HOUSE DEBATES BILL DEALING WITH COAL

Wanganui Chronicle, 6 October 1950, Page 6

HOUSE DEBATES BILL DEALING WITH COAL

Measure To Restore Areas To Owners And Avoid Payment Of Fantastic Compensation Claims

PARLIAMENT BLDGS.. Last Night (P.A.) —The global sum fixed by the Coal Valuation Commission was for both worked and unworked eoal calculated on the basis of the coal areas being worked, and was for division among all the coalmine owners, but it was unfair that the owners of unworked areas should receive compensation at the expense of those who owned the areas that were being worked, said the Minister of Mines, Mr. Sullivan, in the House of Representatives today, when moving the committal of the Coal Mines Amendment Bill.

The Minister said that the total number of claims lodged for compensation under the Coal Mines Act of 1948 was 238, for a total amount of £1,549,000,000. While admitting that the claims were fantastic in the extreme, it must be plain that the sum of £600,000 could nowhere near satisfy the whole of the owners. The average of all royalties for the years 1941-1947, after being determined and multiplied by 15, would give the total sum to be available to i compensate for the worked and un-• worked coal areas taken over. That sum would have to be found by the Crown from the Consolidated Fund, or some other source. While the unworked coal would make no contribution to the global sum it would share in the distribution. It was clear, therefore, said the Minister, that if the unworked areas were to receive compensation at the expense of the worked areas, then tht latter could not receive their fair share. The Minister said that under the Act it was impossible for some coal owners to prove their claims. Indeed, there were some who could not afford to bear the cost of boring-to prove their claims He said that the amount of three claims totalling £344,903 —Kamo £4686. Taupiri £335,217 and Birchwood £5OOO —was about 50 per cent, of the global sum available for distribution to the whole of the coal owners in the country. The Act virtually said to the coalowners: “Here is the sum. Have a go at it and see how much you can get out of it.” Mr. Sullivan said it was safe to say that the people in the unworked areas would have got only the sweepings of the table. Forty per cent, of the | country’s coal requirements came from freehold land in 1949, and the balance from Crown land. The Act, as it stood, deprived about 85 coal owners of their annual rents and loyalties, which ranged from £lO to £lBOO a year. Many of the owners | were women and some properties belonged to estates. The Government had not reached) the decision hurriedly to repeal the 1948 Act, continued Mr. Sullivan. He admitted that the Government had been unable to find a fair or just way to compensate owners. The Act savoured badly of confiscation, and did not respect the rights of ownership. The Bill before the House would give the owners a fair deal and as soon as the Act was repealed royalty payments would be resumed. “The Minister said New Zealand’s anual consumption of coal was under 3,000,000. To give an idea of the enormous coal resources, he said that the measured coal areas contained 28,000,000 tons of bitumenous coal, 52,000,000 tons sub-bitumenous arid 1 13,000 000 tons of lignite coal. The “coal indicated” areas contained 21,000,000 tons, 45,000,000 and 27,000,000 tons of the three types and the “inferred” area 58,000,000, 490,000,000 and 366,000 000 tons of each type. “Bitumenous coal represents onethird of the total quantities,” he said. “There are very strong indications that there are 1,100,000,000 tons of coal that we know of and that will last the country 300 years or more,” said Mr. Sullivan . The Minister said that a very good job had been done in the mechanisation of coalmining, which was to-the credit of those in charge of coal production. MORE LAND MAY BE TAKEN. He agreed that it may still be necessary for the Crown to acquire areas for opening up further coal resources. The land would be acquired under the Public Works Act and the owners would be compensated accordingly. Labour’s 1948 legislation was suggestive of confiscation, but the present Bill restored justice to the coal-owners. Mr Sullivan said possible changes in the nation’s power supplies in the next 40 or 50 years, including development of electricity and the possible harnessing of atomic power, might greatly change the demand for steam power. None of those in the House might live to see tne whole of the North Island Main Trunk electrified, but the conversion of the railways to electric power must remain the aim of every Government. If the day came when the railways no longer required coal it would increase the life of the available coal resources. Mr. McLagan (Opp., Riccarton), former Minister of Stines, said one of the Government’s reasons for introducing the Bill was the claim that all the interested parties were dissatisfied w r ith the basis for payment of compensation provided in tho 1948 Act, but that was not true, as the majority of interested persons—the public—were not dissatisfied. Actually the basis for compensation—ls times the annual value of the rents and royalties etc —was conceived by the British Conservative Party some years ago. The Minister himself had acknowledged that some of the claims were fantastic in the extreme. Those owners who were not satisfied with the basis fixed for compensation would not have been satisfied with any reasonable amount. The proper testing of the supposed resources would disprove rather than prove some of the claims. Mr Sullivan’s statement of the nation’s coal resources had been rather optimistic, and there was today the utmost need for care in both the extraction and the proper use of coal. The claims for total of £1.549,060.000 were silly and preposterous They amounted to claims for 30.000 times the present annual value of the rents and royalties instead of the global sum allou’ed under the Act of 15 times the annual income from coal resources. RENTS AND ROYALTIES. Mr. McLagan said rents and royalties, etc., from coal mined in NewZealand totalled less than £750,000'

