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Thursday, 18 September 1941

Senator McBRIDE (SOUTH AUSTRALIA) - I am sure thai the Tariff Board took into consideration all evidence submitted to it, but unfortunately this is a progressive matter, and what may be entirely correct at one point. may change very rapidly as the war proceeds. It is well known that freight charges, insurance rates, and other such costs are continually increasing as the difficulty in obtaining shipping space becomes more acute. Consequently, it cannot be suggested that bitumen produced to-day could be sold at the price originally submitted to the Tariff Board. Another point which we must consider is that the proposition is based on the assumption that the raw material would be obtained from the United States of America. That, of course, would involve us in dollar exchange liability, whereas a great proportion of the bitumen brought into this country recently was obtained from sterling countries, thus avoiding increased dollar exchange commitments. Another factor which is of some importance is that considerably less bitumen is now being used than was used in peace-time.

Senator Armstrong - It cannot be obtained.

Senator McBRIDE - It is not a question of obtaining the material, but of developing only the roads and highways required for strategic purposes. The normal peace-time roadmaking programme has been abandoned, and consequently the large quantities of bitumen previously required are not now necessary.

SenatorFraser. - That is not altogether correct-

Senator McBRIDE - I suggest that it is a fact. Since this matter has been allied with one particular person, the Senate is entitled to know something about that person whose interests have been advocated so strongly by Senator Ashley.

Senator Ashley - I said nothing about the person concerned.

Senator McBRIDE - The honorable senator mentioned Mr. Craig by name.

Senator Ashley - He applied for permission to float a company.

Senator McBRIDE - That is just what I am saying. It is well that the Senate should be informed in regard to the proposition made by that person. When Mr. Craig, in collaboration with Mr. Watson, made an application for permission to form a company, he claimed that he had a tie-up with a certain Californian company for the sup ply of raw material. He laid great stress on the necessity for such a tie-up, and suggested that a company would be greatly handicapped in this country without some security in regard to the supply of raw material. Unfortunately for Mr. Craig, the tie-up which he had at the time of his application has been discontinued.

Senator Keane - Why?

Senator McBRIDE - I am just giving the facts, and in this case one fact is that Mr. Craig no longer has a tie-up with that company.

Senator Armstrong - People are not prepared to hang around for twelve months.

Senator McBRIDE - That may be the cause, but the fact remains that Mr. Craig does not now have that tie-up. Secondly, Mr. Craig claimed that he also had a tie-up with another company named the Signal Oil Company, and I understand that that arrangement also has been departed from. It can be seen, therefore, that the advantageous position which Mr. Craig claimed to be in when his application was first made no longer exists. Furthermore, it is well that the Senate should know the type of prospectus which was submitted to the Capital Issues Advisory Board along with the application. The suggestion was that it should be a company of 390,000 shares of £1, which would be offered to the public, and 200,000 deferred shares of1s. Obviously that suggestion would not appeal to a competent Capital Issues Advisory Board.

Senator Ashley - That has been varied.

Senator McBRIDE - Whatever alteration has since been made, that was the original proposition. I suggest that the proposal savours very much of company flotation by promoters who are not concerned in the national interest, but rather are anxious to get a rake-off for themselves. Strong objection was taken to that aspect of the matter. The honorable senator claims that the proposal has been varied, but I have no information in that regard. I know that Mr. Craig was written to and asked to put up a new proposal, but I was informed to-day by my officers that no other proposal has been received from him. Whatever the facts' may be in that connexion, the conditions which I have outlined were contained in the original proposal, and it was in these circumstances that the Capital Issues Advisory Board refused the application in November of last year. Mr. Craig was not prepared to accept that refusal, and he then applied to the Treasurer (Mr. Fadden). Since then, a good deal of discussion has taken place in respect, to this matter but, owing to the changed conditions in which we find ourselves in this country, what may have been desirable in peace-time may very well be regarded as completely undesirable in war-time.

Senator Fraser - Was that the guiding factor in reaching a decision?

Senator McBRIDE - As I mentioned to the Senate earlier, a decision has not yet been reached.

Senator Fraser - The Capital Issues Advisory Board made a decision and a recommendation.

Senator McBRIDE - The board made a decision on the prospectus submitted with the application. I know from my experience in connexion with the establishment of munitions factories that, during this critical period, many factors occur which' cannot be ignored. Owing to the extreme urgency of the situation and the continued drain on our resources, it is not possible for us to establish many factories which in peace-time might be considered desirable. For instance, the company which it was proposed to float would require a great deal of plant and we should have to look very carefully into our material and engineering resources to ascertain whether, in view of our more urgent munitions requirements, we could allow such plant to be made available. I have in mind a project which was only recently considered by the Government, and which it had to turn down completely on the score that it could not reduce- productive capacity for the manufacture of the necessary plant because the available man-power was needed for the production of munitions. Honorable senators will realize that the Government has a considerable number of projects in view, including its shipbuilding programme, which is throwing on our engineering resources a great strain, which we are trying to relieve by the expenditure of large sums of money in setting up government factories. I repeat that the matter raised this afternoon is still under the consideration of the Government. I have endeavoured to indicate to honorable senators some of the factors which must receive serious consideration before a final decision can be reached.

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