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Tuesday, 18 May 1920


Mr TUDOR (Yarra) .- The debate last week was remarkable for the fact that only one of the speakers, the honorable member for Wentworth (Mr. Marks), declared himself in favour of the Bill. My honorable friend the honorable member for Kooyong (Sir Robert Best) said he favoured an inquiry, and honorable member after honorable member on the other side urged thai; further information should be given before Parliament was committed to the agreement.


Sir Robert Best - I raised certain objections, and said I desired further information before I could support the Bill.


Mr TUDOR - And apparently the honorable member has had further information upstairs from the Prime Minister.We have not had it down here.


Mr Hector Lamond - We have had it on the floor of the House.


Mr TUDOR - No, we have not. The honorable member has no doubt heard the Prime Minister upstairs, but I did not have that advantage. On Friday, when honorable members on this side of the House were urging the need for further inquiry, the Prime Minister remarked that representatives of the Standard and " Shell " companies were in the galleries smiling with satisfaction, and I interjected that the smile on their faces was as nothing compared with the smile on the face of the Anglo-Persian man in the gallery. The incident reminded me of the limerick -

There was a young lady of Riga,

Who smiled as she rode- on a tiger;

They returned from the ride, with the lady inside,

And the smile on the face of the tiger.


Mr Richard Foster - That does not apply to this situation.


Mr TUDOR - It does. The Prime Minister is absolutely " inside " the tiger as faras this agreement is concerned, and the "tiger" is the Anglo-Persian Oil Company.


Mr Maxwell - I am sorry for the tiger, then.


Mr TUDOR - The best speech made last week on the Bill was, in my opinion, that made by the honorable member for Flinders (Mr. Bruce) . And he ridiculed that part of the agreement relating to freight on crude oil at current rates, also that portion having reference to the amount of capital to be invested in the business. He stated that the £250,000 which the Government have agreed to put into the business, and the £250,000 to be invested by the Anglo-Persian Oil Company, will not be more than sufficient for distribution expenses of the oil business in Australia. The company have taken up land at Fremantle, and have also mads arrangements for land in Port Melbourne for the erection of storage tanks, but there is nothing in the agreement providing that these tanks shall go over to the refinery company. What will be our position if oilrefined in the Commonwealth refineries has to be stored in tanks belonging to the Anglo-Persian Company? It is quite possible that one-tenth of1d. per gallon per annum will be ample for storage, but until we have information' on this subject we ' shall have no idea how much it will actually cost. The Anglo-Persian Company may charge what they like, and no doubt they will do so. We have been told that crude oil has increased in price all over the world. According to the Petrol Commission's report, the price in the United States of America at present is 6 dollars per barrel, and I understand a barrel contains 42 Imperial gallons, making the price about 8d. per gallon. If we can get the crude oil to Australia, not at 8d., but at 6d. per gallon, the 200,000 tons will, at 240 gallons to the ton, cost us about £1,200,000.

Now on the question of freight, I may inform honorable members that the Anglo-Persian Company are the only people who trade in the Persian Gulf, and, according to the Petrol Commission's Report, they are charging more than £15 per ton freight from Adaban, in the Persian Gulf, to the United Kingdom, and as the distance to Australia is as great, if not greater than, to England, they are not likely to charge the Commonwealth less. ' The Prime Minister has stated that he will alter that portion cf the agreement relating to price, and that the rate for crude oil will be the same as that charged to the British Government. But the British Government are not buying crude oil at all.


Mr Hughes - Yes, they are. The British Government are the AngloPersian Company.


Mr TUDOR - I know the British Government hold more than one-half the shares in, the company, but it is not likely that they would fix the price f.o.b. Persian Gulf, and then sell it to themselves after refining. If we discover oil in Papua, are we likely to fix the price f.o.b. there? The honorable member for Kooyong (Sir Robert Best) and the honorable member for Eden-Monaro (Mr. Austin Chapman) will bear me out when I say that these house-to-house transactions are always a source of trouble to the Customs Department with companies having establishments in Great Britain or other countries and Australia. Therefore, the Anglo-Persian Oil Company would not be likely to fix the price for crude oil in Persia. Crude oil varies in quality. During the war it was found that the product of one of the other Combines was' infinitely superior for explosives to that obtained from the Persian Gulf. We have been told that 80 per cent, of the toluol used ' for explosives manufactured by the Allies was made 'from, the Sumatra oil, and the verdict, of the men " over there " was that had it not been for the Combine which1 the Prime Minister has denounced as " foreign " making available this product for high explosives, the Allies would not have won the war. That is the position. During the war we spoke of those who fought with us as our Allies, and of those who were against us as the enemy. The Prime Minister (Mr. Hughes) apparently tried to confuse the issue by making it. appear that the Shell Oil Company was a foreign corporation, and, therefore, worthy of any ill-treatment to which we chose to subject it.


