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Tuesday, 20 November 1973
Page: 3518

Mr FAIRBAIRN (Farrer) - Inthe past year the Department of Minerals and Energy has figured in more matters of public importance in this Parliament than have any of the other 37 departments. That illustrates the concern of the Opposition about the policies that are being introduced by the Government in this field. In no other policy field has the Whitlam Government been so disastrous as it has in the field of minerals and energy. The tragedy is that in wrecking the Australian mining industry the Minister genuinely believes that somehow he is helping Australia. He has a horror of overseas capital. He misrepresents and distorts the position. Figures produced by the Commonwealth Statistician show that 44 per cent of the minerals industry is owned by people who do not reside in Australia, The Minister has produced new figures based on a new formula making the position sound worse. He says that 62 per cent of the industry is owned or controlled overseas. For the purposes of the Minister it is possible for an Australian firm with 75 per cent Australian ownership to qualify as owned or controlled overseas. Final control over Australia's minerals is exercised by the Government. It will always have that control through its control over exports. It appears that the Minister will go to any lengths to prevent private enterprise - Australian or overseas - from carrying on its business of prospecting for and mining minerals. The Minister took over a prosperous, thriving industry with great expectations. Now it is rapidly going downhill. How has the Minister achieved this, and why has he achieved it? Firstly, he has prevented overseas capital from coming into Australia. Originally there was a 25 per cent freeze of overseas funds, and this made it very difficult to borrow overseas. This has now been increased to 33$ per cent. These funds are frozen in the Reserve Bank. But there are exceptions to this.

We were informed in the newspapers only very recently that a new iron ore project at Marandoo in Western Australia is expected to proceed. It is reported that the multi-national company, Texasgulf, which has a 50 per cent' interest in this venture, will not have to deposit 33i per cent. One asks: Why has the requirement been waived, if it has been waived? I should like to know which Minister or Ministers make these decisions. What are the criteria on which these decisions are based? Why should one company receive preferential treatment and another not? For example, we know that Mount Isa Mines Ltd, the majority of which is now Australian owned and which is wholly managed by Australians, cannot get a farm-in even though it has applied to assist in the search for oil. This farm-in is blocked. Yet, if what we read in the newspapers is correct Texasgulf, which owns 50 per cent of this iron ore project and which is completely managed in the United States because it insists on having this management, gets the nod whereas WoodsideBurmah does not. What an opportunity this is for political patronage. It will be interesting to see, when the Minister for Services and Prop erty (Mr Daly) produces a Bill dealing with the disclosure of political contributions, whether any of those getting political patronage are or have recently been contributors to the Labor Party. 1 should like also to know - I hope that the Minister for Minerals and Energy will answer my questions later in the debate, as we expect him to do - whether Texasgulf is getting help in infrastructure which is not available to other iron ore companies.

This is only one of a great many of the Government's detrimental policies. Of course, in the 10 minutes available to me in this debate I do not have time to refer to all the Government's detrimental policies. I shall mention quickly some of the many actions which are detrimental to mining, which have been introduced by the present Government and which are already having a cumulative effect. I have mentioned the freeze of 33i per cent. There is the abolition of the oil search subsidy at a time when we were told by the Minister for Minerals and Energy that Australia needs to step up its search for oil. The oil search subsidy which was of considerable encouragement, particularly to the smaller Australian companies, is about to be abolished. There has been the abolition of the concessions provided under section 77 of the income tax legislation, which encouraged capital for mining. This, of course, has a major effect again on the small Australian companies. I have mentioned already that farm-ins have been cut out. Mount Isa Mines, which is an Australian owned and Australian managed company, cannot even get a farm-in in a prospective area to look for oil. What has happened now, of course, is that virtually every company is not inviting any further farm-ins because it believes it is just a complete waste of time seeking other people to assist it in the search for either oil or minerals.

The Minister for Minerals and Energy has announced that all oil will be taken at wellhead by the Federal Government. This, of course, means that there is no incentive for anyone to search for oil or minerals. The companies have only one buyer and if that buyer, which is the Government, says that it will pay them only half what the oil is worth, the companies have no recourse of any sort, provided of course that the particular Bill on which this is based is held to be valid. I continue with the detrimental policies of this

Government. We were told in the Budget that the gold tax-free assistance was to be abolished. We were told again only last week that it was going to happen, and now we are told that Caucus has overruled this. We are starting to wonder just who runs the Government and who runs the country. It is too late now if the Government tries to restore this assistance because the plain fact is that major projects were scheduled to go ahead in the large area around Kalgoorlie in Western Australia. At least 4 old goldmines were to be re-opened when the price of gold increased, but the reduction in the tax concession has knocked this on the head. It has probably been knocked on the head forever, or for a very long time.

The prospectors' tax exemption has been abolished. If ever the Government has done a futile thing it is the abolition of this tax exemption. The Department of the Treasury has said that the total saving would be approximately $20,000 a year. This exemption is applied in a case where a prospector might find something which turns out, perhaps a long time later, to be a viable mine. If he sells his interest in the mine the proceeds used to be tax free. In most instances a prospector is lucky if this happens to him once in a lifetime. The proceeds used to be tax free but they are no longer to be tax free. One can give many other examples. Of course, the revaluations of the Australian dollar have had a vital effect on the ability of the mining industry to compete in Australia. There has been the abuse of the miners - reference to the mugs and the hillbillies. The Government has forced the withdrawal of uranium offers. The accelerated write-off of capital costs has been abolished.

What is the net result of this on a great mining industry - an industry which in the 1960s built up enormously and has made Australia, in the eyes of the world, one of the leading mining industries in the world? We were the envy of the world. Now only five out of 21 rigs are drilling on-shore; 16 rigs are idle. Three major overseas oil companies are ceasing operations in Australia and moving out. Another major company, Kenecott has announced that it is no longer interested in the Cadia prospect even though there is a possibility that some other company will come in. An Australian owned and operated tin mine at Emmaville in New South Wales has shut down. Shares have dropped 50 per cent in 9 months. Queensland Mines Ltd does not know where it stands. It was delisted but has come back again. It does not know what the situation is.

The new search for oil has virtually ended. I have already mentioned that 4 gold fields are not being reopened. Australian oil companies are going overseas because they know that in countries like Indonesia, Malaysia and the Philippines there is some certainty of what the rules are, but there is no certainty in Australia. Natural gas to Sydney has been delayed. The Pipelines Authority Act is claimed to be wholly invalid. The Weipa alumina refinery, which would have been worth $500m to Australia, is not proceeding because of the actions of this Government. Processing is more economic overseas. Sales of uranium have been lost for all time. We know that $750m worth of contracts could have been obtained and that Australia would have obtained at least a share of that money.

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