House of Representatives
5 May 1938

15th Parliament · 1st Session

  1. House of Representatives
  2. 15th Parliament
  3. 1938

Mr. Speaker (Hon.G.J. Bell) took the chair at 10.30 a.m. and read prayers.

page 901

QUESTION

OTTAWA AGREEMENTREVISION DELEGATION

Mr FORDE:
CAPRICORNIA, QUEENSLAND

– Will the Prime Minister state whether it is a fact that certain members and officials of the Australian delegation to London for the revision of the Ottawa Agreement intend to have a holiday in America while waiting for work to turn up for them in England? By way of explanation, may I say that it is freely rumoured in Canberra that some members of the party propose to pay a special visit to America, and then to return to England for the negotiations with the Government of Great Britain. If this be so, why could not those con cerned have gone to America first, and thus saved the taxpayers of Australia considerable expense?

Mr LYONS:
Prime Minister · WILMOT, TASMANIA · UAP

– I have no information whatever in regard to any proposal of the nature suggested by the honorable member.

page 901

QUESTION

INSPECTOR-GENERAL OF MILITARY FORCES

Mr STREET:
CORANGAMITE, VICTORIA

– Has the attention of the Minister for Defence been directed to a statement in the press, made by General Sir HarryChauvel, Major-General Sir Julius . Bruche and Major-General Dodds, to the effect that senior officers should be sent abroad from Australia to. study conditions at home, and that in any case it would be advisable that the present Chief of Staff should be sent home for two years in order that he might return to Australia as Inspector-General? If 30, will the Government give consideration to such a suggestion ?

Mr THORBY:
Minister for Defence · CALARE, NEW SOUTH WALES · CP

– My attention has been directed to that statement, which appeared in the press. I do not know how accurate it is, nor whether it did actually come from those officers, as reported. All that I can say is that, if correct, coming from those high officers, it merely confirms the wisdom of the Government’s decision to seek an Inspector-General overseas. I shall give further consideration to the point raised by the honorable member, and later furnish him with a reply.

Mr.RIORDAN. - Is the Minister for Defence aware that General Brand declared in the Senate yesterday that the selection of an Inspector-General in Great Britain-

Mr SPEAKER:

– Order! It would not be in order to discuss what was said in the Senate.

Mr.RIORDAN. - Is it a fact that the Minister intends to select an officer in England for appointment as InspectorGeneral, without the knowledge of the Council of Defence or of the Military Board?

Mr THORBY:

– All that I desire to say in reply to that question is, that any announcement made by the Government was made after due consideration, the Government recognizing its responsibilities as a government.

page 902

QUESTION

INTERSTATE MOTOR TRAFFIC

Mr NOCK:
RIVERINA, NEW SOUTH WALES

– Will the Treasurer state whether it would be possible, by inserting a condition in the Federal Aid Roads Agreement, or even by negotiation, to arrange for motorists whose cars are registered or insured in the State of ownership, to pass through other Australian States without being harassed by border interference ?

Mr CASEY:
Treasurer · CORIO, VICTORIA · UAP

– The Federal Aid Roads and Works Agreement has been entered into between the Government of the Commonwealth and the Governments of the States for a period of ten years, and I do not think it would he possible to reopen it. In any event, however meritorious the proposal of the honorable gentleman may be, if it could be arranged at all it -could probably be arranged directly between the Commonwealth Government and the various States. I do not consider that it would find a proper place in the Federal Aid Roads Agreement. I, “however, appreciate the object of the honorable gentleman’s question.

page 902

SPECIAL ADJOURNMENT

Motion (by Mr. Lyons) agreed to-

That the House, at its rising, adjourn until Tuesday next at3 p.m.

page 902

QUESTION

SHORT TERM CREDITS IN LONDON

Sir FREDERICK STEWART:
PARRAMATTA, NEW SOUTH WALES

– Will the Treasurer state whether any reason can be given as to why the Commonwealth finds it necessary to pay 2¼ per cent. for its shortterm credits in London, seeing that the Imperial Government is being offered from £80,000,000 to £90,000,000 week by week, often-times at less than 1 per cent.?

Mr CASEY:
UAP

– To give an effective reply to the honorable gentleman would take a considerable time. In short, he is wrong in describing as short-term securities the so-called treasury bills held by the Commonwealth Bank. They have beep in existence, without any hope of redemption, for six or seven years.

Sir Frederick Stewart:

– Are they not so described in the budget ?

Mr CASEY:

– Certainly; but it is quite impossible to compare Australian treasury-bills held by the Commonwealth Bank in London, which arc nonnegotiable, with the current British treasury- bills to which the honorable gentleman refers which can be sold over almost any counter in the City of London.

Sir Frederick Stewart:

– Make them negotiable.

Mr CASEY:

– They cannot ‘be made negotiable. It would take me too long to explain the position to the honorable gentleman.

page 902

QUESTION

TARIFF BOARD REPORTS

Mr. PERKINS laid on the table reports and recommendations of the Tariff Board on the following subjects : -

Methyl Ethyl Ketone.

Pencils of Wood.

Ordered to be printed.

£7,000,000 LOAN IN LONDON.

Mr MAKIN:
HINDMARSH, SOUTH AUSTRALIA

– Will the Treasurer state whether it is true that 67 per cent. of the loan recently floated in London was left in the hands of the underwriters? Has the honorable gentleman noted the comments of financial writers in London, to the effect that this was a most inappropriate time for the Government to go on the London market for such money? Will the honorable gentleman indicate whether any of the new credits thus made available in London are to be utilised for the financing of purchases of defence materials on the other side of the world ?

Mr CASEY:
UAP

– In order to reply to the first portion of the honorable gentleman’s question, I shall obtain the exact figures, which I have not in my mind at the moment. My reply to the second portion of his question is that I am not aware that the loan in question has been badly received in London; in fact, all our advices are to the contrary - the loan has every prospect of a successful issue. The answer to the third portion of the question is, that of the £7,000,000 sterling which is being raised by means of the current loan in London, £2,000,000 sterling is for defence expenditure. This matter was discussed at great length in this chamber some six months ago, and I have nothing to add to what I said on that occasion.

page 903

QUESTION

BOOCK BREAK-OF-GAUGE DEVICE

Mr HARRISON:
WENTWORTH, NEW SOUTH WALES

– Has the Minister for the Interior taken any further steps to acquire from the Government of New South “Wales the report it has bad prepared on the Boock break-of-gauge device? If so, has he yet received the report ?

Mr McEWEN:
Minister for the Interior · INDI, VICTORIA · CP

– I have written to the Minister for Transport in New South Wales, but have not yet received a reply from him.

page 903

TAPERS

The following papers were presented : -

Power Alcohol - Report by L. J. Rogers, Commonwealth Fuel Adviser, on possibility of expanding the power alcohol industry in Australia.

Ordered to be printed.

Poatina tor-General’s Department - Twentyseventh Report, for year 1036-37.

Meat Export Control Act - Regulations amended - Statutory Rules 1938, Nos. 34, 30.

page 903

COMMONWEALTH BANK

Appointments to High Executive Positions

Mr McCALL:
MARTIN, NEW SOUTH WALES

– Has the attention of the Treasurer been directed to a statement by Sir Claude Reading published in Bank Notes, the magazine of the Commonwealth Bank, in which Sir Claude says* -

It is only natural that a doubt may arise in iiic minds of the staff as a whole as to whether a precedent hae been act that might mean that in future vacancies in the two high executive positions in the Bank will necessarily be filled from outside the service. I have had the very definite assurance that such a construction should not be placed upon the Government’s action in this instance, and that any (,meer in the service of the Bank is at all times eligible and will be considered fur any such appointment

Was that statement made hy Sir Claude because of any dissatisfaction that existed among the executive officers of the Commonwealth Bank; and did he obtain his very definite assurances in this regard from the Government ? If so, why did the Government find it necessary to give Sir Claude those very definite assurances?

Mr CASEY:
UAP

– I have seen the statement to which the honorable gentleman has referred. I find nothing improper in it. I would direct the attention of the honorable gentleman to the word “ necessarily “ which conditions the whole statement. Although the Government has not considered Sir Claude’s statement, I am sure there is nothing in it with which it desires to quarrel.

page 903

QUESTION

INDUSTRIAL TROUBLE AT LYSAGHT’S WORKS

Mr WATKINS:
NEWCASTLE, NEW SOUTH WALES

– As’ the industrial trouble at Lysaght’s works has now been in existence for a period of sixteen week;;, will the Prime Minister reconsider his decision not to interfere, and will he do all that lies in his power to effect a satisfactory and speedy settlement?

Mr LYONS:
UAP

– The Government sees no justification whatever for intervening in a case which is controlled by a State tribunal. We deplore the continued existence of the dispute, but are hopeful that the parties will come together and settle their differences with the cooperation and help of a New South Wales tribunal.

page 903

QUESTION

QUESTIONS WITHOUT NOTICE

Mr LYONS:
UAP

– In order that the business of the House may be proceeded with,-I ask honorable members either to give notice of any further questions that they may desire to ask or to defer them to the next sitting. Although we have replied to the questions which have been asked this morning, not one of them has been urgent. I appeal to honorable members to help the Government to complete the business associated with defence finance at a reasonably early hour to-day, in order that it may be sent on to the Senate.

page 903

QUESTION

BAN ON BROADCAST ADDRESS

Mr WARD:
EAST SYDNEY, NEW SOUTH WALES

– Has the attention of the Minister representing the PostmasterGeneral been directed to the published statement that a ban was placed on a proposed broadcast address by Judge Foster last Monday evening, on the subject of Freedom of Speech ? If so, can the honorable gentleman indicate the reason why this action was taken ? May it be taken as an indication of what the general public may expect in relation to interference with their liberties as the war plans of the Government are developed ?

Mr SPEAKER:

– Order ! The honorable member’s question is distinctly out of order, and may not be answered.

page 904

QUESTION

NAMING OF CRUISERS

Mr NAIRN:
PERTH, WESTERN AUSTRALIA

– Will the Minister for Defence state whether, in the naming of the two new cruisers to be acquired, recognition will be given for the first time to the city of Perth, by naming one of them “ Perth “ ? “Will the honorable gentleman also state what will be the name of the second cruiser?

Mr THORBY:
CP

– No decision has yet been arrived at as to what names will be conferred upon the new cruisers.

page 904

QUESTION

QUESTIONS WITHOUT NOTICE

Mr LYONS:
UAP

– No further questions without notice will be answered to-day.

page 904

LOAN BILL 1938

Second Reading

Debate resumed from the 4th May, (vide page850) on motion by Mr. Casey -

That the bill he now read a second time.

Mr COLLINS:
Hume

.-I join with other honorable members in congratulating the Government on what it is doing in the direction of making Australia safe from the point of view of defence. Many honorable members have suggested that the Government’s proposals mean preparation for war, but it is obvious that that cannot be fairly said. The proposals have the sole object of giving Australia effective means of defence. They constitute a sincere attempt to provide adequate protection, in case this country should be assailed by an outside power. The whole world is in a state of turmoil, and we do not know, from day to day, when Great Britain may be embroiled in a war, and may need the assistance of Australia. It is clear that we must prepare against possible aggression. These proposals were approved by the people at the last elections in no uncertain manner, and the present Ministry was returned to office to give effect to them.

Some honorable members have advocated compulsory military training. The honorable member for Wakefield (Mr. Hawker) characterized the Government’s failure to introduce compulsory training as political cowardice, but I do not agree with him. I am opposed to compulsory training, for the present at least, for the reason that it might interfere with the freedom of the young, men of Australia, who, I know, would be only too ready, if given encouragement,, to join the colours on a voluntary basis. I believe in freedom and discipline, which,, hand in hand, vitalize and uplift a democracy. Freedom and discipline are complementary to one another, and the full value of each cannot be obtained without the admixture of the two. Freedom without discipline would soon degenerate into licence, which has brought about the downfall of many nations. Discipline without freedom, if practised too closely, would be likely to produce a nation of slaves. When our people are free, and are also brought under the necessary amount of discipline, I have no doubt that the future of the nation will be secure.

I have heard various contributions from honorable members during this debate, and I congratulate those who have advanced constructive ideas regarding the defence policy that is being applied by the Government. I consider that some form of military training is necessary, and I have no doubt that, if suitable encouragement were given to the young people of Australia, there would be plenty of recruits on a voluntary basis. I am unwilling to enforce military training on the youth of this country, because it might deprive them of the pleasures and recreations to which they are entitled. If the training were made attractive enough, they would join the defence forces for the pleasure to be derived from military service, and for the honour of defending Australia, should the need arise. We know not the day when this country may have to be defended. No matter how modern our equipment may be, it will prove useless unless the men behind the guns have been trained to operate them efficiently. Therefore, the training of the youth of Australia is essential, because we should no doubt be attacked, if at all, by wellequipped forces. The enemy would send here the flower of its manhood, and Australians have no wish to be placed at a disadvantage. Irrespective of a soldier’s initiative or capacity for hard service, he would be all at sea unless . thoroughly trained. The deeds of Australians in the Great War as well as in the world of sport are such that the world has bowed before them. In the matter of defence, it is even more important than in the sporting arena that our men should be thoroughly trained. The Government might well begin by encouraging the physical training of young people during the school-going period, when a commencement could be made at a very early age in developing the physical capacities of the children, and giving them an elementary knowledge of military technique. Later, when transferred to the militia forces, they would possess a good basis for further training. To appreciate the value of physical exercises, one needs only to witness the marches of the surf clubs on the beaches, or to go to the police depots and see the splendid specimens of manhood that are produced by means of the intensive physical training of the recruits. Sights such as these never fail to arouse the spirit of patriotism, and one can imagine what must have been the physical condition of the fully trained Anzacs.

I have listened to the speeches made in this House from time to time by members of the Opposition. On many occasions valuable contributions had been made by them, but in this debate they have offered nothing of a constructive nature. Although, of course, members of the Opposition are expected to be critical regarding proposals by the Government, they should not let down the people who sent them here. Whilst I have heard many logical utterances by members of the Opposition, I have also listened to some of the most painful and poisonous speeches that could be heard in a legislative hall. Reference was made a few days ago to the necessity for taking a referendum of the people before despatching any troops from Australia to a sister dominion in the event of its being attacked. The honorable member for Bourke (Mr. Blackburn) was asked by a ministerial supporter whether he would favour going to the assistance of New Zealand, if that Dominion were attacked, and, in a wild chorus, the Opposition shouted “Yes, after we have taken a referendum “.

Mr Mahoney:

– Who said that?

Mr COLLINS:

– I did not interrupt the honorable member.

Mr Mahoney:

– Be fair to the Opposition.

Mr COLLINS:

– I am being fair, and Hansard would prove that I am. New Zealand is four days’ journey from Australia, but, if it were attacked by a foreign power, the Opposition would demand a referendum before going to the assistance of the people of the same race and of the same blood as ourselves. After a referendum, Parliament would have to be called together, and, on the law of averages, it would be in recess. It would take a week or ten days, at the very least, to enable honorable members from Western Australia and the far north of Queensland to reach this House. In 1916, it took sixteen days to pass a referendum bill through both Houses, and 30 days elapsed before the referendum was taken. After that has been disposed of, the writ is returnable within 60 days. That means a delay of 116 days, or about three months. Parliament then meets to pass a bill for an act providing for compulsory military service. This occupies another ten days, making a total of 126 days, or approximately four months. All this time New Zealand would be bleeding under the attack of an aggressor. Not a gun, not a cartridge, not a bag of flour would have been sent to help our New Zealand friends, those gallant folk who put the “ N.Z “ into “ Anzac”. I wonder what the people who marched in the great procession on the 25th April would say in reply, to that. Although New Zealand is practically within a stone’s throw of Australia, the Opposition would wait for four months before affording any assistance to people of our own flesh and blood. I suppose that, if Australia were attacked, honorable members opposite would wait till cities and towns had been razed to the ground, until our rich pastoral areas had been despoiled, and until our women and children were about to be destroyed by the teeming hordes that would enter this country. They would then take a referendum to see what should be done about it! Not one constructive idea in connexion with the defence of this country has emanated from the Opposition during this debate. I am opposed to the system of compulsory military training which was formerly in existence and I do not blame the Scullin Government for having abolished it. If a scheme is propounded that will provide for compulsory military training on a more efficient basis, there may be something in it to commend it to me, but I see no necessity whatever for it at present, because I know the spirit of the Australian people so well expressed in Henry Lawson’s Star of Australasia - “ Till the sous of Australia take to war as their fathers took to sport.” For any system of training to be effective, troops must be trained so that they will favorably compare with the world’s best men in war, just as our people have in sport.

Mr Frost:

– Does the honorable member believe in universal military training?

Mr COLLINS:

– As I said a little earlier, I do not; I believe in freedom and discipline combined. That is the position as I see it. We have listened to sneering references to Australia following Great Britain ; but what greater power on earth could we follow than tho Mother Country? No less than 98 per cent, of our people are of English, 1rish or Scottish descent, and with this great heritage bestowed upon us by our pioneers, why should we not follow the Motherland? No one will dispute that Great Britain is not only the great.f’: t factor for peace, but also the bulwark of democracy. Every continent affords evidence of Great Britain’s efforts- to assist others on the road to success in almost every sphere of human activity and progress. We are honoured to belong to such a great Empire.

The views expressed by a few honorable members opposite do not, I am sure, represent the feeling3 of the great masses of the people of this country in regard to this matter. The Opposition has its responsibilities to the country just as has the Government; but in directing opposition to the Government’s defence policy, it has offered not one constructive idea or suggestion. In matters of this kind it should get away from party politics and, a3 a section of a great national parliament, co-operate with the Government to put into effect the best possible policy for the defence of this country. Honorable members opposite are not immune from a share of the responsibilities of government because they are not in power. It is their bounden duty to bring forward suggestions or idea3 which they would put into effect if they occupied the treasury bench, so that they might receive due consideration in the interests of the people whom they are, along with’ us, called upon as a parliament to represent. We need never be afraid that man-power will be lacking in this country in the event of emergency, and it is our duty, as the representatives of the people of this great Commonwealth, to aim at raising, instead of depressing, the soul of the great country to which we belong.

Mr SPENDER:
Warringah

.- At this stage of the debate there is little purpose in addressing the House at any great length, but there are two or three matters to which I wish to direct attention. I should have imagined that this bill would meet with no opposition in any quarter of the House except on the ground that it is a bill to raise loan moneys. Its purpose cannot be disputed. It is for defence, and it is hardly believable that any honorable member in this chamber could say that defence is not necessary for this country at the present moment. I understood the Leader of the Opposition (Mr. Curtin) to indicate that his sole objection to the Government’s scheme was upon the ground that the money was . not being spent to the best possible advantage. There is no doubt that in its present condition Australia is very vulnerable to aggression. For many years past the basis of our defence policy has been primarily to rely on Great Britain in case of need, and merely to protect ourselves against sporadic raids by other nations. I suppose it is no longer disloyal to say that in the event of any major conflict in Europe, Great Britain could not render assistance to Australia; indeed, the actual facts presented to anybody who observes the situation at the present moment, renders such a conclusion inevitable. It, therefore, behoves Australia to bestir itself to provide its own defence. It does not matter very much whether the reason for the introduction of this bill be a change in the circumstances of Europe - I do not think for a moment it is - I think it was because of the. need, which was evident long before last Christmas, to take steps adequately to defend this country. But ever since the Imperial Conference indicated to the dominions that their prime duty was to defend themselves, we, in Australia, in my humble belief, have until now utterly failed to discharge that duty. The only question before us now is whether our defences are adequate. Unquestionably they an; not, and therefore the money to be raised by this bill must be spent to defend Australia. T understand the majority of the honorable members opposite not to have advanced arguments against the need to defend Australia, but to show that they believe in “ adequate defence “ without at the same time defining what they mean by “adequate defence”.

It is obvious that Australia is not adequately defended now. If that be so, the question that confronts us is how best it can be defended. That brings me to say that what I conceive to be a very important matter in our defence is the necessity for coordinating the various branches of the services so as to get the maximum benefit for the money spent. I am not completly satisfied that the various branches of the forces speak with one voice. I am inclined to think rather that they speak with three voices; and frequently those voices are discordant. From what I have learned from contact with men in the various branches, each branch takes a naturally disproportionate view of the value of its own particular part in the defence of Australia. It appears to me, therefore, to be necessary to have one person whose sole purpose shall be to co-ordinate the whole of the defence forces of Australia and to be concerned not with administrative details, hut solely with questions of policy. Defence conditions in Australia to-day I find paralleled by conditions which operated in Britain prior to the appointment of Sir Thomas Inskip as Minister of Coordination of Defence. Previous to that appointment being made the chief advisory body, the Chiefs of Staffs sub-committee, advised the Government upon the best method of spending the defence vote, and as was inevitable, because of open hostility between its members, compromise resulted. Compromises are of no value. In Aus. tralia we need to be guided by one man, not necessarily trained in the art of war, but with a trained mind capable of appreciating our peculiar defence needs and providing for them. Because a great deal of money in the past ha? been carelessly and wastefully spent on defence without proper regard as to whether it would bring us security or maximum advantage. I advance tinsuggestion for the consideration of the Government, that the appointment of one man should be made to co-ordinate our defence forces. Field Marshal Sir Phillip Chetwode, Commander in Chief in India in 1935, repeated with approval the verdict of Marshal Saxe, given 200 years ago, that -

Custom and prejudice confirmed by ignorance are the usual foundations of the 80-caller science of war.

