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Thursday, 8 December 1960

Mr DUTHIE (Wilmot) (1:11 AM) .- I want to make a few general comments, without going into details, which have been most ably covered by my colleague, the honorable member for Bass (Mr. Barnard), in whose electorate this great Australian industry is established. There are three good features of this bill. First, the aluminium industry will be retained in Tasmania. Secondly, its capacity will be increased to at least 28,000 tons annually. Thirdly, in spite of the overwhelming use of overseas capital in the new set-up, the Tasmanian Government will have at least a one-third share. We can say, in effect, that the Tasmanian Government has its foot in the door - but only just.

These three positive features of the transaction will actually ensure employment for nearly 800 men without loss of industrial rights and privileges. They will ensure the increase of the work force in the future, if expansion of the industry proceeds according to plan. The transaction will enable the town of George Town to continue to grow, and it will help to bolster the economy of Australia, and Tasmania in particular. I congratulate the Tasmanian Premier, the Honorable Eric Reece, and his Cabinet on their successful fight to retain a voice in the control of this vital undertaking. Actually the set-up is unique. It is a private-enterprise-government enterprise partnership, and there are very few such undertakings in this country.

I now have some criticism to make of the transaction. The Commonwealth Government has run for cover, rather than invest a further £9,000,000 of public money in a publicly owned enterprise. Furthermore, the sell-out of Commonwealth interests, together with Australia's precious bauxite deposits, to two of the most powerful international cartels in the world, is anathema to the Australian Labour Party. When considering this aspect of the matter we must give attention to the defence angle, which my colleague mentioned in the latter part of his speech.

No country conscious of its defence commitments has a moral right to hand over vital defence materials to overseas interests. If it became nationally necessary in the future to re-establish Commonwealth control of such a vital industry, and to regain access to the industry's lifeblood, the bauxite deposits, we would find it well nigh impossible to do so. It would be most difficult to regain control or even any form of direction of this great industry in time of national emergency. It is a scandalous situation in which our bauxite deposits have been practically sold out to foreign cartels. We know that these foreign interests are our friends at the moment, but in this rapidly changing, fantastic world in which we are living, who is to say that they will remain our friends? In any case, international cartels are the friends of no one. They do not recognize national boundaries. That is the main feature of them; they have their roots in all countries, and in time of war they work underground, behind the scenes, in countries that are enemies of one another. We know the story of international cartels only too well. This transaction really amounts to the selling out of our bauxite deposits and our interests in the aluminium industry in such a way that we may never get them back. The denuding of Australia's vital mineral resources, such as bauxite, copper, iron ore and coal, by selling them overseas, with the active connivance of the Liberal Government, could spell disaster for Australia in years to come.

I also criticize the fact that tenders were not called for the purchase of this enterprise. Senator Spooner said in another place, " We have dealt in no direction other than with this particular company ". On Tuesday, 29th November, as reported at page 1810 of " Hansard ", Senator Spooner said, in his speech in the Senate -

In view of the good price offered it was only reasonable that the company should be granted terms which allow the payment to be spread over a period of years.

What rubbish! Good terms, he said! Actually there has been more money invested in these works than this big organization is going to pay for them. Had we called tenders we could perhaps have got £20,000.000 from another international organization. If the Government intended to sell out to an international show, why did it not open up and let all the international shows have a go? Instead, it kept the negotiations in one channel. That is a most unusual way of dealing with Commonwealth assets.

Another objection I have is in regard to the astounding arrangement for the payment of interest. I simply make one comment without going into the details which have been covered by my colleague. It may well be that during the first five years the company will not pay any interest at all, and it may even get out of paying any interest over the period of sixteen years. In our opinion this is another scandalous feature of the legislation.

Another serious omission is the Government's failure to protect the industry from being sold out to some other firm, or from being closed down altogether. The company is investing more than £120,000,000 in an aluminium plant in New Zealand, while it will be investing only £10,000,000 or £ 1 5,000,000 in Tasmania. Bell Bay is small, therefore, in comparison not only with the undertaking in New Zealand but also with vast undertakings in other parts of the world. The failure to ensure against the possible closing down of Bell Bay is a serious omission. Enterprises of this kind have been closed down before. To big companies such as this one £10,000,000 is a small price to pay. Such organizations have bought up small shows and closed them down deliberately in other parts of the world. The Opposition's fear is that if international circumstances changed within the next ten years the company could easily wipe off Bell Bay. In those circumstances the loss of the Bell Bay undertaking might be offset by gains somewhere else. If the price of aluminium fell and it was hard to sell the product, Bell Bay could well be sold out. This loophole in the bill has not been closed, and we consider that this is a very serious omission.

Tasmania has invested £10,000,000 in this undertaking, and it is natural that Tasmania should be interested in the continuation of it. It has retained a one-third share. As I have said, Tasmania has its foot in the door. Obviously it would not want to throw away the £10,000,000 of capital that it has invested.

How did the Commonwealth clear the decks for this sell-out? The original act of 1944 provided that this great industry could be sold only after legislation had been passed by both the Tasmanian and the

Commonwealth Parliaments. A very important amendment was made in 1952. At that time, I said that this amendment would open the door for an eventual sell-out. Mr. Howard Beale, who was then Minister for Supply, said in effect that the intention of the Government was to sell it. Now, eight years later, this has happened. In 1952, section 9 of the act was amended to provide that the consent of the Commonwealth Parliament only was required for the sale of the undertaking. That was the critical point in the history of Bell Bay. Mr. Beale on that occasion said plainly that the ultimate intention was to hand the project to Australian private enterprise when it was developed. Liberal governments do that. They use public money to establish an enterprise and when it is running sweetly and making a profit, sell it to private enterpise. That is liberalism and has been done frequently, particularly in the past five or six years. Mr. Beale said that the project would be sold to Australian enterprises, but when the sale is arranged, we find that Tasmania has a one-third share and the Consolidated Zinc-Kaiser organization has a two-thirds share.

We will not oppose the second or third reading of the bill. That will be a good thing at this hour of the morning. However, though we criticize the sell-out to private enterprise, especially overseas enterprise, we understand Tasmania's position. It is because of Tasmania's position, with its investment in this industry, that we are prepared to allow the bill to pass without voting against it. However, on behalf of the Leader of the Opposition (Mr. Calwell), I move -

That all words after "That" be omitted with a view to inserting the following words in place thereof: - "this House is of opinion that the Commonwealth Government should provide the capital necessary to expand the aluminium industry at Bell Bay and other suitable places and condemns the Government for handing over to foreign interests the development of bauxite deposits and the production of aluminium which are vital to Australia's economy and defence."

As I said earlier, the Commonwealth ran for cover, instead of investing £9,000,000 of public money to keep this great enterprise fully Australian. That is why we have moved this amendment. The Opposition will vote for the amendment, believing that what we have suggested should have been done. Had Labour been in office at this time, this industry would never have been sold to private enterpise, foreign or local.

Mr Barnard - I second the amendment.

Question put -

That the words proposed to be omitted (Mr. Duthie's amendment) stand part of the question.

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