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Wednesday, 27 September 1972
Page: 1268

Senator LITTLE (Victoria) - The matter of urgency which has been proposed by the Australian Labor Party is not one which the Australian Democratic Labor Party can support. We had expected that if a move of this character was to be made there would have been a far more worthwhile motion containing some positive propositions which could have enabled some action to be taken to clarify the situation. However, what we have before us is a political statement which is merely a criticism of the Government. One cannot help thinking that on the eve of an election it is an attempt to make political capital from an incident that has occurred and that if this situation had not arisen we would not have heard anything of the matters contained in the Labor Party's resolution. The Labor Party would not have been concerned about the employment of the people if that matter had not suddenly been drawn to its attention. I think the whole proposition goes much further than that and 1 propose to develop that suggestion in the course of my remarks. First 1 shall deal with some of the suggestions that were made by the Minister for Works (Senator Wright).

The stand which has been adopted in this case frankly surprises me. There is a responsibility on the Federal Government of Australia in the matter of trade, irrespective of what is the situation between the States. We accept that trade is a highly controversial matter between the States because they are rivals for trade. Different States want to sell gas and the Australian Gas Light Co. in Sydney will be the buyer. It is natural that there should be State rivalries in supplying that market. A solution to this problem which would be popular in one State would not necessarily be popular in another State, nor can we expect there to be complete co-operation between the States throughout the whole of Australia. If we accept this we begin to wonder why the proposal of the Australian Labor Party is so innocuous. Is it the position that the Premier of South Australia is very keen to sell the gas and, being of the same political complexion, for this reason the resolution has been broken down to the innocuous proposition which has been brought into the Senate today? One could gain that impression from what one reads in the newspapers.

One can come to no other conclusion, perhaps, than that the Australian Labor Party does not care where the pipe comes from, so long as South Australia can sell its gas to Sydney. As a short-range policy that might be a quite justifiable attitude for the South Australian Premier to take. There are other people in Australia today who, like the Minister for Works, suggest that because of our terms of trade Japan may not trade with us in wool and iron unless we take from Japan things such as the pipe which is the subject of this contract. I do not accept that suggestion. I have made a study of the Japanese economy and Japan's situation. Japan is very dependent upon primary materials, some of which it can obtain from Australia only and others which it can obtain not so exclusively from Australia but more conveniently from this part - of the world because it fits in with the trading policies that she has developed.

When Japan has such a favourable balance of trade with many of the great trading powers she is not concerned about an unfavourable trade balance which she realises that she must maintain with a country so numerically small as Australia. In her own interests, in the interests of her manufacturers of textiles, fabrics or other products, she will pressure Australia to take more, but she will not be offended by the terms of trade to such an extent that she will refuse to buy from us the raw materials in relation to which at the moment she is able to conduct a massive economic drive throughout the whole world. So long as she is able to get iron ore from Australia so that she can build the huge tankers of 100,000 tons which she sells to Greek shipping merchants and others in order to boost her economy she will not refuse to buy that iron ore merely because Australia has an unfavourable trading balance. I reject that argument in its entirety as being irrelevant.

Senator Georges - They will be buying it from China tomorrow.

Senator LITTLE - I warn Senator Georges who is interjecting-

Senator Georges - You are so shortsighted that you do not realise what is happening.

Senator LITTLE - Senator Georges has just anticipated my warning. I hear members of his Party time and again in this place asking why we are not trading more with China and why we have not people stationed there making representations on our behalf. At this very moment Mr Tanaka is in China. Those people who suggest that, because this contract for steel piping has been let to Japan, automatically it will be Australian iron ore that will be come back in the form of pipes might be anticipating a situation that will not develop. The pipes might be made from China's iron ore. Those people who have been roaming this chamber for a long time screaming that Australia should conduct more trade with China might find that one of the very favourable markets that we have developed in the Pacific is related to the buying of pipes from Japan and that we do not have so much trade for China.

The pipeline in question is very much open to debate. There is no certainty at this point of time that the pipeline will ever be required or that anybody will ever manufacture pipes for it. Yet the Australian Labor Party, in its urgency motion, wants to condemn the Government for creating unemployment. The facts are that the contract that has been signed is dependent upon the proving of the reserves, to start with, and that the supplying company is composed of the Burmah and Santos companies and a smaller American company called Delhi International Oil Corporation which has not approved the contract into which its partners have entered, and does not want to approve it, because it says that the price is too low and it fears that there are insufficient reserves. Some experts have said that there are insufficient reserves; some have said that there are sufficient reserves.

Senator O'BYRNE (TASMANIA) - Whose gas is it?

Senator LITTLE - Never mind about whose gas it is. The honourable senator can put that stupid line if he likes. I am dealing not with his imaginative wanderings but with the facts. The facts are that, as far as these companies are concerned, it is their gas because they have leases over the area which governments of this country have properly given them and they have invested capital to develop them. So, they are the ones who will sell or not sell the gas. The South Australian Government - Senator O'Byrne should know something about this - will reap some of the harvest in the form of the profits that come from the gas because a royalty has to be paid to it.

