House of Representatives
19 October 1955

21st Parliament · 1st Session

Mr. Deputy Speaker (Mr. C. F. Adermann) took the chair at 2.30 p.m., and read prayers.

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Mr. POLLARD presented a petition from 1,079 members and supporters of the Women’s International League for Peace and Freedom praying that earnest consideration be given to a proposal for placing before the United Nations a resolution concerning atomic and nuclear weapons, and that all work cease on further atomic testing.

Petition received and read.

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– I ask the Prime Minister, or the Minister acting for the Minister for External Affairs, whether the Australian Government has been consulated in relation to the negotiations, just announced, that are being conducted by the Government of Malaya in regard to guerilla fighting. Is it the intention of the Australian Government that the Australian troops should remain in Malaya irrespective of whether a successful settlement is reached?

Minister for Defence · WAKEFIELD, SOUTH AUSTRALIA · LP

– The matter of an amnesty for the terrorists in Malaya is one for the Government of Malaya. We all hope, of course, that some successful conclusion may be arrived at, but at the moment we are not in consultation with the Government of Malaya in relation to that matter. Australian troops were sent to Malaya originally, as the Prime Minister announced, as a strategic reserve, and that purpose has not been changed by what has happened subsequently.

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– Has the Minister for Commerce and Agriculture received information regarding the results of the Australian trade publicity campaign in the United Kingdom, which was designed for the purpose of stimulating our export trade in both primary and secondary industries ?

Minister for Commerce and Agriculture · MURRAY, VICTORIA · CP

– It is too early foi’ me to say that there has been any general result ; in fact, it is too early for the campaign to have been fully geared up. I am able to say, however, that there was a supremely satisfactory outcome of a specialized publicity campaign in relation to the sale of Australian eggs.

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– In view of the conference that was held last week between the Minister for Labour and National Service, other Ministers and representatives of the miners’ federation, has the Minister any statement to make which would relieve the anxiety that is now felt by women and employees on the coal-fields because of the displacement of coal-miners, caused by the importation of residual oil? Representatives of the miners’ federation have suggested to me - I do not know what they put to the conference - that there should be a restriction upon the import of residual oil into Australia, as it is competing with coal. The miners were asked to get coal, and they have been getting more than is required. As residual oil is a competitor of coal, and as there is now no market for small coal, will the Government consider, not only restricting the importation of residual oil, but also setting up a plant to extract oil from coal, such as I have been advocating in this Parliament for over twenty years? In order to use the small coal, could a briquetting plant be established, similar to the one at Yallourn, which is used for the marketing of brown coal in that district ?

Minister for Immigration · HIGGINS, VICTORIA · LP

– All of the matters which the honorable gentleman has touched upon were raised at the conference to which he has referred, at which the Minister for National Development (Senator Spooner) and I were present, together with representatives of the coal-mining unions, the colliery proprietors’ association, and the Joint Coal Board. As I said in answer to a question in the House last week, there was very full discussion of these matters, and we have arranged to meet again in December in order to follow up some of the inquiries which have been instituted in relation to a number of the matters. Mr. Warren, of the colliery proprietors’ association, intimated that he was proceeding overseas shortly, in company with some technical officers, and that he would be investigating certain possibilities, including some of the very matters to which the honorable member for Hunter has referred, notably the briquetting of coal and a further examination of the possibilities of extracting oil from coal. I point out to the honorable member in relation to this latter matter, that the high price of Australian coal makes the extraction of oil appear an entirely uneconomic proposition for this country. However, it is not to be overlooked. As to the anxieties of the families to which he has referred, if those anxieties proceed from the prospect of unemployment for the miners, I am glad to be able to tell him that, as a result of the work of the employment committees which have been, established, and on which are represented the unions, the owners, the Joint Coal Board and the Department of Labour and National Service, we are having considerable success in placing any workers who come from mines where production has ceased, or has been curtailed, in other mining work or in alternative occupations in the neighbourhood in which they live. We are hopeful that in this way most of that problem will be met quite readily.

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Minister for Supply · PARRAMATTA, NEW SOUTH WALES · LP

– I should like to correct part of an answer I gave to the Leader of the Opposition the other day in reply to a question about high-octane petrol. The right honorable gentleman will remember that I was answering a question by the honorable member for Yarra, and, in answer to an interjection by the Leader of the Opposition, I implied that actual physical tests of the various types of petrol had taken place in the Department of Supply. That was not quite correct.

Dr Evatt:

– Types of cars?


– Physical tests on the various types of petrol. What happened was that tests were carried out by one of the major car manufacturers on its own cars, of which we use a very large number, and the results of those tests were made available to us. Having regard to the information which was supplied to us, and the types of car which we use, it was decided in the Department of Supply to continue the use of the lower-octane petrol. That decision will be reviewed when we have more ears of a high compression ratio.

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– Can the Prime Minister tell the House whether the Government has considered or, if it has not done so, whether it will give consideration to the possibility of introducing some form of daylight-saving scheme either in the shape of summer-time or double time, as a means of assisting to increase production? If there are any major objections to such a scheme, can the right honorable gentleman inform the House ?

Prime Minister · KOOYONG, VICTORIA · LP

– The Government has not given consideration to this matter. Indeed, I doubt, although I have not thought about it very much, whether we have power to deal with daylight saving, but I shall ask my colleague, who is in charge of meteorology, about it.

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– I ask the Minister for Civil Aviation : Have TransAustralia Airlines and Australian National Airways Proprietary Limited now a close business liaison? Is Australian National Airways Proprietary Limited now in control of Butler Air Transport Proprietary Limited? Hasthe head of Butler Air Transport Proprietary Limited been ordered not to operate his company’s new Viscount interstate in competition with Australian National Airways Proprietary Limited? Has that instruction been given by the Australian National Airways Proprietary Limited’s representative on the Butler Air Transport Proprietary Limited board? Has pressure been brought tobear on the head of Butler Air Transport Proprietary Limited to sell the Viscount to Trans- Australia Airlines? Are there vacancies on the board of” Trans-Australia Airlines, and is the appointment of the head of Australian National Airways Proprietary Limited’ to the board of Trans-Australia Airlinescontemplated? Can these moves lead toprivate monopoly of Australian airways?’

Minister for Air · DENISON, TASMANIA · LP

– All 1” know of the statements that the honorable member has included in his question is derived from some rather extraordinary statements that have appeared in the newspapers to-day. I have no official intimation or information concerning them. I should think, from the report as it appeared in the press, that there is some domestic difference between various sections of Butler Air Transport Proprietary Limited. What the connexion between Australian National Airways Proprietary Limited and Butler Air Transport Proprietary Limited is, I have no knowledge whatever ; but I should like, in the course of my reply to this question, to take the opportunity of saying something in relation to another matter contained in the press report to the effect that Australian National Airways Proprietary Limited was buying TransAustralia Airlines. That statement is completely and utterly untrue. We have had no approach whatever from Australian National Airways Proprietary Limited to buy Trans-Australia Airlines. At the time the Australian National Airlines Act was passed three years ago, the Government made its policy quite clear. It stated that Trans-Australia Airlines would be retained on a basis of competition and rationalization. It has not departed from that policy. I would direct the attention of the House to the fact that the man who is credited - if that is the appropriate word- with making this statement, which, as I have stated, is misleading and mischievous, is a member of the New South Wales State executive of the Australian Labour party.

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– I direct a question to the Minister for Commerce and Agriculture. As there still seems to be a misunderstanding among butter producers and a belief that the alteration of the subsidy was the reason for an immediate drop of 4-Jd. per lb. in the interim payment to dairymen, will the Minister state the facts of the position?


– Unfortunately, there is still some misunderstanding on this point. It has been stated again and again that the reduction of the government subsidy from £15,600,000 to £14,500,000 annually was the cause of a reduction of the interim payment to dairy farmers by 4-£d. per lb. commercial butter, or 5$d. per lb. butter fat. That is not true. The reduction of the payment was caused by a change-over from the basis of estimating forward payments on a firm United Kingdom contract to the present unpredictable basis of trader-to-trader selling - a decision that was the outcome of the United Kingdom Government’s own policy. The position to-day is that the current value of Australian butter on the United Kingdom market is ls. per lb. Australian currency higher than the basis upon which dairy-farmers are receiving interim payments as the result of a decision, not of this Government, but of the farmers’ own organization - the Commonwealth Dairy Produce Equalization Committee Limited. The current value of ls. per lb. Australian currency higher than the present basis of interim payment may or may not continue until all our butter is sold, but it is the level at present. It prompts me, with great confidence, to state that the dairyfarmers will receive this year a higher return than they received last year from the sale of their product and from the government subsidy.

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– I desire to ask the Minister for Supply a question, arising out of the information given by him about the use of the new super spirit now being sold by the major oil companies. First, may I take it from the Minister’s answer to the earlier question that the tests, the results of which are accepted by the Department of Supply, indicate that the super grade of fuel is of no benefit in most cars on the roads in Australia, namely cars such as the Ford and Holden models? Secondly, what motor cars now on the roads in Australia are assisted to higher performance by the super grade of petrol for which so much extra is charged ?


– I think it should be made clear to the House that the 90- octane petrol, which is the super grade, is intended to eliminate knock in the engines of motor-cars.


– It allows a much quicker getaway, too.


– It is designed to enable the ignition to be advanced further in order to give vehicles livelier acceleration. According to the experts, the new petrol is of no great advantage in cars which have a compression ratio of less than 7 to 1, and that is the advice that has been tendered to the Department of Supply. In cars with a higher compression ratio than 7 to 1 - chiefly the newer models - there are very noticeable advantages, 1 understand. I do not know which makes and models have compression ratios of 7 to 1 or more and which have not, but I suggest to the right honorable gentleman and to any other honorable member who is interested that any local car dealer from whom inquiries are made will soon enlighten him.

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– I wish to ask the Minister for Commerce and Agriculture a question which relates to his campaign to increase the sale of Australian dairy products in the United Kingdom - an admirable endeavour, which we all support. Is it true that the Australian Dairy Products Board, or whatever is the correct name under which that autocratic body passes, has restricted the number of English importers and distributors of Australian dairy products to nine, thereby cutting out of the trade inAustralian dairy products many companies which handled it for years? Can the Minister explain to the House how the board imagines that the sale of Australian products in the United Kingdom can be increased by restricting the number of outlets, and will he suggest to the board the probability that to increase sales it should endeavour to persuade every substantial wholesaler and distributor in the United Kingdom to handle Australian products?


– The Parliament itself passed legislation a year or so ago which conformed to the recommendation of all sections of the Australian dairying industry on both the production and manufacturing side, including cooperatives and proprietary companies, that the Australian Dairy Produce Board, on which all those interests are represented, should have complete authority and control in respect of the export of butter and cheese, and it is under that statutory authority that the board now operates. It is true that the board has, in its own judgment - and whether or not that is the best judgment I do not pose as competent to judge - limited the number of authorized dealers or distributors - whatever the proper term is - in the United Kingdom. This is a practice which is not uncommon in this sphere. I think it has some relation to establishing a basis of predictable stability at the retail and lower distributing stage in conditions, discounts, prices, and so on. The honorable member is no doubt right in saying that the number of English importers and distributors has been limited to nine, but I cannot confirm the figure. I hope and confidently believe the decision of the Australian Dairy Produce Board in that respect is not final for all time, and I shall be glad to act as a medium for conveying to the board a proposal that there should be wider allocation of rights to trade in this general sphere.

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– I wish to ask a question of the Minister for Commerce and Agriculture. I might add that we are all pleased to see that he is out of smoke now and has come back to circulation from his meeting with dairy-farmers. Is the Minister aware that there are persons in Australia who are eager to buy Australian meat and willing to pay a higher price than is being obtained for it under the meat agreement, and also to pay for it in hard currency, and that, despite the urgent necessity for Australia to increase its export earnings, particularly in the dollar field, these people, as a result of the policy of the Government and of the Minister on the fifteen-year meat agreement, are unable to purchase that meat?


– I take it that the honorable member is referring to persons who are willing and eager to buy meat for export?

Mr Keon:

– Yes.


– The honorable member did not make the point clear, but I took that to be what he meant. Yes, I understand that that situation could exist. The export of our meat is limited by a long-term meat agreement with the United Kingdom, which was negotiated over a long period and which was initiated by the Chifley Labour Government. When this Government came into office, certain negotiations were continued through representatives of all sections of the Australian meat industry. The outcome has been that, as a result of our agreeing to give first priority to delivery of meat to the United Kingdom, for a period of fifteen years we enjoy free entry and acceptance by the greatest importing country in the world of all the meat that we produce, quantity unlimited, and, for the whole of that period, a guarantee that, under governmenttogovernment contract, or trader-to-trader transactions, the Australian exporters will receive certain minimum price returns. This introduces a tremendously valuable element of stability into the Australian meat export trade. It does carry with it some limitation of absolute freedom to export but, in fact, we are able to negotiate free quotas. Last year, we had free quotas for beef which involved quantities very much greater than those for which the trade was able to find export avenues. I have made it publicly known that the United Kingdom Government would be willing to remove sheep meat - mutton and lamb - from the terms of the agreement. I have put it to the Australian meat-producing interests that they ought to concentrate on studying whether it would be to their advantage to take that opportunity to remove those two items from the agreement. If their considered view were that mutton and lamb should be removed from the agreement, I should convey that view to the Government. I have no doubt that the expressed opinion of the industry if adequately representative of lamb and mutton producing interests, and if accompanied by a convincing analysis of the pros and cons, would weigh heavily with the Government. As things stand at present, there has never been an explicit and reasoned majority opinion from lamb and mutton producing organizations expressed to the Government.

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– My question is to the Minister for the Interior. It concerns war service land settlement. Has the South Australian Government approached the Minister, seeking Commonwealth co-operation in establishing an irrigation settlement for ex-servicemen at Lyrup, on the river Murray? If so, can the honorable gentleman indicate whether the Government will sanction this scheme and, provided the Government is agreeable, when work will bc commenced on it?

Minister for the Interior · CHISHOLM, VICTORIA · LP

– A submission has been received from the State of South Australia in connexion with that scheme, and it is under consideration at the moment. I cannot give the honorable member a definite answer at this stage but, knowing his interest in that area, I shall be very pleased to keep in close touch with him and, if necessary, discuss the matter with him before the final decision is made.

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– Has the attention of the Postmaster-General been drawn to a new development in television announced by the General Electric Company of New York? Is the Minister aware that this company has developed a new vacuum valve that will enable people in outlying areas to receive the benefit of television? Is the Minister aware also that this invention would amplify the ultra-high frequency signals of receiving sets in a manner that would have the same result as an increase of the power of television transmission? In view of the great possibilities of this new development in television, do the Minister and the Department still propose to continue with the restricted use of the very high frequency channels already proved to be unsatisfactory in the United States of America ?

Postmaster-General · RICHMOND, NEW SOUTH WALES · CP

– The statement made in the last part of the honorable member’s question is not correct. Very high frequency channels have not proved to be unsatisfactory in the United States of America. On the contrary, they have proved to be very satisfactory, and they have been adopted by every other country in the world which has introduced television. The development of a new tube and other scientific developments in the United States are in conformity with the progress which is being made in television all over the world. The scientists are gradually improving techniques. It is hoped that, as a result of these new developments, we shall be able to provide television services in areas in which, a year or two ago, that might not have been contemplated. Reference has been made to very high frequency channels and ultra-high frequency channels. In order to make quite clear the amount of attention which has been given to this matter by the officers of the department, by the Australian Broadcasting Control Board and by the Television Commission, I shall make a statement to the House at an early date setting forth the reasons for the choice of those channels.

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– Has the attention of the Minister for Health been directed to allegations that are constantly being made by the New South Wales Minister for Conservation to the effect that the recent staggering increases of hospital fees in New South Wales are due entirely to- a reduction of the amount of money made available to the States for health services ? Can the right honorable gentleman say what funds were made available for health services by the socialist government prior to 1949, and what funds have been made available by this Government since 1949? In the” public interest, and in the interests of truth and justice, will the Minister take appropriate action to inform the New South Wa.les Minister for Conservation of the true position?

Minister for Health · COWPER, NEW SOUTH WALES · CP

– My attention has been directed to the allegations of the New South Wales Minister for Conservation. They are proved to be completely false, first, by the fact that, four or five months before the expiration of the agreement entered into with the Chifley Government, the Premier of New South Wales specially asked that New South Wales be admitted to the present five-year agreement because of its advantages. Apparently, the Minister for Conservation is not in communication with his Premier. In 1949, under the Chifley Government’s arrangement, the New .South Wales Government received approximately £2,500,000 in hospital and fund benefits, whereas in the financial year just ended, it received £6,500,000, or almost three times as much as it received in 1949. In addition, it received approximately £3,000,000 towards the hospital treatment of tuberculosis, and approximately £4,000,000 for free live-saving drugs. Altogether, New South Wales received last year from this Government approximately £20,000,000 for health benefits as against £2,500,000 during the last year of office of the Labour Government. Those figures are a complete answer to the allegation of the Minister for Conservation. I do not think it is necessary to inform him of those facts. I am sure that he is well informed about them, but that he is just misleading the public.


– Did the Minister for Health receive a telegram on Thursday last from the president of the shop delegates of the Royal Blind Society of New South Wales protesting against the proposed restrictions in the free medical scheme for pensioners, and seeking an assurance that the present arrangements whereby blind pensioners are free from the provisions of the means test will noi be altered? Will the right honorable gentleman give the requested assurance to the House?


– I take it that the honorable member is quite aware that all blind pensioners are now free of the means test. Those who have applied have been received into the pensioner medical scheme.

Mr Curtin:

– la the Minister referring to the blind pensioners?


– Yes, the blind pensioners. As I stated recently, all pensioners who have been accepted up to the 31st October will continue to participate in the scheme.

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– Will the Prime Minister confer with his Cabinet colleague, the new Minister for Shipping and Transport, with a view to arranging for that Minister to make an early visit to Tasmania to obtain first-hand practical knowledge of the shipping problems of that State, particularly at Port Huon and at Hobart ? “Will the right honorable gentleman suggest to the Minister for Shipping and Transport that he should have informal discussions with interested bodies about the present and future problems of shipping organizations in Tasmania ?


– The answer to both parts of the question is “Yes”, I will do so.


– Order ! I do not know how any Minister can be expected to remember such a long series of questions.


– I was under the impression that the honorable member wished to direct a question to me. It seems that, instead, he merely wanted to give a lot of information. I suggest that, when he has resolved all the information into the form of a question, he place it on the notice-paper.

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– 1 direct a question to the Minister for Defence Production. What are the terms and conditions under which the Commonwealth took over the Mount Seaview Timber Proprietary Limited mill at Wauchope, which was a subsidiary of Slazenger’s (Australia) Proprietary Limited ? What price did the Commonwealth pay for the mill? Was the price based on capital expenditure by Slazenger’s- at the date of acquisition, or upon valuation at the date of acquisition? If the latter, who assessed the value of the mill? Is it a fact that Slazenger’s, prior to the Commonwealth acquiring their mill, were unable to offer coach-wood at the ruling market prices, although they were receiving a premium payment for that portion of the log which was used for rifle furniture ? Why were Slazenger’s offered a high price for rifle furniture while at the same time no quotes were asked for from other softwood mills in the area? Why are Slazenger’s, through their subsidiary, the Mount Seaview Timber Proprietary Limited, which was making a loss, now - after the Government has purchased the business - installed in the mill as managers, on virtually a cost-plus basis, whilst at the same time no tenders were called in respect of management of the business on behalf of the Government, and no offers were requested from other practical millers in the area?


– Finally, will the Minister lay on the table all papers relating to this matter?

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Mr. Deputy Speaker having called Mr. Fairbairn,


– In reply to the honorable member for Grey, I have been giving the call to honorable members who have asked fewer questions than he has.

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– I ask the Minister for Commerce and Agriculture whether the vacancy which occurred in the Australian Wool Bureau some months ago has yet been filled. If not, when is it expected that an appointment will be made to this important post?


– A vacancy on the Australian Wool Bureau was brought about some months ago by the resignation of a member of the bureau. The same member was re-nominated by his organization and was immediately reappointed to the bureau. There has been no vacancy on the bureau existing over a period of months in respect of a government member of it. The permanent head of the Department of Commerce and Agriculture has been a member of the bureau in his capacity of wool adviser. Of his own volition he has resigned as wool adviser, and steps have been taken to fill the vacancy, the new member of the bureau being a gentleman who is very experienced and highly competent and who, I believe, will be regarded by all wool-growers in Australia as a thoroughly first-class appointment. I expect, and hope, that that appointment will be announced in a matter of days.

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– Is the Minister for Immigration aware that the increasing number of applicants for naturalization, which has resulted in the holding of more naturalization ceremonies, is causing some concern to local government bodies which for some time have, with great credit, conducted those ceremonies, and in most instances have invited the candidates for naturalization, their friends, and visitors to the ceremonies, to partake of refreshments in the council chambers after the conclusion of the proceedings ? As the cost of this catering usually comes out of the mayor’s allowance, will the Minister make inquiries to see whether it is possible to assist in some way with the cost of such entertainment after naturalization ceremonies? I ask this question because some local government bodies have decided to conduct naturalization ceremonies immediately following the usual council meeting, and to discontinue the practice of providing entertainment afterwards. This will make naturalization ceremonies have less of the warmth which has been associated with them.


– I have not learned of any general complaint along the lines to which the honorable member has referred. It has usually been found practicable to work out some local arrangement which has been satisfactory to all concerned. Where the municipality or shire does not feel capable of providing this welcome, if relatively modest, hospitality after these ceremonies, those locally responsible usually combine to do so or the representatives of the Good Neighbour movement in that area do so. If any particular case comes to notice, we shall be glad to examine it. As I have told the House on an earlier occasion, we have looked into the question of whether a government subvention should be paid for this purpose, and decided - I think with the approval of most people - that this should not be paid as it would take away from the community welcome which is extended at such times.

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– I remind the Prime Minister that, a few weeks ago, 1 asked him whether it would be possible for him to indicate whether he would give an opportunity to this House to debate the whole subject of foreign affairs. He gave a generally favorable and hopeful reply. I now ask him whether he is able to indicate any date upon which this House will have an opportunity of debating foreign affairs.


– I cannot do so at the moment; but I agree that this is an important matter. I will put myself in a position to make some statement to the House on the point on Tuesday of next week.

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– Will the Prime Minister make available to the South Australian Government finance, on a £l-for-f 1 basis, so as to assist the State Government in its fight to combat the grasshopper plague? I might state, sir, that the plague has reached most serious dimensions and that the land-owners in the north of South Australia and on Eyre’s Peninsula have made a most valiant effort to minimize the plague. I feel that recognition from the Commonwealth in the manner that I ask will stimulate the State Government and the land-owners to even greater efforts in their endeavour to get rid of the pest.


– We have had some experience in past years of the same matter. I remember very well, in respect of the State of New South Wales, that a. good deal of help was given on the military side, and certain other things were agreed upon which I do not precisely remember. These matters have commonly been dealt with on the request by the State government to the Commonwealth for help in some particular matter. I think we will be doing better if we continue to deal with this matter on that footing.

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– I desire to ask the Minister for Commerce and Agriculture a question which is supplementary, in some measure, to that which was asked by the honorable member for Yarra. Witt reference to the meat agreement on guaranteed prices with the Government of the United Kingdom, and following the return of a trader-to-trader selling basis, did the year of operations conclude on the 1st October, the date of the altered system of selling in 1954? If so, can the Minister say whether the United Kingdom Government will be called on for any deficiency payments to equate the guarantee? Did a delegation of British distributors of beef from the United Kingdom interview him recently? If so, did they say that Great Britain was eager to obtain greater supplies of Australian beef, preferably from younger cattle ?


– As I have said previously, a transformation from governmenttogovernment selling to tradertotrader selling commenced about a year ago. In accordance with the legislation of this Parliament an export subsidy upon beef has been paid in anticipation of a deficiency payment from the United Kingdom. As the whole beef industry understands, that figure will not be known until December next, or perhaps a shade later. I have not had the benefit of meeting the representatives of United Kingdom meat selling interests who are in Australia, but they have met representatives of my department and I think that I, too, am to see them before they leave. My understanding of the position is that they believe that they deserve certain opportunities to sell to better advantage certain types of Australian beef. If that is so, nothing in the long-term, meat agreement will prevent it. In fact, the agreement will facilitate such an arrangement.

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Minister for Territories · Curtin · LP

by leave - In the House last Wednesday, the honorable member for Bendigo (Mr. Clarey) asked me a question relating to the employment of aborigines. In the inquiries I made in order to obtain further information for him, my attention was drawn to an article which appeared in the Melbourne Herald on Saturday, the 8th October, contributed by Douglas Lockwood under the heading, “They Fight a Thriving

Slave Trade “. This article was in the form of an interview which the writer claimed to have had with Mr. Charles Greenidge, the secretary of the AntiSlavery Society in London, and it dealt with the work of the society in various parts of the world. It made reference to Australia and quoted Mr. Greenidge as saying -

We have Lad numerous reports about the conditions under which Australian natives work in the Northern Territory, North Queensland and Western Australia. In our opinion a form of slavery exists there.

The journalist then referred to the drafting of an anti-slavery convention which would give the United Nations “power to inspect conditions under which enslaved people are working”, and implied that such a convention would apply to Australian aborigines.

