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Thursday, 9 November 1911

Senator PEARCE (Western AustraliaMinister of Defence) . - I move -

That this Bill be now read a second time.

In reply to the question raised by the Leader of the Opposition, I promised to supply the Senate with the total amount of the re- votes proposed in this Bill. I find that I am unable to do So at present. I have asked the Treasury officials to let me have the figures the moment they arrive, and if 1 cannot give the desired information before I conclude my remarks, I shall do so at a later stage of the discussion. The total vote represented by this Bill is ,£2,791,365. Under the authority of the Aa which was passed last year an amount of ,£1,318,099 was expended, so that the expenditure contemplated under this measure represents an increase of ,£1,473,266. Taking the Departments in their order, the expenditure which we are asking Parliament to authorize is . as follows : - Department of Home Affairs, .£824,915; PostmasterGeneral, £1,300,000; Treasury, .£5,150; Defence. ^£63 1,900; and Department of External Affairs, .£29,400. I am now informed that the total amount represented by re-votes in the sums which I have mentioned is ,£281,160. There is one item in this Bill to which I desire to direct special attention. It reads, " Division No. 6a, Special Works; No. 1. To pay into Trust Fund, Telegraphs and Telephones Special Works Account, £600,000." That amount is in addition to a vote on account of works for the Post and Telegraph Department of £700,000. Honorable senators are well aware that during the early years of Federation, the Postal Department was undoubtedly starved in its works vote. While the Commonwealth was returning to tlie States large sums of money in the form of the Federal surpluses, the Post Office, during those years, was not receiving the amount of money which it needed to enable it to keep its works up to date, and to meet public requirements. This vote of £600,000 represents an endeavour on the part of the Government to meet the difficulty that has been created by the failure of this Parliament in past years to provide money for necessary works.. Honorable senators know perfectly Well that in ordinary circumstances, at tlie end of June, which marks the close of the financial year; all votes lapse except those which are paid, into Trust accounts. The awkwardness of that procedure comes home to those whoare in charge of Departments, because after the 30th June of each year, the only works which can be proceeded with are those which can be carried on out of the. Treasurer's Advance, and for that expenditure parliamentary sanction has subse-0 quently to be obtained. Naturally, no Government cares to incur extraordinary expenditure out of that fund. As a rule, it is used only to carry out such works as are of an urgent character. Then when the Estimates are passed late in the financial year, an attempt has to be made to rush other works through. The Government propose that this £600.000 shall be paid into a Trust Fund, and that, subsequent to the passing of this measure, a Bill shall be introduced to authorize the establishment of such a fund. The Treasurer has informed the members of another place that when that Bill is submitted it will contain a schedule setting forth the items upon which this money is to be expended. la other words, the measure will resemble an ordinary Works Bill, inasmuch as it will contain" a schedule of works, but with this difference, that any money which may be unexpended at the end of the financial year will then be utilized by the Department to continue such works.

Senator Millen - So that the Government intend to circumvent the Audit Act.

