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Thursday, 27 October 1949

Mr HUGHES (NORTH SYDNEY, NEW SOUTH WALES) - The Minister for Postwar Reconstruction cannot be allowed to get away with such statements as he is making.

Mr DEPUTY SPEAKER -Order! The Minister is replying to matters that have been raised in the course of the debate.

Mr Harrison - That matter was not raised in the debate.

Mr DEDMAN - I shall cite figures relative to the dollar cost of petrol that is entering the sterling area. At an early stage, the Prime Minister said in this House, following the receipt of a cable from the United Kingdom, that petrol imports into the sterling area cost the sterling area more than 400,000,000 dollars a year. That was the only information that the United Kingdom Government, would permit the right honorable gentleman to give to the House at that time, but the figure that was given to Ministers at the London conference, of the dollar cost of petrol to the sterling area last year, was 600,000,000 dollars.

Mr Fadden - That figure includes the cost of capital equipment.

Mr DEDMAN - I shall deal with that matter. The Leader of the Australian Country party has hardly a feather to fly with now, but he will not have one feather to fly with when I have finished with him.

Mr Fadden - He who laughs last laughs best.

Mr DEDMAN - On the basis of the present exchange rate, the amount of the United' Kingdom currency that is expended on petrol for which we pay dollars exceeds £200,000,000. The Leader of the Australian Country party interjected to the effect that a considerable percentage of that cost was represented by the importation into the United Kingdom of capital equipment for refining crude oil into petrol. Actually, the dollar expenditure on that capital equipment amounted to less than 100,000,000 dollars of the 600,000,000 dollars. The right honorable gentleman may re-examine his figures, if he likes, but I hare the correct information.

Mr Fadden - I shall look at the secret document.

Mr DEPUTY SPEAKER -Order! I ask the Minister to ignore the interjections.

Mr DEDMAN - The Leader of the Australian Country party has been interrupting me.

Mr DEPUTY SPEAKER - Order ! The Minister should address himself to the Chair. If he will concentrate on his speech, he will do a lot better.

Mr DEDMAN - I have said that the dollar cost of petrol entering the sterling area is 600,000,000 dollars. It is true, as has been stated by members of the Opposition, that whilst there is a shortage of refined petrol and of refining capacity, ample supplies of crude oil are. available in various parts of the world. The United Kingdom Government is developing its own refineries, and refineries are being established in other non-dollar areas. Refiners in the United States of America, who see the prospect of losing some of their markets, are making a song about the amount of dollars that they will forgo when the new refineries in the non-dollar areas begin production. The American refiners assess the dollar cost of petrol that is coming into the sterling area, not at 600,000,000 dollars, but at as high as ,700,000,000 dollars per annum. When we take into account the fact that more than £200,000,000 sterling is being paid annually for petrol from the sterling area and that the total reserves of the whole sterling area amount at present to a little more than 300,000,000 dollars, which could be exhausted within, say, nine months, we should realize how important it is that the United Kingdom, Australia and every other member of the British Commonwealth of Nations shall do everything possible to prevent an undue expenditure of dollars on petrol or anything else.

The honorable member for Reid (Mr. Lang) and other honorable members have stated that the House has not been given information about the cost of Australia's purchases of petrol. I shall deal with that matter. The value of all the petroleum products that were imported by Australia last year was £50,000,000, cost, insurance, freight, and exchange, of which the dollar content was 45,000,000 dollars. In other words, Australia expended last year 45,000,000 dollars on petrol. As I shall show, we cannot obtain petrol from the sterling area, and the extra cost of importing sufficient petrol to avoid the need for rationing liquid fuel in this country would be 17,000,000 dollars. That amount of dollars would have to be provided either from the dollar and gold reserves of the sterling area or by diverting some of our present expenditure of dollars on motor car chassis, capital equipment for various industries, and equipment for the mechanization of coal mines and for the new strip mill for the Broken Hill Proprietary Company Limited at Port Kembla. All those purchases may be described as vital, and every honorable member knows that if we were to divert our dollar expenditure in the way that I have mentioned, unemployment would follow in a number of industries in this country. Two years ago we had to draw from the United Kingdom reserve of gold and dollars no less a sum than 164,000,000 dollars. Last year, we drew 70,000,000 dollars from that reserve. I do not know how many dollars we shall draw this year, but as we have to rely on that reserve to make up what we do not earn ourselves, it behoves us to do our utmost to conserve our expenditure of dollars.

Having placed that general position before the House, I shall deal with a few of the arguments that have been advanced by honorable members opposite in this debate. The honorable member for Wentworth said that milk was being wasted at some place because petrol was not available to transport it to consumers. The honorable member did not adduce any evidence to support his statement. Indeed, he made only a bald statement, which was completely untrue.

