House of Representatives
25 March 1958

22nd Parliament · 3rd Session

Mr. SPEAKER (Hon. John McLeay) took the chair at 2.30 p.m., and read prayers.

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– I ask the Prime Minister whether he is aware that since the establishment of the Commonwealth Serum Laboratories the hours of duty for all employees have been 36f a week. This is the working week observed in most Commonwealth government departments. Is the right honorable gentleman also aware that recruitment pamphlets featured the 36£ hours week as an attraction for prospective employees, and that as a result of this inducement many people applied and were accepted for service in the serum laboratories and in other government departments? Is he aware of a proposal to extend the working hours to 40 a week and at the same time create a class distinction by exempting professional officers from the extended hours? Does he consider that the extension of the working week, together with the introduction of mechanical devices, will cause a reduction of staff, thereby increasing the ranks of the unemployed? If he is not aware of the facts which I have mentioned, will he take action to prevent this proposal from being put into effect?

Prime Minister · KOOYONG, VICTORIA · LP

– I confess that I am not aware of the matters mentioned by the honorable member, but, as I gather that they refer to the Commonwealth Serum Laboratories, I will take an immediate opportunity of discussing the matter with the Minister for Health.

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– Is the Prime Minister in a position to say whether there will be an opportunity this session to discuss the subject of matrimonial causes legislation?


– I am glad that this matter has been raised by the honorable member. The House will recall that a private member’s measure was introduced by the honorable member for Balaclava. It represented a great deal of very expert knowledge and constant labour on his part. It was discussed up to the second ‘ -reading stage in this House. The Government has given consideration to this matter and has concluded that a matrimonial causes measure of a comprehensive kind ought to be brought forward by the Government itself. That is not to say that the Government disregards the work done by the honorable member. On the contrary, he deserves enormous credit for the originating labour he has put into this matter. In the preparation of the draft of the Government measure, the law authorities have been greatly assisted by him. But we feel, as I am sure he feels, that in order that this matter may be dealt with comprehensively and with as much expedition as possible, it should be the subject of a Government measure. What we have in mind is this: The bill is not quite ready for presentation. When it is ready, the second reading will be moved with a full explanatory speech by myself in this House. It will be necessary to have a lot of close discussions with State authorities because there are very large administrative problems, including some financial problems, that have to be worked out with the States, so that we will avoid duplication and secure the greatest possible efficiency and the least possible disturbance. After the moving of the second reading and the explanation of the measure, we will at once proceed with these discussions. I might add that, as the question of divorce closely touches the individual conscience of members, we propose that, though it will be a Government measure, it shall not be treated as a party measure. Therefore, honorable members will be in a position to discuss it according to their own lights and views.

Dr Evatt:

– And vote independently?


– And vote in the same way. We also propose that when our discussions with the States have ended, as I hope they will, satisfactorily, ample time should be given for debate, particularly in committee, of so important a measure so that not only will those members of the public interested in this matter have an opportunity of studying the bill, but honorable members themselves will have an adequate opportunity of expressing their own views. I hope, indeed, that this proposal commends itself to the honorable member for Balaclava because he is the true inventor of this legislative scheme, and the Government is vastly indebted to him.


– Arising out of the Prime Minister’s statement, I would draw his attention to the fact that when the bill was being debated previously it was suggested on this side of the House that persons in public positions, or important positions, who wished to express their views on this vital matter to the Parliament should be given an opportunity to do so. As the Government is to consult the State governments on this matter, I ask the Prime Minister whether the opportunity will be taken, if feasible, to consult members of the community such as church representatives.


– The time-table that I indicated, I think, will give ample opportunity for the presentation of views. If it appears desirable to put that in any more formal way, I certainly do not close my mind to it.

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– I understand that, by a recent decision, more assistance is to be given to residents in country areas in the erection and maintenance of privatelyowned telephone lines. Will the PostmasterGeneral give details of these reviewed conditions to the House and indicate when these proposals will come into effect?

Postmaster-General · DAWSON, QUEENSLAND · CP

– It is correct that I recently announced a more generous plan for the installation and maintenance of telephone services in country districts. May I point out that, early in the history of this Government, more liberal conditions for the provision of telephone services in country districts were determined. It will be remembered that my predecessor in office was very keen about this matter for many years and that, immediately he took over the portfolio of Postmaster-General, he carried out what he had been canvassing in this House for many years while in Opposition. The result was that the departmental conditions for the provision of services in country areas were considerably extended. That has resulted in many applicants for country telephone services being able to obtain the services at a much reduced cost. There remain however, a large number of country services which involve the erection and maintenance of a considerable length of line by the subscribers themselves. It is not possible, at this juncture, to extend further the pro visions relating to departmental expenditure, but it has been decided that we can help a good deal with advice and work in connexion with the maintenance of the lines. Consequently, it is now provided that departmental officials will discuss with the intending subscribers matters relating to the initial installation of lines, particularly the best route to be followed, the materials to be used and the standard of construction. The expectation is that not only will the subscribers get good service, but also general and trunk line services will be improved without any cost to the intending subscribers. It was provided previously that when a new service was installed, involving the erection of a certain amount of line by the subscribers themselves, there must be an inspection of the line by the department, the total cost of the inspection being borne by the subscribers. A token charge will still be made in this connexion, but it will be confined to a maximum of £2. Also, telephones will be installed by the department without charge to the subscribers. Previously, a charge was made consistent with the amount of time spent on the job.

That answer, I think, covers the initial installation. However, maintenance is a very big problem, not only in respect of new services, but also in respect of services that have been provided over a great number of years, the maintenance of which is now becoming heavy. So the department has proposed that there will be an inspection from time to time by departmental officers of the private sections of the line. At present, responsibility for the inspection rests on the subscribers, but lines will henceforth be inspected free of cost. Also, when a fault is reported, the department will be prepared to assist, not only with the determination of the nature of the fault, but also with the service rectification of it, without any cost to the subscriber.

Finally, it is felt that it would be of advantage to subscribers and the department to have in country areas a nucleus of men who know something about departmental construction and maintenance. Therefore, if any country organizations desire to have people trained in elementary maintenance of telephone lines the department will be very pleased, indeed, to train them without cost.

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– The question that 1 now direct to the Minister for Health arises from an answer that the Minister gave to a question asked last week by the honorable member for Swan regarding the shortage of Salk anti-poliomyelitis vaccine. Is the Minister satisfied that all possible attempts have been made to overcome the difficulties which he outlined in his answer to the honorable member for Swan? When is it expected that the shortage of Salk vaccine will end?


– The honorable gentleman will be glad to know that not only are all possible attempts to resume the supply of Salk vaccine being made, but also they have been successful, and that the supply will be resumed in a few days.

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– Can the Minister for Social Services say whether there has been any recent variation in the amount of unemployment benefit paid by the Department of Social Services?

Minister for Social Services · RIVERINA, NEW SOUTH WALES · CP

– The honorable member will appreciate that the general question of employment and unemployment is the responsibility of my friend and colleague, the Minister for Labour and National Service. The honorable member has referred to the payment of unemployment benefit. He knows, of course, that, after eligibility has been established, the Department of Social Services pays the unemployment benefit to the person entitled to receive it. I speak from recollection when I say, for the information of the honorable member, that, on 1st February of this year, unemployment benefit was being paid to some 29,800 people. Since that time, there has been a progressive decrease, week by week, and month by month, until, as indicated by the latest figure that I have received to date, the benefit is being paid to some 26,600 persons - I speak from memory.

The honorable member for Gwydir will know - no one knows it better - that New South Wales has just experienced one of the driest periods in its history, as a result of which there has been a disastrously poor harvest. Similar conditions applied in Queensland. The honor able member will also know that employment cannot remain unaffected when two ot the major States of the Commonwealth suffer from such a drought. As the figures indicate, in the last few weeks, there has been a progressive decrease, week by week, in the number of people receiving unemployment benefit.

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– I direct a question to the Minister for Immigration. First, I should like to take this opportunity to congratulate the Minister on his appointment. I sincerely wish him every success until the next elections. I should like to congratulate the Prime Minister, also, on his practical example in decentralization by the selection of a member from South Australia, in preference to one from Sydney or Melbourne, for appointment to the Ministry.


– Order! What is the honorable member’s question?


– Now to my question, Mr. Speaker. Under the immigration scheme introduced so successfully by the present Deputy Leader of the Opposition, when he was Minister for Immigration, how many immigrants, other than British subjects, have entered Australia, and of these, how many have become naturalized? How many are now entitled to become naturalized, but have not yet applied for naturalization papers? I am quite willing to wait until the Minister’s officers have provided him with this information if he does not have it at hand.

Minister for Immigration · ANGAS, SOUTH AUSTRALIA · LP

– I thank my friend, the honorable member for Grey, for his kind words, and I hope that he will remember these generous sentiments as the years unfold, long beyond the next elections. In reply to his question, I can say only that, as I am sure he realizes, the question will have to be placed on the notice-paper. If that is done, I will see that he receives a full reply. The honorable member mentioned the institution of the immigration programme by another of my friends, the present Deputy Leader of the Opposition. I hope that the honorable member for Grey will do his best to infuse into his colleagues a willingness to give to the policy originated by the Deputy Leader of the

Opposition the same sort of support that this Government is enthusiastically giving it. I may say that we hope even to build upon it in the future.

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– I ask the Minister for Defence whether, in view of a statement made by the Minister for External Affairs at, I understand, the recent meeting of the Council of Ministers of the South-East Asia Treaty Organization - a statement that emphasized the importance of Manus Island as a forward Australian base - we can now expect this strategically situated island to be re-developed as a base in the near future.

Minister for Defence · WAKEFIELD, SOUTH AUSTRALIA · LP

– I can assure the honorable member that we have always appreciated the worth of Manus Island as a forward base. Indeed, one of the most disconcerting events in this country was the refusal of an earlier government, at the end of World War II., to accept an offer by the United States of America to maintain the installations that the Americans had established there. As a result, the installations were largely dismantled. Since that time, we have built them up to a certain extent. We are very conscious of the importance of the base at Manus Island, and we will do everything possible to ensure that it is appropriately manned.

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– Is the Minister for Immigration aware of the growing practice in southern cities among male immigrants of southern European origin of abducting young women of marriageable age? Is the Minister aware, further, that proceedings in courts against the offenders invariably collapse because the victims refuse to give evidence? Will the Minister instruct the officers of his department to inform all future immigrants that the practice to which I have referred is not looked upon with favour by the Australian people, and that it is contrary to the Australian way of life?


– I shall certainly cause an inquiry to be made into these alleged offences. On the other hand, I remind the honorable member that practices of this nature are, by the conformity of humanity, not confined merely to southern Europeans. Some old Australians have the same tastes, and they could be readily explained. However, I shall certainly look into the honorable member’s complaint and let him know the result.

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– Can the Minister for Air give the House any information about the progress of the work being done in Malaya by No. 2 Airfield Construction Squadron of the Royal Australian Air Force?

Minister for Air · EVANS, NEW SOUTH WALES · LP

– I am very glad to tell the honorable member that the work of the airfield construction squadron at Butterworth is almost complete. We hope that the squadron will be withdrawn within a few months. The first 6,000 feet of the new air strip, which the squadron has been building for two years, is now available for use and was opened early this month. I had the happy experience of landing in the first operational aircraft to use it. The work has proceeded very quickly. It is less than three years since the Government undertook this responsibility and, as I said, the airfield will be completed within two months. It is a first-class operational airfield and will be a most notable contribution to the defence of south-east Asia.

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– My question is directed to you, Mr. Speaker, and I ask: Has a new regulation governing the conditions of, and payment for, overtime worked by some employees of the Parliament recently been brought into effect? Is this regulation the equivalent of what would be in other industrial spheres a variation of an award? Has it been introduced without any prior consultation with the employees or with representatives of the employees concerned? Has it thus been introduced purely as a decision of the Presiding Officers? Does this mean that the Parliament, which makes laws relating to conciliation and arbitration for the Commonwealth, sets aside the processes of arbitration when dealing with its own employees?


– I shall have a look at the matter raised by the honorable member. After giving it further study, I shall inform him of the position.

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– My question is directed to the Minister for Air. I preface it by asking the Minister to convey to the authorities responsible for the visit to Brisbane last week of aircraft of the United States Air Force the appreciation of the majority of the community for the opportunity afforded to them to see the aircraft, and to assure the authorities that the people of Brisbane were particularly interested in the Hercules aircraft which, we understand, will be bought for the Royal Australian Air Force. The question I now ask is: Has the Minister received any information that complaints were made by a section of the community in Brisbane that these aircraft flew low over the city on Sunday morning? If he has received any report of these complaints, will he inform the House whether the aircraft did or did not observe the normal regulations governing the flight of aircraft over city areas?


– I have heard complaints that the visiting American Air Force aircraft made undue noise over Brisbane, to the inconvenience of the inhabitants of that city, last Sunday morning. The information I have obtained is that the visiting United States airmen were carefully briefed by officers of the Royal Australian Air Force, and that they meticulously observed the requirements laid down. The aircraft were routed outward from Amberley towards the sea, and their route took them over the city of Brisbane. When they flew over the city they were climbing to a considerable height, and did not fly low over the city. The fact is, however, that modern jet aircraft are noisy. It is impossible to eliminate noise when operating these aircraft. This was a considerable force of aircraft, a friendly force from a friendly power, and I very much deprecate any suggestion that it did not observe all the requirements laid down. These requirements were meticulously observed, and I think that complaints about the noise are unreasonable and leave out of account the fact that modern aircraft are noisy.

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– Has the Minister for Territories seen a report of the wretched plight of an aboriginal girl, Ruth Daylight, who was allowed, for an all-too-brief time, to be associated with our community affairs, and who proved in all respects capable of conforming to our highest standards, showing this by her poise and admirable personal conduct? Has the Minister seen the living conditions to which she has returned? Could not this native girl, and other aborigines like her, be better provided for and given wider opportunities than are available to them at present?

Minister for Territories · CURTIN, WESTERN AUSTRALIA · LP

– This is not a matter that comes under the administration of the Commonwealth Government. I understand that the girl to whom the honorable member refers is a resident of Hall’s Creek, in Western Australia, and would be under the protection or supervision of the government of that State. I cannot, therefore, speak with first-hand authority on matters concerning her. I understand that she was one of a party brought by the Australian Inland Mission to Sydney to meet the Queen Mother during Her Majesty’s recent visit to New South Wales. The story that has been published - and I have, of course, no means of verifying it - is that after her return to her home in Western Australia she was found living in a bush humpy in rather unfavorable circumstances. While we all, because of our human feelings, must deplore the fact that a girl who showed the brightness and other admirable qualities that apparently this girl did should have to live under such conditions, I believe we ought to see the other side of the coin. It is rather remarkable, and it is something worth noting on the credit side, that a girl living in a humpy should have been brought to New South Wales to be presented to the Queen Mother. We should remember not only that she has returned to these bad conditions, but also that she was lifted from those bad conditions, temporarily, to something better. The moral of all this is, surely, not that we should try to score off this government or that, but that every Australian should lay the matter on his own personal conscience. I put it directly to the honorable member: What has he or any of his associates done to improve the living conditions of this girl?

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– I preface a question to the Minister in charge of the Commonwealth Scientific and Industrial Research Organization by stating that I know that the C.S.I. R.O. has been conducting investigations with a view to securing a poison to combat the pest known as black beetle, ls the Minister able to supply any information to the House on this matter as the black beetle has again appeared along the north coast of New South Wales?

Minister for External Affairs · LP

– I have no information in my mind at the moment on the black beetle, but I shall certainly become informed anc! supply the information to the honorable member.

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– Will the Minister foi Trade inform the House whether it is a fact that the Australian passion fruit growing industry is being systematically destroyed in the interests of one large processing firm which is intent on exploiting cheap native labour in New Guinea? Is it true that the firm, Cottee’s Passiona Limited, pays natives only Id. per lb., or one-twelfth the price that Australian growers receive, for the fruit which is used for processing purposes, and that the difference in price is concealed in freight charges between the point of purchase and the Australian mainland? Is it the intention of the Government to allow, during the next five years, 25,000 gallons of passion fruit juice and pulp to enter Australia each year duty free? Does the Government support the view that was expressed before the Tariff Board inquiry that labour employed in the passion fruitgrowing industry of Australia could be more gainfully employed in other directions? If so, will the Minister explain where and how the labour is to be used as there is considerable unemployment in Australia at present? Will he undertake to review that part of the Tariff Board’s recommendations which provides for the duty free entry to Australia of passion fruit juice and pulp from NewGuinea in order to ascertain whether some arrangement can be made whereby both native and Australian growers may command a more equitable price for their products?

Minister for Trade · MURRAY, VICTORIA · CP

– At its own request, the Australian passion fruit industry has been the subject of an investigation by the Tariff Board, which has made a report as the honorable member has indicated. In accordance with well-established practice, that report is the basis of action the Government has taken. I know that the Tariff Board took into consideration, as it is bourn; to do, not only the well-being of the Australian passion fruit industry, but also other aspects such as the Australian consuming public and the industry in the Territory of Papua and New Guinea. The honorable member can be sure that the action taken by the Government in conformity with the recommendation by the Tariff Board is the best kind of action thai could be taken in the given circumstances in respect of the Australian passion fruit growers.

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– I direct a question to the Treasurer regarding sales tax. Since the introduction of television in New South Wales and Victoria, the range of reception in a number of localities has been found to exceed estimates. This has been noticeable particularly when more elaborate types of antennae mounted on towers have been employed. I ask the Treasurer whether he will treat sympathetically the case of the people concerned in country areas when he is considering rates of sales tax to be imposed in the next Budget. I point out that those country residents not only pay a considerable tax on their receiving sets, but also pay heavy additional sales tax on their antennae equipment. The impost is far heavier than that paid by metropolitan receivers. I suggest to the right honorable gentleman for his consideration that an upper limit should be placed on sales tax on these items.


– I promise the honorable gentleman that his observations and remarks will be taken into consideration in conjunction with the next Budget.

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– I direct a question to the Minister for Defence Production. What was the cost of the inquiry conducted by W. D. Scott and Company Proprietary Limited into the construction, and other relevant matters associated with the development of the St. Mary’s project in New South

Wales? Also, what was the increased price paid by the Commonwealth in respect of the construction?

Minister for Supply · DENISON, TASMANIA · LP

– This report was called for by my predecessor, so I have not the figures available, but I shall get them and let the honorable gentleman have them.


– I ask a question of the Minister for Defence Production which is supplementary to that asked by the Deputy Leader of the Opposition. Will the Minister look at Mr. Beale’s letter, in which he asked Mr. Scott quite early in the piece to tell him the cost, and also at the letter in reply, to see whether it states the cost. Will the Minister try to inform himself before the debate on the matter proceeds?


– I shall try, but as the debate is to come on in about five minutes, I shall have to be quick.

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– I direct a question to the Minister for External Affairs. Has the Government any confirmation of reports that the Soviet bases in Australian Antarctic territory are equipped far more elaborately than is necessary for purely scientific purposes?


– I apologize to the House for being a little deaf from flying with a cold, but I understood the honorable gentleman to ask whether we had any confirmation of the statement that the Soviet main base in Antarctica is more elaborately equipped than is necessary for scientific purposes. No, we have no information whatsoever to that effect. I can only hope and believe that the Soviet base is confining itself to its acknowledged purpose, that is. to conduct scientific work in the Antarctic.

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– I direct to the Minister for the Army a question relating to civil defence and emergency services within the Army. Is the Minister in possession of any information concerning the new force known as the “ rock and roll “ force established within the army of South Africa? I understand that a more accurate title is the “ riot and rescue squad “. As this force would seem to lend itself to meeting the requirements within Australia for emer gency services and civil defence, if the honorable gentleman has not any information concerning this new organization, will he endeavour to obtain it and share it with honorable members?

Minister for the Army · BENNELONG, NEW SOUTH WALES · LP

– Let me, first of all, say that I am no expert on “ rock and roll “. I do understand that there is some organization such as that to which the honorable member refers. Of course, the Army gives its troops certain training in relation to civil defence, but I shall make inquiries in connexion with the matter raised by the honorable member and let him know the result.

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– I direct a question to the Minister for Health. Why did he not attend, and why did no Commonwealth representative attend on his behalf, the conference of Australia’s health ministers on hospital problems ten weeks ago? I would remind him that he himself attended this conference last year,’ that Australia’s tuberculosis and mental hospitals are built and conducted under joint State-Commonwealth arrangements, and that patients in other hospitals receive Commonwealth subsidies. I ask him also whether he proposes to receive the deputation which the other ministers have sought and, if so, when he proposes to do so.


– The plain answer is that there seemed to be no useful purpose that I could serve by attending this conference. In regard to the second part of the honorable member’s question, I have already communicated my decision to the people concerned.

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– I direct a question to the Minister in charge of the Commonwealth Scientific and Industrial Research Organization. As the wild life section of the C.S.I. R.O. has warned us that the rabbit-killing properties of myxomatosis are rapidly waning, and as officers of this section who recently visited New Zealand are strongly in favour of the introduction of the New Zealand system, can the Minister inform me what steps have been taken to hasten its introduction into Australia?

Has the C.S.I.R.O. considered the decommercialization of the rabbit in Australia, as this course has been followed in New Zealand for some time?


– I am not sure that I got the full purport of the honorable member’s question, but I understand that in New Zealand ordinary methods of rabbit eradication are used, but used very effectively indeed. The New Zealand Government is to be congratulated on the extent to which it has induced land owners to use all and every means to eradicate rabbits. The programme has been most successful. The people concerned have gone to what I might call extreme limits to rid themselves of the rabbit pest, and I understand that they have not used myxomatosis. I shall obtain a more precise reply to the honorable member’s question, and let him have it as soon as I can.

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– Is the Minister for Trade aware that Australian production of television sets decreased from 20,040 in November and 16,319 in December to 13,420 in January? Is the Minister also aware that production of radios, radiograms, refrigerators, and washing machines has similarly declined, and that the value of imports has increased by tens of millions of pounds during the same period compared to a similar period in the last financial year? Is the Minister aware that the director of the Associated Chambers of Manufactures alleges that Japanese merchants are paying rebates of up to 25 per cent, on some textiles exported to Australia? Is the Minister aware that other imports are probably being dumped in this country by similar devices? Will the right honorable gentleman take corrective measures, as suggested by the director of the Associated Chambers of Manufactures, Mr. Anderson, to safeguard Australian manufacturers?


– I am not aware of the statistical facts mentioned by the honorable member, but I shall have his question investigated. On the issue that he raises regarding the statement by the director of the Associated Chambers of Manufactures, the position is as I have previously stated in the House: It is an offence against the Customs Act and regulations to underinvoice goods or, by any means, to contravene regulations the purpose of which is to ensure exchange control and a proper knowledge of value by the Customs authorities for the imposition of duties. If facts regarding such action as the honorable member mentions, or as is alleged by the director of the Associated Chambers of Manufactures, are brought to the notice of the Government, then I am sure the normal law will operate.

Dr Evatt:

– You will be very stern about it.


– I was about to add that this is not a matter that comes within the jurisdiction of the Department of Trade, as I think the Leader of the Opposition is aware. It comes within the jurisdiction of the Department of Customs and Excise in determining the value of imports for purposes of duty, or within the jurisdiction of the Commonwealth Bank in respect of exchange control.

On a previous occasion, I said that if the director of the Associated Chambers of Manufactures had knowledge of what he alleges, he should disclose it to the Government. He has twice made a statement, and I am now advised that Mr. Anderson has given some advice to the Department of Trade, but he has asked that his advice in particulars of detail should be treated as confidential. I am now studying the implications of advice communicated with a request that it be regarded as confidential, but the honorable member and the House can rest assured that if an offence is disclosed, the law will operate. Honorable members can equally rest assured that the Government is conscious of the consequences of any escape from the intended application of the law, and of provisions designed for the protection of Australian industry.

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– Has the attention of the Minister for Labour and National Service been drawn to the proposal of the New South Wales Government to legislate for equal pay for the sexes? If so. will he say what effect the proposed legislation could have upon the stability now attained in our economy, and what implications it could have upon the demand for labour and on cost structures generally?


– I read of this proposal with very great interest. It is not an easy matter to discuss briefly by way of reply to a question such as the honorable member has put to me, because I think, as all honorable members are aware, particularly those on either side who have held responsibility for government, that it is a very complex matter.

So far as the Commonwealth Government is concerned, its constitutional capacity to act in this field is, of course, limited. It would not extend beyond Commonwealth employees by way of direct legislation, but in any event, quite apart from constitutional capacity, it has been the firmly declared policy of this Government to leave to the appropriate industrial tribunal the determination of these large industrial questions which have their repercussions throughout the ranks of industry. I think that policy enjoys the support of most thoughtful people in this country. Last year, I received a deputation, led by the Australian Council of Trade Unions, on this particular subject. The deputation asked that the Commonwealth Government should do what it could to apply the principle of equal pay for work of equal value. At the rime it was quite clear that the Australian Council of Trade Unions perceived the complexities of the problem, because in the last four applications for an increase of the basic wage no application had been made by the spokesmen for the unions to apply this principle of equal pay. In the basic wage application now before the Commonwealth Conciliation and Arbitration Commission there is no request from the trade unions represented there for this principle to be applied. It is all the more extraordinary, therefore, that the Premier of one of the industrial States should announce unilateral action of this character. It is worth mentioning that on the occasion of the deputation to which I have referred, I brought to the notice of those present, including the officials of the A.C.T.U. and of the trades and labour councils, some comments made by Mr. Justice Foster when the Commonwealth Court of Conciliation and Arbitration, as it then was, dealt with this matter in the basic wage inquiry of 1949 and 1950.

Mr Pollard:

– They are out of date now.


– The principles are not out of date, because Mr. Justice Foster pointed out at the time that our basic wage includes a social needs element. It differs from the wage which applies in other parts of the world in that the practice ia Australia through the years has been to determine a wage that does take account of family responsibilities. He pointed out that, having regard to our past practice, the application of this principle would mean some immediate reduction in the wage payable to male adult family bread-winners, or alternatively, deferment of some increase which might otherwise have to come to them.

There are many other aspects which will bear closer investigation, but the Government has no doubt that the sounder course in these matters is to have them thoroughly examined by the appropriate tribunal. Personally, I can imagine nothing but mischief and industrial dislocation being caused as a result of one State introducing a principle which must necessarily involve grave disparities between that State and other States.

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– I ask that further questions be placed on the notice-paper.

Dr Evatt:

– I should like to ask a supplementary question on the matter with which the Minister has just dealt. Does the Prime Minister object to that?

Mr Menzies:

– It must go on the noticepaper.

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Mr SPEAKER (Hon John McLeay:

I have received a letter from the honorable member for East Sydney (Mr. Ward) proposing that a definite matter of urgent public importance be submitted to the House for discussion, namely -

The matters associated with the construction of the St. Mary’s Filling Factory, and in particular to the findings contained in the report of the inquiry conducted by W. d. Scott & Co. Pty. Ltd.

