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Tuesday, 25 March 1980
Page: 965

SenatorDURACK (Western AustraliaAttorneyGeneral) by leave- I wish to have incorporated in Hansard a statement by the Minister for Defence, Mr Killen, relating to defence and to table a memorandum of understanding on logistic support signed between the Government of Australia and the Government of the United States of America. I seek leave to have the statement incorporated in Hansard.

Leave granted.

The statement read as follows-

The Government recently announced decisions relating to the level of the nation's defence preparations. I wish today to talk more about the program, and our defence effort generally. Before doing so, however, I want to say a few words about the rationale for our policy and the measures we are undertaking.

The Soviet Union's invasion of Afghanistan is a conspicuous and brutal attempt to destroy the independence of a nation. The Soviet's action represents a matter of grave concern for the entire world. The issue is one which is far more serious than many people in this country are prepared to acknowledge. This attitude may be contrasted with the attitude held by many governments and commentators in a wide range of significant countries. The Government has sought to put the issue in proper perspective. It will continue so to do. Remote as we are, there are many who cannot see a connection between the Soviet invasion of Afghanistan and Australia's interests. They tend to regard the Government's reaction as exaggerated, even unseemly.

The Soviet Union's invasion of Afghanistan represents a crisis in international affairs. But it is more than this. It is also a challenge to those of us who live in this country to lift our eyes beyond our immediate region. The facts are that the Soviet Union has nearly 90,000 troops in Afghanistan at present. They are shooting and killing large numbers of Afghans- civilians as well as the armed guerillas fighting against them. Apart from the unhappy history of Eastern Europe, this is the first time since World War II that the Soviet Union has deployed formed military units beyond its national frontiers. For it to subjugate an independent country is an event of great significance for the international community. With the move into Afghanistan, the Soviet Union is placed to bring pressure against Iran and Pakistan and to work for access to the Indian Ocean. The move also significantly enhances the Soviet Union's scope to develop pressure against the Gulf countries. These are areas from and through which flow the oil supplies vital to Western Europe and Japan, and of great importance to the United States and ourselves.

With the conquest of Afghanistan, the Soviet Union will command a strategic salient that will secure its opportunities in all these respects for decades ahead. It is not good enough to say that Australia is a long way away; that the Soviet Union's military operations there pose no direct military contingency for Australia itself; that the Soviet Union might not at this time push beyond Afghanistan with its military forces. Let me remind the House that much closer to home, in Indo-China, the Soviet Union is active not only in support of the Vietnamese military operations inside the sovereign state of Kampuchea. The Soviet Union has also secured access to air and naval facilities in Vietnam, although we do not know as yet on what terms. It would be folly to believe that the events which have culminated in the Soviet invasion of Afghanistan leave our longer term strategic prospects unaltered, and our responsibilities as a member of the community of free and independent nations, unchanged.

Events in Afghanistan cannot help but change the strategic perceptions of dozens of other nations. The kaleidoscopes which comprise each nation's view of the world have been jolted: The pieces are now in new patterns in each eyepiece. We should be deluding ourselves if we believed that Pakistan should feel just as comfortable in March 1980 as it did in March 1978; that Japan should not feel heightened uneasiness about the security of its sources of energy; that China should not feel affected by Soviet actions in a bordering country; that the Iranian polity now emerging should feel secure with the Soviet Union killing Afghans across the border; that the spectacle of the Soviet Union seeking to extinguish by direct military force the remnants of Afghan independence should pass unremarked in so volatile a belt of nations as the Islamic world represents today. I mention but a few affected countries. They are not blind; they will not pretend that the world 's most powerful land army has not rolled forward into a territory abutting regions of crucial importance to the international community at large. Every major capital in the world feels itself affected. Every government in Asia feels itself affected.

The Prime Minister has already conveyed to the House the sombre mood in which the North Atlantic Nations are taking stock. The Minister for Foreign Affairs (Mr Peacock) found a similar situation on his recent tour of Asian capitals. My own overwhelming impression is the same, following my visit overseas earlier this month. Changed perceptions inevitably will reflect themselves in shifts in the international security policies of nations. We cannot predict the directions of change and the new fabric that will be woven, but we can be pretty sure of at least two things that will colour the pattern. Firstly, there will be recognition that super power relations are now characterised not only by tension but by mistrust. There is scope now for crises deeper and more frequent than we have hitherto experienced. Secondly, there will be few now who can confidently assert that, wherever favourable opportunities may occur for manipulation, subversion and interference, including the Asian and Pacific regions, the Soviet Union will not exploit them. Uncertainty and instability everywhere are stimulated by this.

