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Tuesday, 23 May 1939


Mr BLACKBURN (Bourke) .- The bill before the chamber really has its germ in section 63 of the Defence Act, which empowers the Governor-General, among other things, to " establish and maintain arms and ammunition factories ", and -

Subject to provisions of th is act do all matters and things deemed by him to be necessary or desirable for the efficient defence and protection ot the Commonwealth or of any State.

This measure really expands the provisions contained in that section, and assigns the work in connexion with this department of energy to the Minister for Supply and Development. It deals mainly with the production and supply of munitions, in the widest sense, of all those things necessary or useful for the purpose of defence. I am not one of those who believe that the fear of war in the world is due mainly to the activities of the makers of arms. I believe that those are subsidiary causes, and that there are other and deeper causes. All down through history we read of rulers perturbed by the activities of the makers of arms, and treating them as the real factors in bringing about war. Aristophanes in his comedy Peace, written in 421 B.C., describes how Trygaens went to Heaven to bring back peace to this earth, and on his return was met by protests of the makers of arms and armaments, who said that if there were peace they would be deprived of their living. The most ambitious attempt ever made to prevent the private manufacture and sale of arms was that made by the Emperor Justinian, in the fifth or sixth century. His Corpus JurisCivilis included " novel " So, which provided that nobody should manufacture arms unless licensed by the Government, and then only in licensed factories, and that no person should sell arms to any private person. Justinian was one of the great war makers, but after his death much of the empire he had founded by conquest fell to pieces. Even his laws against private manufacturers of arms «nd armaments did not prevent war. The importance of munition-making in the world seems to be explainable in this way: Every nation is becoming industrialized - becoming an industrial manufacturing nation - and it develops the production of goods which its own people are unable to buy; they have not the purchasing power, ' because only a fraction of their national product goes to them as wages. Nations then have to sell their surplus abroad in competition with other nations. That has become increasingly difficult, and to-day is practically impossible. Nations cannot feed, clothe aud maintain their working classes by producing exchangeable goods. What then does a nation do that is not in a position to employ its own people in the production of exchangeable goods, and yet must employ -them or bc exposed to social revolution? It devotes a good deal of capital and energy to the building up of industries which do not produce exchangeable goods. It embarks on public works and on preparation for war, because the advantage, if we may so term it, of such a policy is that profits are provided for capitalists and employment for the workers. A country cannot provide profits for capitalists and employment for the workers in industry by producing only exchangeable goods, because every country has a surfeit of such goods.. If a country can employ its people on the manufacture of materials required in war and ensure profits to the capitalists and employment to the workers engaged in the industry-


Mr Drakeford - ls that the foolish policy we are adopting?


Mr BLACKBURN - Apparently we have to prepare to destroy men in order to maintain them. That is the position in the world to-day. But for our concentration upon the preparation for war a greater number of persons than are unemployed in Australia and in other countries would be unemployed. That, I think, accounts to a large extent for the great preparations for war that are being made in every country. The following paragraph appears in a circular which has been sent to me - I shall not give the name of the author - and follows other warnings and advice which have been given: -

The Commonwealth has entered also upon a new. era in the production of munitions of war. This is another very valuable adjunct in defence and aid to economic prosperity. A long view plan is in the early stages of development by which Australia- will produce not only for herself but also for New Zealand, South Africa and the Empire in the East, and the Pacific. All these enterprises mean work for thousands, the circulation of more money, more business all round, more new wealth created each year - a widening and ever-expanding circle of prosperity. Australian investors must be intensely interested in all this expansion, not only from the paramount aspect of national safety and growth but also from what might be termed " self interest ". Increased industrial activity means more general prosperity. That in turn connotes larger turnovers, higher profits, bigger dividends.

That represents the warnings and advice given to investors all over Australia. We have been told that the way to prosperity is through the development of the armaments industry. Now comes this bill containing many clauses which mean nothing at present; they must be worked out and their meanings revealed later. The experience of the Great War has warned the people against giving too much power to govern.ments. I make no reflection upon the present Minister for Defence (Mr. Street), whom every one likes and trusts, when I say that I look askance at giving these powers to any government, even one formed by the party to which I belong. The Labour party now regrets that at the beginning ' of the Great War it entrusted to a government of its own party powers that were in the nature of a blank cheque, because the War Precautions Act was used to cause permanent injury to the Australian people. The people of Australia generally will scrutinize most carefully every measure designed to give to the Government wide powers to be used in the event of war, and will insist that regulations made under the legislation passed by this Parliament shall be carefully examined by the House. They will not again give to any minister or government such a free charter as was given in 1914. Regulations to curtail the liberty and intimately affectingthe well-being of the workers of this country should not be made by the Governor-General; if made at all such laws must be enacted, by Parliament itself after full discussion.


