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Wednesday, 27 September 1972
Page: 1264


Senator WRIGHT (Tasmania) (Minister for Works) - This morning when moving for the adjournment of the Senate to debate a matter of urgency Senator Murphy advanced the proposition that the Government had failed to protect the employment and the industry of this country in respect of the commercial contract which the news media announced is about to be or has been concluded between the Australian Gas Light Co. and a Japanese company for the supply of steel for the South Australia-Sydney pipeline. Rising, as I do, after giving a few hours thought to this subject, I want to make it quite clear that the Government hoped that Australian industry would get part of the contract for the main trunk pipeline. Of course, we share the disappointment that apparently a foreign company has secured the contract for the supply of the whole pipeline. But I think it is acknowledged, although I hesitate to trespass upon the commercial area in this forum - it is so inexact and uninformed as to commercial details - that Australian industry is not equipped to undertake the . supply of the whole of the pipe for this pipeline.

Having said that, let me make it quite clear at the outset that I think it is curious that Senator Murphy, a week or so after the news with regard to this commercial contract has flashed out, should come into the Senate and move for the adjournment of the Senate to debate a matter of urgency. It has, 1 think, an atmosphere of opportunism - a purpose of expediency in the political sense. I do not think this is a serious approach to an importment matter, and I will say why. Senator Murphy developed his debate upon 2 considerations. The first was the employment potential and probabilities with regard to the actual contract for the pipeline. Then he turned aside to devote about two-thirds of his time to a proposition in which he urged the support of a federal body to govern the transmission interstate and, as I understood him, the operation both intrastate and interstate of gas and oil pipelines in Australia.

It is that latter aspect to which I wish to turn for the next 2 or 3 minutes, and then dismiss it. I dismiss it not because it lacks abiding interest. It is a matter of great importance, and it is because of its great national importance that I cannot think of any real purpose that would be served in dealing with it in the form of an urgency debate. This is a motion which requires debate without notice. The Senate adjourned the debate this morning and it is resumed now after a period of some 2 or 3 hours in the face of all the pressures of intervening business. I cannot think that the proposition that there should be a Federal governing authority with regard to the operation and construction of interstate pipelines can be usefully discussed at this time. I would think that that is a subject that should be set down by notice of motion and be called on for debate in order to give every honourable senator an opportunity to turn his mind to the subject and to give a good number of senators a chance to participate in the debate. In my view, a day's duration for a debate on that subject would not be inappropriate.

Senator Murphyreferred to various sections of the report of the Senate Select Committee on Off-Shore Petroleum Resources. It ls a report for which I have considerable respect and obviously one in which I have considerable interest, because I had the honour to move for the establishment of that Committee. What does the Committee say? Admittedly, it refers to the opinions of various authorities whose opinions are most valuable in regard to the proposition that there should be a Federal authority. The authorities referred to include Mr Hume, the General Manager of the Brisbane Gas Co. and the General Manager of the Australian Gas Light Co., I believe Sir William Pettingell. They put forward various opinions as did Sir Harold Ragatt and representatives of the Australian Council of Trade Unions. But after reciting all the opinions, the Committee sets forth a few paragraphs later:

That at present the Commonwealth has no power to enforce or to regulate the construction of pipelines within a State or to use the petroleum within a State, other than by indirect means. The Commonwealth has no power to enforce the construction of interstate pipelines, but can only exert its powers to control such pipelines if and when they are built.

