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Tuesday, 23 May 1939

Mr HUTCHINSON (Deakin) .-' The honorable member who has just resumed his seat (Mr. Brennan) referred to this bill as a great and urgent measure, for which, however, he had no approving enthusiasm.

Mr Brennan - I did not say that it was great, and urgent.

Mr HUTCHINSON - The honorable member used those words, though perhaps in a different sense.

Mr Brennan - I must have misled the honorable member.

Mr HUTCHINSON - The words great and urgent describe this bill, because it is designed to ensure that, if .a national emergency should arise, Australia will be prepared for it as well as is possible. We must prepare, not only in regard to the supply of munitions, but also in regard to those contingencies affecting trade, the storage of primary produce, &c, which might arise in the event of hostilities, and against which we must provide in every way that our ingenuity can suggest. I join with the honorable member in saying that I do not believe that any of us view this bill with enthusiastic approval. I would much rather be debating ah international agreement, entered into by Australia as a nation within the British Commonwealth of Nations, providing for international disarmament, and designed to ensure peace. Unfortunately, no such agreement seems possible. Again using the honorable member's words, it is unfortunately true, that we do not know from day to day what may happen overseas to involve Australia in a war that has its roots in the ambitions of people far removed from us. That being so, a government would be betraying its trust if it did not take whatever action was possible to ensure the security of Australia.

I should like to know why the Ministry for Supply is not to carry out the works which it institutes. I have read the bill, and it appears to me that another title could be given to it. This is really a bill of works, because it provides for the undertaking of works of almost every conceivable kind, including works associated with the manufacture of munitions, works to provide storage of primary products, works in connexion with roads and various forms of transport and so on. Yet, we find that the Department of Works is to remain entirely outside the control of the Minister for Supply. The works are to be undertaken by another department which has been described as the " Ministry of a hundred tasks," and is certainly one of the most congested departments of the Commonwealth. It seems strange that the works to be undertaken in connexion with matters arising out of this bill should be delegated to a notoriously congested department for performance, and that the Minister for Supply and his assistant should exercise' no control or supervision over them. I have on previous occasions made inquiries on this subject, but have, so for, received no satisfactory reply.

The honorable member for Batman also drew attention to the fact that the Department of Defence now employs the services of four Ministers. I approve of that arrangement. The task is beyond the capacity of one man, however great he may be. Surely, among the four Ministers now associated with this department, one should be able to exercise control over the works to which I have referred. For instance, the Minister controlling Civil Aviation (Mr. Fairbairn) is now engaged upon rationalizing matters associated with his department, but once that has been done, the department will more or less run itself. I suggest that this Minister could well be placed in charge of the works contemplated in this bill.

Reference has been made in the course of this debate to oil fuel. The finding of flow oil in commercial quantities in Australia is of vital importance to this country, both in war and in peace. There is a conviction in- the minds of many honorable members, and in the minds of the public also, that everything possible is not being done to find oil in Australia. There is a suspicion that some influence is directed against the finding of oil. I do not propose to go into that aspect of the matter, but merely point out that, despite the fact that private enterprise and the Government have expended many thousands of pounds on investigations flow oil has not yet been found. Nevertheless, it has been authoritatively stated that flow oil exists in Australia in commercial quantities. Some time ago, I in contact with a. geophysicist of international repute, who stated that, he was quite sure that flow oil existed in commercial quantities in Australia, and that, if the proper methods were employed, it could be found within six months. This matter is of no mean importance. The expert to whom I refer is well known to the Government.

Mr Mahoney - What is his name?

Mr HUTCHINSON - I have no authority to disclose his name. His qualifications, however, are such that private enterprise in Australia has subscribed sufficient capital to employ his services in areas outside the Commonwealth. That fact shows how highly private enterprise, at any rate, thinks of him. I do not suggest that our present advisers are not the best we can secure; they may be, but the plain fact remains that they have not found oil in Australia. The point 1 emphasize is that if divergent views exist among experts as to the efficacy of the method being followed in the search for oil in Australia, the Government should accept the opportunity to consult any geophysicist of standing, and should, at least, allow him to inspect the exploratory work now being carried out. Furthermore, this expert has had experience in practically every oil-bearing region in the world, including oil fields in Russia, Mexico, the United States of America, and Roumania. I doubt whether the Government's present advisers have had anything like his experience. After checking up on his qualifications, I should be inclined to put him in charge of this work in order to give him an opportunity to substantiate his claims. He states that he would be prepared to give his services to the Commonwealth entirely free in the event of his failing to discover flow oil ; he is prepared to stake his reputation on finding flow oil in commercial quantities in this country. In those circumstances I should certainly be prepared to give him every consideration.