Mr Gregory - What regulations, made in war time, seriously affected the workers ?


Mr BLACKBURN - A great number of regulations which seriously affected the workers were made during the Great War. I admit that other regulations, such as those which fixed prices, benefited the workers. Probably more government by regulation would have taken place at that time were it not for the fact that the man to whom those powers were entrusted had previously belonged to the Labour party, , and although he had departed in some degree from the policy of that party, he stood true to his old belief in unionism and desired to protect it. I shall not reply further to the interjection of the honorable member for Swan (Mr. Gregory). If he made it seriously, I shall be prepared, on some other occasion when I have a couple of hours to spare, to give him a full list of the war-time regulations made against the workers.

There are some things in this hill which I cannot understand, as for instance, the definition of " time of war." The definition is not limited as it is in the Defence Act, where it means a time of actual or apprehended invasion of Australia. There is no such limitation here. Under this legislation it will be possible for the Governor-General to proclaim that a state of war exists in Australia, even though there he no actual or apprehended danger of invasion, but merely a war which involved Great Britain at the other side of the world, and did not involve Australia at all.

Mr.Brennan. - As for example, the present time.


Mr BLACKBURN - I come now to the scheme of the Government in respect of the munitions industry. It proposes to regard the manufacture of munitions as both a private and a public industry; that is to say, most of the production of munitions willbe carried out by private enterprise, but the Government reserves to itself the power to establish factories. In my opinion that is wise. For reasons associated with the Constitution, I do not think that it would be wise to provide that only the Government should manufacture munitions. If the manufacture of munitions were made a government monopoly, we should develop factories in time ofwar, only to find that after the war those factories could not he used at all; they would have to remain idle, and the workers employed therein would be forced to seek employment elsewhere.


Mr Archie Cameron - In other words the honorable member believes that it would be a good thing to let the capitalist carry all the losses.


Mr BLACKBURN - At the conclusion of the war the private capitalist could beat his swords into ploughshares and his spears into pruning hooks. He could use his plant and his employees for the manufacture of useful implements of peace, whereas the Commonwealth's only power would be to make things required for the defence of the country. Honorable members know that when the government of the day desired to utilize its plant at Cockatoo Island for the manufacture of turbo alternating engines for the Municipal Council of Sydney certain private manufacturers moved the AttorneyGeneral of the day to apply to the High Court to stop the Commonwealth Government from doing that work. The High Court decided that the Commonwealth Government may not manufacture for peaceful use. I was not, however, talking about losses when the honorable member for Barker (Mr. Archie Cameron) interjected. I was pointing out the difference between the powers of private manufacturers and those of the Commonwealth Government. The latter can manufacture only in relation to defence, whereas the private capitalist can use his plant and his employees to manufacture implements for peace-time use.


Mr Archie Cameron - -If the honorable member's argument be developed further, it means that if any one has to do the sacking, it should be the private employer.


Mr BLACKBURN - I am not concerned about sacking. Either the honorable gentleman is pretending^ to misunderstand me, or he desires to misrepresent me. I do not think that he wishes to misrepresent me. I repeat that the Commonwealth Government may manufacture only things that are connected with the defence of Australia, and nothing else. 1 Its powers would be temporarily enlarged in the event of war, but at the conclusion of the war those powers would shrink again as they did after the Great War, The Commonwealth Government would not be able to turn its factories to the production of peaceful implements as the privates-capitalist could.

