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Tuesday, 8 November 1910

Senator RAE (New South Wales) . - I do not intend to oppose the Bill. I have seen a little of the operations of the company which the Bill seems to be principally designed to assist. I know that it has expended a very large sum. I am told on very good authority that some of it has been expended, not in developmental work in the best interests of the future of the company, but rather unwisely. But, be that as it may, there is no reasonable doubt in the minds of experts that there are enormous deposits of shale in New South Wales, and that a big business could be built up, in fact is being built up by degrees. I do not agree with Senator Stewart that if the bounty were very much larger the company could in anything like the immediate future supply the needs of the Commonwealth. Even though they may have boundless stores of shale, I think that the developmental work which would be required to open up the deposits would be so large that it would occupy a considerable period, and that if this is a good principle, possibly there will be an ample opportunity of extending it before the expiration of the Bill.

Senator Stewart - I think that they told me that in three years-

Senator RAE - What they tell people has, like the prospectuses of many companies, to be taken with a very large lump of salt. Long ago this company had visions of doing big things. Yet it found its hands tied by want of capital, and had to send its manager to the Old Country to raise more. I do not believe that very much good is going to be done by this application of the bounty system. In the case of an article which is generally used, it is, I think, better to give a bounty than to impose a duty. There is no doubt that the time which it would take to supply the whole Commonwealth with oil, if that could ever be done under the duty system, would be so great that the consumers would have to pay through the nose for years. But with a bounty we shall know what is being paid, and it will not be felt as a heavy tax when it is distributed over the whole community. Nevertheless, I do not think that by this method we are going to bring about an industrial paradise. I consider that this is only a tinkering with industrial matters. Senator Gardiner quite incidentally asked what would happen in the event of the Standard Oil Trust buying out the Commonwealth Oil Corporation. What would become of the nurture given to the industry by the expenditure of public money if such a result did occur? Whether the Minister has an adequate answer to that hypothetical position or not I do not know, but I have heard a rumour that the Standard Oil Trust has cash invested in the company.

Senator Chataway - There is no objection so long as they develop the property.

Senator RAE - The object of this measure is to build up a local industry, believing that, if the foreign industry squelches our own, it will only do so for the purpose of raising the price of the article once it has secured a monopoly. Any attempt to prevent that result is good in intention, but the means taken may be faulty. I do not know whether there is any means of preventing the Standard Oil Trust from investing money in the Commonwealth Oil Corporation, instead of wiping it out by competition, nor do I know whether there is any method of finding out whether or not such is the case. We cannot compel the production of the share list. I consider that in a way this is experimental legislation. We find that the same course has been taken in regard to other matters, but I am not aware of any considerable industries having been built up by that means. But be that as it may, I think that the Commonwealth Oil Corporation is very well satisfied with this bounty as the first instalment of what they look forward to getting. I think that there is a great deal to be said for the proposition put forward by Senator Gardiner that, with a view to ultimately nationalizing the industry, it would be better to invest our cash in the company than to resort to the bounty system. The Commonwealth Oil Corporation has., I believe, expended over ,£1,000,000 in the construction of works, a railway, and developmental work generally, and I do not think the £50,000 proposed as a bounty to be given under this Bill will either make or break the company. It may be taken as an indication of the sympathy of the Government, and, in the notdistant future, the company will probably put in a demand for very much greater assistance. The difficulty is that the Commonwealth hasno guarantee that what Senator Gardiner has foreshadowed may not occur. Even now the Standard Oil Trust may have some secret grip of the industry we are being called upon to assist by this subsidy.

Senator Vardon - Surely any one may examine the list of shareholders of the company ?

Senator RAE - Senator Vardon, innocent as I believe him to be, must be aware that it is possible for a man to invest his cash in an undertaking without having his name disclosed. The business astuteness of the people who control the Standard Oil Trust is quite sufficient to overcome a little difficulty of that kind. Though strict provision has been made in the past to prevent people in Australia obtaining more than a certain area of land by means of dummying, millions of acres have been obtained by those who had no legal right to them. In just the same way it is quite possible for a man to invest his cash in a business without his name appearing as one owning an interest in the business. That is a danger which requires to be guarded against. If this industry is to be of benefit to the Commonwealth in supplying a commodity used all over Australia, it is one to the nationalization of which we may reasonably look forward. Although honorable members opposite will raise the bogy of Socialism, I may inform them that a good many years ago a Conservative administrator like Lord Beaconsfield thought it well to invest British capital in the purchase of Suez Canal shares. If that could be done by a Conservative Administration twenty or thirty years ago, it can hardly be considered strange that we should suggest the nationalization of a business by proposing that the Government should invest money in the purchase of shares in that business.

Senator Vardon - Does the honorable senator think that the purchase of the Suez Canal shares by Lord Beaconsfield was an experiment in Socialism?

Senator RAE -I do not say so. What I said was that honorable senators opposite, in dealing with a proposal of this kind, are apt to raise the bogy of Socialism. To show that there is no occasion to do so, I referred to what was done by a man whose views on Socialism were as wide apart as the poles from the views held by honorable senators on this side.

Senator Chataway - The only objection raised to the Bill, so far, has been from honorable senators opposite.

Senator RAE - I am not raising any objection to it. I merely point out that the investment of money in this way, with the best intentions, might bring about very objectionable results. To swallow legislation merely because it is presented in a pleasant guise, and the intentions of those promoting it are strictly honorable, is not always political wisdom.

Senator Vardon - Would the honorable senator make the repayment of the bounty a first charge on the profits of the company ?

Senator RAE - I am not now going into details as to the repayment of the bounty. I think we need to be assured that in this proposal we shall be giving help to an industry, the benefits of which will be shared in by the whole of the people, and not building up a monopoly, and it may possibly be the very monopoly we are seeking to fight?

Senator Vardon - In South Australia, money has been advanced for the development of mines ; but it has always been made a first charge on the mines when they have become profitable.

Senator RAE - I should not object to that. I think it is only fair that if a business is lifted into prosperity by means of a Commonwealth subsidy, the subsidy should be repaid. While I am not opposing this proposal, I utter a word of warning. In any case, I do not think we shall accomplish very much under the bounty system ; and the dangers to which reference has been made should not be overlooked.

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