I have no means of knowing whether Mr. Greenidge did say what he is reported to have said. Nevertheless, the whole report, as published in Australia, gives an impression so false and injurious to the reputation of Australia that it calls for correction and I thank the honorable member for Bendigo for calling attention to it. The first point to be emphasized is that any coloured citizen of the Northern Territory who is not under the special protective legislation applying to aborigines is free to seek and enter employment on exactly the same terms as any other member of the Australian community and can use the same legal means for protecting his own rights as any other wage-earner. The following remarks apply only to those aborigines who are under the protection of the Administration and who are at a lower level of civilization and have a lower standard of skill and education than ordinary members of the community.

There are, in the Northern Territory, about 13,S00 aborigines. Of these about 550 are nomadic, about 4,380 are in regular contact with missions and about 2,920 are in regular contact with government settlements. The vast majority of those employed are in the remaining 6,000 who are to be found in the pastoral, mining, agricultural or urban areas of the Territory. The total employment at the 30th June last was 3,533, and, of that total, 2,438 were engaged in the pastoral industry, either as station labour or in droving. As honorable members know, station aborigines are not engaged in station activity all the year round and may, for part of the year, go on their walkabout.

Conditions of employment and wages in the pastoral industry are covered by the Aboriginals (Pastoral Industry) Regulations, which provide a scale of wages ranging up to £1 15s. a week plus food, clothing and tobacco for the employee, and food and clothing for one wife and one child for each married employee. The regulations lay down standards of housing, washing facilities and sanitation, but it could not be claimed that this part of the regulation is strictly observed in all cases, a major part of the difficulty being the habits of the aboriginal workers themselves and the effects of their tribal customs. A constant effort is now being made, by education, to accustom them to accepting the better living conditions which the employers can be compelled to provide. In all cases that have come to my notice, employers have been ready and willing to provide these conditions. Other children, and aged dependants, of station labour are maintained on the stations by the Government.

I would emphasize that the wages and conditions prescribed by these regulations are the minimum. In fact, to-day, many aboriginal workers, as the result of their own bargaining with the employers, are paid more. At the 30th June last, out of the 2,438 workers in the pastoral industry, 1,241 were receiving more than the prescribed rate. There are, in the Northern Territory, numerous cases of stockmen receiving £4 a week plus their food, clothing, and tobacco and that of their dependants. In some cases they receive £7 a week. Drovers and drovers’ assistants earn up to £10 a. week with everything found, but the usual wage is from £4 to £7 10s. a. week and keep, according to the work done.

In the mining industry, in which 83 aborigines are employed - all . above ground. - aborigines earn up to £12 a week and everything found. In urban employment domestics - who are less skilled - earn from £1 to £2 a week and everything found. There are also aborigines, who having gained skill and experience, are engaged at the usual award rates as builders’ labourers or mechanics.

The fact revealed by these figures is that there is freedom of negotiation. The minimum wages and conditions prescribed by the regulations are only set as a limit below -which the least skilled aboriginal cannot be employed. They are not set as a limit above which he cannot rise. The Administration reports that to-day an amount of £22,765 is held on behalf of individual aborigines in savings banks or trust accounts in the Northern Territory.

The aborigines under the protection of the Administration can only be employed in accordance with the terms of the special legislation. The effect of this legislation is to ensure that the person who employs them is a ‘fit and proper person, that proper wages and conditions are observed, and that the terms and conditions of their employment can be readily inspected by officers of the Welfare Branch. Our experience in the Northern Territory is that the aborigines themselves are well aware of their rights and are not backward in invoking the aid of welfare officers if they ever feel the need to do so. There have been, for many years, strict penalties against any physical violence against an aboriginal.

The author of this article did not specify what he meant by slavery. Taking the usual meaning of the term, I flatly contradict his statements. The aboriginal in the Northern Territory is certainly not bought and sold as a chattel. He is certainly not bound in serfdom to his employer. He is certainly not subject to corporal punishment. He is certainly not denied the right to bargain for better wages and conditions. He is certainly not denied the right of seeking redress for any injury he may think he suffers. He is certainly not denied the protection of the law. He is certainly not denied a reward, for his labour, which will rise with greater skill and experience. He is certainly not denied a chance to keep his own earnings, as his personal property. By all those standards he is certainly not a slave.

Such restrictions as may be placed on him in regard to his freedom of movement, his access to intoxicating liquor, or his place of residence are not related to his employment but are designed to protect the aboriginal from some of the more harmful contacts with European society. Where the physical standards at which the aboriginal lives fall short of the ideal we set for him, the difficulty is in the nature of the situation itself and in the handicaps which any human being faces in any transition from primitive life to civilized life.

Both the present situation in regard to employment in the Northern Territory, and the positive measures which the Government is undertaking to assist the advancement of the aboriginal and to make possible his assimilation into the European community, give the lie direct to any talk of slavery. The new welfare legislation provides for the vocational training and placement of aboriginals, with apprenticeship for those whose educational standards permit it, and a system of “ wards-in-training “ for those who are not yet qualified to enter on normal apprenticeships. This legislation provides for financial assistance to the trained aboriginal to establish himself in any occupation on his own account. The appointment of an advisory board, representative of administration, missions, employers and trade unions, is proposed in order to assist the Administration in handling matters relating to the training and gainful occupation of aboriginals. Our basic idea on the general question of employment is that the aboriginal of the future, having been advanced towards a higher standard of living, by reason of measures taken in health, hygiene and education for his benefit, will be able to gain a livelihood at a level that will sustain his higher standard of living and give him self-respect and independence. That is the goal to which the Government, on behalf of the people of Australia, is working.

I suggest to both sides of the House that out of our own Australian sense of what is a fair thing, and without any needless prompting from elsewhere, Australia is itself able to recognize the task of national welfare and to do it. As a nation, we are not without our own proud record of achievement in redressing social wrongs and removing ancient inequalities. Native welfare is also a social task that we are capable of tackling as a domestic problem of our own.

page 1669


Report on Item - Annual Report.


– I lay on the table the following Tariff Board reports

Euclid rear-dump wagons. Tariff Board Ai-t - Tariff Board - Annual Report for year 1U54-55, together with Summary of Recommendations.

The Tariff Board’s annual report is accompanied by an annexure which summarizes the recommendations made by the Tariff Board and sets out the action taken in respect thereof.

page 1669


Bill returned from the Senate without amendment.

page 1669


Motion (by Sir Eric Harrison) proposed -

That leave of absence for one month be given to the Speaker (Mr. Archie Cameron) and to the honorable member for Mitchell (Mr. Wheeler) on the ground of ill health, and to the Minister for External Affairs (Mr. Casey) on the ground of urgent public business.


.- All members of the Opposition join with the Government, as I am sure the Government knows, in expressing regret at the ill health of the Speaker (Mr. Archie Cameron). We hope that. he will soon be restored to his usual good health. We are also sorry to hear of the illness of the honorable member for Mitchell (Mr. Wheeler) and hope that he will soon be back with us again at an early date.

Question resolved in the affirmative.

page 1669




– I have received from the honorable member for Yarra (Mr. Keon) an intimation that he desires to submit a definite matter of urgent public importance to the House for discussion, namely -

The urgent necessity for the Federal Government to take such steps as are necessary for the restoration of the quarterly cost nl living adjustments to the basic wage, following the recently announced increases in the cost of living.

Is the proposal supported?

Fewer than eight honorable members having risen in support of the proposal,


– As fewer than eight honorable members have risen in support of the proposal the business of the day will be called on.

page 1670



Auditions, New Works and Other Services Involving Capital Expenditure

In Committee of Supply: Ordered -

That the Estimates - Additions, New Works, and Other Services involving Capital Expenditure 1955-50 - be considered as a whole.

Proposed vole, £101,245,000.

ChisholmMinister for the Interior and Minister for Works · LP

.- When the Prime Minister (Mr. Menzies) made a statement in the Parliament recently on the condition of the Australian economy, he stressed at length the need to mitigate; the pressure of demand upon the resources available to us, and he canvassed briefly a number of fields in which action to that end appeared to offer some promise. The field of government was one to which he naturally gave attention, because this falls immediately and more or less directly under our control. He thought it necessary to point out that for several years past the policy of the Government has been one of firm restraint on levels of public spending and hence on the demand?being made by public authorities on the suonly of resources. Nevertheless, he said that the Government recognized an obligation to give the rest of the community a lead in this matter, and it intended, therefore, to make all possible efforts to achieve further economies in finance, labour, equipment and materials. He made particular reference to the Commonwealth programme of capital works and services, and he recalled that in the 1955-56 budget provision of £104,000,000 was being sought for this purpose. He said that we proposed to defer this year projects totalling £10,000,000. That’ was a. considered proposition on the part of the Government which decided on the step, notwithstanding the fact that the Commonwealth works programme had already been critically examined and very severely pruned back at the time when expenditure proposals were being prepared for the budget. We felt, however, that this was a time when all ideas of priority and essentiality, however soundly based on previous standards, ought to be reconsidered and re-assessed in the light of the circumstances now prevailing in our national economy. Accordingly, in the period following his statement Cabinet took up the question of how such a reduction should be effected, and it drew up some directions e-f a general character which were referred to a committee of Ministers headed b the Minister for Defence (Sir Philip Mcbride), which was to go into the detail of the matter and make recommendations on particular items. The committee went to work with a will, and I propose now to Outline what might be called the first fruit.i of its labours in the form of reductions and deferments of works and other forms, of capital expenditure contained in the programme originally covered by the budget.

Perhaps I ought to say fust that it is no easy matter to effect major reductions in a works programme of this, character. lt is not just a question of taking up a list and striking out items in it with a pencil, whether it be blue, red or any other colour. First of all, there is the fact that has been mentioned, that the programme had already come under very strict scrutiny; so that there was nothing in it that could not be justified as serving some important and highly desirable purpose in the economy. I might add one extra thing in that respect, namely, that all new works in this year’s programme were works that had been accorded num ber one priority in their own several departments.

Then there is the further fact that rather more than four months of the financial year have already elapsed, so that whatever further savings are to be made must be achieved in a period of something less than the eight months that remain. Again, a large part of the programme - the greater part of it, in fact - is made up of works already in progress. In many cases, these works are well advanced towards completion and are covered by firm contracts which cannot be readily varied or departed from. Yet again, there are elements in the programme, most of them very large elements, which I think very few people would want to see reduced, even under the present circumstances. An outstanding example is the War Service Homes Division, which provides funds for building and purchasing homes by exservicemen in all parts of Australia. When honorable members realize that “ War service homes “ takes up no less than £30,000,000 out of the programme of £104,000,000, they will appreciate the difficulties that arise when it is suggested that it is easy enough to make a cut of 10 per cent. It is not so easy, and that is the reason why we have taken it item by item. In the case of war service homes, no cut has been made. These factors impose fairly severe limitations on the scope of reduction of the programme at this stage of the year. Nevertheless, the committee has been able to bring forward some very useful recommendations, and the Government has adopted them. I shall now mention the more important items.

The first is Commonwealth offices, Melbourne. The estimated cost of this project is £1,460,000. Tenders are being called, but if a contract is let, it will be subject to the provision that no work will be undertaken or no expense for the Commonwealth will be incurred during this financial year 1955-56. The next is the Molonglo River project in the Australian Capital Territory. This project, estimated to cost £700,000, has been deleted from the 1955-56 programme.

Then come civil aviation works, building and equipment. Various works, estimated to cost £600,000, are to be deleted from this year’s programme. There will also be a reduction of £50,000 in the provision of various types of technical equipment required for civil aviation.

Then we have the Australian Atomic Energy Commission. The commencement of the laboratory building at Luca3 Heights, near Sydney, estimated to cost £1,900,000, will be deferred beyond the current financial year. However, work on the building to house- the atomic reactor, which is being fabricated under contract in the United Kingdom, will proceed.

For the Postal Department, buildings of various kinds, estimated to cost £350,000, are to be deferred. This represents less than 50 per cent, of the average cut. As a matter of fact, this is a very small cut in the total post office building programme. As to Postal Department technical equipment, the procurement and installation of various types of equipment totalling £1,300,000 will be deferred.

I come now to housing for Canberra. A project for the construction of 1,500 houses and two hostels in Canberra, at an estimated cost of £8,300,000, is to be spread over four years instead of three years. That is, of course, a project which is in addition to the number of houses that will be constructed under the present programme of works, which is very greatly in excess of the number constructed in any previous year.

The next item is housing for Darwin. A proJect to provide 100 houses with related services in Darwin at an estimated cost of £800,000 will be extended over a longer completion period. As to television buildings, a re-arrangement and slowing down of the £1,000,000 building programme for both transmitting and studio purposes is to be effected. With relation to television equipment, the procurement of studio and other equipment estimated to cost a total of £1,800,000 is to be spread over a longer period.

For Qantas, work on the administrative building in Sydney and a hangar at Mascot is to be slowed down. The cost of the work previously planned to be done this year on those two projects was £850,000. Under “ Miscellaneous “, there will be deferments or extensions of certain projects and orders in the fields of broadcasting, railways, overseas buildings and telecommunications, and savings will be effected in plant and equipment sought by the Department of Works and other departments.

The committee also extended its survey to works and other capital expenditure within the defence programme with the result that various projects coming within the purview of the services and the Department of Supply, and estimated to cost £2,100,000, are to be deferred or slowed down. The saving in expenditure during 1955-56 through these measures, so far as we have gone, is estimated at £4,000,000, and we look upon this as very good and very quick progress in an extremely difficult task. We are continuing our review of the expenditure, and in particular, the area of defence expenditure of a capital kind is to be exhaustively surveyed. By that statement is meant that not only constructional work and buildings for the services and the Department of Supply, but also expenditure related to defence production is to be surveyed.

I refer to defence production especially because, recently, a lot has been said about what is known as the St. Mary’s project. This is n project for the establishment of a new filling factory, and the work on it has begun. It seems that much of what has been said in criticism of the project lias been said with not too much knowledge of the facts, and even less knowledge of the expert and responsible advice of the defence authorities. However, the survey which I have spoken of will undoubtedly include the St. Mary’s project. My colleague, the Minister for Defence, has this particular survey in hand. He will report to Cabinet very shortly, and a further announcement will then be made on the subject.

On the matter of procedure, it is not proposed to introduce new Estimates for capital works and services. The reductions of expenditure and deferments of projects will be given effect administratively on the basis of an instruction from Cabinet. I think it reasonable to say that what the Government has alreadydecided to do by way of eliminating, deferring, or extending projects will contribute helpfully towards the object of lessening the demand on the resources.

In total, the projects so far affected involve an overall expenditure of £21,000,000. When projects are deleted from the programme, or when the time for completion is extended, fewer contracts are let, fewer or smaller orders for supplies are placed, and there is a general lessening of the tempo of works activity. In the present circumstances, these arc the important things to secure, and, following the announcement by the Prime Minister on the economic situation, these are the proposals which have been placed before the Government by the committee, and which have been accepted by the Government.


– These Estimates give us a picture of what the Prime Minister (Mr. Menzies) meant when he made his statement about the reduction of the works programme by £10,000,000. I am rather staggered, as I am sure most honorable members are staggered, to find that a committee has already proposed the reduction by £4,000,000 of works that are important to national development and civil welfare in Australia. Let us take just one matter that was mentioned by the Minister for Works (Mr. Kent Hughes) - post office equipment and buildings. I imagine that there is not one honorable member on either side of the chamber who is not concerned about the provision of equipment required for the services provided by the PostmasterGeneral’s Department in his electorate. In my own electorate, there are important areas where a great deal of that equipment is needed. I am thinking not of residential areas and of people who want telephones perhaps for the purpose of telephoning their friends, but of huge and important factory areas that have developed rapidly in recent years where businesses have been waiting for a long time for the provision of various services. They have been told consistently that those essentia] services will be provided when the department has the necessary equipment. It staggers me to find, at this stage, that the Government haidecided to reduce to the tune of £1,300,000 in the current financial year purchaseof essential equipment needed for the expansion of telephone services.

I wonder what honorable members generally think of this decision, which can be taken as a pointer to where we are going in matters of development. It seems to me to be completely wrong, at this stage of national development when we are bringing into the country hundreds of thousands of immigrants and when the needs of the community generally are increasing, to reduce the programme for the provision of equipment and services essential to national development. Of course, it is refreshing to hear from the Minister for Works that it is not intended to reduce the war service homes programme. I imagine that the Minister for Social Services (Mr. McMahon), who administers the War Service Homes Division, would have had a great deal to say if the committee to which the Minister for Works referred had suggested that the division’s allocation of £30,000,000 should he reduced, because the Minister for Social Services knows very well that any reduction of the war service homes programme would have an immediate effect upon the attitude of a very large number of electors. The Government’s disguised attack upon national development must make every honorable member and every one outside this chamber wonder what point the economy has reached under the control of this Government that should make it necessary now to reduce essential services. I. suppose the Minister for Works mentioned the war service homes programme first because it is not to be cut. The reduction of the civil aviation programme by £600,000 will adversely affect many projects that have been considered carefully and have been listed on the works programme for some time.

The Government at this stage proposes to reduce a works programme that was announced by the Treasurer (Sir Arthur Fadden) in his budget speech. The Minister for Works stated that the works programme has been reduced already by £4,000,000, and it is proposed to reduce it eventually by a further £6,000,000. Perhaps even the war service homes programme will suffer, since already it has been decided to reduce expenditure on essential telephone equipment by £1,300,000. The Minister for Works, in his very brief reference to railways, did not seem to be able to state clearly the reduction of the railway works programme. I can only think that the Government’s proposals are false economy. At any time, it is false economy to reduce expenditure on railway works, which are essential to national development. I should have expected the Government to maintain its programme of railway works rather than to reduce it at this stage. Whether we like it or not, reduction of the works programme in this manner is penny wise and pound foolish. If it is necessary to reduce expenditure to maintain the stability of the national economy, expenditure on works that are not essential to national development should be reduced first. I am aware that this is said to be a free-enterprise Government, but it seems plain silly to reduce expenditure on the works that the Minister has mentioned and, at the same time, to allow an open go in the construction of hotels and of other buildings that are not essential to national development. I am aware, also, that the Government is completely opposed to the control of manpower, materials, and everything else. Anyone who listened closely to the Minister for Works must wonder whether the Government is acting wisely in the interests of this young, developing country. It is true that the Prime Minister stated that the Administration must set an example to private enterprise in the reduction of expenditure.

I invite the Prime Minister and his Ministers to visit any suburb in any Australian capital city to see where bricks and mortar are being used with great extravagance, and to see also the type of development that is taking place in those areas completely free of any control, at a time when the Government has decided to reduce expenditure on the provision of essential telephone equipment by £1,300,000. The Government’s decision is a national tragedy. In any suburb of any of the capital cities can be seen in course of demolition buildings that could bf- usefully occupied for many years. They are being torn down to make way for new buildings for Woolworths Limited, new hotels and picture theatres, and new premises for many big business combines. Yet, at the same time, we are told by the Minister for Works, on behalf of the Government, that the programme of new works for the Postmaster-General’s Department is to be reduced and that the construction of houses in Darwin is .to be slowed down. The Government building programme in every field is to be restricted and business interests are to be allowed to tear down existing buildings and construct new ones wherever they like. I wonder how long a. young nation can allow this state of affairs to continue without undermining its economy.

Mr Kent Hughes:

– As long as there is u darg in the building industry.


– The Minister’s approach to the problem is unrealistic. If he believes that the economy is jeopardized because there is a darg in the building industry, surely he does not think he can. rectify the situation by slowing down the Government building programme, especially in a place such as Darwin, where employees engaged in the building trade will see at once that their livelihood is being endangered. That is an invitation for a slowing-down in the industry. To use that type of attack on an economic problem in such an area as Darwin is completely unsound. Whatever the programme is, the drive should be towards finishing the job and not towards dragging it out. Every time a building programme is slowed down the ultimate cost is increased, and the Minister knows that better than anybody else in the chamber. The Government’s policy of slowing down will increase costs over the whole field of activity. How often have we heard Ministers condemning Labour governments in every State because of their failure to finish jobs quickly? Yet now the’ Government’s policy is reversed. It says, “We want to complete so much work in Darwin and Canberra, but we will slow it down so that we take three years instead of two, or four years instead of three “. A moment ago the Postmaster-General (Mr. Anthony) left the chamber. I wonder what he thinks of the proposed arrangement. The slowing-down process which the Government is adopting because of its economic difficulties really amounts to slowing down the progress of Australia, and leaving the doors wide open to persons, and to monopolies such as breweries and Woolworths, to tear down buildings and do as they like with building materials.


– Is Woolworths a monopoly ?


– lt is getting so close to it that there is scarcely any difference.


– What about Waltons ?


– That is amusing! One would almost think that the Minister had shares in Wool worths and not in Waltons, when he starts to compare the two companies. The Minister knows that what I am saying is true. Whereas we are talking about restrictions, such companies are tearing down in every suburb of every city buildings which would have stood for many years to come.

We were told that this curtailment was not easy. I agree that it is a difficult task. Of £104,000,000, an amount of £30,000,000 will be devoted to war service homes. To take £10,000,000 from the remaining £74,000,000, the expenditure of which on certain works has already been approved, is most difficult, but what a tragedy lies behind it. This expenditure is so essential to our national development. I am not concerned so much with television and the curtailment of activity in that field. A second look might well be taken at a new development of that description. I suppose that one might say that equipment installed this year may be out of date twelve months hence. It may he very desirable to curtail expenditure on television and also to reduce the vast amount proposed to be spent on buildings associated with nuclear research and like matters. However, when one contemplates the tapering off of expenditure on Qantas-

page 1674


(Mr. Bowden). - Order! The honorable gentleman’s time has expired.

Minister for Social Services · Lowe · LP

– I refer to Division 27 in the Estimates of Receipts and Expenditure for the year ending the 30th June, 1956. The amount of £30,000,000 has been provided in the Estimates for the provision of war service homes during 1955-56. This is a record amount equalled only in 1954-55. I have been asked by several members to explain why applicants are being informed by the War Service Homes Division that the waiting period is being, increased before their turn on the priority list will be reached. The reason was given by the Treasurer (Sir Arthur Fadden) in his budget speech and his analysis of economic trends. Whilst there has been some lessening of pressure in recent weeks, surveys of conditions in the building industry show that in most States man-power and materials are being used to their full capacity. Any increase in money for building purposes could not result in a significant increase in building but would mean keener competition for builders, tradesmen and materials, with a consequent increase in costs and prices. The Quarterly Bulletin of Building Statistics issued by the Commonwealth Statistician for the March quarter, 1955, shows, on page 5, that the value of new buildings, such as homes and commercial buildings, has increased from £310,000,000 at the 30th June, 1954, to £343,000,000 at the 31st March, 1955.

These figures indicate that saturation point has been reached in the building industry and this is already being reflected in the increased costs of home building. The Government considers that in the interests of all who desire to become home owners, it is imperative that there should not, at this stage, be any substantial addition to inflationary forces. The claims of ex-servicemen who require assistance under the War Service Homes Act are given a high priority in budget planning but their claims cannot all be satisfied at once and the building programme must fit into the general economic picture. From the 1st July, 1945, to the 3th June, 1955, a total of 90,917 homes has been provided under the War Service Homes Act at a cost of £169,284,233. Of these totals, 73,971 homes at a cost of £146,624,247 have been provided since the Menzies Government came into office. From the 6th March, 1919, to the 30th June, 1945. only 37,595 were provided. As I have said, the record sum of £30,000,000 is again being provided this year. In addition, under an agreement recently entered into with the State governments, those ex-servicemen who occupy CommonwealthState rental homes, and who are eligible for assistance under the War Service Homes Act, can buy those houses under war service homes conditions without using any of the £30,000,000 provided in the Estimates. This will enable ex-servicemen who occupy such rental houses to become home-owners on the same generous conditions provided by the Commonwealth to ex-servicemen under the War Service Homes Act. A large percentage of tenants of these rental homes are ex-servicemen who are eligible for assistance under the War Service Homes Act.

The waiting period applies to homes built under the act or for which finance to purchase is made available from the £30,000,000. It does not apply to those tenants who are desirous of purchasing the State homes tenanted by them with the assistance of the War ServiceHomes Division. The waiting period is the time an applicant has to wait from the date he lodges an application until his turn for a loan is reached. Its length is determined by the funds available, the number of applications awaiting attention, the rate of receipt of applications and the average amount of the loan. Applications received in 1954-55 were 28,931, an increase of 3,980 over the previous record in 1953-54. Approximately 60 per cent. of applications are effective - that is, are finally approved and granted loans. During 1954-55 a total of 12,788 homes was provided, either built or purchased, and an additional 1,070 exservicemen were assisted by transfers and resales from those who had already received assistance.

The average amount of the loan to exservicemen during 1954-55 was £2,250. It is estimated that the average in 1955-56 will be £2,600. The increase will be caused by the rise, as from the 8th November, 1954, of the maximum loan for homes not built under the act to £2,750 from £2,000. It will be apparent from this that, within the approved expenditure of £30,000,000, an increase in the waiting period for all classes of assistance cannot be avoided. Loans are made -

  1. To build under the act.
  2. To purchase at the request of applicants -

    1. Newly erected homes which have not been lived in, referred to generally as new existing properties.
    2. Homes which have been lived in, referred to generally as old existing properties.
  3. To discharge mortgages on properties where, prior to raising temporary finance to build a home privately, the applicant obtained the approval of the division.

The funds available each year are divided between homes built under the act, and homes purchased or mortgages discharged, in proportion to the demand by exservicemen for each type of assistance sought, and so as to preserve, as far as practicable, equitable treatment to the various types of applicant. Exservicemenhave, of course, complete freedom of choice as between the various kinds of assistance.

