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Wednesday, 27 September 1972
Page: 1278


Senator KEEFFE (Queensland) - 1 rise to support the matter of urgency raised by the Leader of the Labor Party in the Senate. I requote the words for the benefit of those who may have joined the radio- audience:

The failure of the Government to take action to protect Australian employment and industry in the supply of the Moomba-Sydney pipeline.

Before proceeding to the general terms of the debate I would like to pass a couple of remarks on the contribution which has just been made by Senator Webster of the Australian Country Party, It is indeed refreshing to hear a member of the Country Party suggest that Australian industry and Australian employees ought to be looked after. In the main members of his Party, like members of the Government, usually pay all due respect to overseas organisations when it comes to large amounts of profit.


Senator Webster - That is a lot of rubbish - the kind you usually talk.


Senator KEEFFE - That is an interesting interjection. I was going to refrain from saying this, but I recall that the honourable senator opened his remarks by criticising the Leader of the Federal Parliamentary Labor Party and the Leader of Her Majesty's Opposition about alleged remarks concerning revaluation of the currency. I would remind the good senator that not very many weeks ago senior Ministers of the Government were negotiating a revaluation of the currency. So let us not argue the point about that either. I think the onus is now squarely on the Minister to state all the facts relating to the granting of this $54m contract to an overseas firm. It is amazing, when the Opposition raises subjects of this nature in this chamber, to see the unwillingness that is always shown by most Government Ministers to disclose all the facts of the case. Tonight the challenge to put all the facts of the case on the table has come not only from my own Party but has been endorsed by the junior coalition partner. Was it true that the specifications for this pipeline were not set out clearly as being 34-inch pipe? Or was it 36-inch pipe- and now we find the contract is for 34-inch pipe? As the Leader of the Labor Party in this chamber said when he opened his remarks tonight 'It's time'. It is not only time that the Government was changed; it is time that half the Ministry resigned; starting with the Prime Minister and working either up or down depending on one's view of the Government.

It is significant that not only has this developed into a major scandal but that we can look back at other scandals also. Earlier today papers were tabled in the Senate in relation to the Jetair affair which will get a better airing - no pun intended - at a later stage in this session. We have had another scandal raised from this side of the chamber concerning the possible misuse again of VIP aircraft. We lost trade with China because the Prime Minister and other senior Cabinet Ministers decided that we did not need the trade. We have had the scandal raised in both Houses of the

Parliament of the preferential treatment given to Ministers for the occupation of government homes in Canberra. We have had the problem of the Ustasha, though not so many days ago the AttorneyGeneral denied that there were any such problems. Now we have the pipeline scandal in addition to all the others. Perhaps a lot of this failure starts right at the top with the Prime Minister who not so many months ago thought he had written a letter to the Prime Minister of South Africa and then discovered that he had not written it.

The ACTING DEPUTY PRESIDENT (Senator Lawrie) - Senator Keeffe,I suggest you keep to the resolution.


Senator KEEFFE - I am keeping to the resolution. I am trying to point out the facts behind what appears likely to develop into a further scandal so far as the actions of this Government are concerned. The instances I am quoting highlight the fact that everything that the Prime Minister or his senior Ministers touch turns to dust, and the pipeline is no exception. I recall a further incident in which the Prime Minister thought he had written a letter to BHP on steel prices.


Senator Hannan -I rise to a point of order.


Senator KEEFFE - If you are going to take up my time,I will look after yours.


Senator Hannan - Mr Acting Deputy President,I cannot help but feel that Senator Keeffe is straying somewhat from the content of the proposition. I believe he should address himself to the content of the proposition and forget about the peripheral nonsense which he is bringing into it.

The ACTING DEPUTY PRESIDENT - Senator Keeffe, I suggest you keep to the terms of the motion.