I call upon those members who approve of the proposed discussion to rise in their places. (More than the number of member. required by the Standing Orders having risen in their places) -

East Sydney

.- In October last, the Opposition initiated a debate in respect of a number of scandals associated with the construction of a munitions filling factory at St. Mary’s, in New South Wales. In order to indicate that these particular scandals have been costly to the people of Australia, it is necessary to mention that the estimated cost of this project had been exceeded up to that time by approximately £5,000,000. The actual cost of construction has not yet been assessed, because the firm of W. D. Scott Pty. Ltd., management consultants, which conducted an inquiry into this matter, has not yet computed the final figures.

Let us examine, briefly, what the situation was at St. Mary’s in October last when the Opposition raised this matter. I do not intend to recapitulate all that was said by members of the Opposition on that occasion because the time allowed for this debate will not permit me to do so. But the excuse of the Government at that time was that the increased cost had been due, not to any malpractice or scandal associated with the construction, but to increases in wages and additional expenditure occasioned as a result of flooding. If anybody takes the trouble to read the original proposal contained in the contract which was laid on the table of the Library, he will discover that £1,000,000 was allowed to meet projected rises in wages and materials. So, that was already provided for. In addition an amount of £900,000 was allowed for other contingencies.

In December, 1956, a revised estimate was made of the cost of this project and a further sum of £910,000 was allowed for wages and material cost increases, making a total provision in that respect of £2,810,000. It is quite obvious, therefore, that the increased overall cost was not due to any increase in wages or cost of materials or to flooding, because these matters had already been provided for to the extent of almost £3,000,000.

Several scandals were revealed by members of the Opposition at the time, and I shall merely mention one or two to show the House exactly how serious this situation is. In that debate, I mentioned the construction of a guard house and indicated that because of flooding following rains after it had been constructed, it had been necessary to demolish this building and reconstruct it at a higher level. I said that the floor had been flooded to a depth of 4 feet but the then Minister for Defence

Production, in reply to Opposition allegations, said that I was entirely wrong. He said that the guard house was flooded not to a depth of 4 feet but to a depth of only 1 foot. The contract provided also for the erection of ten staff cottages, the estimated cost of which was £32,500; but the actual cost was £85,000. The labour cost for painting these ten staff cottages was nearly £3,000.

At the time, I challenged the Government to have an investigation of the kind of materials withdrawn from store for the construction of these cottages. If the Government had held that investigation it would have found that at least three times as much building hardware, such as tiles, was withdrawn from store as was necessary for the construction of these ten cottages. How else can the Government explain the estimate being exceeded by approximately £52,500? It could not have been exceeded in any other way. If the Government takes the trouble to ascertain the number of week-enders that were built by certain executive heads of that project at the time it may be able to discover the destination of a great deal of material that was withdrawn from store.

This has been a case of extravagance and waste. When the Prime Minister (Mr. Menzies) visited the plant to inspect it on one occasion, the contractors installed a special air-cooling plant which was dismantled as soon as the Prime Minister and the Minister for Supply of the time had departed. That cost a considerable sum of money. The opening function was a lavish affair which cost £2,500 for 384 guests. That works out at approximately £6 10s. per head. It sounds something like a Mike Todd function! The luncheon was catered for at the rate £1 7s. per head.

When the Opposition raised these matters in October last, the Government claimed that there was no basis for the Opposition’s charges. If that was so, why were arrangements made to have this mysterious report furnished by W. D. Scott Pty. Ltd., business consultants? During the earlier debate in this House, we did not hear that the Government intended to get a firm of business consultants to investigate the charges that had been made in this Parliament. What a peculiar investigation it was! We did not know about it until the Minister announced in this House, in reply to an arranged question by the honorable member for Corio (Mr. Opperman), that the report was to be laid on the table of the Library. According to the records, it was there from 21st February to 7th March. In that time, there were only two sitting days - 25th and 27th February. As every member knows, a report which is laid on the table of the Library cannot be removed from the Library and, of course, the great majority of members are away from Canberra when the House is not in session. The Government took that action deliberately because it wanted to suppress the report. Even on the Public Accounts Committee, endeavours were made by Government supporters to prevent the printing and circulation of the report among members.

I am not going to suggest for a moment that the Government ever intended, when it appointed this firm of business consultants, that it should reveal the truth. This firm was appointed because it was hoped that it would whitewash the department and those associated with these scandals. But the report did not quite do that. It is a peculiar sort of report to those who have had an opportunity of reading it. Tn many respects, it confirms everything that members of the Opposition have said. Why was this firm appointed to make this investigation? Is it not a fact that the Commonwealth Auditor-General has complained that he was not consulted with respect to the appointment of this firm to investigate this great project? Even in this House, on 3rd and 4th December, 1957, when the then Minister for Supply and the Prime Minister were replying to a number of questions which I and other members of the Opposition had asked, they did not reveal that, on 2nd December, the Minister had written to W. D. Scott Proprietary Limited with respect to this investigation.

If there was nothing in what Opposition members had said in this Parliament, why did the Government have to have an investigation? The Government only arranged this investigation so that, when the truth was revealed, it would have some sort of case to present to the public and so that it would be able to say that it had actually had an investigation made. As I have said, the letter was signed by the Minister on 2nd December, but he spoke no word in this House about the investigation. Why did the

Minister not call the Leader of the Opposition, myself, and other members who had participated in the debate and ask us what evidence we had to produce? Could this firm be expected to arrive at any conclusion with respect to the project unless it had witnesses before it? Why all the secrecy about it?

Let me inform honorable members of one or two questions that were asked in this Parliament by the honorable member for Corio. He said -

I understand that a private firm of what could be termed “ efficiency experts “ was asked to make a comprehensive examination of the whole St. Mary’s project, paying particular attention to those items which had been mentioned by the Auditor-General. Is it a fact thai this report is a very favorable one and will the Minister make a copy available in the Library so that honorable members may read it?

Here is the reply of the Minister for Supply -

Yes, it is true that my predecessor arranged with a firm of management and engineering consultants in Sydney for a report on the lines that the honorable member has mentioned. This report has been received. It is most comprehensive, and I shall be quite happy to put a copy of it in the Library.

It could not have been a favorable report, from the Minister’s point of view, or he would have said so. According to the report, the final cost of this great project could not be given because computation of it had not then been completed.

Let us examine some of the damaging comments made in the report. It is disclosed that a central control agency was to be appointed. This was one of the conditions under which the Government entered into its arrangements with the architects and contractors. The man who has been assisting the architects in framing the plan, a Mr. A. C. Hvistendahl, after having made a recommendation that a central control agency should be appointed, established his own firm in order to get the appointment. He was to undertake this part of the activity. No doubt, Stephenson and Turner, the architects, were of the opinion that this would be a very favorable control authority. But, in actual fact, it did not prove to be so because this control authority only acted until 31st May, 1956. The Scott report said that the reports of the central control authority from September, 1955, to April, 1956, “ became stronger in this criticism of the contractor and the architects.” Sir Arthur Stephenson, head of the firm of architects, said that the control authority had entirely disappointed the architects and there was no confidence in their personnel. Of course, the authority was disappointing to the architects because it was doing its job. It was criticizing the architects and the contractors.

Then the Government appointed an inter-departmental committee. This was in addition to the central control authority which was to have had an over-all surveillance of the project. In its report, the inter-departmental committee agreed to the virtual dismissal of the first control authority. According to the Scott report, the committee was obviously under extreme pressure. Where did this extreme pressure upon the inter-departmental committee come from? Did it come from the architects or from departmental officers? It is obvious that the departmental committee was not permitted to do its work of keeping an over-all surveillance of this great undertaking. The Scott report says that the committee agreed to the dismissal of the’ original control authority because the committee was obviously under extreme pressure. Referring to the inter-departmental committee, the Scott report says -

The committee repeatedly requested information from the architects and finally agreed to very much abridged control procedures and job instructions presented by the new central control agency, Messrs. Cameron and Middleton.

Again, the inter-departmental committee was under pressure. The new control authority had been able to introduce this new procedure - this unsatisfactory procedure - merely because the architects became alarmed about what might be revealed if the control authority was doing its work. Then the new control authority, Cameron and Middleton, reported that the job was costing a great deal more than it ought. So, the new control authority, appointed at the instance of the architects and with the approval of the interdepartmental committee, under great pressure according to its own report, felt even then that the work was costing more than it ought.

I think that that warrants some better form of investigation than has been made up to date. The inter-departmental committee criticized the architects and con tractors for inefficiency. Here is one of the questions directed to W. D. Scott and Company -

Has there been any significant waste or inefficiency in terms of the specific allegations made in Parliament on 15th and 23rd October, 1957?

Those allegations were made by members of the Opposition. The Scott report said -

Our answer to this question is, “ No “.

Listen to what they say afterwards in their conclusion, which shows what a strangereport it is.


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

Minister for Supply and Minister for Defence Production · Denison · LP

– In his remarks to the House at the time of the debate on the St. Mary’s project last October my predecessor said -

Of course there were problems and difficulties and disagreements. This is a £26,000,000 project wilh about 500 buildings containing some 30 acres of floor space spread over about 3,500 acres, between 20 miles of road and 11 miles of railway. The design work alone required nearly 20,000 drawings. It would be childish to suggest that in a project of this magnitude it could have been otherwise.

As the honorable member for East Sydney (Mr. Ward) has said, subsequent to that debate the firm of W. D. Scott and Co., management, industrial and engineering consultants, was asked for its opinion on certain managerial aspects of the project. The Minister of the day, of course, never expected the resulting report to be taken in isolation. He expected it to be taken in conjunction with the other reports, minutes, correspondence, and volumes of records which related to this project. But if you take the report in isolation, and study it carefully, there is only one conclusion to be drawn from it. That is, that the report is favourable. What the report of W. D. Scott and Co. does is to analyse the various criticisms that have been levelled at the St. Mary’s project and find them all unjustified. All the way through, the report is commendatory of all those people who had anything to do with the project.

Let us take, first, the broad structure of the report. Scott and Co. were asked certain questions about specific things. They were asked to report on the architects and on the contractors. They were asked to report on certain items of criticism that developed during the debate in this House. In the report they added one or two of their own observations concerning the interdepartmental committee and the Department of Defence production. To every one of the questions, with only one minor exception - one aspect of the architects’ control procedure, namely, the cost - they gave a favourable answer.

Now, let us see what Scott and Co. say about the St. Mary’s project as a whole. At page 1 of Section B of the report they say -

Project 590 was of a complex nature and of considerable magnitude, conceived and implemented in a remarkably short space of time, judged by any standards. It was substantially completed within the narrow time limits set, and the Commonwealth has achieved, at least in the physical sense, what it set out to achieve.

In these terms, all connected with the Project are to be congratulated on their contribution to what must be considered a splendid performance.

Mr Curtin:

– Who said that?


– W. D. Scott, a man who, I may say incidentally, enjoyed the complete confidence of the late right honorable J. B. Chifley, and who has held many different wartime and post-war positions of importance. Mr. Scott points out that in the initial stages of the project great tensions developed. There were disagreements and disputes and, at the time of the heavy floods in the early days of the project, there was some lowering of morale. But we do not have to go to the report to find out those things. My predecessor, as Minister, pointed them out to the House on a number of occasions. He did not attempt to minimize or hide them. In all large or major works you get that kind of trouble. It is not unnatural. Indeed, such troubles are symptomatic. What Scott and Co. have done is merely to go into more detail about problems which the Government had already mentioned in general. In amplification, Mr. Scott also stated at page 4 in Part C of the report -

By Australian standards the Project is immense, complex and full of difficult technical control and management aspects.

The report continues -

A factor which did not enter into the calculations of anybody, however, and justifiably so, was the unprecedented wet weather which occurred during the earlier part of the contract.

Mr. Scott also observed ;

  1. . The only valid judgment appears to be that the Architects’ original opinion that the factory could be completed by 31st December, 1957, was justified, was adhered to and that all the parties involved deserve credit for a noteworthy achievement.

Dealing with the disputes that arose between the cost control authorities Mr. Scott goes to some pains to point out the reasons. Here we had two major organizations, both held in high esteem and both approaching a similar problem with widely divergent outlooks. The American practice, when carrying out cost control, is to rely strongly on figures and statistics On the other hand, the British approach, the approach used by the other firm, is to go into the field and make physical checks of what goes on. Indeed, Mr. Scott points out this difference in part C at page 19 when, in speaking of the two firms he says that the other firm was a British firm representing - a common British viewpoint which expresses itself in some impatience with figures and an attraction to field controls and physical inspections.

At that stage in the report Mr. Scott asks four questions of the utmost importance. The honorable member for East Sydney mentioned one of them himself. These critical questions appear in Part D of the report. The first is -

Was there significant waste or inefficiency?

Mr. Scott’s answer to that question was unhesitatingly, “ No “. The second question was -

Did the contractor satisfactorily perform his obligations including construction and general administration?

The answer to that is just as unhesitatingly, “ Yes “. The third question was -

Were the construction operations overall carried out by efficient and economical methods?

The unequivocal answer is, “ Yes “.

The fourth question was -

Was the labour force or hours of overtime worked excessive?

Mr. Scott says, “ No “.

I mentioned earlier that there was some inadequacy in the architects’ control procedures. We admitted it frankly. Just as frankly I admit that the Government was troubled and disappointed because it was not able to get precise and accurate forecasts of the cost of the project. But it is a far cry from that to the suggestion that the architect fell down on his job, or that the job in general lacked control, or that the cost procedures instituted by the architect had any effect on the ultimate cost of the project. Indeed, Mr. Scott is himself careful to make a point of this, because he says -

This is not to deny that in many aspects the work of the Architects was accepted by all parties as being of satisfactory and perhaps of high order.

He adds - . it would be both wrong and unfair not to draw attention to the fact that the shortcomings mentioned refer to what was, after all, a comparatively small (though important) part of the overall function of the architects. Much of what they did was unquestionably acceptable and v/e have no doubt that their wide experience and unexcelled technical knowledge must in many ways have been a most material factor in the provision of a noteworthy achievement.

Scott carefully warns against the impression that there was lack of control on the project. In part C, he states -

It should not be inferred from the foregoing that none of the controls were instituted. This is indeed far from the truth . . . Whilst the method of charging materials to costs immediately upon their receipt effectively prevented accurate costs, nevertheless the small discrepancies in stock taking were a tribute to the control over materials. . . Both of the parties to the Joint Contract . complained very feelingly more than once that, as the Contractor, they were over-controlled, that the control was . . . well in excess of what had been their experience in some other cases.

Quite clearly, I think, Mr. Scott states also -

To say that total efficiency was reached would be entirely unrealistic. To say that inefficiency was rife would be quite untrue.

I believe that that is the case. This was a good job well done. It was the biggest of its kind ever attempted in Australia, and, in the limited time that was set, it gave Australia this magnificent ammunition filling factory, which is the best of its kind in the free world.

At this stage, we may well ask: Did the architects’ basic method of controlling by physical ground checks increase the ultimate cost of the project? At page 16 of part D, Mr. Scott says - and this is the core of the argument -

We believe that more adequate costing procedures would have enabled the Contractor to control his operations more effectively.

He adds -

  1. . this is a relatively minor aspect; the major causes of estimates being exceeded were, change in the concept of the Project . . .

I might explain that this referred to the re-arrangement of the buildings and camp layout following the expert American process engineering study which the architects promised to have carried out, and did carry out with conspicuous success. There were other matters also.

In answer to specific questions, Scott states that an examination of the completed project does not reveal the use of any unjustifiable expensive materials. Cement quality was controlled, and the basis of the hiring of equipment was under constant review. In short, neither the AuditorGeneral nor Scott has made any critical comment on questions of improper expenditure, faulty accounting, poor storekeeping, or deficiencies in pay-roll or timekeeping practices. As I said before, these are the kind of things that creep into major construction works, and the bigger the construction job the more likely they are to occur. The fact that they did not occur at St. Mary’s is surely a tribute to every one concerned with the project.

To summarize, Mr. Deputy Speaker, there are thirteen identifiable conclusions in the report of W. D. Scott and Co. Pty. Ltd. They are -

  1. We got the factory that we set out to get - the most modern mechanized ammunition filling plant in the free world, as I have already said.
  2. We got it on time.
  3. This was a noteworthy achievement, and a splendid performance.
  4. The contractor performed his obligations satisfactorily, including construction and general administration.
  5. Construction was carried out by efficient and economical methods.
  6. There was no significant waste or inefficiency.
  7. Neither the labour force nor overtime worked was excessive.
  8. The shortcomings of the architects were in respect of cost control - a management tool, and a relatively minor aspect.
  9. This was a small though important part of their functions.
  10. The process engineering study was carried out most satisfactorily.
  11. Much of what the architects did was unquestionably acceptable, and their wide experience and unexcelled technical knowledge must have been in many ways a material factor in a noteworthy achievement.
  12. Project 590 was of a complex nature and of considerable magnitude, conceived and implemented in a remarkably short space of time, judged by any standards.
  13. All connected with the project - this includes the contractor, the architects, and the inter-departmental committee - are to be congratulated on their contribution to what must be considered a splendid performance.

St. Mary’s is a positive achievement, Mr. Deputy Speaker. It stands to-day on some six square miles of land that were virgin bush Jess than three years ago. It makes good a critical deficiency in basic munitions capacity for the filling with modern nonatomic explosive of guided missile war heads, rockets, bombs, shells, detonators, caps, and initiators, and a vast quantity of other munitions of war. In spite of immense difficulties, and disputes and disagreements in the early stages, it is, already, a good job well done. The arguments of the Opposition should be rejected.

Leader of the Opposition · Barton

– The Minister for Defence Production (Mr. Townley) has made a gallant effort to pick some of the eyes out of the wreck, but it seems to me that his mind is completely distorted. I do not claim that the matters to which I shall refer cover the whole ground. The Minister claimed that he did cover the whole ground, and he has given an account of the Scott report which, I think, needs correcting. The only way to correct it is to make the report public. I should like to know who took it out of the Parliamentary Library. Honorable members have not had a real opportunity to read it.

Let me just make these additions to the summing up of the Scott report given by the Minister. The first question - the crucial question - is - . . whether the Architects. Messrs. Stephenson and Turner, have controlled construction operations adequately and effectively in the interests of the Commonwealth as undertaken in their report . . .

That is a very far-reaching question. The architects received £1,250,000 for their services, paid to them by this Government. The answer to that first question states, in part -

In terms of certain aspects of the clearly defined recommendations and specific assurances contained in Volume 1 of Messrs. Stephenson and Turner’s report … the answer to both these questions is “ no “.

That is the first finding, and it is a deadly finding. If it is correct, the architects are not entitled to retain the huge sum of money that they have received.

I am referring only to the Scott report. Let me take a few other references that my friend, the honorable member for East Sydney (Mr. Ward), has collated, but was unable to specify. The first conclusion is -

On the general aspect of (he standards of efficiency reached and the avoidance of extravagance and waste, no clear cut unchallengeable conclusion can be reached.

There is no finding. That is to say, it is not proven one way or the other. I come now to the second one. The Scott report goes on - we believe that it would be beyond dispute that some inefficiencies in the use of labour’ did operate and did persist . . .

There, again, is a finding of probable waste and inefficiency. The report states -

To say that total efficiency was reached would be entirely unrealistic.

Also, it would be entirely untrue. That is my comment on that. At page 14 of the conclusions, the report states -

  1. It was not possible-

This is the final excuse for not having a proper report - within the time limit set for the presentation of this report-

That is the report to Mr. Beale, not the report of the Auditor-General - to make a detailed audit of the purchase and use of material and the use of labour.

  1. Many of the things alleged (if they occurred) would not have been recorded in any way.

Of course they would not. If there is waste on the ground, or if there are more or fewer people than there should be, there may be no record of it. That, in itself, is inefficiency.

Those few extracts are by no means complete. Even on them, there is a case to be made about the Scott report, although I have no doubt that it was intended to whitewash the Government and the people concerned. That is why Mr. Beale called for it. Why did he not go on with the inquiry under oath that we wanted?

Let us see the background of this thing, Mr. Deputy Speaker, and see what a scandal it is. The Minister says that the Government got all it ordered. It did nothing of the kind. It ordered a project, but received nearly £2,000,000 less in value than it ordered. The exact figure was £1,800,000. lt did not pay the contract price, but paid £3,000,000 more than that price, lt paid £3,000,000 more and received almost £2,000,000 less, so it is £5,000,000 worse off than it would have been if the contract had been performed according to its tenor. It is of no use for the Government to talk about a job well done; this job was done in a shockingly inefficient way.

The Auditor-General, who is the chosen officer of the Parliament, has reported on these matters. The impudence of the then Minister in asking for a report from W. D. Scott and Company Proprietary Limited is proof of one fact. In effect, a private businessman was asked to report on what was said in the House on a certain day. However, the motion I put before the House on 15th October last corresponded precisely with the AuditorGeneral’s findings and every one of the numerous matters specified in that motion was taken almost verbatim from the Auditor-General’s report. The AuditorGeneral’s report can be inquired into by one body constituted by the Parliament - the Public Accounts Committee. In an effort to short-circuit the Public Accounts Committee, the Government handed the inquiry to a private accountant for a fee. During question time, I asked the Minister what that fee was. I ask him now whether he has obtained the information.

Mr Townley:

Mr. Scott is in San Francisco. The only information about the fee that I have is that it will be less than £2,000.


– That is some information, anyway. It means that £2,000 is being paid to avoid an inquiry. At the very time that Mr. Beale ordered this inquiry, the Senate was about to debate our demand for a select committee to inquire into matters contained in the Auditor-General’s report, and to make that inquiry on oath. Instead of having an open inquiry, where the evidence could be checked and verified and the witnesses cross-examined, the Minister asked a private firm to report on this matter. He said, “ Hurry up; you must do it before the end of the month “. A fee was agreed upon, and we are now told that it will be less than £2,000. I ask the Minister to verify that figure.

An inquiry by a private firm is no way to conduct the affairs of the Parliament. Serious charges were made, and we say that those allegations were established. We made the charges on the basis of the Auditor-General’s report, and used that report when framing our motion. Fancy such serious charges being dealt with in this shocking and shabby way! The letter from W. D. Scott and Company Proprietary Limited shows how unreliable they are. They furnished their report - incidentally it was late - and said that they had occasion to consult with their economists. What have economists to do with this matter? This is a financial question, not an economic question! The company then said that, on one matter, a psychologist was consulted. The company has a psychologist! Is that to assess the quality of the Minister’s mind or the minds of members’ of the Parliament? If this company is asked for a report on another occasion, it will have a psychiatrist; Government members will say that that is necessary to determine what is in the minds of Opposition members, and Opposition members will say that it is necessary to determine what is in the minds of Government members. This is a shocking way to deal with the Parliament.

I conclude by reading an extract from a magazine, which sums up the matter -

The St. Mary’s project has rightly become a public scandal. It is an example of the way in which the Government has been squandering the huge defence votes that have been such a burden to Australia. . . . After spending over £1,300 million in 7 years, we have an army of less than division strength, an obsolescent air force and the tiniest of navies. We have no effective shore defences, no modern weapons and still no national defence plan. However, we have the partlyfinished St. Mary’s explosives filling factory - 500 buildings spread over six square miles-

The Minister has said that also, and it is correct. It is the one thing that the Minister has said that is completely correct. The report continues - . . but we can’t produce either the shellcases or the explosives to keep it half busy. It turns out that we will need to obtain foreign orders and import cases and explosives if the factory is to work near its economic capacity.

The inefficiency and extravagance of the St. Mary’s project is exceptional only insofar as it has come before the public view. In other respects, it is more or less representative of many privateenterprise projects, whether linked with the government or not.

The report then gives illustrations of this assertion, and goes on -

It is the main reason why money cannot be found for homes, schools, roads and for the dams which would help relieve both floods and droughts.

This report is completely unconvincing. It has been obtained only to avoid further inquiries. It is the duty of the Parliament to see that a proper inquiry is conducted. The facts should be obtained from witnesses - not economists and psychologists. We shall never be satisfied in this House so long as the Government burkes such an inquiry; we shall never be satisfied until a public inquiry is held.


.- This resolution was introduced by the honorable member for East Sydney (Mr. Ward). One of his first remarks concerned the cost of the ceremony opening the St. Mary’s project. I believe that the honorable member for East Sydney can be easily discredited in his approach to this subject by mentioning that he caused a stop-work meeting at this factory, and the stop-work meeting cost £2,700.

I shall go straight to the report in dealing with this matter and read three extracts from it. They are three questions and the answers given by W. D. Scott and Company Pty. Ltd. The first, a dual question, is -

Whether the architects have controlled construction operations adequately and effectively. Whether the architects generally have supervised adequately the performance of the contract.

The Leader of the Opposition (Dr. Evatt) read the first part of the answer, which is, “ No “. That is as far as he went, but the report went on to give reasons under eight definite headings in relation to the control organization. I shall read the final paragraph for the benefit of the House and of those who are listening. It is -

Whilst we believe the foregoing judgments to be fair and in accordance with the facts, it would be both wrong and unfair not to draw attention to the fact that the shortcomings mentioned refer to what was, after all, a comparatively small (though important) part of the overall functions of the architects. Much of what they did was unquestionably acceptable and we have no doubt that their wide experience and unexcelled technical knowledge must in many ways have been a most material factor in the provision of a noteworthy achievement, lt is in respect only of certain of their promises to control the work that this answer should be interpreted.

We did not get that interpretation from the Leader of the Opposition when he spoke a moment ago. The next question deals with the contractors. It is -

Whether construction operations overall have been carried out by efficient and economical methods.

The answer of W. D. Scott and Company is -

There is no doubt that both the architects and the contractors did bring all their considerable skill and experience to bear on the construction problems. We believe it can be rightly said that their skill was tested to the utmost to complete the project by December, 1957.

The final question put to W. D. Scott and Company Pty. Ltd. is -

Has there been any significant waste or inefficiency in terms of the specific allegations made in Parliament on 15th and 23rd October, 1957?

The answer is -

No, when related to the term “ significant “.

The answer continues -

Most obviously, in a contract of this magnitude, with very close time limits coupled with the unforeseen circumstances which arose, there must be some waste and inefficiency if one thinks of those terms in their literal meaning. However, we are of the opinion that the waste and inefficiency were relatively insignificant in relation to the overall picture.

The Leader of the Opposition has cast reflections on the firm of W. D. Scott and Company Pty. Ltd. and has said that they are not capable of doing this particular job. I point out, as did the Minister when he spoke, that Mr. Scott was appointed by Mr. Chifley to investigate the costs of defence projects during the war. Mr. Scott was appointed director of Commonwealth engineering by Mr. Chifley. If the Opposition does not accept Mr. Chifley’s approach to this matter, then I suggest it should not refer to him, as it does, when dealing with many other matters.

What kind of contract was the Government concerned with in this matter? It had to be one of three kinds - either a fixedprice contract, a cost-plus contract or a contract based on cost plus a fixed fee. Obviously, if there was to be a fixed-price contract, full plans and specifications had to be available from the beginning. Having in mind the time factor, and the requirement that the project was to be completed by 31st December, 1957, it was impossible to have full plans and specifications. A fixed-price contract, therefore, was impossible.