With regard to class (i), those who wish to build under the act, the waiting period for applications received in July, 1955, will average 21 months before action to prepare plans and other details preliminary to the invitation of tenders is taken. This means that, together with the building period, an applicant waits 33 or 34 months before he obtains occupation of his home. As. far as is practicable, equal waiting periods are provided in each State but, because of the great number of applications received inNew South Wales, the waiting period there is longer than in any other State, despite the fact that the programme for 1955-56 provides for onehalf of the total contracts to be let in New South Wales. In New South Wales, the waiting period in respect of applications received in July, 1955, will be 231/2 months before preliminary action commences. The waiting period in respect of applications received for each month after July will increase throughout the year. The extent of this increase will depend largely on the rate of receipt of applications and other factors outside the control of the division.

Glasses (ii) and (iii) consist of persons who wish to purchase, or discharge mortgages on properties. The waiting period in respect of applications received in July, 1955, before settlement can be effected for these classes, will be twelve months in all States, and this also will increase throughout the year. The rate of the increase will depend upon the rate of receipt of applications and the programme which can be approved in. anticipation of funds becoming available in the future. In applications for the purchase of new homes or the discharge of pre-arranged mortgages on new homes, the waiting period will be from the date of the completion of the home. Therefore, an ex-serviceman who lodges his application before the home is completed is not allowed to count the period before completion as a part of the waiting period. If he were allowed to count the period before completion, he would have an advantage over other applicants.

Government policy has been to permit temporary finance to cover the waiting period, subject to prior approval by the division, in respect of the purchase of a newly erected home, but not in respect of the purchase of an old existing property. In view of the increase in the waiting period for all classes of assistance, the Government has decided to permit temporary finance to cover the waiting period in respect of old existing houses as well as in respect of new existing properties, subject to the applicant obtaining the prior approval of the division. The property must first be inspected to determine whether it is suitable as a war service home. This decision, which should be of considerable benefit to the applicants who desire to purchase old existing properties, will not be applied retrospectively.

The reasons for the popularity of the war service homes scheme are not hard to find. Briefly, the advantages it has over other bousing schemes are -

  1. The maximum loan of £2,750.
  2. The minimum deposit of less than 10 per cent. overall.
  3. The interest rate of 33/4 per cent. on monthly balances.
  4. The period of 45 years for exservicemen and 50 years for widows and widowed mothers allowed for repayment of the loan.
  5. The scope and cheapness of the insurance cover.
  6. The measure of protection to applicants against structural defects.
  7. The sympathetic consideration of applicants in the event of unfortunate circumstances such as illness or unemployment.

It is no wonder that funds cannot be made available to keep pace with the rate of receipt of applications.

To sum up, the points I would like to emphasize are -

  1. It is essential that the amount of money competing for the services of builders, tradesmen and materials should not be increased so as to add significantly to inflationary pressures.
  2. Ex-servicemen are already in a much better position to become home-owners than the general public. Whilst retaining this advantage, it would not be reasonable to expect that under present conditions it should be increased.
  3. The Government has maintained the record figure of £30,000,000 for the provision of war service homes, despite restrictions in other important directions.
  4. The imposition of a waiting period is the only practical method of allotting the funds available for the various classes of assistance to ensure fairness and uniformity of treatment of exservicemen throughout Australia.
  5. Applicants who desire to purchase old existing properties will now be permitted to raise temporary finance to cover the waiting period, subject to the prior approval of the division being obtained. This places these applicants in the same position, insofar as temporary finance is concerned, as applicants who desire to purchase newly erected homes.

– The statement presented to the committee by the Minister for the Interior (Mr. Kent Hughes), describing the cuts that are to be made in the programmeof new works and services, was based, as the Minister said, on the review made by the Prime Minister (Mr. Menzies) of the economic position of this country. The Prime Minister, in making that review of the economic posi tion, stressed that we were passing through a period of unparalleled prosperity. He said that, in order to contain and maintain that prosperity, it was necessary for us to exercise restraint. But the Minister for the Interior, in the statement that he made to the committee this afternoon, referred to a reduction of homebuilding in the Australian Capital Territory. How one can say to this Parliament or to the people of this country, “We are so prosperous that,inorder to maintain our prosperity, wemust build fewer houses “ is, frankly, beyond me. It seems to me that the very opposite would be the case. Surely times of prosperity are the times when the people can expect to be provided more rapidly and more efficiently with the homes that they need.

The Minister for the Interior said that it was necessary to curtail the Government’s expenditure on new works and services in order to conserve building materials and other materials of an important kind. Recently, the Minister officiated at a ceremony in the Australian Capital Territory - the inauguration of a magnificent motel to be built by Accommodation (Australia) Limited, the managing director of which company, I understand, is the president of the Liberal party in New South Wales.

Mr Cramer:

– That is not right.


– At any rate, ho is a director of the company. The motel is to be built by Accommodation (Australia) Limited. I understand that it is to be on a most lavish scale, and that it will provide luxury accommodation for tourists. I believe that a motel is necessary, but that homes for Canberra people are even more necessary. Three thousand people are waiting for homes and there is very little prospect, at the present rate of building under the existing Administration, of having them built within a reasonable time. A new luxury hotel containing aproximately 400 rooms, each with a separate bathroom, will soon be built also. The building of that hotel will utilize for the purpose, once again, of providing for a luxury trade, materials that are essential to home-building. I think it is proper to cite these examples to show that it is not valid for the Minister, in submitting proposals for the curtailment of works, to use the argument that it is necessary to conserve materials.

The Minister also referred to the curtailment of defence expenditure, and it is to be assumed that that curtailment will limit the number of homes to be provided at defence establishments maintained by the three services throughout the Commonwealth. The tragic fact is that, in the Australian Capital Territory, each of the three services has failed to provide sufficient homes for the men who are required to serve on the various stations. Too frequently in the National Capital, men who have volunteered to serve their country in the armed forces are obliged to live with their families in garages or make-shift accommodation, because they cannot be provided with homes or quarters on the stations. That remark applies particularly to the Royal Australian Air Force station at Fairbairn, to a lesser degree to the Duntroon Military College, and to a. lesser degree still to the Harman naval station.

The Minister for the Interior has also indicated that the programme which called for the building of 1,500 homes and two hostels in the national capital within the next three years is to be extended to cover a. period of four years. The expenditure of £8,300,000 is involved. He stated that that programme was envisaged as being additional to the normal rate of building in Canberra. I point out to .him, and to the committee, that the normal rate of building in Canberra, in recent years has been far too slow. As I have indicated to the committee, 3,000 people are waiting to be provided with homes; but homes have been provided by the department at the rate of only approximately 300 a year. To be exact, 323 homes were provided last year. New registrations for houses are being made at the rate of between 400 and 500 a year, so it is quite obvious that we are not even keeping pace with requirements. Yet it is proposed to curtail the additional building programme that was envisaged to provide homes, not only to overcome the present backlog, but also to accommodate public servants who are yet to be transferred, with their families, to Can berra. It is apposite to direct attention to the fact that the editorial in to-day’s Canberra Times contains the following statement : -

The waiting list for houses has grown to more than 3,000 and the output of Governmentbuilt homes has fallen to the vicinity of 300 a year. Unless some drastic change is made in the Canberra programme from the point of view of achievement instead of Ministerial promises, the prospect for people waiting for homes is that their wait has lengthened from two years towards 10. If it were not for the marked activity by private enterprise, the outlook for Canberra would be desperate. As things stand, no further worsening could lie imagined.

Yet the committee has been told this afternoon that a further worsening of the building programme in Canberra is to be initiated by the Government! Such action is wrong. The Government is at fault in not having maintained the rate of home-building, and is further at fault in having initiated this slowing down of the programme of new construction that is necessary to house the people who are to be transferred to this city.

The Minister has also referred to the deferment of the proposal to build a new high-level bridge over the Molonglo river. That proposal was considered last year by the Public Works Committee. A number of officials and private citizens gave a considerable amount of evidence, and the committee decided that a new high-level bridge was necessary and that its construction should be put in hand’. However, I doubt very much whether the construction would have been put in hand during the current year, so, in effect, the deferment may be one of words rather than one of deeds. But the Government must accept responsibility for failing to commence the construction of such a bridge, which is essential to satisfy the transportation needs of the national capital. As every honorable member knows, there is only one high-level bridge over the Molonglo River joining the northern and southern sections of Canberra. It is a timber structure which is by no means indestructible. Indeed, it has been close to destruction when the Molonglo River has been in high flood. If it were to be destroyed before another high-level bridge were constructed, this city, with all its fire-fighting services and ambulance services on the southern side and its hospital services on the northern side of the river, would be placed in a very unfortunate situation. Such a possibility must not be overlooked. A situation of considerable danger would be created, and I think “ danger “ rather than “ inconvenience “ is the word to be used in describing the position in which people on both sides of the river would find themselves. As I have stated, that is something for which the Government and the Minister must accept responsibility.

I assume that the Minister has had to accept the view of Cabinet on this matter, but I regret that it has been deemed necessary to defer the construction of a new bridge over the Molonglo River, and to extend from three years to four years the period for carrying out the building programme of 1,500 homes. I point out - and the facts of the matter have been placed before the Minister over the years - that the minimum housing requirement in the national capital is 1,000 homes a year for the next five years. The programme envisaged by the Minister does not nearly meet that requirement. The honorable gentleman has pointed out that the provision of war service homes will not be reduced. That is an admirable approach, but I point out to him, and to the Minister for Social Services (Mr. McMahon), who spoke about this matter, that not every ex-serviceman is able to purchase a home through the War Service Homes Division. Ex-servicemen and serving members of the forces are affected by the other reductions that are being made. I am speaking now of the effect of the Government’s proposals in my own electorate. So far as the Australian Capital Territory is concerned, the official figures show that the total number of homes to be provided in the Territory in the year which will end on the 30th June, 1956, is 97. I point out that exservicemen who have served in many theatres of war are affected by the Government’s decision to reduce the homebuilding programme. Among the thousands of people who are waiting for homes are men who have served overseas, but have no capital. I believe that their needs should be given as much consideration as those of ex-servicemen who are able to provide some finance in order either to erect or purchase a war service home. I believe that the decisions are bad. It is very difficult to convince people that, in a time of prosperity it is necessary, in order to maintain that prosperity, to build fewer homes and undertake fewer public works. I do not think that people would believe any such contention for a moment.


.- I am surprised that the honorable member for the Australian Capital Territory (Mr. J. R. Eraser) should have taken such a parochial view of a national matter. The matter we are discussing was put frankly before the people of Australia as a national matter, yet the honor-, able member for the Australian Capital Territory has dealt with it from the point of view of his own little backyard, with only one object in view - not the good of the nation, but the good of the honorable member for the Australian Capital Territory insofar as votes are concerned. So, the honorable member twisted the facts in relation to this matter and spoke as though some great calamity had befallen the Australian Capital Territory. Nothing of the sort has happened! The Australian Capital Territory is being magnificently treated in respect of the provision of housing. It is being treated better, may I say, than are many other parts of Australia which may have equal rights to rapid housing development within the capacity of the nation to carry out such urgent work. There is a need for urgent developmental work all over Australia but the question is, which should be done first?

I shall now deal seriatim with some of the matters mentioned by the honorable member for the Australian Capital Territory. He spoke of the spreading of the original construction proposal for 1,500 homes for the Australian Capital Territory so as to cover four years instead of three years. That construction proposal does not concern people who are already stationed in Canberra and awaiting homes here. It concerns only people in Melbourne and other capital cities who are already comfortably housed, because they are members of the staffs of the head, offices of departments which will later be transferred to Canberra, to accommodate whom those 1,500 houses are intended.

Obviously those people will not be transferred here until the houses are ready for them to occupy, and, equally obviously, in the meantime they will continue to occupy the comfortable houses in Melbourne and elsewhere that they now have. So the spreading of that construction proposal to cover four years instead of three will have no effect on the present housing situation in Canberra.

Comparison of this year’s new works programme with that of 1953-54 is very fruitful. The new works programme for 1953-54 provided for the construction of 463 housing units in Canberra. The new works programme for 1955-56 provides for the construction of 1,604 housing units. Does that increase of 250 per cent, indicate that the development of Canberra is suffering any injury under the present Minister for the Interior and Minister for Works (Mr. Kent Hughes) ? At the 30th September, 1953, 770 employees were engaged on governmental housing in Canberra. At the 30th September, 1955, the total had risen to S50, despite an increased diversion of labour for the greatly accelerated programme of shop construction for private enterprise, which was also necessary for the comfort and convenience of the people of Canberra. Figures of actual expenditure in relation, to the provision of houses and other facilities are also interesting. For the financial year 1953-54 the cash made available for housing, schools and similar facilities in Canberra totalled £1,932,000. For the financial year 1955-56 the cash available for housing is £2,774,000. I think that those figures adequately answer the contentions of the honorable member for the Australian Capital Territory.

The honorable member also mentioned the Molonglo River bridge. You know, Mr. Temporary Chairman, as well as I know, because you were a member of the committee which investigated the matter, that, although that, too, is a very necessary work, it, is no more necessary than are a lot of other works in Australia. Obviously, it will be dealt with in its turn.

I wish to pay a very special tribute to the Minister for the Interior and Minister for Works, who is now at the table. Such a tribute should be paid in this chamber, because he is the only Minister who has ever taken a realistic view of the construction of capital works, particularly in the Australian Capital Territory. He is a realist inasmuch as he has taken action to prevent the continuance in the federal sphere of something which has been noticeable all over Australia, particularly in respect of works within the ambit of State governments, and also in the federal sphere in the past. I refer to the practice of launching out on improperly planned works programmes, which results in a large number of works being started and in few of them being completed. Under this Minister, work on projects is properly planned and is started when it is within our capacity to do it, and such work is brought to completion. The adoption of such properly planned programmes will cure a lot of the evils of the past and save a great deal of public money. So I sincerely compliment the Minister foi’ his efficiency in regard to the planning and implementation of works programmes. Government pigeon-holes are chock-a-block full of the dreams of past Ministers and of Public Works Committees. Some of those dreams date back fifteen or twenty years. A great deal of public money and time has been wasted on the preparatory work done in relation to projects that it was obviously beyond our capacity to complete. That state of affairs is being rectified by the present Minister.

While we are discussing capital works I should like to mention briefly the activities of the Public Works Committee, which has a responsibility to investigate certain public works proposals. I consider that there is a great need to provide that all works estimated to cost in excess of £250,000 shall be arbitrarily referred to the Public Works Committee. I know that the Minister has that suggestion under review. Certain works, such as defence works, are now excluded from prior examination by the Public Works Committee. In my opinion not all such works should be free from investigation by the committee prior to their implementation, because I believe that considerable savings might well be made in the construction of certain defence works if the proposals were referred first to the committee. As we know, urgent works recommended for all parts of Australia are referred to the committee for investigation. I now wish to deal with, among other things, certain government housing projects such as those in the Australian Capital Territory and the Northern Territory. The Minister’s idea of getting an overseas firm to undertake the construction of great numbers of houses so as to relieve pressure on our own capacity to build houses is commendable, and that principle should be extended in the future, and might well be applied to the Commonwealth’s territories, where it would be of great help. A contract to build, say, 500 houses in the Northern Territory, could be let, at a time appropriate to our economic circumstances, to an overseas firm, which could bring both its materia] and its labour with it.

While I am on the subject of the territories I should like to refer to a government hostel which is being erected in Darwin. I have seen this hostel, and it is obvious that a very serious error of judgment was made in relation to its location, because it occupies a position on the Esplanade at Darwin which should never have been used for such a building, because the Esplanade is easily the most beautiful part, and the choicest building site, of Darwin. Whilst the construction of this hostel has gone too far for anything to be done now in relation to making the site available for a more worthy structure, I mention it merely because it indicates that if works of thi3 character were referred to a competent committee before construction commenced such mistakes could be prevented.

One particular appeal that I wish to make concerns the inroads that governments are making on building programmes throughout Australia. In both the Federal and State spheres we find that there is imprinted on the development of Australia, particularly in relation to housing, the stamp of government. This is very serious and will (reflect, I believe, against the good in the development of many cities, and of the Australian Capital Territory, as well as other parts of Australia. Most of these homes are designed by very worthy architects in the Minister’s own department. I have nothing to say against their capacity.

I am glad that the Minister for Social Services (Mr. McMahon), who is responsible for the War Service Homes Division, is in the chamber, because the same remarks can apply to the grouping system of home building that is employed by the division. It does not matter how good an architect is - it would not matter if the best architect outside the Department of Works were brought into a government institution - he has only one mind and can express only one thought, and the houses that he designed would be limited to his thoughts. The thought of the department becomes translated into a sort of official government stamp, and it may be observed throughout Australian capital cities and throughout the Australian Capital Territory.

I wish to impress upon the Minister for the Interior that when 1,500 or 2,000 houses are being built in a place such as Canberra, it is of the utmost importance to have the greatest possible variation of individual expression in their design and appearance. That remark applies also to war service homes. That is one reason why I do not like the group system of building. There, too, one gets a sameness of design and appearance. This can also be observed in housing commission dwellings. Some shocking examples may be seen in New South Wales. I know of a place at Pymble, on the North Shore line, where the Housing Commission is building houses lite dog boxes, although they are surrounded by homes of different architectural atmosphere.

The final effect of such housing construction is that it completely destroys the aesthetic value of the whole neighbourhood. Not only does it cause distress to people who have expressed their individuality in constructing their homes, but it also destroys the capital value of the houses of those people. I suggest that an effort should be made to bring architects into consultation from the various capital cities, all of whom have different ideas. I do not want these people to go ahead with any extreme ideas. That could happen if one were not careful. But the employment of various architects would make possible that individuality of expression which makes all the difference in the world. The inclination has been to take 20 or 30 stock designs, submit them to people, and say, “Do you like this design or that design?” In the Australian Capital Territory we say, “We will take half a dozen of those designs “. One can see evidence of that fact all over Canberra. It is a cruel thing that cities should be allowed to develop with the dead hand of government upon the homes in which people wish to live.

Homes are not merely bricks and mortar to provide shelter for people. They are the places in which the ideals of a nation are nurtured, and in which human love and affection between people have to be fostered. We must see that we do not lose sight of that fact in considering the construction of works in terms of pounds, shillings and pence, and in terms of bricks and mortar. I make that appeal. A series of designs could be obtained from 30, 40 or more architects, particularly relating to certain sites. The siting of a house on a block of land is most important. One should relate the siting of the house to the surroundings. One should not merely pick out a. plan and say, “ That design will do for lot so-and-so “ because in that way the value of the house, and the home-life of the people who live in it, are destroyed.

While the Minister for Social Services is in the chamber, I also want to say that I do not think that it is in the public interest for us to continue much further with the group building of war service homes. I have always expressed my opposition to this type of building, particularly for the reasons that I have mentioned in connexion with other matters. But those are not the only reasons for my opposition to this scheme. If the War Service Homes Division has a programme for the erection of a certain number of houses on a specific sub-division of land in a given period of time, it must reserve the money necessary for that purpose over that given time. In a group system of building, there is also a longer period during which an ex-serviceman must wait to occupy his home. I greatly prefer the money that is allocated to war service homes to be made more freely available to suit the needs of ex-servicemen whom we are helping. We should place no restraint or restriction upon the acquisition of a home by an ex-serviceman. He is entitled to the benefit of a special arrangement, and we should assist him to obtain a home wherever he wishes, and regardless of whether it is old or new, provided that it has the necessary security value.


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


.- I wish to pass a few remarks on the deplorable statement made by the Minister for Social Services (Mr. McMahon) concerning the operation of the War Service Homes Division. The Minister’s statement confirmed the worst fears of many thousands of ex-servicemen who thought, at first, by a mere reading of the War Service Homes Act, that they were entitled to an advance to build or purchase homes under its provisions. The war service homes scheme is one to which we should devote our attention, firstly, because it is our responsibility and not the responsibility of any financial institution, State government or other instrumentality. It is, and it has been, for the last 3*7 years, the responsibility of the Commonwealth Parliament and of the Commonwealth Parliament alone. We should also concern ourselves with this matter, because it is our obligation. We have not promised to provide housing for persons in general in the community, but we have promised to provide, among other rehabilitation measures, cheap and prompt housing for people who served in World War I., World War II., and in the Korean, war.

I shall begin my remarks by referring, as the Minister did, to the over-all housing position in Australia. I shall quote from the Commonwealth Statistician’s bulletin of building statistics for the June quarter, which is the bulletin following the one to which the Minister referred. It will be seen on page 3 of the bulletin that the value of new houses under construction at the end of the last financial year in Australia was £182,000 less than the value of those under construction at the end of the previous financial year. It will be seen, further, that it is very little higher than the value of those under construction at the end of the financial year 1950-51. That is to say, the value of housing construction in this country is practically static, and has been static for the last four years. But if one looks at the value of other new buildings as shown in the next table, one will see that the value of new buildings has practically doubled in the last four years. Therefore, if there is any saturation of the building trade, it is due, not to any increase in the value of houses, but to an increase in the value of other buildings.

I shall now pass to the number of houses involved. It will be seen on page 7 of the bulletin that houses under construction in Australia at the end of the last financial year were 4,497 fewer than at the end of the previous financial year. At the end of the June quarter, houses under construction were 2,869 fewer than at the end of the March quarter.

If one turns to the last page of the bulletin, one will see that the total number of employers and employees engaged on building jobs in Australia has remained practically stationary for the past four years. As a matter of fact, 5,051 fewer people were engaged in building on the 30th June last as contractors, sub-contractors and wageearners than were so engaged as at the 30th June, 1951.

The Minister then goes on to discuss the waiting period. I must confess that he is more frank and honest than was his predecessor, who did his best to disguise the fact that a waiting period had been, instituted by the division and even abused me for having referred to it two years ago. The present Minister’s fault lies in his seeking to justify the waiting period, which is getting longer as time goes by. On the 21st October last the Minister stated that the waiting period for building applications was twelve months throughout the Commonwealth and sixteen months in New South Wales. He forecast that at the end of the financial year the waiting period throughout the Commonwealth would average eleven months, and in New South Wales fourteen months. However, we find, after another year, that in New South Wales the waiting period, before processing begins, has become 23£ months.

The same deplorable doubling is evident in respect of the waiting period before assistance is granted for the buying of homes that are already in existence. On the 21st October last year the Minister said that, as from the 1st November of that year, a waiting period of six months would apply. We now find that the waiting period is twelve months. Many of my constituents have pointed out that during last month, and this month, they 1 ave been notified that owing to “ changed circumstances” - apparently the routine form of expression - “ it has now been found necessary to amend the date on which the loan will be granted and the division hopes your turn will be reached by approximately. . . . “, ten months Inter than the date previously notified.


– Then they change it again !


– There is still no guarantee. The result is that no one who now applies for a loan with which to build a house can expect to receive it during this financial year or next financial year. Similarly, no one who applies for a loan with which to purchase a house can expect to receive it this financial year, or, indeed, before half of the next financial year has elapsed. Stripped of all its verbiage and apologetics, the Minister’s thesis amounts to this: Never have so many applications been received as in the last financial year, and never have so many remained unsatisfied. In 1950-51, the first full year that this Government was in office, homes were provided for 15,165 applicants. The number went up slightly in the next year but in each year since it has remained somewhere in the twelve thousands. From the annexure to the statement which the Minister has presented and which, prudently, he did not ask to have incorporated in Ilansard, it appears that the number to be provided this year will be a mere 11,230, that is to say, fewer than in any previous year during which this Government has been in office. At the same time, applications will reach an all-time record. In 1950-51, the Government received 23.573 applications. In the next year the number was virtually the same and it still had not reached 25,000 in the year 1953-54. In the last financial year it increased by 4,000, but only 400 more homes were provided. One would anticipate that this year the number of applications would increase by some further thousands, but, on the Minister’s own statement, 1,500 fewer will be provided than was the case last year. In other words, the supply is falling further and further behind the demand.

The Minister seeks to rationalize the matter by pointing out the attractive features of the war service homes scheme. I know them full well. I was so convinced on that score that some years ago I transferred my mortgage, bringing it under the war service homes scheme. The Minister, however, does not mention the other action that his Government has taken to evaporate the sources of home finance and make that finance more expensive for borrowers. He does not refer to the fact that at _ the last series of summit economic conferences, over which the Prime Minister presided in August, 1951, the insurance companies were summoned to Canberra and told that they must cease making advances to building societies and, instead, put the money into Commonwealth loans. Every one knows that, at the same time, the interest rate was increased by central bank ukase on loans to building societies and overdraft advances for building by the Commonwealth Trading Bank and other trading banks. As we also know, the amount of money that the Commonwealth has made available to the States under the Commonwealth and States Housing Agreement has remained static where it has not declined. In fact, the States are receiving only two-thirds of the amount to which they are entitled under the agreement. It is little wonder that, the Government having plugged up or contracted all other loopholes for housing finance, there has been a corresponding pressure on the advantageous war service homes scheme. It is often said that great expense is involved in the scheme and that the Commonwealth Government is very generous. In fact, the Government will, on balance, spend fewer pounds on war service homes this year than it has spent in any of its previous financial years. In 1950-51, its first full year of office, it advanced £25,017,548 for war service homes and received £4,854,757 in repayments. Last year it advanced the record amount of £30,0S6,585 and received record repayments amounting to £10,778,768. This year, it will advance no more, but will receive repayments amounting to more than £12,000,000. Therefore the Government this year will be out of pocket to the extent of a mere £18,000,000, whereas in every previous year of office it has been out of pocket to the extent of £20,000,000. The eligible returned soldier applicant is having fewer pounds - let alone pounds’ worth - spent on him than in any previous year of this Government’s term of office.

