28 April 1938

15th Parliament · 1st Session

The President (Senator the Hon. P. J. Lynch) took the chair at 3 p.m., and read prayers.

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Senator GUTHRIE:

– I ask the Minis ter representing the Minister for Defence whether, in view of the advisability of speeding up preparations for the defence of Australia, and the pressing need for a much larger Air Force, the Government will make arrangements for the aircraft factory at Fishermen’s Bend, Melbourne, to work three shifts and thus increase the output? Also, is the Government aware that 4,000 recruits have applied in Victoria for enlistment in the Air Force during the last three weeks?

Senator FOLL:
Minister for Repatriation · QUEENSLAND · UAP

– As the honorable senator was good enough to advise rne of his intention to ask this question, I have obtained the following reply from the Minister for Defence : -

The output of the Commonwealth Aircraft Corporation has to be related to the contemplated expansion of the Air Force and the type of aircraft which the Corporation is equipped to manufacture. Having regard to these considerations the honorable senator may be assured that full use will be made of the potentialities of the factory. The Chief of the Air Staff has informed the Minister that there has beena large number of applications for enlistment in the Royal Australian Air Force.

Senator BROWN:

– I ask the Minister representing the Minister for Defence whether it is true that the Government intends to appoint, as Inspector-General of the Australian Military Forces, a high military official from Great Britain? If so, may it be assumed that the Government believes it is impossible to obtain, in Australia, a man with the requisite qualifications to occupy that position?

Senator FOLL:

– The Prime Minister and the Minister for Defence, in statements made in the House of Representatives yesterday, explained the reason for the proposed appointment. “With the permission of the Senate, I propose, later, to read a full statement of the Government’s defence policy.

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Senator GIBSON:

– I ask the Leader of the Senate whether, in view of the serious outbreak of eczema, causing heavy losses of stock in the Dominion of New Zealand, the Government will take immediate action to prevent the introduction into Australia of sheep and cattle from that Dominion? Also, will the Minister take steps to trace the many recent importations of stud sheep that have been sold in Melbourne, so that they may be carefully watched for a sufficient period to safeguard Australian stock against the disease?

Senator A J McLACHLAN:

– I have already discussed the matter with the

Treasurer, who is in charge of the Council for Scientific and Industrial Research. But the second part of the honorable gentleman’s question raises a new issue. I shall make immediate representations to the Treasurer to protect the flocks and herds of Australia from infection.

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Senator DEIN:

– Having in mind the clever advertising scheme at the recent Royal Agricultural Show in Sydney, of the Department of the PostmasterGeneral, which installed a model parliament and telephone system for the purpose of encouraging the installation’ of a telephone in every home, I ask the Postmaster-General whether he will assist to bring about such a happy state of affairs by reducing the present exorbitant ground rentals for telephones?

Senator A J McLACHLAN:

– I feel highly flattered by the honorable senator’s reference to the department’s exhibit at the Royal Agricultural Show in Sydney, but I can hold out no hope for a reduction of the ground rentals of telephones.

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Senator BRAND:

– I ask the Minister for Repatriation whether, in the event of the Government introducing an amendment of the Australian Soldiers’ Repatriation Act this or next session, it will make provision to extend the provisions of that measure to the SouthAfrican war veterans ?

Senator FOLL:

– The Government has given consideration to the matter, but has decided that it is impracticable to extend the provisions of the Australian Soldiers’ Repatriation Act to include South African war veterans.

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Official Football Game in Schools.

Senator GUTHRIE:

– I ask the Minister representing the Minister for the Interior whether the Commonwealth Government controls State schools within the Federal Capital Territory, and, if so, whether steps will be taken to prevent school teachers in the National Capital from refusing to allow students to play the Australian rules game of football?

Senator ALLAN MacDONALD.The honorable senator informedme of his intention to ask this question, and I have obtained the following reply from the Minister for the Interior: -

The Commonwealth has handed over control of State schools in the Federal Capital Territory to the Education Department of New South Wales. The subject of football is one in respect of which the head masterhas full jurisdiction. The head master at Telopea Park School states that the main reason for adopting the Rugby code as the official game for the school is that it is the only game which affords an opportunity for the school to enter into competitions. Before making a decision the head master received deputations representing all codes of football, and discussed with them the incidence of the game with respect to the school curriculum. It will be appreciated that sport in schools caters for the physical side of education, and also mental development, by encouraging the team spirit.

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Senator COLLETT:

– During the last session I suggested that members of the Senate be given an opportunity to inspect the National War Memorial in Canberra, so that they might note the progress being made. I now ask the Minister representing the Minister for the Interior whether it will be possible to arrange a visit by honorable senators at an early date?

Senator ALLAN MacDONALD.The necessary arrangement will be made to facilitate a visit by honorable senators to the memorial.

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Erection of Terminal Building

Senator BRAND laid on the table of the Senate the report of the Parliamentary Standing Committee on Public Works relating to the proposed erection of a terminal building at the KingsfordSmith Aerodrome at Mascot, New South Wales.

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The following papers were pre sented : -

Inauguration of Aeronautical Research in Australia - Report by Mr. H. E. Wimperis, dated 21st December. 1937.

Secondary Industries Testing and Research Committee - Report dealing with the inauguration of research into the problems of Secondary Industries in Australia - dated February, 1937.

Lands Acquisition Act - Land acquired at Bullsbrook, Western Australia - For defence purposes.

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Senator FOLL laid on the table reports and recommendations of the Tariff Board on the following subjects: -

Aerated or Mineral Waters, viz.: - Contrexeville, Evian, Perrier, St. Galmier, Vals, and Vittel.

Cellulose Enamels, Lacquers and Varnishes, concentrated or otherwise in any form; Colours ground in plasticizing media; and Synthetic Resins incorporated in oil.

Chinaware and Parianware, n.e.i.; Porcelainware, n.e.i.; Earthenware, Brownware and Stoneware, n.e.i., including glazed or enamelled Fireclay Manufactures, n.e.i., and all kinds of porous Insulating Blocks.

Corks and Cork Manufactures excepting Corkboard.

Cotton or Linen Handkerchiefs; Cotton or Linen Serviettes

Curtains and Blinds, n.e.i. (not including Blinds attached to rollers) .

Hydraulic Door Closers

Laundry Machines (not being those of the type used in the household).

Lifting Jacks

Parasols, Sunshades, and Umbrellas, n.e.i.

Tents, Sails and Flags

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asked the Minister representing the Prime Minister. upon notice -

With reference to the memorandum submitted to the Prime Minister concerning the development of the iron ore deposits at Koolan Island, Yam pi Sound, Western Australia -

Has the Government come to any decision in regard to an application for a licence to export 1,000,000 tons of iron ore per annum for 25 years?

If so, what is the decision?

Senator A J McLACHLAN:

– The Prime Minister has supplied the following answer : - 1 and 2. The whole question associated with the development of the iron ore deposits of Australia is under consideration, and a statement of the Government’s intentions in the matter will be made at as early a date as practicable.

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asked the PostmasterGeneral, upon notice -

  1. What progress, if any,has been made in connexion with the preparation of plans for the new General Post Office in Brisbane?
  2. When are operations in this connexion likely to commence? 3.Will the Postmaster-General make available to Queensland senators copies of such plans as have been prepared?
Senator A J McLACHLAN:

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

  1. Comprehensive preliminary plans have been prepared and are at present the subject of detailed consideration.
  2. It is not possible, at this juncture, to say when actual operations will commence.
  3. I am sorry that the honorable senator’s request cannot be complied with.