The second alternative was the costplus contract, and I suggest that every honorable member of this Parliament has had enough experience over the years to realize what this kind of contract can cost the community. I suggest, therefore, that cost plus a fixed fee was the only reasonable basis for a contract in the circumstances. This required that the contractor and the architect would each receive a fixed fee. The contractor and architect were to receive certain agreed fees, whether the project cost £15,000,000, £20,000,000 or £25,000,000. Under the cost-plus system, of course, they would have received fees calculated on the over-all cost of the project. For these reasons, I believe that the time factor made cost plus a fixed fee the only reasonable kind of contract in the circumstances, and the Government was correct in the attitude it adopted.

I now wish to make some comments with regard to the original estimate as compared with the final cost. I have already mentioned that it was not possible to have full plans and specifications at the beginning. In these circumstances, and having regard to the fact that certain specified plant had never been seen and, perhaps, never been heard of before in Australia, how could it have been possible for any person to make a reasonably accurate estimate of the final cost? I believe that the estimate of £23,000,000, having in mind the final cost of £26,000,000- not £28,000,000, as the Leader of the Opposition (Dr. Evatt) suggests - was a reasonable one. We must remember that a part of the additional cost was due to the abnormal rainfall in the early stages of the project. No less than 44 inches of rain fell during the first five months.

I refer now to the departmental committee. The committee accepted its full responsibility, and was commended in the report by Scott and Company for the work that it did. The report stated: -

In the circumstances, we are of the opinion that the inter-departmental committee carried out its responsibilities with great credit.

One can only repeat what was said by the Minister with relation to the control authorities. It would appear that there was some breakdown at that point. But do not let us overlook the fact that these authorities were agents of the architects themselves. The first was principally concerned with figures. The second, an English company, concentrated its attention mainly on field controls and physical inspections. Although there were some differences, as between the two authorities, the report indicates that although there could have been somewhat greater efficiency in the control set-up, any inefficiency that did manifest itself was not of great consequence.

In conclusion, the Minister made thirteen points, and I believe that, when summing up the matter, one can do no better than to repeat what he said. The points that he made were as follows: -

  1. We got the factory that we set out to get - the most modern mechanized filling plant in the free world.
  2. We got it on lime.
  3. This was a noteworthy achievement, and a splendid performance.
  4. The contractor performed his obligations satisfactorily, including construction and general administration.
  5. Construction was carried out by efficient and economical methods.
  6. There was no significant waste or inefficiency.
  7. Neither the labour force nor overtime worked was excessive.
  8. The shortcomings of the architects were in respect of cost control - a management tool, and a relatively minor aspect.
  9. This was a small (though important) part of their functions.
  10. The process engineering study was carried out most satisfactorily.
  11. Much of what the architects did was unquestionably acceptable, and their wide experience and unexcelled technical knowledge must have been in many ways a material factor in a noteworthy achievement.

– Order! The honorable member’s time has expired. (Several honorable members rising in their places) -

Motion (by Mr. Townley) put -

That the business of the day be called on.

The House divided. (Mr. Deputy Speaker - Mr. C. F. Adermann.)

AYES: 60


Majority 23



Question so resolved in the affirmative.

page 615


Second Reading

Minister for Supply and Minister for Defence Production · Denison · LP

– I move -

That the bill be now read a second time.

This is a short measure for the amendment of some of the machinery provisions of the Atomic Energy Act 1953, and does not contain any proposals for modifying the general structure of that act or the purposes for which it was enacted. The principal act has proved to be a well-conceived measure, and it has enabled the initial stages of development of the peaceful uses of atomic energy to be carried forward effectively in this country. It has also enabled Australia to establish advantageous arrangements with other countries for co-operation in the general endeavour to place atomic energy and all its beneficient potentialities at the service of industry and social progress.

Since the principal act was enacted in 1953, Australia has inaugurated and is now carrying forward an advanced programme of atomic energy research, for the purposes of which a large specialized research establishment has been constructed at Lucas Heights in New South Wales. Australia has also emerged as an important producer of uranium, and, at present, has four production plants in operation or under construction, representing a capital outlay of some £26,000,000.

In addition, the Australian Atomic Energy Commission is conducting research in and encouraging the industrial and other uses of radio-isotopes, lt has established arrangements under which research complementary to its own programme is being carried on in all the Australian universities. It has established training schemes at the under-graduate and post-graduate levels to ensure a supply of scientists for future needs in the atomic energy field, and it has established information services through which the Australian community is being kept informed of progress in atomic energy within Australia and overseas. It all these matters our policy has been practical and progressive. Our research programme, I may add, is already producing results which are expected to have important bearings on the way in which atomic energy is ultimately developed in this country.

In these activities, moreover, we are receiving valuable assistance from the international arrangements for co-operation which I mentioned earlier. These arrangements have been established with the United Kingdom, the United States of America and Canada. In addition, Australia is now a member of the International Atomic Energy Agency, through which co-operation over the whole field of atomic energy research and development is being organized on the widest international basis. As a producer of raw materials and a nation with an advanced atomic energy programme of its own, Australia has been accorded a seat on the board of governors of this important body.

Against this background, some enlargement of the Australian Atomic Energy Commission is desirable, and the primary purpose of this bill is to secure legislative authority for this action. As it is now constituted under the principal act, the commission consists of a chairman, a deputy chairman, and a third member, all of whom hold office on a part-time basis. These members will continue with the commission in their present capacities.

It is proposed, however, that in addition a full-time member should be appointed as executive member, to be the executive of the commission and, within the policy laid down by the commission, generally to administer its affairs. The Government is satisfied also that provision should be made for the appointment of a fifth member, who will not necessarily be a full-time member. This will give the commission, within its own membership, a wider basis for consultation on the problems which it is called upon to consider. These problems are increasingly numerous and complex, and the addition of a fifth point of view will strengthen the commission in dealing with them.

The necessary changes to the principal act are proposed in the bill now before honorable members, principally in clause 3. They are straightforward and simple. Clause 5, amending the quorum provision, is consequential.

In introducing these proposals, the Government has thought it desirable to seek the amendment of some of the other machinery of the principal act, partly to remove provisions which are now obsolete, and partly to bring in changes which have been made in acts relating to other statutory bodies. For the first mentioned of these reasons, the principal act is proposed to be amended by taking out the provisions establishing and referring to the Atomic Energy Trust Account. This account was established for purposes connected with the Rum Jungle uranium project, and is now no longer required. Clause 7 of the bill proposes the substitution of simpler machinery.

Clauses 4, 6, and 8 of the bill are included on the second of the grounds mentioned above, namely, to bring in changes made in acts relating to other statutory bodies. Corresponding provisions have all been examined in this House in relation to other acts, and there is nothing new in principle or substance in the proposals now put forward. They will place the provisions of the principal act in relation to the vacation of membership of the commission on a more up-to-date basis, and will modify some of the existing financial provisions. These latter changes, while giving the commission more flexibility in regard to the form of its accounts, as has already been given to other statutory bodies, will increase the powers of the Auditor-General, and will specify in greater detail the matters which he is to deal with in his reports on the accounts to the Minister administering the act.

As I have remarked, in relation to the membership provisions of the bill, this is a simple and straightforward measure, and I hope it can be dealt with as such. Its passage will assist the work of the Australian Atomic Energy Commission. We have made an energetic and successful beginning, and I am confident that, in the development of atomic energy, as in other directions, Australian science, industry and workers will maintain Australia’s status as an advanced and progressive industrial nation. I commend the bill to honorable members.

Debate (on motion by Mr. Crean) adjourned.

page 616


Second Reading

Minister for Air · Evans · LP

– I move -

That the bill be now read a second time.

This short bill is to amend the Service and Execution of Process Act to enable a Suppoena or summons of a coroner to be served interstate under the provisions of that act. Section 16 of that act provides for the interstate service of a subpoena or other summons to a witness to appear and give evidence. The section is at present limited toy the words “ in any civil or criminal trial or proceeding “. Some magistrates have taken the view that this does not permit the interstate service of a subpoena or summons to a witness issued by a coroner. The question so raised is whether a coroner’s inquiry is a “ civil or criminal trial or proceeding “, within the meaning of section 1 6. ft is possible that subpoenas and summonses issued by coroners are in fact sometimes served interstate as, until recently, no criticism of this apparent defect in the act had come to notice. Recently, however, it was suggested that the absence of this power in coroners gives rise to difficulties in conducting coronial inquiries in Western Australia. If it creates difficulties in “Western Australia, it must create greater difficulties in the more populous parts of the Commonwealth, where there is a more extensive movement of people from State to State, and in and out of the Australian Capital Territory.

The Government is of opinion, and I think all honorable members will agree, that it is certainly desirable that a coroner should have power to summon witnesses from outside his own State to give evidence before him, and so be placed in the same position as judges and magistrates. The bill is intended to achieve this result.

Debate (on motion by Mr. Pollard) adjourned.

page 617


Second Reading

Debate resumed from 20th March (vide page 584), on motion by Sir Arthur Fadden -

That the bill be now read a second time.


.- I wish to congratulate the Government and the Treasurer (Sir Arthur Fadden) on the prompt manner in which this bill has been introduced to cure an anomaly which arose after a period of ten years. The Life Insurance Act was passed in 1945, its purpose being to provide security for the investing public by ensuring that the large life assurance companies of Australia would, so far as practicable, at all times have ready cash to meet their commitments. Section 26 of the act provides that any company carrying on life assurance business shall deposit with the Treasurer the sum of £50,000. There is provision that, in the case of a new company, an amount of £5,000 may be deposited annually until that amount of £50,000 is built up.

When the act was passed in 1945, it was never intended to cover associations providing funeral benefits, and nobody ever thought that it did. For a period of nine years thereafter, these associations carried on their business in an excellent manner for the benefit of the community, without a thought or belief that they were required to register under the Life Insurance Act. Associations providing funeral benefits are mainly associations of the aged. In my own State we have two excellent association, the Australian Pensioners’ League, and the Old Age and Invalid Pensioners’ Association. Both of these associations have, for many years, been providing funeral benefits, and thereby removing from the aged the fear that they will not have a decent burial. The members subscribe a few pence each pay day, and a fund is built up. On their death a contribution is made for a decent burial.

Last year, these associations were shocked to receive a notification to the effect that they were required to register under the Life Insurance Act and, of course, to take steps to deposit over a period of time £50,000 with the Commonwealth. It was perfectly obvious that such associations could not possibly comply. The committees of management were very concerned. They did not want to abandon their funeral benefit schemes. These schemes were desired by their members and gave great comfort to them. 1 immediately took the matter up, and in the meantime steps were taken to request the Commonwealth Actuary and Insurance Commissioner to postpone action for the time being until something was done.

One way out of the dilemma would have been for these associations to register as friendly societies, but that would have involved considerable expense and trouble. It is most pleasing that the Treasurer has acted so promptly to remove what was undoubtedly a mistake in drafting, because it was never intended that this situation should result from the legislation passed in 1945. I do not - and I do not think anyone else can - quarrel with the interpretation that has been placed upon this act. A “ company “ is denned as “ a body corporate “, and most of these associations of pensioners providing funeral benefits are incorporated societies and therefore come within the definition of “ company “ in the Life Insurance Act. “ Life policy “ is defined as -

  1. . a policy insuring payment of money on death. . . .

Although no one would imagine ordinarily that a death benefit was a life policy, the definition of “ life policy “ under the act includes everything that ensures a payment of money on death, and obviously these funeral benefits come within the definition in the act. So there seemed to be no way round this anomalous position, except either registration as a friendly society or adopting the method, which has been adopted by the Government, of amending the act to exclude funeral benefits from its operation. On behalf of the thousands of members of the Australian Pensioners’ League and the Old Age and Invalid Pensioners’ Association in South Australia, I should like to express to the Treasurer appreciation for dealing with this matter at the first possible opportunity. While doing so, I should like to pay a tribute to the marvellous work that is being done by those associations. They not only provide funeral benefits for their members but in addition they provide company, which probably gives the greatest comfort to aged people. They provide a forum where these old people can discuss their problems and exchange ideas. They conduct social functions where the old people can get away from what is very often the drab environment of one room and have music, fun and pleasure, They visit the sick and help those who are in need. As chairman of Aged Cottage Homes Incorporated, I can say that there are no groups of people who have pulled their weight better in raising money than have these old people. Aged Cottage Homes Incorporated has already erected homes for the aged costing over £24,000, with very valuable assistance from this Government by way of subsidy. But a great amount of the money has been raised through charitable appeals conducted by these old people. They conduct button days and house-to-house collections, raising their sixpences and shillings which, when subsidized by the Government, have been sufficient to provide homes that have cost, up to date, £24,000. So I feel sure that all honorable members will support the passage of this bill so that funeral funds will be exempted from the stringent provisions of the Life Insurance Act.

While dealing with this matter of life assurance, I wish to address a few remarks to the House along the lines of the very thoughtful speech delivered by the honorable member for Melbourne Ports (Mr. Crean). He dealt with the general principles of life assurance. He pointed out that life assurance was one of the major factors in the provision of capital for investment in this country. We are all extremely proud of Australia’s development. Since the war this country has gone ahead in leaps and bounds. We have had a very substantial increase of population, industries, and capital equipment. This has been possible only because the savings of the people have been available for the Government to borrow. Life assurance is a medium whereby quite a substantial portion of the savings of the people is gathered up, so that it finally finds its way into the capital assets of the community. The net savings in life assurance for the year 1956-57, the last year for which figures are available, was £57,000,000. That sum was made available, through the medium of life assurance, for the capital equipment of this country in one year. The honorable member for Melbourne Ports called attention to the fact that the proportion of life assurance money that has been invested in bonds by these great companies has steadily fallen over a number of years. The inference from his remarks was that the managements of these great institutions had been working against the public interest by not investing as large a proportion in Commonwealth bonds as heretofore.

The honorable member pointed out that the percentage of life assurance money invested in Commonwealth bonds had fallen from 54.8 per cent, in 1948 to 30.9 per cent, in 1954. The reason for that is obvious, but it is not that these great insurance companies have not acted in the public interest. On the contrary, it is because they have acted in the public interest.

The figures also show that although their percentage of investment in Government bonds has fallen, their percentage of investment in mortgages on homes and properties has increased from 13.9 per cent, in 1948 to 28.5 per cent, in 1954. In other words, the great life insurance companies of Australia have been doing the very thing that the Government has been asking them to do - they have been lending more and more of their funds for the provision of homes for the people, and for the provision of buildings for our industries and commercial houses. Instead of criticizing the insurance companies and their managements, we should be grateful to them for their policy of advancing such a large proportion of their funds on mortgage for the construction of homes and commercial buildings.

When we talk about life assurance we must deal in very large figures. In all, there are 3,000,000 ordinary policies in operation in Australia, and 3,500,000 industrial policies, representing a total of approximately £2,500.000,000. So it will be seen that the policy of the directors of the great insurance companies must have a very great influence upon Australia’s investment policy. If, for example, these companies changed their investment policy, the effects would be felt throughout the community. Instead of criticizing them for turning over more and more of their money to homes. I think we should commend them.

If we look at the amount of money invested in local government, we find that the investments of insurance companies increased from 15.8 per cent, in 1948 to 16.8 per cent, in 1954. Does any honorable member say that the local government authorities do not need this capital? I thought almost every honorable member had been urging that more and more capital should be made available to local government bodies. That is exactly what the life insurance companies are doing.

We all know that the percentage of insurance assets invested in ordinary shares has increased from 4.1 per cent, to 8.7 per cent. The people controlling the insurance companies primarily represent their policy holders. They must take such action as is necessary, consistent with safety, to get the best possible return for their policy holders. If. owing to the economic situation, they find that they are justified in investing a greater proportion of their funds in what are known as equities or ordinary shares as against fixed securities, I think that those people who have made such sound judgments in relation to housing and local government finance are entitled to our support. The fact that the proportion of their investments in government bonds has fallen from 54.8 per cent, to 30.9 per cent, is something that the Government and the people of this country cannot ignore. Whichever way we look, we find that government bonds are not as popular with the people as they were in the past. I think the present interest rate on Commonwealth Government bonds is probably as good as the rate on any other equivalent security. Backed as they are by the Commonwealth, there can be no better security than Commonwealth bonds. Why is it then, that wherever we look we find the tendency to swing away from Government bonds into other forms of investment?

On several previous occasions I have called the attention of the Government to this fact because I believe that the lack of investment in Commonwealth securities is the root cause of our major troubles at the present time. We are all determined to continue a policy of development, but development depends upon materials, man-power and capital. Shortly after the war, our limiting factors were mainly man-power and materials. It did not matter how much money we had; we could not do any more building or developmental work because we had neither the requisite man-power nor materials. But that is not the situation to-day. We now have the man-power and materials, but our limiting factor is capital, or savings.

Yet, when we examine the situation in Australia to-day we find that there is a tendency not only to save less but also to switch savings, which the Government requires, from Government bonds or loans to less useful avenues of investment. In the press every day hire purchase companies proudly announce that their issues have been over-subscribed but that they will continue to accept subscriptions up to the closing date of an issue. Yet. there is the greatest difficulty in filling Commonwealth loans, out of which substantially all our schools, hospitals, water works and electricity undertakings are financed. Nothing is more important to Australia than that Government bonds and loans should be fully subscribed, but we find a tendency to switch from Government bonds to other types of investment.

Mr. Lawrence

– Order! I ask the honorable member to connect his remarks with the bill before the House.


– I am dealing with the Life Insurance Act. I have pointed out that the revenue of life insurance companies is one of the main sources of capital in Australia, and that the extent to which those companies invest in Government bonds materially affects our economy. I am following exactly the same line of argument that was put by the honorable member for Melbourne Ports (Mr. Crean) when he deal with this bill. As a matter of fact, some of the figures I have here are taken from the speech of that honorable member.


I suggest that the honorable member for Melbourne Ports also was out of order.


– If consistent rulings are not given from the Chair, it makes it very difficult for an honorable member to know what line of debate he may pursue. I was pointing out that the net savings of life insurance companies for the year 1956-57 amounted to £57,000,000. That figure represents quite a substantial proportion of the capital invested in Australia. I pointed out also that those companies’ investments in Government bonds had fallen from 54.8 per cent, of their total assets to 30.9 per cent. I am now saying that this trend, if it is not corrected, will have a very serious effect upon the economy of the country. For that reason we must ask ourselves why those with large amounts of money to invest are selecting avenues of investment other than Government bonds. The honorable member for Mitchell (Mr. Wheeler) on several occasions, in most able speeches, has pointed out to the House the reasons for this change in investment. He has put forward suggestions to remedy the position. I should like to add my support to his remarks and suggest one or two ways in which this tendency can be corrected.

One reason why people have been changing from investing in bonds to other forms of investment has been that owing to the depreciation in the capital value of bondsand the fact that at various times people, for one reason or another, have had to sell them at prices below par, a situation has. been created in which many people have looked for avenues of investment in which they can consider they can always get their capital back if the need should arise. That attitude could be corrected to a very large extent by the Government providing that bonds shall always be accepted as payment of succession duty, and, perhaps, incometax. Another method which could be considered in relation to bonds is that theinterest rate shall be virtually maintained. I will not elaborate that proposition at the moment, but I suggest that the Government should ask itself why this change isgoing on. We have heard all sorts of suggestions for increasing savings in this country. By that we mean, principally, savings invested in Government bonds. For example, the Government might consider granting as a tax concession the first £I0f> invested by any person in any new loan. However, if this tendency, so clearly disclosed in the report of the Life Insurance Commissioner, of switching from Government bonds to other avenues of investment persists, this country will not be able tocarry out the great development which all of us desire. We shall not be able to maintain our volume of immigration, build new post offices, undertake new public works or erect new schools that arc needed. I am certain that all honorable members are determined to have these things, but we can have them only if the requisite capital is available for those purposes.

There are many ways in which we could encourage saving. Our taxation machinery could be used to give direct encouragement to thrift. Action can be taken also to remove factors which discourage thrift. You need not be afraid, Mr. Acting Deputy Speaker, that I shall transgress by expressing at this juncture, the view, which I have stated on previous occasions in this House, that the means test should be abolished. I have spoken quite often about the discouragement to thrift that has resulted from the operation of the means test. If we are to encourage insurance companies and people generally to invest in Government bonds and if we are to encourage people to save more, whether their savings are through insurance or any other method - and after all, insurance is only a method of saving - we must not only do something positive to encourage saving but -also remove factors which are discouraging saving. In conclusion, I commend the Government on its prompt action in amending the law to remove the anomaly. I ask the Government to give serious consideration to the matters that are disclosed in the report of the Life Insurance Commissioner in relation to the tendency in Australia to shift the investment from Commonwealth Government securities to other and, in some cases, less useful avenues of investment.

Port Adelaide

– I told the Opposition Whip that I would mot be speaking for half an hour on this bill because I did not think it possible to occupy that time on the subject. But I must say, after listening to the honorable member for Sturt (Mr. Wilson), that I wonder whether I could encompass all the matters related to this subject in half an hour. The insurance legislation, which was introduced in 1945, was a great thing for the ordinary people in the community. In the depression years, I had a long experience of insurance matters. In those days, thousands of people were unable to continue their insurance payments and lost everything they had paid in. One of the great provisions of the 1945 legislation was to make it mandatory upon an insurance company to pay a fair amount to the person who was unable to continue his payments. From its inception, I think that this insurance legislation has been good.

This afternoon, I am keen to deal with the amendment that is proposed to the Life Insurance Act. Some months ago, as the honorable member for Sturt said, the pensioners’ associations in South Australia were notified that they would have to comply with the Life Insurance Act. A couple of board members of the pensioners’ funds came to me, not on the instructions of their boards, but as individuals and showed me the letters that they had received. One organization had been informed that it had to deposit £5,000. I told them that the legal firm of the honorable member for Sturt were the honorary solicitors for the pensioners’ associations. No doubt they saw .that firm and received advice on the legal position. The letters to which 1 have referred created great concern among pensioners. Representatives of the trade unions also came to me, wanting to know how their funeral funds would be affected. I think that their position is covered, to a degree, by the existing legislation.

I should like to give a little of the history of the pensioners’ funeral funds. Away back in the early 1930’s, when the pensioners’ associations were formed in South Australia, their idea was, not only to have social gatherings, but also to contribute to funeral expenses. Up to that time, many pensioners had had no means of providing for a funeral and so had been buried as paupers. Some of the very earnest ones in the pensioners’ associations wanted to overcome that situation. So they started funeral funds in the early 1930’s to which pensioners paid 3d. a week in order to obtain a funeral benefit of £10. Some pensioners came and asked me whether I thought it was wise for them to join the fund. Candidly, I had to tell them that from my knowledge of these matters I could not assure them that they would receive a funeral benefit of £10 in return for 3d. a week. I said that I did not think that that contribution would be sufficient. Ultimately, it was found that that was so and the payment had to be increased.

The honorable member for Sturt said that if this amendment had not been introduced the pensioners’ associations could have become registered under the friendly societies legislation in South Australia. I think that the position would be similar in other States. 1 have had a close, life-long association with friendly society matters. I have been working with these societies and the Public Actuary in South Australia in connexion with funeral costs and contributions sufficient to cover those costs. From my experience, I would say that it would be almost hopeless to expect the pensioners’ associations to register under the friendly societies legislation and fix a contribution sufficient to satisfy the Public Actuary that the fund would be able to meet its liabilities.

When I look at the bill before us, it seems to me that the Government has attempted to deal with this problem. But. in our party, we do not deal with these things very lightly. We have had the experience of many of these funds coming to a sudden end. People contribute to a fund for years, and then, suddenly, it goes into liquidation and the contributors lose all that they have paid in. I believe that there should be some adequate protection for contributors to ensure that the money that they pay in is sufficient for the purpose and that it is safely invested. Several years ago, a board member of one of these funds came to me and said, “We have many thousands of pounds in the funeral fund. Can we use it to build homes for pensioners? “ 1 said that I did not know whether, as trustees of money belonging to other people, the board would be competent to use it to build homes for pensioners.

Although the proposed amendment provides for the exemption of pensioners’ associations from the provisions of the principal act, I believe that when the States are dealing with this matter they should ensure that money in these funds is kept safe and liquid enough to meet any need that may arise. In every State, the pensioners’ associations have invested a considerable amount in Government bonds which, if necessary, can be liquidated in order to meet needs.

Right from the beginning, the funeral funds played a big part in attracting members into pensioners’ associations. Just before Christmas, I went to a number of pensioners’ Christmas gatherings. At one of them, in my district, I asked the president about the membership of his association. He said that people were now afraid to join the association because they were fearful that the association would no longer be able to make its funeral benefit scheme profitable if it had to comply with the Life Insurance Act. I have tried to persuade pensioners that there was no need for intending members of the association to refrain from joining. However, the act has been having that effect on them. I suppose that most honorable members have come in contact with these associations. In Port Adelaide - for more than 25 years - I have been at every pensioners’ association birthday gathering except those which have occurred when I have been in Canberra. When I was in the State Parliament, the pensioners would not have dreamt of having a function unless I was asked to come along to it, and I would not have dreamt of missing such a function.

I got to know these people, and to know just what their association was doing for the community in general. I found that many elderly people who had stayed within their homes, after their retirement, with the companionship only of books or something of that sort, and who had consequently felt neglected by the world in general, had. joined this association and the Pensioners’ League and had lost their feeling of isolation. They would go along every fortnight or so to the association meeting, pay 2d. or 3d., have a cup of tea in good and pleasant company. This meant a great deal in the lives of many of these people because, if nothing else, it gave them fresh hope of happiness in life. The association is doing a really wonderful job in this way.

At Christmas, I asked the officers of the association how it was getting along because I appreciate, as no doubt other honorable members do, that there is a big loss of membership every year in an age pensioners association as members pass away. When I discovered that there was a legal provision which would prevent the association carrying on its work I was very concerned, and I am glad that the Government has acted with expedition in bringing down the present measure to amend the provision.

The honorable member for Sturt has said that some associations had taken up with the Government the legal anomaly which would have required them to lodge a total of £50,000 as security, beginning with a deposit of £5,000 followed by an annual payment of £1,000. Anybody can see what the effect of that provision would be on a body such as that of which I am speaking. Nearly all the members of the board of management of that body are men and women from 60 to over 70 years of age who all their lives have taken a keen interest in the welfare of their fellows, not for gain, but as a matter of public service to those whom they regard as their brothers and sisters. That care for the welfare of their fellows extends even beyond life, because they make certain that those who pass away have a decent burial. The great bulk of the people who are doing this great work belong to the poor section of the community and have little more than their pensions, although there are some in comfortable circumstances. When they found that a legal provision was imperilling the work they were doing their concern was understandable.

Friendly societies in this country are generally benefit societies, except for such organizations as the Masons and the Buffaloes. Orders such as the Oddfellows, the Rechabites and the Druids are benefit societies. All of them are keenly interested in the provision of benefits.

Mr Crean:

– Do not forget the Australian Natives Association.


– The Australian Natives Association has another object as well as friendly society work. It has done very good work, particularly in the honorable member’s own State, Victoria. In my State, great work has also been done. When I visited America on friendly society business, I found some branches of the society to which I belong, the Independent Order of Oddfellows. In some of the American States the friendly societies are not benefit societies, but are conducted more on the lines of the masonic order; yet one of the main practices of these societies is to lookafter the aged and orphans. Each State had a home for the aged and an orphans’ home. Many of the people engaged in this work were people in executive positions, who were trying to help the aged and the orphans who might otherwise have felt that they were neglected by the community.