; a year. This was only a temporary : sum because some of the coal was ' nearly exhausted, but the total I amount claimed in compensation would, if invested at three per cent., give an income in perpetuity of £46,500,000 a year. Mr. McLagan said one Taranaki claim was for a total of £1.527,247. Even if those claimants were paid in farthings instead of pounds it would exceed their wildest hopes. I Mr. Bodkin (Minister of External | Affairs): They pay rates on that I valuation ? Mr. McLagan said this claim accounted for 99 per cent, of the total sum claimed. Of the remaining one per cent, some of the claims were still inflated although one claim from a local body impressed by its modesty. One West Coast claim, said Mr McLagan, was for £1,221,000. Assuming the holding were all freehold it would yield only £2250 a year, and that sum would be extinguished in five or six years. Yet the compensation claimed, would if invested at three per cent., yield £36,642 annually in perpetuity. Another West Coast claim was for £2,278,000 although no freehold coal had yet been produced from the property. There was an Otago claim for nearly £1,500,000 for a property from which it was admitted no coal had been produced. That claim was greater than was asked for all the freehold coal in the rest of Otago, and the sum, invested at three per cent., would give an annuity of £44,137 in perpetuity. These claims, said Mr. McLagan, were all part of the remaining one per cent, of the total and showed that even that one per cent, could not be taken seriously in estimating the likely cost of compensation. Discussing other district claims, Mr McLagan said that claims from North Auckland, where last year’s output of freehold coal was 49,136 tons and totalled more than £2,000,000, represented not 15 but 21 years’ purchase of the annual income. The annual income from investment of the amount claimed would be more than £60,000. ROYALTIES £175. COMPENSATION CLAIMED £485,000. Mr McLagan said the annual output of freehold coal in the Nelson , district was about 3510 tons, which at j one shilling a ton would yield royal- ! ties of about £175; yet the total com- I pensation claimed was £485,000, re- , presenting about 2475 years’ purchase of the annual revenue. Mr. Sutherland (Opp., Hauraki): They are looking ahead a bit. Mr McLagan said the total output of freehold coal from Reefton yielded about £127 annually in royalties. Claims from that district were for £2,500,000, representing 19,000 years’ purchase of the coal rights, or enough to give an annual income in perpetuity of £7OOO. The Buller district was the most moderate, with claims for only £458,000 compensation, but there was something to be modest about, for Buller did not produce a single ton of freehold coal. Mr. McLagan said that in view' of the obvious need for scaling down even the one per cent of the claims, he had been very surprised to read a reported statement of the Prime Minister in April that the claims were “well balanced.” It had been said the cost of paying compensation would exceed the cost of continuing to pay royalties to the owners, but if there was as much coal left as the Minister claimed, and if, as could be expected, future generations discovered more coal, the cost of royalties must far exceed what need be paid in reasonably calculated compensation. The Department of Scientific and Industrial Research had recently estimated the country’s proved coal resources at 18,000'000 tons bitumenous and 278,000,000 tons sub-bitumenous and lignite. We had been using our high-grade bitumenous coal in the i wrong ways. For years a ton of bitumenous coal was used for a ton of lower grade coal. In 1948 there was an improvement, with nearly two tons of lower grade coal being used to a ton of bitumenous.. However, even that improvement was not nearly good enough. We should be using 151 tons of other coal to each ton of bitumenous. Mr McLagan said that if our bitumenous coal was consumed at the present rate the time would come when we would have no gas, railway or coking coal, with serious results for ■ transport and industry. Bitumenous coal should at once be reserved for the purposes which it alone could ' serve, with more lignite being used ! for other purposes. | Mr Sullivan: They all want the best. i Mr McLagan: They cannot all be allowed the best, or eventually there will be none of the best for anyone. j Mr McLagan said the Labour Government decided to establish a briquetting plant in the South Island as a means lor encouraging the use of more lignite coal. He was very disi appointed that the present Govern- : ment had postponed the scheme. Party I politics aside, it was in the interests of the whole country that these works 'should be in production as soon as possible, and that the best means of using low grade coal be discovered. i Me hoped the Government would reconsider the matter and would achieve success with the briquetting scheme for which it could claim all the credit if they wished. ■ Mr Sullivan: We will look at it in the recess. Mr Johnstone (Govt.. Raglan) said it should be. understood that the Bill returned the coal measures, but not flio coal mines, to private owners. He personally thought there was som°thiry to be said in favour of State | ownership of lhe coal measure, if it I could be brought about fairly and equitably, but that should have been done in th? earlv days of settlement. The 1948 legislation imposed an injus-