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Motion (by Senator A. J. McLachlan) agreed to -

That leave be given to introduce a bill for an act to make provision for the Inter-State Commission and for other purposes.

Bill brought up, and read a first time.

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Motion (by Senator A. J. McLachlan) agreed to -

That leave be given to introduce a bill for an act to enable effect to be given to the International Convention for the Suppression of Counterfeiting Currency, signed at Geneva on the twentieth day of April, One thousand nine hundred and twenty-nine, and for purposes connected therewith.

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Motion (by Senator A. J. McLachlan) agreed to -

That leavebe given to introduce a bill for an act to amend the Extradition Act 1903-1934.

Bill brought up, and read a first time.

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Motion (by Senator A. J. McLachlan) agreed to -

That leave be given to introduce a bill for an act to enable effect given to Article Twenty-eight of the International Convention for the Amelioration of the Condition of the Wounded and Sick in Armies in the field, signed at Geneva on the twenty-seventh day of July, One thousand nine hundred and twenty-nine, and for purposes connected therewith.

Bill brought up, and read a first time.

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Resignation of Mr. Eden, British Foreign Secretary : Conversations with Italy - Germany’s Absorption of Austria - Position of Czechoslovakia - Anglo-It a li a n A greemen t - Sino-japaneseconflict-Civil War in Spain: Commonwealth’s Contribution for the Relief of Victims - Anglo-Eire Agreement - Pacific Islands as Air Bases - Governor-General’s Visit to Netherlands East Indies - Australia’s Defence Policy.

Senator A J McLACHLAN:
Postmaster-General · SOUTH AUSTRALIA · NAT

. - by leave - In recent months several important developments in the international situation have focussed public attention to an increasing degree on foreign affairs, and I wish, for the information of honorable senators, to review certain of those recent developments.

First, I propose to deal with the circumstances of the resignation from the British Cabinet of Mr. Eden, the late Foreign Secretary in Great Britain. Honorable senators will recollect that the immediate cause of Mr. Eden’s resignation was the difference of opinion which had arisen between himself and his Cabinet colleagues as to whether official conversations should at once be opened by the British Government with the Italian Government. Mr. Eden held the view that these conversations should not be begun unless three conditions precedent were fulfilled, namely, the cessation of Italian propaganda of an anti-British character in the Near East, the withdrawal of some of the Italian troops in Libya, and the conclusion of a satisfactory agreement as to the withdrawal of foreign volunteers from Spain. The view taken by Mr. Chamberlain and other members of his Cabinet was that the seriousness of the European situation was such, that unless an immediate move was made by Great Britain to alleviate it, the inevitable result might well be serious. At the time of Mr. Eden’s resignation, there was certain criticism to the effect that there had been a substantial change of British foreign policy, especially in regard to the League of Nations, without the dominions having been consulted. As to the alleged reversal of foreign policy, Mr. Chamberlain said in the House of Commons on the 21st February, that his foreign policy was based on three principles -

  1. The protection of British lives and interests.
  2. The maintenance of peace and the settlement of differences peacefully and not by force, and
  3. The promotion of friendly relations with other nations who were willing to reciprocate and keep the rules of international conduct without which there could be neither security nor stability.

It will be remembered that representatives of Empire governments at the 1937 Imperial Conference expressed the desire to base their policies on the aims and ideals of the League of Nations. The Commonwealth Government believes that the principles of British foreign policy outlined by Mr. Chamberlain are in effect an expression of the essential aims and ideals of the League, and in no way in conflict with them. Further, the Imperial Conference in 1937 registered the view that differences of political creed should be no obstacle to friendly relations between governments and countries, and that nothing would be more damaging to the hopes of international appeasement than the division, real or apparent, of the world into opposing groups. The recent approach made by Great Britain to Italy with a view to alleviating strained relations in no way represents a departure from the resolutions adopted at the Imperial Conference.

It was alleged at the time that the British Government had departed from its former policy of supporting the League of Nations, based, apparently, on the statement by Mr. Chamberlain that the League, as at present constituted, was unable to provide collective security for its members. In making that statement he merely recognized a state of fact which, unfortunately, cannot be denied. The present weakness of the League in dealing with international questions has been widely recognized by the various States members in their submission of proposals for the reform of the Covenant ; and Mr. Eden himself said, at the Council meeting on the 26th January, that we were compelled, regretfully, to recognize the fact that by the defection of some of its more important members, the area of League co-operation was restricted, and its ability to fulfil the functions originally contemplated for it thereby seriously reduced.

A perusal of various speeches recently made by Mr. Chamberlain and other members of the Government of the United Kingdom clearly shows that there is no intention whatever of withdrawing support from the League of Nations. Mr. Chamberlain claims that he. has served the best interests of the League by taking a realistic view of its present ability to discharge the tasks originally imposed upon it, and that it is dangerous and misleading to small and weak countries to continue to pretend that the League, with the defection of some of its most powerful members, is to-day an effective instrument for collective security.

Senator Duncan-Hughes:

– Will the Minister say how many treaties registered with the League have been broken during the last six months?

Senator A J McLACHLAN:

– Several of them. In order to be in a position to confirm the belief of the Commonwealth Government that the Government of the United Kingdom had not abandoned its support of the League, the Prime Minister communicated with Mr. Chamberlain on the 6th March, and obtained his authority to state that the British Government still adhered to the policy which had been adopted by members of the British Commonwealth of Nations at the Imperial Conference in 1937, and that, in particular, there had been no change in principle in the attitude of the British Government towards the League of Nations andcollective security.

The Commonwealth Government has, for its part, never deviated from its support of League principles. It stands firmly by the statement of League support arrived at at the 1937 Imperial Conference. It feels that the League still remains the best means of striving to give effect to the principles of international co-operation, and its faith in the aims and ideals which originally inspired tlie League remains unshaken.

With regard to the question of consultation between the dominion governments and the British Government at the time of Mr. Eden’s resignation, as there had been no change in the fundamental aims and objects of British foreign policy, it was unnecessary formally to consult the dominions on what was purely a domestic matter concerning a difference as to time and method for the conduct of certain negotiations. Had there been a major change in foreign policy, it would have been necessary, of course, that the Government of the United Kingdom should consult with the dominions. I should like to say that, throughout the whole of this period, the Commonwealth Government was kept fully informed of all the international developments, and on the attitude towards them of the British Government. I should like here to refer to the last words of a telegram the Prime Minister sent to the British Prime Minister early in February -

We agree that the present situation calls for action, and we feel that the re-opening of conversations with Italy is of the utmost importance. 1 should ‘bc glad if you would continue to keep me fully advised as to the situation.”

The events which culminated in the absorption of Austria by Germany are generally well known to honorable senators; but there are certain aspects in connexion with them which “I should mention. In view of the agreement reached between Austria and Germany in July, 1936, the rapid .march of events which led to the elimination of an oldestablished European State came as a shock to world opinion. These occurrences are of great interest to all countries - even to those that are not directly concerned - and it was inevitable that Austria’s absorption by Germany should have created- alarm and tension, and a fear that similar methods, if adopted elsewhere, might lead to serious consequences. This anxiety applied particularly’ to the future of Czechoslovakia. The tension was lessened when Great Britain announced that assurances had been received from Germany that the independence and’ integrity of Czechoslovakia would be: respected. I may add. that Great Britain is at the moment using its best efforts to ensure appeasement.