I have a proud record in friendly society work. My father was elected secretary of his lodge in 1889 and my brother, myself and my son are still carrying on as lodge secretaries. So, right from my infancy I have been connected with friendly societies which are concerned with providing for aged people when they are sick, and with seeing that they have a decent funeral when they die. It is because I have seen so much of friendly society work for over 50 years that I speak as I do to-day. I know what the existence of these societies means to their members, and I am glad that the bill will remove a threat to their existence, thus enabling them to continue with their good work.

Either the Curtin Government or the Chifley Government provided in its social services legislation for the payment of a funeral benefit of £10 on the death of a pensioner. But some of the very people who were most in need could get only a part of that benefit, because they received only the difference between the cost of the funeral and the payment made by a funeral benefit association to which the dead pensioner belonged. In those days a funeral cost about £15 or £16, and if £10 was paid by the funeral benefit association the surviving partner of the pensioner would get only £5 or £6 from the Government to make up the cost of the funeral. I never felt happy about that aspect of the Labour Government’s funeral benefit provisions.

Through the years, pensioners’ associations have battled on and are proud of the fact that in every case they have been able to make up the cost of the funeral of any member. I do not say that under this present measure any further provision can be made to help the pensioners in that direction, but I do say that proper provision should be made somehow to give protection to a society which has not the necessary rules and the control that it should have to enable it to provide sufficient insurance for members.

There is no age limit in pensioners’ associations. When they were started it did not matter if a pensioner was 70 years of age when he joined. He was entitled to benefits on his payment of threepence a week or whatever the charge was. That is one of the reasons why I suggest that if such funds were under the control of the Public Actuary the pensioners would have a hard row to hoe.

I shall not traverse the ground traversed by the honorable member for Sturt. The honorable member for Melbourne Ports (Mr. Crean) dealt very fully and efficiently with insurance generally. The honorable member for Sturt told us that investments by insurance companies in Government bonds have fallen from 54.8 per cent, of the total to 30.9 per cent. I do not want merely to take the opportunity to have a smack at the Government, but I think I should point out that this is all bound up with the fact that many people feel that they cannot go on with investments that they made years ago in government loans that return them only 3^ per cent. Years ago, I used to be able to advise people that it was undoubtedly a good thing to make sure of their investment by putting their money in government bonds, but I am not so sure since the action taken some time ago reduced the value of a lot of 3£ per cent, bonds to about only £80 in every £100. However, I do not think that that enters into the consideration of this measure, except so far as it may have affected the way in which insurance companies invest their money.

Insurance companies put enormous amounts into the construction of their own buildings. I suppose the biggest of the main buildings in the various State capitals are those that the insurance companies have constructed. I recall reading, when Her Majesty Queen Elizabeth the Queen Mother was in Adelaide recently, a report that the only “ skyscraper “ in Adelaide when she previously visited Australia in 1927 was a twelve-story building constructed by the Temperance and General Mutual Life Assurance Society Limited. Subsequently, the Australian Mutual Provident Society constructed its own building. Then there was a C.M.L. building, which was followed by another C.M.L. building, and later an M.L.C. building nearby. All the biggest buildings in Adelaide, apart from the Com-‘ monwealth Savings Bank building and the Bank of New South Wales building, were built by insurance companies. They may be able to make better profits by letting offices; I do not know.

Insurance is a big thing in the lives of the people to-day, Mr. Speaker. Earlier in my working life, I held a policy for £100 with bonuses. When it became due, it enabled me to scrape together enough to pay off my home. Had I not had that policy maturing at that time, I should still have been battling to pay off my home much later. Many people benefit in that way from insurance. That indicates the need for adequate insurance laws in order to protect the people.

The Australian Labour party has always given careful thought to exempting funeral benefit funds from the provisions of the act. When Mr. Chifley, as Treasurer, sponsored the Life Insurance Act in 1945, he specifically provided that funeral benefit societies were not to be included. As the honorable member for Sturt has pointed out, it was discovered only recently that the provisions of the principal act covered them. This bill is designed to exempt them from the provisions of the act. We feel that, so far, the matter has been well taken care of under State laws. The States will doubtless continue to take care of this matter, and, therefore, 1 take pleasure in supporting the bill.


.- This bill amends the Life Insurance Act 1945-1953 in three respects. The first amendment will exclude funeral benefit funds from the provisions of the act. It was believed that they had been excluded, and, in point of fact, many of the provisions of the act that apply generally to insurance companies have not been applied to funeral benefit funds on account of this belief. But legal advice given to the Government indicates that such funds come within the terms of the act, and that this amendment is necessary in order to exclude them. The second amendment is designed to provide that funeral benefit business carried on by a life insurance company shall be deemed to be life insurance business, and shall therefore be subject to the terms of the act. The third amendment extends the definition of children under the act to include adopted children, step-children and ex-nuptial children.

There are two main groups of funeral benefit funds. The larger comprises those conducted by undertakers. The smaller - and it is relatively small - comprises those conducted by age pensioner leagues. The principal act requires that any life insurance company shall place on deposit with the Commonwealth Treasurer a sum of up to £50,000. This obligation, of course, has never been applied to funeral benefit funds. The act requires, also, that every insurance company shall, periodically, have an actuarial valuation made, and that the results of the valuation shall be communicated to the government. This is done in order to assure the policy holders of the solvency of the company with which they are insured, in order to satisfy them that they will receive in due time the benefits to which they are entitled. The Government proposes to amend the act because of these two provisions, which have not been applied to funeral benefit funds. At the same time, the Government realizes that these funds will be left more or less out on a limb. Without control under the Commonwealth act, and without supervision under a State act, there is no guarantee given to subscribers to the various funds that the funds are solvent. The honorable member for Port Adelaide (Mr. Thompson) referred a few minutes ago, to some funds that have gone out of existence while they perhaps owed some benefits to subscribers.

In an endeavour to ensure that subscribers are protected, the Commonwealth Government has written to all the State governments pointing out what action the Commonwealth is taking, expressing the Commonwealth’s view that the matter should more properly be dealt with under the State acts governing friendly societies and co-operative societies, and asking the State governments to take such action as they may consider necessary to afford the protection that the Commonwealth consider* is required.

The third amendment, which relates to adopted children, step-children, and exnuptial children, will apply only to policies taken out after the date on which this bill is assented to. If the amendment were to apply to earlier policies, a family policy taken out earlier by a step-father to cover his own natural children would automatically be brought within the terms of the amendment. It is felt that a stepfather who has natural children also, should deliberately decide whether all the children should be covered by the policy, or whether only children natural to himself should be covered. Therefore, although all the children in a family will be covered by policies taken out in the future, policies already taken out will be taken to apply only to natural children.

These are important amendments, but 1 do not think that they will give rise to any difference of opinion among honorable members, and 1 believe that no difference of opinion has been indicated by Opposition speakers. Some speakers, however, have dealt with matters beyond the scope of the three amendments proposed. This is a bill to amend the Life Insurance Act, and only matters properly relating to life insurance companies are open to discussion during the consideration of this measure.

Insurance companies are very important financial institutions which have considerable significance in the Australian economy. I want to deal particularly with whole life, endowment and industrial policies. We do not always agree on figures. I have made some extracts from a report of the commissioner, and the honorable member for Melbourne Ports (Mr. Crean) also made some extracts. There may be slight differences in the figures that we have; nevertheless, I believe that they will be fairly close. At December, 1956, no less than 6,786,670 policies of the types I have mentioned were in existence. A quick calculation will show that there are two policies for every three people in Australia at the present time. The total amount insured in these categories is no less a sum than £2,199,000,000 and the annual premiums for these policies total £79,000,000. From those figures, honorable members will see that insurance business in this country is indeed big business and that the companies are in control of very substantial funds.

It is interesting, when we look at the assets of the companies, to see how the investments have been made. It is at this point that my figures may differ from those of the honorable member for Melbourne Ports. The total assets in 1956 were no less than £923,000,000. This amount was invested in the following manner: -

The honorable member for Port Adelaide, a moment ago, referred in a critical way to the number and the value of buildings owned by these companies. I point out that, at the end of 1955, £30,000,000 or 3.6 per cent, of the total assets of the companies was invested in this way. Although £30,000,000 is a large sum of money, it cannot be regarded as unreasonable when related to the volume of business that the companies are doing and to the accommodation - particularly office accommodation - that they are providing by this type of investment. The investment of 44 per cent, of total assets in Government and local government securities and of 33 per cent, in mortgages shows that the insurance companies are making a very substantial contribution to the economy.

The honorable member for Melbourne Ports drew attention to the fact that, on a percentage basis, the investment in Commonwealth securities has fallen considerably over the past few years. He concluded from that fact that perhaps some action might be taken by the Government to direct these companies to invest their funds in certain ways. I shall come to that in a few moments. I point out that, although the investment in Government securities has fallen as a percentage, it has really not fallen on a quantum basis and the amount invested in mortgages has increased. If necessary, I shall cross swords with the honorable member for Melbourne Ports on this point, because I believe that we are concerned as a Parliament with developments brought about not only by governments and government instrumentalities but also by the private sector of the community. The private sector has depended, to a very large degree, on insurance companies for the wherewithal to construct buildings. If a company, obstructed - if I may use the term - by banking controls, is unable to find sufficient money to build factories, then it must go to the insurance companies. In this way, the insurance companies are making a very substantial contribution.

I do not like the suggestion that, simply because the percentage of money invested in Government securities has fallen, these people are perhaps falling down on an overall economic responsibility. There is no statutory requirement in relation to these investments, except that one insurance company cannot invest in another insurance company. One company - others have the same opportunity open to them - has done something which a few years ago would have been considered impossible. You know of this, Mr. Speaker, because it is happening in your State of South Australia. A few years ago, the country at Brecken in South Australia was considered to be completely useless, but one of the insurance companies, the Australian Mutual Provident Society, made investigations, applied trace elements to the soil and brought it to a very high state of productivity. On one occasion, some honorable members had an opportunity to see a coloured film which showed that clover grown in this area was as high as the running-board of a car. It cannot be said that this is not of tremendous value to the economy of Australia. Many areas, considered to be valueless, could be treated and, I believe, will be treated in due time by some of the insurance companies as a means of investing their funds. I believe that such an investment would be completely justified.

I wish to come to the final comment made by the honorable member for Melbourne Ports because I believe that he raised a danger signal in relation to insurance. His final comment last Thursday night was -

  1. . I feel that the time may have arrived for a comprehensive re-examination of the role which insurance plays in the community to see, among other things, whether there should be some better guidance or directions with regard to the investment of these vast amounts.
Mr Cairns:

– Hear, hear!


– We have a “Hear, hear! “, I presume from the honorable member for Yarra because he is the most persistent interjector in the House. I have in my hand a booklet entitled “ Australian Labor Party. Federal Platform and Objective”. I find from this booklet that the Australian Labour party believes in the nationalization of banking, credit and insurance. It would seem to me that one is entitled to refer to the comment of the honorable member for Melbourne Ports as once again raising the ugly head of socialism or nationalization in this very important field. We know that the Labour party desires that every financial institution should be under Government control. I say quite definitely that, when these companies move their investments away, perhaps, from Commonwealth securities and into mortgages, they are seeking a higher rate of interest. That, of course, has a reflection in the bonuses which are received by the policy holders. I believe that when the companies do this they are acting in the best interests of the policy holders. Of course, we remember the amounts that are being lent by many of these companies to assist homebuilding.

The Labour party apparently is raising this question of giving direction. If the direction were that the companies must invest their funds - even to the extent of more than 50 per cent. - in Commonwealth loans or in local authority loans, then the companies would not be acting in the best interests of the policy holders. Surely it is the policy holders who are concerned with the investment of funds, and who are concerned with the bonuses that they will receive year by year. Most of us know that during the last few years, because of inflation, the investments we made ten, twenty or thirty years ago in insurance policies have lost a good deal of their value. If the insurance companies can make investments and receive greater profits therefrom than they could from Commonwealth loans, surely we are entitled to have that benefit reflected in the bonuses that are paid, and in the total amounts that will be received from our policies eventually.

On the average, two insurance policies are held between every three persons in Australia. Let me suggest that all these policy holders should beware of the implications contained in the remarks made by the honorable member for Melbourne Ports the other night, which indicated clearly that the Labour party still has in view, should it ever come to power, the nationalization of insurance. I believe that policy holders will take heed of this warning, because they would not wish to suffer further losses in relation to their insurance investments.


.- Those who spoke in this debate before the honorable member for Petrie (Mr. Hulme) made his speech endeavoured to give various points of view on the subject of life insurance. It is rather amazing that a dour citizen such as the honorable member for Petrie should have seen fit, at this stage of the debate, to attack the honorable member for Melbourne Ports (Mr. Crean) because of a statement that he was alleged to have made about socialization or the nationalization of insurance companies.

Mr Graham:

– Does he not believe in it?


– Admittedly that is a part of our policy, but the same circumstances apply with regard to insurance as apply in the case of banking. The insurance companies that are now operating on a mutual, or partly mutual, basis give benefits to their policy holders by way of bonuses. After these disbursements are made, however, the companies still have a great deal of money to invest. I put it to you, Mr. Speaker, and to the House, that if profits can be made by insurance undertakings, the Government is best able to handle those profits in the interests, not only of the policy holders but also of the other citizens of Australia and of the country as a nation.

The bill before the House meets with the concurrence of the Australian Labour party. There are, however, one or two points that I desire to make with regard to life assurance generally. The first point deals with the surrender value of policies.

I am sure that many persons consider themselves unfairly treated when they approach insurance companies with the object of surrendering their policies. Although I can well imagine that the honorable member for Melbourne Ports and the honorable member for Petrie could give me good reasons why surrender values are so low, I am approaching the matter from the point of view of the ordinary policy holder who wishes to surrender a policy and who is told that he will receive only a comparatively small amount of money for it.

I have one case in mind, the facts of which I shall give to the House. It concerns a policy taken out in January 1952, to mature when the holder reached the age of 65. At that time the person insured was about 28 or 29 years of age. The value of the policy was £1,320. The person involved paid premiums of £3 10s. 6d. a month until January 1957, at which time he had paid in all £211 10s. He then made an inquiry of the company and was told that the surrender value of the policy was only £70 9s. 2d. In other words, if he had surrendered his policy at that stage, when it had been in force for five years, he would have lost £141 0s.10d. I wrote to the Insurance Commissioner at about that time, and received a letter in reply, which read, in part: -

The Life Insurance Act 1945-53 lays down minimum basesfor the calculation of surrender values but a life insurance company is not required to grant a surrender value until a life policy has been six years in force. I have to advise, however, that although………….. ‘s policy has been less than six years in force the amount offered by the Society is in excess of the surrender value calculated according to the minimum bases prescribed by the Act.

The disparity between the premiums paid and the surrender value available arises because the premium charged includes -

an amount to meet the expenses involved in issuing and maintaining the policy; and

a contribution towards the cost of claims arising in respect of policyholders who die prior to the maturity date of their policy.

It is only the accumulation of the balance of the premium that is really available to provide the surrender value.

I can have no complaint with the company’s treatment of this policy holder, because the policy was in force for only five years, and the company was not obliged to make any payment upon its surrender. Not only did it make such a payment, but the payment was greater than the amount calculated according to the minimum bases prescribed by the act. At the same time, it appears to me that a person who has paid premiums amounting to £211 10s. should not have to lose £141 0s. lOd. upon surrendering the policy. I ask the Government to have a look at the legislation dealing with surrender values of policies. I cannot understand why it is necessary to withhold such a large proportion of the premiums in order to meet expenses involved in issuing and maintaining a policy and in making a contribution towards the cost of claims arising in respect of policy holders who die before the maturity date of their policy. I believe that many policy holders are of the opinion that insurancecompanies are not giving them just treatment with regard to thi-? aspect of the. matter.

The other point that I wish to mention deals with certain clauses in policies issued by some insurance companies with regard to aviation. I have an insurance policy before me at the moment, one of the clauses of which is as follows: -

Aviation. - Should the death of the Assured result directly or indirectly from travelling or in working on or about an aeroplane or other means of aerial locomotion except as a fare-paying passenger by any recognised passenger air service the amount payable by the Office shall be limited to the total Premiums actually received by the Office under this Policy.

I have also a letter from an insurance company, which reads in part -

Notwithstanding the fact that you may make flights by recognised Air Passenger Services in excess of what is deemed average, the Office is prepared to extend full cover under the Life portion of the contract but, of course, would not be able to afford Air Risk under the Accident contract.

Travel by passenger aircraft is generally accepted today as a safe mode of transport. For insurance companies to place an average on the number of nights that can be made by a policy holder appears to me to be wrong- If they can have such a clause on aviation they would be equally justified in making a provision that if a person uses a motor car more than three times a week he should not be covered by the accident benefit.

Some policies do not provide for an average number of flights, but the policy holders are precluded from benefits under the policy if they work in or around aircraft. They include pilots, hostesses, mechanics and others. I cannot understand why they should be penalized because they work in the aircraft industry which has proved to be quite safe, particularly in Australia. Other policies do not cover certain persons such as test pilots and glider pilots. Possibly those persons are taking a graver risk than paying passengers or hostesses and pilots travelling in passenger aircraft. I believe other insurance companies will not pay accident benefits on policies if the policy holder uses a private aircraft. The two Ministers at the table might find it necessary on occasions to fly between capital cities in an aircraft other than an aircraft normally used by paying passengers. In that case they would not be entitled to accident benefit.

In these days when aviation is considered to be a safe means of transport, insurance companies should reach a common basis to provide cover for those who travel by air. All policies which provide for a double accident benefit on the payment of an additional premium, should give that cover to the insured when travelling in aircraft. At present, some of them exclude air travel. Those are the only two points I wish to raise. I should like those who are responsible for the legislation to examine them for the protection of those who take out insurance policies. Many do not bother to question the insurance salesman, and are astonished to discover that there are embargoes in the policies. Insurance companies generally could be much more honest with those who take out policies. They could give the potential policy holder the full facts. It should not be necessary for the client to have to ask questions to ascertain exactly how he is or is not covered by the policy.


.- This bill deals mainly with questions of funeral benefits. For some time, there has been difficulty in the administration of the principal act because of an interpretation recently given by the Attorney-General’s Department that the provision of funeral benefits was included within the definition of life insurance. That had not been originally contemplated by the Parliament when it passed that act. The fact that such an interpretation was given to the term “ life insurance “ in the act meant that bodies and associations which were providing for funeral benefits, to which persons contributed, would have to come within the provisions of the act and register themselves as life insurance companies. The provisions of the act are quite onerous. The act has been framed in such a way that it is intended to provide for the protection of policy holders, and also to provide adequate machinery to deal with companies and bodies which are not solvent in character. Accordingly, various sums of money have to be deposited or secured so that an organization may obtain registration under the act. In the case of small bodies conducting funeral benefit business, this would involve considerable hardship.

Pending determination whether those bodies should register under the new interpretation that is being given to the act, applications for registration were held up. This bill contains two distinct provisions to clear up the difficulty. The first applies to life insurance companies which, as part of their business, are conducting funeral benefit business. The bill provides that those bodies should continue to conduct that type of business in accordance with the provisions of the Life Insurance Act, but that organizations which are not otherwise carrying on what is generally understood as life insurance business should not come within the act. They are definitely excluded from the act, and funeral business carried on apart from life insurance business will no longer come within the provisions of the Life Insurance Act.

That may or may not be a good thing. The whole object of the Life Insurance Act, as T have emphasized, is the protection of those persons who are paying money in order to obtain some benefit at death, or earlier. In this case, which applies to funeral benefits, they are providing for the payment of money so that on their death there will be proper provision for their funeral or cremation. Death looms very largely with us throughout the whole of our lives, and it is by no means strange that people in all ages have desired that they should be properly and decently buried or cremated when they die. This applies not only to the great who are accorded magnificent State funerals but also to the poorest citizen in the land. Many citizens who are close to the bread line have been providing for years by small weekly contributions to funds of societies so that they eventually might be buried decently.

The question therefore is: Does this amendment which is proposed by the Government properly protect those people; because, as I have said, if they are paying to a fund or a body which is not carrying on life insurance business, they would no longer be covered by the protection which the act affords should this amendment be passed? That, of course, is quite a serious matter for these people. It may be that only a small sum is involved, but that is not the point. The point is that they are hoping to obtain a decent burial. Every one must have proper respect for the wishes of people to be decently buried at the end of their lives. It is the proper way in which one should finish one’s life, and in these days no one has any thought that a person should be buried in the manner which used to be described as “ in a pauper’s grave “.

That being so, the Victorian Parliament has dealt with the question, and dealt with it in a very efficient manner. So far as I have been able to ascertain - I admit that my researches have not been entirely satisfactory - the only legislature in the Commonwealth which has directly concerned itself with the protection of those people who pay into benefit associations for funeral benefits, is the Parliament of Victoria. There is a Benefits Association Act which protects these funeral benefits. It is a very carefully prepared act because we in Victoria had experience - no doubt instances have occurred elsewhere in the Commonwealth - of societies and other bodies, which received monies from people with small incomes, dissipating these monies so that when the time came for funeral benefits to be paid there was nothing to pay out. Because of something of a scandal in the past, the Victorian Parliament passed this measure, and a very important social measure it is.

Sitting suspended from 5.57 to 8 p.m.


– Prior to the suspension I was referring to the position of funeral benefits societies which, under the proposed legislation, would be excluded from the provisions of the Life Insurance Act. I referred to the fact that, so far as Victoria was concerned, those societies would be protected by the provisions of the Victorian Benefits Associations Act of 1951. Under that act, a company or society carrying on funeral benefits business must be actuarially sound, lt cannot use all the contributions it receives tor the purpose of paying expenses. The act provides that a proper proportion of its contributions must be paid to trustees of a benefits trust fund, and an actuary determines what is the proper proportion of contributions to be paid to the trust fund. Unless the actuary is satisfied that sufficient is being paid into the trust fund to enable the benefits provided for under the rules to be paid, he declines to certify the society for registration. In that way those who desire to contribute for funeral benefits are protected.

So far as I have been able to ascertain, there is no similar legislation in any other State. That being so, attention may well be directed by the legislators of those states to providing the benefits and protection that exist under the Victorian law.

There are two other matters with which I should like to deal briefly. In the course of his speech the honorable member for Melbourne Ports (Mr. Crean) referred to the costs incurred by some life insurance companies in conducting their business. He also referred to the fact that people frequently forfeit their policies. I do not know whether the honorable member intended to suggest that some life insurance companies were not financially stable, but he did suggest that an inquiry should be held into the way these companies carry on their business. The whole purpose of the Life Insurance Act is to make sure that only sound and solvent companies are able to carry on business. There is ample provision in the existing law for the Insurance Commissioner to inquire into the solvency of a company and to take the necessary steps, if it is not solvent, to see that it no longer carries on business.

The honorable member for Petrie (Mr Hulme) directed attention to the suggestions made by the honorable member for Melbourne Ports that there should be some direction of the investments of insurance companies. The honorable member for Petrie questioned whether the honorable member for Melbourne Ports and others on his side of the House had it in mind to nationalize insurance. The honorable membe for Lang (Mr. Stewart) made it clear that nationalization of insurance was sometHm that the Labour party greatly desired, but he suggested that insurance was in the same position as banking, and that Section 92 of the Constitution would prevent any nationalization of insurance. That can hardly be taken for granted. It is clear from what the High Court has said with regard to insurance that the making of a contract of insurance is not necessarily protected by Section 92 of the Constitution. Having regard to the fact that the Labour party is so wholeheartedly in favour of nationalization of insurance, it behoves insurance companies and all who have interests in them to take care lest, if they ever vote Labour, they find themselves, almost overnight, nationalized.

Question resolved in the affirmative.

Bill read a second time, and reported from committee without amendment or debate: report adopted. .

Third Reading

Motion (by Mr. Cramer) - by leave - proposed -

That the bill be now read a third time.

Melbourne Ports

.- I should like to clarify one or two statements that were made in the course of the debate this afternoon regarding what I am alleged to have said in the House last Thursday. Honorable members who have spoken to-day have had the advantage of reading my speech in “ Hansard “, where it is most accurately reported. It is a pity they did not pay the same attention to one or two other matters that I mentioned in the course of my speech, matters which, in my view, called for examination. The honorable member for Petrie (Mr. Hulme) stated that something like £77,000,000 per annum is collected by insurance companies in the form of premiums. In fact, the figure is a little higher. But the honorable member did not mention that it costs £23,000,000 per annum to administer insurance in Australia. I pointed to the fact that, in the case of the Australian Mutual Provident. Society, the ratio of administration costs to premiums collected in a year was as low as 15.8 per cent… but at the other extreme there were some companies where the ratio was as high as 57 per cent., and in a considerable number of cases the ratio was well over 30 per cent. If it costs one company less than £1 in administration expenses for every £6 collected, why does it cost another company more than £2. The honorable member for Petrie paid a great deal of attention this afternoon to the fact that those who insured wanted to get the best return for their investment. 1 agree that they should get the best return consistent with the national interest. I would suggest that, despite what the honorable member for Balaclava (Mr. Joske) has just said, there is great room for an examination of insurance practice in Australia, at least to clear up the point of the wide range of administrative expenses as between one company and another. T mentioned only one of the best companies. Those who want to study the position of companies that are worse can find their record in the. statistics published in the annual report of the Insurance Commissioner.

When I referred to forfeiture, I was not dealing with the question of solvency of insurance companies at all; I was referring to the fact that some people are pestered to take out insurance policies the premiums on which are beyond their means to pay. I suggest that there is room for systematic examination there, also. In respect of the industrial policy, on which the premiums are collected at the door either weekly, fortnightly or monthly, the proportion of administrative expenses to premiums is higher even than that on the ordinary policy. It may well be that the day of the industrial policy as a form of investment has disappeared. I pointed to what had been cited in one of the annual reports of the commissioner, that already four insurance companies had decided not to write any new industrial business. I then went on to point to the fact that whereas over the last few years the proportion of investment held by insurance companies in Government loans on the one hand had declined the proportion held in mortgages and in private industry on the other hand had increased. I suggested that these were matters that called for systematic examination.

The majority of the best administered and the largest insurance companies today are what are called mutual companies; and, basically, they are simply agencies for collecting the small savings of individuals and investing them in various investment opportunities in the community. An insurance company is still an insurance company; it is not an investment trust, and it may well be that in the public interest there may have to be some intrusion to find out how these vast organizations are administered and whether or not funds, which basically are public funds, are being utilized in the best interests of the community. The question of the nationalization of insurance was never mentioned, but I would suggest that there is at least some room for rationalization of the collection of insurance premiums throughout the Australian community.


.- One should never miss an opportunity of expressing one’s opinion of the exploitation which, from time to time, takes place in the community, irrespective of the source from which it emanates. Immediately, there comes to my mind the fact that in all types of insurance, but particularly that on property against fire and so on, the profits are extremely high. This represents sheer exploitation, and I can quote a personal illustration which I believe the people should know. After the First World War I was a soldier settler and while there was a mortgage round my neck I had the very generous facilities offered to me by the Closer Settlement Commission of Victoria of being insured under the State Government’s insurance conditions at a very low premium rate - in fact, at cost.