A great deal has been said about the necessity for controlling the prices charged by private producers of munitions. The Minister has suggested that a profit of 4 per cent, would be reasonable," but I point out that it would be impossible to determine the actual profits made by such a body as the Broken Hill Proprietary Company Limited. Unless there were some reliable check upon the actual cost of production by its subsidiary companies, there would be no means of ascertaining that company's production costs. In order to produce figures to prove that it was not making more than 4 per cent, profit, the Broken Hill Proprietary Company Limited would need only to arrange with its subsidiary companies to charge inflated prices. If the Government be in earnest, it should insist that no private company shall manufacture munitions unless it discloses the names of its subsidiary companies and the number of shares held by it, and by its directors in every other company. With that information in its possession, the Government might be able to keep -a check on costs; otherwise a reliable check would be impossible, and any attempt in that direction would become a laughing stock. Such information should he obtained from all private manufacturers of munitions. I am of the opinion that no person should be allowed to manufacture munitions except under licence, one condition- of which should be that he shall make the fullest disclosures ° as to his relations with other manufacturing bodies.

At the moment I am mainly concerned with the power to make regulations. Clause 16 contains a general power to make regulations, whilst clause 6 gives something in the nature of specific power, in that it authorizes the Governor-General to make regulations calling upon such persons or classes of persons as are prescribed to furnish, as prescribed, such information and particulars as are prescribed with respect to certain undertakings or goods. Clause 6, sub-clause 4, provides -

Any offence against this section may bc prosecuted either summarily or upon indictment.

If the offence be prosecuted upon indictment, the case will be heard 'before a jury, but if dealt with summarily, it will be heard before a magistrate without a jury. It is open to the Commonwealth Government to bring the offender before either a jury or a magistrate. It may be said that minor offences do not justify a jury. My answer is that if the offence be a minor one, the penalty also should be of a minor nature. No man should be liable to be sent to gaol by a police magistrate.


Mr Mahoney - If he is a profiteer, yes.


Mr BLACKBURN - No man who has not been convicted before a jury should be sent to gaol. One of the greatest invasions of liberty is' the increased power given to magistrates, sitting without juries, to impose heavy sentences and imprisonment. If the offence- be sufficiently serious to warrant imprisonment, the guilt of the offender should be proved before a jury of his peers.


Mr McEwen - Is any penalty provided for profiteering ?


Mr BLACKBURN - No. The bill provides that, if a man refuses to answer questions, he may, at the option of the Government, be brought before either a police magistrate or a jury. If the case be heard before a magistrate the penalty is a fine not exceeding £50, or imprisonment for three months; if the offence be prosecuted upon indictment, the offender may be fined £500 or be imprisoned for a term not exceeding one year, or both.


Mr McEwen - What is the penalty for breaking some prescribed industrial provision ?


Mr BLACKBURN - I am dealing with clause 6, and expressing the opinion that, in minor cases in which the. offences are prosecuted summarily, only a small penalty should be provided; I suggest a penalty not exceeding £10 without im- prisonment ; but if the case were considered to be serious, it should .be heard before a jury. Offenders in such cases should be either fined or imprisoned. I believe strongly that one of the fundamental liberties of the British people is that no man shall be deprived of his liberty except upon conviction by bis peers. That fundamental right was given in Magna Charta, but, with the passage of the years, it has to a great extent been destroyed.

The bill provides a general power to make regulations, and I have given notice of an amendment designed to prevent what is generally termed " industrial conscription ". I shall not discuss the amendment in detail now, except to say that it is necessary. I believe that something in the way of planning and control of the production of munitions and other things necessary for the defence of this > country should be undertaken. My quarrel with the Government is that, in this bill, it is asking for powers which are too wide and indefinite. Most of the details will be prescribed in regulations, and we all know of the habit of issuing regulations when Parliament is not sitting. Like the honorable member for Swan (Mr. Gregory), I am jealous of the right of the Parliament to control legislation by disallowing regulations. I think that we are in very much greater danger of taking a step upon that inclined plane upon which this country first ventured in 1914. Under the pressure of public opinion, and the fear of war, we are in danger of giving to the Minister of the day powers which ought not to be given to any man, however we may trust him. Ministers come and go. The virtues of the present Minister should not make us blind to the danger of vesting the occupant of his office with such extraordinary powers. I believe that power will corrupt anybody, and I have sufficient affection for the Minister to desire that he should not be corrupted. The House should be very careful to restrict the power of the Government to act without the consent of the Parliament.

