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Tuesday, 30 September 1958

Mr HASLUCK (Curtin) (Minister for Territories) . - by leave - I move -

That the bill be now read a second time.

The purpose of this bill is to approve the execution of an agreement between the Government of Australia and the Government of New Zealand in relation to the rights which are jointly held by them in respect of the phosphate deposits on Christmas Island. The text of the agreement is given as a schedule to the bill.

The new agreement replaces one made in 1949, when the Australian and New Zealand governments first acquired exclusive rights to phosphate and other minerals on Christmas Island. The need for a new agreement arises from the transfer of sovereignty over Christmas Island from the United Kingdom to Australia. The new agreement comes into effect on the date of transfer, which is 1st October, 1958.

The Christmas Island Phosphate Commission was established to work the phosphate deposits of Christmas Island, and its members represent Australia and New Zealand. The commission, which was established' under the original agreement, will function under the new agreement without change, and the production and distribution of the phosphate will continue as in the past. Onenew feature of the agreement is a provision for a payment to the commission of 8s. sterling per ton of phosphate exported. The proceeds will be used first to reimburse thetwo governments for the cost incurred in connexion with the transfer of the island toAustralian control. The principal item in this connexion is the ex gratia payment of approximately £2,800,000 to the Singapore Government to compensate it for the loss- of revenue from royalties and rent, which were applied to Singapore when the island was a British colony. After this charge has been met the payments under this section of the agreement will be used to build up a fund to help meet the responsibilities of the Australian Government in respect of the inhabitants of the island who may remain on the island after the phosphate deposits have been exhausted in some 40 years time. In other words, we will be building up a fund which will be applied to meet those special responsibilities which will be incurred about 40 years from now when the phosphate deposits are worked out. Details of this proposal are given in Article VI. of the agreement.

May I also direct attention to Article IX. of the agreement, which provides that the cost of administration of Christmas Island will be met from the proceeds of the sale of phosphate. This provision follows the pattern that has long operated at Nauru, where the British Phosphate Commissioners make payments to meet the cost of administration of Nauru by Australia under the trusteeship agreement. It is also in keeping with the arrangements followed during the interim period of United Kingdom control from 1st January to 30th September, 1958. One point worth noting is that the agreement makes it clear that while the cost of administration will be borne by this levy on phosphate, any constructional works which go beyond the reasonable requirements of the administration of Christmas Island - for example, an aerodrome which may be required for purposes other than purposes of administration - will not be financed in this way as a charge on phosphate, but will be financed by other means.

The effect of these provisions is expected to mean an increase on each ton of phosphate exported from Christmas Island of not more than ls. 6d. f.o.b. compared with the cost before the transfer. The effect on the price of superphosphate paid by the Australian or New Zealand user is expected to be not more than 3d. a ton, for phosphate from different sources is pooled for the purposes of manufacture in Australia. Christmas Island rock goes in with rock from other places for the purpose of calculating the price of superphosphate to the user. Also, phosphate is only one element in superphosphate. So I repeat: The charges incorporated in this agreement are not expected to result in an increase of more than about 3d. a ton on superphosphate to the user in Australia or New Zealand. I think that is a small price to pay for the security of supplies and the assurance of rock from Christmas Island which is obtained as a result of the transfer.

In conclusion, I should like to express on behalf of the Australian Government our appreciation of the co-operation of the New Zealand Government in the negotiation of this agreement. We believe, as they do, that the transfer of sovereignty is in the best interests of both countries and that the agreement concluded between us regarding future operations on the island protects the interests of both countries and will contribute to the good government of this new Australian territory and the advancement of its welfare.

Debate (on motion by Mr. Calwell) adjourned.

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