As soon as I discharged my mortgage 1 wrote to the Closer Settlement Commission of Victoria and said that I wished to continue the insurance in respect of my home, fences and other property. I was informed that the Government of Victoria could no longer cover me under the same terms because it was virtually an agent of the great insurance companies in this country.

A similar illustration can be given in respect of every purchaser of a war service home. Under the War Service Homes Act, I understand that the War Service Homes Division-

Mr Joske:

– I rise to order. This bill relates to life insurance, and I submit that it has nothing to do with any other form of insurance.

Mr. SPEAKER (Hon. John McLeay).Order! I ask the honorable member for Lalor not to depart too far from the measure now before the House.


– I bow to your ruling, Mr. Speaker, but I notice that whenever the sacred cow of insurance and the profits derived from it come before this Parliament for discussion, members on the Government side want to shut the mouths of members of the Opposition.

Question resolved in the affirmative.

Bill read a third time.

page 632



Debate resumed from 19th March (vide page 442), on motion by Mr. Harold Holt-

That the following paper: -

Defence Organization - Ministerial Statement. be printed.

Minister for External Affairs · La Trobe · LP

– I welcome the opportunity of taking part in this discussion on the defence statement made by the Prime Minister (Mr. Menzies) last week. The relationship between the Defence Department and the Department of External Affairs is a very close one. I do not believe that there is any subject of international importance that is either solely a defence matter or solely one of external affairs. The Minister for Defence (Sir Philip McBride) and I find ourselves in constant communication and the same applies with regard to the officers of both departments, right down the line. The defence liaison branch of the Department of External Affairs is by no means the least important section of the Department of External Affairs. The directions in which there is active contact between the Department of Defence and the Department of External Affairs are illustrated, first, by the presence of the Secretary of the Department of External Affairs on the Defence Committee whenever any matter is under discussion that has any political or international content - which is a very great deal. The Department of External Affairs is represented also on the Joint Planning Committee whenever any of its problems has any political content. The department is represented also on the Joint Intelligence Committee and the Joint Intelligence Bureau. So, the concern of myself and of the Department of External Affairs in defence matters is an intimate one.

My particular concern is to see that the aim which I believe we should have in mind in any reform of the defence machinery is to do something that will relieve the Minister for Defence, the permanent head of the Defence Department and the three Chiefs of Staff of the burden of detail to the maximum extent that is possible so that they can concentrate, even more than is possible at present, on high level matters of policy - what might be called the politico-defence aspect. That should be the aim of any defence re-organization, or, at any rate, one of the most important of the aims.

I do not believe that would be achieved by the acceptance of the Morshead Committee report. In saying that, perhaps I should say now that in any criticism I make of the Morshead report, I do not mean for one moment to criticize General Sir Leslie Morshead or the distinguished public servants who were members of the Morshead committee. They are all men of the highest calibre and I have every respect for them. Possibly, the Government set the Morshead committee an impossible task. In other words, it set it the task of reform of our defence machinery as a whole, whereas countries such as. Great Britain, the United States of America, Canada and countries friendly with Australia have been, for the last generation, attempting to reform their defence machinery and have not - one can say with respect - got very far at all.

So, when the Leader of the Opposition. (Dr. Evatt) seeks to belabour the Government with the criticism that it has not produced the ideal solution, we are in good company - with practically every other democratic country in the world. This is a very intricate problem. I happen to have had some contact with it myself, over the years, and I know. I believe that one of the principal aims should be the shifting of as much detail as possible from the backs and the minds of the Minister for Defence, the Secretary for Defence, and the three Chiefs of Staff. I believe that the Morshead set of proposals does not do that. The basic conception of the Morshead report, shorn of its details, is the abolition of the three existing service ministers and their replacement by two associate ministers who would have, at the same time, other ministerial responsibilities. In regard to defence, they would have what might be called horizontal responsibility in respect of all three services for logistics, personnel and the like.

The reasons I believe that, the Morshead report is not the right solution are these: Whatever we may do, there will still be a Navy, an Army and an Air. Force, selfcontained and on their own. It may be that,, in the future, some degree of common training will be given, particularly to junior officers of the three services. This commons training might be given up to a point after which the personnel concerned would receive specialized training in one or other of the services.. But the. Navy, the Army and the Air Force will continue to exist.

At times I wonder whether we are right in using the word “ integration “ in respect of this defence reform. “Integration “ appears ro connote some bringing together of ail the defence machinery whereas I believe that the real aim is an improvement of the degree of authority that is exercised at the top of the Defence Department. I do not think that can be properly described as “ integration “. My first reason for believing that the Morshead recommendations are not right is that nothing can do away with (he fact that the three services must continue to exist as distinct and separate entities. They must retain their identity for the future. I believe that their identity would be largely washed out by this horizontal conception of associate ministers who would be responsible, not for the whole of the Navy,. Army or Air Force, but for selected portions of each of the. three services

I believe that this horizontal,, functional division’ would be a wrong one.. I believe that it. is necessary to retain the. vertical chain of responsibility. Under the Morshead set of proposals,, the. only individual who. could, speak for his; service would be the Chief of Staff of that service, not as al present, the minister responsible to the Government and to Parliament for the organization of that service. Thus, the Chiefs of Staff, as such, would have an added burden, put on their backs, whereas I believe that one of the principal improvements of any defence reform should be a lessening of the. burden on the Chiefs of Staff. Under the Morshead proposals, because the Chief of Staff of each service would have an extra burden, and because he would have no ministerial representative to whom, he could turn other than the

Minister for Defence, he would inevitably demand much greater access to the Minister for Defence than he now requires, thereby adding to the burden of the Minister for Defence at a time when we should be reducing the burden of detail on the minds of both the Minister for Defence and the Secretary for Defence.. Those, are the- principal reasons,, in the shortest form that I can. give them,, why I believe that the Morshead set of proposals should not be accepted.

One may ask how the Morshead proposals would stand the acid test of war when the three fighting services would be rapidly expanding, probably, at different

Fates1, and without any ministerial responsibility for each service. I believe that It is impossible to conceive the Morshead set of proposals’ standing the test of war. Each of the three fighting services would need what I believe is- always- necessary in the Army and elsewhere, that is, a chain of command, from’ top- to bottom, which, is foot-proof and distinct. I do not think that anybody- can rightly say that that would be the case with the Morshead’ proposals, either in peace or; more particularly, in war.

What does the Government propose to do, having rejected the Morshead set of proposals? It proposes to define* with much greater precision, the powers and responsibilities of the Minister for Defence. Possibly, that should have been done a great many years ago. But that is one of the first things that we shall do. Secondly, we shall create a new appointment in the chairman of the Chiefs of Staff Committee. In doing this, we shall follow the lead of other countries. This arrangement has existed for at least a few years in our mother country of Great Britain, in the U.S.A., and in Canada. An individual, presumably a retired chief of staff, will be selected to act as chairman of the Chiefs of Staff Committee. He will be required, as far as is humanly posible, to set aside his individual loyalty to his own original service.

Quite lately, Air Chief Marshal Dickson, the chairman of the Joint Chiefs of Staff for the U.K. was in Australia with the British, Minister for Defence, Mr. Duncan Sandys. In many of the discussions that we had with him in Cabinet and which I had with him privately, I was impressed by the degree to which he had been able to shed his Royal Air Force loyalty, lt is a very difficult intellectual task to expect of any man, but I believe that he had achieved a high degree of ability to think, not as the representative of the service in which he grew up, but as the representative of all the services, acting as adviser to the Minister for Defence. I believe that that is the sort of man we have to try to obtain here.

It has been proposed that we should use the new chairman of the Australian Chiefs of Staff Committee as a specialist, nonservice adviser to the Minister for Defence and also as an adviser to the defence representatives on Seato, Anzus, and I would expect, Anzam. Also, we are combining the Department of Defence Production and the Department of Supply and this new combined department will be put under the aegis, or general ministerial responsibility, of the Minister for Defence. Those are the three things, shorn of detail, that we are doing. I do not think that anybody would suggest that this is the last word on defence reorganization, but I think it is a good beginning.

I shall deal, for a moment or two, with the Chiefs of Staff Committee as it has existed in the past and as it will exist in this slightly new form in the future with a permanent chairman. The Chiefs of Staff Committee will be looked to for undiluted service advice on matters that have not an international or political content. The Prime Minister (Mr. Menzies) stressed that necessity when he spoke on this subject last week. The Defence Committee will remain undisturbed in its membership except for the addition of the new chairman plus the Secretary of my own department, the Secretary to the Prime Minister’s Department, and the Secretary to the Treasury, when it is required to deal with matters that have a political concept or a concept wider than that of strict defence.

There is also the rather specialized requirement that has been made manifest in recent years by the existence of the Anzus treaty, the Seato treaty, and the Anzam treaty. in respect of those matters, in particular, there is wanted an individual of broad knowledge and experience, able to advise the Minister for

Defence and myself at Anzus, Seato and other meetings in respect of defence as a whole. Neither the Minister for Defence nor I wants a man who represents his own particular service only. He has to represent all three services and give considered military - “ military “ in the broadest sense - advice to the Minister for Defence and myself in respect of Anzus, Seato or Anzam matters.

I, myself, believe that this conception - a new conception for Australia - of an independent chairman of the Australian Chiefs of Staff is a distinct move forward both in respect of organization of the three services in Australia, and in respect of the equally important provision of military advice - again, “ military “ in the broadest sense of the word - at the great international conferences, such as the Anzus and Seato conferences.

When the Leader of the Opposition spoke on this matter immediately after the Prime Minister made his statement last week he leant rather heavily, I thought, on trying to knock the conception of associate Ministers, or to knock the conception of which the Prime Minister had spoken.

Dr Evatt:

– Just the opposite. I said it was constitutional.


– 1 should like to say that even if it were so, and the Leader of the Opposition was right and the Prime Minister wrong, and it was constitutional to have associate ministers with no other ministerial responsibility, doing these horizontal tasks, concerned with personnel, logistics and the like, in respect of the three Services, the criticism of having associate ministers doing these tasks would still be valid. The Prime Minister’s argument did not, I believe, rest in any important way at all on the fact that, in the Prime Minister’s view, it is constitutionally impossible to have associate ministers unless they have, at the same time, some other ministerial responsibilities.

As I have said, I do not believe that any of us on either side of the House believes that what has been achieved, that what the Government proposes to do in respect of defence re-organization, is by any means the last word. It is a good beginning, but I believe that we have to do a great deal more thinking on this subject. We have to do a great deal of close watching, to have close contact with what similarly placed countries like Great Britain, the United States, Canada and, perhaps, New Zealand, are doing in respect of the reform of their defence machinery. As I have said, I myself would tend to proclaim against the word “ integration “. I believe that integration is a rather misleading word to use in this general context. As the years go on, I expect that we may evolve in Australia a better conception than exists in any other country at the present time, because what exists in Great Britain, Canada and the United States is today very far from the perfect setup. Of course, the perfect setup has yet to be found. If the Leader of the Opposition has a proposal fo make now, or in the future, I am very sure that the Government will be most ready to listen to anything of a practical nature that meets the demands of the situation. 1 repeat that anything I have said - and I have said a great deal - in criticism of the Morshead report is not in any way designed to lay anything at the door of these fourdistinguished individuals, General Morshead and his associates. Indeed, 1 believe that we set them an almost impossible task to be done in a short time. The task of optimum organization of defence has yet to be completed in this or any other country. The things we have done, or are proposing to do. are steps in the right direction which will go some little way at least towards relieving this little group - these five men at the top - consisting of the Minister for Defence, the Secretary for Defence and the three Chiefs of Staff, of some of what might be called the housekeeping detail of defence that now sits heavily on them.

So the Government may now look to the Defence Committee for rapid advice on politico-strategic problems - to call them thai - which now surface, I suppose, almost once a week. The Chiefs of Staff have to find time to deal with these high-level policy matters among a great many other matters which may be called the housekeeping of defence. I believe that we have made a good start, and that this is by no means the end of the story so far as defence is concerned.


.- What the Minister for External Affairs (Mr. Casey) has had to say about the Morshead report had little to do with the report. His statements were like the flowers that bloomed last spring - they had nothing to do with the case.

We have never been permitted to see the contents of the report. All we have is the Government’s comments on the report, la fact, I doubt whether any honorable member on the Government side of the House who is not a Minister has been permitted to study the Morshead report. Why did the Government appoint the Morshead com mittee? General Sir Leslie Morshead was one of the greatest of our soldiers of World War II. He is a man to whom any government would naturally turn if it desired a report on the armed services. After it had occupied the Treasury bench for eight years the Government found the position in regard to the armed services so bad that it had to call on the advice of distinguished citizens. General Sir Leslie Morshead headed a committee consisting of the chairman of the Public Service Board, Sir William Dunk, the Secretary for Defence, Mr. E. W. Hicks, and the Assistant Secretary of the Prime Minister’s Department, Mr. E. J. Bunting, all of whom were in a position, by their long experience and their knowledge of the subject they were discussing, to give very valuable support to any recommendations that General Morshead might care to make. But in respect of almost everything that General Morshead and his committee have recommended the Government has said, “ No “. The only recommendation which the Government has adopted is a recommendation to amalgamate the Department of Supply and the Department of Defence Production. As everybody in this House knows, there was never any justification for the creation of the Department of Defence Production except, perhaps, as a means of enabling someone to waste £23,000,000 on the St. Mary’s project in New South Wales. The only reason the Defence Production portfolio was created was to give a ministerial job to the then Vice-President of the Executive Council, who was Leader of the House at the time. Sir Eric Harrison, and whose postal address is now Mayfair, or somewhere else in London.

The Minister for External Affairs has produced nothing to substantiate what the Prime Minister (Mr. Menzies) said. Above all, he has not answered the criticism uttered by the Leader of the Opposition (Dr. Evatt) in respect of the Prime Minister’s speech. If stringing words together could give Australia a defence policy, then Australia now has the best defence policy in the world. But the Minister for External Affairs is obviously not the man to follow the Prime Minister in this debate. Where is the Minister for Defence (Sir Philip McBride)? Reclining on the front bench. He is being kept out of the debate.

Mr Pollard:

– No wonder!


– Of course, no wonder! He either ‘knows nothing about the subject or else the Government is not prepared to advance him as its second spokesman in this very important debate. The peregrinating Minister for External Affairs who, I think does his best for Australia when he is abroad, did not even know that the Leader of the Opposition had criticized the Prime Minister until he returned to this country a few days ago.

This is a most important subject. The House and the country would like to know from the various Defence Ministers just where .they stand .in .’relation to this proposed reorganization. We have, in the Minister for the Army (Mr. Cramer), :a Minister who has no army. He has a brigade, and he says that the brigade will defend Australia. I recall Sir Percy Spender, another Minister for the Army in this House, telling the Parliament, in the dark days of the war .before the Curtin ‘Government came in to mobilize the full physical, material, and financial resources of Australia to save the country, that if an enemy brigade landed on Australian shores it could take Australia. I should like to hear from the Minister for the Navy (Mr. Davidson) - the Minister for the disappearing Navy - just what naval forces we have. I should like the Minister for Air (Mr. Osborne), who has no planes and very few personnel, to tell us the story of what the Air Force is doing about the defence of Australia, and how it will be affected by the Morshead report. The Morshead committee, having studied the responsibilities and ministerial duties of these three Ministers, very properly said, “The roles they fill in regard ‘to the defence of Australia to-day are so insignificant and unimportant that they ought not to .he .anything more than associate ministers.”

The Minister for External Affairs said that he doubted whether the Prime Minister had said that it was not constitutional to appoint Ministers without portfolio. I recommend my right honorable friend, the Minister for External Affairs, to read the Prime Minister’s speech. I quote his words, as follows: -

The opinions obtained show that it would be unsafe to say the least of it, to appoint a salaried assistant Minister, for almost certainly such an appointment would be to an office of profit under the Crown not authorized by the Constitution.

Dr Evatt:

– The Prime Minister has done so twenty times.


– Of course, the Prime Minister himself, as the head of the first Menzies Government, before World War II., and for at least twelve months after the war had broken out, was himself Minister for Defence, and he had assistant Ministers to assist him. The present Prime Minister, the present Treasurer (Sir Arthur Fadden), who succeeded him, and the late Mr. Curtin, were not only Prime Ministers. They held the office of Minister for Defence as well. The other Defence ministers were answerable to them. In the darkest days of the war, v.-e of .the Labour party had to have a Minister for the Army. We had to have a Minister for the Navy. And I am glad to see sitting in his place in the House this evening, the honorable member for Bonython (Mr. Makin), who was our very distinguished Minister for the Navy, as was his successor, the honorable member for Kennedy (Mr. Riordan). In the worst days of the war the Labour Government had a very good Minister for Air, also, in the person of the late Mr. Drakeford. But we had an Army, an Air Force, and a Navy in those days.

This Government has spent £1,500,000,000 over eight years in office. And what has it to show for that money? It has the Morshead report! The £1,500,000,000 that has been spent equals the amount that the Curtin Government raised by loan and spent on the defence of Australia from 1942 to 1945. But there is this difference: The £1.500,000,000 spent by the Menzies Government has gone down the drain, whereas the £1,500,000,000 of loan money raised by the Curtin Government was spent on an Army, a Navy, and an Air Force, constituting at no stage fewer than 500;.000 mer* successfully defending. Australia. Let us have a look, at the figures: of to-day. What have we now? In the Navy, w,e have 14,400 men in the permanent naval- forces, thirteen prospective officers in the Royal- Australian Naval College, and 2,968 civilian personnel. The honorable member for East Sydney (Mr. Ward)- recently asked the Minister for the Navy -

Has the number of enlistments been sufficient to meet wastage from all causes; if not, to what extent has the intake been insufficient to meet requirements?

So bad is the situation in the Navy that the Minister was able to answer - truthfully, and very frankly, too - only that the intake was insufficient by 1,224. So, as the days and the months pass, our naval forces are dwindling. In any case, most of our naval vessels are in mothballs.

In respect of the Air Force,, we are back almost to where we were in the days of the. Wirraways at the beginning of World War II. We have an Air Force of 17,007 personnel and 1,722 civilian employees. We have, in the Army, 26,000 regular soldiers, 3,207 civilian employees, and 28 cadets in the Royal Military College; and we have 21 rifle clubs. Those are the defence forces of Australia. I offer no reflection upon, nor would I attempt to reflect upon, any of the members of the forces, who are giving their services so generously and- so ably to defend Australia.

What the Australian people want to know, and what we in this House want to know, about the Morshead report is: What did General Morshead say about the adequacy of our defence forces to safeguard Australia if we should, unfortunately, be involved in a third world war? The Minister for External Affairs said that our forces are increasing. From what I have told the House - and the people who happen to be listening - it is clear that that is just so much nonsense. The Government cannot fool the people with assurances of that sort when the assurances cannot be backed by anything better than mere assertions.

When members of the Government parties were in Opposition, they chided the Labour Government over Manus Island. They said that the Labour Government refused to give the Americans sovereignty over Manus Island. The Americans never asked for it. What was suggested was that the Labour Government should allow

Manus- Island to be used as an American base. The present Leader of the Opposition, who w3s Minister for External Affairs at the time, suggested that Guam might similarly be made available by the Americans. That is on the files. The Labour Government was never asked to abandon Manus Island. In that matter, we took counsel of the late Field Marshal Sir Thomas Blarney and Admiral Sir Louis Hamilton. We asked their opinions- about the advisability of transferring our control over Manns Island if we were ever asked fo do so. Sir Thomas Blarney said, “ Never surrender one inch of Australian soil “. Admiral Sir Louis Hamilton said, “ Manus Island is the Scapa Flow of the Pacific “’. The Chiefs of Staff, in Washington, decided, as a matter of strategy, that they would not come down to Manus Island, and that their defence line would be from San Francisco through Honolulu to Guam, to Okinawa, and on to Tokyo. They were not going to have a V-shaped line of defence-.. A>nd there the, matter ended.

One would’ imagine- that the people who so vigorously attacked us about Manus Island would defend it. when they became the Government. Over the years, they have been evacuating it. We were told the other day, in the press - since there was no denial I presume: that it was true - that the last of our Air Force units at Manus Island arc to be removed’. In the last five or six years, the air forces there have never consisted of anything more than two Dakota planes and about ten men. The navy at Lorengau consisted of a captain, a lieutenant commander, some Australian personnel and a number of enlisted natives. This naval unit is to be completely withdrawn. All that is left for the defence of our northern gateway to-day is one company of the Pacific Islands Regiment, led by twelve Australian officers. As far as this Government is concerned, Manus Island has been abandoned to the seagulls, the hermit crabs and any foreign power that likes to take possession of it. Will the Government tell us where the £1,500,000,000 has gone, if that is the position with Manus Island? Equally tragically, that is also the position in regard to all the Australian coastline from Geraldton in Western Australia around to Townsville in Queensland.

Mr Killen:

– Who started the rot at Manus Island? Be honest about it.


– I have tried to appeal to the intelligence of the honorable member by telling him the facts. If he is the victim of invincible ignorance, I cannot be held responsible for my inability to make clear to him something that is already very, very clear.

Time does not permit me to tell too much of the war story, but let me read again some of the historic words of the late John Curtin in his election policy speech in 1943. What he said then is true to-day, largely of the same people who let Australia down so badly then. If he ever said anything nice about any of them, he did so in a spirit of generosity and not because he was dealing in absolute truth. In 1943. he said -

Blind to the dangers in the Pacific, the Menzies and Fadden Governments had left Australia very much unprepared. Australia’s resources were spread over many far-flung battle fronts. The men of the three services fought with fine efficiency, and made conspicuous contributions, but at home the then government had left the country almost undefended. Australia was a sector as menaced, and as heirless, as the Philippines.

That is again largely the position to-day. He added -

Despite what the fall of France presaged - that Britain would be unable to send adequate land and air forces to Singapore and a fleet to the Far East - insufficient measures were taken to strengthen the position within and around Australia.

The Labour Government took prompt and effective measures to develop Australia’s maximum effort.

Who can doubt that truth? Mr. Curtin also said -

The strength, disposition and condition of Australia’s forces when Labour took office were several warships in overseas theatres; naval personnel 64 per cent, of the present strength; three divisions of the Australian Imperial Force in the Middle East and another in Malaya, and the call-up of Citizen Forces limited; army equipment related to initial requirements only 20 per cent, in respect of rifles, 28 per cent, of submachine guns, 41 per cent, of light machine guns, 15 per cent, of anti-tank rifles . . . five Real Australian Air Force squadrons outside Australia; no fighter aircraft, and air force personnel 44 per cent, of whit it is to-day.

Let me emphasize that those words were spoken by the Prime Minister of Australia in 1943. This Government talks and talks and talks. It has persuaded itself that making speeches is all that matters and that action follows automatically after the delivery of a fine-sounding speech. This country wants a defence force. When we look at the United States of America and at Great Britain, we see that at least some defence forces are in existence there. Nobody knows the truth of what 1 am saying better than the members of the Government’s own services committee who are sitting on the back benches. They are just as dissatisfied with the present condition of affairs and just as disgusted with the performances of this Government as are members of the Opposition and members of the public. The people of Australia will pay for a proper defence force, but they will not tolerate any longer the continued existence of a paper force and nothing more. As we want defence, let us have defence! So that the people of Australia may know the truth about everything concerning our defence, let the Government not continue to try to mislead by quoting from the Morshead report passages that it thinks suit it, by misquoting other sections as it is obviously deliberately doing and by leaving everybody in the community befuddled and bemused.

It is up to the Ministers to give us some better reasoning than they have advanced up to date. If the report of the Morshead committee were put into effect, this Government would have four or five fewer Ministers, because obviously the present number is not required. This Government increased the Ministery to 22; it now has 21. It has a chance to get rid of several Ministers. I would save the Minister for the Navy because I think he is doing a good job as Postmaster-General. As for the rest, I think they ought to go.


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


.- As 1 follow the Deputy Leader of the Opposition (Mr. Calwell) I point out, in the first place, that he did not give the Opposition’s alternative policy to that announced by the Government. In his light and amusing style, he has referred to some personalities, but many an Australian citizen and soldier can tell a better story about the actions of Labour’s Minister for the Army, the then member for Capricornia, Mr. Forde. I would like to join issue with the Deputy Leader of the Opposition on some of his statements. I shall take one as an example.

He said that our army consisted of one brigade. It is well known that that is not the truth, because we have 70,000 personnel in the Citizen Military Forces and 33,000 cadets. By citing those figures alone, I refute the honorable gentleman’s allegations. The Deputy Leader of the Opposition said that Manus Island had been abandoned. Who was responsible for abandoning Manus Island? The Manus Island base which was built by the United State of America at a cost of approximately £100,000,000 was abandoned by the Chifley Government in 1946 when it refused to allow the United States of America to maintain it. As is well known, this Government is now doing its best to build up Manus Island once again as a base.

I now turn to the statement on defence organization that was presented to the House by the Prime Minister (Mr. Menzies). As I said in my opening remarks, the Opposition has not presented any alternative to the policy enunciated in that statement. To my mind, one of the most important matters dealt with in that statement is the integration of the armed services. This problem is not confronting Australia only; it has also received the continuous attention of powers such as the United Kingdom and our cousins and allies, the United States of America, over a number of years. It is not an easy problem to solve, because as the Minister for External Affairs (Mr. Casey) pointed out earlier this evening, it is not simply a matter of the conception that is formed in one’s mind by the word “ integration “. The thought and the planning must come from the top to ensure that the various arms of the services work together under a unified control, rather than the personnel of the several services being integrated, as may be suggested by the use of the word “ integration “. The Prime Minister made that quite clear, when he said -

We propose to clarify this by issuing an administrative direction which will establish the complete superiority of the Department of Defence in the field of policy and which will also enable that department, by authority, if persuasion fails, to secure the elimination of overlapping between the departments and the creation wherever possible of common services and standards.

It has been made quite clear in the earlier part of this debate that the actual integration of personnel as suggested in some ways by the Morshead report is not practical.

While I am speaking of the statement delivered to the House by the Prime Minister, I think it would be as well for me to summarize briefly what I consider the most important points that the Prime Minister made. The right honorable gentleman said -

We have, therefore, decided that there should be a chairman of the Chiefs of Staff Committee who is not himself currently one of the Chiefs of Staff. He must, of course, be a military man of eminence and therefore drawn from one of the services. But his duty will not be towards his former service but to the Minister in respect of the over-all defence picture.

Because of the interest that is taken in an appointment of this kind, I think I should remind the House of the duties of the occupant of this new position. As the Prime Minister said, he will -

  1. convene meetings of the Chiefs of Staff;
  2. arrange the agenda in consultation;
  3. aim at securing comprehensive decisions and appreciations;
  4. give advice to the Minister and Department of Defence and, with the Chiefs of Staff, attend and take part in meetings of the Defence Committee; and
  5. act as our military liaison officer on Seato, Anzus and Anzam.

