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Tuesday, 29 November 1938

Mr CURTIN (Fremantle) . - I regret that I find it imperative to say a few words at this stage. At the outset,

I emphasize the significance of the observation of the honorable member for Bass (Mr. Barnard), in directing attention to die belated circulation of the document described as an " Explanatory statement in relation to the Estimates of Defence Expenditure ". As one who has had some experience in examining type, I calculate that the document contains about 25,000 words. It was circulated amongst us at 3.30 p.m. when the committee was expected to proceed to the consideration of the estimates of expenditure of the Department of Defence. The vote in this section is £6,874,000 to cover the maintenance expenditure in connexion with the activities of the department, the total expenditure of which in the present financial year is to be £16,796,641. This money is to be obtained partly from revenue, partly from the defence equipment trust account, and partly from the civil aviation trust account, whilst £4,400,000 is to come from the loan fund. There is to be a capital expenditure of nearly £10,000,000, to £1,800,000 of which the country has already been committed as the result of previous decisions by the committee. In the present financial year there is to be new expenditure of £8,113,000, in addition to the maintenance expenditure which I have already mentioned as £6,874,000. On page 36 of the explanatory statement is a dissection of the distribution of maintenance expenditure under the various heads of the defence services, and also a statement showing the proposed capital expenditure in the current year for each group of the services. At this stage .1 am not in a position to say how much of that is an additional allotment under the new programme, and how much of it represents maintenance in completing the three-year programme which the former Minister for Defence (Mr. Thorby) explained some time ago, and I submit that no other member of the committee is in a position to do so. Having regard to the colossal expenditure proposed, and to the way in which this committee deliberates, it is evident that the committee of the whole House is not the most competent body that could be devised to examine in detail estimates of expenditure. I am not satisfied that this proposed vote represents the minimum amount required to ensure the economic carrying out of the Government's policy in respect to defence. I am convinced that there is a great deal of haphazard preparation of the Estimates. The Treasurer has been asked to find as much as he can, wherever he can find it, and, having regard to the hurried way in which plan after plan has been developed, the examination of proposed expenditure has been inadequate for the purpose of ensuring the best return for the money. A finance committee of the whole committee should be deputed to examine in detail estimates of expenditure which represent so great an increase on what has been voted for this purpose over a number of years. I frankly recognize that the world position has rendered it more or less unavoidable that Australia should make increased provision for its own security. The Labour party stands for the adequate defence of Australia, and this places upon it the responsibility of saying how much. in its opinion, ought to be expended on defence. We desire to expend all that is necessary, but not one penny more, because every penny expended on defence represents a diminution of the amount available for essential social services, for the development of the nation in a reproductive sense, for housing, for assistance to primary producers, and for unemployed relief. No one can justify a lack of vigilance on the part of Parliament, or a failure to scrutinize carefully all expenditure on defence or on war. Those two activities have been notorious for profiteering by private firms and individuals, and for an unjustifiable failure by governments to guard against unnecessary expenditure. There is an obligation on the Parliament to guard against invasion and attack, and there is an equal obligation upon it to protect the country from exploitation under cover of the hysteria created by international unrest and danger. We know that there exist certain interests that are not above profiteering from the needs of the nation at the expense of the welfare of the nation as a whole. Recent disclosures of what took place in London during the weeks preceding the signing of the Munich Pact should be a salutary warning against the risks of profiteering which appear to be inherently incidental to defence preparations. The rapid growth of expenditure by the Defence Department is only what I should expect, having regard to the manner in which the international situation has deteriorated, but that does not relieve us of the responsibility of ensuring that we do not unduly burden Australia by expenditure which, if we took time to examine it carefully, we might see was excessive and avoidable. The Minister for Defence (Mr. Street) is not to Warne for the way in which the Estimates were submitted. He has just accepted the portfolio, but [ ask him to ascertain whether all this expenditure is really necessary. This year, £3,800,000 is to be expended on the Army, practically half of which is for maintenance, and half for capital expenditure. On the Air Force, capital expenditure is to be £2,200,000, with an additional £1,300,000 for maintenance. This Parliament has never been in a position to determine whether, as a matter of policy, more or less should be expended on these various arms of the service. For my own part, I should expend on capital equipment more than is proposed for the Air Force, and not so much for the Navy. I put that forward, however, merely as an expression of opinion, because I have not been in a position authoritatively to inform myself regarding the best allocation of the £16,000,000 which it is proposed to expend this year for defence purposes. I may be told that the Government has had the advice of experts on the subject, and that I, therefore, should accept the allocation without question. But I doubt whether that is an adequate answer to give either to me or to the country. The replies which have been given by Ministers to questions have not led me to have complete confidence, either in their frankness, or in the correctness of the information imparted. [ cite one instance. Not long ago, the then Minister for Defence (Mr. Thorby), in reply to a question, said that the high salary paid to the Inspector-General of the Australian Forces, Lieutenant-General E. K. Squires, a salary almost twice that paid to any Australian officer, was in keeping with his rank in the British Army. Then, in answer to a question

