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Friday, 14 May 1920


Mr HUGHES (Bendigo) (Prime Minister and Attorney-General) . - I shall confine my remarks to dealing with the material points raised during the course of the debate by honorable members who for one reason or another do not entirely approve of the Bill. I wish to preface what I have to say by repeating in most emphatic and unambiguous language that the Anglo-Persian Oil Company has no connexion, direct or indirect, with any other great oil company. I have explained that the Burmah Company, which is to all intents and purposes part of the Anglo-Persian Oil Company, is in itself a British company. The Anglo-Persian Company has no relation to the .Standard Oil Company, the "Shell" group, or any American or foreign company. It is British in essence and origin, and owes its success to British enterprise and capital, and its control is now in the hands of the British Government.

Many reasons have been urged by honorable members as to why the agreement should not be ratified. I must confess to a feeling of disappointment at those which have been put forward by some honorable members. Some have urged that if the agreement is ratified it will create a monopoly in this country and place us- under the domination of the Anglo-Persian Oil Company, but this accusation comes strangely from the lips of men who have been absolutely silent under the complete domination of the Standard Oil Company and the " Shell " group for years and years. As soon as a British company, which is dominated by the British Government, and which is Imperial in essence, offers - making the Commonwealth a full partner with it - to erect a refinery in this country, members rise and say that this is a monopoly, and, for their part, they will not agree to it.. The .Shell? Yes. Standard Oil? Yes. But the Anglo-Persian, Great Britain, and . the Commonwealth ? No. I must confess that their attitude surprises me. What surprised me no less was to hear, for the first time in my life, that moderation was one. of the characteristics of the Standard Gil and Shell Companies, that they had not increased their prices, but had stopped. short of taking the last penny from the users of petrol/ benzine, lubricating oil, and fuel oil in Australia. We were told, in short, that those companies, which for years had been, as it were, the stalkinghorse of every Democrat, every syndicalist, and every demagogue, like myself, throughout the world, had suddenly become clothed in the shining garments of the philanthropist, and all the hosts of the archangels. As I looked at the re- presentatives of the Shell. and the titan.dard Oil in the gallery while these things were being said, I saw their faces shine like the faces of those who had found an abiding place in the bosom of Father Abraham. They surely did not recognise themselves in that description. The fact is that the Standard Oil, the Shell, and other foreign companies have done everything that lay in their power as commercial concerns, which are not immoral, but unmoral, whose only god was profit, and whose only purpose was to wring the last penny out of the consumers of this country, to serve their own purposes at our expense, even to threatening this country with an oil famine. When the Prices Commission declined to increase the price of oil, they said, " If you do not increase the price, you will not have any oil."


Mr JAMES PAGE (MARANOA, QUEENSLAND) - Lord Inchcape said the same with the shipping.


Mr HUGHES - Have we' come to this, that when it is proposed that the Commonwealth shall become a full partner in a great Imperial concern - because it is Imperial in the best sense of the word, since the British Government is a. full partner in it - we should refuse to take the opportunity to erect in Australia a refinery which would insure fuel oil for our Navy, without which we aTe undone, and for the British Navy, without whose co-operation we are also undone? I say deliberately that the China Fleet, as well as our own, cannot operate effectively in time of war unless there is ample oil storage round these coasts. On whom are we to rely, then? Is it on the American company and the Dutch companies, or on this company which is built on the rock of Britain itself? So I put these things to one side as being in themselves abundant proof of the excellence of this agreement, since no better arguments can be adduced against it.

I take the other points in the agreement against which criticism has been directed. It is said that we shall have no guarantee of getting crude oil at a fair price from the Anglo-Persian Company. I said when introducing the Bill that we would get it at a fair and reasonable price. It was pointed out that that was not in the agreement. I have had it put in. If honorable members ask, " Who is to be the judge of a fair and reasonable price ?" I answer, " The Commonwealth." That, I submit, is a full and satisfactory answer. It has also been said, " The company will make their money out of freights, for whichthey will charge us what they like." My reply was that we would get freight at current rates. . One honorable member laughed at this, as if it was the most unusual thing in the world that prices should be regulated by supply and demand. We have always heard from the Ministerial Corner, in regard to wheat and wool, and from the Opposition Corner in regard to labour, that prices should be regulated by supply and demand, plus whatever pressure can be brought to bear on the market. Is that not the law which governs the world? However, in order to meet this objection, we have had that provision altered, and, if the freights charged by the Anglo-Persian Company for bringing their crude mineral oil are such as we consider unfair, we can get other freights, either our own or anybody else's.

I think it was the Leader of the Opposition who said that the effect of the agreement would be that the consumer of oil would be sweated and bled. For all these years honorable members opposite have been silent. While we were under the domination of the Shell and the Standard Oil Companies, they cared nothing about the unfortunate consumer; but now they sweat with terror or apprehension at the prospect of the poor consumer being exploited by this company, in which the Commonwealth itself is to be the dominant partner. But what are the facts? For the first time since oil has been used in Australia, the interests of the consumer will be conserved. No longer will he be compelled to pay whatever Standard Oil likes to charge him. I have said that the price will be fair and reasonable. It- was contended that there was no guarantee of this, since no provision was made for it in the agreement. In order to meet this objection, I have had such a provision inserted. If I am asked, " Who is to say what price is fair and reasonable ?" I say, " The Commonwealth." I ask honorable members who are capable of looking at anything that comes out of Judea - or is it Nazareth? - with an unjaundiced eye, what more do they want?

