22nd Parliament · 2nd Session
Mr. SPEAKER (Hon. John McLeay) took the chair at 2.30 p.m., and read prayers.
– Mr. Speaker, I am very sorry to have to refer, this afternoon, to the death of our old friend, Sir Thomas White, who died at the age of 69 years after a lifetime which can be properly described as having been one of continuous and resolute service to his country. He had a long parliamentary experience. He was elected as member for Balaclava in 1929, and he continued to represent that electorate until his resignation in 1951. He was a temporary chairman of committees, early. He was Minister for Trade and Customs from 1933 to 1938. He led a trade mission to New Zealand in 1937. He was a member of the ministerial delegation to London to discuss trade matters arising out of the Ottawa agreement in 1938. He was the Australian delegate to the International Refugee Conference in 1938. He was Minister for Air and Minister for Civil Aviation from 1949 to 1951. He led the Australian delegation to the Fourth Assembly of the International Civil Aviation Organization in 1950. He resigned from Parliament on 21st June, 1951, on being appointed as Australian High Commissioner to London, and he retired from that office, after a distinguished period of duty, on 20th June, 1956.
That is a very bald outline of his political career. That, perhaps, would have been sufficiently distinguished, standing by itself. But he had a career in the military field which was no less remarkable. He embarked with the first contingent of the Australian Flying Corps. He was literally one of the original members of that corps of whom there are very few. He embarked with that contingent in April, 1915, and was attached to the Royal Flying Corps in Mesopotamia. In the course of a daring exploit, he was taken prisoner by the Turks in November, 1915, and he escaped via Russia in 1918. He related his experiences in a very widely known book, “ Guests of the Unspeakable “. He was awarded the Distinguished Flying Cross and was twice mentioned in despatches. He returned to Australia in 1920. Thereafter he commanded, for six years, the Sixth Battalion of the Royal Melbourne Regiment. He became a Flight Lieutenant with the Royal Australian Air Force in 1940. He went overseas with the Royal Australian Air Force and remained from 1941 to 1943, being wing commander in charge of the Royal Air Force Station at Brighton, in England. He became group captain in 1943 and retired, medically unfit, in December, 1944.
Apart from those two categories into which this remarkable life fell, he had, of course, many other activities. His interest in flying neither began nor ended with the last war. He was the founder of the Australian Aero Club in 1914, president of the Victorian section and federal president from 1925 till 1927. He was president at one stage of the Melbourne Legacy Club, and chairman of the Empire Council of the British Empire Service League. He gave seventeen years’ service as president of the Royal Life-saving Society. He was a member of the board of governors of the College of Aeronautics and a member of the governing body of the Imperial College of Service and Technology. He was a member of the board of governors of the Imperial Institute, founder-president of the Australian Musical Society and a Fellow of the Royal Geographical Society. This amount of work - and it was not nominal work; it was always backed by his own enthusiastic zeal and effort - is conclusive proof of the fullness of life that our late friend led.
Looking back on our association - and many of us had a long and happy association with him - one thinks of Tommy White, as he always was and will be to us, as a man who perhaps had as his outstanding characteristic indomitable courage, almost insatiable courage. He looked for difficuties and dangers because it was in his nature to do so. His patriotism was a shining thing, and right through his long life - alas all too short since his death came suddenly at the end - he was a good Australian, a good servant of the people, and a good friend to members on all sides of this House. His widow is a daughter of a very celebrated Australian statesman, Alfred Deakin. She, by his side, maintained these tremendous traditions and activities. To her I should like to convey on behalf of us all our profound sympathy, our deep understanding of what this place and Australia loses when a man of parts, of courage and of unselfish patriotism leaves it. Sir, I move -
That this House expresses its deep regret at the death of the Honorable Sir Thomas Walter White, a former member of this House for the Division of Balaclava, and a former Minister of the Crown, places on record its appreciation of his long and meritorious public service and tenders its profound sympathy to his widow and family in their bereavement.
– Mr. Speaker, I second the motion. It was a great shock to hear of the death of Sir Thomas White. He was for so long a member of the House, and he had a presence in the House which will never be forgotten by those who were his colleagues or his opponents. I suppose in the long period he spent on this side of the House no one was more pertinacious or determined than he was on any matter in which he was interested; and the matter in which he was supremely interested was the defence of this Commonwealth and the British Commonwealth. He was never tired of referring to that subject. He was never satisfied until he got a satisfactory answer. As the Prime Minister has said, his book describes adventures in World War I. of an amazing and thrilling kind, which never could have been faced by a person without his perseverence and courage. He distinguished himself greatly at that time. Later, he became a prominent member of this House and a distinguished Minister of State. Then came the even greater crisis of World War II. I do not recollect exactly what the age limit was, but as soon as he possibly could he sped straight to where he could serve his country again - in the Air Force. I personally pay a special tribute to him, because in 1942 and 1943, when I was engaged on an air supply mission for the Government, he was there in London helping me and those with me in ways which need not be described, but which were always useful.
I deeply regret his death. On behalf of the Opposition, I send a message of sympathy to Lady White, a very prominent woman in the life of this country, through, her patriotic, charitable and other associations. We shall never forget Tommy White. He was a man whom it is impossible to< forget. We shall always associate his trimfigure in Air Force uniform with the crisis of World War II. I feel very deeply his sudden passing.
– Since Sir Thomas White represented the constituency of Balaclava for 22 years, and because hewas a close personal friend of mine and there has been close association, over many years, between the Deakin family and my family, I desire to be associated with themotion that has been submitted by thePrime Minister (Mr. Menzies). Sir Thomas White was a man of great qualities who1 won great distinction; but he had the charm of simplicity about him, and his laurels rested easily on his brow. As has been mentioned by the Prime Minister, his work covered a wide field. I shall refer only tothat small part of it of which I know something myself; that is, in relation to Balaclava, and in relation to life-saving.
The people of Balaclava regarded Sir Thomas White very highly, as a gentleman of courtesy and friendliness, as a war herowho kindled the imagination, and as one who could not easily be forgotten. In relation to life-saving, he will be remembered for many years as one who did so much for life-saving in this country, and even when, he was High Commissioner for Australia inEngland he did not lose his interest in this work.
As High Commissioner in England, he was a notable ambassador. He and his wifefitted well into the English scene. He became known there as the doyen of the diplomatic corps, and, effective speaker as he was in this country, the wider opportunities which he had in England enabled him to make many notable speeches which even his father-in-law, Alfred Deakin, the “ spellbinder “, the “ silver-tongued orator “, would have been proud to make.
The Prime Minister has spoken of Sir Thomas White’s great personal courage. Those who were in this House when he washere will recall that he was always foremost in attack and always ready to defend. Indeed, there was such a degree of eagerness and spontaneity about his courage that it may well be said that he typified Balaclava. The words, “ Theirs not to reason why, theirs but to do or die “, were indeed typical of the courage of Tom White when he was determined that right would be done, even if he had to venture all -
Because right is right, to follow right Were wisdom in the scorn of consequence.
When Sir Thomas returned from England last year the people of Balaclava greeted him with joy. To-day there is dismay and consternation there at his sudden passing. In a spirit of sadness and sorrow all the electors of the Division of Balaclava - that is to say, all his friends in Balaclava, because it is the same thing - would like to be associated with this motion, and to send their sympathies to Lady White and Sir Thomas’s daughters in their loneliness and loss.
Question resolved in the affirmative, honorable members standing in their places.
-I ask the Prime Minister whether he has yet received from the New South Wales Government any acceptance of the offer which he made, on behalf of the Commonwealth, to provide £400,000 towards the cost of reconstructing and tar-sealing the road from Canberra to Bateman’s Bay and the road from Canberra to Cooma. If a reply in favorable terms has been received from the New South Wales Government, is it possible to work out the details of this agreement between the Commonwealth and the State within the next few weeks? How soon may we expect to see this important work begun?
– I am not aware of whether we have received an answer. We may have. Perhaps I should have asked about it this morning. However, the honorable member may take it that if the answer is favorable no delay will be allowed to occur in the working out of the necessary steps to which he refers.
-I direct a question to the Minister for Supply. As 17th October will be the first anniversary of the opening of the atomic power station at Calder Hall, in the United Kingdom, which was the first atomic power station to operate commercially, can the Minister indicate whether the first year’s operations have been successful? What progress has been made with the plans for atomic power stations in Australia?
– I will bring the question to the notice of my colleague, the Minister for National Development, and will let the honorable member have a reply as soon as I can.
– Is the Minister acting for the Minister for Health aware that great hardship is caused to pensioners by the means test imposed on medical benefits under the National Health Act? Is he aware also, that, in many cases, the greater part of pension and income is being expended on the payment of doctors’ fees and contributions to medical benefit organizations? In view of these facts, will the Minister consider immediately removing the means test on medical benefits for pensioners, and thereby end this injustice against the aged, the sick, and the infirm?
– I should like to point out that, until the present Government took office, the pensioners had no free medical services or medicines. This Government spends between £5,000,000 and £6,000,000 every year to give the pensioners the benefit not only of medical attention and free medicines, but also of a considerable measure of assistance with hospital expenses.
– Will the PostmasterGeneral inform the House why he refused to receive a deputation of representatives from various theatrical and actors’ organizations after having consented to meet it?
– On Thursday afternoon last, I received a telegram from the secretary of Actors and Announcers Equity Association of Australia. I understand that that is the organization to which the honorable member refers. Is that correct?
– That is correct.
– I was asked in that telegram whether I would meet a deputation to discuss certain matters relating to the development of the Australian content in television programmes. The telegram referred to a previous telegram which, on investigation, I found had not been sent. However, as a consequence of a second telegram, received on Friday, my staff notified the secretary of Actors Equity that I should be prepared to meet a delegation at 2 o’clock to-day. There was no refusal at that time to see the delegation. At the same time, I asked that I be informed of the size of the delegation, and that I be given some details of the matter to be discussed. No reply to that request has been received. Late on Friday night, in Sydney, I heard that, after a conference with the arbitrator, who, I believe, made certain very wise recommendations to Actors Equity, it had been decided that a 24-hour strike would be called for to-day. Therefore, I immediately instructed my staff to inform th : secretary of Actors Equity that I should not be prepared to meet a deputation while a strike was in progress.
– I direct a question to the Treasurer, who has recently returned from a meeting of the member nations of the International Monetary Fund.
– We are pleased to have him back.
– Yes, we are pleased to have him back. We may now get some satisfactory answers to questions. I ask the Treasurer whether, at the meeting, there was any discussion about an increase of the price of gold. If there was, what were the views of the member countries, including Australia, about a suggested increase, and was any move made for a vote of the member countries?
– Under the procedures followed at the annual meeting of the member countries of the International Bank for Reconstruction and Development and the International Monetary Fund, normally no vote is taken on matters of this kind. The views of the member countries are stated in the various speeches made. The views of both Australia and South Africa favouring an increase in the price of gold were stated, and the executive directors of the fund are considering the matter.
– I ask the PostmasterGeneral whether it is a fact that, on 9th October, the Australian Broadcasting Commission’s transmitting station in Western Australia, known as 6WA, went on the air with increased power. If this is so, can the Minister give the House any information about the quality of reception with the increased transmitting power, not only in areas in proximity to the station, but also in the far north-west of Western Australia? If the Minister has no information about the quality of the reception in those areas, would he be good enough to obtain it, so that the rest of Australia may be informed of the advantages derived from the action of the Postmaster-General’s Department in increasing the power of various stations, I understand, to 50 kilowatts?
– It is a fact that station 6WA at Wagin, in Western Australia, recently commenced broadcasting with much greater power - 50 kilowatts - than formerly. This is part of a plan, which is being put into operation by the Australian Broadcasting Control Board and the PostmasterGeneral’s Department, to give a better service to outlying centres throughout Australia by building up the power of certain stations. Station 6WA is the first to have its power increased. Certain other stations, which will service parts of north Queensland and other parts of Australia, will have their power progressively built up. Because honorable members from Western Australia, led by the honorable member for Canning, have been stressing for some considerable time the desirability of providing better reception in areas such as the Kalgoorlie district and the north-west, I have asked the department to give me a report as soon as possible on any improvement in reception caused by the increase in the power of 6WA. There has not yet been time to obtain any reliable report, but I can assure the honorable member for Canning and others interested that as soon as I have the report I shall make it available.
– I preface my question to the Prime Minister with a reference to the fact that the New South Wales Government is at present contem- plating the provision of financial assistance for the victims of the disastrous bushfires which occurred in that State last week. Since many homes were destroyed, including twelve located in the Gray’s Point area of my electorate, will the Government consider meeting any contribution made by the New South Wales Government, on a £l-for-£l basis, to assist in the reconstruction of the homes and the rehabilitation of the families concerned?
– There is a fairly wellestablished practice that is followed when a very large disaster occurs. The Government of the State concerned communicates with the Commonwealth Government in such cases, and in the past we have been able to make satisfactory arrangements about the matter. While everybody regrets this disaster, I do not personally know enough of it to say whether it is of sufficient magnitude to warrant a request by the State for assistance, but if any such request is received it will be considered.
– Has the Treasurer seen a report that three hire purchase companies have made substantial reductions in their rates of interest in respect of motor vehicle transactions? If so, can he say whether they have been assisted in this direction by the recent reduction in the rate of company tax?
– I am sure that every company that has maintained or increased its dividend rate or has been able to reduce its charges to its customers has been assisted very materially by the taxation policy of this Government.
– Has the attention of the Minister for Social Services been directed to figures issued by the International Labour Organization, and used in this chamber and in another place, giving the percentages of national income appropriated for social security expenditure in 24 countries of the free world? Do these figures range from a maximum of 21.88 per cent, in the Saar to a minimum of 2.12 per cent, in Turkey? Is it a fact that the Australian expenditure on social services is given as 6.87 per cent, of the national income? Can any reliance be placed on these figures as giving a true reflex of the position in the 24 countries mentioned in the I.L.O. report?
– Knowing the honorable and gallant member for Hume as I do, I am tolerably certain that he is aware of the fact that no reliance can be placed on percentages of the kind that he mentioned. Indeed, the International Labour Organization warns against it, and the warning is particularly applicable to the percentage of expenditure on social security in our own country. The International Labour Organization ignores the fact that we are, after all, a federation and that all six State governments have heavy commitments on social security. If these commitments were added to the Commonwealth expenditure on social services, quite obviously the alleged percentages would be appreciably increased. The absurdity of the figures is revealed when it is realized that a country with a high national income would naturally have a low percentage of expenditure on social security and, conversely, a country with a low national income and a large population would have a high percentage of expenditure on social security. So, there is no virtue in these deductions nor have they any practical value. I am quite certain that the honorable member for Hume will agree with me that it would be the height of folly to reduce the national income of our country by half for the doubtful privilege of doubling the percentage of public expenditure on social security. These figures are never used by any reputable person, except, and for dubious purposes, by honorable members of the Opposition from time to time.
– I desire to direct a question to the Postmaster-General. In view of the action taken to increase the power of certain broadcasting stations, particularly in Western Australia, and in view of universal complaints concerning broadcasting reception in north-western Queensland, particularly in the Mr Isa-Cloncurry area, has the Postmaster-General given any consideration recently to the numerous requests from that area for an improved broadcasting service, be it national or commercial?
– I think 1 indicated in my reply to the question put by the honorable member for Canning that consideration was being given to the improvement of reception in areas where it was not good. The honorable member will be interested to know that one of the stations listed for an increase in power is Townsville and that it will be built up to the same power as 6WA. I cannot inform the honorable member exactly when that will happen, but it will be in the reasonably near future. That in itself will provide considerably improved reception in areas in the west of Queensland. I think the honorable member knows that I am aware of the conditions in that area because I have been there myself and have had discussions with people in Mr Isa and other areas. The proposal for a station, either national or commercial, at Mr Isa has also been represented to me, and I am having it investigated at present. I expect to be able to give the honorable member further information within a few weeks.
– Can the Minister for Labour and National Service give the House any information concerning the waterfront stoppages that are at present taking place in Queensland, particularly with reference to any possible attitude adopted by waterside workers to prevent sugar loading?
– I regret that I am not able to give the honorable gentleman an immediate answer on the matters he has raised. I have not had brought to my notice any particular occurrence in recent times which would suggest a worsening of the waterfront position. In fact, this year we have had a very much better experience, generally speaking, around the waterfront than in any earlier year that I can recall. The last report I had of movements from the sugar ports indicated that, with the exception of, perhaps, Port Douglas and one or two of the north Queensland ports - my mind is not precise on the point at the moment - the sugar movements have been rather better than usual. In the port of Mackay, where bulk loading facilities have been installed, there has been a very dramatic improvement. Ships which formerly took about three weeks to load are now being loaded in about two days. If the honorable member has any particular instance in mind which he would like to bring under my notice, I shall be glad to discuss it with him and see what information I can gather.
– I ask the
Prime Minister whether it is the invariable practice for departmental heads, when travelling abroad, to be accompanied by their wives at the public expense. If this is not so, would the Prime Minister prepare a statement giving cases in which such a happening has occurred?
– It is not the invariable practice, nor, of course, is it the practice for a departmental head to be accompanied by his wife when going abroad, but I, myself, have developed the practice of approving of that happening from time to time. Some departmental heads may have to go abroad quite frequently in the course of their work, and it seemed to me to be perfectly fair that if a man had to go away, say three years running, as does happen in some departments, then, on the third occasion, his wife should go with him, at the expense of the Government. That, I think is a reasonable thing. I do not think it is a practice that has been abused. 1 know of one or two cases in which, the general rule having been exhausted, it was still felt by the husband that he would like his wife to go at a shorter interval of time, and, in those cases, he paid her expenses himself; but that is something over and above the general rule.
– I ask the Minister for Primary Industry: In view of the disastrous condition in which the poultry industry, particularly the egg section of it, finds itself at the present time, and, having regard to the possible impact of the disastrous failure of the wheat crop almost throughout Australia, has he taken steps to consult with the Australian Wheat Board authorities in New South Wales and other States, and the Treasury, with a view to ensuring that the cost of the basic food of wheat to maintain this industry will not be such as to endanger the industry’s future?
– Consultations have taken place on a broad governmental level.
Arrangements are in train for the Standing Committee on Agriculture to meet, and I have also discussed the problem of dry conditions with various other organizations interested in the problem. The Australian Wheat Board has, itself, acted independently. As the honorable member would know, it is an independent organization. It has made arrangements for the supply of wheat to both New South Wales and Queensland in order to cover the needs of human consumption and stock feed in conjunction with their own supplies. I can give the honorable member an assurance, on behalf of the Government, that this -whole problem is under continuous review. We are watching each aspect of the problem in order to make up our minds just how and when we should act.
– Does the PostmasterGeneral know of the proposal to transfer the existing telephone exchange at Jervis Bay to the nearby New South Wales centre of Killarney after the return of the naval college to Jervis Bay? Will the Minister inquire into the reason for the selection of Killarney as the site for the new exchange over the claims of the nearby settlement of Hyam’s Beach? Will the Minister ascertain whether the reasons advanced by his department for the selection of Killarney were unsupported by the facts?
– I regret that I cannot immediately give the honorable member the information for which he is asking, but I shall obtain it and let him have it as soon as possible.
– My question is directed to the Minister for Defence, and deals with the visit to Australia of the United States Technical Mission of leading defence experts, which is at present in South Australia. Because of the factory potential in Western Australia, the availability of labour, and the justifiable demand for additional Commonwealth capital expenditure in that State, I ask whether arrangements may be made, even at this late stage, for the United States mission to visit Western Australia.
– It is true that the mission has been informed of the manu facturing capacity and potential of Western Australia. I had hoped that it would be able to go to Western Australia and inspect the resources of that State, but unfortunately the members of the mission themselves decide where they are going, and what they want to see. I can assure the honorable member that at the moment these matters are being discussed with the mission.
– Seeing that the recent increase of power has resulted- in a better broadcasting service to Western Australia, has the Postmaster-General yet reached a decision, on representations made to him and his predecessor in office over a period of years, to provide a broadcasting service for important outback areas of the Northern Territory, such as Katherine and Tennant Creek, where at present residents have to rely on Radio Australia transmissions, which are directed at overseas listeners, and which have little local interest for listeners? Has the Postmaster-General any plans to increase the two low-powered stations already in operation in the Northern Territory, which at present render only a local service?
– The improvement of the broadcasting service in the northern and north-western areas of Australia is a problem to which the Postmaster-General’s Department and the Broadcasting Control Board have been applying themselves for some time. Unfortunately, as the honorable member will agree, it is a difficult problem because of the sparsity of the population in the area. Consequently, efforts have been made to serve the area largely through short-wave stations, the reception from which is sometimes affected to some extent by the operations of stations outside Australia, over which the department has no control. I cannot say as yet that the board has found any satisfactory solution, but I can tell the honorable member that it is a matter to which we are paying attention all the time, and I hope that in the near future we shall be able to effect an improvement, particularly, of course, as far as Darwin is concerned, where the situation is somewhat different from that in the Kimberleys, and in certain other areas of the Northern Territory.
– Is the Minister for Labour and National Service aware that there has been a serious outbreak of mucosal <disease among young cattle in south-eastern South Australia? Can the Minister inform me whether the Commonwealth Scientific -and Industrial Research Organization has undertaken research to discover a cure for this disease? If it has not, will the Minister ask the Commonwealth Scientific and Industrial Research Organization to treat it as a matter of urgency?
– The Commonwealth Scientific and Industrial Research Organization is aware of the fact that a disease of cattle resembling the mucosal disease which occurs in some areas of the United States of America and the United Kingdom has been reported from South Australia. The South Australian Department of Agriculture is taking the necessary preliminary steps to establish a definite diagnosis. I understand that this outbreak will be one of the subjects for discussion at the biennial conference of Common1 wealth and State veterinarians which will meet in Canberra on the 28th October. The question of research which the honorable member raised will be considered then and a decision will be taken as to what action regarding control of research might be recommended to the appropriate authority.
– I draw the attention of the Minister for Social Services to the fact that on 8th October I asked a question regarding improvement of the reciprocal agreement between Australia and the United Kingdom dealing wilh the qualifying period of twenty years in respect of the age pension. In the latter part of my question I asked whether he would consider deleting the twenty-year qualifying period which applied to immigrants from lands other than the United Kingdom and New Zealand. The Minister replied to the first portion of the question by stating that the matter was being examined as far as New Zealand and the United Kingdom were concerned; but he did not answer the latter portion of the question. I ask him now whether, if any alteration is made in the twenty-year qualifying period of residence for immigrants from the United Kingdom and New Zealand, he will also delete the qualifying period in respect of immigrants from other lands.
– I have nothing to add to the adequate answer that I gave to the honorable member’s question on a previous occasion. The reciprocal agreement between the United Kingdom Government and Australia, and the agreement between the Government of the Dominion of New Zealand and Australia, have recently been under discussion on a tripartite basis. The state of perfection would be reached, perhaps, if we could arrive at unanimity with regard to residential qualifications and accept residence in one country as being residence in the other for the purpose of qualifying for social service benefits. But that unanimity has not yet been reached. When it is reached, the Parliament will be informed in the usual way. ,
– I wish to ask the Minister for Primary Industry a question supplementary to that asked by the honorable member for New England. In view of the disastrous conditions in the east of Australia, it seems more than likely that wheat will have to be transported from South Australia and Western Australia to help the people in the east. At the moment, it seems as though there may be. some difficulty over the payment of freight. I ask the Minister whether he can give the House any information about discussions he may have had on this vexed question. I also ask him to keep the matter under consideration with a view to ensuring that the Australian Wheat Board is not asked to carry the whole of this burden.
– If 1 may deal with the last part of the honorable gentleman’s question first, I think it should be made clear that the Australian Wheat Board will not be asked to pay any portion of the excess freight between Western Australia and South Australia on the one hand, and New South Wales and Queensland on the other. I put it to the House that we should look at this matter temperately, and not regard it at present as one of real disaster. I think it is an occasion for cool heads and cool minds rather than an occasion for hurried decision because if we make hurried decisions there is a greater probability of their being wrong. The Australian
Wheat Board has already taken up this problem and has agreed to the movement of wheat to the two eastern States mentioned. As to interstate freights, Queensland is at present paying excess costs - that is, consumer interests are paying for wheat imported this season. I have heard that the New South Wales Premier will approach the Prime Minister about the payment of freight to New South Wales. So far as I am aware, no approach has yet been made, but as soon as it is received I have no doubt that the Prime Minister will pass it on to me for consideration.
– In view of the damaging effect on the Australian economy of bush fires which annually destroy a large number of homes and huge areas of primary producing farmlands, I ask the Minister acting for the Minister in charge of the Commonwealth Scientific and Industrial Research Organization whether that organization is concerned with experimentation to improve bush fire fighting techniques. In particular, I ask whether anything is being done to develop aerial foam bomb firefighting methods. If nothing is being done in this respect, will the Minister give an assurance that this field of scientific development will be investigated with the least possible delay?
– I shall see what information can be supplied by the Commonwealth Scientific and Industrial Research Organization and let the honorable member have it.
– As it is now apparent that the estimate of this year’s wool clip which was made by the Division of Agricultural Economics is far too optimistic - I think a record clip was forecast - can the Minister for Primary Industry say when a new estimate will be made so as to give buyers a more accurate idea of the amount of wool that will be available? Is it a fact that, last year, two different estimates of the clip were made, one by the division and one by the National Council of Woolselling Brokers? Whose job is it to produce this estimate?
– Annually, the Australian Wool Growers’ Council, the National
Council of Woolselling Brokers, and the Division of Agricultural Economics, after presentation to them of statistical material by the Commonwealth Statistician, prepare an estimate of the Australian wool clip. The estimate is the result of a mutual effort by these organizations and it is not made by any one of them. The estimate of the possible wool clip which was made three weeks before the opening of the sales was about 1,600,000,000 lb. Due to reports, that have come in lately, it has been thought: desirable that another estimate should bemade. However, it is considered that thereshould not be a panic approach to this problem, but rather that the new estimate should be based on reason, and made after an examination of all the facts. The preliminary facts are now being collected. The National Council of Woolselling Brokers and my department thought that it would not be realistic to make another estimate before the October wool was received into store. As soon as the October returns come to hand, a new estimate will be made by the organizations that I have mentioned, and then released publicly.
– I preface a question to the Prime Minister by informing the right honorable gentleman-
-Order! The question will be out of order if the honorable member proposes to give information.
– Then I will not give the information and perhaps the question will be more difficult. In view of the published statement by the Premier of South Australia that he cannot yet understand the contents of the Prime Minister’s last letter to him on the Snowy Mountains scheme, will the Prime Minister assist the House and the country generally by telling us what the letter meant?
– I have not seen such a statement attributed to the Premier of South Australia. If the fact is that he finds my communication difficult to understand then all I can say is that I am surprised.
– Will the Minister for Primary Industry make investigations with a view to informing the House of the degree of severity of drought conditions throughout
Australia? When doing this, will he disregard newspaper reports of the sale of sheep for a few shillings in the Mallee area? Does he know that the few sheep that are being sold at low prices are aged and what are known to the trade as “ crackers “, the price of which fluctuates according to the demand by canners?
