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Friday, 5 June 1970

Mr BARNARD (Bass) - This motion is intended to open up for debate the present status and future prospects of the Australian aircraft industry. The

Minister for Supply (Senator Anderson) made a comprehensive statement in the Senate on 9th April 1970 on the aircraft industry. In his defence review the Minister for Defence (Mr Malcolm Fraser) touched on aspects of the industry's future. But the last debate of any consequence on the aircraft industry was in this House early last year during an Opposition urgency motion on defence procurement. During that debate the former Minister for Defence cast grave doubts on the chances of setting up a viable aircraft industry in this country. That argument has been reinforced by the present Minister for Defence. In answer to a question asked by the honourable member for Blaxland (Mr Keating) on 20th May 1970 the Minister pointed out the high cost of developing sophisticated aircraft. As examples he used the F14 and F15 now being developed in the United States of America, pointing out that the developmental costs of one of these aircraft and the contract relating to it are of the order of $US40Om a year. It is labouring the point to say that a developmental programme of this nature is beyond Australia's resources. Of course, it would not be possible to build in i Australia weapons systems such as the Fill or massive transport aircraft such as the Galaxy. If aircraft of this kind are essential to Australia's defences - and I remain to be convinced that they are - they will have to be procured overseas.

It is clouding the issue to put up development programmes such as the FI 5 having regard to Australia's modest capability and requirements. There are many less sophisticated aircraft relevant to our needs which could be and should be designed and built in Australia. It has been argued that Australia cannot afford to develop and build its own aircraft; that it should buy all its aircraft off the shelf overseas. Even if this were feasible it would still be necessary to maintain and service those aircraft within Australia. This would mean the building up of inventories of spare parts and the maintenance of quite a substantial skilled work force. We give our aircraft a long life span gauged on world experience - about IS years seems to be a fair average. If aircraft are to be maintained and serviced in Australia for this length of time the initial development and production should be done in Australia. It would be self defeating to buy abroad for some cost advantage if there were no bases in Australia for the servicing and maintenance of these aircraft.

It can be argued that maintenance and service work with such bread and butter orders as missiles and target aircraft would be adequate to sustain the rudiments of an aircraft industry. This is the sort of tentative industry indicated by the Minister for Supply in his statement on the defence aircraft industry. The Minister said that the industry as now established had a range of technological facilities not inappropriate to the peacetime support of the Services. He said also that the industry had reserve capability for a war situation. What the Minister seemed to be referring to was the excess capacity now apparent in an aircraft industry with the completion of the major programmes which have sustained the industry during the 1960s. It would be completely wrong to suggest that defence orders should be made just to keep an industry going. This invokes the perverse logic of the military industrial complex and all it implies in the distortion of resources. Hut any projection of Australia's needs shows a requirement for large numbers of relatively unsophisticated aircraft for both military and civil needs. These can best be developed and built in Australia where they will have to be supported and serviced.

The emphasis on getting elaborate weapons systems such as the Fill has in recent years obscured the need for the basic workhorse aircraft which all 3 elements of the armed Services will require. The procurement of helicopters and support aircraft is gathering momentum, as disclosed in the posture statement made by the Minister for Defence in March. Yet the aircraft industry remains in a state of insecurity and indecision about how much of this procurement will flow to its workshops. The Minister for Supply advanced 3 basic objectives for the industry. The first is to maintain basic defence aircraft facilities capable of supporting the Services. The industry has this capacity in excess at the moment. In fact, the only certainty confronting it is the continuing need to service the Mirage and Macchi aircraft. The second objective was to ensure that the technologies of the industry were upgraded in line with the latest developments. This is a major problem area because any industry must languish if its development is fitful and unplanned.

The Australian aircraft industry has been a principle victim of the irrational and erratic procurement planning of the postwar years. There have been 4 substantial buildups within the industry since the end of World War EL. Each build-up has stretched the resources of the industry but it has managed to set and maintain high standards. At the same time each programme has brought an accumulation of skills into the industry. However, when each specific programme has wound up there has been no outlet for the designers, stressmen, engineers, draftsmen and other skilled aeronautical personnel. The reservoir of skill and experience has been allowed to trickle away on each occasion. When another major programme comes up this work force has to be re-formed. Inevitably there is a drifting away from the uncertainties of the industry and the reconstituted design and developmental teams are the lesser for this loss of experience and expertise.