On the 24th March, Mr. Chamberlain, in a notable speech in the House of Commons, reviewed in detail the foreign policy of the United Kingdom Government. He began by stating that recent events in Austria had resulted in a profound disturbance of international confidence. He then outlined the existing commitments of the Government of the United Kingdom, which were, first, the defence of France and Belgium against unprovoked aggression, and, second, the treaty obligations which had been entered into with Portugal, Iraq and Egypt. In addition to these defence commitments in relation to particular countries, Mr. Chamberlain stated that British armaments might also be used to bring help to a victim of aggression in a case arising under the Covenant of the League of Nations. There was no automatic obligation to- take military action in such cases, but it was not to, be thought, that the British Government would in no circumstances intervene, as a member of the League of Nations in order to restore peace or to maintain international order.

Mr. Chamberlain stated that the United Kingdom was not prepared to declare its readiness to guarantee the independence” of Czechoslovakia, but he pointed out that the inexorable pressure of facts might well prove more powerful than any formal pronouncement, and that a dispute in Central Europe might involve countries which were not originally parties to such a dispute. He added that, so far as Czechoslovakia was concerned, now was the time to enlist all the resources of diplomacy in the cause of peace.

Before this speech was delivered the Commonwealth Government was apprised of its contents, and the Prime- Minister made a public statement to the effect that he felt that the majority of the people of Australia would approve of the policy outlined by Mr. Chamberlain, and that the Commonwealth Government was, on all vital points, in agreement with the statement. 1 turn now to the Anglo-Italian Agreement, which was signed on the 16th April. Honorable senators will, I am sure, agree with me that any move must be welcome which has for its object the alleviation of international tension. The general aim of the Anglo-Italian Agreement was to re-establish on a firm basis the traditional friendship which, until the last few years., had existed between the British and the Italian peoples. I need hardly remind the Senate that Australia will welcome the improvement in the relations between Great Britain and Italy which it is confidently expected will result from the agreement, It will be noted that, although the agreement was signed on the 16th April, it will not come into operation immediately, as the Government of the United Kingdom regards a settlement of the Spanish foreign volunteer question as a pre-requisite of the agreement taking effect. In addition, the subject of the recognition of Italian sovereignty over Ethiopia remains to be settled.

The Government of the United Kingdom, however, has taken the necessary steps to have the position of Ethiopia brought before the League Council when it meets on the 9th May. It regards it as an anomalous situation that many States Members of the League, including no fewer than five of those represented on the Council, should recognise that the Italian Government exercises sovereignty over Abyssinia, while others, including Great Britain, have not done so.

The terms of the Anglo-Italian Agreement were fully reported in the press, and I needonly refer to certain provisions of particular interest relating to Spain, to Libya and to the Suez Canal.

Intervention in Spain has long been regarded as one of the major causes of European tension, and some uneasiness has been felt as to the objectivesof Italian policy in the event of a victory by General Franco. Any permanent occupation of Spanish territory or the acquisition of territorial and other rights by Italy would have seriously disturbed both Great Britain and France by creating a sense of insecurity regarding their Mediterranean communications. Italy has, however, given an assurance that it has no territorial or political aim and seeks no privileged economic position, in regard to any Spanish territory, and has no intention of keeping there any armed forces in Spain at the termination of the civil war.

Another question which had given rise to anxiety has been the great increase in the Italian garrison in Libya during the last eighteen months. As Libya adjoins Egypt, it will be appreciated that anxiety arose in the minds of the Egyptian Government as to the reason for such a concentration. Italy has now agreed to reduce the Italian forces there toabout half their present strength, and, as a symbolic gesture, a thousand men are now being withdrawn every week.

An item of importance to Italy was . the re-affirmation by the United Kingdom Government of the Convention of 1858 by which liberty of transit through the Suez Canal was guaranteed to all nations. With a large overseas territory to administer, the freedom of the Suez Canal is of great importance to Italy in the maintenance of her communications. There is no need to emphasise the importance to Australia of these guarantees, for they concern an essential artery between Australia and our principal markets.

In the Sino- Japanese conflict, hostilities continue to be concentrated in Southern Shantung. Meanwhile the Governmentof the United Kingdom has continued to seek from the Japanese Government the maximum assurances for the preservation of British interests. Local problems in Shanghai are dealt with largely by negotiations with the Japanese authorities in that area. The longstanding question of the Customs administration is still the subject of discussion with the Japanese Government. The British Ambassador in Tokyo has recently had occasion also to draw the attention of the Japanese Government to the discrimination still being exercised against British vessels and British trade on the Yangtse River, as well as to certain regrettable incidents at Shanghai.

My next reference is to the situation in Spain. The latest information is that the operations commenced by the antiGovernment forces in the province of Aragon some six weeks ago have so far resulted in their reaching the Mediterranean coast and severing the province of Catalonia from the remainder of the territory held by the Government. The ami-Government forces have also occupied a large part of the Pyrenean frontier region and many Government supporters have crossed the border into France. The effect of this rapid advance by the anti-Government armies has been to bring about a certain measure of unity among those political parties supporting the Government at Barcelona. The attitude of the Commonwealth Government, which* is one of strict neutrality and adherence to the policy of non-intervention in the internal disputes of another country, remains unchanged. The policy of non-intervention, despite repeated infringements has, it is felt, prevented the development of the Spanish war into a major European conflagration. Honorable senators will, I am sure, approve of the recent action of the Government in allocating the sum of £3,000 to the “relief of victims of the Spanish war, on the understanding that the action taken for such alleviation is international in character, and that war victims of both sides ure to be assisted.

Honorable senators will have read with satisfaction of the ratification of an agreement between His Majesty’s Government in the United Kingdom and the Government of Eire. The Commonwealth Government is confident that this agreement will strengthen considerably the feeling of friendly understanding between the peoples of Great Britain and of Eire, and also that it will be welcomed by all other members of the British Commonwealth.

Honorable senators will have noted recent references in the press to conversations taking place between Great Britain and the United States of America in regard to Canton and Enderbury Islands. These islands, which form part of the Phoenix Group in the mid-Pacific, are of importance as potential air bases in any trans-Pacific air services. Sovereignty lias been claimed by both Great Britain and the United States. of America. The Commonwealth Government, has been kept fully informed of the course of the conversations and has cabled the Government of the United Kingdom to the effect that, apart from the question of sovereignty, it desired to be associated with that Government in negotiations whereby rights to landing grounds and full air facilities should be safeguarded to the British Empire. It is understood that negotiations for a friendly settlement are well advanced.

The friendly relations existing between the Commonwealth Government and the Government of the Netherlands are evidenced by the recent visit of His Excellency the Governor-General (Lord Gowrie) to the Netherlands East Indies during his journey to England on leave of absence. The Commonwealth Government desires to express its deep appreciation of the hospitality extended to Lord Gowrie during his stay ‘in that country.

I desire to inform honorable senators that the visit of His Excellency to the Netherlands East Indies had no political or military significance whatever, but was merely a neighbourly courtesy call paid by the representative of His Majesty in the Commonwealth of Australia at the invitation of the Dutch Government through whose territories he was passing en route.

In conclusion, I wish to say that although a decrease in tension in the international situation is noticeable at the moment, there is still cause for anxiety. In view of developments which have taken place, the British Government has decided that it is necessary to revise the British defence policy, and to accelerate the various programmes. The Commonwealth Government is in accord with this decision, and also feels it imperative that, measures to bring Australian defence t.o a level commensurate with national security should be proceeded with as rapidly as possible. I lay on the table the following paper : -

Foreign Affairs: Ministerial Statement, and move -

That the paper be printed.