– Two excellent reviews of the present dry conditions throughout Australia have been prepared, one by the Commonwealth Bank and the other by my department. I have read through them. They are voluminous and deal with each of the agricultural sections of the Commonwealth. I shall take note of what the honorable gentleman has said and if I can get a short document prepared which will be of advantage to members I shall seek leave of the House to make a statement on the subject. I think it is important that we should get a balanced and realistic view of the conditions in the agricultural areas, and therefore I will have a document prepared and, as I have said, if the Opposition is agreeable I will be only too happy to make a statement to the House.
– ls the PostmasterGeneral aware that I have had a question on the notice-paper for over a month in relation to the composition of Australian television programmes and the future of these programmes in Australia? In view of the critical position that has been reached in regard to these matters and the relevance of the answers to those questions to that position, can he say why it should take a month to provide the answers?
– It is correct that the honorable member has had a question on the notice-paper for some weeks on the subject which he mentions. The reason he has not yet received a reply lies in the fact that he has asked for a good deal of detailed information, concerning the constitution of television programmes, which has to be obtained from licensees by the Australian Broadcasting Control Board. I think the honorable member will agree that he asked a detailed question and that he expects to receive reliable information in reply. That can only be obtained from the licensees. The board moved, immediately the question was asked, towards getting that informa tion, and informed me only last week that it regretted some time had elapsed but it was endeavouring to furnish the reply as quickly as possible.
– I ask the Minister acting for the Minister in charge of the Commonwealth Scientific and Industrial Research Organization whether it is a fact that the scientists in the Commonwealth Scientific and Industrial Research Organization have discovered a way of treating wool that will make it stand up to the vagaries of travel and weather as synthetics do. If this is so, and having in mind the importance of the wool industry to this country and the competition from synthetics, will the Minister obtain for the House all the details possible and furnish honorable members with that information so that we ourselves as individuals can act as salesmen for this industry upon which the economy of Australia so seriously depends?
– The honorable member rightly stresses the importance to Australia of the wool industry, and I wel-‘ come his undertaking to give publicity to the desirable qualities of wool in contrast with synthetic textiles or synthetic fibres. I feel, however, that the question he has put calls for a precise and authoritative answer, and therefore I shall take up his inquiry with the council and see whether I can supply a general statement which will be of value to honorable members.
– I should like to ask the Postmaster-General: Is he aware, so far as television is concerned, that not one Australian play produced in this country has been screened by the commercial stations producing television? How does this compare with his statement in the House that he would watch the interests of the Australian actor, playwright and technician? Has he spoken to the Australian Broadcasting Control Board on this matter, or has he vacated the field? Is it not a fact that he would not see the deputation waiting at present in the King’s Hall because he had no legitimate answer to give to the deputation?
– I have already replied this morning to the second part of the honorable member’s question and given the reason why only at the last moment, as a result of action taken by Actors Equity and not myself, I said I would not be prepared to see them. I pointed out thatI had agreed to see them only last Friday.
Regarding the other part of the question, the Australian Broadcasting Control Board has been inquiring into all the aspects of this problem, and I think it would be desirable if some of the members applying themselves to this question realized that there is a number of aspects which have to be considered before we can reach a solution. The Broadcasting Control Board, within recent weeks, has had deputations from the various bodies that have some say in this matter as, for instance, the Television Rights Council, the representatives of the Australian producers of television programmes, as well as Actors Equity. All these matters are under consideration and the matter certainly will not be lost sight of.
Motion (by Mr. Harold Holt) - by leave - agreed to -
That so much of the Standing Orders be suspended as would prevent (a) Notice of Motion No. 1, General Business, taking precedence of all other business during this sitting and (b) the right honorable the Leader of the Opposition (Dr. Evatt) and the honorable the Minister of Defence Production (Mr. Beale) each speaking on the motion for a period not exceeding one hour.
Dr. EVATT (Barton - Leader of the
Opposition) [3.32]. - I move -
That as a matter of extreme public importance a select committee of this House be appointed immediately to inquire into -
– I have moved for the appointment of a select committee of the House of Representatives to inquire into, first, the decision of the Government to construct a munitions filling and assembling factory at St. Mary’s, and secondly, which is even more important, into the subsequent carrying out of the decision, together with the costs and expenses of the project to the Australian taxpayer. The cost of this project has reached a very high figure indeed, lt is a characteristic feature of the matter that the actual costs and expenses involved were not disclosed until a very late period; that is to say, answer after answer was given to honorable members in this House and elsewhere in relation to the project, it always being stated that the cost to the Commonwealth would be £23,000,000 or £23,200,000. It was only comparatively recently that we found out, first of all from the Minister for Defence Production (Mr. Beale), who is at the table, that there was to be an increase of approximately £3,000,000 of the cost of the project. But even his statement did not disclose the whole tragic truth of the matter, because although an extra £3,000,000 approximately - I am not using the precise figure for the moment - was to be spent, the project itself was to be reduced, or part of the work was to be postponed, the deferred expenditure being estimated at about £2,000,000. So that the net result to the taxpayers of Australia is that the warnings of honorable members, mostly from the Opposition, but not only from the Opposition, of what would happen under the arrangements that had been made, have been borne out in the event.
The decision was made on 16th May, 1955, the estimate being £23,200,000. Stephenson and Turner, of Melbourne, were employed as architects for the project. This was a firm well known as architects in connexion with a certain type of building, especially hospital construction. So far as
I know, this is the first project of the kind ever committed to them. It is obvious, I think, when we look at the surrounding circumstances, that this was not a part of their true metier. Stephenson and Turner were not skilled in this type of project. They were chosen as architects, as far as we know, without any attempt having been made to select from a panel of architects. In connexion with the great projects conducted under previous governments, such as the Woomera project and many others, there was such a selection, as honorable members will know. There was a joint effort on behalf of the professions. Of course, the big feature of the selection of this firm of architects was the rejection by the Government of the experience, the ability and the skilled knowledge of the Department of Works in which, I think, there are no fewer than 60 architects employed. But no! This Government does not believe in employing the servants of the Crown to carry out the functions of the Crown. If it can, it wants to hand over such matters to people who have not the experience of the Department of Works.
In a speech which, I think, will be regarded as one of the greatest speeches ever delivered in this House, Mr. Nelson Lemmon, who was Minister for Works when the Woomera project was undertaken by the Labour government, warned the present Government that the kind of thing that has been happening, and to which the Auditor-General has referred in his reports, must happen under the system that was decided upon. There is no doubt that Mr. Lemmon and my friend, the honorable member for Bonython (Mr. Makin), warned the Government to that effect. But they were not the only ones to do so. Honorable members on the other side of the House including, I think, the honorable member for Chisholm (Sir Wilfrid Kent Hughes), also warned the Government.
The responsible Minister at the time was Sir Eric Harrison. He was, for a considerable period, Leader of the House, without much of a department to administer. One day, some of the wits of this House asked him, apparently seriously, whether he knew where his department was and whether he ever visited it. Although that may have been an attempt at humour, it was obvious that he did not exercise proper authority and control over the Department of Defence Production. But of course, when the big project was coming along, enter Eric Harrison! He was the Minister who answered questions about the project during that period, but in my opinion he did not reveal to the House the facts which he knew.
Although the Minister for Defence Production (Mr. Beale), in June, 1957, stated that there was to be an increase of £3,000,000 in the cost of the project, it was known by the Government twelve months before that the cost would be at least £3,000,000 more than the estimate which was stated to the House over and over again after that knowledge came to the Government. It is a very sinister thing, iti my opinion, to see the way in which questions on this matter were answered. I shall refer to this aspect as shortly as I possibly can.
The Auditor-General’s report is an utter condemnation of both the architects and the contractors. Who were the contractors? They were Utah Australia Limited, a firm which, apparently, sets out to get hold of projects of this kind from governments in circumstances in which, whatever happens, the government concerned will bear the cost. This is what is called a costplusfixedfee transaction; that is to say, the contractors do the work at cost, and collect a stipulated fee. I shall refer to this matter again shortly. Honorable members may be sure that I shall not overlook it. The sum of £1,250,000 was paid to a firm of architects for a project which was essentially engineering, and not merely a building proposition, such as were the hospitals and the other buildings of a similar character which it had carried out. Why was it selected? It seems to me to have been a wrong thing to have selected that particular firm when the Government had the whole resources of the Commonwealth Department of Works at its disposal - men of proved skill in the greatest crisis that confronted Australia, when such factories and works had to be erected suddenly during the great emergency of war.
Now I come to the second actors in the scheme - the contractors. There were two firms of contractors. One was Concrete Constructions Limited and the other was Utah Australia Limited, the latter of which is controlled by Utah Constructions, a
United States corporation which is apparently skilled in getting contracts of this kind. It is not an Australian firm. As I pointed out, it is a firm from overseas. It has methods of getting business done which it thinks are sufficient. It has not the technical or the practical experience of the great builders whom we have had in this country. Mr. Nelson Lemmon, in the speech to which I have referred, made reference to the tremendous contribution made by the builders of this country - John Grant and all the other people - in carrying out contracts. It would be true, as Mr. Nelson Lemmon said, that the experience gained by the Labour government, and the experience of all, is that in these transactions we should have a fixed price contract - a firm price - if we are to protect the country from exploitation. Has not that safeguard - the only safeguard - against anything of the kind that has happened in this particular case always been used by governments no matter what their political views?
In my opinion, even basing my views on the report of the Auditor-General alone, the work has been done with utter disregard for the public interest, with simply a desire at all costs to spend the money. I go back to the period, not recent, when this Government asked for a huge defence vote of £200,000,000. Towards the end of that particular financial year instructions were given from time to time to spend and spend and spend so that as much could be expended as was physically or financially possible before the year was ended. There is that element in this case, too. The complaints that keep pouring in to the Opposition from people who believed that this should be investigated are really amazing. We have reports of cases in which the quality of cement was completely unsatisfactory. There are other matters of that kind running into details with which I shall not trouble the House now. I think, however, that I should point out this: That fee of £1,250,000 was very large - in my submission it was excessive - and it would, of course, be a matter for the committee appointed, if one is appointed, to determine these things. Is that the right way of fixing the fee for this type of transaction? I submit that it is not.
The decision of the sub-committee of Cabinet to go on with the project was based on a definite estimate of total cost, namely. £23,200,000. An inter-departmental committee was set up to act in conjunction with those in charge of the project. Tenders were invited and the two contractors I have mentioned jointly offered to construct the factory at actual cost. Actual cost - the cost that would be incurred, plus the fixed fee. Cabinet accepted the offer on 20th July, 1955, and the work was to be completed in December, 1957. But the fixed fee for the contractors, it was agreed subsequently, was to be £615,000. No formal contract was completed at the time of the Auditor-General’s report of 1956, but the work was undertaken and progress payments were made. I will not bother the House with the detail of the expenditure up to the end of each financial year. I say without any qualification that the report of the Auditor-General for the two years, 1956 and 1957, in itself establishes beyond any doubt that there is a case for close inquiry into the whole operation of the project, from the original decision right through to the ramifications of the task, so that the nation and the Parliament will know how public moneys have been expended, and if there has been default or waste the people responsible for that will be dealt with by the Select Committee in its report. I think that if that is not done in a case like this it means that the Government is not willing to have the administration of the project examined.
I am not accepting the findings of the Auditor-General’s report as necessarily correct either. They may be an over-statement as against the contractors and against the architects concerned. Equally, they may be an under-statement. There are signs in the report which, in my reading of it, indicate that the document is not of one piece. That is to say, the condemnation is there and then suddenly the qualification or the possible excuse. Therefore it is a matter for investigation to find out the truth. The actual report of the Auditor-General is, in a sense, summarized in my motion which appears on the notice-paper. I have not done more than put in substance the various matters with which the motion deals in sub-paragraph (1) (b), items (i) to (ix) inclusive. Those items deal with the cases of inadequate supervision, for instance. The press commented on it, and was quite correct in saying that these are the findings or comments of the Auditor -General operat ing against the contractors and the architects who may, in various ways, be treated differently. But both are responsible for inefficiency, waste and the extravagant and enormous and unnecessary expenditure to which the Commonwealth has been put. I am speaking on the assumption that the decision to build the new filling factory cannot be disputed. Accepting it for the moment, this expense has got to be looked at.
The other point is, of course, very important, and I think it would be wise to mention it at the present juncture. That is the statement by the Prime Minister recently in reply to criticism of the project, when he said that it would have been a strange act of irresponsibility if the Government, without reason, had rejected the Chiefs of Staff’s advice that the factory was of the very first priority. We know that that statement caused the intervention of one of the leading experts, so far as the relevant subject is concerned, in the Australian Army. Major-General Legge wrote his letter to the press in which he said -
It is true that a filling factory is top priority, but by itself it is quite useless. It puts together the explosive and the container. Without capacity to make the explosive and the container, ammunition cannot be produced. Without weapons, vehicles, signal equipment, many thousands of other material items, and without adequate numbers of highly trained men, ammunition cannot be used effectively in war. All this costs money, a very great deal of money, and to maintain a proper balance between the many top priority items-
I repeat that - “ the many top priority items “ - it is vital that extravagance in any one direction be avoided.
Major-General Legge is not there saying that a filling factory, any filling factory, should not be top priority. He is admitting thai it would, but he is saying that there are so many top priority items that would need to be treated in balance that the decision should be made having regard to that fact. He goes on -
It is my belief that, apart altogether from the matters criticized by the Auditor-General there has been gross and inexcusable waste of public money at St. Marys, not, as the Prime Minister seems to imply, on the advice of the Chiefs of Staff, but in fact contrary to the recommendations made………
The simple facts are these: -
There was a filling factory at St. Marys during the last war.
This was handed over in the main to industrial concerns on permissive occupancy after the war.
After exhaustive examination by the Department of Defence Production, the Director-General of Works, the Defence Production Planning Committee, the Joint War Production Committee and the Defence Committee, all these recommended -
That the old factory be repossessed and reconditioned.
That if the Government thought necessary, the civil industries in occupation should have alternative accommodation provided for them in adjacent areas.
That a new factory be not built since the cost of a completely new factory would be nearly double that of reconditioning the old as well as providing alternative accommodation for the occupying industries, and would take appreciably longer.
Major-General Legge’s conclusion is vital. It is -
The fact that a filling factory is a top priority item is not open to doubt. The means adopted to produce it are open to criticism and require explanation and justification. 1 do not propose to go back to the dispute. The Prime Minister (Mr. Menzies) emphasized in his statement that an ammunition filling factory had top priority, and Major-General Legge did not dispute that. All that he disputed was the decision to build a new filling factory. The causes and the surrounding circumstances ought to be examined. Where are the explosives that are to be sent to St. Mary’s to be put into containers being manufactured? They are not being manufactured in New South Wales, where there is no provision for the production of explosives. They are being manufactured in Victoria. That aspect of the matter is important. Other things being equal, I should have thought that it would have been better to take the containers to the explosives, rather than the reverse.
However, that is a matter of opinion, and I shall not go into it. What was more important was the demand that was made in this’ House, and in the Senate, that this establishment should not be situated close to the sea at a vulnerable site.Indeed, the site is highly vulnerable in time of war, and was declared a highly vulnerable area during World War II. It was stated, in this House and in the Senate, that the site should not be used for this purpose, because there would be great risk to the factory from possible attackby an enemy. Glen Davis, and other places such as Parkes and Orange were proposed,but apparently they were airily waved aside by Sir Eric Harrison. Reference has been made to the United States of America. The great defence production establishments in California have mostly been removed bodily from the coast to the Rocky Mountains in order to put them beyond the reach of attack by an enemy, whether from the air or otherwise.
These are important considerations, and they raise the question of how the factory at St. Mary’s came to be started, on which, of course, there may be differences of opinion. Major-General Legge’s view is that the Government could have used the old factory for the required purposes. One writer commented that, when the new factory is completed, later this year, it will be able to operate only at less than half its capacity; that neither the containers nor the explosives are being made at St. Mary’s; and that they are being made at government factories, nearly all of which are in Victoria.
– Where did the right honorable gentleman get this material?
– From the “ Sydney Morning Herald” of 7th September, 1957. Has the Minister for Defence Production (Mr. Beale) any objection?
– Was not that article written by Mr. Berry, a junior journalist?
– By whom?
– Was not the writer Mr. Berry?
– He may be just as good as Mr. Beale. I do not know anything about Mr. Berry or his qualifications. This is what was written by the correspondent of the “ Sydney Morning Herald “, and it seems to be all true. A letter to very much the same effect was sent to one of the newspapers the other day. Let the Minister say in what respect this report is incorrect. It seems to state the facts correctly, so far as I know. At any rate, I am quoting from it.
– But the Leader of Opposition does not know.
– If it is incorrect, let the Minister show where it is incorrect, and let him not be content merely to rely on assertions made across the table.
Those were some of the surrounding circumstances. Next, I wish to emphasize the findings of the Auditor-General, who is of the opinion that there have been gross neglect, failure to supervise correctly, and failure to do work properly. He imputes at least gross negligence to both the architects and the contractors. What is the answer to these statements? On 4th September last, within a hour or two of the tabling in this House of the Auditor-General’s report, the Minister came into the House and made a statement in defence of the contractors and the architects. He said that the completion of this factory will have been a remarkable construction performance, and he added -
I am gratified to notice that no criticisms are directed toward the Government or my department.
I say that all the criticisms are directed at the Government and the Department of Defence Production, who were responsible for the selection of the site and the completion of the work. The Minister cannot divorce the Government and the department from responsibility by saying that there has been no particular reference to the department. Are not the words of the Auditor-General criticism of those who began the project and entered into the contract, and of Sir Eric Harrison in, particular? Of course they are criticisms. The AuditorGeneral did not say, “ The Department of Defence Production has been negligent.” But he did say that its actions have caused enormous loss to the country, because we shall now be nearly £5,000,000 worse off than the original estimate indicated we should be. I have given the House two sources for that statement, which is correct. Is not that a reflection on the Government? I have never before heard of such a defence.
I repeat that the Minister said -
I am gratified to notice that no criticisms are directed toward the Government or my department.
The criticisms are pointed directly at the Government and the department, which formerly was administered by Sir Eric Harrison, who was succeeded by the present Minister. Sir Eric Harrison should be available in Australia for discussions on these matters. If a select committee is appointed to investigate the project, he should certainly be called before it as a witness. After all, the present Minister is only continuing the job that was begun by his predecessor.
In his statement to the House on 4th September last, the Minister said also -
The Auditor-General has referred to instances of inadequate supervision, particularly by the contractor-
I think by the architects, just as much as by the contractor- instances of excessive costs, and the architects* alleged lack of efficiency in organization and control. In making these criticisms, the AuditorGeneral has fairly drawn attention to the inherent difficulties in the project.
Of course there are difficulties in the project, but people who undertake to construct a modern munitions plant at such a great cost undertake to overcome the difficulties. That is what they are appointed for. The Minister said further -
To criticize weaknesses and at the same time omit reference to the great complexity and noteworthy achievement would, therefore, present the St. Mary’s story in false perspective. The AuditorGeneral avoids this by his clear acknowledgment in the third paragraph of clause 120.
One would think that the Auditor-General had himself paid tribute in that paragraph to the work that had been done, but that is not the case. He simply cited another authority - I think the Cabinet minute, or a statement made by one of the committees.
– He adopts the interdepartmental committee’s statement.
– No, he does not. I shall read the passage in the Auditor-General’s report, in order to indicate clearly how the Government is putting the case in its defence. The report of the AuditorGeneral stated -
That is not the opinion of the AuditorGeneral.
– He does not disagree with it.
Order! The Minister will have his opportunity later.
– The Auditor-General simply says that it is a fair thing for him to report to the Parliament that the interdepartmental committee took that view. It is very nice to know that the interdepartmental committee, which was, in a sense, departmentally responsible for the project, and for which the Government also was responsible, thought that, on the whole, a fair job had been done.
I have directed attention to the kind of ridiculous comment that the Minister made when he tried to answer the allegations contained in the Auditor-General’s report. All that he has done has been to express a hope that the matter will be forgotten and that nothing will be’ done about it, although the country will, even on the present estimated figures, be worse ofl to the extent of nearly £5,000,000, and by the time the project is completed it will probably be in an even worse position. The Minister finally said -
There is ground for criticism, I think, in that expenditure forecasts have proved to be inaccurate. Neither the architect nor the contractor have been able adequately to warn the Government that estimates would be exceeded.
I direct the Minister’s attention to that statement, and I ask him whether it is true that neither the architect nor the contractor were able adequately to warn the Government that estimates would be exceeded. The Minister found out in June last that estimates were exceeded by £3,000,000, but 1 ask him to tell the House in his reply whether he knew at least twelve months before that the contractors were saying that the expenditure that has since been found to have been incurred would be incurred. Is it not a fact that all the answers given to questions by honorable members in this House and by honorable senators carefully concealed that fact and gave information of what the architects thought but not what the contractor thought? I believe that this is a fact and that it should be investigated. The contractor was saying that the project would cost more, but the architects said, “ No, we will see whether we can do it for the original estimate “. The Minister has been proved completely wrong. He may say that the architects were slow to establish an effective control organization, and that there were early weaknesses in administrative practices, and so on. Of course there were early weaknesses in administrative practices. There was no proper administration of the project at all. The estimated additional expenditure of £5,000,000 is just over 21 per cent, of the original estimate of £23.000,000. That represents an enormous additional expense to place on the shoulders of the Australian taxpayers.
I wish to make one other subsidiary point as to the nature of the proposed inquiry, because I have some other observations to make which support our charges of extravagance, inefficiency and gross neglect of the public interest, caused by the contractors and the architects, if the report of the Auditor-General is fair and is upheld by an inquiry. But the matter does not end with the architects and the contractors. The responsibility lies with the Government for its selection, and for its abandonment of the usual checks on public works projects. The Auditor-General had only two men on the job, working half time. They furnished the only checks that he had. From the point of view of the Government the checks were quite inadequate. Was it not the duty of the Government to ensure that the checks were proper, and that public moneys were not wasted extravagantly? The Government should be compelled to put all the facts that it possibly can before a select committee of this Parliament, which is essentially the body to deal with the finances of the country. I point out that our proposal carefully provides that the committee will consist of five members from the Government parties and four members from the Opposition. We have provided that it shall have the ordinary powers of a committee, and that also, if it thinks that any aspect of the matter involves considerations of defence security that require to be dealt with in secret, it may so declare and continue the inquiry in camera - although I cannot see that it could reasonably use that power in matters concerning expenditure.
So far 1 have indicated the scope of the committee’s functions to deal with all aspects of the project. It is impossible to deal with all aspects now, even with the amount of time that the House has been good enough to give me. Some of my colleagues have certain material, and some honorable senators have other material. The only body that can deal with the matter effectively is a proper fact-finding committee. The executive of the Australian Labour party thought that it could do part of the factfinding job itself, and it has done so. We have a great deal of information to put before the proposed select committee. That information will substantiate what I have said this afternoon. It will also substantiate the criticism that has been directed against this project, both in this House and in the Senate, almost from the beginning.
I will give a few examples of the way in which this matter has been handled. The Minister for Defence Production has said repeatedly - although he was, no doubt, saying it on behalf of Sir Eric Harrison - that the contract would be completed within the estimate. In fact, Ministers have shown indignation when it has even been suggested that everything is not right. The Treasurer (Sir Arthur Fadden), who was then acting Prime Minister, said on 12th September, 1956:-
I have made inquiries….. The most recent advice from the architects and the contractors suggests that the final cost will be close to the original estimate of £23,200,000.
Sir Eric Harrison, who was then Minister for Defence Production, said in this House on 18th September, 1956 that is was not expected that the estimate would be exceeded. On 23rd October, 1956, the present Minister for Defence Production, who was then Minister for Supply, said -
On 23rd July, 1956, the architects . . . advised that the final cost would be approximately £23,000,000.
He then added that the original estimated cost was £23,200,000. At that time he said that the final cost would be less than the original estimate!
– What date was that?
– That was on 23rd October, 1956. It was evidently expected that the final cost would not be as much as the original estimate.
– That was seven months after the floods that the Minister now blames.
– The floods were mentioned by the Minister as causing a loss of possibly £1,000,000. I believe the highest assessment that could be made of all losses due to such causes would be in the neighbourhood of £100,000.
– It is of no use for the honorable member to say that.
– Ah, no!
– All right, let us appoint a committee and see who is right.
Mr. Jeff Bate interjecting,
– Order! The honorable member for Macarthur will come to order.
– On 25th October, 1956, the Minister for Shipping and Transport (Senator Paltridge) said in the Senate -
It is understood that the job will be completed on time and at the estimated cost.
He was representing the Minister for Defence Production. Last December, when the Prime Minister (Mr. Menzies) and, I think, the Minister for Defence Production visited the project the Prime Minister said that he was delighted to be behind the undertaking. He said that 65 per cent. of the work was completed and that the cost to date then totalled £12,500,000. He evidently did not work out the proportion very well, because if this was a correct estimate of proportionate expenditure - and I suppose he would not have given a figure if he had not intended to give a correct estimate - the final cost would work out at something under £20,000,000. One need not stretch the argument to that extent because I suppose the Prime Minister did not intend to create that impression. I repeat, however, that the Minister for Defence Production has always said that the original estimate would be adhered to, and that the job would be completed within that estimate. He continued to make those assertions until he made his statement on 15th June last, in which he pointed out that the cost of the factory would be increased by £3,000,000. He said that it was very regrettable and disappointing, and he went on to try to explain the increase in the estimates. He said -
The architects point out that it is mainly due to circumstances beyond control.
But those circumstances beyond control had disappeared long before this estimate was made, and I again repeat that when Government spokesmen referred to what the architects said they were deliberately keeping back from the House and from the country the fact that the contractors, who, after all, have to do their job, were insisting that the cost would be about what it turned out to be. The architects apparently said to the Government, “We will look after it and keep the cost down to £23,000,000 “. The Minister was wrong to the extent of £3,000,000 in June, but he did not tell the House that the extra £3,000,000 was for only portion of the project. In addition, work to the value of £1.800.000, or nearly £2,000,000, was not to be done at all. From the point of view of detriment, £5,000,000 was lost by the taxpayers. One would think from those statements that the situation was well in hand, and I ask the Minister to answer these questions: Is it not a fact that the contractors presented an estimate of about £26,000,000- that is £3,000,000 over the original figure - as early as 5th March, 1956, before all those statements were made by Ministers? Is it not the fact that the Government did not want to admit that it wanted to keep that information back because it was embarrassing? Meetings were held; the architects apparently took one view and the contractors another view. There was no revelation of that fact and, if it is true, the Government was warned by its own contractors that the cost would be increased by another £3,000,000. When the Minister said that he was disappointed, he must have been hoping against hope that the contractors would be proved to be incorrect. In the meantime, answers were given in both Houses of the Parliament that the old figure would be the correct figure. The Parliament should have been told the facts so that action could have been taken.
It will be noted, also, that, according to the Treasurer the contractor gave some information. I do not know the basis for the the Treasurer’s statement, but he said that his basis was information from the contractors as well as from the architects. Some Cabinet Ministers must have known the position. Sir Eric Harrison must have known the position, but the facts were not revealed to the people. The Government says that it cannot give money for certain public purposes such as social services and housing; but it is prepared to watch millions of pounds being wasted in the excessive costs of construction of this project! It had every opportunity to call for tenders and to state exactly what the costs were to be. Cabinet appointed the architects just as it appointed the contractors. It has been emphatic from the beginning; indeed, it laid down that the project was to cost £23,000,000 and no more. Of course, the facts now show that the cost will be about £28,000,00. It was said at the time that every care was taken to see that the cost was adequately provided for in the original figures.
