House of Representatives
28 October 1965

25th Parliament · 1st Session



Mr. SPEAKER (Hon. Sir John McLeay) took the chair at 10.30 a.m., and read prayers.

page 2305

ABORIGINES

Petitions

Mr. HANSEN presented a petition from certain citizens of the Commonwealth praying that the Government remove section 127, and the words discriminating against Aborigines in section 51, of the Commonwealth Constitution, by the holding of a referendum at an early date.

Petition received and read.

Similar petitions were presented by Mr. Beaton and Mr. Bryant.

Petitions severally received.

page 2305

QUESTION

COMMONWEALTH CONCILIATION AND ARBITRATION COMMISSION REPORT

Mr E JAMES HARRISON:
BLAXLAND, NEW SOUTH WALES

– I direct a question to the Prime Minister. Has the right honorable gentleman had time to give even scanty attention to the 9th annual report of the President of the Commonwealth Conciliation and Arbitration Commission? Will be undertake, if he has not yet had a look at the report, to examine closely the comments of the President at page 10 dealing with difficulties in regard to State and Federal powers in relation to conciliation and arbitration and the manner of exercising them? Would he then look at page 12 of the report on which there is mention of suggested legislative correction of these difficulties and amendments of the law in relation to over award payments with a view to considering whether or not the Government should at an early date extend consideration to the report and recommendations of the Constitutional Review Committee with the object of trying to meet the difficulties dealt with in this report by providing for a referendum on industrial matters?

Sir ROBERT MENZIES:
Prime Minister · KOOYONG, VICTORIA · LP

– I have not read the report, but I am grateful to the honorable member for directing my attention to it. I will read it with great interest - perhaps not only pages 10 and 12, but the lot.

page 2305

QUESTION

WATERFRONT EMPLOYMENT

Mr GILES:
ANGAS, SOUTH AUSTRALIA

– My question, which is addressed to the Minister for Labour and National Service, refers to the training of new recruits on the waterfront. Have newly recruited waterside workers and indeed foremen and supervisors received adequate training for their jobs in the past? What is the position in overseas ports? Does the Minister see any practical advantages to training as an aid to greater efficiency on the wharves?

Mr McMAHON:
Minister for Labour and National Service · LOWE, NEW SOUTH WALES · LP

– For some time, my Department and management on the waterfront have been closely considering the problem of efficiency, and of safety too, on the waterfront. In overseas countries, there is pre-recruitment training of waterside workers and we believe it would be wise to introduce such a system here. More importantly, the Australian Stevedoring Industry Authority is anxious to introduce a system of training of stevedores, of foremen stevedores and of supervisory personnel. We think that if this were done there could be a big increase in efficiency and throughput on the various waterfronts. I should point out that already the Authority is in the closest consultation with management. My Department is prepared to play a part, if it can - it has a long experience in this field - in introducing a scheme for the training of supervisors and foremen stevedores. However, primarily the responsibility for training rests on management itself. Consequently, there must be the closest cooperation between management, the Authority, the Waterside Workers Federation and my Department.

page 2305

QUESTION

EAST GERMAN VISITORS: VISAS

Mr BRYANT:
WILLS, VICTORIA

– I direct my question to the Minister for External Affairs. In answer to questions asked in recent weeks in the House, the Minister for Immigration has intimated that the decision to refuse visas to pentathlon athletes from East Germany results from policies of the Department of External Affairs. Has the Minister noticed that the International Olympic Federation has decided that for the next two or three years at least it will accept teams from both West Germany and East Germany, even though the East German team is to be known by a different name? Is he aware that a large trade delegation from East Germany is at present in Sydney and obviously was admitted by the authority of one Commonwealth department or another? In view of the fact that our decision to refuse visas to these athletes puts us in an invidious position with the rest of the world and that this decision is against the policy that has been established for trade, will the Minister have the position reviewed? I am sure that the people of Australia will agree to the admission of athletes if they will admit trade delegations.

Mr HASLUCK:
Minister for External Affairs · CURTIN, WESTERN AUSTRALIA · LP

– I would ask the honorable gentleman to realise that the granting of a visa requires the previous possession of a passport or some other travel document; the beginning of the matter is the original possession of the travel document. The Australian Government does not recognise the capacity of the Soviet controlled regime in East Germany to issue passports that we will accept. The only travel documents that Australia will accept in respect of residents of East Germany are the travel documents issued by the Allied Travel Board in Berlin. This policy is the same as that followed by most Western countries, including the United States of America, the United Kingdom and France. If the Board gives a travel document to an East German resident, the question then arises as to whether we will give a visa.

The only objection to giving visas to athletes coming here for the pentathlon or any other athletic event is related to action they may take that would appear to give in Australia a national status to East Germany and a recognition of the East German Government that the Australian Government does not accord. The only conditions would be that they should not hoist the East German flag or carry badges that purport to show there are two Germanies where our official policy, and the policy of the Western powers, is to recognise only one Germany. This is a question that basically relates not to any consideration of Communism or doctrine but solely to the question of the future of a divided Germany. If the Allied Travel Board gives the athletes acceptable travel documents, and if in the arrangements made for the holding of any athletic contest this question of giving a national status to East Germany is not at issue, there is no difficulty on the part of my Department or, I imagine, on the part of the Department of Immigration; but we do not wish to decide - and we think it would be wrong to decide - in the course of giving recognition to an athletic team, questions that fundamentally relate to the future of the divided Germany.

Mr Calwell:

– Does the question of security come into it?

Mr HASLUCK:

– No, there is no question of security in this particular matter. The question of security would be dealt with quite separately as affecting individuals, not as affecting a group or team.

page 2306

QUESTION

EVACUATION OF AUSTRALIANS FROM DJAKARTA

Dr MACKAY:
EVANS, NEW SOUTH WALES

– I address a question to the Minister for External Affairs. As widespread violence appears inevitable in Java, and as the British and Americans have already evacuated their women and children from Djakarta, will the Minister relieve the Australian Ambassador of the responsibility for deciding on the withdrawal of Australian women and children, especially as public knowledge of that responsibility within Indonesia must increase the Ambassador’s difficulties in reaching a decision? Secondly, will the Minister enable individual Australian families to state their desires in the matter and, as there is no available commercial flight or any other means of transport from Djakarta, will he make an aircraft or ship available if sufficient numbers desire to leave? Finally, in any case, will he make it clear that the ultimate responsibility is accepted by the Government and does not rest on the shoulders of the Ambassador?

Mr HASLUCK:
LP

– With deep respect to the honorable member, I think he has misunderstood the position of an ambassador. An Australian ambassador is essentially part of the whole structure of Australian government. One should not think of an ambassador as some person who is merely an agent and who is unfairly asked to perform functions that the Government itself is unwilling to perform. The Ambassador to

Indonesia is part of the Australian Government - the voice of the Australian Government - and I am sure that on his own part there would be no unwillingness to accept the responsibility involved, any more than there would be unwillingness on the part of a Minister in the Government to accept the responsibility. Moreover, we are in close and continuous contact with the Ambassador so that if he has any uncertainty in his own mind there will be no difficulty in his consulting with me or with the Government in Canberra; but for our part we have the utmost confidence in the Ambassador in Djakarta, and I know that he feels it eminently proper that he, being on the spot, should make any decisions about the removal or transfer of Australian people. If there are any Australians in Indonesia who, for one reason or another, wish to leave, all they have to do is to express their wishes, and arrangements can be made. I think I should say this: On the past conduct of the Indonesian Government, both before, during and since the recent troubles, there has been nothing to lead us to make complaints about the Government’s conduct to Australian nationals or to Australian property, nor at the moment have we any reason to anticipate that that level of correct conduct will not continue.

page 2307

QUESTION

TELEPHONE CHARGES

Mr CALWELL:

– I wish to ask the Postmaster-General a question. In view of the fact that post and telegraph charges are uniform throughout Australia, why are telephone charges not also uniform? As a step towards establishing uniform telephone charges will the Minister ask his officers to increase the extended local service areas in each capital city? The present E.L.S.A. system extends, on the average, for 20 miles from the centre of each capital city. Could the Minister arrange for this radius to be increased to 40 miles?

Mr HULME:
Postmaster-General · PETRIE, QUEENSLAND · LP

– The Leader of the Opposition will appreciate that this is substantially a question of economics, and that if we are to give additional concessions in this direction it will be necessary to increase charges at some other point in the overall structure. The honorable gentleman must remember that the telephone rental charge io capital cities is £20 per annum while in other zones it is only £12 or £8. If we extend the E.L.S.A. system people who live in some of the outer areas will be brought into the higher rental areas. Many of them have made requests to be kept outside the metropolitan zone so that they can enjoy the cheaper rental charge. I would point out that when the E.L.S.A. scheme was brought into operation, some 45 per cent, of what were then trunk line calls became local calls, and this conferred a tremendous advantage on many people. I see no particular virtue in making substantial increases in charges for a large number of people to give slight advantages in other areas. Nevertheless I will ask the officers of the Department to investigate the situation and let me have a report on it.

page 2307

QUESTION

DROUGHT RELIEF

Mr IAN ALLAN:
GWYDIR, NEW SOUTH WALES

– Is the Treasurer aware of the concern expressed in a recent survey published by the Australian Bankers’ Association at the extent of the trading banks’ ability to increase their assistance in the rural sector of the economy? Is he aware that many producers in the areas most seriously affected by the drought are currently deciding whether their best interests lie in cutting their losses and allowing the remainder of their stock to die or in continuing to buy fodder and so increasing their indebtedness? Will the Treasurer consider making a statement to shed light on the question of providing rural finance after an examination of the needs of primary producers, especially those in the drought areas, and their capacity to continue to borrow on bank overdraft terms? Finally, will the Treasurer examine the consequences to the economy as a whole of an even greater reduction in livestock numbers than has taken place in the past 12 months, such as would occur if land owners in the drought areas decided to suspend further borrowing?

Mr HAROLD HOLT:
Treasurer · HIGGINS, VICTORIA · LP

– I fully appreciate the importance of what the honorable gentleman puts to me. I think I have revealed in earlier answers I have given on this matter that the Government has maintained close contact with the banks and has closely followed their activities in providing drought relief. As I told the House earlier in the week, there has been a conference between the Governor of the Reserve Bank and representatives of the trading banks. A report of that conference has just reached me from the Governor and I am sure honorable members will be interested to learn some of the conclusions that he has brought to my attention. In general, the Governor has pointed out that the comments made by the general managers show that the banks fully understand and accept that official policy is not in any way impeding them in providing finance for drought relief but is positively looking to them to provide all reasonable assistance.

The discussion has also confirmed that the banks believe that their generally sympathetic treatment of drought affected farmers with commercially acceptable propositions cannot reasonably be called into question. Expressing the matter in a little more detail, the spokesmen for the trading banks made it clear that they were now receiving increasing numbers of requests for assistance for drought relief and that they expected the impact on the banks of these requests, which was already very evident, would become heavier when restocking commenced, perhaps early in 1966. Additional demands were being reflected both in an increased rate of approvals of new limits and a waiving of repayment arrangements. On these two counts the banking system as a whole was currently incurring commitments of the order of from £1 million to £li million each month. These figures related only to what was readily traceable. If advances to storekeepers who were receiving requests from their clients for increased credit were taken into account the totals would be somewhat higher.

As to the interest rates being charged, the banks assured the Governor that the favorable preferential rate was the general experience. They were asked whether there were any cases in which the maximum overdraft rate was being charged. They said that this would be in very few instances and where the banks, from their own knowledge of the client’s affairs, had come to the conclusion that the client had been using his own resources for investment purposes or, say, for the purchase of a motor car. But, generally speaking, the favorable rate for the primary producer, particularly the drought affected producer, was being maintained. In the event of the banks experiencing liquidity problems as a result of their drought assistance, the Reserve Bank would be keeping that aspect in mind for review. There is one final aspect, and I have taken up the time of the House only because of the general interest in this question. The trading banks raised the problem of the wool broking houses, particularly in the States which have been most affected by the drought. The Governor will be holding a conference next Monday with representatives of wool broking houses from New South Wales and Queensland.

page 2308

QUESTION

EAST GERMAN VISITORS: VISAS

Mr BEAZLEY:
FREMANTLE, WESTERN AUSTRALIA

– I ask the Minister for Esternal Affairs a question supplementary to that asked by the honorable member for Wills. Have members of the trade delegation from what is called the German Democratic Republic, which is the East German Communist regime as we understand it, been issued with travel documents by the Allied control authorities in Berlin?

Mr HASLUCK:
LP

– I do not have personal knowledge of this matter. The visas would have been granted by the Department of my colleague, the Minister for Immigration, and so I have no personal knowledge of what documents they carry. However, I will refer the question to my colleague and obtain a reply for the honorable gentleman.

page 2308

QUESTION

PETROL STATION LEASES

Mr IRWIN:
MITCHELL, NEW SOUTH WALES

– Has the Treasurer’s attention been directed to the modus operandi of certain petrol companies in obtaining unsuspecting people to lease petrol stations? A requirement is that prospective lessees shall deposit £2,000 and give security over any other asset for trading purposes. Can the Teasurer advise the House of the number of lessees who have failed? Can he say how many people had received workers’ compensation or third party insurance just prior to entering into an agreement?

Mr HAROLD HOLT:
LP

– The honorable gentleman’s question appears to relate to transactions of a private business kind which have occurred between petrol companies and certain individuals. These have not been brought to my attention. Indeed, if what is implicit in the honorable gentleman’s question is that there should be some form of

Government control or regulation of this matter, that would appear to come directly within the province of the State Governments and not within the range of activity or administration of the Commonwealth Government.

page 2309

QUESTION

AUSTRALIAN CAPITAL TERRITORY POLICE FORCE

Mr J R Fraser:
ALP

– I ask the Minister for the Interior: Is he aware that a sergeant of police, with 15 years service with the Australian Capital Territory Police Force, was recently confronted by his Commissioner with a demand for his immediate resignation and was told that if this was not forthcoming he faced immediate dismissal; that he was denied a statement of the reasons for the action taken against him and that for family and community reasons he chose to resign rather than face dismissal? Has the Minister had from the Commissioner of Police a report on this matter? Will he send for all the papers in the matter and either give them his personal consideration or have them submitted to the Chairman of the Police Arbitral Tribunal to ascertain whether this officer has been dealt with fairly and whether he should be offered an opportunity of reinstatement in his former position?

Mr ANTHONY:
Minister for the Interior · RICHMOND, NEW SOUTH WALES · CP

– This matter has come before me but I am sorry that I cannot give all the facts offhand. If the honorable member will see me immediately after question time I will have the file ready and will answer any questions that he may put to me.

page 2309

QUESTION

DEPARTMENT OF EXTERNAL AFFAIRS

Mr GIBSON:
DENISON, TASMANIA

– I ask the Minister for External Affairs a question. The Minister will recall that he recently announced that his Department had established an office in Adelaide. This leaves Brisbane and Hobart as the only capital cities without offices of the Department of External Affairs. Will the Minister consider moving the Antarctic Division of his Department from Melbourne to Hobart?

Mr HASLUCK:
LP

– I am sorry to cause pain to the honorable member for Denison but I am happy if I bring joy to the honorable member for Ryan when I say that soon Hobart will be the only capital city without an office of my Department. I promised to get some information for the honorable member for Ryan. That information is that an office of the Department of External Affairs will be opened in Brisbane on 15th November. While I am flattered by the attention that honorable members have given to the opening of offices of the Department in the various capital cities I would like to point out that these are not diplomatic or consular offices. Happily the time has not arrived when we need such offices in our capital cities. The offices are established with the consent of the Public Service Board so that functions hitherto performed in the head office in Canberra may be more conveniently performed in other parts of Australia. When it comes to a matter of making travel arrangements or booking accommodation for large numbers of students or visitors, or supervising courses, it is often more convenient to do the work in one of the other capitals than to do it always in Canberra.

The honorable member asks specifically whether the Antarctic Division could be transferred to Hobart. There may be geographical advantages in having the Division located in Hobart, but the main work of the Division is scientific and associated with the procurement and chartering of ships. The nature of this work makes Melbourne a more convenient and suitable location than Hobart, so I cannot hold out any expectations that the Division will be transferred.

page 2309

QUESTION

EAST GERMAN VISITORS: VISAS

Mr CALWELL:

– I ask the Minister for Immigration: Have members of the East German trade delegation received travel documents from the Allied Travel Board in Berlin to enable them to come to Australia?

Mr OPPERMAN:
Minister for Immigration · CORIO, VICTORIA · LP

– I believe that after the processing of applications in the usual way passports and visas to enable members of the delegation to come to Australia would have been issued. I understand that some 10 were to come at first and that application was made later to Bonn, and visas were issued from there.

Mr Calwell:

– Will the Minister let us know tomorrow?

Mr OPPERMAN:

– 1 certainly shall.

page 2310

QUESTION

CIVIL AVIATION

Mr LUCOCK:
LYNE, NEW SOUTH WALES

– My question is directed to the Minister representing the Minister for Civil Aviation. I refer to the recent conference between State and Federal representatives concerning the reallocation of air routes in New South Wales that is due to come into effect on 22nd November. At that conference were matters relating to the services to various airports fully discussed and what steps were taken to preserve already established air services?

Mr FAIRBAIRN:
Minister for National Development · FARRER, NEW SOUTH WALES · LP

– I presume that the honorable member refers in particular to one service which is to be handed over to East-West Airlines Ltd. and which that airline states that it will not continue. It proposes instead to run taxis some 30 miles to another aerodrome. I understand that the Minister for Civil Aviation and the New South Wales Minister for Transport are to have a meeting on this matter. As soon as any information is available from that meeting I shall pass it on to the honorable member.

page 2310

QUESTION

AIRLINE COMPANIES

Mr L R JOHNSON:
HUGHES, NEW SOUTH WALES

– I direct to the Minister representing the Minister for Civil Aviation a question concerning the reported bid by Freightlines and Construction Holding Ltd. to take over East-West Airlines Ltd. I ask: Is this airline available for purchase? Will the Minister say whether TransAustralia Airlines has been or will be encouraged to acquire the company’s interests?

Mr FAIRBAIRN:
LP

– I am sure that the honorable member realises that TransAustralia Airlines is not entitled to purchase any airline nor is it entitled to conduct intrastate services. Therefore T.A.A. has no opportunity to make a bid.

page 2310

QUESTION

BROADCASTING

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

– My question is directed to the Postmaster-General. Can he explain why the Australian Broadcasting Commission carried news of the hate America rallies opposed to United States action in Vietnam as the principal item of its 7 p.m. news service last Sunday week and yet when the Minister for External Affairs stated last Tuesday that these rallies were part of a hate America month directed from North Vietnam the Commission failed to broadcast his statement?

Mr HULME:
LP

– I have stated in this House on previous occasions that the Australian Broadcasting Commission is an independent body that makes its own decisions in these matters. I believe it is a pity that the Commission did not broadcast the statement made by the Minister for External Affairs, but the failure to do so is its own responsibility.

page 2310

QUESTION

MENZIES MINISTRY

Mr DALY:
GRAYNDLER, NEW SOUTH WALES

– I direct a question to the Minister for Supply. Since his return to Australia has he discussed with the Prime Minister the contents of a letter that the Minister sent to an organisation in his electorate concerning the wool reserve prices referendum? If he has, was the Prime Minister satisfied with his explanation? If the right honorable gentleman was not satisfied can we take it that the Minister will resign from the Ministry in the near future?

Mr FAIRHALL:
Minister for Supply · PATERSON, NEW SOUTH WALES · LP

– The answer to the first part of the honorable gentleman’s question is “ No “. From that he can deduce what are likely to be the answers to the remaining two parts of the question.

page 2310

QUESTION

NATIONAL SERVICE TRAINING

Mr HALLETT:
CANNING, WESTERN AUSTRALIA

– I ask the Minister for the Army: In view of the difficulties being experienced in certain industries as a result of the national service call-up will he state the Government’s views on Citizen Military Forces training in relation to national service?

Dr FORBES:
Minister Assisting the Treasurer · BARKER, SOUTH AUSTRALIA · LP

– I have intimated on a number of occasions that the Citizen Military Forces option in relation to national service training reflects the belief of the Government and its advisers in the importance of a C.M.F. of adequate size and efficiency for the defence preparations of this country. Any young man, therefore, who exercises this option discharges his legal obligation under the National Service Act and also, I may add, his moral obligation to his country. I should point out that if a man desires to exercise this option it is necessary that he join the Citizen Military Forces before the ballot in which he is concerned is held. If he joins the C.M.F. less than one year before the date of the ballot, he has an obligation to give six years efficient service in the C.M.F. before he discharges his liability under the National Service Act. If he has belonged to the C.M.F. for more than one year at the time of the holding of the ballot, he is required to serve a total of five years in the C.M.F. in order to discharge his obligation under the Act.

page 2311

QUESTION

MENZIES MINISTRY

Mr WHITLAM:
WERRIWA, NEW SOUTH WALES

– I ask the Prime Minister whether, in view of the answer given by the Minister for Supply to my colleague the honorable member for Grayndler that the Prime Minister has not yet discussed with the Minister for Supply the letter which appeared in the Sydney ** Daily Telegraph “ concerning the Minister’s attitude to the wool reserve prices plan, I can take it that the Prime Minister has not yet commenced the preparation of a reply to the question I put on the notice paper in connection with this matter on 21st September.

Sir ROBERT MENZIES:
LP

– I had not noticed that there is a question on the notice paper. If there is, it would appear to put these other questions out of order.

Mr SPEAKER:

– They are out of order.

page 2311

QUESTION

MENZIES MINISTRY

Mr WHITTORN:
BALACLAVA, VICTORIA

– I ask the Minister for External Affairs whether he has seen the report that a group of Australians, without responsibility in these matters, has constantly put forward to people in Malaysia the theory that a separate defence agreement should be negotiated between Australia and Malaysia. In view of Australia’s defence aid to Malaysia under the Anglo-Malaysian Defence Agreement, could the present good relations between our countries be jeopardised by these theoretical proposals?

Mr HASLUCK:
LP

– As has been stated frequently in this House, principally by the Prime Minister, we see no necessity for negotiating a defence agreement with Malaysia in order to respond to a straight forward request from Malaysia for support in a particular contingency. We are giving defence aid to Malaysia in order to assist Malaysia to build up its defence capacity to resist confrontation and we can do that without having to negotiate agreement. 1 do not think that the Malaysians expect us to negotiate an agreement, nor do I think an agreement is necessary. I agree with the honorable member that to continue to canvass the idea that an agreement should be made and that defence support cannot be achieved without an agreement would tend to complicate the handling of our relations with Malaysia.

page 2311

QUESTION

MOTOR VEHICLE INDUSTRY

Mr COPE:
WATSON, NEW SOUTH WALES

– I address a question to the Acting Minister for Trade and Industry. The honorable gentleman will be aware of the sharp slump in the sale of Australian made motor cars over the past few months due to strong and active competition from imported cars. Will the honorable gentleman take the necessary steps to protect the jobs of Australian workmen engaged in the automobile industry? Finally, I should like to state that the General Motors-Holden’s plant and the British Motor Corporation’s plant in my electorate produce cars of their type superior to those produced anywhere else in the world. I might add that I do not own a motor car.

Mr HASLUCK:
LP

– The Government is very carefully watching the figures relating to motor vehicle registrations. My colleague, the Minister for Labour and National Service, is watching very closely the figures relating to employment in this industry. The position at the moment, as we understand it, is that on the employment side there have been reductions which really bring the total employment in the motor vehicle industry in Australia back to the position where it was before some rather striking increases on the payroll were made earlier this year. The reasons for the decline in the sales and registration of motor vehicles are rather more varied and complex than the single reason which the honorable member mentioned - that is, the competition of imported motor vehicles. There is probably a variety of reasons for this decline. The matter is receiving very close attention both in the Department of Trade and Industry and in the Department of Labour and National Service.

page 2312

QUESTION

AUSTRALIAN ECONOMY

Mr BUCHANAN:
MCMILLAN, VICTORIA

– My question is directed to the Treasurer. Is any action being taken by the Treasury to dampen down the importation of unnecessary products and correct the steadily increasing deterioration of our overseas balances? Does the Government have at its disposal any system of methodology that enables it to forecast accurately future trends of imports? Will the Government consider introducing a prior deposit scheme to dampen down excess imports, some of which are obtained on overseas credit?

Mr HAROLD HOLT:
LP

– The Government maintains a constant watch on the level of imports and its bearing on Australia’s external position, our balance of payments position, the strength of our overseas reserves and matters of that kind. These matters are, I repeat, constantly under examination by the Treasury and are reviewed from time to time by the relevant Government departments. At various intervals statements are made of the Government’s view of the course of events, for instance, in the economic survey put out by the Treasury. In the Budget and at other times in the year, we give the best assessment we can make of the way events are trending. In the current situation, there has not been revealed such an increase in the import of consumer items that would appear to warrant any special action, particularly having regard to the level of pressure on our internal resources. We outlined our general view of things in the Budget. We felt that, as developments internally took their course in the year - the impact of the drought, the decline of our export sales as a result of drought factors and the falling values of some commodities - this would tend to have a slightly dampening effect on demand inside this country and that, particularly in the second half of the financial year, a better balance between supply and demand would be seen. Fortunately, our reserves have been sufficiently strong for us to accept a higher rate of imports than might otherwise have been the case. From what we can see, the current trends are consistent with the Budget forecast. As I have said, we are maintaining a close watch on matters but the situation does not appear to us to call for additional measures beyond those announced in the Budget.

page 2312

QUESTION

COMMONWEALTH EMPLOYEES COMPENSATION ACT

Mr JONES:
NEWCASTLE, VICTORIA

– I direct my question to the Treasurer. Does the right honorable gentleman recall that on 11th November 1964, during the debate on the Commonwealth Employees Compensation Act, he assured Opposition members that amendments to improve the Act would be introduced during the 1965 autumn sessional period. Now that the 1965 autumn sessional period has passed and the 1965 spring sessional period is almost concluded, when does the Treasurer propose introducing the amendments promised 12 months ago? Does he consider that the paltry weekly compensation payments to injured employees are adequate? What justification is there for an injured employee being paid less than his weekly wage? Will the Treasurer include in the promised amendments a new scale of weekly payments equal to the injured employee’s average weekly wage?

Mr HAROLD HOLT:
LP

– I shall try to let the honorable gentleman have, by tomorrow, an account of the present state of work that has been going on in this matter. I appreciate its importance for those who come within the scope of the scheme. But the honorable gentleman will not need any confirmation from me that this has been a particularly heavy year in relation to a numerous variety of Treasury matters. The officers have been flat out throughout the year dealing with the work load with which they have had to cope, but I shall see just where we have reached on this particular matter.

page 2312

HOUSING LOANS INSURANCE CORPORATION

Ministerial Statement

Mr BURY:
Minister for Housing · Wentworth · LP

– by leave - The maximum rate of interest to apply to housing loans to be insured with the Housing Loans Insurance Corporation will be H per cent, per annum. I have concurred with the Corporation’s determination on this maximum rate in terms of the Housing Loans Insurance Act. This rate lies between the rates currently charged for housing loans by savings banks and building societies respectively, but should be high enough for all classes of approved lenders to give support to the scheme. It is also expected that at this rate of interest some private investment will be attracted into housing. The Corporation intends to keep this determination under continuing review and will seek my concurrence in future changes whenever these appear to be warranted by changes in other interest rates or by other developments.

page 2313

SPECIAL ADJOURNMENT

Motion (by Mr. Hulme) proposed -

That the House, at its rising, adjourn until tomorrow at 9.30 a.m.

Mr CALWELL:
Leader of the Opposition · Melbourne

.- The Opposition opposes this motion.

Mr Bryant:

– To a man.

Mr CALWELL:

– Yes. We hope that some honorable members on the Government side will also oppose it. The number of sitting days of this Parliament has progressively declined since this Government came to office. The hours of sitting have become progressively later. The parliamentary arrangements have become increasingly haphazard. Longer hours and shorter sessional periods seems to be the Government’s approach to its legislative programme, and this is why the work of the Parliament in recent years has been characterised by a rush of legislation at the end of each sessional period, with an arrogant Executive domineering over the members of an exhausted and bewildered Parliament.

This Parliament exists for the benefit of the people. Let me drive that right into the skulls of those members on the Government benches who seem to come here only as a matter of enjoyment when they have nothing to do elsewhere. This Parliament exists for the benefit of the people of Australia, I repeat, and not for the convenience of Ministers. Ministers regard Parliament as a nuisance. To them it is an unavoidable nuisance. They think that if the Parliament meets more than three days a week there will have to be fewer Cabinet meetings. To them, Cabinet is more important than the Parliament. The weakness of this present Cabinet is that it contains too many lawyers. They can never make up their minds, and the Parliament has to suffer.

Mr Harold Holt:

– What will the Deputy Leader of the Opposition think of that?

Mr CALWELL:

– We have lawyers of quality on this side of the House.

Mr Chipp:

– Why does the honorable gentleman have to criticise his colleagues in public?

Mr CALWELL:

– I do not criticise any of my colleagues either in public or in private, and if anybody suggests that I have done so, let him speak up. This is all part of a smear campaign by Government members. Let me now tell the story of the Chifley Government and compare it with the story today. Under the Chifley Government in 1946 Parliament sat on 63 days; in 1947 for 92 days; in 1948 for 90 days, and for 80 days in 1949. Under the Menzies Government, over the past four years, 1961 to 1964 inclusive, Parliament has met on 55 days, 66 days, 53 days and 65 days respectively. In 1949 there were 75 members of the House of Representatives; today there are 124. But this provides only part of the picture, Mr. Speaker. A table was incorporated in “Hansard” on 30th September by my learned and gallant colleague, the honorable member for Wills (Mr. Bryant). Honorable members opposite can interject, but there are very few people on the opposite side of the Parliament whom I would call learned. That table shows very clearly how the responsibilities of the Parliament, and the amounts of public moneys we are supposed to be approving, have increased over the years. In the first year of Federation this Parliament had an annual appropriation of less than £4 million to approve. In 1939 this had grown to £100 million, and by 1949 the total was nearly £600 million. This year’s revenue is expected to be more than £2,000 million.

What sort of supervision can a Parliament which sits on only 60 days a year give to expenditure of this magnitude? In the days of the Chifley Government parliamentary sittings on four days a week were customary. Let us take a period comparable with this one - the Budget sessional period of 1948, a year which, like this year, was not an election year. The sessional period went from 1st September to 9th December. Parliament met for four days a week on 11 out of the 15 weeks.

The result was a reasonably spaced legislative programme proceeding at a reasonable pace. Out of the 56 sitting days of that sessional period the Parliament sat after 1 1 p.m. on only 22 days - a little more than one third of the total sitting days. But when we come to 1965 we find that of the 27 sitting days of this present sessional period we have already sat until or beyond 11 p.m. on 17 occasions - a ratio of nearly two thirds. And this has happened before the real rush of ill conceived and inadequately considered legislation has even begun.

The Opposition does not object to sitting on four days a week. It is prepared to sit for as many weeks as desired, and for four or five days a week, if the Government has worthwhile legislation to discuss and we of the Opposition have worthwhile business for the Parliament to consider. The Government seems to be unable to plan ahead or to lay down any fixed procedure. This is surely symptomatic of its general approach to the work of government. The Government does not seem to know, at the beginning of a sessional period, what its legislative programme will be for that period. As a result we get a torrent of Bills pushed through in the last couple of weeks of every sessional period.

We have the classic example of the restrictive trade practices legislation, first promised in the Governor-General’s Speech of 1956. The proposals were outlined to the Parliament by Sir Garfield Barwick in 1 962. The present Attorney-General (Mr. Snedden), produced another draft early this year, but we still do not know for certain whether the legislation is to be debated in this sessional period or whether it is to be debated at all. It is a weak, anaemic Bill, but we are told that, in addition to a number of Government amendments, 69 big business amendments are to be moved by Government back bench members to weaken it further. There are five weeks of sitting now planned before we rise for Christmas. Why the rush? We could meet up to 16th December if necessary and meet for four days a week or for five days a week.

What we object to is that this resolution was thrown at us last week without any consultation and without any regard for the engagements that honorable members have made for this week-end. The parliament is being run to suit the convenience of the Cabinet. It reminds me of the French revolution, during which the Chamber of Deputies or the Legislative Assembly was continually in session. That seems to be the position taken by the Cabinet. I think it was Peter Propotkin, the anarchist, who said that revolution failed because there were too many lawyers in the Assembly. The Government thinks that if the Parliament meets on five days a week it can hold Cabinet meetings only on Saturdays and Sundays and that Ministers should be able to rest on these days after their labours. A better arrangement can be made. I ask the Government to lift the Parliament up to the high standard it reached when the Chifley Government was in power.

Mr HAROLD HOLT:
HigginsTreasurer · LP

.- The Leader of the Opposition (Mr. Calwell) claims to have a knowledge of history, but it has sadly deserted him on this occasion. He has been able to reject the recollections of memory and make a purely political attack on what is, after all, an innocuous enough motion that the House sit an extra day in this week to enable us the more effectively to deal with a considerable programme of business still ahead of us. He has taken some time and trouble on this occasion and I see that the Deputy Leader of the Opposition (Mr. Whitlam) is lined up ready to carry on some substantial debate on this matter. As, in my absence overseas, some criticism was levelled at me and my methods of running the House, I now welcome the opportunity to say something about :he matter. Although honorable members on both sides of the House are conscious of frictions and difficulties that occur in the course of a parliamentary year, drawing on an experience of 30 years in this place I say that the Parliament has never run more smoothly, more effectively and with a more reasonable despatch of business than it has over the last five years.

I want to put this matter in perspective. Honorable gentlemen opposite have had quite a picnic and it is time that we brought matters into balance. I say that I have drawn on 30 years’ experience. That has been translated into the programme for the Parliament through the year and week by week. The programme has not been designed to meet the convenience of Ministers only. I would be glad to know when Ministers have had their convenience considered in the course of a parliamentary year or at my stage. I speak as one who in 16 years has not had a week’s holiday that I could call my own. Honorable gentlemen opposite, from the comparative comfort of their situations, can sneer if they like at what I regard as one of the hardest working bodies of people to be found anywhere in the Commonwealth. I refer to the present Administration. In the earlier years of the Parliament and in my time here, we had four sitting days in a week. We adoped the practice of sitting on three days, not merely to suit the convenience of the Cabinet but because the private members of the Parliament had made it clear, both by what they had to say on the matter and even more strongly by their own course of conduct, that a four day sitting week did not provide them with adequate opportunities to deal with their constituencies and to carry out the tasks that a member representing a Federal constituency should be undertaking. We found that if we tried to maintain a regular practice of four sitting days, the Whips on both sides had an almost impossible task to keep the House together over that time.

Mr Calwell:

– That is not true.

Mr HAROLD HOLT:

– The honorable gentleman should let me state my case. He has had more than one opportunity to put his views on this subject in recent months. Let me put consecutively and constructively what I see of the matter and, if my conclusions are not acceptable, I will be glad to hear criticisms of them. I want to approach this problem quite constructively, looking for the best arrangements that suit not merely the convenience of Ministers and honorable members but make the Parlimena an effective democratic institution, as we should all wish it to be. The honorable gentleman said something about the Chifley Government and other governments. I have sat here, both in Office and in Opposition during the life of those governments. It is fortunate for this country that in the present Prime Minister (Sir Robert Menzies) we have a man of robust health and quite abnormal stamina and vigour. I do not want to be deeply dramatic but I saw three Prime Ministers die in office, virtually in front of my eyes, because of the stresses that were imposed on them by the leadership of an Australian government. Not only Prime Ministers have been affected. I have seen other public men also succumb to these stresses.

Mr Beaton:

– Does the Minister think late night sittings help?

Mr HAROLD HOLT:

– I do not think late sittings help. If the honorable gentleman cares to go a little beyond his own tenure of a seat in this place and consider the hours of sitting of earlier Administrations, he will see the improvements that have been effected. Of course, I do not like the House to sit beyond 11 o’clock at night and we try to arrange matters to avoid this. In my own rime as Leader of the House we have excluded an adjournment debate on the first sitting day of the week because honorable members have had to travel and some have had to begin their journeys at an early hour. We have tried to organise the hours of sitting and the debates so that stresses will be kept at a reasonable minimum. The three weeks of sitting out of four were brought in not merely because of the physical stress. This system was introduced partly to give honorable members some respite from the travel and the long hours that are associated with the work we have to do here. But the system was also introduced to enable a better average attendance of honorable members in this place. Knowing that there is to be a week of recess, the Whips are able to look to the members to arrange their constituency functions for that week. I think that in the main this system has worked well and has been welcomed by honorable members.

The honorable gentleman said something very true about the growth of responsibility of the Parliament and its members. I can recall the record peace time Budget of 1 939 when it stood at £100 million. This year I introduced a Budget of the order of £2,660 million. That is a reflection of the enormous growth of the responsibilities of the Parliament; and not only of the Parliament but of the Government. The fact of the matter is that the national Administration of Australia has grown enormously and its responsibilities, internal and external, have also grown enormously. One of the very real problems we are facing at present is that so great has become the pressure and demands upon the individual members of the Cabinet, requiring additional Cabinet sittings, that we are seeing far less than we would wish of the proceedings inside the House itself. This is a matter that troubles me, but as a Parliament and as an Executive we have to face up to a situation that is quite without parallel in earlier Parliaments. There has been an increase in business and a growth in national responsibility.

In the external field Australia these days is consulted to a degree unknown in earlier times. This requires weighty decisions to be taken by the Cabinet almost week by week. This has added to the pressures of our situation. I have mentioned one or two of the factors that influenced us to introduce the practice of having three weeks of sittings followed by a week of recess. The honorable gentleman now puts it not only that we should sit extra days - and I have at least partly answered that by pointing to our past expedience-

Mr Pollard:

– Say something original.

Mr HAROLD HOLT:

– This does nol call for originality but for common sense, and the honorable member has never shown himself to be overburdened with that commodity. I am and have been trying to look at this matter quite constructively with the Leader of the Opposition and his Deputy, and I am now answering their complaint about their not knowing about the Friday sitting - about its being thrown at them towards the end of last week. On the first day of the resumption, after I had returned from overseas, the Deputy Leader of the Opposition and I discussed the programme, as is our practice. I said to him that it looked as though there would need 10 be some extra days of sitting before the Parliament concluded. Members of the Government parties with whom I discussed these matters will know that I put them on notice at the first opportunity after my return that from what I could see of the programme it looked likely that we would need some extra days of sitting. So there should be nothing surprising about this motion.