We cannot have the same confidence in our long term strategic prospects that we had two years ago. I speak also of our responsibilities. Above all, Afghanistan has demonstrated the need for a new manifestation of political resolve on the part of independent nations everywhere, in every continent. All of us, together or separately, must give evidence tha* those who perceive a threat to their interests are prepared to back their resolve with military strength. The Prime Minister has already stressed the primacy of political cohesion and clear political purpose as an essential basis for confidence that the Soviet Union will not again achieve military victories by default of action on the part of independent nations.

When I spoke to the House a year ago about the broad perspectives of our defence policy I spoke of the need for us to recognise that it was only on, in and over the sea that hostile military power could be projected towards our country.

Our interest, therefore, is to do what we can to ensure that our maritime surrounds and approaches are not dominated by unfriendly, or potentially unfriendly, countries. We have a basic strategic interest that military relationships in our surrounding oceans are favourable to our interests. As a trading nation, we have a basic interest in the stability and security of international lines of communication across these oceans.

The Soviet invasion of Afghanistan raises serious implications for Australian interests. Australia cannot secure these objectives by itself. We must rely on our principal ally, the United States of America, to carry the main responsibility in this field. But we can, through our policies, and by practical measures in support of the United States, show our concern at Soviet aggression and our resolve to defend our interests and independence, and to raise the cost to the Soviet Union of interference with them. Among other things this means more activity in the Indian Ocean by Australian air and naval units. As the Prime Minister said, this activity will be essentially an independent, national effort but. we shall co-ordinate our operations with those of the United States. We have offered the United States the use of facilities in Australia that might support their own operations. Detailed arrangements with the United States regarding facilities have yet to be discussed, after the United States authorities have clarified their requirements.

In offering the use of facilities to the United States, the Government has sought to ensure that the United States is not lacking in the support of its Australian ally in the heavy burden which it bears in deterring war and nuclear attack, in the interests of the allies and the international community generally. I might add that in the event of hostilities, risks of nuclear attack arise for Australia as an ally of the United States, whether or not it may be hosting particular United States facilities. Recognising this, successive Australian governments have taken the view that our primary concern should be to support the effectiveness of the United States deterrent to war itself. In this, we honour as well our responsibilities as an ally. Along with maritime operations in support of our United States ally, Australia must do more for itself. We must raise the level of our national defence preparedness. We should look to improve our capacity to support our political policies with military capability. Our strategic prospects and our responsibilities so demand. I do not say that military capability is all that is required. However, the range of policies that the Government must employ will lack substance and conviction unless backed by serious intent and capacity in the area of defence.

A most important dimension in our national defence effort is co-operation with the friendly countries of our neighbouring regions. Our objective is to enlarge this co-operation. This activity, already long established, is separate from our co-operation with our United States ally. We believe that the resilience of independent regional countries is an important element in reducing Soviet opportunities for expansion of its" influence. As a regional country, we stand ready to support our friends as best we may by our defence policies. We believe that we can best contribute in our neighbouring regions. This is where we belong. We are well known there and have, as I have mentioned, long-standing ties and co-operative arrangements. Moreover, it is our neighbouring regions that constitute the area of primary defence concern to us.

To support the policies I have described, the Government has announced a program for defence which it estimates will involve spending some $ 17,600m over the next five years, in August 1 979 prices. To those obsessed with planning guidance provided some four years ago, may I say simply that $ 1 7,600m represents significantly more in real terms than the earlier guidance. It will allow defence expenditure to grow by an average of about 7 per cent a year in real terms, and is expected to take total defence expenditure in 1984-85 to about 3 per cent of gross domestic product. My Department has already been instructed to work on the assumption that defence expenditure in 1 980-8 1 will be . $3,063m in August 1979 prices; that is, a real increase of 5.5 per cent above the 1 979-80 level. The 1980-81 expenditure will be further increased, if necessary, to cover requirements for the purchase of the fourth FFG.

