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Tuesday, 14 September 1937

Mr BEASLEY (West Sydney) . -It must be admitted that there is a most noticeable lack of enthusiasm among Government supporters for this measure, and honorable members of all parties will agree that it would be unwise to commit ourselves to an agreement of this kind without first making the most careful investigation. No parliament should be asked to deal with a matter of such importance during the last few days of its life. The proposed agreement could have been circulated amongst, honorable members a long while before it was, so that those who are not lawyers could consult competent legal opinion in order to learn the full implications of the proposal. The comments of the honorable member for Bourke (Mr. Blackburn) were such that the Government cannot afford to ignore them. He mentioned three points that require serious consideration. The proposal involves the expenditure of a large sum of public money, and those honorable members who support it will have to justify their action from public platforms throughout the country. The public are keenly alive to this issue, and will want to know how their money is to be spent.

The honorable member for Macquarie (Mr. John Lawson) devoted a considerable part of his speech to an historical review of the shale oil industry in Australia, and particularly at Newnes. He tried, for reasons that are obvious, to malign the Lang Labour Government in New South Wales for not having done what he thought it ought to have done. I remind him, however, that the present Government has been in office for six years, and it is a remarkable thing that only at the end of that period has it seen fit to bring down a proposal for dealing with such an admittedly important matter. This Government has enjoyed a majority in both chambers, and could have brought in a measure of this kind almost at the beginning of its term of office. I invite honorable members to consider for a moment just what was the condition of the country in 1930 and 1931, the period in respect of which the honorable member for Macquarie saw fit to criticize a Labour Government in New South Wales.

For seven years, the Scullin Government was preceded in this Parliament by a ministry of the same political colour as that now in office. During those years the Bruce-Page Government enjoyed many advantages on account of the very prosperous conditions that then existed. Almost immediately following its removal of that Government from office, every government in Australia was faced with problems of exceptional difficulty, because unemployment was rife. Many employers closed their factories, and caused their employees to be thrown on the streets. This happened in every capital city in the Commonwealth. The responsibility of providing the unemployed with sustenance was thrown upon the various governments, and, particularly, the State governments. It was impossible for them to advance hundreds of thousands of pounds for the carrying out of such ventures as this because the most pressing need was the provision of food, clothing and shelter of those who were out of work. It is merely begging the question to attempt to cast blame on the government of that day for its failure to develop the shale deposits. The honorable member for Macquarie should realize that criticism of that kind will not strengthen his case, particularly as the Government which he now supports has been in office for six years and is now only considering the question. During the trying times to which I have just referred, wages and social services were reduced, and, therefore, the circumstances at that time should he remembered in discussing the present proposal. The Scullin Government was also faced with the problem of assisting the miners on the northern coalfields of New South Wales, and it placed a sum of money at the disposal of th:

Stale Oil Development Committee, which was appointed to investigate the problem of providing employment for the miners. The chairman of that committee, in the course of a speech in the Parliament of New South Wales, remarked -

Those honorable members who happened to be in this Parliament at the time will recall a great nourish of trumpets when an announcement was made regarding proposals to be put in hand in the Newnes Valley. The people in the district were led to believe that a brighter day had dawned for them. All of us were interested in this subject, and we watched the developments patiently, hoping that the work to be undertaken by Messrs. Treganowan and Chambers would meet with success. Reference to the records of this House will show that, on the 16th March, 1933, I submitted a formal motion for adjournment for the purpose of discussing the agreement entered into by the Commonwealth Government with Messrs. Treganowan and Chambers. The Opposition, having waited for a reasonable period, was anxious to ascertain why Messrs. Treganowan and Chambers had not proceeded with the work at Newnes. Considerable space in Hansard was devoted to the discussion of the efforts that this firm had put forward. I consider that it made a genuine attempt to develop the field. It proposed to install a cracking plant that was to cost about. £60,000, and iia plans were approved by the Government. It contemplated the construction of a tunnel into Capertee Valley, and the present Government provided in the agreement for a guarantee by the English, Scottish and Australian Bank of the firm's bona fides. In default of compliance with the conditions laid down, the sum of £5,000 was to be paid to the Government. It was further provided that "this bond shall not be waived for any reason whatsoever, whether for granting of time or otherwise. " Those are definite words. Apparently, those entrusted with the framing of the agreement, endeavoured to make it as binding as possible. I asked a question in this House regarding the matter, and suggested that the papers dealing with the agreement and an account of the subsequent events, be tabled in the library, because I subsequently ascertained that the Government had relieved Messrs. Treganowan and Chambers of their guarantee of £5,000, irrespective of the fact that the agreement had stated that in no circumstances was that condition to be waived. An interesting point arose with regard to the following letter sent by the company to the Government -

The company was unable to combat the propaganda directed against it, so the Government relieved it of its guarantee and compensated it for the expenditure incurred.

