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Wednesday, 7 December 1960

Mr FORBES (Barker) .- Mi. Deputy Speaker, I rise to support the arguments that were so ably put by my friend, the honorable member for Wakefield (Mr. Kelly), about the position of the South Australian companies which manufacture sulphuric acid from indigenous materials. The honorable member for Lalor (Mr. Pollard) has stated that the Opposition supports this bill. Presumably, he spoke on behalf of the Opposition when he said that. I am not so sure in my own mind whether I or other honorable members on this side of the House should support the bill, but I shall support it. I shall do so for one reason only: If I and enough of my colleagues oppose the bill, the sulphuric acid manufacturers and the producers of the indigenous materials would not get any bounty at all. At the same time, I have doubts about the equity and the wisdom of this measure so far as it will affect some of the manufacturers who produce sulphuric acid from indigenous materials. I have genuine doubts about the situation.

The whole position turns on the Government's obligations. What are the Commonwealth Government's obligations to those manufacturers who, as my honorable friend from Wakefield said, at the exhortations and urgings of this Government gave up producing sulphuric acid from imported brimstone and established the expensive plants required to produce it from indigenous materials? My understanding of the Government's obligations is quite clear. I have no doubt in my own mind where those obligations lie. The Government assured the manufacturers, before they embarked on the expensive process of establishing these plants, that they would not suffer vis-a-vis the companies which manufacture sulphuric acid from imported brimstone if they undertook this capital investment. That is the criterion by which we must judge the bounty provided for in this bill. In other words, if these manufacturers do in fact suffer vis-a-vis those who produce sulphuric acid from imported brimstone, the Government, in adopting the level of bounty provided for in this measure, has not lived up to its obligations.

Whether or not the manufacturers who use indigenous materials do suffer - whether or not the Government has lived up to its obligations - depends, as my friend from Wakefield has said, on certain circumstances. Those circumstances cannot be determined except by reference to the costs and trading positions of th: individual companies. The costs, trading positions and circumstances generally of these firms compared with the manufacturers who rely on imported brimstone are not revealed by the report of the Tariff Board on the Sulphuric Acid Bounty Act 1954-1959. because the recommendations of the board in this respect are based on an average cost of ^reduction and not on the cost of production of the highest-cost producer. There is no indication in the report where indi";dual companies stand. But it is clear that the level of bounty provided for in this bill will not meet the situation of all the companies, because, as the honorable member for Wakefield has explained, an alternative level of bounty is recommended. In other words, the Tariff Board has said, in effect, " The Government itself has to determine the position. If it feels that it is obliged to compensate the highest-cost producer for the disabilities he suffers compared to the manufacturer who uses imported brimstone, it will pay a bounty at a particular level. If it feels that the bounty should be based on an average of the cost-of-production figures of all the producers, it will adopt a somewhat lower figure. In this instance, the Government decided to adopt the lower figure.

If an investigation reveals that the manufacturers who rely on indigenous materials, and particularly the South Australian firms of Sulphuric Acid Limited and Nairne Pyrites Limited, suffer by comparison with the companies which use imported brimstone for themanufacture of sulphuric acid, in my view the Government has a moral obligation to redress the situation by paying a bounty or by some means other than that proposed ;:i this measure. I ask the Minister for Air (Mr. Osborne), who is at the table, to bring to the attention of the Government the position of the South Australian companies which has been outlined by the honorable men,Der for Wakefield and myself, and to Ask the Government specifically to investigate the costs and trading positions of those companies in order to determine whether, on that basis - and on that basis alone - Government has in fact honoured its original undertaking to those companies by introducing the bounty provided for in this measure

There is one other reason why I believe that the Government should examine the position very closely. It is that there is a possibility that this legislation will lead fo a rise in the price of superphosphate in South Australia. I am sure all honorable members appreciate the importance of superphosphate to the high rainfall areas of that State. There are huge areas in my electorate which could hardly grow one blade of grass suitable for stock feed witho't the application of great quantities of superphosphate. Honorable members will appreciate also that at the moment primary producers are not in a position to meet an increase in the price of this big element in their cost of production. I submit that it U of vital importance that no action by this Government should place them in the position of being faced with a possible increase in the price of superphosphate.

For the two reasons I have given, I ask the Minister to convey my representations to the Government, and to request the Government to re-examine the position with a view to ensuring that the provisions of this measure do fulfil the Government's obligation to the companies concerned in the production of this material.

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