I have referred to one aspect of the total expenditure, but there are other aspects which, to some extent, have been mentioned in the Auditor-General’s report. They deserve some special consideration. The tender submitted by the contractor was in the name of Concrete Constructions Proprietary Limited and Utah Australia Limited. It was a joint venture. According to the answer to a question asked in the Senate, the inter-departmental committee apparently said that any equipment hired was to be hired competitively, so that those with machines available would get a fair go amongst themselves. The contractors seem to have accepted the position, but the truth is that not one item of rented equipment was submitted to public tender. An answer given by Senator Paltridge indicated that all the equipment hired - for which the public was paying - was hired by private negotiation, and the rates were very high, as I shall show. The equipment used on the project belonged to Utah Australia Limited. Utah Australia Limited is one of the two contractors and also owns most of the equipment used on the job. As such, it was paid for the equipment on an extremely liberal scale. At one and the same time, it is a contractor, watching the interests of the people, and is also making excessive profits from the hire of its machinery and equipment. In fact, it has made more from the rented equipment than it has from its share of the fee of £625,000. The real profits made by Utah Australia Limited in this way have not been revealed.
Being in charge of the hiring and having the equipment there, the method by which the rental was determined must be examined. I shall not go into the details, because the rental involves depreciation at no less than 25 per cent. That is a pretty, favourable rate of depreciation. I shall show what the taxpayers paid. For concrete transit mixers, a rental of £480 a month or £5,760 a year was paid to Utah Australia Limited, if it owned the equipment, for one-shift operation. The capital cost of the equipment involved was only £7,150. Therefore, the capital cost was almost cleared in one year. The rental for a 100-ton crane was £3,175 a month or £38,100 a year, for one-shift operation. Thi capital cost was £96,000. The capital cost of a pay-loader was £6,900 and the annual rental for one-shift operation was £5,290. The rental’ for one year was 90 per cent, of the total capital cost. The capital cost of a three-quarter cubic yard shovel was £13,000 and the annual rental obtained by Utah Australia Limited was £8,160 - and the company still has the shovel. The rental of a grader for one-shift operation was £485 a month or £5,820 a year and the capital cost was £9,643. In addition, the taxpayers bore the cost of the operators for the machinery, the fuel and normal maintenance. The only expense to Utah Australia Limited was the alleged depreciation and major overhauls. This company had the lion’s share of this part of the work. It provided 65 pieces of equipment, and 37 of them were second-hand units.
The formula for calculating depreciation involves other consequences which I do not propose to deal with in detail. However, it is important to note that while the equipment was on the job it was paid for irrespective of whether it worked or not. From August, 1955, to January, 1956, the equipment could have worked for 49,000 hours. In fact, it worked for only 23,000 hours and was under repair for 4,600 hours. The rest of the time it was either idle or was not doing any useful work. In February, there was some improvement. The equipment worked for 8,500 hours but was under repair for 2,600 hours. In this month, the equipment was manned by operators for 2,200 hours, but nothing was done. The bill from Utah Australia Limited to the contractors for rented equipment in February - one month - was just under £40,000. That is a shocking and excessive payment. It involves a contradiction in interest and duty. The duty of Utah Australia Limited was to keep down costs. Its interest was to pay the maximum. That is the system of cost plus and it is the system with which the Government is in love. A famous United States politician said, “ What is good for General Electric is good for the United States “. The United States paid; General Electric made the profits. Apparently, the same position is to apply in Australia. What is good for Utah Australia Limited is good for Australia. I do not think it is. As I said, the total amount paid for rental in February was £39,590 or just under £40,000.
I come now to flood damage. Much will be said about this subject. The recorded cost of flood damage, after everything was over, was £25,000 for actual damage and £35,000 paid to employees for wet time, making a total of £60,000. At the outset, I believe - I was advised - it would not be greater than £100,000. It is no good trying to shelter behind that. We must have something more substantial.
Let us look at the field unit in Concrete Constructions Limited. That company received £615,000. It is not in the sheltered position of the architects who received £1,250,000 for their work. I submit, on the facts, which are substantiated by an examination of the Auditor-General’s report, and also by the necessary evidence, that the architects were not competent for this job, no matter how competent they might be otherwise. The expenses paid to Utah were in respect of the few people on the job. I think the number was limited to six or seven persons; but the company was not required to put up any money at all, because it was operating on advance funds provided by the taxpayers of this country. Concrete Constructions, the other contractor, did not provide any expenses for the top people directing the job. Instructions were given to tenderers in specific terms, that the cost of travelling expenses other than those directly connected with procurement, were to be paid from the contractors’ account. They had to bear it, not the taxpayer. But the cost of this item, to March, 1956, was £36,756, all of which was charged against the project and not against Utah or Concrete Constructions. The taxpayer had to pay all of that.
– What item is that?
– Travelling expenses other than those directly connected with procurement. Freight on hired equipment was not to be a direct cost of the job. The freight on hired equipment was estimated to run into £30,000. Equipment was not to be purchased but hired. The cost of purchased equipment to March, 1956, was £600,000. That was another item the taxpayer had to pay for. The architects failed to take all these factors into consideration when assessing or comparing the tenders. The contractor has, undobutedly, been paid items as job cost, that is fixed project costs which should have been paid out of his fee. In the light of these facts, it is absolutely necessary that this whole matter should be reviewed by a competent committee.
I now come to the point where I can sum up. There are very many details but they involve great questions of principle. I have referred to some of them. I believe that, from beginning to end, this job was done without proper supervision. It was marked by extravagance, waste and inefficiency. It was bungled. This Government bungled it because it had this absurd preference for its friends, as against the
Department of Works, which would have done the job properly. I am not now dealing with the necessity for the work; I admit that it was necessary to have a filling factory, although it will probably not be occupied half the time when it is finished. The new kind of weapons that are being developed may not be used at all. But whether the factory will be used or not, the job of constructing it should have been done properly and efficiently. That has not been the case. Facts have been concealed from the Parliament. As to the statement about the estimate being right, Sir Eric Harrison said he would stick by the estimate of £23,000,000, but the Government knew long before that the cost would be at least £3,000,000 more and now it has turned out to be £5,000,000 more.
This House has every justification for appointing a committee that it can trust to investigate this whole matter and ascertain the facts. It should appoint a committee to find out what is the real position. The Minister dismisses the Auditor-General’s report. The Auditor-General’s report, is, in itself, an indictment of the Government. I have added facts to what that report contains. Possibly other facts are known to the Auditor-General, but they have not been fully disclosed. It is our duty to disclose them. The Opposition has fulfilled its duty in stating this case to-day and, as a result, the people of this country will insist on a full and proper inquiry being made.
– We have heard from the Leader of the Opposition (Dr. Evatt), charges that this job at St. Mary’s was bungled. “ Bungled “ was his word. He also made the charge that I, standing as the Minister for Defence Production in this place, told untruths about my knowledge of when this job would be finished. A further charge was that the former Minister for Defence Production (Sir Eric Harrison) told untruths also and that, in fact, the Government, according to the right honorable gentleman’s words, knew twelve months before about the increased cost of the project.
– That is so, according to the contractor.
– I cannot follow the right honorable gentleman with that sort of exploit. All I want to do to-day is to-
– Cover up.
– We shall see about that. All I want to do to-day is to give the facts about St. Mary’s. I shall give all the facts of the story, from first to last, and let this House and the public judge whether or not there is any truth in the statement made by the Leader of the Opposition or whether, as usual, he has been completely irresponsible in the charges that he has made. The Opposition wants a select committee on St. Mary’s.
Opposition members interjecting,
– Order! The Minister is entitled to a hearing and I will see that he gets it.
– Before a committee!
– Order! If the honorable member for Werriwa offends again I will name him.
– Members of the Opposition do not want to hear the facts about St. Mary’s. They pretend that they want a select committee to conduct an inquiry. They lean heavily - although not quite so heavily as they did - on General Legge, on the Auditor-General and on a number of heterogeneous allegations gathered mostly, as I will show, from very highly dubious sources.
– Do you refer to General Legge in those terms?
– When the general burst into print a few weeks ago members of the Opposition wanted to move a censure motion. Now they do not want a censure motion; all they want is that the facts be investigated by a general inquiry. They will get the facts to-day. I submit that that is the complete answer to the nonsense talked about a select committee of inquiry into St. Mary’s. Most of these facts have been given before, either by my predecessor or by the Prime Minister (Mr. Menzies) in this House, but they have been ignored, for the most part, by the critics.
But, by all means, let us have the facts again. Let us have them all, in order and in perspective, so that the people can judge what was the beginning of this project, why it was initiated, how the contract was let, and all the rest of it. I think the story will show two things: First, the inevitably intricate and difficult nature of defence matters generally; and secondly, the very great care which the Government took to make sure mat the right decision was made and implemented in the interests of the Australian people. I give the facts in a series of questions and answers. The first question, is: Why was another factory necessary? At the end of his speech, the Leader of the Opposition said, “ Of course, we agree that another factory was necessary “. That is not what he said the other day. He gives that away now. It was necessary because Australia was seriously deficient in ammunition filling capacity - that is, the ability to fill shells, bombs, and now, guided missiles and other projectiles with explosives to make ammunition for the Services. Before the war we had one small, old-fashioned, jug and bottle factory - that is the literal name for it - at Maribyrnong. During the war two more had to be built, one large permanent one at Salisbury and one small, temporary one at St. Mary’s, which was a shell filling factory only. The Chifley Labour Government disposed of both of those, after the war. Salisbury was sold to the long-range weapons establishment.
– They were not needed.
– The honorable member for Darling (Mr. Clark) says they were not needed. Are they not needed now? The Salisbury factory was sold to the long-range weapons establishment and the St. Mary’s factory to private industry.
Let there be no mistake, St. Mary’s was disposed of to private industry, and obligations were incurred to industrialists, as the Prime Minister clearly pointed out recently. However, my colleague, the Minister for Works (Mr. Fairhall), will deal with that matter later.
Altogether, £100,000,000 worth of defence establishments were disposed of by the Labour government after the war. In consequence, Australia was left with only the old Maribyrnong establishment. That is why every military adviser from the chiefs of staff down has insisted from first to last that additional filling capacity was a No. 1 priority. Some critics say that no additional capacity was necessary because the next war will be fought with atomic weapons. I suppose we can have that type of critic, who is free to say what he likes, but that is contrary to all military advice that this Government has received, both in Australia and abroad.
The advice it has received is that in any war in which Australia is likely to be engaged there will be need for as much conventional ammunition as we can produce. It is worth noting that almost identical factories to this one at St. Mary’s are at present being built in countries closely allied to Australia, whose names I have been asked not to give. Surely that is the answer to the story that we do not need a filling factory.
The right honorable gentleman said that the factory should not have been built at St. Mary’s, but in Victoria.
– I did not say that.
– I remember the right honorable gentleman saying that. Perhaps he has had another mental blackout. If that statement were true it would be an argument for not repossessing old St. Mary’s, but it is not true. A factory was placed at St. Mary’s upon expert advice, including that of a committee representative of the departments of Defence Production, Works, and Labour and National Service. One vital factor in favour of St. Mary’s was its proximity to the heavy industries. The right honorable gentleman, although he denies that he made the statement, advanced the argument that the shells should be brought to the explosives, not the explosives to the shells. The right honorable gentleman knows that the explosives are mostly manufactured in Victoria.
It was vital to have a factory near the heavy industries, including the steel industry, which is mostly located in New South Wales, and from which the hardware comes. Yet another person has asked why, instead of building St. Mary’s, the Government did not extend Maribyrnong or work two or three shifts there. That is an equally ignorant comment. It is impossible to extend small, old Maribyrnong owing to lack of room, safety distance requirements, and other factors. As to the working of three shifts, the present capacity of Maribyrnong, based on three shifts, is about one-fifth of the new St. Mary’s.
The second question asked is: What was the old St. Mary’s? It was a temporary war-time factory, completed in 1943. It was built mostly of fibro, and had an intended life of about five years. Its capacity was small - about the same as Maribyrnong - but it had no cap and detonator section, and no bomb-filling section. Compared with Salisbury or any modern factory it had a considerable fire risk. By 1950, when this Government came into power, it had deteriorated, and much of the buildings and plant had become obsolete. The main buildings had gone to private firms, and the plant had either been sold, installed elsewhere, or put into store. In truth, there was no longer a St. Mary’s filling factory in existence.
The third question is: How was this proposal initiated? In 1950-51, the Joint War Production Committee, at the request of the Government - this Government - was examining various aspects of Australia’s industrial capacity to meet defence needs. The Joint War Production Committee included Service, Defence, Supply, and Defence Production representatives under the chairmanship of that distinguished industrialist, the late Sir John Storey. In August, 1951, the committee reported on the need for additional filling capacity, due to the alienation of Salisbury and St. Mary’s. As the Prime Minister has said, the committee preferred a new factory, and only reluctantly recommended the repossession and refurbishing of old St. Mary’s because of the time - five to eight years - which the Department of Works said it would take to build a new one. I cast no reflection whatever on the Department of Works.
The right honorable the Leader of the Opposition asked why this job was not done by the Department of Works. The Department of Works was snowed under, and it could not have done this job. At this time, however, Sir John Storey had been urging the Services to make a realistic assessment of the whole of their ammunition needs for mobilization and war. This comprehensive assessment, which had never been attempted before, was very difficult. It involved each of the Services, whose needs, of course, were not the same. It involved difficult strategic considerations, the question of the areas in which our forces might be called upon to fight, the likely availability of ammunition in those areas, and so forth. It was bound to take time because of its complexity, but it had to be done if the Government was to form a reliable judgment of the kind of filling capacity to be provided.
The recommendations of the Joint War Production Committee came to Cabinet in March, 1952. As well as these aspects I have mentioned, Cabinet also had before it a very powerful recommendation from the Department of National Development - a document of 16 pages - opposing the repossession of St. Mary’s for the strong reasons already given by the Prime Minister. More information was obviously required before a decision could be taken.
By the end of 1952 the Services had been able, as requested by Sir John Storey, to submit an assessment of their ammunition requirements. By previous standards their estimate was extremely high, and rightly so, because or trie strategic and other consideration^ which were involved. Translated into filling requirements, the new estimate demanded capacity many times in excess of Salisbury, Maribyrnong and old St. Mary’s all put together. As from that moment the character of the problem obviously began to change, lt was no longer a question of just whether we should or should not throw everybody out of St. Mary’s and take it over. It was also a question of whether, if we did repossess it, we might not immediately have to build another factory as well. The Department of Defence Production immediately consulted the government’s industrial advisers, particularly those connected with the chemical industry, because the crux of the mr.t’:er was Australia’s capacity to make the explosives which were to be put into the shells. By April, two or three months later, the Defence committee was told that the Services’ new ammunition requirements could not possibly be met from Australian production, because the chemical industries could not be expanded to produce enough chemicals for the explosives for the filling operation. But the Defence committee was also told that it would be possible to manu facture in Australia explosives sufficient to enable a filling capacity to be set up equal to Maribyrnong, plus Salisbury, plus old St. Mary’s. This meant a filling capacity four or five times greater than could be achieved by repossessing St. Mary’s.
The Department of Defence Production therefore asked the Services to consider this achievable level of Australian production as a basis, and to work out what it called “ a basket of goods “, that is to say. what sort of shells did they want, what size, what sort of explosives, and so forth, and how was all this to be divided among the Services. This was a complex and timeconsuming task, and it v, as immediately put in hand through the Department of Defence. The matter then came back to Cabinet.
The Government then had before it, in August, 1954, the following powerful arguments in favour of a new factory and against old St. Mary’s: -
The Cabinet, therefore, decided on 1st September, 1954, to build a new factory and not to repossess old St. Mary’s. Could Cabinet have decided anything else? It directed the Minister to explore the feasibility of having a new factory constructed within three years to cope with confirmed service requirements at the achievable level indicated by my department, namely, four or five times what old St. Mary’s could have given. On 23rd September, 1954, with full knowledge of the Government’s decision not to repossess the old factory, but to build a new one with an overall capacity four or five times greater than the old, General Legge personally signed a minute as acting chairman of the Principal Administrative Officers’ Committee in which he said that no lower level than that of the new factory as proposed by the Department of Defence Production be adopted; that every endeavour should be made to increase capacity above that level; that the full requirements of the services still remained; and that means must be found to do this, either by purchase overseas or by increased Australian production. What he was saying, in effect, was, “ This is a good thing. Let us have a factory five times bigger than the old St. Mary’s. But even that will not be big enough for our requirements “. And this is the gentleman who criticized the Government for not repossessing the old factory with a capacity only about one-fifth of the new!
What action was then taken? Industrial and technical advisers were immediately consulted on production aspects. Stephenson and Turner were selected after departmental consultation with leading members of the Minister’s industrial advisory committees as well as with consulting engineers including the late Sir Clive Steele, a man of wide experience. It was on their recommendation that Stephenson and Turner were selected for this job. Stephenson and Turner were authorized to make a special three-month study of all technical information. In this, they had the assistance of the Braun Trans-World organization which built the Altona refinery. They finally reported to us the feasibility of building the required plant within three years by some large construction organization, under supervision, at an estimated cost of £23,200,000.
The architects’ report which was received on 20th April, 1955, was a most comprehensive document. It was a four-volume document but a condensation was made of it and it was communicated to the Defence Department. The services then confirmed their requirements. The deputy chiefs of staff of army and air also later reported to the Defence Committee, and these are their words -
We are of opinion that the new factory as designed should proceed as planned.
Those are the very words of the people who are supposed to have advised us not to build a new factory but to repossess the old. General Legge was, at this time, a senior member of the Military Board and MasterGeneral of Ordnance. Moreover, in May, 1955, after the capacity lay-out for the new factory had been formulated and circulated at a meeting of the Principal Administrators’ Officers Committee, General Legge’ is reported in its minutes as stating he appreciated the fact that approval of the new factory was a major step towards the solution of the services problem - not the old St. Marys factory but the new factory.
The Prime Minister (Mr. Menzies) has told the House of the endorsement of the new factory proposals as a number one priority, orally given by the chiefs of staff to the Cabinet. I was present when this took place. But they also endorsed the proposal in writing as appears from the following letter which was written by the Secretary of Defence to my department in July, 1955:-
Supply of Ammunition in War From Australian Production.
Reference is made to your memorandum dated 21st April, 1955, which forwarded a report on the proposed new filling factory at St. Marys, New South Wales.
This subject was considered at meetings held on 17th and 30th June, 1955, by the Defence Committee-
Which, of course, includes the chiefs of staff- whose recommendations, set out in its minute . . . are as follows: -
The new filling factory at St. Marys as designed should proceed . . .
At this time, too, General Legge was a senior member of the Military Board and Master-General of Ordnance. With everything now before it, including strong service recommendations, to which I have referred, Cabinet approved the detailed plan for the building of the new factory.
What was the plan? What was the contract? What happened? The plan was this:
Tenders were to be invited throughout the world for a contract for a fixed fee, construction costs, labour, plant and materials &c, to be at cost. This is a usual type of contract and is not the same as what is called a “ cost-plus “ contract, which is for a fee determined on a percentage of the cost of the job. There could be no fixed price contract because this would have meant a further twelve months delay in order that drawings, specifications, &c, could be completed. The Government does not believe that, even if we had waited for a fixed price, we would have got a better contract. A process engineering study was to be made to ensure the most efficient selection of plant, building design, mechanization, handling equipment and processing. This was done and when it was added to the information which the department already had, it ensured that the factory, when completed, would be, to our knowledge, the most modern and efficient possible, with the maximum output and the lowest practicable labour force and maintenance requirements. It has been described, again and again, as, at this moment, the best filling factory in the world. Overseas experts were to be engaged for the purpose and the cost was to be included in the architects’ fee.
The Leader of the Opposition (Dr. Evatt) spoke in sneering terms about the architects’ fee and said that he would come back to it but did not do so. The architects’ fee was fixed at £1,250,000, which included the cost of the process engineering study and the cost of the control agency which I shall mention and which was set up within the architects’ organization. The architects’ net fee, I am told, after allowing for these, is approximately £775,000, or about 3.5 per cent, of the original estimated cost. I am also told that that percentage is lower than the normal architect’s fee. Out of this, of course, the architects had to pay for the whole of their organization, which includes no less than 100 professional architects.
Opposition members interjecting.
– This was not for the construction of a fowl-house. It was for a £26,000,000 factory with 4,000 workers.
The architects, in addition to performing their normal professional functions as architects, were to be in actual control of the contract on behalf of the Commonwealth in these ways: They were to give expert assistance in the expediting of building materials and plant deliveries, and they were to employ overseas experts for the purpose; they were to provide the contractor with drawings and details of construction plant and services required, and prepare master schedules showing when critical materials were to be ordered and how the job should be placed; they were to supervise for the contractor ordering arrangements of material and plant and to progress them if supplies were threatened; they were to audit the contractor’s payments and to exercise oversight on the job. In short, they were to ensure on behalf of the Government that the job was carried out in an efficient and economical manner.
Meanwhile, a working party representing the various departments had gone ahead. They had examined sites and had recommended that the factory be located at St. Mary’s for the reasons I have already given to the House. This job has been described by those who ought to know as the most rigidly and closely controlled major construction job ever to be conducted in this country. The following provisions for control of the job were to be provided in addition to the architects’ obligation to see that the job was carried out efficiently and economically: The architects undertook to establish within their own organization a control agency comprising men of overseas experience to control the project so as to eliminate difficulties as they arose and to prevent the job slowing down or becoming too costly. As well as that, an interdepartmental committee representing the Prime Minister’s Department, the Department of Defence Production, the Department of the Treasury, the Department of Works and some other departments was formed to receive monthly status reports from the architects and to consider important matters which arose from time to time, and this body has met regularly throughout the life of the project. Additionally, Commonwealth cost investigators have continuously inspected the project to assess the adequacy of the architects’ control performance and to ensure that the exercise of accounting, tender procedures and the like are acceptable to the Commonwealth, and to test the architects’ procedures in ensuring that, the expenditure incurred on the project is properly charged to the Commonwealth.
Perhaps, partly because of that and partly because of other rigid forms of control, there has never been, in respect of this job, any criticism, any suggestion of irregularity or impropriety with regard to stores, accounting, costing and matters of that sort. An officer of the department who is an expert in foreign filling practices returned from London and was posted to St. Mary’s for technical consultation with the contractor and the architects to ensure that construction and installation had full regard to our technical and safety requirements. The British and German engineers, experts in filling factory operations, were also brought to Australia, and they are still busy at St. Mary’s installing the British and German machinery which forms part of this special purpose plant. I have now given the House a pretty exhaustive list-
– It is exhausting.
– It is exhausting to you because it is unpalatable. You do not like to hear what was successfully done to protect this project. That is a fairly exhaustive list of the steps that were taken, and insisted upon by the Government, to ensure that this job would be properly controlled.
Public tenders were in due course invited. The architects examined the tenders and they submitted them to a special Government committee for final examination and the Cabinet, on their recommendation, in July approved the appointment of American Utah and Australian Concrete Constructions on a joint venture for a fee of £615,000. We had thus engaged most eminent and internationally experienced architects and contractors for the project. There has been some criticism here to-day of their experience and competence. They are listening; I suppose they can stand it. But they will also be encouraged and I hope the House will listen when my colleague, the Minister for Works (Mr. Fairhall) - because I have not got the time to do it - says something later in the debate about the real competence and experience of this widely known firm. So far as Messrs. Stephenson and Turner is concerned, their name is known not only in Australia but also throughout the world. Far from having no experience of this kind of project until they came here, it will be shown that Stephenson and Turner had extraordinarily wide experience, as has Utah. Utah is a great organization with great construction projects all over the world.
Immediately the contract was let, work commenced with great energy. I say to the House: Of course, there were problems; of course, there were difficulties, and, of couse, there were disagreements. This is a £26,000,000 project with about 500 buildings containing some 30 acres of floor space; it is spread over 3,500 acres of land, and it has twenty miles of road and eleven miles of railway. The design work alone required nearly 20,000 drawings. As I said before, this is not building a hen coop; this is building the greatest defence project in Australia’s history. It would be childish to suggest that in a project of this magnitude it could have been otherwise than that there should have been some rough edges, some disagreements and some shortcomings. That happens in every great enterprise. The difference is that under private enterprise corrections and adjustments are made in private, whereas in public enterprises we ventilate them here in Parliament, which gives everybody the chance to air their views and, in many cases, to exaggerate, to falsify and to throw dirt.
On the financial side, the amount set aside in contingencies has not, as I told the House some time ago, proved to be enough largely, I believe, because of circumstances beyond control. I talked before about the unprecedented floods, and the Leader of the Opposition (Dr. Evatt) brushed that aside and said that did not cost more than £20,000.
– I said £100,000.
– All I can say is that the architect, the contractor, the officers of my department, the inter-departmental committee, have all said that the extra expenditure incurred in this project due to these quite extraordinary floods was of the order of £1,000,000, and I prefer to take their word rather than that of the unnamed, anonymous and unnameable gentleman who has given his information to the Leader of the Opposition.
I do not know whether the Opposition is objecting to the site allowances granted by the Taylor award, but that also cost us something more than £1,000,000. There were other wage increases, and the unforeseen electrification of the railway line was a heavy blow to us as well. At any rate, as I said in my statement in the House last June, it was discovered that the increased cost of the project was £3,000,000, bringing it to £26,200,000. I want also to say that this latter sum will enable the project to be completed on time as a going concern, adequate to satisfy all our peace-time requirements. It is true that some proportion of the work which was originally intended to be completed at the beginning of the project will remain to be done out of the normal departmental vote at a later stage. The Leader of the Opposition has said that I have deceived the House, that the former Minister for Defence Production also deceived the House, and that we knew, twelve months before, that this job was going to cost so many more millions of pounds. I say that that is false.
– That is true.
– Well, if you want to have it that way, I say you are lying.
– Mr. Chairman, I ask that that remark be withdrawn.
– I withdraw it. Instead, 1 say that it was deliberately false.
Dr. Evatt interjecting,
– Order! The Leader of the Opposition will withdraw that remark. It is entirely out of order to utter a personal reflection on a Minister.
– If it is out of order, 1 withdraw it.
– Order! Did I understand the right honorable gentleman to withdraw the remark?
– Why did you not make the Minister also withdraw?
– Order! The honorable member for East Sydney is not running this House. He will apologize to the Chair.
– I do.
-Order! The honorable member will rise and say, “ I apologize to the Chair “.
– I apologize to the Chair.
– I have never heard the honorable member in a sweeter mood.
There were difficulties between the architect and his control organization in the early stages, but they were corrected. It is also true, I believe, that supervision was not then all that we desired, but I am assured that this has been corrected. It may also be true, although the contractor vigorously disputes it, that at times too much overtime has been worked. This overtime certainly has created resentment in many quarters, from Sydney to Katoomba, because of the tendency of men to leave their existing employment and go to St. Mary’s for the benefit of the higher rewards. But these are methods which are normal in big construction jobs in the United States. I am referring to this massive driving of the job through, and the demand for overtime when necessary.