What the honorable gentleman has raised in his comments is the larger question of how we should try to conduct the Parliament through the parliamentary year. Let us consider the proposal about sitting a considerable number of extra weeks. Part of the task that members of the Parliament face now involves making themselves better informed about the growing Australia in which we live, Australia’s internal problems and its problems in its Territories. As a Government we have increasingly provided opportunities for members of the Parliament, whether as members of delegations or in their individual capacities, to travel beyond this country to see something of the problems of other areas of the world and the manner in which other countries conduct their affairs. I wonder, if they were able to exercise a secret ballot on this matter, how many backbench members of the Parliament would want to sit considerably more weeks of the year than we are currently sitting. We have two well defined sessional periods. We have the early period - the autumn sessional period - of the Parliament, then we have an interval during which honorable members are able to get around the Commonwealth and to devote themselves to a variety of matters affecting their electorates and the rest of Australia. Then we come to the quite lengthy Budget sessional period. The honorable gentleman quoted approvingly a Budget period in Mr. Chifley’s time which began somewhere in September and continued until 9th December, I think he said. We began this Budget period on 15th August and we do not look like ending it much before 9th December.

Mr Beazley:

– But this is with three day, not four day weeks.

Mr HAROLD HOLT:

– I know that the honorable member who interjects expresses a point of view that has frequently been put by those who come from the more distant States. It would suit their convenience better to sit more days in the week for perhaps fewer weeks in the year, but certainly to compress the sitting times by having more days in the week. On the other hand, we have found that if we attempt to organise matters so that this is to occur, we will not hold the members from New South Wales and Victoria on the extra sitting day of the week. It is no good saying that we will. The Whips can tell honorable members that they now have problems in holding members here of a

Thursday night; so many have commitments or feel the need to get away at that time.

Although it has become an easy sneer and gibe for honorable members opposite to make about this Government being unmindful of the interests of backbench members, again I say that there has been no Government in the history of our Federation that has shown more consideration to backbench members in respect of staff provisions, travel arrangements, allowances and superannuation benefits. I do not say that in any complacent spirit. I believe that this is the proper entitlement of members of the Parliament. They should be equipped to carry out the tremendously important and responsible job they have in representing the Australian democracy. I state these things as an obvious answer to the gibe that we arrogantly ignore the viewpoint and the interests of the backbench membership of this Parliament.

Mr Calwell:

– So you do.

Mr HAROLD HOLT:

– The Leader of the Opposition is entitled to his public interjection. He knows from his private discussions with me how much time we have given together to the wellbeing of all members of the Parliament. I think it is a pretty cheap sneer to come from him when he knows the circumstances. Another point worth mentioning is that there has been inside the Parliament over recent years a considerable development of the committee system, not only in respect of official committees of the Parliament itself - the Public Accounts Committee, Public Works Committee, Foreign Affairs Committee and Select Committees of both Houses of the Parliament - but inside the ranks of the Government parties dealing with important areas of the legislative programme; and I have no doubt a similar situation exists in the ranks of the Opposition. I realise that backbench membership can be frustrating. I spent more than 11 years as a backbench member. I was not a backbench member in Opposition all that time, but I was not in office at that time, and I know from experience the frustrations that can develop. However, speaking as a member of the Government I think that the backbench member, whether he be in Government or in Opposition, tends to underestimate the influence of the viewpoint he expresses, particularly if carefully and thoughtfully expressed and containing the background of information he has gathered from his own study. His effective presentation of these matters, I assure honorable members on both sides of the House, has an impact. They have an impact not merely on Ministers but also on the people who sit behind the Ministers and who guide them.

I would reject the comment which has come far too easily from the Opposition that the Parliament is not functioning effectively. I believe it is an effective democratic instrument. Apparently the Leader of the Opposition so despairs of success under our present system of government which has evolved through centuries of British parliamentary experience, that he has turned hopefully to the American Presidential system. I think he would sooner be President than be right, if I may give a twist to the old adage. I would say that those who are prepared to look at the matter quite dispassionately and objectively will appreciate the contribution which the Australian Parliament has made to what after all is acknowledged to be our present highly favorable situation, not only economically but also in external influence and strength. When we consider our position today and realise what has been achieved over the last 16 years, it is obvious that no man in his senses, or no man who is prepared to deal fairly with the matter, would claim that the Australian parliamentary system has failed to achieve effective democratic representation and effective executive administration.

Mr WHITLAM:
Werriwa

.- The Leader of the House (Mr. Harold Holt) took more than twice the time taken by the Leader of the Opposition (Mr. Calwell) to speak on this motion, but he said considerably less than half as much. Furthermore he did not speak on the issue. The issue is: Why does the House have to sit tomorrow? A supplementary issue is: Why was a decision taken only a week ago to alter arrangements which had been announced long before. The Leader of the House gibes at the Leader of the Opposition for his reference to the effectiveness of the parliamentary system and scoffs at his prospects of success. One might well ask: Why is it, if there are no prospects of success for the Leader of the Opposition, that the Leader of the House has supported the first proposal in the history of this Parliament to gerrymander electorates? We are prepared to contest any election on the basis of electorates of equal population - the basis on which the United States system, to which my leader referred, is now to be conducted, and the basis on which the other great Federal system, in Canada, is now to be conducted, after advice has been given by Australian electoral officers.

Mr Holten:

– I raise a point of order, Mr. Deputy Speaker. Is not the Deputy Leader of the Opposition supposed to confine his remarks to the motion before the House and not bring up extraneous matters?

Mr DEPUTY SPEAKER (Mr Lucock:
LYNE, NEW SOUTH WALES

– The Deputy Leader of the Opposition is in order.

Mr WHITLAM:

– I wish to relieve the Leader of the House forthwith of any personal distress he may feel. He seemed to think that in his absence overseas I said something about his conduct of the House. I do not recall saying anything about his conduct of the House in his absence.

Mr Harold Holt:

– I said that your leader did.

Mr WHITLAM:

– I beg your pardon. May I reassure the right honorable gentleman forthwith that my own observation has convinced me that he conducts the affairs of the House very much better than did his predecessor in the position of Leader of the House. I am also convinced that he conducts it very much better than would either of the two rivals for the position who would succeed him if he became Prime Minister before the next election - the only period in which he will have the opportunity of becoming Prime Minister.

Let us hope that the next Minister who rises will give some reason why the programme has been altered and why we must sit tomorrow. There is no resolution before the House which has to be passed by tomorrow. The only subject which will be debated in the House today and tomorrow is that of the estimates for the remaining departments. Supply until the end of next month has already been voted in respect of those departments. It has been said that the funds will run out; that the amounts appro priated for the first five months of this financial year will in fact be expended by 11th November, which is the Thursday of the week in which we are due to resume. If this is the reason for the change of programme the Treasurer (Mr. Harold Holt) should have told the House. We are left to speculate.

I reiterate that no legislation has to be passed by tomorrow and no debates on the notice paper or of which notice has been given have to conclude tomorrow. The Treasurer, true it is, told me on his return from abroad that the Parliament would probably have to sit for some further days. I did not protest at the time. When I reported it to my caucus no-one protested there. Nobody in the Labour Party objects to the Parliament sitting to debate the business which the Government brings before the Parliament or which private members bring before it. The only things that we insist upon are, first, that Parliament should be able to debate, at decent hours so that the public may know and the public media report, the matters that the Government and private members bring before it. Sufficient notice should be given to allow members of the Parliament to prepare themselves.

Mr Gibson:

– What is wrong with sitting at 9.30 tomorrow morning?

Mr WHITLAM:

– I know the honorable member’s professional preoccupations. He does not want us to sit too many weeks. As I have said, we of the Labour Party insist that the Parliament should debate matters only after proper time has been allowed for members to prepare themselves for the debates.

Mr Calwell:

– And after reasonable notice has been given.

Mr WHITLAM:

– That is so. The Treasurer agrees that more business is coming before the Parliament. I apprehend that if there were a Labour Government much more business would come before the Parliament than comes before it now. But the Treasurer’s remedy does not meet the situation. In 1956, the first year in which he became Leader of the House, we sat on 79 days and passed 113 bills. Last year we sat on 65 days and passed 130 bills. The Parliament has been spending fewer hours on each bill than it did when the right honorable gentleman took over his office. This is an example of the compression which he advocates.

He says - and it ls perfectly true - that Cabinet is busy. I know full well that he is a very busy man. By compulsion and by taste he does not have an idle moment. But the same can be said about the leader of my party, and about me for that matter. It must not be thought that persons who hold office in this Parliament are busy or dedicated or diligent only if they are in the Cabinet, and that they are not busy, dedicated or diligent if they hold other offices or if they are aspiring to Cabinet. It is true that the Cabinet has to spend more time in considering matters. It has to get more notice of the matters which come before it. It should not be thought that private members - and they include not only those with professional preoccupations in the Liberal Party, and not only the dumb driven cattle of the Country Party but also all members of the Labour Party - should need less time to consider matters or need shorter notice of matters which are to come before the Parliament than are needed by members of the Cabinet. If Cabinet’s work expands then it should be assumed that so also will the work of private members expand. What we object to is sitting tomorrow. No reason has been given why we should sit tomorrow. No reason has been given why the plans have been changed in the last week.

Mr Killen:

– Does the honorable member object to sitting on Fridays as such?

Mr WHITLAM:

– Not at all. As my leader made plain, we do not object to sitting more weeks in the year and we do not object to sitting more days in the week; what we object to is sitting at too late an hour or being required to debate measures of which inadequate notice has been given.

Mr Beazley:

– Or changes of plan without notice.

Mr WHITLAM:

– Or changes of plan without notice. Because we are sitting tomorrow, many honorable members have had to cancel arrangements which were made long ago. Ordinarily most honorable members are able to get home to their electorates in New South Wales and Victoria, the two States which have the most electorates in the Parliament, by

Friday night, even if we sit on Friday; it is not possible for honorable members to get to the other States to honour their obligations. I had an obligation in another State tomorrow night, but I shall not be able to honour it and I had to cancel my arrangements at seven days notice when I knew last Thursday of the intention to sit tomorrow. The same situation applies to a great number of members.

Why has this alteration taken place? The objection is to sitting tomorrow at only one week’s notice. As my leader said, it is clear that one week ago it was decided that we would have to sit more days because of the reception to the Trade Practices Bill in the Liberal caucus. It appears that 69 amendments will be proposed.

Mr Calwell:

– Big business amendments, too.

Mr WHITLAM:

– They will be big business amendments. The honorable members promoting the amendments were reported to be the honorable member for Parkes (Mr. Hughes), on whose doings the “Daily Telegraph” appears extraordinarily well briefed, who is to bring in 20 amendments, the honorable member for Parramatta (Mr. Bowen), 30 amendments, and the honorable member for Moreton (Mr. Killen), who is rising in his profession, is to introduce at least 19 amendments. I have referred only to my learned brethren in this respect. Undoubtedly there will be many business interests in the Liberal caucus who will wish amendments. We can expect, because of what we have seen in the “ Daily Telegraph “ editorials and news, that the Trade Practices Bill will be as arduously debated by Liberals in their caucus as the Wool Reserve Prices Plan Referendum Bill and that they will run away from debating it in this House. But even assuming that it was because of the ardours before them in the House that we have to sit more days this year, why do we have to -sit tomorrow? Why do we have to break all these arrangements now? This Bill can be debated in December.

The Treasurer must acknowledge that the Parliament has to devise better methods of procedure. It may be that we should have committees as in Westminster or Washington to debate more technical bills and haVe several committees sitting at different times, but none of this touches the question why we are sitting tomorrow. If the honorable member for Mackellar (Mr. Wentworth) or any of the others on the back benches of the Government parties choose to make as they have in the past, but never pushed to a vote, proposals that we should sit more days in the week, we are more than likely to support the proposals.

Dr Mackay:

– Seven?

Mr WHITLAM:

– No, five days a week like most other national legislatures. The United Kingdom Parliament and the American Congress are sitting many more days in the year than they ever did before. We are not. As my leader pointed out, only in 1950 - the first year of this Government - was the Parliament ever in session as many days as it had been when its predecessor was in office. In 1950 this House sat for 83 days. It has never sat for as many days as that since then, and under the amended programme it still will not. But in 1947, 1948 and 1949 we sat for 92, 90 and 80 days respectively. The Parliament has never sat for as many as 80 days since then. The business of the Parliament has increased in amount; it has increased in importance; and it has increased in complexity. However, the procedures of Parliament for dealing with business, as to the number of sitting weeks in the year, the number of sitting days in the week, the number of hours which it sits on those days and the notice given for the matters which it is to debate - in all of these respects we have not improved. I regret to say that it is typical of the Treasurer’s rigidity of thinking in general that he is as unable to devise methods of improving the Parliament’s handling of its affairs as he is unable to devise methods of improving the Government’s handling of economic affairs.

Mr ASTON:
Phillip

.- We have just seen from the Opposition an exhibition of time wasting at which honorable members opposite seem to have become so adept during the whole of this session. All honorable members on both sides of the chamber appreciate that the business of the Parliament has increased enormously and that the business of the private member has also increased enormously. The private member is, of course, very anxious to get back to his constituency and to attend to that great deal of work which he is called upon to do each weekend. The Deputy Leader of the Opposition (Mr. Whitlam), if I am quoting him correctly, said that one of the reasons why the Opposition has intervened this morning is to enable debates on subjects before the Parliament to be conducted at reasonable hours. I do not think that any honorable member in this chamber would disagree with that proposition. But I think that the Deputy Leader of the Opposition should be fair about this. He has made a charge against the Government that honorable members are not given sufficient time to prepare for debates. I remind him that since we have come back from our first week of recess in this sessional period we have not sat for any length of time after 1 1 o’clock at night. I should add that the Opposition and ourselves have co-operated very well in this regard. I think there should be co-operation in this respect. Private members also have co-operated in this regard.

This morning the Deputy Leader of the Opposition wasted wind and words as quickly as he wastes water in this chamber, because when he complained that honorable members do not have time to prepare for debates he should have looked at the notice paper. If he does so he will see that notice of Government business dates back to 16th September. The first bill on the notice paper is the Honey Industry Bill which was introduced on 16th September, and many of the other bills go back further than that. The Appropriation Bills are, of course, the exception. On the notice paper it can be seen that all honorable members have had adequate time to peruse and study the business before the House. This was one of the main points made by the Deputy Leader of the Opposition. If we are to debate the business of the House at decent times and the Government has a full programme of business, surely it is a correct and proper thing that the House should sit on a Friday. We are sitting tomorrow for a very good reason - so that we can debate business of the House at a reasonable hour and so that we can rise at about 11 o’clock each evening. The alternative to meeting on Fridays between now and December is late night sittings, and I am sure that no honorable member wants a succession of late night sittings.

One of the problems associated with arranging the business of the House with the Opposition is that there seems to be some vacillation in the leadership of the Opposition. We know that this has been going on over a period of time. The Opposition has claimed that it was not given sufficient notice about sitting tomorrow, but notice was given to the Deputy Leader of the Opposition last Thursday. Apparently he did not inform the Leader of the Opposition until later on Thursday evening. We have no control over such matters. They are matters of internal Party workings. If the Deputy Leader of the Opposition fails in his duty to give sufficient notification of these matters to his Leader, that is not our fault. The Deputy Leader of the Opposition did not object to the proposal when informed of it. In fact, I believe he agreed with it. I informed the Deputy Leader of the proposed arrangement in the presence of the Opposition Whip, but the Leader of the Opposition has said that he requires two weeks notice.

Mr Whitlam:

– That is in “Hansard”.

Mr ASTON:

– Of course it is, but privately on that same evening the Leader of the Opposition told me that one week’s notice was sufficient. 1 confirmed this at the back of the Chamber on the Opposition side in the presence of the Deputy Leader of the Opposition. As I said earlier, all the trouble seems to stem from the fact that there is some vacillation about leadership in the Labour Party. I have been told that what he - that is, the Leader of the Opposition - said privately does not count; what counts is what is in “ Hansard “. We see. in this matter another example of the differences that arise between the Leader of the Opposition and the Deputy Leader of the Opposition. This state of affairs has existed throughout the life of this Parliament and it will continue.

Every honorable member has the right to speak in this House on any matter that he chooses to raise but too much time is wasted in debates. Not long ago we debated at considerable length the Social Services Bill but now that the Estimates are before us we find that 16 members of the Opposition wish to engage in needless repetition on the same subject. This is where the time of the House is wasted. The attendance record of Opposition members in the House when Government business is before it is appalling. The extent of the interest of members of the Opposition is displayed by their poor attendance in this House.

The notice paper proves that there is sufficient notice of all items to be debated. Bills are being brought in this week simply to give honorable members an opportunity to study them during next week’s recess. This morning we have had a further classic example of time wasting. Once again matters have been ventilated in the Parliament with the sole purpose of embarrassing the Government. The remarks of the Leader of the Opposition about members of the legal profession do him no credit. Honorable members would be amazed to know of the poor opinion which some members of the Opposition have for one or two of their own colleagues who belong to the legal profession. I am convinced that sufficient time has been allowed to discuss all of the business on the notice paper, provided honorable members are prepared to work and co-operate with one another and not waste the valuable time of this House.

Mr Calwell:

Mr. Deputy Speaker, I wish to make a personal explanation, as I claim to have been misrepresented. I never at any time told the honorable member for Phillip (Mr. Aston) that I thought one week’s notice of a special sitting was sufficient. I know that the honorable gentleman had no dishonest motives in making that statement. He was simply suffering from hallucinations. Whoever told him that one week’s notice was sufficient, it was not I. He should know me better than that. Nothing less than a fortnight’s notice would be reasonable. What I said is recorded in “ Hansard “.

Motion (by Mr. Hulme) put -

That the question be now put.

The House divided. (Mr. Speaker - Hon. Sir John McLeay.)

AYES: 60

NOES: 43

Majority 17

AYES

NOES

Question so resolved in the affirmative.

Original question resolved in the affirmative.

page 2322

QUESTION

EAST GERMAN VISITORS: VISAS

Mr OPPERMAN:
Minister for Immigration · Corio · LP

.- by leave- Mr. Speaker, at question time this morning 1 gave the Leader of the Opposition (Mr. Calwell) an assurance that I would confirm my belief that the East German trade delegation now in Australia received visas for entry to Australia on the basis of travel documents issued by the Allied Travel Board in Berlin.. My belief was quite correct. I give this confirmation now because I shall not be present tomorrow.

Mr Whitlam:

– Does the Minister propose to miss tomorrow’s sitting?

Mr OPPERMAN:

– I shall not be here tomorrow because I have a previous engagement. I have to address an annual Good Neighbour Council meeting. Therefore I considered that I should give the Leader of the Opposition now the confirmation for which he asked. I notice that Opposition members are laughing and interjecting. If this engagement appears to them to be a cause for merriment or comment they may so regard it.

page 2322

INCOME TAX BILL 1965

Bill presented by Mr. Harold Holt, and read a first time.

Second Reading

Mr HAROLD HOLT:
HigginsTreasurer · LP

– I move -

That the bill be now read a second time.

The purpose of this Bill is to declare the rates of income tax for the current financial year. Except for some minor changes necessary to facilitate conversion to decimal currency, the general rates of tax payable by individuals correspond closely with existing rates. Individuals will, however, be called upon to pay additional tax of 2i per cent, of the tax calculated in accordance with the general rates. Tax instalment deductions made from salaries and wages on and after 1st October 196S have been varied to cover the additional levy of 2i per cent, of tax at the general rates. The additional levy will also be reflected in provisional tax payable in respect of income of the year ending 30th June 1966.

I have mentioned that the imminence of the new currency system has necessitated some adjustments to the general rates for individuals. Honorable members will recall my assurance that the Government would not take advantage of the introduction of the new system of currency to increase its revenues. In devising the new general rates for individuals, this principle has been observed. For taxable incomes of £24,000 or less, tax payable at the general rates for the 1965-66 financial year - that is to say, before addition of the 21 per cent, additional impost applying for that year - will in no case exceed tax at the general rates for the 1964-65 financial year. In most cases, it will be slightly less. For taxable incomes in excess of £24,000, tax payable at the general rates will be higher for 1965-66 than for 1964-65, but the increase will be at the rate of only eight hundredths of one penny for each £1 of taxable income in excess of £24,000. This represents an increase in tax of £1 for each £3,000 of taxable income in excess of £24,000. I would mention that these adjustments to the general rates for individuals are being made at an estimated cost to revenue of £600,000 per annum.

An innovation in the Bill is that all rates of tax are being expressed as percentages of taxable income. Previously the practice has been to express the rates as so many shillings and pence, or so many pence, per £1- The percentage form of expression has obvious advantages in that, when the changeover to decimal currency arrives, the rates will represent so many cents per dollar of taxable income. The Bill also declares special rates of tax under legislation introduced last year following the Government’s consideration of the report of the Commonwealth Committee on Taxation 1959-61, commonly referred to as the Ligertwood Committee. I announced what these rates were proposed to be when introducing the legislation on 22nd October 1964.

As to income of a trust estate, other than a deceased estate, to which no beneficiary is presently entitled and which is not taxed as if it were the income of one individual, the rate declared by the Bill for the purposes of the 1964 legislation is 10s. in each £1. As to income from a share in a partnership over which a person lacks, or is deemed to lack, real and effective control and disposal, the Bill imposes a rate of further tax sufficient to bring the aggregate rate on the income up to 10s. in the £1. If a taxpayer’s average personal rate of tax is 10s. or more, this further tax will not be imposed. As to taxable income of a superannuation fund that is not exempt from tax, the Bill declares a rate of tax of 10s. in each £1. The rates applicable to the investment income of a superannuation fund that may be subject to tax only through the fund’s failure to comply with the 30/20 public security investment rule are not being altered. The additional rate of 2i per cent, payable by individuals does not apply in relation to the special rates I have mentioned.

Honorable members will have noticed that the tax on incomes is being imposed by the Bill as “ income tax “ and not as “ income tax and social services contribution “. I will refer in more detail to this change and the reasons for it in my second reading speech on a bill to amend the Income Tax and Social Services Contribution Assessment Act, which I shall introduce in a few moments. Detailed explanations of the technical aspects of the Bill are contained in an explanatory memorandum being made available to honorable members and I do not propose to speak on it at further length at this stage. I commend the Bill to the House.

Debate (on motion by Mr. Crean) adjourned.

page 2323

INCOME TAX ASSESSMENT BILL 1965

Bill presented by Mr. Harold Holt, and read a first time.

Second Reading

Mr HAROLD HOLT:
HigginsTreasurer · LP

– I move -

That the Bill be now read a second time.

This Bill will amend the Income Tax and Social Services Contribution Assessment Act in a number of respects. It is rather a large Bill and no doubt looks quite formidable. Like most taxation measures, it is in some respects unavoidably complex, but I would point out now that much of its volume is explained by the repeal and re-enactment of a number of rather lengthy sections. This has been found expedient in the drafting of amendments to the particular sections. So, while there is an appreciable amount of new material in the Bill, it is not as formidable as it looks in that it reproduces without significant change quite a number of passages that are already in the law. It also contains quite a number of purely formal and machinery provisions.

One of the purposes of the Bill is to give effect to the decisions reached by the Government after its review of representations it received on legislation adopted last year following consideration of the report of the Commonwealth Committee on Taxation under the chairmanship of Sir George Ligertwood. The amendments arising out of this review affect superannuation funds and company losses. I shall return to these later.

The Bill will effect two amendments foreshadowed in my Budget speech. One of these will exempt from tax the pay and allowances of members of the defence force serving in Vietnam and Borneo. The exemption will apply as from 1st July 1965. The other Budget proposal also relates to the defence forces- It is proposed that, as from 1st July 1965, pay and allowances of members of the Defence Forces Emergency Reserve for part time duty will, like the pay and allowances of members of the Citizen Forces for such duty, be exempt from income tax.

Honorable members will recall the statement on the drought situation made by the Prime Minister (Sir Robert Menzies) in the House on 26th August last. The Prime Minister referred to a taxation problem that has arisen in respect of woolgrowers who, because of the drought, have had to advance shearing dates so that the proceeds of two wool clips fall to be taxed in the income year 1964-65. He foreshadowed an amendment to the income tax law to permit a woolgrower in this situation to elect to reduce his 1964-65 income by the amount of the net proceeds of wool from the advanced shearing, and to carry that amount forward as assessable income of the 1965-66 income year. The Bill gives effect to this proposal.

In May of this year, I announced that our income tax law would be amended following the introduction in the Territory of Papua and New Guinea of legislation which grants an exemption from Territory income tax for income derived by a company solely from the carrying on in the Territory of an industry declared to be a pioneer industry under the Territory legislation. The exemption extends to dividends paid by a company out of income derived from this source and applies in respect of income derived from an approved pioneer industry for a period of five years from the start of commercial production. The exemption was introduced in the Territory after consideration of recommendations by The International Bank Mission, which had previously visited the Territory at the invitation of the Government.

In order that the effect of the Territory exemption will not be nullified - so far as dividends derived by Australian residents from companies incorporated in the Territory are concerned - by the inposition of Australian income tax, it is proposed by the Bill to amend the Income Tax Assessment Act to exempt from Australian tax dividends paid to Australian resident investors, both companies and individuals, out of the pioneer industry income of Territory companies. As I said in my earlier statement on the matter, however, we are reserving the right to make our own independent judgment as to whether a particular industry declared to be a pioneer industry for Territory purposes should be accepted as one to which Australian exemption ought to apply.

I turn now to a proposed amendment of a different nature in respect of which the Government’s intentions were announced on 10th June last. The amendment is designed to counter devices whereby companies may, by the use of bonus share issues, arrange for their shareholders to secure an exemption from tax on what, in effect, are cash dividends. Apart from specific exemptions authorised by the income tax law, cash dividends received by shareholders are assessable income whether paid out of a company’s trading profits or its capital profits. However, if a dividend is paid wholly and exclusively out of certain capital profits of a company, and is satisfied by the issue of shares in the company, the dividend is exempt from tax. These shares are not regarded as adding to the income of a shareholder.

The exemption of these bonus issues has, unfortunately, encouraged devices whereby an exempt issue of shares is made with the intention that the shares be redeemed by making cash payments to shareholders which, because they are received in the guise of capital, are not taxable. In effect, the share issue is just a step in paying what amounts to a cash dividend to the shareholders free of tax. The proposed amendment will ensure that the issue of redeemable shares, rather than the payment of a cash dividend, will not result in freedom from tax under the provision that exempts bonus shares out of capital profits.

The amendment will extend to other arrangements which do not involve the issue of redeemable shares but achieve a corresponding result. An example of such an arrangement is where bonus shares are issued and, following the issue, the capital of the company is reduced so as to enable its profits to be distributed to shareholders in cash in such a way that the shareholders do not pay tax on the distribution. If devices of these kinds became widespread, the cost to revenue would be very serious indeed and I feel there will be general support for the proposed amendments. I would add that the amendments will not affect the position of anyone fortunate enough to receive exempt bonus shares in an orthodox issue and to sell them at a capital profit. As I have already announced, the amendment will apply in relation to dividends declared after 10th June 1965.

Another purpose of the Bill is to withdraw the income tax rebate of 2s. at present allowed on each £1 of income from Treasury notes included in a taxpayer’s taxable income. Treasury notes are designed to serve as an instrument of monetary management in relation to short-term funds becoming temporarily available for investment, primarily as a result of seasonal fluctuations in liquidity. In view of this, there could be obvious advantages if the rates they offer can be directly compared with rates available on the market on other short-term securities.

However, it has been pointed out to me on a number of occasions that the tax rebate on Treasury notes makes such comparisons difficult as its value depends on whether or not the subscriber is liable to taxation, the rate of tax he pays if a taxpayer, and whether his taxable income is sufficient to enable him to receive the rebate on the whole or only part of his income from Treasury notes. Withdrawal of the rebate should result in some increase in income tax collections, but there may be need to offer an increase in interest rates to offset to some extent the value of the rebate. The rebate will only be withdrawn on Treasury notes issued after a date to be proclaimed. Due warning of this will be given at the appropriate time.

A technical amendment proposed by the Bill is related to the cost of converting business machines for use with decimal currency and to compensation payments by the Commonwealth in respect of machines that require conversion. In many cases the conversion cost will be borne completely by the Commonwealth. In other cases a new machine will be supplied by the Commonwealth at no expense to the machine owner. No income tax consequences arise in these cases as the taxpayers concerned will receive no payments and will not be involved in any expenditure.

The Commonwealth will, however, be paying compensation in respect of some classes of machine. Where the machines are trading stock of a taxpayer, deductions will be available under the general provisions of the income tax law for conversion costs, and payments received from the Commonwealth will be included in assessable income. The situation is different, however, where the machines are plant used by a taxpayer in producing assessable income. In broad terms, it is proposed by the Bill that, in these circumstances, income tax depreciation allowances in respect of the machines will be adjusted in relation to the net cost of conversion; that is, the actual cost less any payments received from the Commonwealth.

Another technical amendment proposed by the Bill relates to subscriptions of more than £21 to certain kinds of associations. The associations concerned are those which incur expenditure on activities that would, if the members carried out the activities and incurred the expenditure themselves, be deductible by the members for income tax purposes. Due to a weakness in the present law, non-deductible capital expenditure can be reflected in deductions allowed for subscriptions to these associations and it is proposed by this Bill to remove the weakness that permits this.

The Bill also provides for the tax on incomes to be known in future simply as “ income tax “ instead of its present outdated and cumbersome title of “ income tax and social services contribution “. I am sure that there are few of us who describe the assessment of tax we get after the end of the financial year, or the tax deductions that are made from our salaries, as “income tax and social services contribution”. It is a tax on our incomes and we call it “income tax”. The Ligertwood Committee recognised this situation and it also received complaints that the titles of the assessment and other taxing Acts are cumbersome and troublesome, particularly where, in documents relating to the Acts, the titles and descriptions have to be repeated many times. The Committee recommended that the references to “social services contribution “ be deleted and the Government has decided to follow this recommendation. At one stage the social services contribution was a separate levy and the proceeds of it were paid into the National Welfare Fund. In 1950, however, income tax and social services contribution were merged into a single levy and the proceeds of this levy were thereafter paid into the Consolidated Revenue Fund. Subsequently it was provided that the amount expended in any year from the National Welfare Fund on benefits chargeable to that Fund should be appropriated from the Consolidated Revenue Fund. Hence there is no point in continuing a title which expresses a distinction long since discontinued. The change proposed is purely formal and does not, of course, reflect any change in the Government’s policies regarding social services or taxation.

I turn now to the amendments proposed by the Bill that have arisen out of the Government’s review of representations it received in connection with the major amendments to the income tax law made in 1964. I shall deal first with superannuation funds. The Government received a considerable volume of representations concerning the provisions that govern the exemption of income of superannuation funds for employees. Most of these, in one way or another, referred to the discretionary powers that the provisions give to the Commissioner of Taxation. The Government considered this aspect of the representations very carefully but found no satisfactory alternative to the discretions and authorities that are vested in the Commissioner. The provisions in question follow very closely the recommendations that the government received from the Ligertwood Committee. It is important to bear in mind, I think, that that Committee appreciated that the devising of a satisfactory scheme for the exemption of income of superannuation funds posed some very serious problems. In paragraph 742 of its report the Committee said -

We propose that certain authorities and discretions should be vested in the hands of the Commissioner because of the difficulty of providing precise legislation in some other form to ensure that bona fide superannuation funds enjoy exemption whilst preventing exploitation of the exemption by other superannuation funds.

Although much careful thought has been given to the provisions, both prior to their introduction in 1964 and during the Government’s review of representations received, it has not been found possible to diminish the. area of discretionary powers given to the Commissioner. It is proposed, however, by the Bill to amend the existing provisions governing the exemption of income of superannuation funds for employees. Amendments are proposed also to the provisions which grant a special deduction equal to 5 per cent of the net cost of assets of a fund that may provide superannuation benefits not only for employees but also for persons who are self employed.

At present a requirement for the exemption or the special deduction, as the case may be, is that the trustees of a superannuation fund apply any amount of benefits foregone by persons who cease to be members of the fund in accordance with certain rules. As the law now stands, this application has to be made within two months after the end of the year of income in which the amounts become available for application or within such further period as the Commission of Taxation allows. The Government is responding to representations that this requirement should be modified so as to permit trustees to apply the amounts within the period now specified in the law or progressively over a reasonable period in accordance with an undertaking approved by the Commissioner. The Bill will give effect to this decision.

Another effect of the Bill is that a superannuation fund for employees of a company will not be denied exemption of its income by reason of the fact that it includes amongst its members a director of the company who is not, in the strict sense, an employee of the company. The Bill also proposes some modifications of provisions relating to deductions allowable to employers for contributions to superannuation funds for employees. The modifications are in respect of the treatment of amounts of benefits foregone by employees who cease to be members of the fund. The concept of the existing provisions has been generally conceded to achieve equitable results, but the Government has received strong representations that the provisions could impose too great an administrative burden on the trustees of some large superannuation funds. The government has accepted these representations and proposes to adopt a course that I think will be acceptable to organisers of superannuation funds.

Briefly, where benefits are foregone, the present law requires a reduction to be made in the amount otherwise deductible by the employer for contributions made to a superannuation fund unless the amounts of the benefits foregone are applied, within certain limits, to provide benefits for other employees or for other approved purposes. In the generality of cases the upper limit of the amounts that could be contributed or applied for an employee in any year is £200 or 5 per cent of the employee’s remuneration, whichever is the higher. The existing provisions require application of benefits foregone to be made within the appropriate limits not later than two months after the end of the relevant income year or within such further time as the Commissioner allows. Speaking in general terms, the law is to be amended so that if amount of benefits foregone are dealt with by the trustees of a fund in accordance with a scheme approved by the Commissioner, the rules for reducing the deductions allowable to the employer are not to apply. It is proposed also to alter and simplify to some extent the procedures to be followed where an approved scheme is not in operation.

The final matter covered by the Bill is income tax deductions for company losses. Honorable members will recall that in October last year the income tax law was amended to provide a counter to the buying up of shares in companies with accumulated losses deductible for income tax purposes so that the purchasing company could divert its income to the loss company. The diversion of the income in this way resulted in the purchasing company escaping tax on income up to an amount equal to the unrecouped losses incurred by the loss company in the seven years prior to the year of income. Under the legislation introduced last October, losses of a previous year are not allowable, for 1965-66 and subsequent years, as deductions against the income of a year of income of any company unless there is found to be, during both years, a beneficial ownership by the same shareholders of shares in the company that carry at least 40 per cent, of the voting and dividend rights and 40 per cent, of entitlement to distributions of capital in the event of the company being wound up. It is proposed to retain this basic principle but to modify its application in a number of ways.

One amendment proposed will ensure that a major, or even a total, change in the. shareholdings of a company will not operate to disturb a deduction for a prior year loss incurred by the company if, at all times in the year of income in which the deduction may be claimed, the company is carrying on the same business as it carried on immediately prior to the change in the shareholdings. For this purpose, a company is not to be treated as qualifying for the deduction if, after the change in its shareholdings occurred, it begins to carry on a business, or enters into transactions, of a kind that it did not carry on or enter into before the change occurred. The Government considers that this amendment will satisfactorily meet cases of mergers and takeovers of companies that are carried out for sound economic purposes and with which there is not associated any transfer of profitable business from one company to another so that income which would otherwise be taxed is derived free of tax.

Another amendment related to company losses is designed to apply in cases which do not frequently occur but could be treated inequitably if the law remained in its present form. As the law stands at present, a company may lose its entitlement to deductions for losses of prior years in circumstances where there is a change in the actual or direct shareholdings, but this change has not occurred in the persons who have the ultimate beneficial interests in the company. To meet this type of situation it is proposed that, in the application of the broad basic test requiring at least a 40 per cent, continuity of shareholdings, regard may be had to both direct and indirect beneficial interests of persons during the year in which the loss was incurred and during the year of income. For this purpose, provision is being made by the Bill for the interests of persons in the voting power, dividends and capital of a loss company to be traced through one or more companies interposed between them and the loss company. It is not possible to achieve this in simple terms and adoption of the principle has complicated what previously were relatively straight-forward provisions. However, the Government received strong representations on the matter and appreciates the force of the view that in applying the shareholding test it may sometimes be appropriate to ascertain at the relevant times where the ultimate beneficial interests lie.

The final amendment proposed as regards company losses will apply in relation to companies that have adopted a substituted accounting period in lieu of the income year that ended on 30th June 1965. It will apply only where the substituted period ended before 30th June 1965. The provisions affecting the deduction of company losses introduced last year apply for the first time in assessments based on income of the year ending 30th June 1966. A company that lodges returns on the orthodox accounting period basis could thus - despite any change in its shareholdings - deduct losses of prior years against income derived up to 30th June 1965. On the other hand, in cases where a substituted accounting period ended at a date earlier than 30th June 1965 the deductions are, as the law stands at present, available only against income up to the earlier date. The amendment proposed by the Bill will, in broad terms, ensure that in these cases losses may be deducted against income derived up to 30th June 1965.

More detailed explanations of the Bill are to be found in an explanatory memorandum being made available to honorable members and in these circumstances I do not propose at this stage to speak at any greater length on the Bill, which I now commend to the House.

Mr Crean:

– Before the Treasurer sits down could he give an indication when it is proposed that the debate on this Bill will be resumed?

Mr HAROLD HOLT:

– It will be resumed before the end of the sessional period.

Mr Crean:

– I take it that the Treasurer will allow the Bill to be studied for at least three weeks.

Mr. HAROLD HOLT__ I would hope so. That is why I am bringing the Bill in at this time so that during the week’s recess there will be some opportunity to study it. The Bill will certainly not be dealt with immediately.

Debate (on motion by Mr. Crean) adjourned.

Sitting suspended from 12.48 to 2.15 p.m.

page 2328

INCOME TAX (INTERNATIONAL AGREEMENTS) BILL 1965

Bill presented by Mr. Harold Holt, and read a first time.

Second Reading

Mr HAROLD HOLT:
Treasurer · Higgins · LP

– I move -

That the Bill be now read a second time. This Bill is a purely formal measure necessitated by the proposed change in the name of the tax on incomes. It proposes an amendment to a definition in the Income Tax (International Agreements) Act. That Act gives the force of law to Australia’s double taxation agreements with other countries. The definition at present refers to the Australian tax on incomes as “ income tax and social services contribution “ and is being amended so as to extend to that tax under its new name of “ income tax “. I commend the Bill to the House.

Debate (on motion by Mr. Crean) adjourned.

page 2328

INCOME TAX (NON-RESIDENT DIVIDENDS) BILL 1965

Bill presented by Mr. Harold Holt, and read a first time.

Second Reading

Mr. HAROLD HOLT (Higgins- Trea

That the Bill be now read a second time.

This Bill proposes measures consequential on provisions in the Income Tax Assessment Bill on which I spoke before the suspension of the sitting. It relates to the dividend withholding tax on dividends derived from Australian companies by non-residents. At present the withholding tax imposed on these dividends is imposed as “ income tax and social services contribution “. As part of the proposed general change in the name of the tax on incomes this levy is in future to be imposed as “ income tax “ and the Bill will enable this to be done.