Clause 5, sub-clause 1, provides that the matters to he administered by the department shall be matters relating to - (e). arrangements for the establishment or extension of industries for purposes of defence;

(f)   the arrangement or co-ordination of -

(i)   surveys of Australian industrial capacity and the preparation of plans to ensure the effective operation of Australian industry in time of war; and

(ii)   the investigation and development of Australian sources of supply of goods, which in the opinion of the Governor-General are necessary for the economic security of the Commonwealth in time of war.

These are very wide powers. I do not object to wide powers being given to the Minister in such circumstances, and I am aware that it would be impossible to detail in a measure of this kind all the powers that might be required by him. However, I have misgivings concerning this particular sub-clause, because I feel that the views of certain members of the Government may lead them to embark upon industries which may not be necessary to Australia and the maintenance of which in the long run may involve an over-riding cost to the people of this country. Almost any industry one may like to mention has a bearing on defence. I am all the more concerned about this matter because inan explanation given to the House a week ago, the Prime Minister (Mr. Menzies) stated that motor car manufacture would be commenced in Australia at as early a date as possible, one of the reasons for its early commencement being the purposes of defence.

Mr McEwen - That was the first reason he gave.

Mr HUTCHINSON - Like other honorable members, I am not against the manufacture of the complete motor car in Australia ; nor am I against the establishment of any other industry, so long as I can be assured that it will make for the economic benefit of Australia as a whole. However, the Tariff Board has inquired into this particular industry, and has made certain findings in respect of it. Two days before the Prime Minister made this statement, I asked the Minister for Defence (Mr. Street) whether this industry was considered to be necessary from the point of view of defence, and whether certain gentlemen who had been invited to Canberra to discuss it had come here at the invitation of his department? In as clear-cut a reply as one could desire, the Minister answered that no person interested in motor car manufacture had come to Canberra at the invitation of his department, and that the department did not consider this industry necessary for defence purposes.

Mr McEwen - Not one witness could be produced before the Tariff Board to say that it was necessary for defence purposes.

Mr HUTCHINSON - -The illustration which I have just given arose only during the last few weeks. The giving of such powers to the Minister as are enumerated in this measure, may mean eventually that efforts will be made to establish industries which will, not only prove very costly to the people of Australia, but will also mitigate against the success of industries which are unquestionably of vital importance to this country. Shortly after the first Lyons Government assumed office, the view was expressed officially that the depression, not only in Australia, but also in other countries, was due primarily to the fall of prices of primary products. It was also stated as the belief of the Government of the day that economic recovery depended primarily on the recovery of prices of our exportable products. Consequently, all of the energies of the Government at that time were directed to that end.

Mr.McEwen. - And also to reduce production costs in primary industries.

Mr HUTCHINSON - Yes. The Ottawa Agreement assisted us to a very great extent in attaining that objective. As the result of this policy, Australia rose out of the depths of the depression to a prosperity the equal of which in some respects it had never known before. However, a different psychology is at work to-day. Many people now hold the view that Australia's future advancement is bound up almost entirely in the development of industrial enterprises which cannot export products because, in the majority of cases, our production costs are too high to enable us to compete on overseas markets, and also because of our distance from those markets. The new policy may have advantages so far as defence is concerned, but it savours very much of economic self-sufficiency.

Mr Ward - How can we have economic self-sufficiency without industrial development?

Mr HUTCHINSON - I arn not suggesting that we can. The policy of economic self-sufficiency has never succeeded, and it never will. Any policy which aims at hindering international trade and international investment will never contribute towards the peace of the world. The building up of synthetic industries in Germany and Italy in an endeavour to make those countries self-sufficient in a time of war is to-day one of -the very reasons why we are threatened with war. The synthetic machine which Hitler has built up in Germany threatens to devour him and his system should it collapse, and I do not wish to see anything of the kind adopted here. I am not against industrial expansion. In order to populate this country adequately and to ensure that we, as a nation, shall be free from the ups and downs associated with a country which relies solely on primaryproduction, we must expand industrially. I am afraid, however, that this idea, which is definitely held by many honorable members to-day, may lead us along the road to economic insanity and defeat the very object which they have in view.