Senator PEARCE - I do not know that that is the proper way to put the position, because the requirements of the Audit Act can be met in another way, as the Leader of the Opposition knows. I ara sure that those honorable senators who have had much departmental business to transact must have long ago concluded that the time is rotten-ripe when we should attempt to put the Post Office in an efficient condition, and that can be accomplished only by a large expenditure upon works. The ,£700,000 represented in the ordinary Estimates of the Postal Department is supplemental to that, and it is proposed to follow that expenditure by another vote of £700,000 next year, as the officials estimate that, to put the Department upon a proper footing, an expenditure of £2,000,000 is necessary. It may be asked, " Why not embody the whole expenditure of £2,000,000 in these Estimates ? ' ' The answer is that it would not be possible during the current year to carry out the whole of the works which are necessary. Consequently, I ask honorable senators, in their criticism, to remember that, under the proposal of the Treasurer, the control of Parliament will be amply safeguarded. They will have an opportunity of discussing the items, which will be set out in the schedule of the Trust Bill. If any of those items are eliminated, this money will remain in the Trust Fund ; and if, when the works authorized are com pleted, a balance is available, that balance will be paid into the Consolidated Revenue in the ordinary way. Amongst the main items in this Bill are the following : - - Store at Darling Island, Sydney, £35,053 ; towards ,the completion of the Military College, £40,000; cost of the establishment of the Federal Capital at Canberra, £100,000 j Transcontinental Railway, Kalgoorlie to Port Augusta, ,£22,500 ; Naval Barracks, Submarine Depot, £53,000 ; New Quarantine Buildings, £32,800 ; Small Arms Factory, Lithgow, £19,000; Cordite Factory, Maribyrnong, site and works, £16,615; Beerburrum manoeuvre area, £13,608; Sydney Parcels Post Office. ,£25,000 ; Wireless Telegraph Station, Fremantle, £11,000; Purchase of sites - Post and Telegraph Offices, £50,000 ; Telegraph and Telephones - ordinary vote for construction, £700,000; Telegraphs and Telephones - special vote for construction, £600,000; Defence - warlike stores, £300,000 ; cost of providing four batteries Field Artillery, £45,000 ; rifles for Senior Cadets, £65,000 ; reserve of gun ammunition, £31,700; armament and stores for fixed defences, £55,650 > to replace condemned ammunition, ,£12,000 ; raw material for Cordite Factory, £10,000; naval works, dockyards, &c, £20,000; re-armament of the vessels Protector, Gayundah, and Paluma, £20,000; buildings for the Northern Territory, £26,900. The votes for the Home Affairs Department, of course, contain expenditure, not for that Department purely, but for all other Departments. I do not propose in my remarks at the present stage to enter into details concerning those votes, because a more convenient opportunity will arise for making explanation* concerning them in Committee. But I think it advisable, as some of these departmental votes are in the nature of policy, that 1 should make a few remarks now. It will be noticed that there is a vote for new quarantine buildings of £33,280. That has been rendered necessary by the fact that, when the Commonwealth Government took over quarantine from the States, in many cases the buildings that had been used for quarantine purposes were not transferred. This was not a transferred Department in the ordinary sense. Some of the buildings were retained by the States. It has been found necessary, therefore, to provide buildings in a number of the States for quarantine as conducted under the Commonwealth; whilst in other States in which buildings were taken over it has been found necessary to renovate and extend. Consequently, we have on these Estimates a pretty substantial vote for that purpose. I think that practically all the items for works under the control of the PostmasterGeneral's Department are of a detailed character, which can be best dealt with in Committee. The only items which, perhaps, call for comment are those relating to wireless telegraphy stations. Of two wireless stations at present in course of completion, the one at Pennant Hills, Sydney, is in the more forward condition, and only ,£5,000 is asked for the purpose. But for the purpose of the Fremantle station ,£"11,000 is required.

Senator Sayers - Is no vote proposed for wireless telegraphy elsewhere?