To my mind, the duties that he will perform include many of those that might be expected to devolve upon such a person as a commander-in-chief. No doubt a number of honorable members can form a conception of the duties of a commanderinchief of the Australian forces in peacetime. In time of war, of course, such duties are very much more clearly defined. It appears to me that the duties of the proposed chairman of the Chiefs of Staff Committee will approximate those of a commander-in-chief.

The Prime Minister’s statement also informed us that the Defence Committee, which, as we all know, is presently in existence and has been working well for about a year, will continue. I believe all honorable members will agree that this committee should continue. The Government has accepted the recommendation of the Morshead committee that the Departments of Supply and of Defence Production should be amalgamated into one Department of Supply. Once again I believe that we will agree with that decision.

As is well known, much criticism has been levelled by persons outside this place at the defence policy of the Government. Of course, Acre has always been criticism of defence policy, no matter what government has been in office. It is not possible to achieve general agreement on a defence policy for, I believe, one very good and basic reason. If, unfortunately, we should be committed to a war, the critics would immediately say to the Government, “ You have not spent sufficient money in defence preparations.” If, ‘looking on the happier side, we are not to toe committed to a war, the critics will say, “ You have expended far too much money on defence; you should have expended more on national development and for other purposes.”

Let it not be thought that I am contending that the Government should not be criticized. It will be an ill day for Australia when the Government, or, indeed, members of Parliament, cannot be criticized or made the subject of cartoon. I believe om democratic system -should allow any person to voice his opinion, if he truly believes in a particular cause. It is wise, however, for the general public to remember that a good deal of comment appears in our :daily press. I agree, again, that the authors of that comment have a right to make it, but we should remember that very often such comment represents the opinion of one person, and that person’s opinion is given wide circulation. I think we have all heard comments that have appeared a day -or two earlier in the press given as persona] opinions by .persons other than the original author. This is as it should be, so long as we remember that the particular opinion has, in many cases, emanated from the one source.

The second point that it is wise to remember when making criticisms of defence policy ‘is that it is not possible to obtain all information regarding factors affecting the situation. Those honorable members who belong to such a committee as the Foreign Affairs Committee have an advantage over the private members, on both sides of the House, who do not belong to such a committee. But, surely, defence policy is a matter upon which one should have the fullest knowledge before offering criticism. Let me ray what T believe aTe the necessary items of information that one must obtain in order to make a .true appreciation of the situation and evolve a strong and adequate defence policy. At this stage let me say that the private members of this Parliament can, I believe, make useful contributions on this subject as a result of their own observations and research, and their interest in the problem, but they suffer, as 1 have pointed out, from a lack of detailed information and technical advice.

The first matter that we should consider when dealing with this aspect of the situation is that of information. We should know as much as it is possible to know regarding the strength of any potential enemy. The government of the day, of course, has the advantage of its intelligence service and can study the actions of possible enemies. It can consider .the significance of statements made by potential enemies, and it is kept .informed of the infiltrating tactics being engaged in by those potential enemies, especially in countries adjacent to their own. We should also have the fullest information regarding our own forces. We should know the strength of our troops and of those of our allies. We should have information regarding the training of those troops, and we should have some knowledge of the mobility of our own and allied forces, the availability of reinforcements, and the effectiveness of the various services. I suggest to the House that many of the persons who, from time .to time, have offered criticism regarding the Government’s defence policy, have not given full consideration to the information available under the headings that I have enumerated.

Under the second main heading, we have the factors affecting the situation as it changes from time to time. I believe that the situation as it is today will not necessarily be the same next week. Therefore, we have to have mobility in our thinking also and we have to keep ever constant in our minds the changing possible methods of attack upon ourselves and upon our allies. We have to think of the arrangements we have made in our various treaties such as Seato, Anzus and Anzam. We have to think of the geography of the various nations with whom we are connected. We have to think of the location of their population and that of our own. and we have to give important consideration to the decisions that have been made by our allies.

Having given full consideration to those two main headings which I have just stated - the first regarding information, and the second the factors affecting the situation - we then have the very important responsibility of deciding upon the plan or method which we will adopt. I presume that in our own thinking the first thing we have to decide upon is the role of Australia as a nation. I believe honorable gentlemen opposite forget that because they limit their suggestions and their thinking to terms of the number of men we have under arms and where they can be located. I should think it would be well within the role of Australia in a future conflict to be the main supply area for all allied forces based in the South-West Pacific or South-East Asia. Therefore, our main role might not be to supply a large number of men to their forces in the field.

Having considered that, we come to the next point which is the role of Australian forces, keeping in mind the whole time our responsibilities under our treaty obligations which I have already mentioned. As a background to all that thinking, we must realize at all times that we will have the assistance of our many allies. Quite a number of them are powerful. Some of them are smaller nations such as our own but all will make their contribution. We have to realize in our planning the type of assistance that they will be able to give, and how we can fit into the plan or the method. Another consideration, especially under the Seato Treaty is this: We must get to know one another better. We have to plan against another type of war - that of Communist infiltration of some of our allied countries. I know that important consideration was given to that matter during the recent Seato conference. In our planning and in any suggestions we can put forward to that council, we must do all in our power to help our allies to advance to a strong and active democracy instead of allowing them to fall back to the pernicious doctrine of communism.

I have pointed out to the House that no alternative policy has been brought forward in the present debate by honorable gentlemen opposite as to what they would do if they were in office. We on this side of the House who have listened to previous debates, know that it is the policy of the Leader of the Opposition and those who support him not to allow any soldier to go out of Australia if they can possibly help it. Their idea is to maintain the defence of Australia around the Australian coastline. We know that that is a physical impossibility. They want war to work out as a simple sum so that we shall have one soldier with one rifle approximately every 2 miles, and field guns of some sort posted at intervals of 10 miles. Of course, that is a ridiculous policy. A true defence policy is one which provides that, with our allies, we shall do all in our power to contain any potential enemy within his present boundaries. I believe that the whole direction of our external affairs policy and our defence policy is directed towards that aim and objective. In the few minutes remaining to me, perhaps I shall be permitted to return to one of the headings upon which I spoke recently, that is the need for us to get to know our own neighbours and allies better.


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


.- I shall open my remarks by referring to the last part of the speech of the honorable member for Robertson (Mr. Dean). I am afraid that the last part of his argument did the rest of it little justice. I have never heard more utter rubbish than his statement that the Australian Labour party has little care for the defence of Australia. Who created the Australian Regular Army? That was in being when this Government was elected to office. Who created the Fleet Air Arm? That was in operation when this Government was elected. Who organized the Woomera rocket range? Surely that would be the last refuge of isolationism? Who created those organizations and gave them to this Government as a going concern? Who presented to this Government the C.M.F. filled with volunteers whose enthusiasm was diluted by this Government with its wasteful and ineffective national service scheme? If supporters of the Government were honest with the people, they would admit these things.

It is nonsense for honorable members opposite to talk as they do about the organizations they inherited not so long ago. We have now reached a stage where the Government is not even prepared to bring down the report of a high-powered committee which should have been presented to this Parliament. That is a serious affront to the whole parliamentary institution. The Prime Minister (Mr. Menzies) himself made great play on the association of the parliament with defence. He said that Parliament granted the defence money on behalf of the people who elected it and Parliament was entitled to control that expenditure. After many more words he referred to the need to .preserve the vital principles of parliamentary authority. Nobody has shown less regard and more arrogant disregard for the rights of the pa;rliamentary democracy than the right honorable gentleman himself. To appoint a co-limit lee of four people of such distinction as Lieutenant-General Sir Leslie Morshead and three top public servants after a great fanfare and then to refuse to table their report in this House where honorable members could consider it - and 1 presume that most honorable members on the Government side themselves have not been able to see it - is a serious affront to the working of this institution and unworthy of it.

Why is it that the Minister for Defence (Sir Philip McBride) has taken no part in this debate? Why is it that on the three important occasions when the Government has seen fit in the last twelve months to discuss its defence policy, the Minister for Defence has been pushed aside and the Prime Minister has taken up his duties for him. If honorable members look into the history of our defence system generally, they will find that it operated efficiently only when there has been a strong Minister for Defence. I am not criticizing the personal strength of the Minister for Defence, but the authoritarian control of me Prime Minister. The mantle has descended upon the Prime Minister and he has assumed it whether it gives him control of external affairs or command of a statement on defence. It is only by the creation of an effective Department of Defence led by a Minister who has the ability, the will and the power to wield his authority that an effective defence force can be created. That challenge should be taken up in this House tonight: The proposition is that we should create a defence force based on these principles in the first instance; it will have to be effective for its fighting role, despite our paucity of numbers; it must have morale as the basis of its recruiting and it must give the people some sense of security and value for their money. The Prime Minister has made no attempt in his statement to solve these problems. He has made no attempt to lay bare the general problems of defence or to encourage the Parliament to debate them. I wonder at the actual structure of the committee which inquired into this matter. Sir Leslie Morshead is known as a soldier of great distinction. So also were his three public service colleagues - Sir William Dunk, Mr. E. W. Hicks and Mr. E. J. Bunting but they are part of the Public Service and steeped in a certain sort tradition. Why could we not have called in some of our retired generals. Why could we not have called upon Sir John Macauley, the retired Chief of the Air Staff? We have, for instance, Sir Frederick Shedden. Not two years ago the Minister for Defence announced that Sir Frederick Shedden would spend the remaining two years before he retired writing a book on Australian defence administration. Why was the man who was doing that sort of work not taking some part in the committee’s investigation? Why has this report been kept secret? That is the question we ask from this side of the House.

In the first instance, the general problem of integration of the services will have to be tackled in a wholehearted fashion. The figures show that it is possible for the Defence Ministry to be handled by one Minister. I would disagree with that part of the report which suggests that some duties should be handed over to part-time Ministers. I do not think that in these days there is any scope for part-time Ministers in our governmental institutions and organizations.

What would be the role of the Minister for Defence? What would be the duties devolving upon him? Excluding the cadets mentioned by the honorable member for Robertson (Mr. Dean), the grand total of men in the three services is about 123,000. What was the position in 1938-39? We had 59.000 men in the Services in 1939. As a result of the recruiting drive, the number was increased by 30,000. Therefore, there is quite a deal of similarity between the situations in the two periods. The present Army is more complicated as regards equipment, but it is less complicated as regards organization. I think that at the moment we have only three divisions of about seven or eight infantry brigades, and a great number of ancilliary troops. One has only to look at the front pages of the telephones books for the capital cities to see the terrific organization behind our Army, and I presume that the other ser.vies are much the same. What we have to do is find some method of reducing this administrative tail.

Back in 1938 we had 53 infantry battalions. They, of course, were based upon a volunteer organization. The force was manned, generally, by a very small nucleus of professional soldiers, but the very basis of it was not a great deal different from what we have today. The Navy and the Air Force are both a good deal bigger today, but I think it is idle to suggest that it is impossible to create an organization by which the Ministry of Defence could handle all the problems associated with the forces. I believe that in this country we face a challenge which we could, perhaps, take up in a more experimental and courageous fashion than can other countries. Our problems are completely dissimilar from those of the United Kingdom and the United States of America. It is obvious that a country such as the United Kingdom, with constant commitments overseas of great bodies of troops and the naval and air force personnel that go with them, faces different problems from ours. It is obvious that America, with troops and ships overseas and with great manpower resources, faces problems which are completely different from the problems which are posed to Australia. Therefore, the time has come to cast aside some of the shibboleths inhibiting this Government. What is the reason for delivering three Defence statements in twelve months or less, all contradictory but full of hope, and none producing anything more than a report which members of the Parliament are not allowed to see?

These are some of the problems we ought to be facing. What then are some of the factors common to all the services which can be integrated? First, there is transportation. The whole problem of transportation could be handled by one corps or organization. Such a system would allow a great deal more flexibility and permit more economy of effort. It would preserve economy of the forces and reduce the administrative tail, which is one of the great problems facing our Army, Navy and Air Force. We should also examine the general system of supply. I understand that at present it is the Army’s duty to supply petrol to Air Force establishments away from bases, and this system could be developed. The whole system of supply could be developed and integrated. The same comment applies to such functions as pay. After all, the forces comprise only 123,000 people, so an integrated pay system would not be such a terrific organization. This number is only 50 per cent, more than the staff of the Postal Department, which is handled by the Postmaster-General (Mr. Davidson), who is also a spare-time Minister for the Navy. This argument against integration can be completely disregarded if we turn our eyes to the functions carried out at the present time.

The records systems of the various services employ a great number of people. They are very important sections of the forces but they could be completely integrated. The medical services are another instance. There is no doubt whatever that that branch of the services could be handled by one organization. Another one is the intelligence section of each service, which the honorable member for Robertson mentioned. During the last war intelligence personnel of all services and of various nations worked side by side together, with no difficulty whatsoever about seniority, functions, duties or responsibilities. It is possible to unite and unify this kind of organization when people have a single aim.

Those are some of the questions to which the Government should apply itself in regard to the internal organization of the defence services. I think that in the end any saving that might result from reducing the number of Ministers is of small import. What is important is that we try to create an organization which is integrated, of high morale, effective, and economical in manpower, which can answer for us when the time comes.

We assume - I believe that the Prime Minister has almost said so - that it is unlikely that we shall be brought into a global war. What are the two defence problems that face us? First is the matter of home defence. What is the problem here? If the threat came from the north - all our enemies are supposed, apparently, to live in the north - and the enemy landed forces at 50 points round our coast, we could not send half a battalion of effective troops to try to seal off every one of those forces. What is more, the transport system of the country could probably not shift the necessary troops. Unless we do something about transportation the whole system of defence will be effectively hamstrung. The Government is very slow off the mark on that important matter. The home defence problem cannot be solved by the simple application of man-power, lt can be solved only by organization and an effective use of the transport system.

If, for some reason, we answered a call of the United Nations and sent a force overseas, what would be the position? I thought that the Prime Minister was very optimistic when, over two years ago, he spoke in terms of two divisions being committed to Malaya. What chance have we of mobilizing two divisions and of shifting 30,000 men and their equipment? What chance have we of gathering together the necessary ships? Assuming that we could do so, would not the movement of that whole force be a single operation? During the last war did we not see develop great combined operations in which all services and allies worked together? Recalling this type of operation, we can think back in our history a long way, to Quebec, the West Indies, and the Mediterranean operations in the Napoleonic wars, when small forces worked together almost with a single thought, although sometimes incompatible personalities prevented the system from working satisfactorily.

We can produce such a system in this country. After all, we are not committed, as perhaps England is, to an historical, traditional association of services. If there was any tradition behind our Services, the mangling of units of the Citizen Military Forces in the last seven or eight years has killed it. If we send forces overseas, it is important to take heed of the lessons of both the 1914-18 war and the last war. In both instances, at the beginning we committed small numbers of troops in various theatres of operations under commanding officers of other nations. Australia should take very firm steps to ensure that it always takes part in such operations in such a way that the responsibility of command lies with an Australian, and so that the responsibility comes back directly to the Parliament and the people. During the first world war it took three years to integrate the five corps on the western front under Monash. In the last war there was a historical struggle to regain control of the divisions that went to the Middle East. This must not be allowed to happen again. If Australian forces are to be committed to theatres of war let them be committed as Australian forces under Australian commanders. I believe that this country can create, without any trouble at all, a new, experimental, and courageously organized force, which can answer for us at any time. We must overcome the administrative delay which has occurred in the past. In 1955 FieldMarshal Montgomery said -

Obviously we cannot go over to one service, but we might well introduce such a close integration between the three services that the final stepcould be taken without confusion if it was ever decided it was necessary. An essential step would be gradually to produce a new type of senior officer who was trained to be completely inter-service from his earliest days. This could not be done unless we combine the service cadet colleges, the staff colleges, and so on. I consider that this might well be done now.

This last was done in Canada in 1949. That country will soon be producing people of the type envisaged by Montgomery. Those men will be moving up the ladder of seniority and will have an overall picture of defence requirements. Montgomery also said -

The more we mess about with the old organisations designed for conditions which will not recur, the further we shall get from the right answer.

I believe that this Government will get nowhere with defence. It will continue to waste money and ruin the morale of the services. The way things are going with the permanent Navy and the permanent Army, in another six months there will be no men in those services unless something is done about their pay. conditions, housing, and future security. Unless something is done about those things, it is impossible to create an effective defence force, no matter how much money is spent.


.- We have just listened to the honorable member for Wills (Mr. Bryant), who is, I think, the senior military officer in the Opposition. He is always cheerful, but some aspects of his speech 1 found very entertaining. He said that Australia’s defence problems were completely different from those of the United Kingdom or the United States. He said that as a military strategist. But the Leader of the Opposition (Dr. Evatt) takes quite the opposite view. He suggests that we should take the British system as our example. Well, who is right - the Leader of the Opposition, or the honorable member for Wills? Do we accept the military brain of the Labour party, or do we accept his leader? They cannot both be right if they are contradictory.

The honorable member did not contribute a great deal towards this debate. Honorable members know that he is a serving soldier, and we know that he is prepared to go overseas in defence of his country. I admire him for that, but I find fault with him when he says that the Government has wasted money on national service training. The honorable member has, apparently, never served with untrained troops. If he had, he would not have made such a remark. I would expect that sort of criticism from the honorable member for Hindmarsh (Mr. Clyde Cameron), who, in his speech during the Address-in-Reply debate, deplored the Government’s waste of money on national service training.

The Opposition has made no constructive suggestion with regard to this country’s defence. The Deputy Leader of the Opposition (Mr. Calwell) said that this country must have a defence force and that the Opposition is determined to see that it gets it. If that is so, why did the Labour party oppose national service training? Why is it that during every election campaign Labour talks about reducing the defence vote by £40,000,000? Why did the Deputy Leader of the Opposition say that this Government spent as much during eight years of peace as a Labour government spent during four years of war? He said that the amount involved was £1,500,000,000. But when it suits their case, members of the Opposition say that the present £1 is only worth one-quarter of its previous value. So the right honorable gentleman is comparing an amount spent to-day with an amount spent when the value of money was four times greater. The

Opposition is so divided that it has no policy and offers no opposition of any value whatsoever to the Government.

A technique is developing within the ranks of the Labour party of criticizing the Government by quoting the “ Sydney Morning Herald “, and other newspapers. The Leader of the Opposition has quoted from the “ Sydney Morning Herald “. The right honorable gentleman asked: “ What can the Government show for its expenditure of £1,500,000,000?” That is a technique in generalities. It is so easy to say things like that. I could go to the leader of a trade union and say: “ You have 20,000 members in your union. Over the last ten years they have received £300,000,000 in wages. What have they to show for that? “ That is exactly what the Labour party is here. It is a spurious technique, with which it is very easy to put a government on the defensive.

But during the last eight years we have been engaged in a cold war. The cost of maintaining peacetime forces is infinitely higher than the pittance that it cost during the last war. Not once has the Opposition pointed to an item of expenditure on defence in the Budget and said that it was wasted money. But to-day, when one newspaper criticizes the defence vote, the Opposition rallies behind it. At the next elections the Opposition will doubtless offer to reduce the defence vote. The honorable member for Hindmarsh in his speech during the Address-in-Reply debate said -

If our defence programme was brought up to date we could save £90,000,000 or £95,000,000 a year in defence expenditure alone.

What is the Opposition doing that it can allow such a tremendous squandering of money? The Prime Minister’s statement was a sound one, designed to streamline our defence. It is not a bad thing to overhaul something regularly. The reason why Sir Leslie Morshead’s report could not be tabled is because a report in which Government officials have given evidence cannot be tabled in the House. Older members of the Opposition are well aware of this fact. But the public is not aware of it. To say that the report should be tabled sounds very good on the radio. The Opposition gets a certain amount of kudos from misleading the public. Labour’s whole policy is to mislead. The Morshead report recommended integration of the three services in one defence service. I do not agree with that recommendation, but the other recommendations are sound. In my opinion the integration of the three forces into one would be quite wrong. Australia’s defence policy has been based on a small regular army, a hard hitting force that could be used in any theatre of war at very short notice, followed by three divisions on longer terms. Those troops are available. The honorable member for Wills said that our defence in 1938 and 1939, when we had 57 battalions or three divisions in the country, was good. But a Menzies Government was then in office. Other members of the Opposition have said that Australia was not prepared when war broke out in 1939, but Mr. Curtin, when he was Prime Minister, said that the foundations of Australia’s defence force were laid by the good planning of the previous Menzies Government. Again the military men say there were good Citizen Military Forces before the last war, which is completely contrary to what members of the Opposition say. Our plan is for rapid expansion. If there is to be a rapid expansion in time of war - and any war that might break out will be at very short notice, in modern times - surely the system of maintaining the three services is sound, so that expansion can be achieved rapidly without overlapping. In the meantime, what the Government proposes to do is to secure the overall superiority of the Defence Department. Under the new programme, the Minister for Defence will have an overriding power in respect of the three services. That is sound.

The other important decision which has been made is to appoint a military chairman of the Chiefs of Staff. Under the present system the chairman of the Chiefs of Staff is a civilian, the Secretary of the Defence Department. That is not wise. Whatever happens in any joint staff negotiations to try to achieve an appreciation, there will always be rivalry between the arms of the forces. A civilian chairman inevitably leads, psychologically, to efforts on the part of each force to paddle its own canoe, and consequently there will never be a good appreciation of the overall position. The decision to have a military man - or a representative of any arm of the forces - as chairman is a wise one. He will probably have had experience as a Chief of Staff in previous negotiations, and this will strengthen his hand a great deal in trying to dispel the spirit of rivalry between the various arms. The result will be a much better military appreciation by the Ministry of Defence. The Minister for Defence has not only the military angle to deal with; he has to deal with many other angles as well.

The decision to combine the Department of Supply and the Department of Defence Production is sound. As a result, the Chiefs of Staff will be able to maintain a very close liaison, particularly in respect of research and development. As honorable members know, a rapid change is going on in the type of weapons used, and there should be a very close liaison between military thinking and the scientific approach to new weapons. As a result of combining these two departments the possibility of combining these two schools of thought will be much stronger.

There is a feeling abroad that the next war will be a push-button war and that modern conventional weapons will not be used. Again, that great strategist, the honorable member for Hindmarsh, says that all future wars will not be fought with such weapons as guns and tanks; these will all be old-fashioned. It appears to me that there is only one potential enemy of the free world, that is Soviet Russia. But it is interesting to observe that Russia and all the countries under its control have retained conventional weapons. Russia has probably 100 submarines in the Pacific. It has also a strong air arm in the Pacific. Aeroplanes and submarines are conventional weapons. In Europe, Russia has standardized these weapons and is retaining them. There is no talk of Russia engaging in a push-button warfare. Consequently, we have to think along the same lines. All the wars that have taken place since World War II. - in the Middle East, North Africa, Korea or elsewhere - have been fought with conventional weapons. None of the armies in those wars used nuclear weapons. To suggest that conventional weapons should be abandoned is plain stupidity.

Nowadays a very strong attempt is being made on the part of people who are illinformed to ban the hydrogen bomb and the atom bomb. Those people should consider for a moment what the result of such action would be. It is easy to say that these nuclear weapons are horrible. Of course they are. But we must study the balance of power in the Asiatic world, which particularly affects us. Communist China has enormous conventional forces. There are no comparable forces in Vietnam, Thailand or Malaya, yet they are the first line of defence against communism in Asia. Once a start is made to ban the deterrent of nuclear weapons, how will Australia stand? People who are so keen to accept the advice that the nuclear deterrent should be banned should just think how we in Australia would thereby be affected. They should remember that there are enormous land armies supported by Soviet navies in the Pacific. If such people would think of the fact they would realise that the course they favour would be very dangerous indeed to Australia.

Mr Cope:

– What do you think of



– The subject of defence to me is one of the utmost importance. If Opposition members do not take it seriously, but flippantly interject about Liberace, what will future generations say when it is too late and our liberty has been destroyed? The only query that Government back-benchers raise in respect of the Government’s proposals is whether they go far enough. Cabinet must decide how much the country can afford on defence and how such expenditure will affect the national economy. So far as I am concerned - and I speak from experience - I cannot believe that any money spent on defence is wasted.

The Government now has a sound, balanced plan which is designed to obviate overlapping. That is one of the recommendations of the Morshead committee which the Government has adopted. The advice of the Morshead committee is to give the Minister for Defence an overriding responsibility in order to improve efficiency, reduce overlapping, encourage the development of atomic weapons, define the responsibilities of Service chiefs and strengthen the overall authority and control of the Minister for Defence. That is the important part of the Morshead committee report. The duties of the Service chiefs are clearly defined. They will have their own chairman and Chiefs of Staff and as a result of their deliberations and advice the Minister will be able to get a clear appreciation of the military picture.

The Australian system of having a defence committee is very highly regarded overseas. Under that system there is in existence a defence committee under the chairmanship of the Secretary of the Defence Department. In that committee are linked not only the Chiefs of Staff to give the military view, but also reports of the Treasury to give the financial view, and reports of the Defence and Supply departments to give the atomic and supply view and the overall picture of what the country can afford and can do in defence. That is sound policy.

A danger which is prevalent to-day is the continual derision of Australia’s defences by members of the Opposition, who have no technical knowledge or any knowledge at all of these matters. They are creating doubt and uncertainty in the minds of the people. Have they any justification for their attitude? Have they proved in one single iota where money has been misspent on defence? They talk about St. Mary’s filling factory and claim that money has been misspent there. The only real criticism that can be made of the St. Mary’s project is that it should have been started long before it was. Honorable members opposite are continually making statements belittling Australia’s defences. Do they seek to destroy confidence in our defence system? I ask them to consider what must be the reaction of friendly people in SouthEast Asia, in countries such as Thailand and the Philippines. When the peoples of those countries hear such criticism of our defences, will they be encouraged to combat communism? If honorable members opposite think that the Government has misspent money on defence, they should show where it has been misspent. But they should not belittle our defence forces. Otherwise, possible allies will come to the conclusion that Her Majesty’s Opposition in this Parliament believes that our defences are weak. According to the Leader of the Opposition (Dr. Evatt), our defences are poor. That is not true. Our defences are better than they have ever been in peacetime. It is easy to give the impression which the Leader of the Opposition sought to convey by using a cunning technique and asking, “ What have you got for £1,500,000,000? “ At least 80 per cent, of that money has been spent on paying and maintaining the forces themselves.

The honorable member for East Sydney (Mr. Ward) said that there were too many admirals and generals in the forces. Do Opposition members not realize that when a large body of men is not retained under arms in the forces one must have highly trained cadres so that when the time comes, it will be possible to fill out the divisions? If the Opposition wishes to criticize the Government’s defence policy, I suggest that it should criticize it on sound lines. I defy the Opposition to state that the Government has not answered a single allegation made by the Labour party concerning defence. The Deputy Leader of the Opposition asked why the Minister for External Affairs (Mr. Casey) had not answered the case presented by the Leader of the Opposition. The only point in the speech of the Leader of the Opposition that I could understand was one which was completely contrary to the Labour party’s defence policy.


