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Wednesday, 30 September 1942

Mr DEDMAN (Corio) (Minister for War Organization of Industry) . - by leave - It is now nearly five months since I last presented to the House an account of the activities of the Department of War Organization of Industry. In view of the important developments which have occurred since then, I think the time is opportune for a further review. This is necessary, not only because I believe that honorable members on both sides of the House are entitled to the fullest possible information about matters with which the department is concerned, but also in view of the frequent evidence of misunderstanding of our work, which is to be seen in the statements of the department's critics.

Before I go on to review the major activities on which my department is engaged, I should like to give to the House a broad picture of what has been done in the way of diverting resources to the war effort. Since the Government took office, nearly 400,000 persons have been transferred from civilian life and work to direct war work in the armed services, factories, and elsewhere. Where before the war there were more than 500,000 persons employed in factories making goods for the civil population, there are now only 200,000. The total number of factory workers is 700,000, but of these 500,000 are making munitions, aircraft and other war supplies. Man-power movements of this magnitude have not been achieved without careful planning and organization. Inevitably, the diversion of man-power and materials from civil production and the cutting off of imported supplies have given rise to shortages of civil supplies, but the Government, through the Rationing Commission, and in other ways, has taken and is taking steps to ensure that a reasonable and equitable distribution of the available supplies amongst the civil population is maintained. Were it not for the organized diversion of resources from civil production, there must have been available to Australia in this time of grave emergency an army, an air force and a navy not only smaller, but also much less well equipped. The production departments have achieved miracles in stepping up production of war supplies, but it would have been impossible for them to find the men and the materials to feed into the war factories if the Government had not been prepared with plans for the organized movement of labour and for the organization of civil industry on a war basis.

I propose now to survey briefly the more important activities of the Department of War Organization of Industry in order that members may have a clear picture of the progress which has been made, and of the range and difficulties of the problems which must be faced. I hope to make it clear, amongst other things, that my department is not merely concerned with prohibitions and restrictions and other such negative measures, important as these are for the progress of the war effort. To begin with, the department is charged with important responsibilities as the secretariat and executive department of the Production Executive of Cabinet. In this capacity, it has to put together the information and prepare the necessary submissions on the basis of which the Production Executive can frame its policies. It has to follow up the decisions of the Production Executive to ensure that these are carried out by whatever Commonwealth authority happens to be appropriate for the purpose. In addition, where there is no existing authority available to implement the Production Executive's decisions, the department is obliged to undertake the executive work itself.

In its capacity as the secretariat and executive department of the Production Executive, my department is also involved in many activities connected with the coordination of the various departments which are responsible for war production and for the control of industry and commerce. The Production Executive itself ensures co-ordination in the development of policy at the ministerial level. In addition, however, the Department of War Organization of Industry is responsible for the maintenance of a variety of administrative arrangements which contribute greatly to the smooth and coordinated operation of measures taken in pursuance of the war effort. These arrangements take principally the form of inter-departmental committees, the secretariat of which is provided by my department. Of these committees, undoubtedly the most significant from the national viewpoint is the standing departmental committee which was set up by the sub-committee of War Cabinet constituted in March to review war commitments in the light of altered conditions. This standing departmental committee has prepared reports which provide a comprehensive review of the Australian man-power situation, setting the man-power commitments of the war programme against the supplies of labour which can be made available from various sources and by various methods. Before the Government made provision for this comprehensive review there was no means by which Cabinet could see the manpower commitments of the Commonwealth in true perspective, no means by which it could be established whether some new project was within the man-power resources of the country if these were stretched to the utmost. The co-ordination »f man-power policy at the administrative level which this departmental committee provides and the information which it assembles are amongst the most vital elements of the machinery which enables the war effort to go forward smoothly, and the Government to make its major decisions on war policy with a full knowledge of the facts of the situation.

