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Wednesday, 19 April 1972
Page: 1234

Senator James McClelland (NEW SOUTH WALES) - It is the oft repeated claim of the Government that its policy is to maintain a small, viable aircraft industry. This was stated in October last by the Minister for Supply (Mr Garland) when there was a debate on a subject such as the one we are debating today, and it was repeated by the Minister today. But, he says, it is in the nature of the aircraft industry that it is characterised by unavoidable peaks and troughs. At the same time he admits that work levels in the industry are largely dependent on defence orders. This is really an admission that the Government does not have a coherent, continuing defence policy, but that in this, as in other spheres, it procedes in fits and starts. The Minister admits that the industry is at present going through a trough, but, to quote his inimitable jargon, endeavours are being made to overcome the problem'. This, of course, is one of those delightfully vague phrases that are used to fob off criticism, and it raises the question why there is any need for troughs at all.

We know, of course, as everybody knows, that aircraft become obsolete and have to be replaced by more modern aircraft. But does there have to be a hiatus in this process? Why is it not possible for a Government with foresight to plan and be ready to proceed wilh production of an aircraft coincidental with the cessation of production of another aircraft? An interesting case in point is the Project N, which has been referred to by earlier speakers. As was pointed out, Project N is a short take-off and landing light-utility turbo-prop aircraft capable of carrying about 13 passengers. It is the first wholly designed and built aircraft in the past 20 years.

On 21st December last the 'Australian' newspaper carried a story purporting to claim that some of the design staff of the Project N aircraft had resigned from the Government Aircraft Factories in Melbourne, and that more resignations were imminent. This story said there were about 60 members in the Project N team and officials there were concerned that unless the Federal Government soon gave the green light for production of the turboprop aircraft, a fair proportion of the team would resign. The manager of the Government Aircaft Factories, Mr Churcher, was quoted as saying:

This must be regarded as serious. The morale of the. professional team and workers is low. If for some reason the Project N production programme is not approved by the Government it will be serious for GAF and for the whole of the aircraft manufacturing industry in Australia.

Yet today the Minister states that although the 2 prototypes of this aircraft have been tested and found satisfactory, the Government has not yet committed itself to production of the aircraft. We on this side, as indeed anybody else who is following this subject, must ask the question, why not? Why does the industry have to sink into a trough? Why are skilled men dispersed through frustration because the Government in this, as in everything else, takes a long while to make up its mind?

On 12th February this year the 'Sydney Morning Herald' reported that the Army was seeking Federal Government approval to buy between 25 and 34 military versions of the Australian designed and manufactured Project N aircraft. The report went on to state that deliveries would be made over a number of years. It described the plane in the way I have already described it, and mentioned that it had a potential military and civil use and that it had beendeveloped by the Government Aircraft Factories in Melbourne. The report stated further:

Failure of the Government to order a production run has been causing great concern in the local aircraft industry which is desperate for orders.

The main reason for the delay has been the reluctance of the Federal Treasury to approve more expenditure on the Project N until certificates of airworthiness have been issued for two machines now under tests. The Treasury also has been demanding evidence of the economics of the project, both from a military and commercial aspect.

At present the cost of each aircraft to the Army could range from $250,000 to $400,000 depending greatly on the number of outside orders.

The Army's decision, that it needs the aircraft to carry troops and supplies from short and rough runways should have a big influence on any Government decision to go ahead.

Last December, the Minister for Defence, Mr Fairbairn, said interest dad been shown in the aircraft by local and overseas companies and also by a number of Government departments which use light aircraft.

There have been reports since of more overseas interest in the Project N, notably from France.

Today the Minister states that although the 2 prototypes have been tested and found satisfactory, the Government has not yet committed itself to production of the aircraft. Again, we ask, why not? Why does the industry have to sink into this trough before anything is done? At a time when the Government talks of stimulating the economy, why does it have to dither on this decision? Is it perhaps because there is some disagreement between the Ministers - between the Minister who has spoken today and the Minister for Defence (Mr Fairbairn).

Another matter, to which I have not heard any reference today, is the HS1182 jet trainer that has been adopted by the Royal Air Force. On 30th October last the London Financial Times' carried a story from its Australian editor under the title Facing a crucial decision'. In part it reads:

Within two months, the Australian Government must make a decision that is important not only to the future of the Royal Australian Air Force's requirements in jet trainers, but one which is crucial for the Australian aircraft industry.

The Government has before it a proposal from Hawker de Havilland, the wholly-owned off-shoot of Hawker Siddeley, that it should join now in a joint manufacturing programme for the HS 1182 jet trainer that has been adopted by the Royal Air Force, though the aircraft design has yet to be settled in detail.

The offer is one of collaboration m manufacture on the basis of the Australian end making some parts for the jet trainer, and also assembling, so that Australia would eventually produce about one-third of the known requirements of the British Government and, if the jet is adopted as the future trainer for the RAAF, of the local requirement. In total this would be about 250 aircraft. More important, the Australians would also have marketing rights for South East Asia for the aircraft, which can be used for combat.

The Australian Government has long maintained that it wants to see a local aircraft industry flourish. Yet at present it is the very lack of government orders which is slowly choking the 3 aircraft manufacturers - Hawker, the privately owned Commonwealth Aircraft Corporation and the Government owned Government Aircraft Factory. Apart from a few Mirage jets, there has not been any major aircraft programme in Australia since the last Vampire rolled out of the Hawker factory in 1960.

The report also states: lt is not known just how much capital the Government will be required to find to join in the HS 1182 programme, but it is not considered to be great. It is known that the defence authorities here favour the HS 1182 and would want to follow the British decision. It is also a known fact that many South East Asian orders would follow once Australia made this choice, and they are attracted to the dual trainer-combat prospects of the HS 1182.

The report concludes:

The difficulty facing the Government is heightened by political and social problems raised by the withdrawal of troops from Vietnam, and the planned run-down that will follow. But politics and social decisions apart, the simple fact is that for the Australian aviation industry, Hawker De Havilland's proposals are important. On present thinking and planning, it offers the only tangible plan to keep the industry alive in what has become a make or break situation.

That sounds like the kind of proposition in which the Government should be interested not only as a defence proposition but as a stimulus to our lagging local aircraft industry. Can the Minister say whether the report which I have just quoted is an accurate report? If so, if the project has been considered, what decision has been arrived at? If the report is not accurate, can he tell us whether there are any comparable projects under consideration? What the industry and the Opposition want is a clear cut Government statement of its intentions for the industry, no waffling political jargon such as 'endeavours are being made to overcome the problem*. I am sceptical of the Government's endeavours because I fear that it does not understand the problem.

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