Before I turn to the main elements of the program, I want to comment briefly on some recent statements that the program contains 'little that is new '. The inference which such responses invite us to draw is that any program for an increase in defence preparedness must necessarily contain something 'new'; some surprises, perhaps. The most charitable thing that can be said about such shallow comment is that it reflects a continuing failure to comprehend how the defence program is always adjusting to changing circumstances of one sort or another- financial, technical, strategic, commercial. It glosses over the many changes which are reflected in the recently announced program, on which I will elaborate shortly. Furthermore, it overlooks the fact that defence programs are generally unlikely to contain important elements which have not previously been publicly anticipated. This, I am pleased to say, is because of the very considerable amount of information which is provided by my Department to this Parliament and to the public about defence activity and planning in Australia, and because of the extensive public discussion which quite properly occurs about our defences.

We do not judge it necessary at this time to make sweeping changes to the force structure planned for later in the decade. On the whole, there is not yet a case for the large additional emphasis upon equipment numbers that would commend measures such as off-the-shelf purchases, or other short cuts with attendant cost and other penalties in terms of suitability for the Australian environment. Thus the major, highcost capital items to be brought into service are well known, and have been for some time: Patrol frigates commencing next year; new tactical fighters, the final selection and ordering of which will occur within months; patrol boats which start to come into service this year; the amphibious heavy lift ship HMAS Tobruk, launched a few weeks ago.

We are aiming for decisions this year on the kinds of capabilities to be acquired for the period after HMAS Melbourne retires. Honourable members will be aware that designs for a new aircraft carrier are currently being evaluated. Closely associated with this matter is our consideration of the type of ship we should acquire to replace the present destroyer escorts from the end of this decade on. These equipments will, of course, account for a large part of the increase in capital items, which are planned to rise from 1 5 per cent of total defence expenditure in 1979-80 to over 25 per cent in 1984-85. Payments on some of them will extend to the end of the decade. These items will now be added to. Limitations on the numbers of some items that we had previously been prepared to accept will no longer be accepted.

I turn first to our destroyers. While in the United States for the ANZUS conference, I opened discussion with the United States Government on Australia's wish to purchase a fourth guided missile frigate of the FFG-7 class, and to bring it into service as soon as possible. The Americans have given us every assistance in examining ways and means of achieving an early delivery. Senior officers of the Department have already held detailed discussions with the Americans on the purchase arrangements. They are not yet concluded, but I am pleased to report that they are proceeding most satisfactorily. I expect to be in a position before long to inform honourable members of the outcome.

I turn next to our tactical fighter force. The new decision is that the number of new fighters to which commitment will be made at the end of this year will be 75- not fewer. Furthermore, we will not be making a series of separate decisions, as was earlier envisaged. A team of senior defence personnel, led by a deputy secretary of my Department, has just returned from negotiations in the United States on an understanding with the United States Government. This will cover arrangements under which the further evaluation will proceed, how the fighter to be selected will be acquired, and how our requirements for industrial co-operation will be met.

Overseas visits by other defence and Royal Australian Air Force teams will follow in the near future, to acquire and analyse the further data needed to enable the Government to reach a final choice of the aircraft that will be the mainstay of Australia 's air defences beyond the year 2000. This work is proceeding to schedule. Much needed to be done; much more is still to be done. But it is being done to the timetable planned. There has been no delay, no procrastination, at any time during the process of evaluating and selecting the new tactical fighters, nor will there be any.

I mention our fleet of patrol craft. There will be 10 additional patrol boats ordered, to meet increased surveillance and patrol requirements. These boats would also assist our defence cooperation programs with other countries. In September 1979, I told Parliament that the Royal Australian Navy was withholding its acceptance of the lead vessel, HMAS Fremantle, pending negotiations with the shipbuilder over the problem of the vessel being heavier than specified. I now inform honourable members that HMAS Fremantle was provisionally accepted by the RAN on 5 March 1980 and was commissioned into naval service on 17 March 1980. Final acceptance will be subject to trials with propellers of a new design, more appropriate to the vessel 's larger weight. These should be completed within about six weeks.

