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Wednesday, 1 November 1967


Dr MACKAY (Evans) - I would like to reply to the honourable member for Cunningham (Mr Connor) because I believe he has not fairly stated the situation concerning this legislation. He quite rightly indicated that there was an Agreement. As he said, in the strict sense the Agreement is not justiciable and is not a legal document in that it can be treated as an Act of Parliament. Nevertheless, it is an agreement and it was signed by the Prime Minister of Australia (Mr Harold Holt) and by the Premier of each State of Australia - Labor and Liberal Premiers alike. It is an Agreement arrived at after a tremendous amount of discussion between the industry and the Governments concerned. It is brought into this Parliament as a vehicle whereby an honoured and honourable agreement can be presented to enable a very great advance to be made in the petroleum industry in Australia. The

Minister for National Development (Mr Fairbairn) pointed out the importance of the Agreement in his second reading speech:

The crux of the inter-relationship between the States and the Commonwealth is contained in Clause 11 of the Agreement. In brief this clause provides that in the administration of the Common Mining Code the States will consult the Commonwealth on all aspects which may affect the Commonwealth's own special responsibilities under the Constitution.

That is precisely the way in which Clause 11 of the Agreement spells this out.

Clause 11 of the Agreement states: (1.) Except in so far as the Commonwealth Government has informed the State Government that it is necessary to do so, a State Government will consult the Commonwealth Government -

(a)   before a permit, licence, pipeline licence, access authority . . .

(b)   before approval is given to any transfer of a permit, licence, pipeline licence or access authority . . .

(c)   before approval is given to any instrument by which . . . any farm out or farm in or any kind of dealing in these things can be carried out. Further, sub-clause (2.) states that the Commonwealth Government will, in considering these things, take into account consideration of the responsibilities which have been placed on the Commonwealth under the Constitution. Sub-clause (5.) states:

A State Government will accept, and will ensure that effect is given to, a decision of the Commonwealth Government with respect to a responsibility of the Commonwealth taken into account as aforesaid.

This, of course, is something which is not spelt out in detail in strict legal jargon. But I have sufficient faith in the way this Agreement has come about and the benefits which will flow from it for all parties concerned, Commonwealth and State alike, and the enormous advantage that will come to the nation, to believe that there would need to be a very grave reason indeed for a breakdown of the basic Agreement.

If there were to be a breakdown of the basic Agreement then there are provisions whereby the whole business becomes null and void. The Commonwealth has reserved all along its sovereign rights under the Constitution to turn round immediately and implement new legislation to cover the whole national interest in terms of the petroleum industry. I maintain that while, in the strict legal sense, what the honourable member for Cunningham has just said is true enough, nevertheless the argument on which the Government is basing its preparation and presentation of this Bill - and the several State governments are doing likewise at this time - is that it is bringing it forward as a vehicle to get over the necessity for clash and litigation and the kind of breakdown in relations which could only harm Australia.

After looking through this legislation, I say that the Commonwealth will play a formative and consultative role at every point. The very things which the Commonwealth can contribute, in terms of its strength; the great issues that have been given to it as its responsibility under the Constitution, are all covered in full without any kind of abnegation in this legislation. I believe that given a fair go by all concerned - given the willingness to see that it is not the kind of thing to be used to go into a court of law and to win a smart point, but rather that it is a matter .of principle and understanding and of agreement - this Agreement is something which the Government has been proud to bring into the House.

Stemming from the Agreement will be a tremendous upsurge in the search for petroleum. There will be a revolution in the whole understanding of this enterprise in Australia particularly when one considers - to mention just one or two things - that as a result of this legislation, 6 years after it comes into effect literally half of the enormously prospective offshore areas in Australia will become vacant. Those areas must be surrendered and reapplied for. This, in itself, will provide a tremendous opportunity for Australian companies - for companies which perhaps have not been formed yet - to prepare themselves for this time of opportunity when, perhaps, in terms of the opinions of the designated authorities of the States, some kind of preference will be given to Australian companies or those with which they are m partnership to apply for and receive some of the surrendered areas at the end of the 6 year period. The period then shortens to a 5 year period. From then on the areas covered by the exploration permit are continually surrendered.

There are other ways in which this legislation brings new and highly desirable things into the petroleum exploration industry, so far as the Governments and people of Australia are concerned. I believe that the industry has had a chance to look at these things. I have had very fair and friendly conversations, by no means easy in the sense that the oil industry was taking this lying down. There were very trenchant criticisms at times. But out of this legislation there have come, I believe, an understanding and goodwill about the business which, if we perpetuate this, will be only for the national good. I do not believe for one ment that the Commonwealth has weakly or supinely handed over its traditional powers of leadership in this Bill.







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