Further, the critics of the agreement complain that this company is going to be protected against the competition of the Shell and Standard Oil concerns, the two which I take as being the greatest of the foreign companies, by having a refund of duty on crude oil if those companies, as our competitors, wish to undersell the Anglo-Persian Company and destroy them, for the purpose of subsequently exploiting this country and resuming their monopoly of it. It is said " You are going to give the AngloPersian Company an unfair advantage." My answer is this : " The established policy of this country is Protection. It is a good thing to have the oil refined here, in order to give employment to our people, and to have here supplies of oil, both in its raw and in its refined state. In order to do that, we must protect these industries in Australia by the same means as we employ to protect every other industry." But we provide that, in order to prevent this company exploiting the people, none of the advantages set out in section 12 to safeguard the company against unfair competition by foreign companies shall be enforced unless the company sell their finished article at a fair and reasonable price. The. Commonwealth is to say what a fair and reasonable price is. If the company charge more, we lift the floodgates and allow the foreign oil of the dear friends of the critics of this Bill, the Shell and the Standard Oil Companies, to come in, and they can wallow in it to their heart's content.

It is said that we shall have to pay a greater price for crude oil than is necessary. I have already said that one guarantee against this has been inserted in the Bill. But there is also another, and it is this: That in no circumstances is the price to be greater than the price paid by Britain to the Anglo-Persian Company for crude mineral oil. Surely it will be admitted that there is now a complete guarantee.

Honorable members have seen in this measure the shadow of a menace against exploration for oil in this country and in its Territories. They say, " If we are to get 200,000 tons of crude oil from Persia, the Anglo-Persian experts will not be very keen on finding oil in Papua." One honorable member said that the effect of this agreement would be to send up the price of Anglo-Persian shares. There is an old story about the three tailors of Tooley-street that might be applied here ; but all I will say is that when we speak of a company with £20,000,000 of capital, and remember that all we are asked to consider is a matter of £250,000, such a contention may be dismissed without more ado.

The best answer to those who fear that the effect of this agreement will be to retard development and the discovery of oil in Australia or in its Territories is the fact that there is an ample market for Anglo-Persian crude oil all over the world. We believe they will do their best to find oil in Papua. It is an Imperial venture, of which the British Government is paying half the cost. But I say, on behalf of the Government, in order to remove all apprehension, that we shall do two things. First, we shall increase the reward offered to those who find oil in payable quantities, either on the mainland or in New Guinea, or in German New Guinea when we begin to explore there, to the sum of £50,000. Then we shall offer every facility to experts, other than the Persian Oil Company's experts, to explore the mainland - I mean Australia - Papua, and German New Guinea. Further, we shall do all things within our power to give breadth, scope, and life to a policy which will insure not only the discovery, but the development of oil when discovered in this great country of ours.

I think that what I have said covers most, if not all the ground that has been traversed by those who object, for amy reason, to tie Bill. It has been suggested that the Bill should be referred to a -Select Committee.. What is this Select Committee going to do? Who is going to compose it? Who is going to inform its mind ? To whom shall it look for inspiration? I speak not at all, of course, of those higher sources that are open to all poor mortals; but to whom below is the Committee to look? What do we know about oil? I speak as a chastened, humble being, and I say that I know nothing about oil. There are those in this Chamber who know everything, about all things, and I leave them to flounder in the wealth of their knowledge. I speak of ordinary men. If I were on such a Select Committee, I should have to inform my mind from reports of previous Committees on the subject, or to listen to evidence from the Anglo-Persian, the Standard, or other oil companies. The Cabinet has done its best to inform its mind, and it relies principallyon. the fact that -what is good enough for Britain is good enough for the Commonwealth. And we feel, above all things, that our present circumstances are such that we dare not go on as we are; we dare not, in the face of facts - in the face particularly of the. fact that, without fuel oil; our Navy is ' powerless - allow this country to remain- dependent for supplies of this thing, which is vital alike to our national safety and economic welfare, upon foreign companies. For that reason, I urge the House, to accept this proposal.

One other point before I sit down. It is said that this Bill will mean the deathknell of the shale-oil industry. I deny that utterly. It exposes the shale industry to no greater competition than at present, though it changes' the nature of the competition. The shale industry will not be exposed to the American competition only ; it will be asked to face competition, partly in our midst and partly from overseas, but the volume of competition will remain the same. Since we have established', by bonus and otherwise, the shale industry in this country, we shall not desert it merely because we pass this agreement. We shall encourage the shale industry; we . never know but the day may come when we shall have to fail back on shale oil, and we shall not . desert those men who have put their money and given their time to the establishment of the industry. Above all, we shall do everything we can to make ourselves independent of Anglo-Persian crude oil by finding oil on the continent of Australia or in our Territories.







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