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Tuesday, 9 October 1956

Mr CLAREY (Bendigo) .- The Department of Supply and the Department of Defence Production are now under discussion in the debate on the Estimates. The money provided for the administration and functioning of both those departments comes from the total vote of £190,000,000 that is to be made available for defence services. According to the Estimates, last year the Department of Supply spent £12,796,000. The Estimates now before the committee provide for expenditure of £12,030,000. The Department of Defence Production spent £12,304,000 last year, and the estimated expenditure this year is £19,891,000; so that last year the combined expenditure of the two departments was slightly more than £25,000,000, and this year it will be approximately £30,000,000. I mention that because both of those departments produce essential equipment for the armed services. Obviously, if the various government factories are in full production, not only is the valuable plant and machinery fully utilized, but also, employment is provided in non-governmental establishments, thus helping to stabilize the economy.

I think that all honorable members will agree that the most important defence services for an island continent are the Air Force and the Navy. In those circumstances, one might expect that expenditure on the production of essential equipment for the defence of the Commonwealth would: be concerned mainly with those two arms. Unfortunately, the Estimates do not give us any idea of the kind of work that is being done, the raw materials that are being used and the type of equipment being turned out. In other words, we are not given even a bird's eye view of exactly how the equipment for our defence forces is being improved or increased in volume. For that reason, we find ourselves at a disadvantage.

Sir ERIC HARRISON (WENTWORTH, NEW SOUTH WALES) - I hope to make good that deficiency later in the debate.

Mr CLAREY - I assure the Minister for Defence Production (Sir Eric Harrison) that that will be very helpful, particularly to honorable members on this side of the chamber who are gravely concerned about the future employment position at munitions plants. It seems to me that, in regard to certain of the munitions plants, there has been an entire lack of long-range planning. I bring to the notice of the committee the position of the Commonwealth Aircraft Corporation Proprietary Limited at Fishermen's Bend, which is not a government concern, but which depends upon both the Department of Supply and the Department of Defence Production for orders to enable it to function. It was started at the beginning of World War II. and has been engaged exclusively on the manufacture of aircraft since then. Until a few months ago, it employed approximately 4,500 persons, and has turned out very creditable aircraft for Australian defence purposes. Some time ago, the factory received an order for 90 Sabre jet fighters. Last week, the 61st of those aircraft was completed and towed off the production line. The balance of the order will be completed before the end of the financial year. That, of course, is a great achievement on the part of both the management of the factory and the men who are doing the work, but it is regrettable that, when that order has been completed, there will be no further work for the factory because no other order has been placed with it. Perhaps the only work that could be done there, in the absence of an order from the Government, would be repairing aircraft. Without some such work, the wonderful plant and machinery, and the large staff of skilled tradesmen and technicians, would have absolutely no work to do.

So far, the Government has not announced its policy concerning the new type of fighter aircraft which it proposes to order, and in any event, it must be borne in mind that, before production could be commenced in Australia, considerable time would have to be spent by the staff in familiarizing themselves with the plans, in tooling up the plant, and in inspection of overseas factories in order to see the exact manner in which the aircraft is constructed. I understand that the Royal Australian Air Force has asked for a new American aircraft known as the FI 04, and I also understand that the United States Government has made it clear that it is prepared to approve supply of a number of these aircraft to the Australian Government. Whether the offer will remain open indefinitely. I do not know, but so far, there has been no announcement of Government policy in respect of the new aeroplane that is to be built by the corporation when the Sabre jet fighters are no longer required.

The unfortunate result of all of this is that, whereas a few months ago approximately 4,500 people were employed at the factory, that number has now dwindled to 3,500, and as the number of Sabre jet aircraft to be completed diminishes, more and more of the staff will go off. It is expected that, in a few months, an additional 1,000 people will go off, which will reduce the staff to 2,000 or 2,500. As honorable members know, it is not possible to assemble a staff of skilled technicians and tradesmen in a short space of time. This organization has been operating for fifteen years and during that time has assembled a wonderful staff of technicians and tradesmen. Once that staff begins to disperse, it will be a long time before the corporation will be able to re-assemble suitable staff to do the kind of work that it has been doing during recent years and which it did so efficiently during the war. I suggest to the Minister that this problem should receive the immediate attention of the Government.

In the remaining few minutes at my disposal I want to deal with defence factories generally. They include the ball-bearing factory at Echuca; the ordnance factory at Bendigo, in my own constituency; several factories al Maribyrnong, Victoria; the small arms factory at Lithgow; the fuse factory being built at St. Mary's; the Department of Defence Production factory at

Fishermen's Bend; the various dockyards in New South Wales; and the dockyard at Williamstown. The question of what those organizations are to do during the current financial year is causing a good deal of concern, not only to the people who are employed by them, but also to their managements. There is a widespread feeling of insecurity. It is known that severe retrenchment is to take place. Why retrenchments should be made is difficult to understand when it is remembered, as 1 pointed out earlier, that the total vote for the two departments for this financial year is nearly £7,000,000 more than it was last year.

Sir ERIC HARRISON (WENTWORTH, NEW SOUTH WALES) - Approximately £6,000,000 of that will go to St. Mary's.

Mr CLAREY - That may be so. Nevertheless, approximately £7,000,000 more will be spent by those two departments this year than was spent last year. That being so. it is very hard to appreciate the reason for retrenchments. It is certain that orders are not being received by the factories. At the Bendigo ordnance factory, overtime has been cut out and certain work upon which the employees were engaged has been slowed down. I believe that within the last week or two a policy has been evolved for these factories, but unfortunately nobody knows what it is. 1 hope that during the course of the debate upon these Estimates either the Minister for Defence Production or the Minister for Supply (Mr. Beale) will be able to make a statement to the committee indicating to what extent retrenchment will be made, the number of persons who will be dismissed, and why these things are taking place when the total proposed vote for both departments this year is, as I have already pointed out, almost £7,000,000 more than was expended by them during last financial year.

I cannot say what will be the effect in relation to the factories in Melbourne beyond saying that wherever unemployment occurs it has a snowballing effect. Not only will persons employed in the government factories be affected but also persons in outside firms which supply materials to the government factories. Whether we like it or not, more and more people will be dismissed. I also point out to the Ministers concerned and to the committee generally that retrenchments in factories that are concentrated in country districts will have a severe economic effect. Echuca, which is nol very far from Bendigo, has a ballbearing factory. So far, the men engaged there have been employed constantly, and the regular payment of wages has a very big effect upon the economic life of the town. The effect of a fall in the weekly distribution of wages in a small place like Echuca would be severe. The same thing applies to the City of Bendigo, which is the centre of the constituency that I represent. At the present time, 1,200 persons are employed at the Bendigo ordnance factory. A substantial reduction of that staff would have a tremendous impact upon the economic life of the city and a disastrous effect upon the employees themselves, because in the smaller country towns the avenues of employment for displaced employees are by no means as great as in the capital cities. As the Minister for Defence Production knows, retrenchment would mean that in many cases the displaced employees would have to sell their homes and go elsewhere. Then, when the time arrived for a greater production of war-time equipment, the government factories would have the same problem in building up their staffs as would the Commonwealth Aircraft Corporation Proprietary Limited.

I hope that a general statement on this matter will be made to the committee, because the employees, who have a feeling of insecurity, are entitled to know where they stand, whether their jobs will last, and whether there will be a general decrease of the manufacture of equipment for Australia's armed forces. That equipment is essential, and unless it is available the defence forces will not be able to give the service that is expected of them.

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