HMAS Fremantle and the follow-on craft will be heavier than the design displacement, but the effect on operational capability will be almost negligible. To be specific: Fremantle's maximum sprint' speed has been lowered by about one knot. My naval advisers have assured me that the new craft meets the Navy's requirements and will have a good range of speed- up to about 30 knots- and endurance, more than 3500 nautical miles at patrol speeds. The trials have demonstrated that the effects of the additional weight have been largely offset by the efficiency of the hull form. The range of Fremantle at maximum continuous speed has been reduced by about 100 nautical miles.

An extensive weight-reduction program was carried out by the builders, Brooke Marine Ltd. Although the first patrol craft will still be about 20 tonnes heavier than specified in the contract this is less than the weight excess earlier in prospect. As a result of an agreement recently concluded with Brooke Marine, the amount to be paid to the company for the lead craft will be reduced because of this departure from the design objectives. The first four of the fourteen follow-on craft being built by North Queensland Engineers and Agents Pty Ltd, of Cairns, will be slightly lighter than HMAS Fremantle. However, further design changes which could not be incorporated in these vessels are expected to save a further 10 tonnes in the weight of each of the remaining 10 patrol craft. The Commonwealth's indemnity has been extended to cover the consequential effects of additional weight on the Australian built vessels.

Although HMAS Fremantle and the four follow-on craft will be heavier than the design displacement, they will be entirely suitable for the tasks envisaged for them. Furthermore, the craft will have the 10 tonne margin for future development of their capability that the RAN had specified when the contract was placed. This margin would allow the future fitting of new weapons should this be necessary.

HMAS Fremantle is expected to arrive in Australian waters in mid-August 1 980.

The acquisition of the 15 new patrol craft broke new contracting ground for Australia, with separate contracts for construction of the leadcraft overseas, followed by an Australian building program. We have learned a number of lessons from this project, as a result of which my Department will be examining closely the contracting and phasing of any future building programs for such projects. For the time being, these craft will be equipped with the Bofors gun. This gun is used by most North Atlantic Treaty Organisation navies, and it is satisfactory in our judgment for present Australian requirements. A new weapon for the fifteen patrol craft could cost in excess of $30m. At such a cost, the House will understand that we must look very closely at the priority of requirements.

I have so far mentioned developments in respect of our destroyers, tactical fighter aircraft and patrol vessels. There will be a second underway-replenishment vessel similar to the one recently ordered from Vickers Cockatoo Dockyard Pty Ltd. The two will allow us for the first time to have afloat support for the RAN operating simultaneously in the Indian and Pacific Oceans. An aerial refuelling capability for our tactical fighter aircraft, which was one of the capabilities we judged last year could be left until later, now enters the program for decision in the five-year period. The same applies to additional capabilities for our air defence systems. We will seek, in particular, to improve the capability for early warning with radar systems tailored to our environment. Much hinges here on the results of the work on over-the-horizon radar, Project Jindalee, which is continuing with all possible speed.

Some items already in the program are now to be considered for decision earlier than was previously envisaged. One example is an additional hydrographic ship, brought forward now specifically with a view to adding to our capacity to give assistance to South- West Pacific countries. A research vessel, for experimental trials of equipment at sea, has been restored to the program, and brought forward for decision. The decision on medium trucks to be taken this year will now be made in respect of recommended larger numbers; among other things, to put more equipment, and more modern equipment, at the disposal of the enlarged army reserve.

The Government has also examined what else might be done ahead of the 1980-81 defence Budget. It has agreed that there are particular advantages in proceeding with the acquisition of two additional Sea King helicopters to replace recent losses, and the buying of further Mark 48 submarine-launched torpedoes. A close-in weapon system will now be fitted to the third patrol frigate, for training in defence against seaskimming missiles. I have spoken about some of the larger prime equipments, and some of the more significant additions to our capabilities. Those members of the House who have made a study of the first phase of expansion of the coreforce for that is what we are discussing- and who took evidence last year from my Department will recognise practical applications of ideas put before them. They will therefore recall that some other early measures were envisaged.

More specifically, they may recall it being put to them that provided the Government made decisions in response to the external indicators, the force existing when actual warning time began for a major threat would already be in the process of being shaped. It would, in the first place, be operating at a higher level of activity, making full operational use of some equipments which are now only relatively sparingly used in training and operation. The first expansions of force capability would be with intensified use of existing equipment and manpower. Decisions have been made in response to indicators. As I shall be describing later, first expansions of force capability, making much more use of equipments for training and operations, will be occurring.

