B.H.P. profit, prices provoke opposition

Press, Volume CXI, Issue 32541, 26 February 1971, Page 16

B.H.P. profit, prices provoke opposition

(N.Z. P.A. 'Reuter—Copyright)

CANBERRA, February 25. * Opposition members have mounted a concerted attack on the Australian Government over the possibility of a rise in the price of B.H.P. steel, and the company’s dominance of the crude-oil industry.

For the first 35 minutes of i the 45-minute question time ' in the House of Representatives on Wednesday, Opposi-< tion members concentrated all ’ their questions on 8.H.P., its < pricing policies, and profits.! All but one of the ques-1 tions went to the Prime Min-1 ister (Mr Gorton), who defended the company as at- 1 tempting to stave off price ! inrrpacpc ' • In his first answer, Mr Gor- 1 ton said that rising prices ’ could only be curbed if there • was an increase in productivity. He had been asked by Mr C. K. Jones (Labour, New 1 South Wales) about a B.H.P. 1 statement which forecast an 1

increase in the price of steel “in the very near future.” Mr Jones asked if any increase in the price of steel would have a serious effect on prices, and whether the 3 per cent increase in the price of steel last year was justified. “Does the Government intend to take any action to prevent B.H.P. from increasing the price of steel, similar to the action taken by President Nixon when the American steel industry threatened to increase its prices in 1970?” Mr Jones asked. “Has B.H.P. over the years received great assistance and protection from the Tariff Board to develop the steel industry in Australia?’’

Low earning rate Mr Gorton said that the 1970 increase in the price of Australian steel could scarely have been inordinate. Since that time B.H.P. had been earning between 6.25 and 6.5 per cent on shareholders' funds,” he said. In reply to Mr F. E. Stewart (Labour, New South Wales) who asked for a review of the Government’s oilprice policy, Mr Gorton said that Australia was getting oil “far cheaper” than it could in any other way, and!

he would not undertake to change the policy. Mr Stewart referred to B.H.P.’s announced 52 per cent increase in pre-tax profit for the six months to November 30. “Was it due almost entirely to the sale of crude oil, and does it indicate that EssoB.H.P. have been given too good a deal to the detriment of the Australian motorist?” Mr Stewart asked. Mr Gorton said that he had noticed that some oil companies had been complaining about the pricing policy for Australian crude oil but the complaint had been that the price set by the Australian Government was too low, not too high. He said that some companies which might have found an oil field with small flows would not feel encouraged to go ahead because they considered the price set was too low. “That is what has been complained about,” he said.

Mr Gorton said EssoB.H.P. had entered into an arrangement to supply oil from Bass Strait at a fixed price for five years. The price was set at $1.89 a barrel, and the overseas price was 42c or 43c a barrel I more, Mr Gorton said.