Mr HARRISON (WENTWORTH, NEW SOUTH WALES) - That is not so. This Government completely ignores the welfare of country people.

Mr DEDMAN - The honorable member for Wentworth makes the wildest statements without any evidence to support them, and expects people to believe them. But, of course, the people do not believe them.

Mr DEPUTY SPEAKER - Order ! The honorable member for Wentworth made a long speech. The Minister is now entitled to be heard without interruption. It is a bit late in the day to turn members out now, but I insist that order be maintained.

Mr DEDMAN - The honorable member for Wentworth said that it was strange that petrol rationing was in force in only those countries where there were socialist governments. Obviously, he did not know what ho was talking about. There is petrol rationing in France, and although there is no French Premier at the moment, the last one was a socialist. There is petrol rationing also in Belgium, where a socialist government has been in power since the end of the war.

The honorable member said that defence stocks of petrol should be used for essential purposes. Everybody knows that if the reserve stock of petrol, amounting to 50,000,000 gallons, is released for general consumption, there is no way to ensure that it will go to essential users. It will be available for use by essential and non-essential users alike. The honorable member also said, in connexion with the proposal to buy petrol from Poland, that the Polish vendors had sold a cargo elsewhere because the Australian Government was too slow in making up its mind. That is untrue.

Mr Fadden - It is true. I ask the Minister to table the file.

Mr DEPUTY SPEAKER - A little while ago I warned the honorable member for Wentworth not to interrupt, and that warning goes for the Leader of the Australian Country party, too.

Mr Fadden - Well, why does not the Minister tell the truth?

Mr DEPUTY SPEAKER - The Leader of the Australian Country party has made his last interjection during this speech. If he makes another, he will go out.

Mr DEDMAN - The Prime Minister quoted from cablegrams to show that, whilst the Australian firm which was interested in this matter said that it could get petrol from Poland, its agents in London were approaching Australian officials there asking them to obtain an export licence from the Polish Govern ment. The Leader of the Australian Country party also said that if less petrol were available there would be less production. The honorable member for Hume (Mr. Fuller) made an interesting point by interjection, when he asked whether it could be shown that production had declined during the period of petrol rationing. The honorable member for Calare (Mr. Howse) said that no petrol was available for shearing, fruit spraying, transport, or even for running school buses. Did any one ever complain during the whole period of petrol rationing that there was no petrol for shearing, or fruit spraying, or transport, or for running school buses? The fact is that, under rationing, there was plenty of petrol for essential purposes, and I believe that it will be in the interest of essential users of petrol to have petrol rationing restored. The Leader of the Australian Country party said that Australia could obtain sterling petrol from Europe, and he added that the Minister who represented Ceylon at the economic conference in London had agreed to reduce the importation of petrol into Ceylon. I have gone carefully through the minutes of the conference, and I find no record of any such promise having been made. The Minister representing Ceylon made the same promise as did the Ministers representing other countries, which was to cut the dollar expenditure by 25 per cent. If one government decides to cut the importation of petrol, and another decides to effect a saving in some other way, that is a matter for the governments concerned, and for no one else. The London conference spent a whole day discussing petrol. We were addressed by the British Minister for Fuel, Mr. Gaitskell, and I quote the following relevant passage from the minutes : -

Mr Harrison - I rise to a point of order. I ask you, Mr. Deputy Speaker, to direct the Minister to table the document from which he has been reading extracts. He has not claimed that it is confidential.

Mr DEPUTY SPEAKER - Does the Minister claim that the document is confidential? If he does, it need not be tabled.

Mr DEDMAN - It is a confidential document. I explained earlier that I had offered this document to the Leader of the Opposition so that he could study it, and that the Prime Minister had offered him other documents dealing with the subject. The Leader of the Australian Country party alleged that the Government of the United Kingdom was sending petrol to Argentina. That matter also was raised at the London conference, and Mr. Gaitskell made it clear that the great bulk of the petroleum exports to Argentina from sterling areas consisted of crude oil. I have in front of me a statement of the estimated sales by British-controlled oil companies to countries outside the sterling area. It shows that, for the year under review, sales of aviation spirit to Argentina amounted to 18,000 tons.

Mr Fadden - That is refined petrol, surely.

Mr DEDMAN - Yes, but the grand total of oil and petroleum . products exported to Argentina was 4,843,000 tons, of which only 67,000 tons was motor spirit. The Leader of the Australian Country party has suggested from time to time that we could get petrol from here, there and everywhere. First, he said we could get it from Russia; then from Poland.

Mr Fadden - I never said Russia.

Mr DEDMAN - A series of very interesting cablegrams on the French petrol position has come in only this morning. The first is from the Australian Ambassador in France in answer to inquiries from Australia. It states -

Mr Harrison - What is the date of that cable?