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


– One would have expected a very intelligent approach to the defence recommendations by a soldier with a great record such as that of the honorable member for Hume (Mr. Anderson). I expected that I would have to answer a contribution to this debate that would have given a lead to this House and the country, and which would have presented some very valid explanation of why the Government, after appointing a special committee to do a special job, had not only failed to present the committee’s report to the Parliament but also decided to reject the committee’s advice. I had reason to believe that when one of the outstanding military men of this Parliament rose to his feet he would spend his twenty minutes in intelligently telling us the reason why his military friends were wrong. I wonder what his speech would have consisted of if he had not had the honorable member for Hindmarsh (Mr. Clyde Cameron), the honorable member for East Sydney (Mr. Ward) and one or two other Opposition members to talk about.

His only intelligent contribution to the debate was his query as to what we should think if somebody asked a trade union leader what the union had to show for the £20,000,000 that had been paid to its members in wages over a period of years. Speaking as one who has had experience in trade union affairs, I should say that what the union leader would have to show for it would be a body of unionists capable of rendering most efficient service to the nation. The Government has the same measure of responsibility with respect to its defence expenditure. That is my first criticism of the honorable member for Hume.

My second criticism is that the honorable member did not touch the real crux of this debate which is the question, “ Why has the Government rejected a recommendation from a committee that it set up itself? “ I think we are entitled to analyse the background of that committee’s report. On three occasions in less than twelve months this Parliament has been subjected to statements from the Prime Minister (Mr. Menzies) all of which should have come from the Minister for Defence (Sir Philip McBride), purporting to set out the Government’s policy on defence. Perhaps we can be excused for harking back to some of the previous statements made by the Prime Minister. There we shall find, I believe, the basis for the very report that was submitted by this special committee. On 4th April, 1957, the Prime Minister subjected this House to a very long statement of the reasons why certain alterations were being made in defence organization. At page 576 of “ Hansard “ of 4th April, 1957, dealing with the defence proposal, the Prime Minister, in making the first of three statements on this subject, is reported as follows: -

Defence policy is inseparable from other aspects of Government policy and, in particular, foreign and financial and economic policy. The Government has, therefore, decided that it should take steps to repeal the separation and to improve the swift co-ordination of policy and action. To this end, we are initiating a movement to Canberra of those elements in defence which deal with policy.

The Deputy Leader of the Opposition interjected -

You will meet a resistance movement, will you not?

The right honorable gentleman, sure of his ground as usual, said -

Oh, we have met it; but I am a bit long in the tooth. The Minister for Defence and the Minister for the Interior are in consultation about the details of the transfer. The Government will provide the additional money for the necessary development of housing and other elements in Canberra.

Honorable members will notice that it was the Minister for Defence and the Minister for the Interior (Mr. Fairhall) who were in consultation, not the Minister for the Navy (Mr. Davidson) or the Minister for the Army (Mr. Cramer). This is the vital policy matter enunciated by the Prime Minister. He said -

The first part of the move will be accomplished in two sections. At the beginning of 1’959, some 500 officers from the Department of Defence and from the Departments of the Navy, Army and Air, who are associated with the operation of the Defence Committee, the Chiefs of Staff Committee and others will move. Later in that year, another 600 persons from the service departments will move, so that the service boards will meet in Canberra.

There we have the very .basis that would be considered by the special committee which was set up by the Government. In other words, in April, 1957, the Prime Minister provided the very policy that was translated into words in this report which we have not seen. The Prime Minister went on to say -

The Defence Committee, which today comprises the Secretary of the Defence Department and the three Chiefs of Staff, is being made a more comprehensive body by the addition of the secretaries of the Prime Minister’s Department, and the Departments of the Treasury and of Externa] Affairs. The present practice of coopting representatives of other interested departments and specialized advisers from time to time will be continued.

Having said that in April, 1957, the Prime Minister himself set the seal on the type of report that the committee which he set up in November, 1957, should produce for the guidance of the Government. The Prime Minister indicated that co-ordination of the service departments under the Minister for Defence would be undertaken. That would remove the necessity for the ministerial portfolios that are attached to the three services. Let us be honest about it. Let us look at the only reason that the Prime “Minister gave for not adopting the report. He said, in cold terms, that a constitutional difficulty prevented the appointment of associate ministers. He said that, according to the Government’s legal advisers, they would not be entitled to payment or, if they were paid, they would lose their positions. What is the position of the Minister for the Navy? Could he not continue to be Postmaster-General and be an associate minister in respect of his Navy portfolio without there being one bit of difference in the duties that he performs? The position could be exactly the same in respect of the Minister for the Army and the Minister for Air. So that the constitutional difficulty advanced by the Prime Minister was not the ground of the opposition that this report obviously met in Cabinet.

The Prime Minister then said that we were going to be subjected to further changes; but in September the policy enunciated by the Prime Minister in April was confirmed, if anything, by the right honorable gentleman himself. On 19th September, 1957, he said, as is reported in “ Hansard “ at page 801 -

A review of the major aspects of our recent defence decisions shows that there have been no significant changes in the policies announced last April, apart from the modification of the plans for the fighter re-equipment of the Air Force, which I have already explained in detail. In all other respects, there has been substantial progress toward the achievement of our objectives.

Those objectives I have previously dealt with- to bring to Canberra the whole of the co-ordinating forces so that they could be dovetailed into the various departments as occasion arises. How important that is for the proper defence of Australia!

Earlier this evening reference was made to the need for transport co-ordination in our defence. Without co-ordination of transport we would not have any real defence in Australia. That also is a problem which could be much better dealt with by one organization co-ordinating the requirements of all three services.

I was rather surprised to find the Prime Minister, in making his excuse for not adopting this report, referring to a statement by President Eisenhower. Surely everybody here knows the great disagreement that has existed in America between the army and the navy. I found when I was in America a few months ago, that the general public opinion was that disagreement and lack of co-ordination between the army and the navy were the real reason why America was lagging in the development of nuclear and ballistic missiles and outer space projects. Argument between the services is a very serious thing. So long as we have separate departments controlling the Army, the Navy and the Air Force we will have each sector looking to its own particular requirements and building up its numbers to maintain its own status quo.

If we read the three different statements on defence made by the Prime Minister over the last twelve months we find that he admits that what is necessary is mobility in our armed forces. In other words, it is a question of having the Army sector ready to dovetail in with the Air Force for movement at short notice whenever required, and having the Air Force similarly linked with the Navy. The fact is that once again we have this Government moving from one crag to another. Ever since it came to office it has poured out money on defence, and I join with the leader of my party (Dr. Evatt) in saying that we have not had anything like value for that money.

It has been said consistently in this Parliament that our defences were in good shape when a government of the same kidney as this Government was in office prior to 1941. I have heard that statement made on numerous occasions, but I had not looked it up until today in order to find out exactly what the Labour war-time Prime Minister, Mr. Curtin, had to say about the position he found when he came into office. I shall refer briefly to a debate which took place in this House on the 22nd June, 1943, after the present Treasurer (Sir Arthur Fadden), then the Leader of the Opposition, had moved a motion of want of confidence in the Curtin Government. I invite everybody to study those words, which appear at page 25 in volume 175 of “Hansard”. Mr. Curtin said -

F did not act to disturb the Government of the day until it had been made manifest to me, and to the country at large, that the internal squabbling and discomfiture, and the incompatibility of the elements then composing the Government made a maximum war effort impossible. It was in those circumstances that the present Government assumed office in October 1941. I had heard previously, in this House, the statement by a responsible Minister of a former government, that one Japanese division could have walked through Australia. That was the position when the present Government came into office.

So much for the statement about what the same type of government as the present Government did prior to crumpling up in 1941. That Government in 1941 crumpled up in the same way as this Government would crumple up under the pressure of war. It is common knowledge that the Government’s own committee dealing with military investigations does not agree with what the Government is doing on this occasion.

Dr Evatt:

– It is not speaking up.


– Not only do we have a situation where the committee is not speaking up, but the Minister for Defence (Sir Philip McBride) himself is not speaking up. The Minister for the Army, the Minister for the Navy and those associated with defence are missing from the chamber while this debate is on, because they know that if this report saw the light of day it would be seen to criticize the present administration for what is being done. I have no doubt that if the report were seen by us we would discover that it actually makes reference to the plan outlined by the Prime Minister last April.

So 1 say that this Government has jumped from one crag to another ever since it started to do anything about defence. Again, if the need really existed for the reform mentioned in the portion of the report that the Government is adopting, has the thinking of the Ministry of Defence been so barren that it could not itself have evolved the solution without the Government having to appoint a committee? The real function of the committee was to do something about the co-ordination of the forces. Let us be honest about it. The only thing worth while in the report is the very thing that is being burked by this Government.

The Prime Minister went to great pains to say that, after all, it is the constitutional difficulty that is worrying the Government. I put this to the Government quite frankly: If a constitutional problem is preventing the Government from giving Australia real defence, the Labour party will not hesitate to help the Government to obtain the author? of the electorate for the necessary aneration of the Constitution. We will do that if it is needed to give Australia proper defence. But let us have the truth; let us have the report.

Government members and supporters say, * You are not telling us what you would do if you were in office.” How can we say what we would do as a Government? How can we give any advice at all, when even our leader has not had the courtesy extended to him of being allowed to see the report, which is not to be made public? If the Government is not going to do anything about the report, at least the Leader of Her Majesty’s Opposition in this Chamber is entitled to see the contents of the report. If the Leader of Her Majesty’s Opposition is not entitled to see documents that relate to the proper administration of defence matters, where is our parliamentary institution going?

The attitude of this Government towards defence may be that the Leader of the Opposition should not see such documents, but it should not content itself with allowing its supporters in this House to ask what is the defence policy of the Australian Labour party. Labour has the same defence policy as it had in 1941 when it had to take over from a government that found it impossible to implement a worth-while defence policy. When Labour is again given the opportunity, it will provide the same fullblooded defence policy as it has done before, and it knows that, in this policy, it will have the people’s confidence. It will not go behind the people’s backs, and will not hesitate to tell them of the need for a real defence effort. Because the Australian Labour party is the only party capable of doing that, it is the only party that can provide for the proper defence of Australia. I leave it at that, and say to the Government, “ If you want co-operation from the Opposition, you must recognize that the defence of Australia is paramount, and that the Leader of the Opposition is entitled to see all documents that relate to the proper defence of Australia “. The Government will heed these words if Australia really means anything to it.


.- I am rather surprised at some of the remarks made by the honorable member for Blaxland (Mr. E. James Harrison), who made much of lack of co-ordination in the defence services. He harped on that matter and the question of the integration of the services, as did the honorable member for Wills (Mr. Bryant), who spoke some time before him. I am surprised because, as I understand it, it is precisely in order to achieve this co-ordination and integration that the Government has advanced the proposals that are now before the Parliament. I. will say more about that matter later. We are trying to do precisely that. Yet, Opposition members beat us over the head for not doing it!

The only other reference to the remarks of the honorable member for Blaxland that I wish to make concerns a point that was made with greater force - and also with greater crudity - by the Deputy Leader of the Opposition (Mr. Calwell). Both he and the honorable member for Blaxland, echoing the utterances made by their leader on Wednesday of last week, repeated what I say advisedly is a despicable charge that, in terms of defence, this country has nothing to show for the money that has been spent on defence since this Government took office. I say that it is a despicable charge, because I would have thought that the responsible leaders of a responsible Opposition would have considered very carefully before making and retailing such a charge. Any one who makes a charge of that sort deliberately accepts the risk of undermining the confidence of the Australian people in the defence programme. If the charge is correct, it is the duty of the Opposition to make it. But if, as I suspect, the Opposition is making the charge purely in order to gain a party political advantage, it is fair to refer to it as despicable. I did not hear the Deputy Leader of the Opposition give chapter and verse for any of the assertions that he has made this evening. Have the Deputy Leader of the Opposition and, for that matter, the Leader of the Opposition (Dr. Evatt) gone out and looked at the defence forces - at the Air Force, at the brigade groups and other Army units, and at the Navy - in order to see what forces we have?

Mr Calwell:

– Yes.


– How recently have you done so? I have not seen any reference to the fact that you have done so.

Mr. Lawrence

– Order! The honorable member will, address the Chair.


– If Opposition members had been out into the field to see what our defences are like, it would have been possible for them to give chapter and verse for their description of them. But they have not given it. On the other hand, Mr. Acting Deputy Speaker, a group of members from this side of the House took the trouble, during the last recess, to look at the defence forces on the spot - not only at the men themselves, but also at the equipment that they use. On the basis of that personal inspection, we at least are satisfied that the charges made by the Opposition are illfounded, and can be described only as despicable.

To return to the subject of this debate: I should like to congratulate the Government on the great step forward in our defence organization that it has taken with the proposals announced by the Prime Minister (Mr. Menzies) last Wednesday. I have said before in this House, Sir - and I should like to say it again - that the remarkable thing about this Government is its readiness, despite its long years in office - a readiness that was not emulated by the Labour Government - to adapt our administrative structure to the rapidly changing needs of the modern world. Not for it the inertia so often associated with long occupancy of the government benches! If we stand back and take a bird’s eye view of the proposed changes in the defence structure, we are inevitably reminded of the words of Field Marshal Montgomery - that great soldier. In a speech to the Royal United Service Institute, in 1955, he said -

In the future, as political, economic, and technical changes accelerate, it is a grave question whether any large military organization which is not closely integrated and gripped tightly at the top, can adapt itself successfully to the required speed of modern life. If this is not done, the lack of adaptability of the organization as a whole, will tend continuously to promote individual Service interests over those of the nation concerned.

The Government has taken action to integrate the defence organization closely, and to have it gripped tightly at the top. It has made changes which will mean that our whole defence structure will be more tightly gripped at the top. And being more tightly gripped, it will be more readily and quickly adaptable to the changes in methods* weapons, and organization, that press in. on; us with such bewildering rapidity. “ More tightly gripped at the top “ - that is the meaning of the Government’s decision to make the overall authority of the Minister for Defence and the Department of Defence absolutely clear, not only over the Service departments, but also over the supply and* production spheres of the defence effort.

The same desire to see our defence organization more tightly gripped at the top has been responsible for the decision to appoint a chairman of the Chiefs of Staff Committee. He will have two important roles. First, it will be his responsibility to ensure that the advice tendered by the committee om military matters is a genuine presentation! of the military picture, and not a compromise picture formed from a synthesis of thestrongly held views of three able men, each fighting like an alley cat in the interests of his own service. Secondly, he will be available to give much-needed interserviceadvice, to the Minister for Defence. TheMinister will now have available to him* military advice that he will know is untainted by the interests of any particular service.

What change does the Government hope to achieve by gripping the defence organization more tightly at the top? I believe the key lies in the one word, “ integration “. It is the spirit of integration which breathes through and informs the policy which the Government has put forward. It is to promote integration wherever it seems necessary that the Minister for Defence has been given additional power to cut through the present obstacles to such an achievement. We can now look forward with confidence to the elimination of overlapping and duplication, particularly in the services provided by the Navy, Army and Air Force. For example, a common medical system for all three services should be a product of the near future. Moreover, in the same way, it is to promote integration of military policy formulation that the chairman of the Chiefs of Staff Committee has been given his vital role to perform.

I believe that integration is the key to the defence problem of a country with limited resources, such as our own. Indeed, Field Marshal Montgomery, whom I quoted earlier, believes it to be the answer to -the defence problems not only of a country with limited resources, but of the great powers as well. He said -

Progress and development in the modern world have outmoded the old conceptions of the organization of military forces. But we cannot see this, so strong are our habits and traditions. All the great nations to-day have three Services - -sea, land and air. This separate existence of the three services results, in every nation, in waste of money, waste of manpower, and waste of time.

The impact of scientific progress makes it essential that we shall be able and ready to adapt ourselves to change. But the present organization of military forces is incapable of adaptation to changes, neither quickly nor economically, nor efficiently.

Field Marshal Montgomery added -

Each service has developed within itself a system which provides for specialization where it is wanted, and yet ensures overall unity of direction.

But the fact remains that we have not achieved for the three Services in combination a system which is comparable to that which each service has evolved for itself. … It is rather as if a ship were commanded by a committee consisting of the Gunnery Officer, the Major of Marines, and the Engineer Officer, each of whom has under him one-third of the crew and each wearing a different uniform.

It seems to me ridiculous to go on in this way. Obviously we cannot today go over to one Service. But we might well introduce such a close integration between the three Services that the final step could be taken without confusion if it was ever decided it was necessary.

If the arguments used by Field Marshal Montgomery are applicable to the United Kingdom and the United States, how much more applicable are they to a country wim the small resources and in the exposed position of Australia? I would go as far as to say that, the smaller the resources and, therefore, the smaller the forces, the more important it is to aim at the increased efficiency, the reduction of overlapping and the added value for money spent that integration would surely bring. Indeed, it could even be argued that, in relation to a large nation with powerful forces and great resources, Field Marshal Montgomery may be wrong, but he is certainly not wrong about a nation in a position such as ours.

This is underlined by the role that we are likely to have in war and the area in which we are likely to fight - south-east Asia. There is no area in the world where the type of war that we are likely to have to fight is so suited to the type of defence forces which would be created by integration. As all honorable members know, this was clearly demonstrated in the last war by the outstanding success in the Pacific of the American Marine Corps. The Marine Corps, though a part of the United States Navy, is a completely integrated force of all arms of the services, and its strength overall is not far different from the total strength of the Australian services. Moreover, the integration of the Marine Corps extends equally to base establishments as it does to operational forces. We have in the command and staff arrangements of the Marine Corps a ready made example of what could, and I hope will, eventually be achieved in the Australian forces.

Because of the peculiar circumstances ia which we are placed, and with the example of the United States Marine Corps, I am not impressed by the argument that Great Britain and the United States have not integrated their defence forces. What matters is what is best in the circumstances that face us - not the United States, not Great Britain, not Canada or any other country, but us. Moreover, 1 think it fair to say that in some respects the Americans, despite their tremendous resources, have achieved a much higher degree of integration than we have. All their overseas forces are integrated at the theatre command and staff level, and the same applies at least to some of the administrative areas in the United States itself.

I recognize that the Government’s proposals are a step in the direction of complete integration of the defence services at both the political and military levels. I recognize, too, that a complex structure such as defence cannot be completely reorganized in five minutes. Nevertheless, I am doubtful whether the proposals are imbued with the urgency which I believe to be their due. Do they express the sense of urgency which should govern our approach to defence when a great nation to our immediate north is in the process of blowing itself to bits at this very moment - bits which at the worst will be picked up by the Communists, and at best will remain fragmented in anarchy? As the Minister for Territories (Mr. Hasluck) said recently, we are plunging towards an isolation deeper than we have ever known.

I believe, with this upon us, that we cannot wait. I should like to see the obstacles which inhibit integration right down to service level removed as quickly as possible. As it is not conceivable to envisage fully integrated services without first the full integration of the defence and service departments, I urge the Government to take steps to remove the constitutional barriers which at present prohibit its consummation. Finally, in this age of bewildering technical change, the best thai Australia can do is to gear its defence services so that they are acutely responsive to changes as they occur and, by pruning inefficiencies and overlapping in administrative functions, make it possible to bear the inevitable burden of obsolescence of weapons and equipment without crippling us economically in the process. I believe that the Government’s defence proposals are a long step towards this objective. I ask the Government, in view of the urgency that I have outlined, to quicken the step so that that objective will be reached with tha greatest possible speed.


.- It is a long time since I have seen such a lot of dejected members sitting on the benches behind the Government.


– There are not so many sitting behind the honorable member.


– Someone says that there are not so many sitting behind me. That is true, and I might add at this stage that it is not the Labour party which is on the defensive; the Government is on the defensive, and its defence has been so paltry and inadequate that its back-benchers and other supporters are now as dejected a lot of men as I have ever seen in my life.

Let us examine the situation. Let me say, first to the honorable member for Barker (Mr. Forbes), who seems to resent criticism very deeply, that if it had not been for the criticism by the Opposition during the last few months, and, indeed, years, and also the criticism by newspapers like the “ Sydney Morning Herald “, which has had some very caustic remarks to make about the Prime Minister (Mr. Menzies) and the Minister for Defence (Sir Philip McBride), when discussing the defence programme, there would not have been any Morshead report. Stung by these criticisms, the Government decided that there might be something wrong, and it appointed a committee under the chairmanship of Sir Leslie Morshead, a competent and distinguished soldier, and composed of members equally distinguished in their various spheres. That committee submitted a report, containing certain recommendations, to the Government. The Government almost at once rejected practically all those recommendations out of hand, as being of no use whatsoever.

The plain fact is that if the Government had amongst its members men capable of handling their departments - and these remarks apply particularly to the service ministers - it would not have had to go to Sir Leslie Morshead and the other gentlemen who assisted him in the preparation of the committee’s report. Each of the service ministers would have known and been able to pin-point the weaknesses and deficiencies in his particular department. The plain fact is, however, that the service ministers, from the Minister for Defence right down through the Minister for the Army (Mr. Cramer), the Minister for the Navy (Mr. Davidson) and the Minister for Air (Mr. Osborne) are a lot of tired old men. When a clean-up job is required in their departments, when they are subjected to the strong wind of criticism, they do not go to work. Instead, they say, “ Let us appoint some distinguished soldier, with some senior officers of the departments concerned to assist him, and when that committee furnishes a report let us wheel it along to the Cabinet “. Then we have the spectacle of the Prime Minister coming into this House and, in essence if not in fact, word for word confirming every criticism that the Opposition and the newspapers have levelled at this Government for some considerable time past.

According to the Prime Minister, the first reaction of his Government to the Morshead report was that it was attracted to the amalgamation proposals of the committee, which suggested that there should be a merger of the Departments of Defence, the Army, the Navy and Air. Then the Government discovered that this plan would not work. Well, why did it need the Morshead committee to discover for it that the plan would not work? Did not the members of the Government know in their own minds, before the committee was appointed, that it would not work? If they did not, why was it that they did not? Surely they could have ascertained, through the valuable officers whom they have at their disposal, what was wrong, if anything was wrong. But no, they had to appoint the Morshead committee, and when the committee made a recommendation they were at first attracted to it and then discovered that it would not work.

Does the Prime Minister tell us that his Cabinet Ministers and all the back-benchers who are now sitting so dejectedly behind them, have not at any time during the last few years considered and talked over the great problem of the integration of the Departments of the Army, the Navy and Air? Of course they have, but they were men of uncertain minds. They found conflicting interests. They found that the Minister for Air would very much dislike interference from the Minister for Defence, and would not tolerate too much subservience to the Minister for Defence. They found that the Minister for the Army was utterly incompetent, and that he does not know exactly what is going on within the Army Department. As far as the Department of the Navy is concerned, the PostmasterGeneral (Mr. Davidson), who is also Minister for the Navy, was so busy obtaining cheaper telephones services for the people in country areas at the expense of city tax-payers, that he was not interested in that department.

That was the state of affairs so far as any proposed integration was concerned, until the Morshead committee was appointed to dig the Government out of its difficulties. Then it was discovered that the plan would not work, and it is almost humorous to hear members of the Government suggest that the reason why it would not work was that if parliamentary control was to be retained and was to be efficient, we could not have an integrated service, in which the two or three minor Ministers would have to bend the knee to the Minister for Defence. They could not come at that.

Then we heard the naive story that although before World War II. we had an integrated system, with one department covering the Army, the Navy and the Air Force, in those good old days our total defence expenditure was only £14,000,000, while today it is £200,000,000. The expansion that has occurred since 1939, says the Prime Minister, has made separation inevitable. Why did not the Prime Minister learn, before he got the Morshead report, that the circumstances that existed before 1939 were entirely different from those that exist to-day? It required a costly report, some stirring within the confines of the various departments, and some heartburnings within the breasts of the Ministers, before the Prime Minister discovered that the circumstances existing to-day are entirely different from those that existed in 1939. Marvellous! Now the Prime Minister says that overall control by one Minister would be too great a task, and that we cannot possibly go back to the previous system. What do honorable members think convinced him of this? It was only the proddings of the Opposition, which the honorable member for Barker does not like, and the proddings of journals like the “ Sydney Morning Herald “, which recently showed a photograph of Mr. Menzies, and referred to our “ verbal regiments “, and described Sir Philip McBride as the Prime Minister’s pale shadow. Truer words were never spoken.

The Morshead committee recognized the inefficiency inherent in the present system. We have not seen the report, of course, but the Prime Minister has told us that the committee suggested that the novel expedient of associate ministers should be tried. Then we have a whole page or more of the Prime Minister’s stupid statement devoted to the why’s and wherefore’s of the question of whether a system of associate Ministers would work.

Mr Falkinder:

– The honorable member was one himself, was he not?


– The honorable member for Franklin suggests that I was once an associate minister, and I can tell him that I was not. I was, however, what was called an assistant to a Minister, and all I have to say about it is this: Although I worked with one of the grandest men and one of the greatest Australians who ever drew breath, the system was unfair to the minister and to me. If the two persons concerned are of different temperaments, it is an impossible situation. In the final result, the minister has to take the responsibility, and if his assistant has any feelings he must, from time to time, consider himself in an invidious position when dealing with departmental chiefs on matters that he cannot possibly finalize. I have always been against the system, although I was, for a time, involved in it. I am still against it. I know what the experience of this Government has been with regard to assistant ministers. Some honorable members on the Government side were at one stage appointed assistant ministers, and some of them took to their heels very quickly because they found they were working with ministers whose temperaments were incompatible with, their own.. Now the Government has in operation a humbug system of under-secretaries, or something of the kind. It is on a basis of no pay, but no doubt the occupants of those posts are recompensed in some way, perhaps by fairly liberal travelling expenses. It is again an unsatisfactory system..

I am one of those who believe that a Minister should have sole control of hrs Department, should exercise complete authority and be responsible for it - and be prepared to defend it. But when men like the Prime Minister, his Minister for Defence, his Minister for Air, and his Minister for the Navy, get into a jam they hide behind men like Sir Leslie Morshead, the Secretary of the Department of Defence, Mr. E. W. Hicks, the Chairman of the Public Service Board, Sir William Dunk, and the Assistant Secretary of the Prime Minister’s Department, Mr. E. J. Bunting,, and get them to do the work that they themselves should have done.

If members of the Government are incapable of doing the work themselves, they have at their disposal the Public Service Commissioners who ought to have - and no doubt have - a great knowledge of the staffs ing of departments,, wastages and all the rest of it. There are competent officers throughout government departments who could have done this job without the Government calling in and ultimately insulting a great soldier and businessman like Sir Leslie Morshead.

As to this business of associate ministers, something was. said about somebody working on the horizontal but nothing was said about anybody working on the vertical. There was reference to somebody attending to logistics and somebody else attending to personnel. The whole thing would be funny if it were not so tragic, because the matter is of great importance to the Australian people both from the point of view of defence and in relation to the expenditure of the tax-payers’ money which has been wasted shamefully..

We heard a further plea from the Prime Minister that a system of associate and asistant ministers would not work because of the constitutional position. I should not like to delve too deeply into that matter except to point out that the Prime Minister in his speech did not play fair with Sir Leslie Morshead and his. fellow committeemen. I do not pose as a constitutional authority but I believe the Minister for Primary Industry (Mr. McMahon) could, act as an associate minister and carry out what is, in reality, the work of the Minister for the Army if Cabinet so. decided.

Mr McMahon:

– The honorable member is complicating his own argument.


– I agree, but the Prime Minister confused the question of associate ministers. That principle was recommended by the Morshead committee which stated specifically that a man could be an associate minister provided he was a Minister of State.