Debate (on motion by Senator Collings) adjourned.

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Senator FOLL:
Minister for Repatriation · Queensland · UAP

by leave - In his broadcast statement of the 24th March, the Prime Minister (Mr. Lyons) gave an outline of the defence programme adopted by the Government. Following the consultations held in London last year, we have now completed a comprehensive review of the whole of the defence organization throughout Australia, and I take this opportunity to inform honorable senators of the main features of our defence programme.


As previously announced, it is the intention of the Government to provide for £24,800,000 additional of new expenditure in the next three years. The allotment of this amount is as follows: -

The amounts for the government munitions factories and ‘civil industry are mainly for army purposes. Including an estimated expenditure of £18,200,000 for the maintenance of the existing defence services, the total defence expenditure during the next three years, apart from civil aviation requirements, will be £43,000,000, distributed as follows:-

On the completion of the programme, the amount required annually for the maintenance of the services then in being will be £10,000,000, as compared with the present recurring maintenance vote of £6,000,000. Funds for the early authorization of most urgent proposals will be provided from a loan bill for defence purposes. Certain miscellaneous expenditure, totalling less than £100,000, which can be carried out by the 30th June, is being provided from Treasurer’s Advance, and the balance of the first year’s requirements will be dealt with in the next budget.


The naval programme provides for two additional cruisers of the Sydney type, which were built in 1936 and are at present in commission in the Royal Navy. The first cruiser willarrive in Australia this year, and the second about the middle of next year. The cost will be spread over a period of years, with the value of the Albatross, which is to be transferred to the Royal Navy, as an offset. Arrangements have been made for the building of two sloops of the Yarra type at Cockatoo Island. These will be completed early in 1940. The Adelaide is being converted into on oil-burning cruiser. The Australia is now being fitted with an improved anti-aircraft armament and given extra armour protection. When the Australia is completed, the Canberra will undergo similar treatment.

Provision has been made for seaward defences to protect , our principal harbours, and an anti-submarine school is being established at Sydney. Three small seaward defence vessels are to be constructed in Australia, the first of which will be completed this year.

Increased facilities for the storage of fuel oil and ammunition are being provided at suitable points. Equipment is on order and personnel are being trained for the strategical wireless stations, which will be in full operation in 1939. These stations will enable communication to be maintained with shipping over an extensive area at all times.

A special defence course for officers of the Australian merchant navy will be instituted at Sydney, Melbourne and Fremantle early next month.


Modern fixed coast defence armament and equipment are being installed at Brisbane, Newcastle, Sydney, Port Kembla and Fremantle. The defences at Port Phillip, Adelaide, Hobart and Darwin are being improved, and an increase of about 500 men of all ranks is being made in the Permanent Forces controlling these defences. Anti-aircraft guns are now being manufactured at the Government Ordnance Factory, and extensive additions are being built to provide for the production of heavier guns of the latest pattern. In connexion with the extension of the anti-aircraft defences, the Permanent Forceswill be increased by approximately 370 men, and additional militia units will be raised in each of the main ports to complete the manning of this armament. The Government is continuing the annual increase of £225,000, which was provided to bring the militia forces up to the strength of 35,000, and to improve the conditions and standard of training generally, and is increasing the training vote still further to provide for the extension of the annual training from twelve to thirteen days. TheRoyal Military College is being expanded to ensure an annual output of officers that will remedy in a reasonable period the present shortage in the Australian Staff Corps. A command and staff school is to be established at Sydney to conduct courses of instruction in tactics and staff duties for officers of the permanent and militia forces, and to carry out the practical part of their examinations. Schools of military engineering and signals are to be provided, and the small arms school is to be expanded.

The efficiency of the first line component of the field army will be improved by increasing thepermanent staff of militia units by an average of three for each of 73 fighting units. The increases include quartermasters, warrant officers, orderly room sergeants, and sergeant or corporal instructors, and will facilitate mobilization in an emergency.

In view of the importance of Darwin as a naval and air base, a permanent force of mobile troops will be established and maintained at that port. The reserve stocks of all classes of ammunition are being increased considerably. . The process of mechanization is being continued by the local construction of armoured cars and machine gun carriers, and the conversion of artillery units to mechanical draft. The new programme includes works for the fixed coast defence, barrack accommodation, and storage for armament, equipment and ammunition.

Air Force

On the 30th June last, Part 1 of the

Government’s air defence scheme was completed, providing eight squadrons, with a first-line strength of 96 aircraft, together with one flying training school, two aircraft depots, and certain adminis trative units. Part 2 ofthe scheme is now to be completed during the next three years, and will provide for -

Nine squadrons;

One flying training school;

One equipment depot;

Two armament training camps;

Two group head-quarters;

Four station head-quarters, and the extension of existing establishments.

This will raise the number of squadrons to seventeen, with a first-line strength of air craft of 198, and reserves in proportion. The increase in permanent personnel will be 2,900, of whom 275 will be pilots. The increase in citizen force personnel will be 11.6, including 21 pilots. Steps are being taken to accelerate the output of aircraft from the Commonwealth Aircraft Corporation Proprietary Limited, to increase substantially the number of aircraft on order, and to lay in stocks of essential materials. It will be agreed that we are indeed fortunate that this local factory is in existence. To accommodate the new squadrons and other establishments, arrangements have been made for additional barracks, hangars, workshops, wireless stations, and other buildings.

The Government is fully seised of the importance of the further development of civil aviation. The Government’s civil aviation policy on the proposed reorganization of internal routes consequent upon the commencement of the flying-boat service, will have regard to defence considerations.

Munitions Supply

In 1934, the Government initiated a forward developmental policy in regard to the local production of munitions, and this was approved by the last Imperial Conference. Extensive additions are being provided for the manufacture of new types of munitions and explosives, and an increased output of all classes of ammunition. Large additions are under construction at the Lithgow Small Arms Factory, and the Government is providing £1,000,000 towards the cost of organizing civil industry to meet any emergency. The plant provided under this scheme will, in the main, remain the property of the Government and subject to our control. This will enable a close check to be maintained on the cost of production, and will facilitate the control of profits. The Government, therefore, will not relinquish control of the manufacture of munitions but will, in effect, enlist the aid of private firms for management and operation.

The requirements of the fighting services in general call for the co-operation and assistance of other branches of industry, and this is being fully explored. The Defence Department is co-operating with the Council for Scientific and Industrial Research and the Advisory Panel of Industrialists. An invitation has been extended to the representatives of the industrial unions concerned with a view to creating the most complete form of Australia-wide co-operation. A representative committee has been appointed to deal with the control of interstate shipping and the maintenance of coastal trade. The co-operation of the railways managements has also been provided for, and other committees are dealing with the problems of wireless, telephone and telegraphic communications, whilst a further committee has been appointed to co-ordinate medical services and supplies. A special committee, representative of the Navy, Army, Air Force, Employers Federation and Trade Unions for the purpose pf marshalling man power, will be constituted as soon as the Trade Unions Advisory Panel is appointed. Our defence plans provide for the linking up of every national activity throughout Australia.


