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Wednesday, 3 December 1986
Page: 3314

Senator CHANEY (Leader of the Opposition)(10.01) —The arguments which have been put by the Australian Democrats for the non-support of this clause are only very superficially attractive.

Senator Sanders —Getting a higher price later is superficially attractive!

Senator CHANEY —I must say that if I wanted to put someone in charge of Australia's affairs the honourable senator would be at the very end of the queue. The sort of bushy approach that is adopted by the honourable senator from Tasmania is reminiscent of the Club of Rome. I have little doubt that there is only one person left in the world who still believes what the Club of Rome set down 10 years ago-namely, that we face a world which will run out of resources. Senator Sanders is a wonderful little fly in aspic. He sits there, locked into the past. Whilst we have the inanities that we have been hearing from him, we will never get any sense in this country.

In the days of the late Sir Robert Menzies we had an embargo on the export of iron ore. That was based on the proposition that there was a great shortage of iron ore and that we would never really be able to be sure of our supply. That attitude is generations old. It is a sad fact that 10 or so years ago a group of people who came from Senator Sanders's school sat down in Rome and drew up a whole lot of nonsensical predictions which have been proved to be totally wrong. What we get from people like Senator Sanders is the suggestion that, if we place as our first priority the idea that resources must be conserved because they are scarce, we will help solve the long term problem. The reality is that ever since the Club of Rome made its predictions it has been proved utterly wrong by the fact that, with an increase in prices for resources, there was a massive exploration and production effort. One of the parts of Australia's current problem is that we now have a surplus of most of the commodities in which we deal.

If we are to encourage oil exploration in Australia, we have to accept the fact that exploration money, whether it is Australian or foreign, is mobile. It will be invested in oil exploration where the best returns are likely to be achieved. That may be in China, New Guinea, North America or Australia. The idea that we can say to people who are prepared to put up money and search for and discover oil that, once found, must be kept in the ground until some moment when apparently politicians or bureaucrats will determine that the price is right, is to fly in the face of any hope that we in this country have of attracting exploration expenditure.

I am sorry that the points have been raised in such a harum-scarum way by Senator Sanders because they do less than justice to the arguments that were put by Senator Vigor. Senator Vigor's argument is 100 per cent wrong. If accepted, it would mean that Australia would become an even less attractive place for oil exploration. There are a number of things that make this country unattractive for oil exploration. As I said before, one is the lack of prospectivity for oil. We are a difficult target and therefore we are less attractive than some other areas. That is one of the reasons why we see Australian explorers, among others, looking elsewhere. It is a difficult area; we accept that. It is important that we attract exploration money to this country.

A second area of concern and one that is man made and can be changed is the taxation regime. As I said in my speech on the second reading, the very high taxes on oil represent a disincentive to explore for oil in this country. A third area that would amount to a disincentive would be if we said to people `Come to Australia and explore', or if we said to investors: `Put your money into oil exploration, but do not expect to be able to produce the oil when you find it unless the Government decides that it is timely'. There is no way in which that would be attractive to the sort of investment which is required if we are to maintain self-sufficiency in oil. The fact is that the oil pricing policies of the Fraser Government represent a very important plus for Australia. They succeeded in restoring the faith of oil explorers in this country as a target. We had useful finds on a regular basis during the 1980s, not the sorts of finds that we would hope for, the hundreds of millions of barrels that would give us an easy self-sufficiency, but valuable pools of oil have been found and it is a really high national priority, in the Opposition's view, to be attracting more exploration in this country so that we can have some hope of continuing self-sufficiency.

I think Senator Vigor put his point forward very seriously, and I was rude to his colleague Senator Sanders in a way that I would not wish to be rude to Senator Vigor because he put his argument in a much more sincere and straightforward way. I say to Senator Vigor that, in the Opposition's view, to achieve his objective one needs to take precisely the opposite view. To achieve the objective we have, which is to ensure continuing oil self-sufficiency and to avoid the stark problems of even greater balance of payments problems that we face if the present oil taxation regime continues, we must, as the present Government is doing, permit people who have put their money into the industry to see a return on that money. That is the simple argument which leads us to move away from the superficially attractive idea that we lock up what oil we have in Australia now and conserve it as long as possible. That, I think, is a formula for just long, slow strangulation of our industry. We are saying that the Government is right to be permitting the sort of flexibility that it is permitting with respect to exports. We are very sorry that it allies with that correct approach an approach which puts on the industry taxes which in a sense cancel out the positive attractions for investment that this part of the Government's policy represents. We will not be supporting the amendment moved by Senator Vigor. No doubt the Government will not be supporting it either. I make a plea for an end to the sort of luddite, antiquated approach represented by the sorts of interjections we have had from Senator Sanders who, if he had his way, would have us moving back into a new dark age.