Senator PEARCE - Not under this Bill. There is, of course, provision for wireless telegraphy generally, but not for any specific establishments. That is to say, the Post and Telegraph Department has obtained the services of an expert in Mr. Balsillie, who will recommend where wireless telegraphy should be established. If in Committee honorable senators choose to ask for information on that point, I shall endeavour to find out what stage the expert's reports have reached, and what particular points in the various States have been selected for the establishment of stations. I may mention generally, however, that it is the intention of the Government to proceed with the establishment of wireless telegraphy stations around Australia, apart from the two which I have mentioned, though it is not proposed that they shall be of the same expensive character as the stations at Pennant Hills and Fremantle. In connexion with the Department of External Affairs, a commencement has been made - perhaps on a small scale, but still a commencement - with the problem of the development of the Northern Territory. These Estimates contain votes for various works that will be necessary to commence that development. Obviously, there cannot be a large amount for the purpose at present, because the work that is being done is largely of the nature of inquiry. Scientific and survey expeditions are being sent out to various parts of the Territory, in order that the Government may be able to formulate a developmental policy. Most of the expenditure represented in this Bill is caused by the necessity for inquiry, analyses of soils, establishment of ex perimental stations, and so forth, in order that the Government may be able to decide on scientific lines what the nature of the development shall be, and how it shall be carried out. Coming to the Department over which I have the honour to preside, honorable senators will recognise that a very substantial vote is included in this Works and Buildings Bill. A considerable portion of the money asked for, however, is for the purpose of works that have already been authorized by Parliament. In that connexion I may mention the Lithgow Small Arms Factory, the Cordite Factory, the Military College, construction of rifle ranges, and the armament of our forts with modern guns, together with the extension of fortified places in the Commonwealth. A new policy in connexion with defence is the commencement, for the first time, of a Works Department under the control of the Naval Branch. The Government have determined to make a new departure in this respect : - That naval works, so far as they partake of a marine character - that is to say, such works as constructing dock-yards, shipbuilding, and depots - will be carried out by the Naval Branch of the Defence Department directly, and not through the Home Affairs Department. The construction of buildings ashore, however, and the acquisition of land, will still pertain to the Home Affairs Department, even when the work is done for the Defence Department. The Naval Branch has had placed upon its shoulders also the responsibility for the construction of vessels for the Commonwealth. I do not refer simply to vessels built for the Defence Department, but also for the Department of Trade and Customs. There are votes in the present Estimates for the construction of certain Customs vessels by the Naval Branch of the Defence Department. Although it must be admitted that the Defence votes are large, and in some senses new, the policy which they are intended to promote is not new. That is to say, these votes are for the purposes of the policy which Parliament has decided upon. Honorable senators will observe, in looking through the Works Estimates, and general Estimates, that the vote for rifle ranges has mounted up from ^17,000, the actual expenditure last year, to- £"70.000 in the present year. The Defence Department has been subjected tocriticism from time to time with regard tothe provision of facilities for rifle clubs and rifle shooting. But I venture to say that when honorable senators consider that the expenditure has risen to .£70,000 they will admit that the Government are making an honest effort to meet the requirements of the riflemen and of rifle shooting throughout the Commonwealth. In regard to special defence material, honorable senators will know that some four years ago it was decided, on the advice of the Colonial Defence Committee, that the fortifications around Australia, which were then deemed to be of an old type, armed with ancient guns, should be re-armed with the most modern weapons of the same calibre. There were, therefore, votes for the displacement of the old guns by new ones. The policy is being continued this year, and provision is made on the Estimates for placing new guns at the fortifications at Melbourne, Sydney, and Newcastle, and for new additional guns at Thursday Island. One very large vote is represented by the Lithgow Small Arms Factory. There has been considerable delay in the establishment of that factory, and I should like to give a short history of what has occurred. When Sir Thomas Ewing was Minister of Defence, he invited offers from firms throughout the world for the erection of a rifle factory capable of turning out fifty service rifles per day of eight hours. He did not provide plans and specifications, which contractors themselves had to supply with their tenders. When the first Fisher Government came into office they found that tenders had been called for on that basis, and that there were various types of machinery in use in such factories. One practice in the manufacture of rifles was adopted in America, and another in England. The English firms tendered according to the English system, under which, roughly speaking, a separate machine is used for the manufacture of each part of a rifle, and is not adjustable for the manufacture of any other part. Under the American system a lesser number of machines are used, and the cutters and gauges are so adjustable that one machine may be used for the manufacture of several parts of a rifle. Of the two tenders which, in the opinion of the Department, were the cheapest and the best, one was an American tender on the American system, and the other an English tender on the English system. The latter tender represented a very much larger sum of money than the former, but it was argued that the method of construction gave cheaper results.

Senator Sayers - What was the difference between the tenders.

Senator PEARCE - I cannot give the exact amount, but the honorable senator will be able to find what it was by consulting a parliamentary paper which has been published in connexion with the matter.

Senator Millen - There was a very substantial difference.