Lt is noteworthy that there has been no authoritative report on the Army since the Senior Officer’s Conference of the Australian’ Imperial Force war leaders in 1920. The Government has, therefore, decided to obtain the services of a senior officer from the British Army to report to the Government on the matters normally covered by the functions of the Inspector-General of the Military Forces when that post was in existence.

In view of the rapid developments in air defence, the Government has also asked the United Kingdom Government to arrange for an early visit by the Inspec tor-General of the Royal Air Force, to report on the existing organization and the lines of the proposed expansion.

In order to provide for expedition aird efficiency in the construction of special defence works and the completion of local defence supplies, it has been decided to appoint an Inspector-General of Defence Works and Supplies. Mr. Brodribb, ControllerGeneral of Munitions Supply, who for many years was the. engineer supervising the development of the Maribyrnong and Footscray factories, has been appointed to the new position. To enable him to undertake this work, the Government has requested Mr. Leighton, who recently retired from the post of ControllerGeneral of Munitions Supply, and who is at present serving on a part-time basis in a consultative capacity to the Munitions Supply Board, to resume his former position. Mr. Leighton is one of the most eminent authorities in the British Empire on munitions production, and rendered very distinguished service in Britain during the war.


To summarize. The scheme of Australian defence is related to a wider pattern of Empire defence, and its fundamental basis is Empire sea-power and the Singapore naval base. Nevertheless, it is complementary to this conception of Empire collective security that we should do all we can to defend ourselves, and the new programme is claimed to be a substantial step towards this end. It will provide for the cruisers necessary for trade defence in our local waters. It will greatly strengthen the land, sea and air defences of the main ports and centres of population. It will strengthen the equipment and munitions reserves of the field army and increase the permanent personnel and the general standard of efficiency. Finally, it will provide greater resources for the local production of munitions, and complete the national planning of all phases of activity associated with the Defence Forces.

The basis of the Government’s policy has been endorsed by the best advice obtainable at home and abroad, but the deterioration of the world situation which occurred subsequent to the Imperial Conference of last year has resulted in a programme much greater than the one contemplated at that time.

It has already been announced that the new programme is aflexible one, to be increased or decreased according to the trend of the international situation, and the public is assured that its progress will be under constant review by the Cabinet and the Council of Defence. I lay on the table the following paper: -

Defence proposals of the Government: -

Ministerial statement and move -

That the paper be printed.

Debate (on motion by Senator Collings) adjourned.

page 580



Debate resumed from page 576, on motion by Senator A. J. McLachlan -

That the paper be printed.


– This, I imagine, is one of the most important subjects which the Senate has ever been asked to take into consideration. I think that we can take it for granted that uppermost in the minds of all senators, regardless of their political affiliations, is the desire for the preservation of world peace rather than any inclination whatever to stimulate passions which may lead to another world war. This subject of foreign policy is of supreme importance because, so far as I am aware, Australia has never yet declared a foreign policy, notwithstanding that, since the Imperial Conference of 1917, and more particularly since 1926, when the Statute of Westminster was passed by Great Britain, Australia has been an entirely sovereign country in respect of foreign affairs as well as internal affairs. We have always slavishly followed the foreign policy of Great Britain as dictated by happenings in Europe and in other parts of the world. Those of us who sit in Opposition are of the opinion that the time has come for an understanding and acceptance of our responsibilities of nationhood.

This afternoon we heard from the Leader of the Senate a partial statement relating to foreign affairs.

It would be an insult to the intelligence of honorable senators to suggest that we have heard a complete account of all that is happening so far as Great Britain is concerned. As the Leader in this chamber of a party which hopes some day to be strong enough to provide the Government of this country, I realise that all the negotiations which are carried on in diplomatic and other circles with regard to foreign policy cannot be made public; but I do suggest that the elected representatives of the people of this country are entitled to be kept more closely in touch with what this Government is doing than has been the case hitherto. In Queensland recently, I issued the following statement, which I now repeat, because it sets out clearly just how members of the Opposition feel in regard to this matter : -

I think it is a first-class political scandal that Australia’s National Parliament has not been called together since the middle of December, 1937. At a time when affairs in Europe are developing so disastrously for the Empire that it is impossible to forecast from day to day what tragic happening may next occur, Parliament remains closed against the people’s elected representatives.

Labour leader Curtin has publicly demanded that Parliament should be called together, but the Prime Minister refuses. The daily press at home and abroad is publishing reports as to the international crisis and commenting upon it. Many and various organizations are also in the arena. Chambers of Commerce, Trades and Labour councils, business executives and industrial unions, church congresses and synods, and many eminent ecclesiastics are all contributing their quota to the discussion, which in the final analysis can only result in further complicating the issues.

With no sort of responsibility or authority for national action these bodies are engaged in actions which finally may be dangerously embarrassing. All this goes on while the elected representatives of the people, with a keen sense of their position, of their responsibility to the electors, must perforce remain out of action. Never were more serious issues at stake.

Australia’s attitude towards the League of Nations and collective security: our position under the Statute of Westminster: our attitude as to war and peace; our position as an integral part of the British Commonwealth of Nations: the vital importance of a recasting of the Ottawa agreement; the new AngloAmerican Trade Pact, and other matters, cry aloud for immediate and serious attention while Parliament merely looks on as if indifferent to any intelligent consideration of. or action regarding, Australia’s position. I enter my protest, as Leader of the Opposition in the Senate, because in the present circumstances 1 am prevented from doing more.

Senator Duncan-Hughes:

– The British Parliament was in session nearly all the time.


– What has that to do with my complaint that the elected representatives of the Australian people were, for so many months, denied the right to discuss what the. British Parliament was doing?

Senator Duncan-Hughes:

– It was a good reason why this Parliament also should have been in session.


– There is no evading the facts as I have stated them. During the last” few months, many irresponsible bodies without any authority for action have been declaring boycotts of various products of other nations, with whom our relations were, at times, extremely delicate. So much so, that in one instance the Prime Minister deemed it imperative to intervene in respect of action threatened by one particular trade union. The truth is, that we ought to have a foreign policy, and the elected representatives of the people should be consulted, if the Commonwealth is to tell the British or any other government where Australia stands with regard to overseas happenings. We have not been given this opportunity. This is not a new protest, but it is made because Australia is, at the moment, in far more serious circumstances .than ever before. All honorable senators know that this statement of foreign policy, and the statement on defence are to be followed by a bill providing for the expenditure of certain sums of money on. defence. We know all about this, but we are not deceived by any of it. The fact is that there is no justification, in the present state of world affairs, for the hysteria-creating propaganda which is being indulged in here, and unfortunately in all too many other countries.

The statement which we have heard this afternoon falls a long way short of justification. The Minister told us that several important developments had occurred, but he did not indicate precisely what those important developments were. He merely told us, without any elabora tion,’ some of the things which the Australian newspapers have circulated in detail from one end -of the Commonwealth to the other. But, from behind this propaganda emerges the fact although consultations between the dominions and the British Government have been going on for four months - and the Leader of the Senate himself admitted it - this Parliament has not been given any information, regarding the matters discussed. The Minister stated that information had ‘been given through the press. My reply is that nothing of any value to the elected representatives of the people has appeared in the press, because at no time was there an authorative statement of Australia’s foreign policy. I am entering my protest against this procedure. 1 do not expect the Minister to come into the chamber and tell us all those secrets which, in time of national emergency, it would be unwise to make public property. Nobody asks him to do that.

Senator Abbott:

– What docs the honorable senator expect?