And Foch himself made it perfectly clear that it is not necessary for a man to bo trained in the science and technicalities of war to appreciate properly art of war and the needs of defence. The average Service man always believes that the next war will take place and be fought on exactly the same lines as the last; it never is and it never will be. It seems to me that at least the Minister for Defence should be relieved completely of administrative detail at this particular period, and that his sole duty should be the question of policy, and policy only, to determine in what way the money may best be spent. I am one of those who are not satisfied with our present system. I notice that the Government in its scheme of defence says nothing about submarines. On that, question, too, the majority view of naval officers is that submarines are of little value; they pin their faith to surface ships, without having proper regard to the fact that the value of surface ships in modern days has not been proved, and despite the fact that after Jutland English shipping was almost completely paralysed by the activities of German submarines operating under most difficult conditions with the odds 300 to 1 against them which nearly brought Great Britain and the mighty Empire to its knees. In my humble view this evidence carries much more weight than the theoretical views held by a majority of naval experts. A minority of naval men pin their faith to submarines and I notice that in the present defence scheme provision is made for the fortification of harbours against submarine attacks. By whom will such attacks be made except by a country operating from a base very many thousands of miles removed from Australia? That seems to me to imply that there is a good deal in the menace of submarines. Why is it that other countries are building them? In Holland at the present moment expenditure is being confined to destroyers, aeroplanes and submarines for service mainly in the East Indies. Australia has a huge coastline, and the problems of defence peculiar to us find no parallel in any other country in the world. For this reason I urge upon the Government the necessity for the appointment of a minister for co-ordination of defence, one whose sole duty will be to determine how best to spend the money voted for the defence of this country. It appeared to me that the major view exemplified by the Leader o’f the Opposition (Mr. Curtin) was that there is need for further defence - adequate defence - of this country; but the honorable gentleman carefully refrained from saying what he thought was necessary, or what money was needed to be spent to carry out his programme. Another view expressed by a minority, which is neither British nor Australian in its outlook but entirely international - and I find it difficult to believe that any honorable member could hold such a view - is that, having regard to the economic conditions of this country, it is not worth fighting for. I regretted very much to hear that said. No matter what our views may be, I cannot conceive this country growing into a great nation unless, whether we have

British or imperialistic views, we believe that it is worth defending. If it is worth defending then it is unpardonable for any honorable member of the House to say that no .man should in any circumstances lift a gun to defend it. I cannot be accused of being a militarist, I hope. I believe in peace, but I do not believe that peace can be accomplished by mere pious aspirations. It has been said about arms that if people arm they provoke war. If by arming war is brought about I suppose the natural corollary is that by not arming peace will be realized. I cannot believe that by the mere adoption of a pacifist attitude towards other peoples of the world we shall preserve peace. That was the view held by an ex-Prime Minister of Great Britain, Mr. Ramsay MacDonald. He believed that if an attitude of peace were adopted towards European and Asiatic countries then necessarily peace would come to the world. It was that attitude which reduced the British Empire almost to extinction, and, which during the last few years, has necessitated vigorous action to cure the fatal mistake that was then made.

Mr Brennan:

– That is a slander on the dead.

Mr SPENDER:

– It appears to me that first and foremost we need defence; secondly, we need to co-ordinate our activities with those of Great Britain; thirdly, we should not simply rely on the possible source of invasion being sporadic raids; and, fourthly, in all circumstances, we should be prepared to defend ourselves, not as a means of provocation, but, as of necessity, dictated by the circumstances of our country.

Mr FROST:
Franklin

.- I had not intended to participate in this debate, but as I have listened to the speeches of honorable members opposite I have come to feel that I must reply to some of the assertions that they have made. Some of them have attempted to lead the country to believe that the Labour party is against all expenditure on defence. That is not so. We have criticized the proposed expenditure from loan of £10,000,000 because the Government has furnished us with so little information on. the subject. The honorable member for Warringah (Mr. Spender) said that honorable members on this side of the chamber were pacifists who would not shoulder a gun. The tru.th is. of course, that Labour believes in the provision of adequate defence for this country. We have not stipulated the amount of money that should be spent, or how it should be spent. The Government is in charge of finances and it is under obligation to deal with that matter. Yet it was only at the eleventh hour, and after the Leader of the Opposition (Mr. Curtin) had delivered his speech on this bill, that details were provided for us of the items of expenditure to be covered by this proposed loan.

I regret that most of this money is to be expended in the two largest States. A great deal of it will actually be spent in our two biggest cities. The effect of this policy must inevitably be to drain men from the smaller States and to centralize our population. That was the effect of the policy pursued by the Government in the construction of Canberra, and in the carrying out of other large Commonwealth works. To my mind it is a deplorable policy.

The Government is proposing to increase the number of cruisers in our navy. The honorable member for Moreton (Mr. Francis) said that this was necessary in order to keep our trade routes open; but according to high military authorities that is not our business. If Great Britain needs our primary produce and our metals in time of war, it should keep our trade routes open. If war occurs in the East and our primary produce is needed, then again it is the duty of Britain to keep the trade routes open. 1

Mr Brennan:

– Britain recognizes that.

Mr Stacey:

– Does not the honorable member wish to sell his produce?

Mr FROST:

– I am speaking about a time of war. Australia could be selfsupporting for a considerable period. My contention is that if Great Britain needs our produce it should provide convoys to take it overseas. Even if two cruisers are obtained from the Admiralty, as the

Government proposes, they will probably be obsolete when they get here as were the last cruisers obtained in that way. It cost more to put those cruisers into commission that it would have cost to build new vessels. We are spending a huge sum of money in modernizing the Australia and the Canberra. I have no doubt that when these vessels are reconditioned they will be tied up in Port Jackson. Certainly they will not be put into commission, for we have not the men available to man them.

It is also proposed, as a sop to the Minister for Defence (Mr. Thorby), to build two sloops at Cockatoo Island Dockyard. We may well ask whether these vessels will ever be of any use to defend our shores. The question is often asked “Is our navy of any use?” The plain fact is that we are unable to provide a navy capable of defending our shores. While I was abroad with the Jubilee delegation I conversed with a number of prominent people in- England who had made a close study of the defence of Australia. I was told “ You will never be able to have a navy which can compete with a first class navy of any other country.” At the naval review at Spithead I saw 165 vessels of Great Britain steam past. It cost £9,000,000 for armaments for some of those ships. How could we ever expect to obtain vessels of that description? We do not want a great navy; we cannot afford to pay for it; why then, should we bother about it? The Government should not spend a large sum of money in refitting vessels which will never be of any use.

I am in favour of the building of additional munitions works and also of increasing our air force. I do not question the proposed expenditure in these directions, except to expect that it is to be centralized in the big States. I understand that the £10,000,000 provided for in this bill is part of a proposed expenditure of £43,000,000. I am not in a position to say whether that expenditure is sufficient or not. If that amount of money were required to defend Australia according to the policy of the Labour party, I should be favorable to its expenditure. I protest, however, against the discrimination between States inthe expenditure which the Government is now proposing. Among the itemsI notice : -

On the next page of the schedule the following items appear : -

Also on that, pagethere isthe item -

How much of that money is to be expended in Hobart, which is one of the most important cities of the Commonwealth, and has one of the best harbours in the world? Its coastal defences are totally inadequate. The schedule also provides for -

But we find later in the list that new or improved buildings are to be provided at the. Ordnance . Factory at Maribyrnong at a cost of £300,000 and at the Small Arms Factory, Lithgow, at a cost of £150,000. making £450,000 under these headings; yet the expenditure at Wakefield, in South Australia, on the laboratories and other equipment there is only £50,000. Here again the tendency to concentrate expenditure in the larger States is very noticeable. The effect of this policy must inevitably be to drain men from the smaller States.

At the recent Loan Council meeting the Treasurer (Mr. Casey) declined to provide the amount of money required by the smaller States.

Mr Casey:

– The honorable member should ask the Premier of Tasmania about that.

Mr FROST:

– I shall do so, but I know that he did not get all he wanted. He was afraid to ask for too much.

Mr Archie Cameron:

– Does the honorable member suggest that Mr. Ogilvie is shy?

Mr FROST:

– Yes.

Mr Archie Cameron:

– If shyness is the only disease that he could die from, he would live for ever.

Mr FROST:

– Mr. Ogilvie does not like to be knocked back every time he asks for anything. I consider that a” much larger proportion of this £10,000,000 should be expended in the smaller States with the object of decentralizing our population. We know, however, that the Government is kept in power by the votes of people in the two big States.

Mr Archie Cameron:

– - The bulk of the taxation comes from them, too.

Mr FROST:

– It will all come from them in the future if the Government continues to starve the small States and drain them of their man power. An examination of the schedule will show clearly how a balance has been maintained between Victoria and New South Wales. Why cannot small arms factories and munition works be established in other States? Why should not Tasmania have a share of this expenditure? It has cheap hydro-electric power, an enormous supply of minerals and chemicals, a climate which is superior to that of the mainland, good sites for factories, and ports which are as good as, if not better than, those of other parts of the Commonwealth. It is proposed to expend £30,000 on the removal ofa few guns from one of the forts, and that is all that Tasmania is to get. out of this huge total of £43,000,000. The Minister said that it was cheaper to add to existing factories than to build new ones, but we know that in other parts of the world munition factories and defence establishments are being widely scattered so that if some are destroyed or captured others will still be available to provide supplies.

The Acting Minister for Commerce (Mr. Archie Cameron) made reference to the decision of the Tasmanian Labour

Conference in regard to compulsory military training. I was a delegate to that conference which represented the trade unions of the State, as well as the political Labour leagues. The conference was attended by 150 delegates, and the votingon compulsory training was unanimous. The Premier (Mr. Ogilvie) had just returned from his second trip round the world, and he explained what was being done in other countries in the way of physical and military training. He had visited the training camps in Germany where youths were being given physical training, and he convinced the conference that it was necessary to institute a system of physical and military training in Australia. Honorable members on the other side of the House are divided on this issue. Before Parliament went into recess in December last, a great many Government supporters were in favour of compulsory training, but now they have turned against it because it has received the support of a Labour conference in Tasmania. If compulsory training was desirable and necessary in December it is desirable and necessary now. The Government proposes to expend £43,000,000 on defence, but is taking practically no steps to train the men. “Why is this? The reason is obvious. The supporters of the Government want all the money expended on munitions in the two big manufacturing States of Victoria and New South Wales, so that the profiteers may get it all. If compulsory training were introduced there would not be so much money left for expenditure on munitions, and the profiteers would get less. The Government is prepared, in the event of invasion, to throw untrained levies into the battle regardless of how many lives are sacrificed. Mr. Ogilvie is opposed to this, and that is why he advocates compulsory training.

The honorable member for Denison (Mr. Mahoney) said that Australia should have a standing army. I have been in favour of a standing army for a long time past, and it is more necessary that we should have trained men now than ever it was. For the last two years we have had dinned into our ears the possibility of invasion, but no steps have been taken to train our men. Of what use would our militia be with only 12 days military training a year? When we were in Russia in 1935, we were told that, during the war in 1916, the Russian soldiers were without munitions or provisions. They were compelled to retreat, and the army was practically annihilated. Our experience would be much the same in the event of war unless we had proper equipment.

Mr Paterson:

– And unless the men were trained.

Mr FROST:

– That is what I have been saying, but the. honorable member’s party is opposed to giving the men the necessary training. The Minister is apparently satisfied with Australia’s present militia force ‘consisting of 35,000men who receive twelve days’ training in the year. Everybody knows thatmen cannot, be adequately trained in that short time. In some instances, it takes the men two days to - get to camp and two days to get home again, so that there is not much left out of the twelve days in which to be trained. I wasa member of the Autralian Light Horse at one time, and so much time was occupied in getting to camp and home again that we had only four or five days’ training in camp, in addition to a few half-day parades during the year. Yet the Government is afraid to introduce compulsory training, because the profiteers who support it demand that the whole of the defence vote shall be expended on the manufacture of munitions.

The Defence Department should give greater encouragement to rifle clubs, which provide excellent military training for men who are getting on in years, but who would still make useful soldiers in the event of an emergency. The department should make available free to the clubs as much ammunition as is wanted. In some clubs training has had to be curtailed because of lack of ammunition. The rifle club in my home town sent the Tasmanian representative to the Bisley meeting last year, and he put up as good a performance as any of the other Australian representatives. When this man came to the district a few years ago, there was hardly a rifle shot in it; but, as the result of his coaching, members of theclub have carried off most of the prizes. in the State. Still better results would be achieved if more ammunition were made available. It is very difficult to induce the department to provide rifle ranges, or to make any repairs to existing ranges.

In conclusion, I again urge the Government to consider favorably my request for the establishment of munition factories in the smaller States which possess the necessary facilities, and in this respect Tasmania can offer better facilities for manufacturing than can any other State in the Commonwealth.

Mr ROSEVEAR:
Dalley

.- The bill under consideration is one in which the Government proposes to depart very violently from the financial provisions for defence which were considered adequate last year. Nothing has been put forward by any of the Government spokesmen to show that the international situation which existed last year, when a record high defence vote of £11,000,000 was passed, has altered, or that it has become worse so far as Australia is concerned. In deciding the defence requirements of this or any other country, the international situation should be taken into consideration. It is also important at least to try to understand what is the foreign policy of the Government, and what is its outlook on international affairs. The two considerations are interwoven, and should receive consideration when we are attempting to decide whether the present defence Estimates are adequate, or more than adequate. We become utterly mystified when we look for some indication of the present foreign policy of the Commonwealth Government. Not only has the Government no set plan for the defence of Australia, but also it has no foreign policy of its own making. Whatever changes are made in what Ministers are pleased to call their policy on foreign affairs are involuntary and are dictated by overseas authorities. Whereas, when the budget for the current year was introduced and provision was made for increased expenditure on defence amounting to £11.000,000, we were told that the spreading of £18,000,000 over three years would be adequate to meet Australia’s defence needs. Now, little more than six months later, we are told that during the next three years it will be necessary for Australia to expend £43,000,000 on defence, an increase of 150 per cent, for which no adequate reason has been advanced. This is the first occasion on which I have ventured in this House to discuss defence matters. I have refrained from doing bo in the past, principally because I have felt that the whole atmosphere of the defence debates was unreal and designed to capture public imagination. Imaginary foes have been created to inspire public fear in order to justify the Government’s preparations for war. From time to time we have been told that Australia lived, moved and had its being by grace of British arms, particularly the navy, and that, accordingly, Australia had some obligations in respect of Empire defence. But I have always held that it was doubtful whether we could depend on that protection upon which we were said to be absolutely dependent. but until very recently anyone who ventured such an opinion was classed as disloyal by supporters of the party opposite. The honorable member for Warringah (Mr. Spender) was charitable enough this morning to say that it might not be disloyal to-day to voice the opinion that in an emergency Australia might be left in an isolated position. The honorable member had justification for conceding that much to the Opposition by reason of the following recent statement by Mr. Chamberlain : -

Therefore our first main efforts must have two main objectives: we must protect this country and we must preserve the trade routes upon which we depend for our food and raw materials.

In the last election campaign members of the Labour party were labelled “ isolationists “ because they understood the position and were ready to provide for the adequate defence of Australia and to dismiss the possibility of collective security under the League of Nations or rely upon any Empire defence plan. We were charged with being disloyal, our policy was held up to ridicule, and the people were invited to avoid the Labour party as they would avoid a plague spot. Yet the opinions expressed by us have now been verified by no less an authority than the Prime Minister of Great Britain, who has indicated clearly that in times of international stress the first care of the British Government would be the protection of Britain itself, and of the trade routes over which the food for the people of Great Britain is carried.

Mr Lane:

– There is nothing wrong with that.

Mr.ROSEVEAR- This is one of the rare occasions on which I agree with the honorable member for Barton. No, there is nothing wrong with that. The Prime Minister of Great Britain was justified in asserting that Britain’s first consideration would be the protection of itself, and its second consideration, to keep open its trade routes, and the time has arrived when we should have an Australianminded Government that would declare that its first consideration is the protection of its own people.

Because we cannot depend on those defence resources which we were led to believe were at our disposal, we are justified in saying that we shall prepare for the adequate defence of Australia and leave other countries to settle their own international complications. “Whilst the Labour party was criticized most severely for its adoption of what was called “ an isolationist policy “, Great Britain, which is the heart of the British Empire, has become completely insular and has adopted a policy of self-preservation, which is a complete endorsement of our policy. The Labour party has always stood for the adequate defence of Australia.

Mr Lane:

– What does the honorable member mean by “ adequate defence “ ?

Mr.ROSEVEAR. - That plank was put in the platform for the general guidance of the party, whose representatives in Parliament will determine from time to time, according to the circumstances, what is needed for the adequate defence of this country. But we shall refuse, in any circumstances, to allow the manhood of Australia to be used as a police force in the perpetual disorders of Europe. During the election campaign we were told by supporters of the Government that in this warlike world the survival of Australia was dependent on collective security as laid down in the Covenant of the League of Nations. We were told that we must follow Great Britain. But because of the attitude of the British Government towards the League of Nations that policy of collective security has been scrapped. That which we were told was the salvation of Australia is being studiously avoided by the British and Commonwealth Governments. Without rhyme or reason this Government has followed slavishly at the heels of the British Government. There has been conflict of opinion in the British Cabinet as to foreign policy, but apparently the majority has decided on the abandonment of that policy which this Government at the last election declared was the salvation of Australia. Mr. Chamberlain, the gentleman who pulls the strings on which this marionette Government of ours dances, and who was elected as the Commonwealth Government was elected, on a policy of adherence to the League of Nations and collective security, said recently -

I doubt very much whether the League will ever do its best work as long asits members arc nominally bound to impose sanctions or use force in support of obligations.

Yet two years ago when the British Government and the Commonwealth Government were tied to collective security we were virtually brought by it to the verge of war over the Italo-Abyssinian war. The degree to which this country should prepare for its defence depends on the international situation; that is to say; the greater the danger, the greater the necessity for defence, and conversely, the less the danger, the less the need for defence. The Government has told honorable members that the international position has changed, but it has neglected to show where that change involves any greater threat to Australia than existed previously. As a matter of fact, the position is better to-day than it has been at. any other time within the last twelve months. When asking last year for authority to spend the record amount of £11,000,000 on defence, this Government directed the attention of honorable members to the position in Europe and pointed out that Italy was on the rampage and likely to cause an international conflict. The Government also said this, that there was a possibility of an invasion of Australia by -Japan. Fear was created in the minds of the ‘people by those two statements, and the Government took advantage of it to bring down a record defence budget. Let us examine the position as it exists to-day. As the result of conversations between the British Government and the Italian Government, Italy, we are told, has been appeased. If that be so, the danger of a European conflagration practically disappears. We are told also that as the result of the resistance which has been made by the forces of China, the Japanese have their hands full, and that there is to-day no menace to Australia from that quarter - if, indeed, such a menace ever existed. If the international situation has changed at all, it has improved in comparison with the position placed before us last year, when the Government asked for a record defence vote. In 1936, when this Parliament was invited to support the application of sanctions against Italy, it was said that we were then on the verge of war. We were informed that Mussolini had violated the sanctity of treaties, andthat his troops had ravished the people of an unprotected member of the League of Nations, and must be taught that warlike aggression could not be countenanced. The people of Australia were told that, in consequence of the way in which the Abyssinian dispute was developing, Australia was being brought to the verge of war. Although we were then asked to follow slavishly the policy of the British Government, we now find that conversations between Italy and Great Britain have been proceeding satisfactorily and that Italy has received recognition of a conquest that was condemned by the Government two years ago. Italy has been appeased and a conflict avoided, but, at the same time, we are asked to increase, instead of reduce, our defence expenditure. Obviously, the danger which was said to be imminent, twelve months ago does not exist to-day. It has been said by some honorable members opposite that Australia is in danger of invasion. I was interested in listening to the many views expressed by honorable members opposite, and it appears that there is a good deal of confusion in their minds as to what is absolutely essential for the defence of Australia. I heard one honorable member who advocated an increase of the Army, advocate apolicy of conscription in order to build up a standing army of 200,000 men.

Mr Harrison:

– Who advocated conscription? That statement is entirely inaccurate.

Mr ROSEVEAR:

– The honorable member for Wentworth may not have been in the chamber when the honorable member for Henty was speaking.

Mr Lane:

– The honorable . member for Henty did not support a policy of conscription and the- honorable member for Dalley knows it.