It must be clear to all honorable members that, before reaching this decision, the Government should have had good ground for doing so. It is obvious also, to all who have studied the subject of oil supplies, and are familiar with the history of oil scandals in various parts of the world, that the forces beyond the control of Messrs. Treganowan and Chambers were no other than the foreign major oil companies, which eventually succeeded in preventing the development, of the shale oil industry at Newnes. In my opinion, the oil combine has continued to prevent the discovery of oil and the development of oil resources in this country. We, therefore, have good grounds for saying that the position of the Government in this matter is no different from its position when dealing with Chambers and Treganowan. The major oil companies prevented operations then; the Government has done nothing to curb their influence, and what they have already accomplished they are certain to repeat unless proper safeguards be provided. Consequently, we are not prepared to allow this bill to pass without providing a measure of control over the expenditure of the money to be provided by the Commonwealth and State governments. The foreign major oil ' companies should not be able to prevent development at Newnes, robbing the Commonwealth and the States of £500,000, and, in the process, denying employment for all time to a number of men badly in need of it.

That is where I stand on this matter. I am not merely indulging in party political propaganda. The facts in regard to this matter must be made known in order that the people interested will not be misled into believing that the passage of this bill in its present form will bring great activity to the Newnes district. There is grave doubt whether the venture will result in the success said to be anticipated by the Government and its supporters. Unless the proper safeguards which I will later propose are inserted in the agreement, first of all, every effort should be made to see that we do not put £500,000 into a pool over which we shall have no control. It seems to me that if the company does not produce shale oil in the desired quantities, it will be impossible to ascertain the reason for the failure. I understand that Messrs. Treganowan and Chambers were engaged in an oil refining business in Melbourne, and, in order to tie them up there, the Shell Oil Company cut off their supplies of crude oil.

Mr McCall - Is the Shell Oil Company the only company that supplies crude oil? What about Commonwealth Oil Refineries Limited?

Mr BEASLEY - When the price of petrol is raised, even Commonwealth Oil Refineries Limited falls in with the arrangement made by the major oil companies.

Mr McCall - Was there not an obligation upon the part of the Commonwealth Oil Refineries Limited to provide the crude oil required?

Mr BEASLEY - I understand that the conditions under which the companies supply oil are such that they remain a law to themselves. Who would dare to fight them in the courts on the grounds of breach of agreement or restraint of trade? I often wish that the Government of one of the States would take legal action against them. Obviously the oil combine is an allpowerful body, as was shown when sanctions were applied against Italy at the time of the Italo-Abyssinia war, but the interests of the oil companies were not in any way affected. The point I make is that the power possessed by these major corporations at the present time is such, that it would be a forlorn hope on the part of any private individual to tackle them.

The question that concerns me at the moment is: Who was responsible for the draft of this agreement? From the report submitted to the Minister in charge of Development (Senator A. J. McLachlan) it would appear that the principles laid down by the Newnes Investigation Committee, which has been giving its attention to this matter for some years, have not been followed in the agreement. Apparently some one else has come into the picture. One would have thought that the Government would be influenced by the recommendations of the committee and that it would attach some value to the information which its investigations elicited. Apparently this aspect was ignored. Speaking in the New South Wales Legislative Assembly on the 18th August, the Premier, Mr. Stevens, said - '

It is said that thu general agreement is one that gives an undue advantage to Mr. Davis and his associates. '.Chat is not true. It is hu agreement which Mr. Davis did not seek. H is an agreement that lie was asked to enter into

Yet on the next page of the New South Wales Hansard report, Mr. Stevens said -

Mr Prowse - The two statements are not incompatible.

Mr BEASLEY - I consider that they arc. When attempting to answer the charge that the agreement gave undue advantage to Mr. Davis, Mr. Stevens paid that Mr. Davis did not seek it, his intention being to convey the impression that Mr. Davis is one of those loftyminded gentlemen with a great national outlook, and that some ' one had come along and said to him, " Here you are, Mr. Davis, take this agreement."

Sir Archdale Parkhill - And that, substantially, was the position.