– We do not expect the Commonwealth Government to tell the British Government - the Minister admitted that this had been done - that the majority of the people of Australia are in favour of its foreign policy, unless Parliament has been given an opportunity to register the public opinion of this country with respect to foreign affairs. I am willing to admit that he would probably get the views expressed in his telephone conversation with the Prime Minister of the United Kingdom confirmed by a majority of the representatives of the people in this Parliament. Nevertheless, the fact remains that, if our democratic institutions are to be preserved in the regard and esteem of the Australian public, the elected representatives of the people must be taken into the confidence of the Government, and not kept cooling their heels during an adjournment extending over several months. I wish to make it clear that I am not suggesting that the Prime Minister of this country has any right whatever to tell the British Government what he, or the majority of the people of Australia, think is right and proper regarding Imperial policy. That would be ail impertinence on our part; we have no right to do anything of the kind. In my opinion, it would be equally impertinent - and this is where the Australian Government falls down on its job - for the British Government to tell Australia what its foreign policy should be. Australia has a right to decide its own course of action. I say that the international situation, instead of having worsened during recent months, lias definitely improved. Consequently, there is no justification for’ the present wave of hysteria which has been created by the press and swelled by the Prime Minister and the party to which he belongs. We all know what happened recently in Central Europe, when Germany marched into Austria. Those of us who have made some attempt at intelligent thinking in regard to European affairs, foresaw what would happen, and, indeed, warned the Government on numerous occasions. Recent events in Central Europe are, as we pointed out, the inevitable result of the peace treaty signed at Versailles by the victorious allies at the conclusion of the war of 1914-1S, when an attempt was made to destroy Germany’s racial pride. That nation was subjected to conditions which no self-respecting nation could be expected to endure for 24 hours, except under duress. What was more natural than that the people of Germany should rally as one man under a Fascist dictatorship. The result is a condition of affairs in Central Europe which, is now giving the world the utmost concern. I admit that the position is not a happy one; but it is time that Australia had a foreign policy of its own, and declared to the world that it intends to keep free from European entanglements. Why should this nation of 7,000,000 people, including the aged, the infirm, and children, none of whom are wealth producers, be involved in every diplomatic complication which the negotiations of past decades in’ Central Europe have made inevitable? Yet that is the result of the attitude adopted by the Government of this country. We are told that it is in consultation with the Government of the United Kingdom. It would appear that members of the Australian Cabinet are “ Yes-men “, who say “ Yes “ to everything that the British Government proposes. We do not find the leaders of the other British dominions acting in this way. Australia has as much right to declare its own .policy as has South Africa or Canada. It should declare to the world that its policy is one of friendly co-operation with all nations, and that it will make an honest attempt to introduce a more Christian spirit into what the Government is pleased to term its foreign policy. It is not a policy at all, but a hotch-potch of communications between this country and Great Britain. At a later stage of these sittings we shall be asked to translate into hard cash the result of these negotiations. When that time arrives the members of the Opposition will have something more to say on the subject.

About three months ago the annual conference of the Australian Institute of Political Science was held in Canberra. It sometimes happens that at nongovernmental functions, of this nature, statements of far-reaching effect arc made, and the public gets some idea of what is going on behind the scenes. At that conference Mr. Casey, the Treasurer of the Commonwealth, said : “ The Australian Prime Minister receives as much information on the foreign affairs of the United Kingdom as do most members of the British Cabinet.” I am prepared to accept Mr. Casey’s word that that is so. The statement by the Leader of the Senate here this afternoon contained a hint to the same effect. It would be interesting to -know what the Treasurer meant by his reference to “ most members of the British Cabinet.” Surely he meant all of them. I take it that all the members of the Australian Cabinet know the nature of these disclosures. Mr. Casey made another important statement at the conference, when he said -

Australia on occasions takes the initiativein suggesting’ a course of action in the field of foreign .affairs. I refer to a recent exampleof Australia’s proposal for the negotiation of a regional understanding and pact of nonagression in the Pacific

What happened to that proposal? Was it accepted with any measure of enthusiasm at the conference at which it was made on the other side of the world ?

It was not; in fact, it was promptly dumped. No action was taken in regard to it, and nothing more has been heard of it. That is the kind of sophistry which is indulged in by members of the Government in order to give reasons why we in Australia should follow the lead of the Government of the United Kingdom.

Senator Duncan-Hughes:

– The proposed Pacific Pact was not helped by the Sino- Japanese war breaking out

SenatorCOLLINGS.- Does not the honorable senator know that something is always happening as the result of years of diplomatic action? Because of the refusal of governments to recognize basic causes, as distinct from the effects of those causes, tragic happenings are inevitable. Is that not a reason why members of this National Parliament should attempt to get at the facts of the situation, with a view to establishing the basis of a policy which Australia could then declare to the world? If the Government declared to the world that it was able and willing to take on all coiners, we should, at least know where we stand. That would be a definite foreign policy. But it does not do that. Instead, it waits until complications in which the British Government is involved arise, and then it says that it is in consultation with the Prime Minister of the United Kingdom, and that it knows all that is going on. Australia is committed to increased expenditure on defence, merely because it has joined those who, at the instigation of the armament rings of the world, have been worked up to a state of hysteria. An atmosphere is created in which the peopleare willing to agree to the actions and proposals of the Government.

Senator Duncan-Hughes:

– British diplomacy does more to prevent wars than to bring them about.

SenatorCOLLINGS. - If I were to answer the honorable senator’s interjection I, too, would be disorderly. The honorable senator will have an opportunity later to criticize every statement that I have made.

The Opposition is prepared to assist the British Empire in a very important way. It is willing that Australia should do all that it is capable of doing to pro tect this part of the Empire. But it is not to be rushed forward on this wave of hysteria and undertake to do things that it cannot perform. For the six years during which the present Government has had control of the Commonwealth, the Opposition has pointed out that the defence of this country has been neglected. It is remarkable that within a few months of thefinal declaration by the Labour party on this subject, the Government has been falling over itself to accept some of the suggestions of the Opposition. Australia should make a declaration to the world that its first line of defence is its intention to make this country worth defending by the people who live in it. The Labour party holds that every penny expended on defence should be expended within Australia. As further remarks on this subjectwould probably be more appropriate to a discussion of the defence proposals, I shall leave them till a later stage.

Senator McLeay:

– Would the honorable senator say that Australia’s first line of defence is in Australia, or at Singapore ?

SenatorCOLLINGS. - I shall not answer the honorable senator’s interjection further than to say that this is a very serious problem. It will be admitted that, so far as I have gone this afternoon, I have not attempted to make political capital out of the international situation. It is generally recognized that at a time such as we are now passing through, any sane criticism of a government’s foreign policy, or of its defence policy, is liable to distortion and misrepresentation. I was about to say that the honorable senator’s interjectionis a clever ruse, but that is too dignified a term to apply to it. I shall describe it as a “ Smart Alec “ suggestion, like those which frequently are made by little men during a serious discussion. The honorable senator has referred to Singapore. At the proper time the Opposition will have something to say about Singapore. Now is the time for Australia to lay down a definite foreign policy. We on this side say that Australia should declare to the world that it can make no better contribution to the defence of the Empire than to defend Australia- its people, its wealth and its great coast-line - to the utmost of its ability. The Government has made no attempt to do these things. Thoughtful people are not likely to be deceived by the Government’s so-called policy. No honest attempt hasbeen made to organize Australian defence. We have the right to say that that shall be our just and final contribution. It is really more than can be expected of us. What does Mr. Chamberlain say? He states definitely that if a world war occurs Great Britain will not be able to come to our assistance.