Mr ROSEVEAR:

– Even if the honorable member for Henty did do so, the honorable member for Barton is too stupid to understand what he said. Some honorable members opposite have advocated a system of conscription for the purpose of building up an army six times the strength of our present militia forces. If, at the suggestion of the Government, we accepted the bill now under consideration, the cost involved would be a mere circumstance compared with the amount that would be required had we a conscript army. I was interested in the suggestion of the honorable member for Henty that we should set up a stronger Australian defence force and also a more powerful navy. He said that we must have a navy sufficiently strong to protect our , trade routes and, in order to justify that contention, he conjured up visions of piracy on the high seas - of a Captain Blood and his brood pirating our trade routes. His contribution to the debate was rather mixed. On the other hand, he pleaded for the conscription of our manhood and pointed out the grave danger in which Australia would stand in the event of an invasion by Japan. He said that in such an emergency every able-bodied man would be needed to defend this country, and. in order to create an atmosphere that would make his contention acceptable, he had to produce a potential enemy. He said that possibly, Japan would be the in- vader, and that, because ofthe imminent danger from that quarterevery ablebodied man in Australia should don khaki. We should also, he said, have an immense, navy to protect our trade routes, otherwise we would not be able to export one bag of flour, one quarter of meat, or. in fact, any other primary produce upon which the solvency of Australia depends. But he did not explain how this country is to produce an exportable surplus if every able-bodied man in Australia is under arms. One would imagine that, if the circumstances visualized by the honorable member for Henty existed, it would be impossible for Australia to meet its own domestic requirements, much less produce a surplus for export. Like many militarists, he had to find some justification for the policy he was advocating. Another interesting argument raised by the honorable member for Henty was in connexion with the Singapore base, which has cost the British Government many millions of pounds and was allegedly constructed to protect the eastern Pacific, and particularly Australia.. A patriotic New Zealand government made a. huge contribution towards the cost of constructing that bare, which, it was said, would assist in the protection of Australia and New Zealand. But now, when it suits the Government and its supporters, we are told that, in certain circumstances, it would be necessary to conscript men in Australia to assist in the defence of Singapore. The Singapore base, which was constructed for the defence of Australia has now, according to honorable members opposite, to be protected by Australia. The honorable member for Bendigo (Mr. Rankin), in endeavouring to justify increased defence expenditure, introduced another remarkable argument. He said that if we regard Japan as a potential enemy, there is a possibility of that nation attacking Java, a Dutch possession, and that we might be called upon to assist in the defence of Java. In these circumstances we are entitled to ask where the Australian frontier actually is. During the debate on the imposition of sanctions against Italy. we were informed by the then Attorney-General that if Gibraltar or Suez were attacked, our frontier might be at those points or in fact at any point in the Mediterranean. Mr. Baldwin, an ex-Prime Minister of Great Britain, when speaking on behalf of the British Government, said that the frontier of the British Empire is on the Rhine. “We are informed by the honorable mem- ber for Henty that the northern frontier of Australia is at Singapore, and by the honorable member for Bendigo that it is in Java. We should at least be told where this ever-receding frontier is, so that we shall know where our obligations in respect of defence are. Another alarming statement made by the honorable member for Bendigo - I am not sure whether he suggested it during the last federal elections - was that Germany has to be watched, because it is a growing nation, and he suggested that we must prepare to suppress her, by force if necessary. if it is an obligation of the Australian Government to watch every nation which is growing, we shall always be either at war or on the verge of some great conflict. I do not think the honorable member for Bendigo will get the electors whom he represents, or, in fact, those in any other part of Australia, to support additional expenditure to build up a fighting force sufficiently powerful to combat nations merely because they are becoming stronger economically. Emphasis has been placed upon the possibility of invasion by a certain eastern power but even if that possibility did exist some time ago, recent developments in the Sino.Japanese war suggest that it does’ not exist to-day. Circumstances having improved, I fail to see how, si.v months after we passed a record vote for defence, the Government can now discover any justification for placing an additional burden upon the people of Australia. Another objection to the Government’s proposals is that all money for the purpose of additional defence should be raised by loan and not by taxation. The expenditure of loan money upon defence cannot be justified, because the assets so acquired depreciate very rapidly. Before the proposed loan is redeemed, much of the material to be purchased from the proceeds will have deteriorated and become obsolete and practically useless. Loan expenditure can be justified only in respect of reproductive works, where the assets remain and become wealth-producing. Borrowing for defence peaces upon posterity a burden which it should not be called upon to carry. Under a system of direct taxation, the people who have most to lose in the event of an invasion would make the greatest contribution towards the defence of their property. Apart from the question of whether or not the proposed expenditure is justified, the raising of the money by the flotation of a loan is certainly not warranted.

In order that the Government’s plans may be more acceptable to the public, stress is laid on the amount of employment to be provided by their adoption. Honorable members have at their disposal the schedule of works proposed to be financed by the loan of £10,000,000, which actually is only one-quarter of the amount proposed by the Government to be spent during the next three years; but an examination of the schedule discloses that very little of that money will be spent in the provision of employment in Australia. The major portion of the loan will be utilized in the purchase from Great Britain of two second-hand cruisers, with which we are, presumably, to protect our trade routes.

I also disagree with the proposal to make available an amount of £1,000,000 for the provision, apparently free of charge, of machinery to private enterprise for the manufacture of munitions for profit. I have a deep-rooted objection at any time to these merchants of death being permitted to profit from the supply of armaments. I object still more strongly to the provision by the Government, free of charge, of materials to enable private enterprise to exploit the public in this direction. There are in existence numerous government workshops, including railway workshops, manned by expert tradesmen who are capable of doing this class of work. If the manufacture of munitions could be confined to government undertakings, there would be no inducement to private enterprise to enter the field for the purpose of making profits. Secondary industries which propose to purchase machinery to enable them to launch out upon new avenues of production do not ask the Government for the necessary capital, but under the Government’s defence scheme private undertakings that enter upon the manufacture of munitions are to be supplied by the Government with the wherewithal to do so.

I contend that increased expenditure upon defence is not warranted by the internal circumstances of the country or by our obligations here or overseas. Further, I claim that the method decided upon by the Government for raising the money is not justified. Supporters of the Government resented my suggestion that they are anxious to conscript the youth of Australia, but the position is that the greatest difficulty is experienced to-day in manning the existing defence forces, and in view of the fact that the implements of war we already possess, will shortly be doubled in number, the Government will be faced with the position of having the war machines but not the men to man them. I have no doubt that in those circumstances honorable members who quibble about the distinction between compulsory military service and conscription will without hesitation support conscription as a means of manning the fighting machine that is now being built up. For the reasons I have indicated, I intend to vote against the bill, which I hope will be rejected.

Mr LANE:
Barton

.- It was not my intention to participate in the debate, but after listening to the misstatements and misrepresentations by the Leader of the Opposition (Mr. Curtin) and repeated by his colleagues, I came to the conclusion that it was time somebody placed the true position before, the House. [Quorum formed.’] I listened with interest to the statement of the Leader of the Opposition - a statement repeated in a parrot-like fashion by other members of the Labour party - that in providing increased funds for defence by the flotation of loans the Government is not adopting the correct procedure. It is, I know, generally believed that it would be preferable to obtain the money by taxation, but that would not appear to be possible. I point to the fact that on three occasions the Government has been returned with the approval by the people of its policy in respect of various matters, including the economic recovery of Australia, and the international situation. Many explanations of the international situation have been offered. The position, looked at in the most favorable light, is that the world may become involved in war through the actions of certain countries controlled by dictators, and Australia would not have any part or lot in determining whether or not a war would take place. The honorable member for Dalley (Mr. Rosevear) suggested quite seriously that Australia would not enter into any war unless it had the right to determine where it should be fought and who should engage in it. I honestly believe that honorable members of the Opposition read only the Labor Daily or a similar paper, which does not give an unbiased view of the international situation. We have had striking evidence that those honorable members view the position from only one angle, which was referred to by the Leader of the Opposition when he submitted the party’s defence policy, the details of which have not been disclosed beyond the fact that it is not proposed to permit Australians to fight outside the Commonwealth.

It will be recollected that when our trade with Japan was under discussion, the Leader of the Opposition said that the Government was endeavouring to create strife with a Pacific neighbour. It was suggested that, instead of negotiating a trade treaty, we should permit Japan to do what it desired without protest.

Mr Martens:

– Who said that?

Mr LANE:

– The Leader of the Opposition said it very clearly. He is a journalist, and honorable members know that very often he says one thing but means another.

Mr SPEAKER:

– Order !

Mr LANE:

– I stated that the honorable member is a journalist, and that he has a very subtle way of presenting his facts to the House. Very often he says things which he docs not really mean. Honorable members opposite have stated definitely that they do not favour any alliance between Great Britain and Australia. The Leader of the Opposition (Mr. Curtin) denies that he ever said that, but I clearly recollect that he did, and in this debate Labour members repeated the contention, that Australia should not become embroiled in any war simply because Great Britain had been forced to take up arms. They believe in a policy of isolation. At the time of the Italo-Abyssinian dispute they said that we had no right to send even one

Australian cruiser into the Mediterranean in order to help to protect our trade routes. In support of those contentions they point out that the Prime Minister of Great Britain considers that the protection of trade routes is secondary in importance to the defence of the United Kingdom. Honorable members opposite apparently forget that we are vitally interested in the protection of our trade routes because if we cannot maintain access to our markets overseas, we shall find ourselves in greater difficulties than we experienced during the depression. The primary reason why Australia is prepared to ally itself with Great Britain is that we are blood of Britons’ blood, and flesh oftheir flesh. Furthermore, Britain has never failed to supply the men and money necessary for the pioneering and development of Australia. For these reasons honorable members on this side of the House disagree with the rebels in the Labour movement, who, apparently, have imbibed a spirit which is entirely anti-British, anti-Imperial, and revolutionary in every respect.

Mr SPEAKER:

– Order ! The honorable member must refrain from provocative language.

Mr LANE:

– I am pointing out that honorable members opposite consistently demand that Australia should “ cut the painter” and that we should not in any way help the Old Country in time of war. The honorable member for Dalley (Mr. Rosevear) asked what are the frontiers of Australia, and stated that honorable members on this side had variously claimed that our outposts are Singapore, Gibraltar, and Suez. They argue from such statements that this Government held the view that Australian troops must be sent to those parts in order that Australia might be effectively defended. Honorable gentlemen who put forward such a contention clearly indicate that their only source of knowledge on international affairs is the Labor Daily. Should Australia he embroiled in a conflict at all, it will not rest with us to decide where our soldiers shall fight in defence of the liberties we now enjoy. The international situation changes from day to day; to-day tension exists, to-morrow the situation eases. This is made abundantlyclear from the daily reports of commentators in the press and over the air.

The honorable member for Franklin (Mr. Frost) has told us that Mr. Ogilvie, and the Tasmanian Labour party, favour compulsory military training. Yet, practically every other section of the Australian Labour party opposes conscription. The issue so far as conscription is concerned, I suggest, can be left for determination until such time as we are forced to fight for our lives and rights. The Government contends that for the present, at any rate, the manpower of Australia should be developed in such a way as to prepare for the effective defence of this country in case of attack. I remember that in my youth, all students at public schools served as cadets. We were taken to rifle ranges and taught how to use a gun. 1 hold the view that every boy over fourteen years of age should be taught how to use a gun. Some honorable members opposite have never had a gun in their hands and never intend to handle one. The honorable member for East Sydney (Mr. Ward) said that there was nothing in Australia worth fighting for, and that he would not walk across the road to assist in the defence of this country, because it was controlled by capitalists.

Mr Ward:

– The honorable member must have been pretty close to one shell that burst.

Mr LANE:

– No honorable member opposite has been more cowardly in his attitude on defence than has the honorable member for East Sydney.

Mr SPEAKER:

– Order !

Mr LANE:

– If you speak to him, Mi’. Speaker. I shall not be so disorderly.

Mr SPEAKER:

– All interjections are disorderly, and the remark just made by the honorable member is most disorderly.

Mr LANE:

– Every able-bodied Australian should be ready to play his part in the defence of his country. At no time has this Government ever suggested that it desires to train men for active service overseas. Honorable members opposite, however, have deliberately and wilfully misrepresented its policy in that respect. Some time, ago, the honorable member for Hindmarsh (Mr. Makin) declared that the United Australia party was a warlike party and that it demanded that every man should be conscripted for active service. I repeat that this Government has never acted in any way to suggest that it intends to conscript the youth of Australia. [Quorum formed.] The Leader of the Opposition in this House, and the Leader of the New South Wales Labour party, Mr. Lang, visited my constituency during the last general election in company with a few of their satellites-

Mr SPEAKER:

– Order ! The honorable member is not now discussing the question before the Chair.

Mr LANE:

– I am discussing public men outside this Parliament. They came into my electorate and made certain statements as the result of which many men and women have written to me asking-

Mr SPEAKER:

– Order ! I ask the honorable member to confine his remarks to the question before the Chair; what was said by men and women in his electorate has nothing to do with the bill.

Mr LANE:

– These men and women-

Mr SPEAKER:

– If the honorable member does not comoly with the direction of the Chair, and the Standing Orders, 1 shall ask him to resume his seat.

Mr LANE:

– As the result of the misrepresentation of members of the Labour party during the last general elections, to the effect that this Government intended to conscript the youth of Australia, many of my constituents, only within the last few weeks, have written to me asking whether it is a fact that the. Government intends to borrow this money for the express purpose of sending their sons to war. Various branches of the United Australia party have published denials of that assertion. This Government has no intention whatever of sending the youth of this country to what honorable members opposite have described as a blood bath. Were there any possibility that any of this money would be used for that purpose, I should certainly vote against it. I have assured my inquirers that the United Australia party has at no time in its history been in favour of conscription for service overseas. The honorable- member for Melbourne Ports (Mr. Holloway) and the honorable member for Bourke ( Mr. Blackburn) made two of the bestreasoned speeches that we have heard from the Opposition side of the House. With great subtlety they have conveyed the impression that this money could be obtained from the Commonwealth Bank, without going on the market for it and allowing the capitalist section of the community to derive a considerable profit in the form of interest on the loan. They know quite well that underlying their suggestion is the socialization of r lie banking system of Australia. In order to disarm criticism they have endeavoured to make it appear that they have in mind only this particular loan. They have said “ Let us obtain this £10,000,000 from the Commonwealth Bank at a nominal rate of- interest, and later repay it to that bank, thus shutting out the associated banks and other large financial institutions.” My friends opposite stand to-day in exactly the same position as Hitler and Mussolini stood 20 years ago, when they advocated, not the democracy that we possess to-day, but the socialization of industry and the destruction of the private banking system.

Mr Blackburn:

– I did not refer to the Commonwealth Bank, or make that suggestion. What I said was that the money should be raised by direct taxation.

Mr LANE:

– The honorable member for Melbourne Ports made the other suggestion. We all believe that it would be very much better to raise money for defence purposes by means of direct taxation. But we have passed through a period of financial difficulties, and are now enjoying a measure of prosperity. As the situation in relation to war is still somewhat obscure, and it is doubtful whether or not we shall become involved in any conflict, the Government has done the right thing in deciding to raise this money by loan. Statements have been made from time to time in regard to the necessity for strengthening the fortifications of the Singapore Naval Base, and r he attitude of the Commonwealth Government in improving the defences of Darwin. The intention behind the policy of the Government of Great Britain and the Commonwealth Government was that, should’ Australia be attacked from the north, there would be available for its defence a fleet of capital ships from Singapore, acting in co-operation with the two new vessels which honorable members opposite have derided as secondhand cruisers. Australia cannot defend itself except in alliance with Great Britain. Honorable members opposite misstate the policy of this Government when they assert that its only purpose is to provoke a war in order that capitalists may make profits out of the manufacture of munitions. The statements that have been made by responsible Ministers may, I consider, be accepted as an honest indication of what is intended in regard to the manufacture of munitions. They have told this House that the Government is experimenting with private enterprise in order to test the machinery that is in operation in their factories, to ascertain whether they can produce certain parts which would be required in the event of war breaking out, and Australia having to be selfcontained and to defend itself against aggression. The statements of honorable members opposite are very far-fetched. They can see nothing but sinister motives in the actions of the Government. Their claim that big profits are to be made by private enterprise, notwithstanding the fact that even now private enterprise is offering to make experiments without any charge to the Government, is wicked and false. [Quorum formed.’] I combat the assertion of honorable members opposite that the sole purpose of the” construction of the Singapore Naval Base was the protection of India. Great Britain is fully aware of the immense coastline that we have to safeguard, yet it did not ask us to contribute anything to the cost of constructing the Singapore base, although that base is of advantage, not only to India but also to Australia, and to the Pacific Ocean generally. Proof that Great Britain is willing and prepared to enforce its rights was afforded quite recently, when a British commander ordered the decks of his ship to be cleared for action, and demanded that Japan should” return a British vessel that it had seized. Had Japan refused, and challenged Great Britain, I am confident that Great Britain would have demonstrated its preparedness to defend its rights. The Government of

Great Britain has shown clearly on more than one occasion that if the dictators of Europe overstep certain boundaries it will defend the rights of the smaller nations. It stands to-day, as it has always stood, as the great protector of Australia. When certain honorable members take it upon themselves to insult the British people and the British Government, by telling us and the people outside that we shall not receive either sympathy or help in time of trouble and difficulty, they merely convince us that there is in the ranks of the Opposition a very strong desire to cut the painter that holds us to Great Britain, and, if possible, destroy the Empire. They have argued that at no time and in no circumstances should we be linked up with Great Britain in any conflict in which that country might be engaged with other nations. I hope that the people r Australia will study closely the speeches of honorable members opposite. Those honorable gentlemen should tell us what their defence policy is, and indicate what their attitude towards Great Britain would be should it become embroiled in a war with any European country. They have endeavoured to misrepresent the position and to mislead the people by claiming that their sole object is the defence of Australia, and that Great Britain should take care of itself. They have always been anti-British and anti-Imperial. Generally speaking, the Labour movement has adopted revolutionary standards. That is indicated by its attitude towards Russia. During the last election campaign the Leader of the Opposition (Mr. Curtin) endeavoured to induce Mr. Lang to desist from going into the strongholds of the United Australia party, and telling the people that this Government was determined to conscript the youth of Australia. Although very few people were deceived by such propaganda, some mothers became hysterical and begged us to tell the truth. These tactics have been employed for years, but they have not caused us to deviate from our policy. The United Australia party Government still stands for alliance with Great Britain. We shall support Great Britain in every way should it be in trouble, just as Great Britain has protected this country and made it what it is to-day.

Mv. Lane.

If an attempt were made to sweep Great Britain from the seas, Australia’s destiny would not be decided in this country. Mr. Chamberlin’s attitude to Australia has been misrepresented in this chamber. My party believes that Australia is worth defending, and, in the interests of the present and future generations, it will continue to fight to uphold the rights, privileges and liberty of our people. For nearly half a century, supporters of this Government have stood firmly for liberty and freedom. I maintain that the present Ministry is the best one that Australia has ever had. If the people of this country were ever called upon to defend their hearths and homes, they would take no notice of what the Labour party says, but they would rally to the support of the policy of the United Australia party. Great Britain is standing almost alone to-day in endeavouring to uphold democracy and liberty and Australia wishes to be linked with the Old Country in support of these ideals.

Mr MARTENS:
Herbert

.- I have listened carefully to all of the speeches delivered during this debate, and I was rather amused by the suggestion by the Minister for Defence (Mr. Thorby) that members of the Opposition had attempted to make political capital out of the Government’s proposals. I should say that no speech to which we have listened has indicated an early election more than that just delivered by the honorable member for Hume (Mr. Collins). The honorable member for Bendigo (Mr. Rankin) said that Australia had done little in the Great War, but I maintain that it was outstanding among the dominions, making allowance for the smallness of its population, in the assistance it rendered to the Empire, in both man-power and money. When I came into this Parliament, the Australian Workers’ Union had a membership of about 100,000, of whom 40,000 enlisted for active service. Their actions proved that they were not cowards. When those men returned from the front they were granted continuity of membership and their first year’s ticket was granted free. Our troops made a proud name for themselves and for those who were privileged to lead them. Whether the honorable member for Bendigo realizes it or not,hehas offered a great insult to many returned soldiers. Personally, I am opposed to war. I believe that Australia is worth defending, but it should not be dragged into international conflicts with which it is not concerned, without the people having been consulted. The Labour party is accused of having a policy of isolation. I am definitely in favour of such a policy. We should be very careful that we are not involved in wars, which are often waged with the deliberate object of making profits for capitalists. Patriotism Limited, issued by the Union of Democratic Control, 34 Victoria-street, London, S.W.I, states at page 62 -

page 921

QUESTION

PROFITS BEFORE PATRIOTISM

And on January 24, 1919, in the Chamber of Deputies, Deputy Barthe made the following declaration, which was unchallenged: - “ I affirm that either by the fact of the international solidarity of the great metallurgy companies,or in order to safeguard private business interests, our military chiefs were ordered not to bombard the establishments of the Briey basin, which were being exploited by the enemy during the war. I affirm that our aviation service received instruction to respect the blast furnaces in which the enemy steel was being made, and that a general who wished to bombard them was reprimanded.”

The exposure in the French Chamber showed conclusively that, during the war, the French and German armament manufacturers had a “ gentleman’s agreement”, so that neither side would be embarrassed by the lack of munitions which the bombardment of the Briey basin would have involved. The continuation of the war was made possible by this agreement between the German and French arms manufacturers, because both sides were able to make colossal profits. As M. Flandin, a French Deputy, remarked: “There was a means of shortening the war, and this means was neglected for more than two years. War, for those who manufacture the weapons of death, is a good business.”

Damning Letters

But this alliance of French and German capitalists was not confined to thecoal and iron industries. Germany did not have a supply of ferro-silicon sufficient for its war industries, and an agreement existed between France and Germany to supply Germany with sufficient to meet her war demands. This agreement, made on February 23, 1912, with Krupp by a French firm. . was described by Deputy Barthe in the French Chamber on January 24, 1919: - “ I have here the contract “, he said, which was signed with Krupp several years before the war, and by which the big cannon maker benefited by a reduction ‘in price of 40 marks on the ton. What is serious is that when the French industry treated with the constructor of German cannon it knew that it was contracting for the production of war munitions. I will say more, it knew that it was furnishing Krupp with stock for a war that was coming. Better yet. It knew that the war would break out about 1914.”

This statement provoked M. Viviani, a former Premier, to summarize this case, which had come before the Court of Assizes during his administration. “ The letters,” he said, “which had been seized at the homes of those whom I had had indicted permit one to ask if they had not negotiated with Germany up to 1914, if my memory is exact, agreements from which it resulted -

  1. 1 ) That ferro-silicon was delivered.
  2. ) That, on the demand of Krupp, this stock of ferro-silicon was brought to the door of his plant, so that in case of mobilization he would have almost immediate command of it.
  3. That the French agents of the company who were in Germany were forbidden to deliver this ferrosilicon to Russian agents; that is to say, that our allies were deprived of war materials of which they had need.

