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Wednesday, 21 September 1983
Page: 1085

Mr SINCLAIR(3.35) —In the brief period that the present Government has been in office, it has progressively set about placing different emphases on areas of government expenditure. One area that has suffered more than any is that of the defence forces. Of course, it is easy to say, as the Minister for Defence (Mr Scholes) no doubt will say in a few moments in his explanation to us , that this year there is to be a 4 per cent real increase in defence funding. In a few moments I hope to address that matter. But I think that what we need to recognise is that the terms of this matter of public importance-namely, the uncertainty and concern in the Australian defence forces resulting from Government decisions affecting service morale, conditions of employment and force capability-are all a deliberate product of the actions of this Government and the present Minister.

There is little doubt that over the course of the last few months, uncertainty has certainly been generated because of the 'on again, off again' approach of the Minister and the Treasurer (Mr Keating) on the question of DFRDB, defence forces rehabilitation and defence benefits, commutation. There is equally little doubt that the fact that the Services because of their premature retirement, have uniquely different terms and conditions of service from those of almost every other sector of this community, is one that the Minister and the Treasurer say they accept but, in the next moment, say they are not prepared to do anything about. The result is that a very large percentage of servicemen, as we all know, retire before the age of 55, yet the Government in that much flaunted modification to the changed tax arrangement for DFRDB, decided that those who retired before the age of 55 would still bear that full 30 per cent of tax on commuted superannuation.

It is equally true that the very nature of the effect of DFRDB changes on the servicemen concerned is completely contrary to the firm undertakings given by the man who sits at the table as the Minister for Defence, on 3 March, only two days before the 5 March election, when he saw fit to send a telex around the defence installations of Australia telling every serviceman that in no circumstances would the Australian Labor Party in government prejudice the entitlement of servicemen to DFRDB. Then he had the hide to come into this place and say: 'But we did not do that; it was the Treasurer. The tax changes that are imposed in the course of those modifications affect every citizen of this country'. That might be so, but as far as servicemen are concerned, they operate under different terms and conditions of employment from those of everyone else, and secondly, they certainly had a right to expect that the man who is the Minister would do something to honour that undertaking. Although that undertaking, he well says, affected the terms and conditions of DFRDB and not the tax imposed on it, the impact on the individuals concerned is nonetheless most severe, most selective and most detrimental to what they had a reasonable right to expect.

As if that were not bad enough, as in a number of other instances about which I want to talk shortly, the Minister then says: 'Don't worry, boys and girls; we are going to have a re-examination of DFRDB'. That has really only heaped coals on the fires of Newcastle, for the product of an inquiry into DFRDB is not the certainty that, as the Minister might well say at some time in the House or in a public place: 'If there is to be a change, we shall ensure that the conditions are no worse than they were, in net benefit, to servicemen before 5 March'. He has made no such statement. What he has done is to create complete uncertainty as to the character of the changes that will follow this inquiry into defence forces rehabilitiation and defence benefits. I believe that the result of those two changes alone has been the principal catalyst behind what we were told only this week and the week before is leading to increasing rates of premature resignations in the services. If that were not bad enough, there have been a number of other direct attacks on the terms and conditions of employment of this particularly vulnerable section of the Australian Public Service. It is incredible. We have a party that, in one theatre, seems to be listening to the radical cries of the Carmichaels and the Halfpennys of this world-

Mr Hodgman —The marxist-leninists.

Mr SINCLAIR —As my colleague says, the marxist-leninist philosophers of the trade union movement, who have greater influence on this Government than any of those responsible servicemen whose loyalty and adherence to duty and whose obligations deny them the voice that the more radical left wing trade unions assert as being a matter of right.

The sad part about it is that we all know that one of the much flaunted features of the economic policy of the Australian Labor Party is its prices and wages accord. Let us look at the prices and wages accord for servicemen. Since the Labor Party has come to government it has meant a progressive reduction in a serious number of matters affecting their conditions of employment. On top of that we have already the announcement of a number of reductions in numbers of people in the services. Amongst those reductions in numbers we have selectively the fact that the people who will be most hurt will be the apprentices and those who could well have received training which would have enabled them to go into the civilian work force and make a positive contribution to better their own lifestyle and to make a contribution to our society. The Government has deliberately affected numbers. Apparently it is going to do that to an even greater degree. Whether or not that is so, we need to recognise that the Government has also announced that it is going to reduce the numbers in the reserves. Of course, the Government has removed the tax exemption for serving personnel in the reserves. I want to go down the track to look at those decisions and the impact of them. I think it might be worth while to start by looking at what seem to be the totally contradictory statements of the Prime Minister (Mr Hawke) and the Minister for Foreign Affairs (Mr Hayden) in their acceptance of these matters. We can look at the statement by the Prime Minister at the National Press Club in Washington which was reported in the Canberra Times of 17 June. In that statement he accepted that the most effective contribution by Australia to global defence considerations would be, he said:

. . . by ensuring that we-

That is, Australia-

accept an appropriate burden in our own area in respect of any foreseeable threats that may arise . . . in the future.

We had the statement on ANZUS made by the Foreign Minister in the House only about three days ago in which he said:

. . . agreement was explicitly reached as to Australia's prime defence role, namely, as one of building our self-defence capability within our regional context . . .

We have the Foreign Minister and the Prime Minister both saying: 'Sure, we have to build up our defence forces'. The Foreign Minister has said that he believes it is necessary that we have an independent naval patrol in the Indian Ocean. That would be a wonderful achievement. We would all be delighted to see us be able to do that. But if we are going to undertake that sort of responsibility we can do so only if the sinews of financial support, manpower, operating costs and equipment are available to the forces. The deliberate product of this Government 's Budget is to ensure that the funds will not be available.