Mr Osborne:

– Read the statement again.


– The Minister himself should read it again. It ought to hurt him more than anybody else because it tells him things he should have known, before somebody else told him. The Prime Minister said that an associate minister could first be appointed as a Minister of State at a salary only in respect of the portfolio he held. The right, honorable gentleman added -

The position and authority of the associate minister would be extremely ambiguous.

I think that he was right there, for the first time. We were told the good old story - and I do not think the Government really believes it - that the Government wants a clear subordination of the military services to duly constituted civilian authority. The right honorable gentleman quoted the words of President Eisenhower -

This control must be real, not merely on the surface.

I quite agree, but I do not think the Government really believes that. If it did, it would not allow the Chiefs of Staff and the military authorities to run this country. The right honorable gentleman stated -

Parliament votes defence moneys on behalf of the people who have elected it.

We were also told that integration was not feasible. What was the next bed-time story related by the Prime Minister? The right honorable gentleman told us this - and it confirms and amply justifies all the criticism that has been levelled against this Government -

We are, like the committee, and greatly assisted by it, convinced that the present administrative structure in defence needs candid examination and, in important respects, material improvement.

That is nice, is it not? What has the Government being doing when our defence set-up requires improvement as the Morshead report has pointed out? If the committee had found the situation as it should have been under sane and sensible examination, that comment would not have been necessary even by the Prime Minister himself. The right honorable gentleman also stated -

The authority of the Department of Defence, which should be clear and commanding, has come to be regarded as uncertain in various particulars.

This Government has been in office for eight or nine years and the position of the Defence Department is “ uncertain “. Let me say this finally: lt seems to me that the Government is unaware that the old concept of defence is completely outmoded. If, instead of fiddling around and getting reports from an eminent soldier, the Government had set to work to rectify the things that Sir Leslie Morshead now criticizes, and if it had devoted its attention and that of some eminent authority - a world authority if you like - to the new concept of warfare, it would not have wasted the people’s money on forming fours and that sort of thing.

I agree with the honorable member for Hume (Mr. Anderson) that the day of the rifle and the bomb has not gone forever. But what is the overall picture? The Government has criticized the members of the Opposition and has stated that we were against national service training. The Government was in favour of it and put its proposals through the Parliament. Then it destroyed two-thirds of the strength of the military forces. It could not call up the men, so the Government - not the Opposition - abandoned national service training.

Before the outbreak of the Second World War, pressure was brought to bear on the Scullin Administration. It was refused the requisite money, and ultimately was persuaded to abandon military training. Mr. Lyons was elected to office after Mr. Scullin, and anti-Labour governments were in office from that time until early in the Second World War. They were not game to introduce national service training and when it ultimately was introduced, this Government destroyed it, just as it did between the two world wars.

If this Government attended to its job and made fewer jibes at the Australian Labour party and its attitude to defence, it would be doing a better job for Australia. The Australian Labour party proved to the people in the Second World War that a Labour government was capable of conducting a war. If the Government attended to these matters, it would be performing a greater service than it has done during the eight or nine years that it has been in office.

Debate (on motion by Mr. Falkinder) adjourned.

House adjourned at 10.48 p.m.

page 657


The following answers to questions were circulated: -

Lead and Zinc.

Public Service Examinations.

Constitution Review Committee.

Mr Whitlam:

asked the Prime Minister, upon notice: -

  1. Under what statutes have (a) boards, tribunals and committees been established and (b) courts been empowered to hear appeals from the decisions of Commonwealth departments and instrumentalities?
  2. What is the title of each board, tribunal, committee and court?

Vice-Regal Residences

Mr Ward:

d asked the Prime Minister, upon notice: -

  1. What was the expenditure in each of the last five years upon (a) Admiralty House, Sydney, and (b) Government House, Canberra, for (i) repairs, (ii) alterations, (iii) renovations and (iv) new furnishings?
  2. What permanent staff is employed at each establishment?
Mr Menzies:

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


  1. Permanent staff at Government House totals 24 domestics and thirteen gardeners, and at Admiralty House four domestics and seven gardeners.

Kirribilli House, Sydney

Mr Ward:

d asked the Prime Minister, upon notice -

  1. What amount has been expended to date on the recent renovations, rehabilitation of the grounds, and the refurnishing of Kirribilli House, Sydney?
  2. What persons have been accommodated at Kirribilli House, and for what periods of time, since it again became available for occupation?
Mr Menzies:

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

  1. £61,608.

  2. (a) The Prime Minister and Dame Pattie Menzies, 25th to 29th October, 1957; 15th to 18th December, 1957; 31st December, 1957, to 14th January, 1958; 14th and 15th March, 1958. (b) The Prime Minister of Japan and party of seven, 30th November, 1957, to 1st December, 1957. (c) The Prime Minister of the United Kingdom and party of six, 3rd to 5th February, 1958. (d) Sir John Marriott, Deputy Grand President, British Empire Service League, 12th and 13th February, 1958; 2nd to 4th March, 1958; (e) Director-General of Royal Visit and members of Queen Mother’s staff and Commonwealth staff (5 persons), 21st to 25th February, 1958. (f) The Prime Minister of New Zealand and party of three, 27th February to 2nd March, 1958.

Government Loans and Finance

Mr Kearney:

y asked the Treasurer, upon notice -

  1. What amounts to be borrowed by (a) local government and (b) semi-governmental bodies in (i) Australia and (ii) New South Wales were authorized by the Loan Council in 1945-46 and in each succeeding year?
  2. What amounts were actually raised by these bodies in each year?
Sir Arthur Fadden:

– The answer to the honorable member’s questions is as follows: - 1 and 2. The borrowing programmes of “ local authorities “ and “ semi-governmental bodies “ approved each year by the Australian Loan

Council refer to authorities with programmes of less than £100,000 for that particular year (“ local authorities “ and authorities with programmes of £100,000 or more (“ semi-governmental bodies “). In the following table showing borrowing programmes and actual raisings by the authorities between 1945-46 and 1957-58, this Loan Council classification has been used.


Mr Daly:

y asked the Treasurer, upon notice -

  1. Was the matter of allowing an income tax deduction for expenses of travelling to and from work ever referred to the Commonwealth Committee on Taxation?
  2. If so, will he table the committee’s report for the information of honorable members?
Sir Arthur Fadden:

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

  1. The question of allowing an income tax deduction for expenses of travelling to and from work was not specifically referred to the Commonwealth Committee on Taxation, but was dealt with by the committee in a report on the general question of allowances for private, domestic and capital expenditure.
  2. As I have previously indicated to the honorable member, the question of allowing a deduction for these expenses will be considered in conjunction with the Budget. In the meantime, it is not proposed to table the committee’s report. The Government’s review of the question will, however, take into account any observations made by the committee, as well as the terms of the recent decision of the High Court on the subject.
Mr Chaney:

y asked the Treasurer, upon notice -

  1. Does a co-operative organization receive a deduction from its assessable income of reversionary bonuses not paid in the year of income but held for payment to the shareholders at some uncertain future date?
  2. Are producers credited with reversionary bonuses by a co-operative organization allowed to defer payment of income tax thereon for an uncertain period; if so what is the reason for this?
Sir Arthur Fadden:

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

  1. The income tax law authorizes the allowance of deductions where assessable income of a co-operative company is distributed in the form of rebates or bonuses among its shareholders. However, rebates and bonuses are not necessarily distributed by crediting an amount to a shareholder’s account. If the shareholder has no right to receive the amount, the company has not, in the absence of a distribution, an entitlement to a deduction.
  2. Income tax is imposed upon taxable income derived. So far as rebates or bonuses are concerned it is necessary to determine in the light of the facts whether such rebates or bonuses are in fact derived by the taxpayer concerned. The mere crediting to a shareholder’s account of a sum described as a rebate or bonus, but conditioned by other factors, is unlikely of itself to amount to derivation by the shareholder of that income. The taxability or otherwise to the shareholder is determined in the light of all the facts.

n asked the Treasurer, upon notice -

  1. Is it a fact that interest paid by hire purchase companies on notes is a deductible allowance for the purposes of income tax assessment whereas dividends paid on share capital are not?
  2. If so, will he give consideration to amending the income tax law in such a way that it will discourage the channelling of money into hire purchase companies?
Sir Arthur Fadden:

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

  1. To the extent that notes represent money borrowed for the purpose of producing assessable income, interest paid on the notes is an expense incurred in the earning of that income and, as such, is an allowable deduction for income tax purposes. Dividends paid on share capital, on the other hand, represent a distribution of company profits already derived and are not expenses incurred in the earning of income. Accordingly, dividends paid by a company are not deductible for income tax purposes. These principles apply to all taxpayers and not only to hire purchase companies.
  2. In view of the fundamental nature of the taxing principles involved, any amendment of the income tax law which would discriminate against a particular industry in this respect would be departure most difficult to justify.
Mr Webb:

b asked the Treasurer, upon notice: -

  1. In order to encourage donors to provide scholarships to enable needy children to proceed from the junior to the leaving examination, will he take steps to allow the amount donated to be claimed as a deduction for income tax purposes?
  2. Will he take similar action in regard to all donations in excess of £1 to parents and citizens’ associations?
Sir Arthur Fadden:

– The answer to the honorable member’s questions is as follows: - 1 and 2. The question of extending the income tax allowance for donations in the directions sought by the honorable member will be considered when the taxation provisions are reviewed prior to the next Budget.

Adelaide and Newcastle Telephone Exchanges

Mr Griffiths:

s asked the PostmasterGeneral, upon notice: -

In regard to the trunk line telephone exchange at (i) Newcastle, (ii) Adelaide - (a) which is the larger, (b) what is the number of employees, (c) how many telephonists are employed, (d) how many trunk line calls are handled daily, (e) how many calls originate at the same time, (f) how often does demand service operate, (g) how many trunk lines operate, (h) does a queuing system operate for listing trunk line calls; if not, by what means are trunk line calls recorded to ensure that callers receive their calls in proper order, (i) what is the area of floor space, and (j) is he satisfied with conditions?

Mr Davidson:

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

  1. Adelaide, (b) Two hundred and thirty-eight at Adelaide and 107 at Newcastle, (c) One hundred and ninety-seven at Adelaide and 92 at Newcastle. (d) Approximately 10,000 at Adelaide and 7,000 at Newcastle, (e) During the busiest hour of the day approximately 1,100 at Adelaide and 750 at Newcastle, (f) In the busiest hour of the day 80 per cent, and 53 per cent.’ of the total trunk calls booked at Adelaide and Newcastle respectively are handled on demand. During other periods, demand service operates fully on most trunk line routes, (g) Five hundred and sixtyfive at Adelaide serving 80 centres and 226 at Newcastle serving 35 centres, (h) A queuing system is installed at Adelaide but not at Newcastle. However, at both exchanges the usual procedure is observed whereby a docket showing the time of lodgment is prepared for each trunk line call as it is booked. If service is not given on demand calls are connected in the order of their time of lodgment, (i) Five thousand five hundred square feet at Adelaide which will cater for development for at least ten years and 1,470 square feet at Newcastle, (j) The conditions at Adelaide are adequate and satisfactory. The trunk exchange room at Newcastle is congested, however, and will not accommodate any additional operating positions. Relief is to be provided by installing multi-metering facilities for calls between Newcastle and Sydney whereby Newcastle subscribers will be able to dial Sydney numbers themselves thus reducing the requirements for operating positions and staff at Newcastle. The new system will be introduced progressively commencing in 1958-59. When all exchanges in the Newcastle network have been equipped for multi-metering, about 50 per cent, of the originating trunk line calls now handled manually in the Newcastle Trunk Exchange will be dialled direct by the calling subscriber and the existing manual exchange room should meet requirements for some years to come. An additional 149 trunk line channels are planned to serve the Newcastle Exchange. Also ventilation of the exchange room is to be improved at a cost of approximately £2,000.

Toowoomba Postal Buildings

Mr Swartz:

z asked the Postmaster-General, upon notice -

  1. When will arrangements be completed for the provision of two new official post offices in Ruthven-street, Toowoomba?
  2. Will he furnish a full list of services which will be provided by these proposed post offices?
Mr Davidson:

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

  1. The post office in the Commonwealth-owned building near the Town Hall, Toowoomba, will be established as soon as the necessary structural alterations have been completed, lt is expected that this office which will be called the Town Hall post office will be opened at the end of May. The post office in leased premises at 336 Ruthven Street will be opened shortly afterwards. It will be called the Ruthven Street post office. The honorable member, whose keen interest in the proposals is appreciated, will be advised further when definite opening dates have been fixed.
  2. At each post office normal counter facilities will be provided. These will cover the sale of postage stamps, the issue and redemption of money orders and postal notes, the acceptance of telegrams, registered articles and parcels not posted in bulk and the payment of pensions. Commonwealth Savings Bank transactions will be conducted at the Ruthven Street office but not at the Town Hall office which is close to the Toowoomba branch of that bank. Private letter boxes will be available at both offices but postal and telegram deliveries will be made from the Toowoomba post office for the time being at least.

Telephone Services

Mr Webb:

b asked the Postmaster-General, upon notice -

As age and invalid pensioners often need to make emergency telephone calls, will he consider allowing a pensioner to obtain a telephone without having to pay the installation fee?

Mr Davidson:

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

Payment of the £10 service connexion fee is prescribed for the provision of each new or additional telephone exchange line and although sympathetic consideration has been given to the question of waiving the fee in the case of age and invalid pensioners and other deserving groups the Department could not as a public undertaking administering a communications service on behalf of and for the benefit of the community generally, do other than provide its services on an impartial basis. This being so, it would n”t be equitable to discriminate between various groups on the application of the telephone connetion fee.

Trans-Australia Airlines

Mr Webb:

b asked the Minister representing the Minister for Civil Aviation, upon notice -

Is the Minister in a position to furnish advice regarding the new type of aircraft to be used by Trans-Australia Airlines on the Perth-Adelaide route?

Mr Townley:

– The Minister for Civil Aviation has replied as follows: -

Cabinet has not yet considered the reequipment plans of Australian airlines, incluring TransAustralia Airlines. When it has done so a statement will be made.

Pollution of the Sea by Oil.

Mr Whitlam:

m asked the Minister representing the Minister for Shipping and Transport, upon notice -

  1. Did Australia agree in May, 1954, to the International Convention for the Prevention of Pollution of the Sea by Oil?
  2. Does the convention prohibit the discharge of oil within SO miles from land and, in the case of the Australian zone, within 150 miles of the eastern, southern and south-western coasts of the continent?
  3. Did the United Kingdom Parliament pass the Oil in Navigable Waters Act in May, 1955, to give effect to the convention?
  4. Did this act come into operation in September, 1956, with the exception of a sub-section which concerns the Australian zone?
  5. Had a sufficient number of countries ratified the convention by July, 1957, to permit it to come into force?
  6. When did Commonwealth and State authorities commence discussions on the measures necessary to enable Australia to ratify the convention?
  7. When did these authorities conclude, or when is it expected that they will conclude, these discussions?
  8. When is it expected that legislation will be introduced into the Commonwealth and each State Parliament to secure the benefits of the convention for Australia?

Mr- Townley. - The Minister for Shipping and Transport has furnished the following replies: -

  1. Yes, but the convention was not signed by the Commonwealth representative within the specified time nor has it yet been formally accepted by the Commonwealth.
  2. Yes.
  3. Yes.
  4. Yes.
  5. Yes. The convention will not however come into force until the 26th July, 1958.
  6. 24th February, 1956.
  7. Discussions with the State harbour authorities have not yet been concluded. Finality as to State legislative requirements will not be reached until the respective State Governments have examined a model bill which will be considered by the permanent committee of the Australian Port Authorities Association at its next meeting at the end of this month.
  8. A draft Commonwealth bill has been prepared in addition to the model State bill but it cannot be stated at this stage when the bills will be introduced into the respective parliaments. It is hoped however that it will be possible to introduce legislation before the end of this year.
Mr Webb:

asked the Minister representing the Minister for Shipping and Transport, upon notice: -

As Western Australian beaches are still being polluted by dumping of oil in the sea from ships, will the Minister advise what progress has been made towards the introduction of legislation to implement the provisions of the international convention aimed at preventing such pollution?

Mr Townley:

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

The Australian Port Authorities Association on which the Director of Navigation is Commonwealth representative has had under consideration for some considerable time the requirements to be included in State legislation which in conjunction with the provision to be made in related Commonwealth legislation will permit of acceptance of the convention for the prevention of the pollution of the sea by oil. A model State bill has been drafted and will be considered by the permanent committee of the association at its meeting at the end of this month. The model bill will then be referred by the committee to the various State Governments for examination. A Commonwealth bill has also been drafted but its terms cannot be finally settled until discussions with the U.K. Ministry of Transport and Civil Aviation are completed and legal advice is obtained on certain matters. You can be assured that every effort is being made to obtain finality on Commonwealth and State legislative requirements and that action will be taken to see that legislate.. » > implement the convention provisions is introduced as soon as is practicable.

Imported Fish

Mr Freeth:

h asked the Minister represeneinR the Minister for Customs and Excise, upon notice: -

  1. Will he take steps to ensure that snap-frozen, tinned and smoked fish imported into Australia is correctly labelled, both as to type of fish and country of origin?
  2. Is it a fact that snap-frozen fish is being sold in Australia under the label “ Australian Snapper ‘ with the additional information in small type that it is “ packed in Hong Kong “?
  3. In view of allegations that imported fish sold as “ Hong Kong Snapper “ or “ Australian Snapper “ is not in fact the type of fish known to Australians as snapper, will he ascertain what types of fish are sold by those names?
Mr Osborne:

– The Minister for Customs and Excise has now furnished the following answer to the honorable member’s questions: -

  1. All possible care is exercised to ensure that the marking of imported goods is in accordance with the requirements of Commonwealth marking legislation. If goods are not correctly marked they become liable to seizure or, at least, detention pending compliance with requirements.
  2. Investigations carried out in all States have failed to produce any evidence that imported snapper is being sold on the Australian market labelled as “ Australian Snapper “. However “ Red Snapper “ is being imported from Hong Kong and examination of the retail 12-oz. containers discloses that they bear correct commerce markings. The markings of consignments contained in bulk containers do not in some cases fully satisfy marking requirements and steps are being taken to ensure that correct marking is applied to all such shipments.
  3. My inquiries disclose that the term snapper may properly be applied to several different species of fish found in various parts of the world viz: -

Rejection of Immigrants

Mr Bryant:

t asked the Minister for Immigration, upon notice -

  1. Can an application for a permit to land in Australia be rejected on political grounds?
  2. What are the principles underlying the acceptance or rejection of intending immigrants on medical grounds?
Mr Downer:

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

  1. Applications for permission to land in Australia are not rejected on political grounds. Consideration is, however, given to special cases where there are well-founded grounds to suggest that a person may be a danger to the security of the Commonwealth. In such cases applications may be rejected.
  2. The medical standards for migrants are laid down by the Commonwealth Departmentof Health. The basic principles are -

    1. the person concerned should be fit to take an appropriate part in the life of the community, including generally the ability to earn a living, and
    2. applicants should not be of such a kind that they might constitute a danger to the health of the community.


Mr Freeth:

h asked the Minister for Trade, upon notice -

  1. Is it a fact that Australian spinners will not buy Australian “ B “ grade flax fibre because they are able to buy imported flax fibre at £214 per ton as against Australian fibre at £290 per ton?
  2. Is it also a fact that Japan has offered to buy Western Australian “ B “ grade flax fibre at a price based on a world market price of £290 per ton?
  3. How are Australian spinners able to purchase their requirements overseas at a considerably lower price?
  4. What prices have in fact been paid for the most recent imports of flax fibre, in particular by Millers Ltd. of Victoria?
  5. If Australian flax fibre is sold at quoted world market rates, how are overseas manufacturers, after paying duty, freight and other expenses, able to tender for Government contracts for canvas goods at prices considerably below those quoted by Australian manufacturers?
  6. Do large quantities of Australian flax fibre suitable for canvas goods remain unsold because of the inability of Australian manufacturers to secure orders for these goods?
  7. Will he investigate allegations that there is dumping or other unfair marketing of flax fibre and canvas goods in Australia by European firms which has the effect of defeating the objects of the tariff protection and the Commonwealth bounty now applicable to the industry?
Mr McEwen:

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

  1. I understand that spinners are buying and will buy all fibre of Grade “ B “ and higher grades suitable for the manufacture of thread. However they are not at present buying all available Australian flax fibre of lower grade as there is at present little demand for end products made from these grades. (See also answers to No. 3 and No. 5 below.)
  2. The Government has no knowledge of offers by Japan to buy Australian “ B “ grade flax fibre.
  3. Under present circumstances spinners only seek licences for fibre of quantities and qualities which they cannot obtain from local sources.
  4. It is not the practice to disclose details of private importations. Official statistics show that all import clearances for the second half of 1957 were from Belgium at an average f.o.b. price of approximately £A.235 per ton, which corresponds broadly to a c.i.f. price of £A.265 per ton landed in Australia.
  5. This question is based on wrong premises. In order to assist the Australian flax industry the Australian spinners, at the present time, are paying for fibre produced in Australia about £40 per ton in excess of the landed cost of comparable fibre from overseas.
  6. See answer to question 1 above.
  7. Any concrete evidence of practices such as dumping would be investigated on request in accordance with the provisions of the Customs Tariff (Industries Preservation) Act which is administered by my colleague, the Minister for Customs and Excise.


Mr O’Connor:

r asked the Minister repre senting the Minister for Shipping and Transport, upon notice -

Will the Minister take steps to ensure that in the future the Australian Shipbuilding Board will make public the price submitted by the successful tenderer for contracts offered by the Board, particularly contracts that are let to overseas companies?

Mr Townley:

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

When calling tenders for the construction of new vessels in Australian yards the Australian Shipbuilding Board acts as an intermediaary between shipowners and shipbuilders. In this capacity it receives information which is regarded as confidential between the parties concerned. It would be a breach of confidence for the board to disclose information of this nature. The Shipbuilding Board does not let contracts for the building of vessels in overseas yards.


n asked the Minister representing the Minister for Shipping and Transport, upon notice -

  1. Is he able to state the estimated cost of the large tanker which is to be built at Whyalla by the Broken Hill Proprietary Company Ltd. for Ampol Petroleum Ltd.?
  2. What would a similar vessel cost to construct in the United Kingdom and in other shipbuilding countries?
  3. What amount has the Government agreed to pay towards the cost of this tanker?
Mr Townley:

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

  1. Prices paid for vessels ordered through the Australian Shipbuilding Board are regarded as confidential and it would not be proper for the Government or the Shipbuilding Board to disclose them.
  2. It is difficult to estimate precisely the probable cost of building overseas a tanker similar to that Ampol will build here but on the information available the overseas cost would be approximately one third less than the Australian.
  3. The Commonwealth has agreed to apply to the construction of the Ampol tanker the subsidy provision recommended by the Tariff Board and adopted by the Government, which limits the subsidy payment to 33 per cent. of the building cost.
Mr O’Connor:

r asked the Minister representing the Minister for Shipping and Transport, upon notice -

  1. What is the number of ships under construction for (a) private industry and (b) Commonwealth and State Governments?
  2. Where are they being built?
  3. What are their respective tonnages and the contracted dates of delivery?
  4. What are the plans for the Australian Shipbuilding Board for the calling of future contracts?
Mr Townley:

– The Minister for Shipping and Transport has replied as follows: - 1, 2 and 3. Particulars of merchant vessels at present under construction or on order for the Australian coastal trade are as follows: -

  1. The question of whether or not ships shall be built for any particular trade is a matter for decision by the shipowner concerned. The Australian

Shipbuilding Board acts for a shipowner who has decided to place an order through the Board for a vessel to be constructed in Australia.

Australian Airlines

Mr Whitlam:

m asked the Minister representing the Minister for Civil Aviation, upon notice -

  1. By what airlines and for -what aircraft have import licences been applied for since the 1st January, 1957?
  2. When were the applications made?
  3. Which applications have been granted?
  4. When were the applications granted?
  5. What is the cost of the aircraft for which applications have been granted and in what currency will it be paid?
  6. Which applications have been refused?
  7. When were the applications refused?
  8. What would have been the cost of the aircraft for which applications have been refused and in what currency would it have been paid?
Mr Townley:

– The Minister for Civil Aviation has replied as follows: - 1 to 8. The aircraft re-equipment programmes of Australian airlines are currently receiving detailed consideration by the Government. When a decision is taken a statement will be made.

International Air Treaties

Mr Whitlam:

m asked the Minister representing the Minister for Civil Aviation, upon notice -

What steps have been or are being taken to ratify the following treaties which Australia has signed: - (a) 1948 Convention on the International Recognition of Rights in Aircraft; (b) 1952 Convention on Damage caused by Foreign Aircraft to Third Parties on the surface; and (c) 1955 Protocol amending the Convention for the Unification of Rules relating to International Carriage by Air?

Mr Townley:

– The Minister for Civil Aviation has furnished the following replies: -

  1. The ratification of this Convention has been carefully examined in light of developments since 1948 and there is now some doubt as to whether the Convention will fully achieve its objectives. Only six States have so far ratified. The matter has also been discussed at several meetings of the Commonwealth Air Transport Council. The States, including Australia, which are members are. still consulting each other on the problems involved. The Convention is more important to States in which aircraft are manufactured or finance made available to promote sales of aircraft in other countries. Any decision by Australia will therefore be influenced by the action taken by such States. The matter is being kept under review in consultation with other Commonwealth countries.
  2. and (c) Legislation to give effect to these Conventions and to approve ratification will be introduced in the near future.

Seating in Aircraft.

Mr Webb:

b asked the Minister representing the Minister for Civil Aviation, upon notice -

  1. From what date does the Department of Civil Aviation regulation apply requiring all new aircraft placed in service in Australia to have rearward-facing seats?
  2. Has any regulation been promulgated requiring alteration of existing aircraft to provide rearwardfacing seats?
Mr Townley:

– The Minister for Civil Aviation has supplied the following answers: -

  1. An air navigation order was issued in January, 1955, requiring rearward-facing seats to be fitted in new aircraft types introduced into Australia after 1st January, 1957. Australian airlines objected to the order because they believed that experience to date did not prove conclusively that rearwardfacing seats were inherently safer than securely installed seats facing in the conventional direction. These objections were discussed by the Department in a series of meetings with airline representatives and as a result it was agreed that implementation of the Australian order would be deferred until agreement could be reached on the matter at an international level. Experts from the Department of Civil Aviation attended a meeting of tha I.C.A.O. airworthiness division in 1957 and presented a case in favour of rearward-facing seats. Although some major states supported the Australian view, the majority of States represented at the meeting was opposed to rearward-facing seats being made a mandatory requirement in civil aircraft. The question, however, was left open for further study and discussion and will be on the agenda of future I.C.A.O. airworthiness meetings. In accordance with the agreement reached with the operators, the existing air navigation order will not be implemented until some agreement has been reached at these international meetings. If I.C.A.O. adopts a standard, then Australia, in accordance with its normal practice, will implement it in Australian civil aviation.
  2. No.

Cite as: Australia, House of Representatives, Debates, 25 March 1958, viewed 22 October 2017, <>.