  4. That there was the customary stipulation that a strike might annul the contract, but that war between only two nations was not considered an annulling cause, or that, if war had existed between Germany and France alone, or between Germany and Russia, . the contract would have continued in force.”

    1. Viviani said that these were the conditions in which the case came before the general assizes, and that suddenly the AdvocateGeneral dropped it. He added : “ I regret . . . that the Advocate-General, M. Wattine, had the accusation abandoned.”

These illuminating letters, to which M. Viviani referred, were between a Frenchman, Riva-Berni, and the representative of Krupp. They showed that both men recognized the certainty of a war and that the French business man nonetheless helped to supply Krupps. During the two years preceding the war, up to July 28, 1914, Krupps received 6,000 tons of ferro-silicon from France, 1,000 tons each year more than was normally needed for the treatment of steel.

The letters which exposed this affair were found in the office of a Frenchman, Giraud-

Jordan, who was a prominent member of the Comite des Forges and the representative in Paris of an international group centering round Lonza, a hydro-electric company with head-quarters in Basle.

Before the war Austro-German influences had held a majority of the stock in this company, but some of it was held by French capitalists, one of whom was Giraud-Jordan.

When the war broke out the Lonza sold its product - chiefly cyanimide - to German munitioumakers. It was not until March, 1915, that Giraud- Jordan resigned from the board of directors, and in his letter of resignation to the Electrical Plants of the Lonza he stated - “ I had at first hoped that our reciprocal relations could have continued unchanged by this terrible war. … If some day international relations become better again, perhaps we can resume the collaboration which was based on times of peace.”

And on the same day, March 13, 1915, he wrote to M. A. Vogt, at Laufenstrasse, 4, Berne, as follows: - “ Dear Sir, - Following the opinion of Dr. Roller (an Austrian), I have sent to the Lonza a letter of resignation of which I have included a copy. Nevertheless I shall continue to be greatly interested in the Lonza, of which I remain the largest shareholder after M. Wacker, and I have asked him to continue to send me through you as intermediary the documents of the council of administration, such as the minutes, reports and monthly balances, and I will be obliged if you will receive them as in the past and transmit them to me when you have the opportunity.”

Mr. Vogt accepted the commission on March 15, 1915.

Thus, ‘M. Giraud-Jordan, a patriotic Frenchman, was able to keep in touch withGerman and Austrian financiers, and remained, in spite of his resignation, one of the biggest stockholders in the Lonza company, which was working primarily to supply Germany with material necessary for her munitions supply.

Behind the fighting between France and Germany was the co-operation of the armament firms, in whose interests war continued. Profits have no fatherland.

I am not foolish, enough tobelieve that the men in command of the Allied forces were not fully aware of what was occurring. The Great War would have ended within nine months if the proposal of M. Flandin had been adopted. The Minister for Defence claims that the Government will take steps to see that no exorbitant profits are made in connexion with the manufacture of munitions in Australia, but we cannot prevent munition-makers from taking all the profit they can get. The Sydney Sunday Sun, of the 20th March last, announced the profits made by British steel corporations in 1937 as £1,317,000, whilst Vickers-Armstrong showed profits totalling £1,965,000. Why did General Motors Limited buy into Holdens Limited, if not for the purpose of controlling the enterprise in its own interests? If the Government gives contracts to private munition-makers, it is idle to say that the contractors will not make big profits. Those with whom the suppliers will have to negotiate in this country will be no harder to handle than are those dealing with this matter in any other part of the world, and the profiteers will doubtless get their own way. It has been said that the Government is desirous of seeking greater co-operation among the people in connexion with the voluntary system of military service ; unless it is prepared at the same time to do something to better their conditions and to add to their comforts, that cooperation will be lacking. If a country is worth defending, old and young alike will join forces to resist an aggressor, and, naturally, a more satisfied people will more readily respond to the call to arms. Attention has been drawn during this debate to the percentage of rejects amongst the volunteers. The reason for that has been fully explained by the right honorable member for North Sydney (Mr. Hughes) in his various public utterances and contributions to the press, which show that malnutrition, underfeeding and bad housing, not only in Sydney hut also in towns throughout the length and breadth of the country, are only too common. Is it expected that those who suffer from the effects of bad government will be prepared to rush to the defence of their country? The policy of the Labour party is to protect Australia against aggression. On the publicplatforms, the Labour party has proclaimed its advocacy of an adequate defence for this country, but, at the same time, its spokesmen have said that they cannot agree with the Government’s method of financing defence expenditure. If direct taxation were imposed to meet expenditure for defence purposes, much less war or talk of war would exist in the world to-day. The records of every nation, compiled from official sources and made available to the public, show definitely that it is the munition makers who foment wars and are responsible for the loss of many millions of lives. If munition makers are permitted to set up private establishments for the manufacture of arms in this country, as they have done in other countries, they will bleed the people to earn high profits out of the manufacture of war materials to be used for the destruction of human life.

In answer to an interjection which I made the other day, the Minister for Defence (Mr. Thorby) said that £80,000 was to be expended on defence requirements in Queensland. I do not know where that money is to be spent, but, in my opinion, a great part of it should be spent in that portion of Queensland which I represent in this Parliament. It constitutes the most dangerous portion of the State to air transport. In the whole of that large area, there is not one aerodrome on which a big plane could land with safety. When the Commonwealth is asked for assistance for the improvement of aerodromes already established, the councils are told that no money can be made available except for purely defence purposes. The country lying between Cardwell and Cairns constitutes one of the roughest portions of Australia ; it is heavily timbered, and in places is covered by jungle, and, unless emergency landing grounds are provided, it will remain a constant danger to airmen. The dangers are increased because of its enormous rainfall, which makes it too boggy for aeroplanes to land anywhere but on prepared grounds. The Government is neglecting its duty if it fails to make provision to overcome difficulties of this kind. The construction of aerodromes in that area would be of real value because it is in that part of Australia that we may look for an attack by an aggressor. That district is so fertile that, after the big cities had been reduced to subjection, it would be one of the first places to be occupied if an enemy force landed in this country.

In its desire to subordinate everything to defence, this Government has caused the various State governments to reduce their programmes for necessary developmental works during this year and the coming year. In imposing this restriction, the Government has adopted a very short-sighted policy. The curtailment of funds has resulted in the Queensland Government being unable to push on with its proposal for the development of a large tract of country in the northern portion of the State. It is as large as the Darling Downs, and is represented by the honorable member for Kennedy (Mr. Riordan) and myself in this Parliament. In it, a tremendous number of people could be successfully settled. It is frequently suggested that Australia’s greatest need is additional population, and, in my opinion, no part of Australia offers better prospects for successful settlement than this area of which I am speaking. If it had shown foresight, the Commonwealth Government, instead of reducing the loan expenditure of the States, would have increased it. Queensland stands in the forefront among the States in its efforts to settle people on the land in the interests, not only of the State itself, but also of the Commonwealth, yet the Commonwealth Government has neglected an opportunity to make provision for the population and protection of what may be termed the danger zone of the Commonwealth.

I have no hesitation in saying that I support the Leader of the Opposition entirely in regard to the defence of this country. I am an isolationist, and I believe that we should take no part in any war at any time, except it be a war of aggression directed against Australia. 1 believe also that the people of this country would desire to have no part in any war in the making of which they have had no say. If Great Britain wants diamond mines or coal-fields in another country, let it secure them unaided by other members of the British Commonwealth of Nations, who have little or nothing to gain by their acquisition. If the true history of the world war were written, we should find that many things took place of which we cannot be proud. Everybody appreciates the fact that, in 1914, Germany wa3 a dangerous power menacing the peace of Europe; but it cannot be denied that the munition makers kept the blood bath of international strife going for more than four years. Those same wai mongers and profiteers are only too ready to plunge the world into another war for their own gain. In my opinion a contented, well-fed and well-housed people is our first line of defence. I agree that proper physical training has a very great effect upon the physique of our youth - I remember with a vengeance the type of physical culture I got from the profit-makers of this country - but I am totally opposed to any system of compulsory military training. 1 say definitely that the defence policy of the Opposition is understood by the people of this country just as well as it is understood by members of this Government. Indeed, the former Minister for Defence, Sir Archdale Parkhill, in answer to an interjection made by the Leader of the Opposition (Mr. Curtin) said: -

Your defence policy is similar to ours in so far as it directly affects Australia; we differ only in regard to our outlook in respect of Empire defence.

We believe, as a party, that negotiations should be conducted with every nation in order to secure the settlement of differences that arise between them. We also believe that by the application of common sense and intelligence the greatest part of our most difficult problems can be overcome.

Mr SHEEHAN:
Cook

.- One would think from the alarming statements made by members of the Government that some invading force is close to our shores ready to strike at a moment’s notice. That impression has been forced upon my mind by the panicky statements made by honorable members opposite in an endeavour to influence the people into supporting the proposal for the raising of a loan of £10,000,000 for defence purposes. The Government has brought down a schedule providing for an expenditure of £43,000,000 covering a three-years plan. That schedule requires that there shall be made available immediately a loan of £10,000,000, and the Prime Minister (Mr. Lyons), in seeking to influence support for this proposal, read a statement on the international situation which, in my opinion, had the directly opposite effect to that sought by him - at least it had on honorable members on this side of the House. Estimates were brought down a few months ago covering an expenditure of £5,992,000 for defence, and it was then stated that our annual commitment would be £6,000,000. Now we have another proposal for an increase of the defence Estimates by £10,000,000 with an annual commitment of £10,000,000. or an increase of £4,000,000 per annum. This expenditure is not to be merely a temporary expedient to meet a passing emergency; nor is it so urgently required as the Government would have us believe. This is merely an attempt to lay the foundations of a huge defence programme of a permanent character. Only one or two items in this proposal are designed to assist us should the international situation boil over, and there does not seem to be any possibility that that will take place. The statement read by the Prime Minister on the international situation should at least have influenced honorable members into believing that everything is much better to-day than it previously was when military experts considered that £6,000,000 would be adequate to defend Australia or to make plans for the preparation of the defence of Australia for the ensuing twelve months. During the last three or four months, statements have been made with regard to the international situation in the course of which it has been said that Italy has indicated that it has no territorial or political aims in Spain. That statement at least removes any tension that may have existed in connexion with the Italian situation, and the agreement recently entered into by Signor Mussolini and Mr. Chamberlain must also assist to ease the tension of the world situation. Recent events in the Sino-Japanese conflict must prove to honorable members that the Japanese Government has bitten off more than it can chew. I believe that Japan would be glad to get out of the situation in which it now finds itself. Therefore, that has eased the situation from the viewpoint of Australia.

According to the statement made by the Prime Minister -

The attitude of the Commonwealth Government, which is one of strict neutrality and adherence to the policy of non-intervention in the internal disputes of other centres, remains unchanged.

I should like to know how that observation crept into the Prime Minister’s statement. That is the policy of the Labour party; but because Labour adopted it, it was charged with desiring to isolate this country. An agreement has been made with Eire, and Mr. Chamberlain has said that the danger spot at present is Czechoslovakia. That should not influence the outlook of the Australian people, for Great Britain has not yet been able to make up its mind in regard to Czechoslovakia. It has not decided whether it is prepared to assist that country in the event of German troops marching into it as they marohed into Austria. I reiterate that no statement of British policy on this subject has been made. If the Germans march into Czechoslovakia as they marched into Austria, what would be the use of our spending an additional £10,000,000 on defence? Only a few months ago our military experts declared that £5,992,000 would be sufficient to meet defence charges in the next twelve months. We have frequently been told by members of the Government, and also by its supporters, that our military experts are very highly skilled, now is it then that they were not able to say three months ago that an additional expenditure of £10,000,000 would be required for our defence in the next twelve months? To my mind, it is a scathing indictment of the ability of these officers that the Government should find it necessary to bring a person from Great Britain to fill the office of InspectorGeneral of the forces.

But we should not suffer ourselves to be misled in this regard, nor should we labour under any misapprehension as to the Government’s intentions. I will tell honorable members now the most important recommendation that this gentleman will make before he leaves’ our shores to return to England. He will say definitely to our people, “ You must have universal military training “. The bringing of this gentleman to this country is, in my opinion, a step which the Government is deliberately taking in order to prepare the way for the re-introduction into Australia of universal military training, which T classify as conscription under camouflage.

The Labour party has been attacked before now for having introduced universal military training into this country. I remember reading the speeches made by members of the Labour party in this Parliament at the time that measure was adopted, and there can be no doubt at all that the gentlemen responsible for it looked upon it mainly as a health-giving activity, which would also enable our young men to understand something of the meaning of discipline. Those honorable gentlemen little realized what would happen when this scheme came under the control of the military “ brass hats “. Had they done so, they would never hav introduced it. Under that scheme, many of our young men between the ages of 14 and 21 years were brought before our police courts to answer charges of having failed to attend drill. Some of the lads were able to give excellent excuses. Some were not able to get away from home at the time ; others could not obtain freedom from their employment; others, again, were threatened with dismissal if they left their work to go to drill. We know that many of these boys were sent to fortresses in Victoria and to Middle Head, in New South Wales, where they were compelled to mix with people with whom they would otherwise have had no contact at all. This segregation was harmful to them in every respect. Yet I believe that the Government desires to re-introduce that system. It is one of the far-reaching effects of the new military policy.

I recognize that the Government desires to increase the man-power of the forces, and I have little doubt that two or three months after this expenditure has been agreed to we shall be faced with a request to increase our man-power and we shall be told that this will involve the reintroduction of universal military training. For that reason, I wish to recall to the minds of honorable members some of the things that happened in the days following the introduction of this system of military training. At the Central Police Court, Sydney, a batch of twenty cadets appeared before Mr. Love. After having pleaded guilty, one of the group of cadets handed the magistrate a letter written by Mr. Illingworth, of the Enmore Tabernacle. The writer stated that the boy was running a milk business, and that to take him away from his work would mean ruining the business. Mr. Love, after reading the letter, said to the cadet, “Defending your country is of more consideration than selling milk”. To another cadet who complained that the camp was 6 inches deep in mud and water, Mr. Love remarked, “ That is the way to make soldiers of you. The more hardships you go through the better soldiers you will be “. That report appeared in the Sydney Morning Herald on the 14th June, 1913. The Labour party is definitely opposed to the re-introduction of this system of camouflaged conscription. We will not allow the military authorities to get hold of the liberty- and freedom-loving youth of Austraia to conscript them.

It has been said that the policy which the Government is adopting is designed to to result in a structure of lasting peace. What is a structure of lasting peace? In my opinion it requires the laying of a deeper, wider and more unshakeable foundation for the community life of Australia. At present we have in this world the “haves” and the “ have-nots.” A very extensive phase of history then becomes the attempt of the “have nots “ to recover control over the necessaries of life - a chance for freedom and a hope of happiness.

It is also said that we must collaborate with Great Britain in the struggle for markets. The Labour party has been charged with indifference in this matter because it will not adopt the warlike policy which the Government has evolved. We have been asked to explain how far we are prepared to go in providing adequately for defence. Let me give my opinion on this subject. I shall not be so rash as to say that I speak for the whole of my party, but at least I speak for an electorate 95 per cent, of the people of which belong to the working class. The Labour party is of the opinion that a happy and contented people is the first necessity to an effective defence scheme, and it affirms that the first charge upon defence allocations from Commonwealth revenue should be the restoration of “ real “ wage levels and the stimulation of employment. It believes that owing to the exposed nature of Australia’s trade routes defence will be impossible until such time as this country is capable of producing within its own territory every necessity for war and for the victualling of an army and a civilian population for a long period. It therefore recommends that the tariff should be used to provide this security. - It believes also, that an adequate fuel supply is an outstanding necessity and recommends that the first defence allocation for v. ar equipment should provide sufficient money for the development as a nationalized industry, of the distillation of petrol and oil from shale and the hydrogenation of coal. The Government should eliminate private enterprise from these activities and should itself make money available for them.

The Labour party regards the alienation of the Cockatoo Island dockyard from government control as a very serious mistake. One of the principal items in the new expenditure which the Government has foreshadowed is theconstruction of two new sloops at Cockatoo Island. Under the conditions which now prevail, those vessels will be built by private enterprise. Had the dockyard remained under government control the work would have been performed under direct government supervision. If our military experts had been alive to their responsibilities and had realized the importance of the dockyard for defence purposes, they would have foreseen the folly of allowing it to revert to private management. Actually, however, they encouraged the Government to lease the dockyard and, in my opinion, by so doing performed a grave disservice to the community. Vested interests are now seeking to make a profit from this undertaking and we cannot doubt that they have used the influence and money at their command to induce the Government to embark upon this scheme of building warships and of providing replacements at profitable contract, rates. The Labour party also lays it to the charge of the Government that it disposed of its clothing factories and woollen mills, which were established for defence purposes, and reduced our small arms factories to the absolute minimum.

Now we find the members of the Ministry seeking to lay the foundation for a new and big defence force by an expenditure covering a long period of years and having, at the back of it, the intention to re-introduce camouflaged conscription. The Labour party recommends that all army food contracts should be terminated and that the provisioning of the defence force should be placed under the control of a government organization which would be compelled to deal directly with the producers.

We also believe that one of the greatest incentives to the provocation of war is the professional soldier, and we urge that this element be eliminated from any scheme of defence. We know very well that our military officials claim that the forces are undermanned. They say that they do not get sufficient men to train and so cannot exercise themselves in military skill. They contend that they must have men under their authority in order to become successful disciplinarians. They ask how they can be expected to become highly qualified experts when they have not the human materia] at their command to drill and discipline, and they call for men for this purpose regardless of the fact that it involves robbing our young men of their freedom. The military officials are considering only their own personal desires and ambitions.

One other matter that I wish I could deal with at some length relates to our petrol and oil supplies. Every scheme of defence controlled by military officials contemplates the government rationing of petrol stocks and the maintenance of reserves for war purposes. I believe that we should take care to keep our stocks at such a point that rationing would not be necessary. We should never allow ourselves to reach the stage at which the Government could step in and say, “ We will compulsorily acquire all oil stocks in the community as an emergency measure.” That would mean, of course, that people who rely on oil and petrol in order to maintain their industrial activities would not be able to secure supplies or else would have to buy at a prohibitive price. The Government should make definite arrangements to provide in this country reserves of oil and petrol which would ensure that, in the event of war occurring, the rationing of these essential commodities would not be. necessary.

It has been said by some honorahle members opposite that no racketeering would be tolerated if war should occur. We have been told that every step will be taken to exclude the possibility of private persons making profits out of armaments. This whole subject was investigated by a sub-committee of the League of Nations in 1921 and, in its report, it made the following charges against the armaments ring : -

  1. Armamentfirms have been active in fomenting war scares and in persuading their own countries to adopt warlike policies and to increase their armaments.
  2. Armament firms have attempted to bribe government officials both at home and abroad.
  3. Armamentfirms have disseminated false reports concerning the military and naval programmes of various countries in order to stimulate armament expenditure.
  4. Armament firms have sought to influence public opinion through the control of newspapers in their own and foreign countries.
  5. Armament firms have organized international armament rings, through which the armaments racehas beenaccentuated by playing off one country against another.
  6. Armament firms have organized international armament trusts. which have increased the price of armaments to governments.
  7. They have lied about the naval and military programmes of other nations.
  8. They have used their influence over the press in order to inflame public opinion.
  9. They have used their influence in banking institutions in order to finance armament programmes in other countries.
  10. They have sent representatives to international conferences in order to hinder the achievement of disarmament.

Those are the people which the Government says will not be allowed to exploit Australia. They are, in fact, the international armament racketeers who foment all the wars, no matter where they occur throughout the world. That is my answer to the claim of the Governmentthat there will be no exploitation by armament manufacturers in Australia. The Labour party does not boast or assume that it possesses a key to open all locks, or that any defence policy which it may formulate will solve all the defence problems with which we are likely to be confronted. But we deem it important to ourselves and our supporters, as well as to those who wish to take up arms against us, that we should make quite clear and definite our aim. and purpose, as set out in the policy of the party. The Labour party calls for more warmth in politics, for less of that apathetic acquiescence in the miseries that exist, and for none of that cynicism that characterises the outlook of the leisured classes. Nevertheless, the Labour party does not believe that the problems of the world can be solved by goodwill alone, for goodwill without knowledge is like warmth without light. Especially is this so when we have to deal with the complexities of politics, and the still primitive science of sociology. The Labour party stands for the development of research organizations, and for the more rapid dissemination throughout the community of scientific knowledge. It is, perhaps, the special duty of the Labour party thus to place scientific instruction in the forefront of its political programme. What the party stands for in all fields of activity is democratic co-operation, and co-operation means a common purpose that can be agreed to, a common plan that can be explained and discussed for the exploitation of our resources for the satisfaction of all. I am glad that I have had an opportunity to speak on this bill. I had not intended to do so. but I felt that I must express my opinion upon the Government’s defence policy, believing as I do that its proposals in regard to the loan of £10,000,000 are unsound. Therefore, I cannot support the measure.

Mr SCULLY:
Gwydir

.- I feel it necessary to explain my attitude regarding this loan bill. Only a few months ago, when the budget was under discussion, provision was made for the expenditure of a record amount on defence. We were then told that Australia was in imminent danger of attack from some overseas power, and on that understanding the Labour, party supported the Government’s proposals. Now. however, the general situation has considerably improved. International tension has eased, owing, among other things, to the trend of events in the Sino-Japanese war. It has been stated by experts that the war in China will put Japan back for at least a decade, if not for a quarter of a century. The financial position in Japan is acute; and if the war is prolonged, as we are told it will be, the financial resources of that country will be so strained that it wil1 take years to recover. We may, therefore, state without hesitation that there is at present no reason for the increased defence expenditure which the Government proposes.