The rate of dividend withholding tax declared by the Bill is the same as the existing rate - that is, 30 per cent, of the dividend. I should mention, however, that by reason of provisions in our double taxation agreements with the United Kingdom, the United States, Canada and New Zealand, the rate of dividend withholding tax on most dividends flowing to those countries is 15 per cent, of the dividend. The Bill will not alter this position. Honorable members will find further explanations of the Bill in an explanatory memorandum that is being distributed. I commend the Bill to the House.

Debate (on motion by Mr. Crean) adjourned.

page 2329

CUSTOMS TARIFF BILL (No. 3) 1965

Bill presented by Mr. Bury, and read a first time.

Second Reading

Mr BURY:
Minister for Housing · Wentworth · LP

I move -

That the Bill be now read a second time.

Mr. Speaker, this Bill, together with an Excise Tariff Bill which I will introduce following this Bill, will enact the Tariff Proposals now before the House, namely - Customs Tariff Proposals Nos. 1 to 3 which were tabled on 17th August 1965; Customs Tariff Proposals No. 4 which was tabled on 18th August 1965; Customs Tariff Proposals No. 5 which was tabled on 16th September 1965; Customs Tariff Proposals No. 6 which was tabled on 30th September 1965; and Customs Tariff Proposals No. 7 which was tabled on 12th October 1965.

The Tariff Proposals dealt with tariff amendments of three origins. First, a num ber of the tariff amendments were based on recommendations by the Tariff Board and the Special Advisory Authority. Honorable members will recall that the Tariff Proposals of 17th August 1965 dealt, in part, with reports which were tabled during the Autumn session and remained undebated when the House went into recess in May last. However, the collection of duties under the Proposals introduced at the time the Tariff Board and Special Advisory Authority reports were tabled, was validated until 30th June 1965.

The subjects covered by the Tariff Board reports were as follows -

Safflower seed and soya beans, safflower oil and soya bean oil,

Acetyl products,

Ethylene polymer and copolymer products,

Continuous filament acetate yarn,

Monofil, strip and imitation catgut,

Umbrellas and sunshades,

Laboratory, hygienic and pharmaceutical glassware,

Copper and brass sheet, strip and foil,

Electrostatic air or gas filters operating at voltages not exceeding 20 kV,

Static transformers,

Telescopic sights for weapons,

Bubble levels,

A.C watt-hour meters.

Those covered by Special Advisory

Authority Reports were -

Continuous filament polyamide and polyester yarns, and air cooled, four cycle, horizontal driving shaft, internal combustion piston engines, not exceeding 10 b.h.p.

Also, certain of the amendments dealt with in the Tariff Proposals of 17th August 1965 gave effect to the Government’s decision on matters arising out of the Budget. The remaining Tariff amendments related to changes which were made in order to correct discrepancies which occurred in the translation from the Customs Tariff 1933-1965, now repealed, to the Customs Tariff 1965. Honorable members will remember that full documentation was distributed at the time the duty changes were made. Additional copies are available if required.

Section 3 of the Customs Tariff Bill (No. 3) vests in the Minister for Customs and Excise the power to determine an f.o.b. price for goods exported to Australia where, in his opinion, there are reasonable grounds for believing that the documentary f.o.b. price has been fixed with a view to avoiding customs duties. The need for this power arose because certain duties were introduced which were related to f.o.b. prices. Some of these duties are commonly referred to as “ sliding scale “ duties and come into operation automatically as f.o.b. prices fall below specified amounts.

Experience has shown that duties of this type have been circumvented by inflated f.o.b. prices. This means the overseas supplier has made an unusually large profit at the expense of the revenue. This has also enabled some Australian subsidiaries of such overseas suppliers to sell goods in Australia at abnormally low prices and thereby damage Australian industry. In other words, any loss made in Australia has been more than offset by high rates of profit made by overseas suppliers. In practice, the discretionary power is intended to allow the Minister to reject an f.o.b. price ascertained from the invoice and other documents produced to the Department of Customs and Excise at the time of entry and to determine a notional f.o.b. price having in mind the practices to which I have referred above. The wider power would not, of course, be exercised in cases where the goods are imported in good faith and the importer genuinely incurs a loss.

A Bill to amend the Customs Tariff (Dumping and Subsidies) Act was recently introduced into this House to give the Minister for Customs and Excise a discretionary power to determine the export price. The intention of that amendment was to counter such practices as sales dumping. The powers contemplated under this Bill are complementary to those incorporated in amendments to the Customs Tariff (Dumping and Subsidies) Act which are now before this House, and both will give the Minister for Customs and Excise the necessary legal authority to counteract practices designed to undermine the protection afforded to Australian industries. I commend the Bill to honorable members.

Debate (on motion by Mr. Crean) adjourned.

page 2330

EXCISE TARIFF BILL 1965

Bill presented by Mr. Bury, and read a first time.

Second Reading. 1

Mr BURY:
Minister for Housing · Wentworth · LP

– I move -

That the Bill be now read a second time.

This Bill enacts the excise tariff proposals now before the House, namely, Excise Tariff Proposals (No. 2) which was tabled on 17th August 1965. These tariff proposals gave effect to the Government’s decision on matters arising out of the Budget. I commend the Bill to honorable members.

Debate on motion (by Mr. Crean) adjourned.

page 2330

APPROPRIATION BILL (No. 1) 1965-66

In Committee.

Consideration resumed from 27th October (vide page 2301).

Second Schedule.

Department of the Treasury.

Proposed expenditure, £148,070,000.

Advance to the Treasurer.

Proposed expenditure, £10,000,000.

Mr CREAN:
Melbourne Ports

.- When the estimates for the Parliament were, being considered there was considerable debate on the question of the need to reform the procedures of the Parliament. I suggest that there is equally some need to reform the presentation of some of the documents in order to facilitate better debate in this chamber. In my view some of the dissatisfaction that exists arises out of the degree of information that is available to honorable members and the time at which certain debates are launched. During the course of the debate this morning on the question of sitting times the Treasurer (Mr. Harold Holt) said that this year he had presented a Budget that provided for a total expenditure of about £2,600 million. I draw attention to the fact that the Estimates that we are now considering provide for a total expenditure of about £1,100 million in round figures. In other words, a big proportion of the expenditure is not contained in the Estimates at all. My first proposition is that quite large amounts of expenditure are debated in relation to Bills not directly associated with the Estimates. Basically what we have in the Estimates are simply the expenditures concerned with the mechanism of the various Government departments. Consideration should be given to doing in Australia what is done in the Parliament of the United Kingdom, namely, presenting the Estimates to the Parliament in advance of the Budget. This would overcome one great difficulty that is apparent in the Australian parliamentary system. At the beginning of sessional periods - and we tend to have two sessional periods of the Parliament each year - a lot of dawdling occurs in the debating process simply because the Government does not have its programme ready. Much time is devoted to debating matters that members are not quite as seriously concerned with as they are with some of the matters that come up later.

Mr Harold Holt:

– That could not be said of this sessional period.

Mr CREAN:

– I am simply suggesting that in the first week the Treasurer introduces his Budget, it is not debated for at least another week and in the meantime discussion takes place-

Mr Harold Holt:

– We had a discussion on foreign affairs this year.

Mr CREAN:

– I am putting this proposal. I think consideration could be given to presenting the Estimates in advance of the Budget. This would enable the Estimates debate to come on at any time. Increasingly it seems to me that the Estimates debate, instead of being a critical analysis of expenditure, tends to relate to policy matters because honorable members feel that there is not sufficient time to debate them otherwise. I cannot see why the estimates for the Department of External Affairs, for instance, should be the occasion for a debate on foreign policy. That is not my view of the purpose of the Estimates debate at all. I am simply putting this proposition up to the Treasurer, as the Leader of the House, for consideration. He should at least examine it. After all, these Estimates are not primarily a matter of policy at all. They relate to the detailed conduct of departments. I do not think anything is being given away in having the Estimates in advance of the Budget.

Mr Harold Holt:

– Is the honorable member attracted to the idea of having a committee of the House on the Estimates?

Mr CREAN:

– I was going to go into that when the estimates for the Department of Defence were being considered. I think there is an opportunity in respect of some departments for special committees. There could be a committee on either the estimates for the Department of Defence or for the Estimates as a whole. Some consideration should be given to the suggestion. I am afraid I was not a wholesale supporter of some of the suggestions that were made in the recent debate about the Parliament. While there was criticism of how the Parliamentary machinery was working I doubt whether there was universality as to the remedy. It may be that we ought to have some committee of inquiry into the working and procedures of the House rather than that we should plump for a series of committees. I am inclined to agree with my colleague the honorable member for Scullin (Mr. Peters) that if we were not careful there might be such a proliferation of committees that members would have more taken away from them than the committee gave back. However, the suggestion is worth considering.

In the time that remains I want to quote from a rather interesting book that I commend to the consideration of all honorable members, lt is a Pelican book published recently. It can be purchased for 7s. 6d. in Melbourne. It is titled “The Treasury under the Tories 1951-1964 “. It is very well written. It was written by a skilled journalist - a man who has a lot more knowledge of his subject than have some people in Australia who write rather critically at times on this type of subject. The author, Mr. Brittan, is the economics editor of a very reputable paper, the “Observer”, in Great Britain. I should like to quote two references because 1 think they have some relevance to recent happenings in Australia. On page 304 of the book, in dealing with the Treasury in particular, the author says -

The weakness on the ministerial side was aggravated by a growing staleness in the Civil Service itself after the last wartime temporaries left and the Service returned to normal. The habit of asking distinguished lawyers or other outsiders to pronounce on essentially political issues, such as. wages or restrictive practices, showed how badly the normal machinery of government was working.

I think that those statements are fairly relevant to some of the criticism that has been voiced recently of the report of the Vernon Committee. After all, the Committee of Economic Inquiry, whether honorable members opposite like the idea or not, could not avoid making comments, conversant with its terms of reference, on what were essentially political matters. I would have thought that the Government should have contemplated that eventuality before it set up the Committee, but the Committee having been hand picked by the Government and given its terms of reference, what was it that the Government expected the Committee to report upon? I have never known in my experience in public life any document that has been so undeservedly rubbished in so many odd places as the report of this Committee. To begin with, it was not a Committee of the Labour Party but a Committee hand picked by the Government from -

Dr J F Cairns:
YARRA, VICTORIA · ALP

– People close to it.

Mr CREAN:

– That is right. The Government carefully defined and redefined the terms of reference and the Committee, after the expenditure of an amount of about £45,000 which is referred to somewhere in these estimates, came forward with two very compendious volumes. I must confess that I find the volumes most interesting. I think they contain a good assemblage of the kind of information that ought to be freely available in Australia before decisions are made.

I want to quote now a further extract from this very interesting book by Mr. Brittan. He is very critical of the policy of the Tory Government, and of course I find great pleasure in being able to quote this sort of thing. At page 293 we find the following passage -

A different fault of British economic policy was the neglect for so many years of what economic theorists call the supply side of the equation. By this they mean absence of measures for improving the efficiency and responsiveness of British business. This type of thing is today on everybody’s lips. Examples are; encouraging science and automation; improving industrial management; education; the training of skilled labour; redundancy; regional development and the new look in the nationalised industries. This is not to speak of the failure to do anything about the state of industries such as shipbuilding and machine tools early enough in the day. State interest in such fields-

Here are the words that I commend particularly to the attention of the Treasurer - is a normal part of any mixed economy; and a government that neglects them is not being pro-free enterprise, or anti-dirigiste, but simply asleep.

I suggest that that is a fair commentary on the Government of Australia and perhaps on some of its advisers. They are not alive and active and alert about the problems of the Australian economy; they are asleep. I think that what was most resented about the Vernon Committee was that according to its terms of reference it could not do anything else, apparently, but publicly suggest that it, too, thought that the Government had been asleep in some of these fundamental fields. It is not possible in the course of a debate as limited as this to read the whole of this very interesting book, but I do commend it and I hope it becomes a best seller in the parliaments of Australia as a source of information on what can happen when we are living in 1965 and think we can go on as if it were 1865.

As I see it, I do not have to accept or reject the findings of the Vernon Committee, but I do see the Committee’s report as a comprehensive document that attempts to look at the economy of Australia as a whole. What has rather appalled me is that apparently anybody who was prepared to go along with the rubbishing of the report was able to be fed with information from the Treasury to provide a basis of criticism. If the Government feels that there are so many obvious mistakes in this report that most of us are so manfully ploughing through, why has not some official statement on the matter been produced in reasonably comprehensible form and made reasonably available? It seems that one can attend seminars at the Australian National University at which gentlemen from the back rooms of the Treasury explain to the economists where they think the assumptions of the Vernon Committee were wrong.

I believe, as I have said before, that in the sort of economies that we have in 1965 the Government must make a lot more information available. It cannot be said of the Treasury that there is less information available now than there was in earlier days, but the fact is that much of the information is not available in the form that the man in the street wants. I have here a document which I commend to the Treasurer and which I will hand him later. It is published by a new department in Britain, the Department of Economic Affairs. It is the Department’s first progress report for January 1965. It attempts to put in simple language - the book is freely available to schools and members of the public - what the department is endeavouring to do. Similar publications were previously issued under the title of “Treasury Bulletins”. I have mentioned them previously in this Parliament. I hand this now to the Treasurer and I ask him to consider seriously producing in Australia some similar kind of documentation.

The TEMPORARY CHAIRMAN (Mr Drury:
RYAN, QUEENSLAND

– Order! The honorable member’s time has expired.

Mr PETERS:
Scullin

.- Mr. Temporary Chairman, sufficient information is not given to this Parliament or to the people of Australia about loans that are raised overseas; nor is sufficient information given to the Parliament or the people with regard to the amount of Australian real estate owned by overseas interests. The Government gives information to the people and to members of Parliament through the Press in connection with loans that it raises or intends to raise overseas. It does not give very full information; in fact it gives very scanty information in the Press. We are informed that in May of last year a loan was raised in Europe of 25 million Euro dollars. The loan was raised at 5i per cent, and it was issued at 98i, which meant that the effective rate of interest was 5.63 per cent. This, of course, does not tell the whole tale. We do not know what the notation charges for that loan were. The rate of payment for servicing that loan overseas may therefore have been considerably more than 5.63 per cent. Another loan of 25 million Euro dollars is now being raised in Europe. Those 25 million Euro dollars have an equivalent value in Australian currency of about £11 million. But the conditions under which the loan is being raised are not yet available. The Government does not know yet what rate of interest it will pay on that loan, nor will it know until November when the loan opens in Europe. The point that I desire to make is that each loan of £11 million - £22 million in all - was raised overseas.

Why was it necessary to borrow overseas? Why were the loans not raised in Australia? I do not know what the main purpose was in raising this first loan overseas, but the purpose of the Government’s second loan was stated by the Treasurer in this morning’s Press as being to finance the works and housing programmes of the State Governments. But what does that mean? Does it mean that the £11 million borrowed from overseas will be used to buy something that is essential to the States of Australia in housing construction? Does it mean that these Euro dollars that are being secured overseas will be used specifically and directly to purchase something that will be used within Australia by one of the States in carrying out its plan of public works? I say definitely that that is not the reason for raising these loans. The loans are for the purpose of replenishing Australia’s rapidly diminishing overseas funds. The people of Australia should be told that that is why the Government is seeking, not only in Europe but also throughout the world, money from wherever it can obtain it, not for the purpose of financing further necessary imports from overseas but in order to pay for unnecessary imports that have already been sold within Australia. That is the purpose of these two loans of £1 1 million. When announcing the new loan, the Treasurer made a very pertinent statement. In this morning’s Press he is reported as having said -

  1. . most overseas markets, apart from Europe, appeared to be effectively closed to Australian loans.

He was saying that we cannot raise loans in America, we cannot raise loans in Great Britain and we cannot raise loans in other parts of the world; we must go to the common market area of Europe in order to obtain loans with which to replenish Australia’s depleting overseas funds.

Mr Harold Holt:

– We can get the money if we are prepared to pay fancy rates of interest, but the honorable member is complaining about our paying too much interest.

Mr PETERS:

– That is right. The honorable gentleman said that if we are prepared to pay fancy rates of interest we can secure loans elsewhere. My objection is that the situation in Australia in which we need a loan has been brought about by the Government’s trading policy. It is because of the Government’s action that we must raise loans overseas to replenish our overseas funds which have diminished because of the purchase of goods that were unnecessary to the economy. I refer to products such as canned chicken and canned fruit from Chicago, suits of clothes from Italy and elsewhere and other products which are not needed to promote development in Australia. It is because of such imports that we are in our present position. It is a position that has been brought about by this Government.

The Treasurer said that I object to the raising of loans at exorbitant rates of interest. I consider that an interest rate of 5i per cent, on a loan raised at 98i per cent, is an exorbitant rate. I have no doubt that the interest which will be payable upon the loan of £11 million to be raised next November will carry an even more exorbitant rate of interest than was paid on the one raised in May. I believe that honorable members should regard these matters as most important to our economy. I believe also that we should be given the fullest information on all loans that are raised overseas and that we should be told the specific purposes for which the money is needed. By that I mean we should be told exactly what goods will be purchased with the money borrowed or whether the loans which are raised allegedly for the purpose of financing State works and housing programmes are in reality being used to carry out the works programmes. We should be told if the loans replenish overseas funds that are being dissipated by a disastrous trading policy of the Government. I leave that question and come to a second matter. A newspaper article in yesterday’s Press carries a heading -

Foreign Companies are Buying Up Land. Who Owns the North?

In that article we are told the story, not of acres, not of square miles, but of thousands of square miles in the Northern

Territory which are being purchased by overseas companies. The article states that 58,000 square miles of the Northern Territory is already in foreign hands and that there is foreign ownership of almost an equivalent area of the Kimberley district.

Mr Harold Holt:

– How many head of cattle will those areas carry?

Mr PETERS:

– I have not counted the number of cattle on 58,000 square miles of territory, but I would suggest that that area has carried quite a number of cattle in the past and that, because of the manner in which our Territories are being exploited by those whose only interest is the amount of money that they can extract from them, in the future they will carry less cattle than in the past.

Dr Mackay:

– Ha; go to Brunette Downs and learn the facts.

Mr PETERS:

– A loud laugh betrays a vacant mind. One resident of the Northern Territory who was employed there for 30 years and who knows the Northern Territory as probably no other man in Australia knows it pointed out in a series of articles in the “ Australian “ a few months ago the manner in which overstocking of stations in the Northern Territory with the use of overseas capital was so destroying the potential grazing capacity that in future that region, instead of being suitable grazing land, would be little better than a dust bowl.

Mr Brimblecombe:

– He is just 30 years out of date.

Mr PETERS:

– That may be so. Overseas interests are buying land not only in the north of Australia but also in the south. Chinese interests, European interests and American interests are purchasing real estate of considerable value. The point that I desire to make is that I have asked the Treasurer, who is responsible for the Bureau of Census and Statistics, what amount of real estate is owned by overseas interests and he has said that he does not have the slightest idea. He is right; he does not have the slightest idea. The. figures issued by the Bureau of Census and Statistics relating to overseas investment in this country do not include purchases made by private individuals or companies of station properties, factories, hotels and other real estate. The public should have this information. I have before me a document which shows that 7,000 square miles of the Northern Territory is controlled by Chinese interests and that those interests are ‘gathering together to destroy the leasehold system in the Territory in order to perpetuate their control there. In every capital city more and more of our real estate is passing into the hands of overseas interests. Why is this situation allowed to continue? It is allowed because the Government is able to bolster its overseas reserves with the money paid for our farms, factories and mines.

This Government’s trading policy has put the country into pawn to people in other nations. If the Government is to be able to continue its methods of financing the country’s operations it must encourage overseas interests to buy more and more not only of our land and factories but also of our industrial enterprises. Our mineral resources must go. In return we are left with holes in the ground. Our mineral resources are to be worked by indentured labour from Japan and elsewhere. This Government’s policies are detrimental to the best interests of the nation.

The TEMPORARY CHAIRMAN:

Order! The honorable member’s time has expired.

Mr GILES:
Angas

.- I was interested in the remarks of the honorable member for Melbourne Ports (Mr. Crean) and the honorable member for Sculling (Mr. Peters). Might I refer briefly to two points touching upon the work of the Treasurer (Mr. Harold Holt) in his capacity as Leader of the House. First, I think two things have been overlooked in all the discussions about the time available to honorable members for debate and the amount of time that is wasted. Over the years the maximum time allowed for speeches has been gradually reduced.

The TEMPORARY CHAIRMAN:

Order! The honorable member may not revive a debate that took place this morning.

Mr GILES:

– I apologise if I have been guilty of a misdemeanour. A matter that interests a great many honorable members is the number of days in each week that Parliament meets in Canberra. We must remember that many people throughout the country believe that we spend too much time each week in Canberra. I favour the retention of the present policy of meeting on three days a week. This allows honorable members some time each week to get out into the country and into their electorates and become known as a person who does not sit here in an ivory tower, ignoring his electoral commitments. I toss those views into the ring as something that has not been mentioned so far.

The honorable member for Melbourne Ports referred to a book that he finds most interesting and made some derogatory remarks about a Tory Government in England. He claimed that the Government and the departments under its control were asleep. In my opinion this could not happen in Australia under the present Government. If we have an economy that is vital and viable and if we have a vigorous expanding nation with a lot of youth in its Government ranks and in its heads of departments, we cannot have a situation of a stagnating economy or governments or departments that are asleep.

The honorable member was probably on more solid ground when he referred to the Vernon Committee’s report. I can agree with some of his remarks in this connection. In my opinion there is a great deal of good in that report. If he imagines for a moment that we on this side of the chamber will condemn out of hand the Vernon report, he can think again, because when the debate comes on many honorable members on this side will have a great deal to say in favour of it. If some of the report’s projections are out of date and if this fact destroys any of its value at this time, I do not look on this as important, because reports and projections may be brought up to date. Factors can alter. Although I have not, as the honorable member put it, manfully struggled through the report to the extent that the honorable member obviously has, I would point out that there is a lot of good in it.

I was a little confused by the remarks of the honorable member for Scullin. I look upon a euro as something other than a dollar that hops. If my memory serves me correctly, a euro is a small kangaroo that inhabits parts of South Australia. I do not think it propagates vegetatively. Perhaps the honorable member sought to convey the idea that dollars have an ability to dart from country to country and from source to source. The honorable member seemed to contradict himself when he stated on the one hand that it was necessary to raise loans overseas, although he did not like the practice, and on the other hand that companies and land in Australia sometimes were not owned by Australians. There is obviously a state of limited liquidity. It seems ridiculous to say that if money for certain projects cannot be raised in Australia we should not go overseas seeking loans. My only comment on that is that the policy of borrowing money overseas at reasonable rates of interest has been a contributing factor in Australia’s development over many years and I believe that this policy will continue to serve the development of this country for some time to come.

I did not rise to generalise but rather to particularise. I have been doing a small exercise for some time on investment allowances. The honorable member for Scullin referred to canned fruits, and I would pick up the thread there. I refer to section 62aa of the Income Tax and Social Services Contribution Assessment Act, which provides for an investment allowance in the form of a special income tax deduction based on expenditure on new manufacturing plant. In addition to strictly manufacturing items, however, sub-section (4.) lists a number of activities that qualify for the concession, such as the scouring or carbonising of wool, the milling of timber, the freezing of primary products, the curing of meat or fish, the production of chilled or frozen meat, the pasteurising of milk and the canning of foodstuffs. I emphasise that all these processes qualify for an investment allowance by their very nature.

I wish to refer in particular to a series of anomalous positions that arise. A cooperative packing shed in one of the towns in my electorate along the Murray River may install an automatic machine costing up to, say, £6,000, for weighing raisins and placing them in cartons, mostly for export. But machines used for weighing and packing raisins in this manner are not eligible for the investment allowance. A comparable machine used for the weighing and bagging of cement, however, is eligible for the investment allowance. I know of one plant in which a carton sealer is eligible for the concession and yet a similar machine in a neighbouring fruit cannery does not qualify. An anomaly exists here in the difference between the treatment accorded to one industry and that accorded to another, or rather in the different treatment accorded to two plants in the same industry.

May I cite the example of another expensive piece of machinery of capital equipment. This is a plant that washes oranges, treats them with fungicide and then dries and waxes them to prevent shrinkage and spoilage before the operation of grading, sorting and packing even starts. The machine that does all these things is worth more than £6,000. It is owned by a cooperative packing shed but it is not eligible for an investment allowance, whereas plant used in wineries, fruit canneries, butter factories and wool scouring establishments qualifies for the concession.

The Treasurer, in his second reading speech on the measure that introduced the investment allowance, I think in April 1962, said that the purpose of the allowance was to lower costs so as to help our industries to seek export opportunities in overseas markets. Again, in a letter that I received from him some months ago, he repeated the statement that the purpose of section 62aa of the Income Tax and Social Services Contribution Assessment Act is to promote exports. I should just like to point out that the citrus industry is very much dependent on exports and at present has a great surplus of production in excess of the demand on the home market. It regards this anomaly in the Act very seriously. Three quarters of our production of dried fruits is exported, but the plant used to pack dried fruits in cartons does not qualify for the investment allowance. The dried fruits industry, as honorable members know, esports in keen competition with Greece and Turkey. I believe that the recent introduction of a stabilisation scheme for dried vine fruits in order to help the industry to deal with its problems should indicate to honorable members that it is not in a particularly good position financially.

It seems particularly anomalous to me that ‘ this legislation specifically excludes plant used in the packing, processing and exporting of these commodities. Why were the processors of these items eliminated from consideration? May I say that one has only to use plant to put any product - fruit, for example - into a can and that plant immediately becomes eligible for concessional treatment. Yet if produce, is marketed in a pack as is dried fruit, or if citrus fruits are packed in any container such as a carton, sack or bag, the plant used does not qualify for the concession. If the object of the investment allowance is to help industry in the field of exports and to promote the earning of hard currencies to help us solve the problems of our overseas balance of trade, I suggest that it is time that these industries which in some instances are feeling the effect of surplus production were brought within the scope of section 62aa of the Income Tax and Social Services Contribution Assessment Act.

I offer no argument against the Government’s policy of fostering exports of manufactured goods. This is entirely to our national good. I agree that the investment allowance is a very good way of helping to foster such exports. But, as the Act stands, inequity is done to a group of related industries, some of which are hardly distinguishable from others in the work they do and which do not likewise qualify for the investment allowance. I find it difficult to believe, for instance, that it is any better for the country to export orange peel, which has to be processed, than it is to export fresh oranges, or that the export of dried fruit in boxes or cartons is any less advantageous to the nation than the export of, say, peanuts in cans.

As the situation stands, some primary industries are in and some are out. This has no relation to whether or not an industry is a traditional exporter. Those that pack in bags, boxes or cartons are out and those that pack in cans are in. Yet the manufacturer who makes each type of container is in. If a processor washes oranges, treats them with fungicide and applies a wax coating to increase their shelf life, he is out. But a processor who increases the shelf life of products such as fish, meat and milk by smoking, pickling or pasteurising is in. If peaches are marketed canned, frozen or fermented, the processor gets a concession. If he markets dried peaches, he does not. If a grower, who is of course a primary producer, puts in a packing plant he receives a concession. But if a co-operative factory puts in similar plant, the concession is not available. There is one other real anomaly that arises. A plant that chills fruit for export and later use is eligible for the concession. But a plant that takes the temperature only about two degrees lower and is regarded as a freezing plant does not qualify for the concession. So it strikes me, Mr. Temporary Chairman, that definite anomalies arise. I ask for the help of the Committee in rectifying these problems.

I have not dealt with all the examples that I had ready. May I finish by saying that I do not know what were the intentions of the Parliament or of the Government when the legislation that I mentioned was introduced in 1962. But I do know that the examples that 1 have given show that there is a farcical situation and that many anomalies arise. The existence of such anomalies suggests that the law has grown up rather like Topsy and has become unrealistic and lost its balance. I hope that the Treasurer will in due course lend his aid to efforts to correct these anomalies by amendments to the Act.

The TEMPORARY CHAIRMAN:

Order! The honorable member’s time has expired.

Mr FULTON:
Leichhardt

.- Mr. Temporary Chairman, 1 shall not take up more of the Committee’s time than is necessary. I should like first to comment on the criticism by the honorable member for Angas (Mr. Giles) of statements made earlier by my good friends, the honorable member for Melbourne Ports (Mr. Crean) and the honorable member for Scullin (Mr. Peters). I suggest that the honorable member for Angas was not very successful with his criticisms. Nevertheless, he is entitled to his own views. He touched also on the matter of the sittings of this chamber. I am one of those honorable members who are very much affected by the arrangement of the sittings. I live far away in north Queensland and I would like a lot more time in my electorate. However, I recognise that we are elected to this place to see that legislation is passed in the interests of the people and that while there is business to be done here we should attend. I should like to see us sit on more days of the week, because there is not much of the week available to me-

The TEMPORARY CHAIRMAN:

– Order! I point out to the honorable member that he is reviving a debate that took place in this chamber this morning. In doing so, he is not in order.

Mr FULTON:

– You allowed the honorable member for Angas to do that, Sir.

The TEMPORARY CHAIRMAN:

Order! I pointed out to him just what I have now pointed out to the honorable member for Leichhardt.

Mr FULTON:

– Very well, Sir. I wish to discuss some matters that concern the Treasury. The Treasurer (Mr. Harold Holt) is very well aware of them, for I have raised them every year since I became a member of this place. I hope that his officers will now be sympathetic in their understanding of these matters which affect a lot of Australians who can ill afford to bear the burdens that they have to carry.

The first matter concerns those people who live in country districts and who are unable to obtain certain necessary medical treatment within a reasonable distance of the areas in which they live and have to go to metropolitan centres. I think the right honorable gentleman will remember the matter to which I am referring. I am speaking particularly of people who live in such remote areas as Thursday Island, Normanton and other places on the west of the Cape York Peninsula and in the Gulf country. The nearest central hospital for these people is Cairns but very often they are unable to receive the required treatment there. My main concern is for the children who are often advised by the medical superintendent at Cairns to go to Brisbane for treatment. In many cases it is necessary for them to travel to Brisbane by air because rail travel would take too long. But neither for rail travel nor airtravel is any income tax concession allowable in respect of fares.

Very often it is necessary for parents either to accompany the children to Brisbane themselves or to pay for an attendant to travel with them. Frequently the cost of this to the family is as high as £100, yet it is not an allowable tax deduction. On the other hand, businessmen from the same areas may travel all over Australia, and even overseas, and claim some income tax concession for the cost of their travel because it is said that the expense has been incurred in promoting business or encouraging development. The people about whom I am concerned are helping to develop this counntry and they are suffering a great burden in meeting this heavy expense. I have in mind particularly families in which children are suffering from heart trouble or some disease of the blood which cannot be treated anywhere outside the metropolitan area. I ask the Treasurer or his officers to study this question again with a view to seeing whether it is possible to make some concession to those people who are faced with the cost of fares and accommodation when seeking medical attention in Brisbane.

Another matter which I referred to the Treasurer some time ago and to which I think some sympathetic consideration should be given by the Government relates to Australian seamen employed on Danish ships chartered to work in Australian waters. These seamen are required to pay a seamen’s tax to the Danish Government but, despite this, they are still required to pay Australian income tax on their entire income. As an example of the hardship this can cause, I mention the case of a young lad who is in his second year of apprenticeship as an engineer. His earnings for the year amounted to £784. He was required to pay £82 by way of seamen’s tax to the Danish Government. The Australian Government refused to make any allowance for this £82 and required him to pay £142 in income tax. The Treasurer has pointed out that no allowance is made for the £82 paid to the Danish Government because Australia has no reciprocal tax arrangement with the Danish Government. If this lad had been working on an American ship he would not have had to pay the £82 tax to the American Government because we have an reciprocal agreement with that Government. Treasury officers suggested that I take the matter up with the Danish Government. But it is hard enough dealing with this Government. One would have no chance of success whatever in dealing with a foreign government. I again ask the Treasurer to give consideration to allowing some concession to Australian seamen who are employed on Danish ships chartered to work in Australian waters. What they pay to the Danish Government should be deductible from their earnings for taxation purposes in Australia. They should not be required to pay income tax twice.

I come now to the question of zoning. I think the Treasurer has already had representations made to him by the Chambers of Commerce at Cairns, Innisfail and many other places in the north suggesting that a little more of the territory of the Peninsula should be taken into zone A. If this were done, it would help considerably with the development of the area. I have not a taxation zone map, nor do I know who decided what the zone boundaries should be, but 1 can assure the Treasurer that small places like Chillagoe in that part of Queensland could well be included in zone A to the advantage of development of the area. Surely these people are paying enough for living in the area. The help given recently by way of subsidised petrol prices will be of some assistance to them, but it took a long time to obtain even that small amount of relief. Again I ask the Treasurer to examine the zones with a view to including more of the smaller areas in zone A where the rate, is a little lower. I understand that the present exemption in this zone is £270 for the taxpayer plus half of the concessional deductions which are available for dependants. ]f my suggestion were adopted, some assistance could be given to those areas which really deserve consideration. The people living there are already paying high transport and other costs, and a tax concession would not only help them to develop the area but also would encourage more people to go there. This Government’s actions are driving people away from these areas at a time when we should be populating them.

Mr FAILES:
Lawson

.- The document entitled “ Estimates of Receipts and Summary of Expenditure “ includes in Table No. 5, under the Department of the Treasury, the sum of £570,000 to be paid to the New South Wales Government under the New South Wales Grant (Flood Mitigation) Act of 1964. It seems to be anomalous that we should be discussing Treasury estimates which include an item of that kind at a time when this country is suffering from one of the most disastrous droughts on record - a drought which in my opinion is not yet nearing an end - there is no provision in the estimates of the Treasury for drought relief. 1 do not suggest that the Treasurer or the Government is unmindful of the drought position. On the contrary, I am confident that although no provision is made in these Estaimates to meet this problem the Government will see to it that those people who are suffering from the ravages of this drought are properly catered for. I think that is the general feeling in the community; but there is also a strong desire that some positive statement should be made that action will be taken to mitigate the damage which is being done.

I do not want to haggle over the problem of drought. The circumstances are well known, but little or no acknowledgement of the seriousness of the drought was made until July of this year. A statement issued by the Australian Agricultural Council indicated that whilst there had been a severe drought, it was thought that when everything was over it would be found to have been not as bad as had been feared. That opinion seems to have been accepted by the Prime Minister (Sir Robert Menzies) who stated on 26th August that the consequences of the drought, particularly the consequences to the. nation and the plight of those suffering from the drought, would be kept well in mind; but he added -

  1. . provided the drought does not extend into the coming season … it should not have a seriously adverse effect on the overall economy . . .

Unhappily, it has extended into the coming season, and the devastation that is going on now is something that I suggest we did not dream about even three months ago. There is another reason why possibly the Government did not feel at that time that the matter was urgent. In the annual report of the Tariff Board for 1964-65, which was dated 26th August 1965, we find in paragraph 3 of Chapter 1 which is headed “ Economic situation in Australia and overseas “ the following statement -

Although demand was still strong in June 1965-

It had been said in an earlier paragraph that the general economic expansion apparent in 1963-64 was maintained throughout 1964-65-

  1. . there were by then some indications of uncertainty in the forward outlook.

One might ask: Why is there some indication of uncertainty? The next sentence answers that question in blunt terms. It reads -

The effects of drought, particularly in New South Wales and Queensland-

Then the terms used cease to be quite so blunt - it continues -

  1. . were causing some concern in the prospects for rural production in 1965-66.

I feel impelled to follow that quotation by referring to a statement on the drought by the Commonwealth Director of Meteorology. This statement was published by the Bureau of Meteorology on 7th October 1965. Coupled with this Government document is a plan of the drought affected areas in Australia which, no doubt, honorable members have noticed. It is surprising and striking that in the area from the Fitzroy Crossing, through Alice Springs, south west Queensland, north and north west New South Wales - of which the electorate of Lawson forms a very large and valuable part being in normal times one of the very rich parts of that area but now suffering the devastation of this drought - down through Goulburn to the south east area of New South Wales, the report shows that from 1st January to 30th September this year rainfalls were amongst the lowest on record. And the records go back to the last century. So, my information comes from an authentic source. The Bureau of Meteorology goes into detail in this matter. Let us begin with the Northern Territory. The Bureau points out that from November 1964 to September 1965 - about 11 months - only 1.92 inches of rain fell in that area. This is the lowest rainfall since 1901-02 when 1.22 inches - not very much less - fell in the driest November-September period on record.

This document refers to Coonamble which was part of my electorate but which is now in the electorate of the honorable member for Darling (Mr. Clark). This is one of the very wealthy pastoral areas of New South Wales. The overall total rainfall of 5.69 inches since November 1964 is the second lowest recorded since 1878. The lowest total rainfall was 3.89 inches recorded in 1901-02. Coming to the central tablelands area and referring particularly to Mudgee, we find that the December 1964 to September 1965 total rainfall of 9.37 inches was the lowest since 1901-02, when the record low total of 8.59 inches was recorded. The records for this area go back to 1870. On the central western slopes and particularly at Dunedoo - again in my electorate - the total rainfall of 9.40 inches for the same 11 months period was the lowest recorded. So the report goes on. Throughout this document the records show that this drought is unquestionably the worst since 1901-02 and also is probably one of the most severe that this part of Australia has ever suffered. I do not claim that I can speak for the rest of Australia. I speak primarily for my own electorate about which I can quote facts and authentic figures.

Let me give honorable members some brief idea of what has happened. I believe that the Government is optimistic because hope springs eternal in the human breast. This applies particularly to the farming and grazing community. But generally speaking last year’s income has been lost to most men on the land. This loss will be reflected in the income tax returns which will be submitted next year. On the coast, dairy herds have been lost. I will have to be very brief because time does not permit a long discussion. In the inland, cattle, sheep, wool and crops have suffered. The Pastures Protection Boards in the western division of New South Wales - I have no doubt that this is correct - have referred to the loss of nearly li million sheep. Through the courtesy of the honorable member for Maranoa (Mr. Brimblecombe) I saw a Queensland publication today which said that in that State the number of sheep lost for the 12 months to the end of March 1965 totalled H million. That is a loss of 6 per cent. That is only to the end of March. The worst of the drought has occurred since that time and the drought is still continuing. The Iamb drop was down 13.6 per cent. This is a serious loss to the industry. It has lost the young lambs - the growing sheep and the wool growers of the future. For the far west of Queensland, the lamb drop was down by 27.1 per cent. Again, these figures are only up to the end of March. All through these areas we find this devastation taking place.

Coming to wool, we find that supplies have been reduced by 22 per cent, in Queensland and 24 per cent, in New South Wales. A close neighbour of mine has told me that of a normal clip of 600 bales, he was able to send only 400 bales to Sydney this year. I know that the Treasurer is aware of the devastating effect this drought will have on his Budget for the next financial year when the reduced income tax returns come in. As I said before, I know that the Government will not treat this fact as an excuse for not assisting wherever possible the people who have suffered through the drought. It is true that the overall loss in the wool clip, taking the good with the bad, is only approximately 10 per cent. But great areas of wheat have been complete failures. I can speak with some authority because many wheat growing areas in my electorate have experienced complete failure. In New South Wales the production of wheat will be only 40 million bushels whereas the normal average is 109 million bushels. Australian wheat production will be down by between 100 million and 120 million bushels.