The honorable member for Bennelong (Mr. Cramer) referred to the group building scheme of the War Service Homes Division. He affected to be interested in it on purely aesthetic grounds. I have never doubted the aesthetic leanings of the honorable member for Bennelong, nor have I failed to appreciate that he is not unmindful of the main chance when it comes to disposing of land, or building upon it. He need have no fears that group building will prosper under this Government. In fact, it is continually being diminished. At the end of its first full year of office 2,467 homes were being constructed under the group building scheme. At the end of the last financial year only 417 were being built. Last year the Government spent fewer pounds on the group building of war service homes than in any previous year of its term of office. The plain fact is that project building, whether by housing commissions or building societies, is more economical. Moreover, homes produced in this way need not be unaesthetic. All the homes that I have seen built by the War Service Homes Division under the group method have been both economic and aesthetic.

In my own electorate project building is being carried out by Taylor Woodrow (Aust.) Proprietary Limited, which has been very successful in this field in the United Kingdom and in other parts of the British Commonwealth. Its success is shown by the fact that the homes that it builds have not even to be advertised. There is always a waiting list for them and they are pounced upon as soon as they become available. One of the unfortunate effects of the policy adopted by the War Service Homes Division is that this company will no longer make advances to persons who want to purchase its homes through the division. Its fingers have been burnt too often. Its homes are being made available to persons who have ready money, as distinct from those who are eligible for assistance from, the W ar Service Homes Division but who will have to wait twelve months before they get it.

The group building scheme should not have been sabotaged, or decelerated, as it has been by the Government, but should have been continued. It is a scheme which eligible applicants appreciate. I do not know why, in his report for the financial year, the director of the War Service Homes Division makes no reference to the group building scheme. Is it because the division has doubts as to the constitutionality of resuming land for such purposes ? If so, we should have received an explanation of this further matter from the Minister.


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


.- It is remarkable how these comparative “ Johnny-come-latelies “, with their very superficial knowledge of historical events and of the basis of many of the jobs being done by the Government, will enter the field of controversy, in the way the honorable member for Werriwa (Mr. Whitlam) has done, and reveal a lamentable ignorance. He said that under the war service homes scheme soldiers in World War I. and World War II. and in the Korean war were all offered reasonable and cheap houses. As a matter of fact, the War Service Homes Act was passed many years ago for the benefit of ex-servicemen from World War I., and it has never been amended to any material extent. The war service homes scheme was not basically a housing scheme. The scheme was based upon the principle of enabling ex-servicemen to own a home. It was not a housing scheme. That is a comparatively new idea. The scheme was intended to provide for ex-servicemen something which they would not have been able to acquire for themselves under the conditions which prevailed at the time. It was in tended to grant them the great benefit of obtaining finance in order to be able to own a home.


– What is the difference ?


– There is a vast difference. Under the scheme originally, exservicemen had to wait two or three years, because it was a home ownership scheme and not a housing scheme. In comparatively recent times it has turned itself into a housing scheme and it was never intended to be so.

It is remarkable, too, that the honorable member for Werriwa, in criticizing the Government’s current programme for war service homes, has been able to take, for purposes of comparison, only the Government’s own performance. He cannot go back and say what governments did in previous years and what his own party did when it was in office. He can use, as a. basis of comparison, only this Government’s own performance, which is a record performance.


– Is the honorable member happy with it?


– This Government, during its very brief period in office, has provided more money for this purpose, and more homes, than were provided in the whole period that the act was in operation before the Government assumed office.


– Is the honorable member satisfied ?


– I shall tell the honorable member again, as I have told him before, that I am never satisfied, because when one becomes satisfied, one starts to stagnate. I always believe that there is room for improvement in anything, and there is certainly a lot of room for improvement in the honorable member for Hindmarsh (Mr. Clyde Cameron). The honorable member for Werriwa, with his lack of knowledge of the basis of this scheme and of what goes on, actually commends the Government for what it has done, by using its own performance as a basis of comparison.

I was extremely interested to hear the Minister for Works (Mr. Kent Hughes) explain the Government’s proposal in connexion with the restriction of expenditure on capital works and additions for this financial year. Unfortunately, we are not in a position, in this chamber, as we should be, to examine critically what the Government proposes to do and in what direction it proposes to restrict some of its expenditure. ‘ The Government is setting an example to the people generally of the necessity to watch their finances and to see the direction in which they are spending their money, and I am hoping that in doing so the Government, when selecting works on which it proposes to spend money, will make sure that those works will not be such as will limit or restrict private productive or developmental works, because productive works are very necessary to us at present.

The total of the proposed votes we are now considering is £104,000,000, and I suggest that the amount that would be produced by productive developmental works covered by that expenditure could be described as microscopic. Therefore, there should be an opportunity for very considerable savings in some governmen t works at this time. I know that there is a public clamour everywhere for a tremendous amount of government money to be spent in all directions, but we must cut our coat according to the cloth. The Government is to be given credit for what it is doing, and for viewing the position realistically, but I am hopeful that the realism will be carried to the extent to which I wish to see it carried. Honorable members are not able, as they should be, really to appreciate what the Government is doing in this connexion.

During my remarks on the budget debate I paid a tribute to the Minister for Works, and I endorse it again, for the document which he issued in conjunction with the Estimates which are now before us, showing the civil works programme. I said then, and say now, that it is a revolutionary move, so far as this Parliament is concerned, to give us the information contained in that document. However, I find upon examination that while it fully describes the Minister’s responsibilities in regard to the overall works programme, it is the most misleading document that has ever been presented to us, because it does not describe anything like the amount of capital works and additions for which the Government is asking this Parliament to vote money. When we go through the document we find that it does a number of things. First, it indicates the amount that has been, authorized for a specific project in previous years. It gives us the expenditure which has been incurred up to the current financial year, the proposed expenditure and the balance remaining to be spent. That information is most necessary to this Parliament, if it is to assess reasonably the cost of work and the justification for the work. But this document gives details only of the works which are under the control of the Department of Works. There are items covering millions of pounds that are not under the control of the Department of Works and about which this department has practically no knowledge at all. If we turn to page 222 of the Estimates of Receipts and Expenditure for the year ending the 30th June, 1956, we find that it applies to capital works and services. Division 1, under the control of the Department of Works and Services, relates to an expenditure of £30,000. Some detail of that is given. In Division 2, under the control of the Prime Minister’s Department, the estimated expenditure for this year is set down at £943,000- nearly £1,000,000- and the information given is extremely brief. Reference is made to “ the Australian High Commissioner in the United Kingdom - Buildings, equipment and furniture for Australia House and official residences “. Reference is also made to the “Australian National University - Permanent buildings, acquisition and erection of dwellings, equipment and works “ and also to “ Official Establishments - Buildings, works, fittings and furniture “. The amount provided for the official establishments is £10,000. Of the whole of the £943,000, we have no details such as those given by the Minister in connexion with the works he has under his control, and as submitted by him to this Parliament.

I come now to the works under the control of the Department of the Treasury. In Division 6, we have mention of the Government Printing Office and a proposed expenditure of £145,000 for the purchase of machinery and additional equipment. Division 6 is not mentioned in the civil works programme under the control of the Minister for Works. In bis list, Division 5 and Division 8 are mentioned. Divisions 6 and 7 are omitted. The entries on the list then jump to Division 10. In Division 11, the substantial sum of £270,000 is mentioned, but no details are given. In the list, Division 12 is mentioned, and the next entry is Division 14, and the following one is Division 17. I have not the time to go through the details, and I have not made a total, as the Minister has given us in connexion with this document, but I do stress the necessity for the Government to give to the Parliament full details of its proposals. The committee should remember that once the Parliament approves blindly of the expenditure of £1 in the Estimates, it is then regarded as having agreed to expenditure each year on a project which might in. the long run cost £20,000,000. Bless my heart and soul, it is accepted that the Parliament lias approved the whole of the expenditure, when, in actual fact, we do not know anything about it.

I have mentioned the inquiry by the Public Accounts Committee into the proposed expenditure by the Department of External Affairs of £400,000 at New Delhi. We were told that the Parliament had approved the expenditure of that amount merely because in the initial year of the project, we had approved the expenditure of £500 for preliminary expenses in connexion with the preparation of plans, and what have you. Because the Parliament had voted that sum of £500, it was to be presented every year with a bill for a work about which we knew nothing whatever until eventually £400,000 or more was spent. .We suggested in our report on the Department of External Affairs that all these projects should first be submitted to the Public Works Committee. I do not know whether anything has been done about that matter, but something should be done.

In Division 4 of these Estimates, under the control of the Department of External Affairs, provision is made for the expenditure of almost £250,000, and we are not given the slightest information about it. We should be told the estimated cost of these works, and how it is proposed to undertake them, so that from the beginning we can exercise some control over the governmental expenditure. We are not in possession of vital information about the expenditure of substantial amounts by certain departments, and more details should be given to us. We have all the information that we require about the proposals of the Department of Works. We know what is to be done with such big amounts as those voted for war service homes and the Snowy Mountains scheme, but we have not sufficient information about other items of expenditure to enable us to decide whether the Government is acting intelligently, and in the best interests of the economy of the country. It might well be that a project that is to be delayed because of the present financial position will prove to be very costly in the long run, but we do not know of such matters. It may even be that money which the Government proposes to spend could well be saved. We should be able to exercise our judgment in these matters, specially in examining projects to see whether they will add something to the productive capacity of the country. After all, it is essential that this be the objective, for mere bricks and stones will get us nothing. It is of paramount importance that any money spent by the Government at the present time be expended with a view to increasing the productive capacity of the country. The money must be expended on works of a developmental nature which will add directly to production and thereby help the country in its present difficulties. The money must also be spent on works which will not be of such a nature as to compete with the efforts of private enterprise to undertake developmental productive work. Our paramount cry to-day should be to stress the necessity for greater production. We can achieve that greater production only if we provide the means for private enterprise to expand so that every penny spent by it will produce more money quickly, and thereby assist us to get out of our difficulty.


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


– It was not my intention to deal with the subject of war service homes on this occasion. I should have preferred to discuss civil aviation, but the honorable member for Moore (Mr. Leslie) has mentioned that the purpose of the War Service Homes Division is to provide homes for returned servicemen because many of them, could not provide homes for themselves from their own financial resources. The honorable member also stated that the division deals fairly with exservicemen in this connexion. I desire to refer to war service homes which have been built since 1920, and many of which were constructed in a slip-shod manner. To-day, many of them are worn out; they are falling to pieces; and the division has not careel whether they were kept in a proper state of repair or not. Many of the people now occupying those homes are not ex-servicemen; some of the occupants are war widows ; and the division is seeking to dispose of these old buildings. In disposing of them, it fails to apply the provisions of the War Service Homes Act to prospective purchasers. I make that statement because of a letter written to me by Mr. Smale, in which he jays -

The defined policy of the Division is to take all possible steps to dispose of reverted homes to eligible persons within the meaning of the War Service Homes Act if the property is regarded as suitable for the purposes of the Act, or if not suitable, then to effect sales on the open market at the reserve sale price and the present condition of the home.

That is the point I want to make.. In one home I have in mind, a war widow has been residing with her two invalid daughters for eighteen years. During that time, she has paid rent at the rate of £1 a week, or a total of approximately £S00. The division has told her that she should be able to buy the house, and has offered it to her on two occasions, but has never worried about the state of disrepair in which the dwelling has fallen. In making the offer of the home to the war widow, the division has increased the price from the £775, which the building cost to erect in 1922, I think, to £1,455. The division told her she could pay a deposit of £146, and that it would lend her £1,309 over a period of 25 years. The terms would be over 25 years and the interest would be at 4f per cent., with instalments at the rate of £7 9s. 4d. a month. The security would be the contract of sale. The letter stated also -

It is mentioned that you must purchase the property on civilian terms, and the purchase of this home would naturally preclude you from the benefits of the War Service Homes Act.

Repairs required are tu be effected within a period of twelve months, the estimated cost for material and labour is £275-

That sum must be added to the purchase price of £1,455 - details of which are indicated in the attached schedule.

I ask honorable members to note the next sentence, which reads -

It may be noticed from this schedule that much of this work could be done by a handy man at a greatly reduced cost.

Where is a war widow who must support two invalid daughters going to get a handyman to make the repairs? The War Service Homes Division describes the repairs as follows: -

Whole of interior and exterior painting - ill! settlement cracks to be raked out and made good, attend to foundations, bearers, joists, and piers, overhaul, renew and repair as required - all locks, doors, sashes, fasteners and sash cords to be renewed and repaired as required. Straighten and repair all fencing - treat timbers for borers and renew where required. Renew and repair gutters and downpipes - roof water to be discharged away from house foundations.

The division estimated the cost of that work at £275’. I know the place very well. It could not be repaired for £500. The division has received rent from the war widow at the rate of £1 a week for eighteen years. I understand that, previously, the house was occupied by a returned serviceman. It is difficult to estimate now how much the division has received in rent from it. The dwelling was valued at £775 when it was built, but, in accordance with the times, the War Service Homes Division has increased the valuation to £1,455, plus the £275 for the estimated cost of repairs.

The group of war service homes, of which this house is one, was constructed in a very slipshod manner. The home in question is in Kings-road, New Lambton. It is one of the worst areas in Newcastle, and is surrounded by the dust and smoke of industry and the locomotive workshops at Broadmeadow. However, because this war widow is unable to find the money to purchase the home, she has been told by the division that she must vacate it within the next nine months, although her returned soldier husband died from warcaused injuries and she is supporting two invalid pensioner children. One of the children is 32 years of age, and the other is about twenty years of age. This war widow should be entitled to remain in the home and to continue paying £1 a week rent as long as she can do so. If the division still wants £1,455 for the house, why should she not pay £1 a week until it was paid off, if it would ever be paid off at the rate of £1 a week? I suggest that the house will be of no further use in 25 years. Therefore, her relatives or whoever acquires it on her death would have only the land as an asset. The present occupant of the home has twice received a.n eviction order. I asked the Minister for Social Services (Mr. McMahon) to investigate this case last July, and he is still inquiring into it. I sincerely hope that the Minister will have something done. Such cases are a disgrace to the Government and an indictment of its treatment of war widows.

These Estimates, in Divisions 15, 16 and 17, provide for the expenditure of £5,119,000 by the Department of Civil Aviation. With the £7,719,000 voted under the general Estimates, this makes a total of £12,838,000 to be spent by the department in the current financial year. I am. perturbed because, in this huge expenditure, not one penny piece has been allocated for an airport for the City of Greater Newcastle. I assume that a great deal of public money is being wasted in the department, and the Minister for Civil Aviation (Mr. Townley) will not do anything about the acquisition of land for an airport for Newcastle. He apparently does not wish to proceed with the construction of the airport. Aerodromes and aerodrome buildings are being constructed at obscure country centres, many of which are represented by Ministers, or, to a lesser degree, by Liberal back-benchers, and the needs of the big industrial cities represented by Labour members are being ignored. How much money has the

Government spent during the last six years in developing country aerodromes? Six or seven months ago, approval was given for the expenditure of £140,000 at Casino, in the electorate of the PostmasterGeneral (Mr. Anthony). I do not know how many other country centres have been chosen for similar expenditure, but I do know that the citizens of Newcastle have been told by the Minister for Civil Aviation that he does not intend to provide an airport for that city in the foreseeable future. The Minister’s attitude is utterly intolerable. His refusal to visit Newcastle to confer with officers of the city council and with leaders of commerce and industry about the matter is to be deplored.

Recently, the Minister went so far as to say that if the present owners of an area of land at Hexham did not reduce the price that they had asked the Commonwealth to pay for it, the land might be lost to the people of Newcastle as an airport, perhaps for some time to come. What is wrong with the Minister? He has resumption powers, which were exercised to resume land at Williamtown for the Royal Australian Air Force establishment there, irrespective of the views of the local farmers. The Minister should use his resumption powers if the owners of the land at Hexham are asking too high a price for it. He should stop stalling and get on with the job. Has the Minister ascertained whether the owners of other land adjoining the Hexham property that he has sought to acquire would sell at a reasonable price, or has the Government no serious intention of acquiring the adjoining land because some of it belongs to the W. C. Wentworth estate and estates with which other prominent Liberal members are associated? That matter should be inquired into. One would expect that the honorable member for Robertson (Mr. Dean), the honorable member for Paterson (Mr. Fairhall), the honorable member for Lyne (Mr. Lucock), the honorable member for New England (Mr. Drummond), the honorable member for Gwydir (Mr. Ian Allan) and the right honorable member for Cowper (Sir Earle Page) would be happy to see an airport at Newcastle.

Mr Townley:

– Why does Newcastle not construct one, as 500 other towns in Australia have done ?


– Newcastle contributes to the national income more than do some of the capital cities, and it is entitled to have an airport suitable for air services linking it with country areas as much as are towns such as Devonport and Launceston in the State to which the Minister belongs.

Mr Townley:

– Those towns provided their own airports.


– The Government has provided £140,000 for a runway at Casino. It is of no use for the Minister to try to make us believe that most towns provided their own airports. They helped in the construction of the aerodromes, just as the City of Newcastle would do if the Minister would acquire land and make funds available for filling, dredging and other necessary work.

Mr Townley:

– The honorable member mentioned Casino. Why does Newcastle not build its own airport, as did Casino?


– The building of an airport at Newcastle is a different proposition from building one at Casino.

Mr Townley:

– Why? Newcastle is a bigger town and ought to be able to do it more easily.


– Casino is more level. An airport is not required for industrial purposes and rural expansion to the same extent at Casino as at Newcastle. Newcastle, through, its industries, has subscribed heavily to Consolidated Revenue, and its huge population is as much entitled to an airport as the population of any other place.

Mr Townley:

– They should build it themselves, like any one else.


– The Minister has repeatedly refused to come to Newcastle even to speak to the people who seek the establishment of an airport.

Mr Townley:

– Most of the people from Newcastle have been down ‘ to see me about it. > Mr. GRIFFITHS.- That is quite all right.

The TEMPORARY CHAIRMAN.Order ! The honorable gentleman’s time has expired.


– I do not desire to spend very much time on the comments of the honorable member for Shortland (Mr. Griffiths), but recently it was my privilege, as a member of the Public Accounts Committee, to have some discussions with officers of the Department of Civil Aviation. They pointed out to the committee, in evidence given in public, that the general procedure in relation to the establishment of aerodromes is that the local authority first expends a good deal of money on acquiring a site and developing it to certain specifications for aerodrome .purposes. The local authority then approaches the department to take over the site. That seems to have been the pattern of airport development in almost every town in Australia. I do not quite know why the honorable member for Shortland should expect Newcastle to be treated differently. I do not know how he can say that Newcastle contributes more to the general revenue than do the capital cities, or if that were so, what bearing it would have on the matter. Every community contributes to the national income and it also contributes, through rates, to the revenue of its municipal authority and, therefore, where there is an aerodrome, to the establishment of that aerodrome. Once an aerodrome has been taken over by the Department of Civil Aviation the department goes into the question of the additions necessary to it. The money available from Government sources is used from time to time to develop aerodromes in accordance with their increasing use by people of the district. As the community develops, the assistance given to local aerodromes is increased.

I think that it is a pity, perhaps, that the parish pump is worked when we are considering the Estimates, which are of great national importance.

It is unfortunate that this afternoon, Parliament is asked, within a period of only two or three hours, to provide an amount of approximately £104,000,000 for capital works, and that the debate does not continue for longer, because many aspects of Commonwealth public works should be investigated and discussed in the National Parliament.

There are one or two matters to which I wish to refer particularly. First, I am pleased that the Government has decided to reduce its works programme in the current year by approximately £10,000,000. Honorable members may remember that when I made some comments on the budget, having regard to the difficulties facing Australia this year, as disclosed by the Treasurer in his budget speech, I offered the opinion that the Government should set an example to the community by reducing its expenditure. Included in my suggestions was one that public works expenditure this year should not exceed the amount expended last year, namely £95,000,000, or better still, that it should not exceed £90,000,000. It so happens that the Government proposes to reduce public works expenditure from £104,000,000 to £94,000,000 and, personally, I am gratified that it has made this decision. The Government is to be congratulated on it, because I cannot conceive of anything which is more inflationary in its nature than public works expenditure.

To-day, we are seeing very definite evidence of increased inflationary tendencies in the community. The New South “Wales Government is adding its contribution to what might become another wage-price spiral. The Labour governments of New South Wales and Queensland have clone nothing to check* inflation since this Government caine into office. Rather, there is every evidence that both those State governments have, in a crude way, done things that would encourage inflation rather than help towards a solution of this national problem. Had this Government continued with its public works programme, an additional demand would have been made on both materials and man-power. I was interested in the remark by the Minister that the programme had already come under very strict scrutiny, so there was nothing in it which could not be justified as serving some important and highly desirable purpose in the economy.

Let me briefly give the background. In the first place, these Estimates are prepared in about January or February. They are submitted to the Treasury, which puts a pruning hook through them and reduces them to a sum which the Treasury thinks may be made available, in the budget programme. Whereas in January or February the Estimates may have been in the vicinity of £200,000,000 or £250,000,000, they are pruned considerably by the Treasury itself. The Treasury, having indicated that only a certain amount of money is available, the Estimates go back to the Department of Works, which re-examines the position. They are brought before the Parliament on the basis that they have had the closest scrutiny and are justified as serving some important and highly desirable, purpose in the economy. In view of a comment like that from the Minister, it is interesting that we should look, not merely at the Estimates which are before us, but at those for the previous year, because in my opinion it would seem that, per medium of the public works Estimates, what is a nominal surplus in the budget may, in point of fact, be turned into a very substantial surplus, because all of our public works expenditure is made from revenue. As it happens we may create a secret reserve through our public works Estimates, and I think that last year there was evidence of it. Let us look at page 221 of the Estimates, where a summary of expenditure appears. We find that a vote of £66,500,000 was under-expended to the extent of nearly £7,000,000. Every department is listed in that summary, and in not one department was the full amount voted expended. If we try to particularize and look at the figures for the Department of the Treasury, we find that the amount provided was £549,000 and that the amount spent was considerably less than a half of that sum. It was only £22S,000. For the AttorneyGeneral’s Department, £161,000 was provided and £36,000 was spent. For the Department of Civil Aviation, £6,650,000 was provided and £2,000,000 less than that sum was spent. For the Repatriation Department, £444,000 was provided and only £131,000 was spent. For the Department of ‘Shipping and Transport, £5,000,000 was provided and only £4,000,000 was spent. For the Department of Immigration, £475,000 was provided, of which £207,000 was spent. The amount voted to each of those departments was not nearly spent during that year.

So I am inclined to doubt that there’ is the close scrutiny which the Minister says is given to these items. I ask him why we have not been given some explanation of the fact that those amounts were not spent. Perhaps I might particularize in relation to just one item. As a result of an investigation of the accounts of the Department of Civil Aviation by the Public Accounts Committee, I took it upon myself to go through the various divisions and take out a list of figures in relation to the acquisition of sites. The total amount provided last year for the acquisition of sites was £1,500,000, hut only a half of that amount was spent. The expenditure was £800,000. The Department of Civil Aviation, which was voted £550,000 for sites, spent only £155,000; and the Department of the Treasury, which was voted £357,000, spent only £83,000.

These are matters which should be brought to the notice of the committee. The Minister should explain why we are called upon early in the financial year to vote substantial amounts for these purposes, only to find at the end of the year that they have been grossly underspent. Last year we provided £107,000,000, of which only £95,000,000 was spent. In those circumstances it seems ridiculous for the honorable member for Blaxland to say, referring to a reduction of the expenditure on the programme by £100,000,000, “ This is a sio wing-down process “. What is actually shown by the figures put before us is a speeding up by the Government in this year. I feel that what the Government is doing now is in agreement with the proposal that I made in my speech on the budget. I said that, owing to present circumstances and conditions, we should hold our hand in relation to increasing expenditure on public works. I emphasize that last year, although we fully spent the vote for war service homes, we underspent the total public works vote by £12,000,000. Therefore, looking at the whole of the picture for this year, I cannot see that any hardship would be inflicted by reducing the proposed expenditure by £10,000,000, which would bring the figure down to the amount spent last year. I commend the Government for going that far in relation to this matter and for setting an example to the community. I should not like it to be felt by the . community that, in some way, honorable members resent the action which the Government is taking, or feel that we are sacrificing this year something which was done last year. In point of fact, we are doing nothing of the sort, because the original programme was to spend £9,000,000 more this year than was spent in the previous year.


– I desire to make a few comments on the Estimates relating to national development. Division 40 contains the only item that I can see which relates to that subject. I want to make my position perfectly clear. I have no objection to this Government carrying out national projects. I have never protested against it doing so, but I have protested at the way in which it has treated Queensland in relation to developmental works. Many of the works being undertaken by the Queensland Government, under extreme difficulties, are very important, not only to the development of Queensland, but also to the defence of this country. Looking through the Estimates, not only for this financial year, but also for previous financial years, I find that, from revenue, this Government is financing capital works ‘ in every State except Queensland. I have already said that I have no objection to the Government providing finance for urgent and important national projects, but I cannot understand why Queensland is always left out when financial assistance for such works is being provided.

Let us look at what has been done by the Government in relation to developmental and capital works in the States. The great Snowy Mountains project is a very fine project that will be of great value from many points of view, but New South Wales and Victoria are the only States that will benefit from it. In South Australia, a standard-gauge railway line is being constructed from Port Augusta to Leigh Creek. Those projects are being financed by this Government, which claims that they are of national importance. In Western Australia, a water supply scheme is being financed by the Commonwealth. In Tasmania, there is the aluminium project, for which, until this financial year, finance was provided by the Commonwealth. That, again, is a very important project. But nothing has been done for Queensland. That State has received from this Government not one farthing in addition to its allocation of loan moneys. The projects to which I have referred are being financed from revenue. I say that is wrong. I believe that all national development work should be financed with loan money. The rising generation should not be called upon to pay out of revenue for projects the benefit of which future generations will enjoy without having contributed towards their cost. In Queensland, many works which are important, not only in the development of that State, but also for defence purposes, are being undertaken. I refer to such undertakings as the Burdekin River irrigation and flood mitigation scheme, which is still in the course of construction under very difficult conditions.

