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Thursday, 18 September 1941

Senator KEANE (Victoria) .-I listened with interest to the speech by the Minister for Munitions (Senator McBride), and agree that the circumstances in regard to this application are substantially as has been stated by him. When it was represented to Mr. Craig that the original prospectus provided for the issue of 200,000 shares at1s. each, he said that that could be completely eliminated, because he was anxious to get on with the work. The Capital Issues Advisory Board has on three occasions authorized the issue of deferred shares by other companies. Craig had a connexion with two oil companies in the United States of America and on three trips to America he expended £5,000. One of his engineers, when on his way back to Australia, travelled with Sir Norman Brookes of. Melbourne, and then an application was made by the group with which Sir Norman Brookes was associated in order to " crib " Craig's oil supply. Another application then had to be made, and, when it went, before the Capital Issues Advisory Board, there was also an application by Sir Bertram Stevens, of New South Wales, who represented a group which 1 contend purloined Craig's brain and organizing ability by taking from him his oil connexion. In certain correspondence which I shall give to the Minister, there is a statement in a letter written to the Signal Oil Company, in which that company was told " not to waste its time with Craig, because he had no political pull ". The Minister will find something on the file to substantiate my remarks.

Senator McBride - The honorable senator does not suggest that anybody else has been given permission to undertake this work?

Senator KEANE - I am suggesting that, if there had not been some intervention, the other company would probably have got away with Craig's proposition.

Negotiations have been in progress for nineteen months, and practically every member of the Cabinet has had the matter placed before him. On three occasions, Craig was in a position to carry out his project, but under the law as it stands, a new company cannot be launched unless its formation is authorized by the Capital Issues Advisory Board.. With that legislation I am in entire agreement, but I suggest that muddling has occurred in connexion with this case during the last nineteen months.

It is claimed that Craig's proposition is economically sound. Ordinarily, the policy of this Government has been to give effect to recommendations of the Tariff Board. The fact that the board reported in favour of the proposal is one reason why the Government should grant the company's application. Another strong reason is that oil tankers are not readily available. Assuming that the application is granted, Mr. Craig will have to leave immediately for the United States of America, and he could do nothing in the matter unless a supply of tankers was assured. I suggest that Craig, not the Government, must accept all responsibility in regard to tankers. I have made at least five attempts to see the ex-Prime Minister (Mr. Menzies) in regard to this matter, and I protest against the great difficulty which private members have experienced in interviewing the heads of rais and other governments. The Clerk of the Senate typed a memorandum which was sent to the ex-Prime Minister, seeking permission for me to interview him for five minutes, but five months elapsed before I was able to have a word with him. Ministers should see that their officers are instructed that senators and members at least should have priority of access to members of the Cabinet. The ex-Prime Minister undertook to consider this matter carefully. The Prime Minister (Mr. Fadden) telegraphed to me yesterday as follows: -

Have perused file. Will submit application to my Cabinet to-morrow.

When Broken Hill Proprietary Company Limited sought permission to increase its capital to £25,000,000, the Prime Minister, who was then Treasurer, lauded the efforts of that company in being able to enlarge its capital to that enormous amount, but, when Mr. Craig wished to do something on a much smaller scale, every possible obstacle was placed in his way. Despite the war, there is urgent necessity for the establishment in New South Wales of the proposed cil refinery. Senator Spicer knows that, with the discovery of oil in Gippsland, a refinery will be required there.

Senator McBride - A different kind of refinery altogether.

Senator KEANE - No. Mr. Craig's proposal was to bring crude oil from America, and refine it in Australia. There is every necessity for the establishment of the industry.

Senator McBride - Does the honorable senator suggest that it would be economic, to obtain tankers from America when the journey can be shortened by one-half by obtaining oil from the Netherlands East Indies?

Senator KEANE - I contend that Mr. Craig's proposal is economically sound. Crude oil could be obtained from America and refined in Australia, and the petrol that would be produced is badly needed in this country. The refinery could be adapted for the treatment of oil from the various oil shale fields in New South Wales. Therefore, the whole case in favour of the proposal is sound. It is regrettable that the matter has been bandied from board to board, from minister to minister, and even from Cabinet to Cabinet. There has been such a game of battledore and shuttlecock that it is not surprising that the applicant is sore over the matter.

