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Thursday, 12 April 1973
Page: 1415


Mr DEPUTY SPEAKER (Mr Duthie (WILMOT, TASMANIA) - I am hoping that the honourable member for Farrer will soon get back to the statement.


Mr FAIRBAIRN - I certainly will. I hope to show how this statement is putting into operation the socialist platform of the Party. The Minister says:

.   . we will regulate exploration, development, transportation, marketing and use of oil, natural gas and all related hydro-carbons.

One could not get a more perfect socialist state. The statement continues:

Such an Authority would explore, produce, transport and refine petroleum.

Call it 'nationalisation' and 'socialisation', it means the replacement of private industry by state-operated industry. This is something to which the Opposition is strongly opposed. I mentioned the use of new words for this glossed up policy - words such as 'energy budget'. I do not have the faintest idea what an energy budget is meant to mean, but it sounds very good. I am sure our modest member could write a thesis on just what energy budget' is meant to mean.

Apart from the new words used, let us look at the policy which was implemented by the previous Government and which was an extremely successful energy policy. It was our policy, when in government, to assist in the discovery, assessment and development of fuel and energy resources. We did this in a number of ways, all of which were extremely successful. First, through the Bureau of Mineral Resources and the Joint Coal Board there was mapping, measurement and assessment of our coal resources. Honourable members know, if they have read of the national development output in this field, that we now have proven resources of recoverable black coal of about 13,000 million tons and recoverable brown coal of about 10,000 million tons. There has been considerable exploration, particularly in Queensland but in other areas as well. There is no doubt that there is potential for proving additional reserves well above those of which we already know. The previous Government assisted in the development of hydro-electric power resources in Australia. It did this both with the Snowy Mountains Hydro-Electric Authority and in Tasmania where it gave financial assistance to that State. It encouraged the search for uranium and the production of uranium.

The revised policy which I introduced when I was a Minister in 1967, led to a very considerable increase in the discovery of uranium. This was because it made it permissible for people who discovered new deposits to export a small percentage of those deposits provided, of course, it complied with all the requirements. The Minister still had to agree to the exportation, it had to be exported under safeguards and there had to be adequate availability of uranium in Australia. Provided this all happened, people had the right to export a percentage of a new discovery. This has led to the discovery of proven reserves in Australia which at present total more than 100,000 tons and probably reserves of more than double that quantity. In fact, some contracts had been written, but I understand they have been frozen by the present Government. There was also the development of techniques in atomic energy. Here again, when the Opposition was in government it set up the Atomic Energy Commission which has done a tremendous amount to develop an understanding of atomic energy in Australia. That is a first class organisation. In fact, when we were in government we had gone as far as to plan a generator at Jervis Bay but, unfortunately, when the costs were looked at it was discovered that this would be more expensive than had been anticipated and so the project was suspended. I hope that in the not too distant future Australia will have its first generator, making nuclear power from uranium. I am sure that this will be a great advantage to Australia in helping to produce energy, so saving some of our other resources.

Of course, the previous Government was responsible for proving large deposits of oil and gas. It is noteworthy, of course, that before we came into government in 1949 the Ampol company had been trying to interest an American company in coming to Australia. The American company showed some interest but the moment that it was proposed that Australian banks should be nationalised it immediately threw the proposal aside and said: 'We have been nationalised in one or two other places in the world and we are not prepared to be nationalised in Australia'. It was not until 1953 that Ampol succeeded in getting to Australia an American company, and between the 2 of them they discovered Rough Range. This was a very small deposit and although it led to a boom at the time there was no follow-up. So the search for oil went downhill. The then Government said: We must do everything we possibly can to encourage people to search for oil.' It introduced subsidies and taxation concessions. The Minister in his statement pours cold water on the concessions and says that the Government is paying for some of these things. But what would have happened if we had not paid? It was obvious that the search for oil in Australia was drying up and would not have been carried on. We would not have the oil we have today or the conditions under which we are now able to supply more than 60 per cent of our own requirements from crude oil and to supply 4 of the major cities of the Commonwealth with natural gas. Shortly we will be able to supply a fifth major city.