Everybody in this House, except, possibly, the honorable member for East Sydney, at one time or another has praised the industrial might of America, with its dynamic genius for big construction achievement. Yet now, when for the first time, or almost the first time, we in this country employ the same dynamic methods to get a job done, those methods are denounced by the very people who, previously, have praised them. The point is that we have got the job done; we have had it done skilfully; we shall have it done in time, and, in the opinion of our advisers, we have had good value for our money.
As I have shown, the Government has insisted upon the incorporation in the contract of provisions for a rigid system of control and supervision. That this supervision did not work perfectly, especially in the early stages, I have already acknowledged. Indeed, some occasional weaknesses in this respect could scarcely have been avoided in a project of this magnitude. But the point is that great care was taken. There cannot be any doubt of that. The manager of Utah Australia Limited on the job - and I come now to answer the honorable member for Yarra (Mr. Cairns) - a man who has had world-wide experience of large projects for his company, has told me that this St. Mary’s project - he said it rather wryly, I am afraid - is the most closely controlled and supervised in the whole of his experience.
Now, Sir, I come to the Auditor-General’s report. It seems to me strange that the Opposition should want a select committee to inquire into the Auditor-General’s report. To me, this position gives a new twist to the old Latin tag, “ quis costodiet iposos custodes “, or “ who is to take care of. the caretakers “. I answered the Auditor-General on the day that his report was tabled, namely 4th September last. The position then was that he had made his report, and I had replied. The Government had already taken action, and the Parliament and the people were thus in a position to note his warnings, to approve his justified criticisms and to discount such criticisms as were thought to be unjustified. I am glad to notice, incidentally, that the Leader of the Opposition acknowledges that the Auditor-General may sometimes be wrong. But now we are invited to have an inquiry upon his inquiry. Is that to be followed by still another inquiry on this proposed select committee inquiry? The Auditor-General will be reporting on the project again next year. Is there to be a select committee to inquire into that report, also? The Public Accounts Committee will be investigating this matter in due course. Are we to have a select committee to investigate the findings of the Public Accounts Committee? All of this seems to me so fatuous as not to need any further argument or exposition.
I content myself with summarizing what I have already said about the AuditorGeneral’s report. The first point I make is that the Auditor-General, in his report, freely acknowledges that orthodox contract procedures could not be followed in this kind of job, and that unit costing was not practicable; that construction time generally was up to schedule and that many difficulties - he was referring to floods and things of that kind - had to be overcome by the contractor; and that, in view of the magnitude of the undertaking and the area involved - he quoted the inter-departmental committee and adopted its findings, I take it, because he quoted it - the present stage of conclusion was a noteworthy achievement. That, at least, is something.
The Auditor-General directs attention to the increase of expenditure from £23,000,000 to £26,000,000, but here again, he makes no criticism at all of that increase, nor, indeed, I believe, could he reasonably do so for the reasons given when I announced the increase last June. Furthermore - and this, I believe is very significant - on those matters in respect of which the Auditor-General is expert, that is, questions of improper expenditure, faulty accounting, poor storekeeping, inadequate auditing, and deficiencies in payroll or timekeeping practices, he makes no critical comment whatsoever. In big construction jobs, weaknesses in these departments frequently occur; the bigger the job the more likely they are to happen. I believe that it is a great tribute to both architect and contractor, to the inter-departmental committee and my own department, as well as to the efficiency and rigidity of the control and supervision arrangements which were made, that nothing of the sort - not just a few instances, but nothing of the sort - took place at St. Mary’s.
In respect of the criticisms of the Auditor-General, which are directed against architect and contractor, I freely admit that, in the last resort, the Government takes responsibility. I have never said anything to the contrary, notwithstanding some ill-natured remarks that were made a while ago. The criticisms which, as I have said, are directed against architect and contractor, are concerned mainly with matters having a considerable technical content, such as technical supervision, construction performance, and variations of specifications and drawings. Here, I think it is fair to say, his lack of technical knowledge has sometimes, but not always, led him into error, and it is certain, at least, that both the architect and the contractor have protested vigorously against some of his judgments on technical matters. His criticisms are very brief and general, but this is the gist of them: First, the failure of the architects to present regular costs forecasts. As I said in my statement to the House on 4th September last, I believe that this criticism is justified. In particular, there was delay in presenting to the Government the estimates for the increased cost of the job, requiring the granting of additional funds. That came to the knowledge of my department and myself in late December or early January last. This was inconvenient, annoying and exasperating, to say the least, but so far as I am aware - and I am so advised by the department - this delay should not make the job more expensive. The architects and the contractors, for their part, have claimed that they were hard pressed and therefore unable to get the new estimates ready any earlier.
In this same paragraph the AuditorGeneral refers to what he calls “ other instances of lack of efficiency in organization “ on the the part of the architects.
But he does not tell us what they were. It is a fact, I believe - and this is what he may be referring to - that the architects took longer than the department expected in establishing an effective control organization, and that there were early weaknesses in administrative practices. The department itself was compelled to take a much more active part than was originally expected in developing adequate control procedures and in assisting to remedy defects in the contractor’s administrative practices; however, the department is now satisfied with the manner in which the architects and the control authority are performing their function.
The third charge concerns the alleged lack of adequate supervision on the part of the architects. Here, as I have indicated, the Auditor-General is criticizing matters involving a good deal of technical content, as to which there is real difference of opinion between him - the layman - and the architects and contractor - the experts. Perhaps the Leader of the Opposition would permit me to continue without interruption.
– Order! The Leader of the Opposition should not be talking at the table.
– It is of great importance to note that the Auditor-General does not rely on the findings of his own officers, but upon reports, freely handed to him, by the architects’ own control authority dealing with day to day operations in checking the contractor’s efficiency. How can it be said that the architects are failing in their duty of supervision when the evidence cited in support of this failure consists of documents written by the architects’ own employee - the control authority - which show on their face that the architects were duly exercising day to day supervision over the contractor? That is the point made by the architects and the contractor, and it seems to me to have a great deal of force to it. The architects have pointed out, moreover, that these reports are not intended to reflect the overall efficiency of operations, but are raised only when the control authority’s investigations disclose apparent inefficiencies. They are never raised when satisfactory performance is disclosed. That is why it seems to me wrong to pluck them out, take them on their own and give them out of context.
In these technical matters the architects are the authority competent to express an informed technical opinion, and they have repeatedly and emphatically stated that the Commonwealth is getting a very good job at a reasonable price. It is, moreover, fair to say that in many of the matters raised by the control authority there was room for differences of technical opinion between the architects and the contractor, and many of their criticisms were strongly contested by the latter. Notwithstanding the fact that the control authority did report specific instances of inefficiency - upon which the Auditor-General has substantially relied - the control authority, in its official report to the Commonwealth for the period in question, stated that “ overall progress has been satisfactory “. Morover, as the AuditorGeneral notes, remedial action usually followed.
There is also a charge of over-manning. That, again, is based on the field report of the control authority which deals with particular operations or functions and not with the overall manning of the project. Well, the contractor has simply said that to pluck an item, or a series of instances, from their context and say what may be happening here, there or somewhere else, without having any regard at all for the full sweep of the job as a whole and without taking account of the fact that thousands of people are employed on it and that the work covers an area of 3,500 acres, is to give a completely false picture. That is the contractors answer to the Auditor-General.
The Auditor-General’s remaining comment deals with variations between specifications and drawings. Both the architects and the contractors regard such variations as quite normal on any large construction job. Indeed, they say that they are necessary, and that not to have them would be foolish. They claim that they would be failing in their duty if they did not take such action when required by the exigencies of the work. They say that it reveals a lack of understanding of the requirements of a great project of this nature to assert that there should not be variations to specifications and drawings by agreement between architect and contractor from time to time.
These are the criticisms by the AuditorGeneral. As I have said, the architects and the contractor have protested very vigorously against them. I could quote the words they used, but it would take too long. The House may be assured, however, that there are, in the Government’s possession, powerful arguments or strong cases put up by both. These gentlemen state that at least some of the criticisms made by the Auditor-General are not justified under the circumstances. 1 want to say in conclusion that criticism of the kind made by the Auditor-General should, as he himself has acknowledged, be carefully judged against the quality of the work, the size and complexity of the job, and the remarkable progress which has been made. If these things are kept in view fair-minded people will, I think, agree with the architects that the Commonwealth is getting good value for its money, and that project 590 at St. Mary’s has been well done.
There are other allegations with which I should also deal now. They were tossed out in a jumbled sort of way by the Leader of the Opposition, but I am afraid that I shall have to leave some of them to be dealt with during the debate on the estimates for the Department of Defence Production in a day or two. The right honorable gentleman may be sure that they will be answered at that stage. I want to say, however, that these allegations of his arise partly out of the action of the Labour party, through its leader, in publicly advertising and inviting people - the sort of people Labour is always calling “ pimps and squealers “ - to come forward and tell tales against the St. Mary’s project. Surely at this point the Labour party and its leader have touched bottom in political shame and degradation. The riff-raff, the loafers, the men who have been sacked from the job for incompetence or dishonesty, and, of course, the Communists, fishing in troubled waters as usual, have all been invited to come forward and testify against this job; nobody is wanted who will say a good word for it. Worse still, members of the Opposition have actually encouraged trade union officials to go about among trade unionists on the job, inviting them to say damaging things against the job, but nothing in favour of it, but I am glad to tell the House that several of the men approached, despite the unspoken implication of victimization within the union if they did not come good, have said to these officials, “ You go to hell. This is a good job and we are not going to smear it.”
– You are a liar.
– Order! The honorable member for Parkes will withdraw that statement.
– What did I say?
-The honorable gentleman accused the Minister of lying.
– I withdraw the remark.
– If the honorable member repeats the offence I shall name him immediately.
– The Labour party was once a great party which stood for freedom, for the improvement of the lot of the workers and for human betterment a long time ago. What sort of leadership is this, and what sort of parliamentary representation is this, when that party can stoop to such squalid and contemptible tactics?
The Government decided to build the St. Mary’s filling factory because we believed it was essential to Australia’s defence security. We made that decision after long and careful deliberation supported by the highest and most expert advice in the land that it was, and would continue to be, vital to our defence and was No. 1 priority. We chose eminent and widely experienced architects, engineers and contractors, and we adopted methods designed to give us the most modern, efficient and economic plant possible for a fair price. It has been well built. It will be finished on time and, according to our advisers, Australia is’ getting 20s. in the £1 value for its money.
The Utah organization has many great projects in progress right throughout the world. The senior vice-president of the company, who visited Australia recently at my request to investigate the progress of the project, stated, “ This job is in as good shape as, if not better shape than, any of Utah’s projects anywhere in the world “. A writer in the Melbourne “ Herald “ who saw the project only last week - he went up to see it, unlike the Labour party, which we also invited but not one single man Jack of them would go over the place-
– I was there.
– None of them was there, except the honorable member, who called a stop-work meeting, and caused 1,218 workers on an important defence project to lose 3,348 productive man-hours. That is typical of this great statesman and champion of defence and liberty.
The writer for the Melbourne “ Herald “, wrote -
Grand St. Mary’s has a look of quality. St. Mary’s is created standing strong and good, the best thing of its kino we have ever had.
But, most important of all, Mr. Deputy Speaker, it is there, standing strong and good, and it will meet all our requirements in peace-time, and part of our requirements in war-time, for shells, bombs, and guided missiles as well. It is capable of rapid expansion, should it be required, to meet greater war-time needs. Thus, a great instrument of security has been forged in the interests of the Australian people, of whose safety this Government is the guardian and the trustee.
– One could agree with the Minister for Defence Production (Mr. Beale) that the St. Mary’s ammunition filling factory - project 590 - ought to be standing strong and good. Any project on which more than £26,000,000 has been expended within eighteen months should at least appear to be good. However, that is hardly the question that the House is discussing this afternoon. The motion proposed by the Leader of the Opposition (Dr. Evatt) sets out that, in this project, there are manifest examples of colossal waste and inefficiency. The right honorable gentleman, instead of merely relying upon rumour to support his case, as the Minister implied, pointed to the carefully chosen phrases in which the Auditor-General dealt with the St. Mary’s project in his last two reports. The Auditor-General’s report, Mr. Deputy Speaker, is a report, not to Ministers, but to the Parliament itself. There is a duty on the Parliament to take heed when its attention is directed to matters so serious as this. The Opposition has endeavoured to play a responsible part in the affairs of this Parliament by asking for a more thorough inquiry than has so far been made.
The St. Mary’s project was begun in 1955. Although it had been suggested, as early as 1951, that such an establishment was urgently needed, it was not until four years later that its construction was begun.
What went on in those four years is anybody’s guess. Apparently, all that time was needed to get agreement between those who thought that the old factory could be used and those who thought that an entirely new one ought to be built. The only indication that we have so far is a statement by Major-General Legge that the chiefs of staff said one thing. The Prime Minister (Mr. Menzies) said, and the Minister for Defence Production has told us to-day, that the chiefs of staff said another thing. At no stage have the chiefs of staff themselves stated what they had in fact said. At least, if the select committee sought were appointed, the chiefs of staff would be given the opportunity to give evidence before it without any fear of repercussions against them. If the St. Mary’s project has been satisfactory as the Minister suggests, it seems odd that he should deny an opportunity for fuller and more frank inquiry than has been made up to the present time.
The Minister accused the Leader of the Opposition of uttering an untruth in the House this afternoon about variations in the cost of the project. The Leader of the Opposition cited an answer to a question given by the Minister as late as 26th October, 1956. I ask honorable members to remember that date. The Minister said at that time that the project would be completed within the scheduled time, and within the contract price.
– The Leader of the Opposition said that I knew that twelve months before.
– I am suggesting that the Minister ought to have known it twelve months before.
– That is different.
– This Minister does not always know what is going on in the department that he administers. He must bear, all the time, the brunt of the criticism for the things about which he does not know. »
The Auditor-General, in cold, sober words, states in his report for the year ended 30th June, 1957, that, in December, 1956 - five or six weeks after the Minister had given the answer to which I have referred -
In other words, about six weeks after the Minister had answered the question that I have mentioned, the contractors, apparently after financial matters had been examined, announced that the cost would be about £3,000,000 more than the original estimate. I find it hard to understand that a responsible Minister would not have been informed by those who went into the financial matters that they had been a little wide of the mark in their original estimate. Surely they did not just decide on the inquiry overnight, and find that the work would cost about £3,000,000 more than it had originally been supposed to cost!
If we read further in the AuditorGeneral’s report, we find that, for a considerable time, there had been departmental proposals to reduce the standard of the work in order that the contract price should not be increased. In other words, work costing £1,800,000 was to be deleted from the work originally covered by the estimate of £23,200,000. It was said that this would involve a reduction of the overall capacity of the factory. It seems odd, also, that, on 26th October, 1956, the Minister was not aware that these changes had taken place.
The Auditor-General has been criticized in the House this afternoon. He made several significant comments about the architects and their responsibilities. I suppose that, in terms of the amount of work done in the time, this is probably one of the largest construction projects ever undertaken in Australia. 1 do not mean that it is the biggest in the aggregrate over a long period, but it is the biggest when one thinks in terms of the expenditure of £26,346,000 in eighteen months. Therefore, it was incumbent upon the Government to ensure that financial control over the project was satisfactory.
The Government had put in its hands, only a month or two before the project was begun, the report of the Public Accounts Committee on the Bell Bay plant of the Australian Aluminium Production Commission. It was even more important - or should have been more important - that the Government should have learned its lesson from the indications given in that report that a great deal of the trouble at Bell Bay was due to the failure to establish in the first place satisfactory cost records. Apparently the Government initially took that lesson to heart, because the architect was supposed to have been charged with the duty of looking after the cost, and he was supposed to have appointed an authority known as the control authority. The Minister has mentioned the control authority very briefly, but he has not answered a question that I now ask him, and to which I hope he will later give me an answer. It concerns the remarks that appear in the report of the Auditor-General for the year ended 30th June, 1956. In the concluding paragraphs of his comments on project No. 590, St. Mary’s, in paragraph 116 of the report, the AuditorGeneral said -
It is recorded for information that the Control Authority appointed by the Architect at the commencement of the project resigned as at 31st May, 1956, and was replaced by a new Authority appointed from 1st June, 1956.
Who was the original control authority appointed at the commencement of the project in May, 1955, and why did that authority resign on 31st May, 1956? Was it, as rumour has suggested, that the authority was horrified at the things that were going on, and at the fact that no notice whatever was taken of the various matters that were brought to the attention of the appropriate authorities? Was that the reason for the resignation of the original control authority on 31st May, 1956? I would suggest again, for the health of this project, that the Minister should indicate why the control authority resigned when he did, and who was the new authority appointed in such haste on the day after the previous one had resigned.
The Minister has told us that the AuditorGeneral did not indicate anywhere that there had been extravagance or inefficiency in the project. Again I direct the attention of honorable members to paragraph 120 of the latest report of the AuditorGeneral, in which he said -
Considerable savings could have been effected if the most economical methods had at all times been adopted and if supervisory arrangements throughout had been such as were promised before the contract was let.
I suggest that those are important words. Important also are his final words, when he said -
The Architects failed to carry out completely their obligations upon which the Government agreed to this type of cost-plus fixed fee contract.
In other words, the contract would not have been let in this way if certain undertakings given by the architects had not been entered into in the first place. It is easy enough for the Minister to brush the matter aside and say that the Auditor-General is not a technical man, and that there are disputative opinions about certain matters. Of course there are disputative opinions about certain matters, and there will certainly be disputative opinions about certain other matters that have still to be resolved, because in his previous report the AuditorGeneral said that due to the lack of proper costing records, when the project is finally finished the cost of each aspect of it will have to be arbitrarily assessed. One can tell the aggregate cost of the project, but one cannot tell how much a certain shed or a particular building cost. What kind of efficiency does that show, in a project such as this? So huge is this undertaking, and so rapidly has it been proceeded with, that proper costing records should have been established from the outset. They were not established, and the Government is attempting to defend itself by saying, “We have a splendid filling factory in 1957 that we did not have in 1955 and that we should have had in 1951 in any case “. The significant point is that this splendid edifice will cost the community at least £5,000,000 more than it should have cost, according to the original estimates. It is difficult to see why the initial estimate should have been exceeded, because that amount was large enough to have necessitated adequate control in the first place.
Attacks of the kind made here this afternoon by a responsible Minister on the Auditor-General are to be deprecated. The Auditor-General has set out his findings in a report, and if honorable members read them carefully they must agree that they represent a terrible indictment of the mismanagement of the Minister for Defence Production, who should be endeavouring to give a better explanation of what has taken place than he has given this afternoon. He has attempted to white-wash one point of view and to deny altogether the accuracy of another.
Auditors-General, as I have known them in the past - and I must say that I do not know the present incumbent - have not been given to making wild statements. When they have made reports such as the ones we are considering they have weighed their words carefully, and, as was stated some years ago by the former holder of the office, they have been disappointed at times at the fact that when they have directed attention to matters such as those we have been discussing the Parliament has appeared to take no notice of their remarks. They have said, “ In the last analysis all we can do is to bring these deficiencies to the notice of Parliament, and it is up to Parliament to act in regard to them “. On this occasion the Opposition has chosen to act upon the remarks of the Auditor-General and to suggest that in the interests of all parties concerned there should be a full-scale inquiry, so that we can examine not only the technical question of whether the job was done efficiently and economically - which, I think, were the words used by the Minister - but also the broader question of why it was decided to build a new plant in any case. The Minister has attempted to brush that question aside airily by saying, “ The Labour government rented these premises to certain private concerns, and we did not like to dispossess them “. I would suggest, knowing the Labour government for the careful government that it was, that when it built the filling establishment at St. Mary’s in the first place, temporary though it may have been, it would have chosen the best site. The best site has now been taken over by private organizations, and the filling factory has had to be built around the periphery of the area, where floods occur. There has been an argument this afternoon as to the extent of the damage caused by floods. I suggest that the physical damage done by the floods was of the order suggested by the Leader of the Opposition (Dr. Evatt), but that the project has been loaded with additional alterations to structures that ought never to have been built there in the first place. They have been built there only because the best sites have been taken for other uses, and the filling factory has had to be placed on an inferior site.
These are all matters that could be fully canvassed by a committee of inquiry. They are not matters that can be adequately dealt with by the speakers who have only twenty minutes or so in which to try to cover all aspects of the matter.
To return to the report of the AuditorGeneral, let me say that the Minister has relied on a number of saving comments made in that report. My interpretation of those saving comments is that the position, could well have been much worse than it. is. The Auditor-General made allowance for certain extenuating circumstances, but he was not expressing his opinion. He wasmerely saying that the department or theexperts made some comment. Despite that, the safeguards that ought to have been: taken were not taken and the Government, once more, has been recreant in its trust. It has attempted, as before, to say to the people, “ We have spent this large sum of money; now you are safe “. The Parliament should ask of every penny that isexpended, not only should it be spent but indeed has value been obtained for it. Those two tests should be applied. Some doubt arises, in the first place, as to whether so large an undertaking as this should have been embarked upon, but there is nodoubt whatever that there has been inefficiency, waste and gross exaggeration, in some of the things that have been done. Therefore, the Parliament should welcomethe motion moved by the Leader of the Opposition.
– Order! The honorable member’s time has expired.
– There is a tendency on the question of St. Mary’s filling factory to condemn what wedo not understand. That applies to somesections of the public and, of course, from what we have heard during this debate, to - the Australian Labour party. We must not overlook that this debate arose out of charges that, in the provision of new filling capacity at St. Mary’s, there had’ been gross and inexcusable waste of public money and, indeed, that that gross and inexcusable waste of public money occurred because the Government had disregarded the opinions of its technical experts. The critic has mentioned a series of technical defence agencies which gave the Government advice on purely technical questions. The one matter on which we have some evidence is that the critic mentioned the Department of Works as being one of the agencies that gave the Government sound advice. The Government is alleged tohave disregarded that advice and has, therefore, involved itself in this gross waste.
It is true that the Department of Works, on the question of filling capacity, gave to the Government certain advice relative to plant, cost, time factors and, because these matters were important at the time, the effect on manpower and material supplies. In his latest comment, the Director-General of the Department of Works said that the advice given by that department was on a purely limited front. His closing words were that the department was invited to give this information on only part of the problem as many of the issues involved in the decision by Cabinet were quite beyond the scope of this department’s normal interest “.
– Hear, hear!
– The right honorable gentleman says “ Hear, hear! “, and I am glad to have his support because it is true that the Department of Works confined itself only to technical advice, as it had no knowledge of the other matters involved in the decision.
– The department was not consulted on other matters.
– It did not have to be consulted because, as the Director-General of Works said, the other matters are right outside its terms of reference. Let us proceed, because if the Department of Works is extracted from the list of technical agencies, then, by the same process, the advice given by all the other people should also be extracted. Let me take it a stage further. The critic who has gone to bat on this subject in the” Sydney Morning Herald “ of 4th October was Deputy Master-General of the Ordnance and became a member of the Defence Production Planning Committee. He stated in the press report -
The Defence Production Planning Committee - decided that the old filling factory at St. Mary’s should be repossessed.
I content myself with pointing out merely that this committee had no competence to decide whether the old St. Mary’s filling factory should be repossessed or not. In other words, it had exceeded its field of technical advice and had gone into a field for which it had no responsibility and of which it had no particular knowledge. However, the Leader of the Opposition (Dr.
Evatt) has magnanimously suggested that, on the assumption that the decision to build a new factory cannot be disputed, certain things follow. The Government does not want any concession from the Australian Labour party on this matter and this matter should not be left as one of assumption. I believe that we should follow through the general history of the development of the St. Mary’s proposal, with particular reference to the tenure of industrial factories in the old filling area, and show, first of all, that no course was decently or honorably open to the Government other than the course it followed. It ill becomes the Australian Labour party to chide the Government on this matter because what we were doing in this procedure was to protect undertakings made by the Labour Government when it was in office. Of course, it is easy enough to be wise after the event in matters such as this and we might now question, as we must seriously question, whether the Labour Government in 1946 was wise in closing the old filling capacity at St. Mary’s and turning it into an industrial area. But we are not debating that point. At the time it seemed to be a sound decision, and we will not quarrel with it. However, it is a pretty poor situation when the Opposition picks up that set of circumstances, attempts to quarrel with it and suggests that we as a government should have repudiated every agreement made by the Labour government when it was in office.
We must consider the position as it existed. The fact is that, in 1946, the Chifley Government’s decision to throw the old filling factory open for occupation by industrial concerns was the result of a deliberate scheme by that government to decentralize industry, and we all remember what was being said on that subject at the time.It was designed to provide an avenue of employment for the immigration programme which that government was about to launch, and it was an attempt to team with New South Wales in the development of a planned satellite industrial area at St. Mary’s. No less than 80 firms moved into occupation of the old St. Mary’s within a matter of months after the area became available.In 1950-51. when consideration was being given to this project and to the proposal to re-occupy the St. Mary’s area, 90 firmswere in occupation using between them 1,000.000 square feet of industrial floor space. Those firms had 2,850 people on their pay-rolls and paid £971,000 a year in wages in the production of goods valued at £3,500,000. That is the scope of the industrial activities at St. Mary’s at the time.
The heavy growth of all this industrialization rested firmly on agreements. The 1946 Premiers’ Conference considered and made decisions on the question of extending the Commonwealth-State housing agreement to provide additional housing for workers at St. Mary’s. Documents reveal that the Cabinet sub-committee on secondary industries, a Labour sub-committee, had authorized the granting of leases - I repeat, the granting of leases - including the right of renewal and first right of purchase should the government decide to sell. It is quite true that no lease document was executed. One of the major reasons was that it was almost impossible to describe the area which would be covered by a lease because the area was virtually in one piece, without any subdivision, and services, such as water, sewerage, electric light and roads, were common and there was no basis upon which a sound lease could be drawn. However, nothing alters the fact that these offers of leases rested on the correspondence as agreements to lease. No provision was made in these agreements to lease for the government to resume the area in an emergency, for defence purposes or for any other reason. The Leader of the Opposition has referred to this as a state of permissive occupancy. All I have to say is that, if this is claimed to be a state of permissive occupancy, then the Australian Labour party has been busy for years misleading every industrialist who went into St. Mary’s, because the evidence is quite clear that this was planned to be a permanent industrial settlement.
I have in my hand the booklet produced by the Labour government in 1946. I am not quarrelling about it; it was a good thing at the time and it was a constructive move, but it confounds the argument we have been asked to listen to here this afternoon because sixteen of the 24 pages in the booklet are devoted, with illustrations, to selling the story of St. Mary’s. In it is a beautifully laid out illustration in colour of the planned industrial satellite area of St. Mary’s. Are we to believe that this was only a temporary provision, to be disbanded if somebody should want it again? The Government’s clear intention was that as industrialists went into occupation, they would stay in occupation. The effect of this was to bring something like 20 per cent, of the occupants of St. Mary’s from overseas, firms that we badly wanted in this country, to develop industries here and bring their techniques and their “ knowhow “. Are we to throw all these people out because we want to re-occupy the area and rebuild it for munitions use?
– That would depend on how urgent was the need.
– We will come to that in due course. It has been suggested that we should provide an alternative industrial area into which we would have put these people, so making old St. Mary’s available for the refurbishing of the filling factory. But the fact of the matter is that the rents struck on this industrial area were on the basis of 4 per cent, on £1 per foot of space that would be taken by these people at old St. Mary’s. With respect to an alternative industrial area, I hope it will not be overlooked that the cost of providing a factory space had gone up three or four times in the intervening years and the rental structure would have been 300 per cent, or 400 per cent, above what we had charged these industrialists when we persuaded some of them to come here from overseas and occupy this place. It would have destroyed the whole economic basis of these industries here in Australia.