What is the remedy for this problem? How can we help the people who are suffering? There are three phases I would suggest. There is the immediate need - the urgency to help people who are really in dire straits now. Largely, this responsibility falls in the State Governments which will be called upon to make grants, probably supplied or subsidised by the Commonwealth Government. The State Governments will have to provide short term credit for fodder, hay, grain and transport. This can be done through the system of declaring drought areas in respect of which the transport of stock, water and fodder is undertaken at reduced rates. But the important thing I want to speak of is the long term situation which will require low interest loans for re-stocking of grazing properties and for the purchase of fuel and seed by wheat farmers. In addition, farmers have accumulated machinery debts and these, I suggest, can be disposed of only by means of a moratorium. I hope the State Governments will keep that suggestion in their minds.

Our problem arises with the banking system which comes under the control of the Commonwealth Government. Over the years the banks have lost interest in lending to primary producers and that responsibility has been very largely passed over to the wool firms. Now, the wool firms have now run out of money. Questions have been asked in this House as to how the banks can be assisted to improve their liquidity. I shall read very briefly from a letter which has been given to me by the honorable member for Riverina (Mr. Armstrong). This letter, which was sent to the honorable member, sums the position up. It is from a capable and industrious young fellow who has a family. He refers to the problem of finance to carry on feeding. The letter reads -

The solution to the problem of finance to carry on feeding is a release of funds to finance each grazier to a certain limit of money through his normal trading bank as a term loan so that it would be repayable over a number of years (say 6-8 years).

He suggests -

More money for restocking and general carry on on completion of the drought would assist the economy by the circulation of money which otherwise would not occur for a number of years.

He adds - 93% of the graziers here have spent half their annual income in drought fodder and are not yet out of the wood.

This is the only remedy I think, that can possibly be considered in the long term to assist men who are suffering from this great problem and to assist the nation which is going to suffer also. I direct the Treasurer’s attention particularly to the fact that this assistance to enable primary producers to carry on until the end of the drought would assist the economy through the increased circulation of money which otherwise would not occur for a number of years. That has been our experience.

Right now we need a statement of policy to give heart to drought sufferers. We do not only want it to be said that we ought to be doing something, we want a statement that something will be done so that men can keep their stock alive and be able to restock when the drought is over. I made a suggestion to the Prime Minister only the other day that we could emulate the assistance which we have given through the Primary Producers’ Board in the Northern Territory to pastoralists in necessitous circumstances who were unable to obtain further credit elsewhere. They have been able to obtain loans up to a limit of £3,000 repayable over seven years and bearing interest at 4i per cent. That has been done in the Northern Territory and I suggest that it could be done through banks in the various States, lt could be done through the Rural Bank in New South Wales and through the Agricultural Bank in Queensland, for instance, provided a guarantee were given by the Commonwealth Government that if the banks suffered pecuniary losses through their action the Commonwealth would assist. The State Governments have the machinery to carry out such a function. I regret the inadequacy of time to deal fully with this matter, but I do plead with the Government to give the subject earnest consideration and right now, as far as it is possible to make a statement, that early assistance will be given to people who have suffered from the drought.

Mr HAROLD HOLT:
HigginsTreasurer · LP

– I thank the Committee for the opportunity to intervene in the debate for a few minutes. I know my intervention will put back, for the length of time that I speak, the opportunity of others who are on the list to speak in the debate on these estimates, but I have an appointment for a discussion with the Prime Minister (Sir Robert Menzies) at a quarter to four. I expected that the debate on the Treasury estimates would conclude by that time. I would like to comment briefly on a few of the matters raised in the debate and to assure those who will be speaking after me that even if I am not present in the chamber my colleague the Minister for Supply (Mr. Fairhall) will be here. What is said will be carefully studied in the Department, as is the practice.

The comments I wish to make could perhaps take as their starting point the very moving statement which has just been made by the honorable member for Lawson (Mr. Failes). I am certain that he has the sympathy, as have others similarly affected in their constituencies throughout Australia, of all members of the Committee for the dreadful toll which the drought has been taking now for a long time. The drought has seriously affected the size of the flocks, herds and crop yields and has reduced farm incomes dramatically for the worse in various parts of Australia. I do not propose to try to cover the matter fully in a policy sense at this time. I think that honorable members know that the Cabinet has already given a great deal of time to consideration of the drought and problems associated with it, and I have no doubt that there is much additional discussion ahead of us before this tragic story has been concluded. I repeat the assurances which have been given by the Prime Minister and others on earlier occasions that not only is this matter very much in our minds, but we recognise the responsibility which the Commonwealth Government has. Other Governments and instrumentalities in the various parts of the Commonwealth also recognise their responsibilities.

What emerges from all this has a bearing on the general economic situation and a relevance to what has been said about the state of our external balances, the rundown of our reserves and the prospects of general stability in the future. Although we shall experience these heavy losses, and particularly a loss of export income, . there are factors which suggest that the rundown of our reserves will not be as heavy as we previously expected. This will be due partly to a strongly sustained capital inflow and partly from some slackening that we expect in the level of imports over the concluding six months of the financial year. The honorable member for Scullin (Mr. Peters) had some critical comment to make about imports. He rather presented the picture as being one of a consumption boom with goods flooding into this country. He used the term “goods not necessary for Australian purposes”. Perhaps .he used it unwittingly, but certainly anyone listening to him would have gained the impression from what he said that there was a spending spree by the Australian people on a lot of goods from overseas that we could have provided from inside Australia.

The first point to be made on that is that at a time of full employment - and our manpower resources have been about as fully employed as one could expect in a free society - additional demands occur above those which can be supplied from domestic production. These demands necessarily have to be supplied from imports or otherwise we would have a rising price level because of the inadequate supply of goods inside the country. This would bring about a very serious inflationary situation. We have been fortunate in that we have been able to meet some of this surplus demand - a demand going beyond capacity in many directions- - from supplies from overseas, and we have been fortunate also that we had substantial reserves which enabled us to do this. It may interest honorable members to have a few illustrations of the way in which imports have been coming in. I shall classify the percentage increases which have occurred in particular directions. The increase over 1963-64, in the financial year 1964-65 which has just concluded was about £266.5 million. That was an increase from £1,183.9 million to £1,450.4 million. In that increase - and there was an increase overall of 22.5 per cent, in imports - the increase of imports of finished consumer goods was well below the average for all categories. Imports of finished consumer goods increased by 18.2 per cent, or by £38.6 million. Putting it another way, of a total increase in imports of £266.5 million only £38.6 million was attributable to finished consumer goods. The category which represents the overwhelmingly largest item of increase is producers’ materials. There has been an increase of £120.4 million in the value of producers’ materials imported. These are required, of course, for buoyant Australian industry. The increase was 19.8 per cent. The high level of investment and general industrial activity in Australia is again reflected in the figures for producers’ capital equipment. This rose by £63,200,000 or an increase of 26.8 per cent. Transport equipment increased by £31,900,000 or 66.6 per cent. This is largely new aircraft brought into the country.

Mr peters:

– Why should unnecessary imports increase at all?

Mr HAROLD HOLT:

– I have just tried to explain that. At a time when our resources are fully engaged, one would not need to be an economic seer to estimate what would have happened to the price level of consumer goods inside Australia if we did not have this increase in consumer goods. The honorable gentleman is very interested in costs. Costs would have soared to very uncomfortable levels had we not been able to supplement our stocks of consumer goods with imports. The honorable gentleman says they are unnecessary. That, of course, is a matter of definition. Certainly he cannot apply that definition to most of the other items I have mentioned. The final illustration I give is that of munitions and war supplies. The level of imports currently is being affected quite significantly by the increase in our defence programme. Last year, there was an addition of £9,100.000, which was a percentage increase of 65.5.

Other special factors have affected the demand for imports in 1964-65. There has been an increase of stock building. Other special factors included a high level of steel imports, because local productive capacity was under pressure. There was an unusual level of copper imports because of the Mount Isa strike. Aircraft imports rose sharply to a new plateau as the three major airlines equipped themselves with jet aircraft. The import of motor vehicles and parts also rose sharply as registrations increased and as dealers’ stocks of imported cars increased. Honorable members will gather that most of the increase in imports that has taken place has been in aid of industry or to increase the capital equipment of the country, whether for defence purposes, for transport purposes or for development projects that have been launched on an increasing scale over the last year or so. In addition, there has been the supplement to supplies which otherwise would have fallen far short of needs.

The honorable member for Scullin is also worried about the fact that we are raising some money on overseas loan markets. Let us have a look at our requirements for the State works and housing loans this year. We agreed on a programme of £295 million. In my Budget speech, I said that the best estimate we could make of our likely loan raisings inside Australia was £210 million. I did not have any very optimistic expectation at that time that we could secure loans overseas at rates that would seem to us to be acceptable. Honorable members will not need to be reminded by me that the gap of £85 million has to be bridged by the Commonwealth

Government. It has to be found out of revenue or by a call on bank credit at a time when we are trying to maintain some restraint over the general credit level inside the economy. So what we can raise overseas, whilst it does have the quite useful and incidental benefit to which the honorable gentleman referred rather scornfully of helping to sustain the level of our external reserves, reduces the budgetary problem of bridging the gap that I have mentioned. That is quite an important factor. I think it is of importance to taxpayers generally as well as to the Government. The amount involved is relatively small. As the honorable gentleman said, it is somewhere between £11 million and £12 million. But, though it is small, it is useful.

The rate at which we are likely to borrow this money is in the course of negotiation. I do not expect it to be very far removed from the rate for the previous loan of this character and not necessarily a higher rate. We were encouraged to learn of the interest in Europe in another Australian offering and we were gratified to find that we seem likely to be able to raise this amount at a rate that could not be matched by most of the industrialised countries of Europe. I very much question, for example, whether France, West Germany, Italy or any of the other quite strong European economies would be able to borrow for Government purposes at a rate below that at which Australia is borrowing in this transaction.

The honorable member for Melbourne Ports (Mr. Crean) always makes a very thoughtful contribution to these debates. I intend to study what he has put to us about the possibility of some reform in procedure. This is not an easy problem, as we know, because this is not the first time that we have given some thought to it. Without wanting to transgress your earlier ruling, Mr. Temporary Chairman, I mention that I pointed out earlier today that we must try not merely to reconcile the procedures and activities inside the Parliament but we must also try to reconcile these activities with the other responsibilities that members of the Parliament have as representatives of constituencies to service the needs of constituents in their areas. The honorable mem ber for Angas (Mr. Giles) made some interesting comments on investment allowances. I shall also study his remarks closely. The honorable member for Leichhardt (Mr. Fulton) again put to me representations that he has advanced earlier in favour of some taxation concession for those who must travel long distances for either schooling or medical treatment. This matter is listed with other requests for tax concessions and will be studied at Budget time. It is at least in the list and will receive the same careful consideration that other requests for concessions receive periodically when we review these matters.

As to the rest, I repeat the assurance I gave at the outset, that what is said in the course of the debate of these estimates will be closely studied. Where some policy decision is called for, this will be in the minds of my officers and myself for recommendation to the Government if that course is considered desirable. Where some administrative action is called for, consideration will be given to the desirability of taking such action. I conclude by thanking the Committee for the temperate and constructive manner in which it has considered the estimates that have been under discussion at this time.

Mr DEVINE:
East Sydney

.- -In speaking to the estimates for the Department of the Treasury I should like to comment on the remarks of the honorable member for Lawson (Mr. Failes) who expressed deep concern about the drought situation. We are all greatly concerned, because it will have a big effect on our economy, especially next year when our overseas sales of wool and wheat are affected. Naturally, with less money coming into the country there will be further increases in taxation. For many months members of the Australian Country Party have been agitating for special assistance for farmers in drought stricken areas. Notwithstanding all the questions they have asked, and all their pleas during debates, they have not been able to get any assistance from the Government. This goes to show the lack of harmony in this coalition Government - which is simply the result of a marriage of convenience between the

Country Party and the Liberal Party. Those who claim to represent the farmers cannot get any assistance from the Government for the people in drought stricken areas.

Since the 1963 general election when the Government was last returned to power we have had increases in taxation that have brought into the Treasury an additional £500 million from the workers of the country. In the last two years tax revenue from personal income has increased by Ti per cent. This year big increases are proposed in excise on tobacco, petrol, beer and spirits. This will bring more money to the Treasury. But 1 did not rise to speak about the income the Treasury receives. My main reason for speaking is to refer to the taxation the Government derives from the registered clubs in New South Wales. This income has been gained since the Australian Hotels Association drew the Government’s attention to provisions in our taxation legislation that made it possible for the Government to tax the income that the registered clubs obtain from non-members. This year the extent of the taxation is being increased. The Government will be taking a bigger bite of the cherry. Many of these clubs are situated in pleasure resorts to which people go for their holidays. If they are club members elsewhere they enjoy reciprocal rights to use the facilities available. The Treasury is after more revenue from those clubs, some of which will have to pay in taxation almost 40 per cent, of their income. Earlier this year I asked the Treasurer (Mr. Harold Holt) how many clubs in New South Wales were charged income tax on money derived from visitors, and what income tax was collected from this source in each State. In his reply the. Treasurer referred to an answer that the honorable member for Reid (Mr. Uren) and I had received on 28th October 1963. He gave a satisfactory explanation of how taxation was derived from the clubs, and we accepted that explanation, but he said that separate statistics were not maintained in relation to tax collected on income from non-members derived by clubs in each State. The Deputy Leader of the Opposition (Mr. Whitlam) asked a similar question later and received the same reply.

Why are separate statistics not maintained? In the taxation statistics that are available we can find details concerning all revenue that is derived from income tax from all sources in Australia, but when we want information regarding this specific form of taxation we are told that separate statistics are not kept. I contend that separate statistics are not kept because the Government does not want the people of Australia to know that New South Wales is the only State where registered clubs pay income tax on revenue derived from nonmembers. I regard this as discrimination against New South Wales clubs. In other States there are recreation and social clubs - golf clubs, cricket clubs, football clubs, swimming clubs and rowing clubs - many of which are licensed. Members take visitors to their clubs and the visitors pay for their own entertainment. However, for some reason the Government says that it does not have statistics of the tax collected in each State. I maintain that New South Wales is the only State from which this income is derived, and it is derived from the New South Wales clubs only because the Australian Hotels Association put pressure on the Government to tax the clubs.

From an examination of telephone directories I have ascertained that in Queensland there are 45 social clubs in Brisbane alone, quite apart from the country areas. In Victoria there are 156 metropolitan clubs. I have excluded cricket, football and golf clubs because the Treasury does not tax such organisations. However, registered clubs have been taxed and this taxation is definitely discriminatory against New South Wales and its 900 clubs. The Treasurer should study the Constitution, particularly those sections dealing with the powers of the Parliament. Section 51 states -

The Parliment shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to-

Taxation; but so as not to discriminate between States or parts of States.

If the Treasurer is taxing the clubs in other States, the statistics should be available for the information of members of the Parliament. We should not be treated with contempt. If we ask a question we should get an answer. I want to know the true position, and the Treasurer should give the answer. Last year the Government compelled the registered clubs in New South Wales to pay sales tax on ice making machines that they purchased for the convenience of their members, but when these machines are purchased by hotels they are not subject to sales tax. The Returned Servicemen’s League of New South Wales made representations to the Commissioner of Taxation on this subject. It maintained that the imposition of sales tax represented discrimination against its clubs in favour of hotels. The League received a reply from the Department. The Taxation Branch adopts the policy that theicemaking machine is an aid to manufacture only in hotels and not in clubs. An icemaking machine serves the same purpose in a club as in a hotel. It makes the ice that is put in drinks sold to members.

After representations were made to the Commissioner of Taxation by the registered R.S.L. clubs association, a reply was received which mentioned that clubs bring to account for income purposes only a small percentage of their turnover as income from sales to non-members. I suppose the Commissioner of Taxation did not realise that people who go to these clubs as visitors purchase beer on which excise duty is paid, that they purchase spirits on which excise duty is also paid, that they drink cordials containing the ice made by the icemaking machine and that they also purchase cigarettes on which excise has to be paid. So the Government derives a certain amount of income by way of taxation from every non-member who visits a club. The letter also stated -

Icemaking machines would be used principally in the making of ice for sale to members and not in the making of ice for sale to non-members. The Commissioner has decided that exemption as aids to manufacture is only allowed where the relevant goods are for use principally in the course of carrying on a business and he has directed that in the circumstances exemption will not apply to icemaking machines for use by R.S.L. clubs.

This reply shows clearly that one section of the community, the members of the Australian Hotels Association, is being given favouritism. The persons running hotels as businesses and making money from the sale of ice are receiving preferential treatment. If this is not discrimination I do not know what is.

I think the Treasurer (Mr. Harold Holt) should look closely at this matter and I suggest that both the Deputy Leader of the Opposition (Mr. Whitlam) and I are entitled to an answer to the question we asked. I think the Treasurer has openly dodged the issue and treated us with contempt. If any member of this Parliament asks him a question he should make sure that a decent reply is given. I hope that in the near future the Deputy Leader of the Opposition and I will receive a satisfactory reply to our question.

Progress reported.

page 2346

TARIFF PROPOSALS 1965

Customs Tariff Proposals (No. 8)

Mr BURY:
Minister for Housing · Wentworth · LP

.- I move- [Customs Tariff Proposals (No. 8).]

  1. That the Customs Tariff 1965, as proposed to be amended by Customs Tariff Proposals, and as proposed to be amended by Customs Tariff (No. 2) Bill 1965 introduced into the House of Representatives on the twenty-fourth day of August, One thousand nine hundred and sixty-five, be further amended as set out in the Schedule to these Proposals and that the amendments operate on and after the twenty-ninth day of October, One thousand nine hundred and sixty-five.
  2. That in these Proposals, “ Customs Tariff Proposals “ mean the Customs Tariff Proposals introduced into the House of Representatives on the following dates: - 17th August, 1965; 18th August, 1965; 16th September, 1965; 30th September, 1965; and 12th October, 1965.