At the recent meeting of the Loan Council, it was made evident that the Go vernment’s defence proposals were interfering seriously with the loan expenditure programmes of the States, thus retarding the development of the States. This will occasion discontent in rural area3, and will curtail employment throughout the country. I have in mind one important undertaking which happens to run through my electorate, namely, the railway from Sandy Hollow to Maryvale. We arc told when this undertaking was first mooted that it would be of immense value for defence purposes. This was stated by the Premier of New South Wales, and hundreds of thousands of pounds have already been expended. Practically two-thirds of the earth work are completed, but only the other day it was stated that, owing to the curtailment of borrowing by the State, this very important work would probably be held up. The results of this will be most serious, both to the people of the district through which the railway is being constructed, and to the thousands of men who will be thrown out of employment. The State cannot hold out any hope of employment in the near future because of the curtailment of loan moneys.

In my opinion, the whole of the defence expenditure should be met out of revenue. If, as we are told, that is impossible, then the Government should follow the course advocated by the honorable member for Melbourne Ports (Mr. Holloway), and credit resources of the nation should bo utilized through the Commonwealth Bank to assist the Government to finance excess defence expenditure. If this were done the money could be provided at a minimum rale of interest, and whatever interest was paid would help to stabilize public finances ; but if the money is raised on the open market, the interest will go either abroad or into private circulation in Australia.

The matter of oil supplies is of vital importance to Australia, both for defence and economic reasons. No matter how much money we expend on defence, if we do not develop our oil fuel resources we shall be falling down on our job. In recent years the mechanization of the means of primary production has proceeded at a tremendous rate until, at the present time, 90 per cent, of the power used iu the wheat industry is mechanical. We may imagine, then, what would happen if the trade routes were cut in time of war, and it was impossible to obtain supplies of oil from abroad. Yet the Commonwealth Government has made no attempt to meet the situation. “We know that oil fuel can be manufactured in Australia, but when it was proposed to establish an industry for the extraction of oil from coal, the Government refused to co-operate on the plea that such manufacture would be uneconomic, despite the fact that in Germany and Great Britain manufacturers have been successfully and economically extracting oil from coal for years past. The oil content of Australian coal is higher than that of any other coa! in the world, and Australian coal can be won more cheaply than can coal anywhere else. It is obvious, therefore, that the Government should take immediate steps to exploit the coal resources of the country, as well as the shale oil deposits at Newnes and other places. Money should be made available from the defence vote for this purpose, so that we should have a reserve of oil fuel against an emergency. The Labour party has a sense of its responsibilities in the matter of defence and would not shirk them. Our methods are different from those of the* Government and I am glad that they are, because I would not in any circumstances give my support to the proposals that have emanated from that side of the House. Nevertheless, we are just as anxious to defend Australia as is any other party.

Mr BAKER:
Griffith

.- The conservative economist, Hartley Withers, has stated that there was a legend in Great Britain at the outbreak of the Great War that the British Government had attended to everything concerning the the Army, Navy, Air Force, munitions and transport, and was going the next week to decide methods of financing the war, when it suddenly broke out. The same position arises with the Commonwealth Government. We are dealing with a bill the purpose of which is to raise £10,300,000 for defence. While a discussion on defence is not totally irrelevant, it is not strictly correct, as this is a finance bill. The honorable member for Henty (Sir Henry Gullett) accused -the Minister for Defence (Mr. Thorby) of not being present in the chamber whilst the debate was proceeding, but the Minister pointed out that it was a Treasury bill and not a defence bill, and, therefore, under the control of the Treasurer (Mr. Casey). Incidentally, not only has the Minister for Defence been absent at times, but the Treasurer also. Whereas in previous wars, for example the Napoleonic wars and the Crimean war, Great. Britain paid approximately 50 per cent, of the costs through taxation, only 20 per cent, of the costs of the last war to Great Britain came from that source. The remainder was provided by carrying out a policy of inflation - a policy to which this Government and the British Government, governments of similar political colour, are opposed. Because of that policy, the cost of living rose and people on fixed salaries suffered. They had not only the disadvantage of trying to cope with increased living costs, but also the additional burden of paying interest on what was merely government inflation. The Government inflated the currency and the private banks received interest on the amount of the inflated capital.

The honorable member for Barton (Mr. Lane) accused members of the Opposition of following blindly in the footsteps of their leader. We on this side of the House do agree, but this debate shows that there is no agreement on the matter of defence on the Government side. The honorable member for >Henty endeavoured in the opening parts of his speech to show that there was a diversity of opinion on defence on this side of the House, but the greater part of his speech - I regret that the honorable gentleman is not in the chamber - was a demonstration of the differences between himself and other members of his own party. The honorable member, according to his remarks, is prepared to send troops from Australia to any stray war, anywhere, at any time. Contrast that view with that of the Acting Minister for Commerce (Mr. Archie Cameron) who said that in the present circumstances, in the event of an international conflict, it would be impossible for any troops to be sent out of Australia. That is only one example among many, of the differences of opinion that exist on this question, among members opposite. In case there should be any honorable member who still takes seriously the statement that the Labour party is the only party in which there can be any differences of opinion on the question of defence, I refer him to the Australian Quarterly Review, which no one could describe as a radical journal. It is shown on page 163 of that publication that at the Australian School of Political Science which was held recently at Canberra, among 130 delegates who were certainly not members of the Labour party, there were thirteen diverse opinions as to defence methods. There is no need for me to quote them, but this journal gave thirteen different examples of thirteen different opinions among persons all of whom are opposed politically to the Labour party. That should be sufficient proof that the Labour party has no monopoly of differences of opinion ; but if not, we could ask for no more definite proof than the present debate, in which almost every honorable member of the Government parties has put forward a different policy on defence.

I could imagine casual visitors to this House listening with great interest to the honorable member for Fawkner (Mr. Holt) the other day and the honorable member for Henty last session when they made speeches in criticism of the raising of moneys for expenditure on defence measures abroad instead of in Australia. The honorable^ member for Fawkner yesterday made a fine speech in opposition to the principle of overseas borrowing, and I could imagine any person in the audience thinking that he was absolutely sincere in his ideas, and could on no occasion vote for overseas borrowing. If one refers to Hansard, however, he will see that last session when a bil] giving authority for the raising of £2,500,000 in England was passed, the voting was 29 votes to 26, and two of the honorable members who made up that slender majority were two who, if they had adhered to the principles they had enunciated, would have defeated the measure. They were the honorable member for Henty and the honorable member for Fawkner. Words are of no use; let us judge men by their deeds. Casual visitors to the House hear the words of honorable members, but we ourselves not only hear them but also see their actions and know that they do not mean what they say. Incidentally, I point out that, as far as I can ascertain, there is nothing in this bill to prevent overseas borrowing taking place under it. Hitherto, honorable members have seemed to have assumed that it provides only for internal borrowing, but, to my mind, it is quite certain that it gives the executive power to decide whether the money is to be raised internally or externally.

I take this opportunity to read to the House a portion of the speech delivered by the honorable member for Henty on the occasion of the last bill of this nature. He said -

  1. should not net consistently if I did not express regret in this House that this loan is being raised in London.

Remember that the honorable member voted for the loan to be raised in London -

During the absence of the Treasurer (Mr. Casey) in England, I delivered many speeches in opposition to this policy, which I resisted very strongly.

Speeches do not count in this Parliament, but votes do -

It was quite obvious to me that my attitude was supported by the press of this country. The proposal to raise this money abroad has been condemned by the great majority of the members of my own political party.

Did the majority vote against their own convictions ? - 1 think the policy is unwise. I believe thai, in the deepest sense - and 1 say this without wishing to reflect upon the Treasurer - this is a dishonest loan. 1 shall speak quite frankly.

It goes on, sentence after sentence attacking his own party -

I do not think that we should borrow further money abroad except in circumstances of extreme national emergency. This amount of £2.fl<)0,000 could have been found in Australia very easily either by a local loan or by increased taxation. Hither of these courses would have been preferable to the course the Government is taking, which must increase our indebtedness overseas. I cannot look forward in complete happiness tn the future. I do not believe that we shall always be able to meet our overseas liability with ease in bad seasons rs well as good seasons. If we should have two or three had seasons in succession, or if a world-wide fall should occur in commodity prices, we should find ourselves in difficulties.

The London market should be reserved to unable us to meet a condition of emergency - either international or financial emergency. Such a state of emergency lias not yet arisen, and, therefore, this money should not be sought overseas. An overseas loan oi a mere £2,000,000 was not worth floating seeing that it meant the breaking down of the practice that we have adhered to for quite a number of years of declining to add to our indebtedness in London. There never was a weaker plea offered in support of an overseas loan than that offered by the Government in support of this one. The money could have been raised in this country and it should have been raised here. However, the proposal is now an accomplished fact and I can do no more than express my opposition to it. Al though I am opposed to the loan, I shall not vote against the Government, for I cannot by that means save the day.

The honorable member was wrong in that respect, because if the honorable member for Henty and the honorable member -for fawkner, who apparently so strongly opposed overseas borrowing, had voted with the Opposition, the Government’s proposal would have been defeated by a majority of one. The Treasurer has now introduced this bill which provides for the raising of a loan of £10,300,000 in addition to the loan of £2,500,000 raised a short time ago. In his budget speech the Treasurer said -

As honorable members will be aware, the Loan Council is endeavouring to limit its demands on the Australian money market to a total of £16,000,000 for all governments in 1937-38. The necessity for this largely arises out of the imminence of the loan conversion operation of £72,700.000 that will fall due towards the end of 1938. Of this £10,000,000, the Commonwealth Government will have only £2,500.000, all of which it is necessary to allocate to rural debt relief. The Government is therefore obliged to carry on the budget a considerably greater volume of works and other items that would normally bo expected to fall on the loan fund - indeed to an extent very considerably in excess of £2,500,000. I will give an analysis of these items at a later stage.

Tn these circumstances, the Government feels that the carrying of £2.500.000 of defence expenditure on loan instead of on the budget is justified.

For the reasons that I have given, it is considered inadvisable at the present time to take this loan money from the Australian market, lt is proposed, in the first place, to raise £2,000,000 sterling (the equivalent of £2,500.000 in Australian currency) on Commonwealth treasury-bills from the Commonwealth Bank in London, and at an appropriate time to fund these short-term securities from the proceeds of a public loan.

Procedure on these lines has an added advantage in the fact that the Government will be faced with the necessity of meeting financial commitments in Britain on account of the purchase of defence equipment that cannot be manufactured in Australia, to the approximate amount of £2,000,000 sterling in the current financial year. These commitments will thus be met without necessity for encroaching on our existing body of London funds which we are in course of building up as rapidly as possible.

I ask the Treasurer : If on that occasion it was inadvisable to borrow overseas, why should it be the policy of the Government to do so now? As mentioned by the honorable member for Henty, who apparently is opposed to the policy of the great majority of honorable members opposite, it is undesirable to raise such a large sum of money on the overseas market. The Treasurer will probably say that the Loan Council has expressed the opinion that it may be desirable to raise at least £4,000,000 of the proposed loan of £10,300,000 in Australia. If that is so, will the Treasurer say how he expects to successfully convert the loans of over £72,000,000 which soon fail due? The arguments of the Treasurer in support of the attitude adopted at that time are just as strong to-day as they were then. Very little information has been given to the House concerning this proposal, and it would appear that the supporters of the Government are as much in the dark as we are in connexion with this matter. It seems certain that at least £24,800,000 which is the increased expenditure over the next three years will have to be raised by means of loan. The members of the Opposition, I believe, without exception are of the opinion that money required for defence purposes should be raised by taxation, which is the fairest possible way. Notwithstanding all that has been said by various authorities, taxes in Australia are lower than those imposed in most countries. For a long time we have been accustomed to reading and hearing propaganda by interested persons to the effect that our taxes are the highest, with the exception, perhaps, of Great Britain, of those imposed by any nation; but a study of the actual position will show that it is not so. The Producers Review, a farmer’s journal, published in Toowoomba, contains an interesting article on the subject of taxation. Unlike most elected members of the Country party, it adopts a fair and broad attitude, and amongst other things, states -

The present agitation against taxation probably derives most of its fervour from a relatively small group of interested personsfrom those who would like others to bear their share of taxation and from those with political aspirations. Outside unemployment relief tax the lower earning class in Australia pays no direct taxation. Strange to say, nobody seems concerned with the federal indirect tax of £7 13s.1d. per head of population which presses so heavily on the lower income class. For instance, the man with wife and three children earning £200 a year, who pays no direct taxation excepting unemployment relief tax of £4 3s. 4d. per annum, may contribute £20 per year indirect taxation. A facetious accountant tells us that men earning £100 per year who strongly object to pay a sole tax of 16s. 8d. for unemployment relief, are contributing £4 3s. per annum in excise, customs duty and sales tax if they consume two ounces of tobacco and four pints of beer per week - and, of course, they pay much more in indirect taxation. They are not concerned about these payments, because, with most of us, ignorance is bliss.

No one appears to be concerned with the fact that indirect taxes to the amount of £7 13s.1d. a head are imposed on Australian citizens.

Mr Badman:

– Does not the honorable member believe in the imposition of high customs duties?

Mr BAKER:

– We do not support a policy under which taxes paid by the wealthy section are remitted. An income tax is the fairest form of taxation.

Mr SPEAKER:

– The honorable member is not entitled to discuss the incidence of taxation on this bill.

Mr BAKER:

– I submit that as the measure provides for raising £10,300,000 for defence purposes - it is not a defence bill, but a finance bill - I am entitled to show that instead of the money being raised by means of a loan, it should be provided by taxation.

Mr SPEAKER:

– The honorable member is discussing the incidence of taxation.

Mr BAKER:

– According to the budget, certain taxes have been reduced by 50 per cent. Disregarding the sales tax and taxes which may be of relief to the small man, the taxes paid during the last five years by those who are able to pay have been reduced by £20,000,000.

Mr SPEAKER:

– The honorable member is not entitled to reflect upon an act of this Parliament.

Mr BAKER:

– I am not doing so.

Mr SPEAKER:

-Order! The reduction of taxes is irrelevant to the bill.

Mr BAKER:

– Am I entitled to eay that, according to the figures supplied to us, there has been a reduction of £18,000,000 in taxes in one direction, whereas at the same time there has been an increase of £9,000,000 in total government revenue, mainly from indirect taxation?

Mr SPEAKER:

– Order ! The honorable member should know that his arguments are irrelevant.

Mr BAKER:

– I am endeavouring to argue that this money should be raised by taxation, and in elaborating that argument I must deal with the incidence of taxation.

Mr SPEAKER:

– The honorable member will not be in order in doing so.

Mr BAKER:

– I bow to your ruling, sir. Had I been allowed to proceed I should have said that this Government, while remitting taxes-

Mr SPEAKER:

– The honorable member is deliberately evading the direction of the Chair.

Mr BAKER:

– If this bill becomes law, it necessarily means that there will be a reduction of the works programmes of the States and of social services generally. Although defence expenditure need not necessarily come within the purview of the Loan Council, as provided in the Financial Agreement Act, the Treasurer informed the State Premiers of the probable amount which the Government would require for defence purposes and intimated that the State requirements would have to be reduced. This means a reduction of employment and an interference with our ordinary social services. No one realizes more than the Treasurer that such a statement necessarily embodies a fallacy. The Government is acting upon the assumption that the amount of money current in the community at a particular time is the correct amount. It would be able to estimate the correct amount only if all our men were fully employed and industry were engaged to its full capacity; only if this were so, would it be correct to divert finances. There is another fallacy that posterity must carry the greater portion of a burden such as this, but if in the future one section is to pay the money another section will reap the benefit. Others cannot fight our wars. We must at least produce the goods and defence materials required at the moment. This generation cannot hold over production of goods until some other generation has come into being.. This Government is well able to provide by taxation all the money required for defence purposes. According to the Melbourne Harold, a newspaper which strongly supports this Government, the Government will have a surplus of over £2,500,000 at the end of this financial year. At the end of ten months it had received over £3,000,000 more than the £1,250,000 estimated from customs and excise during that period. Yet the same Government which has increased indirect taxes by £27,000,000 has the temerity to say that it has reduced taxes. It is just as much a fault to have a large surplus as it is to have a large deficit, and the continual recurrence of surpluses over the Government’s estimates is an indication that some one is not doing his job properly.

Mr SPEAKER:

– Order ! The honorable member is not discussing the bill.

Mr BAKER:

– I am suggesting that the money should be obtained by one method but that the Government proposes to adopt another.

Mr SPEAKER:

– The honorable member has been called to order several times. I insist that he be relevant.

Mr BAKER:

– In the circumstances I merely suggest that the Government should adopt the policy about which it prates so much and “ tune in to Britain,” by providing finance for defence of this country through increased taxation in a manner similar to that adopted by Great Britain.

Mr CASEY:
Treasurer J [2.32]. - (in reply · Corio · UAP

– It, is necessary, as honorable mom bers are aware, that the bill .should bc 3ent to another place as quickly as possible, otherwise the public loan that is to be

Fought very shortly will have to be postponed for some time. I have made this known to the leaders of the Labour party, who recognize the position, but the Opposition generally has made very little response to my request. The position is that I shall be obliged to conclude the debate in a relatively few minutes, although there is a great deal of material that I think I could, and probably should, deal with. I shall, therefore, confine myself to a few remarks upon the financial aspect of the bill which, of course, is primarily a financial measure.

I am not normally given to taking debating points in this chamber, nor to attempting to pin down senior members of the Opposition to the strict letter of remarks they see fit to make in the heat of debate, but the Leader of thi. Opposition (Mr. Curtin) made reference to a broad method of finance to which I must at least draw his attention. He said that, in his opinion, the Government’s defence proposals should be financed by the creation of treasury-bills through the Commonwealth Bank with a subsequent redemption of those bills through a sinking fund. I merely draw his attention to that remark and do not propose to hold it. against him in future as a considered statement in respect of a particular method of finance. If the honorable member cares at some later stage to repeat that remark I shall discuss it at length. 1 shall not deal further with the necessity for the bill. I do not believe that there is in the minds of reasonable persons any doubt of the urgent necessity for the Government’s accelerated defence programme. I could discuss that at some length but shall confine myself to a few remarks on the strictly financial side, and will merely remind honorable members that, as I stated at the commencement of my second-reading speech, the bill is necessary as an authority upon which to base future commitments and to place orders of some size and considerable urgency. Before those orders are placed and those commitments are entered into, the Government must have authority from Parliament for the necessary appropriations from revenue, trust funds, or loan funds. In this case the only authority the Government can obtain at short notice is authority based upon loan funds, and the bill is therefore submitted with that object in view.

The Leader of the Opposition made play of the fact that a week ago in the British Parliament a very definite and distinct scheme was submitted for the defence of Great Britain during the next twelve months. That, however, was perfectly proper inasmuch as it was included in the British Government’s budget. In this case we are endeavoring to make immediate provision to deal with a situation of no little urgency. When the budget is introduced I shall give, on behalf of the Government, a most complete description of the proposed method of financing defence expenditure during the year 193S-39; and when the Government on that occasion lays before the House its plans for obtaining £15,000,000 for defence, honorable members will see that its requirements are divided fairly between revenue and loan funds.

Sir Henry Gullett:

– What does the honorable gentleman consider a fair proportion ?

Mr CASEY:

– I do not wish to bind either the Government or myself upon this plan. The honorable member will recognize that it is impossible to visualize the general framework and shape of the budget four or five months in advance.

Mr Curtin:

– The Treasurer knows that, it is the practice of the Treasury to prepare trial budgets even at this stage of the year.

Mr CASEY:

– I do not hide the fact that for six months I have had my own ideas of the proportions in which the money will be obtained from revenue and loan funds, but those ideas have not up to the present been discussed with any one else and I think it would be of no advantage for me to expose them now. I can, however, say that, because the Government seeks authority to float a loan of £10.000,000, it does not necessarily follow that the whole of this money will be raised and expended before the end of the year 193S-1939. If honorable members desire a general expression of opinion, 1 would say that the proposed loan of £10,000,000 should quite easily cope with defence expenditure from loans during probably the next two years. I do not desire to be bound to the letter to that statement, but I hope that this loan will be sufficient for the next two financial years, unless, of course, there is a serious recession in the revenue position. That, however, would be apparent to honorable members, and I should then re-state the position to the House. If the situation remains as at present, the loan of £10,000,000 will, I think, suffice at least until the 30th June, 1940.

Mr Curtin:

– Our objection is that when the Government makes provision for its total expenditure upon defence, the Treasurer announces its loan proposals but says nothing in respect of other schemes.

Mr CASEY:

– How could it be otherwise? The rates of income tax cannot be altered at this period of the year; it would bo pure camouflage to attempt to do so. Income tax is now being collected in respect of income earned in 1936-37, and it would be useless to announce in advance of the budget any of the Government’s proposals in respect of the next financial year. They will be explained at the earliest possible moment - when the budget is introduced.

Mr Curtin:

– The Government’s loan programme could have been reduced to the £4,000,000 required prior to tb( introduction of the budget.

Mr CASEY:

– Orders that must be placed before the 30th June next amount already to £5,250,000 and defence commitments involving several millions of pounds must be entered into during the early months of the next financial year. Authority to enter into commitments amounting to probably £7,000,000 or £8.000,000 is required before the next budget is introduced. That is why the round figure of £10,000,000 has been included in the bill. When the time arrives to prepare the budget it may be quite possible and, indeed, quite proper to transfer some of the items now on the schedule of the bill to revenue.