It was impossible to remove all these businesses from the old industrial area, convert it and re-occupy it for defence purposes. Most certainly, on the documents, we would have been subjected to long and difficult litigation. Most certainly, we would have been faced with large demands for compensation, and if this amount, plus the cost of providing an alternative industrial area, had been set off against the £10,000,000 which General Legge has said we wasted on this particular project, I venture to suggest that it would have been shown that we were really in credit over the deal.
Sitting suspended from 5.57 to 8 p.m.
– Before the suspension of the sitting, I believe I had shown, to the satisfaction of reasonable people at least, that the Labour government, in 1946, as a result of a policy decision, had established at St. Mary’s a satellite industrial area, that it had leased off 1,000,000 square feet of factory space, and that in fact it had, by intent and by decision, made this a permanent industrial satellite area. So, any resumption of the old St. Mary’s plant for purposes of rebuilding a filling factory at that point was impracticable, even if possible, and I doubt that. It would have meant the destruction of the area; it would have meant the Government’s breaking faith with other bodies, both local and State, and it would have meant this Government’s repudiating agreements which had been made in good faith by a previous government, albeit a Labour government.
The old plant at St. Mary’s was intended to have a short life. To introduce new techniques would have involved rehabilitating old St. Mary’s, and rebuilding and extending it on a wide scale. We would have lost the efficiency that goes with the construction of a new plant. The old St. Mary’s occupied an area of 1,000,000 square feet. The new St. Mary’s occupies approximately the same area, yet its filling capacity is four to five times that of the old plant. So, it seems to me that the decision to build a new factory was inevitable. Even the Right Honorable the Leader of the Opposition (Dr. Evatt) grudgingly makes a virtue out of necessity, and admits that the new factory was a necessity. Then he turns his attack to the methods of getting the job done. I thank the right honorable gentleman for the vote of confidence in the Department of Works, which he said could have done this job, as I have no doubt it could, but it would have been with tremendous difficulty. The Department of Works then, as now, faced an annual programme which was approaching £50,000,000 a year, and it would have necessitated the development of a new section to deal with a project of this kind. For that reason, the Department of Works estimated that it would take five years or more to construct a new factory. Any organization selected for the work had to be able to plan and supervise the preparation of 3,250 acres of land on which the 500 buildings at St. Mary’s now stand. It would have had to supervise the installation of millions of pounds’ worth of highly technical equipment. That is a job not to be done in a moment by a department as heavily committed as was the Department of Works. Time was the essence of the contract. To save time, planning must proceed with construction, and, for a job of that kind, there is no possibility of securing a firm contract price. Inevitably, you are forced to the sort of proposal which the Government finally embraced. It is a sound proposal, and is not unusual in engineering works of this kind. It is the costplusfixedfee contract. It is a system which works very well, particularly under the type of supervision which was given to it by Stephenson and Turner, the architects in question.
The Opposition turned its mind to Stephenson and Turner, the people who had to do this job. The Leader of the Opposition said this was the first job of that sort that Stephenson and Turner had had to do, but I direct attention to some of the work this firm has done in the long years of its existence, when it was coming to be the biggest architectural organization in the southern hemisphere. This firm has had industrial design experience in connexion with some of the following undertakings - the Ford Motor Company; H. V. McKay Massey - Harris; the Rheem factory; Taubman’s extensions; Vacuum Oil Company; a powerhouse for the Victorian Electricity Commission; and a new factory for Taubmans. Recently, it completed the new plant at Dandenong for General Motors, which is the largest General Motors plant ever to be built in one operation. That is the background of experience of this firm, to which the Government entrusted this important undertaking.
The Labour party seizes on the fee of £1,250,000 which was paid to the architects. It sounds a big fee, but when we look closely at it, we find that it is not all fee. No less than £500,000 represents the cost of the control section, which any contractor would have had to provide in doing work of this kind. The only difference would have been that the £500.000 would have appeared as part of the contract price, and not to the account of the architect. When you realize that the architects’ fee is also on a fixed basis, and that any increase in the cost of the job will not result in a benefit to the architects, then you find that the architects are doing the job for a figure that is already lower than 4 per cent., and may well be lower even than that in the final analysis.
Once again, Labour turns its attention to the two contractors who are doing the job. The Leader of the Opposition made some odd remarks designed to prove that Utah Australia Limited is not a very efficient organization, but he is bound to admit that it is a specialist in the big contracting field. He is bound to admit that it is backed by some of the finest and most experienced engineering brains in the world. The right honorable gentleman makes the statement that Utah Australia Limited is skilled in securing this kind of contract from governments and others. If this organization is skilled in getting these contracts, it is because it is efficient. When I look at the class of work performed by this organization, and by its partner in this joint venture, Concrete Constructions Proprietary Limited, I am bound to believe that organizations of this kind, where time was of the essence of the contract, where constant communication and co-operation with the architects was required, served this country well by giving of their joint know-how, experience, and resources, technical and otherwise, which they could jointly bring to the satisfaction of Australia’s need for a filling factory of this type.
I only have this to say about the whole project - that if every contract of the proportions of this one is going to turn into a political witch-hunt to bolster the waning fortunes of a political party, it will noi be very long before worthwhile architects and worthwhile contractors will not expose themselves to the sort of vandalism which we have had from the Labour party during this debate. It has been a debate which has not in any way at all raised any evidence which would justify the Opposition’s demand for an inquiry.
.- The two Ministers who have made a case, or attempted to make a case, in respect of St. Mary’s have kept right off the subject. They have decided to do that because they know there is a case to answer, and in no circumstances will they touch on the facts. The Minister for Defence (Sir Philip McBride) and the Minister for the Interior (Mr. Fairhall) have merely circulated a few vague generalities, but have not got down to cases. The man who should be here to answer the Opposition’s allegations is Sir Eric Harrison, who is now in semiretirement as High Commissioner in London.
The whole of this story stems from the days when he was handed the portfolio of Defence Production. I should like to recall certain circumstances with regard to that. In 1951, the Prime Minister (Mr. Menzies) said, “ There will be war in three years “. Sir Eric Harrison, ever the loyal follower, said “ No, there will be war in one year “. So having established the priority of urgency in war, they decided to do something about it, but they did nothing about St. Mary’s until 1955, when work was undertaken. Why was there that interval of four years? The situation in Korea had been resolved. The Indo-China situation was over. There was an entirely new aspect to the urgency of war. Yet it is on record that the Prime Minister had warned the nation that there would be war in three years! Sir Eric Harrison had said that there would be war in one year. The Treasurer (Sir Arthur Fadden), in connexion with the now famous Marcus Clarke case, told the High Court that the urgency of the Government’s credit restrictions which had been challenged was due to the fact that war was imminent. So, in 1951, the Government made known its intention in regard to defence. Much later on it asked the chiefs of staff to concur. That is the story without all the flounces.
The Minister for Defence Production (Mr. Beale) made an unwarranted attack on General Legge. All that General Legge did was to point out, as former Master of Ordnance, just what had happened. He expressed his views as a patriotic Australian. Is there any reason why he should be bashed for that? The whole of Australia has been asking these questions and not one of them has been answered. Perhaps the Prime Minister can answer them. Here is the entrepreneur in his business. Here is private enterprise at its greatest. The lobbyists and the ten-percenters are moving in on government contracts. In the first place, Utah Australia Limited, which is an Australian subsidiary of the United Slates construction company, has no “ know-how “ of its own. It, was employed in Victoria in moving earth from place to place, but had never been engaged on a great munitions project. On its own confession, as the statement of the Leader of the Opposition (Dr. Evatt) has shown, it had no equipment of its own but borrowed it from the parent company. In the month of February in a certain year the cost of hired equipment was £40,000 and in the total period of between nine and twelve months the cost was between £700,000 and £800,000. The position was that this company acted as an agent. It said, “ All right. You want something built. I cannot do it, but I will get some one who can. My principals in the United States will lend the equipment. We will hire it from them.” Australia is horrified to see the wickedness of the cost-plus system, against which the newspapers have been hammering for years, introduced into the defence planning of this country. First, there is a contractor who is not a real contractor. He is a sort of gentleman’s gentleman in the building trade. He undertakes to prepare St. Mary’s for a munitions factory if some one will give him the “ know-how “. That is flaw number one. He is not an “ honesttoGod “ contractor of the sort to which we are accustomed in this country. He is an agent. Money has been lost and rackets have flourished because of that very business. It is not good. That is why the Opposition demands a select committee to probe those things. Some of the allegations can be proven; some may be conjecture. We want to find out, through an instrumentality of Parliament, what has happened.
Let us look at the architectural side of the matter. The architects, on their own admission, had never built a munitions factory. They have done certain factory work, but they are specialists in the building of hospitals. They are gentlemen’s gentlemen in the building of munitions factories. Under their contract for £1,250,000, provision was made for a central control authority. So it gets more remote as time goes on. The contractor for St. Mary’s called in Concrete Constructions Limited to do the work. There we have an agent for the constructors, or an agent’s agent. This is a most extraordinary position and one at which the Australian public is entitled to be alarmed.
The architect’s fee of £1,250,000 was divided between various parties because it was necessary to find some one with the “ know-how “ to do the job. Two statements, one by the Minister for Defence Production, and the other by the Minister for Works (Mr. Fairhall), indicate what has happened. The Minister for Works said, “ We did not put the Department of Works in on this because it had plenty to do “. Is the explanation not that the Department of Works could quickly have smelled a racket, that it could quickly have smelled inefficiency and maladministration, and that, being a government department, it would have had to report accordingly? The Minister quite lamely said that the 67 architects who are employed by the Government were snowed under and unable to do the job. Yet the Prime Minister has stated that this work had No. 1 priority on the advice of the chiefs of staff and his own Ministers! On the statement of his “ stooge “, war was just around the corner, and on the statement of the Treasurer in the High Court war was a certainty within a few years. Yet the Government would not use the services of the official trained architects and engineers of the Department of Works, who had built the Woomera rocket range, in the construction of this government project for our defence! It went outside the Public Service and was badly caught. That is why the Opposition is asking, validly, for a parliamentary instrumentality to probe these matters. We on this side of the House can prove a case.
Although only twenty minutes are allowed to each speaker in the debate one is tempted to spend some time in debating such fascinating questions as “ Who fixed the priority? “, “ When was the contract let? “, “ Why were these people given the job? “. There is not time to deal with all these matters, but I shall speak about some of the losses that have been sustained. I am not charging these two people with malicious maladministration, but because of their inefficiency this country has lost £5,000,000. At least, it has lost £3,000,000 including the sum of £1,000,000 which has benn a kick-back as the result of the reduction made because of change of plans.
The Minister for Defence Production said that the Labour party had not been interested enough to go to St. Mary’s. Labour men have been there often. The honorable member for East Sydney (Mr. Ward) and I addressed a meeting there. The honorable member for KingsfordSmith (Mr. Curtin) and the honorable member for Hughes (Mr. L. R. Johnson) were there. Many other members of the Labour party went to St. Mary’s. But we did not go on a conducted tour. We met the unionists and the people concerned in construction, and we saw enough to satisfy ourselves that things were not as they should have been.
Mr. Beale interjecting, “Mr. HAYLEN- The Minister is holding the bag for some one who is abroad and he has made a pathetic case of it, winding up with a lot of vicious asseverations to the effect that we were asking people to give information. Who better could we consult than the people of this country? It is a poor compliment for the Minister to call the people of Australia spivs, pimps, and urgers. These are serious allegations. We have been frustrated for two years by the Government. I asked the previous Minister for Defence Production, Sir Eric Harrison, many questions on this matter. His flowery replies have been proved wrong by subsequent events. So naturally, the Labour party went to the fountain head to get information and we got plenty. It did not have a narrow aspect. It revealed a feeling .that things were wrong at St. Mary’s. The people wanted to help. If the Government is so lacking a sense of decency that it disapproves of a taxpayer telling of something that he saw and did not like, then things are bad indeed.
What is happening to the administration of supplies at St. Mary’s? Ten cottages were built for executives, all on the cost plus basis. I have a copy of the plans for them; but there have been many alterations to the plans. There have been showers of alterations to plans every day, in an attempt to undo what has already been done. Many thousands of pounds have been lost because of maladministration and inefficiency because one end of the contracting line has not known what the other was doing. The price agreed upon for the ten cottages that were to be erected for executives was £3,000 each. The plans were altered three times and finally they cost £8,500 each. I challenge the Government to prove me wrong. Holidays for executives were charged to cost plus.
There is a surplus dump at St. Mary’s into which everything is thrown including certain goods that would be quite useful outside. It is called a salvage dump. It is guarded by two men and it has all sorts of things on it including aluminium gutter ing, timber, sheet iron, window sashes, architraves and down pipes, all surplus to the job. Every one of the alterations to the original plan indicates that everything has been over planned and material has been wilfully and scandalously wasted. In one case of which I have heard, costly aluminium downpipe and guttering was ordered for a project. It was provided. When the job was done thousands of feet were found to be surplus and it was put on the salvage dump which is known as the “ glory hole “. Then a man came from another section and said, “ Where is our aluminium down pipe and guttering? “. He was told that it was on the salvage dump. In the meantime, it had been bought at ls. 3d. a foot and it had to be bought back at 3s. 6d. a foot. They are little things, but they are most important when they go on and on. In one case the sheet-metal workers were called upon to put a box drain on a factory so that it would be waterproof, most essential in the preparation of munitions. In most cases those things are done in the shop by the sheet-metal workers and tinsmiths. Actually they cut it to size. In this case it was done a quarter of a mile away and when it was brought along at a cost of a couple of hundred pounds it would not fit. Over the week-end it was checked and it still did not fit, and another £100 went in labour. Finally, there was a thunderstorm and the factory was almost washed away; and one of the American officers said, “ For God’s sake do it your own way. Lay it on the roof and see the rain does not come through “. There is the technique, the know-how, of the superlative exponents of making a lot of money for themselves and filching it off the Australian people. There is a case to answer in this matter. Jobs have been done and re-done.
In munitions factories the problems of security and safety for the men working in them are immense. I am told that the steps leading into certain factories had been built because someone deviated from the plan, but they need a slope so a man carrying explosives may not stumble; otherwise the whole edifice could go up in smoke. All these jobs had to be done over again. On no less than ten occasions heavy concrete blocks were turned out and remade because of the original specifications. What is that but inefficiency on all sides. We hear a lot from the Minister about the new and the old St. Mary’s. It is important to remember that many, at least half a dozen, of the old structures are in St. Mary’s. The Minister would believe that to be true. All that is happening to those old structures is that the contractors, who are getting the contract price and the cost-plus, are giving them a rough cast and plaster; and they become new buildings. It is a piece of extraordinary work on the part of the contractor and architect, who do not know their job and are wasting money, that they have to come to the Government and ask for more. Area 40 has six or seven buildings already on it which are classed as new buildings; and the attack on the Chifley Government for allowing those buildings to go back is a side issue.
When the war was over the Opposition of the day, which is now the present Government, was asking us to have satellites. The way the honorable Minister spoke about satellites one would think he had discovered “ Sputnik “, which is now circling Australia. It is all so futile. We believe, in relation to the inquiry requested in most sober language by the Leader of the Opposition, that there ought to be a select committee. If such a committee is not appointed, it indicates that the Government is afraid to have an inquiry. The two Ministers who have spoken have proved nothing. They went round and round, and came out by the same door as they went in. They did not get to the job of debating it and answering the charges we have made. Their speeches have only strengthened our case for an inquiry. The two years of battering by the newspapers, who are not our friends, would seem to indicate there ought to be an inquiry. The cartoons which seem to annoy the Prime Minister (Mr. Menzies) so much indicate their interest because the man who runs may read that there has been wastage, maladministration and racketeering in these things because of the inefficiency of the Government. The contract is to get the job done expeditiously. We must reject entirely the theory that any government - and I am sure if this Opposition were the government it would reject it - in any urgent project would not use its own architects or its departmental experts for top priority work for which they had been trained. Instead of that it dismisses them and says, “ You are too busy doing this and that. We will get entirely independent people outside to do this job “. That would have been forgivable if they were efficient, but we say again it is an extraordinary departure from the contract system in this country to have an agent for a contractor building a £23,000,000 project, and to have architects with a control agency supervising the whole of its structure. If this question had been one that could be talked out in this. House there is no doubt we would not have brought down this request for an, inquiry; but everywhere the people are asking, “ What is the Government’s answer to” this? “ The Prime Minister has a rare opportunity now to give them the answer.
If I may sum up, the things we want to know are these: When will the Government bring before us the former Minister responsible, who was handed a portfolio which consisted of nothing and very soon was able to hand out this contract for £23,000,000? He should be brought back to explain the things the Prime Minister cannot explain, and to address the committee which I hope will be set up. If such a committee is not set up, that former Minister should be brought to the bar of the House to explain his conduct. Secondly, we want a probe into these expenses. We want a probe into the fact that lobbyists, ten percenters and entrepreneurs are preferred to good Australian contractors. What is wrong with the people who built Woomera? Why were they suddenly overlooked in favour of American contractors? Utah Australia Limited is an off-shoot of the parent company and it was formed in Texas some years ago to do this very thing, to get around the lobbies and see if there are any big jobs offering and then get some one else to do them. It is the rake-off par excellence. Nothing like it has previously been seen in this country, and that fact has agitated and annoyed both the people and the Opposition.
The next point is the stupendous fee paid to the firm of architects who formerly did not have the know-how in regard to munitions. Then there is the queer incident of priority. It is on again, off again, on again, and off again; and no one can explain. Then, there is the interpolation, after much private thought, of an honorable soldier, General Legge, who felt that something ought to be said. Having discussed the genera] question of priority, he referred to the waste and extravagance that had been taking place. We want that answered.
Order! The honorable member’s time has expired.
[8.281. - I do not propose to occupy any material part of my time in dealing with the somewhat reckless utterances we have just heard from the honorable member for Parkes (Mr, Haylen), part of which concerned itself with being very rude to Sir Eric Harrison at a distance - 10,000 “miles or thereabouts - but Sir Eric ^Harrison’s reputation will survive it; and part of which consisted, remarkably enough, as I remember some of the speeches the honorable member has made, of making a series of entirely unsupported little allegations and then saying, “ I call on the Government to prove that I am wrong “. I thought his views on the onus of proof were somewhat different from that. Nor do I propose to take any material part of my time in dealing with what fell from the right honorable the Leader of the Opposition (Dr. Evatt), because I venture to say that no attack has been so devastatingly treated as it was by my colleague, the Minister for Defence Production (Mr. Beale). I must admit that, in one sense, my colleague had an uncommonly easy task, because the remarks made by the right honorable gentleman were about as confused and inconsequential as any I have ever listened to. T pause to give one example before I go on to say what I rose to say.
First, the right honorable gentleman praised in aid Major-General Legge, who purported to draw upon his knowledge of confidential documents to offer a view in the newspapers. The right honorable gentleman praised him in aid, and said that all that Major-General Legge had done was to dispute the need for a new filling factory. At that moment, I thought that the right honorable gentleman was going to say that we did not need a new factory and that we ought to have re-occupied the old one and turned out the 3,000 people. But he paused, and by the next sentence he had changed his ground. He said that, of course, for a filling factory, the risks at St. Mary’s were too great, that it was near the coastline and in a vulnerable place; therefore, there should have been a factory at Parkes or Orange - T imagine a new one, since they do not have one at present in either of those places. That was the second ground taken in the next sentence.
Then, of course, it occurred to him that the filling factory ought to be close to the factories where containers were made. He remembered that most of the containers were made in the Maribyrnong area, so he gave us to understand that this factory should have been established at Maribyrnong - no less vulnerable than St. Mary’s and even more distant than Orange and Parkes. When the right honorable gentleman puts up a case and then goes to the trouble of destroying it himself in that fashion there is no occasion for me to add to the devastating words that were spoken this afternoon by my colleague, but I have risen to deal with a matter in which I have a particular concern.
On Tuesday, 1st October, I made a statement to the House on the new St. Mary’s filling factory. Since that statement, which contained a careful and accurate summary of the relevant facts, seems to have been overlooked by some commentators, I crave leave very briefly to remind the House of its salient features. It arose from views put forward by Major-General Legge substantially to the effect that, first, the new St. Mary’s was an extravagance, that is. that it did something unnecessary for effective defence; and secondly, that its construction was contrary to the advice and recommendations of the Chiefs of Staff. Anybody who looks back will recall that that is a fair statement of what these charges were.
As I thought that Major-General Legge was drawing upon his memory of what was discussed as far back as 1951 or 1952, and that he was not accurate about the crucial discussions and decisions of 1954 and 1955, I pointed out, with great care and with the responsibility which properly attaches to my office, the material facts. They were: First, that there were overwhelming economic, financial and social industrial reasons, on which the Chiefs of Staff were not expected to advise, for the Cabinet’s decision in 1954 that the old St. Mary’s should not be repossessed. I stated those reasons and they have been supported this afternoon. I have not heard them challenged.
Secondly, that the Joint War Production Committee, whose views the general purported to rely on, had, by recommendations made in 1951 and brought before Cabinet in 1952, “noted that the difficulties in respect of both the St. Mary’s proposition and the alternative Salisbury proposition are so formidable that the most desirable course it to build a new factory, giving preference to the capacity required for heavy bomb filling.” - these are the very words - and had then recommended that the Department of Defence Production examine the time factor in respect of a new factory, and that if time was adverse, then “ the conclusion, reluctantly reached, is that reoccupying and rehabilitating St. Mary’s should be adopted “. That is the view. It is a far cry from a decision in favour of going back to St. Mary’s on a free choice, as everybody can understand.
Thirdly, that the outstanding advantage of the new factory - I am repeating my statement - was that it would be up to date, efficient and considerably greater in muchneeded filling capacity. Fourthly, that the Chiefs of Staff had given it as their opinion that the construction of the factory was of the very first priority.
This particular matter might reasonably have been expected to end there, leaving for subsequent debate, as that of to-day, the entirely separate criticisms made of the methods employed in doing the job. But Major-General Legge came back to the attack, with the support and encouragement of some newspapers. Apparently, the memory of one Army officer was to be preferred to the objective narrative of a Prime Minister speaking on behalf-
Opposition members interjecting,
– I may add, for the benefit of honorable members opposite, a Prime Minister elected by a democracy, a Prime Minister speaking on behalf of all those Ministers who had participated in the discussions. In this atmosphere, the matter was again raised in the Parliament on Thursday, 3rd October, when I made an answer to a question without notice by the Leader of the Opposition.
The answer was highly summarized in form. It restated, in the briefest terms, the information I had previously given to the House. Notwithstanding that answer, and the fact that my earlier statement had been written by me after many hours of examination of documents, and of my independent recollection and that of colleagues and officials, it has seemed good to some to pursue the allegation. The grossest example is in the “ Sydney Morning Herald “. Admittedly, this journal, as all its readers know, has for a long time been my most acid personal critic.
Opposition members interjecting,
– 1 will have to call for time off, shortly. It has long since abandoned any pretence at being a newspaper of record so far as I am concerned, but it has a wide circulation and its personal attacks, therefore, cannot be entirely ignored where the issues involved are nationally important. I hope that, as the freedom of the press cannot decently operate merely in one way, such a newspaper will welcome and will publish fully a categorical refutation of its charges.
On Thursday last, it offered its views on St. Mary’s, with full knowledge, I hope, of what I had said in this House, including my final answer. I quote two passages from the newspaper, because they state in a concentrated form the charges which once more I propose to answer. The first passage is -
The question which has still not been answered is: Why did the Government persist with the St. Mary’s project in its present form when (as far as can be gathered) ali expert advice was against it?
The expression “ as far as can be gathered “, of course, plainly means “ gathered from Major-General Legge and contradicted only by the elected head of the Administration “.
Since the fact is that, speaking with knowledge, I have dealt with this question, which contains a charge, at least twice, it is even more offensive to find this newspaper going on to say -
The Government statements-
That is, my statements, because I have made them - on this matter have left an unpleasant flavour of evasiveness and prevarication.
These are grave charges to make against a Prime Minister on the basis of a newspaper letter and subsequent statements by a retired officer, with which I have already dealt twice. I am, therefore, intervening in this debate, not to discuss matters already adequately dealt with, but to nail down the falsity of an attack on what I regard as my own probity and candour.
When it appeared, in spite of my statement of 3rd October, that the campaign was proceeding, I visited Melbourne. I there saw the chairman of the Chiefs of Staff Committee, Admiral Sir Roy Dowling, the Chief of the Naval Staff, who, as I knew, had been present at the crucial final discussions, and was familiar with the history of this business. I gave him copies of my general statement on defence and of my two subsequent statements on St. Mary’s, each of which he had previously read, and invited him to check, by all means available to him, their accuracy. That conversation occurred on Sunday, 6th October. Subsequently, I received from the Admiral a letter dated 7th October, and signed by him as Chief of the Naval Staff and chairman of the Chiefs of Staff Committee. As that letter refers to my statement of 3rd October, and so that its full significance should be made clear to the House and to the people, I will, before reading the letter, read out my answer of 3rd October, to the question put by the Leader of the Opposition. I do not think I have time to read out the question, but honorable members will recall that question put by the Leader of the Opposition. My reply was this -
All that I can do is to re-state what I have already stated to the House - I hoped clearly. The first approach of the Government’s technical advisers - I shall group them in that fashion, because the Leader of the Opposition has described a number of them - including the Services, and the Service Departments, was that they would prefer to have a new ammunition filling factory, but that, if they could not have one within a limited time, they would reluctantly recommend the re-possession of the old St. Mary’s factory. When the Government decided that it would not repossess the old St Mary’s - for the compelling reasons that I have already described to the House, and which have not been challenged by anybody - the Government considered a proposition to build a new factory at St. Mary’s; obviously, since the old one was not to be re-possessed. The decision of the Government not to re-possess was well known to the Services and to the technical people, because there was a constant process of consultation. When the Government decided that it would go into the proposition to build a new St. Mary’s, and an estimate of the cost was made - it was something over £20,000,000-1 myself specifically raised with the Chiefs of Staff the question as to what priority they gave to this very proposal. This was done by me orally. No Master-General of the Ordnance was there; indeed, I do not think that I have ever seen him. But the Chiefs of Staff were there. I said, “ Before we adopt a proposal for such an enormous expenditure, I want to know what priority you give to it “. The answer was, “ Completely No. 1 priority “.
Now, that is the answer that I gave, and this was the answer, among other documents, that the Chairman of the Chiefs of Staff Committee had before him. I will now read to the House the letter of the Chairman of the Chiefs of Staff Committee to me dated 7th October, 1957.
– Tell us what you told him before.
– I gave him copies of my three statements. I have already told you that I gave him copies of my general statement on defence and my two other statements and I invited him to check their accuracy. The letter reads -
The subject of this letter is St. Mary’s filling factory which I discussed with you yesterday.
I have before me copies of questions by Dr. Evatt and Mr. Ward and your answers in the House of Representatives on Thursday, 3rd October.
