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Wednesday, 17 May 1939

Mr NAIRN (Perth) .- The helpful and moderate speech made by the honorable member for West Sydney (Mr. Beasley) leads me to hope that it may not be long before party differences are thrown aside and we have the one policy for the defence of this country.

Mr Ward - Our policy.

Mr NAIRN - Perhaps it is too much ro expect at the moment, but the honorable member's speech was a step in the right direction, and was more helpful than I should expect from some honorable gentlemen who sit behind him. A good deal of anxiety has been expressed at the policy of the Government in negotiating with private enterprise for the production of ammunitions. It is not without cause, because the experience of other countries is that the makers of munitions are a menace. In Australia we are in the fortunate position of starting this enterprise anew. We have the benefit of the experience of older countries,, and the opportunity, if Ministers are active enough to take advantage of it, to guard against the serious intrusion of private interests which has occurred in other places. I do not like the idea of encouraging the manufacture of munitions by private enterprise, but the establishment of what are called annexes is to be commended and is necessary for tho production of 'large quantities of munitions in a short space of time to be ready to meet the emergency which may arise at any time. The Labour party contends that the manufacture of munitions should be restricted to munition shops conducted by the Government, but it is doubtful whether we get the best efficiency from workshops under Government control. Our experience of them does not lead us to the belief that they represent the latest in efficiency. It is a good thing for Government workshops to have the spur of competition, even competition from private enterprise. If in peace time we had to carry in our own workshops a sufficiently large quantity of machinery and staff to turn out the great quantities of munitions that would be required in an emergency, the cost would be more than we could possibly provide. Vast quantities of unwanted material would have to be stored against the day when it might be required. Moreover, if this work were confined to establishments conducted by the Government, we should not have the benefit of the skilled mechanics who are to be found in private enterprises, such as the Broken Hill Proprietary Company Limited, whose services it would be essential to use in a state of emergency. For that reason, it is necessary that there should be something in the nature of shadow factories. I understand that it is proposed to set up annexes equipped with machinery and that they shall he given trial orders to give them enough experience to show that they are capable of carrying out the work. Our power to control them in time of war will not lie so much in the legislative provisions that we make, as in the capacity of the Ministers to exercise supervision over profits. I understand that the Government is setting up means to keep a check on costs and profits, but just how far it will succeed will depend on the capacity of Ministers.

Centralization is altogether too evident in the defence policy. About two years ago the late Prime Minister (Mr. Lyons) and the then Minister for Defence (Sir Archdale Parkhill) gave assurances, which the people in the outer States considered very satisfactory, that there would be a system of decentralization in the production of munitions. Military authorities were quoted as having advised that it was not desirable to keep all our eggs in one basket, and that it was most desirable, as far as practicable, to spread our munition factories. Since then, however, the policy of decentralization has been overlooked, and the Supply Committee which has been set up has, on the score of economy, completely turned down the establishment of munition factories in any but either of the greater cities of the Commonwealth. Nevertheless, now that the Government has entered upon the establishment of defence annexes, those annexes might just as well be established in any of the other capital or larger cities in the other States of the Commonwealth as in Sydney or Melbourne. Nineteen powerful firms established in or about Melbourne or Sydney have been provided with annexes. That accentuates the policy of centralization, and is not only undesirable, but also extremely unfair to the people of Australia not resident in those cities. The Prime Minister (Mr. Menzies) the other night said that one of the first objectives of the new Ministry would be the creation of general employment, which would necessarily follow from the establishment of military enterprises. It is not right that that additional employment should be limited to the great cities in eastern Australia. The people in the other parts pay taxes, and the defence of those parts is no less important. Indeed, as they are the most vulnerable and therefore the most likely to be attacked, it would be most dangerous to neglect their defence. It is important that the people in those areas should not only have the opportunity to engage in the commerce of munitions, but also be encouraged to acquire mechanical skill in order to be able to make their proper contribution to the defence of this country.

