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Wednesday, 8 May 1968

Mr FAIRHALL (Paterson) (Minister for Defence) - Running through many of the speeches made in the defence debate in the last day or so was the theme of change in Australia's strategic circumstances and the need to reappraise the situation and to indicate the direction of our defence policy in the future. One could sense the general awareness and acceptance that new and important factors are coming into play in South East Asia. Examples of this are the British withdrawal from Malaysia and Singapore and the contact that has been made with Hanoi in relation to the war in Vietnam.

I well remember the Deputy Leader of the Opposition (Mr Barnard) making great play, as he thought, of the suggestion that the Government was surprised by the withdrawal of the British forces from Malaysia. It is quite interesting to read to the House an article which appeared in the 'Australian' of Saturday, 12th November 1966. The headlines in this article - and I blush to mention it - were: 'Fairhall upsets UK diplomats, Britain is pulling right out of Asia, he says'. The article went on to state:

The Defence Minister, Mr Fairhall, has shocked British diplomats in Canberra by saying that Britain will soon withdraw all her forces from South East Asia.

There is nothing known to be about this matter that is not known by the Cabinet. Therefore, it is quite clear that the Government has known about this for a long time and has been working in anticipation cf a complete withdrawal of British forces from South East Asia. We do not have to discard the fundamental principles that have guided our defence programme in the last decade. The strong and close ties with the United States of America will always be of prime necessity to this country. Mutual defence arrangements with countries of South East Asia are of tremendous importance. We will continue in our pursuit of regional security in its broadest meaning in South East Asia. But of course some of our broad objectives will be sought against an environment different from that which we have known in the past.

During the course of the debate some mixed views were expressed. Some of these views showed a little confusion and some showed a little old-fashioned thinking. But I suppose we should not be surprised at that. The general tenor of the debate clearly mirrored our uncertainty of the future. The honourable member for Batman (Mr Benson) pointed out that forecasting in the defence field was anything but a precise science. He can underline those words. At the moment we are on the eve of contact between the United States and North Vietnam. This is only a contact. We ar; not to know at this point of time how this contact will develop. It might not develop at all. but we certainly hope it will. We hope the contact will result in a meaningful overture of peace before too long. But the war in Vietnam will come to a close sooner or later. Who knows when that will be in precise terms? No one can see clearly what the situation is going to be in Vietnam. The war could move throughout the whole South East Asian area and into the western Pacific. This is the kind of situation we face. On the whole, I think it was refreshing to find there was agreement during the debate on the uncertainties of the present situation and the importance and complexity of the issues. All honourable members suggest it would be unwise to take binding decisions at the moment as to the sort of course we should follow and the sort of programme we should pursue. I was at some pains to point out that the forthcoming five-power talks in Malaysia in June are very relevant. Of course, the course of events in Vietnam is also important.

When we engage in planning we have to contemplate the kind of situation which is likely to occur in 5 years, 10 years or perhaps longer. I believe that in this atmosphere of uncertainty there is just no wisdom at all in proceeding with a 3-year plan which looks forward to a 5-year or a 10-year term about which there can be little certainty in anyone's thinking. This is the prime reason behind the delay in the announcement of a following 3-year programme to succeed that which will conclude in June next. Nevertheless it would be .wrong to assume that the intervening year, 1968-69, is going to be a wasted year. The fact is that there is a tremendous job of assimilation of the equipment now coming forward under the last 3-year plan. We still know the direction of a considerable amount of our defence responsibilities. But there, is an area of uncertainty throughout South East Asia. Until we can see our way through the five-power talks and assess the results, 1 think it would be imprudent to establish a 3-year programme.

Looking into the future, there has been some talk, and quite rightly so, about the amount of our resources we can reasonably devote to defence. There has been some suggestion that the Treasury is clamping down on the amount of money which will be available for defence spending. 1 do not recall anything that has been said inside or outside the Parliament by the Government which indicates that there is to be any clamping down on what the Government considers essential to our defence. What there has been is a right and proper warning to the people of this country that the burden of defence has risen enormously, as it has in the last few years, as it must rise again next year, and as it may well continue to rise. But there is a right and proper time to consider how much of the resources of this country will be devoted to defence, as indeed, to the other, responsibilities of government. These things cannot be dealt with on an ad hoc basis. They will be dealt with at the right and proper time. This will be at Budget time.

