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Tuesday, 14 September 1937

Mr BLACKBURN (Bourke) .- If it were possible, I should like, as I think every member on this side would like, to have this industry developed by a national effort, but I cannot see how that can be done by the Commonwealth Parliament in a territory which is not under its own exclusive control. We could develop oil in our" territories because there is no division of power there, but it is- very difficult to see that in the State of New South Wales .we should have the constitutional power, as a government, to exploit the industry ourselves. Consequently, if we do anything at all in this direction, it must be by means of subsidizing or aiding private enterprise. There is no more objection to doing that by means of a dole or bounty than to doing it by means of tariff protection. It seems to me that if a fair scheme were devised, there would be no objection to the Commonwalth aiding such a company in the way proposed in the bill, but I do not think the scheme laid down by the Government is fair, nor is the agreement one that can be accepted by the House. There are several reasons for that, some in the terms "of the agreement itself, and others arising outside. One is this, that we are engaged in a search for flow oil, and we now propose to engage in aiding the search for oil from shale; we shall be committed to both of those and spending money upon both and it will be very difficult indeed to induce the people of this country to embark upon what I believe is the better means, namely, the extraction of oil from coal. I believe that it is the proper means, more suitable for this country, and more likely to be advantageous to it than is the extraction of oil from shale; but the adoption of the scheme contained in the bill will preclude any possibility of coal oil production in the near future. That is one of the objections I have to it, but, as I say, I also have objections to the agreement itself. In what I say now I am conscious that I am really elaborating what was so effectively said this morning by the honorable member for Barker (Mr. Archie Cameron). One of the prime objects of the agreement is not achieved at all by the words of the agreement. Its framers went to considerable trouble to preclude the possibility of foreigners acquiring control of the enterprise. They provided that a foreigner should not be an officer or shareholder of the company, and that a company incorporated in a foreign country should not be a shareholder in the company; they went beyond that by saying, " We shall deal with the case of foreigners coming here and incorporating a company under our law", so they provided that , a corporation controlled by foreigners should not be allowed to be interested in the enterprise. They drew up a fairly elaborate scheme to achieve those ends, but by the agreement itself all those provisions can be waived with the consent of the Government of the day either of the Commonwealth or of the State of New South Wales. Either government can release the company from the obligations intended to be imposed upon it, and so destroy those safeguards. One of the objects that this country should, like every other, have jealously in mind, is that its natural resources, particularly oil, shall not pass under the control of people who may possibly become its enemies; yet paragraph 23 of the agreement is so drawn that either Government can release the company from the obligation to comply with the first schedule.

Mr Scullin - Even if the other Government objects?

Mr BLACKBURN - Yes. The paragraph provides -

If the company, without that consent, were to alter those provisions it would be liable to proceedings instituted against it by the Attorney-General of the Commonwealth or the Attorney-General of the State, but those safeguards can be destroyed, and those provisions can be waived, without the consent of the Commonwealth Government at all.

Mr Beasley - Does that clause provide that they can wipe out all those safeguards if they like?

Mr BLACKBURN - Yes, if the Government of New Sou th Wales consented, they could he wiped out without the consent of the Commonwealth Government, and vice versa. I believe that that is an error, and that it, was intended to rectify the defect, but I also understand that the third party to the agreement is not prepared to waive the advantage so given to him. He desires to retain the power to bring in foreign capital, and put the company under foreign control, so long as the Government of either the Commonwealth or New South Wales will consent. In my opinion, it is absolutely necessary to require both governments to consent. In fact, the paragraph would be much better without any stipulation for consent at all. It should provide absolutely that the company shall not infringe the provisions of the first schedule, in no circumstances allow foreigners to hold shares in it, or a foreign corporation to acquire shares in it, or permit a corporation controlled by foreigners, but registered in Australia, to manage the enterprise. Paragraph 23 as it stands simply allows a coach and four to be driven through the most vital partof the agreement, so long as the consent of one government of the day can be had. It would be an advantage to require the consent of both governments, because it is quite possible that different parties will be in control of the respective Parliaments, but better still to stipulate absolutely that the company shall not depart from the strict provisions originally laid down, and that no government may release it from them.

Another objection, and a very important one, to the agreement is that it is proposed to tie the hands of this Parliament for 20 years in respect of its control over customs and excise duties. Honorable members will remember the criticism levelled at the Ottawa agreement, that it, and the legislation to be passed under it, would tie the hands of the Commonwealth Parliament by prohibiting the raising of duties. The answer to that was that they could not tie the hands of Parliament, because the people who made the agreement knew that this Parliament was free. Having in mind that position, the framers of this shale oil agreement have provided that, if the Commonwealth Parliament does alter relevant duties, then the Commonwealth Government of the day shall pay to the company the amount that the company may be thought to lose as the result. A protected manufacturer takes the risk of protection being withdrawn, but in this case the company is to have a guarantee for 20 years that, if it suffers by any alteration of duties, it shall be compensated by the Commonwealth.

We are pursuing our quest for flow oil, and paragraph 24 of the agreement provides that, if we do find it, the Commonwealth Government of the day and the State Government of the day together, shall favorably consider the granting of adequate relief to the company. The answer to all that, of* course, is that governmentscannot do these things without the money being voted by Parliament. The Ministry, foreseeing that objection, has tabled an amendment which provides for the appropriation for 20 years in advance of any amount that may be necessary to discharge any obligation that may be incurred by the Commonwealth.

Mr Scullin - Without limit?

Mr BLACKBURN - Yes, the amendment provides that Parliament hereby appropriates in advance for 20 years such sums as may be necessary to meet the liabilities of the Commonwealth arising under or out of the agreement.

Mr Scullin -Why, that is giving a blank cheque !

Mr BLACKBURN - It means that we practically give a blank cheque for the period of the next generation, enabling the Government of the day, without asking the consent of Parliament, to pay such amount as it may think is fair compensation to the company for any loss arising from the discovery of flow oil, or as may be required to compensate the company for loss resulting from the imposition of duties. Those are provisions that Parliament should not accept. The control of the purse, which is vested in this House, will be taken out of its hands, if those provisions be accepted, by means of a bill passed by a dying Parliament. This Parliament, which has only a few more days to live, is asked to pass legislation enabling the Commonwealth Government, for 20 years, without the consent of Parliament, to pay money for the purpose of meeting its obligations under the agreement. This, therefore, is a measure which the House should not pass. It, seems to me that the agreement is in all respects one in which theCommonwealth and the State of New South Wales, particularly the Commonwealth, are giving away a great deal which should not be given away. I am reminded by it of the old distich -

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