Mr McEwen - The honorable member -believes that some people are willing to exploit our defence position?

Mr HUTCHINSON - ,Yes ; I fear that because of the great powers proposed in this measure to be conferred upon the Minister, we may go far beyond the objective which the Government now has in mind. I warn the Government to bear that aspect of the matter in mind, and I shall watch any move in this direction with the closest possible interest. T still maintain - and I defy any honorable member to say otherwise - that Australia's financial security depends basically upon its export industries. Our development must be -built upon

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this foundation. Anything that interferes with that basis, and, consequently, interferes with the economic stability of Australia by decreasing our accumulated funds overseas, must rebound in such a way as to reduce our standard of living. For instance, this financial year our overseas funds will probably decrease to something like £10,000,000. That prospect is by no means pleasing. Therefore, I urge the Government to tread very warily along the path it is about to take. I know that we shall be obliged, in the interests of our defence, to establish many new industries in this country, but in considering our needs for war purposes, the Government should, before it embarks on any synthetic ventures, or establishes any factories that will prove white elephants in time of peace, if such a time should ever recur, consider the storage of these commodities a much better proposition. After all, any commodity so stored could always be utilized should the quantity placed in reserve prove to exceed requirements for defence purposes.

The only other point with which I propose to deal is that relating to profits. I believe that if the people of Australia can be assured that profit-making will be kept under control, they will be more amenable to the expenditure of large sums of money for defence purposes. Under this bill, provision is made for the appointment of an advisory panel to work in conjunction with the Minister for Supply and Development and his permanent Staff. The members of this panel will advise as to the best means to check profiteering in the manufacture of munitions and in the production of materials used in their manufacture. As honorable members are aware, under the definition of munitions in clause 4, almost every commodity produced in this country can be brought within the scope of the bill. I know that this is the hope of the Government, and that it will probably be fulfilled in some instances.

Mr McEwen - Does the honorable member know if it is more than a hope?

Mr HUTCHINSON - The power which the Government seeks to acquire should enable it to work in an effective maimer in certain cases, but the mere making of profits in the manufacture of munitions is one thing, and the general profit-making that takes place in time of war is another. I do not think that it is possible to devise any system to prevent profiteering in a general way under this measure. The co-operation of the Treasury will have to be sought. As honorable members are aware, I have for a long time .been very keen to see the introduction of some means by which the Government could tax undue profits made in any industry. I am well aware of all the difficulties associated with the taxing of excess profits, but, I still believe, notwithstanding what has been said concerning "shutting the stable door after the horse has gone ", that something of the nature proposed is imperative. It should be possible to assess excess profits, but, studying the whole range of manufacture and primary production in Australia, it is not easy to devise a means by which industrial activities can be supervised effectively, and excess profits actually determined.

Mr McEwen - Docs that mean that the honorable member has not any confidence in the proposals of the Government?

Mr HUTCHINSON - Yes, in certain directions, but I do not think it possible to devise a satisfactory scheme to cover the whole of Australia's industrial activities in the manner suggested by the Minister when introducing this bill. In moving the second reading of the bill, the Minister for Supply and Development said that he would work in close co-operation with the Department of Commerce and the Department of Trade and Customs. I believe that he will also have to work in close co-operation with the Treasury. It is the bounden duty of the Treasury to prepare supplementary legislation well in advance in order to satisfy the people of Australia that no excess profits will be made, or that if they are made that the Governmen will by legislation be able to bring such profits, or a great proportion of them, into the Federal Treasury for use for defence purposes.

Mr McEwEN - Does the honorable member not think that the Government should indicate what it regards as a fair rate of profit?

Mr HUTCHINSON - I think that it should, and possibly that will be stated by the Minister when he replies to the debate on the second reading. There seems to be a general consensus of opinion that the rate of profit made on the manufacture of munitions should be comparable with that derived from investment in treasury bonds, and I believe that that is the intention of the Government. This measure does give the Minister wide powers, but I believe that they are essential, and that under the present Minister a new and vigorous drive will be made so to organize Australia that, in the event of war, it will be able to meet the position with a minimum of disorganization.

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