Senator PEARCE - Yes; speaking from memory, I think the tender of the American firm was for £60,000, and that of the English firm for about .£120,000. Prior to the receipt of the tenders, Sir Thomas Ewing had sent to England EngineerLieutenant Clarkson, an officer of repute in the Commonwealth service, to look into and study the business of rifle manufacture. The various, tenders were by correspondence referred to Engineer-Lieutenant Clarkson for his report. It became a question of correspondence between the Commonwealth Government, represented first of all by Sir Thomas Ewing, later by myself, and later again by Mr. Cook, and the tendering firms, to find out exactly what they were prepared to supply for the amounts of their tenders. As I have said, no specifications were laid down by the Commonwealth, and I remember that it was an extremely difficult matter to judge as between the two principal tenders which would be most advantageous to the Commonwealth. Eventually the American tender was so supplemented by guarantees, and in other ways, and its advantages were so clearly pointed out, that Commander Clarkson, who had been promoted in the meantime, was satisfied that the American tender would give the best return to the Commonwealth, and lie finally recommended1 that it should be accepted. That recommendation was received, I think, just before the first Fisher Government went out of office; and when Mr. Joseph Cook assumed control of the Defence Department one of the earliest acts of his administration was to accept the tender of the American firm. There are some terms connected with the contract which I cannot at present make public. The tenderers are considerably over the contract time in the supply of the machinery. They asked me, when I became Minister of Defence for the second time, to give them an extensionof time for three months. I gave them an extension for one month. They also put forward a claim for compensation, on the ground that specifications supplied by theRoyal Enfield Rifle Works of England, the manufacturers for the British Army, were not correct. We, of course, repudiated any idea of compensation. They asked also that the penalty for delay in the completion of the contract should be waived on account of laxity in regard to the specifications. I said that I would consider the question of waiving the penalty when the contract was completed. We have consulted the Crown Law authorities, and believe we have done the best thing possible throughout in the interests of the Common wealth, but it would 0Dviously not be in the public interest that I should make public the exact position, nor the exact nature of the claims made by the company. I am giving the Senate this information because I think it will tend to clear up a doubt which seems to exist in some quarters, that since we have not yet exacted the penalty for' delay in the completion of the contract we have in some way waived the rights of the Commonwealth.

Senator Sayers - That is publicly stated.

Senator PEARCE - I am aware of that. I point out that the penalty can always be inflicted at the termination of the contract, should we consider it advisable and right to do so. So far as I am aware, we have not waived any of our rights by any action so far taken.

Senator St Ledger - Is there any threat or imminence of legal proceedings in connexion with the matter?

Senator PEARCE - There is no threat or imminence of legal proceedings so far from either side. I do not think the position of the Commonwealth in the matter has been jeopardized in any way. I consider -that it is a business attitude to take up to insist that the contract must first of all be completed before we decide what we shall do with regard to the infliction of a penalty, or with regard to any claim which the company may press for compensation. The fact is that from whatever cause, the completion of the contract is long overdue.

Senator Givens - It will be nearly two years overdue by the time it is finished.

Senator PEARCE - No, it is nearly a year overdue.

Senator Millen - Does the honorable senator remember what was the time limit in the two tenders?

Senator PEARCE - I do not; but the paper to which I have referred will give that information. There was a time limit in each case, and the English tender I know stipulated for a much longer time than did the American tender. I believe that the difference in time was one of the factors which induced Mr. Joseph Cook, as Minister of Defence, to make up his mind to accept the American tender. ' Just before I left office, with the first Fisher Ministry, the departmental officers had pointed out in connexion with the question of time that under one tender we might be manufacturing rifles during the time when the other tenderers were manufacturing the machines. The position now is that practically all the machinery has been delivered and is being installed. The buildings are about completed. The power plant, which was made in Australia, at the Cockatoo Island Dockyard, has also been delivered, although it has not yet been officially taken over. It is being put through a series of tests to satisfy the departmental officers that the specifications have been complied' with.

