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Tuesday, 23 May 1939


Mr WHITE (Balaclava) .- There is much in this bill which commends itself to me. Some of its general principles will, I have no doubt, be approved by the majority of honorable members, 'but at the same time, there is much in the measure which is vague, unexplained and undefined. I do not agree with the contentions of the honorable member for Melbourne Ports (Mr. Holloway) who speaks of " imaginary " enemies. Let him tell the Albanians, the Abyssinian,?, or the Chinese, of imaginary enemies. We .cannot live in isolation; we are part of the world, part of an Empire, and wc must be realistic and face facts. Insofar as this measure will improve the position in respect of supplies of the Defence Department, I applaud it, because there has been a deplorable lag in that respect. The Minister for Defence (Mr. Street) admitted, in reply to a- question which I asked, without notice, this afternoon, that the department had not overtaken the supply of uniforms for volunteers in the militia forces. Our army is a small one, its full strength is only 70,000, and about half of that number have been enlisted within the last six months; yet we have not been able to supply all of those volunteers with uniforms, despite the fact that the enlistment campaign has been in progress since September last. The Minister is, undoubtedly, a hard worker, and is applying himself earnestly to his job, but he must take some responsibility and blame for the fact that all of these men have not yet been issued with complete kit. It is a fact that certain units have gone to casual camps without uniforms, and when in camp were issued with working clothes, boots and greatcoats, which were taken from them when they left camp. Months have passed since they enthusiastically came forward to enlist, but these men are still without uniforms, and even now attend Saturday afternoon and night parades in such circumstances. If my statement is challenged, I can cite the units and specific instances which I have in mind, but the Minister admitted sufficient in his reply to my question this afternoon to prove that the department has been guilty of an omission in this respect. If any provision in this measure will tend to improve this position, all honorable members will heartily support that part of the measure at any rate. If mobilization is necessary, and if we should be dragged into war willy-nilly - and war may come at »any time - we shall have to make provision for more than 70,000 men, because, under the Defence Act, all men from 18 years to 60 years become liable for service.

Mv. Street. - The honorable member will realize that we could have equipped the militia force completely if we had taken over all of the civilian factories.


Mr WHITE - That is only taking refuge in a pretext. Let us recall what happened in 1911 when universal training was introduced and equipment was found for 100,000 men.


Mr Street - We then had more time to prepare.


Mr WHITE - The Minister has had six .months in this instance.


Mr Thorby - We had two years to prepare in 1911.


Mr WHITE - As I was an area officer at the time, I know that they were all equipped.


Mr Thorby - But the honorable member was not an administrator.


Mr WHITE - I have administered a bigger department than the honorable member, .and I can say that the job was well done in 1911 by Sir George Pearce, who "was then Minister for Defence.


Mr Street - The department had two years in which to prepare at that time.


Mr WHITE - At any rate it did the job. The Minister says that the department could have provided all necessary uniforms had it taken over all of the. civilian factories. I submit that the failure of the department shows that there has been absolute inefficiency on its part. The department did the job very well in clothing the Australian Imperial Force in 1914. It did not have two years to clothe our forces on that occasion. The first division was fully equipped and sailed in a matter of a few weeks. I recall that my own unit was fully clothed and equipped in a fortnight, and the department on that occasion did not take over the civilian factories in order to do so. The Minister should not take refuge in a. pretext of the kind which he has suggested.


Mr Street - The strength of the first division was 20,000, whereas this is a matter of equipping 70,000 men.


Mr WHITE - The department really has to equip an additional 35,000, because the militia force was 35,000 strong before the enlistment campaign was started in September last.


Mr Street - We have to equip an additional 40,000.


Mr WHITE - The Minister can raise it by another 5,000 if he wishes, but even on that figure, is it creditable to the department that within six months it has not yet completed its work of clothing these few men? I point out further that, what was once the portfolio of Defence is now being shared among four Ministers, and that the former Treasurer (Mr. Casey) has been brought in to help. I suggest that the Minister might well look into the. contract branch of his department. It may be revealed that the channels through which the contracts have to go and the red tape in which some of the officials may be enmeshed, are responsible for the delay. Many officers of the department are earnest officials who are endeavouring to do their best .according to the regulations, but I suggest that contracts could be let infinitely quicker than isthe case at present. I suggest that the manufacturers of boots and clothing could be called in and asked to put forward their proposals and quotes on a mass basis, and the department could then place its orders quickly or call for three quotes, as was its practice at one time. In fact, whenever purchases are made without calling tenders, three quotes should always be obtained, a procedure not always carried out. The Minister could very well look into that suggestion. I feel sure that by acting in that direction he could effect greater savings to the taxpayers and bring about greater efficiency in his department.