Mr Curtin:

– That would be most desirable.

Mr CASEY:

– It will probably be essential to adopt that course if I am to abide by the expression of opinion I have now given that the loan money authorized by the bill will probably be used during the next two financial years. In view of the necessity to pass the bill at the earliest possible moment I shall confine myself to what I have said and I ask honorable members to assist the Government to deal with this measure at once, otherwise the proposed public loan will be delayed for four or five days.

Question put -

That the bill be now read a second time.

The House divided. (Mr. Speaker - Hoa. G. J. Bell.)

AYES: 38

NOES: 26

Majority 12

AYES

NOES

Question so resolved in the affirmative.

Bill read a second time.

Mr FORDE:
Capricornia

I move -

That the bill be referred to a select committee, to be designated “ The Defence Finance Select Committee “, of members of this House for examination, to ensure that waste, extravagance and profiteering are strictly guarded against; that the proposed expenditure is the minimum necessary in every particular; to recommend, if deemed desirable, alternative projects more efficiently to secure the defence of the Commonwealth, and to report to the House as early as a complete examination makes possible.

I move this motion because I believe that the Government hastily decided upon this expenditure from loan fund without a proper investigation, and that a select committee of this House should investigate the proposed expenditure so as to obviate the possibility of -waste, extravagance and profiteering. There is no doubt that an effort will be made to misrepresent ‘Labour’s attitude in moving for this select committee. It will probably be said that we are unfavorable to a defence policy. As a matter of fact, it has been clearly and definitely stated by the Leader of the Opposition (Mr. Curtin), and, I repeat it now, that the Labour party stands for the adequate defence of Australia against any possible foreign aggression, lt believes in the establishment of a defence scheme commensurate with Australia’s ability to provide, and maintain one, but is very definitely opposed to the purchase of cruisers in Great Britain at a cost of approximately £5,000,000 when they could have been constructed in Australia. Had the Government been sufficiently far-seeing, it could have laid down a policy two years ago for the construction of these cruisers in Australia, and thus have given direct employment to 2,000 workmen for a period of three years. There is room for grave doubt, even in the minds of most honorable members opposite, as to whether this money is to be spent wisely. I listened to-day to a speech by the honorable member for Warringah (Mr. Spender), in which be said that a lot of money had been wastefully spent in the past-

Mr SPEAKER:

– Order! The honorable member is not in order in referring to a previous debate on this bill.

Mr FORDE:

– While we stand as a party for adequate defence, we are totally opposed to gross extravagance, unnecessary waste and profiteering in the manufacture of armaments, and to handing over the manufacture of armaments to private enterprise in peace time, when that is absolutely unnecessary because the

Commonwealth’s own defence organization can cope with the demand. There is in existence a Public Works Committee, which was established by this Parliament for the purpose of inquiring into proposals for the erection of post offices, hospitals and other public buildings, which involve the expenditure of only a few thousand pounds, yet there would seem to be some reluctance on the part of the Government to authorizing the appointment of a select committee for the purpose of inquiring into this proposed expenditure of £10,000,000 of loan money for defence purposes. If the Government would put aside party political considerations, it would meet the desire of the Opposition for the appointment of this committee. At one time there was a Public Accounts Committee, which conducted inquiries into the expenditure of public moneys in various directions, with the result that very substantial savings were effected, to the benefit of the taxpayers of Australia. From what we have been told by members of the Ministry, and from what we have read in the press of the deliberations of the Loan Council, we know that the raising of this loan money will undoubtedly have the effect of starving social services and of retarding the progress of the very necessary loan works that are being and should be carried out by the State Governments of Australia, thereby providing employment for thousands of workmen.

Mr Casey:

– That does not happen to be the fact.

Mr FORDE:

– The Treasurer (Mr. Casey) told the State Premiers at the Loan Council that it was impracticable to raise loan money to the amount that they desired for their works - works which are necessary for the economic development of this country - because, he said, the Federal Government proposed to raise loan money for defence purposes.

Mr Casey:

– That is a. supremely inaccurate statement of what I said.

Mr FORDE:

– Great Britain proposes to raise £250,000,000 from revenue in order to carry out its defence programme. We as a party have no quarrel with any proposal to put into operation an adequate scheme to defend Australia against possible aggression, but we do find fault with the methods that the Government proposes to adopt for the raising of the necessary finance to give effect to this defence scheme. We consider that we are justified in moving for the appointment of a select committee thoroughly to investigate the whole matter. In the opinion of the Opposition the outline of the proposed scheme brought down by the Government is badly shaped, and shows a lack of investigation and inquiry and an utter disregard of the rights of honorable members of this House. The particulars of the proposed expenditure given in the bill are of the vaguest possible nature. It was an insult to honorable members to ask them blindly to vote this money without having in their possession proper information. It is evident that the Government has entered into this scheme in the most haphazard manner. We have been told that an additional expenditure of. £24,800,000 is to be incurred in the next three years, but the Government has not said in what way the money will be found. We have been given no guarantee that when the £10,000,000 which it is now proposed to raise is expended the Government will not come forward and say “ We propose to borrow another £10.000,000 to expend upon defence”. We are justified in pointing out to the House and to the country that in borrowing £10,000,000 the Government not only is increasing the burden of debt on posterity for a swiftly-vanishing asset, but is also increasing the maintenance burden by £4,000,000 per annum. There is no gainsaying the fact that much of the material to be purchased will contribute nothing permanently to Australia’s prosperity. In 25 years’ time we shall have paid £10,000,000 in interest, and we shall still have to redeem or convert the loan. That means that defence equipment costing this nation £10,000,000 to-day will have cost £20,000,000 in 25 years’ time. Then we are told that the Government proposes to spend £43,000,000 on defence during the next three years - 1938-39, 1939-40 and 1940-41. To this we must add an additional £1,000,000 per annum for civil aviation clubs, which makes the total £46,000,000. As custodians of the rights of the people, we are justified in asking whether this money will be spent wisely, and whether there will be elimination of all waste, extravagance and profiteering. If honorable members think there is any room for doubt, they should vote for this motion which asks for the appointment of a select committee. If we look back over the past we shall find that, although the last war to end war cost Australia £843,000,000, we have spent for defence purposes since 1914-15 no less a sum than £118,000,000. What is there to . show for that expenditure? Is there any wonder that the honorable member for Warringah said to-day that there had been gross waste and extravagance in the past?

Mr SPEAKER:

– Order !

Mr FORDE:

– This Government, under the leadership of the right honorable member for Wilmot (Mr. Lyons), has spent £31,000,000 on defence in the last six years. What is there to show for that expenditure? Australia is in practically a defenceless position to-day in comparison with other nations. No one can say that we have an up-to-date scheme which is adequate to defend this country against a possible aggressor. Money has undoubtedly been wasted in the past, and before we commit ourselves to any increased expenditure we should, as responsible representatives of the people, satisfy ourselves, first, that the expenditure is necessary, and secondly, that we get full value for such expenditure. Surely, if the building of a hospital at Canberra or a post office at Timbuctoo is to be subject to an investigation by the Public Works Committee, the expenditure of £10,000,000 of loan money upon a swiftly-vanishing asset should be the subject of close investigation by honorable members, and they should not be asked to rush this legislation through the Parliament. It is not our responsibility that Parliament did not sit for four months. We are here to-day, and we wish to have the right to do our work as representatives of the people. Although the Government now proposes to borrow for defence purposes, it remitted taxes in the case of its wealthy friends to an amount of £20,000,000.

Mr SPEAKER:

– Order ! Such decisions were made by the Parliament and may not be debated.

Mr FORDE:

– The honorable member for Henty (Sir Henry Gullett), in one of those eloquent speeches to which we are accustomed to listen at times - when he is not in the Cabinet - said a couple of years ago : “ It was for the rich more than for any other class that the war was fought. It meant infinitely more to the rich than it meant to the poor of Australia, and the rich should be called upon to pay “. That is what we say - that instead of borrowing and loading up posterity with stupendous debts and interest payments, this should be a charge upon the rich of Australia to whom the honorable member for Henty then referred. Why does he not use his influence in his own party room? If he tried on this occasion he has not had much success. The honorable member for Wentworth (Mr. Harrison), judging by the speech that he made, does not agree with the raising of this money-

Mr SPEAKER:

– Order! I shall not again remind the honorable member. He will have to resume his seat if he does not pay regard to what the Chair has said.

Mr FORDE:

– I did not indicate the speech to which I was referring.

Mr SPEAKER:

– Order ! The honorable member obviously referred to something that the honorable member for Wentworth had said during the secondreading debate on this bill.

Mr FORDE:

– Honorable members of this House, and a great body of public opinion, are opposed to the borrowing of money for defence purposes, until the Government has explored the possibility of raising it by a direct impost upon the 30,000 taxpayers who have a taxable income of £50,000,000. At the last annual meeting of the Rockhampton Chamber of Commerce, one of the most prominent business men in that city bore out the contention of the Labour party in the following words: -

I move - “That the Federal Government be asked to strike a direct tax to cover defence.” I believe in direct taxation for defence. The Commonwealth Government should provide for it. The people will know what they are paying for, and will pay accordingly.

Another important aspect of this matter, and one which should be considered by a select committee, is the wisdom of allowing the manufacture of munitions to get out of the control of the Commonwealth authorities. The Labour party stands for the complete control of the production of munitions and war materials of all kinds, and believes that these activities should be vested solely in the Commonwealth Government. An important deputation headed by Sir Robert Garran and the secretary of the League of Nations Union at Canberra, Mr. Raymond Watt, waited nu the Prime Minister recently, and presented to bini the following resolution, which was carried, at the annual meeting of the union at Canberra in January: -

This union views with grave concern the decision of the Federal Government to organize a system of private munitions manufacture in Australia, such system being diametrically opposed to the spirit of the Covenant, notably article 8, and one which is considered unnecessary in view of the instrumentalities at hand, or of their possible development under direct State control.

That decision, which was reached by a non-political organization, should be given serious consideration. An article appeared in yesterday’s press to the effect that a Pacific Defence Council is proposed to be established. The article continues -

If the suggestion is adopted it is likely that Australia wi’l become the munitionmanufacturing centre of the Pacific, and that contracts will be placed to ensure emergency supplies to the British forces in the Far East, in addition to the yew Zealand defence arms.

The manufacture of munitions in Australia is comparatively in its infancy. If thi3 proposal is adopted, the quantity of munitions being made here wi-1l bc trebled in a short time, and, eventually, Australia will become an important centre for this work. We should not allow Australia to drift into the position into which some other countries have fallen. We recall the scandals associated with the manufacture of munitions, the extortionate profits made, and the undue influence exerted by the manufacturers with regard to the defence policies of governments. Over two months ago, reports were published in the press showing the huge profits made by armaments manufacturers in Great Britain. The ordinary dividend of Vickers- Armstrong, which in 1935-36 was 12 per cent., rose in 1936-37 to 16-J per cent., and Hawker-Siddeley’s ordinary dividend increased from 30 per cent, to 42 per cent., whilst the dividend of Armstrong-Siddeley, its brother in arms, jumped still further, the ordinary dividend being 150 per cent, compared with 107 per cent, in the previous year. How long will the millions of men and women who have no money to invest, but on whom the catastrophe of a world war, if it comes,’ will fall with a devastation horrible to imagine, and who are still bearing the burdens left by the last war - how long will they, the cannon and bomb fodder of future wars, be asked to remain the victims of the greed of the armament manufacturers? It behoves us to see that nothing of this kind is allowed to happen in Australia. If the manufacture of munitions is handed over to private firms, vested interests will be established, and we shall have taken a step which other countries would be very glad to retrace. As Deputy Leader of the Opposition, I appeal to the Government to keep the manufacture of armaments and munitions strictly and specifically under the control of the Commonwealth in its own munition factories. If it becomes necessary to go beyond those factories, the Government should consider having the work done in the railway workshops under the direct control of the various State governments. There are other aspects of this matter upon which 1 should like to touch, but time will not permit.

I protest against the purchase of two cruisers in Great Britain. The work of laying them down should have been commenced in this country probably two years ago. It would have given direct employment to thousands of Australian workmen for a period of about three years. The Government have badly bungled in this matter. It has been criticized even by its own supporters, and there is every justification for asking for the appointment of a select committee to inquire regarding the whole of the defence programme. This would be more important than an inquiry by the Public Works Committee into the necessity for a post office or hospital.

Mr CURTIN:
Fremantle

.- I second the motion. I urge that, as the bill has been read a second time, the control which this Parliament should exercise over this tremendous expenditure should be definitely established, and that we should ensure that the items of proposed expenditure are examined by members of this House, which is the branch of the legislature primarily responsible for the imposition of taxes and for their wise expenditure. One reason why a select committee should deal with this matter is that the defence estimates are of an intricate character. They always present a problem to the Committee of Supply, and must inevitably do so, because of the diverse sources from which the revenue is obtained. On this account we get the Estimates in a piecemeal fashion, and cannot easily trace the relationship between the items in a particular section and similar items elsewhere relating to the same work, but not under examination by us at the same time.

Not so long ago, this Parliament authorized the Government to raise’ £2,000,000 sterling overseas, for the purpose of meeting the obligations of Australia with regard to the purchase of equipment in London. We were told that portion of the money was to be used to complete the purchase of a ship which had been ordered, and which is now in service. This does not relate, in any way, to the enlargement of the existing defence programme. I refer to H.M.A.S. Sydney. Some instalments for the purchase of the Sydney were made out of revenue. The last instalment was to be met out of the £2,000,000 sterling loan, which, T take it, is about to be raised; and the obligation must have been met by the issue of treasury-bills; but it is extraordinary that, in this new £10,300,000 local loan, provision is made for an outstanding payment on the Sydney of £295,000. It appears that in this loan programme, ostensibly to carry out a new and enlarged programme for the defence of Australia, we are using some of the money to meet the cost of defence measures already provided. Therefore, I submit that, however much this procedure may satisfy the Defence Department, it is an extraordinary state of affairs. Some of the instalments have been paid out of revenue, the second last instalment came out of a loan previously authorized, and the final instalment is io be met out of a loan raised specifically because the Government has said that, in view of the international situation, the previous provision for defence is inadequate, and an enlarged programme is necessary. We pass a bill to raise the necessary money, and the money is being used to satisfy obligations for which thu Parliament has previously made provision. lt is as much the duty of this Parliament to examine the items in this schedule as it was to consider the international situation and the general principles of the enlarged expenditure on defence. I hesitate to reflect upon the ability of the committee of the whole House to examine the schedule which was supplied to us during the consideration of the bill. It will be found that items relating to the same works and services appear in legislation already passed. How far this provision is necessary to make good deficiencies in the carrying out of works previously authorized, I am not in a position to say, but I feel apprehensive. With very great respect to the Treasurer (Mr. Casey), for whose knowledge of his department I greatly admire him, I say that he is responsible for safeguarding the expenditure of this country, mid should be able to assure the House that every item in the schedule is one for which the minimum price will be paid; but it is well known that, out of defence equipment, excess profits are constantly derived by interested persons. We ought to safeguard this country against profiteering in connexion with supplies to the Government for defence purposes, and to do that I submit that there has to be evolved some organization superior to that which the Defence Department at present possesses. In any consideration of expenditure which involves the lifting of our annual commitment from £11,500,000 this year to £15,000,000, this Parliament should see that every safeguard has been taken to reduce it to the minimum amount that will satisfy the needs of the situation. There is more in this than that, for should not only this bill guard against profiteering at the present time, we should also take care that in what we are doing the burden on posterity will be minimized. This bill proposes a staggering addition of £10,300,000 to the debt of the Commonwealth on top of the £7,000,000 which is being raised in London at the present time. The Commonwealth, but a few months ago, was warned in, I think, moderate terms, by my distinguished predecessor, the right honorable member for Yarra (Mr. Scullin) that it was entering upon a slippery slope. Everything that has happened since then bears out the importance of the warning the right honorable gentleman gave. I shall not, however, continue the discussion of that side of the matter, other than to say that in borrowing for defence, watchfulness over public expenditure ought to be trebled instead of lessened. As a Parliament we have not been able, and I feel confident that we will not be able, to examine this schedule with that great attention to detail which the importance of this tremendous enlargement of public expenditure demands as a prudent measure on the part of the Parliament in order to safeguard the people against unnecessary taxation. I do not know which view the Treasurer will take in regard to this matter. There has been talk about the importance of co-operation in defence. I agree that defence is essentially a matter, insofar as policy is concerned, for the Government to be responsible for and for which it should obtain parliamentary authority; but in respect of the expenditure arising out of that policy, then, I venture to say, the co-operative intelligence of this Parliament ought to be devoted to ensuring that we spend only what we must, whilst at the same time ensuring the avoidance of waste and, what is equally important, the avoidance of an excessive burden on future generations in this country which will inherit it and have to accept, not only its riches, but also the burdens which are an inescapable part of their inheritance.

Mr CASEY:
Treasurer · Corio · UAP

.- The Deputy Leader of the Opposition (Mr. Forde) supported by the Leader of the Opposition (Mr. Curtin) has moved that a select committee be set up to examine the items of expenditure in this schedule. In the course of their many remarks which with great respect had no relevance to the motion-

Mr SPEAKER:

– Order ! The Minister is reflecting on the Chair.

Mr CASEY:

– I have no desire to do so. In respect of the compilation of a schedule of this sort, the Government, of course, takes the views of its technical officers. It has been said that this schedule was hurriedly compiled. That, I deny. The schedule was carefully compiled and checked, and is the result of many months’ work on the part of officers of the Defence Department. With regard to the proposed select committee, I suppose it would not be improper for myself and the Leader of the Opposition as individuals to be put on a committee of that sort, but with great respect for the Leader of the Opposition, and with equal respect for myself, I say that we should both be completely useless for the job he suggests should be done. What would be the value of the opinion of the Leader of the Opposition or of myself as to whether we should have defensive seaward loops at Darwin, or an extra 9.2 gun at Newcastle? These are questions in respect of which his opinion is worth no more than mine. The Government has put forward its proposals in a straightforward way, and honorable members on all sides of the House have had long enough during the currency of this debate to put forward any ideas they may have. I cannot remember any instance in which any honorable member opposite, while I was in the chamber - and I was present most of the time - has raised any criticism on any individual item appearing in the schedule. A lot of political speeches have been made based on the establishment of munition works and the like. The Government has submitted a schedule to the House and honorable members have discussed it at great length, and have been given every opportunity to express their views regarding it. Though it is the Parliament itself which finally decides the matter, the Government has to take responsibility for the schedule, and it is not prepared to delegate its responsibilities to a select committee of the Parliament.

Mr FROST:

– The Government does so in other matters which are referred to the Standing Committee on Public Works.

Mr CASEY:

– These are defence works, and it has never been the practice to submit such works to a committee. The Government can only interpret this utilization of the forms of the House in a rather extraordinary way as a definite attempt to delay the passage of this measure. It cannot accept the motion.

Sir HENRY GULLETT (Henty) (3.24].- Mr. Speaker-

Motion (by Mr. Gardner) put -

That the question be now put.

The House divided. (Mb. Speaker. - Hon. G. J. Bell.)

AYES: 37

NOES: 26

Majority . . 11

AYES

NOES

Question so resolved in the affirmative.

Question put -

That the motion (Mr. Forde’s) be agreed to.

The House divided. (Ma. Speaker - Hon. G. J. Bell.)

AYES: 26

NOES: 36

Majority . . 10

AYES

NOES

Question so resolved inthe negative.

In committee :

Clauses 1 and 2 agreed to.

Clause 3 -

The Treasurer may, from time to time, under the provisions of the Commonwealth Inscribed Stock Act 1911-1933, or under the provisions of any act authorizing the issue of treasury-bills, borrow moneys not exceeding in the whole the amount of Ten million three hundred thousand pounds.

Sir HENRY GULLETT:
Henty

. -I should not be true to my electors or to the views I have expressed in this chamber if I did not express my opposition to the policy of the Government in raising so much money from loan to meet the cost of its new defence programme. The proportion of loan money i=. in my opinion, much too heavy. L do not think the Government is justified in proposing to apply £10,300,000 from this source. Indeed, it is certain that over the whole three-year programme the amount of loan expenditure will he £15,000,000. The Treasurer (Mr. Casey) told us a few moments ago that £10,000,000 would suffice for two years, hut the honorable gentleman was careful not to commit himself definitely to that proportion. He even indicated that circumstances might arise which would cause the loan proportion of £5,000,000 to be exceeded. I point out. that this proportion of loan expenditure is relatively higher than that agreed to last year, when out of a total expenditure of £11,500,000, only £2,500,000 was provided from loan. If we preserved the same proportion this vear, the amount of loan money would bc £3,500,000. The Leader of the Opposition (Mr. Curtin), in a recent speech, referred to the passing on of this loan indebtedness to posterity. That remark interests me considerably. In the past, when allusions to posterity have been made, I have bad in mind 10,000,000 15.000,000, 20,000,000 or even 40,000,000 people as the community upon which the indebtedness would be heaped, or, to put it in the vernacular, to whom we should be “ passing the buck “. As a matter of fact, there seems to be little prospect of these millions ever materializing. If we take our vital statistics over the last five years, and balance them with arrivals and departures, we shall find that the population of Australia is likely to become stationary at about S,000,000. T admit that the figures for the last, two years would, give a slightly better result, but it seems to me that our birth-rate in the next ton or fifteen years, given normal gains and losses, will probably be lower than it is to-day. I do not see anything in the Government’s immigration policy to lead me to believe that our population from that source will be materially increased. I. therefore, warn the Government that, a* the time, is fast approaching when our population will become stationary, if ought to be careful about the raising of loans for expenditure of this description. Nothing will be provided under this programme which, in my opinion, will not become obsolescent or completely obsolete within ten years. That beingso, this, in my opinion, is not true loan expenditure. I say quite definite. y that the policy of this Parliament should be, “ Tax while we may ; and .borrow when we must “. I do not see any necessity for borrowing this money.