Emphasis during the defence debate has been on the need to have the defence forces well rounded and self reliant. 'Australia now providesthe logistic support for her own forces which in earlier Wars was furnished by major allies. From: the strategic and technical angles, we have vastly improved the air transport facilities for our forces. 'We have an excellent helicopter support. Our engineering capability and our repair and maintenance, facilities have also been improved. This is all very costly in men and equipment. But it does reflect Australia's growth and technological development.It makes our forces more acceptable as part of a. larger. allied force and givesthem the capability . to operate independently in situations where this may be necessary, I : well understand that there should be demands from both sides of the House for more of this and more of that. There are those who. believe, for example, that we ought to concentrate on the Navy. Such people argue that; there is uncertainty in the Indian Ocean area and that this country has a long coastline. There are those who believe that we ought to rely more on garrison forces at home ready for quick deployment into any theatre. There arc those who believe that the Air Force ought to be strengthened in all of its branches. The truth is that we must have a little more of each of these things. But merely to demand more of everything does not amount to a policy. If someone likes to sit down and tot up the kind of budget allocation we would have for defence if we integrated alt the demands that were made for the three arms of theforces, and satisfied those demands I think we would have a formidable total indeed. It certainly would swamp the Budget. Nevertheless, 1 have talked about the expansion of the capabilities of the three arms of our defence Services and of that section which is administered by the Department of Supply at home. The Government will certainly be working to expand all of these capabilities.

It is rather intriguing to see the number of members who speak in debates, of this nature who . compare the performance of this country with that of Sweden. I have an enormous respect for Sweden.I know something of its engineering capabilities, and I know what the Swedish people have done in the development of their country. I know of their achievements in the fields of social services and education. They are comparing a country of 3 million square miles at the end of a line of communication with a nation of 173,000 square miles. We have a population of nearly 12 million; their population is7½ million. I venture to suggest that if we had our 12 million people in an area of 173,000 square miles we would have a vastly smaller problem in developing port facilities and in providng roads, telephone - systems, broadcasting facilities and all the other things that make a tremendous demand on national development. lt is freely understood that national development underlies whatever we do in the field of defence. In 1966-67, the last year for which I have figures, Sweden spent approximately $US1 , 000m on defence compared with our defence budget for this year of $A 1,1 18m. This represents 1 6% of our total national Budget and about 4.5% of the estimated gross national product.

If we compare Sweden's expenditure with ours, it will be seen that we are devoting about the same percentage of our gross national product to defence. What this plainly indicates, if figures indicate anything, is that productivity in this country is lower than in Sweden. So 1 hope we might turn our attention to the need to do in the field of industry what the Swedish people have been able to do. The Swedish armed forces are intended to be primarily defensive; they are not meant to be used outside the country. There is, therefore no need for such expensive items as longrange missiles, aircraft carriers, strategic bombers and heavy land-based armour. In addition, we must understand that from an industrial point of view Sweden stands in the midst of one of the world's great markets, but it does not stand on the traditional invasion routes nor is it near any of the traditional battlefields. The fact is not since 1810 has Sweden been engaged in serious warfare. It is not reasonable to try to compare what Sweden has done in the defence field with what we in this country are obliged to do. Ours is a big country, far away from our friends. We are living in one of the most disturbed areas of the world. These circumstances impose tremendous responsibilities and burdens upon us.

The Fill has come in for a good deal of comment and criticism during the last day or two - and quite rightly so because we day not want to avoid debate. The honourable member for Corio (Mr Scholes) was good enough to pay tribute to this aircraft. He pointed out that the Fill would be superior to anything that we are likely to encounter. Whilst I appreciate the reference to the aircraft his remarks do seem to indicate that his thinking is a little behind the times. The Fill is npt a fighter to be engaged in dog-fights; it is a strike reconnaissance aircraft with a tremendous penetrating capacity. One does not overlook the fact that this aircraft as Colonel A. P. Butterfield the United States Air Force liaison officer on this project is reported to have said to the Royal Aeronautical Society here in Canberra a little while ago has truly been assassinated by its critics.