The point I am making is that the Delhi company, which is a very interested party in the combination of companies that controls the oil and gas, has not signified its intention to be a party to the contract. It says that, even if the reserves are sufficient, it doubts whether the companies have the capital to develop the reserves in order to supply the gas. Yet the Labor Party comes along with an urgency motion that says that inside 3 or 4 days the Government has created unemployment. That is not the Democratic Labor Party's attitude. We believe that this incident has revealed the very urgent necessity for consideration of the matter by the Australian people.

It is not a fact that the Australian companies concerned have been given the right opportunities to tender for the pipes. 1 refer to a statement that was issued by Tubemakers of Australia Ltd and reported in the Press in these terms:

Tubemakers said in its statement on Friday: The pipe sizes specified by AGL were 30-inch and 36-inch, the quantities being approximately 700 miles of 30-inch and 87 miles of 36-inch.

Tubemakers of Australia says that it was never informed that the requirement was for 34-inch pipes and that what it tendered for was the supply of 30-inch pipes because that was the specification. It claims, as reported in this article which was published in the 'Australian Financial Review' last Friday or Saturday, that it was never asked to tender for the size of pipe for which it is alleged a contract is being negotiated and therefore was unable to submit a tender for it.

In spite of the Minister's statement and in spite of the wild speech which we heard from Senator Murphy and which meant nothing at all except that the Labor Party was saying that the members of the Gov- ernment were a Jot of naughty boys, we have to consider the fact that the Government has some control over this situation because this pipe is subject to a 35 per cent duty. If it cannot be made in Australia, because of the nature of the contract and the need for the development of this country there could be some justification for a remission of that duty so that Sydney consumers of gas would not have to pay a higher price to cover the cost of the duty that is payable on the pipe. If the pipe can be produced in this country, I doubt that the Government has the same right to remit the duty that is payable on the pipe. It is obvious from the statements made by the Australian companies that could tender that they could not supply all of the pipe that will be needed. The Minister is right in that assertion. Therefore the Government will be faced at some lime, if this project comes to fruition, with considering whether it will remit the duty on the whole of the contract or on a part of the contract, and that must inevitably cause a reconsideration of tenders from Australian companies because if the duty is not remitted it will add enormously to the cost of the pipeline, which will be increased by more than one-third.

The Democratic Labor Party has given this matter very serious consideration. Tomorrow we will give notice that on the next day of sitting of the Senate we will move that the following matter be referred to the Senate Standing Committee on Industry and Trade:

The report that the Australian Gas Light Co. is proposing to conclude a contract with a Japanese corporation for the manufacture and supply of steel pipes for the proposed natural gas pipeline from Moomba natural gas field in South Australia to Sydney, which would deny Australian steel producers and suppliers the opportunity to fabricate and supply the required steel or any part of it.

The Democratic Labor Party believes that it would require very strong evidence indeed to justify handing over the whole of a contract of this magnitude, relating to Australia's fuel resources, to a wholly overseas company. We propose to take that positive action so that a full inquiry can be made into all aspects of this matter, ls Tubemakers of Australia right when it says that it was not given the size of the pipe correctly; that it was given 30 inches and 36 inches as the sizes of the pipe and now the contract is alleged to be for 34-inch pipe all the way? Is it a fact that the contract for the supply of gas is under as many shadows as it seems to be from the newspaper reports we have had of the disputations between the companies controlling the Moomba basin? I believe that all these matters have to be taken into consideration before a real decision can be made on the question.

This highlights the need for Australians to begin to realise that, on a State basis, this area could be very competitive. The question could arise whether Victoria, South Australia or somebody else would gain a massive contract to supply Sydney. In America today many areas are running out of supplies of this very commodity, lt may well be doubtful whether it is a very good idea for South Australia to be entering into a contract of this magnitude, which may denude that State of potential for industrial development by the use of cheap fuel, merely to supply Sydney which might be able to obtain supplies from somewhere else. Where is the policy of decentralisation in that? If it is necessary to prove the reserves and they are in so much doubt, it would appear that it is lime we had an overall authority to investigate and study the whole matter in the interests of Australia as a whole. Already we are receiving warnings from experts who claim that Australia would be foolish to engage in the over-export of this type of fuel and denude the ability of its industries at some future stage to compete on world markets for the products that can flow from an industry of this nature.

I know that my time is short; I have only 15 minutes in which to make this speech. I conclude by reminding the Senate of the constructive action that we suggest in the motion of which we will give notice tomorrow and which I have already read to the Senate. It is a constructive action that will enable the making of a full inquiry designed to ascertain the facts. It will not be a rushed action designed to gain a few lousy votes in an election by condemning the Government over something which it has not yet had time to consider. I hope that when the Government considers this problem in depth it will come down with solutions that will be in the interests of Australian industry and the employment of

Australian men. I hope that it will not run away with the idea that Japan is buying iron ore from us because she has to.

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