The Committee then goes on to recommend the use of the constitutional machinery of an Interstate Commission which, it says, it might be desirable to set up with powers in this regard. I find that a very interesting proposition and therefore one to which I would like to give proper debate. Then there is the third point that Senator Murphy's outlook on this matter seems to overlook idly, and that is the viewpoint of the States. We know that under the present constitutional arrangements the States are very jealous of the powers they have in this regard. What we as practical men should be debating tonight is the situation of the South Australia-Sydney pipeline and not debate on the assumption that the States will agree to surrender powers or that by some referendum the Commonwealth powers will be enhanced. We should be debating on the practical basis of today's incongruous Constitution. I part from this aspect of the matter by simply reminding the Senate that I believe New South Wales resorted to South Australia as a source of this gas because of the price required by her neighbour, Victoria, for gas ex BHP, Bass Strait. I am told that it is claimed by New South Wales that she made a saving of $150m by avoiding a transaction with Victoria and effecting it with South Australia. I mention that because it enters into the consideration of how we can expect the States to make agreements today. I leave aside this major question of policy, which cannot be discussed adequately in a debate on a motion such as this, and turn to the commercial fact of this pipeline contract involving as it does, we are told, a price of $54m and providing for a pipeline of approximately 760 miles in length with a pipe diameter of 34 inches, for at least part of the route. The first thing I want to say about that is that Senator Murphy has moved this motion today in the wake of an announcement last week that if the proposed contract between the Australian Gas Light Co. and the Japanese companies goes ahead a ban would be placed upon the work by trade unions. I believe that this motion is calculated to fan the flames of that discontent in the industrial sense. I believe that it is unfortunate that Senator Murphy can put himself in the position of supporting a viewpoint that has the purpose of paralysing all the potential elements of this proposal.


Senator James McClelland (NEW SOUTH WALES) - Senator Cotton did not agree with you. He said that the Government would listen very seriously to the thoughts of Mr Short on this matter.


Senator WRIGHT - Of course, the Government always listens to the thoughts of Mr Short upon this matter. But listening to does not mean complete acceptance, and Mr Short is in the position of being the leader of one union amongst others. Therefore, to some extent he is bound by them. What I want to point out is that it is inescapable that the whole policy of Labor has been developed to point up its purpose - that if it were to attain government it would be a government dominated by unions for the purpose of unions. That wants to be steadily borne in mind. When we are faced with an accusation that the Government has failed to protect employment in this country in this respect, I ask honourable senators to bear these matters in mind: Firstly, the Broken Hill Pty Co. Ltd has said that there is no likelihood of a reduction of its employment by reason of this matter. Secondly, Tubemakers of Australia Ltd, which would be expected to participate in the pipeline construction, has said that it has not the plant capacity geared to the situation and that fabrication of pipeline of the diameter referred to would be achieved by tooling up the factory at present not in operation. That would take some 6 months and possibly it would provide employment for 250 men. It is that employment potential which we all would like to see utilised in this country but at the present time there is no such employment group.

When the unions come forward and say that the Government should arrange for the contract to be given to an Australian company in order to gain that employment potential, which, as I say, would give employment to about 250 men for some two or three years I believe, the first thing we must take note of is that, if the Government does not do so, they simply would destroy the opportunity of working on the construction of the pipeline. I believe work on the construction of the pipeline would be infinitely more rewarding to workmen than work in the pipe factory.

It is incongruous to have this proposition asserted in the present circumstances when one remembers that last year within BHP alone there was a loss of some 986,000 man hours because of strikes. We must realise that the BHP vessel 'Iron Somersby' was immobilised for ever 4 months at Port Kembla after its maiden voyage because of bans imposed by the maritime unions. Then we must remember along with those facts that the recent oil strike damaged BHP and caused it a loss, according to its report, of some $ 1 2m to SI 3m. lt also did damage to the joint venture of Esso-BHP amounting to $24m to $26m. When we consider these facts we can put into perspective the attitude of the trade unions in regard to this matter of the manufacture of steel pipes. That is an attitude - one which Senator Murphy come here to support - of damaging assets and damaging work potential far in excess of the potential involved in this particular contract. It needs to be understood that, if we are going to have a prosperous trade union movement and if we are going to maintain employment with sound operating companies, we must have a policy on the part of the trade unions which will ensure a continuity of work on a responsible basis.

So I find myself deeply -disappointed about the attitude adopted by the trade unions and about a possible ban upon the work because this would deprive so many unions and unionists of the construction work involved. That illustrates the reckless approach of the unions over the last year to this and the allied industry of simply resorting to strike action instead of settling disputes without disruption of work by going to the independent arbitrator.