Senator Millen - Was there not some little trouble in connexion with the power plant.

Senator PEARCE - Yes, it was found that it did not come up to the required test, and that is now being adjusted. The whole of the factory is approaching completion, and the acting manager informs me that he believes that before the end of the year it will be in full working order. In regard to the Cordite Factory, work has been proceeding steadily, and a stage has been reached when they are making the constituent parts for the manufacture of cordite. A large quantity nf nitric acid has been manufactured, and the manager tells me that towards the end of the present month he expects to be turning out cordite from the constituent parts, which have been already manufactured. I wish to refer briefly to what is proposed in connexion with the Naval Department. If honorable senators will turn to the Estimates they will see a vote of £20,000, put down for dockyards,. dredges, piers, wharfs, surveys, and other naval works. We had a report from Admiral Henderson as to what, in his opinion, were the best lines on which to base the Commonwealth naval policy. In their naval policy the Government are endeavouring to follow these lines, as far as the recommendations made cover the immediate future. In his report, Admiral Henderson saw fit to refer to a period of time covering twenty-one years, which he divided into three periods of seven years each. So far the Government are directing their attention to the first period of seven years; although, ns Admiral Henderson points out, what is done to-day ought to be done with a view to the period ahead, and the development which will follow from the taking of the proposed steps. As regards naval development and naval works, his main recommendation was that there should be a chief eastern naval base and a chief western naval base. At the outset he recommended that Sydney should be the eastern base, and that Fremantle, or a place in its vicinity - Cockburn Sound - should be the western base. He also recommended that round Australia, there should be subsidiary bases for various purposes, and he instanced Westernport, in the vicinity of Hobson's Bay, Port Stephens in New South Wales, Port Lincoln in South Australia, Thursday Island, and Port Darwin. The amount which is asked in these Estimates largely represents surveys of the various places which he indicated, with a view to ascertaining whether they comply with the requirements which he laid down. In making his recommendations, he had at his service all the data which had been collected by the State Departments, the various surveys which had been made, and all the knowledge in the possession of the Navigation or Marine Boards. But it was obvious that the data as to some of the sites could not be definite. Take, for instance, Cockburn Sound, in Western Australia. That is not at present what we would call a harbor. The mouths of what is deemed to be the harbor are closed by shoals in one place and by rocks in another. We are asking the State Government to have borings made to see whether it is practicable to blast a passage through the rocks, or cut a passage through the shoals of sand. We are also taking steps ourselves to have surveys made of the land in the vicinity, to plan what should be done there to create a naval base, so that later we shall be armed with all information as to actual cost, and able to tell Parliament exactly what we propose to do, and where we intend to place the work. That we are not able to do to-day, because we have not the data. This vote, although it looks formidable in its wording, is largely required for works pf an exploratory character, because what I have said about Port Cockburn also applies to Westernport and Port Stephens.- In each of the last two mentioned places we desire to have surveys and trial borings made, in order that we may be able to decide where to place dock yards and naval works of various kinds. Admiral Henderson took it for granted that the Commonwealth was prepared to adopt the recommendation of the Imperial Conference of 1909, that we should establish a fleet unit, providing as it did for three submarine boats. He took into consideration the question as to where the boats should be located, and he recommended that one should be located at Westernport and one at Port Stephens ; the former base to be used as the headquarters for the southern coast, and the latter base as the head-quarters for the north-eastern coast. He also recommended that we should take steps to provide for the training of the personnel, who would be raised in Australia for the manning of the Fleet Unit. In the Commonwealth service we have a number of old gun-boats which, according to our naval advisers, are perfectly fit for training purposes. I refer to the Protector, the Paluma, the Gayundah, and a couple of torpedo boats. The recommendation of our naval advisers is that, if these boats were each armed with an up-to-date gun, so that gunnery instruction could be given, they would be useful for two purposes. First, for training the Naval Reserve, which will be raised under the Defence Act - that is, youths who are over eighteen and under twenty-five years of age - and have to go to sea for twenty-five days in each year. Not only would the boats be useful for training these lads, and making them a valuable reserve for the Fleet Unit, but they would also be useful as recruiting boats for the personnel of the Fleet Unit. At present recruiting is carried on by the Australian Squadron, which is, of course, under the control of the Admiral. Some 400 Australians are being trained there, besides 200 or 300 who were enrolled for the Royal Naval Reserve. Those who joined the Naval Squadron during the last year or eighteen months were told that, in joining, they were practically undertaking to serve in the Australian Fleet Unit, and they signed on with that understanding ; so that when the Fleet Unit takes the place of the Australian Squadron, the Australians who were enrolled during that period will pass over to the Australian Government, and will be used to man the Fleet Unit. It is necessary to supplement that number, because we shall require about 800 of the lower ratings for the Fleet Unit. Following Admiral Henderson's recommendation again, it has been decided to establish a Naval