Motion (by Sir Eric Harrison) put-

That the question he now put.

The committee divided. (This Temporary Chairman - Mr. G. J. Bowden.)

AYES: 49

NOES: 40

Majority . . . . 9



Question so resolved in the affirmative.

Proposed vote agreed to.

Motion (by Mr. Kent Hughes) agreed to -

That the following resolution be reported to the House: -

That, including the sum already voted for such services, there be granted to Her Majesty a sum not exceeding £101,245,000 for the services of the year 1955-50, for Additions, New Works and other Services involving Capital Expenditure, viz.: -

Part 1. - Departments and Services - Other titan Business Undertakings and Territories of the Commonwealth.

Resolution reported.

Standing Orders suspended; resolution adopted.

In Committee of Ways and Means:

Motion (by Mr. Kent Hughes) agreed to-

That, towards making good the Supply grunted to Her Majesty for the service of the year 1955-56, for Additions, New Works and other Services involving Capital Expenditure, there be granted out of the Consolidated Revenue Fund the sum of £68,558,000.

Resolution reported and adopted.

Ordered -

That Mr. Kent Hughes and Sir Philip McBr ide do prepare and bring in a bill to carry out the foregoing resolution.

page 1694


Bill presented by Mr. Kent Hughes, and passed through all stages without amendment or debate.

page 1694



Debate resumed from the 14th September(vide page629), on motion by Mr. Holt -

That the following paper be printed: -

Report of theRoyal Commission on Espionage.

Suspension of Standing Orders

Motion (by Sir Eric Harrison) - by leave - agreed to -

That Standing Order 92 be suspended to enable the Bight Honorable Leader of the Opposition (Dr. Evatt) to speak until 10 p.m.

Leader of the Opposition · Barton

– The report of the Royal Commission on Espionage requires forthright analysis and plain speaking. What is the upshot of this Petrov affair? Two foreigners, the Petrovs, and one foreign-born Australian spy, Bialoguski, have made a lot of money. The forum in which they appeared cost, the taxpayers £140,000, plus unlimited security service expenses. The nation has suffered heavy loss in trade, and the breaking of diplomatic relations with a great power. There has been the attempted smearing of many innocent Australians, grave inroads have been made into Australian freedoms by attacks on political non-conformity.

Honorable members interjecting,


– Order! I ask honorable members to maintain silence. These interjections must not continue.


– But after eighteen months of inquiry, at this great cost to the nation, no spies have been discovered. Not a single prosecution is recommended.

It is now clear that the Prime Minister (Mr. Menzies) must have known, when appointing the commission, that there would be no legal evidence fit to warrant the prosecution of any person, that there was in fact no security ground for the inquiry itself. Indeed the inquiry has in many ways been destructive of the national security of Australia. Furthermore, it is now abundantly clear that the Prime Minister knew many months before the 13th April, 1954, when he made his melodramatic and coldly calculated announcement to the House, that Petrov’s defection was being deliberately organized by security agents under his ministerial control. He waited, and sprang the announcement on the House on the very last sitting night of the Parliament prior to the May general elections. He completely deceived the House into rushing through legislation to appoint a commission. In the apparent emergency, there was no opportunity of examining any of the basic facts. His statements should be re-read in the cold light of the facts which have since been established during the last eighteen months since the 13th April, 1954. ‘ Let it all be read.

In some circumstances, a debate on a report of a royal commission can be confined to a short discussion of its recommendations. But in this case the surrounding circumstances, the way in which the commission itself was established and conducted, and, above all, the proved evidence, make it essential to have a close examination of the whole affair, not merely of the report, but also, so far as possible, of the evidence before the commissioners. The report itself is a very long document of some 450 page.”. It is absolutely essential to pay regard to the whole of the transcript of evidence. The length and complexity of the ease will prevent us from dealing with the vast number of details, and inconsistencies in evidence, all of which are important to a complete study and a fair judgment on the Petrov affair. On thi3 occasion, I propose to concentrate on some of the major issues arising out of the evidence and of the report. One outstanding question is, of course, the genuineness of documents A to F - that is, the Moscow letters of 1952 - and the G documents, the alleged Sadovnikov letters.

Determined to ascertain the truth of these grave matters, I took two steps, as follows: - First of all, I communicated with His Excellency the Foreign Minister of the Soviet Union. I pointed out that most of the Russian language documents in the Petrov case were said to be communications from the M.V.D., Moscow, to Petrov, M.V.D. resident in Australia. I pointed out that the Soviet Government or its officers were undoubtedly in a position to reveal the truth as to the genuineness of the Petrov documents.

I duly received a reply, sent on behalf of the Minister of Foreign Affairs of the Union of Soviet Socialist Republics, Mr. Molotov.

Honorable members interjecting,


– Honorable members may laugh, but they have to face some facts to-night. They will not put me off by their organized opposition. They have to listen to this because this is the truth of the affair. The letter to which I have referred informed me that the documents given to the Australian authorities by Petrov -

Can only bc, as it bad been made clear at that time and as it was confirmed later, falsifications fabricated on the instructions of persons interested in the deterioration of the Soviet-Australian relations and in discrediting their political opponents.

I attach grave importance to this letter which shows clearly that the Soviet Government denies the authenticity of the Petrov documents. It seems to me that in these circumstances the matter cannot be left where it is, and that, if possible, some form of international commission should be established by agreement with the Union of Soviet Socialist Republics to settle the dispute once and for all. The Soviet Union was not represented at the hearing. It will be in a position to prove clearly, definitely and unequivocally, that the letters are fabrics ted.

I subsequently took a second step to check the authenticity of one document at least produced by Petrov as part of exhibit G and alleged by the Petrovs to have been written by SadovnikovThe photostat of one of the G documents was made available to me by the solicitor for one of the witnesses called before the royal commission. At the same time, two other persons who had both been witnesses before the royal commission, courteously made available for inspection undoubtedly authentic specimens of Sadovnikov’s handwriting.

An official photostat of the alleged Sadovnikov document, exhibit G, and photographs of two specimens of Sadovnikov’s genuine handwriting were submitted to Dr. Charles Monticone, an outstanding New South Wales expert on handwriting. Early in this month Dr. Monticone certified that the result of his analysis of the handwritings was a0 follows: - Documents A on one side, that is, the alleged Sadovnikov handwriting in exhibit G, and documents B and C on the other side, that is, the authenticated specimens of Sadovnikov’s real handwriting, “ have been written by two entirely different persons “. This opinion, if correct, as I most certainly believe it is, means that the Sadovnikov document produced by Petrov and now included as part of the vital G series was not written by Sadovnikov at all and was an undoubted fabrication. If so, of course, the foundation of the case built up in relation to the G documents is broken and it collapses. These two separate matters provide overwhelming ground for my demanding - and I do now demand - that all the documents in the Russian language produced by Petrov should be immediately tabled in the House and made available for inspection by honorable members. These are vital matters. Nobody can deny their importance to the relationship between this country and other countries and also to the internal affairs of this country. .

Let us now look at the real origin of this sensational episode. The fact is that early in 1954, shortly before Petrov’? defection, the Menzies Government faced an uncertain position in relation to the forthcoming elections.

A gallup poll on the 7th March predicted a majority against the Government. The Government had done its best, of course, to keep the Communist issue alive, having snatched electoral victory on that false electoral issue in 1949 and again in 1951. But it had been defeated in the referendum of September, 1951, and overwhelmed in the Senate vote of 1953. I think that Government supporters frankly admitted the desperate need to produce a rabbit out of a hat if they were to succeed at the general elections, and there was undisguised glee on the part of Government supporters after the announcement in the House on the 13th April, and the insinuations of misconduct against unnamed Australians. The “ red “ bogy was to be exhumed again in a slightly different form.

As I have emphasized, the Prime Minister’s Petrov statement was made on the very last night on which the House of

Representatives was to meet before the general elections. If the public had known, on that night of the 13th April, one-thousandth part of the facts subsequently revealed in the evidence or, in one form or another, made public, thi* Prime Minister would have been discredited for political chicanery. He would have been overwhelmed at those elections by a nation which values highly the integrity of its electoral procedures.

Let me turn now to the speech of the Prime Minister on that night. He said that “ some days ago “ Petrov had applied for asylum in Australia. Ho further referred - and I quote his word- - to the “ comparatively few days “ that had elapsed since Petrov “came to people “. These carefully worded phrases are now shown by the established facts to be untrue and deliberately misleading. “ Some days ago “ was, in fact, nearly two w7eeks, and thi» phrase “ comparatively few days “ wa? also deliberately misleading, even if ir was meant to refer to the mere fact tha Petrov had formally - and quite unnecessarily - signed a document asking for asylum. On the most conservative estimate, Petrov had come to security and was under the control of Bialoguski, the security agent, at least seven months previously. Bialoguski had been working towards Petrov’s defection since the middle of 1951, a period of three years. Moreover, Petrov never came to security 1 Security came to Petrov !

During that period they gradually persuaded him to desert his own country under circumstances which have to be examined. There is evidence that Petrov had formed a general intention to defect as early as 1952 and, that by the middl of 1953, the security service was calling the whole movement “ Operation Petrov “. Richards and Spry both knew, late in 1953, not only that Petrov was desirous of staying in Australia, but also that the go-between, Bialoguski, had by means of a wire recording, organized by Richards himself, placed Petrov in so compromising a position that he would be faced with utter ruin if he failed to leave the Russian service as and when required. The scene, described by Bialoguski in his writings, is sheer, downright, roguery and will long be remembered in the annals, not of security, but of crime. As a matter of fact, one well-informed paper, News Weekly, bad said on the 28tb January, 1953, that there would be startling disclosures affecting the third secretary at the Russian Embassy. That was before the Senate elections of 1953. It was, of course, a reference to Petrov. For some reason - I do not know why - most newspapers like to make a scoop. That was their scoop, and after the defection News Weekly said, “We tipped you off fifteen months before “. I am only mentioning this to show that “ Operation Petrov “ was a long, sustained effort by a government agency of this country to cause the suborning of a servant of the Soviet Union.

Remember the Prime Minister’s statement that “ a few days ago Petrov came to our security service “. But the security service had been after Petrov for three years ! They “ had him in the net”. That is the phrase used. The wire recording was taken under circumstances, set out in Bialoguski’s writings, which were indescribable and disgusting from the point of view of ordinary decent Australians. The plan for Petrov’s reception was communicated to the heads of Commonwealth departments on the 17th February, 1954. Did the Prime Minister not know that? It went to the head of his department. Did he not know of the instruction that if Petrov came to any of their offices he was to be given protection if he wanted it? That was 50 days before the Prime Minister’s announcement to the House. On the 4th March, 1954, Richards received from Spry, 40 days before the announcement in the House, the sum of £5,000 for the very purpose of paying it to Petrov. That is the position. It was dangled before Petrov just as a sign of good faith that if and when he did what was required of him he would get the cash. Is any one in the House or the country prepared to believe that the Prime Minister knew nothing of this great and elaborate coup ; of the careful government planning involved in organizing “ Operation Petrov “, and the use of £5,000 of Commonwealth money? I say that if Spry used money like that for such a purpose,, without informing the responsible Minister, he does not deserve to stay another moment in his job.

Further, from some subsequent submissions made by the Prime Minister in answer to questions on the 12th August, it became clear that, in fact, he had interested himself very directly in the arrangements following Petrov’s defection. He then admitted that he knew of the payment of £5,000 at least nine days before the opening speech at the first sitting of the commission at Canberra where the rule was, “Expense is no object”. The Albert Hall was set up for the occasion. It cost a great deal of money, but the commission never sat there again. The whole of the arrangements, including the broadcasting of proceedings all over the world, were simply, of course, to give special publicity at this very short time before the general elections - there were only twelve days to go. On the instructions of the Prime Minister, counsel in the commission was deliberately told not to tell the public in the opening address of the payment of £5,000 and that vital fact was kept back from the public of Australia until the elections were over.

Mr McMahon:

– Nonsense !


– I hear the little voice commenting, but that is the statement. The date was fixed by the Prime Minister’s own statement. Read Hansard of the 12th August. Recently there has come to light further information as to the intimate connexion of Bialoguski with the Prime Minister. In the published account of his part in the Petrov affair, Bialoguski reveals that he made a special visit to Canberra to see the Prime Minister. His only job was to secure the defection of Petrov. He had no other security job and he was discontented with his status. He had had trouble with security. He said he was going to appeal to the Prime Minister and he came to Canberra. Of course, no one would accept Bialoguski’s account of anything unless it was independently corroborated, but the facts and date of his visit to Canberra are set down in the sealed letter to the Prime Minister which was handled on his behalf, by Mr. Yeend, his private secretary. With the letter open in front of them, the matter was discussed by Bialoguski and Mr. Yeend.

The date of that interview with the Prime Minister’s secretary, on behalf of the Prime Minister, is set by the fact that it took place on the day on which the former Soviet Ambassador, Mr. Lifanov, was taking his leave at Canberra. Mr. Lifanov left Australia in September, 1953. The visit and the letter related solely to the activities of Bialoguski and his remuneration and status as a security agent in his long-sustained - nearly three years old - attempt to nurture, corrupt, blackmail and trap Petrov with a view to seducing him from his allegiance to his own country. It is obvious that the Prime Minister knew of Richards’s “ Operation Petrov “ at least seven months before his first announcement to Parliament on the 13th April, 1954. Yet, when I asked in the House on the 12th August, after the general elections in May, whether there had been an intermediary employed to bargain with Petrov in 1953 - and all the dates T have given so far in relation to Bialoguski are in 1953 - the Prime Minister answered, “ I do not know “ - and he knew all about it!


– He did not!


– He knew all about it. He gave the decision on it.

Mr Menzies:

– Oddly enough, he did not.


– He knew all about Bialoguski nearly twelve months before that date in August to which I have referred. The plain truth is that Spry and Richards and a number of trusted persons had known of this. There were dozens of written reports by Bialoguski in the operation designed to cause Petrov’s defection. The operation was conducted over a period of nearly three years, and involved 200 written reports from Bialoguski. I believe that this slow and elaborate cultivating and corrupting of the officer of a foreign government for the purpose of using him, not only for security, but, as the facts show, as a political pawn, is quite unprecedented in British countries. Nothing like it occurred in Canada. Nothing of that kind was done with Gouzenko. Gouzenko rushed for help in his emergency and distress. He received no money. There had not been anybody trying to entice him away from his own allegiance. It was a completely different case. Neither did he receive any payment of money such as the £5,000 that was paid to Petrov.

It is clear now, and I submit it to the judgment of the House and the people, that the Petrov affair was saved up for the 1954 elections. The wire recordings show that Richards and Bialoguski were using his chicken farm as bait for Petrov. That is the very phrase that Bialoguski used in his Saturday Evening Post articles. It was bait to catch Petrov. In their conversations the date was fixed on which Petrov, who was then in the position that he had to do what he was told, should defect. The date was fixed as the 5th April. It was two days out, because the date of his actual defection was the 3rd April. Her Majesty was due to leave Australia a couple of days before, and that was the date which was fixed, when the election date had been practically fixed for May.

Once that conclusion is reached - and it is inescapable - the Petrov case, as 1 said in August of last year, will rank in history as far worse than that of the notorious Zinovieff letter which was produced from anti-Labour sources on the eve of the 1924 elections for the purpose of defeating the British Labour Government. The only difference is that the Petrov case was on a bigger scale.

The main impression of the report is that some of its findings bear little relation to the published evidence. The commissioners’ findings imply attempted espionage in one or two cases, yet they recommend against prosecution. They insinuate the inadequacy of existing laws, but a study of the evidence shows that it is not the inadequacy of the laws that prevents prosecution, but the complete absence of any legal evidence of espionage or criminality that makes prosecution impossible. Indeed, some of the findings of the commissioners are in absolute conflict with the published evidence and with certain well-established rules of British legal procedure. I shall mention one or two examples. There are hundreds of such cases in this great hearing which should be analysed, but I shall take just a few cases. I do not want to be misunderstood, and therefore I shall take a case at its strongest and highest. I refer to the case of a Communist named

Clayton. He was a known Communist, and had been a Communist official until 1951. He has been accused in the report of attempted espionage against Australia. It is asserted that he acted as a link between Commonwealth departments and Soviet agents centred in the Russian embassy. Attempts were made to support these allegations by the cross-examination of witnesses and by reference to documents - the Russian documents that are disputed - and by the reliance on hearsay evidence that no British court of law or tribunal of inquiry would use. In this connexion I refer to the Lynskey tribunal, which is the generally accepted model in Great Britain. In the royal commission that we are debating, hearsay evidence was used repeatedly. Nevertheless, in spite of all these attempts there was no real evidence that Clayton was associated with espionage, still less that he was the head of an organization. There was no evidence that he received any confidential document. There was no evidence that any Russian had any contact whatsoever with him, still less any evidence that he furnished any material to any Russian. The commissioners, however, arrived at the general conclusion that Clayton was an active agent of the M.V.D.

It is elementary justice, surely, that no man, whatever his views, should be prejudiced before the courts because of his political views, however extreme or unpopular they may happen to be. In the great case of Hobos and Tingling, Lord Justice Scrutton was not dealing with a Communist, but with a convicted criminal, a man named Hobbs who had defrauded Mr. “ A “, which was the nom de plume or nom de guerre of an Indian rajah. This was a famous case in its day. It is perhaps as well to remember the words of Lord Justice Scrutton, in these days of pseudo-McCarthyism. He said -

The worst of criminals is entitled to a fair hearing according to the rules of law . . . He is entitled to be presumed innocent until he is found by a trial according to rules of law to he guilty; and I regret to say-

Speaking of Hobbs -

I do not think he got such a trial. Mr. Hobbs is entitled to justice, and I hope he will get it.

He was hoping that justice would be done after the judgment of the Chief Justice had been set aside and a new trial ordered.

I refer also to the approach of Mr. Justice Lowe as a royal commissioner, which was completely different from the approach in the present case.

There is a second principle, which may sound technical, but I ask the House to bear with me for a moment while 1 direct its attention to this principle, which was disregarded by the commissioners. There was an alleged meeting at about Easter of 1950 of Clayton with a junior officer of a government department. Clayton and another witness, also a Communist, had positively denied that Clayton had met the junior officer. The officer concerned, despite persistent questioning by security officers and by the commissioners, refused to identify Clayton as the person she said she had met. But in their report the commissioners say that in spite of the denial of Clayton and the other Communist, and in spite of the officer’s failure to identify, they were satisfied that on the probabilities Claytor, was the person. That finding is made in the teeth of the second principle stated by Lord Justice Scrutton, that where the credibility of a witness is shaken or destroyed the court or jury is’ quite entitled to reject his evidence on matters that are material. But, as Lord Just i,:, Scrutton said -

By destroying that evidence you do not prove its opposite. If, by cross-examination to credit you prove that a man’s oath cannot be relied on, and he has sworn he did not go to Borne on May 1st, you do not, therefore, prove that he did go to Borne on May 1st; there is simply no evidence on the subject.

It is the technical rule, in one sense; it is the basis of justice on the other, and well recognized in English law. It is wrong to argue that a commission of inquiry is at liberty to brush aside the safeguards which are expressed in the basie rules of law and justice. Where there is a statutory investigation or inquiry, of course there are no parties, no defendant?, and the field of evidence is wider to the extent that hearsay is admitted in the first instance. But at the crucial point where a finding of misconduct is to be considered, the procedure has been laid down by Mr. Justice Lynskey in the great inquiry in 1948 in England. He said -

In coming to a conclusion as to the conduct of any individual witness, and in particular whether any allegation made in reference to him has been justified, we have had regard only to such evidence as would properly be admitted in a case in which he was a party and his conduct was in question.

Apply those rules to the case against Clayton and the finding is insupportable for the following reasons: - -First whether Communist or not, Clayton was entitled to justice and the just procedures laid down by British law, and the practice of public inquiries set forth by Mr. Justice Lynskey. Secondly, the Petrov document submitted to the commissioners would have been utterly inadmissible in a court of law as hearsay many times removed. Petrov did not say it was a correct document. He said somebody else told him it was a correct document; and that somebody else would say that Somebody had told him it was a correct document. It was hearsay thrice removed. Thirdly, there was no legal evidence whatsoever that the meeting between Clayton and the Government official took place.

Then there is a similar case, that of the alleged receipt. It is, again, a case in which there is no sympathy on the part of anybody with the people concerned, but, still, . they are entitled to justice - an extraordinary proposition, I know, to some people. They are entitled not to have findings against them unless those findings are supported by evidence. That is the famous case of the 25,000 dollars. Just imagine, 25,000 dollars received in a parcel about the size of a telephone book by Petrov ! In his first statement, he said two telephone books, two Melbourne telephone books. I do not. know whether it is possible to get that amount in such a parcel, but Petrov’s story was that this 25,000 dollars consisted of 25-dollar notes and 10-dollar notes. Subsequently, it was found that there are no 25-dollar notes in existence, that there never have been 25-dollar notes. Therefore, Mr. Petrov had to come to the second edition. But that was not all.


– Yes, that is right. That is a very curious coincidence. They are trying to mimic the honorable member for Gellibrand (Mr. Mullens) in a very odd way. Let me add one more point to that. The money was supposed to have been paid to Sharkey at 8 p.m. on the 16th October.

Mr Mullens:

Mr. Mullens interjecting,


– Order ! The honorable member for Gellibrand will remain silent, or I shall deal with him.


– The money was supposed to have been paid to Sharkey, according to Petrov’s evidence, at S o’clock on the 16th October, 1953. Prior to that, the security officers had given him details of his movements, as to where he had been. At any rate, he went for the 16th October, 1953, at S o’clock, and that is when he said that the money was to be paid over. Not by Petrov! He never comes in directly. It is always somebody else who does it, but, still, that was the time.

Then the commissioners had a look at it, and counsel for the commission said he had to tell the commissioners that on the 16th October, 1953, Mr. Sharkey wa? attending a meeting of his party, and was under security surveillance and, therefore, the payment could not have been made at that time. So there had to be a third edition of the story, and the third edition was cooked up by Petrov. Then where are we left? Not with the statement of any person on oath that anything was paid to Sharkey - and this is the keynote of Petrov’s evidence throughout the case - but to Antonov, and Antonov is not here ; he is in Russia, presumably. At any rate, he is not in Australia. He says the payment was made to Antonov, and that there is a receipt, but he cannot produce it. Had that question been decided by a court of law, the court of law would have found that not one penny was paid to Sharkey. But because it was hearsay before a royal commission, there is a difference. The commissioners say that on the probabilities it was; and I regret to say that in order to support that amazing proposition, they quoted two High Court judgments, one of which happened to be my own, but it was completely misunderstood.

Honorable members interjecting,


– At any rate, I was very pleased to see that I was quoted for one correct proposition in a report by this particular royal commision. Unfortunately, the commissioners failed completely to understand the decision. I am taking these two cases of Clayton and Sharkey merely as illustrations of the great difficulty in this case. These two men were Communists and it was very difficult to convince the commission. Crossexamination ranged all over the globe. In some respects,, it was really a very unsatisfactory hearing; indeed, so unsatisfactory that I believe a court of appeal, if there were a court of appeal from royal commissions, could not have allowed some of these findings to stand. There was no evidence that Sharkey had been in receipt of any money, yet there is a finding that he got 25,000 dollars. Many other illustrations could be given; but there, taking two unpopular sides for the moment, and looking at the matter fairly, uo juryman could have listened to such a case, and these judges should not have done so, either.

The absence of any sound evidential support for two of such findings, taking them as typical, raises the question whether there was any evidence to justify the inquiry, and what was its real purpose. There was nobody to be prosecuted. There was no breach of law. The law is quite sound. It is very clear. Had there been evidence, a prosecution could have been launched. The ordinary security way of attacking a problem like the Petrov case, in order to decide whether there is a possibility of a breach of the law, is to let security in the first instance act, search and see whether it can find evidence on which to prosecute. That would have been the normal thing. We pointed out that fact in the House at the time. But that was not done, and, of course, there was no evidence, as I have said. It is a clear feature of the report.

I want honorable members, if they will - it is not possible for me to do it in the short time available - to look at the opening address of counsel, no doubt prepared after consultation with the Prime Minister who gave the instruction that the £5,000 was not to be mentioned in the opening address.

Mr Gullett:

– Ah!


– It is no good ah-ing about it. The people of Australia would say “Oh”, not “Ah”. When we have a ‘man like this who has £5,000-5,000 good reasons for doing this - is it not relevant to tell the jury? Why is that information kept back on the eve of an election? It is a perfectly scandalous thing, and it has never happened before-


-Order! There is whistling in the House. If I find out who is whistling, he will be named.


– I ask the House and the country to compare that opening address with the sworn evidence. In his opening address, counsel forecast the finding of spies. He referred to “ traitorous activities “, “ a spy-ring “, and “ a systematic and organized group “. That was a dramatic opening, conducted dramatically. It was melodramatic. No expense was spared, as we know. The old Albert Hall was converted into a great film house for the time being, and public servants in certain degrees were told they should go down and show their loyalty. The press was- there, and the broadcasters were there. Never was there such a sensational opening.

Mr Ward:

– The Hollywood touch.