Another inter-departmental committee more recently established is the Australian Clothing Council. This consists of representatives of the Department of Supply and Development, the Division of

Import Procurement, the Directorate of Man Power, the Commonwealth Prices Branch, and the Rationing Commission, with an officer of the Department of War Organization of Industry as chairman and executive officer. The council provides a central point of reference on all aspects of clothing policy, and enables all the departments concerned to take concerted action to ensure that the clothing which is needed by the Australian population is made available to the full extent permitted by the resources open to us. The Matches Co-ordination Committee and the committee which controls the use of cocoa beans and their products are other examples of co-ordinating machinery within my department. Both of these have been set up to correlate the supply of the commodities concerned with essential civil and service demands. The most recently established committee is the Transport Emergency Freight Committee. This committee was set up in recognition of the fact that, however effective the separate authorities responsible for providing transport facilities may be, there is need, in addition, for a body which will look at the transport question as a whole, and ensure that freight priorities are so allocated that first things come first where transport, whether by sea, land or air, is in question. A central focus for transport priorities is imperative in the present circumstances, when transport facilities are strained to such a degree that even the basic fuels and raw materials of industry must often be withheld.

Apart from these formal interdepartmental administrative arrangements, there are many informal measures of coordination for which my department is responsible. In a large measure, these result from informal discussions by which the Department of War Organization of Industry is able to provide advice and information to other departments on many matters involving the general principles and broad development of the war effort, rather than the special spheres of the various departments. In particular, the department is looked to for advice on the relative essentiality of various civil industries in relation to, for example, of man-power policy, and the supply of scarce materials. In these and other co-ordinating activities, the department is assisted by the fact that the statistician of the Department of War Organization of Industry has been given general charge of the war statistics section instituted by the Commonwealth Statistician to maintain liaison between statistical officers of various war departments.

An important group of functions exercised by my department arises from its relationship with the Food Council, over which the Minister for Supply and Development presides. The department maintains the statistical services of the Food Council, and co-operates with the executive officer of the Food Council in furnishing advice upon the problems of food industries. For example, it was on a submission from my department that the Food Council decided to establish production goals as a basis for government policy in dealing with food production. In co-operation with the Department of Commerce, the Department of War Organization of Industry has now carried out the investigation necessary for the determination of appropriate goals of food production. The production executive has approved these goals, and there can be no doubt that they will provide a concrete basis for the development and administration of policy on such matters as the supply of man-power, agricultural machinery, and fertilizers, in the food industries. 1 have now briefly surveyed some of the activities of the Department of War Organization of Industry, which are sometimes overlooked by those who imagine that our only job is to impose restrictions. I turn next to those activities of the department which are concerned specifically with the diversion of the resources cf the Commonwealth from non-essential uses to uses in which they will minister to the cause of victory. These are, for the most part, the restrictive activities of the department. Yet even with these, the action which we take is not always negative or purely restrictive from the point of view of the civil population. In some industries - .notably the clothing trades - the rationalization plans which my department is implementing are designed, not to curtail civilian supplies, but, to ensure that greater supplies of essentials shall be produced as efficiently as can he managed. In a broader sense, moreover, none of the department's restrictive measures is purely negative. Restrictions are not imposed for their own sake, or from a sadistic delight in imposing hardships upon civilians. They are imposed only in cases where restrictions will make a clear and positive contribution to the war effort. Sometimes, I have been criticized for moving too fast with restrictive measures; sometimes many of the same critics have accused me of making slow progress. The first of these criticisms, in view of the acute shortage of man-power and other resources, entirely lacks substance. My policy has always been to push on with the diversion of resources from nonessentials just as fast as we could deal with the problems and obstacles. My only regret is that we could not manage to move faster. Measures designed to divert labour and resources include the control of building, prohibition of the manufacture of certain articles, and control of new business, disemployment orders, and the rationalization of industry. I do not wish to weary the House with a detailed account of all these activities, and shall confine my attention to the problem of the rationalization of industry.

In my statement to the House on the 29th April, I explained the principles on which we were working in our plans for the rationalization of industry. I now propose to review the progress which has been made in this direction. This review will, I think, provide « full answer to the question which the honorable member for Robertson (Mr. Spooner) asked the Prime Minister in the House on the 9th September.

