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Tuesday, 26 August 1980
Page: 697


Mr SCHOLES (Corio) - The Minister for Defence (Mr Killen) was at great pains and, I think, probably a little self-conscious, which it is almost impossible to say in this House, when he said that the Government refuted the suggestion, which was not supported by evidence, that activity in the area of defence surrounded the timing of elections. It may be only a coincidence that on this occasion the Government's defence statement is being made on the day on which the Budget debate is to resume. In previous years, when the Minister occupied that office, a statement has been made at least a month and sometimes later in the Budget session. Recognising that the later dates may be illusionary because of election needs, the coincidence of the timing of this speech clearly indicates that it is being presented to the House today for two reasons; the main reason being to inject into the 1980 election campaign an air of urgency about defence - an air of urgency which is not only necessary but also is something the Australian people should understand. Whilst the Minister has outlined publicly - not included in the speech he made today- very comprehensive Government intentions on defence and has announced in round terms rather large expenditure programs which are ten or more years away from commencement, the actual figures contained in this Budget, which I suggest are not represented accurately in the Minister's speech, indicate that new expenditure on defence this year will be less than $50m.


Mr Killen - Who told you that?


Mr SCHOLES - If the Minister took the trouble to read his own speech, then if he got the estimates of his own Department as set out in the Budget Speech, and added them up, he would find that they do not come together as a cohesive whole. Someone is cooking the books. If the Minister's statement is correct then it is his Department. I will point out to the House what the Budget shows. The Minister states that this year 49 per cent of the defence Budget will be spent on manpower. That represents a two per cent increase, in real terms, on manpower expenditure. The fact is that, based on the components of the manpower assessment on which he arrived at an expenditure of 52 per cent of the defence vote for last year, the expenditure on manpower this year will also be 52 per cent. There has been no alteration in the percentage of the total defence vote, as set out in the Budget, to be spent on manpower. The Minister said on the second page of his statement:

There is also a small net provision in the defence outlay for future salary increases and revenue.

He said that there is a small net provision. It is not included in the assessment that he makes of the total percentage to be spent on manpower. The increases in manpower costs are included in the total sum where he arrives at the 52 per cent assessment for 1979-80. That small amount is $1 10m. It may be a small amount but it is a very significant amount. The total increase in cash terms for manpower in this defence budget is $252m. The Minister's assessment is based on an amount of $141m or $145m, depending on which document one looks at. Another amount of S 1 79m in the defence budget is for increased costs, charges, changes in exchange rates for equipment already on order and $52m is provided for maintenance - not new expenditure- of existing facilities. Maintenance facilities of the defence forces and the Department of Defence have been neglected over the last two or three years as a deliberate act of policy in order that money could be diverted to other areas of defence expenditure because of the Government's program of cutting costs in the defence area as in other areas of Government expenditure. So when those figures are put together, they total well in excess of $460m.

Other figures for recurring non-avoidable cost increases add another $50m to the Budget expenditure of the Government. This leaves less than $50m available for new orders when we account for falls in expenditure and some recoveries in other revenue areas. Most of the new equipment being paid for in this Budget was ordered prior to the Afghanistan conflict. It was ordered a considerable time ago. I acknowledged that the Minister has announced a number of new programs. Significant programs for defence are under consideration, not the least of which is the tactical fighter force. Unlike the Minister, at this stage I would not criticise delays in the decision. I would like to be absolutely certain that the decision will be made based on adequate information and assessment of the aircraft concerned. At least one of the aircraft is still in the developmental stage. Whilst the company concerned assures us that it does not have problems, there are recurring rumours and reports coming out of the United States Congress and from other sources such as the Canadian Parliament which indicate that problems do exist.

The Minister has indicated that this will be the most costly purchase ever made by an Australian Government. It represents an expenditure of about SI SO for every Australian. It is a major commitment that has to last us into the twentyfirst century at least. Therefore if there are any considerations which cannot be assessed confidently and if there are any considerations which cannot be made on the basis of existing information, it is important that the commitment be delayed a few months to clear up the doubts. It will not cost the Australian Defence Force, in its capabilities, anything near as much as it would cost if the decision were made prematurely.

I think it is important to point out also that the Minister has announced that a decision on the proposed carrier force will be made in the near future. The vessel being mentioned so far has not received any commitments from the United States forces. It represents an expenditure in current terms in the order of $750m. If a decision is made to proceed with such a carrier, it is likely that Australia will have to pay the research and development costs especially for alterations in the drive components which currently are not turbine but conventional and which are not being altered for United States purposes at this time. We could find ourselves involved in very heavy costs if a premature decision were made. One can say that in this case a premature decision would still be a late decision because of the inordinate delays which have taken place in bringing the matter forward for consideration, given that it has been known for more than a decade that HMAS Melbourne would be pensioned off in about 1985.