tice which the present Bill corrected. Tne 1 per com. oi claims totalled I £21,000,000 and the global sum which would have been available for distribution would not have been more than £750,000. vVhat a scramble there would have been. It would have been a great opportunity for the lawyers, who would probably have been the only people to benefit. Mr Johnstone said there was at present a lot of wasteful and prevent- ! able working of coal in State as well J in private mines. | Mr. Johnstone said he had been asI tounded at the state of the schools, the inadequate reading systems, the deplorable condition of some houses, the shortage of water and the lack ol amenities in some mining areas he had visited. That indicated the neglect of those areas by the Labour Government. He said that private enterprise had been accused of committing mur- ! der when accidents occurred in pri--1 vately-owned mines. Accidents could • happen just as easily in State-owned I mines and there had been two or three i in England recently. I Mr. McLagan: But there was no ; evidence of neglect. Mr. Johnstone said it was in the in- ■ terests of the miners themselves to know of all the exit routes from the mines they worked in. He considered the Bill was an honest attempt to help the mining industry. “This Bill restores to private enterprise what is theirs. It finishes the confiscation that was prevailed in the past and puts a stopper to future incursions by the State into the realm of indi vidual enterprise,” declared Mr. Gotz (Govt., Otahuhu). He said the fact that coal resources, like timber resources, were dwindling had been used by the Socialists as an argument in favour of nationalising the ownership of coal, but nowhere had socialism been able to provide anything better more cheaply or more plentifully than private enterprise. Mr. Gotz said he hoped the levy of 3d a ton on coal for welfare in mining districts would be used to ensure that future generations of children would be healthier and happier. PRIVATE ENTERPRISE CONDEMNED. Mr. Semple said that private enterprise did have a place in society so long as it served the people and did not exploit them. Coal deposits in the country should not be permitted to be a gambling instrument in the hands of private dividend hunters. He said that coalminers had been murdered by the greed of private enterprise and because of its deregard for human life. Both the Huntly and Brunner disasters could have been avoided. “Private enterprise has a rotten, bloody record,” said Mr. Semple. Mr. Speaker: Order. Mr. Semple: I mean bloody and not the vulgar word, Sir. He amended his remark by saying that private enterprise had a record stained by human blood. The Bill ws a retrograde step, said Mr. Semple. Mr. T. L. MacDonald (Minister of Defence) said that a tremendous amount of argument would have resulted had the work of the Coal Valuation Commission been gone on with. The Bill was an attempt to reach a fairer method of setlement than was contained in the 1948 Act. He said that everything possible should be done to conserve our more valuable deposits of coal. If scientific research could find additional ways of using lignite coal the life of the more valuable coal deposits would be extended. The Bill gave reasonable recognition to the rights of private ownership, which would not be in conflict with the best interests of the community. It proposed to give compensation on a fair basis and provided safeguards against wastage. The debate was interrupted by the adjournment of the House at midnight.