First, let me indicate some of the rationalization plains which have been submitted to the production executive and formally implemented under National Security Regulations. It should be explained in advance that these plans for which legal measures have been necessary, constitute only a proportion of the results so far achieved, and a much smaller proportion of the work already carried out and awaiting only the determination of final details before being put into effect. It is convenient to list the various rationalization schemes which have been formally approved and implemented: Gold-mining, packaging, bread and milk deliveries, standardization of clothing materials, other retail deliveries, dry cleaning, veterinary remedies, stockfoods and stock-licks, simplification of meals, standardization of clothing styles, and the standardization of footwear.

At least as important as the rationalization proposals which have been formally adopted are the measures of voluntary rationalization by which firms and industries have anticipated the department's proposals. From the beginning, it was intended, and made plain to the representatives of industry, that as far as possible, industry should work out its own salvation, whilst the Government would step in with legal measures only where voluntary arrangements could not be successfully introduced or operated. The voluntary measures which industry has taken relate chiefly to the elimination of unnecessary varieties of products. By this means, there have been achieved not only large savings in respect of materials and man-power previously absorbed in unnecessary " frills hut also important gains in industrial efficiency resulting from the avoidance of frequent change-overs in production, and the necessity to handle and stock many different varieties. In addition, many industries have voluntarily introduced zoning and other arrangements to save fuel and transport facilities, and a few have undertaken more ambitious schemes of rationalization involving some degree of concentration of production. In some cases, the industries adopting rationalization measures in this way, have acted quite independently. Others have acted in consultation with the Government departments which have been concerned, for example, with supplies of materials. But in the great majority of oases, the industries have acted in close collaboration with, and often under pressure from, the Department of War Organization of Industry. Examples of industries in which rationalization has progressed on a voluntary basis include the following: - Biscuits, soap, soft drinks, tobacco, confectionery, jam, glass products, canisters, sausage casings and smallgoods, matches, stationers' requisites, stationery, dry batteries, and buttons.

Most of the schemes so far introduced - especially those introduced voluntarily - do not achieve complete rationalization. Often, still more varieties could be eliminated and production concentrated in fewer firms. But it has been found that after a certain point, the difficulties and time required for rationalization rise sharply. Greater results can, therefore, be obtained in a short time if a reasonable amount of rationalization is spread over a wide range of industry, than if time is taken to cross the t'E and dot the i's in each industry before passing to the next. The department plans to undertake a further review of many industries as opportunity permits. In industries where rationalization has so far been on a voluntary basis this further review is in many instances already proceeding, and a greater degree of rationalization may subsequently be insisted upon.

In the near future, complete proposals for a considerable number of industries, representing months of careful preparation, will be produced. Some of the industries in respect of which a great deal of work has already been done are indicated in the following list: - Cosmetics, dentifrice, cycles, soap, confectionery, gas-producers, optical munitions, electroplating, banking, hand and garden tools, iron and steel foundries and moulding, and catering.

I mention these industries merely by way of example; there are many others on which a great deal of progress has been made. Moreover, the department has recently begun to give its closest attention to other fields in which manpower and other problems are now arising in an increasing degree - for example, rural industries and wholesale and retail trade. One of the chief problems which must be determined before rationalization can be carried to its logical conclusion in many industries is the question of compensation for firms which must cease business in the interests of efficient war-time organization. The principles at issue in this question are amongst the most fundamental of domestic policy in war-time, and it has been necessary to allow time for the accumulation of experience in the problems involved before making a final determination of government policy. The Government is now considering the matter with a view to establishing some basic principles, and an announcement may be expected soon.

When the critics of my department are not busy saying that we do not consult industry enough, they can generally be heard complaining that the officers and advisers of the Department of War Organization of Industry are inexperienced in the business and industrial problems with which the department deals, and that they are academic theorists rather than practical men. This charge is of course entirely baseless. In order to disprove it, it is only necessary to run one's eye over the records of the department's principal officers and advisers. So that honorable members may have an opportunity to do this, I shall incorporate in Hansard, with their approval, a list of the personnel of the Department of War Organization of Industry.

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