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Thursday, 2 May 1957

Mr WHITLAM (Werriwa) .- Nobody in the House dissents from the proproposition that if we are to maintain our primary production and if we are to increase our industrial production Australia must have greater supplies of sulphuric acid, and preferably from indigenous materials. I, therefore, would certainly like more information than either of the t wo Ministers now at the table have been able or prepared to give on this bill.

Mr Beale - I have not spoken yet. I have not had a chance yet.

Mr Osborne - Do you want it done by way of interjection?

Mr Cramer - What do you mean?

Mr WHITLAM - The Minister for the Army (Mr. Cramer) is not at the table. lt would be a more critical problem if he were. One of the Ministers at the table spoke yesterday on this and did not make reference to the Tariff Board's report of 1954. to the report of the Sulphuric Acid Committee to Cabinet, or to the annual reports which are made under the existing act. The Minister gave us no information to show how the Government was succeeding in the objective, to which we all subscribe, of producing more sulphuric acid from Australian sources.

Mr Osborne - On the contrary, the matter is covered in the second-reading speech.

Mr WHITLAM - Since the Minister interjects again, I reiterate that he has not referred to the Tariff Board report of 1954; he has not referred to the report of the Sulphuric Acid Committee to Cabinet; and he has not referred to either of the annual reports which the Comptroller-General of Customs has had to make under section 22 of the existing act, and has in fact made. That is, the two reports from the ComptrollerGeneral of Customs, and the report by the Tariff Board, all of which have been befo-e Parliament, have not been referred to or brought up to date. The report which should have been before Cabinet and, on application, lesser Ministers, has also not been referred to in this debate. We are asked to give a blank cheque to remove any limitation on the payment of bounties, without being given any information as to how the Government's objectives are being achieved by the present bounties. I hope that the Minister for Supply (Mr. Beale), within whose purview this matter falls administratively as well as scientifically, will at least give us some of this information, in the committee stages.

Let me indicate its relevance. It has been stated departmentally that the Government's sulphuric acid conversion programme has been a comparative failure. It has also been stated that there are very considerable difficulties under the present legislation in promoting an increased conversion of Australian materials into sulphuric acid. In view of the way bounties have to be administered by the Commonwealth Parliament, all available information should be given to honorable members.

Mr Beale - Bounties have to be uniform.

Mr WHITLAM - Precisely. I was coming to that, and if I may anticipate, I think it is partly the answer to the questions which have been raised by the honorable member for Capricornia (Mr. Pearce) and the honorable member for Corangamite (Mr. Mackinnon). It answers first the question why the Tariff Board in 1954 recommended the repeal of the limitation on profits and secondly the question why the Parliament did not eliminate that limit on profits but raised it. Now the only information which the Parliament can go on is in the two reports made under the existing act, by the Comptroller-General of Customs, and they show a varying position which deserves further explanation. It is true that in relation to the over-all position we can derive some satisfaction. In 1.954-55 the quantity of sulphuric acid in respect of which bounty was paid to producers under the existing act was 132,000 tons. The quantity in respect of which it was paid in 1955-56 was 237,000 tons - an increase of 80 per cent., and a very satisfactory figure one might think. But the position of individual producers - and there were only five and seven in the respective years - varies in a way which I think deserves explanation. One Western Australian company for example, Cumins

Smith and Mount Lyell Farmers Fertilizers Limited, was paid in respect of 20,000 tons in 1954-55 and in respect of 42,000 tons in 1955-56. The other Western Australian producer, Cresco Fertilizers (Western Australia) Limited, was paid in respect of 29,000 tons in the former year, but in respect of only 21,000 tons in the latter year. Why is there more than double the production by one company and 30 per cent, less by the other company?

This might highlight the difficulty to which the Minister for Supply adverted by interjection - the fact that in Australia bounties payable by the Commonwealth Parliament have to be uniform, despite the fact that the cost of producing or manufacturing goods in various parts of Australia may very greatly vary. This is particularly the case in regard to sulphuric acid components. At Norseman, in Western Australia, there are very considerable resources of pyrites. This material is eminently suitable for conversion to sulphuric acid, and yet the cost of converting it to sulphuric acid at Norseman or anywhere in Western Australia is very much greater than it is in the eastern States. Whichever way you look at it, it is greater. If one puts in a conversion plant at Norseman one still has the very great problem of conveying the acid - always a difficult and dangerous thing on narrow-guage railways - over some hundreds of miles to thi ports. It is dangerous on any railway, but particularly on narrow-gauge railways, where, it is common knowledge, derailments are very much more frequent. If, on the other hand, one conveys the pyrites from Norseman to some plant at the seaboard, or, say, at Kalgoorlie, there again one has the very heavy and expensive task of conveying bulk cargoes over some hundreds of miles. I think it is common knowledge that in Western Australia, therefore, it is not as profitable to convert pyrites to sulphuric acid as it is in the eastern States. One therefore has the problem that in order to achieve any return at all to the companies which are doing this national job in Western Australia, one has to guarantee perhaps an excessive return to some of the companies which can cheaply perform it in the eastern States. Under this flat rate of bounty, in order to provide a 2i per cent, return in Western Australia, which is a very small return on a heavy mineral plant, it might be necessary to give a return of 22i per cent, in the eastern States. Also, whereas a profit limit of I2i per cent, as under the present act, or 10 per cent, as under the previous act, might permit a very adequate return to plants in eastern States, the Western Australian plants might be unable to make any profit at all on the flat rate of bounty.