– I thought it was an act of singular condescension. The letter continues -
The Chiefs of Staff were not present when the decision was made, on 16th May, 1954, not to re-possess the old St. Mary’s site, but to build a new factory. This decision was clearly a matter for the Government and not one on which the Chiefs of Staff would be expected to give their advice in person, as there were many relevant factors of a non-military nature which are outside the scope of Chiefs of Staff responsibilities. However, the Service Ministers-
Opposition members interjecting,
– I hope I may be heard by somebody other than the deliberate noise makers in the chamber. This happens to be a very important matter. The letter went on -
However, the Service Ministers were briefed by their respective Departments to support the project as a high priority requirement.
The Chiefs of Staff did advise in January 1952. that a certain filling capacity was necessary for effective defence preparations. It is obvious that to have the capability of making shell and bomb cases, torpedo warheads, mines and the like, but not to be able to fill them with high explosives would be a ridiculous situation.
The filling requirements of the Services for the first year of war were reviewed from time to time, and in June 1955, it was agreed at Defence Committee level that they should be approximately as follows: -
I was present as Chief of Naval Staff at a Defence Preparations Committee meeting in August, 1955, when you personally asked the Service representatives whether, in view of the estimated high cost of St. Mary’s, they still gave this proposal a Number One priority. A short discussion followed, connected with the general effect on all major Service projects of the reduction of the Defence vote, from £200 million to £190 millions and the financial impact of St. Mary’s on the latter figure.
The other Service representatives present were Air Marshal McCauley (Chief of Air Staff) and Major-General Edgar (representing the Chief of General Staff). All three of us, in reply to your question, agreed that in view of the absolute necessity of having sufficient filling capacity, the St. Mary’s project should proceed as a top priority requirement.
Not only do I clearly remember this discussion, but I have checked it with Major-General Edgar, who confirmed my statement.
I have also studied all relevant documents and I confirm the complete accuracy of your reply to Dr. Evatt’s question.
I would wish you to know, Sir, that the Chiefs of Staff most strongly deplore the action taken by Major-General Legge (Retired). His public statements regarding St. Mary’s are both unethical and inaccurate. I reiterate my statement that the Chiefs of Staff unanimously supported the decision to build a new filling factory at St. Mary’s.
That letter is signed by the Admiral as Chief of the Naval Staff and as chairman of the Chiefs of Staff Committee.
– You pulled the strings, and he danced.
– The honorable member for Darebin is now going to accuse Admiral Dowling of being a crook. What sort of people have we got in this place? If they gave up their pious pretences, there might be something to it.
– Order! The honorable member for Darebin will remain silent, or I shall have to deal with him.
– As the date “ 16th May, 1954”, referring to the decision to build a new factory seemed to be a typographical error, I sent a message of inquiry and also asked for further information about the briefing of Service Ministers “ by their respective departments “. Honorable members will note the words to that effect in the letter that I have read. [Extension of time granted.] I then received a further letter, dated 9th October, from the Admiral, which read as follows: -
My dear Prime Minister,
With reference to my letter dated 7th October. 1957, the date given in line 2 of paragraph 3 should read 16th May, 1955. With regard to the last sentence of paragraph 3, as far as I can determine the only written brief to Service Ministers was in the case of the Army. I attach a certified copy of this brief which was signed by MajorGeneral Edgar on behalf of the Chief of General Staff and dated 13th May, 1955.
On 16th May, I was in Canberra and prior to the D.P.C. Meeting, in company with MajorGeneral Edgar, I conferred at length with Mr. Francis, who was then Minister for the Navy and the Army.
– Order! There is too much audible conversation on the Opposition front bench.
– The document continues -
On this occasion both Major-General Edgar and I verbally briefed our Minister as stated in the written brief.
It may be of interest to note that on 30th June, 1955, by Minute 108/55, the Defence Committee recommended that the new filling factory as designed, should proceed.
The attached document sent to me by the admiral, and referred to by him, is headed -
Brief for the Minister
It reads -
That is the Defence Preparations Committee - who, inter alia, decided that a competent firm of experts should be engaged to prepare plans, specifications and detailed estimates for the project.
This document was dated 13th May, 1955. It continues -
If the present proposal is approved the total filling capacity then available would meet the Services’ mobilization or first year of war requirements (whichever is the greater) in one year’s operation. The new factory would supply at’ least 50% of the second year of war requirements of those items it is designed to produce.
I consider that from the Army’s point of view it is essential that approval be given for the early building of a new filling factory. The proposal provides for the earliest possible construction, i.e. completion by the end of 1957.
The document was signed, on behalf of the Chief of the General Staff, by MajorGeneral Edgar.
Since the whole challenge to my own accuracy and frankness, Mr. Speaker, was based on statements made by MajorGeneral Legge, I think it just and proper that I should add a reference to another “ Brief for Minister “ which has been forwarded to me by the Deputy Chief of the General Staff, the Chief of the General Staff being at present abroad. It will be noted that the document is undated. But, as it refers to Agendum 189, which was dated 9th November, 1954, it clearly was written soon after that date. In fact, it was written before 22nd November, 1954. It is headed -
Brief for Minister
CABINET COMMITTEE ON DEFENCE PREPARATIONS AGENDUM No. 189
PROPOSED NEW FILLING FACTORY
As my extended time is going, I will make available to honorable members, but will not read, the earlier paragraphs of the document, which merely recite some history. I shall go to the concluding paragraphs, which are the operative ones. They read -
The location of the proposed new filling factory at St. Mary’s is suitable to this Department as there are five (5) ammunition depots on the N.S.W. rail network.
With present capacity in Australia, there is noprospect of a quick build-up of our mobilization, stock and even with the proposals in this agendum it will be at least four years before any real, capacity for improving our mobilization holdingsis felt.
So far from being too big, or beyond our requirements, it was too small, but it wassomething to be provided urgently, and in the right place. The document to which 1 have just referred was signed -
F. LEGGE Maj-General Master-General of the Ordnance.
The suggestions that this huge project was. undertaken in opposition to the advice of the Service Chiefs; that it is a species of unwanted white elephant; and that it is of excess capacity are therefore demonstrated to be completely unwarranted and untrue.
I will simply add one general observation of public policy. Documents passing between the Government and its defence advisers are confidential. Any belief that they are liable to disclosure would gravely, and perhaps fatally, impair the mutual confidence and utter frankness which is of the essence of defence communications. In the present case, I have quoted two significant, and indeed conclusive, documents, for one reason only. That “reason is that the Chiefs of Staff, through their chairman, have, to prevent a grave public misconception, felt it necessary to make a partial waiver of a rule properly designed to protect their performance of their duties. I hope, Mr. Speaker, that there will be no future occasion for a departure from the general rule of non-disclosure of defence documents, for the rule is vital to the integrity of the Defence Services, and the preservation of their frank and intimate association with the political administration of the nation.
.- If the Opposition required any evidence of the need for an investigation of the construction of the St. Mary’s ammunition filling factory, the Prime Minister (Mr. Menzies) has furnished it himself. It is cowardly for a Prime Minister to make an attack in the Parliament, on a man of the reputation of Major-General Legge without affording him an opportunity to prove what he has stated to be the facts. If there is a difference of opinion between Major-General Legge and the Prime Minister, can it be resolved by a statement by the Prime Minister? Should it not be properly investigated by an investigating committee? It is rather noteworthy that the Prime Minister studiously avoided any reference to the situation regarding the -construction work at St. Mary’s. He religiously kept away from it. I hope to be able to prove, not only that an investigation of this undertaking is warranted, but also that it smells to high heaven, and is riddled with rackets.
Let me, at the outset, deal briefly with the question of whether it was the Chiefs of Staff who actually urged the construction of the new filling factory. I have the Prime Minister’s own statements to prove that it was not. I do not refer to the statements that the right honorable gentleman has made this evening after careful consideration of the statements that he had made earlier. On 1st October, he said -
The Chiefs of Staff are responsible for technical military advice. Their powers include that of advising whether a filling factory….. is necessary for effective national defence.
The Prime Minister then proceeded to show that the Chiefs of Staff had not originated the idea of a filling factory at St. Mary’s, and that the idea was originated by the Department of Defence Production. In a speech made earlier on 19th September, the right honorable gentleman said -
If that is the responsibility of the Chiefs of Staff, and if, latterly, in an endeavour to defend the Prime Minister, they have pointed out the urgency of the work, they have proved themselves to be completely incompetent for not having directed the Government’s attention to it earlier. However, they left it to the Department of Defence Production. Then, it is said, the matter went before the defence preparations committee of Cabinet, and after that the Government consulted the Chiefs of Staff, who then declared, according to the Prime Minister, that the filling factory was of the very highest priority. The Prime Minister said, “ It would have been a strange act of irresponsibility if, without reason, we had rejected that advice” - not the advice of the Chiefs of Staff, but of the Department of Defence Production and the defence preparations committee of the Cabinet, because both those bodies had the question before them before it was referred to the Chiefs of Staff.
The Prime Minister tries to defend his attitude by talking about conversations that he had with the Chiefs of Staff in the Cabinet room. No records exist of those conversations. No documents have been produced with regard to them. All we have is a letter written by the Chiefs of Staff in an endeavour to extricate the Prime Minister from a very difficult situation. Up to this point, Major-General Legge, in my opinion, is as much entitled to expect the Australian public and the press of this country to believe that he is speaking the truth as the Prime Minister is. The question of who is speaking the truth can be determined only after a proper and impartial investigation of the position.
It is rather interesting to note that when the allegation was first made by Major-General Legge, General Sir Sidney Rowell and Air Marshal Sir John McCauley, who had both been Chiefs of Staff at different times, declined to comment. The Minister for Supply (Mr. Beale), who should have been able to contradict Major-General Legge immediately, had nothing to say, because he knew that Major-General Legge was speaking the truth. Major-General Legge had criticized the Government by saying, “ I do not know what arbitrary means the Government has of arriving at our defence quote, but I think they must just take it out of a hat. It certainly is quite unrealistic.”
This Government stands condemned because of the inaction of its own Ministers in failing to reply immediately to the allegations that were made against them. Let us consider the argument advanced by the Prime Minister and his Minister for Supply. The Prime Minister admitted that the arrangements entered into to carry out this work at St. Mary’s were novel. The Minister for Supply said this afternoon that there was nothing unusual about them, but the Prime Minister admitted that they were novel arrangements. He said -
The contractual arrangements for the building of St. Mary’s were admittedly novel. But all expert opinion indicates that if the normal process of full drawings and specifications and quantities had been completed before calling for tenders, and tenders thereafter closely examined before acceptance of any of them, the starting of the enterprise would have been delayed for probably at least eighteen months.
Let us look at the length of time that it was delayed. The Prime Minister made his statement about war in three years, which has been often quoted in this debate, away back in 1951. According to the Prime Minister, this filling factory was an urgent work which could not be given to the Department of Works, because it would have taken too long for the department to complete it. The first Cabinet discussions, according to the Prime Minister, occurred in 1952. It appeared, from what the Prime Minister said, that everybody wanted the new filling factory. If that is so, why did it take the Cabinet two years, until 1954, to make its decision? It took two years tor the Cabinet to make up its minds, although, again according to the Prime Minister, the Chiefs of Staff, the Government, and all concerned believed that we urgently needed the new filling factory.
In endeavouring to excuse the delay, the Prime Minister said -
But the formulation and submission of the views of Ministers and departments with sometimes conflicting opinions not infrequently leads to delays.
In this case, there was a delay of two years, on an urgent job! And, according to the Prime Minister, normal practices could not be adopted. The Prime Minister said -
By the unusual methods employed at St. Mary’s the new factory will have been completed in less than three years.
If the Department of Works had been given the job in 1951, when the Government was supposed to have been aware of the urgency of the situation, even assuming that the department could not have done it in less than five years, we would still have had the factory twelve months earlier than we will get it now.
Why was there delay at the Cabinet stage? I will tell the House why. It was because the Minister for National Development (Senator Spooner) was leading a section of the Cabinet in a move to decide against reoccupying the old factories at St. Mary’s. He did this because he had friends whom he was protecting, just as the Prime Minister has been endeavouring to protect his friends this evening. One of the friends of the Minister for National Development is Mr. Basil Oswald Smith - a very common name, but belonging to a Very influential man. Mr. Smith is chairman of 39 companies and director of ten others. He happens to be the managing director or chairman of directors of A. E. Goodwin Limited, which is the firm that occupies at least a quarter of the entire floor space of the old St. Mary’s factory. This firm was not to be disturbed, because it had powerful friends inside the Cabinet. The Minister for National Development is a member of the firm of Hungerford, Spooner and Company, and Mr. Basil Oswald Smith is a managing partner in that firm. In 1951, this same Mr. Smith was appointed to the advisory accounting panel of the Department of Defence Production, in the same year in which Senator Spooner was appointed Minister for National Development in this Government. What has happened, therefore, is quite obvious.
Let me now turn to the increased cost of this project. The Minister for Supply now talks about the disastrous flood that took place. Let us consider what damage was done by the flood. The original estimate for the project was £23,200,000. This was to include the cost of an engineering study, a fixed fee of the architect and contractor, £900,000 for contingencies, and £1,000,000 for projected rises in labour and material costs. So that there was an amount of £1,900,000 included in the original estimate to meet the contingencies that might arise over the following two years. The work commenced in 1955, and it is now 1957, so that that amount of £1,900,000 should have taken care of these additional costs.
In December, 1956, the architects notified the department that the contractors had re-estimated the cost at £26,346,000, including a further £910,000 for contingencies and wage and material cost increases, which had already been taken care of in the original estimate. Nothing was said in this Parliament or anywhere else to indicate that the estimate had been revised. From December until June the Minister was completely silent on the matter. It was only on 15th June that he made an announcement with regard to the increase, and then he blamed the flood. I can tell the Minister that local residents warned the Government originally that it was building in a flood area. T sent correspondence to the Department of
Defence Production containing these warnings, and the department completely disregarded it. because its officers thought that they knew better.
The Auditor-General said that at this point the Government invited proposals to ensure completion of the project within the specified time, and the instruction of the Government was that it was to be completed at a cost as near as possible to the original estimate of £23,200,000. The revised estimate is about £5,000,000 above the original estimate. How did the department propose to keep the cost down to the original estimate, or somewhere near it? The departmental proposals included the deletion of certain works and the deferment of others. I thought that this was an urgent work, that it had to be completed by the end of this year. Evidently the urgency disappears when the Government tries to cover up the squanderings of public money that are apparent throughout this project. In order to keep the cost down near the original estimate, the Government was prepared to delete certain of the works and defer others. However, despite that effort, the cost now exceeds the original estimate by £4,879,000 and no doubt it will go even higher yet by an amount of £4,879,000. Let us have a look at the damage that was done by the flood. The Minister for Supply said-
The contractors moved on to the site in September, 1955, and immediately commenced the job of clearing the factory area. When the face of the area had been disturbed-
They had not done very much - and before drainage and sewerage activity could be completed, New South Wales was subject to the torrential rains and floods of 1955-56 - 63 inches of rain were recorded on the site.
He would like us to believe that 63 inches of rain fell at one time, but that is the annual rainfall. He continued -
Existing installations and equipment were damaged.
Of course some damage would be suffered, but nobody would believe for one moment that, if only the surface had been disturbed, damage to the extent of £900,000 would be caused by this heavy downfall of rain. Let us have a look at whether the architects are entitled to the fee of £1,250,000. The architects undertook to establish within their own organization a cost control centre. The
Minister this afternoon applauded the representatives of the architectural firm because the principals of it were sitting in the public gallery. I believe they are still sitting there and I hope that their visit to Canberra will not be added to the cost of the St. Mary’s project, as all other costs have been. The Minister said -
The architects were slow to establish an effective control organization . . .
They were slow to do it, which meant, in effect, that at that time they did not have a control organization at all, though they had undertaken to establish one. The Minister continued -
If the architects were carrying out their undertaking and if they were earning their enormous fee, why did the department need to take action to protect Commonwealth interests? An interesting point about this project is that revised costing instructions have been issued with the approval of the department. Therefore, in my opinion, the department becomes as much involved in this crookedness as the architects and contractors themselves. The revised instructions become effective from 1st September, 1956, and provide for efficient control over field operations, in lieu of orthodox accounting control, as provided in the original instructions. In effect, there is no proper accounting to-day on the St. Marys project. The Auditor-General said -
Procedures, although well founded, were not invariably followed-
That means that there was no effective control - . . due in most cases to inadequate supervision by the architects and the contractors.
In an earlier speech - not the speech he made this afternoon - the Minister said-
This is true.
There has been inadequate supervision and 1 hope to give a few illustrations of how that inadequate supervision has affected the community. The Minister continued -
With the type of organization which we have set up at St. Mary’s, there are always dangers of weaknesses appearing in control and supervision . . . some did appear.
That shows that the Auditor-General was completely right in the statement he made in his annual report. The Minister went on to say -
The Auditor-General’s comments imply some inefficiency on the part of the contractor. The latter disputes such allegations. In this, the contractor would be supported by the parent Utah organization.
Did you ever hear such a ridiculous statement from a responsible Minister? The people who are accused of being engaged in these rackets or of protecting those who are engaged in them are the people whose word he accepts that everything is all right. He then said -
An inter-departmental committee was set up generally and regularly to consult with the architect and contractor. Cost accountants of my department regularly test checked the administrative practices of the contractor and architect.
Why was this elaborate departmental organization needed if the contractors and the architects were completely honest? As the Leader of the Opposition (Dr. Evatt) pointed out, the Minister said -
I am gratified to notice that no criticisms are directed towards the Government or my department.
The revised costing procedures were introduced because the Government did not want any revelation such as that made by the honorable member for Parkes (Mr. Haylen) in respect of the construction of ten staff cottages. In the 1955-56 report, the Auditor-General said -
The position is that complete cost accounting over the hundreds of buildings and the various services of the project has not been and will not be established . . . The ultimate value of the individual assets will have to be determined at the completion of the project by an allocation of final expenditure on the basis of arbitrary assessments.
Did you ever hear of such a scandalous state of affairs? It means that to-day no one is able to say what an individual item of construction cost, such as staff cottages or a factory in area 10. All the cost is lumped together and so jumbled that no one can determine whether there has been extravagance or not. Many strange procedures are being adopted. [Extension of time granted.] One strange procedure is that individual invoices are being paid by separate cheques, and cases of dual statements have been discovered. I was given this information by a man who is in a position to know the facts. I do not worry whether the Minister for Supply refers to such men as pimps and spivs. The facts are that, if an investigation is made - and this is the real test - these men are willing to come forward and support their allegations by sworn evidence.
Now let me give some illustrations of waste that have occurred on this undertaking. I invite the Minister to check these statements to see whether they are accurate. A guard house was constructed in area 10. After some rain had fallen, it was discovered that the floor of the guard house was 4 feet under water, so that guard house was demolished and another one built 4 feet higher so that it would not be flooded. Carpenters at the project built hundreds of doors that were required for the various factories. Then somebody discovered that the doors were too small, and so they were destroyed. A concrete floor was put down for another guard house. After that floor had been laid, it was discovered that no provision had been made for drainage pipes or for conduit for lighting and power; so the concrete floor was pulled up. I shall tell honorable members why the ten staff cottages referred to by the honorable member for Parkes were estimated to cost £32,500, but actually cost £85,000. The labour alone for painting came to £2,972. If the Minister cares to produce or to examine the store records, about which he said there was no question, he will find that what I am saying is correct. I invite the Minister to table the store records for the period when the ten staff cottages were constructed. Those records will show that three times the necessary quantity of tiles and household fittings were taken out of store for the ten cottages. Where did they go? Who got them? There has been wide scale theft on the job, but it is not the big thief they are after. As an illustration of that, on one occasion one of the boys on the job took a plumb bob home in his bag by mistake and the authorities were considering prosecuting him for theft. I do not know whether the prosecution actually took place. But the big burglars on the job were carting away this material that was wrongly taken from store, probably to build week-enders; but only a proper inquiry could disclose what use had been made of it. That is why these ten cottages cost £85,000. It is also the reason why the costin? system had to be changed. They did not want any one to discover that this sort of thing was happening at that particular establishment. The Auditor-General, on page 79 of his report in referring to these cottages said -
Estimates had been substantially exceeded, due to unsatisfatory costing, use of more expensive materials and fittings.
Does it not appear obvious to any reasonable person that one does not account for an excess of £53,000 above the original estimate by talking about unsatisfactory costing or the use of more expensive materials and fittings. One could not account for that enormous increase in the cost of these dwellings in that way. It can only be accounted for by dishonesty on the job, and the withdrawal of supplies from the stores by those in authority which were not required in the construction of these staff cottages.
Now, let me turn to another question. On one occasion it was discovered, when preparing to put down concrete floors in some of the sheds, that they had excavated too deeply. Instead of filling in some of the material that had been excavated they poured in concrete and the floors - which can be tested or measured to prove the truth of this statement - in those ordinary sheds are now concrete, 12 inches thick. That is another illustration of the waste that went on.
The Auditor-General talked about overmanning. On one occasion the warehouse clerks were taken in for work on a Sunday at penalty rates, but there was no work available for them. They run their own internal transport system at St. Mary’s, and on 3rd February a remarkable thing took place. I am giving only a couple of illustrations because time will not allow me to give more. On 3rd February last eight men were working over the week-end with twelve transport drivers to look after them. On the following Sunday, 10th February, three men were working with eight transport drivers to look after them. On 5th January last, which was a Saturday when penalty rates would be payable - these facts can be checked - 207 men were rostered for work. They consisted of carpenters, bricklayers, electricians, riggers and 38 transport drivers. But there was no work provided for them, and the men resented what was occurring. They supplied this information to me.
I turn now to the hire of equipment. Some time ago, I asked a question in the House about the amount of money expended on this equipment. As the Leader of the Opposition pointed out this afternoon, most of this money has gone to Utah Australia Limited, one of the contractors. The amount paid in the hire of equipment up to 30th June this year was no less a sum than £1,015,000. That represents £45,000 a month for the hire of equipment, much of it second-hand. To give an illustration of what is going on in this connexion, the hire charge for one crane for three months was £15,000. All I can say is that there has been complete extravagance on this undertaking. When the Prime Minister paid a visit to the works, in company with the Minister for Supply, the visit lasted only an hour or two, but, prior to their arrival, special cooling apparatus had been installed. The factory put on a display of filling shells and worked the men overtime so that the Prime Minister and the Minister, during their visit to the works, would be completely comfortable in their surroundings. But all this preparation added to the cost of this project.
We all hear of the rackets, and the records will disclose that on one occasion 300 staff members were working on the job and were provided with morning and afternoon tea. I do not object to that. I think it is a good thing. But one of the men on the costing system of the St. Mary’s project at the time, told me that a bill came in from McIIrath’s Limited, wholesale grocers, for tea, amounting to £1,200. How much tea could you get for such a figure. The Minister attempts to laugh it off, but let him have an investigation, and he will know that what we are saying is true.
The firm of Stephenson and Turner were the architects for this project. They were selected to design and control the. enterprise for a fee of £1,250,000. Why were they selected? It is rather interesting to note that Sir Arthur Stephenson, a member of this firm, since this work was undertaken was awarded, in one year, the honour of “ C.M.G.”, on the recommendations of his friend the Prime Minister. The following year he was given a knighthood, which, I understand, is quite an unusual happening. So, one can see there is a very close connexion between the Prime Minister and these people. Then let us consider the contractors. The contractors were to get a fixed fee of £615,000. lt will be much more than that, because, as the Leader of the Opposition has pointed out, they will receive enormous sums of money for the hiring of equipment to the project and there is evidence of gross overcharging on various items. By those and other means, they have been able to rake in considerable additional sums of money. I say, in conclusion, because my time expires, that the Minister for Supply-
– Order! The honorable member’s extension of time has expired.
.- To-day, honorable members on this side of the House have learned, with great pride, that there is now partly in operation, and almost completed, a good, sound, modern ammunition filling factory. All honorable members on this side congratulate the Government, the Prime Minister (Mr. Menzies), the former Minister for Defence Production, Sir Eric Harrison, the present Minister for Defence Production (Mr. Beale), the department, and everybody concerned with it. Tomorrow, when the members of the American military mission visit St. Mary’s and see this new factory, they will be assured that in this part of the Pacific at any rate there will be plenty of ammunition of the calibre which is necessary for both American and Australian armed services, because of the uniform calibre rifles now in use. There will be plenty of ammunition also for SEATO and Anzus Pact armed services and this fact will prove that we have discharged our responsibility to our allies and to the people of Australia.
We have just heard a speech from the representative of a party which has set out to sabotage the defence effort of Australia at every possible opportunity. We can go through each stage of the sabotage that has taken place. Since the war, the Chifley Labour Government pursued a policy of total disarmament. Its behaviour was such that through the remarkable action of the then deputy Prime Minister, now the right honorable member for Barton-cum-Hunter (Dr. Evatt), the Labour party succeeded in making Australia bad friends with our Asian neighbours and the United States of America. We all recall the refusal of the right honorable member for Barton to give the Americans a chance to occupy Manus Island. Had they been allowed to do so, Australia would have been given complete protection at this time.
– I rise to order. This debate is dealing with the St. Mary’s project. What has Manus Island to do with the question before the Chair?
– Order! There is no point of order.
– The Australian Labour party has taken every possible opportunity to sabotage the defence policy of this country. That is its real reason for making this attack upon the St. Mary’s project, but it is one reason the Opposition did not give for launching this motion. Honorable members opposite said nothing about that because, politically, it would be unwise to do so. I invite honorable members to recall some of the activities of the honorable member for East Sydney (Mr. Ward) in his endeavours to sabotage the St. Mary’s project. The honorable member, accompanied by the honorable member for Parkes (Mr. Haylen) went to St. Mary’s and held a stop-work meeting which lasted for about one and threequarter hours. His general line of appeal to the workers was that they had to be looked after and that the large American firms were undesirable in the Australian economy. The average wage paid to the members of the audience of the honorable member for East Sydney on that occasion would be about £18 10s. a week. So, as a result of that stop work meeting, those workers altogether lost £950; and 2,100 man hours were lost while the plant was idle. Of course, this is in line with the attempts of the Communist party to hold up the St. Mary’s project. The following article appeared in the Sydney “ Sun “ in 1955: -
A red shadow organization is behind most of the twelve stoppages which have lost £97,000 in wages since beginning the St. Mary’s £23,000,000 munitions project. The basis of the series of stoppages is a communist plan to close down the project.
Here is the real reason for the attack on this St. Mary’s project, a project of which Government supporters are tremendously proud. We on this side of the House remember that men lost their lives because they did not have ammunition, because they had not been properly trained, and because at the last moment they were handed rifles and ammunition which they had never seen before. Every honorable member in this House has a responsibility to the young men of Australia, because if they are ever to be in danger again we on this side of the House want to see that those men have the ammunition. The Government showed courage in pushing through with this project. Stephenson and Turner, and Utah and Concrete Constructions all showed courage. How would any honorable member like to go into a place like that with all these forces arrayed against him - the Communist forces, the Building Workers Industrial Union, and the other forces of industrial lawlessness which would make it almost impossible to attempt to do anything? These men were backed by the strength of the Menzies-Fadden Administration, which would not rest until it was certain that we would have a modern filling factory in this country. Honorable members on this side of the House are proud to know that this project will be completed shortly, and at a low cost. This is one of the cheapest jobs that have been completed in Australia in living memory. It is an amazing thing for the Labour party to talk about waste and inefficiency. Look at some of the jobs they attempted to do with day labour under depleted departmental staffs! Look at what State labour governments have done! I am referring now in particular to a job on the Hunter River, where the right honorable member for Barton proposes to go shortly. That job is the Glenbawn dam, started ten years ago. It was first authorized in 1947 at an estimated cost of £1,500,000. The Americans said they could do the job for £5,000,000, and the State Department of Public Works said it could do the job for £2,500,000, but when it is finished it will have cost nearer to £16,000,000, which is an increase of 1,000 per cent, on the original authorised cost. The whole State is littered with unfinished public works which have cost enormous amounts of money. That is the background of the party which comes here and talks about waste and inefficiency at St. Mary’s.