Mr. FADDEN(Darling Downs) [5.55'J. - At this stage of this important debate very little new ground can be broken. However, I desire to make a few comments on matters which arise in the consideration of this measure. The bill can be made a very important piece of legislation if the Government is sincere in the application of the principles which it embodies, and is desirous of carrying out that national stocktaking that is so essential in' the unsettled conditions at present obtaining in the world. T submit that if a thorough, conscientious and equitable stocktaking of the resources of Australia is carried out, very many of the ills from which we have suffered can be remedied. A large sum of money is to be expended on the defence of this country; that money is to come out of the purses of our people. Consequently, it should be the aim - it certainly is the responsibility - of this Government to see that value is received for every pound expended, and that no person makes any undue profit out of such expenditure. The disbursement of a huge sum of money on the indispensable defence of this country can be carried out in parallel with the development of very many important industries, that are requisite not only for defence, but also for the general economic welfare of Australia during peace time. I refer particularly to the position in which Australia finds itself in regard to that very essential commodity, oil. Let me deal first with lubricating oil. Australia is reluctantly compelled to import, from overseas approximately 15,000,000 gallons of lubricating oil annually. It is not very difficult to imagine what would happen to our industrial activities, to say nothing of the defence of this country, if the supply of lubricating oil were cut off as the result of hostilities in which we were embroiled. We depend on a seaborne trade for the whole of that essential commodity. What steps are we taking to find substitutes which would alleviate the intolerable position were the supply of lubricating oil from other sources to be cut off? That brings me to a matter upon which I have spoken publicly whenever the opportunity has been presented, namely, the necessity for taking steps to produce petrol substitutes in this country. I know that the Liquid Fuels Committee has been set up to carry out an investigation of this very important matter. As a Queenslander I am particularly interested in the research and investigations carried out in connexion with power alcohol. From all I have been able to read in connexion with this matter and from statistics collected from 49 countries and made available by the courtesy of the United States of America Department of Commerce, I find that Australia is practically the only country in the world which is entirely dependent upon imported petrol; at the same time, it is the only country which has failed to provide by national legislative enactment for the compulsory blending of imported petrol with locally produced alcohol. "We import into this country approximately 360,000,000 gallons of petrol annually. If we compelled only a 10 per cent, addition of locally-produced spirit we would at least be able to dispose of 36,000,000 gallons of power alcohol annually. It has been stated that, from an economic viewpoint, power alcohol cannot compete with imported petrol. We know very well that it cannot, but neither can a lot of other things produced in this country compete with foreign articles. We do not want them to be competitive if their production is to be at the expense of the White Australia policy and the industrial conditions of which we are proud. Comparison with the prices of imported petrol is not the basis upon which we should approach the national consideration of the local production of fuel oil. Eather we should consider how indispensable is an assured supply of fuel, particularly in time of war. I urge the critics who reject local production of power alcohol as uneconomic to bear in mind that they have no guarantee as to what the petrol companies in this country will charge for their product at any time. We know very well that the Government was not able to satisfy itself and the people, even after exhaustive inquiry by a royal commission, regarding the activities of the petrol companies in Australia. We also know that during the war Australians paid as much as 3s. 6d. a gallon for imported petrol, and that even at that price supplies were, rationed. We got exactly what the petrol companies were prepared to give us and only at an exorbitant profiteering price. To make the price of imported petrol an excuse for discouraging the expansion of the power alcohol industry is ridiculous, decidedly unfair, and un-Australian, because the price of imported petrol has no relation to the costs of production, importation and distribution. During the last few years there has been a big move to amalgamate the great merged corporations of the United States of America with the combines of Europe. One of the most notable achievements in this direction was the pooling of the interests of the Standard Oil Trust of the United States of America, the Royal Dutch Shell Company, the British firm of Imperial Chemical Industries, and the German Chemical Combine known as the I.G. for the commercialization of the patents for the production of fuel oil from coal by the hydrogenation process which received so much publicity in this country and which has such an indefatigable champion in the honorable member for Hunter (Mr. James). This gigantic monopoly was brought about in 1931 by the establishment of the International Patent Company, with head-quarters in Germany, which operates in all countries including Britain and Australia. The rationalization of the world's petroleum industry, outside Russia, has been brought about by an Anglo-American-European " understanding ". Honorable members know that Australians, particularly those interested in power alcohol, have suffered greatly because of lack of encouragement of that very important industry, the expansion of which I consider to be essential. All the factors necessary for the successful establishment of the industry are here. First, we have the market. At present we import almost every drop of petrol that we use. Secondly, we have all the raw materials necessary for the production of power alcohol. We also have the sunshine, the rain, the idle men - plenty of people are looking for work - and the idle land. As we are anxious to provide adequate defence for our country, why can we not do as the people of other countries have done? During the war, Germany had to produce alcohol locally, because it had no other liquid fuel for its mechanized armies. Approximately 40,000 distilleries were established throughout Germany to process all surplus materials from farms. Refuse, and even straw were used to produce power alcohol. Certainly it had to be done at a price. "We in Australia, have the opportunity to establish the industry, and it is the responsibility of the Government, and in fact, of every Australian, to see that it is established. The industry should not be considered simply from the point of view of pounds shillings and pence, particularly as we have to depend now on imports from other countries.

