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Thursday, 28 November 1974
Page: 2916


Senator STEELE HALL (South AustraliaLeader of the Liberal Movement) - I agree almost entirely with Senator Cotton's remarks and the case that he makes for a better allocation of resources in Australia and a better method of reaching agreement on how those resources should be allocated. However, I do not share his optimism that this position can be arrived at easily and certainly not at the behest of the States. I remember very clearly being involved in South Australia in the presentation of a new financial approach to the Commonwealth Government. This approach was worked out between all State Premiers working together over a number of meetings- certainly more than 3 meetings- and many meetings held subsequently by the Under-Treasurers. A new updated and composite case was presented to the Commonwealth Government for resolution of the problems which bedevilled CommonwealthState financial relationships.

All of the States were united in making a most impressive new-deal approach for the States in Australia. But they were united only until they got to the conference table and there was the final confrontation with the Commonwealth of Australia. Whilst there was no basic difference in the politics of the governments which confronted each other, the States immediately divided. After almost 12 months of hard slogging in order to compile an aggregation of ideas into an agreed approach to the Commonwealth, when the States approached the Commonwealth they divided on parochial interests. I say to Senator

Cotton that it was the Liberal governments that sold out the agreed approach. They were the governments of Victoria and New South Wales. When they obtained what they wanted to obtain in a separate offer outside the hard-won agreed State approach, and on a parochial basis, they left the agreement lamenting. The brand new agreement which was to be negotiated with the Commonwealth fell to nothing once again under the parochial interests of State governments.


Senator Wriedt - What year was that?


Senator STEELE HALL - I believe that it would have been 1969. It took more than a year to work out the approach. It was documented and printed in a publication which I am sure is available in the Parliamentary Library. I believe that it would have been the most significant approach on financial matters to the Commonwealth since Federation, considering the seriousness with which the step was taken by the States and the seriousness with which they allegedly agreed to make the final presentation of the negotiated approach to the Commonwealth. As I have said, this fell to nothing when the parochial interests of the 2 larger States were satisfied by the Commonwealth government of the day. From a great deal of experience, because I was privileged to be involved in these negotiations and arrangements, I say with despair, to Senator Cotton: Under the best conceivable conditions for the States to come together, in that they were not divided politically one against the other, and under the best conceivable conditions for the promotion of their common stance in negotiations with the Commonwealth, the States divided when the pressure was on. I believe, and I say this, from experience, to Senator Cotton: The States are not capable of presenting a unified case to the Commonwealth.


Senator Cotton - Senator, Iam not interrupting you, but I am interested in your observations. 1 wonder whether you might develop out of them for my elucidation whether you therefore favour a centralist system.


Senator STEELE HALL -No. I am not saying that at all. 1 say this to Senator Cotton: The arrangements were entered into, and the very hard work was proceeded with on the basis that Federation should work. I am a great supporter of that. South Australia played a very large part in the negotiations at that time because of the quality of its Under-Treasurer and his staff, which was of course recognised throughout Australia. It would be wrong not to face the fact that it was the States which fell apart and not the

Commonwealth. It was not really the Commonwealth 's fault that the States fell apart. Not knowing the answer to Senator Cotton's question and agreeing with his basic assumption I say that the States so far have found themselves incapable of going about the business of arranging the solution which I think both Senator Cotton and I would like to find.


Senator Cotton - I am suggesting that the Commonwealth has a responsibility to lead in a family sense the dissolution it found.


Senator STEELE HALL - I agree with that and I would like to have thought that the Federal Liberal-Country Party Government of the day would have done it, but it did not. It bought the States off individually so that it could destroy the approach that the States made to it. In that circumstance, I suggest that we will have to look at some other disciplines which will bring about the support of federation that both Senator Cotton and I want.