Mr. Curtin.on notice on the 5th October, 1 learned that Lieutenant-General Squires had been promoted from the rank of majorgeneral in the British Army to that of lieutenant-general simultaneously with his appointment as Inspector-General of the Commonwealth Forces. I now ask the .present Minister for Defence whether it is not a fact that Lieutenant-General Squires received the rank of lieutenantgeneral after hi3 appointment as Inspector-General of the Commonwealth Forces and, as a matter of fact, only two days before he sailed from England to take up his position in Australia? The previous Minister for Defence announced Lieutenant-General Squires' appointment on the 18th May of this year. The British Army list, as at the 30th June, 1938, shows that, on that date, his rank was still that of major-general. I readily acknowledge that, in the search for a competent inspectorgeneral, the Defence Department might have made up its mind that the best man in England for the position was Major-General Squires, who, when approached, may have said : "I am willing to go to Australia, but I do not think that I should accept there the salary of a major-general, the same as I am getting here. I feel that, if I am to accept so important a position, I should be promoted ". I could understand the Australian Minister for Defence saying, in the circumstances, "It is Squires whom we want. Squires is the man we oughto pay for. He is worth twice as much as any Australian officer, and, therefore, we are going to arrange with the British authorities to promote him to the rank of lieutenant-general, and then he will be entitled to the salary that goes with that rank ".

Mr Street - Does the Leader of the Opposition know the date upon which the appointment was gazetted?

Mr CURTIN - No, but the appointment was announced as from the 18th May. The first answer to my inquiries was that he was promoted simultaneously with his appointment as InspectorGeneral. I now ask if his promotion took place only two days before he sailed for Australia.

Mr Street - The announcement may have appeared in the Gazette then, but the promotion and the appointment COU10 have been simultaneous.

Mr CURTIN - I have access only to the Gazettes which are published from time to time, and I do not know whether I have been frankly dealt with or not, Such documents as are available make it appear that, instead of a reasonable statement having been made, there was a desire to be not quite as frank as the circumstances warranted. If I had been Minister for Defence I should have said, " We have appointed Major-General Squires of the British Army to be InspectorGeneral of the Australian Forces. We believe that, in order to get him out here, we ought to pay him a higher salary than that of a major-general, and, therefore, we will take steps to have him promoted to the rank of lieutenant-general ". That would have been honest and straightforward, but there has, instead, been a lack of candour. This lack of candour characterizes, not only the appointment of this man, but also the greater part of these Estimates, involving the expenditure of £16,000,000 this year. I suggest to the Minister - who I believe is a sincere and capable man, anxious to render high service to the country, as I believe he will - that this committee owes a duty to the public to examine all proposed expenditure very carefully. It is not enough for members of Parliament merely to accept the Estimates as put- before them. There ought to be a special finance committee rather than a committee of the whole House.

Mr Anthony - 'Would the Leader of the Opposition accept membership of such a committee?

Mr CURTIN - The committee should be appointed by the House, and its personnel determined by the House.

Mr Holt - Would the honorable member confine the activities of the committee to defence expenditure? Other honorable members have put forward suggestions in regard to public accounts generally.

Mr CURTIN - I mention defence because, apart from expenditure under special acts, defence expenditure is greater than that of any other department. It is, in a social sense, the expenditure -which the country can least afford.

That applies to all war and defence expenditure in every country. I do not say that it is expenditure that we can avoid, but we could certainly put the money to better use if we were free from the menaces which make it necessary for us to devote it to defence.

The next thing - and this is an additional reason for my submission - is that, in respect of the expenditure on defence, there appears to be what I have described as an inherent capacity on the part of certain interests in the community to charge excessive prices for the services which they render. The record of profiteering in regard to war and defence is more abominable and more scandalous and, I venture to say now, more documented, than it is in regard to any other aspect of our national life or governmental activities. You cannot call for tenders with that precision in respect of the requirements for the Defence Department that is possible in connexion with the requirements of the Postal Department because, if the latter department is satisfied that the price is too high, it need not go on with the work. The Defence Department, having regard to the general atmosphere in which it labours, is always working under pressure, in that its expenditure is usually reduced when the world appears to be un a fairly even keel, and there is a terrific acceleration of speed when danger threatens. Whatever costs are incurred are costs which cannot be examined with that carefulness which can be exercised in respect of the requirements of other departments. As I have said, the Defence Department must get the material. I feel sure that that is so with regard to the supply of aeroplanes. We must buy them from the United States of America, and we have to pay the price charged for them. We are in competition with other countries for equipment which we urgently need. It is idle for the Minister for Defence to say that he can police carefully the prices charged for these things. He cannot. He will do his very best, I have no doubt, but his best will not safeguard the country against excessive burdens in this connexion. I rose merely to say that the number of honorable members present in the committee, the expenditure in these Estimates, and the general circumstances associated with the limitation of the debate when we come to the consideration of specific items of expenditure, all suggest to me that in the future the examination of the defence estimates ought to be the work of a special committee instead of the work of the whole committee.

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