Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Full Day's HansardDownload Full Day's Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Wednesday, 26 November 1941

Mr BEASLEY (West Sydney) (Minister for Supply and Development) . - by leave- I move -

That the bill be now read a second time.

The bill proposes, first to amend para graph a of sub-section 5 of section 5 of the principal act, in order to remove from it ambiguity in relation to the powers possessed by the Minister in respect of advances under the act. It is not clear that the Minister has the power to enter into an agreement relating to advances, as well as agreements covering the repayment of advances. The sub-section reads -

The Minister may, in connexion with any advances made or to be made under this act - (a.) in the name of the Commonwealth enter into such agreements and take such securities for repayment of the advances as he thinks fit.

The bill proposes to alter that so as to make it read - in the name of the Commonwealth enter into such agreements relating to the advances and take such securities for the repayment of the advances as he thinksfit.

This is really a drafting amendment for the purpose of clarifying the powers of the Minister. It merely does what I have no doubt was originally intended when the bill was drawn.

Mr Holt - Has this matter arisen in connexion with Lakes Entrance development ?

Mr BEASLEY - No. The other alteration is contained in clause 6, and has a much wider significance. This is the clause which proposes to confer on the Minister power to vary the conditions governing the making of advances under the act so as to give greater flexibility. The amending provision is in these words -

Section 6 of the principal act is amended by ' inserting after the word " not " wherever occurring, the words " unless in any particular case the Minister, by notice published in the Gazette, otherwise directs".

The special case which decided the Government to take this action is that of the Apanapi Petroleum Company, which was searching for oil in Papua. The previous Administration agreed to advance £50,000 to this company, on a £1 for £1 basis. However, although the arrangement was for £50,000, the amount actually advanced was only £30,000, leaving a. balance of £20,000, which has not yet been paid over. The company has now used all the money advanced by the previous Government, plus what it was able to raise itself, and it is now unable to continue its operations. We had to decide whether boring was to be continued, having regard to the very real need at this time for discovering oil. The Commonwealth geological adviser, who had all along been advising the company, and had directed it where to sink the bores, has informed the Government that prospects are favorable, and that boring operations should be continued. He has recommended that the Government should advance a further amount of £55,000. The last Government hired to the company a drilling plant worth £25,000. The plant weighs 500 tons, and even when dismantled, parts of it weigh as much as 12 tons. There is no wharf or crane to handle it, and it had to be floated into position on pontoons. We have been informed that if it were proposed to remove the plant it could be done only during January and February, when the tides were suitable. All these factors were taken into consideration when the Government was making up its mind whether or not to allow the enterprise to lapse, or to make a further advance. Eventually, the Government decided that it should advance at least the amount of £20,000 which had been promised by the previous Government, but which had not been paid over.

Mr Archie Cameron - How much more does the company want?

Mr BEASLEY - That is always the problem. The Commonwealth geologist has reported that £55,000 should be sufficient. The Government considers that companies of this kind should not be encouraged to believe that they have only to apply to the Commonwealth in order to receive large sums of money. We believe that the best way would be, not to hand over £20,000 in one sum, but to make monthly advances of £3,000 or £4,000 each. In order to safeguard the expenditure of the money it has been decided to place a representative of the Commonwealth Treasury on the company's board of directors. As the company is unable to find £1 for £1 for the advance, we are asking Parliament to agree to the granting of £20,000 without this condition. It has to remembered that the Commonwealth has already advanced £30,000, and has plant valued' at £25,000 on the spot. If we decline to make a further advance it might be said that, when the company was within 100 feet of striking oil, the enterprise had to be abandoned for lack of funds.

Mr Holt - Does the Minister know the cost of searches conducted by other companies in those territories?

Mr BEASLEY - I cannot say.

Mr Holt - I know that one big oil company has expended very considerable amounts.

M'r. BEASLEY.- That may be, but I ask honorable members to consider this case on its merits. The bill provides that if the Minister uses his discretion to make advances for the purposes stipulated, a notice of his intention shall be published in the Gazette. It was originally provided that the money should be advanced free of interest, that it should be re payable only when profits were earned, and then at the rate of 50 per cent, of the profits earned. It is now proposed that on money advanced interest shall be paid at the rate of 5 per cent, when the enterprise becomes profit-earning, also that the Commonwealth shall receive a share of the profits in proportion to its share of the capital for ten years after the liquidation of the Commonwealth's advance. These are the special circumstances that have arisen in connexion with the searches that have been made. The Government considered that it was desirable to effect the alteration by an amendment of the act rather than by means of regulations under the National Security Act. In my opinion, the matter should be dealt with by Parliament, so that honorable members may have precise information about the efforts which are being made to discover flow oil in those areas and dealt with in such a way as to allow opportunity to exploit to the full these projects, particularly the one in which the Commonwealth has already expended £30,000.

Suggest corrections