– The Hollywood touch! We have had it before here. We had it on the night the Prime Minister introduced the Communist Party Dissolution Bil], which the people subsequently rejected. The Australian people were told to expect that there would be evidence of widespread espionage. Window-dressing statements were made referring to the Soviet Government in such terms as a “tyrannical government” and “despotic” and to certain Australians as persons “ not troubled by conscience or by scruple “ and “ who have no firmly anchored religious faith “. Just imagine it, coming into a cold inquiry into espionage ! It had nothing whatever to do with the case if facts only were to be presented. I wonder who was the draftsman of this last phrase?

Mr Keon:

– Lockwood.


– I am quite sure the honorable member would think that was possible, because he would credit anything to the people whom he hates and whom he fears. All these and other loaded terms of praise and blame should be re-examined by the people. The allegations of active or attempted espionage of a treasonable character were not justified by the evidence. Looking back, it is plain that the proceedings were devised and built up to assist the Government in the then-existing political situation. This occurred just twelve days before the election. Of course, reference was not to be made to it during the campaign. The Prime “Minister did not refer to it, but other Ministers did, and, of course, the newspapers did. One of them had a report under a Washington date-line about facts which subsequently came out in evidence in certain respects. It was obvious that systematic leakages came to the press from Canberra all through that period. It i3 clear that the Prime Minister, who brought up this matter on the eve of the general elections, must take personal responsibility for all the exaggeration and deception. Of course, he gave specific instructions, as I have said, that the £5,000 was not to be mentioned until after the elections. As a result, the Australian people were completely misled, just as the Parliament was misled on the 18th April, 1954. The concealment of that payment from the people in those circumstances will always remain a blot on the inquiry. lt is not surprising that, after the elections, an early opportunity was taken to play down the more serious implications of the opening address. Counsel rather went down from the level at which the opening had taken place. He stated that evidence would be adduced to show that on occasions, there had been communicated information that would have been useful even if it was of no importance. The chairman of the royal commission was taken aback by this great anti-climax and interjected : “ I trust we are going to track down some spies “. Though a stream of virulent condemnation had been directed at the Soviet Government, counsel, in his opening, failed entirely to mention the activities throughout the world of certain embassies, and, indeed, of Australian intelligence organizations acting here and abroad. Of course, there was no mention of Bialoguski’s longsustained and officially-supported endeavour to corrupt, blackmail and seduce a Soviet representative in Australia. The above facts show that the opening address was not justified by the evidence. A fair conclusion is that the opening was in tended by the Government and the Prime Minister to be part of a deliberate political move, or that the security service was grossly inefficient and misinformed and that it gave completely wrongful advice. In any case, the Prime Minister was guilty of a gross betrayal of trust in giving the allegations widespread publicity here and throughout the world without first finding evidence to support them. I know of no previous case in which that kind of thing has occurred.

We can find a starting point of importance, and that is the extraordinary affair that commenced in this House in May, 1952. Perhaps it provides a clue to the political and security policies behind the Petrov affair. I refer to the charge made by the present Minister for External Affairs (Mr. Casey) in this House in May, 1952. The honorable member for Mackellar (Mr. Wentworth) on that occasion asked the Minister a question based upon a statement in the Tribune to the effect that there was under negotiation a trade treaty between Australia and the United States of America. The Tribune published a condemnation of that treaty by Chiplin, who signed the article. Six months after the article was published, the honorable member for Mackellar asked the Minister for External Affairs about it. Having regard to certain aspects of the Petrov case, in which the same type of thing was dredged up in a slightly different way, it is very important to see what really took place. The insinuations that high public servants had been responsible for a deliberate leakage of what was obviously confidential information were so important that one might think the Minister would have asked for notice of the question, but he was quite ready. He said, “ The statements that the honorable member has made are all substantially true “. He said also that the leakage of the information that had been published in the Tribune six months before was very grievous. However, that was not enough for the honorable member for Mackellar, who raised the matter again during the debate on the motion for the adjournment of the House the- same day. He mentioned the possibility that the former secretary of the Department of External Affairs, Dr. Burton, could have been implicated in the leakage.

Mr Gullett:

– As he well could have been.


– The honorable member for Henty (Mr. Gullett) apparently is ignorant of the fact that the royal commissioners, in their report, have completely cleared Dr. Burton of any implication whatsoever. I do not think the honorable member believes for a minute that Dr. Burton was involved.

Mr Gullett:

– I do believe it.


– The honorable member ought to be thoroughly ashamed of himself.

Honorable members interjecting,


– Order !

I ask the House to come to order.


– I think the honorable member for Henty is ashamed of himself, because he was laughing while he interjected. During the debate on the motion for the adjournment of the House on the occasion in May, 1952, to which I have referred, the Minister for External Affairs was again ready. He said he thought it improbable that Dr. Burton had been responsible for the leakage of information, and that the disturbing feature of the business was the fact that some senior public servant had been so treacherous as to give the draft of the treaty to a Communist journal. He added these dramatic words : “ There are traitors in our midst, and the Government is doing its utmost to uncover the nest of traitors that exists in the Public Service “. “What happened subsequently? Day after day in this House for months the honorable member for East Sydney (Mr. Ward), the honorable member for Eden-Monaro (Mr. Allan Fraser), the honorable member for Parkes (Mr. Haylen) and other Opposition members demanded that the Minister act, because action obviously was possible. A newspaper had published confidential information from a department. There was a clear breach of the Crimes Act, and Opposition members demanded that action be taken. I shall not go through all the questions that were asked. A dozen or fifteen questions were asked, but they all were evaded by the Minister for External Affairs, who dealt with them in a blustering way. On no occasion did he indicate that any action would be taken about this obvious breach of the official secrets provisions of the Crimes Act. Let us see why the Tribune and Chiplin were not prosecuted. I shall not quote all the comments that were made in this House. There were many newspaper comments. The Sydney Morning Herald stated that the reference to a nest of traitors in the Public Service would cause serious disquiet at home and abroad and that action must be taken.

The matter went before the royal commission, and these facts emerged: It turned out that Mr. Chiplin of the Tribune, had been provided with material, and not from the Department of External Affairs, to which reference was made, not obscurely, and not by any high level public servant, or by Dr. Burton, who had by that time left the department. It was stated in evidence that material was systematically handed out to Chiplin by a person whose name was not mentioned before the royal commission and who was employed as a security agent in the Department of National Development, which the Minister for External Affairs had previously administered. In the evidence there is the extraordinary and amazing conflict between that witness and Chiplin. Chiplin thought that she handed out the material because she was politically friendly, but she was a security agent and acted throughout, according to her, under the control of one of the highest officials of the security service. It is perfectly true that the royal commissioners, as they did in respect of practically every person who was a Communist, refused to accept Chiplin’s evidence. Chiplin was evasive because he was obviously trying to protect his source of information. When the matter was raised in this House, the woman in question asked Chiplin to go to Melbourne, obviously because she was worried. The fair inference is that she either gave the information to Chiplin for publication or knew all about it. At any rate, the Government knew of the publication. It was an obvious breach of the Crimes Act, but nothing was done. Chiplin was known to be responsible, because he signed the published article. The article was seized by Detective Inspector Wilks under a seizure order made by a magistrate. But there should have been a prosecution.

After the affair in this House, as I have stated, Chiplin went to Melbourne, because the lady concerned was worried. Naturally she was worried, because she thought her name would come out. There is no other explanation. As I have said, Chiplin did not know that. That explains how the material came to be published in the Communist newspaper. What is the situation then? The Prime Minister, representing the Government, suggested to the people that there had been a leakage through high government officials, and the Department of External Affairs was mentioned. The Government found out that the department could not have been implicated, because the report of the investigation came before the royal commission. It is obvious from that that it came from the Department of National Development, because of the references to it, and the Public Servic at a high level was allowed to be smeared for political purposes by the Minister for External Affairs, the implication being that Dr. Burton, and persons associated with him, were responsible. I say that that is one of the most serious things that has ever occurred in this country. Nothing was done to prosecute the author of this article, which is most injurious to and slanderous of Dr. Burton and officers of the Department of External Affairs. The Government knew that they were all perfectly innocent, yet it allowed them to be slandered in the House and to remain under a grievous slur for three years, and it has not even yet remedied the position, even though the commissioners in the report cleared Dr. Burton completely.

Honorable members interjecting,


– I am perfectly well aware that there is an attempt from certain quarters to prevent my speaking to-night. I think that the public is aware of it. One cannot get away with these tactics in Australia, although one may do so for the moment. They are sheer tactics of fascism and McCarthyism. A report was made by the Commonwealth Investigation Service, and the Government should produce to the House that report, which was included in the evidence. I believe that it will show a deliberate frame-up of the worst description to pretend that there was a leakage of confidential information from the

Public Service to the Communist party and to the Russians, when it was in fact only a frame-up in an attempt to create a situation, when it was manufactured and fabricated. I think that that is an illustration of what took place in other aspects of the commission’s inquiry. Instead of yielding to the Labour party’s demand* to prosecute, the Government did nothing. It did not even declare the innocence of people who it must have known were innocent as soon as the inquiry was made. It is a fair inference from that, and the other circumstances, that this Government had prior knowledge, not merely of Petrov’s probable defection, but of the nature of the evidence of leakages which might appear from his documents. His intending defection was anticipated by Security throughout the whole of 1953, and all that Bialoguski and others were concerned with was how to make the best use of it.

The matter goes even deeper, because when the Prime Minister took office from the Chifley Government in 1949, he knew that information was coming to Australia from overseas intelligence sources, which suggested some possibility of leakages of official information from Australian departments. He knew then that information, or rather suspicions, had been conveyed to Australian authorities that several Australians might possibly be involved as having been the source of information, and that some of these person? could have been given code names. In fact, of course, at that time, real evidence in the legal sense was lacking. No action was advised against any person, but a warning had been sounded, and strong and appropriate action was taken in respect of any person about whom there might be the slightest suspicion. Indeed, action that was most drastic was taken by the then Secretary of the Department of External Affairs, Dr. Burton, who has been smeared for years by these people. It is undoubtedly true that in respect of some quite unsubstantiated suspicions he took far-reaching action, with the approval of Mr. Chifley. No risks were taken. The precautions taken were not dramatic from a public point of view, or calculated to injure the careers of officers who were completely innocent. Because of the steps taken, the matter was regarded as closed by the time the Menzies Government took office and the security organization, under Mr. Justice Seed, a Supreme Court judge, was fully established.

An extraordinary thing happened in 1953. I beg the House to follow this closely. In _1948 this affair took place. Bialoguski watched and nurtured Petrov in 1951, but in 1953 a few of those persons who had been mentioned years before were interviewed and interrogated by security - Richards included - and statements were obtained from them on one pretext or another, and, in some cases, after considerable pressure. That emerges fairly clearly from the evidence. Attempts were made to persuade some of them-

Mr Keon:

– Who were they?


– Perhaps the honorable member might read the evidence instead of relying on his proteges. I have tried to avoid mentioning the names of people whom I believe to be innocent. I think that is the correct attitude to take. Certainly I am not going to mention the names of people against whom there was suspicion.

Mr Keon:

– What about Dr. Burton?


– He is absolutely innocent. The attacks on him by the honorable member and his coterie are a scandal and a disgrace to the Parliament. Some of these people were promised immunity if they talked, and freedom from further investigation. All this took place from six to twelve months before Petrov’s defection. It seems certain that evidence was then being collected and collated, having in mind the probability, or certainty, of his defection. I repeat that vital statement, that this indicates that twelve months before the actual defection evidence was being prepared to deal with the situation in the event of his defection. Those cases are all-important in themselves. The 1953 inquiries are vital to an understanding of the Petrov affair. They show that security officers, including Richards, were seeking to collect information, some of which learned by security for the first time in 1953 by a miraculous coincidence, had found its way into the Sadovnikov documents produced by Petrov in 1953. There is an extraordinary coincidence, which is so unusual or so nearly impossible that it could not be a mere coincidence. Late in March, 1954, just on the eve of Petrov’s defection, an envelope which had been sealed for three years in the embassy, according to Petrov, was opened by him. He had promised Richards to help him on external affairs; Richards gave this evidence as well at Petrov. This was at the time that negotiations were going on, when the money had been dangled before him. He promised Richards that he would help him on external affairs, if possible, by producing documents. When the documents produced by Petrov, which were given to him not by Sadovnikov but by somebody else, and the seals of which had not been disturbed for three years, were opened, they were in accord with some of the circumstances suggested merely by way of suspicion in 1948, and with the additional information obtained by security during 1953, twelve months before the defection. That is quite a remarkable series of coincidences, having in view the further coincidence of the false allegation of a nest of traitors, made by the Minister for External Affairs in the House in May, 1952. There was a sequence of events starting from vague information received in 1948 and 1949 and sound precautions taken before this Government took office. Arising from that, the false “ nest of spies “ allegation was made against the Public Service in 1952. Then there was the interviewing, in 1953, of persons who were not then known to he security risks, the cultivation and coaching of Petrov from early in 1953, the formal defection of Petrov on the eve of the elections, armed with documents containing some information which was, for the most part, already on the security files of Australia, and some of which had been collected by security officers from persons in 1953.

I ask the House to look through these documents dealing with the particular cases and see the nature of the particulars that are supposed to come from Moscow. Could that information have been obtained from Moscow, or is it obviously information collected from official source? in Australia? Date of birth, place of birth, address in Townsville, Perth or some other city, telephone number - the particulars are so clearly of a local character that some of these documents, on the very face of them - that is what I mean by internal evidence - are obviously not genuine documents.

It should not be necessary to go further than this to suggest that the genuineness and significance of the evidence given before the commission should have been tested far more carefully than it was. The commissioners knew that the Chifley Government had certain vague information in 1948, that it had set up a security service under impartial judicial leadership, that all necessary action had been taken, that no continuing suspicion remained and that Petrov’s possible defection was known to security in 1951 to be likely in 1953. The commissioners never sought any explanation of why high-ranking security officers should suddenly renew their interest in some of these persons in 1953, twelve months before the Petrov documents were produced. On the bare facts, there was a strong argument furnished that all Petrov’s documents should have been most stringently examined to see whether they contained any information which security acquired or placed on its files in 1953. Under the present security control, its files include, not only those of the Australian Security Intelligence Organization, but also those of military, naval and air force intelligence and of the Commonwealth Investigation Service as well as selections from aliens’ and immigration files. All that information was available. But the commissioners failed to do that. On the contrary, time and again they argued - this was a very important part of their argument - that because the so-called Moscow documents contained information which security files showed to be correct, they must be authentic documents of Moscow origin. That was an absurd conclusion. In fact, one commissioner actually said that, even if Petrov swore that the documents were false, he would not believe him.

If the information was true, it must have come from some source. What was the source? A careful study of these documents will show that the source of a great many of them was certainly not Moscow. These Petrov documents were handed over after the payment of £5,000 in notes. On the 20th March, Richards had shown Petrov £5,000 in notes while Bialoguski was present. He was living in a luxurious flat, partly subsidized by Commonwealth taxpayers. On the day before, that is the 19th March, Petrov discussed with Richards the time of his defection. He agreed with the chairman of the commission that at that time he was very anxious to learn what arrangements would be made for his future and his wife’s future in the event of defection. On the next day, Richards and Petrov met in Bialoguski’s flat. The transcript of the evidence of Petrov on this point reads as follows : -

Counsel. - You were there for an hour. Was anything said about any information which you had? - Yes; just only shortly.

What was said ? - I said to him that I would help him about external affairs.

You said you would help him about external affairs? - That’s right.

Did you give him any information? - I did. (Interpreted) - What did you tell him? - (Interpreted) - I did not give him any information then - not yet.

Did you tell him you would give him information later? - I did.

The Chairman:

– If suitable arrangements could be made to look after your future; is that it? - That is so.

That was the bargain. Why all this humbug about saying there was no arrangement for the payment of money and the furnishing of information or documents in return? There was the admission out of Petrov’s own mouth. It was confirmed by Richards in his evidence. Richards wanted to get something tangible - that is, documents; but Petrov wanted to get something tangible, too. The evidence of Richards on the point was as follows : -

Counsel. - On that day you told us you formed an impression that his physical wellbeing in this country was a factor in his mind? - Yes, I felt that.

And that he needed something tangible to assist him in his decision? - I felt that he did.

Did you report that impression on the same night, or Brigadier Spry? - I did.

You received, the next day, a report from Bialoguski? - Yes, I did.

That he had formed the same impression, but not in those words? - Yes. He put it more bluntly.

He said that Petrov would probably want some indication of a sum of money - That is so.

Then an account was given of a draft, which was obtained and cashed as early as the 19th March. Richards went to see

Petrov at Bialoguski’s flat, and the money was shown to Petrov, who said that he was gathering something together in order to meet the requests that Richards had been making. So a conversation went on about documents. The transcript of the evidence given by Richards in crossexamination reads as follows: -

Counsel. - However, just let me get it again. You did, undoubtedly, have in the forefront of your mind the existence of some tangible corroboration of what this man had in his bead? - I think he had suggested-

He had suggested the documents? - That is what gave rise to my comment.

And, of course, you are not going to tell us that you were disinterested in that, are you ? - I was most interested.

Of course you were. And you made it clear to Petrov, did you not, that you were very interested in documents? - I also made it clear to him that it was his decision: he knew the risk, and he would make his own decision on that.

Mr Haworth:

– Who said that?


– That is the evidence given by Richards in reply to questioning by counsel. Those are the circumstances surrounding the bargaining that was going on. For some reason, those appearing in the interests of the Government would not admit that, there was bargaining. But it was clear that bargaining had been going on ever since the occasion late in 1953, when the bait was set for Petrov. He made his statement on the wire recorder and fixed the date of his defection at a certain date, subject, of course, to the arrangements being satisfactory. These discussions went on.

On the 3rd April, Petrov produced his documents. By a remarkable coincidence, they included the exhibit G documents - the very things that Richards was so eager to get. Petrov’s evidence was that when he finally made up his mind to leave the embassy, he went to the safe, where - lo and behold ! - he found a sealed document. . He did not know it was there. He bad not noticed it before. When he opened the safe, he found, without any effort on bis part, not only the envelope, but the contents. He became one of the luckiest finders in history. As an illustration, the name of a lady typist interviewed three times by Richards in mid- 1953 was written three times in the documents that Petrov miraculously discovered in 1954. The document by Sadovnikov said of her that “ K “- “ K “ in the end was shown to mean Clayton but, according to Petrov’s evidence, “ K “ meant quite a different person - received “ interesting information” from her - the one fact which Richards persuaded her to say in 1953. So Petrov so easily managed to discover documents eagerly desired by Richards that he might well adopt the motto, “ T never seek but I always find “.

One of the most important exhibits produced before the commission was not in Sadovnikov’s writing, not in Petrov’s writing, but in Richards’s writing. That was the statement made by Petrov on the night of his defection, lt was dictated by Petrov, but written in the handwriting of Richards. That was the document dealing with the alleged situation of a serious nature in the Department of External Affairs between 1945 and 194S. It was a statement by Petrov, who could have known nothing about the matter, and who put that down because he knew what his masters, the people who were paying hi in the money, would like to hear. It was an outrageous statement for Petrov to make. When he was cross-examined, he said only that somebody told him about it. No direct evidence was produced. This utterly hearsay evidence, valueless from an evidentiary point of view against any person, produced in extraordinary circumstances, was the basic foundation of the finding of the commission. After my reading of the legal procedures of the English inquiries tribunal, one can see how severe would be the judicial criticism directed against basing any inference whatever against anybody on so worthless a foundation. Moreover, the evidence establishes that the questions put to Petrov were leading questions from Richards. That was quite improper in the circumstances, when Petrov was trying his best to do what was wanted of him.

The history of the defection, the circumstances surrounding it, including the desire of Petrov to defect, the payment to him of a large sum of money, the political occasion, the inconsistent statements of the Prime Minister, the sinister and dishonest activities of Bialoguski, the over-dramatized opening by counsel and the admitted correspondence between the information held by security and much material in Petrov’s documents, all point to one conclusion, from which I have never shrunk - that is, the existence of political fraud in this case. I shall cite one example only, but dozens could be cited. The multiplicity of examples tends to show that, by some means not fully ascertained, many of the Petrov documents reproduce details about persons which could only have been contained in official documents recording their careers. As T have stated, I could cite case after case to illustrate my point. Crossexamination of persons who were in possession of the security documents indicated their sources of information. A study of such cases and of the details that are given even in the Sadovnikov documents proves that almost beyond doubt. The details could not have come from any source outside Australia. I refer to such information as the date of birth, telephone number, and details of a university career, all of which are matters of no import to any other country, even if it had any hostile intent towards us. Such details are contained in the particular document to which I refer, which purports to be a Russian document. A fair inference is that these documents are not Russian documents. The two statements that I made to the House earlier in roy speech, and which were so scandalously greeted by those honorable members who are opposed to what I am saying, prove that there is a grievous doubt about the documents. The Soviet Government says that they are not authentic documents.

Mr Keon:

– “Who said it?


– I read out who said it. What kind of people are these who, in a national parliament, are not prepared to hear a case ? Is the House not entitled to have a proper investigation of the matter instead of being insulted by a lot of people who reduce themselves to a level that has scarcely been known in a responsible parliament? Will any one suggest that a proper examination of the handwriting is not warranted?

Mr Mullens:

– Molotov!


– Yes, Molotov. Molotov, of course, meets the highest representatives of the British Commonwealth of Nations and of the United States of America. He is not great enough for the honorable member for Gellibrand (Mr.

Mullens). I have had my fights with Molotov, but I have the right and the duty to refer to his statement in support of independent conclusions to which reasonable people may come, and the honorable member cannot get rid of that outstanding fact. I was directing attention to individual cases of detailed statements of careers referred to in the report of the commission. Paney a Russian M.V.D. document showing a date of birth as being 1923, a particular university degree, and the like! That is the type of thing that is always found in Australian security dossiers. This is a matter which must be cleared up, and I believe that it will be cleared up and cleaned up. In the absence of positive evidence that Sadovnikov wrote the document from a Moscow letter, which is one of the G series of letters stated to have been written in 1948 or 1949, a fair prima facie conclusion is that it was built up of extracts for the most part truly stated in the Australian dossiers, and therefore with a probability of security origin. Moscow could not have had any concern whatever with most of those details. The ex-wife of Bialoguski says that from time to time Bialoguski obtained from the security service information which she furnished to Petrov, so there is a possible source of information to Petrov. Petrov and Bialoguski were joint operators over a very long period.

The case to which I have referred exposes the fallacious assumption by the commissioners who said, in effect, “ The statements in the documents are true; therefore, the documents are genuine “. But that does not follow. The truth of the statements shows that they must have proceeded from some source which had collected them in an organized way. What source would that be? The irresistible inference is that it could not be Moscow entirely, and I challenge anybody to examine the documents from that point of view. The particular documentto which I am referring deals with the man’s university and military careers. Why are such details contained in a document like that? Why should Moscow know? Why should it want to know? Why should Moscow collect that information if it thought that it might be treacherously or dishonestly given? All those particulars are beside the point.. Moscow only wants something by which to identify the person, but far more information than that has been given.

A great deal of factually incorrect evidence was placed before the commission. I refer to one example which honorable members may have forgotten but which they will remember when I mention it - the salaries and allowances of the Petrovs. In order to excuse the payment of £5,000, evidence was led that Petrov was a very highly paid and important person. That was an important piece of evidence, and the commissioners regarded it as being very important in determining the reliability of the witness and, therefore, the authenticity of these alleged M.V.D. documents of 1952. A learned economist associated with an Australian university has made a commentary on that matter, the substance of which was that the commissioners based their calculations on official or normal exchange rates, which are completely artificial and have no relevance in a calculation in Australian terms of Soviet salaries. The economist stated that a careful calculation based on the exchange rates adopted by the Australian Government in the payment of its own officers, and by the British Government in the payment of its embassy staff, showed that the Petrovs were receiving a remuneration which was less than that of the most junior Australian diplomatic official.

Mr Menzies:

– Who said that?


– I am saying it.

Mr Menzies:

– I thought the right honorable gentleman, said that an economist had said it.


– He did.

Mr Menzies:

– I am courteously asking the right honorable gentleman the name of that economist.


– I deliberately did not state his name. The information can be checked. Let the Prime Minister get his own people to check it, otherwise he will have a visit from some of his friends. That observation shows that the Petrovs were receiving a remuneration which was less than that of the most junior diplomatic officials of Australia, and about one- third of the remuneration received by the most junior diplomatic officer of the British embassy in Moscow. On those realistic calculations, the remuneration received by Petrov indicated that his status was in fact the official status with which he arrived in Australia, that is, junior to a third secretary. His rank was the lowest referable to a man of his seniority, and his salary was appropriate to that rank. This alleged M.V.D. dictator with vast powers had a status and salary which, considering his age, indicated that his career was almost finished - a view which was supported by the terrors he experienced when he got into argument with the ambassadors, who, according to part of the case, had to shrink before him. I do not say that merely to rub in the fact that he was of inferior status, but in order to’ answer the suggestion that he had a high salary, which, according to one of the commissioners, was better than that of a Supreme Court judge. That is nonsense, and the Government had information at its disposal which could have shown that it was nonsense.

Mr Joshua:

– How much did Petrov get?