We all are aware of the criticism of this aircraft. That criticism began in 1963, because it was in that year that two aircraft, the TFX in America and the TSR2 iri England, matured as the only aircraft likely to fulfil the needs of the Air Staff. That happened to be before an election and the Australian Labor Party was quite happy to get on the bandwagon and use this criticism as a theme for that election. This is all very legitimate. We are used to criticism of this kind. It is the very coinage of politics. But amalgamated with that was the kind of criticism which grew up in the United States about a variety of things - whether or not the contract should have been awarded to the General Dynamics Corporation and whether or not Robert McNamara's policy of a single aircraft for the needs of the Navy and the Air Force was a good one. Al] these criticisms were imported into Australia, whether they had relevance or not, and were heaped on to this unfortunate aeroplane, so much so that criticism of it has been allowed to obscure our need for it and the aircraft itself.

Much has been said about the price of the Fill. I came back to a passage which appeared in the Melbourne 'Age' of 18th November 1963 in which the Minister for Defence at that time, the late Mr Athol Townley, stressed 'that the cost of £A56m he had announced last week for Australia's twenty-four TFX bombers had only been an estimate'. That has been completely lost sight of by the critics, but certainly not by the Government. The complaint is made that we have not been able to put down a final price for the aircraft as yet. I would be interested if somebody would tell me how we could possibly put down a final price for a product which is still in the course of research and development when the contract says that we shall pay for that research and development. I want to know how it is possible to indi:ate a price for this aircraft' which is based on cost of delivery when the aircraft has not yet been delivered. We put in some provisos about escalation of costs. Provision was made over and above the ceiling price of $US5.95m for the fly-away aircraft for an escalation in labour and material costs during the course of production. The Deputy Leader of the Opposition rose in his place and said that this was something new, that he had never heard of it before. All I can say is that for a man who presumes to be an expert on this subject he has not been listening very carefully because on two occasions in quite major speeches to the House - on 12th May 1966 and again a year later on 9th May 1967 - my colleague the honourable member for Fawkner (Mr Howson) made two quite long statements on the Fill in which he mentioned quite precisely this proviso to which I have referred.

The Deputy Leader of the Opposition said that the comparison ! made between' a Boeing 727 and the Fill was absolutely incredible. I suppose it was, but not in the way that he tried to imply. Here we havea Boeing 727, a civil aircraft of quite normal performance, costing $5. 14m. We are asked to pay only $5.95m for a most sophisticated aircraft of greater weight, of enormously greater speed, of tremendously greater performance all round in terms or load and range, and facing the technical problems of variable geometry. So much of what is built into this aircraft was not within human knowledge when the project was entered into. To all these things we have to add the navigation systems, the fire control systems, the terrain-following radar, electronic counter measures and all the rest of the gadgetry which cannot be talked about because it is on the secret list The honourable gentleman said that it was wrong to compare $5.95m for this highly competent, sophisticated package of military hardware with an ordinary civil aircraft. If anyone is wrong about the comparison it is the honourable gentleman.

My good friend the honourable member for North Sydney (Mr Graham) this afternoon dealt very thoroughly, and I thought competently, with the comparison between the performance of this aircraft in flight and that of military aircraft of the last or succeeding generation. I do not propose to go over that. The losses of the F111s are regrettable, but it is a great shame to find that a man even like the honourable member for Warringah (Mr St John) should have joined the ranks of the critics because he is a legal man who, if I understand rightly, is accustomed to testing his evidence. He has taken references out of a newspaper, quoted from another newspaper, to condemn this aircraft. I invite the honourable gentleman to start checking his evidence. I understand his quite right and proper concern about the state of this aircraft when we receive delivery of it. May I point out that the United States of America has a vastly bigger stake in the performance of this aircraft than we have. It is highly unlikely that that country will let it go into service with a known fault. But the kind of flying that has been done and is being done is still very much in the early stages of development.

We delayed delivery for a year so that we would have some of the bugs out of it at American expense. The House may rest assured that when we get our aircraft delivery will not be taken until they have been thoroughly inspected and thoroughly tested and we are satisfied that there are no mechanical faults within them. The debate has opened a good range of new fields for thinking in terms of defence. We understand clearly that new responsibilities are coming up. They will impose new burdens upon us. The House has accepted them, as I understand from the debate in the last few days. I sincerely hope that the Australian people will understand that the Government has these matters well in hand and we will follow a course that we best perceive to be in the national interest.

Question resolved in the affirmative.

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