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Tuesday, 20 November 1973
Page: 3520

Mr HURFORD (Adelaide) - In speaking to the estimates for the Department of Minerals and Energy I, in a contradistinction to the honourable member for Farrer (Mr Fairbairn), am delighted that such a department exists. I congratulate the Minister for Minerals and Energy (Mr Connor) and all who work with and for him for their many achievements through the Minister's 1 1 months of stewardship. One of the many and great achievements of the Australian Labor Government is that at last we have some planning in this vital sphere of our minerals and energy resources. No plans previously existed, and the honourable member for Farrer is, to a large extent, responsible for that. The world has an energy crisis. Recent news has indicated that Australia's great overseas airline, Qantas Airways Ltd, is cutting its services to the west coast of America. Why? Because there is a shortage of fuel. We read that Belgium is the second European country to ban Sunday driving. Why? Because there is an acute shortage of fuel. That is just recent news and there has been more of that sort today. Yet when our Government took over the reins of power in this country 11 months ago there were no plans. As I understand it, there was not even an inventory of our resources. One would think from this that there was no national interest. It was incredible. Money was pouring into this country from foreigners buying up our precious national assets without anyone being being given an inkling of what might be the priorities of Australians. Under the Liberals and the Country Party we were lying back and enjoying what was happening to us, which was a form of rape. That was the heritage of the Australian Labor Government and, in particular, of our Minister.

We on this side of the chamber are people who believe in planning, not in the ad hocery of the Liberal-Country Party Government past. It has no right whatsoever to criticise, as the honourable member for Farrer did today. That Coalition left a vacuum in policies in the field of minerals and energy. We are perfectionists. We want, for instance, to see the Bureau of Mineral Resources as one of the great areas of government in a country like ours gathering all the facts and figures for the benefit of policy making which it is possible to gather. I hope these estimates cover that need. We want to see the Minister using those facts and figures in arriving at the correct decisions - in public - as part of open government. We want to see him with adequate staff. Of course, he needs to build up the staff and resources of his Department to do the things which he is doing and which he wants to do. Some criticism was made in relation to this only last week by, I believe, a member of the Country Party. There will need to be new staff because the jobs have not been done hitherto. Our political opponents - our predecessors in office - did not arrange to do this vital work, I suspect that these estimates do not provide all the answers. I suspect that the Minister needs to win a few more battles with the Public Service Board in order to be able to do the work which he has set for himself and which his colleagues have set for him.

Let me come to some of that work. I would sum up our Australian Labor Government policies in the minerals and energy field as follows: Firstly, optimism of Australian equity and control in the production, processing and sale of minerals and mineral products; secondly, the rationalisation of production, that is, conservation of raw materials; thirdly, the rationalisation and conservation of energy resources. The Minister had more to say about that during question time a week ago. The area where there has yet to be, in my opinion, more to be said - I am sure that the Minister will agree with this - is in respect of the dis covery of new resources. I recognise - I know that the Minister recognises - that there will have to be more guidelines when he has got the necessary facts. We must not throw out the baby with the bath water and we do not intend to do so. Exploration is needed. I shall give some of my guidelines in relation to this a little later.

Firstly, let me make some comments on those areas in which our policy is clear. The first point is that the minerals and energy industries have no parallel in any other industry in that they are each based on a resource which can only be discovered at high financial risk and at very great expense. The second point is that Australia does not have available in the indigenous private sector all the high risk funds necessary for successful exploration. I believe that more thought will be given to the way in which Government funds are to be used in this area. Certainly the previous Government used public funds by means of taxation concessions and subsidies. I understand that $49m was used last year in this way and that $41 6m has been used over the last 20 years. I have my own personal doubts as to whether public funds ought to be used in these risk areas. It depends how they are used. Certainly our predecessors used public funds wrongly. What I do know is that the Liberal and Country Party Opposition in the Senate is putting in danger the Australian Labor Government's attempts to harness savings in Australia by means of updating the Australian Industry Development Corporation. It would seem that the Liberal-Country Party Coalition with the help of the Australian Democratic Labor Party is going to throw this proposal out when a harnessing of savings is sorely needed.

My third point, which I think needs to be made, is that foreign risk money is available and is only waiting for clear-cut rules to be laid down. Foreign companies are accustomed to the requirements that local equity is a condition of mineral development. In some cases they are at present unable to find out the required proportion of equity although we do know that once production is undertaken we want Australians to own at least 51 per cent. These sorts of questions will await the introduction of the Bill relating to the fuel and energy authority. My fourth point is that there seems to be no reason why we should not welcome foreign risk capital. In my view 99 per cent of it will be lost, and what better country to lose it in than ours? Provided that once a discovery is made, the development of it is subject to predetermined Australian equity interest - I have already mentioned 51 per cent - there is, in my opinion, no risk in allowing foreign control; as long as we have 51 per cent margin over it or more if possible.

My fifth point is that we have to realise that minerals are discovered only after great financial and physical effort. We cannot change the rules after discoveries have been made, and that is why the Minister has been very careful to lay down rules. A change in the rules is not only inequitable to those who have laid out their money at risk, it is also disastrous so far as any further exploration effort is concerned. Although so much risk capital is lost, it is true that there is a direct relationship between the amount of successful discoveries and the amount of risk capital invested. That is why we need that risk capital. A minerals and energy policy requires a very subtle balance between the need to maximise Australian interest, conserve presently known resources and encourage the discovery of new ones. My last point is that the Government will achieve all of its policy objectives with the energetic help of the Australian mineral and petroleum industries. I know that this Government can and will consult with the industry on how best to achieve these objectives. Today's issue of the 'Australian' carries a supplement which shows very encouraging signs of the industry's response.

Let me come back to that area of mineral exploration where I suggested that the guidelines are not yet sufficiently clear. Let me put forward my suggestions about those guidelines. Firstly, the Government is anxious to compile a reasonably accurate inventory of its raw material resources. This should have been done years ago but our present Government is now doing this. In the case of some raw materials such as iron, aluminium and coal, the reserves are so large that there is no point in further exploration expeditions, in my belief. In other cases, the Government should, in my view, require that Australia's 30-years requirements be reserved. Perhaps it should be 20 or 40 years but I am suggesting 30 years. Under my guidelines the Government would normally issue permits for exports only for any excess beyond that reserve figure of 30 years.

Another policy suggestion from me is that I recognise that the Government is anxious to encourage exploration of Australia's mineral resources and welcomes expeditions for this purpose from any source. It especially welcomes joint venture operations with Australian companies. However, the Government makes it clear that Australian equity, both in shareholding and in management, must predominate in any production arrangements. I mentioned that earlier in my speech. My third suggestion is that the Government might believe that because of the intrinsic material value of Australia's raw materials it is appropriate and desirable that it should participate directly in all phases of the industry, including exploration and financing. However, it might prefer to undertake the geological and geophysical surveys which are basic to all earth science developments and to encourage detailed exploration by the private sector. Nevertheless, in my view the Government should reserve the right in the national interest to buy an equity position in any discovery, either by outright reimbursement of part of the exploration costs or by sharing in the development program.

I congratulate the Minister on what has been achieved. I know that Rome was not built in a day - he knows that as well as I do - and that much more has yet to be done. Thank goodness we have a department and an energetic Minister like the ones that we have to get on with the job of finding a solution to these problems in the interests of Australia. I condemn the previous Government for leaving this vacuum which the Minister has had to fill.

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