The cotton industry is also vitally important to us. Cotton is a raw material for defence purposes. I have the privilege and pleasure of living in and representing a State which has within its borders the only suitable cotton-growing land in Australia. If all Australia's requirements of cotton were to be supplied by local industry, the growers of Queensland would need to crop another halfmillion acres of land. Visualize what that means! People are looking for work. The problems of defence, of decentralization, and of the development of rural centres are staring us in the face. En the circumstances the opportunities available are not merely opportunities; they are also responsibilities. We should take full advantage of them. If the Government is sincere in its intentions, it has a wonderful opportunity in Queensland to- give practical application to this measure, the main purpose of which, so we are told, is to effect a national stocktaking and develop the country's resources. Our policy should be determined by our own needs, not by external influences. No considerations, other than those which involve an effort to find the best methods to develop Australia's resources, increase its population, and ensure the security of its people beyond any possibility of successful challenge, should be permitted to affect the position. Some honorable members have become so pro-English that they are now anti-Australian, although they do not recognize it. We must give serious consideration to our defence responsibilities, and do everything in our power to reduce expenditure on the defence programme, even though we may be told by our experts that it is essential. We are informed that we are in danger of war. War implies a breach of international relations, and therefore it appears to me that every logical system of defence should provide for the maintenance of international, friendships, the smoothing out of difficulties with potential enemies, and the establishment of intimacies with potential allies. The Commonwealth Government has neglected this aspect of defence. Australia has a special interest in Japan and the United States of America. Consequently, the Government should be trying to solve outstanding problems which affect our relations with Japan, and it should also be trying to secure some promise of assistance from the United States of America in the event of war. Other dominions have appointed Ministers to non-British countries. The Australian Government has refused consistently to follow their example. It is not necessary to make appointments wholesale. Still, an Australian Minister at Tokyo would be invaluable at presentHe could do much to improve international relations, and help to solve outstanding problems. Possibly, also, he could act as an intermediary between Japan and the United Kingdom. An Australian Minister at Washington could do much to establish Australia's security, and, as a consequence, lessen expenditure on what, under existing circumstances, seem to be essential defence activities. It may be true that the "United States of America will not make a general agreement with the British Commonwealth of Nations, but it is quite probable that it would be willing to conclude a regional defensive pact with Australia. These factors are far more important than the mere expenditure of money, particularly when the expenditure is decided upon by experts, or so-called experts. Naturally, I believe in the employment of experts, but I have had some experience also of so-called experts. The Government should not place too much power in the hands of, or repose too much confidence in so-called " defence experts It has the responsibility to decide all matters of policy. It should formulate its policy and then see that it is applied. Naval and military experts often seek to take advantage of critical times in order to urge expenditure on projects calculated to advance the interests of the professional sailors and soldiers rather than those of the country. We must benefit by experience and take full advantage of the knowledge that is in our possession in order to ensure that Australia obtains full value for every pound expended, and that a pound is not expended if a shilling will be sufficient.

The decentralization of our population is highly necessary. Records show that although our population has increased by 38.4 per cent. in the last twenty years, the population of the six capital cities has increased by 58 per cent., whereas that of the country districts has increased by only 24 per cent. Obviously this unhealthy tendency should be arrested. Every possible means should be used to adjust this ill-balance of population. Australia needs not only an increase, hut also a better distribution, of population. We must remember that the security of the country is based upon its man-power.

Sitting suspended from 6.15 to 8 p.m.







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