Mr RODGERS (WANNON, VICTORIA) - That company was working on purely business lines.


Mr TUDOR - Undoubtedly. And the Anglo-Persian Oil Company is not in business merely " for the good of its health " or for the benefit of the country. It is in this enterprise for what it can make out of it.


Mr Richard Foster - And' so with, the Imperial Oil Company.


Mr TUDOR - The whole of them are in exactly the same position. I urge that we should have further information upon this subject, firstly, because the agreement would commit us in respect of too long a period, and, secondly, because of the amount of money involved. Let us assume that the crude oil to-day is worth 6d. per gallon, or 25 per cent, less than the American crude oil is worth to-day, according to the report of the Petrol Commission. That Commission was appointed by the British Government. It was not in any way connected' with the oil trade, and its report was denounced by the trade in Great Britain. It proved that the value of crude oil in America at the present time is about 8d. per .gal: lon, or 6 dollars per barrel, and it is said that the price is going up. Taking the value of the crude oil at 6d. per gallon; we have a total of £1,200,000 in respect of the annual supply from Persia. If we allow freight costs at £15 per ton, or less than is being charged the British Government at the present time, we have in respect of the 200,000 tons an expenditure of £3,000,000 per annum, making a total of £4,200,000. Thus, during the first' five years we should have a total of £21, 000,000 if before the end of that period we discovered oil in Papua, and they started to work it. The company's ten years' operation in Papua would represent, in respect to the cost of the oil, £1,200,000 per annum. Freight, at £7 10s. per ton - or one-half the rate at present charged between Persia and the United Kingdom - would amount to £1,500,000 per annum, making a total of £2,700,000. Thus, in respect of the ten years' period the amount involved is £27,000,000, or a grand total of £48,000,000, spread over the fifteen years covered by the agreement. We shall be committed to an expenditure of £21,000,000 during the first five years, assuming, of course, that by that time oil will have been found in Papua, and that the crude oil is still worth 6d. per gallon, or 25 per cent, less than it is to-day in America. The Prime Minister said last week that if we were dissatisfied with the freight charges it would practically be possible for us to bring the oil over in our own ships. Have we any oil-tank steamers available? As a matter of fact, we have none. There are only two or three companies in the world that have " oil tankers," and by means of this Bill we are saying to thos© companies to-day, " Clear out of Australia. We will have nothing to do with you." Under this Bill the Go'vernrnent are taking up an attitude which I hope will never be adopted by the Labour party when in power. They are creating what may prove to be a valuable precedent. They are saying, in effect, in this Bill, " If you have an opponent, destroy him by fair means or foul. Freeze him out." They are saying to the oil companies now doing business here, " We will rob you of the trade you at present enjoy here; we will destroy your business." They are going to render valueless the storage places that they have scattered all over Australia. When I entered into possession of the room assigned to the Leader of the Opposition, which had previously been occupied by the present Minister for the Navy (Sir Joseph Cook), and before him by the late Sir George Reid, the only book I found there was an album of photographs of the tank storages of the British Imperial Oil Company. That book shows that the company has storage places all over the Commonwealth. Under this Bill the Commonwealth intends to take such action eis will prevent that company from doing any trade in Australia. If the honorable member for Flinders (Mr. Bruce) were a director of that company, and received two years' notice of the intention of the Government to take over the whole of the oil business in Australia, what action would he take in regard to oil supplies for Australia in the meantime f


Mr RODGERS (WANNON, VICTORIA) - But 50 per cent, is not a monopoly.


Mr TUDOR - In respect of some of the commodities dealt with more than 50 per cent, of the trade is to be taken over. The Government propose to favour a company with which they have entered into partnership, and to impose' a rate of duty on oil brought in by other companies which will lead to an absolute monopoly. If I happen to be in Parliament when such a proposal is made, I shall not hold myself bound by this agreement to give the company an absolute monopoly by imposing prohibitive Customs duties, and refund them later to one company only. I shall not be prepared to freeze out every other company by means of Tariff preferences. I shall not be prepared to join with the Government in a proposal to refund to this company every penny that it pays by way of Customs duty, so as to give it an advantage over its competitors. We are asked to tie ourselves up for the next fifteen years to this company. We are to have only three directors, while the other parties to the agreement are to have four. We shall thus have no real control over the £48,000,000 involved; but. if the House votes for an inquiry, it will be open to us to determine what terms should be imposed.