Mr BEASLEY - There can be no doubt that, whatever happened, Mr. Davis was well in on the ground floor when the agreement was' being drawn up.

Mr ARCHIE CAMERON (BARKER, SOUTH AUSTRALIA) - Would the honorable member expect him to be outside?

Mr BEASLEY - Very well. lt would seem that honorable members opposite are agreed that Mr. Davis was right in on the ground floor when the agreement was made. Therefore, the agreement embodied in the bill is in the form determined entirely by Mr. Davis. This, [ suggest, is an extraordinary thing for the Government to accept.

Mr Rosevear - Mr. Davis was in this House all last week listening to the debate.

Mr BEASLEY - The honorable member for Bourke raised a number of major issues when he was debating the memorandum of agreement this afternoon. They have not yet been answered. The defence aspect of this proposal is, perhaps, one of the most important. If. as appears likely, foreign interests can come into this venture if Davis wishes them to do so, then the argument that this scheme has been propounded in the national interest falls to the ground. Paragraph 23 of the agreement is vital. The honorable member for Boothby (Mr. Price) admitted its importance, but I have no doubt that honorable members opposite will attempt to dispose of our fears regarding it by simply contradicting them. It has been stated that Mr. Davis is not prepared to waive the right given to him by the provisions of paragraph 23 to seek an alteration of the agreement.

Mr Lane - Does the honorable member think that either the Commonwealth Government or the State Government would do what he suggests?

Mr BEASLEY - Provision is -made in that clause for the alteration of the memorandum of agreement with the consent of the Commonwealth or State Governments. "It is in this connexion, I suggest, that one sees the possible intrusion of foreign interests again. In short, the agreement is presented in such a form as to make possible its variation in certain circumstances over which the Commonwealth Government' has no control. Therefore, the argument of the honorable member for Bourke that this is a matter which the House should consider, has not been disposed of. Another aspect of importance is that of employment. I am certain that when supporters of the Government mention this matter outside they will refrain from stating the facts, and, unfortunately, many who are interested will not be in a position to analyse all the reports concerning this subject. It has been stated, in an offhand manner by our opponents, that we on this side are not concerned with the employment aspect of this scheme. I emphatically deny any such suggestion. The employment value of any proposal is of paramount importance to everyone who has at heart the welfare of the people and the country. The report of the Newnes investigation committee states that on a capital investment of £600,000, this scheme will give employment to 350 pea-sons directly, and probably an equal number of persons indirectly. The honorable member for Macquarie (Mr. John Lawson) and the Premier of New South Wales have asserted that employment will be provided for 600 persons directly and probably 700 persons indirectly. The honorable member for Macquarie, when making this observation, said that the output, according to the committee's report, would be 6,000,000 gallons, whereas this agreement provides for 10,000,000 gallons. The point is that the committee's report states that on an amount of capital invested, namely £600,000, only 6,000,000 gallons can be produced, and the supporters of this agreement say that on the same capitalinvested, namely, £600,000, 10,000,000 gallons can be produced. Whom are we to believe? I know that in this Parliament during the last few years it has been customary to present exaggerated estimates of the numbers of persons to be employed by various projects. It is quite wrong to mislead the people in this way.

Mr JOHN LAWSON (MACQUARIE, NEW SOUTH WALES) - The honorable member is astray as to the amount of capital to be invested.

Mr BEASLEY - I am not astray ; I am quoting from the Shale Oil Investigation Committee's report, and I am prepared to accept its comment as against that of the honorable member for Macquarie. It is, I repeat, wrong to suggest that any project will give employment to a greater number of people than actually will obtain work from it. It is misleading, and these practices should be condemned. I know that the honorable member for Macquarie has led people in portion of his district to believe that this scheme will provide work for twice the number that will actually get employment from it. All that the Government has presented to the House is this bill; there is no report or investigation to back its contents in any way. On the other hand, we have the report of the Newnes investigation committee which made its inquiries in 1934, and I am afraid that the estimate of the number of persons that will be employed may not be realized. It will not be denied that ever since the report was submitted in 1934, the mechanization of industry has proceeded at such pace as to make possible, if not probable, a substantial reduction of the estimated number of persons to be employed from the capital investment of £600,000 on this proposal. In all probability the number to be employed will be reduced to 300.

