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Friday, 14 May 1920

Mr CORSER (Wide Bay.) .- This is one of the most important measures calling for the attention of Parliament to-day. It affects not only the present industries. of the Commonwealth, but those which, we hope, will be established after the Tariff has been considered. It vitally affects also the welfare of our Navy. It is important for the manufacturing interests of Australia - in being, aud to be - that we should be in a position to supply industries with necessary motive power adequately, and with certainty. Some honorable members have stressed the necessity for appointing a Select Committee. I could quite appreciate that if the Committee could call upon expert evidence; but we have not expert experience and information at our disposal in Australia. It is all very well to say that the Committee could examine commercial men representing oil concerns; but it is not usual for business men to go to their mercantile' opponents , to secure technical information. Surely we have in the Ministry and their advisers men who are as good as those whom we could call upon from private commercial sources. Time is the essence of this contract; we have no time to lose. I congratulate the Government upon having entered into the agreement. It should be remembered that it will be two years before the refinery can be completed. Meanwhile, there are prospects of large crude oil supplies being struck in Australian Territories. What will be the value of crude oil discoveries if 'there is no refinery available to deal with the product? I know of two companies, working to-day in Queensland, which are very hopeful of getting oil within a brief period. One man interested has told me that he feels sure he will be . able to get oil within the next three months. It is believed that in Queensland alone there is no less an area than 20,000 square miles of oil country. The best encouragement we can give these prospectors is, first to offer to reward them for making a discovery in payable quantities; and, secondly, to re-assure them that, when oil has been discovered, there will be a ready purchaser who will refine it. The buyer to whom they should look to receive the highest value from their supplies should be the Commonwealth refinery. I do not consider the AngloPersian Oil Company in any degree a foreign concern. Seeing that more than half of its shares are held by the Imperial Government, and that the Commonwealth will hold half of the interests in the refinery to be erected here,, it means that practically three-fourths of the total interests will be in the hands of the British and Commonwealth authorities. We should give the Imperial Government credit for being shrewd. When they entered into an. agreement with the Anglo-Persian Oil Company, they knew what they were about. When they appointed to the directorate as their representative a man of such knowledge and experience as Lord Inchcape, who was not a shareholder, they knew what they were doing. Their purpose was to secure the benefit of his world-wide acquaintance, with business management. If the British authorities considered it safe that they should be represented by only two out of fourteen members of the directorate, they must have recognised that their nominees were men of specially wide experience, and that the remainder, who were experts, would not be hostile to Imperial interests. If we in Australia take the precaution of appointing three out of the seven directors as Government representatives, it should be sufficient to insure that those three shall be men of considerable mercantile experience, and that the four remaining directors shall be oil experts. The fact that Lord Inchcape is largely associated with a shipping combine has no bearing in this instance, and it is absurd to raise the point. The AngloPersian Oil Company has tank steamers of its own - sufficient, I understand, to make the concern independent of any outside shipping combine. Lord Inchcape cannot hope or expect to control or wield influence along those lines. So far as Australia is concerned, it is obviously advantageous that we should be associated with a company which has its own shipping available to bring to us requisite supplies of crude oil for refining here, until we have our own. We will not be dependent upon other shipping sources.

The Prime Minister (Mr. Hughes) has informed me personally that ample protection will be afforded to producers of oil in Australia, in the matter of their securing fair value for the Australian product. He has told me, further, that they will be given preference. I trust the Prime Minister will take the opportunity, when this measure is being dealt with in Committee, to place those safeguards in the Bill itself. We have a continent which is larger than the United States of America, and I look forward to the day when discoveries of valuable oil deposits will have been made somewhere in Australia. We should- see that, having a national refinery, the discoverers are given not merely a fair, but a preferential opportunity of having their crude oil refined and placed upon the market. It is essential that the Commonwealth should be fully protected against the possibility of dumping. In my experience as an importer I have seen a good deal of that- evil. And there is always the danger that, as soon as one has established an industry, the large foreign interests already operating may so reduce the price of their commodities as to crush the local infant rival. What consideration would the loss from a temporary reduction in the price of oil supplies to the Commonwealth be to the foreign oil companies which carry such huge interests at the present time? The honorable member for Maranoa (Mr. Page) said there was no fear of dumping in Australia, but I remind him that prior to the war there was a .considerable amount of dumping on the part of German houses, shipping freights, Germany to Australia, being offered at 12s. 6d. per ton, as compared with our coastal rate of 35s. In candles, for instance, dumping was particularly notice* able. British firms at that time supplying mining companies' requirements were under agreement between themselves not to sell at below a certain price in London, but some of them shipped enormous quantities to Australia on consignment, and drew upon their agents for 90 pex cent, of value, and the're was an understanding, I believe, that the agents were not expected to pay any more. As a result, British firms were able to compete very effectively with Australian manufacturers who were then becoming established.

I think I was instrumental in inducing the Government to offer the reward' of £10,000 for the discovery of payable oil in Australia, but I believe now that that amount is not sufficient. I hope the Government will see their way clear to increase it. What would £100,000 mean to the Commonwealth if, as a return for this reward, payable oil in large quantities was found in some part of the Commonwealth ? In Queensland the practice of the State Government, who have an oil monopoly, is to issue a licence for prospecting over an area of 2,000 acres, and to grant a lease for 60 acres only, but the prospector -will get 2-J per cent, on all oil taken out of the balance of the area of 2,000 acres. This inducement is not sufficient to encourage prospecting.

If the agreement with the British Government is considered a fair and workable one, surely after investigation it ought to be good enough for us to establish a refinery in conjunction with the Anglo-Persian Oil Company. If we do not take advantage of this opportunity, where are. we likely to get experts and the machinery to carry out the work ourselves, and what would become of our crude oil? I have not heard any honorable member suggest an alternative.

Mr Jowett - If the agreement is adopted, will any other firm be unable to erect refineries in Australia?

Mr CORSER - No; there is nothing to prevent them.

Mr Tudor - Yes; Customs provision 14b will prevent them.

Mr CORSER - That provision is necessary to prevent any Combine dumping oil in this country in order to destroy an Australian industry.

Sir JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) (Minister for the Navy) - Dumping at unfair prices.

Mr CORSER - Of course. If any outside firms compete on fair terms, nobody should object, and the Government will not object. There is a general belief that payable oil exists in Western and South Australia and Queensland, and there is every reason, therefore, why refineries should be established without undue delay, so that we may be able to deal with oil when found. I should like to emphasize the fact that the Anglo-Persian Oil Company controls a larger area of oil lands than all the companies in the United States of America, and, therefore, it should be to our advantage to be associated with the corporation commanding such huge supplies of crude oil, and which, moreover, is not dependent upon any other organization for transport. The agreement also contains a safeguard in that, if the Anglo-Persian Oil Company attempts to charge unfair transport charges, there is nothing to prevent our chartering other vessels for the conveyance of this crude oil to Australia, the price fixed being f.o.b. port of shipment. This means that the oil becomes our property when it is put on board ship, such ship tobe named by us, so we are free to choose our own vessels for its conveyance to Australia; but the Anglo-Persian Company undertakes to carry it at a reasonable price. I trust the agreement will be ratified with as little delay as possible, so that, with an adequate supply of fuel oil at reasonable prices guaranteed, our manufacturing industries may be increased and developed satisfactorily.

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