Mr DEDMAN - The 27th October. These cables were received to-day. Our Embassy in Paris has also sent us another interesting cable dealing with the question whether petrol is sterling petrol or not. We wanted to know where France got its crude oil from. We received the following cable in reply: -

Both countries are in the dollar area -

That may be either a sterling area or a dollar area, depending on whether a British company or an American company is operating -

The Leader of the Australian Country party claimed that petrol from Bahrein Island was sterling petrol, but the cost of it turned out to have a 95 per cent, dollar content -

So 50 per cent, of the crude oil going to France comes from the dollar area. The right honorable gentleman claimed that there was not petrol rationing in France. That is not so. The cable states -

There is a coupon system which is operated through a two-price system.

Mr Fadden - That is a price coupon system, not rationing.

Mr DEDMAN - The cable continues -

Finally, we asked Londonhow the importation of petrol from France by Ampol would affect sterling petrol reserves. Our representative in London, Mr. McCarthy, replied -

So it is perfectly clear that there is a dollar content in the petrol which Ampol is to import from France.

Mr Fadden - Then, why was it granted a licence to import it?

Mr DEDMAN - Because no one could tell whether the cost of the petrol had a dollar content or not. You can have dollar companies operating in sterling areas and sterling companies operating in dollar areas. The only place from which one can learn whether petrol from any part of the world is dollar petrol or not is the Bank of England; and the Bank of England has advised that there is a dollar content of the cost of the petrol to be imported by Ampol. The Government of the United Kingdom was asked whether we could accept the petrol from France or not. It was not clear whether the petrol involved dollars or did not. We were advised that, as the amount involved was so small, we could go ahead, but that if large transactions were involved, the matter would have to be further considered. That has been done, and the investigation has revealed that there is a dollar content in the cost of the petrol coming to Australia from France. But that really does not matter. All the petrol that we could get from France would not avoid the necessity for petrol rationing in the next six months. So it is necessary that this bill be passed to ensure that petrol rationing shall operate again.

The Leader of the Australian Country party said that there was no petrol rationing in Belgium, and the honorable member for Calare mentioned Italy and Germany.

Those countries obtain their crude oil from dollar areas under the European Eecovery Plan. If the United States of America provides dollars for that purpose, we can- not complain. The position in Belgium is very interesting. It has had a socialist government ever since the end of thewar and it has made one of the most rapid recoveries of all the European countries. So much has it recovered that it is classed as a hard currency country. There is a sound reason for that. It obtains a very large revenue from the sale of uranium ore mined in the Belgium Congo.

The Leader of the Australian Country party has asked how we shall be able to ensure a sufficiency of petrol after the 15th November, as petrol is so scarce to-day. There is an easy explanation of that. Last year, when petrol rationing operated, the Government set a quota for the full year. This year, it decided, in order to keep a closer grip of the petrol situation, to issue licences quarterly. We started late and, consequently, had to merge the first two quarters. The period will end on the 30th November. Normally, the quota for the third quarter would become available on the 1st December. We propose, however, to allow the oil companies to draw their quota in advance on the 15th November. That is why we feel assured that, when the coupon system comes into operation again, on the 15th November, adequate petrol will be available to satisfy the requirements of coupon holders.

The honorable member for Warringah said that we should expend more on the production of oil from shale. If we did that, in order to get the necessary labour, we should have to direct labour to the shale oil-fields, and, if we did that, the Opposition parties would immediately attack us for directing labour.

Mr Harrison - Encourage the Baerami project, and the people in charge of it will get what labour they need.

Mr DEDMAN - The honorable member had plenty of opportunity when he was a Minister to encourage the Baerami people, but he did not do so to any degree. The honorable member for Warringah also suggested that we ought to take steps to increase our dollar earnings. We have done so, as far as we can, as a government. We have set up a departmental committee with that object in view. Honorable gentlemen opposite, to be logical, ought to say that that is a matter for private enterprise. Private enterprise is trying to increase our dollar earnings, too. It is doing its utmost, and so- are we. The honorable member for Reid asked how many dollars were required. It would require 17,000,000 dollars to buy all the petrol necessary to avoid petrol rationing in Australia next year. There are two ways in which the Government could avoid the necessity for the introduction of this legislation. One would be to repudiate the solemn agreement entered into with the United Kingdom to save as many dollars as possible. The second way would be to divert dollars now used for the purchase of such goods as motor car chassis and capital equipment to finance the purchase of petrol. No member of this House and no reasonable person in the community would suggest that the Government should take either of those courses. If we repudiated the agreement with the United Kingdom, that country's already bad position would become so much the worse. By diverting our dollar expenditure from the purchase of goods that help to maintain the employment of a great many Australians at the present time to the purchase of more petrol, so that non-essential users should have all the petrol that they wish to have, we should harm our economy.

Question put -

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