Having said that, as a representative of a State which has a larger per capita debt than any other in the Commonwealth, I say how much I support that portion of this grant which is for the support of the capital works projects in my State. In so doing, I believe that I have an opportunity of spending a few minutes discussing a project in South Australia which, of course, is greatly allied to the dispersal of capital funds in my State, that is, the proposed Redcliffs project south of Port Augusta on Spencer Gulf. I take this opportunity of doing so because this subject is current in South Australia and is one which has provided great doubts as to the methods by which it has been handled by the State Government and as to the advisability of proceeding with the Redcliffs proposal. One of the reasons why there is doubt is the committal of State and Commonwealth loan funds which would be required as a basis for the building of the infrastructure which would stand behind the Redcliffs proposal.

This proposal was first publicised in 1973 as part of the election program of the Premier of South Australia, Mr Dunstan. His proposal was introduced in his policy speech, under the heading 'Regional Growth Centres', in this fashion:

South Australia's second regional growth centre will be established with the industrial integration of the three northern cities on our 'iron triangle '-Port Pirie, Port Augusta. Whyalla.

As a take-off point, and the basis for a complex of new industries in those cities, the Government is already in an advanced stage of negotiation for the establishment at Redcliffs, 17 miles south of Port Augusta, of a $300m petrochemical industry of world scale, together with a fully integrated refinery to treat Cooper Basin and imported crude oil.

These enormous works will have their own port facility. A liquid gas pipeline will be laid to Redcliffs, and natural gas will be provided to the 3 cities. The works will be established in such a way as to avoid ecological or environmental damage or pollution in the general area.

That was the introduction of the matter. I remember clearly how I questioned Mr Dunstan during the election campaign as to what protection there would be of the environment of Spencer Gulf, especially in relation to the prawn industry, which is based on a very delicate environmental factor in those waters, and of course other factors of general pollution. The Premier's reply during the election campaign was that he had a report from the Department of Fisheries which gave the all clear to any possibility of the pollution of Spencer Gulf. I may say that the Premier, when asked after the election in 1973 to table the report in the House of Assembly in South Australia, said:

Mr Speaker,I have lost the page

Pointing at me, he said:

The previous Premier, I believe, has friends in the Premier's Department who have stolen it.

I mention that matter only to illustrate to this House the very low standard which the South Australian Government has used to promote a most extensive and expensive new industry in my State. I may say that the proper promotion of this industry has been greatly handicapped by this low standard of approach. Before I leave the environmental factor I wish to remind the House that the Premier said in April before the 1973 election that the environmental question had been cleared; yet in May 1974, over one year later, a report of his own Government- of course, a report obtained under the pressure of politics in my State- under the heading of Effluents', in part of a very large report of the South Australian Department of Environment and Conservation, said that little information is yet available on the nature and quantities of plant effluents and noise. That was said over 12 months after the Premier had said that the all clear had been given.

On the question of costs and planning the project has suffered very greatly indeed. In the State Parliament on 29 October of this year a colleague of mine asked a question concerning the costs of the project in very minute detail. I wish to give one of the Premier's answers to illustrate the slack, haphazard planning of this project. His reply reads:

The original cost of the infrastructure is a difficult figure to quantify, because of the changing size of the complex and escalation in price. The power station, for instance, has risen in price because of these 2 factors from $9m in 1971, to $69.5m in 1977 price terms.

If a project of this magnitude is to be sensibly promoted should we initially have everyone come in behind it on the basis of a cost of $9m which will now end up as $69m? That is just one further reason for doubting very greatly the situation which has been promoted in South Australia by the South Australian Government.

I turn to the subject of supply. Whilst the Cooper Basin is expected to yield a very much greater total quantity of gas and liquids. than is known as yet, on present known reserves the Cooper Basin will supply the Adelaide and Sydney market for 12 years from 1977. If Redcliffs is included in that supply position the Cooper Basin, on known reserves, will be effective for 10 years. In relation to Adelaide alone it would have been effective for 1 9 to 20 years. It is contended by some that three major motives are involved in the promotion of the Redcliffs proposal. The Minister for Minerals and Energy, Mr Connor, is not so much concerned about the establishment of a new industrial complex in South Australia but wants to use the future requirements of the Redcliffs proposal as a reason for building an intercontinental pipeline for gas to the northwest shelf of Western Australia. It is contended that the company concerned, through the indenture which I will mention directly, will get South Australian gas at most favourable terms and will be able therefore to supply in a major sense an overseas market and that Mr Dunstan will have a political advantage in being able to claim that he has at least produced one large new industrial complex in South Australia amongst the desert of his non-performance at the moment.