Senator Sir George Pearce:

– No, he did not say that. He said that there are three obligations.

SenatorCOLLINGS.- I know there are three obligations, and the Prime Minister was so sure that what Mr. Chamberlain said meant that Great Britain would not be able to come to the assistance of Australia, that he communicated with Mr. Chamberlain pointing out the seriousness of such a statement. Mr. Chamberlain did not then say, “I did not make that statement.” What he said was, “Because, in stating three obligations with which the British Government would be confronted in the event of war breaking out, I placed the protection of Australian trade routes third on the list, it must not be construed that in my opinion that obligation is third in importance.”Mr. Chamberlain has given this country definite warning, which I think is only right. During the last decade at any rate the rulers of Great Britain have made a definite attempt to bring about a better state of affairs throughout the world. They are, I think, making a valiant effort now to put their own house in order, and, Australia as a part of the Empire, should realize that they have undertaken a big job and that we must do likewise; but every member of the Opposition would resent any attempt to drag Australia into a war outside its own shores. We should oppose Australia taking part in any war except to resist aggression against us. There can be no misunderstanding of the position of the Opposition on this matter. The policy of the Labor party makes ample provision for the adequate protection of Australia, but we are definitely opposed to this country being dragged into any war with which it has no concern, and which has resulted from actions taken in respect of which we were not consulted, and the responsibility for which cannot be said to rest upon Australia. There is a call for Australia to declare where it stands in this mad world and for Australian statesmen to formulate a foreign policy, and there is a duty upon the men of this country who are physically fit to see that Australia is adequately defended should the need ever arise. In such an event the Australian Labor party will not be found to shirk any of its responsibilities. But we are of the opinion that while Australia has had no hand in bringing about the complications existing in world affairs to-day, if it is to survive it must definitely keep clear of entanglements with other countries.

There are, of course, other members of the British Commonwealth of Nations that also come into the picture, for example, the Irish Free State, which is now known as Eire. Honorable senators are aware that the British Government has just concluded an agreement with the Government of that country, but the opinion of Australia with respect to that agreement was not asked. I agree that there was no necessity for the British Government to consult us. But as the British Government was under no obligation or necessity to consult us in this matter, Australia should not be embroiled in any complications that may result from actions taken without our knowledge or consent, and in respect of which our knowledge or consent is not essential.

Senator Duncan-Hughes:

– How does the honorable senator know that the British Government did not consult the Australian Government?

SenatorCOLLINGS. - I make that statement and if it is not true the responsible Minister will no doubt refute it. But if the Commonwealth Government was consulted before the pact was concluded between Great Britain and Eire the Commonwealth Government again failed in its duty to Australia if it did not protest against some of the provisions of that pact. Without doubt the Ottawa Agreement will now have to be recast, because as a result of the pact with Ireland, we shall in future not be able to export to Great Britain anything like the quantity of meat we have sent away in the past. Important trade provisions have been included in the pact, by which Great Britain has agreed to import from Ireland a large quantity of meat which in the past it has refused to accept because of certain complications that developed in the relations between the two countries, and this arrangement will mean that Great Britain will not be able to purchase so much from Australia as it has taken in the past.

Senator Sir George Pearce:

– The new arrangement might be at the expense of Argentina.

SenatorCOLLINGS.- It might, but I should be surprised if that were so, for in the past Argentina has been given preference which, if there had been that consideration for the silken bonds of Empire about which we hear so much at times, would have been extended to Australia.

Senator A J McLACHLAN:

– What preference has Argentina had?


– A definite consideration due to the amount of British capital invested in that country. I am submitting my own case, and if the Minister can later refute it I shall be perfectly happy to listen to hint. I think Senator Pearce said that Mr. Chamberlain did not state that in the event of war Great Britain would not be able to assist Australia - possibly he meant to the extent that he would like to help. But we have the testimony of Mr. R. T. E. Latham, son of the Chief Justice of Australia, and now resident in London, who, as a result of the education he has enjoyed, and his close contact with his illustrious father, at least knows something of the matters about which he speaks. He has said, inter alia - “If a European conflict broke out now it is unlikely that Great Britain would be able to spare many ships for Singapore.” What does that mean?

Senator Sir George Pearce:

Mr. Latham is only a university student. The honorable senator said that Mr. Chamberlain had made that statement.

SenatorCOLLINGS- This comment was made by an educated and intelligent Australian after the statement made by Mr. Chamberlain. .

Senator A J McLACHLAN:

– What was the date of Mr. Latham’s comment?

SenatorCOLLINGS. - The 4th January, 1938.

Senator McLeay:

– What does Mr. Latham mean by “many ships?”

SenatorCOLLINGS- What he means should be apparent to every hondrable senator. During recent years Great Britain made a splendid and determined attempt to reduce armaments throughout the world, but when the crisis came the British Government was forced to undertake rearmament upon a huge scale and felt it necessary to declare to Australia that in future it would have to look more to itself and less to Great Britain for protection. There is no doubt that that is the position, even if it had not been said in so many words. We shall have to take action, and to Senator McLeay I say that the Opposition would . oppose with all its strength any attempt to utilize Australian ships for any purpose but the protection of our coast line.

Senator McLeay:

– Yet the honorable senator expects British ships to come here to protect us !

SenatorCOLLINGS.- I do not. We cannot expect that in future, and it is therefore imperative for us to take those intelligent steps for the defence of this country about which honorable senators will hear during the debate on the relevant legislation to be submitted at a later stage. I think the present is an excellent time to declare to the world that Australia has some conception of nationhood, some appreciation of its responsibilities under the Statute of Westminster, and some realization of the mad state of the world to-day. It should declare, both by action and by precept, that while prepared to defend itself against aggression nothing on earth will induce it to engage in war in any other direction. The possibility of a defensive war for the protection of a country threatened with aggression is a justification for putting one’s house in order, but instead of any such proposal being submitted this chamber has been given a long dissertation, allegedly a statement upon foreign affairs. I trust the Leader of the Senate will realize that in making these comments I do not desire to be disrespectful to him, but I ask him if he was satisfied with the statement he made this afternoon. I do not think that he was.

Senator A J McLACHLAN:

-. - Of course I was.

SenatorCOLLINGS.- Then that is evidence of the honorable senator’s splendid loyalty to the policy of his party. Later, no doubt, we shall have an extended debate upon the concrete proposals which the Government will submit for the carrying out of the defence policy which has been submitted to the Senate this afternoon. The Opposition will then be able to indicate very definitely what it thinks should be Australia’s contribution to national defence.

Debate (on motion by Senator Sir George Pearce) adjourned.

page 586


Bill brought up and (on motion by Senator A. J. McLachlan) read a first time.

page 586



Senator FOLL:
Minister for Repatriation · Queensland · UAP

by leaveHonorable senators are aware that since Parliament adjourned in December last, discussions have taken place between the governments of the Commonwealth and New Zealand bearing on the tariff and commercial relations of the two dominions. The arrangements reached as a result of the discussions relate only to the duties and conditions applicable to Australian goods imported into New Zealand and do not necessitate any amendments of Commonwealth legislation. As I am sure that honorable senators will wish to be informed concerning the arrangements, I propose briefly to explain them.