– He received a salary which was equivalent to that of an officer junior to a third secretary. That is the information that has been placed before me, and I believe it to be true. One of the most serious aspects of the commission’s procedures was that misleading evidence of a general character could not be corrected while the inquiry was being conducted piecemeal. The witnesses came in one by one, there was no general disclosure of the case. “We had the eclat of the Albert Hall opening, but there was no analysis of the whole of the evidence that was to be placed before the commission in order that the issues could be determined. That is why the Parliament and the people generally must carefully examine it now. If counsel assisting the commission had been free from instructions by the security service, or if arrangements had been made for a general address on all these matters, I believe that many of the commission’s conclusions would have been different. Then, of course, there were the other occasions when hearings were held in camera. I suppose that, in some instances, that would be justified on security grounds. But the proceedings at these hearings in camera were published later, some of them at a date much later, when it was quite impossible for them to be dealt with. I need give only one illustration. Codes and code names were features of this case. In the opening address much mention was made of the word “bank”, not a real bank, but as meaning “secret hiding place”. Another illustration of these codes is that “ dispatch office “ meant “ Department of External Affairs “. These are two illustrations of the use of code words to describe certain places. Yet in a key document of the G series, the one which purported to list the contacts of Clayton, the word “ bank “ also is used. But there it was interpreted by counsel as meaning “ Department of .External Affairs “ and not “ secret hiding place “. The word “ bank “ was there taken to mean “ Department of External Affairs “ instead of the words “ dispatch office “, which it had been stated earlier were used to refer to that department. One would have thought that any examination of those inconsistencies could have been made in public. But no, it was done in secret session, and the two Petrovs were recalled for further examination. On any fair judgment of the proceedings the Petrovs were being forced, under pressure, both from the chairman of the commission and counsel assisting the commission, to state on oath that “ bank “ could, in fact, mean “Department of External Affairs “ as well as “ secret hiding place “. Both, however, were most reluctant to commit themselves to such a statement, Mrs. Petrov having very firmly stated in a similar connexion that Moscow did not make mistakes of that kind. That matter is dealt with in portions of the evidence which I shall not read to the House in full, but it is most important for honorable members to see this ambiguous meaning given to a word. The evidence in this connexion was taken in camera on the 20th July, 1954, but the transcript was not published until August, 1955 - thirteen months later, and after all evidence had been concluded. Contrast this extraordinary evidence with the dynamic assurance of counsel assisting the commission in his opening address in. which he said -

Similarly, only a short period of study of the documents and of the internal evidence in them will show, for example, that “ dispatch office “ is “ the Department of External Affairs”.

So it was, in connexion with people with code names, all through the documents. There was no evidence to show who were the other persons referred to by code names. They were simply used - not used in the Russian letters in the sense that there is to be a direction to the person of that code name, although code names occurred quite frequently.

In regard to “secret hiding place”, I think the comment made by London Punch is most devastating. It said, referring to Petrov -

When he slipped up was in consenting to pass on information about such petty professional details to the H.Q. of the M.V.D. in Moscow. A spy’s reports to his Chief (or to the M.V.D. or to Boom 6 as the case may be) should consist of the weight of tanks, plans of guided missiles, etc., not of pitiful selfcongratulatory memoranda beginning “ I have hit on a plan for hiding secret messages in a crack in a board of the embankment of a railway bridge “.

That railway bridge was a bridge near Canberra. Punch then refers to the instruction from Moscow that Petrov must test hiding places first by inserting articles like newspaper cuttings and cigarette papers to determine whether the hiding places were suitable. Some one was pulling somebody’s leg on some occasions, in some of these letters. I think that Punch’s comment sufficiently crushed the genuineness of such an absurd and ridiculous document. Similarly, I have mentioned the reference to “ bank “ partly to illustrate the extraordinary use made of secret hearings. It was impossible in a hearing in camera for these things to be checked in the way that they should be.

Not only that, but there is the additional fact that there were many occasions on which there was leading of witnesses. I mean by that that leading questions were asked of them. People misunderstand what the term “leading question “ means. They think that a leading question is a difficult question, whereas, of course, it is really a question that suggests the answer. Such questions were asked over and over again. For instance, Petrov was asked about leakages. He had made the statement to Richards, which I have criticized, because Richards was leading him when he made that statement on the night of his defection. He admitted that. In the sworn evidence, when Petrov was asked about leakages, he was asked when they had occurred. He said, in substance, that they had occurred all through. Then he was taken in hand and a series of questions made him go back to the statement made on the night of his defection when he was paid £5,000, and the answers to the questions in that series of questions were, “That is right”: “That is so”; “That is right”; “That is possible” and so on. In other words, he was answering the very questions put into hig mouth, in the affirmative, and taking them away from his statement. I say that this was improper leading of a witness to build up a case which counsel was putting, especially of a witness who should have been closely cross-examined on all points, as the two Petrovs should have been. The fact is that, from the outset, it was intended to assume, or assert, the honesty of the Petrovs, and it came to be almost heresy to criticize them. In the opening address one of them was described as “ educated, attractive and intelligent “, something which had not the slightest relevance to the matter. It was for the commissioners to find out such things for themselves. Whilst the case was proceeding there was held the notorious Christmas party at which the guests were the three judges and the two Petrovs. I say that that is a completely wrong procedure. If it had happened in the administration of justice in the ordinary way, the judicial proceedings would have been invalidated. Normal people would look with reserve at the glamorizing of the Petrovs that went on. They had made charges of a vague nature against Australian people, very few of which have been substantiated on legal evidence. They were not entitled to any advantage in the hearing of the case. We do not treat spies or informers in that way according to the ideals of English law and jurisprudence. Why were they treated in that way? Why were they glamorized before a court which should have been concerned only to get at the truth? The glamorizing was started in this chamber on the 13th April, 1954. I venture to say that a reading of the speech of the Prime Minister on that, occasion will show that from beginning to end there was hardly a correct statement in it. I say that it was completely misleading and started the atmosphere of building up the Petrovs. If the Prime Minister had told all the facts, especially about the £5,000 paid to Petrov, there would have been a very severe reaction, I believe, from the people of Australia. The normal attitude to self-confessed spies and informers would be to check very carefully whether what they had to say was accurate or inaccurate, to look on them with suspicion, and to check their motives for giving information. Petrov was destined to come over to this country after he had been trapped by the wire recording. If that had been sent to his ambassador by Bialoguski, who was at that time parading as a Communist, the result would have been serious for Petrov. Bialoguski also went to the American consul and offered his services. That fact is recorded in his book. But Petrov had no chance after he was trapped by Bialoguski, acting in co-operation with Richards, the deputy head of the intelligence service. Just imagine the use of a wire recorder to get this wretched man ! He said he liked to live in Australia, and therefore, he had decided to settle here. What kind of life did he live in Sydney? The evidence on that is clear enough in Bialoguski’s book, which shows that he was living a life in which he became a sodden drunkard practically under the control of Bialoguski. It is of no use going into all these aspects of the case, but they should have been brought out and ruthlessly exposed by the commission. Consider the Oilier case. Consider those two witnesses who, at a secret hearing, gave false evidence against the representative of France, Madame Oilier. Both of them were obviously guilty of false swearing and of making conflicting statements although both carefully avoided direct conflict of testimony wherever possible. This is one of the instances which I ask the House to read. The evidence in relation to it was published only later. It is possible to see from the evidence the way in which these two people acted to protect each other. “When one would make a positive statement the other would try to come to the rescue. One illustration refers to the letter from Moscow which concerned the giving of £75 to Madame Oilier and the making of an excuse for giving it. Did they do it? No. Petrov said that the reference did not mean that Madame Oilier was to get £75, but that it meant that he was to take £75 and buy a watch for her. A complete misrepresentation, and no one was present to cross-examine ! It was put only by a representative of the commission who had brought these witnesses forward as witnesses of truth. Their evidence could have been torn to ribbons. They said that Pakhamov gave her a watch. The question was asked, “Did you see Pakhamov give her a watch ? “ The answer was, “ No. I never saw it.” They gave heresay evidence so that they could not be charged with perjury. On that evidence, the commissioners were influenced to make aspersions on Madame Oilier which were not justified. What a disgrace to Australian justice that such a case should be heard in camera while the woman was held incommunicado in Noumea by connivance between the Minister for External Affairs (Mr. Casey) and the French Ambassador. Because I took that case up, I was excluded from the commission. I did not act for her professionally. I cannot possibly look on that state of affairs without being horrified and disgusted. Madame Oilier has now been cleared of the serious imputation of subversion that was made against her.

Mr Mullens:

– She has not.


– I ask the honorable member not to say that, because I do not think that he is a person who is intentionally unkind. Madame Oilier has been cleared of the major charge. The only charge remaining against her is one of neglect, in that she did not report on Petrov. In that connexion, it is possible that she might have thought that this man who was importuning every one ought to be treated as being beneath contempt. I do not know. But the case of Madame Oilier is scandalous and it is a complete disgrace that it was heard in camera, and worse than that, the proceedings published without her case having been put. The evidence was broadcast throughout the world, although she had not been heard in her own defence. Of the enormity of this the commissioners are apparently unconscious. It is a disgrace to British justice, and could never have occurred in the United Kingdom or any other part of the British Commonwealth.

As I have said, the circumstances leading up to this inquiry are sufficient to cast the gravest suspicion upon the whole episode. The procedures adopted by the commission and the handling of the witnesses were most unsatisfactory. But it is when critical examination of the documents is made that the most desperate wickedness of the whole Petrov affair becomes fairly evident. In fact, it is not possible even yet to make a full examination of the documents because a lot of them have not seen the light of day. The key ones are buried away still, not having been examined, tested or compared. All the exhibits from A to G should be laid on the table of the House. I demand that this be done. The Moscow series are in Russian; we should see these original documents. I have asked to see these documents, and have been refused the right to see them. Why should the Parliament be ignored? The Prime Minister has said that the Parliament should not see more than the royal commissioners were prepared to reveal. I agree with that on one point. It is true that a secret annexure has been included for the information of the Executive Government and of the Governor-General only. I do not think that that procedure was right, but I can understand that it might be excusable on security grounds. But the Parliament must see the other documents which have been interpreted. One of the greatest handwriting experts in this country who has served in Commonwealth and State courts for twenty or 30 years is of the opinion that one of these G documents was not a Sadovnikov document.

Mr Mullens:

– What is his name?


– I have mentioned it.

Mr Mullens:

– Monticone?


– Has the honorable member something against him, too ? Surely the honorable member is not serious ! I think that, at heart, the honorable member does not have anything against the gentleman to whom 1 have referred. He has not examined the matter, Dr. Monticone is recognized in all the courts as perhaps the most able and prominent man in that particular field. I say that the documents must be made available to all honorable members.

Honorable members interjecting,

The DEPUTY i SPEAKER. - Order ! The House is getting out of hand.


– I cannot go through all these documents. I have given only one or two illustrations. But there is one document in particular that I must mention in another connexion. The date on one of the alleged Sadovnikov documents is the 10th November, 194.9. It contains the names of a number of Australians. The names of some members of Parliament and public figures are set out with some descriptions of them. There are statements in that document which are completely untrue as at that date. The age of one man is given. Age seems to be completely irrelevant. Why would they want to know his age? But the man’s age was wrongly stated by seven or eight years, and that seems to me as if those particulars have been derived in some way from Bialoguski from security documents of ten or eleven years’ standing. That would be the natural inference if one looks at the surrounding circumstances. Here is a case which is of special significance. It is a description, contained in the alleged Sadovnikov document, of an Australian who is said to be aged “ about 40 years “, and a “ former “ member of Parliament. In this case, there is a double error. The person in question was not a “ former “ member of Parliament; but at the alleged date of the alleged Russian letter he was a sitting member of Parliament. That is rather a different thing, as honorable members know particularly well. Only afterwards was he defeated as a candidate for Parliament. At the time of the alleged letter his correct age was not “ about 40 “, but about 36. In other words, the reference in the alleged Russian letter of Sadovnikov would have been true of this person, not in November, 1949, the alleged date of the alleged letter, but in 1953. In other words, this letter predicts what is going to happen to this man’s parliamentary career. That is what happened in the famous Dreyfus case. There was a clue. After all, he must be a good forger who is guiltless of any error of fact. A prediction, in a letter, of what will happen in the future is generally regarded as stamping that letter as a forgery or fabrication. I give that illustration. Others can be given, but I think that is a striking one.

Now I want to come to the M.V.D. letters of 1952. The bulk of these letters were written between January and December of 1952. On the night of his defection Richards asked Petrov in relation to these letters, “ Are you an M.V.D. man? “ Petrov answered, “ Yes. They came from the M.V.D. Moscow and I was the M.V.D. resident in Australia and received them in that capacity”. Documents A to E contain 200, 300 or 400 references to the M.V.D., stating or implying that Petrov was an M.V.D. Officer and that the M.V.D. in Moscow was sending him the letters. What are the facts? That was the way in which the case was opened, but when the Petrovs were called upon to give that evidence on oath, they would not swear to it. The fact is that these M.V.D. letters of 1952 are not M.V.D. letters at all. I am not basing that statement on any inference, but on the sworn evidence of the two Petrovs when they were pressed. Neither of them had anything to do with the M.V.D. during any part of 1952. On their own sworn statements, made after some prevarication, they could not have become members of the M.V.D. before April or May, 1953, when the letters were finished. Yet the whole case for the authenticity of the Moscow letters of 1952 is that M.V.D. Moscow sent them all to Petrov as the Acting Chief Resident of the M.V.D. in Australia throughout the year 1952. That is of vital importance, and in his sworn evidence, this is what Petrov said -

In one envelope are a group of photostats. These photostats were printed from negatives sent to me from the M.V.D. head-quarters, Moscow, U.S.S.R. I printed and developed them myself. They were sent to me personally, by courier with diplomatic mail. They were sent to me because I was the Chief M.V.D. representative in Australia. Except for my wife, no one else has knowledge of them. My wile knew of them because M.V.D. Moscow arranged for her to receive them here - she was a cipher clerk at the Embassy for M.V.D. Section.

That is what Petrov said in his written statement, which was prepared by Richards. Richards thought he was with M.V.D. While they were pressurizing Petrov, he found out that they thought he was an M.V.D. officer at this particular time and he did not mind them thinking it. When he came to give evidence on oath, he said the reverse, as I shall show. If his assurances as to the alleged M.V.D. letters from Moscow are false, it is obvious that the 1952 letters are utter shams intended to bluff and deceive the people who were over-eager for him to assume a false role - the role of a 1952 M.V.D. officer. He could not discharge it in 1952 because he then had no connexion with the M.V.D. That appears over and over again in the evidence and is brought out by Mr. Windeyer, after all the evidence has settled down. Petrov was not an M.V.D. servant, according to his own statement, until after March, 1952, when the M.G.B., which is another organization, run differently - a different department of governments - and the M.V.D. were merged. I quote further from the evidence -

Mr. Windeyer. ; The service in which you served was known to you as the N.K.V.D. from 1934 to about 1943?- Yes.

And the N.K.G.B. from 1943 to 1946?- Yea.

The N.K.G.B. is a different department again. I quote further -

And the M.G.B. from 1946 to “arch, 1953? - Yes.

He had no connexion with M.V.D., which is simply the Russian name for the Ministry of Internal Affairs, until March, 1953. Therefore, apart from every other consideration in the case, all the documents of 1952 are clear fabrications.

I hope that honorable members follow what I am saying because one has to read letter after letter. The instructions say, “ The M.V.D. this year must be careful . . . The counter-intelligence is doing very well . . . Mr. Richards and his people are so difficult, therefore the M.V.D. this year “- 1952- “ must be bold and show initiative”. They are told to do all these things. They were phoney letters because they could not be true. Petrov had nothing to do with that organization in 1952, and it had nothing to do with Australia in that year. What happened after March, 1953, is irrelevant: All the letters are 1952 letters. The sworn evidence of Petrov, showing that he lied to Richards when he handed him the documents, is conclusive evidence against them. What sort of inquiry is it when that evidence is not brutally pointed out, but, in fact, is kept back? If one looks carefully one finds little references to it. I have stated the facts. I challenge any one to prove that what I have said is in any way inaccurate on that point. If it is not, the consequences are devastating.

I wish to refer now to a point that 1 thought would have been obvious to all, on the genuineness of the letters. This M.V.D. organization, or whatever it is called, is supposed to be ruthless, centralized and efficient. Over and over again it gave instructions to Petrov. There is no dearth of instructions in these documents. Let us assume for a moment that there is no doubt about their authenticity. It is very difficult to find any case where instructions given to Petrov were carried out. He is told to do something. He simply treats the instruction as though he had never received it, and I think that is the answer. He did not carry out any instructions because there were no instructions to carry out, and if a man is going to fabricate documents, including instructions, he is in difficulty when he is faced, after the event, with the necessity of showing that he carried them out. I will give one illustration. He was asked to consult certain people. He had to look up a telephone book. What did he do? He did nothing except write a few answers to questions. The House has been very generous in listening to me. hut the importance of this is obvious. Here is another illustration. I shall quote again from the transcript Petrov’s answers to questions - (Interpreted) You notice the paragraph recommends that you should personally undertake the study of S. (Interpreted) Yes, that was so, but. T was unable to visit him or make contact with him.

His answers were given in a sing-song way- (Interpreted) Did you try? (Interpreted) I had his address but I was just unable to visit him. (Interpreted) Why? (Interpreted) Well, there were various reasons. When you come here you have an awful lot to do, and I just had not the time.

This was his answer to the ruthless M.V.D., which was supposed to give him the power of life and death over Lifanov and Generalov. The evidence continues - The Chairman. - (Interpreted) When you come to Sydney - is that what you mean when you say “ When you come here ?” - “(Interpreted) The thing is that when I came to Sydney I was given various tasks to do by the Ambassador sometimes and those tasks were limited as to time, they had to be done within a certain time, so 1 had not the possibility of doing them all.

He must obey the Ambassador because he is the third secretary, but not the “M.V.D. !

Mr. Windeyer. (Interpreted) You have told us that you could come to Sydney on M.V.D. duties whenever you wanted to - couldn’t you, after Pakhomov had gone? - (Interpreted) Tes, I certainly had th’.’ right, but these visits were always tied up with various Embassy matters. (Interpreted) S. you knew lived al Drummoyne ? - (Interpreted) - Yes, I knew, because the task had been assigned to me and I knew bis address. (Interpreted) Did you write down his address ? - (Interpreted) Yes, I wrote it down. (Interpreted) Where did you write it down ? - (Interpreted) Possibly in my diary. (Interpreted) You had his address, then, when yon came to Sydney? - Yes. (Interpreted) So von remember getting this letter and you made a note of his address; is that so? - (Interpreter) Yes, T remember.

Then he is asked this question by Mr. “Windeyer - (Interpreted) So the position ir that you got the letter, you had the instructions, but you actually did not do anything about it; is that so? - Yos, that is so.

That happened in almost every case. It became something of a public joke, as well as a public scandal. The students of the Canberra University College had a little skit on it, which sum3 up all these cases. It was as follows: -

Scene 7. Royal Commission.

Three judges sitting at table facing audience. Petrov in witness box, Counsel it Bar table.

Counsel. - Can you tell us about a man called I Ivanawffulkoff ?

Petrov. - Yes, I know Ivanawfulkoff. He was a spy. He was a member of the M.K.V.D. He wrote me a letter from Moscow. He asked me to make contact with Mr. Smith.

Counsel. - Did you make contact with Mr. Smith, Mr. Petrov y

Petrov. - -No I was too busy.

Counsel.- Mr. Petrov, six months ago you told us about Ivanawfulkoff. Three months ago you told us about Olga Orloff. I understand you now have some important evidence.

Petrov. - Yes, .1. have some very important evidence. 1 would like to tell you about Vladimir Bumpemoff. He was the head nian in the N.K.V.D. He wrote me a personal letter. He asked me to make contact with Mr. Brown. He said Mr. Brown would be very important in our work.

Counsel. - Did you make contact with Mr. Brown, Mr. Petrov?

Pet-rot:. - -No, I was too busy.

Mr Keon:

– What has this got to do with Petrov ?


– It has a great deal to do with it. The honorable member was out of the chamber and would not know. He must seek the help of those who extended me the courtesy of remaining -

Counsel. - Did you do anything in Australia, Mr. Petrov?

Petrov.. - Ob yes, I did something in Australia.

Counsel. - What did vcm do in Australia, Mr. Petrov y

Petrov. - I collected f5.000

That is about all he did do. This all relates to the genuineness of the documents. Did he get instructions from Moscow - from this sinister and centralized force that was so unyielding in its discipline, and so determined to put people in their places that, according to Bialoguski, at a frown from Petrov, Lifanov and Generalov would have been dismissed, and all the officials in the Soviet Embassy down-graded? Nothing of the kind happened. The evidence shows failure to observe instructions. There are only two alternatives. Either he disobeyed the instructions, in which case one presumes that this centralized body would have dealt with him, and recalled him. There is no evidence of thar. The other alternative is that he never got them, and this is the more logical explanation in view of the other matters that I have mentioned. I have in mind the fact that he was not in the M.V.D. and that they were M.V.D. letters. There is also the fact that the internal evidence shows information that could not be Moscow information, in many respects, but which comes, in all probability, from an Aus-; tralian source. There is also, of course, the other evidence to which I have referred. I have also referred to the code names. I shall not develop that matter. I think that it has never been properly examined. The fact that there are two different code words to describe the one thing shows, perhaps, that there were two different minds operating on the translations, or perhaps bringing the letters into existence.

The fact is, as I have implied, that we must look at the part played by the intelligence and security organizations in this affair. Even if one were to assume that the Prime Minister had no knowledge until a few days before the defection, as he said, the Government is open to the most severe criticism for permitting intelligence organizations to pursue political ends. I refer to the statement of Dr. Burton after the tabling of the report, in which he pointed out the struggle that had been going on between the Department of Defence and the Department of External Affairs for the initiative in shaping foreign policy in this country. He referred to Sir Frederick Sneddon’s position in the matter. There was a feeling that the Department of External Affairs was taking too much initiative in carrying out the objectives of the United Nations, a policy which, of course, might very well be frowned upon by the Department of Defence.

All those things are behind this matter. I have not time to develop that aspect to-night, but it is extremely important. Dr. Burton’s statement will be available. I have some copies of it and I think it should be studied. I ask honorable members to call to mind the scene in this House when the Treasurer of this Government (Sir Arthur Fadden) came into the chamber, supported by the VicePresident of the Executive Council (Sir Eric Harrison) and the Speaker of the House (Mr. Archie Cameron) and produced to the House part of a Cabinet document of the United Kingdom Government, suggesting that atomic secrets could be safely kept only in the United States of America - not in England and not in Australia. That is very important. Mr. Chifley said that the document was either stolen or forged. It is quite possible that there is another explanation - that the document was planted. The Treasurer did not give an explanation. When he was asked by security officers he pleaded that a breach of privilege had been committed. It may have been technically a breach of privilege, but one would have thought that he would have told the facts. He never did so. At that time a struggle was going on with military intelligence, which had been deprived of the terrific power that it had in war-time of internment of civilians. When I became Attorney-General in 1942 I found that 7,000 people had been interned in this country by military intelligence. Thousands of those people should not have been interned. Mr. Curtin, together with Mr. Mackay, who was the civilian security director at that time, and I appointed the then Deputy Leader of the Opposition, now VicePresident of the Executive Council (Sir Eric Harrison), to a committee to go through those cases, and after exhaustive inquiries extending over a period of twelve months the number of cases was reduced to 700.


– Does the honorable member recall what he did to the Australia First movement?


– Yes, and I remember the Australia First movement in Western Australia, where Richards was chief organizer of the prosecution, and he had his agents provocateurs in that affair, too. I was thanked by the present Prime Minister for my action in that matter, and even by the present Vice-President of the Executive Council, at a time when he had some decencies and knew the right thing.

Those are background matters, and I cannot possibly deal with them at length, but I ask that they be studied. The hatred and jealousy of the new Department of External Affairs, which was built up from nothing, has reached such a degrading level that there is an attack on the administration of two men. I do not intend to mention their names. I do not believe that either was guilty, hut there was suspicion of them. Dr. Burton took drastic action to clear up the matter-

The three secretaries of the Department of External Affairs who were involved were Colonel Hodgson, Mr. Dunk, the present chairman of the Public Service Board, and, for a few months, Dr. John Burton. Why were those gentlemen not brought before the royal commission and questioned? They are the ones who were responsible for the original employment of the two men named in the report. Of course, the responsibility lies with the permanent heads, to act on the information they receive. I feel that this has been, in some respects, a deliberate and malevolent attempt to injure the reputation of the Labour party, which established the Australian Security Intelligence Organization, and because military intelligence did not like a judge being appointed as head of that organization it has never forgiven those responsible for it. They include, of course, Senator McKenna, Mr. Chifley as Prime Minister, and myself. We were responsible for everything necessary for the security of this country, and action was taken of a most proper and drastic character.

That is an illustration of the viciousness and wickedness of this matter, and it must be cleared up. And it will be cleared up. I shall not allow innocent men to be degraded by royal commissions. A court of law would tear some of these decisions up, because they are not supported by any legal evidence. The commissioners say that they acted on hearsay, because I said something in a certain case. That decision has been completely misunderstood. It was quite a wrong legal interpretation.

There is a threat in this matter to the freedom of the people. That threat is evident in the whole Petrov episode. Mr. Chifley was alive to it. We fought it in 1951 at the time of the anti-Communist referendum. The same threats were made even on that occasion.

Mr Mullens:

Mr. Mullens interjecting,


– I think the honorable member for Gellibrand (Mr. Mullens) was with us then. He may not have been ; I do not remember. McCarthyism is evident in this matter. Consider the case of the cross-examination of one of the young men from the Department of External Affairs. It was most disgraceful. His mother is one of the greatest authoresses in the world, and his father the winner of a Victoria Cross. This young man was charged with guilty association - a son associating with his mother, and the son not a Communist.

Mr Mullens:

– Not true !