Barracks at Westernport, and there we shall give gunnery and torpedo instruction to recruits who will be recruited by the gun-boats in various parts of Australia, kept in barracks for some time of the year, and at other times sent to sea. There is also a proposition to do the same thing at Garden Island, in Port Jackson, with the consent of the Imperial authorities.

Senator Givens - Will they retain Garden Island after the Fleet Unit is established ?

Senator PEARCE - No. When the Fleet Unit comes to Australia, they are prepared to hand over to the Commonwealth, free of cost, the whole of the naval establishment in Sydney.

Senator Sayers - That is very generous.

Senator PEARCE - It is very generous indeed. We are asking the Imperial authorities to allow our recruits in the interim to go into the Garden Island establishment, and from there to be drafted on to the drillships - the Pyramid and the Psyche - which are set aside for that purpose. This vote on the Works Estimates is intended for the establishment of Naval Barracks, and a Gunnery and Torpedo School at Westernport, the idea being to get as many Australians as possible, so as to insure that in the Fleet Unit all the lower ratings shall be Australians. The expenditure of another, large sum in connexion with the Defence Department is rendered necessary by the universal obligation to train which has been laid upon the youths of Australia. A sum of £65,000 is required for procuring rifles for the Senior Cadets. Orders have already been placed, and the object of this vote is to supplement them, so as to secure the necessary number of rifles. On the military side we have the advice of Lord Kitchener, which was tendered to a previous Government, and which was largely accepted and followed by the present Government. On that advice we are adding to the field batteries of Australia four batteries per 3'ear, and the Works Estimates contain an item of .£45,000 towards that object. A new item, which also marks a departure and a new policy in defence, is an item of £31,700 to establish a reserve of gun ammunition. When we came to consider the position of our field artillery we found that the reserves of artillery ammunition were dangerously small. When we recall the quantity of ammunition which was expended in a gun during the Japanese- Russian war we can realize how danger ously low our reserves of field gun ammunition have been in the past. Unless we take the proposed step we may find ourselves at some time in an awkward position. Suppose that we were cut off from Europe by sea for a few weeks, we would have very great difficulty in providing ammunition for field artillery. There are no manufacturers of the ammunition in Australia, and, therefore, it became imperative that some steps should be taken. Two courses were open to us : either to establish a factory for the manufacture of shells for field guns, or to establish a reserve of this class of ammunition. In time of peace our consumption of field gun ammunition and ammunition for the fixed defences is too small to employ a factory during the whole year. A huge sum would have been required to establish a factory, and when it was established our requirements would have been too small to keep it economically at work. Therefore, the Government decided that, until our consumption of ammunition is on a larger scale, it was imperative to establish a reserve of this ammunition on which we could fall back in time of war, if supplies from the Mother Country were cut off.

Senator Chataway - What is the value of the ammunition expended in a year during peace time?

Senator PEARCE - I cannot give the value, but I can get it foi the honorable senator.

Senator Millen - The real point of interest is, by what amount will the proposed vote be in excess of the consumption for the year ?