Since 1933, the tariff relations between the two dominions have been covered by the agreement negotiated by Senator the Honorable Sir Walter Massy-Greene and approved by the Commonwealth Parliament in November of that year. The agreement provided for the reciprocal accord of special rates of duty on a number of commodities of interest to each dominion. In respect of some commodities, the special rates were lower than the

British preferential tariff, and in respect of others, higher. The agreement also provided that any goods not included in the categories to which the special rates were applicable should’ be dutiable at whatever rate of duty was in force under the British preferential tariff at the time the goods were imported into Australia or New Zealand, as the case might be. A reservation stipulated that any of the special rates would be alterable by mutual agreement between the two governments or by six months’ notice by the government wishing to effect an alteration of rates.

In consideration of the extensive grant of the British preferential rates and the special commitment of New Zealand to place producers in the United Kingdom in the position of a domestic competitor, a supplementary agreement was made in 1933, that in the event of a substantial diversion of New Zealand’s import trade from the United Kingdom to Australia, both governments would endeavour to devise a satisfactory method of checking such diversion, either by the regulation of trade or by such other means as might be mutually acceptable. As. a result of increasing competition from imports from Australia, and because the New Zealand Government desired to safeguard and encourage the development of industries in the dominion, it decided that it was urgently necessary that steps be taken to restore and improve the competitive position of its manufacturers in their home markets. To this end, the. New Zealand Government gave formal notice to the Commonwealth Government of its desire to enter into immediate discussions for a complete revision of the 1933 agreement.

In the discussions which took place in December, in Wellington, between my colleague, Mr. White, and the New Zealand Ministers, it was arranged that the 1933 agreement should continue in force, but that the Commonwealth Government should give its consent, in such respects as was necessary, to a number of alterations of. duties which the New Zealand Government wished to put into force forthwith in accordance with the policy to which it was committed.

Other subjects which have been highly controversial in the past were also brought into the discussions and amicably settled. In this category I include the. potato question, which for some years presented difficulties because of impediments imposed by Australia on imports from New Zealand. The position of the Commonwealth with respect to the industry was placed fully before the New Zealand Government which withdrew its request for relaxation of the conditions of import into Australia.

The decision of the New Zealand Government with respect to citrus fruits should remove this question from the sphere of controversy also. In future the importation of citrus fruits into New Zealand will be subject to government supervision through the organization of the New Zealand Director of Marketing, and no quantitative restrictions will apply. Purchases through the New Zealand governmental organization will be made entirely on commercial lines. The New Zealand Government, however, considered it necessary to continue the maintenance of protective measures against the importation of fruit from fly-infested areas. As Australian producers demanded and were given similar protection against the introduction of plant pests and diseases, the restrictions arising from the enforcement of similar protective measures in New Zealand can hardly be questioned.

The commodities in respect of which the Commonwealth Government gave its consent to a variation of the customs duties may be conveniently divided into four groups.

Group 1 consists of 36 items in respect of which the duties have been raised against all supplying countries except the United Kingdom. The increases range from 5 per cent, to 20 per cent. The principal items affected are : -

Items Affected by Increases of 5 Per Cent. - Soap, boots and shoes for adults (an alternative duty of 4s. per pair is also imposed on Australian boots and shoes;, slippers, leather belting, and certain types of leather.

Items Affected by Increases of 10 Per Cent. - Knitted piece goods of silk or artificial silk, stationery, showcards, calendars, programmes, lawn mowers, carbons and electrodes, electric irons, hardware, woodware, certain machinery.

Items Affected by Increases of 15 Per Cent. - Hosiery and certain articles of apparel, rough tanned hide leathers, rubber hose and tubing, rubber parts of milking machines, rubber sheet and miscellaneous articles of rubber.

Items Affected by Increases of 20 Per Cent. -Hats, caps, millinery, upholstery leather, storage batteries, wireless sets.

To protect and encourage expansion of the New Zealand wine industry, the duty on Australian non-sparkling wines has been raised from 4s. to 5s. 6d. a gallon. Previously, South African wine paid a duty of 3s. 6d. a gallon, and Australian wine a duty of 4s. The differential rates have been eliminated and the duty of 5s.6d. will apply to both Australian and South African wines. Treaty commitments with certain foreign countries precluded New Zealand from maintaining the former margin of preference accorded to Australia. Australia’s trade in the items in this group amounted to £550,000.

Group 2 consists of six items on which Australia previously enjoyed lower rates of duty than other dominions supplying similar goods. The duties applicable to Australia have been raised to the level of the duties previously applicable to the other dominions. They involve an increase of 5 per cent, in the duties applicable to. fancy goods and sporting goods, jewellery and platedware, canned peas, dress stands and lay figures, brushes and brooms, and an increase by 10 per cent, of the duty on electric cooking and heating appliances. The trade in the items in this group amounted to £80,000.

Group 3 consists of eleven items on which the increased rates, although applied only to Australia, result in the duties applicable to Australia being very slightly in excess of those applicable to other dominions supplying similar goods. The new rates increase the duty on woollen piece goods and mouldings by 5 per cent., and the duties on toilet preparations and perfumery, paints, varnishes, ink, pickles, and stereotypes by 10 per cent. The trade in the items in this group amounted to £150,000 in 1936, of which toilet preparations and perfumery accounted for £50,000 and paint and vam ishes, £78.000. The higher rates have also been applied to Canadian paints and varnishes.

Group 4 consists of 13 items on which the new rates applicable to Australia arc higher than those applicable to other dominions. The volume of imports of these goods from other dominions is very small but competition from Australia has, for many years, necessitated the application of special rates against Australia to protect New Zealand producers. The trade in the items in this group amounted to £30,000 in 1936 but rose sharply during 1937 following an increase in the cost of production in New Zealand. The principal items in the group are: Furniture and upholstery, miscellaneous leather manufactures, enamelled baths, tinware, plain textile articles, and electric fittings and lumps.

Although the new duties cover 66 items the bulk of our trade with New Zealand is not affected. It is also unlikely that the new duties will mean a substantial Toss of trade in those cases where the increases are designed to restore the former level of protection. Naturally we would have wished to retain the whole of this trade, but honorable senators will agree that the Commonwealth could not reasonably question measures which the Now Zealand Government considered necessary for the protection and encouragement of industry in New Zealand. The agreement with New Zealand has given Australia access to a valuable market, and, measured in terms of exports against imports, has operated in Australia’s favour. The volume of our trade with New Zealand has expanded remarkably in recent years. In the calendar year 1933 New Zealand imported Australian goods to the value of £3,808,000, and exported to Australia goods to the value of £1,393,000. In 1937 its imports of Australian goods had grown to £6,944,000, while exports’ to Australia reached only £1,824,000.

The New Zealand Government insisted that the measures necessary for the protection of New Zealand industries were urgent and could not be delayed later than the 1st March last. Consent to the alterations was, therefore, given by the Commonwealth Government and die new duties were put into force in

New Zealand on the 1st March.

Pursuant to the desires of the New Zealand Government the Commonwealth Government has also consented to accept three months’ notice in lieu of six months’ for alterations of rates of duty or for termination of the agreement. Subject to this understanding the agreement of 1933 will continuo until such time as both parties find it convenient to open discussion for a new agreement.

page 588


Motion (by Senator A. J. MCLACHLAN) agreed to -

That the Senate, at its rising, adjourn till Wednesday next, at 3 p.m.

Senate adjourned at 4.47 p.m.

Cite as: Australia, Senate, Debates, 28 April 1938, viewed 22 October 2017, <>.