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Thursday, 2 December 1965

Mr CONNOR (Cunningham) .- I listened with great interest to the remarks of the honorable member for Moreton (Mr. Killen) about the Broken Hill Proprietary Company Limited and its subsidiary, Australian Iron and Steel Pty. Ltd., which is within my constituency. I can imagine no industry which is more entitled to be scrutinised than the steel industry with respect to its price structure. I do not speak as one who wants to put 25,000 men out of work. As a matter of fact, without throwing bouquets at myself, as a State parliamentarian I was responsible for the expenditure of about £75 million of State funds to facilitate the company's activities. Accordingly, I have a vested interest as a public representative in the matter.

The position with relation to this company is that it produces two-thirds of Australia's steel. It produces 3i million tons a year. It is on record, and those who are interested can look at an article in the financial columns of the " Sydney Morning Herald" of 14th November last year in which the financial editor calculated that the company's gross profit per ton of steel produced was £16. If we multiply that by the production, the figure amounts to £53 million a year at Port Kembla, to which can be added the Newcastle profit as well. The industry is technically most efficient. There is no more efficient steel industry in the world for its size than the Broken Hill Proprietary Company Limited. However, several criticisms can be made of it. The first relates to the remuneration paid to its employees. There I join issue strongly with the company. A further issue concerns the steps it is taking to ensure that it plays its part in Australia's export trade. Thirdly, there is the further question that any prices tribunal or restrictive trade practices tribunal would undoubtedly examine the company's legitimate margin of profit because the chairman of directors stated some six years ago that in future the company would depend upon its ploughed back profits for further development and expansion.

I want to do justice to the company and its shareholders; I want to do justice to the men; but above all I want to do justice to Australia. A pretty problem will be imposed on the Tribunal when it considers the cost structure of this company and its profits. What is to be a fair profit? The company could say: " Even now our prices are considerably below the cost of imported steel, because of two things - technical efficiency plus the high metallic content of the iron ore". Nevertheless, further considerations might arise and could arise in view of the loose definitions in clause 50 of what is in the public interest and what is contrary to the public interest. I can conceive a situation in which there should be quite a substantial reduction. I know of no industry that is more amenable to treatment under this clause than the steel industry is.

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