It is interesting to note that the supply position in South Australia of the Redcliffs plant could be very much in jeopardy unless a pipeline is constructed out of the Cooper Basin fields in the future. It is also interesting to note what the Liberal Party spokesman for the Opposition in this House has said about such a pipeline. I refer the Senate to a statement in the House recently by Senator Durack in which, in reference to the intercontinental gas pipeline proposal, he said that he hopes that it has been abandoned because it is a ridiculous scheme which would be depriving Western Australia of a valuable resource. At this stage of the early consideration of the merits or demerits of an acrossthecontinent pipeline I do not become involved in a discussion as to whether that pipeline should or should not be built, but on the question of whether Redcliffs should be built to use the finite resources of the Cooper Basin I do become involved because the Party that is likely to be more often in government than the Party that is now in government has as its spokesman a person who says that the pipeline should not continue. Therefore, in planning the petro-chemical complex at the moment and in allocating to it the gas resources in South Australia one must consider the practical political point that it may very well not be backed by an intercontinental gas pipeline. That is a very important factor in saying whether the complex should proceed.

I come now to the indenture about which I asked a question in the chamber this morning. I received access to this indenture only yesterday. 1 understand that it is a document that is still unavailable outside. I am astounded, as my question today indicated, that the State Government of South Australia is endeavouring to subvert the new trade practices legislation that has been passed by the Senate. It seems to me incredible. This Parliament, after great discussion, passed the trade practices legislation. The Opposition in this chamber, whilst it had strong feelings about certain provisions, did not prevent the legislation in the final assessment from passing. It can be said that the trade practices legislation has the approval of Federal Parliament.


Senator Webster - Not my approval.


Senator STEELE HALL -That is for the honourable senator to say. It is his right to say it, but 1 do not think he voted against the third reading. Federal Parliament has approved the trade practices legislation which seeks to set up in Australia a fairer system of free competitive enterprise. The State Government of South Australia is trying to get around it and to make it void in relation to what would be, if it was proceeded with, one of the biggest industrial concerns in this nation.


Senator Webster - So is the Federal Government in relation to the airlines issue.


Senator STEELE HALL - 1 do not wish to confuse the issue or to downgrade the honourable senator's interjection. 1 do not wish to confuse this very vital question. I ask the honourable senator to bear with the argument on that basis. The Commonwealth Labor Government has promoted pioneering legislation in trade practices in Australia. A State Labor Government has introduced a specific clause to exempt this major new company from that legislation. I trust that Senator Murphy will treat this matter with sufficient gravity. I believe he will. I thank him for the answer so far to my question. I can now read this important clause more fully than the shorter passage that 1 had to read at question time. Part 25 (2) of the draft indenture states:

For the purposes only of the Restrictive Trade Practices Act 1971 or any other legislation of the Commonwealth relating to trade practices whether passed in substitution therefore or otherwise (and only for such purposes) the State hereby approves those agreements practices arrangements acts or things in connection with the undermentioned matters which would, but for this Indenture, be a contravention of such act or other legislation.

The matters hereinbefore referred to are-

(i)   the acquisition of raw materials power steam and services for use in the Petrochemical Complex;

(ii)   the manufacture of chlorine caustic soda ethylene, ethylene dichloride polythene and any other products of the Petrochemical Complex or any part thereof by the Company; (iti) the sale or disposal of the aforementioned products to the Company South Australian EDC Company Limited, South Australian Ethylene Company Limited, South Australian Gasoline Components Company Limited, South Australian Polythene Company Limited, South Australian Chlorakali Company Limited, ICI Australia Limited, Alcoa of Australia Limited, or Mitsubishi Corporation or their respective subsidiaries (such companies are hereinafter collectively called 'the Companies').

