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Tuesday, 9 October 1956

Mr O'CONNOR (Dalley) .-I rise to support the amendment that has been moved on behalf of the Opposition. In respect of the proposed votes now before the committee, I intend to direct some of my remarks to the disparity in allocation as between the various departments, and also to say something of conditions in the Air Force and certain matters in regard to naval administration that I think should be ventilated. The Government has claimed that it has reduced defence expenditure, and has attempted to justify such a course to the Parliament. One finds, however, that the sum of money that is to be devoted to defence during the current financial year is exactly the same as that expended in the previous financial year. On that basis, I fail to see how the Government can say that the defence votes have been reduced.

Last year, £190,000,000 was expended on defence, and this year a similar amount is to be spent. Although the Estimates for 1955-56 provided for the expenditure of £197.000,000, only 190.000.000 was spent. How honorable members opposite can support the claim that defence expenditure is being reduced is beyond my comprehension. In fact, there has been a reduction of the vote of only one department - the Department of the Navy - which has been reduced by £11,000,000, a reduction that has brought with it certain problems that should be discussed here. Over the years, the department, when it has not wanted to spend money at the end of a financial year, has followed the practice of sending notices to people who were performing contracts for it with the result that those persons have had to forgo their contracts and cease work, and unemployment has resulted. That kind of thing happened in Sydney some months ago. Although there has been a ministerial denial of it. there is positive proof to the contrary. I discovered, following investigation, that that was not an unusual occurrence; indeed, it seems to have become part of the administration of the Department of the Navy. When the department informed its contractors to this effect in Sydney recently, notices of dismissal were issued and men were placed out of work. It seems that the department is definitely committed to this policy, but I submit that it is one which it should not adopt. I repeat that the fact that such orders were given a few months ago has been denied, but there is too much evidence to the contrary to make the denial acceptable.

If the Government is reducing its defence expenditure, it seems to be doing so at the expense of persons on the lowest rung of the ladder. The aircraft manufacturing industry is facing a parlous situation similar to that which has been experienced in naval establishments. In Sydney during last week-end, a very prominent person associated with the Royal Australian Air Force stated that, unless Government assistance, was forthcoming, the aircraft manufacturing industry was faced with extinction. Only to-day we have heard in this chamber about the service and temporary withdrawal of dismissal notices in aircraft production establishments.

I submit that the Government should give serious consideration to the fact that, when defence expenditure is reduced, unemployment follows. I have already pointed out and proved conclusively that the policy that has been followed by the Department of the Navy at the end of past financial years has led to unemployment. To-day, naval establishments throughout Australia are approaching the stage where, if the department persists in its policy, they will be faced with extinction. In about a fortnight's time, " Vampire " will be launched at the Cockatoo Island dockyard in Sydney, and I have been informed that it is possible that, after the launching of that vessel, between 100 and 150 employees will be dismissed. During the last fortnight no fewer than 60 persons at that establishment have received dismissal notices. I have no doubt that the same process is in operation at other Australian naval establishments, but I have quoted the above examples because I am in a position to speak authoritatively about them.

Having read the annual report of the Auditor-General upon the Treasurer's statement of receipts and expenditure, I feel that certain criticisms must be levelled against the administration of the Department of the Navy. Certain things seem to have occurred, or to be occurring, and very little attention has been given to rectifying them. For example, at page 71 of his report, the Auditor-General, when dealing with the naval dockyard at Williamstown, said -

A stocktaking of plant, machinery and equipment at the Naval Dockyard, Williamstown, has not been carried out for a number of years. Although repeated representations have been made to the Department, the matter was still outstanding when this Report was prepared.

It is extremely odd that a request should have been made to the department for years without anything having been done. When dealing with the base at Manus Island, the Auditor-General said -

Following a visit to Manus Island a departmental inspecting officer reported that storekeeping and store accounting generally were unsatisfactory at this base. Particular reference was made in his report to poor stowage of stores, inaccurate stowage records and the holding of large quantities of redundant and unserviceable stores. Insufficient staff, lack of knowledge of regulations and inadequate supervision were stated to have contributed to the unsatisfactory position. Remedial action is being taken.

I refer now to the report on " H.M.A.S. Hobart ". What has been happening to this vessel has been the subject of a number of questions and inquiries both inside and outside this chamber. The Auditor-General, in the concluding paragraph, stated -

The position is that £1,430,637 has been spent on conversion and modernization of a vessel which, because of changes in Naval policy, is now placed, in its incomplete stale, in Reserve and that additional expenditure, estimated at £ 1,000,001), will have to be incurred before the ship can fulfil a role in the Fleet of the Royal Australian Navy.

From 1950 to the present time the Navy has followed a policy of change and has been unable to make up its mind about what to do with " H.M.A.S. Hobart ". The figures that I have just read show that it has been quite a costly policy.

The Navy, the Army and the Air Force should be in a position to determine what they propose to do, and if their changes of policy lead to the expenditure of such large sums of money as has been spent on this one vessel, it is time that the Government had a look at the matter. It is unfortunate for honorable members that the Minister for the Navy (Senator O'sullivan) is a member of another place. The naval shipbuilding industry is important in relation to not only defence but also employment, and we are sometimes at a disadvantage in obtaining information about it. The Government proposes that the Navy is the particular arm of defence that should suffer most in the allocation of expenditure. It proposes to reduce naval expenditure by £11,000,000, but it has not proposed a corresponding reduction in the Estimates of other departments; in fact, the Estimates for some defence departments have been increased. The naval shipbuilding programme was laid down a few years ago, and it has been subjected to change. I do not deny that there must be changes in defence planning; but we have reached the stage at which the naval shipbuilding programme has almost run out, and the Government is not prepared to do anything to maintain the stability of the industry. I have already indicated that it is important not only from the viewpoint of defence but also because it employs thousands of artisans.

At Garden Island, about 290 men were dismissed about a month ago. About a fortnight ago, 60 men went from Cockatoo Island. That means that 350 men have been retrenched from naval establishments in Sydney. There is a possibility of the figure reaching 500 in another fortnight or so. Consequently, the question of the retention of staff has become a very important one. The Government should not disperse staff of this kin J which possesses the skill and experience that are so essential in maintaining this vital industry of shipbuilding, repair and maintenance for naval defence. These are some of the matters that 1 have desired to bring to the notice of the committee. I regret that the Government has seen fit to reduce the vote for the Department of the Navy, simply because it will mean unemployment. 1 feel that if the defence vote is to be reduced, it should not be reduced in a way that will create hardship and unemployment.

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