In the hope that it will tend towards greater efficiency and more rapid development, I intend to support this measure on general principles,but I hope that the Minister for Supply and Development will apply his ability to the the development of the Commonwealth. If his department is merely to be one to which surplus officials who have been recruited by the National Insurance Commission are to be transferred, the proposal will not bear examination. The former Treasurer, who has now been transferred to the Department of Supply and Development, was previously Minister in charge of Development. In this new department a great field awaits him, and if he applies himself to the task, in which he will have the full support of Parliament, he can bring about the development which is needed in this country. We are on the threshold of great new industries, such as the manufacture of motor cars and aircraft and ship-building. These industries can be undertaken on a large scale. Another aspect which the Minister should bear in mind is the decentralization of these industries. In asking for all of these powers, however, he should be careful that he does not put power into the hands of vested interests in a way which will re-act detrimentally on the taxpayer. We have his assurance that a careful survey will be made of expenditure and prices - it may he a pious promise that may prove futile - but there is nothing definite in the measure to ensure that profits will be carefully explored. We are told that the annexes, which are excellent institutions modelled upon the shadow factories in England and will be utilized for the manufacture of arms and munitions - will be operated on a basis of small profits. But what of the people who will supply the raw materials to those annexes? After all, very little profiteering exists where competition is encouraged. There is very little exploitation among the smaller manufacturers, but there is top much exploitation where monopolies are concerned, and the whole power of pricemaking may very well fall into the hands of a ring, with the result that the public is exploited, and an unnecessary burden is placed on the taxpayers. The profiteer is of a type that no one can admire. There can be no doubt that we have profiteers in our midst. They are a product of the last war - and are powerful to-day. The American poet, Alan Seegar, who was killed in France, wrote of them -

Those who watched how the battle veered

Waited, profited, trembled, cheered.

We have the profiteers with us to-day, and we should not wait until war is declared before we take steps to check up on profits. 'To-day we are piling up stores of shells and munitions, as we would also be if war were declared,' yet certain essential materials for the manufacture of war requirements are in monopolistic hands. The Broken Hill Proprietary Company Limited has been attacked at length in this debate, and there may be some merit in the arguments used against that concern, but I point out that that company supplies steel to Australian users at a cheaper price than British manufacturers of steel supply that commodity to British users. Prices of steel in Great Britain are fixed by a cartel which controls the prices of that commodity, not only in Great Britain, but also on the Continent. Australian steel is obtainable at cheaper prices, and is more efficiently made.


Mr Ward - But that does not prove that there is no exploitation in Australia.


Mr WHITE - I do not suggest that, but simply point out that there may he some merit in the fact that Australian steel is cheaper than British steel. But what about other materials, such as copper, zinc, and tin? These are controlled by a monopolistic group, and at present copper, which is one of the components of brass, is loaded with fictitious costs. Does the Minister consider it fair that copper mined in Australia is sold to the public, and I presume to the Government, at a price equivalent to the cost of exporting it to Britain and re-importing it plus exchange?


Mr Street - I shall be obliged if the honorable member will let me check his figures.


Mr WHITE - I point out that during the war period the prices in Australia moved up and down as the prices fluctuated overseas and when the Australian pound depreciated by 30^ per cent, before it was pegged at 25 per cent., as it is at present, Australian prices moved up almost simultaneously by 30^ per cent. There may be some merit in this being done, but I suggest there can be very little. The Tariff Board condones this practice in respect of certain supplies, but it is definitely a loading against secondary industries in Australia. Copper is- one of the essential ingredients of brass which is so extensively used in the manufacture of munitions. Is the Government satisfied with these prices as a basis on which contractors shall supply materials to the annexes? If it is not satisfied on that point it should provide specifically in this measure to check profiteering. I shall now quote the prices to which I have referred, prices for which the Minister for Defence has asked and about which I think the Minister for Supply and Development knows something -

The price/s quoted is/are based on a price of electrolytic copper wire bars of £53 15s. per ton, made up of the London market price of £43 per ton, as issued by the Australian Mines and Metals Association, plus the bank buying telegraphic transfer Tate of exchange, Australia on London, of 25 per cent., and is to be varied up or down by one-tenth of a penny per lb. for every complete £1 or part thereof by which the price of electrolytic copper wire bars, as issued by the Australian Mines and Metals Association, plus the bank buying telegraphic transfer rate of exchange, Australia on London, on the day of receipt of order by us, is greater than £53 10s. lid. per ton, or less than £53 per ton respectively.

Is the Government to be satisfied with that? Zinc is used in making brass which is employed in the manufacture of cartridge cases and small arms. Sheet brass which is rolled in the munition works at Maribyrnong is used extensively in the manufacture of shell cases. Here is an opportunity for the Government to display some activity. I should not have mentioned this subject but for the attitude which the Government has adopted in omitting specific methods of dealing with excess profits, though it declares its anxiety to do so. The Minister should ascertain whether undue profits are being made by manufacturers.


Mr Ward - And injure his friends who are shareholders?