Mr Rosevear:

– Then why did the. honorable member vote for the ‘bill?

Sir HENRY GULLETT:

– I think every penny of this money could be raised by taxation. This country is to-day abounding in prosperity, and this money could be raised by graduated taxation based upon capacity to pay. I have held this view for a considerable time, and have frequently expressed it here. I very much regret that the money h; not to be raised by taxation. Undoubtedly, the time is coming when we shall want money from loan very much more acutely than we need .it to-day.

Mr Rosevear:

– I again ask why the honorable member voted for the bill?

Sir HENRY GULLETT:

– I voted for it in the interests of preparedness.

Mr CURTIN:
Fremantle

.- The Treasurer (Mr. Casey) told us a few moments ago that, until he examined the situation in the light of the budget that he proposed to bring down early in the next financial year he -would bc unable to decide the exact proportion of loan money as against money from other sources which would be needed to carry through this defence programme. He has also told us, however, that £4,000,000 will he needed between now and the introduction of the budget. In those circumstances, I move -

That the words “Ten million three hundred thousand “ he omitted, with a view to insert in lieu thereof the words “ Four million “.

If that amendment is agreed to, the Treasurer will have authority to meet such commitments as he must at once undertake in order to lay the foundation of this programme, and both the Treasury and the Defence Department will be able to tide over the period between now and the submission of the budget.

Mr Casey:

– I said only ten minutes ago that £7,500,000 would bc required.

Mr CURTIN:

– The honorable gentleman contemplates raising £4,000,000 now.

Air. Casey. - But other authorizations are necessary.

Mr CURTIN:

– The authorizations will not be of much use to the honorable gentleman unless he gets the money. We have maintained all through that the amount of the loan is excessive. We have questioned the validity of the principle of borrowing money for carrying out the Government’s new defence programme, at least until we receive a statement of the total financial provision that is to he made, and of how it is to be made. If we authorize the Treasurer now to raise £4.000,000 from the Australian public by loan as a first part of the financial provision for this enlarged defence expenditure, we shall provide the Government with all it needs between now and the date of the submission of tlie budget for the next financial year.

Mr Casey:

– That is quite untrue. The honorable member knows that the amount involved is £7,500,000.

Mr CURTIN:

– I desire as far as possible to conserve for Parliament control over this expenditure. However, I am prepared to be influenced by what honorable members opposite have to say, and if the Treasurer assures me that £7,500,000 will be needed, I accept his assurance, and wi’l substitute £7,500,000 for the £4,000,000 in my amendment. That will meet the objection of the Treasurer. We should then be able to envisage the total expenditure to which we will be committed, and shall have before the House in proper perspective the various sources from which the Government proposes to obtain the money.

Amendment - by leave - amended to rend -

That the words “ Ten million three hundred thousand “ lie omitted, with a view to insert in lieu thereof the words ‘’ Seven million five hundred thousand

Mr CASEY:
Treasurer · Corio · UAP

1 3.48]. - Replying in Bie first instance to the honorable member for Henty (Sir Henry Gullett), I remind him that this proposed defence expenditure is only a part, and a relatively small part, of the total budget of over £80,000,000. One can only take the remarks of the honorable member to be a general stricture on the Government’s allocation of expenditure as between loan and revenue funds in regard to all its activities. 1 remind him of what I had to say in my last budget speech, in which I made an analysis of the amount of works expenditure normally met out of loan, which this Government had, for many years past, been finding out of revenue. Last year, between £7,000,000 and £8,000,000 from revenue was spent on definitely reproductive works, including no loss than £3,500,000 for postal works. For reasons regarding which the honorable member for Henty and myself are in close agreement, we have taken the absolute minimum of money out of the Loan Council pool. I believe, with him, that the generation of to-day should, to the largest extent possible, meet its obligations from the revenues of to-day. Insofar as I have had a hand in shaping the financial policy of the Government in recent years, 1 have been guided by this principle, and it has been firmly in my mind when I have been considering the way in which we are to meet our obligations this year, next year and the year after. I have never recommended low taxation, and the shifting of obligations on to loan fund. I regard that practice as wholly unsound. In this coming year we must meet even more than this year’s proportion of works expenditure out of revenue. This year the amount was between £7,000,000 and £8,000,000, but next year it will be greater. The honorable member for Henty referred to my statement that the amount of £10,000,000 would probably last about two financial years, and I admit that I may have been unwise in making that statement. While I believe that what I said will be found to be substantially true, I do not want to be held to it. The amount may be decreased, or it may be increased; the position will be made clear when the Government brings its budget down within the next few months. In regard to borrowing generally, the Lyons Government ha3 an extremely good record over a number of years. Under the Financial Agreement the Commonwealth Government is authorized to take 20 per cent, of the loan moneys raised in Australia, but. speaking from memory, I should say that we have actually taken less than 10 per cent. Moreover, for many years past, all the money taken from the loan fund by the Commonwealth has been handed back to the States for rural debt adjustment. The Commonwealth has received no benefit whatsoever from it. The Government cannot accept the amendment of the Leader of the Opposition which he so flexibly altered in less than 30 seconds from £4,000,000 to £7,500,000.

Mr Curtin:

– The Treasurer made two statements. First he said that he wanted £4,000,000, and now he says that he wants £7,500,000.

Mr CASEY:

– Normally, the Leader of the Opposition is able to pick up a point very quickly, but as he was, perhaps, out of the chamber when I gave my explanation, I shall repeat it briefly. I said that the Government had urgent proposals to place orders for £5,250,000 between now and the end of June, and we must have some financial authority for the placing of those orders. In the next financial year, a total of about £7,500,000 will be required, including the £5,250,000 which I have just mentioned. That, I think, will bring us to about the end of August. No one knows exactly when we shall be able to bring in the budget, but this authority for expenditure of £10,000,000 is to be exercised within a relatively short space of time. It is not wise to attempt to confine the Government within the limits of any smaller amount.

Sir HENRY GULLETT:
Henty

– I am opposed to the Government’s proposal on the ground that it is tantamount to giving the Government an open cheque, and authority to spend the money as quickly as it wishes. I strongly object to that. If the Treasurer is able to state that the annual expenditure from this loan of £10,000,000 will not exceed £5,000,000 a year, then I will support the Government. If he is not able to do that I shall vote for a reduction of the amount to £7,500,000 in an attempt to preserve some control by Parliament over expenditure.

Question put -

That the words proposed to be omitted (Mr. Curtin’s amendment) stand part of the clause.

The committee divided.

AYES: 0

NOES: 0

AYES

NOES

Ayes . . . . 34

Noes . . . . . . 27

Majority . . 7

Question resolved in the affirmative.

Amendment negatived.

Clause agreed to.

Clause 4 (Purpose for which money may be expended).

Mr GREGORY:
Swan

.- Did the Treasurer (Mr. Casey) give any consideration at all to my suggestion that as a corrollary to this bill there should be established a sinking fund of approximately 4 per cent.?

Mr CASEY:
Treasurer · Corio · UAP

– The sinking fund contribution from revenue is a statutory amount, and I do not think that it would be possible to do what has been suggested by the honorable member except by voting a sum of money from revenue equivalent to the increased sinking fund appropriation required. That, I consider, is a matter for consideration in connexion with the next Budget, and I assure the honorable gentleman that consideration will be given to it.

Clause agreed to.

The schedule.

Mr FORDE:
Capricornia

.- I suggest that the schedule be taken item by item.

Mr Casey:

– The schedule must be taken as a whole.

The TEMPORARY CHAIRMAN (Mr Nairn:
PERTH, WESTERN AUSTRALIA

– There are plenty of decisions that the schedule must be taken as a whole unless the committee otherwise agrees.

Mr FORDE:

– In that case, I move -

That the amount be reduced by £1.

This amendment, if carried, will be regarded as an instruction to the Government to-

Transfer the amount of £1,000,000 from the navy vote to tlie air force vote, making the latter amount £4,700,000 and leaving the grand total unaffected, except for the reduction of the amount by £1.

We are told that the Government intends to purchase two new cruisers overseas. Those’ cruisers are to cost a considerable amount of money, about £2,000,000 each, which will mean a total cost to Australia of more than £5,000,000. The vessels themselves will cost £4,000,000, exchange will amount to £1,000,000, and the cost of bringing them to Australia will be about £91,000. My contention is that this Government should have laid down a policy of having all necessary naval equipment built in Australia. That would have given employment for a period of three years for 2,000 workmen directly in the manufacture of the cruisers. There is no justification for the action of the Government in making these purchases overseas. Too frequently this Government and governments of the same political hue have approached Parliament in a hurry and decided upon the importation of cruisers from overseas, although we have trained artisans looking for employment in this country. In 1926, the Bruce-Page Government purchased two 10,000 ton cruisers from England.

Addressing the House, when asking for authority for their purchase, Mr. Bruce, by way of an apology for the Government’s decision, said -

I say most emphatically that it is essential from a defence point of view that we should build our own vessels.

Despite that statement, importation of naval vessels from overseas continues. The former Minister for Defence (Sir Archdale Parkhill) in 1936 said it was the intention of the Government to build in Australia all the cruisers and all the naval equipment that were required. Notwithstanding that statement, the importation of naval vessels continues.

Surely there is nothing wrong with developing the air arm of defence which the Labour party says should be developed. We have been laughed at by so-called experts on the other side of the House, but recent events have shown clearly how the great nations of the world are realizing the importance of the air force for defence purposes. The French Government has decided to build 2,500 new war planes as rapidly as possible, as well as many planes for aircraft carriers. I am not alone in my contention that this arm of defence should be further developed in accordance with the Labour party’s policy. The right honorable member for North Sydney (Mr. Hughes), who is Minister for External Affairs in this Government, in the course of a very eloquent speech in July last, said -

Australia can only defend herself if she has an air force strong enough to make an attack on any part of her coast a hazard too terrible for any nation to attempt.

In a speech delivered on the 20th October, 1936, he said-

I regard the aerial defence of Australia as the only defence within our capabilities. Collective security has broken down. The aeroplane has completely changed the outlook.

I could quote further from his very eloquent utterances on that occasion, but what I have said is sufficient. Let me now quote what Air Commodore L. E. O. Charlton, of Great Britain, wrote in an article which appeared in the United Services Review of the 21st October, 1937-

More and more the development of modern warfare is towards the air. Before very long bombing will become precise. A comparison between the crudities of the Great War and the scientific methods in vogue to-day affords the proof of immense progress in accuracy. If ever a country were well-positioned to swap loyalties, changing from an old reliance to a new independence on an air force for defence, it would seem to be Australia.

I have said sufficient to support my contention that £1,000,000 of this money should be switched from the naval to the air force vote, and to protest against the placing of orders fornaval vessels overseas whilst there are workmen available in Australia. If the assurance given by Mr. Bruce in 1926 is to be carried out, and if Australia is to become independent of other countries in respect of its naval and air force requirements, I contend that the committee should carry my amendment.

Mr CASEY:
Treasurer · Corio · UAP

, - I find it difficult to believe that the honorable member for Capricornia (Mr. Forde) is serious. I find it impossible to believe otherwise than that his motion forms part of the delaying tactics that have been adopted by the Opposition. He knows a good deal better than he would have the committee believe. He knows that all of the dockyards of Australia that could build naval vessels are 100 per cent, engaged and will be for about the next two years. The honorable gentleman thinks that the Australian public will be fooled into believing that he is sincere in what he is putting up.

Mr Forde:

– I rise to a point of order. I submitthat the Treasurer is quite wrong in saying that I was insincere. I resent his caddish tactics.

Mr CASEY:

– if the remark was offensive to the honorable gentleman I have no hesitation in withdrawing it. There is a great deal more that I could say about the conduct of the debate by honorable gentlemen opposite, but, as I say, I can only take this as being another deliberate attempt at delaying the Government at a late stage. I repeat that the dockyards in Australia are 100 per cent, engaged and will be for about two years. That removes any possibility of building naval vessels in Australia. I venture to say that the honorable gentleman knew that before. . If he did not, I say, with great respect, that he might quite easily have found it out.

In regard to air force expansion, the Government’s proposals are well known. The Minister for . Defence (Mr. Thorby) has said, and he has the support of his technical officers, that he does not believe that any further expansion over and above the present rate could possibly take place in the Royal Australian Air Force. The present rate of expansion of the air force has reached about the limit. I regret that the Government cannot accept the amendment.

Amendment negatived.

Mr HOLLOWAY:
Melbourne Ports

– I desire again to protest against a portion of this money being spent in helping to develop the machinery and plant of private manufacturers for the manufacture of arms and ammunition.

Mr Thorby:

– Even in the event of an emergency?

Mr HOLLOWAY:

– That is not quite the position. The Government has definitely decided to accept tenders and to allow private manufacturers to manufacture arms and ammunition in peace time.

Mr Thorby:

– That is incorrect.

Mr HOLLOWAY:

– I hope that it is; but I know of men employed at one of the finest workshops of Australia, probably as modern and up-to-date as any in the world, the only difference being in regard to size, who have been dismissed during thelast few months and have been immediately picked up by a firm which had a tender to make shell cases for the Defence Department.

Mr Thorby:

– An experimental order only.

Mr HOLLOWAY:

– Why the experiment ?

Mr THORBY:
CALARE, NEW SOUTH WALES · CP

– To see whether they could make them.

Mr HOLLOWAY:

– I am certain that the private manufacturer whom I have in mind would not re-arrange his plant, engage expert engineers, turners and fitters - who receive high wages - for the purpose of experimenting only, and taking the risk of never being able to use that plant unless a war broke out, a contingency which is very remote in the minds of many people. Because I believe that the Government has gone further than the Minister suggests, I protest against £1,000,000 being expended in enlarging and perfecting the plants of private manufacturers in this country. I think the Minister will agree that not only has the money been passed for that purpose, but the Government has also loaned experts to private manufacturers to advise them in this work and has sent along to the workshops patterns, blue prints and drawings. I know that men who were dismissed from Maribyrnong were re-employed by a firm in Richmond which had been given a tender, had been assisted by the Government, and had received the promise of the help of expert knowledge, costings, and other things, which involved the expenditure of the taxpayers’ money. I object to that, not because I am opposed to the expenditure of Commonwealth money in fostering and helping to extend the operations of private manufacturers for the carrying out of ordinary peace-time work which would help to develop the technical knowledge of our people, and have done in Australia work which formerly was done abroad, but because I believe that it should not be spent for the purpose of conducting private operations in the manufacture of arms and ammunition. I would object to permission being given to private manufacturers to do this work even if they did it at their own expense. This country has been affiliated with the League of Nations almost since the inception of that body. There is a clause in the Covenant of the League which strongly urges its members not to permit the private manufacture of arms and ammunition, and suggests that it is a very bad practice indeed, which should not he encouraged. We are affiliated with the League of Nations, we are bound by its Covenant, yet not only do we try to make legal what the world has been endeavouring to prevent for many years, but we actually foster and help financially and in every other way the conduct of this business by private manufacturers. I consider that that is wrong. I believe there is a good deal of truth in the suggestion not only that this Government decided to make sure that we have our own supplies of arms and ammunition for purely defensive operations, but also that this country has been zoned out as a depot for the supply of requirements in the Pacific area. Thus, for the first time in the history of Australia, this country will invite the attention of raiders, because the first place to which those with whom we are in conflict will pay attention is the place in which arms and ammunition are stored. In one fell swoop, we shall be brought right into the very cockpit of war.

Mr Hughes:

– That would be the case if they were made by the Government.

Mr HOLLOWAY:

– I know that it would. I am suggesting that the Government should make only sufficient to meet what is necessary to defend this country, that it should not be a manufacturer and salesman for other countries. That is where I draw the line. I am not opposed to this Government helping Australia to defend itself, but I have always been opposed to private enterprise engaging in the manufacture of arms and ammunition.

Mr Thorby:

– The Government could not possibly cope with the requirements of warlike operations. The existing capacity would have to be increased fifteen times.

Mr Collins:

– Would the honorable member offer any opposition if these operations were under the control of the Government?

Mr HOLLOWAY:

– I would rather not have private manufacturers engaged in the business at all. For six or seven years, I, with other honorable members in this House, have urged the Government to enlarge its docks and shipbuilding plants, so that we might build our own ships. I recall an occasion when the honorable member for Moreton (Mr. Francis) was Assistant Minister some years ago. He was requested to make such provision as would enable ships to be built at Cockatoo Island, and his reply was that we had not the plant, the men, or the technical knowledge to build the particular boat the construction of which was then under consideration, although it was only a small vessel. Years have passed, and we are given the same answer to-day. We are told that we have no docking facilities. For years I have been asking that the Commonwealth Government should only be a third party with the Melbourne Harbour Trust and the Victorian Government in making the docks at Williamstown or elsewhere in Port Phillip fit to do this work, or even to repair ships. What do we find? If a ship became crippled in Victoria it would have to be towed to New South Wales for repair. Yet the reply has always been that such provision is , not necessary in order properly to balance our defence scheme. The answer given to-day shows that there are no dockyards in Australia which can keep up with the requirements of the Defence Department.

Mr Thorby:

– Spasmodic requirements.

Mr HOLLOWAY:

– The Treasurer (Mr. Casey) has said that for the next two years, without any’ emergencies, for the ordinary requirements of peace time or preparatory operations the existing dockyards will be engaged to their fullest capacity. What position would we be in, seeing that the British Government could not sell us a pound of nails if we needed them for our defensive operations? Everybody knows that there is not a man in the metal or the engineering trade in Great Britain whom the Government of that country would allow to go to Australia or anywhere else, because, as the Treasurer has said, the British artisans are working at 100 per cent, pressure, at overtime and double time rates. The engineering societies are being urged to agree to some form of dilution, so that unskilled labour may be employed in the armament factories on defence work. The Government has consistently refused to assist in the establishment of a dockyard in Victoria, which has one of the largest seaports in this country. A new, modern dockyard, capable of handling ships of the size of those to be purchased, could be built for £1,000,000, yet the Government proposes to spend that amount in assisting private manufacturers to make their plants efficient and up to date in order that they may compete in the manufacture of arms and ammunition. I urge the committee to reconsider the matter, and to insist that that £1,000,000 be spent in helping the aeroplane industry, which already has been established in this country, so that the chair of aeronautical engineering may have something to do, and the laboratory, which is to be established in

Victoria in association with the aeroplane factory, will be able to fulfil its rightful purpose. Everybody is beginning to realize that that is the only efficient direction in which the money could be spent. I am certain that the right honorable member for North Sydney (Mr. Hughes) has heard resolutions discussed when he has been abroad at big international conferences, asking the League of Nations, or any other authority from whom help could be enlisted, to make illegal the private manufacture of arms and ammunition.

Mr THORBY:
Minister for Defence · Calare · CP

– I regret that the honorable member for Melbourne Ports (Mr. Holloway) should have made some very misleading and absolutely inaccurate statements in regard to the manufacture of arms and munitions. The Commonwealth Government has stated very definitely, and I have stated in this House on its behalf, that there is no move whatever to transfer to private enterprise the manufacture of arms and ammunition. There is no suggestion that there should be given to private enterprise the opportunity to manufacture any explosives that are being or are likely to be manufactured for the Defence Department. There is no provision whatever for the actual manufacture of arms. That is being provided for in the Government’s munition factories at Lithgow, Maribyrnong, and other places. At Lithgow., provision is being made for an expenditure of £350,000 in the extension of the small arms factory for the purpose of manufacturing the Bren gun and improving existing resources. As the honorable member knows, all machine guns, rifles, and small arms are manufactured at Lithgow. I emphasize that fact. There is no suggestion whatever that there is any move on foot on the part of this Government to transfer to private enterprise the manufacture of arms and ammunition. What honorable members must recognize, however, is that, ever since the Commonwealth has been established, private enterprise has been manufacturing a very large proportion of the general requirements of the Defence Department, lt has provided much of the clothing, most of the materials, and the whole of the foodstuffs and building materials. It is very difficult for me to follow the arguments of the honorable member when he picks out one or two items, as though those would make or break private enterprise. We have taken the necessary action to make provision for the manufacture of certain parts of heavy ammunition for the Defence Department in the event of an emergency. That is merely a precautionary measure. We have asked certain firms to take trial orders, so that the suitability of their factories for the production of defence equipment can he tested under practical conditions.

Mr Curtin:

– If you did not give them repeat orders, the machinery would lie idle.

Mr THORBY:

– That is not quite the position. The £1,000,000 referred to is the sum allotted to assist certain private firms, in whose factories it is considered desirable to install machinery at the expense of the Government. This would be held in reserve by the Government to make up for any deficiencies in the organization of the factories, so that they could manufacture particular articles for the department, if the necessity arose. The real reason for this is that, in the event of an emergency, it would be impracticable to take trained artisans from an established factory, to transfer them to some government organization at short notice, and to give them the whole of the equipment necessary to manufacture arms, munitions or other equipment for the department.

Mr Makin:

– What nonsense!

Mr THORBY:

– I object to being told that I am talking nonsense.

Mr Makin:

– I speak as an engineer.

Mr THORBY:

– I know what I am speaking about. It is not merely a matter of obtaining a big output of general defence supplies, but it is also desirable to have the necessary trained men under the direction of skilled foremen and general management. The important thing is to have a complete organization. If, in the event of an emergency, we took men out of the workshops in which they were engaged, and transferred them to a government institution, tremendous delay and disorganization would ensue. An organization has been planned under which full advantage will be taken of established industries that could be utilized by the department in the event of an emergency.