– I do not like to mention names, as the honorable member for Gellibrand does. This young man is not ashamed of his name. I am merely saying that that is the situation. We must be careful with a security service. A security service must be limited to its proper field, which is protection against subversion or sabotage. Do not let the security service become a collector of nonconformists or radicals, or Communists, or left-wing adherents, or people who believe in peace. “ Peace “ is a dangerous word, according to Richards and Spry. There is nothing against half the people mentioned in these documents, except that they advocate some form of peaceful cooperation with Russia.

Mr Mullens:

– Tell us about O’sullivan.


– He is one of you; you gave evidence for him. You went down to help him. When I attacked him you defended him. I suppose that you thought, “ If you are going to attack him you are quite mistaken “.

Mp._ DEPUTY SPEAKER.- Order ! The right honorable member must address the Chair.


– I say that the whole matter involves a threat to freedom, and I believe that we can resist the attacks on freedom. There must be a unity of the people not to be deterred from pursuing peaceful relationships with other countries. That is the spirit of to-day. The Government does not know it yet, but it will, get to know it. That does not exclude Russia; it includes Russia and China. Secondly, and equally important, we must beware of setting up a security organization which has political views, and which regards the left-wing man at the union meeting, who says something, perhaps boisterously and perhaps wrongly, and who goes too far to the left, as being a criminal. An example of that was seen at the University of Sydney recently, when security officers went there to ask a lecturer to inform against his fellow lecturers and students. The same thing occurs in relation to trade unions, broadcasting stations and the press. We must prevent any attempt to set up an espionage system for spying on our own people. In the long run the country is more secure and safer for free people if we have a properly functioning security system. The security service was never intended to be a secret police organization. It was supposed to advise Commonwealth departments, but now it wants to run the police of Canberra and everything else, and it is only kept from doing so by public opinion.

I thank the House for its great patience in listening to me. This is a complicated matter, and if I had been in a court of justice or before a commission it would probably have taken me twelve days to finish my remarks.


-Order ! The right honorable member’s time has expired.

Mr. OSBORNE (Evans) [10.0”.- In the proceedings before this royal commission, the word “ farrago “ was used by learned counsel in connexion with some document or other. The first recorded use of this word in political affairs that I can recall was by Lord Randolph Churchill when he castigated his opponent’s politics as a farrago of nonsense. To-night we have heard another farrago of nonsense, a farrago of pathetic, defensive nonsense of a man desperately trying to avoid the consequences of a judicial inquiry. At the last minute not before the commission but before the House, are thrown in sensational disclosures - correspondence with the Russian Foreign Office, with the Russian Government, which is said to disown Petrov. Is anybody surprised at that? What does the Leader of the Opposition (Dr. Evatt) expect them to say? This House remembers how the Russian officials in Canberra, before they left, charged Petrov with half the crimes in the calendar as soon as he came over to us. Then there are personal charges against the Prime Minister (Mr. Menzies). The House and the people have judged, and will judge again between these two men, and the judgment of the House and the people has been, and will be very heavily against the inventor of these conspiracies.

Then there is the electioneering charge. The Leader of the Opposition says that Petrov was kept in cold storage and produced a. fortnight before the last election. Does the House recall that, in his preliminary remarks, counsel appearing to assist the commission, on the first day of its hearing, and before the election, said that among the in-the-dark informers recorded in the documents to be submitted to the commission were members from both sides of the Parliament? Does the House recall that? From that moment, any political influence that the Petrov Commission could have had for that election was utterly destroyed. Thos-‘ assisting the commission handled this, for political purposes, antiseptically.

I .cannot traverse a two-hour speech in twenty minutes, but I propose to put two things into the balance. On the one hand, I put the commission, the three judges - Mr. Justice Owen, Mr. Justice Philp and Mr. Justice Ligertwood, none of whom has had anything to do with politics except that one of them sat on a highly political royal commission once, which I understand - it was before my time - exonerated one of the colleagues of the Leader of the Opposition from certain charges that had been made against him.

Mr Menzies:

– He was appointed by the Leader of the Opposition in his ministerial capacity at that time.


– I thank you sir, for that information. There is no possibility of suggesting political bias against the three members of the commission. We have them on one side of the scales. On the other side of the scales we have the Leader of the Opposition and a whole array of Communists, functionaries like Clayton, journalists like Chiplin, “ fellow travellers “ like O’sullivan, suborned public servants like Rose and now Mr. Molotov thrown in for good measure. The balance, in the view of all reasonable men, will be on the side of the commission.

Reinforcing it is the interim report of the commission. Does the House recall that those charges of conspiracy were put up before the commission itself? The commission treated them with the utmost seriousness, examined them, deliberated upon them and brought out an interim report about them. This is what paragraph 36 of appendix No. 2 of that interim report states -

Apparently, in these circumstances, Dr. Evatt conceived the theory that he and the political party which he leads had been made the victims of a political conspiracy and he proceeded to cross-examine the witnesses before us with that in mind. After the withdrawal of his permission to appear, his juniors continued in the same line.

Paragraph 37 says -

Charge followed charge with bewildering variations. Suggestions were made of blackmail, forgery, uttering, fabrication, fraud and conspiracy and - upon the repeated assurances of Dr. Evatt that his examination of witnesses was directed to these matters and would prove them - we felt constrained to permit him great latitude in his questioning. This we felt bound to do, since an exhaustive inquiry by us into the authenticity of Exhibit J was part of our duty.

Further on in the report, in paragraph 42, the commission says -

Although, in the result, all the charges turned out to be fantastic and wholly unsupported by any credible evidence, they were grave and necessitated patient judicial inquiry by us.

Those are the same charges that the House has listened to foi- two hours to-night.

This will be a long and detailed debate. It should be about the report, not about some imaginary conspiracies. The Leader of the Opposition is wily and cunning enough to seek to divert the course of the debate away from the true issue in order to avoid the consequences of any judgment that reasonable men must make about the findings contained in the report. Therefore, I feel that I should, at this stage, and at the cost of using up the little time available to me, bring the debate onto the rails by informing the House and the people of what this report contains. The commissioners were kind enough to summarize their general conclusions, and I quote loosely from that summary.

The commissioners found that in April, 1954y Mr. and Mrs. Petrov sought political asylum and that he brought the “Petrov papers” which the commission says are authentic documents; that the Government of the Soviet Union had been using its embassy as a cloak for espionage organizations, and that these organizations consisted of two sorts. They are the G.E.U., the “legal apparatus” concerned with military espionage - the words “ legal apparatus ‘’ merely meaning that they were controlled by a person with diplomatic immunity and not by a person who was subject to the law of the country. The other organization was the M.V.D., a legal apparatus concerned with all espionage other than military espionage. These were controlled by trained M.V.D. espionage officers, assisted by alleged press representatives. The resident or controller of these apparatuses was rigidly controlled himself from the Moscow centre, and assisted with dossiers and information from world-wide sources. The aim was to obtain information useful to the Soviet by inducement or pressure or unwitting in-the-dark disclosures. The commission also found that the Moscow centre kept under close surveillance the many Australians who visited the Soviet Union and other Communist-controlled countries, particularly members of delegations to’ the various “ peace “ and “ youth “ congresses for which the Soviet contributed very large sums of money.

The commission went on to say that the evidence showed that it was only among Communists, among whom the commission included Communist sympathizers, that the M.V.D. could expect to find in Australia willing helpers. The commission said it believed that the Soviet deliberately refrained from using the Australian Communist party for espionage for fear of the consequences of exposure, and that without communism Soviet espionage could have no hope of success in this country. The commission also said that the principal target of the M.V.D. was confidential information in the Department of External Affairs. The reason for this is obvious. It also found that in 1948 Mr. Chifley formed the security service because information in the hands of the Crown gave rise to the suspicion that Australian security was inadequate, particularly in the Department of External Affairs, and that Petrov only knew the bare fact that leakage had occurred between 1945 and 1948. I ask the House to note those years carefully. He knew that “ Klod “ was the code name of the Australian agent involved in this. and the commission found that the documents confirmed what the Government had been told in 1948. It found that “Klod” is Walter Seddon Clayton, a functionary of the Australian Communist party and an active agent of the M.V.D. The inquiry, so the royal commissioners say, disclosed no trace of any significant leakage from the Department of External Affairs since 1949. Again, I ask the House to note that date.

Before and after Petrov arrived in Australia, a most important design of the M.V.D. was to obtain, through Madame Oilier, a French Embassy cipher clerk, French cipher books and details of French cipher technique. In June, 1952, due to international tension, Petrov was instructed to establish an illegal organization in Australia - a fifth column - which could operate if war should destroy the legal apparatus. Petrov’s defection destroyed that design.

That is a summary of the principal general conclusions of the royal commissioners. These are findings of very great importance to the security of Australia. They are important to our relations with other countries and to matters far wider than our own domestic affairs. The House will recall that the disclosures that Petrov has made have thrown light on the disappearance of two British diplomats. These matters are of very wide consequence throughout the world. Yet the Leader of the Opposition to-night chose not to refer to them. He ignored them entirely. He preferred to deal with his chimera of conspiracy. His persistence with this alleged conspiracy has cost him half his party. It is the reason why the corner group sits apart from the remainder of the Opposition. If the right honorable gentleman ever had any devoted followers, he has lost them through this persistence. Why does he persist with his allegations of conspiracy ? Why has he followed this destructive course? My belief is that it is because, when the royal commission began, he did not know what evidence would be brought before it. But he did know that his own past was tainted with association with Communists or at the least with proCommunists and “ fellow travellers “. He had used Communists and been used by them, and he was terrified of the possible consequences. Not knowing what evidence was to come before the royal commission, he was terrified of what might come out. His only course was to attempt to destroy the royal commission, and that he set out to do. Happily, he failed. Having committed himself to that course, and having destroyed his party in the process, he is unable to let it go.

What are the things that have emerged from the findings of the royal commissioners that he had to fear ? As AttorneyGeneral from 1945 to 1949, he knew of the situation in the Department of External Affairs. He knew that he had hoisted his protege, John Burton, into the highest position in the department, and had left him there, and he knew, presumably, of Burton’s indiscretions and his associations with pro-Communists and Communists. It is true that the leader and the protege fell out, or appeared to do so, for the time being.

Mr Keon:

– They were together last night until half-past three.


– If there is any truth in the gossip throughout this building, they are in close consultation from hour to hour, and for all I know, the junior may have written half the speech that the Leader of the Opposition made this evening. What else did the right honorable gentleman know? He knew, presumably, of the cluster of Communist sympathizers in the Post Hostilities Planning Division of the Department of External Affairs and of J. F. Hill, a former Communist, who was given a job in the department in 1945. He knew of Milner’s association with Communists. Milner was head of the Post Hostilities Planning Division of the department in 1945. He is now a lecturer, or something of the sort, in a Communist university behind the iron curtain, where he has been since 1950.

Mr Keon:

– If he is still alive.


– That is, if he still has his head. These are the things that we know the Leader of the Opposition knew must come out, and there are many other things in the same category. Many of the people that I have mentioned are not themselves Communists, but, in the trend of post-war history, at any rate since 1945, there was no possible excuse for the employment, in the confidential work of Australia, and particularly in relation to its diplomatic affairs and its external relations, of any one, whose loyalty could not be relied upon absolutely. In the history of activities since 1945-

Mr Andrews:

– Why only since 1945?


– Let us give him everything we can and put it as late as we can. There has been no excuse since 1945 for employing these innumerable people disclosed by the report to have been in close association with Communists and Communist sympathizers. Those are some of the things that we know the Leader of the Opposition had to fear. He could have continued to appear before the royal commission and could have brought out these facts if he had wanted to do so. It was not necessary for him to be thrown out of the royal commission. He had himself thrown out. He had his right to appear withdrawn, and it is my opinion that he acted deliberately with that intention because he saw that he was doing no good there and thought he would have a better opportunity later in this House. I hope honorable members and the public will have the good sense not to allow him an opportunity in this House or elsewhere that he was not given before the royal commission.

The panic behaviour of the Leader of the Opposition before the royal commission, his subsequent obsession with this imaginary conspiracy to injure him, his total neglect of the welfare of his own party, and his destruction of that party in pursuit of his wild and extravagant schemes - all this is a sad spectacle of the decay of a great mind. The student, scholar, former judge, and political leader has sunk to this pathetic defensive invention. It is a sad spectacle indeed, and it is one that, I confess, fills me still with fear, for so long as the right honorable gentleman remains Leader of the Opposition, he is the alternative Prime Minister of this country. I grant that it is most unlikely that he will ever become Prime Minister, but, however vague, unlikely, or far off that possibility may be, I, like countless other Australians, would sleep better if I knew that the event that is so devoutly hoped for by almost every honorable member who sits behind him had come to pass, and he had been deposed from his leadership of the Opposition.


– It is a well-known fact that the Leader of the Opposition (Dr. Evatt) entered into this debate to-night in the spirit that marked his speech against the wishes and opinions of all the honorable members who sit behind him. After he had been speaking for some time, the glum faces of the men who sit behind him were a very eloquent commentary upon the fact that, to-night, the right honorable gentleman brought the Australian Labour party to the lowest depths to which it has ever descended. To think that he said all those things, and made all those allegations, not in any private or legal capacity, but as the Leader of the Australian Labour party, therefore committed to them all the men who sit behind him! The most eloquent commentary upon the shocking exhibition of the right honorable gentleman this evening was the fact that, at the conclusion of his speech, the Prime Minister (Mr. Menzies) uttered a very hearty “ Hear, hear “. We heard an amazing array of legal technicalities and diversions from the real issue, and saw the right honorable gentleman once again playing hi9 part on behalf of the Australian Communist party and again defending leading Communists in this Parliament, as he has defended them in other places. On this occasion, he even defended Mr. Sharkey and Walter Seddon Clayton, who was proved to the royal commissioners to he the key man in the espionage network that operated in Australia.

The right honorable gentleman defended those people this evening, just as he defended Lockwood on another occasion. He tried to divert attention from the basic facts by a lot of legal talk about the Lynskey report and what should legally have been hearsay evidence in the proceedings before the royal commission. After the right honorable gentleman had thrown in all these diversions, he quoted, in a triumphant voice, the fact that he had received a letter from Mr. Molotov, which he said proved that all the documents handed over by Petrov were complete fabrications. He did not produce the letter. He had a letter from Mr.. Molotov, and that was the end of the whole matter. That aspect is so utterly fantastic that I do not think it calls for any comment. I must say that I was unable to follow the succeeding remarks of the right honorable gentleman, but I gather that he said something about an international commission. He wants an international commission to go into all these matters again.

Mr Beale:

– He wants Russia to be represented on it, too!


– He wants Russia on the commission. I really feel that the most charitable opinion that we can form of the right honorable gentleman is that he is suffering from strain and overwork, and that he is really not responsible for what he says in regard to these matters. He, an ex-justice of the High Court, to my horror and, I am sure, to the disgust of the people of this country, again attacked the three responsible and eminent citizens who comprised the royal commission. He made a most dastardly and unwarranted attack upon their integrity and character. He said that some of the findings of the royal commission were in conflict with the published evidence. He said that there were hundreds of instances of such conflict, but he would cite only one or two by way of illustration. What a serious allegation against three Supreme Court judges from various States of Australia, to say that the findings they made were contrary to the evidence which they had heard! Leaving that matter aside for the moment, here is the real significance of the illustrations that the right honorable gentleman put forward. He said, in effect, “ Let us take one or two instances out of the hundreds that are available to illustrate my point”. What were the instances that he took? He took the case of the man, Walter Seddon Clayton, whose code name was “Klod”, a key man in the Soviet espionage network in this country, an arch-traitor and found to be so by the commission. The right honorable gentleman said that the commission’s conclusions regarding this man were arrived at without any evidence. The reasons why the right honorable gentleman was so interested in the case of Clayton are well worth considering. Let me quote from the report to show why this was one of the cases to which he directed particular attention. The report sets out, at page 119, the following statement by Petrov.- -

The Communist Party here had a group of External Affairs officers who were giving them official information. The members of the group were bringing out copies of official documents, which they gave to a Communist Party member. This Party man gave the documents to Mr. Makarov at the Soviet Embassy. The documents described the Australian foreign policy and also contained a lot of information about American and foreign policy.

Further on in the report the commissioners found - . . that leakages of confidential information from the Department of External Affairs had occurred between 1945 and 194S and that “ Klod “ was the code name of the Australian agent involved.

The dates quoted are significant. The findings of the commissioners continue -

The material before us clearly shows that the suspicions held in 1948 were well founded and that “ Klod “ is Walter Seddon Clayton-

That is the man whom the Leader of the Opposition so zealously defended here tonight who, during the relevant years, was a functionary of the Australian Communist party and an active agent of the M.V.D.

There is the key to one of the persons whom the right honorable gentleman chose to defend, and he disputed the findings of the royal commission regarding that man. It is a very significant fact that during the years mentioned when this Soviet espionage network was really operating, leakages of information, as the commission found, were taking place from the Department of External Affairs. The right honorable gentleman was then Minister for External Affairs, and it was in the department which he was administering that this Communist infiltration took place. It was then that the Communist agents got into the department, and it was from his department that leakages of vital information to the Soviet Embassy took place, not only about Australian affairs, but also about the affairs of our allies. It is a well-known fact - indeed, it is now part of history - that, because of discussions with the United Kingdom Government, because a guided missiles project was being established in this country, because of the grave uneasiness in governmental circles about leakages ot information from the Department of External Affairs, the Prime Minister of the day found it necessary to establish in this country a security service. It is a significant fact that when that service was established here, mainly because of leakages of information from the department administered by the right honorable gentleman, it was placed under the control not of the Attorney-General, which office was also held by the right honorable member for Barton, but of the Prime Minister himself. I suggest that from those facts it is apparent that the Prime Minister, the late Mr. Chifley, was very concerned, and with good reason, about happenings in the Department of External Affairs and those leakages of information, and that he decided that he would administer the security service and see that it did its job. He did not place it under the control of the man who would be expected to be in charge of it, the Attorney-General of the day.

Equally significant, I suggest, was the other example given by the right honorable member for Barton in his very feeble and ineffectual attempt to show that the findings of the royal commissioners were not based upon evidence. There are several very interesting findings about the nature of communism, and about the fact that all the people who were engaged in espionage and handing over information to the Soviet Embassy were associated with the Communist party, were Communists, or pretended to be exCommunists, or under-cover Communists. I should like to refer to a number of very interesting findings of that kind, but my speech is limited to twenty minutes and time will not permit me to do so. All those interesting findings should be debated in detail. After all, the Labour party under the leadership of the right honorable gentleman supported the establishment of the commission, and one would have thought that under those circumstances it would have debated the really important findings of the commission. From all those findings, the right honorable gentleman chose this one, which is of most vital importance to the Communist party. The royal commission found that the Communist party, through Sharkey, the general secretary, received 25,000 dollars as a direct subsidy from Moscow of its work in this country. That finding is proof positive of the fact, which people who understand the workings of communism have known for years, that the Communist party in this country is not just another political party, as some of the followers of the right honorable gentleman try to make people believe. The Communist party in this country is conspiracy. The members of that party receive their finance from another country and they work in the interests of that other country. In this document, very moderately stated, we have a specific finding. It is as follows : -

In the result, we find that the payment was made by the Soviet Government-

The payment referred to was the 25,000 American dollars paid to Sharkey - to the Australian Communist party to recoup it for its expenditure in the campaign to defeat the proposal put to the electors in the 1951 referendum.

That was a finding that the Communist party here received 25,000 dollars from the Soviet Union, and that Mr. Sharkey told a lot of lies when he said he had to go to Moscow to get medical treatment. The Communist party paid £1,000 for his fare there. It is quite clear from the evidence - the right honorable gentleman skipped over it - that Mr. Sharkey went to Moscow to negotiate that 25,000-dollar subsidy from Moscow, and that he succeeded in his mission. I put it to the House that it is very significant that the amount that Mr. Sharkey received from Moscow, at his suggestion, corresponded almost exactly with the amount that the right honorable member for Barton received from Communist sources for payment into Labour party funds at the time of the 1951 referendum campaign. It was suggested in this House that the right honorable gentleman authorized Senator Kennelly to receive the sum of £13,000 from the Communist party for payment into Labour party funds for the referendum campaign. A couple of years later, we find that Mr. Sharkey went to Moscow and that he got 25,000 dollars, almost an identical amount, to reimburse the Communist party for its out-of-pocket expenses. That is a matter of significance. The significance of it will not be lost on the Australian people.

It is also significant that the officials of the Communist party said that they had no books of account, no banking accounts and no records of membership. When they said that, they were lying deliberately, because they did not want any evidence or proof to be available of the fact that they were subsidized by another country. There is a parallel case. When the matter of the £13,000 was raised in this House, the right honorable member for Barton adopted exactly the attitude that the Communists had adopted. He said that he would not produce his books or allow them to be examined in connexion with the allegation that he had authorized the acceptance of £13,000 from Communist sources.

There is another matter to which I should like to refer. It is the remarkable procedure whereby the right honorable gentleman gets back to his old story that the Petrov commission was an election stunt and that the Prime Minister brought the matter forward on the eve of an election in order to try to defeat the Labour party. The only comment I shall make on that suggestion is that if this thing was a conspiracy and was brought forward on the eve of an election as a conspiracy, it was a most ineffective conspiracy, of which very poor use indeed was made. The right honorable gentleman made a point of some alleged discrepancies - whether the Prime Minister said that he first knew of the Petrov business on this day, on the previous Tuesday or on some other day. He pretended that he was quite ignorant of the allegations that had been made about members of his staff and about Communist infiltration of the Department of External Affairs while he was the head of that department. But it is a wellknown fact that the right honorable gentleman had been warned by a member of his own party, the honorable mem ber for Fremantle (Mr. Beazley), who had told many members of the Opposition about those allegations months before I had ever heard of Petrov. In the latter part of 1953, the honorable member for Fremantle told me and other members of the Opposition that there were members of the staff of the right honorable member for Barton who were in touch with the Soviet embassy and in league with Communists here in Canberra. He told us that the staff of the right honorable gentleman was infiltrated by Communists and that the Department of External Affairs had been infiltrated by Communists during the period that he was there.

The honorable member for Fremantle was very disturbed and upset about those matters. He decided that they were of such grave importance that they transcended party interests and party politics. He told me and other members of the party that he had decided to see the Prime Minister and tell him about these startling matters, because he thought they menaced the security of this country. The honorable member for Burke (Mr. Peters) pretended that he was upset about them at that time. He was constantly making attacks on the right honorable member for Barton then; but now, in order to try to hang on to his seat, he is prepared cravenly to sit behind the man whom he bitterly attacked in those days. Practically all the members of the Opposition knew in 1953, months and months before Petrov was ever heard of, about these allegations against Fergan O’sullivan, Grundeman and others. They knew the story that the honorable member for Fremantle had been talking about.

Ultimately, the right honorable member for Barton himself found out about the story. He was pressed by members of his own party - the honorable member for Burke was one of them - who said, “ Most serious allegations are being made against the leader of this party, and we shall have to have a discussion about them in caucus “. But the right honorable member for Barton said, using a well-known Australian adjective that starts with a “ b “ and has six letters, “ I won’t b- well allow it to be raised in caucus “. He did not allow it to be raised in caucus. He refused to allow these serious and startling allegations to be discussed by caucus. I ask the honorable members who are sitting behind the right honorable member for Barton : Why at that stage was the Tight honorable gentleman afraid to allow these matters to be raised? Why did he evade the issue then ? Why did he refuse to allow those matters to be fully discussed? He was a guilty man. That was why he would not allow them to be discussed. He had a guilty conscience. He was afaid that, if those matters were discussed, the £13,000 received from the Communist party and the infiltration of the Department of Externa] Affairs while he was there would come out.


– Order The honorable member’s time has expired.

Debate Con motion by Mr. Menzies) adjourned.

House adjourned at 10.38

page 1725


The following answers to questions were circulated: -


Bank of . New South Wales.

Telephone Services

Mr Coutts:

s asked the PostmasterGeneral, upon notice -

In view of the Prime Minister’s statement that imports by Commonwealth departments would be limited this year to £40.000,000 instead of the £59,000,000 asked for and that a reduction of £10.000,000 would be made in the Commonwealth capital works programme, and the Postmaster-General’s statement that 1 30,000 applications for new telephone services are being made each year and only 70.000 services supplied, will the Postmaster-General state whether these reductions will affect the telephone section of his department thereby causing even greater delay in supplying the telephone services asked for by the Australian people?

Mr Anthony:

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

The capital works programme of the Post Office for the current financial year, in common with those of other departments, is being reduced in conformity with the Government’s decision to restrict Commonwealth works and because of the need for lessening the amount of imported materials in view of the balance of payment difficulties. These measures will inevitably influence the progress in meeting public demands for communication facilities, but I am not in a position to state in detail to what extent the connexion of new telephone services will be affected. I can assure the honorable member, however, that the department will take all steps within its power to make the best use of the resources ma<le available to provide services for which it is responsible.

Commonwealth Shipping Line

Mr Duthie:

e asked the Minister representing the Minister for Shipping and Transport, upon notice - la it a fact that providing certain conditions, which lie recently stated, are fulfilled, the Government will dispose of the Commonwealthowned fleet to private shipping companies?

Mr Townley:

– The Minister for Shipping and Transport has furnished the following reply : -

The policy of the Government in regard to the future of the Commonwealth ships has remained constant, namely that the Government is not prepared to consider the disposal of the fleet unless certain conditions, designed to ensure the provision of adequate services on the coast and the maintenance of the shipbuilding industry, are fulfilled.

Cite as: Australia, House of Representatives, Debates, 19 October 1955, viewed 22 October 2017, <>.