A further basic proposition about early expansion was put forward last year to the relevant committee of this Parliament. In essence, it was this: A very significant distinction had to be drawn between the inventory of defence equipment that would be in service under the financial and strategic guidance then authorised, and the inventory that could be available if, in some new situation, it were considered to be a cost-effective use of defence resources to retain major equipments in service longer, or in reserve. Funds will now be applied to meet the necessary maintenance and manpower costs in selected areas of the existing inventory, where there is useful life longer than we felt justified in providing for this time last year. There is consequently a number of highly significant items in the inventory that must now re-enter calculations of just what Australia could put on the scales in any given year in the 1 980s.

The Prime Minister has already announced that HMAS Vampire will not now be paid off. It will be retained beyond 1 982 as a training ship and restored quickly to operational status should the situation warrant. A full modernisation of the DDGs is planned, instead of the more modest life-extension refit previously envisaged. An extensive modernisation of the older Orions, the P3Bs, is planned, instead of the more limited update previously provided for. The Fill weapons system will be updated for precision guided missiles.

I want to add something about vessels falling under the general heading 'destroyers'. I have referred already to the discussions taking place about acquiring a fourth FFG from the United States and the retention in service of HMAS Vampire. A major consideration in our minds is that, at the end of this decade, the River class vessels will be approaching the end of their costeffective life within a core-force. Part of the thinking behind the proposed acquisition of the fourth FFG is that it will give us more insurance against temporary reductions in core-force destroyer numbers, over the period when the River class vessels are being phased out, and the follow-on vessels are coming into service.

As we have already made clear, these follow-on vessels are to be built in Australia. To that end, investment in the Williamstown Dockyard will now further increase. Work is already well advanced on the massive task of selecting a destroyer design, for decision this year if possible. Some 50 different types have been under consideration. The vessels will be central to our maritime strength well into the next century. Their construction will comprise one of the largest warship-building enterprises on which the nation has ever embarked. We want to plan it thoroughly and get it right, and do it in a way which provides opportunity for maximising the Australian content of the vessels.

In attempting to strike a balance between counsels of urgency and the objectives I have just mentioned, I have so far been inclined towards the latter. Given the intention in respect of the fourth FFG, I believe this to be the right emphasis for the time being. But I am confident that the Government would not shrink from measures requiring additional funds, or the setting aside of some of the more exacting objectives, should the nation's defence necessitate the acquisition of follow-on destroyers more quickly. I have spoken so far about additional new equipments in our defence inventory; about equipments to be retained in the inventory and modernised; about the more extensive use of equipment; and about increases in the operational activity of selected equipments, in response to the immediate and the long-term strategic situation in our maritime environment.

These things cannot be isolated from the other elements of our defence. Of fundamental importance to our military operations and defence preparedness is an improved availability of resources for such things as spare parts, maintenance and equipment repair, flying hours, steaming time, ammunition holdings and other stores, and higher states of training of skilled manpower. In these respects also we aim to broaden the expansion base and reduce the leadtime for movement to a higher state of operational readiness, should that prove necessary. I cannot trace in detail all that is proposed as regards the stores that will now flow into the Force, to sustain the operations and training that will proceed, and to raise the level of defence preparedness in selected areas. I will confine myself to some examples.

Action is already well advanced to build up Navy stocks of furnace fuel oil and dieso in western and northern Australia. These stocks will support all classes of ship, including the aircraft carrier HMAS Melbourne, that may be involved in increased activity in the Indian Ocean area. As well, selective enhancement of strategic fuel stocks in other locations is being arranged. Accelerated ordering of Army ammunition from Government factories is in hand. As well, early orders will be placed to enlarge the stocks of some basic metals, which will be used in the increased production of both weapons and ammunition. Inventory levels of selected stores, spares and repair pans of operational equipments are being increased to improve preparedness, and to raise the levels of operational effectiveness. An example is Sonobuoys which are used for underwater surveillance.

