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Wednesday, 24 May 1939

Mr FRANCIS - I regard clause 5 as the most important in the bill. It provides that the matters to be administered by the department shall be matters relating to -

(a)   the provision of supply of munitions;

(b)   the manufacture or assembly of aircraft or parts thereof by the Commonwealth or any authority of the Commonwealth;

(c)   arrangements for the establishment or extension of industries for purposes of defence; (d)the acquisition, maintenance and dis posal of stocks of goods in connexion with defence;

(e)   arrangements for ascertaining costs and for the control and limitation of profits in relation to the production of munitions; and

(f)   the arrangement or co-ordination of -

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

(ii)   the investigation and develop ment of Australian sources of supply of goods, which in the opinion of the GovernorGeneral are necessary for the economic security of the Commonwealth in time of war.

It enacts further that the GovernorGeneral may, from time to time, determine the extent to which or the conditions upon which any of these matters may be administered by the department. This is the crux of the bill. I would direct special attention to paragraph e which deals with the arrangements to be made for the ascertaining of costs and for the control and limitation of profits in relation to the production of munitions.

I understand that the Minister intends to submit an amendment in language more explicit to prevent undue profits from being made out of the manufacture of munitions or other war-time supplies, than which there is no more heinous crime.

Mr White - What is the amendment?

Mr FRANCIS - The honorable member for Balaclava knows that as well as I do. The honorable gentleman has himself moved an amendment to limit profit from activities associated with the new Department of Supply and Development to 6 per cent. I believe that paragraph e should be as broad as possible, in order that the Government may effectively curb any tendency to undue profits ; hut to fix the limit at 6 per cent. as has been proposed by the honorable member for Balaclava, will not, I suggest, give the Government sufficient scope. For that reason I am opposed to it. In some industries a profit of 6 per cent. might be too much; in others it might be too low. I should not like to see any arbitrary limit imposed. I am sure that the Government will see that profits from private defence industries are kept as low as possible. I believe that the great majority of manufacturers and suppliers of raw materials for the Department of Supply and Development are honest and patriotic citizens. Therefore the fixing of an arbitrary limit on profits will be unnecessary. I know, however, that in every community there are people who are not actuated by the same high motives, and for that reason I think that the widest possible power should be given to the Government so that the strictest supervision may be exercised, in order to prevent the making of undue profits by any one.

The expenditure of £78,000,000 on defence calls for the highest possible efficiency. I commend the Government for its decision to appoint an advisory panel on industrial organization to tender advice in connexion with the very big job which the new department is to undertake; but, as I remarked earlier, I think a mistake has been made in selecting four gentlemen from Victoria. This may cause some dissatisfaction in other States. The panel includes the following. - Mr. Essington Lewis, Mr. M. Eady, Sir Colin Fraser and Sir Alexander Stewart, all of Victoria. The fifth member is Mr. H. P. Kneeshaw, M.L.C., who, although a citizen of New South Wales, is interested in big industrial undertakings in Victoria and for that reason might also be regarded as being a representative of Victoria.

The CHAIRMAN (Mr. Prowse.)The honorable member's time has expired.

Several honorable members rising,

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