Mr WHITE - I do not suggest that the directors of this company, two of whom are on -the industrial panel, are profiteers. They may be conducting their businesses in a legitimate manner, and the profits they make may be moderate and reasonable; but this is definitely a matter which should be investigated and I now suggest a way in which it can be handled.

It is anticipated that the profits allowed to those manufacturing in annexes shall be about 4 per cent., which is a fair return on the capital and labour invested, and equivalent to the rate of interest paid on government bonds. In some businesses where energy, enterprise and effort have to be displayed, a profit of even 6 per cent, may be fair. That profit is allowed even in Germany where industry is socialized. I do not think there is much that we can copy in that country, and I believe that £ have said sufficient on previous occasions to show how I abhor the German form of government.


Mr Beasley - Six per cent, would be no good to General Motors-Holden's Limited.


Mr WHITE - This is an occasion on which the directors and shareholders of these companies can show their practical patriotism. It is a call to patriotism. We have appealed to the youth of this country to join the Militia so that they will be trained in the event of war, and those who do not want to go or who cannot join our fighting forces can serve in other ways. The great controllers of industry can help their country by foregoing the profit that might come to them through trading in the weapons of death and of defence. This measure will apply to the profits made not only cm materials and equipment but also on foodstuffs. I suggest that our friends in the Country party should not look alarmed because the profits of those engaged in primary production should also be checked.


Mr Asc Hrs Cameron - There is no alarm here.


Mr WHITE - Profiteers and monopolists will have to be watched and curbed. Many manufacturers and producers would, no doubt, come forward of their own free will without waiting until pressure is applied and offer to supply at reasonable rates the materials they win from industry and the earth to the firms which are patriotically establishing annexes. Large profits will not be made in these establishments, but those supplying the raw materials may be making excessive profits.


Mr Argute Cameron - The wheatgrower cannot make much profit when his product is selling at under 2s. a bushel.


Mr WHITE - That may be so, but amendments are being rolled off so rapidly that we are hearing of new ones almost hourly, yet there is no specific amendment to deal with profiteering. The Government should frame another amendment to provide that in the supply of raw materials, particularly metals, used in the manufacture of munitions the profits shall not exceed 6 per cent. I support the bill in the hope that when the measure is in committee some necessary amendments, some of - which I propose to move, will bc inserted. I believe that the bill can be of great ' benefit to the taxpayers. Surely no one thinks that the £70,000,000 which has been earmarked for defence purposes for the next three years is to he expended on equipping 70,000 trainees? Cruisers and aircraft are expensive, and we know that many millions of pounds will be expended on munitions, and rightly so, because without munitions we cannot fight. I regret the negative attitude adopted by the honorable member for Melbourne Ports (Mr. Holloway) who said that this country is in no danger of attack, but that if we build up armaments somebody will want to use them. Any day we might have to fight for our existence. One hundred and fifty years ago we acquired this country cheaply and easily without fighting, but to-day there are only two persons to every square mile of Australian territory, while Japan has 370, Belgium over 700, and even Britain which is spending thirty times more a head of population on defence than we are, has 493 to each square mile. We have a great responsibility. We must not be the weak link in the Empire chain. If this measure will assist our Defence Department to function more efficiently, and lead to the more extensive development of the Commonwealth, it will be worth while and enable us to feel more entitled to hold this continent.

Mr. GREEN(Kalgoorlie) [9.37 |.Beading the speech of the Minister for Supply and Development (Mr. Casey) who introduced the bill, I gathered that the object of the measure is to control defence supplies. That is a desirable objective at which no one can cavil, provided that the expenditure is reasonable. It is pertinent, however, to ask at this juncture what is proposed to be done to develop our resources. It would appear that if effect be given to the policy outlined by the Minister, a good deal of the work undertaken by State departments will be duplicated, more particularly that, done by Mines, Forestry, Agriculture and Water Supply Departments. On all those subjects ample information is available without establishing a Commonwealth department to obtain it. The Minister also stated that the establishment of the new department will not result in a. large increase of staff, but judging by experience, although the staff may be small at present, it will be unduly large before long. When the Development and Migration Commission was established some years ago, the staff consisted of a commissioner and one typist who did all the work, but before long an army of expert and clerical assistants was employed. Commonwealth expenditure lias grown out of all proportion to the work undertaken, due largely to the fact that the Commonwealth controls the main source of revenue, the Customs Department, and through the Loan Council, limits the expenditure of the States. Unfortunately, unemployment now appears to be a permanent feature of modern civilization.

The unemployed should be assisted by some system such as that in operation in the United States of America and in the sister dominion of New Zealand. We need not only national security but also social security, and the proposed expenditure of £70,000,000 on defence over three years is altogether disproportionate to our annual revenue of which it represents about one-fourth. The honorable member for Balaclava (Mr. White) said that Australia as a member of the British Commonwealth of Nations must play its part. Our annual revenue is about £90,000,000 and we are expending approximately £23,000,000 on defence this year.







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