This is a matter with which the Parliament is not powerless to deal. It is true that, under section 90 of the Constitution, the Commonwealth Parliament has exclusive power to grant bounties and that, under section 51 (iii), those bounties must be uniform throughout the Commonwealth; but there is a way out in section 91 of the Constitution. If we are to use the sources of pyrites in Western Australia properly, we should avail ourselves of them by using section 91 in conjunction with section 96, which, as honorable members know, is the section under which this Parliament grants financial assistance to the States. I suggest that the proper way is for this Parliament to make grants to the States under section 96 to encourage sulphuric acid production and to pass a resolution under section 91 consenting to the States making such a bounty. I refresh the recollection of honorable members by reading section 91, which is in these terms -

Nothing in this Constitution prohibits a State from granting . . . with the consent of both Houses of the Parliament of the Commonwealth expressed by a resolution, any aid to or bounty on the production or export of goods.

Mr Pollard - This is as important as the gold bounty to Western Australia.

Mr WHITLAM - That is so. Western Australia was built on its minerals. What gold was to Western Australia, and silver to Broken Hill, and what base metals are to the Carpentaria and Northern Territory areas, pyrites may also be to vast areas of Western Australia. If we are to have a balanced development of the whole of Australia, and if we are to foster fully the production of sulphuric acid, which is basic to increased primary and industrial production, we should not resort to a flat bounty under section 51, which we have done now for many years, and on which the department is known to have expressed the confidential opinion that it is has not succeeded or is not satisfactorily achieving its purpose. Let us sink our pride and say that a flat bounty throughout Australia is not appropriate in the case of sulphuric acid production and that we will not pay the bounty ourselves. Instead, let us make grants to the extent that is necessary to increase Australia's production of sulphuric acid, and resolve that the States to which we make grants can make bounty payments for this purpose, albeit that they will not be at a flat rate. If we pass a resolution, there is nothing to prevent each of the States paying such bounty as is necessary to increase the production of sulphuric acid from all the Australian sources available.

I hope that, in the committee stages at any rate, some Western Australian members - and I notice that at present in the House there are members from that State in each of the three parties - will move appropriate resolutions. Honorable members opposite who have already spoken should then be satisfied. There will be a very real difficulty for many honorable members and there will be a very great resentment in the community if the Parliament removes any limitation on profits as high as 121 per cent. Many honorable members and a majority of people in the community think that 121 per cent, is a reasonable return on investment. This is not a hazardous investment, because, in every part of the world which is engaged in industrial production and in most of the progressive parts of the world which are engaged in primary production, increasing quantities of sulphuric acid are being used. No one can foresee the time when sulphuric acid will not be required in ever-increasing quantities. Therefore, people who are investing in plants to convert pyrites into sulphuric acid are investing in a certainty. It is not a hazardous or relatively superfluous form of mineral or industrial investment, as one might say gold production is. From the point of view of most people, gold is a luxury but sulphuric acid is not.

I do not think that the honorable member for Capricornia (Mr. Pearce) would achieve his objectives by asking for the mere removal of the section which stands in the 1954 act although, from his point of view, it is better than the section which preceded it in the 1939-1944 act. He would achieve his objective, and Australia would be more equally developed in all parts where there are these resources, if we were to adopt the method I have suggested. The Western Australian companies, which have just as good pyrites available to them but must carry the raw product or the distilled product over longer distances than companies in the eastern States, would also be able to make a profit of 121 per cent., 10 per cent, or whatever figure was determined as a fair one. I suggest, therefore, that in the committee stage, if nobody is prepared to do so at this stage, we should move amendments which will achieve the proper utilization of this very important national asset and which will make available more supplies of this essential product.

While I support the general objective of this bill, I do not think that it is being properly achieved. That would become quite manifest if we had the further information before us which the Cabinet has, which Ministers who are not members of the Cabinet can have if they ask Ministers who are, and which the Parliament should have. However, on the information which we already have, our objective is not being achieved. I have suggested a method by which it can be achieved for the benefit of the whole of Australia.

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