Generally, this bill is one which will be received with commendation from all sides of the House, because it indicates that the Government is alive to defence needs. I hope that the Minister of State for Supply and Development (Mr. 'Casey) will be able to devote to his new department the same activity as he devoted to the Treasury. I feel that his entry into the provision side of defence will result in substantial advantage. But there is an important omission from the bill which is designed to improve the material resources of the country - the omission to make any reference to financial resources. In his secondreading speech, the Minister said that this bill was complementary to another bill for the creation of a national register. The Minister said -

This bill . . . provides for the taking of what is, in effect, a census of material resources in Australia, as distinct from the national register of man-power with which the Minister for Defence is concerned.

I cannot imagine any census of material resources being complete unless it includes also the financial resources of the country.

Mr ARCHIE CAMERON (BARKER, SOUTH AUSTRALIA) - Cameron. - Financial resources represent material resources.

Mr NAIRN - Money is aptly described as the sinew3 of war, and I cannot imagine any government, minister, or committee, being able to complete a compendium of material resources of the country, without having regard to financial resources. I point out in reply to the honorable member for Barker (Mr. Archie Cameron) that already in existence is an economic and financial committee, which is one of the consultative bodies to be used by the Department of Supply and Development. Its purpose, I take it, is to advise the Government on economic and financial affairs. How can it properly carry out its functions unless it has regard to the financial resources of the country? I raise this matter now for fear that if I raised it in debate on the National Registration Bill, I should be ruled out of order, because that bill deals only with man-power. I see no reason at all why there should be any omission to inquire as to the financial resources of the people. We willingly furnish our income tax returns.

Mr Rosevear - We do not do so willingly.

Mr NAIRN - We do so under compulsion, knowing of course that the policeman is always at hand if, having failed in our obligation, we are found out. There is no trouble in obtaining figures concerning income tax and the like, and I do not think there would be any more difficulty in obtaining information concerning the capital resources of people who furnish income tax returns. Income tax returns do not supply the information needed to show the financial capacity of this country. For instance, many people have property and do not make any return at all ; others have property which does not produce income. Indeed the best we can say for the income tax returns is that they give a number of clues as to where property is, but for the purpose of making a national balance sheet or making a complete picture of the wealth and capacity of this country to ascertain the degree to which we can safely go for the purchase of munitions and the like, income tax returns are useless.

Mr Blain - What would give that information ? Would a national planning authority be able to ascertain it?

Mr NAIRN - We should have a census of capital wealth just as we have a census of income wealth. A census was taken not long after the commencement of the last war. A questionnaire was sent out which required answers to be given as to the wealth of the people. The information gleaned enabled us, of course, to estimate the national wealth of the country. No objections were raised to the questions asked on that occasion, and I see no reason why there should be any objection to these questions on this occasion. I am anxious to hear what objection there could be.

Mr McHugh - The wealth of Australia has already been estimated.

Mr NAIRN - Yes, but only in an extremely vague way. It is of no use to make an estimate of national wealth unless it is a reliable one. I am pleading that a census should be taken to elicit accurate information not only in respect of materials such as coal, iron and the like, the manpower of the country, what occupations the people follow, and where they may usefully assist in time of emergency, but also .to obtain what is perhaps of more material importance, information as to- what wealth there is, where it lies, and whether corporations or individuals hold it. For instance, aliens control a good deal of the wealth in this country. It may be desirable, particularly in - war time, to know just how much wealth is controlled by them. It would be well to keep some track of the distribution of wealth in order to know the movements of money that take place, particularly during a time of threatened war. I am astonished at the attitude of members of the Labour party in regard to this bill.

Mr Rosevear - The honorable member is always astonished at -us.

Mr NAIRN - Honorable members opposite never know which way they are veering these days. One of the strangest objections to the making of this, inquiry which I have heard from the Labour party is that it is only the first step towards conscription. They ask : " If you conscript men, why not conscript wealth ?" I ask them to be consistent.. I do not propose conscription of wealth or conscription of men; but I think we should have full information, not only as to what man-power we have, but also as to what goods we have, and what is the purchasing capacity of the country. I should be very surprised if the Labour party makes any objection to the insertion of a clause which will require people to declare the amount of their capital wealth.

Mr Rosevear - I suggest the honorable member should move the insertion of such a clause, and see for himself.

Mr NAIRN - I hope to be in a position to support such a proposal. Subject to that, I believe that the Government is entitled to our commendation for taking a step in the right direction, and getting on with the job as it has done.

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