To support both the increased manpower and the higher levels of training, there will be a higher level of ordering for replacement vehicles, clothing, machinery and plant for workshops, and a range of other defence stores. Additional funds will be spent on the repair and overhaul of equipment. This expenditure will be used to improve turn-around in the repair of equipment. Australian industry will attract the major portion of this expenditure and thus will be contributing to an increase in the preparedness of the Defence Force. There will be upgrading of our industry capabilities in support of defence, including research and development. Direct investment on upgrading plant and machinery and facilities in the aircraft industry and munitions factories is being increased. Similar expenditure is provided for facilities required in industry to support defence activities. Workload in industry will be increased by orders resulting from a higher level of service activity and a general increase in orders of capital equipment.

The decision to order 75 aircraft for the tactical fighter force will enhance considerably our ability to create opportunities for Australian industry in this project. The introduction of new technologies to permit long term support of the aircraft is an essential part of our procurement strategy. I personally impressed this on potential suppliers during my recent overseas visit, and they have been very active in developing industry programs to meet our needs.

The development and production of the new basic trainer aircraft will also enhance the skills of the aircraft industry. Local construction of the additional underway-replenishment ship will help the Australian shipbuilding industry, which depends significantly on defence contracts. Notwithstanding all our endeavours, it would be foolish to pretend that total self-sufficiency is a practicable option. Reality obliges us to bear in mind the size of the Australian industrial base, and the 'state-of-the-art' defence technology which a relatively small Australian Defence Force must seek to maintain. The reality is that the Australian Defence Force is dependent on overseas sources for the supply of major weapon systems, and for a substantial part of the ongoing supply of many associated support items. The country that supplies by far the major portion of the defence equipment and support items which we necessarily have to procure from overseas is the United States.

At meetings of the ANZUS council in June 1978 and in June 1979, it was agreed that there should be more definitive understandings about the continued availability of the supply and support of defence equipment which we procure from the United States. I am delighted now to be able to inform the House that, as a consequence of the ensuing negotiations, a memorandum of understanding on logistic support has been signed between the Government of Australia and the Government of the United States of America. This memorandum recognizes the special relationship between our two countries. Guaranteed supply of all that we might ever want is, of course, not a realistic object of policy, and not what we have been seeking. The memorandum does, however, provide an important body of principle for logistic support to the Australian Defence Force during peacetime, during periods of international tension or in circumstances of armed conflict.

Vital aspects are specifically addressed in the memorandum- such as the provision of additional weapons systems and equipments which may be required by the Australian Defence Force to meet expansion or to replace combat losses. There are also provisions for the locating of increased stocks in Australia and for expanding the defence production base. In addition, the memorandum contains reciprocal clauses regarding the provision of logistic support by Australia to the United States in given circumstances. Not all of the arrangements the memorandum embraces are new. Some of them flow from logistics agreements reached between the two countries in 1965. However, the memorandum does repesent a substantial development in defining practical logistic relationships and responsibilities between Australia and the United States. I take pleasure now in tabling this important document.

I should make mention of some major developments in respect of defence facilities, and especially those fronting the Indian Ocean. There will be development of HMAS Stirling at Cockburn Sound. In the later half of this year, ships will be base-ported at Stirling for periods of several months, and before the end of the program period, ships will be home-ported there. The United States Government is currently considering whether it will seek base or home porting facilities at Stirling for ships of the United States Navy. The Government has authorised the construction of a new armament depot at Stirling and the construction of additional housing at nearby Rockingham, to support the increased activities at Stirling. A new fuel installation is also planned for the short term. In the longer term, further facilities are planned to increase the support capabilities of Stirling.

Ground facilities are to be developed at Learmonth, to support increased deployments to and from this RAAF base. The new airfield planned for Derby is to take the full range of RAAF operational aircraft. It is to have taxiways, hardstanding fuel facilities, weapons replenishment areas, and accommodation for deployed personnel. The cost is estimated at $47m. Site investigations are proceeding now. The scope for a new amphibious training area in the west is being examined.