(iv)   the acquisition holding or disposal of shares in the Companies.

(v)   the management of the Companies.

It seems to me incredible and no wonder that Mr Dunstan has been keeping his indenture under wraps so that no one will see it until the day it comes before the Parliament. Of course it has not got there yet. The Committee of Inquiry that was set up very sensibly by the Commonwealth Government- I compliment it for doing so- and the. respective Federal Minister had to bring discipline to the question of the environment in this matter because the State Government was incapable, following the first standard that the Premier set, of looking after environmental questions of the Spencer Gulf in South Australia. I would say to Senator Cotton, if he were in the chamber, that it is another blow for federation that a State government cannot even look after the polluting effects of a proposal for its own gulf waters and that the Commonwealth must step in to look after the matter for the State Government. It is a blow for federation that the Commonwealth should have to do it. Thankfully it did. The finding of the commissioners was that the indenture was defective and that the Bill supporting it should not be passed until it was suitably amended. Of course negotiations have fallen down on this point. The companies and the State Government under Commonwealth discipline have been unable to agree and the indenture has not been proceeded with. I understand that the State Parliament is rising today.


Senator Webster - Could I take you back to the point about the Trade Practices Act? What was the Attorney-General's reply to that, particularly on the point as to whether a State government can override the Trade Practices Act? One would have no doubt that the Labor Premier would have been in touch with the Attorney-General on this matter.


Senator STEELE HALL -First of all, I am not certain that the Labor Premier has been in touch with the Attorney-General. I understand that my colleague in South Australia will be inquiring about that today in another place. I do not wish to do the Attorney-General an injustice. I have not yet seen his reply in writing, which will be in Hansard. I understood him to say, firstly, that a State does have this power within its own borders but that it could come under the discipline of a regulation which the Attorney-General would have to frame under the Federal Trade Practices Act. I await the Attorney-General's further detailed reply, lt would be unfair to criticise him because obviously it would be a matter of some legal study. I hope that he continues what I thought was a good standard.

The ACTING DEPUTY PRESIDENT (Senator Marriott)- Order! The Chair cannot condone senators interrupting another senator in the second reading debate, particularly when the remarks are inaudible to the Chair.


Senator STEELE HALL - I hope my remarks are not inaudible. I was addressing myself to the general question which is that it is most important, firstly, at the political level that there is apparently a division within the Labor Party at the State and Federal level as to the intentions of what I thought was a very firmly held precept of the Party and, secondly, that it has been done under cover and that the public, while talking very rightly in South Australia about the environmental prospects of Redcliffs, should have this sort of thing done on the quiet without being able to answer it publicly.

There are other points about this indenture which are also defective. Whilst there is great public argument about the requirements of the indenture and its disciplines on the company, I find that there are 15 points on which the company itself might void the indenture. One of them is simply if the project does not appear to be viable. But the indenture may be varied with the written agreement of either party. This great $800m complex, that the funds about which we are talking in part would support, may be varied, despite the public argument and the indenture which is to go through the State Parliament, in writing by both parties, the company and the State Government, as long as the variation is not a substantial variation. It is within the province of the Government to define the meaning of the term 'substantial'. I could go on for a while but it would not do any service to the Senate. I bring to the attention of the Senate the gravity of the situation in South Australia and the extremely low standard which the State Government started in presenting this project and which has continued through the negotiations. The fact is that it has hidden from the people of South Australia some of the more obnoxious proposals of the indenture. I ask in this debate that the AttorneyGeneral (Senator Murphy) view with considerable gravity the question I put to him today. In general terms this is a proposal which South Australia needs. We need the industrial base it can give us. We need it to bring to South Australia an additional liquids pipeline from the Cooper basin so that gas producers can market a valuable but limited production of petroleum in liquid form from that basin but we do not need it at any cost. We do not need it at the destruction of the environment of Spencer Gulf; we do not need it at the destruction of the operation of free competitive trade in Australia. I ask the Federal Government to take the same disciplines in regard to other parts of the indenture as it has taken in relation to the part which has included the environment of South Australia.







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