It is true that the provision of adequate funds for defence forces is a matter of extreme difficulty. There are inordinate expenses in a number of areas. For example, we all accept that the FA18 purchase has escalated in price not because of any action of the Australian Government, officials or personnel but because of the changing price relativity of the United States dollar to the Australian dollar, the changing inflation product and the impact that has made on that single purchase. but it is no use the Government looking only at those items of defence equipment and raising its hands in horror. In looking at the funds provided we need to recognise the content of the Budget and see its implications for the future.

While I want to talk about these things in another debate in this place, I think it is essential, if we are having a look at these three aspects of direct and deliberate attack on service capability by the Government, to wit decisions affecting morale, conditions of employment and force capability, that we realise that the Government said in the Budget that it has provided a real 4 per cent growth. Mind you, if one looks at the Budget Papers one sees that they show 2.2 per cent. If one goes through the Budget one will see that that is all predicted on inflation being no more than 6.4 per cent over this financial year. Anybody in his right mind would accept that a 6.4 per cent inflationary figure is totally unrealistic. Certainly if the prices and wages accord continues to blow out as it seems to be significantly at the moment, there is absolutely no chance of that figure being achieved. The product of that, therefore, is that there will have to be further reductions.

It is also true that there are a number of major items of defence equipment which, in government, we committed the Government to buying because we believed it was necessary to upgrade the technical capability of the Australian Armed Forces. Indeed, that it is necessary so to do is universally accepted. I think it is worthwhile my commenting briefly on several recent articles appearing in the Pacific Defence Reporter. One article was written by Major-General J. D. Stevenson. He referred to the fact that it is essential that the Australian Armed Forces:

. . . maintain a high level of expertise in the technological field . . . but this does not require purchase of high performance equipment on a large scale. There can be a 'state of the art' purchase sufficient to maintain technological expertise and capability for expansion in the relevant field when strategic circumstances dictate the necessity.

Above all else it is essential that the Government provide enough money within the five-year rolling capital equipment program to ensure that we will be able to expand and that that capital equipment will be available for the future. There will certainly be an absolute necessity to increase the amount of money within the defence vote to maintain and expand our defence equipment in the future. I suspect that the Minister for Defence and I have very many similar objectives in trying to achieve that objective. But I am afraid that it is not sufficient just to have good motivation, for the product within the present defence vote is that a greater sum is committed for the future than in the whole of this year's defence vote. I believe the product is that there will be very serious cuts in the other two components of the defence vote unless something can be done to provide additional money for that purpose.

Certainly in the field of manpower and operating costs we see the impact of this Government's actions more than anywhere else. As far as manpower is concerned, it seems that the Government is deliberately setting about reducing the number of trained and well-motivated manpower within the Services. I have mentioned already cuts in numbers in both the permanent and reserve forces which , if they were to occur in the civilian sector, would be roundly condemned by Labor Ministers. Instead, within the Services the Ministers not only say nothing about them but also they advocate them. They are the ones who are implementing them. Certainly, the changes in the reserves will reduce the capability of the Australian reserves to play the role for which they were designed-namely, allowing a reasonable augmentation of our defence capability in the circumstance of a defence threat developing.

The problem in the whole field of operating costs is perhaps even more intense. On the presently available figures it seems that the amount of money available is something like 10 per cent greater than the figure for last year. I have no doubt that the Minister will refer to the product of that increase. But he has failed to allow for the fact that a very big percentage of those figures is to cover the real costs in inflationary terms of the fuel and equipment necessary to maintain the level of Service operations. The difficulty is that in the operational field there will in fact be less than a real increase. The inevitable result of that will be that there will be a lower level of activity, as we have already begun to see, in the number of exercises that are being curtailed and the number of steaming and flying hours which are prejudicing the operations of both naval ships and aircraft of the Royal Australian Air Force.

However, the one area that I think has been hit as hard as anywhere is the reserves. In the few minutes available to me I want to try to identify three areas of concern. This is, of course, regardless of any changes that I am told the Government is about to introduce to the Australian cadet services within the schools. We all know of the Government's attacks on the educational system. The Minister, before the election, committed the Government to pulling out the cadets. Let us look at the reserves. The overall strength is to be cut by 1,572. We are told that the allocation of permanent forces to reserve and cadet units is to be reduced. The general change in the number of training days from 38.25 to 36 will reduce the level of capability of those who are serving in the reserves. Finally, we have the tax exemptions for persons serving in the reserves which are to be phased out. The product of all this is that the number of personnel serving in the reserves will be reduced because of both the deliberate act of the Government and the lack of incentive to participate. The whole character of the Australian reserves is to encourage people in the work force and in the community to participate and to supplement those who are in the Australian regular services. The numerical reductions will be very serious. The lack of incentive to serve, however, will reduce the whole meaningfulness of the opportunity to make an alternative career, which so many have sought to do over recent years.

In the course of the short period in which the Government has been in office it has taken steps which are already reducing Service morale. Conditions of employment, unique amongst this important sector of the work force, have been reduced and are now at a lower level than they were six months ago, while Force capability, because of the lack of provision of adequate funds for the future, will certainly lead to significant difficulties. Sure, this will happen down the line but defence is not something that can be measured in terms of pluses and minuses on day 1. What happens at the end of the long lead time is important. The product of Labor in government, regrettably, in 1983 as it was from 1972 to 1975, is that defence will be called on to pay the price and without doubt Australia's defence forces will be reduced significantly because of the deliberate actions of this Government.

Mr DEPUTY SPEAKER (Hon. Les Johnson) —Order! The honourable member's time has expired.