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Friday, 21 May 1926

Senator GRANT (New South Wales) . - I should like to remind some honorable senators that Henry George, in his work, Progress and Poverty, set out the important formula that all industries which were in the nature of a monopoly should be controlled by the State or the municipality. The supply of oil is an industry in the -nature of a monopoly. It came as a surprise to most people when a few years ago they were informed thatJohn D. Rockefeller, in New York, was able to control the price of kerosene throughout the world. Since that time other companies have come into existence. So far as I have been able to ascertain, the British Imperial Oil Company and the Vacuum Oil Company have come to an " honorable understanding " regarding the disposal of petrol in Australia. Little or no undercutting is practised. The Government some time ago realized that, to a certain extent, the people of Australia were being exploited by reason of the high prices charged by these corporations for motor spirit, and, in order to prevent a continuance of that exploitation, it very properly decided to establish the Commonwealth Oil Refineries Limited . in conjunction with the Anglo-Persian Oil Company. At that time the price of petrol was about 3s. a gallon; it is now about 2s. a gallon. I admit that that result may not be entirely due to the operations of the Commonwealth Oil Refineries Limited. But even 2s. a gallon is beyond the price charged for similar spirit in some other countries. Nothing would be more acceptable to tens of thousands of people in the Commonwealth than a substantial decrease in the price of petrol. I do not see any reason for the introduction of heat into this debate because of the statement that the Commonwealth Oil Refineries' motor spirit was at one time hot of a particularly high quality. The Leader of the Government in this chamber, when introducing the bill, stated definitely that at the commencement of its operations the company did not supply spirit of the required standard.

Senator Pearce - I made it clear that that was at the commencement of the company's operations.

Senator GRANT - Yes. In the same sentence the Minister also said that to-day Commonwealth Oil Refineries' motor spirit is equal to any on the market. I, therefore, fail to understand why so much emphasis has been laid upon his first statement. That stage of production has passed and to-day Commonwealth Oil Refineries' motor spirit is equal to the best obtainable in Australia. That fact cannot be too strongly stressed. Considering the small proportion of the oil required by

Australian consumers which is supplied by the Commonwealth Oil Henneries Limited, the Government would be well advised to consider the advisability of granting immediately further financial support to that company to enable it to extend its operations. Although only 6 per cent, or 7 per cent, of the petrol consumed in Australia is supplied by the Commonwealth Oil Refineries Limited, it may have a restraining effect on the other companies in the same way that the Commonwealth Woollen Mills kept down the price of the material required for clothing the Australian Army. But whether that is so or not, in view of the fact that these companies have practically enjoyed a monopoly of the supply of oil in the Commonwealth - they have been working in harmony all the time - and that this industry is one that in its nature lends itself to monopoly, it is highly essential, in my opinion, that the Government should immediately consider the advisability of making additional financial provision, so that the Commonwealth Oil Refineries Limited may extend its operations throughout the Commonwealth. I do not sec why Tasmania should be excluded from the benefits that flow from the establishment of this refinery. We are informed that the company's product is not available in Tasmania. The supply in New South Wales is certainly very limited. In fact, the benefit of the establishment of the refinery seems to be mainly derived by Victoria. That was not my intention in voting for the original bill, nor is it my purpose to support this bill if the product of the company is to be confined exclusively to one State.

Senator Thompson - The product of the Commonwealth Oil Refineries Limited is available in Sydney.

Senator GRANT - As the Commonwealth Oil Refineries Limited supplies not more than 7 per cent, of the total petrol requirements of the Commonwealth, its output is so small as to be almost imperceptible.

Senator Thompson - It will grow.

Senator GRANT - But not unless the Commonwealth gives the company further financial assistance. While the Government has very properly put into operation a plank in the platform of the Labour party, it is not doing so with the vigour and determination that the occasion warrants. I hold no brief for or against the companies that have been supplying oil to the Commonwealth during the past, but I think it is a very wise step on the part of the Government to go into the oil business, realizing that when private enterprize possesses a monopoly it cannot be relied on to give a fair deal to the public. I should welcome any proposal on the part of the Government to go into any business that would affect a monopoly, and no doubt by and by it will see its way to do so. I should not like to say that it is determined to enter into the oil business because a large number of wealthy people are affected by the price of oil, but it is a fact which cannot be gainsaid that it is not embarking upon it as wholeheartedly as it should. With the high overhead charges one would expect from a company like the Anglo-Persian Oil Company, 'it is difficult indeed, without the supply of adequate capital, for the Commonwealth Oil Refineries Limited to carry on successfully against the keen competition it has to face. T hope that the Government in the very near future will see its way clear to review the position again and supply the refinery- company with additional capital which will enable it to extend its operations not only in the favoured State of Victoria, but also throughout New South Wales, South Australia, Western Australia, and Queensland, not forgetting,, also, that there is a small State like Tasmania somewhere down in the Southern Ocean.

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