It has been said that the cruisers provided for under this bill should have been built in Australia, but I point out that it would have taken considerably over three years to have even one of the vessels constructed in this country. There is no possibility of a continuity of orders being placed with local firms for cruisers of the size of those to be obtained. Their construction here would have meant the importation of costly machinery, and of a large proportion of the material required for the work, and the cost would have been considerably increased thereby. The chief difficulty, however, was that we could not have had delivery of the vessels until the third and fourth years, whereas the Government requires them at the earliest possible date. The first cruiser will be put into service this year, and the second one will be commissioned early next year. The time which we shall be waiting for the cruisers will be sufficient to enable the requisite officers and men to be trained to man them without disorganization. Large orders have been placed with the local ship-building yards, not only for new sloops and harbour defence vessels, but also for the conversion of the Adelaide into an oilburning ship, and fitting increased armour protection and improved antiaircraft armament to the Australia and Canberra. This will absorb much of the labour available in the shipyards for the next two years. It provides the kind of work which the local shipyards are able to do without incurring heavy expenditure by the importation of new machinery which could not be kept in use.

Mr Holloway:

– If it could reasonably be done, would not the Minister prefer to have these ships built wholly in Australia?

Mr THORBY:

– Undoubtedly, if it could be done economically. In the Defence Department to-day special officers are detailed for the purpose of examining overseas orders for the purpose of ascertaining whether the articles required could be purchased or manufactured in Australia. Of course, there are a few materials that cannot be obtained in Australia, and certain articles have to be imported so that they may be interchangeable 100 per cent, with similar articles used in the British Navy. Many Australian factories are working overtime to cope with orders which the department has already placed with them.

Mr MAHONEY:
Denison

.- I understand from the statement by the Minister for Defence (Mr. Thorby) that the Government is spending money in the importation of machinery to enable private manufacturers to produce munitions for sale to the Government at contract prices.

Mr Thorby:

– .1 did not say that. I explained that we were spending money to provide certain branches of private industry with machines which they do not use, but which will bc available to cope with an emergency.

Mr MAHONEY:

– The Government will hand over to private enterprise a quantity of machinery for the production of certain munitions for the Defence Department, but no rebate will be made by the manufacturers to compensate for the machinery placed in their hands by the Government.

Mr Thorby:

– Who said that’?

Mr MAHONEY:

– The Minister remarked that new machinery would be placed in private factories with which to produce munitions for sale to the Government. I object to private enterprise making an enormous profit out of goods supplied to the Government. This is a ramp upon the people.

Mr Brennan:

– To whom will the m a eh inery bel ong ?

Mr MAHONEY:

– To the private factories.

Mr Thorby:

– Nothing of the kind ; it will remain government property.

Mr MAHONEY:

– If it were put into a factory of mine, I should certainly claim it.

Mr Thorby:

– I am quite aware of that.

Mr MAHONEY:

– There is no guarantee that the machinery will ever be returned to the Government, or that the Commonwealth will ever get back any money for the plant. Apparently, the machinery will simply be presented to private enterprise. Is that the way to spend the money of the taxpayers? It is time we had a new Minister for

Defence, if that is the way government business is to be conducted. I object to the incompetence of the Government, as shown by its decision to purchase machinery, and hand it over to private enterprise. I hope that the Auditor-General will not approve of this procedure. Private enterprise should not be allowed to benefit by £1,000,000, and then have the privilege of selling munitions to the Government at a huge profit. I enter my emphatic objection to the manner in which the Government proposes to allocate the expenditure on defence, which will permit the munition makers of this country to exploit the people.

Mr MAKIN:
Hindmarsh
Mr Chairman:

Motion (by Mr. Thompson) put -

That the question be now put.

The committee proceeded to divide.

The TEMPORARY CHAIRMAN (Mr Nairn:

– There being no member voting on the side of the Noes, I declare the question resolved in the affirmative.

Schedule agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 950

GENEVA CONVENTION BILL 1938

Bill received from the Senate and (on motion by Mr. Hookes) read a first time.

page 950

ADJOURNMENT

Censorship of Broadcast Address: Pensions: Effect of Financial Emergency Acts; Relevancy of Debate

Motion (by Mr. Hughes) proposed -

That the House do now adjourn.

Mr HOLLOWAY:
Melbourne Ports

– I desire to draw the attention of the House and of the Minister representing the Postmaster-General (Mr. Perkins) to the action of the Australian Broadcasting Commission in censoring a lecture which was to be broadcast through the national station by Judge Foster, of Victoria. In an extraordinarily arbitrary manner, the commission mutilated the text of a lecture submitted to it by Judge Foster so greatly thai he had no option but to refuse to deliver it. This seems to me to be a very extraordinary thing, especially when we consider the reputation held by Judge Foster as a lecturer before Melbourne University and other gatherings throughout Australia. For many years the learned gentleman has been a very welcome lecturer at Melbourne University gatherings, and, in addition, has been invited to lecture on and discuss many public questions affecting the interests of the people of Australia generally. He is highly respected, both in his professional capacity and in the life of the country generally, and I cannot imagine that he would submit a lecture for the approval of the commission to which reasonable objection could be taken on the ground that it was not in the public interest that it be broadcast. “When Judge Foster saw the censored manuscript of his proposed lecture he said to the commission and to the people of Australia in the most dignified way that, as a protest against the interference with the democratic liberty of the people, he would not go on with it. This arbitrary action on the part of the commission is causing great concern, not only to the people of Victoria, but also to many people throughout the Commonwealth. I ask the Minister in charge of the House to cause an inquiry to be made into this matter and to submit a report at the next sitting of the House.

Mr MAKIN:
Hindmarsh

.- I desire to bring before the Government a matter which has long awaited consideration and one that should receive prompt attention. As honorable members know, most people who were affected by the financial emergency legislation have since had their position restored to what it was prior to the enactment of that legislation; but the parents of deceased returned soldiers who, prior to the enactment of the Financial Emergency Acts, enjoyed repatriation pensions as a right seem to have been ignored. The enjoyment of u repatriation pension did not then preclude a person from participating in a pension under the provisions of the Invalid and Old-age Pensions Act or vice versa. As the law stands at present when a person receives a pension, either for invalidity or old age, the receipt of that pension affects his eligibility for a repatriation pension. By reason of this, considerable hardship is visited upon certain parents of deceased returned soldiers who are not being afforded the aid from the Commonwealth that is rightfully due to them. I have at present under my notice three cases which I feel have been very harshly dealt with. When he was framing the budget last year, I asked the Treasurer (Mr. Casey) to recognize the claims of these people for the payment of that portion of the pension which has for a number of years been denied to them, and urged that they should be placed in their former position in which the receipt of such a pension would not disturb their eligibility for other pensions. I recognize that it would be an imposition on the part of wellcircumstanced people .to make a claim upon the Commonwealth for relief of this sort; but that is not the case of many people who are forced to depend upon pensions for their livelihood. I know the Minister for External Affairs (Mr. Hughes) will be .sympathetic towards the claims of these people and that when the opportunity is offered he will stand loyally behind them in their endeavours to have this anomaly rectified.

Mr BAKER:
Griffith

.- I desire, Mr. Speaker, to bring under your notice a matter upon which I should be glad to have your guidance. During the debate which took place in this House to-day in connexion with a bill to authorize the raising of money for certain purposes, I endeavoured to bring forward the question of taxation. I drew the attention of the Government to my view that money” for defence purposes should be raised by means of taxation instead of an overseas loan. In order to elaborate my argument it was a necessary requisite to deal with the incidence of taxation. I wished to show that taxation should be largely increased and that there was room for an increase. While I was endeavouring to develop this argument, you, Mr. Speaker, ruled that my remarks were out of order. As I was dealing with a matter vitally connected with the bill and seeking to show an alternative means of raising the money required, I was surprised by your ruling.

I felt that it was necessary to elaborate the point that I was making. I should be glad, therefore, if you would let the House know the exact position of honorable members, and how far they may go in a matter of this kind. Will you, sir, in short, define the boundaries of debate so that we may know where we stand in regard to other bills?

Mr SPEAKER (Hon G J Bell:
DARWIN, TASMANIA

The honorable member has asked me to explain the Standing Orders and the rules governing debate. He has raised this matter because of a ruling I gave this afternoon. In accordance with the Standing Orders it was open to the honorable member to move dissent from that ruling, which was based on the rule of relevancy. Standing Order 274 provides that no member shall digress from the subjectmatter of any question under discussion - the whole matter hinges on the point that a debate must be relevant to the question before the Chair. The honorable member has said that on a motion for the second reading of the Loan Bill he wished to discuss the incidence of taxation. I ruled that to do so would not be in order. Beyond that I shall not attempt to go at the moment. I think it unnecessary.

Dr MALONEY:
Melbourne

.- I endorse the remarks of the honorable member for Melbourne Ports (Mr. Holloway). I have known Judge Foster for 30 years and have always held him in the highest respect, regard, and even reverence. I think of him as one of the trio of judges that the people of Victoria most admire - I refer to Mr. Justice Higinbotham, Mr. Justice Higgins, and Judge Foster. I trust that proper inquiry will be made to see who has a bee in his bonnet in regard to this matter.

Mr HUGHES:
Minister for External Affairs · North Sydney · UAP

– I shall refer to my colleague, the PostmasterGeneral, the matter relating to the censorship exercised by the Australian Broadcasting Commission as it affects Judge Foster’s speech. I shall also bring it before Cabinet to-morrow.

The matter raised by the honorable member for Hindmarsh (Mr. Makin) is quite familiar to me. He may rely upon my bringing it before Cabinet, where it will receive sympathetic consideration.

Question resolved in the affirmative.

House adjourned at 5.4 p.m.

page 952

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

Ownership of Land: Mineralrights

Dr Maloney:

y asked the Minister for the Interior, upon notice -

When public lands are sold or leased by the Government, are the minerals contained in such lands also sold, or does the Commonwealth retain them?

Mr McEwen:
CP

– The answer to the honorable member’s question is as follows : -

The Commonwealth acquires land for Commonwealth purposes by three methods, as follows: - (a) Land transferred by a State pursuant to the Constitution, i.e., “transferred property “ ; (b ) land compulsorily acquired from a State or from a private individual resident therein ; (c) by agreement with the State government or by agreement with the private citizen. The term”Crown lands “refers expressly to lands owned by a State. In “ transferred property “ and property compulsorily acquired, all minerals therein are the property of the Commonwealth. In land purchased by agreement, the minerals remain the property of the Crown, i.e., the State. When the Commonwealth disposes of property to the public which it acquired by (a) or (6), it reserves therefrom the minerals. In the disposal of property under (c), -the minerals are reserved to the Crown as in the original certificate of title, and are therefore owned by the State.

Financial Assistance for States

Mr Jolly:
LILLEY, QUEENSLAND

y asked the Treasurer., upon notice -

Will he supply the following information to the House: - (a) The amount of loan money raised by the Commonwealth Loan Council for each of the State governments for each of the past three years; (b) the amount of loan money raised by semi-governmental bodies during the same periods; and (e) the amount of the Commonwealth Government grants made to each of the States during those periods ?

Mr Casey:
UAP

– Inquiries are being made, and a reply will be furnished as soon as possible.

Public Service: Working of Overtime

Mr Mahoney:

y asked the Prime Minister, upon notice -

Will he supply the number of hours of overtime worked in the Patents Branch, the Department of Commerce, and the Department of Trade and Customs in the Federal Capital Territory in the last twelve months, and the amounts paid for overtime in each of these departments for that period?

Mr Lyons:
UAP

– The information is being obtained, and will be made available to the honorable member at an early date.

Australian Broadcasting Commission: Visits of Overseas Artists

Mr Badman:

n asked the Minister representing the Postmaster-General, upon notice -

  1. What was the cost to the Australian Broadcasting Commission in salaries and transport of all overseas celebrity artists who were engaged by the commission during the year ended 30th June, 1937?
  2. What were (a) the gross returns, and (6) the net returns, from all concerts at which overseas artists performed during that year?
Mr Perkins:
Minister without portfolio assisting the Minister for Trade and Customs · EDEN-MONARO, NEW SOUTH WALES · UAP

– The honorable member’s questions have been referred to the Australian Broadcasting Commission.

Power Alcohol from Potatoes.

Mr Barnard:
BASS, TASMANIA

d asked the Minister in charge of Developments, upon notice -

  1. Has he or his department any information in respect of the production of power alcohol frompotatoes ?
  2. If not, will he obtain particulars respecting the result of experiments in other parts of the world, and the prospect of developing the industry in Australia?
Mr Casey:
UAP

– The answer to the honable member’s questions are as follows : - 1 and 2. The production of power alcohol in Australia from various sources including sweet potatoes was recently investigated by Mr. L. J. Rogers, Commonwealth Fuel Adviser, and a summary of his report was made available to the press. The report will be tabled in Parliament to-day, and copies will be placed in the Library for the information of honorable members.

British Preference for Australian Wheat

Mr Badman:

n asked the Acting Minister for Commerce, upon notice -

Will the Government use every means possible to retain the duty of 2s. per quarter on all foreign wheat entering the United Kingdom, so that Australian farmers may continue to reap the benefit of the extra 3d. per bushel which is derived from the existing agreement?

Mr Archie Cameron:
CP

– The answer to the honorable member’s question is as follows : -

In the review of the Ottawa agreement, the question of the retention of the duty on foreign wheat entering the United Kingdom, in common with duties on other commodities, is under the notice of the Government.

Civil Aviation : Shortage of Pilots

Mr McCall:

l asked the Minister for Defence, upon notice -

  1. Is it correct that there is an acute shortage of pilots and instructors for commercial aviation in Australia and New South Wales in particular?
  2. Does it cost approximately £250 for a pilot to obtain a B class licence and approximately £600 for an instructor’s ticket?
  3. If so, will he institute an inquiry for the purpose of overcoming the shortage, and consider the necessity of reducing the cost to pilots and instructors of obtaining their certificates?
Mr Thorby:
CP

– The answers to the honorable member’s questions are as follows : -

  1. There is no shortage of pilots holding commercial licences or instructor’s certificates but there is a shortage of pilots fully qualified for air line operation.
  2. The cost quoted for obtaining a commercial licence is approximately correct. The cost of obtaining an instructor’s ticket varies according to how the necessary experience is gained and cannot be estimated generally.
  3. My department is keeping a close watch on these matters and any action considered necessary will be taken.

Wireless Broadcasting: Control of South Australian Stations

Mr Clark:
DARLING, NEW SOUTH WALES

k asked the Minister representing the Postmaster-General, upon notice -

  1. What broadcasting stations in South Australia are owned and/or controlled by Advertiser Broadcasting Services Limited or Advertiser Newspapers Limited?
  2. In what broadcasting stations in South Australia do Advertiser Broadcasting Services Limited and Advertiser Newspapers Limited hold shares?
  3. What are the numbers of shares held by each of these companies in the various broadcasting companies?
Mr Perkins:
UAP

– The information is being obtained.

Postal Department : Surcharge on Air Mail - Mascot Telephone Exchange.

Mr Perkins:
UAP

s. - To-day, the honorable member for Wentworth (Mr. Harrison) asked the following questions, upon notice -

  1. Has his attention been drawn to a statement in the Sydney press of the 28th April, to the effect that “ the Postmaster-General’s Department is willing to abandon the surcharge on air mail, but the Defence Department believes that the abandonment would mean the loss of revenue”?
  2. Will he say how long the Defence Department has been regarded as an authority on postal matters?
  3. How long has the defence expenditure been considered as a factor in determining what are the appropriate charges that should be made by an essential service such as the Postmaster-General’s Department?

I am now in a position to furnish the honorable member with the following reply from information supplied by the Postmaster-General : -

  1. Yes; the press statement” has been seen.
  2. There is no reason to suppose that the Defence Department regards itself as an authority on postal matters.
  3. Defence expenditure, as such is not related to the charges made for postal services, although it is presumably recognized that themoneys collected from surcharges on air mail matter conveyed over subsidized routes is credited to the Civil Aviation Branch, as a contribution to the subsidy payments which have to be made.
Mr Harrison:

asked the Minister representing the Postmaster-General, upon notice -

In view of the fact that other parts of the BritishEmpire with a serviceable area approximately as big as the Commonwealth of Australia, such as South Africa, have1d. postage within their boundaries, and that the air mail between Africa and England iscarried both ways without surcharge, will he advise the House why comparable charges cannot be made in Australia ?

If he cannot see his way clear to eliminate this surcharge, will he consider the reduction of the present figure of 1,700 per cent, per oz. to the more modest figure of, say, 100 per cent, per oz. ?

Mr Perkins:
UAP

s. - The honorable member will be furnished with a reply to his inquiries as early as possible.

On the 3rd May, the honorable member for Cook (Mr. Sheehan) made certain inquiries pertaining to the conversion of the Mascot telephone exchange to automatic working. I have since ascertained from the PostmasterGeneral that, unfortunately, it has not been possible to secure deliveries of the necessary equipment as early as was hoped, and, although the department is making efforts to improve on the delivery times, it has not been able to obtain promises for earlier than June, 1939. It’ is the department’s wish that the installation should be completed as soon as possible.

Australian Military Forces: Salary of Battalion Commanding Officer

Mr Martens:

s asked the Minister for Defence, upon notice -

What salary, if any, is paid to Colonel North, commanding officer of the 31st Battalion. Townsville?

Mr Thorby:
CP

– The answer to the honorable member’s question is as follows : -

Lieutenant-Colonel North receives militia pay of £30 per annum.

Defence: Expenditure in Dominions.

Mr Thorby:
CP

y. - On the 4th May, the honorable member for Kalgoorlie (Mr. Green) asked the following questions, upon notice -

  1. What were the expenditures on defence for the last financial year in the following countries, giving the main details of expenditure in each case: (a) New Zealand; (!>) South Africa; (c) Canada; and (d) Australia?
  2. What are the current detailed estimates for defence for the coming financial year in each case?

I am now in a position to inform the honorable member as follows : -

  1. The main details of expenditure on defence for the financial year 1937-38 for New Zealand. South Africa, Canada and Australia are as follows: -

South Africa (approximately). - Total, £1,742,500 (includes £37,040 for civil aviation). Other details are not readily available. Equals £2,153,840 Australian currency.

  1. No information has been received of the details of the estimated expenditure on defence for the coining financial year 1938-39 in respect of New Zealand, Canada and South Africa. As regards Australia, the allotment for 1938-39 is at present under consideration and details will be furnished when the budget is brought down.

Airport fob Melbourne.

Mr Thorby:
CP

– On the 28th April, the honorable member for Flinders (Mr. Fairbairn) referred to the Fishermen’s Bend Airport, and asked that a statement be made setting out what efforts have been made by the Commonwealth Government with regard to assistance towards the development of this airport. I am now in a position to inform the honorable member as follows: -

In . June, 1936, the Prime Minister addressed to the Premier of Victoria a communication setting out in detail the Commonwealth’s views and attitude towards the project of an airport at Fishermen’s Bend. The establishment of such an airport was stated to be one in which the State and/or civic authorities should interest themselves, but this Commonwealth indicated it was prepared to assist and, under certain contingencies, make a sum of money available towards the development of Fishermen’s Bend. The Premier replied stating that “ whilst the State Government itself does not propose to establish an airport, it will be prepared to consider any definite proposition which the Commonwealth Government may submit with reference to the acquisition of any area of laud for such a purpose.”

In September, 1936, the Prime Minister made an offer of £100,000 to the fruitier fur the freehold, forairport purposes, of the area of 365 acres known us the” western site “ of Fishermen’s Bend area, and it was asked that this offer be given serious consideration. The Premier replied stating that the amount offered by the Commonwealth was extremely low,but that he, would be glad to confer with the Minister for Defence, when he was hopeful a reasonable valuation would be arrived at, This conference took place on the19th October. 1930. The discussion disclosed considerable differences of opinion us to the value of the365 acres required. An alternative proposal was discussed. whereby the area would remain unalienated for otherpurposes, with a view to the future establishment of an airport on the site. This proposal envisaged the establishment and control of such an airport by a trust.

Following the interview which the Minister for Defence had with the Premier on the 19th October, the matter received the further consideration of the Commonwealth Government, but itwas unable to sec its way to increase the offer of £100,000 previously made for the acquisition of the airport site to the figure of £250,000 which it was understood was the minimum which the State Government was prepared to consider. The Prime Minister advised the Premier to this effect, and also slated that the alternative proposal, whereby the airport might be established and controlled by some form of trust, commended itself to the Commonwealth, and that the Commonwealth was prepared to contribute up to an amount of £100,000 towards the establishment of the airport, subject to its being satisfied with the arrangements proposed for its preparation and control.

A conference of State and Commonwealth representatives considered the matter on the 4th November, 1930, when the Commonwealth’s offer of £100,000 towards the establishment of the airport was repeated on the assumption that satisfactory arrangements could be made for the preparation and control of the airport. The conference decided to form a sub-committee of State officials to go into the question of a trust to control the airport. The subcommittee met on the 18th November, , 1936, and after dealing with various aspects of the matter, the Defence Department was asked to furnish various information relating to the area required, cost, &c. It was stated the sub-committee would meetagain at an early date, which wouldbenotified and when it would be desired that representatives of the Defence Department should be present. The information desired by the sub committee was supplied on the 4th December, 1936, but no advice of any further meeting of the committee has been received from the Premier’s office.

Cite as: Australia, House of Representatives, Debates, 5 May 1938, viewed 22 October 2017, <http://historichansard.net/hofreps/1938/19380505_reps_15_155/>.

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