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Tuesday, 11 May 1920

Mr BRUCE - That is what the Prime Minister's figures show..

Sir ROBERT BEST - -I believe they do. That is to say, that after the final st age of refinement, and when the bitumen or asphaltum has been recovered, there will be still a waste residue of 31,000 tons. What will be the effect of that wastage over a period of fifteen years upon the freights to be fixed under the conditions to which I have already referred?

Mr Riley - The by-products of oil refining will be very valuable.

Sir ROBERT BEST - After all the by-products have been removed, there will still be an absolute waste of 31,000 tons. 'That quantity must be carried yearly between the Persian Gulf and Australia in the specially-constructed tank vessels belonging to the AngloPersian Company and heavy freights paid therefor. In other words, they will be conveying to Australia each year 30,000 tons of waste material for which there will be absolutely no return. That means that the industries of Australia will be taxed with the freight of 30,000 tons of waste per annum. That is a very serious point which we cannot altogether ignore.

There is another matter that I desire the Government to take into consideration. I think we are all anxious to have the oil industry established in Australia and to offer every encouragement to that end. It is provided that the technical and commercial management of the refining operations shall be left entirely in the hands of the company, which must forthwith, after registration, erect, equip and operate in Australia a modem re- finery. We dare not place ourselves in the hands of this company any more than we are obliged to do ; the best interests of the Commonwealth may be gravely endangered unless we take the necessary precautions. The company will employ in the refining of the oil a highly-skilled staff, and I shall endeavour to provide in the Bill that there shall be within the refinery nominees of the Australian Government whom the company shall be obliged to instruct in this highly skilled and technical work. I shall suggest the insertion of a provision to the following effect -

In the case of each important division in the technical management of the refinery, an Australian understudy shall be appointed by the company under nomination by the Commonwealth Government, the Government undertaking to pay half the salary in each instance.

I consider it most important that we should have understudies in the various divisions of this very technical work, so that at the end of the fifteen years for which the agreement is to run, if the Commonwealth desires to take over the control of the refinery, we shall not be left in the lurch through lack of a technical staff. We should exercise every precaution to protect our interests in that regard.

I have just been handed a note by Major Bird, which says, " This agreement stipulates for a quantity of oil not exceeding 200,000 tons. The refinery which is to be erected to treat 4,000,000 gallons per month will, therefore, treat only 179,000 tons per annum. The refining loss on 179,000 tons is only 6 per cent. There is, therefore, only a loss of 8,000 to 10,000 tons, and not 30,000 tons." That is a point that requires investigation, but from the Prime Minister's figures it would appear that there will be a wastage of 30,000 tons per annum, and I am assured by an expert that that will be so. Such a loss would be very serious.

Dr EARLE PAGE (COWPER, NEW SOUTH WALES) - There should be an inquiry into the agreement.

Sir ROBERT BEST - I certainly require more information.

Mr RICHARD FOSTER (WAKEFIELD, SOUTH AUSTRALIA) - But assuming that the correction is right?

Sir ROBERT BEST - Whether the loss be 30,000 tons or only 10,000 tons, it will be still very serious. Looking through the agreement I notice that several of the clauses require amendment from a strictly business stand-point.

Mr Considine - It is a good agreement for the company.

Sir ROBERT BEST - I do not for one moment attribute any bad faith. I have criticised the agreement solely from a rigid business stand-point. I started upon the premises that, having regard to the objective in view, the agreement is entitled to the generous consideration of honorable members. If we desire to establish the oil industry in Australia we must give every encouragement to any company or corporation, particularly a British corporation, that is prepared to come amongst us, or to any Australian company that is ready to engage in the enterprise. Therefore, I urge that the points which have been raised by the Leader of the Opposition (Mr. Tudor) and myself shall receive full consideration from the Government. We are entitled to the most complete explanation, and to the fullest information, in order that we may be enabled to come toa fair and just decision.

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