There are much wider considerations than those to which Senator Murphy adverted. No government could formulate a specific policy to interfere with or direct one particular commercial contract, especially a contract being negotiated and forged by such powerful units as BHP and its subsidiary Tubemakers of Australia Ltd, the Australian Gas Light Co. and, I think, the Japanese company Mitsui. Rather than direction about such a contract and interference with it, a government gives best service towards maintaining full employment by maintaining proper trade opportunities. We must recognise that it was this Government which, in the teeth of opposition from the Australian Labor Party at the time, took the unpopular step of initiating trade with Japan. That step was taken in view of the approaching crisis of Europe being increasingly denied to us as a trade destination. We must realise that today we export to Japan goods worth over St, 000m.


Senator Sim - It was $l,198m in 1970- 71.


Senator WRIGHT - Is that the figure? I thought it was over $ 1,000m.


Senator Laucke - It was $ 1,062m.


Senator WRIGHT - My figure is $ 1,062m. Let us correct it later if I am in error. Birt we import from Japan goods worth about $400m.


Senator Webster - Why put a comparison like that before us? What is the population of any country in comparison with the 13 million in Australia? Do you want to compare the situation of the millions in America with our population?


Senator WRIGHT - If we compare America it should be on the other basis. However, $ 1,060m of Japanese money coming into this country means increased work on our iron ore fields, increased income to our wool growers and increased income to all our other exporters. I point out that $ 1,0:60m is $l,060m. The other figure is resorted to only because merchants always regard it as requisite to have a little give and take in trade. We will not maintain that market for wool and iron ore unless we provide some access for Japanese imports. Do not think that Australia is Father Christmas because it allows imports worth $400m. For the most part we impose a duty on those imports of some 30 per cent or 35 per cent. Anybody who is conscious of the facts knows that the slight recession last year in the Japanese economy tightened up iron ore exports and tightened up the wool market, and that it was a pretty potent factor in creating the cold breeze that hit Australia and made the employment situation less buoyant than it was.

We cannot maintain this economy unless we maintain successful trading units within it which can employ people throughout the whole range of employment. Unless we maintain that international trade on a basis in which, thankfully, we have a great advantage at present we risk reducing the employment potential that iron ore exporters and wool growers can give. Those considerations induce me to think that the Government has afforded ample protection to employment. The Government has maintained a pretty high wall for the protection of local industry, the reduction of which Labor has incessantly advocated over recent months. Labor goes to the consumers and says that one means by which it will keep prices down will be to reduce the tariff. We have maintained that we have the tariff, which is protective of Australian secondary industry, on a basis that behind it are run economic and effective businesses.

There is provision that if goods reasonably suitable for the pipeline are not reasonably available in Australia the Minister has the authority to adjust, reduce or remove the tariff - I am not sure which - so as to facilitate the entry into Australia of goods which otherwise would not be allowed to compete with suitably equivalent goods made in Australia, except on the basis of duty being paid on them. As recently as yesterday the Minister for Trade and Industry (Mr Anthony) said that he had maintained within his Department the Office of Secondary Industry which has maintained a liaison between the Australian Gas Light Co. and the Australian companies that might be suppliers of the type of equipment necessary for the construction of this pipeline and the distribution lines. The Minister said:

Our efforts have been to see that the Australian companies were given an opportunity to tender for the work that was to be carried out. My Department has been told by AGL that it provided the necessary specifications for Australian firms to tender but they have not been able to fulfil the specifications required.

The Government has constructed a policy of protection of Australian industry, it has constructed a policy of expanding Pacific trade, it has endeavoured to combat unio.i disruption which damages employment personnel, and in addition it is constantly watching the situation in various departments of government so as to ensure that the hope that we now maintain will be fulfilled and that, with a bit of give and take and a bit of adjustment, it will lead >o the conclusion of commercial arrangements which will enable a satisfactory part of the pipeline contract to come to Australian companies. I submit, therefore that the the proposition in Senator Murphy's motion, that we have failed to protect the industry and employment of Australia, completely fails.







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