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Thursday, 22 September 1983
Page: 1218

Mr SINCLAIR(9.06) — There are a few things about which I wish to comment in respect of the estimates now before the Committee. Obviously, given the time allotted and the intricacies of the Department of Defence and the Department of Defence Support, it is impossible to deal with them other than with relative brevity. I was most concerned today to read that there is yet again another suggestion that the Defence Force retirement and death benefits may be changed. The suggestion is that apparently there is to be a five-year commutation instead of a four-year commutation, and that as a result the onerous tax liability that has been imposed by this Government on those who are under the age of 55 at the time of their retirement will in some way be lessened.

As most people would know, the commutation formula means that the pension that a serviceman is entitled to receive is, as to four years of the prospective entitlement, paid by way of lump sum if he desires and intends to commute his pension. Apparently there is some absolutely incredible idea that if he takes five years of entitlement he will be just as well off as he would have been before this Government introduced its onerous tax that takes a 30 per cent cut of that commuted five year, or four year as it is now, Defence Force retirement and death benefits superannuation entitlement.

That is not an answer to the changes that this Government has imposed, quite contrary to the undertakings given by the Minister for Defence (Mr Scholes) on 3 March in a telegram sent to every unit of the Australian forces. It is incredible that a Labor Government, which supposedly is interested in the welfare of those in the Australian work force, has taken this step, along with a number of others that I intend to mention shortly, to reduce the terms and conditions of employment of those who work in that permanent service. Of course, they wear the uniform; they are loyal. I do not in any way resent the fact that it is now suggested that they will have to form a trade union. If they have any sense, it will be a radically left trade union; they will go on strike and do all the other things. That seems to be the only way to get the Prime Minister ( Mr Hawke) and other Ministers to react to industrial pressure. The Government's proposition is a nonsensical development of our Defence Force.

I have spoken on a number of occasions about the lifting of the tax exemption on reserve forces pay. As most people would know, one of the difficulties in our present tax scale is that if someone who is working has a second job, he is taxed at a different tax rate from that which he would have been if he were working ordinarily and perhaps served overtime, or for some reason received an increment. The lifting of the tax exemption for members of the reserve forces will not only destroy the incentive to serve; it will place on those who are now prepared to give their spare time to serve in the reserve forces a disincentive to do as they are now doing.

The whole concept of Australian defence has been that we have a core force which can be expanded. The reserves have been made part of the forces so that they can be seen as part of the total Australian Defence Force. The effect of this Government's decision is not only to destroy that incentive, I believe it is also deliberately to reduce the manpower component. If I had time I would go through the statistics, which show how tight the pressure is on both manpower and operating costs. I believe that this Government has deliberately set about reducing the manpower and has intentionally reduced the capacity to go out and perform normal training exercises. I think the result will be quite a disaster for the Australian forces. I believe that in those two areas-the superannuation tax and the lifting of the tax exemption for reserves-this Government has acted in a way which is totally unacceptable. Of course, it has also reduced the number of hours that reserve personnel serve and it generally seems to be moving to reduce the incentives we provided so that we could have a capacity to expand the core force in a meaningful way.

I want to talk about two other areas in the brief time allotted to me. One is my concern about some of the implications in the report of the Auditor-General. I believe that the way the defence forces generally now operate in conjunction with the Department of Defence is not very satisfactory. I want to talk about the Utz Defence Review Committee, but I believe that one thing that needs to be done is that those who have responsibility in particular areas need to be given the capacity to implement their responsibilities. It is absolute nonsense that people who at a time of war would be given enormous responsibility are so circumscribed by the committee system of the Department. If they are in charge of a project-it might be a ship that is being built or some other project on behalf of the Department-they have to report back constantly to those in Defence central.

I was interested that on page 34 of the Auditor-General's report, which Mr Speaker tabled in this House the other day, reference is made to the responsibilities of a project director. Had we remained in government one of the areas I would have wished the Utz Committee to cover would have been the whole field of how we could utilise those with very considerable skills, in both the military and civilian side of the Department, to a greater degree and with greater effect. I believe it is essential that we provide greater delegation of authority in that Department and that we find a way by which those who are put in charge of a new project can be given more authority. I noticed today that the Minister for Defence Support (Mr Howe), who is at the table, talked about handing down a contract to Williamstown Naval Dockyard for two follow-on destroyers. I trust that those ships can be built in Australia. I believe there is every reason why they should be.

I think we need to encourage production within this country. It would be a very good way by which we could move within existing plans and programs; and also, whether it be in regard to WALER, the defence integrated secure communications network, the generation of new submarines or whatever, we have to develop the skills and capability within Australia. I think it would therefore be a very good idea if we can give the follow-on destroyer contract to Williamstown. If we are to do so, whoever the military commander is-if need be we could appoint a Department of Defence adviser to stand alongside him-those people need to be given delegated responsibility. They should be given an ability to implement the construction. Hopefully, the particular service, whichever one it might be, can set down what it wants at the time the contract is let and not have the successive changes that, regrettably, have taken place in so many of the contracts we seem to have let over recent years. In that respect, I was particularly unhappy about the number of changes the Royal Australian Navy insisted should be implemented on the contract for what is to be HMAS Success. The other problem relates to cases where a contract is let and there are necessary changes. I find it quite unacceptable that the shipbuilder and the people on the job are not allowed to interfere in any way to have anomalies corrected. I know that a number of us have seen changes that were needed on the patrol boats. I am told that because of the nature of the prime contract with the British designer it is not possible to change that design. I find that absolutely ridiculous when ships are to be built and Australians are to serve on those ships which go out on patrol, wherever that might be.

The report of the Utz Committee was tabled in this House after its presentation to me last year. This Government has been in office since March. The only change implemented out of the Utz Committee recommendations was that the Department of Defence Support was constituted. I am concerned about relations between the Department of Defence Support and the Department of Defence. To a large degree I blame the present permanent head of the Department of Defence Support, yet I have a great deal of sympathy for him. I think there are problems with the way in which the relationship evolved and in the development of his responsibilities . I believe it is essential that we find a way in which that very wide responsibility for domestic production can be carried out.

There were many other recommendations in the Utz Committee report and they need to be responded to by this Government. It is now nearly six months since this Government was elected. It is about time the Government told this Parliament what it is going to do about that report. Many things in the report would be beneficial to the Australian forces. I hope that within the very near future we can get a statement on what is happening in both the Department of Defence and the Department of Defence Support and on what the Government is doing about the final report of the Utz Defence Review Committee. Unless we get some changes in the structure of the departments I do not believe those very few funds that are allotted to them will be applied economically and wisely. Goodness only knows, under the Australian Labor Party we will have enough difficulties. If we cannot get the funds spent wisely and well I think that this country will be the poorer .