Senator KEEFFE - Thank you, Mr Acting Deputy President. The letter which the Prime Minister wrote to BHP about the increase in the price of steel was probably symbolic of this new development. I wish to raise a further point. The Sydney pipeline project probably went back to a period about 3 years ago when the Australian Gas Light Co. was endeavouring to negotiate with Esso-BHP for the supply of Bass Strait gas to Sydney. In addition to this the$54m contract that has now been agreed to between Mitsubishi and the Australian Gas Light Co. has a lot of other overtones or undertones which I note were not mentioned by Senator Webster. I ask the Minister whether it is a fact that Mitsubishi was told that it was impossible to manufacture 34-inch pipe in Australia. If the Japanese company was told this, and this had some bearing on the fact that that company was given a contract, was it leaked by a Government Minister or was it done somewhere in the trade without Government supervision of this type of control? Next, if it is impossible to manufacture 34-inch pipe in Australia, why did Tubemakers of Australia tender for the contract? As Senator Webster of the Country Party said, there is at least one other company that could have carried out this job and would have been able to give satisfaction. I wish Senator Little, who is interjecting, would keep quiet because his own contribution had very little logic in it. If I were to refer to the previous attempts by the Australian Gas Light Co. to get Esso gas and the reasons why the Government did not assist in any way at that time it would probably create another major scandal. AGL wanted to get the best deal for Sydney that it could at that time. The company was prepared to do its own exploratory work in an attempt to find sufficient gas with which to supply commercial and domestic users in Sydney. But because of the Government's ineptitude, Sydney has been deprived of the use of natural gas for a period of more than 5 years.

On 22nd September last the Prime Minister (Mr McMahon) said that Australia would not intervene in the contract. But the New South Wales Premier said that his Government would endeavour to persuade Mitsubishi to spend the contract money locally. A few hours later the Deputy Prime Minister and Leader of the Australian Country Party (Mr Anthony) said that the New South Wales Government had a fair degree of authority to. intervene because it had granted AGL the franchise to supply gas to Sydney. I ask why at the Commonwealth level there was an all-out attempt to duck the issue. It is possible that the loss of this contract to Australian pipemakers and to Australian contractors can lead to the loss of jobs for between 300 and 400 Australian workers, and with the current rate of unemployment we can ill afford to have so many additional people without jobs.

My time is limited and I now want to refer to the recommendations of the Senate Select Committee on Off-shore Petroleum Resources and in particular to the recommendations made in the minority report. First of all, I will read paragraphs 6 and 7 on page 709 of the report. This is the report about which I and my colleagues have complained bitterly from time to time. The Government has avoided bringing the report before the Parliament for proper consideration. Paragraph 6 states:

We are of the opinion that there is no excuse for not having a national pipeline policy. Such a policy should be implemented without delay and gas pipelines, in particular, should be controlled by the Federal Government, especially as we believe that it is only a matter of time before at least every capital city on the eastern and southern seaboard' of Australia will be linked by gas pipelines.

It is true that the pipeline under discussion, which is of several hundred miles in length, is coming over an inland route but, nevertheless, the Government is adopting the same ad hoc approach to this matter as it adopts to other legislation. It is the same hotch-potch arrangement under which various companies for various considerations are laying down pipelines in various parts of Australia. There is no planning, cohesion or co-operation in the supply of the hydro-carbons that are carried in the pipeline. In paragraph 7 of the minority report we state:

We recommend that a national pipelines policy be implemented immediately and that legislation be enacted - this may require the co-operation of the States - to regulate the construction and operation of pipelines for the carriage interstate or intra-State of oil and natural gas.

I should like to refer to a couple of other paragraphs of the report because I think that they are relevant to the argument. Paragraph 15 on page 710 states:

Pricing agreements in respect of crude oil produced from indigenous sources have been nothing more than ad hoc arrangements made between Prime Ministers and limited sections of industry.

Further on we state:

We recommended that a thorough examination be made of the cost price structure of the production of petroleum in Australian off-shore areas.

That applies also to production on land. This is where half of the trouble has been generated. Without a shadow of doubt, if there had been a cohesive policy at the Commonwealth level, almost certainly this pipeline would have been manufactured in Australia from Australian materials, and it would have been constructed and serviced by Australian workers. But instead the Government adopts the other attitude that it can do nothing at all in this area and that it does not matter very much to this country. I suppose there are hard words which can be used in a descriptive manner, but I do not propose to be offensive about this matter. The issues raised by the Leader of the Australian Labor Party when he introduced the motion relating to this matter of urgency are correct and complete in every detail. The onus is right back on the Government to make a clear and unequivocal explanation of why it refuses to take any action in the matter; why Australian manufacturers were not given the opportunity to tender properly or to have the proper specification in order to be able to submit a tender. It is of no use to say: 'We do not have in this country the knowhow or the factories or the specialists properly to tender for and carry out a job of this nature'. If the Government admits that, it is admitting that it has been a complete and utter failure. Under those circumstances I think the granting of this contract is a clear indictment of the inability of this Government to govern properly.







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