What happened at St. Mary’s is that during the period from February, 1955, to December, 1956, there was a rise in the formula basis of building, applying to contracts in Melbourne and Sydney, of 16.6 per cent. If we deduct the cost of the Taylor award of £3 14s. a week; the site allowance, which cost £1,000,000; the flood, which cost £1,000,000; and the electrification, which cost £400,000 - there was a rise of only 4 per cent, or 5 per cent, in the cost of St. Mary’s, a small rise compared with the general rise in the formula basis. The Auditor-General’s report could not be accepted by any building tribunal, because from any point of view the report draws major conclusions from minor circumstances inherent in all building contracts or projects, regardless of the basis on which they are carried out. If we look at this project in true perspective, we see that we have a magnificent job, and that it has been done very cheaply, indeed. I think that the Labour party, in submitting this motion for the establishment of a select committee, has made one of the greatest mistakes of the many it has made in the past three or four years. It has given the Government a perfect opportunity to reply to criticism about St. Mary’s. I emphasize that this job is a magnificent one, a cheap one, and honorable members on this side of the House are proud of it.
Let us look at the people who were concerned with the job, taking first Stephenson and Turner. The right honorable member for Barton said to-day that this firm only did hospital jobs. To use the word “ only “ is most unfair, because in addition to such projects as the Royal Melbourne Hospital, the 113th Australian General Hospital at Concord, and Royal Prince Alfred Hospital, which are magnificent jobs, Stephenson and Turner, who are the greatest architects in Australia, and among the greatest in the world, have done such jobs as General Motors at Dandenong, which is a factory occupying 90 acres. That was a job done at a reasonable price, in a similar way to St. Mary’s. Other jobs which this firm has done have been General Motors at Pagewood, the Rheem factories all over Australia, power houses for the Victorian Electricity Commission, and a factory for the Ford Motor Company. Just recently, the firm landed contracts for three large hospitals in Iraq. Government members are proud that Australian architects got that contract. The firm has constructed buildings at the world fairs in Paris and New York on behalf of the Commonwealth Government and the Austraiian National Travel Association.
Now let me deal with Utah Australia Limited. Mr. East, when opening the big Eildon dam, said that it had been constructed on time, and that throughout the four years and 36 weeks of the contract there had been excitement in the air. That is rare on the day labour jobs in Australia. If honorable members went to St. Mary’s, as I have done, they would see the same thing - excitement in the air. Anybody could see the difference in the work at St. Mary’s and the work on day labour jobs scattered all over the State of New South Wales. The honorable member for East Sydney (Mr. Ward) also went to St. Mary’s, but in a discreditable way. Messrs. Fogg, Thomas, and McCardle, the latter having worked at the Oak Ridge atomic energy plant in the United States, are supplying the American know-how which, together with the Australian experience of Concrete Constructions, is doing the job.
Let us look at Concrete Constructions. Anybody who has been to Sydney recently must have noticed the spectacular building at the end of Elizabeth-street, which was built for Qantas by Concrete Constructions. The same firm built the M.L.C. building in Sydney. That firm has £30,000,000 worth of work going on in South Africa, and is giving work to many Australians. That firm was associated in this great work at St. Mary’s, and, instead of attacking the Government in the way it has to-day, the Opposition should be congratulating the Government. I congratulate the Government, and the Prime Minister in particular, because of the impeccable way he has behaved with respect to this matter. He dealt with General Legge in a restrained and moderate way. He has achieved even greater stature by the way he has handled this matter.
It is difficult to understand the Labour party on this matter. It appears to have attempted to make political capital out of alleged defects in the St. Mary’s filling factory, but the way it has acted is naked hypocrisy. The past actions of the Labour party with respect to St. Mary’s, and to Australia’s defence in general, are sufficient to discredit it. One thing that is certain is that this rocket which they have tried to put up will backfire with heavy casualties. Labour’s launching platform is in grave danger.
Anybody who listened to the right honorable member for Barton would have gained the impression that he did not care how much it cost to build St. Mary’s so long as Parliament was told from day to day. The right honorable gentleman complained bitterly about the fact that Parliament was not kept informed. Then, if the Department of Works had done the job the right honorable gentleman would have had no complaint at all. In other words, if the job had been socialized it would have been all right with the Labour party. The fact that there has been some temporary easing in the cold war does not affect in the slightest the need or the priority. At this moment our defence measures, as always, are for peace, not for war. Therefore, our measures succeed when peace is maintained. One of the important things about building a filling factory is that it will assist us to ensure peace because a country that is strong and well armed will get peace. If we did not have a filling factory such as St. Mary’s we might be attacked because we could not protect ourselves.
Finally, I wish to congratulate the Government. I think that it has come out of this debate tremendously well. I think that the method of building this factory was correct. The Auditor-General has really not made any criticism of the Government. Certainly he has not made any criticism as severe as the one that he made of the Department of Munitions when it was under the control of the Labour Government in 1947. The Auditor-General said -
In the circumstances the Treasury decided to discontinue financial adjustments between the Department of Munitions and Service Departments in respect of all orders placed prior to 1st July, 1946, which had not been finally cleared.
In that case, the Labour government did not have an inquiry into what happened. Let the Labour party check the records of its government. If it does so, it will find that in certain departments, records of stores and receipts were incomplete. It is well known that the Chifley Government disposed of our war materiel at the rate of £50,000,000 a year. In page after page of his reports, the Auditor-General drew attention to the failure properly to account for munitions stores when the Labour party was in office. Nothing was said about an inquiry then, although that was a serious .matter whereas this debate concerns a job which was undertaken against terrific difficulties by courageous men who had to make their designs and surveys as they went along.
These men also had to face the lawlessness engendered by the honorable member for East Sydney (Mr. Ward) and some other members of his party. I concede that not all of them agree with him. Some of them came to me and said how ashamed they were of his action. If honorable members opposite wish, I will name them, but I do not think it would be fair. Half of the Opposition disagreed with the way in which the honorable member for East Sydney went to St. Mary’s and tried to stop the work. The report of the AuditorGeneral which has been mentioned so often to-day really says that this project is a noteworthy achievement. The AuditorGeneral said something about the lack of supervision. He got that from letters addressed by the control authority to the contractors asking them to tighten up in certain respects. I do not think that the Auditor-General went there himself but that he gol his information from papers. Those of us who did go there saw a job proceeding magnificently; a job of which everybody concerned was proud, a job on which Australians handling machines were proud of their American managers who helped them to work so well.
.- The honorable member for Macarthur (Mr. Jeff Bate) is one Government supporter who could not say, “ I shall return “, if the Government had the courage to appoint the select committee for which the Opposition has asked, if such a committee were permitted freely to inquire into all the matters concerning this munitions project, and if the committee were given free access to all documents and witnesses, to some of whom reference has been made in the debate. In order to understand the Government’s psychology on this matter, one must consider the position at the outbreak of war. There had then been eight or nine years of uninterrupted Liberal government in Australia and Australia had no modern filling factory at all. At that stage, the Government had to set about finding other factories. In fact, the plans which it made were not put into operation in regard to the filling factory at Salisbury or the old filling factory at St. Mary’s until the Curtin Government took office.
Ever since then the Prime Minister (Mr. Menzies) who was Prime Minister at the outbreak of war, has been obsessed with the fear that he will have failed twice. He does not want to go down in history as the man who has left the country unprepared for war on two occasions. Accordingly, frantic efforts were commenced in 1951 when he told us that we had to be prepared for war in three years, at the most. The astonishing thing about the new St. Mary’s project is that it was not decided to build it until after the conclusion of that three-year period. The panic associated with this project stemmed from the Government’s realization that this essential component of Australia’s defence preparedness had been completely overlooked by the time we reached the deadline set by the Prime Minister. Still more had it been overlooked by the time we reached the deadline set by the then Minister for Defence Production, Sir Eric Harrison, who also, in 1951, improved on the Prime Minister’s forecast and said that we had to prepare for war within one year.
No one disputes that the factory which will be opened by the end of this year is a splendid factory for its purpose. No one disputes that it is a necessary component of o:;r defence preparation. If we have troops who are well-trained, skilful and fit, as we have, and if we, for a power of our size, have reserves of good aircraft and naval craft and artillery, and if we have adequate resources to produce explosives and casings for all our projectiles and bombs, there is no question that we need a filling factory to bring together the explosives and the casings. But we did not have it, and by the deadline set by the Prime Minister and the former Minister for Defence Production we would not have had that essential component of our defence preparedness. All our troops would have had to use imported ammunition. By the end of this year we will no longer be in that humiliating position.
I feel it is necessary to go over the background to understand the extravagances and the panic which have attended every feature of this project. First of all, let me deal with the cost of the project. It was said, from the beginning, that it would cost £23,200,000 and that figure was adhered to throughout the debate on the Estimates last year. Let me give the chronological order in which costs were stated. The then Minister for Defence Production, Sir Eric Harrison, said in the House on the 4th October, 1955 -
There is no basis for the assumption that the total cost will be more than £23,200,000, nor is it a valid assumption that the cost of overtime will be beyond that now provided in the £23,200,000.
On the 13th October, 1955, he said - . . every inquiry I have made, every inquiry that has been made of the architects, and every inquiry that has been made of the contractor has revealed that the estimated cost of £23,000,000 will not be exceeded.
That was the atmosphere in which the project commenced. It was an atmosphere in which we were allowed to regard the project in the Estimates last year. On the 1 1th September the Minister for Defence (Sir Philip McBride) referred to - the new filling factory at St. Mary’s which is estimated to cost £23,000,000 . . .
On the same day, the then Minister for Defence Production, Sir Eric Harrison, said, speaking of the senior partner of the firm of architects which the Government selected to carry out this project and who has been paying great attention to the proceedings throughout this afternoon and this evening, said -
Sir Arthur Stephenson, in a conference with the Prime Minister only a few weeks ago gave an assurance that St. Mary’s was proceeding to schedule, and would cost - barring extraordinary and unforeseen circumstances - the quoted sum of £23,200,000.
On 12th September last year, the Treasurer (Sir Arthur Fadden) in reply to a question on notice by the Leader of the Opposition (Dr. Evatt) said -
I have made inquiries but have not found evidence that the Commonwealth is likely to be involved in very large additional expense. The most recent advice from the architects and the contractors suggests that the final cost will be close to the original estimate of £23,200,000.
The Minister for Defence Production (Sir Eric Harrison) on 18th September last year, in answer to a question by the insatiably curious member for East Sydney (Mr. Ward), who had asked -
What is the approximate amount by which it is now expected that the originally estimated cost of £23.200,000 will be exceeded? said, “ It is not so expected “. I sympathize with the incoming Minister for Defence Production (Mr. Beale). Despite the heat of debate which has been generated in this place from time to time, I must say there is no member of the Ministry or the Cabinet who has made facilities more readily available to honorable members to see the projects which he has supervised, whether it is Rum Jungle, the Menai reactor, Maralinga, Woomera or St. Mary’s. He has always made it possible for us to acquaint ourselves with those projects, but he did not take over St. Mary’s until a year ago. In answer to a question by the honorable member for Bass (Mr. Barnard) on 23rd October last year he said -
On 23rd July, 1956, the architects Messrs Stephenson and Turner, advised that the final cost would be approximately £23,000,000.
That was £200,000 less than the original cost. It was not until 15th June last that the present Minister for Defence Production had to reveal that the factory would cost within £26,200,000. I will come in greater detail to how that was made up. In fact, as the Auditor-General’s report this year shows, there were in the interim two revised estimates, both upwards of the cost of this factory.
The reasons given by the Minister for Defence Production were several. One was the unprecedented floods; another was the increase by £1,500,000 in material prices; another was the wage payments arising from the St. Mary’s site allowance. I take it that the honorable gentleman was referring to what this afternoon he acidly called with considerable sarcasm the “ famous Taylor award “. One gathers that he did not approve of, and was casting reflections upon, the award made in respect of this site by the President of the Industrial Commission of New South Wales. Let it be stated quite plainly that under legislation we passed last year it was quite open to the Commonwealth to take this project, like all Commonwealth projects, out of the purview of the Industrial Commission of New South Wales and bring it within the purview of the Commonwealth Conciliation and Arbitration Commission. The Minister did not choose to do it, and therefore he is in no position to asperse the decision of the authority with whom the Commonwealth chose to leave the whole matter.
Then he mentioned the sharp cost of living increases under State awards. I do not recollect that at any time during the two years this project has been under construction the difference between Commonwealth and State awards has amounted to more than ten shillings a week. If it were ten shillings a week throughout that two years, and if every one of the 3,000 people on the job was subject to that cost of living difference between Commonwealth and State awards, it would not amount to £150,000 all told. That would not go far towards justifying the increase of £5,000,000 in the cost of the original project, and the increase of £3,000,000 in the reduced project which we are now being given.
The last factor which the Minister for Defence Production relies on is the need to electrify the railway system into the factory. This afternoon he referred to the unexpected electrification. If that is the sort of planning which has been going on, no wonder there has been such a vast increase in the cost of the project. In the report of the Commissioner for Railways of New South Wales for the year ended 30th June, 1954, and ordered to be printed by the Parliament of New South Wales in December 1954, it is stated -
Good progress was made on the electrification of the western line from Parramatta to Lithgow, which is scheduled for completion early in 1957.
The St. Mary’s project was to be finished by the end of 1957. It was known, therefore, nearly twelve months before that the line past the factory would be electrified. For the following year the Commissioner reported that steady progress had been made on the electrification to Lithgow, and the section from Parramatta to Blacktown was opened for electric traction on 26tb February, 1955. Before the project was ever started at St. Mary’s, trains were already running within half a dozen miles of it by electric traction, and electric traction alone. From last year’s report, of course, we are reminded that electric passenger services were commenced to Penrith on 8th October, 1955, that is, a couple of months after the St. Mary’s project was actually commenced. If that - and this is a feature upon which we can be definite - is typical of the apologia of the Minister for Defence Production, then he has made out no case whatever.
What are the other cases he has made out? He has sought to asperse the AuditorGeneral. He said the Auditor-General is not a technical man and he is in no position to criticize the contractors or the architects. Let it be mentioned immediately that the criticisms which are relied on in the report by the Auditor-General are those which the Auditor-General quoted from the control authority; the control authority appointed by the architects; a control authority which is a firm of chartered quantity surveyors, and it is that control authority which points out the following things mentioned by the Auditor-General -
The lack of adequate supervision was frequently brought to the notice of the Architects and the Contractors by the Control Authority and although remedial action usually followed, the fact remains that considerable savings could have been effected if the most economical methods had, at all times been adopted and if supervisory arrangements throughout had been such as were promised before the contract was let, when the Government received assurances from the Architects that careful control and economies and establishment of all reasonable safeguards would be provided. The Control Authority reported cases of extremely poor, and, in some instances, complete lack of supervision, noi only in regard to the responsibilities of the Area Superintendent, but to all supervision down to the grades of foremen and gangers.
Those are not the criticisms of an accountant who is not versed in the procedure; they are the criticisms of a firm of chartered quantity surveyors chosen by the architects themselves.
One would think that far from sheltering behind the architects and the contractors and abusing such independent persons as the control authority or the AuditorGeneral, the Minister and the Prime Minister would agree to this select committee being appointed, because this attitude of sheltering behind experts has characterized the Government all along. There is no question that right from 1955 when the Prime Minister first announced this project he wanted it to be thought that the Chiefs of Staff and the services advisers were responsible for the nature of this project and the amount of money which was being spent on it; and throughout to-day Ministers have sought to cover up that position by quoting reports by services officers subsequent to the decision by the Government, not by the services officers, that the new factory should be built. It is quite possible to reconcile to-day’s statements of the Prime Minister and the Minister for Defence Production with everything that has been said by Major-General Legge, who has been referred to, during the debate, as “bursting into print” by the Minister for Defence Production, as “ the critic “ by the Minister for Works (Mr. Fairhall), and as “ a retired general “ by the Prime Minister - any retired general. This former Master-General of the Ordnance has been spoken of in the most depreciatory terms.
It is perfectly possible to reconcile the statements made by these independent people, as well as these belated admissions made by members of the Ministry, if we remember that the advisers said, “The quickest and the cheapest way to get this necessary filling factory is to rehabilitate the old factory built during the war “. When they were told by the Government that it would not do that and they were asked, “ Do you still want a factory? “, they said, “ Yes, we must have a factory “. They were not asked to say whether they should have an old factory or a new factory; they were asked, “ Do you still want a factory, if you cannot have the old one? “ and they said, “ Yes, we must have a factory “. The original recommendation was not adopted. The Prime Minister has said, and he may be right, that it is not for service chiefs to make such a recommendation. The question of how much money shall be spent may be a matter, not of military decision, but of economic or political decision. But it is a matter for military decision to decide whether or not the facility is required.
First of all, the military people were asked, “ Do you want a filling factory? If you do so, what do you suggest we should do about getting one? “ They all said, “ Rehabilitate the old one. That is the quickest and the cheapest way of doing it “. The Government, after three years’ delay, said, “ We won’t give you the old one. A new one will cost a lot. Do you still want it? “ and they answered, “ We must have a factory “ and the other things which have been referred to to-day, bearing on the later decision. They were given the choice - no factory or a new one.
The astonishing thing is that the Prime Minister still wishes to hide behind the service chiefs. He now produces, because he alone can produce such defence papers, a long signal from the Chief of the Naval. Staff. I should think that if Nelson got. a viscountcy on the basis of “ England, expects every man will do his duty “, Sir Roy Dowling ought to end up as a duke on. the basis of that signal which was read out by the Prime Minister. After that, the Navy can never again be regarded as a. silent service. Whatever that signal might lack in pith, it certainly does not lose in bite. The Chief of the Naval Staff wasguilty of spleen in referring to the retired Master-General of the Ordnance, the very serviceman within whose province armaments, ordnance and filling factories peculiarly reside, as unethical and inaccurate.. That was surely a belated and contemptibleattack on a man who, alone among theservice people quoted in this debate, is in an impartial position. Major-General Legge has no axe to grind and is not subject to direction.
– Order! The honorablemember’s time has expired.
.- Whenthe honorable member for Werriwa (Mr. Whitlam) entered the chamber, he had his arms loaded with copies of “ Hansard “,. all tagged at pages from which he intended* to read. The honorable gentleman approaches all the debates in this House with a legal attitude. As he spoke this evening, one could almost visualize the wig and gown on him. I advise him in matters of this kind to follow his leader, the right honorable member for Barton (Dr. Evatt), who has long since found that legal logic is of no use in this place. He has abandoned it because his case invariably is bad and his logic untenable.
The honorable member for Werriwa began his remarks by referring to the expenses involved in this project. He said that they were £3,000.000 too much. He referred to statements made by various Ministers, approximately a year ago, to the effect that the estimates were accurate. A little later in his argument he defended the criticism of the AuditorGeneral by quoting the control authorities. He said that the Government was hiding behind the findings of the control authorities as a result of their various surveys during the construction work. Yet it is the control authorities which claim that the increased estimate of £3,000,000 was based on the contractor’s detailed estimates, which were both reasonable and reliable. On the one hand, therefore, the honorable member used the control authority to support his argument, and on the other hand he discarded it.
The concluding remarks of the honorable member, concerning the Chief of the Naval Staff, who supported the contention of the Prime Minister (Mr. Menzies), were in my opinion both unreasonable and grossly unfair. The Prime Minister has been attacked most severely in this House, and the whole of the statements made by him have been treated with grave suspicion. In those circumstances, if he has not the right to defend himself and the high position he occupies, who has? No doubt the honorable member for Werriwa will say, “ What about the rights of Major-General Legge? “ I say that Major-General Legge has been proved categorically wrong by documentary evidence. But what sort of justice is it that does not allow a man to defend himself?
The whole of the Labour case has been presented in hesitant fashion. Honorable members opposite have spent a long time boggling over this matter. They have been discussing it for weeks and weeks, but when they finally come to the point of presenting their case they stick to the report of the Auditor-General. In their motion, there is nothing of their old statements about whether or not the filling factory was necessary. They use the report of the AuditorGeneral, although they abandon it when it suits them to do so. If they were sincere in their attack, why did they not ask for a royal commission? I suggest that the answer is that a royal commission seeks to establish facts. What would happen if there were a royal commission and it established that the Commonwealth Government had been perfectly right in this matter? Of course, the whole case of honorable members opposite would fall to the ground. They would lose the benefit of propaganda material and they would be made to look a miserable lot. In any event, however, the reply to their case from the Government side of the House has made them look miserable.
Honorable members opposite have asked themselves, “What shall we do in the matter? “ and have decided to ask for the appointment of a select committee on which the Government would have the generous allocation of five members, and the Opposition four. Does any one think that 1 would trust any four members of the Opposition to produce an unbiased view? Who would those four members be? Would they include the honorable member for East Sydney (Mr. Ward), a man who says that the whole of the St. Mary’s project smells to high heaven? One wonders who told him that. How does he know that it is so. or, for that matter, how would he know that anything smelt?
As I have said, all the speeches from the Opposition on this matter have been hesitant because there has been no case to make out. Two or three weeks ago, they were buoyed up by Major-General Legge’s statement, but when, after investigation, they found that the Government had a good case, they decided to rely on the report of the Auditor-General. Their attack has been by no means strong. Throughout the debate, no member of the Opposition has really shaken the Government’s case. The right honorable member for Barton led the indifferent attack by querying whether the cases are moved to the explosives, or the explosives to the cases. He was not sure of his ground, because he had not prepared his brief properly. Then he referred to the present site - and I noticed the Prime Minister making a note at the time - as possibly dangerous. Yet, he was supporting the refurbishing and rehabilitation of the old St. Mary’s factory on the same site. The Opposition’s attack is on shifting ground all the time. Statements of honorable members opposite on this occasion consist of the double talk of which I have always accused the Labour party.
Again, most members of the Opposition have questioned the qualifications of the architects who were selected for the job. Now, the honorable member for Macarthur (Mr. Jeff Bate) has told the House of the international repute of the architects chosen. Those architects were chosen after having been strongly recommended by people who are qualified to speak on such a matter. The right honorable member for Barton asks why the Government’s own architects were not used. But, as the Minister for Defence Production (Mr. Beale) said, it requires the constant work of 100 architects to maintain the work at St. Mary’s. One hundred architects! Does anybody think that our Department of Works would not suffer in other directions if it attempted to provide 100 architects for this one job? What ill-advised talk is that from members of the Opposition? Have we 100 architects whom we can afford to put on to this project when it is a matter of urgency and when it is being built by highly-trained men?
There is another important question: Were the architects chosen wisely? Not one member of the Opposition, not one critic of the Government, has ever said that the factory is not a first-class show. The proof of the quality of the architects and their work is there for all to see. If their work was a failure, then the architects could easily be blamed, because architects are always under the disability that their work stands. It is always there to be criticized. But a doctor’s work is not. He buries his mistakes. I think that the Labour party would be much more fortunate if its leader had a medical degree instead of a legal degree.
My impression is that the Opposition, in its present attack, has built its arguments on criticisms which it alleges are in the Auditor-General’s report, but which, in fact, are not. I recall the Leader of the Opposition saying that the Auditor-General’s report conveyed an impression that the Government had encouraged the architects to spend and spend and spend. Those were his very words. But an examination of the report shows that there is nothing in it to substanti te that statement. Nothing whatever! The report can be divided into two parts. In the first part, the Auditor-General is reporting on matters concerning which he is highly qualified - matters of stores accounting, maintaining accounts records, and so forth. These are matters in which the AuditorGeneral is, in a classical way, fully competent to report. Nowhere in that part of the report is there any criticism of the Government. In fact, in the first part of the report the Auditor-General conveys the impression that he is satisfied with the work. The Leader of the Opposition, in fact, said, “ It is but fair to recall that on many points in the first part of the report he is very satisfied that the work was carried out satisfactorily “. It is only in the second part, dealing with matters of which the
Auditor-General is not so qualified to report as he is on the matters dealt with in the first part, that we find criticisms - and these criticisms are not serious. The Auditor-General says that the control authority was able to substantiate certain cases of slackness or inefficiency. But the control authority has been working for three years, and how many cases has it found? As the Minister said, it is easy to pick out a few things, take them out of their context in the whole project, and proceed to base a case on them. I do not feel that the report, particularly the last paragraph, with the generalization that the AuditorGeneral has used, provides a sound case that would substantiate criticism of the control at St. Mary’s. I myself am not satisfied that a strong case can be built on the report. Where he is qualified to criticize, the Auditor-General has not criticized.
The right honorable member for Barton mentioned the hiring of machinery and plant, and plant standing idle. Surely that would be a classical case, and if, as the right honorable member alleges, there was slackness, there would be a mention of it in the Auditor-General’s report. Why is there no mention of that in the AuditorGeneral’s Report? It is not mentioned at all in the report.
– Because he let them down lightly.
– You say that he let them down lightly, but honorable members on your side are making unsubstantiated statements the whole time. They have not substantiated a single charge here. What the Opposition is trying to do is to make a case out by reading into this report matter that was never there. The Auditor-General’s report gives no support to any charge. It contains no evidence of inefficiency except a generalized criticism of the architects.
I am very glad that the Prime Minister raised the matter of the personal attack on him by the “ Sydney Morning Herald “. It is a curious thing, and it is flattering, not to him, but to me, that we have the same notes on two or three things that he mentioned to-day. I have here a note of the statement that he made in reply to a question by the right honorable member for Barton. He said, in part -
When the Government decided that it would go into the proposition to build a new St. Mary’s, and an estimate of the cost was made - it was something over £20,000,000 - I myself specifically raised with the Chiefs of Staff the question as to what priority they gave to this very proposal. This was done by me orally. No Master-General of the Ordnance was there; indeed, I do not think that I have ever seen him.
I read that in the spirit in which the statement was made in the House, yet the “ Sydney Morning Herald “ accused the Prime Minister of being petulant and of giving the person referred to the brush-off. That newspaper has given a completely erroneous view of the Prime Minister’s statement. I have been a great supporter of the “ Sydney Morning Herald “ for many years. I have enjoyed association with the highest forms of journalism and with people who own newspapers. I have been reared in the highest form of journalism. Until the last seven years, when 1 first noticed a big change coming into the “ Sydney Morning Herald “, I regarded that newspaper as probably the finest Empire paper. I am not going to subscribe to it any further because that personal attack, that mean and ornery form’ of attack on the Prime Minister, which is going right through the press to-day, is just a personnal vendetta against the Prime Minister. I believe in freedom of the press; but freedom of the press carries responsibilities with it. The press cannot answer the Prime Minister’s challenge. The Australian press is adopting a system of carrying on personal vendettas against people. I believe in crtiicism, and I enjoy very much the cartoons that appear in the press. But I also believe in factual reporting, and Australia is not getting factual reporting. There was no excuse for the “ Sydney Morning Herald’s “ action in using the terms “ petulant “ and “ brush-off “ in respect of the portion of the Prime Minister’s answer to the Leader of the Opposition that I read out a few moments ago. The impression that the “ Sydney Morning Herald “ gave was an untrue impression. If the press, whose representatives are here, wants to face its responsibilities it has to stick to the facts.