Again we have not allowed these facilities to be exported. The only exports in this area have been of liquefied petroleum gas which has been produced as a result of the drawing off of natural gas. This has earned funds for us overseas. Eventually one can see some of it being used in Australia. I have been talking about the energy policy of the previous Government. I want to stress that under our policy we realised that while we had to do everything possible to assist in the discovery, assessment and development of fuel and energy resources, the final choice of the fuel was in the hands of the authorities - the State Electricity Commission in Victoria or equivalent authorities in the other States. We have to realise that these people will make the choice of fuel which suits them best.

It does not matter if the honourable member for Hunter (Mr James) wants them to use black coal. They will say: 'We have used that once already. We were held to ransom by the New South Wales miners. We will use brown coal'. They will continue to do that, so that it is not possible to have what is loosely called an energy budget or an energy and fuel policy while users have the undoubted right to select the fuel which serves them best. The Minister acknowledges this because he has said the fuel policy is heavily dependent on the closest co-operation between the Commonwealth and the States. The basic difference between the present Government and the previous government in respect of an energy policy is that we believe in private enterprise assisted by the Commonwealth or by the Commonwealth and the States where it is necessary.

The present Government believes in a staterun organisation going right through from exploration. It is even trying to turn the Bureau of Mineral Resources into something which it has never been before so that it can drill for oil. The Government wants transportation in its Commonwealth-owned pipes. It will even have refineries.


Mr Clyde Cameron (HINDMARSH, SOUTH AUSTRALIA) - Hear, hear!


Mr FAIRBAIRN - I am glad to have confirmation that that is what the Labor Party stands for. I do not stand for that. I believe that private enterprise, where it is available, ready and willing to undertake a job, does it better. It also uses funds which do not have to be diverted from the taxpayers. Therefore the taxpayers' funds are available in other areas in which funds cannot be drawn from private enterprise.


Mr James - You have a lot of investors in the Liberal Party.


Mr FAIRBAIRN - There are a lot of investors in Australia and I can assure the honourable member that they are not all in the Liberal Party. The difference is that we believe in private enterprise, the Government believes in a state-run show. We believe in overseas assistance where it is necessary in capital and techniques. Of course, the Government does not believe in capital assistance from overseas and has done everything it can to block it. We believe in close co-operation with the States; the Government believes mainly in the mailed fist approach, although it realises that that cannot always work.

The Minister goes on in his statement to complain that the Commonwealth has provided some of the oil search funds, an amount he estimates at $245m. I repeat: Where would we be without those funds? He claims that the funds have been put in but there has been no equity. I am interested to read in the Minister's statement that the authority he is planning to set up is to explore, produce, transport and refine petroleum. It will employ its own personnel and equipment (Extension of time granted.) I thank the House for the extension of time. The authority is to employ its own personnel and equipment in search. Is there any need for that? I appreciate that one or two countries in the world have their own search organisations but I do not believe it is necessary here because there are a number of Australian-controlled and operated companies which carry out search. The authority will let out contracts for search. These contracts are let out now. When we make available a licence or a permit to explore there is a work requirement. There are relinquishment requirements. So much money must be put into the work. Returns must be furnished and areas must be relinquished which are then available at a later stage to others. It is even planned to take up shares in companies. I must say that that horrifies me. I do not know how it will be done. I have no doubt that Normie Foster, the Minister's friend, will be put on the board of some of these companies to give them the advantage of his great brain in this area.


Mr Connor - He will stir them up.


