting. The President of the Executive refused permission on the ground that the application was not in writing and that for that reason he was not prepared to accept it although, as I have said, the ‘West Australian’ was pre-, pared to accede to the conditions laid down. That is the first thing to remember.
What were’ the conditions? The conditions were set out in a letter dated 26th March 1967. of which I have a copy, which was sent to the editor of ‘West Australian’ Newspapers, Newspaper House, St George’s Terrace, Perth, the editor of the ‘Sunday Times’, the editor of the ‘Daily News’ and the manager of the Australian Broadcasting Commission. The letter carried, the heading Press Representatives State Executive Meetings* and was in these terms:
Further to previous correspondence on the above, I now wish to advise the following was adopted at the last meeting of this State Executive:
That representatives of the Press be admitted to State Executive meetings on the understanding that should the State Executive decide to go into private session- that is, into committee - such representatives shall leave the meeting room on the further understanding that the reporter shall not use the name of any member of the Executive other than the President, General Secretary and members of Parliament without the authority of the General Secretary’.
The letter then went on to advise the date of the next meeting of the State Executive. I think everyone will agree that those conditions are perfectly reasonable. There was no threat that’ the representatives had to submit any report to the General Secretary or to any other member of the State Executive for perusal. If the representatives of the Press accepted those conditions they could report anything that occurred while the State Executive was sitting. The Press representatives also were asked to remove themselves or to agree not to take notes while the Executive was in committee. On that condition they were permitted to remain. No reports by the representative of the Australian Broadcasting Commission were submitted for approval. He left the meeting at its conclusion and submitted the reports to the ABC newsroom.
Similar conditions appertain in most States of the Commonwealth. There is nothing unusual about this. An attempt has been made to stir up a tremendous amount of emotion on the question of what the ALP did, and does, at its meetings. The ALP conducts its business in a reasonable, normal and democratic way and representatives of the Press are entitled to be in attendance. The representative of the ‘West Australian’ newspaper could have attended had an application been made in writing. Representatives of the ABC always attend and I have stated the basis on which they attend. I hope there will be no further snide remarks about what happens in the Western Australian Executive of the ALP regarding the Press.
– in reply - Senator Keeffe spoke first in the debate on the motion for the adjournment and, as I did not want to close the debate, I did not rise earlier to reply to him. I was rather surprised that he spoke on this subject tonight, because only yesterday we debated it for a considerable time. In fact last night we spent all our time on a motion calling for the establishment of a national disasters fund. Tonight the honourable senator spoke about flood disaster and flood relief. Nevertheless, it was his right to do so.I can only say that I will refer the matters he raised to the appropriate Minister.
Question resolved in the affirmative.
Cite as: Australia, Senate, Debates, 29 May 1968, viewed 22 October 2017, <http://historichansard.net/senate/1968/19680529_senate_26_s37/>.