The Shale Oil Investigation Committee, having in. mind the power wielded by the major oil corporations, has laid clown in its report certain guiding principles as to the constitution of the board. It has suggested that the board should consist of a chairman and four other directors, one to be nominated by the Commonwealth Government, one by the New South Wales Government and two by the preference shareholders, and the chairman to be nominated by the Com monwealth and State Governments conjointly. Will any honorable member say that this recommendation is not sound? No person would be willing to invest his capital in a business venture without some such safeguard; therefore, the same precautions should be provided in transactions by the Commonwealth as would be applied by private individuals in any business venture. The honorable member for Macquarie referred to Messrs. Orr and Nelson, representatives of the miners.

Mr JOHN LAWSON (MACQUARIE, NEW SOUTH WALES) - -I did not mention Mr. Orr's name.

Mr BEASLEY - Perhaps I am wrong; but he did refer to the men who are in charge of the miner's organizations in Lithgow.

Mr JOHN LAWSON (MACQUARIE, NEW SOUTH WALES) - I referred to the miners' representatives in the Western District.

Mr BEASLEY - Very well. The honorable member asked if they stood by this agreement. I know that they arc concerned] with the welfare of their members and would not favour any agreement that did not, first of all, give preference in employment to them. That would be the first stipulation the miners would make, and I challenge the honorable member for Macquarie- to deny that. The next point which they would lay down in keeping with the -present-day developments would be that ample safeguards should be provided for them against the consequences of mechanization, because, after all, that is the great problem to-day on. the mining fields. The honorable member cannot rightly claim the support of union officials as he has done, unless I am very much mistaken in the attitude a union official should take. Furthermore, from my knowledge of these men and the movement with which I am associated, I know that one of the cardinal conditions they would insist upon is representation of the workers on the boards controlling industries in which government capital is invested. Whilst capital is one thing, labour power is another, and if the rights of capital are to be preserved through representation upon boards and directorates, the rights of labour and labour power must be preserved in the same way. That is a cardinal point in all our undertakings.

Does any honorable member opposite object to that policy? If the outlook of the officers of this organization is in keeping with the policy they have adopted in this respect in the past, they would not be a party to ignoring any of the three cardinal points involved in this instance - mechanization, preference to unionists and representation of the workers. Therefore in these circumstances alone they could not support this agreement. Quite a lot has been said about private enterprise, and in that respect the most appropriate observation in the debate came from the honorable member for Barker (Mr. Archie Cameron). When the honorable member for Boothby was speaking about the great national purpose behind Mr. Davis, the honorable member for Barker said : " Yes, with national revenue." It is remarkable that private enterprise with its reputedly great capacity to meet the requirements of the country, has to come to governments to secure a sum. of £500,000 before it can set out on this venture. Private enterprises that can survive only under those conditions is not entitled to the name.

Mr Holloway - It is to be spoon-fed for 27 years.

Mr BEASLEY - I have not sufficient time to deal with this matter as fully as I should like. I point out that, according to the agreement, if this company has not made satisfactory progress by 1940, the Government, as a government, will lui ve no power to call it to book. Any failure on its part in this respect is to be referred to the Auditor-General of the State of New .South Wales. What is the reason for that provision? The AuditorGeneral of New South Wales is an authority apart from this Parliament altogether, whilst, in respect of the Parliament of New South Wales, he enjoys an overriding power and ca.n condemn, criticize, say and do what he likes in his official capacity. Why is it proposed, to hand the matter over to this official? We in Parliament are not to bc allowed to deal with it; and the workers in Newnes Valley, whose interests will be involved in this undertaking, will not, be able to place before this Parliament their views concerning any hitch that occurs. For instance, in the event of a hold-up, say, through the failure of the company to put a tunnel through to Capertee Valley, they will not be able to voice their protests in this Parliament. They will have no right to make any adjustments through their representatives in this Parliament. Apparently, in the event of any difficulty through the power of foreign major oil interests, they may pitch their tents in the valley and their lot will be to remain there to rot. until the matter has been dealt with by the Auditor-General of New South Wales, who can, like many mining wardens do in similar circumstances, give extension after extension to this company: 'possibly in time the company will claim to have proved to the world at large how impossible it is to extract oil from shale, and so justify the contention that after so much money has been spent on the project without result, the whole enterprise should be regarded as a washout. In that event, the major oil companies will, register another victory. This Parliament cannot accept this agreement in its present form, but must, as the. honorable member for Bourke (Mr. Blackburn) suggested, provide for the establishment of a. board through which it shall have some say in the progress of this work. That is how honorable members on this side of the House regard this measure, and we feel that this Parliament must give serious consideration to the points we have raised. I therefore, move -

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