The follow-on destroyer program is a major program which has to be at least advanced significantly in the first half of the 1980s if we are to receive deliveries of vessels to coincide with the pensioning off of existing destroyer escort vessels. It has been suggested- we have suggestions only which have not been confirmed; but it is not unusual for this House to be given information until after decisions are made and I think that is lamentable - that we will continue with a production run of FFG frigates built in Australia under licence. I suggest that that may or may not be a convenient means of advancing the follow-on destroyer program. But it should be taken into consideration that the vessel, good as it may be, lacks flexibility and a capacity for altered roles.

Already an assessment done at the request of the Australian Department of Defence for a different form of equipment was found to be too expensive to proceed with. It should be the aim of the Australian Defence Force to have flexibility of capacity in its major surface vessels in order that it can carry out the variety of roles which would be expected of a defence force in the Australian environment. That environment certainly is not uniform and the major components of our Defence Force cannot be placed in a position of being operational for narrow purposes. The United States and the Union of Soviet Socialist Republics can afford that type of luxury. Australia certainly cannot. The problem of the helicopter for the FFGs must be one of the recurring scandals in defence at the moment. The first FFG was ordered in 1976. We are told that there is still not a helicopter which is capable of performing the role expected of a helicopter operating off that vessel available anywhere in the world. The United States may be restricted because it purchases only equipment which is derived from United States sources. That is becoming more and more the Australian Government's policy also. A variety of helicopters are available. I doubt whether it is beyond the capacity of the Australian Defence Force to find a helicopter which is capable of carrying out the roles for which we require a helicopter for the FFGs.

The Prime Minister (Mr Malcolm Fraser) said, in May of this year - members of the House should remember it- that we have to be ready for war in three years at the latest. We will get our first helicopter for the FFGs one year after that war has started if that timetable has any validity at all. I think it was an hysterical statement made by a person who has no commitment to honesty in the statements he makes when he wishes to influence a current political decision.

Mr DEPUTY SPEAKER (Mr Millar)Order!I ask the honourable member for Corio to withdraw the reflection.


Mr SCHOLES - I withdraw the reflection. All I can say is that the Prime Minister has never been inhibited in those statements which he makes when he feels that his political interests are involved.

The Minister has laid it on the line, I think as clearly as anyone has ever done in this House, that our current enemy is the Soviet Union and that we are preparing to be involved in hostilities against that country at some time in the future. Ministers in the present Government have previously made exactly the same statements. Members of the front bench, though younger then, made exactly the same statements about China in the run-up to the 1966 election and in the period before that. Today we are talking about defence co-operation with China - joint exercises - and it is at least reasonable to suggest that the Prime Minister consults the Chinese as much as he does the British about his future foreign policy decisions and his pronouncements. The Government's love affair with China is one of the great mysteries of our time.

The Government now is not talking so much about Afghanistan, but it is still promoting the war-with-Russia theme, both here and outside. It may be that that is the greatest threat. Certainly, I do not support the Russian action in Afghanistan. I do not believe that the projection of military power is a reasonable or acceptable means by which foreign policy or government objectives should be pursued by any power, and the Soviet Union certainly is acting quite improperly in that area. However, we ought to look at what the Government is doing in this area. For instance, we had the embargo on the Olympic Games, but that has finished now. Whether it was successful or not, it would not have made any difference to the Russian Politburo or the Russian ambitions. The Minister for Defence in his statement quoted at least one Russian general and a number of other spokesmen--


Mr Killen - He is an admiral, for a start. There is a basic difference.


Mr SCHOLES - I apologise to the Minister. I am not as well acquainted with him as the Minister is. On the other hand, the Government is acting in exactly the same way as it did in the run-up to the Second World War. At that time threats were made to Australian waterside workers who refused to load pig-iron to go to Japan to make armaments which ultimately were used against Australian forces. On this occasion, at a time when we have a trade embargo, at a time when we are teaching the Russians a lesson on the international field, we have a situation where last year our trade with the Union of Soviet Socialist Republics was a record. Trade with the Union of Soviet Socialist Republics is at the highest level ever at a time when we have a trade embargo on that country.

Earlier this year it was pointed out that we were exporting rhodium, a strategic material, to the Soviet Union. That trade was cancelled for seven days but then restored. Rhodium is the base material for titanium. The Minister in his statement made great play of the Russian build-up in naval capacity. Surely his intelligence has told him that the Russians are currently constructing a super-submarine with titanium hulls capable of operating at depths below the reach of any known sonar detection devices. We are providing the base raw materials for production of that weapons system, which will place the Russians at a great advantage over all the allies.


Mr Giles - Do you support this statement on defence?


MR SCHOLES - The Minister made great play of this particular area. If the honourable member looks at the statement, which I am sure he has not done, he will find considerable effort made to portray the Soviet Union as our enemy. I am saying that the Government has double standards. The Government wants its cake, but it also wants to be paid for it after the cake has been eaten. So that we can be absolutely certain about how the Government treats who it names as its enemies, a few days ago an agreement was entered into whereby we will send uranium to Finland for processing in the Soviet Union. The Minister for Trade and Resources (Mr Anthony) said that we have the Russians' word that they will not keep any of the material. He has the Russians' word! That must be the greatest guarantee a Liberal government in this Parliament has ever had. In addition, the Government is fully aware that the waste from Finnish nuclear reactors is sent in part to the Soviet Union and that in fact it contains the raw material for nuclear weapons construction. We are going to supply them with uranium because there is money in it. Australians may die because of that profit, as they died because of the profit made in 1939.