Mr RODGERS (WANNON, VICTORIA) - Are these the only points in respect of which the honorable member has asked for an inquiry?


Mr TUDOR - No. I am not going to traverse the ground travelled by me last Tuesday when dealing with this question. I object to the agreement for the reasons given last week by the honorable member for Flinders and myself. The British Petrol Commission reported that the people in Great Britain who were supposed to be interested in keeping down the price of oil were apparently interested in keeping up the price. That will be the effect of this agreement. The Commonwealth, as a partner in this enterprise, will be more interested in getting revenue from its operations than in seeing that the people of Australia obtain oil at a reasonable price.


Mr Hector Lamond - What sort of an argument is that against State enterprise?


Mr Hughes - It is the most fatal blow ever directed, within my knowledge, at Socialism.


Mr TUDOR - Not at all. We have only a half -share in this enterprise, and while we are to have three directors on the Board, the other party are to have four.


Mr Hector Lamond - But if the Commonwealth is going to do what the honorable member suggests, because it has a half -share, what would it do if it owned the whole concern ?


Mr TUDOR - Many Commonwealth enterprises - particularly the factories associated with the Defence Department - have been able to manufacture and sell at prices below those charged by private firms and companies. But with, four directors controlling this business as against three representing the Commonwealth interests-


Mr Hector Lamond - And the Parliament will control the whole.


Mr TUDOR - Not at all. We shall control this enterprise only to the extent set out in the agreement. There is not one word in the agreement in regard to the fixing of the price of oil.


Mr Hughes - There is.


Mr TUDOR - The right honorable gentleman is mistaken. It gives the company complete power to conduct its operations as it desires, and, very naturally, it will take advantage of that privilege. It will fix the price. I have read the agreement which was only recently signed by the Prime Minister, and presented to this House on Thursday or Friday night last, and there is not one word in it to indicate who is the owner of the oil after it is discovered.


Mr Hughes - Which oil?


Mr TUDOR - The oil discovered in Papua.


Mr Hughes - What has this agreement to do with oil in Papua ? If I were to employ the honorable member at 30s. per week to build a house for me, am I the owner of the building before it is completed ?


Mr TUDOR - Of course: but that is anentirely different proposition to the one I am submitting. There is no provi sion! in the agreement to say who is the owner of the crude oil when it is discovered. I suppose we are to assume that all indigenous oil belongs to the Commonwealth, and I am objecting to the AngloPersian Company taking one-half.


Mr Hughes - One-half of what?


Mr TUDOR - One-half of the oil.


Mr Maxwell - That is not so.


Mr TUDOR - The Anglo-Persian Company is to receive one-half of the profits on the reined product.


Mr Hughes - The company is contributing one-half of the capital, and is also supplying the necessary expert assistance. What does the honorable member know concerning oil?


Mr TUDOR -Nothing. I told the Prime Minister (Mr. Hughes) that on Tuesday last.


Mr Hector Lamond - The honorable member is now proving it.


Mr TUDOR - I have gone into this question very carefully, and am more than ever convinced that if the agreement is adopted it will be a bad bargain for the Commonwealth. I stated last Thursday that during the nineteen years I have been in public life I have never received a single penny-piece from any outside source. I say that deliberately. I have not the slightest interest in any concern, either manufacturing or importing, insideor outside of Australia, and if honorable members dare to hint that I am in any way connected or interested in any commercial concern, I may inform them that they are absolutely wrong. I am justified in repeating this statement, because certain insinuations have been made that opposition has been taken to this agreement because some of those outside who are supporting me in my motion for an inquiry are interested parties. I am confident that if we enter into this arrangement with the Anglo-Persian Company we shall be making a bad bargain, and one which we shall always regret. We shall be encumbered for a period of fifteen years, and the Anglo-Persian Company will be in a position to charge what it likes for refined oil.


Mr Hughes - But it cannot.


Mr Maxwell - Of course, it cannot.


Mr Hughes - It is nothing of the kind.


Mr TUDOR - I can only follow one interjection at a time, and-


Mr Maxwell - Under the agreement it is impossible for the company to fix any price that, in the opinion of the Commonwealth, is not fair and reasonable.


Mr TUDOR - Where is that stated ?


Mr Maxwell - In clause 14, I think.


Mr TUDOR - Clause 14 gives the company an absolute monopoly.


Mr Maxwell - I am not quite sure of the clause, but the Commonwealth interests are protected.


Mr RODGERS (WANNON, VICTORIA) - Who is the tiger in this instance ?


Mr TUDOR - The Anglo-Persian Oil Company.







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