Senator McBride - His application has been refused once.

Senator KEANE - No. His application has never been withdrawn at any time, and the file of the Capital Issues Advisory Board should be examined to prove the correctness of my statement. The applicant persists in his original application, although the ex-Prime Minister (Mr. Menzies) suggested that he should submit a new one.

Senator McBride - He is not prepared to give information that is asked of him, apparently.

Senator KEANE - To the best of my knowledge, he has supplied all information that has been demanded.

Senator McBride - No.

Senator KEANE - I have seen a draft of his reply, and am convinced that this protest to-day is justified. I hope that a decision will soon be arrived at.

SenatorFRASER (Western Australia) [4.6]. - This discussion to-day has given to honorable senators an opportunity to see the inner workings of the Capital Issues Advisory Board and also to discuss the report of the Tariff Board which inquired into the position of the proposed company. In the light of that report, which is dated the 8th May last, and of what Senator Keane has said this afternoon, it would appear that the Government has attached more importance to the evidence of the major oil companies than to the statements made by the applicants.

Senator McBride - No evidence was given by the major oil companies.

Senator FRASER - That is not so. The Tariff Board inquired into the position of the proposed company.

Senator McBride - And it has submitted a report.

Senator FRASER - I do not hold any brief for these people, but I do say that the Tariff Board submitted a report on the evidence submitted to it.

Senator McBride - The Tariff Board does not take cognizance of the effect of the war on our economy. It is not asked to do so.

SenatorFRASER. - If that be the only reason for refusing the application, why the delay in arriving at a decision? Is it necessary to hold up the application for several months? The reasons for not granting the application are based on evidence submitted by the oil companies. The Minister referred to deferred shares in the proposed company. If the Government were disposed to refuse the proposed company's application because of some difficulty in connexion with its deferred shares, the Government could have asked it to confine itself to certain requirements before the application was granted.

Senator McBride - The application has not been granted.

Senator FRASER - It has not been refused. If the Government honestly fears that this proposed company may be a bogus concern, it is entitled to impose certain restrictions on the company. The

Minister also referred to the necessity for saving dollar exchange, but what has the Tariff Board to say on that subject ? The following extract from the board's report hardly bears out the Minister's statement : -

It is very doubtful whether the local production of bitumen would effect any saving in non-sterling exchange. The present tendency is for increasing proportions of bitumen to be imported from sterling sources and the indications are that any saving in non-sterling exchange now used for the purchase of bitumen would be counterbalanced, if not exceeded, by the non-sterling exchange needed for the purchase of crude oil.

That statement does not contain any reason for not complying with the company's application.

Senator McBride - It is a factor which must be taken into consideration.

Senator FRASER - Admittedly. This controversy has arisen out of the delay on the part of the Government in coming to a decision. What is the reason for the delay? I quote again from the report of the Tariff Board-

Reference has already been made herein to a suggestion on behalf of the Shell Company of Australia Limited that it should be left to the cartel companies to decide when a refinery or refineries for the production of bitumen in Australia should be established and that outsiders should not be permitted to enter the business. The Board has not taken any cognizance of the suggestion in its consideration of this question, nor does it offer any comment thereon. It regards the matter a.' one of policy for determination by the Government.

I have a suspicion that the evidence tendered by the major oil companies isthe reason for the delay in coming to a decision.

Senator McLeay - If the company's application were granted, would the honorable senator invite his friends to invest their money in this concern?

Senator FRASER - That is not the point. I have risen in support not of the proposed company, but of a principle. 1 want to know the reason for the Government being unable to come to a decision in this matter. Senators Ashley and Keane have told us that, because of the delay on the part of the Government in coming to a decision after it had received the Tariff Board's report, this man had lost his connexion with certain Californian companies. I regard the report of the Tariff Board as the opinion of an impartial body which has no axe to grind. After reading the Tariff Board's report I am of the opinion that the Government has given undue weight to the evidence of the oil companies and has ignored certain references in the report. I wish to make it clear that I do not know this proposed company, and am not in any way connected with it; but I am convinced that the Government has left itself open to criticism because of its failure to come to a decision. I cannot see any reason why a decision could not have been reached long ago.

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