The Schedule - continued

  1. Omit sub-items 62.02.2 and 62.02.3, insert the following sub-item:-
AMENDMENTS OF PART II. OF THE THIRD SCHEDULE TO THE CUSTOMS TARIFF 1965 Customs Tariff Proposals No. 8, which I have just tabled, relate to proposed amendments of the Customs Tariff 1965 which will operate from tomorrow morning. The amendments will give effect to the Government's decisions following receipt of the Tariff Board's reports on cotton fabrics and on man-made fibre fabrics. In each report the Board recommended uniform rates of duty - 55 per cent, ad valorem under the general tariff and 47* per cent, under the preferential tariff. This would simplify the administration of the major part of the textile tariff where we now have a multitude of tariff items each with different rates of duty. Although the Government has accepted in principle the recommendation that a general tariff of 55 ad valorem be applied to woven fabrics of cotton and of man-made fibres, it has decided to introduce alternative fixed rates of duties on several types of fabric. In the case of cotton sheeting there is a wide variation in the quality and price and the recommended ad valorem duty could become unnecessarily harsh on some imports. To overcome this there will be an upper limit of 2s. 6d. per square yard in the duties on this fabric. The general tariff rate of 55 per cent, ad valorem as recommended by the Board will apply to other cotton fabrics weighing more than 6 ozs. per square yard. The Board's recommendation on manmade fibres would have far reaching effects on the local industry. It would reverse the present pattern of protection which has been in force for some years and which encourages local production of the lower value fabrics - for which long runs are available - and discourages manufacture of the higher priced materials. The recommended duties amount to drastic reductions in the protection on the lower value fabrics and a substantial increase in protection on the higher value materials. As this might lead to a significant change in the industry's pattern of production, the Government was concerned that the industry should have time to make any adjustments it considers necessary without undue dislocation of production. Accordingly, it is proposed that the duties on man-made fibres will have a minimum rate of 2s. per square yard. An upper limit of 5s. per square yard is also proposed for all man-made fibre fabrics except some special fabrics used principally for furnishing. Althougha reduction in the present duties on lower value fabrics and an increase in duties on the higher priced materials is proposed, the variations from the present levels of protection will be somewhat less than those recommended by the Board. The industry, however, will again be reviewed by the Tariff Board within two years. In the case of the preferential tariff rate, international commitments prevent adoption of the uniform level of 47½ per cent, ad valorem recommended by the Tariff Board. Honorable members will, of course, be aware that we have given undertakings under the General Agreement on Tariffs and Trade and under bilateral trade agreements which commit us on the preferential margins in our tariff. As a consequence it is proposed that the preferential rate be 45 per cent ad valorem on some cotton fabrics, 52½ per cent, on other cotton fabrics and 55 per cent, less 2½d. per square yard on man-made fibre fabrics, instead of the rate of 47½ per cent, recommended by the Board. The introduction of the new duties has made necessary considerable re-drafting of the tariff and will make it much easier to interpret and to administer. The number of separate tariff sub-divisions, for example, has been reduced by about one hundred. A summary of the proposed amendments is now being distributed. I commend the proposals to honorable members. Debate (on motion by **Mr. Clyde** Cameron) adjourned. {: .page-start } page 2353 {:#debate-33} ### TARIFF BOARD Reports on Items. **Mr. BURY** (Wentworth- Minister for Housing). - I present reports by the Tariff Board on the following subjects - Woven man-made fibre fabrics and interim report under the general textile reference on woven fabrics wholly of or containing not less than 20 per cent, by weight of man-made fibres. Woven cotton fabrics, bed linen, etc., and interim report under the general textile reference on woven cotton fabrics, etc. Ordered to be printed. {: .page-start } page 2353 {:#debate-34} ### APPROPRIATION BILL (No. 1) 1965-66 In Committee. Consideration resumed (vide page 2346). Second Schedule. Department of the Treasury. Proposed expenditure, £148,070,000. Advance to the Treasurer. Proposed expenditure, £10,000,000. {: #debate-34-s0 .speaker-KUX} ##### Mr STEWART:
Lang .- In December 1962 the Parliament appointed a joint select committee to investigate and report upon the publication and printing of Parliamentary and Government publications. The committee consisted of five members of the House of Representatives - the honorable member for Ballaarat **(Mr. Erwin)** as Chairman, myself as Vice-Chairman, and the honorable members for Hughes **(Mr. L. R. Johnson),** Wimmera **(Mr. King)** and Sturt **(Mr. Wilson)** - and Senators Breen, Marriott, Murphy and Toohey. The Committee met over a number of months and finally submitted a report in May 1964. That report, apparently, has just been put into a pigeon hole and little, if any, notice of it has been taken. I raise the subjecttoday because I feel that the work of the Committee deserves greater consideration than it appears to have received. The recommendations of the Committee were made in an effort to improve the printing and publication of Commonwealth documents. The Committee recommended that a central Government publishing office be established. It made recommendations on the style and format of papers, on the size of Commonwealth papers, the quality of Commonwealth papers, the sale of publications of Commonwealth departments and the Parliament, the distribution of those documents, the establishment of a mail order service, the regular publication of lists of publications of the Commonwealth, the establishment of book shops in various capital cities of the Commonwealth, the setting up of repository libraries so that Commonwealth documents might be forwarded to them for record purposes. It was suggested also that arrangements be made with overseas countries for the supply and distribution of our documents in those countries. There were recommendations on the Parliamentary paper series, certain recommendations about ministerial papers and the distribution of those papers and of treaties and various other matters. All these recommendations were made after careful deliberation by the Committee, having in mind the lack of co-ordination that existed, and still does exist, between Commonwealth departments on the printing and distribution of their publications. Each year the Commonwealth publishes more than 2,000 separate public documents at an annual cost of about £4 million. The publications of the Commonwealth vary extensively in size and there is very little control over publications by departments. There is not one single office in the Commonwealth which is responsible for the publishing of Commonwealth documents. There is no uniformity of style or size, nor is there uniformity in the preparation of copy. There is no control over the costs of publication. There is no central distribution of publications and very little publicity is given to the availability of important and interesting documents which come before the Parliament and which are issued by the various Commonwealth departments. The Committee reported also on the difficulty that the Government Printer has in maintaining control over the printing requirements of departments and also, at the end of each financial year, being able to cope with all the work that is placed before him by the various departments. Departments were having their printing done in various ways. Some used outside printers. Some used State Government printers. Some even had their own printing unit. Although the Treasurer **(Mr. Harold Holt)** and the Government Printer were supposed to have an overall control of the printing of documents, the system fell down in practice and it was a rather haphazard system which existed. The Committee investigated all these points and made its recommendations, some of which I have read to honorable members. I feel, and I am certain that other members of the Committee feel, that as the report has now been in the hands of the Government since May 1964 it should have received more consideration than it has received and some of the recommendations should have been implemented. Their implementation would bring about greater efficiency in distribution and would give greater control over the printing of documents. There would be an indication to the public of the number of publications which are of interest and people would know where they could be obtained. One recommendation was for the establishment of book shops in capital cities. It was suggested that a trial be made in one capital city and, if the scheme proved satisfactory, that it be extended to all other capital cities and, eventually, to some of the larger country towns. We would not be doing anything unique in establishing these book shops because in the United Kingdom, Canada and New Zealand this practice has been in operation for a number of years. About three or four years ago the New South Wales Government moved its Government Printing Office from one of the back streets of Sydney to a central position in Sydney where it now sells New South Wales Government publications. In a period of four years the sale of such publications from that office trebled. In 1962-63 the office received £30,000 from the sale of publications. As I said earlier, the Commonwealth Government publishes more than 2,000 publications a year. Perhaps some of them could not be sold, their main purpose being for advertising and to provide general information, but it does not take much thought to appreciate the number of documents that would find a ready market throughout Australia. I refer particularly to statements and declarations made on subjects such as external affairs, the report of the Vernon Committee of Economic Inquiry, reports of royal commissions that might be held or inquiries into education, the annual reports of the Australian Broadcasting Control Board, financial statements that are released by the Treasurer and policy statements that might be released by departments. All these things have a ready demand and all honorable members know how often we are asked by interested people to obtain a copy of a certain publication or to obtain a copy of some act of Parliament. People come to us generally because they do not know where these things can be obtained. Admittedly, in the Sub-Treasury, in some little back room in one of the Treasury offices, these publications are on sale. But there is no real control over them. No effort is made to keep all publications in stock and no publicity is given to the fact that Commonwealth documents are available for sale. The Committee expected that this recommendation would have been Immediately Implemented by the Government because if this were done not only would the public be given an opportunity to obtain these documents but also the Commonwealth would receive income from the sale of documents. This is a matter which the Treasurer and his officers should look into with a view to implementing immediately the Committee's recommendation. The Committee recommended that parliamentary papers should be of uniform size. At present the Government Printer has to carry stocks of paper in no fewer than 15 sizes in order to meet the various departmental and parliamentary requirements. Commonwealth documents are published in such sizes as foolscap, quarto and octavo. All honorable members see documents in these various sizes in the course of their parliamentary duties. The Committee recommended that parliamentary documents should be printed in what is known as demyquarto size, which is 10) ins. by 8* ins. The report of the Committee was printed on paper of this size in order to give an indication of how publications in this size would look. One reason why the Committee recommended a standard size of paper was because of the need to store Commonwealth publications for future reference and research in offices and libraries. With publications at present appearing in foolscap, quarto and royal octavo sizes it is almost impossible to arrange library shelves in order to store the publications neatly. To facilitate storage the Committee recommended that all publications be in demy quarto size. The Committee settled on this size because it is most suitable for storage purposes. Commonwealth departments, including the Treasury, which make wide use of statistical tables, suggested that demy quarto size would be adequate for the publishing of statistical information. This is the size of paper used also by the United Nations and other international agencies. I raise this subject today because the time spent by members of the Committee in inquiring into these matters deserves greater consideration than it appears to have received. I am certain that eventually the recommendations will be accepted. There may be room for argument about one or two of them, but the intention of the Committee was to make more efficient the printing and distribution of parliamentary and Commonwealth publications. I urge the Treasurer to see that his departmental officers do not allow this report to remain in the pigeonhole. I trust that the recommendations will not be forgotten, because many of them are worthy and should be implemented. Proposed expenditures agreed to. Proposed expenditure - Department of Works, £14,156,000- agreed to. Department of Defence. Proposed expenditure, £10,444,000. Department of the Navy. Proposed expenditure, £95,467,000. Department of the Army. Proposed expenditure, £128,916,000. Department of Air. Proposed expenditure, £108,649,000. Department of Supply. Proposed expenditure, £36,235,000. Defence Services- General Services. Proposed expenditure, £1,899,000. {: #debate-34-s1 .speaker-K97} ##### Mr GALVIN:
Kingston .- The nation's defences must be so arranged that the intention of Australia to defend itself to the limit of its ability is clear beyond all doubt to our own people, to our allies and to any potential aggressor. Those words are taken from the defence policy of the Australian Labour Party. Our policy also is for our defence forces to be equipped with modern weapons of war, having sufficient range and strike power to deter aggressors. We would all agree that our intention to defend ourselves to the limit of our resources must be clear to the Australian people, to our allies and, what is most important, to any potential aggressor. Modern weapons of war are certainly needed if we are to deter a potential aggressor. May I here refer to some remarks that I made in the debate on the estimates for the Department of National Development. la that debate I advocated the immediate construction of nuclear power stations for the purpose of supplying power and for use in the desalination of water. The byproducts of nuclear reactors also would be valuable. Nuclear power would be of tremendous assistance in mining and tunnelling ventures and in removing overburden from development projects. May I hasten to assure you, **Sir, that** my remarks are connected with the Department of Defence. In my opinion development is inextricably linked with defence and I hope to show that defence can be used for development. Let me make it abundantly clear that although I advocate the immediate construction of nuclear power stations, I do not advocate their use in the production of plutonium for the manufacture of nuclear bombs. I hope to show that these reactors have a far more useful purpose than the manufacture of bombs. I admit frankly that once we have nuclear power stations we would possess the potential to make the bomb, but we should not delay the development of this nation and the provision of modern methods of defence simply because we fear the manufacture of the bomb. Recently the honorable member for Macquarie **(Mr. Luchetti)** and the honorable member for Eden-Monaro **(Mr. Allan Fraser)** urged the Government to make a decision about the future of the Snowy Mountains Hydro-electric Authority. Speaking in that debate the Minister for National Development **(Mr. Fairbairn)** said - >Do we have the constitutional authority to go into some part of some State and undertake a major work? As the matter of constitutional authority may be raised against my advocacy for the construction of nuclear power stations I immediately state that the defence power should be invoked. If this were done arguments that the Government was exceeding its constitutional authority would not be valid. It is only a short time since the Prime Minister **(Sir Robert Menzies)** stated that this nation was at war or at least engaged in what amounted to a form of war. Unquestionably if we can develop northern Australia and populate it we shall help the nation's defence. Only when we can populate the north shall we have adequate defences there. Once Australia possesses nuclear power we shall have a sufficient deterrent against any possible aggressor. A likely aggressor would know that nuclear power stations, although they functioned for the peaceful development of the nation, could be swiftly converted to the manufacture of modern and powerful weapons if the need ever arose. The Australian Labour Party believes in the creation of a nuclear-free zone and has called on the Australian Government to take the necessary steps to initiate a conference of the Antarctic Treaty powers, China, Japan, India, Pakistan, Ceylon, Burma, Malaysia, Thailand, Laos, Cambodia, Vietnam, the Philippines, Indonesia and all other countries in Africa and South America for the purpose of making the southern hemisphere a nuclear-free zone. This does not mean that we are opposed to the use of nuclear power for developmental purposes. It does not mean that we believe that if we fail to convince the nations mentioned of the wisdom of the establishment of a nuclear-free zone Australia should stand alone. The fact that we are opposed to the manufacture and testing of nuclear bombs does not mean that we oppose the use of nuclear energy for the purpose of providing power and water supplies. The water supply for the Woomera rocket range is piped from the Murray River. A few days ago the Minister for National Development warned the Parliament that water restrictions may well be applied in South Australia shortly because of the low level of water in the Murray. The defence establishment at Woomera, as well as the north of South Australia, could have ample supplies of water if a nuclear power station were constructed at Port Augusta. Electric power could be supplied to complement the supply from the existing power station, and salt water from the ocean could be desalinated and piped to Woomera. Plutonium developed by such a power station could be used for the production of explosives and these could be tested by the Army on its training manoeuvres in Queensland and the Northern Territory. Such explosives could well be used for driving tunnels when required. It is possible that we could redirect the flow of water in some of the big streams in northern Australia by the use of explosives that could be derived from a nuclear power station. Our possession of nuclear power would certainly deter any aggressor and I believe that if we possessed the potential that nuclear power would give us we would win the respect of our allies. Already Japan, India, Pakistan, the Philippines, Malaysia end China either possess nuclear power plants or have in hand plans for their construction. China possesses the atomic bomb and Indonesia has claimed that it will explode one within a short time. In my opinion Australia should have the potential to manufacture modern weapons of war but we should not entertain the idea of manufacturing atomic weapons of any kind. The manufacture of such weapons is not desirable or necessary for us. We already have powerful allies who can give us necessary assistance if the need arises, though we all hope that it never will. Having said these things, **Mr. Chairman,** let me mention a matter that is of great concern to the Returned Servicemen's League, particularly its National President, as well as to many people in Australia. I refer to the apathy towards defence that appears to exist throughout the nation. I believe that the National President of the League was quite right when he said that there is apathy towards defence in this country. Probably all of vs in one way or another are responsible for the existence of this apathy. The Government certainly must take its share of the. blame. Surely it has a responsibility for convincing the Australian people of the need for adequate defence. In the Budget debate we were told that the additional taxation being imposed was necessary to finance defence projects. The Government proposes to finance our defence needs by an additional excise of 3d. on a packet of cigarettes, 3d. on a gallon of petrol and the like. I venture to say that the money earmarked for defence in the Estimates for this financial year will not be sufficient. The present Government is the first that has had to face up to the need to provide in peace time defences on the scale now required. But any government worth its salt would tell the people bluntly and plainly where we stand. The situation should be put plainly to the people. They should be told that if they consider that we need to make a greater defence effort - if they believe that Australia should be defended - the defence programme will cost them more money and that you, **Sir, I** and all the other taxpayers in Australia will have to pay the additional taxes required. {: .speaker-0095J} ##### Mr Howson: -- Does the honorable member consider that we should spend more money on defence? {: .speaker-K97} ##### Mr GALVIN: -- I would not hesitate to impose higher taxation if the defence needs of this country demanded it. I believe that the Australian people would willingly pay whatever is necessary for their defence if the Government came clean, told them exactly what the position was and convinced them that the nation needed a defence programme calling for additional expenditure. We should be conscious of the fact that the Australian people have never had to live with the fear of some future war. The people of European countries have lived with such a fear for years. With the changing state of the world the time has now arrived when we shall need regular Defence Forces of increasing strength. This brings me to a point that I particularly want to discuss. However, my time is running out and I shall be prevented from saying much that I should like to have said. I shall have to deal with this matter very briefly. I hope that the Minister for Defence **(Senator Paltridge)** and the Ministers in charge of the respective Services will embark on a programme to bring the accommodation provided for our regular forces up to the same standard as the accommodation provided for national service trainees. I give the Service Ministers full marks for the standard of accommodation provided for national service trainees. If we are to attract recruits to the regular forces the Service Ministers must hasten to complete the job of reconstructing existing accommodation and building new, modern accommodation for members of the regular forces. National service trainees are receiving the best possible treatment in terms of accommodation. This is as it should be. But they are getting it only because national service training is a hot political issue. The Minister for Labour and National Service **(Mr. McMahon)** realises how politically hot this issue is, and he is taking no chances. He has sufficient influence in the Cabinet to see that the best possible accommodation is provided for national service trainees. As I have said, it is only right that they should have accommodation of the highest possible standard. The various Service Ministers should get on with the job of bringing up to a reasonable standard - only the best is reasonable in this instance - the accommodation provided for the members of the regular forces. I need mention only one defence establishment as an example - the Air Staff College at Fairbairn, in Canberra. Accommodation standards there are a long way below what they ought to be. I know that the responsible authorities are engaged in bringing up to date much of the accommodation provided for members of the Regular Army. The best possible accommodation has to be provided for the members of all the Services. The standard provided for national service trainees should be the norm throughout and all Service Ministers should set out to achieve the same standard for every Service. Before resuming my seat I should like to mention one more matter, **Mr. Chairman.** I suggest that we embark on a Commonwealth aircraft production scheme - a scheme in which all the Commonwealth countries would take part. During the last war, the Empire Air Training Scheme in Canada was a great success. The United Kingdom is losing such skilled men as designers to the United States because of lack of support for the United Kingdom aircraft industry. Surely all the Commonwealth countries could pool their resources. Perhaps the various countries such as the United Kingdom, Canada, New Zealand and Australia could manufacture different components. Let us establish an adequate Commonwealth aircraft production scheme which will make us independent. Irrespective of how strong our ally the United States of America is, we do not want always to be entirely dependent on the United States. If we had such a scheme, then we of the Commonwealth countries would know that we would always have our own equipment. {: #debate-34-s2 .speaker-KIW} ##### Dr MACKAY:
Evans .- I congratulate the honorable member for Kingston **(Mr. Galvin)** on some of the constructive things he had to say. His comments were quite refreshing, coming from his side of the Committee in a debate such as this. But perhaps it was not unnoticed that the only member on the front bench of the Opposition who listened to him was the honorable member for Melbourne Ports **(Mr. Crean).** This afternoon I wish to address my remarks to the astonishing change that has taken place in the defence scene in Australia in the past two years, and to the growing confidence with which we face the future. The Royal Australian Air Force today boasts some of the world's most up to date types of aircraft; the national service training scheme is swinging, remarkably free of bugs, into operation in a way that will provide very significantly for the future; and the Royal Australian Navy has become a significant anti-submarine force, which is its primary role for the future. Despite this, however, there have been ridiculous and out-dated controversies particularly about the role of an attack aircraft carrier in the Royal Australian Navy. I find myself wondering where this kind of attack originates, and my conclusion is that it largely stems from a daily newspaper in New South Wales which seems to be adopting almost hysterical methods to make a point. For example, Rear-Admiral Morrison, on his return from the first convoy to Vietnam, was asked during a Press interview a purely hypothetical question about defence against air attack. He gave the proper answer, but this was misconstrued by the Press, and by radio and the television commentators as indicating that he was criticising the format of the fleet and the role of his particular ship in terms of air defence. It is said that the French lost Indo-China because they fought their battles on the pattern of previous wars rather than current ones. I believe that we in Australia have to be on our guard against any anachronistic clamour directed towards the acquisition of materials which would be related more to situations of a previous war than future wars. Those are strong words, and they are meant to be. I speak not only as a member of Parliament but also as a former naval officer. Nobody holds the Navy in higher regard than I do. I am doubly reinforced in what I say because I believe that, not only has the Navy not sought an attack carrier but it is unlikely to do so even if increased funds were to be available. Let us look at the problem squarely. We are told that we need an aircraft carrier to protect our fleet at sea. First of all, then, we ask: To protect it from whom and from what? There are two possibilities. The first is to protect the fleet from carrier based planes from another navy and the second to protect it from land based planes from some other source. What countries have aircraft carriers today? Has Indonesia? No. Has China? No. Has Russia? No. Has Japan? No. Well, who has carriers in the fleets of the world today, particularly in the Pacific? Argentina has one ex-British Colossus class carrier of 14,000 tons. She was laid down in 1942 and she is called " Independencia ". She takes aircraft with landing speeds of up to 60 knots. France may be looked upon as still being a Pacific power. She has two 22,000 ton "Clemenceau" class carriers and one of the ex-British Colossus type similar to that possessed by Argentina. The Netherlands also still has an interest in this part of the world. She has one of these ex-British Colossus type carriers of 1942 vintage. Brazil also has one. Canada has one aircraft carrier virtually identical with "Melbourne", and that is in the Atlantic. So, of all the naval powers of the world, only the United States and the United Kingdom possess modern attack carriers. Need I say more, then, about the dangers of an attack by carrier borne planes on any Australian fleets? So the only other possibility against which we must defend our fleet is an attack from land based planes. Such an attack can take place only in a strictly limited area because of the limited flying range of planes and because any such operation against the fleet would have to be of a search and destroy nature and would have to be based on a patrol type of operation. So, as one looks to the countries north of Australia to see from where such land based air attacks could emanate, one looks to Indonesia, perhaps as far as Malaysia - if its politics or occupancy were to change - and perhaps as far as Indo-China, but not much further. So the only realistic query relates to Indonesia which has no supersonic bombers and which lacks the industrial and economic structure to make the future look very threatening. Let us pass over all these arguments which, to me, are significant and comprehensive, and let us suppose that nevertheless, we were to go ahead right now and order a carrier, or carriers - I am sure that one on its own would be too vulnerable and inadequate. It would take six years to obtain delivery of a carrier even if the keel were laid down immediately and plans and specifications were immediately available. She would then have a possible life of between 20 and 25 years. Almost before she was in commission, the whole pattern of naval war fare would have changed. Global satellite observation is just immediately round the corner and this will remove almost entirely from naval operations the surprise element that has existed from time immemorial. This surprise element, I might add, is vital to the operations of a carrier force and its absence will make these huge ships all the more vulnerable' targets for nuclear armed missiles and submarine attacks. In purchasing such a carrier force, Australia would spend some £400 million on ships and equipment which would be already obsolescent and which could be blotted out in a single strike, taking to the bottom some thousands of our sailors and trained airmen, to say nothing of a substantial part of our protection against air attack. In spite of these arguments, there may still be a lurking suspicion in the minds of some people that this is a risk which, nevertheless, we have to take. It was in my mind until I heard of what I believe is the answer for Australia - virtually a land based aircraft carrier. At this moment in the United States of America, the four largest suppliers of aluminium, Kaiser, Alcoa, Dow and Harvey, who produce some 10 million tons of aluminium a month, have been totally requisitioned by the United States Navy on behalf of the three armed Services, for the sole purpose of supplying those Services with the latest extruded aluminium portable airfields. These airfields can be set up on virtually any type of terrain, from sand to swamp, from barren rocks to jungle, in a matter of days. Let me now read a few paragraphs from an. important article which appeared in the New York " Times " of 7th June of this year. The date line is " 3rd June, South Vietnam ". The article reads - >A large United States Marine Corps air base has been put into operation under combat conditions in less- than a month in this desolate coastal swatch of rolling sand dunes and scrub pine. > >Seabees - men of the Navy's Mobile Construction Battalion 10 - are still working at top speed to complete the airstrip, but jet fighters of Marine Air Croup 12 are already putting the metal mnway to limited use. > >Above the roar and clatter of the seabees' earthmoving equipment, 105-mm. and 8-inch howitzers boom in support of Marine patrols trying to push the Vietcong back from the high hills that overlook the west side of the base. > >Technically the Marines are enlarging their " tactical area of responsibility." The actual object of the operation, however, is to speed the day when Marine aircraft can get on with their primary mission: Close support of Marine infantrymen in combat. > >Three obstacles must be overcome before that goal can be reached. > >The airstrip, destined to be 8,000 feet long, was opened to some fighter aircraft two days ago when its surface of interlocking aluminium panels passed the 3.300-foot mark. The field will probably operate fully in a few weeks as a base for two squadrons of A-4E Skyhawk jet fighter-bombers. This is remarkable because of the recent announcement with regard to the reequipping of our Navy. The article continues - >Each Skyhawk can carry six 500-pound bombs and twelve 250-pound bombs, or other weapons in similar amounts. > >Because the runway is still too short for normal operations, the Skyhawks use jet-assisted take-off devices- known as JATO- -to get into the air under full loads. When they land, their taxiing is stopped by arresting devices similar to those used by planes on aircraft carriers. That quotation is tremendously important to Australia because this type of operation :s so suited to our own terrain. This revolutionary type of matting can give us airfields at will in a matter of days throughout the enormous wastes of Northern Australia. These airfields will take every known type of aircraft used by the Air Force and, more importantly, by the Navy, which have tyre pressures up to 400 lb. a square inch. These matting airfields rival concrete airstrips in efficiency. They could be laid down on our network of beef roads and so transform the whole strategic concept of the north of Australia. In New Guinea this matting could make those airstrips which are so close to the West Irian border fully operational for every type of aircraft that the Royal Australian Air Force uses. We are making this product in Australia now at prices which are making conventional airfields economically outdated. The current price, for instance, of AN2 matting, now standard for all United States Armed Services, is £2 10s. per square foot. Aluminium, honorable members should remember, is one thing we have aplenty in Australia. So, to conclude and to answer the Sydney newspaper directly: There is no "Carrier Muddle", as the leading article of today's date in that newspaper claims. There is no intention either among the Service experts of the Navy or *in* the Go vernment to revert to the idea of equipping the Royal Australian Navy with an attack carrier. On the contrary, there is every indication that our defence decisions have been eminently sensible, for the submarine is emerging as the greatest naval threat to our lifelines across the oceans. With the acquisition of the Skyhawk aircraft, and with the Ikara missile which, to our great credit, we are producing here, the Navy will be more than ever in a position to deal with the submarine threat which is very present and very real. It can cope also with the special problems presented by the Indonesian Navy, such as the missile equipped light surface vessels which have a speed of around 40 knots. Also, the Australian DDG's would be able to meet the threat of the one Indonesian cruiser, the " Irian ", which at present has a slight advantage in the gunnery field. If Australia looks like getting another carrier type ship in the future it is my hope that it will be another anti-submarine vessel like H.M.A.S. "Melbourne". Submarine warfare is emerging as the key concern for the future Navy. Most of our critics are still fighting the last war. In fact, it is a wonder we are not being asked to increase our cruiser fleet with our ability to produce our own A-K line of cruisers to protect our battle fleet at sea. I end by congratulating the Government on giving Australia formidable defences in such volume and at exactly the time when they are most likely to be useful. {: #debate-34-s3 .speaker-JAG} ##### Mr CREAN:
Melbourne Ports **.- Mr. Chairman,** between now and approximately 11 o'clock this evening, with two hours off for the dinner adjournment, this Committee will contemplate the expenditure of £382 million for defence. First I should like to ask honorable gentlemen whether they seriously believe that an intelligent assessment of our defence expenditure can be made in that time and by this sort of machinery. I have listened with interest to the honorable member for Evans **(Dr. Mackay)** who has just spoken and who has now left the chamber. Even if I were to agree with what he said, how does this Committee assess the defence effort in terms of money, which is, presumably, what we are supposed to do? I find great difficulty, every time these defence estimates are considered, in answering this question: Can we really believe we are getting value for our money? Who can say "Aye" or "Nay" in these matters? I think that the presentation of the material explaining the defence estimates is much better now than it was, say, 10 or 12 years ago. I can remember as long ago as that suggesting that I could not see why it would be any great breach of top secrecy for us to know how many aircraft of a certain type or how many ships of a particular kind were available. I am grateful to find that in the Defence Report, 1965-66, the whole composition tracing the potential of the Navy for the next two or three years is set out. I cannot see any harm in this sort of documentation. There are attempts to break up the expenditure in the estimates into what is perhaps a more comprehensive form than the mere document that is before us. This is in the form of charts and diagrams. Again, I find this of some value also. Who is able to say that the Army should have a certain expenditure on manpower relative to its total expenditure? Who is to say how much should be expended on building and maintenance or how much should be spent on the things that frighten an enemy? In the long run it is surprising how little of this total of £382 million is for capital equipment for the Services. I am not cavilling at that. All I am suggesting is that I doubt whether we have proper indexes, if that is the right description, to enable us to assess with any degree of finality whether a certain expenditure is right or wrong. I know there must be considerable argument between the various departmental heads as to whether there ought to be expenditure on a few more aircraft or one more ship or some kind of Army equipment. These are matters of policy. I suppose they are matters also of strategy consonant with the estimates. How would we as members of this Parliament find out the sort of thing that the Minister for Air **(Mr. Howson)** was able to find out about a company in England, engaged in defence contracting, which apparently overcharged the British Government? How do we know whether some of the people who supply defence equipment to the various branches of our Services are charging too much or too little for that equipment. I was interested to hear the Treasurer **(Mr. Harold Holt),** in the course of the debate on the Treasury estimates, say that one of the reasons for the large inflow of imports into Australia last year was the demand for defence equipment purchased overseas. As I see it, no figure appears in these estimates on which I or anybody else could ask: " How much of this Defence expenditure is in regard to the purchase of capital equipment from overseas? " I should think that that is a deficiency that exists in the figures as they are set out for us. We discussed some time ago when debating other estimates the necessity for certain committees to be set up. I suggest that it is worth considering, at least, whether there ought not be a defence estimates committee which could bring before it officers from the Departments and perhaps ask them the sort of questions that both the honorable member for Kingston **(Mr. Galvin)** and the honorable member for Evans have raised this afternoon, which cannot possibly be canvassed in the limited time of 15 minutes which is allotted to speakers during each section of the Estimates debate. At least I make that suggestion because I think it is obviously not possible to assess properly the allocation of the expenditure of £382 million in a matter of a few hours. This is something that is not good enough. I have said that we have no evidence of how much of the expenditure on capital equipment for our Forces is being incurred overseas. I hope that by the end of the debate the Minister will be able to produce that evidence for the Committee. This raises the very interesting question of why the things that are being procured overseas could not be produced in Australia. I happen to have in my electorate a naval dockyard which is quite a handsome establishment. During the war it had a very good record for the production of ships for the Royal Australian Navy. At the moment it is in the course of constructing one vessel and I understand that that is the last project about which the dockyard has any definite programme for the future. It has one or two refitting jobs in view, but no project of the kind I have just mentioned. I hope that when the Minister sums up later he will be able to indicate what the programme for Williamstown dockyard is in the foreseeable future. A deputation from the dockyard recently came to Canberra. It comprised men who have a sense of pride in their trade. The men at Williamstown think that because of their circumstances and experience they can build ships better than they can do anything else, but they have some apprehension as to the continuity of the flow of work in the future. I have heard this fear described on a previous occasion as a sort of creeping paralysis. The men feel that the faster they work and the nearer a particular jobs draws to completion the quicker they are putting themselves out of work. That is not a satisfactory state of mind for people to have. The other matter on which 1 should like to comment concerns the estimates for the Army. I happen to have also within my electoral boundaries the Williamstown rifle range. I do not know how many Ministers for the Army we had had in the course of 14 or IS years, but at least on every occasion when a new Minister has arrived I have endeavoured to direct his attention to the fact that however useful the Army might think the Williamstown rifle range is, the citizens of Williamstown think the area would be much more useful as a piece of real estate that could be used for home development in an area that has not much other scope for expansion. I am no great strategist. I have never been a shooting man myself, but I sometimes wonder whether in the year 196S the sort of rifle range that was established in 1915 is still necessary. 1 should think that now it would be almost possible to have a shooting gallery where the results of shooting accuracy could be assessed by some sort of electronic device and the Army could obtain the same results as by having men shoot at targets at distances of 400 yards, 200 yards or 100 yards, as the case may be. Is the practical need for a rifle range still the same with the rifles that are used today when compared with the .303 rifles that were used many years ago? These again are technical problems. One previous Minister for the Army said that if the people in Melbourne could find an alternative site for a rifle range the Army would be willing to consider vacating Williamstown. I hardly think that it is the responsibility of the people of Melbourne to do that, when a rifle range is situated almost in the centre of the city. It is certainly much closer to the centre of the city now than when the range was first established. I think that there is a good case for suggesting that if rifle ranges are still neces sary they ought to be established further away from the residential areas than they are at present. There are difficulties at Williamstown experienced even by people who like to go fishing. The period in which they can go fishing is restricted by the shooting that goes on at the range. There are long periods when the range is not used 'at all. In those periods it is easy for unauthorised persons to go on to the range, and I think it is fairly difficult for the Army to police an area of some square miles when the range is not being used for its legitimate purpose. These are all questions which 1 hope the present Minister will look into. The first question for him to consider is whether it is necessary for the Army to have a rifle range. Secondly, if it is necessary to have a rifle range, does it still have to be at Williamstown? The Municipality of Williamstown hopes that the range will be established somewhere else, as the municipality could use this very desirable area for an alternative purpose. I leave it at that, having directed the attention of the two Ministers concerned to my particular local problems - the rifle range and the dockyard. I hope also that among themselves the Service Ministers will consider the larger question of whether the existing machinery for evaluating the Defence estimates is satisfactory. I certainly do not think it is. I hope that some attempt will be made to improve the machinery and to improve the adequacy of the consideration of the Defence estimates by the Parliament. Theoretically we are supposed to know, when we sanction expenditure, exactly what that expenditure is for. At least we should have a reasonable idea, not in a vague sense but fairly specifically, that the expenditure will give value for the purpose for which it is allocated. I have some difficulty in arriving at an honest answer to some questions on Defence expenditure that need to be asked. {: #debate-34-s4 .speaker-QS4} ##### Mr Malcolm Fraser:
WANNON, VICTORIA · LP -- The honorable member for Kingston **(Mr. Galvin)** who opened the debate on the Defence estimates gave the appearance at least of being confused as to his objectives. As I understood him, he made it quite plain that we should establish stations in Australia for the production of nuclear power. He then went on with some talk about a nuclear free zone in the southern hemisphere, a proposal which is known to be completely impossible in view of the attitudes of other countries. Surely, in talking of nuclear power stations in a debate on the Defence estimates the inference intended to be drawn is that we may want some day to use the byproducts of nuclear power stations for the production of nuclear weapons. It would have been of some help to the Committee had the honorable member for Kingston gone one step further so that the Committee could have judged whether his remarks would have been more properly related to national development with no particular relevance to the Defence estimates debate. I should like to spend a few minutes discussing some aspects of Army organisation and the ability of the Army to expand in times of more urgent necessity. To understand the structure of our Army at the moment, I think it is important to understand the role not only of the Australian Regular Army but also of the Citizen Military Forces and to see how these two parts of the one Army fit together. Our Army as a whole is, of course, designed to meet the needs of Australia's security in South East Asia and to make whatever contribution is necessary in the limited wars that can, have and are occurring in this region and which could develop into a much larger war. Indeed, it may be said that the war in South Vietnam has now almost gone beyond the stage of being a small limited brush fire war. It may be regarded now as something between the two. But the prime task of our Army, speaking of the one Army, is surely in the first instance to assist our allies who can be, have been and are under threat. By helping them we believe, and indeed we know, that we are helping ourselves and maintaining our own security. There has been and there still is a good deal of argument concerned with the kind and the size of Army that we should have in Australia. But it is important again to know that we are in a much better position than we ever have been except in times of full mobilisation either in the First World War or the Second World War. It is quite impossible, I believe, to make a comparison between the present situation, which is not really a time of peace, and the situation between the two Great Wars. We are in an infinitely better position in relation to the Army and to the threats that confront us than we were then. Although our Army is a one Army concept, it is one Army in two parts. They are the Australian Regular Army, which includes national servicemen, and the Citizen Military Forces. The role of the A.R.A., as I understand it, in the first instance is to make whatever contribution is necessary to a joint defence effort in Malaysia, Borneo or South Vietnam. Beyond that, its purpose is to provide a shield to protect Australia in a period of more acute defence emergency, pending the use of the C.M.F. and the Regular Army reserves in a defence emergency, or pending general molibisation in a situation of general war. If the prime purpose of the A.R.A. is to provide this kind of shield, it then becomes a matter of judgment to decide how large the Army should be at any one time. The Government's present target is an Army of 40,000, which includes an annual intake of something over 8,000 national servicemen, giving an effective Army probably of about 35,000 at any one time. Whatever the judgment needs to be concerning the size of the Army, there are two main limiting factors which govern the rate of expansion that may be envisaged. The first of these may be the availability of officers and non-commissioned officers to train national service recruits. It is obvious that, if the national service intake is too large, units of the front line troops would have to be disbanded to become an instructional corps or instructional group of some kind. That would destroy the immediate fighting ability of the Army. Beyond that there is a second limitation. We need Regular Army units to which trained national servicemen can be drafted after they have done their recruit and corps training. Therefore, there would be no point in having a larger number of trained servicemen than the Army could use in its regular front line units. For these reasons, therefore, there needs to be a balance in Army expansion between the numbers of national servicemen, the availability of officers and non-commissioned officers to train them and the availability and the number and size of regular units to which the trained national servicemen can be directed. The Army's capacity to grow within this framework depends very largely upon the extent and number of volunteers who can be attracted to the Army and upon the number of national servicemen who can be attracted to a more permanent Army career. It is encouraging to know that there are some signs from the national servicemen themselves that quite a number of them may consider joining the Army for a longer period after their national service. As the capacity of the Army to employ national servicemen and to train them expands, it is my personal view that the numbers of national servicemen should be increased from something over 8,000 a year up to a limit, in the present circumstances, of about 14,000 a year. But this would depend upon the number of volunteers who are coming into the Army. If the number of volunteers rose above the number that was expected, the number of national servicemen that may be required at any one time would be correspondingly lower. This would provide an Army of about 54,000 as opposed to the Government's present objective of about 40,000. 1 realise that a decision to go to the larger objective would be reached only over a period of time as the A.R.A. improved its ability to expand. If the security of Australia demands a standing Army of this size, there is no question but that Australia can afford it. If we regard the A.R.A. as the shield that must be ready at all times, pending the use of the C.M.F. or reserves in a period of defence emergency or pending full mobilisation through the C.M.F. in circumstances of complete warfare, I believe that a larger shield than the one envisaged at the moment should be seriously considered. The C.M.F. has, as I understand it, a dual role. It is there to be called up for full time service during a period of defence emergency and perhaps its major function is to provide a basis for rapid mobilisation if there is a full scale war. Mobilisation will probably come largely through the C.M.F. Three factors limit the speed with which mobilisation could take place through the C.M.F. They are the availability of trained officers and non-commissioned officers, the availability of equipment and the speed with which troops can be trained and put into the front line. In the time designed to be provided by the protective shield of the A.R.A., the availability of troops is probably the factor that is most easily overcome. There can be no excuse in circum stances of this kind, 1 believe, for a shortage of equipment. This means, if the analysis is correct, that the availability or lack of availability of officers or noncommissioned officers would be the most serious limitation and the most difficult to overcome in the circumstances of mobilisation that I have tried to outline. This means, therefore, that the prime purpose of the C.M.F. in the present circumstances should be to do what it can to concentrate on the training of officers and non-commissioned officers to provide the framework and the basis of the organisation that would enable a much fuller and more rapid mobilisation to take place, if it should be necessary. I believe that this is indeed what the C.M.F. is trying to do and what the Government's objective is in relation to it. If the analysis is correct, it is clear that the availability of trained officers, noncommissioned officers and instructors in the C.M.F. is much more important than mere numbers. I think this is a factor that has not always been taken into account by some of the critics of the present Army structure. These remarks must be taken in the context of having a sufficiently large, sufficiently adequate and sufficiently powerful front line shield provided by the A.R.A. It is worth noting that such a front line shield did not exist in 1938 or 1939 when a standing Regular Army was pretty well non-existent. In the present circumstances and with the present plans, we will soon have an Australian Regular Army of 40,000. By 1969-70 the reserves and national servicemen doing their reserve service should number 22,000 and I hope the C.M.F. will by then have reached its present target of 35,000. This would give a reasonably readily available Army of something over 90,000 with the inbuilt ability to expand which must be inherent in the way that the C.M.F. is itself organised. There is one other difference, compared with the position in 1938-39, which is of very real significance. The men who volunteered for the militia in 1938 and 1939, as many other honorable members would know far better than I, volunteered primarily for service in the first instance within Australia and her territories. When it was necessary to send an expeditionary force abroad, these men had to volunteer again for overseas service. Many did, but some did not, and because of this units had to be broken up. The Government has made a most significant contribution to the ready availability of the Australian Army because all servicemen, including national servicemen, volunteers and members of the Citizen Military Forces and people mobilised in a general emergency would now have an obligation to serve where the security of Australia demanded. This is a significant difference in the Army in the structure of our defence framework which should not be under-rated. Very briefly I should like to make one or two remarks concerning the Fleet Air Arm. The purchase of the Skyhawk completes the re-equipment of the Fleet Air Arm which began some considerable time ago. This will, I believe, give the Navy a relatively short breathing space in which it can consider the future and use of the Fleet Air Arm, and its future need in Australia's particular circumstances. It is again necessary to have in mind the purposes of the Fleet Air Arm and the purposes of the Navy, which are to safeguard our convoys, to safeguard our troops and the troops of our allies and to safeguard ships carrying supplies to places like Malaysia and South Vietnam. This aspect was not mentioned by the honorable member for Evans **(Dr. Mackay).** Convoys need to be safeguarded from submarines, from Komar boats and from standoff bombs. The Navy has been very well equipped for anti-submarine warfare in its ships, and through Neptune and Orion aircraft soon coming into service. With aircraft like the Skyhawk, I believe the Navy will be equipped to deal with Komar boats or standoff bombs. For this reason I am more than glad that the Government has made this decision, which will greatly help the morale of the Fleet Air Arm. However, there are certain implications of the decision that the Government has announced. It means that there have been areas to which convoys could not be sent, because they could not be given adequate air cover - without the Skyhawk on the " Melbourne " - unless we were prepared to rely on our allies. It may be regarded as unreasonable judgment to rely on our allies to that extent. Furthermore, there is the implication that there are areas - and I should have thought this obvious - in which the Air Force cannot provide adequate air protection in all circumstances. The prin ciples that have been adopted in this decision are that we should not be dependent on our allies for air cover for our convoys and that the Fleet Air Arm must continue with the present state of technology for air and sea warfare. I believe that the acceptance of these principles will probably involve the purchase of an aircraft carrier not in the immediate future but at some stage ahead. I hope that this indeed will be the case, because I believe that it will be necessary. One last thing I should like to say is that the present impetus of our defence re-armament must be maintained. {: #debate-34-s5 .speaker-KIH} ##### The CHAIRMAN (Mr Lucock:
LYNE, NEW SOUTH WALES Order! The honorable member's time has expired. {: #debate-34-s6 .speaker-JSU} ##### Mr BRYANT:
Wills .- I was rather surprised that both the honorable member for Wannon **(Mr. Malcolm Fraser)** and the honorable member for Evans **(Dr. Mackay)** should use, for demonstration of their arguments, statements about Indonesia, our closest foreign neighbour; not because I do not think that is logical - and I think it was without any malicious intent towards our Indonesian neighbour - because perhaps logically we should look at Indonesia. But they did not point out the rather odd strategy in placing what the honorable member for Wannon called our front line shield on the far side of Indonesia. Some very odd attitudes have been developed in the last few years on the defence questions. I believe that our defence policy has been based upon false assumption. To start with, our strategy is false. We have developed a total dependence on our American allies. This is unbecoming of a mature and self reliant nation. It is a policy that produces a false sense of security. We are also developing a sense of dependence on America in respect of industrial questions too. Further, I think we have disregarded the possible role that a citizen might perform in the service of defending his country. We have also disregarded the strength and capacity of Australian industry. These are some of the subjects I want to bring before the Committee. The honorable member for Wannon said that we are in a better position now than we were in 1939. Obviously as regards equipment and materials this is the case. We are living in a completely different age. However, if we study the records of 1939 we find that then we had about 60 to 70 combatant units upon which to base the expansion of our Services- I believe this is one of the current weaknesses of our Services. Where do we find the men when we carry out the total mobilisation of which the honorable member talks? The other aspect was his attitude that citizen forces cannot possibly be of any use in the immediate future. I spent some time last year when I was overseas in talking to people in some of the smaller countries. 1 will mention, briefly, Switzerland, which is a tiny country. It has total citizen service. It has no more than a few hundred uniformed servicemen, but it has about 400,000 men on call. They genuinely believe that they could be in business within two hours. In a country of Australia's size this would be an unreal objective, but we would have a lot longer warning of anything that is to happen than would Switzerland. These are some of the questions at which the Committee should be looking, as the honorable member for Melbourne Ports **(Mr. Crean)** pointed out. Are we getting value for our money? Is our strategy correct? Is our appreciation of Australia's defences correct? On a £ for £ basis are we getting value for what we are spending, because fantastic sums are involved? In the last few years - and almost certainly since the return of this Government - there has been a great deal of uneasiness about the defence policy of this country, primarily because there seems to be no pattern. We have an on again off again defence policy. In the last 12 months or so we have had conflicting statements. In July of last year we were told that national service was to be rejected because it was uneconomic. This was quoted in the Press. A few months later the conscription scheme was introduced. Last year we had a full scale defence review, which involved the Navy. We were told that we were going to do this, that and the other thing and that we were going to spend £10 million refitting one of our ships. The other day the Minister for the Navy **(Mr. Chaney)** told us that these plans had been changed and that something different was to be done. We will have little time before this session of the Parliament concludes to debate that subject. This on again off again inconsistency that is obvious in the Government's approach to foreign policy and the defence of the nation is causing much dissatisfaction and concern in the community. I believe that currently we are in a position where decisions are based on foreign policy. To me, this is plain bad strategy. For Australia to have two of its Army units - and we have only five or six, apart from the Royal Australian Air Force unit at Butterworth - thousands of miles from our shores and tied down is bad strategy. If we were in any particular danger it would be incredible folly. In the last war in every case when we had isolated independent groups - at Rabaul, Timor, Ambon, Singapore, Java, Greece and Crete - we lost the lot. Australia is not an insignificant country. We have a fairly large population but we have not the manpower to enable us to distribute our forces round the world in this kind of exercise. I believe this is a piece of pure strategic folly. What is the position of this country? In the last few years we have seen a growing feeling of dependence upon our allies. The whole nation is becoming obsessed with the idea that we cannot defend ourselves and that we have no strength in manpower, industrially, strategically, geographically or in any other way. I believe this is a false analysis of the Australian position and that it is unbecoming and unworthy of the country. I also believe that it is bad for the national morale. What are those things upon which the defence of a country is based? First there is its manpower, secondly its industrial resources, then its strategic position, then its allies and then there is the national morale to be considered. All these, things must be balanced against the strength of potential aggressors. What is the position of this nation manpowerwise? We have a population of 11 million people, which gives a mobilisation capacity of about H million. We have a population as large as that of Belgium and of Holland, three times that of Switzerland or Denmark, five times that of Israel and one and a half times that of Sweden. Does anybody hear the peoples of those countries cringing and crawling and acting as if they cannot look after themselves? Consider a country like Yugoslavia with a population of 17 million. For *4i* years, simply by keeping up national morale and with threats to be able to resist to the last man, that country stood off the whole mass and power of Russia. I believe that in the last few years we have talked ourselves into a position in which we lack self-reliance, simply because we have overrated the potential strength of people around our shores. This, I think, is one of the basic considerations. What is the position in terms of mobilisation capacity or voluntary service? In 1939 there were 80,000 members of the Citizen Military Forces. At that time we had a population of about 7 million. On that basis with our present population we would have 120,000 persons or thereabouts in the voluntary services. In Britain at the moment there is a total of something over 400,000 in the voluntary services. Again on a similar ratio of the number giving voluntary service to the total population Australia should have about 120,000 persons in voluntary defence services. This is not an insignificant number of people. I believe we have the manpower available to do much more than give a good account of ourselves. I believe we could offer a total deterrent to any possible invader. What would a nation have to do to come here and defeat a mobilised Australia? What would it have to do to land on these shores a force which could defeat a mobilised Australia? I realise, of course, that at the present time nobody would want to mobilise the nation. Obviously we are not going to see any country in Asia building the fleets of ships required to land an aggressive force here and not act accordingly. Any country with such ambitions would have to turn up with at least half a million men, and even if they could be mobilised, how could they be brought here? I invite honorable members to turn to the tables of shipping in the back of " Merchant Fleets of the World ". I think it is one of Jane's publications. It sets out the total capacity of fleets in the world. There are not enough ships in Asia, even counting those of Japan, to land on our shores a force of the magnitude I have mentioned and maintain it here. This does not mean that we should disregard the future, but that we should encourage the attitude that Australia can defend itself, and that we will make it obvious to everybody that we propose to do so and can do so. I invite honorable members to recall the operation in which the 7th Division went to Borneo at the end of the last war, in 1945. Two hundred ships were required to take that one Division. I understand that 1,700 ships were needed to land the American forces in the Philippines. This brings me to another point. Australia is in a singularly strong strategic position. Consider the position, for instance, of Israel, which is ringed with enemies. They sit on the hills and can almost look right across the country. In some parts it is only 40 miles wide. Obviously it is an armed camp of a kind that we would not like to see in Australia, but it retains its self-reliance. Or consider the position of Sweden, a nation of 7 million people which for more than a century has been girt by potential enemies. That country has been able so to organise itself that it looks as if it could hold off any potential aggressor. I believe that as an exercise in the strengthening of national morale we should try to convince the people of Australia that they have the capacity, latent as yet and undeveloped, to organise themselves properly and to hold off any aggressor. This does not imply that we do not want allies. I do not often agree with General de Gaulle, but I think there was some wisdom in a remark he made in one of his speeches, when he said that treaties have no absolute value. This is quite so. Without public debate we can easily envisage a situation in which certain allies would not be available to us. We have seen in the strife in the Indian sub-continent the unreality of such alliances as S.E.A.T.O. We have to look to ourselves. I believe we must place much more reliance on our citizen servicemen - citizen soldiers, sailors and airmen. We do not have to go very far for examples of the value of these citizen forces. In the course of my efforts to discover the true potential I visited the United States last year, and I called on the National Air Guard in Hawaii. It is part of the conceit of the professionals to contend that the citizen, the part timer, the amateur, cannot handle defence matters. I said that I wanted to see the most technically advanced piece of military equipment operated by amateurs, by citizens, by part timers. The National Air Guard in Hawaii showed me the aircraft operated by its members. I think they were F104's and I think they are supersonic. They are certainly super aeroplanes and they are manned by part time people who carry on their service around the clock. As they finish their work they come out and carry on their service in the National Air Guard. While I was there a man arrived who was a ticket clerk for one of the airline companies. His civilian duties are performed behind a desk. His effort for the country is to put in two or three hours at a time, or a weekend here or there, sitting in readiness in what looks like a space suit, waiting to take off if necessary. America can do these things and Switzerland can do them. I discussed the subject with people in Switzerland. The citizen air pilots of Switzerland are either on the reserve or on the active list, and when they are off duty they report to the airport and do their flying in Mirages. I believe there is a potential in this field in every community in Australia. I imagine for a moment the defence capacity of a city such as Newcastle, or a smaller one such as Cairns, or one like Geelong. Everything needed for defence is available. There are the workshops, the people who can drive transport vehicles, people to work ships and fly aeroplanes. This kind of effort will I think represent the style and pattern on which we will have to rely if we are to mobilise the people of Australia. Then we have to develop our industrial capacity. I understand that the Army is presently considering, according to public announcements although no announcement has been made in this Parliament, reequipping the Army with a light tank. Last year in Paris I had a look at the French model. It is the AMX13. I have a number of documents about it here. It was most impressive. I do not claim to be an armoured man, although I spent some time with the Centurions. I do not know whether the Army has carried out a proper evaluation of the French system. I received the impression from the French that they would be pleased to see these tanks manufactured under licence in Australia. This is what I want to see done. Whatever tank we buy, whatever armoured equipment we get, it should be manufactured in Australia. We have the ninth largest automotive industry in the world. We are turning out something like three motor vehicles every working minute of every day of the year. Yet our automotive industry has never yet, as far as I can determine, been asked to produce an armoured fighting vehicle for the Services. I believe this French machine would be ideally suited for production in Aus tralia. We have the ordnance workshops in Bendigo. We have the naval dockyards in Melbourne. We have an automotive industry that belongs, unfortunately, to the capitalists of foreign countries. However, as I have said, I want to see manufactured here the vehicles that we use in our defence Services. We have to develop our manpower resources through citizen organisations. We have to develop the industrial capacity of the nation and place before our scientists, technologists and engineers the challenge of producing plans and specifications for Australia's defence. But the essence of our defence system must be to build into the Australian people such an attitude of self reliance that every Australian will know that we can defend the country, so that any potential aggressor in the foreseeable future will know full well that it would be a most profitless adventure to invade this country whether we are with or without allies. {: #debate-34-s7 .speaker-KCD} ##### Mr DAVIS:
Deakin .- This Committee is engaged in the usual annual exercise of examining the estimates of the Defence Department and the three Service Departments. We are looking at the problems that arise in this changing world from time to time and relating our defence reactions to those problems. We have been given various documents containing information. We have in particular the Appropriation Bill itself. Then we have the Estimates of Receipts and Expenditure prepared by the Treasury. We have the AuditorGeneral's report and lastly we have the report provided by the Defence Department. I believe that in the past I have been critical of the information that has been supplied to the Committee during this essential debate. Before I get on to some consideration of the actual document I want to say a word or two about what was said by my friend, the honorable member for Wills **(Mr. Bryant).** The honorable member and I differ in a number of matters. He had the privilege of serving in the last war. {: .speaker-KJO} ##### Mr James: -- He was a colonel. {: .speaker-JSU} ##### Mr Bryant: -- Not quite; he should have been. {: .speaker-KCD} ##### Mr DAVIS: -- I agree that he probably should have been a colonel. He had the privilege to serve with distinction in the last war. 1 did not have the opportunity. The difference in our views perhaps comes back to that. Looking at it objectively, as I can being one who did not serve in time of war, I think that my friend from Wills is inclined to think in terms of reacting to today's conditions with the readability of 20 years ago. Further, the honorable gentleman, it seems to me, might well be described as a well meaning and well informed isolationist. In his speech he accepted some of the facts of our geography, but he ignored others. Honorable members may recall that he referred to countries in Europe with a population similar to that of Australia. He mentioned Holland and Belgium, among others. I remind the Committee that these are not comparisons which apply with great force to the situation with which we are confronted. I ask honorable members to forgive me for repeating these things, but I believe that they are necessary. We have a continent with a coastline of about 14,000 miles. We get a mental picture of Holland or Belgium, or some of the other smaller European countries. Australia has a territory of about 3 million square miles and we have 11 million people spread fairy thinly down the eastern coast and very thinly in the north and the west. We are at the end of a chain of islands which links us with Asia. We are, in fact, part of the world of Asia and we cannot avoid accepting obligations in Asia, nor can we dodge the consequences of action already taken in Asia. These are the facts and we cannot avoid them. The honorable member for Wills spoke of dependence on our allies and implied that our dependence is too great or that we are thinking in negative terms. I point out, first, that that is quite wrong. Secondly, it is an impossible situation for 11 million people to defend 14,000 miles of coastline and 3 million square miles of territory. We must have some dependence on allies. If we carry the strategic argument forward, we must do everything we can to keep the prospective enemy as far away from Australia as we can. That is a basic military strategy. I do not wish to appear in the role of a strategist - I am not - but these things seem to me to be elementary. {: .speaker-2V4} ##### Mr Clyde Cameron: -- Would that cut both ways? Does the honorable member think that the enemy should do the same? {: .speaker-KCD} ##### Mr DAVIS: -- I think the enemy should confine his activities to his own land. I will illustrate, if I may, the point of principle which I think divides the honorable member for Hindmarsh and myself. I want now to turn to the documents. The first to which I refer is Estimates of Receipts and Summary of Estimated Expenditure which, at page 20, sets out the expenditure per head of population on a number of main items, including payments to or for the States and National Welfare Fund. Finally it sets out the expenditure per head of population on Defence Services. It is interesting from a number of points of view to look at these figures. In 1964-65 we spent £271s. 4d. per head on Defence Services. It is estimated that in the current year we will spend £33 12s. 9d. This is, in terms of money provided, a significant reaction to the situation with which we are confronted. But further than that, the table illustrates the problem facing the Government. Here, in broad, are the major obligations of the Government in a country that has an increasing population and an expanding economy. The future security of the country depends very largely upon maintaining those two factors. So the Government is committed to increasing expenditure in a variety of fields. The best judgment that the Government can make is to assess the strategic situation and to weigh the realities of the situation as are evident in expert opinion and then make a judgment on the allocation of funds for the various purposes. Further, the Government must make a decision as to the effect on the community of withdrawing too much in terms of taxation or, alternatively, of spending too much in an economy which, if not stretched to its limit, is at least reasonably fully expanded. These are the sorts of considerations at the back of any defence programme in times which my friend from Wills, in terms of 20 years ago, would call almost near peace. In fact we are in a state of mixed peace and war and that is the sort of modern world we live in. But I want to pass on from that to the increasing responsibilities which we cannot avoid in this country. It is all very well to speak, as my friend from Wills did, about dependence on allies. That is only part of the pattern. The other part of the pattern is the acceptance of increasing responsibilities with our friends and allies in that part of the world - in Asia - of which we are part. I come back to the figures that are provided in the Bill which, in theory at least, we are considering. At page 106 of the Appropriation Bill (No. 1) we see set out for Defence Services a summary of expenditure of the Department of Defence, the four Service departments and the Department of Supply. On the next page we go into some detail. Honorable members will see that for the current year £5,871,000 is provided for defence aid for Malaysia. Last year our expenditure for this purpose was £1,687,958. This is symptomatic and is evidence of a growing responsibility which we readily accept, but which in any case we could not avoid in terms of money. Here are the things, I suggest, on which are based realistic assessments of the programme that we have already accepted in principle in the Budget and which we are now being asked as a committee to examine in detail. I turn next to another of the interesting documents, the Defence Report I recall that some years ago in this place the information available to honorable members on defence was not excessive; indeed, on occasions I believe that I described it as inadequate. But here we have a document which is indexed and clearly written. It has some public relations content, of course. {: .speaker-KFH} ##### Dr Forbes: -- It has pictures. {: .speaker-KCD} ##### Mr DAVIS: -- As the Minister reminds me, it has pictures. In short, it is almost popular reading. But it also contains much sound commonsense. That is where I think we might look. Various matters are dealt with in the report, including manpower, finance and logistic arrangements with the United States of America. One paragraph is devoted to an explanation of arrangements made with the United States which, over the years, will spread the impact of our defence expenditure in that country. This is not an insignificant contribution towards solving the problems of defence when you consider that they cannot be entirely divorced from the problems of growth. The report deals in detail with the Navy - with ships, the Fleet Air Arm and activities in survey and research. Finally, we turn with interest for more knowledge to a graph of expenditure in a form which is readily understood and which may be readily checked. This is the pattern throughout the report lt is interesting to note, having regard to other reports which should be presented to us, that here we have uniformity in the presentation of financial detail about services which together go to make one armed service. We find in the report a lot of information about the Department of Supply, which the honorable member for Wills forgot to mention. This is a realm of defence expenditure that did not exist 20 years ago. I am sure honorable members will agree that here is a Department which on occasions demonstrates that Australia is making a valuable contribution to the safety and progress of the Western world. At the back of the report we find statistics which will enable anybody, in the course of a few minutes, to compare today's expenditure in terms of material and manpower with expenditure five or 10 years ago. All these things add up to what I think is an essential provision to Parliament of adequate information on which it may make an assessment. I wish to refer finally to the AuditorGeneral's report. The Auditor-General reports directly to this Parliament. While the Public Accounts Committee devotes a good deal of time to an examination of the reports of the Auditor-General, this Parliament should still examine them in the first instance. In his latest report the AuditorGeneral is critical of stores accounting procedures in some of the service departments. While these matters may not be in themselves important, if they can be scrutinised at the direction of this Parliament they will make some contribution to a more efficient defence effort. Having regard to the information that has 'been supplied to us and the details of the Government's defence programme, I believe that the proposed expenditure should be supported. Sitting suspended from 5.58 to 8 p.m. {: #debate-34-s8 .speaker-6U4} ##### Mr WHITLAM:
Werriwa **.- Mr. Chairman,** in speaking to the estimates for the defence departments, I wish to stress the industrial base which we should have to found proper defences for this country. All advanced industrial countries, at times when they have been re-equipping or greatly expanding their defence forces, have taken the opportunity to increase their industrial potential. Industrially, very few countries have ever been weakened by undertaking a large defence programme. This certainly would seem to be the position which the Australian Government should anticipate here. Judged on the percentage of our population employed in industry and the percentage of our investments devoted to industry, we are a large industrial country. We are at present undertaking a large expension of our defence forces. Therefore, we ought to use thi opportunity provided by this increase in defence forces to ensure that we have a similar increase in our industrial strength. The advantages of having a greater and more varied industrial base for our defence forces have been very clearly borne out by some recent incidents. I have been particularly concerned with raising in this chamber over two or three years now the importation of electronic equipment for the Bloodhound missile. I compliment, and I am certain all honorable members would wish to compliment, the Minister for Air **(Mr. Howson)** on the firm decision which he announced in the middle of last month to transfer the contract for equipment which we need to import for the Bloodhound missiles from the Ferranti Co. to the Marconi company. This was a case in which we were able to profit from investigations which had been made by the British Government and in which we were able also to take advantage of the fact that there were alternative suppliers in Britain. Unfortunately in many other cases we have no alternative supplier in another country and we certainly have no supplier in Australia. Clearly, if we are to check on the proper price or quality for our defence equipment we ought to develop some yardstick of our own. We ought if possible to have some alternative supplier of our own. Electronic equipment is a clear' example of a field in which we should increase our industrial base. We are importing annually £18 million to £20 million worth of electronic equipment. It should have been possible for much of this money to have been spent with local industry. About 80 per cent, of this expenditure on imports of electronic equipment relates to equipment for the forces. For every £20 million which we spend on imported electronic equipment £1 million is invested by the overseas suppliers in their own research. So the more electronic equip ment we import the more we ensure that our suppliers will keep abreast of future developments. One cannot go into much detail in discussing imports for the defence departments, but I can illustrate by reference to electronic equipment which we have purchased for other departments the position in which we could have found ourselves. For instance, some of the equipment being bought by the Department of Civil Aviation and the Bureau of Meteorology is no doubt the most modern and the best of its type in the world. It is not available in Australia. But this does not mean that it could not have been available here. If the Federal Government, and particularly the Department and the Bureau, had had the foresight to spend sufficient money on research and development in these radar fields some five or ten years ago we would already have been producing the kind of equipment which we are now importing. The first specific example is that the Commonwealth Scientific and Industrial Research Organisation in 1950 installed airport and airways control radar equipment in Sydney and Melbourne on an experimental basis with the intention of developing the processes of air traffic control. A relatively small sum - about £50,000 a year over four years - was set aside to cover the cost of this project. This was a promising beginning. But industry was not encouraged to proceed with the manufacture of equipment locally. Today the Department of Civil Aviation is buying airport radar equipment from France. It is buying airways control radar warning systems for aircraft approaching terminals from 120 miles away and airport control radar for aircraft 20 miles from terminals. The installation of this equipment is costing £750,000 at each capital city. So we are spending all told about £44 million on this overseas equipment whereas, if we had continued the C.S.I.R.O. development which had been commenced when this Government took office, we would have been able to produce it and install it ourselves. The second example relates to meteorological radar equipment. As a result of wartime experience with centimetre wave radar it was well within Australia's capacity to manufacture weather warning radar. Moves in this direction were made years ago but little interest in the development was showa and nothing happened. The Bureau of Meteorology is now buying advanced meteorological radar equipment from the Decca company in Britain. Australian industry would have been competent to develop this kind of equipment had sufficient money been available for research. The reason why the French are now so proficient in producing the kind of airport radar equipment which we are importing from them is that they failed to develop radar prior to the last war. During the war they found themselves entirely dependent on imported equipment. Therefore, after the war was over they resolved to stand on their own feet and they poured substantial sums into research. Today this research is bearing fruit. France is one of the top nations in the manufacture of airport radar. This affords a lesson which Australia should learn. The time to start our research in advanced electronics in these fields is now. This research should be undertaken by the Federal Government in collaboration with private industry, which will benefit in the years to come. The work should be done on a £1 for £1 basis, with equal contributions by the Federal Government and the companies concerned. As I have said, for every £20 million which we spend on imported electronic equipment the overseas suppliers set aside £1 million for their own research and development. This 5 per cent, is the current figure in the United States of America, the United Kingdom and France. The Western Electric, Bendix, Collins Radio and Radio Corporation of America organisations, to mention only a few of the companies concerned, work on this basis and have done so for years. This money goes not into the product of today but into the product of tomorrow. It helps to maintain the present pre-eminence of these companies in their particular fields. It forces customers to go back to them because the companies have prepared them for the next generation of products. Funds for this kind of research and development in Australia should be distributed in proportion to the way similar funds are being spent overseas. For instance, if the bulk of the expenditure overseas is being devoted to electronic aviation equipment, a corresponding proportion should be ploughed into research and development in aviation electronics in Australia. To a degree, industry itself is to blame for the lack in research and development. It has enjoyed a happy period with home sales in television and broadcasting equipment. It has tended to concentrate on these fields, neglecting the development of specialised equipment such as radar for airport, weather and defence purposes, specialised communications equipment used in satellites, and specialised instruments for test measuring control equipment used in industry and so on. This latter field has been neglected not only in Australia but in Britain. Only a fortnight ago a special division was established in Britain to develop computerised machines. Until now, Britain has been using American computerised machines. One cannot expect a return in a very short time on moneys spent on research and development. It takes 10 years and more to reap the benefits of research and development. By the same token, it takes an equally long time for the neglect of research and development to become manifest. Unless something positive is done now on a co-operative basis by the Commonwealth Government and industries which have a defence potential in Australia, Australia can be left behind in many important branches of the telecommunications industry for defence. As I say, 80 per cent, of the amount which we are spending on electronic equipment today is going into our defence forces. There is always justification for purchasing overseas equipment at any one time in order to get immediate delivery, and to obtain the benefits of overseas research, but such purchases are made without setting aside a percentage of the expenditure for research and development in Australia. We shall be in no better position in five to ten years' time when the need again arises for equipment which we do not and cannot produce. If sufficient money is spent on research and development in Australia, money that would otherwise be spent overseas would go into Australian industries. Furthermore, we cannot ensure as we were able to ensure by good fortune in the Ferranti and Marconi cases, that we can make a correct assessment ourselves of the efficacy and the economics of any equipment. We could at least produce, install and service some of it ourselves. We could therefore be certain that we were getting a proper deal in the additional equipment which we had to pay overseas companies to produce, install and service, if we were not yet producing enough to do it all ourselves. Above all, we should definitely at this time resolve that the money we are spending on defence orders is partly used to ensure that Australian industry is improved in efficiency and techniques. More government money is now going into purchases from overseas than ever before. It is very largely, in key fields, money going into research in overseas industries. We ought to see that as much money is set aside for research and development in each type of industry in Australia as is being taken from our overseas purchases into research and development in those industries in the countries whence we are at present importing. This is a proper way to ensure our industrial future as well as our defence future. We would be getting a better deal for our money if we had done this research before. We would be finding that we got more for our money; we would be finding that we were spending less overseas; moreover, we would be finding that we were in a better position to produce defence equipment quickly, to service it independently and to establish a market for our industries among the countries in our region. {: #debate-34-s9 .speaker-KKB} ##### Mr JESS:
La Trobe .- I must say at the outset that I agree with much of what the Deputy Leader of the Opposition **(Mr. Whitlam)** has said, especially about electronics, precision machining and other things which it would be essential for us to do if this country should ever go to war. I begin my address on these estimates by saying that I am grateful indeed to the Government for being given my annual 15 minutes to speak on the five departments associated with defence. This allows three minutes for each department, so one can cover the subject only broadly. But I am appreciative, as I am sure all honorable members are, of the job that the defence Ministers are endeavouring to do under present circumstances. I think I speak on behalf of most honorable members when I say that we realise that they have a difficult job not only in keeping up the morale of this country but also in overtaking the backlag in our defences that has been built up over a period of years. I compliment them on what they are doing, but I do feel there is still an air of unreality and a lack of speed and cohesion. I feel that there is a deal of unnecessary delay and confusion with respect to certain defence decisions. One example is the pay and allowances of the troops in Vietnam. The delay in arriving at a decision on this matter was not necessary, and it should not have happened. Indeed, I think that the Government deserves to be criticised for it But I cannot criticise the Service Ministers because I think decisions relating to these matters are arrived at between the Treasury, the Prime Minister's Department, the Defence Department and other authorities that seem to be very slow where decisions affecting troops and defence are concerned. It is not possible in the 15 minutes at my disposal to deal fully with the three fighting Services. I shall merely say that I think that the Navy has a long road to travel before it is as effective as I think it should be and before it is capable of doing the job which I think it could be called on to do if certain things went wrong in this area in which we live. I also have the feeling that the ships which the Navy has purchased were ordered before decisions were made as to how the crews would be trained. We ordered destroyers overseas, but a decision as to how we would train the electronics specialists and others who will man those ships was not made until very much later. The present Minister for the Navy **(Mr. Chaney)** cannot be criticised for this because he did not hold the portfolio at the time the destroyers were ordered; but we must give some consideration to this matter. Has a decision yet been made as to how future officers, technicians and other specialists on these highly specialised ships are to be trained in the future? Will a shore establishment be set up, or will one of the destroyers be taken out of service for use as a training ship? I come now to the Royal Australian Air Force. In my opinion, we will have a reasonable Air Force at some date in the future. The Mirages are coming off the line quickly but other aircraft such as training aircraft seem to be some way off at the present time. {: .speaker-2V4} ##### Mr Clyde Cameron: -- What about bombers? {: .speaker-KKB} ##### Mr JESS: -- Bombers, too. Reports on the strategic situation reveal a number of recent happenings which must give us some cause for concern. 1 am not saying that all these fears will be realised, but I do point out that the Conservatives in the United Kingdom have agreed that there should be a review of the commitment of United Kingdom forces in bases overseas. This does not mean that those forces will be withdrawn, but it does indicate that the United Kingdom Government is fully extended in money and manpower. Future events in Africa and in other parts of the world could deprive us of protection on which we have counted. I think, therefore, that there is reason for haste in Australia to look at our defences, to speed up our mobility capability and to cause any enemy that may be looking at us or considering looking at us to have reason to hesitate. It is not just by saying that you are going to do something that you stop an enemy. I know of no country in the world, except for some of the most minor nations, who have a force as small as we have at this particular moment in a situation of such danger. 1 would like to address most of my remarks to the Department of the Army. 1 feel that the remarks made at this time by some people both in and out of this chamber about a situation which they contend exists between the Australian Regular Army and the Citizen Military Forces is not accurate. I think it is unfair and that it does not do very much service as far as the Army as a whole is concerned. If one looks at the situation in respect of the Army at the moment the blame, if it is to be laid, can fairly be laid on the Commonwealth Parliament. I am not saying that there were not reasons, perhaps, for allowing the defence vote to stay as it did for so many years without an increase, and that there were not other things in the way of development in this country that had to be done. But as far as the Army and other Services are concerned, it did cause the amount of money allocated to defence to be insufficient to buy the things required to keep up to date and to make them effective forces. The situation was that the money voted was the same. The Army had to make a decision as to what to do with the money voted for it and it had to decide whether it should have an inadequate permanent army and a C.M.F. which was incapable and not equipped to do the job it was required to do; or whether it should contract within the amount of money it had and try and get the best out of what was available. Of course, we had to have a regular army ready to go if something happened overseas. I think the decision made was a correct one. The Army had to pull in all the ranks it could in order to make the field force as efficient as possible. This led to insufficient numbers of trained personnel being available for instructors in the C.M.F., the cadets and the various other areas of training which were necessary. I pay a high compliment to the officers of the Regular Army who frequently have had to do two jobs at the one time. I pay a compliment to them for the way in which they have brought the forces to the state of efficiency they have at this moment. But this does not take away the fact that in my opinion Australia's requirements for a long time into the future are certainly going to be one regular division of regular troops who are ready to go and be the shield - as the new term is - anywhere abroad. But when we are capable of getting the officers, instructors and equipment required, we must have a C.M.F. which is based on the old system that we had in 1939. In other words, we should have a cadre of officers and non-commissioned officers on which we can call in the event of mobilisation. At present we talk of having a division, or hoping to have a division, of 40,000 regular troops. But as far as I can find out that will not provide a regular fighting division because those 40,000 troops will have to include all the ordnance stores in Australia, all the engineering stores, all the pay corps and all the other headquarters which must remain in the country to support a force overseas. Out of a force of 40,000 I cannot make the total front line troops very much more than around 12,000 or 13,000. Time is against me in this debate but I want to read a few remarks from documents I have with me. It has been said that in 1939 we were unprepared but in 1939, in my opinion, we had more time than we could possibly have under the present circumstances. The threats of war are closer to us now than they were in 1939. No honorable member has been able to convince me that that is not so. I want to read one section from a statement by the Honorable G. A. Street, former Minister for Defence, on the report of Lieutenant-General Squires who, honorable members will remember, came to Australia in 1939 to report on our preparedness. To begin with, **Mr. Street** said - >The role of the Australian Military Forces as depicted by the Inspector-General was firstly, the capacity to defend certain vital and vulnerable areas and localities against attacks on a relatively small scale which may take place, with little ot no warning . . . It is exactly the same situation today but, I would suggest, the danger is more immediate. He went on to refer to the position of the Army at that time and said that the Army vote had not been sufficient; that the Army had had to allocate priorities to buy equipment; and that the number in the forces was inadequate at that particular time. He then recommended that the strength of the militia forces should be raised to 70,000. The Minister went on to say - >The Inspector-General pointed out that the present insufficiency of the Militia's effective strength would not disappear at once with the enlistment of greater numbers of men, but would persist until those men were adequately trained and equipped. He observed, however, that from its nature of being a Citizen Army, time was required for training, and the provision of munitions of war was a gradual process. Under the heading " Future Composition of the Militia Forces ", the Minister said - >The Inspector-General reported that, as a result of his examination of the problem in conjunction with the military authorities, a First Line Component consisting of only two divisions and three cavalry brigades and four mixed brigades, with fortress and ancillary troops, was insufficient. There were so many points on the coasts of Australia that must be protected, and the distances between them were so great, that the system of defence involved a wide distribution of the greater part of the available forces and the provision of reserves to reinforce the most important and most vulnerable localities. Very little of that has changed in the situation today. If honorable members would read this report I think they would find that the- views that applied then, and which were reported on, should be very similar to those of today. The Minister continued and referred to a militia peace establishment of 60,000. As appears at page 4 of his report he said-- >The Inspector-General recommended that the future peace establishment of all units to be maintained in peace, including the requisite cadres for non-maintained units, and the four new units previously referred to, should be 60,000 all ranks. He was referring to the militia. He continued - >The Inspector-General further recommended that personnel recruited in excess of 60,000 should not be formed' into additional units. . . . I have not time to read the rest of his statement but he went on to say that it takes time to recruit and train personnel. There have to be officers and noncommissioned officers and these cannot be obtained overnight. Furthermore, for the sake of the Ministers who may think that we now have an adequate Regular Army, I point out that the report recommended that, in addition to the 60,000 personnel, there should be a regular field force which would give us the first bastion of defence and which would be able to do a job until the militia were at full strength. I want to reply to the argument that regular soldiers are against the C.M.F. I want to read from a statement by Major-General Blarney, as he then was, at an officers conference in 1932. He said - >The present Militia Forces exist solely by reason of the enthusiasm of Militia officers and N.C.Os whose enthusiasm has grown out of the A.I.F. and subsequent U.T. organisations. > >This personnel should' receive every encouragement to continue till more prosperous times come, and a really effective scheme can be considered; and I commend for sympathetic consideration the resolutions and recommendations made at this Conference. I want to read the words of another regular army officer who said, referring to World War II- >In the public reaction after this war the Defence Force may at some future time be relegated to a background of public interest, but General Blarney's words should be kept in mind regarding Citizen Forces, for if the enthusiasm and sacrifice of time and study of the keen officer and N.C.O. nucleus is allowed to die out, no amount of money or the volunteering of hundreds of thousands of gallant untrained individuals will enable an effective citizen army to be suddenly recreated in a crisis, with the cohesion, confidence and efficiency of past fighters for Australia's freedom. {: #debate-34-s10 .speaker-10000} ##### The CHAIRMAN: -- Order! The honorable member's time has expired. {: #debate-34-s11 .speaker-JP5} ##### Mr BENSON:
Batman .- I want to spend most of the time at my disposal discussing the naval estimates. I wish to say something about Division No. 664 - Australian Naval Forces, but before I do I shall comment on two remarks made by the honorable member for La Trobe **(Mr. Jess).** He spoke about confusion in decisions and the unpreparedness of this country. I have with me an extract from the " Official History of the War " by Gavin Long. It deals with the position in June 1940 when Australian troops were on their way to Benghazi. **Mr. Long** says - >From the beginning of the war a multitude of problems had proceeded from the fact that Australia was unable to equip her armies from her own factories. The size of her expeditionary force, the organisation of that force and of the militia, the A.I.F.'s destination, and many of the problems its commander was to face in the Middle East derived from a fundamental flaw in Australian policy, namely failure to recognise that effective defence depended on a nation's ability to manufacture arms. We are still muddling along in the same way. As far as defence hardware is concerned we are the greatest bargain hunters this world has ever known. Let somebody Hash something and we have Ministers going all round the world buying bits and pieces from this country and that country. They will buy from any country which can provide equipment. I am glad that they are getting equipment, but it would be far better if they were to get as much as they can within Australia, because when the heat is on we will have to rely on ourselves. As I said when I commenced, I want to spend some time discussing the naval estimates. I want to say something about keeping our Navy, of which I am very proud, up to date. First of all I wish to speak about our naval colours. I do not want to be misunderstood. We in Australia still fly the White Ensign. The White Ensign means a lot to me, but nevertheless it is a British ensign that we are flying. The White Ensign has a Union Jack in the top left corner. It has a white field with a red St. George's Cross. That is the ensign the Navy took over when Australia became a Commonwealth, but it is my opinion that at that time we should have adopted our own ensign just as we adopted our own Australian national flag. Other Commonwealth countries fly their own adopted White Ensigns. For instance, the Malaysian Navy has the White Ensign with the red St. George's Cross and in the top left corner the Malaysian national flag. As I have said, our White Ensign has the Union Jack on the top left corner. I would not like to see the Union Jack disappear from our White Ensign, because it means a lot to many people; it means a lot to me. However, if we were to put the Australian flag in the top left corner with the stars of the Southern Cross displayed we would still have the Union Jack there and at the same time we would have our own flag. At present it is necessary that we have our own naval flag because we have our naval forces in Vietnam. We are at war, if I might use the words of the Prime Minister **(Sir Robert Menzies),** whereas Great Britain is not at war in Vietnam. We are in Vietnam waters flying the ensign of another nation, and that is not the correct thing to do. I am not a lawyer, but I think that under international law we could find ourselves in serious trouble. If we want to go to war in that area we should be proud enough and big enough to fly our own flag and not fly the flag of a nation which is not at war. I know that this would require diplomatic handling, but we should have our own ensign, and we should have it quickly, since we have ships in an area where we are at war. In today's Press is a rather startling statement. The " Sydney Morning Herald " publishes an editorial headed " Carrier muddle ". I have not time to read all of the article because my time is limited, but it commences - >No Department of our defence has suffered as much from governmental wavering and indecision as the Royal Australian Navy. The failure of the Government to shape a consistent naval policy- a failure for which the R.A.N.*s weak presentation of its case has been partly responsible - has been nowhere better exemplified, than in the fate of H.M.A.S. Melbourne and the Fleet Air Arm. Some people say that because we are the Opposition we must say the things we say, but I think that the Government must be fair if it wants to be consistent. It must recognise that we on this side of the Committee have been saying for a long time - ever since I have been in this Parliament - that the Fleet Air Arm must be built up. In 1963 we went even further, and I shall mention that later on when I refer to the Labour Party's policy speech. The Fleet Air Arm that the Royal Australian Navy has at the present time exists due to the insistence and persistence of one man only, a man who, I am sorry to say, is about to retire from this Parliament. I refer to the honorable member for Kennedy, the Honorable W. Riordan. As Minister for the Navy he brought into existence the Fleet Air Arm. When it was put to him that we should have an aircraft carrier the Chief of the Naval Staff at the time thought that he would be lucky if the matter were even considered. The Navy as a whole was astounded when **Mr. Riordan** was able to say that it could have two aircraft carriers. If it had not been, as I said, for the honorable member for Kennedy's insistence, we would not have one aircraft carrier at present. Several senior naval officers, some of them now retired, have said this to me. I think it is fair to say that when history is written the greatest credit for the Navy that this country has must surely go to the honorable member for Kennedy. I said earlier that I would refer to the policy speech of the Labour Party before the general election in 1963. At the time, Labour's policy was rather ridiculed. We said that if we became the government we would order 20 fast motor-cum-torpedo gunboats for tropical duty and coast defence work. We would purchase or lease a modern aircraft carrier. We would build in Australia a submarine depot ship, four transports, including a hospital ship, two refrigerated cargo ships and an ice-breaker survey ship. It rather amazes me that whatever the Labour Party decides, in two or three years time - as history shows - this Government adopts the policy which has been putforward by the Labour Party. Labour has insisted that we must have motor patrol boats. First, the Government said it would get 14 such boats. Now it has decided to increase the number by six. Is it purely coincidental that the Government is going to get the very number that we proposed to get? Now the Government is obtaining the 20 that we urged it to get. The only difference is that we said these would be fast, modern patrol boats or gunboats, whichever expression is preferred. I do not deride the Navy because I do not believe in doing so, but the patrol boats that we are now getting are not fast enough. The Government should buy patrol boats that could meet other similar craft on equal terms. Nothing is more disheartening to a member of the Services than to know that his equipment is not equal to the equipment of his opponents. I know the Minister for Air **(Mr. Howson)** will agree with me that this has happened with fighter aircraft. I do not know of any country near us that has a programme to build patrol boats with the speed of the boats we are building. 1 hope that something will be done and at least half of the boats will be of the faster type. I hope they will be of the type that the Malaysian Navy has found necessary to order. As the Minister well knows, Malaysia is ordering three, or maybe four, of the Brave class patrol boats. I believe that is the type of craft we need in Australia. These patrol craft could well be manned by the Naval Reserve Forces. What will happen to the Naval Reserve Forces? lt alarms me to note in Division No. 644 that over the last 12 months the strength of the Forces has dropped by 1,540 persons. We cannot afford to have this happen. I know that 400 persons have been transferred to the new reserve, but it is very alarming to see the Naval Reserve Forces gradually decreasing. In time of need, our strength is built up from the Reserve Forces, just as the strength of the Army is built up from the Citizen Military Forces. If the Minister could see his way clear to handing over these vessels to the Naval Reserve Forces, I think he would be acting wisely. The young people in the Reserve Forces must be given an interesting job to do. It is no good taking them to a naval depot, pointing round the wall and saying: "This is a Mark 18 mine" and so on. They go away more confused than ever. There is little point in showing them a big compass card and saying: "This is north, this is south, this is east and this is west ". They must be given some interesting job. They could be given some small ships like these patrol boats. They could man them, take them out at night in company, do their exercises and come back again. The Minister said that the fast fleet replenishment tanker is now not to be built. I am sorry that this decision has been taken. In any event, the Navy should not have manned it. We have two auxiliary vessels, the " Kurumba " and the " Biloela ". They were manned by the fleet auxiliary. This should also happen with the replenishment tanker. Navy personnel should not be used to man these ships. 1 was amazed when the " Tide Austral ", which is now H.M.A.S. " Supply ", was sent back to the Navy and it was found necessary to man it with permanent naval officers and permanent naval men. That is not right. These people should be used to fill other positions in the Navy. Permanent men are not used in this way in the Royal Navy, on which we pattern ourselves. People who have retired from the Navy and reservists could well be employed on this work. Now that we have coastal tankers in Australia, every now and again one of them should join the fleet under naval orders and exercise with the fleet so that the officers and mcn serving in the tankers will know what is expected of them in time of war. It is no good waiting until we have an emergency and then starting to do our five finger exercises. We should do our five finger exercises before we have an emergency. Now that we have some 12 tankers on the coast, it is not very difficult to place one of them with the Navy for a month. Every tanker could be used in rotation on this sort of work. {: .speaker-10000} ##### The CHAIRMAN: -- Order! The honorable member's time has expired. {: #debate-34-s12 .speaker-YI4} ##### Mr ROBINSON:
Cowper .- The Committee is dealing with one of the most important sections of the Estimates, the appropriation for the Defence Services. Australia's security is, of course, paramount to all of us and the tremendous scope of the Defence Services today concerns every Australian. I believe that the proposition offered by the Government to the Parliament in respect of defence is most significant. We see a build up of the Services and an increase of expenditure. At the same time, there is a continuing concern for our responsibilities in international fields. It is in this atmosphere that we must consider, first, the provision that we are making at this time. Our responsibility in the international field results from the treaties into which we have entered. We have not entered into them lightly. They are part of an overall defence concept for the security of Australia and it is necessary for us to work in very close co-operation with our allies - with the United States of America, the United Kingdom and the countries to the north of us who are determined to fight against the Communist threat. I want to refer very briefly this evening to a recent exercise mat I was privileged to watch with the Minister for Air **(Mr. Howson),** the Minister for the Navy **(Mr. Chaney)** and some of the heads of the Ser vices. This was a joint air exercise during the Pacific Concord operation. I believe that it would do any Australians good to see the accomplishments in an exercise of this kind. It proved beyond all doubt the ability of the Air Forces of three nations - Australia, New Zealand and the United States - to work together. I pay a tribute to those concerned in this exercise, which took place in my electorate. It was evidence of what the Government has been telling the people of Australia for a long time past, that our defence effort is geared in such a way that we are able to co-operate with our allies, our friends and those who are determined to see that we have reasonable security in the South West Pacific area. In this short debate, one is unable to cover in detail all the ramifications of the armed Services, but I believe that the record of the Government in strengthening the three Services is a complete answer to the pessimists who spoke in a similar debate a year ago. They criticised the Government for lack of action, particularly in the building up of our defences. The Government has a tremendous responsibility in a time of swift change. The commitment to procure the requirements of each of the Services is a tremendous obligation. The Government could enter into commitments to buy aircraft and a whole range of tremendously expensive equipment for our Services and find that, almost before it was delivered, it was out of date because of the swift change and advances made in this field. We in Australia have been fortunate to have a very remarkable concept of the equipment that would suit this nation best. We find that we are right in the forefront with our standards. I believe that the accomplishments of our Air Force are of tremendous significance. We have been able to equip our Air Force with aircraft that are comparable with those of our allies. We have the Mirage aircraft. The situation is such that we have a common arrangement with the United States whereby there can be an easy interchange of aircraft. I will not attempt - nor would I as a layman want to try - to analyse the details of this arrangement. Suffice to say that there is ample evidence that much has been accomplished. Our participation in Vietnam is proof of the soundness of our defence policy, so far as the Army is concerned. Our co-operation in past naval exercises, and our intention to participate in another exercise within the next few weeks, are further evidence of our sound approach to defence. Of course, there is great concern throughout Australia about our preparedness for any major emergency. It is often claimed that much more should be done. If we consider the vastness of this continent we appreciate the impossibility of defending it by merely establishing a ring of defence weapons around the coast. Australia's situation is quite unique. There is no similar continent, and no other nation is faced with a similar situation. For a comparatively small nation this is a task of tremendous magnitude. We have to have a strategic approach to this problem. In the north we have provided airfields capable of taking our own aircraft and the aircraft of our allies. Through the co-operation of the United States we have on our north west coast a range of facilities that will stand us in good stead. From this provision we can recognise the true co-operation that exists with our allies, and we can gain confidence from this sharing of defence responsibilities. Some problems, however, arise in respect of the Indian Ocean area. If I had any criticism it would be that there is a tendency to think toe much of the South West Pacific and too little of the situation north and north west of our continent. I say this because .of events that have happened north of Australia - the disquiet in the Asian subcontinent and the somewhat vague situation in Africa. We must not overlook the need to insure against possible problems in the Indian Ocean area. This leads me to mention Cocos Island, which at present is really only a communications point without any defences. We should think in terms of providing minimum defence facilities on Cocos Island. This suggestion has been made in some quarters. I read an article by an authority in, I think, the " Sydney Morning Herald " about two months ago. He mentioned this aspect and referred also to the Jamestown base in South Africa. For obvious political and diplomatic reasons this Government could not be expected to commit itself so far as the other side of the Indian Ocean is concerned but I believe this should not be overlooked. In recent months we have had the Government's decision to build up the defences of Papua and New Guinea and to expend large sums in that area. I believe we should study this very carefully. We have a responsibility to Papua and New Guinea but I think there could be dangers in locating bases in the Territory and training the indigenous people if, at the same time, we neglect to provide adequate facilities on our northern and north western shoreline. I say this because there are political and other, difficulties in Papua and New Guinea. It is a trust territory *md* it is our responsibility to defend it. On the other hand, we must be fully aware of the military aspects that arise. In the event of a major conflict to the north the question arises of our real capacity to defend Papua and New Guinea if the Territory is regarded as a province of the United Nations at that time. I believe there is need for much thought on this subject. Views could well differ on what should happen in that sector. It is true that we have a prime responsibility there, but I believe that on a long range basis we should not over-commit ourselves there and neglect strategic aspects on the northern and western parts of the Australian continent. In these estimates provision is made for a whole range of supplies and for the provision of equipment and so forth. The Deputy Leader of the Opposition **(Mr. Whitlam)** claims that we should spend more on research in this country - that we should endeavour to produce many of the defence items that we purchase from other countries. He has referred to precision machinery and a whole range of articles and has claimed that we could undertake their manufacture in Australia. This is out of the question, for several reasons. I remember a debate in this chamber last year during which it was asserted that we should build our own aircraft - that we should establish an aircraft industry here. Since then we have seen the difficulties experienced by the United Kingdom in even maintaining an aircraft industry. We must be realistic and appreciate that it is all very well to claim that we can engage in research and undertake manufacture on a vast scale, but that if we did so the possibility is that we would end up with a T model Ford when we needed a RollsRoyce. This is exactly what happened with the United Kingdom aircraft industry. This is exactly the problem that confronts any small nation. The United States, with its vast resources, has difficulty in keeping pace with research requirements and the provision of expensive equipment, including precision machinery. We have to realise that we are in an age where there is a three power situation. The United States is a vast country with vast resources. Were it not for this fact the Iron Curtain countries, led by the Soviet Union, would be in a dominant position. We must never allow ourselves to be lulled into a false sense of security. Therefore it is good for us to obtain our requirements from the United States and the stronger countries that are in a position to perform this work successfully. I believe that these estimates deserve the support of the Committee and that they are a further indication of the Government's sincerity in the field of defence. {: #debate-34-s13 .speaker-KF5} ##### Mr GRAY:
Capricornia .- I want to deal this evening with an aspect of defence expenditure which should, in fairness to the taxpayers of Australia, be the subject of a parliamentary inquiry. The cost of H.M.A.S. " Perth " and other destroyers of the Charles F. Adams class being constructed in the United States is between £20 million and £22 million each. The cost of each of the ships, including everything except the Tartar guided missile system - one twin launcher - on each vessel is about £6.4 million. The cost of the missile system for each vessel is at least £13.6 million. This latter cost is obviously absurd. It could not possibly be a reasonable charge for the delivery of material of value, but must contain excessive amounts for commissions, patent rights and/or profits so excessive as to indicate fraud. The missile system includes 42 missiles per vessel, one twin launcher, an electronic computer and the associated wiring and controls. Compared to the bulk of the remainder of the ship the missile system is not extensive. I am reliably informed that if the system became unserviceable for any reason the salvage value would not exceed £500, compared with the cost of more than £13.6 million. In passing it should be noted that the Americans launched a destroyer of this class in 1964 at a total cost of 34 million dollars, or some £3 million less than the charge to Australia. An expert in electronic equipment has assured me that although the type of guided missile system being installed is expensive, it should not cost more than £1.5 million. Australia could itself have built and equipped these vessels for about £8 million each. For the money it is spending on the three vessels being built in America it could have built eight destroyers locally and had about £2 million in change. The final cost of the American built ships is expected to be about £22 million each. It is worth mentioning here that Indonesia has already secured five destroyers similar to those of the Charles F. Adams class, but faster and more efficiently armed. They do 38 knots as against the 35 of which our vessels are capable. The Minister for the Navy **(Mr. Chaney)** has claimed that the decision to have these destroyers built in the United States of America was influenced by Australian Service Chiefs. However Vice-Admiral **Sir Henry** Burrell, who retired three years ago from the position of Chief of the Australian Naval Staff and who would apparently have been the adviser on naval planning when the decision to secure these ships was made, has severely criticised the ships and has stated that the Tartar guided missile system as installed is next to useless, has insufficient range and could discharge only two missiles in an action if attacked by hostile aircraft. So apparently the Tartar system, even if it were obtained at a reasonable price, is not of any great value as a surface to air defence weapon. The Indonesians have motor patrol boats that each carry two of these twin guided missile launchers of very much the same size and range as the one being installed in the " Perth ". These ships are being constructed in the United States, beyond the easy reach of Australian parliamentary investigation and where it would not normally be easy to have matters of costs, prices or conspiracy to defraud looked at. However, events in the United States in connection with the supply of electrical equipment in other circumstances have recently been the subject of official investigation and legal action on a scale that quite clearly indicates the probability that the Department of Supply and the Department of the Navy have been tha victims of grossly excessive charges. A report appearing in the Australian Press on 2nd September 1965 gave details of a conspiracy to evade the United States Sherman Act, leading to court action and very severe penalties on the firms involved. The United States Government has initiated about 2,000 charges against 29 electrical equipment manufacturers, and 700 suits are now pending. Within the last few weeks two charges were heard before Federal Judge Wilfred Feinberg against the General Electric Co. and the Westinghouse Corporation, which companies were found guilty of defrauding the Ohio Valley Electric Corporation and the Indiana-Kentucky Electric Corporation to the extent that the court assessed damages of £7,532,700 and required this sum to be refunded. In the course of his judgment the Judge said - >Based upon all the evidence in the case and my judgment as to the credibility of witnesses when appropriate, I conclude that ... the defendants and other steam turbine generator manufacturers violated the Sherman Act by engaging in a conspiracy in restraint of interstate trade and commerce in large steam turbine generators. > >To achieve and preserve secrecy the conspirators falsified their expense accounts to hide the true nature and purpose of their meetings and trips, made telephone calls at night from public telephones rather than from their offices, destroyed notes taken at conspiratorial meetings and instructed newcomers to the conspiracy not to divulge its existence. General Electric and Westinghouse afterwards informed the Press that they had settled 99 per cent, of the remaining claims out of court, but declined to state the amount of money involved. Here we see 29 of America's leading electrical equipment manufacturers forming a cartel headed by two firms well known even in Australia and entering into a conspiracy to swindle public authorities in their own country. What would we normally expect them to do when faced with an opportunity associated with the supply of electrical installations on our three destroyers, and when the actual event shows that we are asked to pay more than £40 million for this type of equipment, after three vessels have been separately paid for? In all the circumstances it must be admitted that there is more than a suspicion that Australia has been the victim of a conspiracy to overcharge, not only involving a considerable amount of public money but also depriving this country of more extensive defences because more than twice the number of destroyers could have been secured for the money spent. With all the experience gained at Woomera why could not Austraiian scientists and workmen design, construct and install guided weapons systems in warships built in Australia? It is worthy of note that Russia is also constructing naval ships to carry surface to air guided missile systems, with a range of 15 miles, approximately the same as the Tartar system installed in H.M.A.S. " Perth ". Russia has built two classes, the Osa and the Komar, to a total of 110 ships, capable of speeds up to 40 knots. These are classed as motor gunboats of 160 tons, but they carry four twin launchers each, against only one on the " Perth ", together with other types of armaments, lt is most unlikely that the Russians would be putting four launchers on a single motor gunboat at a total cost of £52 million. Such an assumption would be absurd. From all the facts the only conclusion that can be drawn is that we have been grossly overcharged, to say the least. {: .speaker-JWV} ##### Mr Chaney: -- That is right if you are right, but you are not. {: .speaker-KF5} ##### Mr GRAY: -- Well, the Indonesians have motor gunboats that carry twice the number of missiles that our destroyers will carry, having two twin launchers each, and these boats, which we are now apparently building motor gunboats to counter, have twice the speed of ours. They do 45 knots against a speed by our vessels of something in excess of 20 knots. If the Minister took the trouble to find out he would discover that the Canadians are now building a motor gunboat that does 60 knots. He would find out that the Americans have under construction, one that will do 80 knots and that the British have produced a motor gunboat of the Brave class capable of 52 knots. Yet we now begin to build boats that we are told are capable of speeds in excess of 20 knots. There are outboard motor boats in Australia that could outrun them. They could not catch ships that they are sent out against, nor could they escape from ships that are more heavily armed. The Indonesians have these boats - every navy of any consequence has them - but we, being the latest to begin to build them, are building the slowest ones that we can find. In addition, apparently we are going to equip them with the most ineffective armaments. The ships that we are building could not catch any ship in the Indonesian Navy. We have three destroyers whilst Indonesia has five. Their ships could out-gun and outspeed ours. When our destroyers were first ordered I asked why we were not purchasing from Great Britain ships similar to theirs. 1 was told that they were too slow and were capable of only 33 knots whereas we were buying ships capable of 35 knots. Now we learn that one of our possible opponents - our nearest one - has bought five destroyers as against our three and they can travel at 38 knots. We might just as well have bought the ones capable of 33 knots - our ships will be caught in any case. The honorable member for La Trobe **(Mr. Jess)** quite rightly, and I think quite honestly, expressed concern about the strength of our Citizen Military Forces. I remind him that a country with a population only two-thirds as large as ours - 1 refer to Sweden - has an equivalent militia force of 600,000 men who can be mobilised within 72 hours. I cite this against the claim that we cannot afford to do more. Sweden has a front line air force of 1,000 aircraft of which 600 have been designed and constructed in Sweden. Their Saab fighter is equivalent at least - the Swedes claim that it is superior - to the Mirage fighter that we are purchasing. Again referring to cost, the Saab costs less than half as much as we are paying for each Mirage fighter. If this can be done by Sweden with only 8 million people, why cannot at least an equivalent effort be made by Australia? If Sweden can have a citizen military force of such strength, with equipment to the extent I have mentioned and efficiency to the degree where their entire force can be mobilised within three days, why cannot Australia do better? What is the taxpayer getting for the money which the Government is spending on his behalf? The Opposition is quite entitled to question the expense, to question the equipment that we get for the money spent and to question the general efficiency of government departments. In fact, we can question everything but the quality of the men who will use the equipment. The Opposition is not satisfied with Australia's defence effort. We feel not only that Australia can do better but also that it must do better. If we ever have to face a powerful enemy, what will we do with naval ships that are out-sped and out-gunned, with an army that has not sufficient numbers or equipment, and an air force that does not have enough aircraft to meet even a third rate power? Our lack of defence effort can be demonstrated by referring to only one country - Sweden - which has done ten times as much. In any circumstances Sweden would be able to give a good account of itself. Despite the geographical advantages that we have, what have we done? We have been spending the money which the taxpayer has provided in good faith to have his defence brought up to date. We on this side of the chamber are quite satisfied that in most cases, and particularly in the case of the three destroyers, we have been the victim of a conspiracy to defraud the Australian taxpayer. {: #debate-34-s14 .speaker-JF7} ##### Mr BEAZLEY:
Fremantle .- The Opposition does not have access to expert advice on defence matters, but there are some common sense points which it seems to me can be made. The naval programme that was read to us in this chamber recently involved the purchase of six mine sweepers. These mine sweepers were used in the Malaysian confrontation situation as patrol boats. I believe that their use as. patrol boats in those circumstances was a use in circumstances unlikely to recur. If air attack on surface ships had been involved in Indonesia's strategy of confrontation, those mine sweepers could not have been used as patrol boats. If Indonesia had been prepared to commit her destroyer forces to the confrontation, those mine sweepers could not have been used as patrol boats. Although those ships are new, we have now heard it announced here, that they are going into reserve - that they are going into moth balls - and that the Commonwealth is going to invest instead in patrol boats. I asked the Minister for the Navy **(Mr. Chaney)** across the table whether the patrol boats were to be missile armed and he was kind enough to inform me that they will each be armed with two 40 millimetre Bofors guns. This is a weapon which was known in the Second World War. The Indonesian patrol boats - I presume not all of them, but a good many of them - are armed with missiles and it has been quite authoritatively said in British naval writings that these missiles would be capable of sinking the biggest ships. So if our patrol boats are armed with Bofors guns they are no doubt fully equipped for a situation like the confrontation has been so far in Malaysia, that is to say they would be ideal for intercepting sampans. But the Indonesian patrol boats, armed with guided missiles, could intercept and threaten a vessel like the aircraft carrier " Melbourne ". In various naval writings of the United States of America, those that go into the political implications of defence weapons freely demonstrate that to confine a country's navy to patrol boats is to keep that country in a subordinate political role. The United States does not want South Korea armed with anything more than patrol boats. It does not want Taiwan armed with major vessels of war because this would give it an independent strategy that would enable it to ignore the United States. It seems to me that we are getting more and more to the idea that our role is utterly subordinate and so we are now turning to a motor boat navy of patrol boats armed with Bofors guns. The role of Australia in naval action has never really been clearly explained. I do not know what we really envisage our role to be. One of Australia's most distinguished diplomats was saying to me that the slogan we accept, and seem to regard as a marvellous thing to say in the Parliament again and again, is that it is better to fight a war in somebody else's country and not in our own. That is a statement that should be confined to confidential defence documents or confidential diplomatic documents. Imagine Tunku Abdul Rahman making a public statement that he would much rather fight a war in Australia than in Malaya. Imagine the effect on the thinking of the Australian people. These kinds of statements are offensive. If we are envisaging that our military action is to be in South East Asia and we are becoming increasingly moved towards the idea of a patrol boat concept, we must be envisaging a situation in which the major warships - the assault craft and so on - will belong to somebody else and we will be functioning in a subordinate role. The sea is still a vehicle to bring combined naval, military and air pressure to bear swiftly wherever required. Our Navy seems to be shrinking from that concept. If our patrol boats are not missile armed it appears to me that we are ignoring the weapon of our age. If we are not envisaging a nuclear propelled Navy - I am talking about nuclear propulsion; not nuclear weapons - we are doing something the equivalent of continuing to build sailing ships after the discovery of steam. Tonight some honorable members, including the honorable member for Capricornia **(Mr. Gray)** discussed the speeds of warships. This is a rather intriguing matter. A big ship capable of high speed can maintain that speed in a rough sea, but a small ship, although also capable of a high speed, cannot maintain that speed in a rough sea. If we are thinking in terms of oil fired propulsion, a ship that is large can maintain a high speed over a long distance, but a ship that is small cannot maintain a high speed over a long distance. But when we turn to nuclear propulsion we have a form of propulsion that would enable us to maintain maximum speed round and round the world, because refuelling is needed only every two or three years. We are persisting in constructing a navy which ignores the nuclear engine. The result of this attitude is that when an Australian warship works- in company with the United States aircraft carrier " Enterprise " and the "Enterprise" moves off at 35 knots, the accompanying Australian destroyer, although capable of 35 knots, cannot go all the way with the " Enterprise " at 35 knots. I have been informed by sailors that in these circumstances the American ship signals " We will see you in port" and the so called Australian escorts, not being nuclear propelled, are left far behind. Why are we ignoring nuclear machinery? It is not nuclear machinery that is super expensive; it is guided missiles and their ancillary electronic equipment that are super expensive. I think the honorable member for Cowper **(Mr. Robinson)** actually answered his own question when he brushed aside Australia's capacity to build aircraft and even claimed that Britain was incapable of manufacturing defence aircraft, but congratulated the Government for buying Mirages, which were manufactured in France. So undoubtedly France, which is a comparatively small power, is capable of manufacturing aircraft that meet with the honorable member's approval. I am sorry that he did not hear the remarks of the honorable member for Capricornia about the Swedish Air Force. A large sum of money is being spent on maintaining the " Melbourne " as an aircraft carrier. Do we want to persist with aircraft carriers? Would the £9.5 million that is being spent on the " Melbourne " be better spent on building one of the modern assault ships which carry guided weapons, landing craft, tanks and helicopters and which are under construction for the Royal Navy? The research for this type of warship has been done. I wonder whether we are considering that we will always have an utterly dependent defence and always be in the position where somebody else will defend us. Is this why we buy subordinate and obsolescent types of vessels? I think the great powers are always pleased when smaller nations do this, because their vision for small and middle powers is that they should play a subordinate role and if they are not capable of independent action, so much the better. Another thing I wonder about is the type of submarine that we are purchasing. The United Kingdom is building nuclear submarines. Two that are under construction at the moment are known as hunter killers. That is, submarines are now considered to be the most efficient anti-submarine vessels. The "Valiant" and "Warspite" are two such specially equipped hunter killer submarines in the Royal Navy. The United Kingdom has done the research into this type of vessel. But we are buying submarines that are periodic submersibles. They are the conventional type of submarine. With the nuclear powered submarine you have the true submarine - a vessel capable of remaining submerged for months; a vessel which has a much higher speed submerged than it has on the surface. In this respect it resembles a fish. The crews of nuclear submarines wear seat belts, as do passengers in an aircraft. These vessels are capable of speeds under water in excess of 40 knots. They manoeuvre like an aircraft, which is why the crew must be strapped in. They can hunt other submarines and I imagine that the conventional submarine, which we envisage purchasing, would be a sitting duck for a nuclear submarine. When the United Kingdom, whose Navy has influenced ours, is developing nuclear powered submarines, why do we deliberately turn our backs on this new form of propulsion and go for the conventional submarine with a speed between 15 and 20 knots submerged? The expensive research into these things has been done by others. Surely we could rely on the results of the United Kingdom research being made available to us. It is profoundly disappointing that we have had so much vacillation on whether we are to have a Fleet Air Arm. We have gone in for mine sweepers, which in last year's Estimates were hailed as something new and which are now to be put into mothballs. We are now going for patrol boats equipped with Bofors guns when those of Indonesia are equipped with missiles. We are turning our backs on modern forms of propulsion. We are investing in submarines which are conventional when Governments all over the world are increasingly building high speed true submersibles with indefinite ranges. If the Government is right in its view that our front line of defence is many miles from our shores and that it is better to be fighting there than in this country, surely the vessels that we build should have unlimited range. And they would have unlimited range if they were nuclear propelled. I do not suggest that the Minister for the Navy **(Mr. Chaney)** cannot refute everything I have said but I do say that these things are discussed in all the Service journals in the world. These matters are perfectly obvious in journals in our own Parliamentary Library. Notwithstanding this, statements are made such as the statement last year that our Navy was to be equipped with minesweepers. Nobody could deny that such a vessel, having regard to its speed, design and equipment, would have looked familiar during the Second World War 25 years ago. Nobody can say that a patrol boat armed with 40 mm. Bofors guns, having regard to its design and speed, would have looked unfamiliar in the Second World War 25 years ago. What naval policy is being pursued? Why are we turning our backs on modern equipment? {: #debate-34-s15 .speaker-JWV} ##### Mr CHANEY:
Minister for the Navy · Perth · LP -- In all the years I have been in this Parliament and listened to debates on the Estimates, particularly those relating to the defence departments, 1 do not think I have heard more constructive suggestions or more constructive speeches than I have heard in the short time that we have been debating the current estimates. {: .speaker-KDA} ##### Mr Duthie: -- They were all from the Opposition. {: .speaker-JWV} ##### Mr CHANEY: -- I do not suggest that all the constructive suggestions came from the Opposition or from this side. I have never subscribed to the view that good ideas spring only from one section of the community. My fellow Service Ministers and I have been intensely interested in the debate. At times some honorable members have become rather imaginative. Some of the things that they have claimed as facts can be quickly shown to be well removed from the world of fact. The honorable member for Fremantle **(Mr. Beazley),** of course, is known for his constructive and thoughtful contributions to debates on most subjects in this chamber. I was interested to hear him ask: Why should not we as a nation just building up a submarine service look to the modern means of propulsion and have a nuclear propelled submarine? I acknowledge that no government has the right to say that the country's defence must be looked at purely from the standpoint of expense and that the main consideration is whether one thing is cheaper or dearer than another. A government must plan for a certain type of force to meet a certain kind of situation and then it must se.t about getting that kind of force regardless of the cost. We in Australia are to have a submarine service for the first time for many years. We are just starting to develop our own submarine force. Honorable members will recall that my friend, the honorable member for Isaacs **(Mr. Haworth),** was rather concerned about a television programme on the proposed Australian submarine service which was produced by the British Broadcasting Corporation. The narrator, with considerable pride, said of the submarines: "At least, none of these will be captained by an Australian officer." There is a very simple reason for this: We have no officer with sufficient submarine experience to captain a submarine. But eventually all these vessels will be captained by Australians. I believe that honorable members realise this. We are developing a submarine service. There are reasons for not acquiring nuclear driven vessels which are tied up with international considerations of which I am sure the honorable member for Fremantle is aware. The Oberon class submarines that we now have on order are to cost, I think from memory, about £4 million each. I understand that the cost of a British nuclear submarine is about £45 million. Obviously, one cannot develop a submarine service by acquiring one submarine at a cost of £45 million. We are starting off with four submarines. This is where financial planning comes in. As I said earlier, cost is not the most vital factor, but it is an important consideration in deciding what one can do and must do. Who knows what will happen in the future? I for one do not possess the kind of mind that would enable me to look into the future and see it as if I were gazing into a crystal ball. It is very difficult for any member of this Parliament to look far ahead with any degree of certainty when considering armed forces and defence equipment. Rapid changes are constantly taking place in scientific research and development. However, I shall take advantage of this opportunity to try to put straight what I believe are misconceptions in the minds of some speakers in this debate. I turn particularly to the remarks made by the honorable member for Capricornia **(Mr. Gray).** This is the second occasion on which he has discussed the purchase of the guided missile destroyers. He made a rather long speech on this subject, I think in the Budget debate. I have, not had an opportunity in any debate since to reply to the points that he raised. He brought up two points in particular. These related to what he described as the ineffectiveness of their Tartar missile system and their overall cost. For obvious reasons I cannot, here or anywhere else, make fully public details of the capabilities of a weapons system, particularly one. which is not ours and which originally belonged to another nation. I am sure that honorable members will appreciate this. But I can say without going into the sort of detail that impinges on the area of classified information that these D.D.G.'s will certainly have a single arm launcher with a rapid reload facility that will allow missiles to be fired at intervals of a few seconds. Targets for this missile system are initially detected by air warning radar. The weapons system can evaluate data from a number of targets . simultaneously and two missile targets can be engaged at one time. Sufficient missiles for a prolonged action can be carried in the magazine. We should not overlook the fact that in addition to the Tartar system these destroyers will also have a powerful anti-aircraft capability in their 5-inch gunnery system. I shall mention this again later. When honorable members talk of costs, they sometimes become a little confused. One honorable member opposite misquoted costs. When he purported to be giving the cost of the Tartar missile system he was in fact giving the cost of a completely different system. There is of course no surface to air missile system anywhere in the world that would give a single unit the capability of repelling continuing large scale air attacks. Such a contingency, if it should be assessed as likely, would be met by evasive routing or the arrangement of additional protection for convoys. In other words, the force is suited to the sort of situation that is likely to arise. I can say with complete confidence that the Tartar missile system being fitted in the new D.D.G.'s is the most up to date and the best developed ship borne medium range surface to air missile system currently available anywhere in the world. I announced in this chamber earlier in the week the decision to obtain Skyhawk aircraft for the carrier " Melbourne ". This will retain - I emphasise the word " retain " - in the Australian Fleet the capability of anti-aircraft defence beyond the range of ships' armaments, as well as the ability to counter hostile reconnaissance aircraft, and a strike capability against attack by surface forces. I mention these things because some people seem to imagine that the only way to counter one sort of weapon is to use another sort of weapon designed for the specific purpose. The honorable member for Capricornia also expressed doubts about the value of the D.D.G. project to the Navy. This is surprising, because in these vessels we shall acquire a force of the most effective and most versatile modern escort ships available. The professional view of experts in the United States Navy at the highest levels is that this kind of destroyer escort is the best they have had since the war. This is acknowledged in the other navies of the world. These ships have an armament of two 5-inch automatic guns as well as the Tartar missile system and antisubmarine homing torpedoes. Their anti-sub marine Ikara torpedo equipment, which is a significant item in their missile armoury, is Australian designed, Australian built and Australian serviced. With their equipment these vessels will be able accurately to engage surface targets and aircraft, provide gunfire support for the Army, detect and attack submarines and direct any sort of aircraft operating in the vicinity. The honorable member for Capricornia, in his Budget speech and again tonight, said that instead of getting these guided missile destroyers we should acquire a large number of small vessels which he described as a scaled up version of the British Brave class. In its present configuration, according to "Jane's Fighting Ships" which is available to honorable members in the Parliamentary Library, this is a convertible gunboat and torpedo boat. I think the honorable member suggested that these should be scaled up 50 per cent. Is that right? {: .speaker-KF5} ##### Mr Gray: -- The Canadians have done it. {: .speaker-JWV} ##### Mr CHANEY: -- This would give them a surface to air missile capability. In addition the honorable member said that 120 such vessels could be built for the cost of the three D.D.G.'s that we are getting. Let us have a look at this proposition. First, the cost of a scaled up version of the vessels mentioned would not be £500,000 as stated by the honorable member. The Brave class vessels cost the Royal Navy nearly £1 million Australian to build in the present version. {: .speaker-KF5} ##### Mr Gray: -- It has built only two of them. {: .speaker-JWV} ##### Mr CHANEY: -- That raises another point: The Royal Navy stopped building them. Without taking into account such vital matters as the feasibility of the proposition, and associated questions of research and design, the cost of the so-called scaled up version would be a minimum of £1.5 million each. To this, of course, must be added the cost of the missile system and associated control and communications facilities. The sort of ship that the honorable member envisages would therefore run us into a cost of some millions of pounds for each unit. The next question is: What is such a ship to be used for if we do get it? Its role would be very limited for our requirements because of restricted range and armoury. We have to realise that if we build in one capability we have probably to omit another. In our situation in the world, we must have vessels with a long range. When it comes to patrol boats - not motor torpedo boats, I may say - range becomes very important. At times it might have to be sacrificed for a few knots of speed. I think those honorable members who live in the far north of Queensland will surely realise this point. Therefore, it would not be merely a patrol craft with an anti-air missile system. We are building our own patrol vessels which have been designed for service in northern Australian and island waters. Twenty of these are being built in Australia for the Navy at a cost of between £350,000 and £400,000 each. They are ideally suited, as designed, for the job they will do, that is, patrol and surveillance duties in our own area. The primary responsibilities of the Navy include the escorting of Australian military convoys to operational areas and the protection of our shipping routes. These tasks require fleet units with a range and all round capability which would definitely not be provided by vessels such as those proposed by the honorable member for Capricornia. So we get back to the D.D.G.'s which are highly efficient, comprehensive escorts. The other types we have, the Darings and the Type 12's, are also excellent anti-submarine ships. The combination of these with the D.D.G.s provides the best escort force for convoy and trade protection. In addition to escorts, convoys also need, in some circumstances, the protection of long range maritime patrol aircraft and carrier based aircraft. The ships proposed by the honorable member for Capricornia, even if they were feasible, would hardly have a place in such a force. I rise to speak at this time because we have been on the air and those honorable members who were in the chamber at the time will have heard the charge made by the honorable member for Capricornia that we should have a parliamentary inquiry into the purchase of the destroyers. I must say that here again I believe that the honorable member's remarks bristle with inaccuracies. In the first place, the cost of the Tartar guided missile system, including a full outfit of missiles for each of the three destroyers, is £4 million, not £13 million. It is also incorrect to say that the Tartar system costs twice as much as the defrayers themselves. In fact, the cost of the system, with an outfit of missiles, is less than half the cost of the ship without its electronic and weapons equipment. The next point the honorable member made was that the General Electric Co. and subsidiary electrical companies had been charged under the Sherman anti-trust laws for rigging contracts, or some other offence. I think he was a little mixed up. In the first place, the General Electric Co. is not the contractor for the missile system. {: .speaker-KF5} ##### Mr Gray: -- I did not say it was. {: .speaker-JWV} ##### Mr CHANEY: -- The General Dynamics Corporation is responsible for this. I ask the honorable member to note carefully that the purchase of the ships is by Government to Government agreement. The United States Navy is responsible for making and oversighting all contractual arrangements. The regulations which apply to all United States armed forces procurement also apply to contracts associated with the construction of destroyers for the Royal Australian Navy. Prosecutions under the Sherman Act have not related to any equipment for these ships. If, however, a case arose in the United States similar to the situation that arose in connection with the Bloodhound missile and the Ferranti Co. involving equipment for the Royal Australian Navy destroyers it follows that the same safeguards as are provided for the United States armed forces procurement would apply. The Royal Australian Navy is very proud of these ships. The present captain and crew of " Perth ", who are engaged in working up trials off the coast of America, are sending back highly, favorable reports. These are the people upon whom the Government depends for advice. I come now to the three speakers who mentioned patrol vessels and suggested that they be equipped with this, that or something else. There has been a tendency to compare the Russian built Komar with the vessels that we have ordered. They are not comparable. They are designed for different roles. Ours are defensive ships designed for patrol and surveillance duties in shore waters. They are capable of driving off any similar patrol craft and intercepting infiltrators. The Komar is purely an offensive craft for use against larger units. It is not a patrol craft at all. These patrol vessels are not torpedo boats, and I might say that they were not designed by the Government. Someone suggested that the Government ought to have built five more knots into them, and something else. As a matter of fact, they were designed by the Royal Australian Naval Staff for general purposes. {: .speaker-KYS} ##### Mr Reynolds: -- Where does the Minister envisage them being used? {: .speaker-JWV} ##### Mr CHANEY: -- I will come to that if I may. I said in the statement I made to the House that their first function would be to replace the minesweepers. The minesweepers we have had on patrol in Malaysian waters have had to do most of their patrols at 10 knots. I think my friend the honorable member for Batman will realise that an engine which is designed to operate at high revolutions will be damaged eventually if it is run continually at 10 knots. The second thing that happened to the minesweepers was this: I think most honorable members know the waters in South East Asia. These waters are covered with debris of all sorts. These minesweepers have wooden hulls with nylon sheathing. The nylon sheathing became torn by the debris and as a result damage was done to the wooden hulls. These patrol vessels are designed primarily to undertake the task of anti-infiltration patrol. Apart from that, they will be used round the Australian coast at places like Fremantle, Melbourne and Sydney. To cover the point raised by the honorable member for Batman, they would also be used for reservist training. {: .speaker-JF7} ##### Mr Beazley: -- The Minister says that these boats will be. capable of dealing with boats of equivalent types, but is it hardly likely that such a vessel would have the necessary range to get to Fremantle. {: .speaker-JWV} ##### Mr CHANEY: -- I am not talking about dealing with boats at Fremantle. What I am saying is that there has been a tendency here, to imagine that these are front line, ships intended to go out and attack something. That is not the purpose for which they were designed. I repeat that they were designed by people who are professionally qualified to know what they need to have for the purpose for which these ships are to be used. As I have said, they will also be used for reservist training. The honorable member for Batman mentioned H.M.A.S. " Supply ". He. said that it was a pity that we did not man this ship as the Royal Fleet Auxiliary mans comparable vessels in the Royal Navy. He will realise that there is in Australia no counterpart of the. Royal Fleet Auxiliary. **Mr. Benson__** We had it. {: .speaker-JWV} ##### Mr CHANEY: -- In wartime. {: .speaker-JP5} ##### Mr Benson: -- In peacetime. We had it for years. We had it from 1918 onwards. {: .speaker-JWV} ##### Mr CHANEY: -- There is no equivalent to it here. We have merely followed the American patter., of manning such ships with personnel from the Royal Australian Navy. At the beginning of his speech the honorable member for Batman mentioned the use of the White Ensign. The Navy is in no doubt at all as to its Australian identity. It is aware that this identity should be more readily obvious both in Australian waters and abroad, and I appreciate the honorable member's comments. He said the ensign ought to be changed. As he well knows, if a ship goes into action it always flies the Australian flag and the White Ensign. I want the honorable member and the House to know - there was a Press release on this- - that it was decided only recently that in future all Australian sailors and officers will wear " Australia " flashes on the shoulders of all uniforms so that they may be readily identified as Australians. As honorable members know, there is a great similarity between the uniforms of the Royal Navy, the Royal Australian Navy and the Royal New Zealand Navy. This decision is a start. In action and in harbour, Australian warships always fly the Australian flag on the jackstaff. The White Ensign is flown aft both at sea and in the harbour. {: .speaker-JP5} ##### Mr Benson: -- When a ship is cruising at sea it flies only one flag- {: .speaker-JWV} ##### Mr CHANEY: -- I think the Navy is profoundly conscious of the great tradition of wearing of the White Ensign on the Queen's ships. At the present time investigation and research are being conducted into this very point. While preserving the essence of this tradition and still conveying a distinctly Australian appearance, I think that some alteration would be quite commendable. The Navy has been thinking along these lines. I understand it is seeking opinions on the matter and I thank the honorable member for his interest and for the contribution he made. I realise that this is the time when honorable members are given an opportunity to debate these estimates and I do not want to take up any more of it. I thank the Committee for its indulgence. {: #debate-34-s16 .speaker-JZP} ##### Mr FULTON:
Leichhardt .- It is very nice to hear the enthusiasm of the Minister for the Navy **(Mr. Chaney)** when telling us of the striking power of the future Royal Australian Navy. I hope that his ambitions are fulfilled. We also hear honorable members talking about the striking force of the Royal Australian Air Force. That is very nice. It is about time we had some assurance about the defence of Australia. But let us get down to fundamental facts. This Government stands condemned in the eyes of the Australian people for its pathetic and inept attitude during the past 16 years for ineffectively building up the defence of Australia. In that time it has allowed even the previously existing defence forces in the Navy, the Army and the Air Force to deteriorate. The Press is also to blame for encouraging this apathetic attitude and deceiving the people of Australia. This deceit is still occurring. It would appear in statements by the Government and in the Press that by 1968 Australia will have defence weapons capable of suppressing any aggression on Australia. This is not so. The Government says that we will be able to hold back any aggressor until we receive assistance from our allies. But who are our allies? At the present time we have in Australia a delegation from the United Kingdom. While conversing with members of that delegation we have been told that the United Kingdom could never assist Australia in the future as it had in the past. It is not that she does not want to do so but she will not be in a position to help us. I submit to honorable members that our ties with England are much stronger than with any other ally because over the years we have answered her call for the defence of right in the Boer War, the 1914-18 war and the 1939-45 war. But we do not have the same ties with the United States of America, and I do not know of any other country which would be our ally. We never know our allies until the war breaks. I think that the United States of America will assist us but she is in a different position from that of England. In those days England's leaders could commit that country to our assistance but America could not. {: .speaker-KWP} ##### Mr Turnbull: -- Why not say Great Britain? {: .speaker-JZP} ##### Mr FULTON: -- Great Britain, if you like - I do not care what you call that country. The United Kingdom joined with Australia because of the ties we had. The United States of America came to the assistance of Great Britain in our time but it took her a long time to do so, and the same thing could happen to us. We have to build up a defence force strong enough to withhold aggression, not only for a short time, but for a long time. Announcements saying that the Royal Australian Navy and the Royal Australian Air Force, particularly have the latest equipment on ships and aircraft make very nice reading but those things will not give us the numbers necessary to defend us from aggression by nations to the north. We would not have even the same number of ships that we had prior to the 1939-45 war. It is very interesting to see the figures relating to the strength of the Navy. At the end of 1945, we had 314 naval vessels. At the end of August 1964 we had 36. We had more vessels in 1920 than we have today - one more. People will say: " That is so, but our future vessels will have greater striking power." Certainly, we hope that they will. Any enemy likely to invade Australia will have them anyhow, so we will have to counteract their striking power. Therefore, it will be necessary for us to have the latest weapons possible to use in defence of our shores. Although the small number of vessels we will have by 1968 are said to be the latest in equipment we must remember that the other nations will be similarly equipped, if not better equipped than we are; but they will have them in the hundreds, if not thousands, whereas we will have them in ones an twos. This is not good enough. We have to build up our defences otherwise Australia will be open to aggression by any nation which cares to attack us. I do not think any nation is preparing to attack us now but there will come a time when some nation which, in its opinion, has grown powerful will have the numbers to Australia. That is what we have to guard against if we love Australia and wish to defend this country. I also believe sincerely that if the Government had told the Australian people of the difficulty they would have in defending this country there would have been no need for the conscription of the 19 and 20 year old lads. Australia has never failed to recruit sufficient numbers when needed for defence. Honorable members know as well as I do that a lot of young lads who volunteered for the permanent forces and for the citizen forces were rejected because of educational qualifications. People in that category were not rejected during the 1939-45 war. Many lads could not even sign their own name when they joined the Army, but there was an educational system operating throughout the Army and they were given an education during the war. A lot of those lads turned out to be excellent soldiers. Many were decorated. Therefore, there is no reason why we should not accept these people in our armed forces and educate them to the standard required so long as they are physically fit and capable of carrying out their duties. In conscripting the 19 and 20 year old lads, the Government has forced hardship on many people in the country areas, as explained by my colleague the honorable member for Herbert **(Mr. Harding).** This is particularly so in the dairying and sugar industries. This could have been avoided. If the facts had been told to the people, I think we would have had volunteers for our forces, and one volunteer is better than 10 pressed men at any time. The only defence force that represents an improvement at the present time is the Army We do not hear much about the Army's potential striking force so far as weapons are concerned. There is no doubt that the weapons have improved but so have those of armies retained by other countries - probably they have improved more than ours. I do not think for one minute that our Army is equipped as well as it should be. It is time that the present Government and the Army, the Navy and the Air Force equipped their forces properly, not only with weapons but with clothing, footwear and all other necessities. I think that members of the Services deserve the best and should be given the best. There is no reason why this country should not be able to pay for those things. We live in a very affluent society and should spend more money on our defence than we do. In my opinion, it will take 10 to 15 years to bring the forces up to the strength and capability to defend this great nation of ours. Direct and indirect taxation was placed on the people under the pretext that it was being used to build up our defences. That is not quite true as the increased taxation will not be used solely for defence. Speaking for the constituents of my electorate of Leichhardt in the north - and I feel I am speaking for the whole of northern Australia - there is no confidence in the Government which has allowed Australian defences to becomes outdated. I should still like an answer to the question: Is the Brisbane line still alive? A colleague of mine on this side of .the House has brought this question up on many occasions but has never been given a satisfactory answer. I believe that the Brisbane line of defence still exists in the eyes and hearts of the leaders of our defence forces. We have no troops stationed in the north, as we had in the last war, for the defence against aggression. No troops are stationed north of Townsville, but we know that we are to have some troops stationed in the Townsville area. I hope that the Minister will realise that these troops cannot be allowed to stay in the Townsville area. They will need to be deployed all round the north in order to gain experience in tropical conditions. Such experience will be necessary not only for the combat troops but also for ancillary units like medical, engineering and signals units. This is very important. We should have learned our lesson from the last war. A tremendous number of problems in the north had to be solved by the army medical services and the communications services, although the area was only a jumping off point for the Islands. The whole of the Army was held in the north and the Army medical service, as I have just said, had to contend with many problems such as tropical fevers, insect bites and that kind of thing. The same sort of problems could arise again. Defence forces should be stationed in this area in order to gain experience unless it is the intention of the Government to implement a Brisbane line policy. It is in the northern areas that our troops will have to serve if hostilities occur and it should be in these areas that they are given their training. If the morale and physical wellbeing of our defending forces are to be guaranteed they must have the necessary experience behind them which has been gained in the areas in which they will be called upon to serve. The Minister for Air **(Mr. Howson)** knows that many of the airstrips that were used during the last war in the defence of Australia have gone out of existence. This has occurred probably because of the longer range of our bombers and other aircraft. However, we will use these airstrips again, if necessary, and therefore they should be kept in a condition where they could be quickly put into operation. The Army unit to be stationed in the Townsville area will be well catered for. I assure the Minister for the Army that Townsville will be able to look after his troops. If it cannot, there is plenty of room still further north where 8,000 troops could be housed and catered for, and even fed off the land if necessary. {: #debate-34-s17 .speaker-0095J} ##### Mr HOWSON:
Minister for Air · Fawkner · LP -- Before I get on to what I want to say I should like to reply to the honorable member for Leichhardt **(Mr. Fulton)** who quoted some remarks of British members of Parliament who are in Australia at the present time. The honorable member purported to give the views of these gentlemen on the problems of defence in this part of the world. He may not have gained a completely accurate picture of the views expressed by all these British members of Parliament. I had the opportunity at the same gathering at which the honorable member was present to talk to the leader of the delegation, a former Minister for War in the Labour Government, who gave me a very different idea of the views of the British Government on the defence of this part of the world and of our own contribution to it. The honorable members should not take every thing he has heard at that gathering for gospel truth, and he should be a little careful in regard to some of the information he received. I have found the comments in this debate extremely helpful and useful. Relatively few of them have been specifically directed to the Royal Australian Air Force. That could indicate that most honorable members are happy with the work done by the Air Force during the past year and therefore have few comments to make concerning it. I should like to thank the honorable member for Cowper **(Mr. Robinson)** for his remarks about the recent exercise, Pacific Concord, and its value in proving the compatibility of equipment used by the three participating nations, the United States of America, New Zealand and Australia. I should like also to thank the honorable member for Melbourne Ports **(Mr. Crean)** for his suggestion that more information be provided in the Defence Report, particularly in relation to the amount of overseas expenditure. It is not easy to do this over a one year period, because so much of the expenditures is provided by funding arrangements, some being spread over one year and some over three years. However, it will be worth while to see whether more information can be provided. I think honorable members will realise that during the last year or two much more information has been provided in defence reports, and more could be incorporated from year to year as a result of such suggestions. The honorable member for Wills **(Mr. Bryant)** suggested that we should consider using Citizen Air Force pilots as reserves for the Royal Australian Air Force. This matter has been raised during the year by other honorable members, particularly the honorable member for Batman **(Mr. Benson).** It is a matter, that I have been investigating with the Air Staff. It will not be possible to do anything on the scale mentioned by the honorable member for Wills with pilots flying FI 04 aircraft, as is the case in Hawaii, but at least, something on a smaller scale might be practicable and we will certainly consider the matter. The honorable member for Evans **(Dr. Mackay)** raised the question of using mobile airstrips made of aluminium. This matter has been investigated by the Air Staff but the cost is fairly astronomical. For instance, to have provided a mobile airstrip at Tindal instead of using the normal airstrip construction would have cost 50 per cent, or perhaps 100 per cent. more. The honorable member for Kingston **(Mr. Galvin)** suggested that we should have a Commonwealth of Nations aircraft production scheme incorporating the countries of the Commonwealth, particularly Britain, Canada, New Zealand and Australia. On a superficial examination this suggestion has many attractions. It was even raised with me during my visit to the United Kingdom last December. I should like to remind the House that, for one. thing, the performance requirements of the various Commonwealth air forces are very different. The aircraft range required by the United Kingdom is very difficult from that required by Australia. The proposal does not have the same attraction when examined in detail it it might appear .to have on the surface. At least we have done a great deal during the past two years to get greater compatibility of equipment between the various nations concerned. The agreement between the United States, Britain, Canada, New Zealand and Australia has gone a long way towards rationalising the compatibility of weapons, aircraft, stores and other types of equipment and will make it much easier for our forces to work together in the future than has been the case in the past. I should like to refer to the remarks of the honorable member for Capricornia **(Mr. Gray)** who seems to have the habit of reading journals, getting only about half the story and then trotting it out as if it were all true, whereas in fact it usually contains a number of falsehoods. I think that once again tonight he was just as far off the beam as ever, and that is saying a good deal. He has frequently compared the Royal Australian Air Force and the Royal Swedish Air Force. Officers of the Air Force had an opportunity this year while examining the potentialities of various training aircraft throughout the western world, to visit various countries including Sweden, and I have had a report from the officers who visited those countries. It is rather interesting to have, a look at the comparison between the Royal Australian Air Force and the Royal Swedish Air Force and between the Australian aircraft industry and the Swedish aircraft industry. Let me say, first, that I can see the value of having a local aircraft industry. It is for this reason that, not only do we manufacture the Mirage in Australia but we will also manufacture the Macchi trainer in Australia in the next year or two. One would think, listening to the honorable member for Capricornia, that the whole, of the Swedish aircraft were locally manufactured. He spoke about the Saab factories. He mentioned the Draken aircraft and said this was a Swedish aircraft. So it is, but it has a Rolls Royce engine, and Ferranti radar made in the United Kingdom, it uses a Falcon missile made in the United States of America, a Sidewinder missile made in the United States of America, and an auto pilot also made in the United States of America. Therefore, the proportion of local manufacture in the Draken is not very much higher than the proportion of local Australian manufacture in the Mirage aircraft. This shows how it is possible to get off beam if we do not know all the facts. When we look at the situation in Sweden, we find that the proportion spent on defence as a whole there is very much higher per head of population than the proportion spent in Australia. Sweden adopts a neutral attitude; we. rely on co-operation with our allies. More than SO per cent, of the amount Sweden allocates to defence is spent on the Air Force. I must say that I wish the same might have happened in Australia, but if it had I do not think we would have had an ideal balance for our defence purposes. If we had as much to spend on our Air Force as Sweden has spent on its Air Force, and if we did not have other tasks to perform with the other Services, we would have an Air Force comparable to the Royal Swedish Air Force. Sweden is only half the size of New South Wales and, as the honorable member for Deakin **(Mr. Davis)** said earlier, we have 14,000 miles of coastline and 3 million square miles to look after. This is very different from the task that Sweden has. Sweden, therefore, does not need transport aircraft. It relies only on fighter aircraft, and interceptor fighters of short range. These, in fact, are the cheapest aircraft to maintain. Sweden can get more aircraft, for the same amount of money, than can an air force that must also have bombers, Army co-operation aircraft, transport aircraft and so on. The two Air Forces are not strictly comparable. The honorable member for Capricornia, however, took the time to compare various aircraft. He compared the Swedish Saab Draken aircraft with the Mirage aircraft. He said that the Swedish Draken was faster, had a better range and was much cheaper. I think we should have, a look first at the speeds. The maximum speed of the Mirage is mach 2.15 and the maximum speed of the Draken is usually mach 1.8 but sometimes rises to mach 2. That is quite a different speed capability. The combat radius of the Mirage is 745 nautical miles. The range of the Draken is considerably less than this. Obviously, Sweden does not need an aircraft with as long a range as we do in Australia. However, to say that the 'performance of -the Draken is better than that of the Mirage is not true. The honorable member does not know the facts. Last May, the honorable member for Capricornia made a similar statement about the FI IIA. I shall quote his remarks as they are reported in "Hansard " on 25th May 1965. He said- >We are buying a bomber from the United States - the FI IIA - but at this stage we find that the Swedes have produced a better plane at half the price. Before the F111A has gone into service in America, let alone in Australia, it is already obsolete. The honorable member for Cowper **(Mr. Robinson)** luckily at that time said "What rot ", and how true he was. The honorable member for Capricornia at that time was comparing the FI 1 1A with the Saab Viggen. He said that the Swedish aircraft would go into service long before the Fill A would. As he knows, the FI IIA will be in service here in 1968. The Viggen will not be in service in Sweden until 1972. He said that the Viggen was a better plane. The FI IIA has a longer range, a bigger weapon load and is far more adaptable to many roles than the Viggen is. The F111A is a long range, high performance, strike reconnaissance aircraft. The Viggen is a short range interceptor and ground attack aircraft. It is completely different from the FI IIA. {: .speaker-KDN} ##### Mr England: -- I hope the Minister will see that the honorable member gets a copy of this speech. {: .speaker-0095J} ##### Mr HOWSON: -- I think it would be wise if he did a little more homework. He also said that the Viggen is a completely Swedish aircraft. But it will have a Pratt and Whitney engine and Philips navigation equipment made in Holland. It works, for instance, in co-operation with the Bloodhound surface to air missile. The Bloodhound missile will be bought from the Ferranti organisation. Again, on 30th March of this year the honorable member for Capricornia had his facts rather wrong. He said, referring to the FI IIA- it is anticipated that after this aircraft has flown for one hour it will require 40 hours of servicing before it flies again . . . He did not read his book correctly. The fact is that the aircraft needs 40 man hours of servicing. This means either one man working for 40 hours or 40 men working for one hour. This gives rather a different picture of the number of hours that the aircraft will be on the ground. {: .speaker-KUX} ##### Mr Stewart: -- They will get in each other's way. {: .speaker-0095J} ##### Mr HOWSON: -- If the honorable member looks at the FI IIA he will see that it is designed so that a large number of people can work on it at one time. It is designed for this very purpose. The actual fact is that, after a sortie, it will be possible for the F111A to be turned round completely in 30 to 40 minutes and for it to be refuelled, rearmed and completely ready for the next flight in that short time. This is a completely different picture from the 40 hours mentioned by the honorable member for Capricornia. I have not the time to go into the many problems of maintenance of these aircraft. I have tried to show that the honorable member, who sets out to be one of the Opposition's experts on defence, spends his time reading magazines and does not know enough even to understand what he is reading. He has given so much false information in this place that I think he is really endangering the defence efforts of this nation and it is time that some of the facts were put right before he does any more damage. {: #debate-34-s18 .speaker-KGL} ##### Mr HARDING:
Herbert .- Since I have been in this place I have always shown concern at what appeared to me and the people in the area from which I come to be a lack of interest in the defence of the northern areas of the continent. I think I said last year that the only things that would annoy anyone landing in the north would be the mosquitos and the sand flies. However, I am pleased to see now that we are to have an Army task force in Townsville. I compliment the Government and the Minister for the Army **(Dr. Forbes)** on their attitude. {: .speaker-6V4} ##### Mr Daly: -- They took a Labour idea. {: .speaker-KGL} ##### Mr HARDING: -- That is true. I am sure that, politics being what they are, pressure would have been brought to bear on the Government to put this whole project somewhere other than in the north- probably somewhere in Victoria. The people in my area are more than a little defence conscious. This is not surprising, as they were on the receiving end of a few Japanese bombs in the last war. However, the bombs did not do much damage. At that time, as we all know, the American bombers stationed at Garbutt saved the day. All we could muster in Townsville in 1942 was a Wirraway squadron with no aircraft. They were lost at Rabaul - and one Hudson squadron in much the same situation. This was after 24 years of war. Honorable members can understand why the people in that area regard defence differently from those living in the South. Before the Americans arrived it was commonplace in the early days of the war to see telegraph poles sticking up all over the place disguised as guns. However, that situation has passed; and thank goodness for that. If the Government sticks to its plans, which I hope it will do, we will have in Townsville an air base with No. 10 Squadron of Neptune bombers and an Army task force as well. With most of the potential trouble spots quite close by no difficulty should be experienced in transferring units quickly should they have to be moved, although I hope they will not have to be moved. I should like consideration to be given to the establishment of anti-aircraft defences for the military installations in the area, as well as for the whole area. At present we have virtually nothing, unless we regard Bofors guns as effective, which I do not. I know that the Government has Bloodhound missiles farther south and that they can be- transferred but I should like to see some of them in Townsville. If the Government intends spending money in the area, it should provide adequate defence facilities. I know that it is easy to say: " Let us have this and that" without giving any thought to where we will get the money. Most Australians would like every possible means of defence so long as income taxation did not increase. I know that the Government must have regard to politics, and must keep in mind the ballot box. We can appreciate this, and we should realise these factors when we are discussing defence matters. However, a Government has responsibilities. It is interesting to look back over the last few years. We have heard much about defence. I can recall more than 10 defence statements each containing new proposals to meet situations that the preceding statement was designed to meet. Only this week we have had a statement on the Navy. This seems to me to have been received reasonably well, as I have not heard much criticism of it. I compliment the Minister for the. Navy **(Mr. Chaney)** on what appears to be a practical approach to the problem. Australia is a small nation in population with large areas to defend. Apart from in the northern areas we have never been confronted with enemy action. In the old days we had Britain to rely on; latterly we have had the United States of America. I am sure this is the cause of our inability to really get down to meeting our defence requirements. We want defence provisions but the thought of less fun to meet the cost involved makes most Australians shudder. The attitude, of the Government and of the general public to defence is so casual as to be worrying. I turn now to civil defence. The Government has established a training area at **Mr Macedon,** but has left the. general question of civil defence to the States who have so little money for their urgent requirements, including education, that they neglect civil defence. Last year I mentioned that the Queensland Government would not give the civil defence, organiser a rail ticket from Townsville to Tully. The cost involved would have been the equivalent of the petty cash for a pie cart. The distance involved was about 130 miles and the cost of the fare would have been about 30s. I drove the man to Tully because although the residents of that area are isolated they are civil defence minded, which is quite unique, and I thought their interest should be fostered rather than discouraged by apathy. Civil defence training is useful in times of national disaster, and national disasters are not unknown in Australia. I said last year, and I repeat it now, that I think civil defence is sufficiently important to be controlled by the Commonwealth Government under the Defence portfolio. At present it is a Cinderella that no-one wants. If adequate civil defence training is to cost money then the cost should come out of the pockets of the general public as it does in other countries. In Israel the people, live in real danger of war constantly. That Government spends half its budget on defence. We spend less than 5 per cent, as the Leader of the Opposition **(Mr. Calwell)** indicated. I said during the Budget debate that the complexities and technicalities of a modern defence system involved a lot of needless duplication and consequent waste. This results from the present set up under which we have a separate Navy, Army and Air Force. This should be obvious to anyone.. We should study what the Canadian Government has done, because we may eventually have to do likewise. Canada has integrated the three services into one force. By so doing Canada found that the money available for new equipment from the. defence allocation increased from under 20 per cent, to more than 50 per cent., and it is expected to increase as the new system settles down, as it will in time. We can realise what the reaction would be among the top brass in Australia. A lot of them would be most upset, but if we are ever going to get anywhere we must take a radical step such as this, and the sooner we do so the better. The people generally in Townsville welcome the decision to locate a task force in the area. I do, and I am pleased that the Army today has a sense of public relations, as have most Government instrumentalities. I can remember how bad the feeling was in Townsville in 1939 when the Air Force first arrived there. This was primarily because of bad public relations. Today the members of the Royal Australia Air Force at Garbutt are among our. best citizens. Many are close friends of mine. When I was in business they were good clients of mine. However, this has not always been the position. There was considerable ill feeling against them when they first arrived in the area. I should not like the townsfolk, or the members of the Army, to have to go through this again. Townsville must become a garrison town and as such there will undoubtedly be many shortages, ranging from hospital and school accommodation to a housing shortage. We have a housing shortage now, but it will become more acute as more people arrive. There will also be less room on the roads for motorists. There will be far more men than women. This, of course, will not worry the married people. {: .speaker-KUX} ##### Mr Stewart: -- It might. {: .speaker-KGL} ##### Mr HARDING: -- It should not. However, it will mean that a lot of young men will be faced with insufficient entertainment facilities and they will probably end up in the hotels. I ask the Minister to bear these facts in mind, as I have no doubt he will do. Who will pay for the essential services - water and sewerage - that will be needed? I understand that these matters are being considered, but I hope that the decisions that are made will be favourable to the local council which has some big financial problems to overcome. These problems will be aggravated by an increased population ahead of expectations. While there is no doubt that the people generally, and the business people particularly, will benefit from the Army establishment - and the State will benefit from a decentralisation and development aspect - the public will contribute in no small way to the cost. I should like this factor to be noted. Beef roads have made a notable contribution to the defence of the North, quite apart from serving the purpose for which they were constructed. However, I would suggest that the Government inspect the Bruce Highway. From a defence viewpoint it is most unsuitable. It is far too narrow, the bridges on it are too narrow and not sufficiently strong, and it could not carry the heavy traffic that would traverse it in time of need. Many bridges in the district represented by the honorable member for Leichhardt **(Mr. Fulton)** are completely under water for days on end in the wet season. I realise that to make the necessary improvements would be a costly business, but consideration should be given to this aspect from the viewpoint of defence and national development. Finally, I hope that we do not get nuclear weapons in Australia. I do not think the Government will procure such weapons. There are sufficient of these devices in the the world now. At present they are in the hands if not of responsible nations at least of nations that have something to lose. For my book I hope the position remains as it is. Our defence set-up is not sufficiently sophisticated to include such weapons. Far from being a deterrent their presence would invite the destruction of our built up areas; and they could be destroyed in a very short time. {: #debate-34-s19 .speaker-KFH} ##### Dr FORBES:
Minister for the Army · Barker · LP -- I welcomed the remarks of the honorable member for Herbert **(Mr. Harding).** I was almost beginning to think that he did not really want the Army in Townsville. I now find that he does and that he gives his enthusiastic support to the proposal to set up an Army establishment there. I am deeply conscious of some of the problems which he mentioned, such as that of absorption, which are involved in taking a force of the size involved and planting it adjacent to a city of the size of Townsville. However, I am sure that with goodwill on both sides - on the side of the Army, which I can promise - and on the side of the citizens and the Council of Townsville - and with the honorable member's own valued support, the difficulties can be overcome and a mutually satisfactory situation can be created. The honorable member mentioned the strain on the amenities of Townsville. No doubt there will be a strain, but 1 point out to him that these days the Army provides a considerable volume of amenities for its own personnel. In the barracks area at Townsville there will be provided playing fields, swimming pools, gymnasiums, squash courts and other amenities of that kind. I hope that as well as some of the amenities and facilities of Townsville itself will be available to the soldiers, and that in turn, with mutual goodwill, the Army facilities will be available to the citizens of Townsville. I want to take the opportunity of replying to points raised by other honorable members who have spoken in this debate and to say, as my colleagues, the Minister for the Navy **(Mr. Chaney)** and the Minister for Air **(Mr. Howson)** have already said, that we welcome the interest that honorable members have taken and the suggestions that have been made, particularly those of them that can be classified as constructive. The honorable member for Kingston **(Mr. Galvin),** who spoke first from the Opposition side, concluded his speech by expressing his desire that the standard of accommodation now being made available for national servicemen should be made available also for the ordinary regular soldiers. My answer to that would be that it is being made available. There is no distinction between national servicemen and ordinary regular soldiers in the Army in the £23 million barracks construction programme that is being undertaken. The vast majority of these barracks will accommodate units consisting of both regular soldiers and national servicemen. I speak of the permanent constructions in the major task force centres at Holsworthy outside Sydney, at Ennogera outside Brisbane and at. Townsville. The barracks at these three task force centres will, as I say, accommodate units consisting- of both regular soldiers and national servicemen. The honorable member for Melbourne Ports **(Mr. Crean)** raised again, as he has on quite a number of occasions, the matter of the Williamstown rifle range. I can understand his interest in this matter and the interest of the local people. The land involved is an open space in a housing area and many people would like to see it used for housing purposes. On a number of occasions I have examined the possibility of giving it up, but the fact is that the facilities there are not available anywhere else reasonably close to the Melbourne area. The need for this rifle range is not decreasing, as the honorable member suggested it was or should be, but in fact it is increasing. It is used primarily by the Citizen Military Forces, by the cadets and indeed by the rifle clubs themselves. The honorable member suggested that the rifle range could properly be located a good deal further away from the metropolitan area. This is just not possible. The members of the Citizen Military Forces, in particular, have to do their training in their spare time. They give up their spare time to do their training. If they are to train efficiently in the time they have available they must have rifle range facilities reasonably adjacent to their depots and to the places where they live. So I can hold out no hope that the Williamstown rifle range will be abandoned unless - and we have suggested this - the honorable member himself can come up with an alternative acceptable area, or unless the people of Williamstown can suggest an alternative acceptable area. The honorable member for Melbourne Ports also asked specifically for the proportion of expenditure on equipment in each of the Services which was spent in Australia and that spent overseas. So far as the Army is concerned I can inform him that in relation to the £30 million approximately which will be expended on equipment in this financial year, £7.6 million of it will be spent overseas and the remainder in Australia. That is to say, approximately 80 per cent, will be spent in this country. Having regard to the small quantities of some of the equipment which the Army requires, and therefore the uneconomic nature of setting up productive capacity in Australia in those circumstances, I think that this represents a satisfactory result. The honorable member for Wills **(Mr. Bryant)** and also the honorable member for Capricornia **(Mr. Gray)** at the end of his speech, reverted again to an idea which is popular amongst at least some members of the Opposition. It is the fortress Australia concept. The proposition is that the whole of our defence, effort should be directed to defending Australia from Australia and should be related only to a direct physical threat to Australia itself. I think that the honorable member for Wills mentioned the example of Switzerland and Israel, and the honorable member for Capricornia mentioned Sweden if I remember correctly. They said that if only we followed the example of those countries and enlisted a large proportion of the population part time in the forces, that is all we would require. It seems to me absolutely astonishing, as my friend the honorable member for Deakin **(Mr. Davis)** pointed out in his. usual inimitable fashion, that anybody could compare the circumstances of countries like Switzerland, Sweden and Israel on the one hand - tiny pocket handkerchief countries in a situation entirely different from ours, topographically and in every other way - with a nation of 11 million people required to defend a vast continent such as this one. I think that one has. only to consider the absurdity of the contrast to make the point that this approach to Australian defence is just not on and just not practicable. I would like to thank the honorable member for La Trobe **(Mr. Jess)** for his constructive comments although, if I may say so, some of his remarks did, perhaps suggest that we should concentrate unduly on an army which was related purely to the possibility of defending this country from Australia itself. {: .speaker-KKB} ##### Mr Jess: -- I had only 15 minutes to get it in. {: .speaker-KFH} ##### Dr FORBES: -- I appreciate the difficulty, but I should like to thank the honorable member for expressing the belief, which undoubtedly is true, that there exist today no antagonism and no clash of interests between the two components of the Australian Army. The two components to which I refer are the Australian Regular Army on the one hand and the Citizen Military Forces on the other. The honorable member for Wannon **(Mr. Malcolm Fraser),** in an excellent speech, made the same point. We have today one Army with a regular component, including national servicemen, which is at a high state of readiness to react quickly to a situation which might arise overseas, and a C.M.F. component - a part time force - at a lower state of readiness, as any citizen army must necessarily be, designed to provide the followup forces and the framework for expansion should that be required. But the point I want to emphasise is that within the Army today it is considered to be one Army. There is close co-operation between the two sections. There is no suggestion of any antagonism between the two and there is no conflict of interests. People who attempt to keep this conflict alive when it no longer exists certainly do no service to this country and certainly do no service to the Army. The honorable member for Leichhardt **(Mr. Fulton)** raised the old bogy of the standards applied to people entering the Army. As I have said on quite a number of occasions, the standards applied today for entry into the Australian Regular Army are exactly the same as those that were fixed in 1943. Those standards were fixed as a result of experience gained in war, in which it was determined that people who did not come up to those standards medically, educationally and intellectually were an administrative risk and a danger to their comrades. I am sure that, recognising that fact, the honorable member would not suggest that we should fill up the Army with people in that category. I just make this point. The honorable member talked about education. Anybody who has not been fortunate enough to have the necessary schooling to enable him to reach the level required but who is intellectually up to the correct level and is medically fit is not rejected for enlistment. We do enlist people in that category in the Army and we educate them in the manner that the honorable gentleman has suggested. But it stands to reason that in a country in which, for many years, most children have been required by law to have, say, 10 years' schooling, the majority of people who have not reached the educational standard of an 11 year old child, which is the standard for acceptance in the Army, are not intellectually capable of benefiting from further education. The honorable gentleman also mentioned the importance of exercising our soldiers in tropical areas. This is fully recognised by the Army. It is one of the reasons for the establishment of the task force at Townsville and for the acquisition of the Shoalwater Bay training area. It is one of the reasons why Regular Army units exercise a good deal further north - indeed, in New Guinea. In conclusion, let me say that I was most gratified by the small number of matters which honorable members felt it necessary to raise in relation to the Army during this debate. I take this as a tribute to the Army and what it has achieved. I think that every member of this Parliament will agree with me when I say that the smooth and efficient way in which the national service scheme was planned and brought into operation, and the obviously successful way in which it is operating at present, are the results of a tremendous effort by the Army and merit a tremendous tribute to the efficiency and training of the Army. I think that the way in which this scheme was handled has brought home to the Australian people in a way in which it has never been brought home to them before what a well-run, well-organised and devoted professional Army we have. I believe that the reputation which our units and soldiers, both other ranks and officers, have established for themselves in Vietnam and Borneo, where it is clearly recognised that their standard of training, their efficiency and their equipment are equal to if not better than those of any other troops fighting in those areas, has again brought home to the Australian people the fact that all the hard work, all the planning and all the devotion to duty of officers and men of the Australian Regular Army have produced results which are a credit to this country. I would like to say, too, that this has not been done easily. After all, the Army is in the process of undertaking a 60 per cent, expansion in a period of about 18 months. It is undertaking that expansion at the same time as it is actively undertaking commitments in Vietnam and Malaysia, while retaining a capacity to undertake further commitments. It is undertaking this expansion in peace time. By " peace time ", I mean a situation short of the declaration of a defence emergency. I say " short of the declaration of a defence emergency" because when a defence emergency occurs all sorts of resources, particularly of manpower, become available to the Army. Those are resources which it does not have short of the declaration of a defence emergency. In such an emergency it has available to it everybody on the Reserves - the Reserve of Officers, the Regular Army Reserve, and so on. It has available to it the resources of the Citizen Military Forces and the resources of all those people in the community who come forward in times like that. But, short of the declaration of a defence emergency, the Army has to undertake these commitments and this expansion entirely from within its own resources for command, administration and so on. This has been possible only because of the high professional competence of Australian officers and senior non-commissioned officers. It has been possible only by their devotion to duty and willingness to work long hours. These people would have had to do these things even if we had available to us all the people that we would like to have, but, as is well known, we have some shortage of officers. This has placed an extra burden on those who are in the Army. I take this opportunity on behalf, I am sure, of all honorable members of paying a tribute to the Army and the people in it for what they have achieved in meeting Australia's commitments and an undertaking the present programme of expansion. Proposed expenditures agreed to. Progress reported. {: .page-start } page 2399 {:#debate-35} ### PRINTING COMMITTEE {: #debate-35-s0 .speaker-KDO} ##### Mr ERWIN:
Ballaarat -- I present the tenth report of the Printing Committee. Report - by leave - adopted. {: .page-start } page 2399 {:#debate-36} ### ADJOURNMENT {:#subdebate-36-0} #### National Service Training - National Health Scheme - Political Parties Motion (by **Dr. Forbes)** proposed - >That the House do now adjourn. {: #subdebate-36-0-s0 .speaker-K97} ##### Mr GALVIN:
Kingston .- I wish to bring to the notice of the Minister for Labour and National Service **(Mr. McMahon)** what appears to be the very slipshod method adopted in the final call up of youths for national service training. I am compelled to raise this matter during the adjournment debate because the debate on the estimates for the Department of Labour and National Service was gagged. I cite the case of a youth who registered for service in February of this year in accordance with the requirements of the law. He received a registration certificate dated 22nd February 1965. The first advice he received regarding medical examination and call up was dated 13th April 1965, and on 30th June 1965 he received advice to attend for a medical examination at 6.30 p.m. on 8th July 1965. He then received a letter from the Department of Labour and National Service dated 5th August 1965 advising him that he had met the medical standards laid down. The letter went on in this way - >You will be required to commence your national service with the Army during the week commencing 27th September 1965. Further advice will be sent to you at your registered address giving full details of the date, time and place at which you are to report for service. > >If you are in employment, you should inform your employer now that you have received this advance notice but you should not make arrangements to leave work until you are advised of the time when you are required to report for service. If you leave your employment before you are required to report, you may forfeit rights you may have to reinstatement in your employment upon return from service. Nothing further was heard from the Department of Labour and National Service, so on 15th September the boy's father contacted the Department to see whether his son would be required to go into camp on 27th September as notified earlier. As a result of this telephone conversation he was advised that it was very doubtful that the boy would be going away because there was a surplus of intake and he probably would not be required until the February 1966 draft. The officer of the Department suggested that the boy's father contact him again on 17th September. Late on the afternoon of 15th September the Department contacted the boy's father and advised that it had been learned that it would now be necessary for the boy Geoffrey to report for national service on 30th September 1965. The official call up notice was received on the afternoon of 16th September confirming the boy's date of departure. This was one day after the day on which the boy's father had been told it was doubtful whether the boy would go into camp. Further, the letter was dated 6th September 1965, which was ten days before it was received. With the call up notice the boy received a form of agreement to undergo medical treatment if necessary and a further letter from the Commanding Officer of the 2nd Recruit Training Battalion, Puckapunyal, dated 12th August 1965. The opening paragraph of that letter read - >I have just learned that you have been selected for national service training . . . The point I make is that surely any youth called up for national service training could receive, in the final stages, at least 30 days notice that he was required to go into camp. The first notice a youth receives tells him to hold himself in readiness. That is fair enough. This boy accepted that and has raised no objection to going into camp, but the method adopted by the Department is the cause of this complaint. The Department tells these boys: " Do not give notice to your employer until you have received the final call up notice". Twelve days before he was due to go into camp he took the initiative and asked whether he would be going in and he was told: " No, it is not likely that you will have to go in at this time. We have more than we want. Then the Department decided that they would take him into camp. Surely any lad would look forward to having a couple of weeks off work before going into camp. I do not intend to pass on to the Minister the boy's name because nothing can be done to help him now. In any case, he is not complaining about going into camp. I have brought this matter to the Minister's attention in the hope that at least 30 days notice will be given of the date on which a boy is required to enter camp so that he will have the opportunity to meet all necessary commitments and perhaps have a week or two off work before commencing his national service training. {: #subdebate-36-0-s1 .speaker-6V4} ##### Mr DALY:
Grayndler **.- Mr. Speaker,** I wish briefly to bring to the attention of the House one or two matters of national importance. The first concerns a letter that I have received from an optometrist in my electorate. The letter reads - >Another Federal Budget has passed without any attempt by the Government either to include optometrical benefits in the National Health Scheme, or to remove the factors in the present scheme which discriminate against optometry in favour of medicine. ' On March 17th last, the Minister for Health, **Mr. Swartz,** arranged for our Federal **President, Mr. G.** Bell, and our Federal Secretary, **Mr. K.** Attiwill, to meet **Mr. A.** A. M. Kelly, the Asst. Director-General of Health. > >This meeting convinced us that the Government had been investigating our case. We contend that there is no real barrier to our patients receiving a benefit under a new section that could be added to the present Act. The estimated cost seemed to be realistic and practical, and we felt justified in believing that the Minister was about to take the matter further and make at least a preliminary approach to Cabinet. > >A month later the Minister wrote to us saying that it was " not possible at this stage, to provide benefits for optometrical benefits ". He gave two reasons: (i) Benefits are payable only for services rendered by qualified medical practitioners, (ti) The extra cost to the Commonwealth which must be financed by taxation. > >The first reason given by the Minister is a fallacy. Under the present Act benefits are paid for services rendered by pharmacists, physiotherapists and others as well as by medical practitioners, while the extra cost involved is estimated at less than one per cent, of the present National Health Act budget. > >It is only too obvious that the Government is swayed by the medical fraternity, and it is high time that the public were presented with the facts of the issue. Would you be good enough to take up the matter in Parliament for me. I raise this matter as requested by my constituent. 1 believe that the Government should heed the request that has been made by optometrists concerning provision in the National Health Act for optometrical treatment. When all is said and done, the request is very fair. The present situation adversely affects a great number of people who require spectacles and treatment for their eyes. Generally speaking the Government has ignored what is a very genuine request. So far, it has refused to consider the matter on the occasions when members of the Australian Labour Party in this Parliament have brought it up in an effort to induce the Government to make the change desired by optometrists. I present the case for the attention of the Minister for Health **(Mr. Swartz)** and I trust that the Minister for Social Services **(Mr. Sinclair),** who is now at the table, will convey it to his colleague and that something will be done as suggested tq meet the wishes of this section of practitioners who are very much akin to the medical profession. The other matter that I wish to mention is of particular interest to members of the Australian Country Party. I believe that a report that appeared in the Melbourne " Age " of 22nd October is worth recording so that members of the Country Party will know what some members, at least, of the Liberal Party - the other party in the Government coalition - think of their colleagues who sit so expectantly and so patiently in the Country Party corner. Under the heading, " Pall-bearer at town's death ", this newspaper report states - >The Country Party would be keen to be a pallbearer any time at the death of a country town, the Minister for State Development **(Mr. Dickie)** said yesterday. He is a good, solid Liberal, I understand. The report continues - >There was too much insidious propaganda by the Country Party that conditions were poor in the country and that people who lived there were at a disadvantage. **Mr. Dickie** was one of five Ministers, including the Premier **(Mr. Bolte),** who spoke to 120 people at a Liberal Party rural rally in Morwell yesterday. > > **Mr. Bolte** said that the present Government had taken office after a succession of Country Party Governments. At the time there was no forward plan for water storage, hardly any sewerage in country towns, and little done in afforestation. The Electricity Commission was next to bankrupt; Dookie Agricultural College was a collection of slums and there was not a decent police station in Victoria. That is a first class reference from a Liberal colleague in any Parliament, is it not? It happened just over the border, in Victoria. It is a record for the public of this country of what they believe there is the worth of Country Party representation. I hesitate to offend the Minister for Social Services **(Mr. Sinclair),** who is at the table and is a representative of the Country Party. As a matter of fact, those sentiments could well have been stated with great truth by somebody on this side of Parliament. We believe that the Country Party has not brought much to country districts. The fact that Liberal Ministers in responsible positions realize and tell the public of the shortcomings of their coalition partners in this strange marriage in all States, between the Country Party and the Liberal Party, is a matter that should be raised in this National Parliament so that the people will know that the Country Party does not represent them as it indicates it does in this Parliament and other places. Even the Liberal Party has been moved in the interests of the people it represents to explain to the nation that the claims of members of the Country Party should not be taken too seriously when they refer to their representation of country districts. I do not mind saying that it pains me that I have to state these things and to hear them said by partners in the coalition, wherever they might be. We know that strange things happen south of the border in all kinds of political parties. The Labour Party is constantly criticised as being disharmonious. Evidently disharmony exists in the ranks of the Government of Victoria. That is a matter the Melbourne " Age " saw fit to report. Tonight, at the end of what has been a rather harmonious day in this Parliament, I am somewhat regretful that I have had to strike a discordant note in this chamber. However, I felt that I could not let pass unnoticed a true, outstanding and enlightening statement by a Liberal colleague of the Country Party in the Government of Victoria. Question resolved in the affirmative. House adjourned at 11.7 p.m. {: .page-start } page 2402 {:#debate-37} ### ANSWERS TO QUESTIONS UPON NOTICE The following answers to questions upon notice were circulated - {:#subdebate-37-0} #### Health Services: Expenditure {: #subdebate-37-0-s0 .speaker-K9M} ##### Mr L R Johnson: son asked the Minister for Health, upon notice - {: type="1" start="1"} 0. Is he able to state what expenditure or estimated expenditure was represented by each of the following services during the years 1963-64 and 1964-65:- (a) Health services provided by States (net expenditure), (b) hospital benefits, (c) medical benefits, (d) pharmaceutical benefits, (e) pensioner medical service, (f) miscellaneous Commonwealth Health Department services, (g) allowances to tuberculosis sufferers, (h) repatriation medical treatment, (i) personal expenditure on medical, hospital and funeral expenses (less national health service benefits), (j) pharmaceutical benefits - patient contribution, Qc) contributions to medical and hospital benefit organisations (less benefits received), 0) chemists goods and (m) any other services, consideration of which would enable this table to represent a schedule of all major components of the total expenditure on health in Australia? 1. What was the total expenditure on health during the year 1963-64? 2. What was the estimated total expenditure on health during the year 1964-65? 3. Can he also state, in respect of each of the last five years, what has been the expenditure on health services per head of population in - (a) Australia, (b) New Zealand, (c) the United Kingdom, (d) Canada and (e) the United States of America? {: #subdebate-37-0-s1 .speaker-KVR} ##### Mr Swartz:
Minister for Health · DARLING DOWNS, QUEENSLAND · LP -- The, answers to the honorable member's questions are as follows - 1, 2 and 3. The available details of expenditure on health in Australia during the years 1963-64 and 1964-65 are as follows - 1 (b) Hospital Benefits- Details of expenditure by the States on health services during these years (paragraph 1 (a) of the question) are not available, but their total expenditure under the heading " public health " during the year 1960-61 was £80.9 million. Details of expenditure on the following items are also unavailable - personal expenditure on hospital and funeral expenses, less benefits received (item 1 (i) of the question); chemists goods (item 1 (1) of the question); and other services (item 1 (m) of the question). In the absence of the abovementioned details, the total expenditure on health in Australia during 1963-64 and the estimated total expenditure on health during 1964-65 cannot be provided. {: type="1" start="4"} 0. Due to the different methods by which the cost of medical care is financed in Australia, New Zealand, the United Kingdom, Canada and the United States, no figures are available which would enable a valid comparison to be made of expenditure on health services per head of population in these countries. {:#subdebate-37-1} #### Social Services. (Question No. 1351.) {: #subdebate-37-1-s0 .speaker-6V4} ##### Mr Daly: y asked the Minister for Social Services, upon notice - {: type="1" start="1"} 0. On what date was it decided to classify a person 85 per cent, incapacitated as "permanently incapacitated" under the terms of the Social Services Act? 1. Has the decision been reviewed since that date; if so, when? 2. If not, is it to be reconsidered in the near future? {: #subdebate-37-1-s1 .speaker-5E4} ##### Mr Sinclair:
Minister for Social Services · NEW ENGLAND, NEW SOUTH WALES · CP -- The answers to the honorable member's questions 'are as follows - {: type="1" start="1"} 0. Amending legislation under which a person who was permanently incapacitated for work to the extent of 85 per cent, became qualified for invalid pension came into operation on 11th December 1941. 1. No. 2. This is a matter of Government policy. Social Service Benefits: Information from Registration Authorities. (Question No. 1293.) {: #subdebate-37-1-s2 .speaker-6U4} ##### Mr Whitlam: m asked the Minister for Social Services, upon notice - >From what Federal, State and Territory authorities has his Department arranged to secure information concerning births and marriages (a) with and (b) without the consent of the persons in relation to whose benefits or claims the information is sought. {: #subdebate-37-1-s3 .speaker-5E4} ##### Mr Sinclair:
CP -- The answer to the honorable member's question is as follows - >Verifications of births and marriages of claimants for benefits under the Social Services Act are made in the majority of cases from the Federal, State or Territory authorities responsible for the registration of births, deaths and marriages. Where it is not possible to make verifications from these sources inquiries are made of any other public or private authority which may be able to assist. > >The specific consent of the persons, concerned is not usually obtained in making these inquiries. Such persons, however, are generally aware that the inquiries are being made as the Department normally requires their advice as to the appropriate sources from which information may be obtained. {:#subdebate-37-2} #### Social Services. (Question No. 1368.) {: #subdebate-37-2-s0 .speaker-RK4} ##### Mr Hayden:
OXLEY, QUEENSLAND n asked the Minister for Social Services, upon notice - {: type="1" start="1"} 0. Will he consider whether it is possible for the supplementary allowance provided for single pensioners paying rent to be extended to married pensioner couples who pay rent? 1. Where a pensioner is, or a pensioner couple are, purchasing a house by weekly instalments, will he consider granting the supplementary (rent) allowance to these people on the same terms as apply to those pensioners paying house rent? {: #subdebate-37-2-s1 .speaker-5E4} ##### Mr Sinclair:
CP -- The answer to the honorable member's question is as follows - >These are matters of Government policy and, therefore, outside the scope of questions in the House. {:#subdebate-37-3} #### Standardisation of Rail Gauges. (Question No. 1376.) {: #subdebate-37-3-s0 .speaker-6U4} ##### Mr Whitlam: m asked the Minister for Shipping and Transport, upon notice - {: type="1" start="1"} 0. Did the Prime Minister announce on 19th April 1963 that the Commonwealth would proceed with the standardisation of the railway between Port Pirie and Broken Hill? 1. What was the nature of the steps which the Commonwealth has since taken to ensure that the Silverton Tramway and the locomotives and rolling stock thereon are acquired and vested in the South Australian Railways Commissioner, and what were the relevant dates? {: #subdebate-37-3-s1 .speaker-JXI} ##### Mr Freeth:
Minister for Shipping and Transport · FORREST, WESTERN AUSTRALIA · LP -- The. answers to the honorable member's questions are as follows - {: type="1" start="1"} 0. Yes. 1. Since the announcement by the Prime Minister, the South Australian and Commonwealth Railways Commissioners have been engaged in detailed planning of the work required between Port Pirie and Cockburn. Construction work has been authorised and is proceeding between these points. Discussions have included the small section of line between Cockburn and Broken Hill, at present owned and operated by the Silverton Tramway Co. Ltd. The work between Port Pirie and Cockburn is being carried out under the provisions of the Railway Standardisation (South Australia) Agreement Act 1949, and the schedule to the Act included a rider that "the Commonwealth shall take all reasonable steps to ensure that the Silverton Tramway and the locomotives and rolling stock thereon shall be acquired and vested in the South Australian Railways Commissioner". There are legal and constitutional problems involved in standardising the line between Cockburn (on the South Australia-New South Wales border) and Broken Hill (in New South Wales), which work is outside the scope of the 1949 Agreement, and these problems concern the Governments of New South Wales and South Australia, as well as the Commonwealth and the Silverton Tramway Co. Ltd. Discussions have been held with all parties, and action is well advanced to resolve the outstanding issues. Prisoners of War in Vietnam. (Question No. 1366.) {: #subdebate-37-3-s2 .speaker-K9M} ##### Mr L R Johnson: son asked the Minister for the Army, upon notice - {: type="1" start="1"} 0. Do Australian and United States military forces take prisoners in Vietnam or are prisoners considered to be the technical responsibility of the Government of South Vietnam? 1. Can he say whether the Government of South Vietnam complies with the provisions of international conventions covering the treatment of prisoners of war? 2. Are Australian soldiers in Vietnam protected by the international conventions covering prisoners of war? Or. Forbes. - The answers to the honorable member's questions are as follows - {: type="1" start="1"} 0. Any prisoners taken by Australian or United States forces are subsequently handed over to the forces of the Government of the Republic of Vietnam. 1. The Government of the Republic of Vietnam has formally confirmed its willingness to observe the Geneva Conventions on the treatment of prisoners and to co-operate actively with the International Commission of the Red Cross to this end. 2. North Vietnam has filed a document of accession to these four Conventions with reservations but we cannot be confident that North Vietnamese troops or the Vietcong, who are under the direction and control of North Vietnam, would respect them in practice. The Vietcong have for example indicated that they do not regard themselves as bound by the Geneva Conventions and have shot two United States prisoners, an act which is completely contrary to the provisions of these Conventions. The North Vietnamese have threatened to try captured United States pilots as "criminals" which would also be contrary to the provisions of the Conventions. The Australian Government actively supports efforts by the International Red Cross to secure the observation of the Geneva Conventions and the extension of humanitarian treatment of prisoners. Entertainment of Troops in Vietnam. (Question No. 1388.) {: #subdebate-37-3-s3 .speaker-6V4} ##### Mr Daly: asked the Minister for the Army, upon notice - {: type="1" start="1"} 0. Is it a fact that Lucky Starr, prominent radio and television personality, is at present in Vietnam at his own expense to entertain Australian troops? 1. Did this artist make an application to the Government for the payment of any expenses, etc., in connection with his visit? 2. If so, was the application rejected? 3. If the application was rejected, what was the reason for this decision? {: #subdebate-37-3-s4 .speaker-KFH} ##### Dr Forbes:
LP s. - The answers to the honorable member's questions are as follows - {: type="1" start="1"} 0. Lucky Starr is presently in Vietnam entertaining American and Australian troops. His services were offered to the Australian Army gratuitously through Julia (Associates) Pty. Ltd. 1. No application was made to the Government for the payment of any expenses. 2. Not applicable. 3. Not applicable. {:#subdebate-37-4} #### Australian Servicemen Abroad. (Question No. 1389.) {: #subdebate-37-4-s0 .speaker-6V4} ##### Mr Daly: y asked the Minister for the Army, upon notice - {: type="1" start="1"} 0. What is the total number of Australian Servicemen in (a) Vietnam and (b) Malaysia? 1. How many Australian servicemen have (a) lost their lives (b) been wounded and (c) been taken prisoner in each of these areas? {: #subdebate-37-4-s1 .speaker-KFH} ##### Dr Forbes:
LP -- The answers to the honorable member's questions are as follows - {: type="1" start="1"} 0. As at 29th September 1965, approximate army strengths were - {: type="a" start="a"} 0. Vietnam - 1,400 1. Malaysia - 1,700. 1. Army casualties in the two theatres to 20th October 1965, were - Figures include non-operational as well as operational casualties, and for Malaysia, cover the period for which Australian troops have served in the theatre, i.e. since 1955. {:#subdebate-37-5} #### Australian Military Forces. (Question No. 1390.) {: #subdebate-37-5-s0 .speaker-6V4} ##### Mr Daly: y asked the Minister for the Army, upon notice - >What is the (a) name of each Army unit, (b) strength of each unit and (c) total number of personnel in Australia trained and ready at this date to defend Australia against attack? {: #subdebate-37-5-s1 .speaker-KFH} ##### Dr Forbes:
LP -- The answer to the honorable member's question is as -follows - {: type="a" start="a"} 0. and (b). The answers to question (a) and (b) are classified, and the public disclosure of the information requested could be prejudicial to Australia's security. 1. As at 29th September 1965, the P.M.F. had a strength of 23,108 members who had completed basic and corps training. The C.M.F. had a strength of over 29,000 on the same date.

Cite as: Australia, House of Representatives, Debates, 28 October 1965, viewed 6 July 2017, <http://historichansard.net/hofreps/1965/19651028_reps_25_hor48/>.