At the moment the run-down in the industry is reflected in the dwindling of the work force at the Government Aircraft Factories from about 2,800 at the peak of the Mirage project to fewer than 2,000 today. It may be many years before there is a project comparable to the Mirage. The next may well be the successor to the Mirage in the years from 1975 to 1978. Unless other work can be found within the industry there will be a marked waste of essential skills until again a hasty build-up has to be made in the mid-1970s. Even the major programmes have been subject to fits and starts in the placing of orders. Even the Mirage and Macchi orders were broken into haphazard and illogical segments. This lack of continuity has been the major cause of the industry's malaise. Without firm knowledge of forward requirements and what finance is available it is completely impossible to evolve a steady pattern of production and growth. It is absurd to expect specialist skills to be on tap when a sudden decision is made for local production after a lapse of some years.

This leads to the third objective prescribed by the Minister for Supply - the need to rationalise the effort of the industry. Closer links between the 3 major components of the industry - the Government Aircraft Factories, the Commonwealth Aircraft Corporation and Hawker de Havilland - have been foreshadowed in recent years. In answer to a question placed on notice by the honourable member for Corio (Mr Scholes) the Minister for Defence has confirmed that the amalgamation of the Government Aircraft Factories and the Commonwealth Aircraft Corporation is receiving close attention. Sir Lawrence Hartnett has gone further in suggesting that these 2 agencies should be joined with the aeronautical research unit of the Department of Supply to form a new corporation for the development of civil and military aircraft. I am sure that the Minister for Defence will agree that Sir Lawrence Harnett has had considerable experience in building up essential Australian industry. All honourable members will recall the significant part he played in the establishment in this country of the motor car industry. I suppose many of those who now advance arguments against the establishment of an aircraft industry used the same irrational arguments in 1948 and 1949 when the Labor Government, acting on the advice of and with the co-operation of Sir Lawrence Hartnett, set out to establish in Australia a successful motor car industry. It is now the third largest employer of labour in this country. The arguments against the establishment of a motor car industry are now being used against the establishment of an aircraft industry.

It seems that some degree of rationalisation is inevitable although its final form cannot be predicted. It is to be hoped that this can be done without dislocation of the work force, which has made a notable contribution to the success of the major aircraft programmes of the 1960s. With regard to the future, there are a number of areas where additional work may be found for the industry. The outlook is not encouraging for local project design. The industry had pinned its hopes on the development of a joint project with the British Aircraft Corporation for a swing wing jet trainer. Much work has gone into this project but it seems there is no prospect whatever of it getting off the drawing boards. The only major project in view is the so-called Project N which is intended to fulfil a variety of military support roles. It has been claimed that this project was so-called because it was the nth design to come off the drawing boards after innumerable paper planes had been flown into the filing cabinets. There may be sound military and commercial prospects for Project N but it is a very hypothetical project at the moment.

I referred earlier to the necessary role of the industry in the manufacture of aircraft engines and guided weapons, and in making spares and performing repair and overhaul work. A vexed area of the aircraft industry at the moment is the negotiation of coproduction, offsets and sub-contracting arrangements with overseas manufacturers. There has been some progress made here but the contracts obtained are negligible compared with the glowing words of successive Ministers for Defence about building the industry into the fourth arm of defence. There have been some reasonable contracts negotiated for aircraft components, particularly helicopter parts and jumbo jet parts. But this has amounted to a mere fraction of a percentage of our foreign exchange spent each year on aircraft and aircraft parts. Despite the Government's emphasis on offset and sub-contracting arrangements it seems to have been reluctant to insist on them when the actual terms of the contracts were being hammered out.

In summary, there is room for great dissatisfaction about the present state of the aircraft industry and its prospects. There has been a complete failure to work out a forward planning policy assessing future needs and budgeting for them on a 5-year or 7-year basis. This state of uncertainty raises grave doubts about the future of the industry and even its chance of survival. The Opposition believes that it is not possible to opt out of the industry, that it is an essential industry and that it should be made as self-sufficient as possible. The fluctuations between over-commitment and comparative idleness have damaged the industry. It can be put on a footing of competence and confidence only by developing a forward programme which would meet military and commercial needs for aircraft of relatively simple design.

Certainly elaborate weapons systems are way beyond Australia's reach but there are a number of less sophisticated aircraft which are needed and which can be developed by the Australian industry. There has been a reluctance on the part of the Government to see the aircraft industry in Australia as a viable one. It has maintained its absolute adherence to the purchase of aircraft overseas and its reliance on the technology available in other countries which may not always be available to Australia. The Government has shown a refusal to accept the factual success of European countries with a much smaller population than Australia and certainly with ho greater skills. These countries have been able to design and produce aircraft for defence and commercial purposes with very great success. These reasons-

Mr DEPUTY SPEAKER (Mr Lucock)Order!The honourable member's time has expired.

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