This morning the honorable member for Darling (Mr. Clark) said in an interjection that it was not necessary to have factories for making conventional arms in these times. Now, here is the curious thinking of the Labour party: We have the honorable member for Werriwa (Mr. Whitlam) getting up and saying that he does not disagree with the necessity for these things. In fact, he would probably say that this is a very fine filling factory. But the honorable member for Darling says that the factory is not necessary. What is the thinking of the Labour party on defence, if it thinks at all? Honorable members opposite have often spoken about reducing the cost of defence. They say it is not necessary to have conventional arms. But Russia still has conventional arms and so have our allies. Russia still maintains vast armies, navies and air forces using conventional arms. But, according to the Labour party, we are not supposed to need them. Is that the view of the Labour party? Has it any policy of defence at all? I should like to make it clear that I think that there should be no disagreement between the Government and the Opposition in such a matter as this, because it involves the security of Australia. A very much-needed adjunct to our defence is a modern filling factory, but the Labour party would probably cut our defence vote.
Another thing that I find very tedious is the continual reiteration by Opposition members that the Prime Minister had stated that we must prepare for war in three years. It is quite easy, of course, to put words in somebody else’s mouth, and to keep on repeating them in an effort to make that person sound silly. I ask honorable member’s to take their minds back to 1950. In that year, out of a blue sky, came the war in Korea. That was indeed a critical time. The whole of the Western world was disarmed, and there could have been war within three years of that time. What prevented it? That is the thing that Opposition members do not think about. The Prime Minister said, “ There may be war in three years, and we must prepare for it “. In consequence of the reports that there might be war in three years, we began to spend huge sums on defence.
Let us not get away from the facts. War could have come in three years, and the only reason why it did not come was that, not only Australia, but also the United Kingdom, the United States of America, and the whole of the Western world adopted the same plan, and the stronger they got, the less was the chance of war. A parrot-like repetition of the cry that the Prime Minister had said that there would be war in three years is the sort of thing that one expects from the honorable member for East Sydney, but one does not expect it from thinking members of the Opposition, whose minds work differently. The reason why war did not come in three years was simply that Australia and all the other democracies decided to pull up their socks in defence matters. They spent huge fortunes on defence, and made themselves sufficiently strong to deter aggressors and prevent war. That was the choice that we had to make.
The Government’s defence expenditure is under attack because the Australian Labour party thinks that the St. Mary’s project was not necessary, or was too expensive. Is any expense too great if it will enable a country to supply its troops with arms? I have served in two world wars, and, in each, I was short of the weapons of war. That sort of thing always happens in a democracy, because it is never prepared for war. Let us show now that we have learned some of the lessons of history. Let us make ourselves sufficiently strong to deter an aggressor.
I agree with the honorable member for Macarthur that the St. Mary’s ammunition filling factory is a first-class adjunct to our defence forces. I see nothing in the arguments that the Opposition has presented so far in its attack on the Government to indicate that the project has not been well undertaken, reasonably well supervised, and pushed ahead at high speed, with very satisfactory results for the nation.
– The Prime Minister (Mr. Menzies) is peeved. He seems greatly peeved at the criticism heaped upon him by the daily newspapers, and especially his old friend and crony, the “ Sydney Morning Herald “. The right honorable gentleman seems pained, and he is sick and tired of answering questions about the St. Mary’s ammunition filling factory. Of course, there is only £28,000,000 of the taxpayers’ money involved, but the right honorable gentleman is sick and tired of it! It is a good thing for Australia that the Leader of Her Majesty’s Opposition (Dr. Evatt) never becomes tired of exposing the rackets that occur from day to day under the administration of this discredited Government. The Australian Labour party has always contended that something fishy was going on at St. Mary’s. Opposition members have asked question after question about the project over the last few years, probing, and seeking information from the various Ministers concerned about what was going on in relation to this huge project, which we knew was being undertaken at enormous cost to the taxpayers. Despite what has been said by the Minister for Defence Production (Mr. Beale), delegations of Labour members did in fact visit the project. I was a member of one such delegation, most of the members of which had served apprenticeships, and had worked for many years in industry, and were well fitted to make constructive criticisms of various aspects of the St. Mary’s factory. Most of them could draw, read, and implement, plans for particular jobs as well as the architect could.
Labour members have received disquieting information from men who were formerly employed on the project, and from men who are still employed there, and have questioned the Minister for Defence Production about it. However, as is usual with incompetents, the Minister sidestepped the questions one by one, and hid behind the old screen - the security screen. As a matter of fact, he has tried to intimidate Opposition members. This Minister, who is hopelessly inefficient, and is incapable of administering the Department of Defence Production, from time to time gave the House his personal assurances that all was well, and that everything was going according to plan. That is a common thing here: Everything goes according to plan. He assured us that the plant would be completed on schedule, although he knew full well that, as a Minister of the Crown, he was deliberately misleading the Parliament.
Order! The honorable member will withdraw that statement.
– What statement?
Order! The honorable member will withdraw immediately the statement he made about the Minister for Defence Production.
– I withdraw it. Then the axe fell. The Auditor-General produced a blistering report about the Minister. Let us consider briefly a few of the shocking revelations of this Minister’s gross inefficiency, and, what is more important, the cost to the taxpayers as a result of his inefficiency. In his report for the year ended 30th June, 1957, the Auditor-General stated that the total estimated cost was £23,200,000, for completion by 31st December, 1957, and that this figure included £950,000 for contingencies, and an escalation figure of £1,000,000 to cover projected rises in labour and material costs. “ Escalation “, I suppose, means “ working backwards and forwards “.
At page 76 of his report, the AuditorGeneral stated also - the Defence Preparations Committee of Cabinet had approved the formation of an interdepartmental committee to advise on the project and assist the Architect, the Contractor and the Department of Defence Production in the problems associated with the construction programme.
The architects, of course, are to receive £1,250,000. Yet they could not employ assistants of their own, but had to get assistance from an inter-departmental committee. The Auditor-General reported further -
The Architects undertook to establish, within their organization, a Cost Control Centre to “ review and interpret all cost data, supervise the system of allocation of materials to the job “-
That is an architect’s job - “ control all time-keeping records and take such other action as will assist in maintaining the necessary delivery and construction schedules”.
Here comes the bombshell. In December, 1956, the architects notified this inefficient Minister for Defence Production that the contractors had re-estimated the cost of the project to be £26,346,000, including a further sum of £910,000 for future escalation. We would all like to be on this escalator! This meant an increase of £3,146.000 on the original estimate. What a racket! The control authority advised the department that the contractor’s detailed estimate was reasonable and reliable. This is the architects’ control authority! It must be remembered, we have been told, that this authority was set up by the architects to watch the racketeers who are always operating on these big projects. The inter-departmental committee approved by Cabinet advised that the increase in the estimate is not abnormal. In other words, according to that committee, a 20 per cent, increase in the cost of a munitions factory is not abnormal. 1 have never heard the like of that statement in my life! Whatever it means I do not know. The names of the members of this committee have not been mentioned. Why? It is interesting to note how these various persons worked in with one another, just like well-oiled machinery.
In May, 1957, this Government approved of a revised plan for a factory with reduced overall capacity, at a cost of £26,279,000. The Auditor-General tells us that the additional cost of the project, over and above the original estimate of £23,200,000, which included £1,950,000 for contingencies and projected rises in costs, is £4,879,000, which includes £1,800,000 for work provided for but now deleted. The racketeers are now evidently getting a rake-off on work that has been deleted! Who are the persons behind this crookedness? Let us be frank and tell the people of Australia that there is crookedness in this project, and that it must be investigated in the interests of the people.
The Auditor-General has said that another unsatisfactory feature has been the failure of the architects to meet their responsibilities regarding presentation of regular cost forecasts. Why does not the Government remove the architects? Why does it not give the job to another architect? Is this firm that is worth £1,250,000 of hard-earned taxpayers’ money not capable of keeping to its obligations with regard to cost data on the job? This project is not just a big racket, it is a super racket. These and other instances of lack of efficiency in organization, direction and control indicate that the architects have failed to carry out completely their undertakings upon which the Government agreed to this type of cost-plus fixed fee contract. It is appropriate to point out that the contractor is Utah Australia Construction Limited, which company had a contract at Mount Isa taken away from it, and its conduct in relation to this project surely needs further investigation, as it exhibits all the ingredients of a public scandal.
Let us now consider the position of the Minister for Defence Production. After reading the scathing report of the AuditorGeneral, this perfect specimen of an inefficient administrator rushed into this House and asked leave to make an obviously prepared statement which, to all intents and purposes, made the position worse. He said that his inter-departmental committee was set up generally to consult at regular intervals with the contractor and architect. This prompts the question: Were the members of the committee changed from time to time? The appointment of this committee seems like another lurk - if I may use an old Australianism which is synonymous with “ racket “. Why did the personnel of the committee have to be changed? It was because the Government did not want the different members of the committee to know too much. The Minister said that various technical officers, chemical engineers and cost accountants of his department have, additionally, given technical advice on the operational requirements of the factory and regularly testchecked the administrative practices of the contractor and the architect. It might he as well to point out that the Minister used the word “ additionally “. Was that work charged for? Who defrayed the cost of all this advice and assistance? Was it gratuitous, in addition to the extra millions involved? Will the Minister tell us the cost to his department of all the assistance given to this most favoured private contractor?
The Minister is pleased to defend the contractor, even at the expense of the Auditor-General. We see this Minister, this inefficient administrator, betraying a highly placed public servant, the Auditor-General, in order to defend a private contractor and racketeer. He says that the contractor disputes such allegations. Of course the contractor does. Who would be so naive as to think that he would not? The Minister says that the contractor would be supported by the parent Utah organization. I am convinced that the Minister believes that in a thorough and objective manner the Utah organization investigated the project, and that he believes its statement that the project was in first-class shape and compared favorably with other projects under construction in other parts of the world. How naive is this Minister! The average Australian would take some convincing that the St. Mary’s project is anything more than a racket, a super racket, and the greatest postwar racket yet.
The Minister went on to say that the architects have an international reputation. What a reputation! He said that they are the only architects technically qualified to express an opinion as to the efficiency of the operations. This is a sad reflection, of course, on the integrity of the AuditorGeneral, and it is deeply regretted by honorable members on this side of the House, although it is to be expected from a Minister of an anti-Labour government that is completely under the influence of avaricious American racketeering monopolies.
The Minister has said that the architects are emphatic that the Commonwealth is getting a very good job at a reasonable price. I wonder whether the taxpayers think that £28,000,000 is a reasonable price for the St. Mary’s project, especially when it is well known that the factory will be obsolete even before it is finished. It must always be remembered, the Minister said, that time is money when one is considering great construction projects. He talks like an industrialist. He goes on to say that this is one important reason for seeking to have the job completed by December, 1957. In reply to this argument the honorable member for Chisholm (Sir Wilfrid Kent Hughes) said that 50 per cent, of the factory will not be used before 1960. Why the rush? Of course, the Minister went on to say, we will not be using more than 50 per cent, of it in peace-time. Would it be appropriate to ask why there is this desperate hurry to get the project finished by 31st December next, even at an extra cost of nearly £5,000,000? Perhaps the Minister’s birthday falls on that date. Now the Minister’s tremendous ego asserts itself! He says -
I am gratified to notice that no criticisms are directed towards the Government or my department.
That was too much even for the Prime Minister, who found it necessary to come to the defence of the irresponsible Minister for Defence Production in his speech on defence on 19th September last. Referring to the St. Mary’s filling factory, the Prime Minister said that criticisms of the construction do not touch the desirability of the factory, but that it is necessary that we have a capacity to fill projectiles as well as to make them. He further said that some time back the Department of Defence Production pointed out that a new filling factory should be constructed, and that it would be a very expensive undertaking. He said that the Defence Preparations Committee of Cabinet then consulted the chiefs of staff, who unhesitatingly gave it as their opinion that the construction of the filling factory was a very high priority. Then Major-General Legge entered the picture. I was very sad to-night to see ex-servicemen among the Government’s supporters trying to deride and ridicule this officer.
– That is not so.
– The Government held him up to ridicule.
Mr. SPEAKER (Hon. John McLeay).Order! The honorable member’s time has expired.
– It is my intention not to cover the whole scope of the debate but, if I can, to support what has been said by my colleague the Minister for Defence Production (Mr. Beale) and the Prime Minister (Mr. Menzies) as to the need for the St. Mary’s ammunition filling factory and the events that led up to the decision to proceed with the project. Before giving the House a complete picture, in its true perspective, of the allegations that were made by the honorable member for East Sydney (Mr. Ward), I inform honorable members that he had already raised most of the matters that he referred to to-day and had been given a complete answer to them. Those answers obviously did not satisfy him, because he has raised the matters again. So the House and the country generally should be informed of the facts in relation to these allegations.
His first allegation was that three months’ rent on one crane totalled £15,000. The piece of equipment in question was not a crane; it was a large excavating shovel which dug a full lorry load in one dig, worked an average of sixteen hours and occasionally 24 hours a day without let-up, and worked when other equipment was bogged. In the opinion of the architects’ representative on the site, who was the former Victorian Director of Commonwealth works, the rental was reasonable. The Department of Defence Production is of the opinion that the equipment was hired to the project on a very favorable rate.
The second allegation was that the Commonwealth had been charged more than £1,000,000 for rental of equipment to build the factory. The answer is that the contractor is responsible for the provision of construction equipment either by purchase or hire, the purchase price or rental to be charged to the cost of the job. A great deal of construction equipment is needed for a project of this size, and the availability of heavy construction equipment from Utah Australia Limited was one of the factors that influenced the selection of this company. Rental of Utah equipment is based on a universally recognized schedule. The control authority permits the hire of equipment only where the rates are no less favorable than those that are obtainable elsewhere. It was suggested by the honorable member for East Sydney that the Utah company was the sole supplier of equipment.
– I did not say that.
– You did not say it, but you implied it.
– That company supplied the bulk of it.
– The equipment has been hired from the Utah company, Thiess Brothers, Tutt Bryant, MacDonald Constructions, and some nineteen other firms. The decision not to buy but to rent was made not by the contractor but by an inter-departmental committe of officers from the Treasury, the Department of Works, the Department of Defence Production, and the architects. This is a vast project which covers 3,500 acres and enormous quantities of excavation were necessary for the 500 buildings, roads, railways and drainage channels. No less than 1,500,000 cubic yards of earth was moved, and that could only have been done by considerable quantities of very heavy equipment. For example, without the “ Manitowoc “, which was used for drainage channels, this excavation alone would have taken four months longer. Most of the vehicles and trucks, and quantities of other plant and equipment, have been purchased by the Commonwealth.
The honorable member for East Sydney also referred to transport. Transport is provided on the site to take the men to their place of work. Payment for time worked commences from the time that the men arrive at the entrance to the site, and it is more economical to transport men to their place of work than for them to walk there. As I said earlier, the’ site covers 3,500 acres, and, in addition to being more economical, it is quite proper for the men to be transported to their jobs.
The honorable member also raised the question of the excessive use of drivers on the job on various Saturdays and Sundays. An analysis of the records which were checked by the Commonwealth cost investigators on the site with the contractor’s master time record showed that on all occasions the allegations were incorrect.
The honorable member also said that carpenters made hundreds of doors that were found to be too small and were destroyed. Approximately 130 doors have been fabricated at the site, and more than 2,000 have been supplied by sub-contract. All have been used. Some 400 doors from the old pyrotechnic and migrant hostel area were removed during rehabilitation work and were not suitable for re-use. They were of several sizes and in various conditions. They were sold. The architects and the contractors state, “We know of no instance where doors were destroyed because they were too small or for any other reason “.
Another allegation was that workmen who built a guard house at the project were ordered to pull it down and build a new one. The contractors and architects state that no guard house was pulled’ down and rebuilt.
– Oh, yes it was!
- Mr. Speaker, the honorable member has already spoken. I am trying to answer and my time is short.
– Order! The honorable member for East Sydney will cease interjecting.
– The architects and contractors state that no guard house was pulled down and rebuilt because it had no provision for power supply. The proposed floor level of the main guard house was amended and raised two feet after the floods of February, 1956, at which time the foundations had been constructed. The honorable member for East Sydney (Mr. Ward) already had that information, but despite that he suggested to-night that they were vital questions which should be answered. I have given the answers.
I wish to refer to one other matter. The honorable member for Werriwa (Mr. Whitlam), in order to make a case, frequently departs from the facts. In the course of his speech, he suggested that the Defence Committee had recommended the rehabilitation of the St. Mary’s factory. The Joint War Production Committee is the authority which decides how the needs of the services are to be met. It laid down quite clearly that the filling capacity in this country was insufficient and that the need was urgent. It suggested that extra filling capacity be established. On 15th August, 1951, the committee reported on the need for additional filling capacity due to the alienation of Salisbury and St. Mary’s. As the Prime Minister has said, the committee preferred a new factory and only reluctantly recommended the repossession and refurbishing of St. Mary’s because of the time - five to eight years - which they were told it would take to build a new one. In other words, the Defence Committee at that period had not passed an opinion on whether St. Mary’s should be refurbished or a new factory built; the Joint War Production Committee made that recommendation quite reluctantly. When it was found that, under the new system, a factory could be built quickly, it was unanimously decided to build’ a new factory which would be modern, and not antiquated and out-of-date before it was completed, as the honorable member for Werriwa suggested.
– It is out-of-date now.
– I would stand, corrected, of course, by the honorable member who knows such a great deal about these matters, but the technical men who advise us say that it is the most up-to-date factory of its kind in the world to-day. Of course, it is the responsibility of the Government to formulate, in consultation with the services and the various departments, a balanced defence programme. Tt is also true that, owing to what happened before we came into office, a great deal of the production capacity that had existed and been built up during the war was disposed of and dispersed by the previous Government without consultation with the services or the defence departments. Consequently, this need arose when we took office. It is useless for the Leader of the Opposition (Dr. Evatt) to suggest that, after the end of the war, the Labour Government envisaged a period of peace, because it was the first Government in time of peace to bring forward a five-years’ defence programme. I give it great credit for that. I point to that because this same gentleman is continuously carping and critical of a programme that we bring forward in which we state a set figure for planning purposes. The Labour Government’s programme was for five years and it allowed, for planning purposes, £250,000,000 or £50,000,000 a year. I am not suggesting that it was wrong; I am not suggesting that it plucked a figure out of the air, as the honorable gentleman has suggested that we have done. But the simple fact remains that before that programme had finished, the amount had gone up to £290,000,000. The original figure was quite wide of the mark, as I admit our figures have been on certain occasions. The simple fact remains that, because of the disposal of so much equipment and capacity, the construction of a filling factory had to be undertaken.
It has been generally accepted, after all the discussion and criticism, that the new factory was necessary and it has been accepted, certainly by every reasonable man on both sides of the House, that the St. Mary’s project was the one most likely to meet our needs. Now the Opposition is quibbling and criticizing the cost of the project. It is true that original estimates are usually exceeded. That does not apply only to the Menzies Government; it applied just as frequently and to the same extent to the Labour Government when it was in office during the war and afterwards. I call attention to a project that was left on the plate of the Labour Government. I refer to the Captain Cook graving dock in Sydney, which was started by the Menzies Government before it went out of office. That dock was originally estimated to cost just under £3,000,000. Quite frankly, the estimate proved to be wrong. I do not object to, indeed I applaud, the fact that shortly after Labour came into office, it had a re-estimate of this project. The estimate then was £4,650.000. I admit quite frankly, because I want to be completely frank on this matter, that certain additions were made to the dock. Those additions were of a minor nature, but they added to the cost. In the result, the estimate of £4,650,000 proved to be very wrong. Though certain land and other items were sold and set off as a contra against the cost, the net expenditure was £8,448,327. I do not complain about that; I merely mention that the estimate rose from £4,000,000 to £8,000,000 or 100 per cent.
I shall refer now to a legacy that the Chifley Government left to the present Government, and I do not complain at what the Chifley Government did. It gave orders for two light aircraft carriers which at the time were estimated to cost this country £2,500,000 each. The British Government was contributing towards the cost and the amount I stated is what it was expected to cost the Australian Government. The construction of the aircraft carriers was out of the ambit of any of us. They were being built in England to British specifications on our behalf. The first one, H.M.A.S. “ Sydney “, instead of costing £2,500,000, cost £3,400,000. I do not want to mislead the House and I want to say that there were certain modifications, but the second one, instead of costing £2,500,000, which was the original estimate, cost £7,314,000.
I mention these things because it is perfectly obvious that estimating for these large projects is a pretty difficult job. I think it is rather to the credit of those who were connected with the St. Mary’s project that, after providing for a number of extraordinary events including floods and unexpected increases of wages, the factory, which was estimated to cost £23,000,000, has cost £26,000,000 so far, and, upon completion, will cost perhaps an additional £2,000,000. The simple fact is, however, that we have obtained quality in this work. We have a m’odern factory and we have it on time. Whatever the actual cost of the project, within two years of paying out the first penny piece we have a factory completed.
By contrast, we have an example of the Labour government’s management in the administrative block which now stands near Parliament House. The contract for the construction of that building was let on a cost-plus basis. It was never satisfactory until we put it on a fixed-fee basis. The simple fact is that construction of that building has been in progress for seven years with the cost increasing all the time and interest being paid on the money invested in it. From an economic point of view, a quick job is the best job and the cheapest. That is true from the defence aspect where something’ is needed urgently. The St. Mary’s project is a credit to the Government that approved it, to the architect and to the contractors. I have no apologies to offer for the project.
– Order! The Minister’s time has expired.
Several honorable members rising in their places,
Motion (by Mr. Harold Holt) put -
That the question be now put.
The House divided. (Mr. Speaker - Hon. John McLeay.)
Majority . . . . 25
Question so resolved in the affirmative.
Question put -
That the motion (vide page 1323) be agreed to.
The House divided. (Mr. Speaker - Hon. John McLeay.)
Majority . . . . 25
Question so resolved in the negative.
Bill returned from the Senate without amendment.
House adjourned at 11.17 p.m.
The following answers to questions were circulated: -
Standardization of Rail Gauges.
– On 10th September, the honorable member for Dalley (Mr. O’Connor) asked the following question without notice: -
I desire to ask the Minister acting for the Minister for External Affairs whether Australia, through the Department of External Affairs, received an official invitation to be represented at the International World Exhibition to be held between 17th April and 19th October, 1958, in Belgium. Is it correct that Australia officially declined the invitation without giving any reasons? In view of the nature of this exhibition and the fact that every important country will be represented, will the Prime Minister inform the House of the reasons why Australia declined the invitation?
Australia received an official invitation to be represented at the Brussels Universal and International Exhibition which will begin in April, 1958, and will last six months. The Government recognized the special nature and importance of this exhibition to which the honorable member referred, and carefully considered the question of Australian participation. We considered that if Australia were to participate, it should do so on a scale which would reflect favourably on our national prestige, and decided that the benefits to be gained from such representation would not be commensurate with costs. I understand that the average cost of national exhibits will be around £500,000. Even a very modest Australian exhibit would cost between £125,000 and £190,000. The Government’s decision not to be represented at the exhibition was conveyed formally to the Belgian Minister in a note from the Department of External Affairs. The note itself did not give reasons for the decision, but the department told the Belgian Minister verbally that the decision had been taken largely on financial grounds.
Diplomatic Missions in Canberra.
m asked the Minister for Immigration, upon notice -
– The following answers to the honorable member’s questions are based on information contained in official documents of the Inter-governmental Committee for European Migration and relate to the calendar years 1952 to 1956 inclusive. Information on movements and revenue for the calendar year 1957 will not be available until early in 1958.
The figures for Italy for 1953 reflect only refugees as prior to 1954 I.C.E.M. made no contribution towards the passage costs of Italian nationals recruited as assisted migrants by Australia. No figures for the Netherlands for the years 1952 to 1954 inclusive are indicated, as prior to 1955 I.C.E.M. made no contribution towards the passage costs of Dutch nationals recruited as assisted migrants by Australia.
The balance of funds making up the operational budget was subscribed by migrants and their sponsors, certain voluntary agencies and from other sources. The majority of movements carried out by I.C.E.M. to “ other immigration countries “ represents migrants towards whose passage costs there has been no contribution by those member countries. Consequently, the percentages listed under (c) above for “ other immigration countries “ relate only to a small proportion of the total number of migrants moved by I.C.E.M. to these countries each year. The Australian assisted movements, to which the percentages listed under (b) above refer, comprise the largest government assisted programme of any immigration country for which I.C.E.M. makes a contribution towards the passage and, accordingly, reflect a higher total contribution made to I.C.E.M. by Australia than that made by other immigration countries in respect of their movements. The increase in the percentage for Australia for 1955 as compared to 1954 was primarily due to arrangements reached with the Dutch government and I.C.E.M. for Dutch assisted migrants to be financially assisted by the committee.
t asked the Minister for the Interior, upon notice -
What firms have been granted leases at the former St. Mary’s filling factory, and what are the terms of the leases?
– The answers to the honorable member’s question are as follows: -
Tenant - Date of expiry of lease.
Anthony Squires Proprietary Limited - 11th August, 1958.
Compresstile Proprietary Limited - 31st December, 1959.
H. Freeman Proprietary Limited - 4th January, 1959.
O. Morris (Australia) Proprietary Limited -
30th June, 1966; (ii) 24th July, 1966.
Neotype Manufacturing Proprietary Limited - 11th November, 1957.
Borman Brothers Proprietary Limited- 4th March, 1959. .
Control Systems (Australia) Proprietary Limited- 9th October, 1959.
Containers Limited- 31st December, 1959.
Goldring Engineering (Australia) Proprietary Limited- 10th August, 1958.
Herring (Australia) Proprietary Limited- 7th February, 1959.
Ideal Capsules (Australia) Proprietary Limited- 30th September, 1959.
S. Kirkwood- 13th July, 1959.
McCosker Byrne and Company Proprietary Limited- 23th December, 1959.
Tru-di Manufacturing Company- 22nd June, 1959.
John Vicars and Company Proprietary Limited- 26th June, 1966.
Gear Manufacturing Company Proprietary Limited- 14th August, 1959.
Madelaine Textiles Manufacturing Proprietary Limited- 15th May, 1959.
E. Goodwin Limited - (i) 4th August, 1966;
9th February, 1967.
asked the Minister for the Interior, upon notice -
l. - The answers to the honorable member’s questions are as follows: - 1 and 2. Attached is a list of tenants of the old St. Mary’s factory area as at January, 1954, showing the rents payable in each case.
Rentals were determined on the basis of 4 per cent. per annum of a notional value of £1 per square foot of floor space. There were no increases in these rentals up to January, 1954, but in three cases where the rentals were below the 4 per cent. basis they were brought into line on expiry of the first five years. These firms were -
Cite as: Australia, House of Representatives, Debates, 15 October 1957, viewed 22 October 2017, <http://historichansard.net/hofreps/1957/19571015_reps_22_hor16/>.