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Thursday, 18 November 1976

Mr SCHOLES (Corio) -The White Paper presented by the Minister for Defence (Mr Killen) on 4 November sets out -

Mr Martyr - Four November?

Mr SCHOLES -It is a day of the month, if the honourable member did not understand. The White Paper sets out in fairly great detail the general philosophy of the Minister and, I presume, the Government in regard to defence matters. The Paper contains a number of matters that I believe the Minister or the Government ought to explain to the House. I also believe that the White Paper makes presumptions in some areas, which are just that- presumptions- and could well have some examination from a defence point of view as opposed to other points of view.

Mr Cotter - Would the honourable member like to pot the black?

Mr Martyr - That is a presumptuous statement.

Mr SCHOLES -I do not know whether we need to have clowns in the House. But if the honourable gentleman wishes to proceed in that way on a serious subject and continues to treat it so jovially that is his business. The White Paper firstly mentions new equipment. I do not think that anyone would question that the defence forces need new equipment. I do not think that anyone would question that levels of equipment far higher than the Minister has outlined are desirable. I do not think that anyone will suggest that those levels of equipment can in fact be obtained because there are balancing factors in any area of activity. What we would like must be balanced against what we can have. In this case obviously the defence forces cannot have what they would like; they can have what the Government can at any given time afford.

This brings me to the first point that I want to make in respect of the White Paper, and that is what the Government can afford. The Minister and the honourable member for Curtin (Mr Garland), who was the last speaker from the other side of the House, have both indicated an amount of money which is to be expended in meeting the requirements of the White Paper on defence. I think the amount is $12 billion. It works out at about $250 per head of population per annum; that is, about $5 a week per taxpayer.

In presenting a program such as this and remembering that continuing suggestions are coming from the Treasurer (Mr Lynch) and the Prime Minister (Mr Malcolm Fraser) that the tax burden will be in fact reduced and not increased, I think some explanation of the financial background to the defence White Paper should be made to the House. I do not accept that that is the responsibility of the Minister for Defence. His responsibility is to put forward the Government 's program on defence. I think the Treasurer should come into the House and inform us what the forward expenditure means in budgetary terms. It is fairly evident that if this expenditure is to be met with a reduced or a consistent tax base, other substantial cuts in expenditure will be required in order to fund the major section of the program. After all, funding is what it is all about in the long run. What you buy you must pay for.

The second thing I question is the way in which the report skates over two of the basic requirements of defence. One must remember that when a defence force is required no additional planning can be undertaken. The first proposition which I think ought to be discussed and examined fairly deeply by the Department of Defence is the capacity of Australian industry and technology- this is mentioned in the White Paper but not in any depth- to meet war time emergency requirements of maintaining a defence force. In recent years there has been a gradual decline in design capacity in almost all sections of Australian industry.

Mr Cotter - Especially under the Labor Government.

Mr SCHOLES -The matter is serious. The honourable member obviously feels it is a joke. There is a very serious decline in the capacity for design in Australian industry. Scientific backup is declining and major industries in Australia are fast degenerating into production line operations. In a defence situation first class design capacity, especially at an industrial level, is absolutely essential.

The Australian defence aircraft industry has for a number of years been limping from one crisis to another. There has been talk of rationalisation, amalgamation and various other programs over a considerable period. I remember having discussions on this matter when the honourable member for Curtin was a Minister. I remember discussions taking place under both governments at various times. It seems that the major defence aircraft industries are prepared to talk about amalgamation when they do not have orders and when they need something to prop them up. They become very disinterested immediately they have some work to do. The long term future of the industry very much depends on that problem being resolved and some guarantee of continuity of participation in the provision of our military aircraft in the future from Australian sources.

At the moment part of the industry is being maintained by making windows for aircraft and by making small sections of aircraft. We have at the moment a very high degree of skill within portion of that industry as a residue from the manufacture of highly sophisticated fighter aircraft which have only in recent years ceased to be produced from our aircraft factories. They are skills which would be vital in any defence emergency to this country. They are skills which require maintenance and continual renewal. The skills are already in existence, if the honourable member for Holt (Mr Yates), who has been seeking to interject, wants to know. The skills will decline very rapidly if they are not used in the manner for which they were developed; that is to produce and work on sophisticated military aircraft.

The Nomad project is keeping part of our aircraft industry alive. It is not a highly sophisticated military aircraft. The skills required m that area of production are quite different from those which would be required in a defence emergency. I think it is proper to put before the House, when considering a defence White Paper, the absolutely essential proposition that no amount of armed forces, no amount of equipment and no amount of military skills can maintain a defence force in the field unless it is supported by highly skilled persons able to quickly produce, maintain and repair military equipment of the most sophisticated type. I think it is also important that we should understand that not only in the aircraft industry generally but also in the electronics industry Australian design and development skills are rapidly disappearing. It is no longer economic for the electronics industry to design and produce primary goods of Australian origin. Imported design is cheaper and more economic. I think it is fair to say that what was a very substantial industry- it was one of the world leaders -is in decline within Australia. In a defence situation the electronics industry would be crucial. I think it is important that surveys be undertaken of our capacity to meet needs which may occur.

The Minister sets out what he sees are the possible needs. We may agree or disagree on them, but defence is about a lot more than just soldiers in the field. A soldier in the field needs supplies. I think those of us who have taken the trouble to read about some of the last days of the Second World War will be aware of the tremendous damage which was done to the German forces because of an incapacity to supply themselves.

The defence White Paper envisages the purchase of a considerable amount of new equipment. A great deal of that equipment is to be purchased and designed outside Australia. I hope that when an aircraft is chosen similar arrangements will be made to those which were entered into relating to the Mirage. The Mirage was built under licence in Australia. This maintained Australian skills and an aircraft was produced which was admirably suited to Australian conditions and which was capable of being modified by highly trained Australian craftsmen. The planes were delivered on time and in general had a better reputation as aircraft than those which were built m France, the country of their origin. Prior to that, the Sabre and the Canberra were substantially produced in Australia as military aircraft. Those skills are fairly deep-seated, but would be very quickly lost.

I make one other comment in this area. One of the unfortunate things about production of defence equipment relates to guided missiles. Australia has produced a number of military missiles. To date, despite substantial sales, there has been little benefit commercially to the industry because orders for production have been stilted. I think that the Treasury is most likely to blame for that and not the Department of Defence. For instance, 420 to 4S0 Jindivik units have been produced, but there has never been a production run of more than 12 units at any given time. The Nomad aircraft project is suffering a similar Treasury domination. We are not able to produce the aircraft with a sufficient material flow in order to gain the benefits of mass production or semi-mass production. In fact, the orders are not bad but they would be far better if we could produce the aircraft to sell rather than sell the aircraft to produce. Unfortunately, that is a non-commercial operation which is being forced on that industry.

The Opposition would hope that defence could be an area in which a proper and rational approach from both sides of the Parliament could be achieved. I believe that I have spoken about an area in relation to which serious thought has to be given. It is usual in defence debates for people to talk about soldiers, airmen or military equipment. If a defence emergency arises, the soldiers, sailors and airmen- the trained personnel who will be available- will perform as they are expected to perform. But they can perform only as well as the back-up services the country can provide to them will allow. I suggest that these back-up services are in decline. They are not as available as would be necessary in a defence emergency. I think that as a serious consideration the Minister for Defence and his department should be looking at the preparedness that Australian industry has to meet a defence requirement.

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