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Tuesday, 8 November 1910

Senator STEWART (Queensland) . - This Bill represents a very feeble and timid attempt to deal with a very important matter. The question which we have to settle is whether it is worth while making an effort to establish the oil industry in Australia - whether it is in the interests of the community that we should establish the manufacture of kerosene within our territory. If that object be a desirable one, the measure before us represents only an infinitesimal portion of what it is necessary for us to do. I would like honorable senators to recollect that in dealing with this industry we shall have to face one of the most powerful trusts in the world - I refer to the Standard Oil Trust. The policy of that corporation has always been to beat down opposition, wherever it shows its head, by the exercise of superior force. 1 have not the slightest doubt that it will still continue that policy in Australia. Its object will be to beat down this attempt to deprive it of the Australian . market. Some persons may say, " It does not matter much to the Standard Oil Trust whether it loses the Australian market." From a monetary point of view that statement may be perfectly correct. But the Standard Oil Trust is like many other trusts in that it cannot brook successful opposition anywhere. No matter how small may be the market which is available, it will wish to force an entrance. Under this Bill, what assistance is it proposed to offer to the only company which has hitherto engaged in the kerosene industry in New South Wales? It is proposed to grant it a bounty of 2d. per gallon upon its production of kerosene during the first year that the measure becomes operative. In other words, during that period the company will receive bounty upon only 960,000 gallons of oil.

Senator Pearce - That is more than three times the quantity which it is now turning out.

Senator STEWART - I quite believe that. But we do not wish any company which may be engaged in the industry merely to produce 1,000,000 gallons per annum. Our desire is that it shall produce sufficient to supply the Australian demand. During the year 1908 we imported nearly 17,000,000 gallons of kerosene, and during the current year, I suppose that the quantity imported will aggregate 20,000,000 gallons.

Senator E J RUSSELL (VICTORIA) - Last year we imported 19,000,000 gallons.

Senator STEWART - In these circumstances it must be evident to everybody that the proposed bounty will be of very little assistance to the' Commonwealth Oil Corporation.

Senator Millen - If we offered it a bounty of is. per gallon, it could not im- 0 mediately produce the quantity that we require.

Senator STEWART - Probably not. But unless we- are prepared to go forward, -at is idle for us to endeavour to establish the' industry in this way, because as soon as we do so the Standard Oil Trust will begin to1 undersell the Commonwealth Oil Corporation so as to make it impossible for that corporation to carry on operations. Are honorable senators prepared to fight the Standard Oil Trust ? If they are not, it is much better that we should leave this industry alone. It may cost the Commonwealth, not £50,000, but ,£100,000, or even £200,000, to place it upon a firm footing. We have sufficient shale to enable us to produce all the kerosene that we require for generations, and we ought to "be independent of foreign countries for our supplies of that commodity. We all "know that kerosene is becoming a more and more necessary article of human consumption, and is used, not merely for lighting, "but also for cooking and heating purposes, and even for the production of power. In fact, its use is being widened every year. Probably in the near future it will be a much greater national necessity than it is now. For that reason I am willing to pay the price that may be required to establish the industry. But I 110 not think that the proposals which are embodied in this Bill will prove sufficient. The Leader of the Opposition has stated, by way of interjection, that, even if the Commonwealth Oil Corporation received a bounty of is. per gallon it could not supply the requirements of Australia within the next few years. But if that Corporation be driven out of the market by reason of the Standard Oil Trust supplying the public with oil at 2d. or 3d. per gallon less-

Senator Chataway - It will be a jolly good thing for the consumers.

Senator Millen - Where is the Commonwealth Oil Corporation now selling its annual output of 300,000 gallons? It can sell all that it produces.

Senator STEWART - It is a matter of common knowledge that large trusts frequently allow small concerns to live, in order that they may be able to say they do not enjoy a monopoly. Probably that is why the Standard Oil Trust and the Borneo Oil Company have allowed the Commonwealth Oil Corporation to sell its annual output of 300,000 gallons. But the moment they realize that a serious attempt is about lo be made to establish the industry in Australia, they will declare war, and the extinction of the Commonwealth Oil Corporation will become their definite policy. That is the position that we shall have to face sooner or later. So long as they think that the Commonwealth is merely playing with the kerosene industry they will not worry themselves. But the moment they see that ari. earnest effort is to be made to put the Commonwealth Oil Corporation upon its feet, they will deal it a staggering blow. Will it throw down the gauntlet to the importing companies, or will it allow the manufacture of kerosene from Australian shale to be abandoned? As far as I am concerned, I am in favour of the establishment of the industry in Australia on sound lines. I know that it will cost something, but the people of Australia ought to be prepared to pay the cost. It is. not a mere question of getting kerosene cheap. A thing may be cheap and very nasty.

Senator Vardon - What will be the cost ?

Senator STEWART - I have not the slightest idea. It depends altogether on whether the companies concerned are willing to enter into a war of competition with any companies that may be established in Australia.

Senator Vardon - How long will it take Australia to produce 20,000,000 gallons of kerosene per annum?

Senator STEWART - Why should it take very long?

Senator Vardon - The company have been a good while at die work now.

Senator STEWART - But they have had no encouragement.

Senator Millen - There must be something attractive in the industry when an English syndicate put up £1,250,000 to start it without a bounty. This bounty will put them in a better position.

Senator STEWART - The company carrying on business in New South Wales has had to reconstruct, and has been in deep water for a considerable time.

Senator Millen - The company has been getting more capital.

Senator STEWART - If it had not been in the hands of men of substance - some of them men of very large fortunes - it would have been brought down years ago. A large amount of money has been invested in developing the industry.

Senator Rae - A good- deal of the money has been very unwisely spent.

Senator STEWART - Very probably. I was astonished at the kind of the country through which the railway has been carried. I am not prepared to pass any opinion as to whether a good deal of. the work has been unwisely undertaken. Very likely it has been. But the company was promoted by English capitalists who knew little or nothing of Australian conditions ; and we all know what happens when an' English company puts its affairs into the hands of people in Australia, and gives them carte blanche. The money flows like water, and useless expenditure is very often incurred, with the result that the company frequently goes to the wall. But the question with me is whether Australia is going to establish the oil industry or not.

Senator Vardon - Can the honorable senator say whether the amount proposed to be granted will place the company on its feet?

Senator STEWART - I have had no communication with any official of the company for a very long time. I remember once being told by an agent of the company that in three years it would be able to supply the Australian market with kerosene.

Senator Vardon - It is a question of putting money into the concern.

Senator STEWART - Will this bounty give sufficient encouragement to enable the Australia company to supply the Australian market in three years. That cannot be done if the Standard Oil Company and the Borneo Oil Company choose to fight the Australian company ; because there is nothing in this bounty of 2d. per gallon which of itself can lead to success. As I have pointed out, if the importing companies choose to reduce their selling price by the amount of the bounty, they will immediately handicap any company that engages in the industry in Australia, and prevent the expansion of its business. I do not say that that will be done, but it may be done. We all know that that happens frequently in the war of commerce, and it may happen in this case. I shall vote for the second reading of this Bill, and am glad to see that something is being done towards the establishment of the oil industry in this country. What is proposed may not be all that I should like, but still it is a step in the right direction, and even if failure should appear to be the immediate result, I hope that the people of Australia will determine that ultimately this industry shall be established within their borders.

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