The Minister's statement makes a lot of claims for things that have not or will not be done. It is designed to whip up in the community a belief that things are being done in defence that are not being done. In fact, this year's Budget achieves the 1 978-79 projections in the White Paper delivered to this Parliament in 1976 by the Government as its blueprint for defence. The Minister mentioned the 5.5 inch guns, but the Budget does not. If he looks through his estimates he will find that no money has been allocated for them this year. A small sum is allocated to the 105-millimetre Howitzers. The 5.5-inch weapon has been obsolete for nearly 10 years. It was due for replacement in 1 977, but that was deferred by this Government. The 105-millimetre Howitzer was due for replacement in 1978. That is still under consideration.

In the White Paper presented in 1976 it was indicated that there was a need in the five-year program for the Army to be provided with medium and short range surface-to-air weapons. These are no longer in the five-year program; they have been dropped by the Government. I do not know what honourable members opposite think, but I suggest that any Army unit going into a hostile area that was not equipped with adequate surface-to-air missiles would be totally vulnerable. If Government members do not believe this I suggest that they read the history of the fall of Singapore. Air offensives have improved significantly since that time.

The Minister's statement is a repetition of preelection, conservative government defence statements. The increase in pay for the Services and the increase in commitments on already acquired projects form the major basis of this year's increase in defence expenditure. The reality is that that increase has become necessary because of total neglect, because earlier commitments to defence were not met by the Government. The 1976 White Paper program is, and has been, in tatters.

If the five-year program is met in full it will catch up with what the Government announced in October 1976 would occur. In no year in the first term of this Government did it allocate to defence the amount required under the 1976 White Paper. Since that time it has not caught up with the three-year backlog- the equivalent of $ 1,500m - which accrued as a result of the 1 976 White Paper program's not being met. The results are that our Air Force will have to depend on Mirage aircraft which have reached the end of their effective life and which can be kept in operation only in the hope they will not be required for combat. The jet trainer program has been dropped.


Mr Killen - You told us a moment ago not to hasten to a decision on the TFF. You are in a state of confusion.


Mr SCHOLES - The Macchi replacement jet trainer program has been dropped. We have no helicopters, and there will not be even orders for the next two years. According to the Minister's statement, anti-armour has been dropped from the five-year program for the Army. We have announced for the third time that we will be examining multi-hulled minehunters for the Navy. Our minesweepers are 27 years old and do not have a capacity in this day and age to deal with modern mine warfare. The Caribou, which the White Paper announced was to be replaced, will not be replaced.


Mr Killen - There is nothing wrong with the Caribou, and I said nothing of the sort in the White Paper. Your imagination is running your intellect.


Mr SCHOLES - The Minister might think that we have some other form of light to medium military transport aircraft. The Caribou is the one that I know of, and the White Paper mentions that. I think it is unfortunate that in the lead up to an election we have what is developing into a scramble to prove prudency in the defence area which can and probably will seriously affect the future balance of our defence forces. Whenever a situation occurs in which a government, through conscious decision, defers action in an area in which obsolescence already exists, in which regular maintenance is not performed and in which manpower conditions are allowed to deteriorate, that government places itself and the nation in a position in which efforts to catch up in a shorter period than is reasonable can result in serious damage and a waste of public funds.

At the moment there is a mad scramble to get contract commitments for defence items for a number of reasons, not the least of which is that those responsible want signatures on the dotted line before an election is held because they know how easily things can be forgotten after an election. The evidence of that was in 1969 when the Budget increases in defence and announcements on equipment programs were completely scuttled in the following two years because of economy measures by the government of the day. The announcements which took place in 1976 never reached the stage of programs. They also were completely scuttled in exactly the same way. I think it is time that defence was treated as a continuing and ongoing thing in this Parliament, and that more information of a real nature was provided to the public. I think there is a little more information being provided for which we should thank the parliamentary committee which has operated in this area and of which the Minister has been so critical.

The statement by the Minister was a lot of words. It was the standard format of defence activity by Liberal governments over 75 to 80 years of this century. It is talk, talk, talk - and nothing is done. Their commitment to defence is a verbal one. Whether this program comes to fruition is something we are not able to predict or to project into the future, but on every occasion in recent times when a statement of this nature has been made immediately before an election, the commitment has been to the political result and not to the defence forces, which have been left holding the bag afterwards.


Mr Neil - In view of the hopeless speech by the honourable member for Corio, I move:

That the debate be adjourned.


Mr Scholes - Mr Deputy Speaker, I draw your attention to the fact that the honourable member is not entitled to comment when moving an adjournment motion. I suggest that, in accordance with Standing Orders, he be listed as having spoken in the debate.







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