Senator PEARCE - This is the first vote of the kind, and it was compiled by the Chief of Ordnance with a knowledge of our annual consumption of ammunition. I may mention that this reserve will not be charged shells, because cordite is one of those tricky explosives which cannot be kept for any great length of time. From the time it is manufactured it begins to deteriorate, especially in a warm climate.

Senator Chataway - It does not get more dangerous, like melignite?

Senator PEARCE - Yes, it does. In the case of all these high explosives deterioration means danger, and once a certain point is reached the article has to be destroyed. Our inspectors are continually going round and testing the cordite, and since I have been at the head of the Department we have had to destroy over £10,000 worth of this explosive. ' What we propose to do, therefore, is not to store the cordite, but to store the metal parts of the cartridges - the shells. Then, having the cordite works, we shall always be in a position to charge the shells in time of war. This reserve, I need scarcely point out, will not deteriorate. The shells will be as good in ten years' time as they are to-day. This is a new departure; but I think honorable senators will agree with me that it is a very necessary one. Then there is an item of£12,000 for replacing condemned ammunition. This does not refer exclusively to cordite which has deteriorated, but to ammunition in store for the old type of 6-in. guns. This ammunition has now become useless, owing to our having mounted more modern guns. Wherever it was possible to do so, we have used this ammunition; but, of course, we have not been able to use the whole of it. There are one or two places, too, where, according to experts, additional steps will need to be taken to make the proposed naval bases which we are establishing safe. That is to say, we shall require to mount guns of a heavier type, and we shall also need to extend the fortifications in those places. It is obvious that, if we have a formidable Fleet - and our Fleet, though small, will be a formidable one - no fleet will attackus unless it is equally formidable, both from the stand-point of the range of its guns, and of their penetration. Therefore, any ships sent down to attack our bases will be vessels carrying guns of a certain calibre. That consideration has caused us to extend our policy by arming our fixed defences. The amount which is set out on these Estimates represents the preliminary expenditure towards that end. I wish now to say a word or two regarding the Government policy in connexion with the factories which have already been established. In those factories, a system of accounts has been instituted by means of which we hope to be able to check the cost of production. We hope that these factories will be able to turn out the goods they are supplying as economically, if not more so, as we have hitherto been purchasing them from the contractors.

Senator Chataway - They will need to be an improvement on the Post and Telegraph Department.

Senator PEARCE - We ought to be able to profit by the mistakes of other Departments. I repeat that a system of bookkeeping has been instituted in these factories, so that we shall be able to check, the exact cost of materials, of labour, and of production. I do not know that there are any other items in the Bill to which I can direct attention at this moment. Most of them are of an ordinary character, and simply give effect to the policy which has hitherto been adopted. Certainly, we are asking for larger amounts than have previously been voted; but these larger votes do not relate to new items. During the past twelve months we have placed very huge contracts for clothing materials, and these contracts are provided for upon the Estimates now under consideration. Both the production of the cloth and its manufacture into uniforms are being carried out in the Commonwealth. Although there have been some complaints about the nonsupply of uniforms to Cadets, honorable senators must recollect that it was only in 1910 that the Bill was passed which authorized the increase of our Defence organization ; so that only a little more than twelve months have since elapsed. During that period, we have passed through one of the busiest years Australia has known, our factories have been working up to their full capacity, and we have had to go round and, as the Americans say, "hustle," in order to get our contracts placed, both for the supply of cloth and of uniforms. Though here and there we are slightly behind in the supply of uniforms, in most cases, they have been sent out as soon as the lads have been ready to receive them. In conclusion, I merely wish to say that any information which I can give to honorable senators, either in replying upon the motion for the second reading of the Bill, or in Committee, I shall be only too pleased to supply, because I recognise that Parliament has an undoubted right to the fullest information in respect of any subject which is dealt with in these Estimates. All I ask is that honorable senators will, as expeditiously as possible, pass the Bill, so that the many useful works for which it provides may be commenced, and that the Government may get going with many undertakings for which both Parliament and the people have been clamouring for a long time.

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