Mr FAIRBAIRN - He may stir us up but he will not stir up any oil. Farm-ins and farm-outs are to be granted, but all this is doing is putting up the ante because we already have a system under which considerable amounts are taken by the Government. It is interesting to look at this take because the Minister said that on a list he. had looked at we were number 49 out of 50 countries in order of government take. I would like to learn how he arrived at that figure. The Senate Select Committee on Off-Shore Petroleum Resources produced an authoritative report. In relation to the Government take as a percentage of the divisible profit, information was provided by Mr Abbott, who was then Chairman of the Australian Petroleum Exploration Association, an organisation which the Minister would not meet last week. I am sorry that he did not, because I would have had an enjoyable lunch if he had agreed to go there.


Mr Connor - I will make my statements on major policy matters in the House.


Mr FAIRBAIRN - But you can still meet an organisation to discuss matters.


Mr Connor - After the statement is made here is the appropriate time, and not before.


Mr FAIRBAIRN - The Government take as a percentage of the divisible profit in the United Kingdom is 50.4 per cent; Denmark 45.8 per cent; Germany 50.6 per cent; Norway 55.2 per cent; France 47.72 per cent; the Unittd States 46.8 per cent; and Australia 52.8 per cent. In other words, according to the table we were the second highest. Mr McMahon, who was Treasurer at the time,, said that he could not accept the figures in their entirety because of the great difficulty in assuming what could be written off in the way of income tax deductions. I agree with him. But we know that in other parts of the world - for example in the United States of America - there are certain ways in which oil companies write things off which we do not have in Australia.


Mr Keating - What a shame!


Mr FAIRBAIRN - I am referring to the depletion allowance in the United States. It was pressed for strongly here and resisted by the previous Government because we wanted to retain a high take. I come now to one or two other points in the statement. The Minister said that Labor strongly opposed the Petroleum (Submerged Lands) Legislation when it was in Opposition. But it is interesting to know that at least 2 Labor governments, that of Mr Reece in Tasmania and that of Mr Dunstan in South Australia, agreed with it so there cannot be that much wrong with it. Secondly, the Minister said that the Australian continental shelf of 1,250,000 square miles is the world's largest. I think whoever prepared that information for him ought to take a second look at it, because the largest continental shelf is Russia's, Canada's is second, the United States of America's is third and Australia is very slightly behind the United States. The Minister said that this vast shelf is beng explored on a non-intensive basis. I repeat again that there are work requirements. These have been set, and in most cases - I think in almost all cases - they have been exceeded. There are relinquishments so that people cannot indefinitely sit by and sit on a prospective area. They must undertake this work requirement or relinquish the permit, and they have a legal necessity to relinquish certain areas as they go.

The Minister complains that only 3 rigs are drilling on the North West Shelf but there are 40 rigs drilling in the European area. First of all, of course, there is enormous demand for fuel in Europe and that is one of the reasons why it is a more sought after area if oil can be discovered there. The other point is one on which I now find myself substantially in agreement with the previous shadow Minister for National Development. I suppose he could be called my predecessor as shadow Minister for National Development, the honourable member for Dawson (Dr Patterson). He said: there is an urgent and justifiable need substantially to increase the exploration subsidy, particularly to Australian companies.

He went on to state:

One of the principal reasons for the reduction in oil exploration activity is the Government's absurd policy -

This was our Government, of course, at the time - with respect to the guaranteed price for domestic indigenous crude oil. The domestic price for indigenous crude oil is pegged at the import parity price prevailing as at October 1968. This price is supposed to apply to 1975. When this price was first pegged the import parity price of crude oil was significantly lower than the Australian guaranteed price. This gave the industry a decided incentive to explore for oil. But early in 1971 there were substantial increases in world prices, to the degree that producers of Australian oil are now receiving prices around 20 per cent below the real import parity price. Thus despite severe inflation which has played havoc with exploration and development costs, the Government refuses to increase the price of Australian oil to _ at least equivalent to the non-dumped import parity price.

So those are the views of the present Minister for Northern Development. I hope they are also the views of the Minister for Minerals and Energy and I hope he will implement them and we will see an increase in the search for oil in Australia.







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