In eastern Australia, the New South Wales Government has agreed to Defence acquisition of the unused Maritime Services Board berths adjacent to Garden Island. This will provide extra berths for RAN ships and will permit the efficient modernisation of Garden Island in a manner which will also enhance the aesthetics of the area. The Government intends to acquire Australian National Line's interest in the Mort Bay container terminal in Sydney, and to use the site as a base for the deployment and logistic resupply of elements of the Defence Force. As well as contributing significantly to our Defence Force deployment capability, the relocation of Army terminal regiment elements to Mort Bay will allow the Commonwealth to meet a commitment to New South Wales to transfer a further 6.5 hectares of Commonwealth land at Middle Head to the control of the State. The Mort Bay acquisition will also give the Commonwealth guaranteed shore access to the facilities at Cockatoo Island dockyard, where a major employment-generating project is in progress. I refer, of course, to the new underwayreplenishment ship for the Navy.

I should point out here that the Commonwealth recently transferred back to the people of New South Wales 305 hectares of prime Sydney Harbour foreshore land. Any suggestion, therefore, that the Commonwealth is now engaged in a land grab is a mathematical falsehood. These acquisitions are unquestionably in the national interest.

I would like now to say a few words about manpower. If you add to your new equipment inventory, retain existing equipments in service longer than planned, and step up your rate of use of equipment, obviously you need more manpower. You also step up your use of manpower already trained. Consequently you diminish the availability of skilled manpower to train fresh manpower, unless you take remedial measuresfor example, to improve retention rates. With the financial constraints prevailing, we have in the recent past accepted the existence of some chokepoints in these respects. We are now taking action to alleviate the problems, especially in respect of skills that take some time to train.

The Department has been given a target of 1,000 additional persons in each year of the program period for the permanent forces of the Navy, Army and Air Force. They will be additional to the 600 or so men required to bring the Townsville battalions to full strength. In recognition of its potentially vital role in the expansion which a major emergency could require, the Army Reserve is to be increased from 22,000 to 30,000. This will require a wide range of further stores and equipments, for which provision has been made. The intention is to ensure that if, in some future situation, we need to expand further, we could start from a substantially broader base.

Earlier this year, I announced that the Government had decided not to accept a recommendation by a previous inquiry that it should legislate to provide for the compulsory call-up of the Reserve in peace-time. Nevertheless, the Government makes it clear that in times of national emergency, elements of the Army Reserve most certainly would be deployed. In reaching its decision the Government took account of the current provisions of the Defence Act, which provide for call-up of the active Army Reserve in time of war or defence emergency. It took into account also that members of the Reserve can, if accepted, serve full time on a voluntary basis. Of particular importance is that the present legislation allows a stable relationship between the Reserve soldier and the employer. The Government believes that the Reserve will attract a satisfactory level of support without resort to compulsion. We want it widely known that the opportunity exists for every suitable young Australian to serve the country and contribute to its defence preparedness by Reserve service.

I have previously made an announcement about the Army re-organisation that has now been set in train following a thorough review. Time militates against my recapitulating that ground here, except to say that the process will be given more momentum by the decisions we have now taken. There is, however, one particular aspect to which I would like to allude brieflythe decision in respect of the battalions at Townsville. One particular objective is to increase the availability and readiness of Army elements for limited operational tasks that can arise at short notice. In order to achieve this capability, we have constituted the Third Task Force in Townsville as an operational deployment force. It will be an air-transportable Task Force, with logistic elements. Depending on the task and its location, it will be capable of quick deployment, building up by stages to a balanced battalion group, which would include from the outset both combat and logistic support as well as the First Infantry Battalion. The remainder of the Task Force would be capable of follow-up deployment as and when required.

Another point to note with respect to manpower is that there will be a requirement now for some easing of the numerical constraints on certain categories of civilian employees, and for increases in some areas. This would be mainly in government factories and dockyards, in key equipment projects and technical and specialist areas in the Department, and in direct support of the Defence Force in workshops, supply, training and base support units.

A word about service pay and conditions. In recent weeks some publicity has attended the issue, which has two aspects: First, the delays which have occurred in the past in passing on to members of the Services increases in pay and allowances which had been awarded themparticularly those increases arising from recommendations of the Committee of Reference for Defence Force Pay. Second, the adequacy of existing rates of pay and allowances for attracting and retaining the right type of person in the armed forces. As regards to the first point, the passage of amendments to the Defence Act in November 1979 will substantially overcome the delays which have beset the administration of the Services pay and allowance system in the past. The Act now empowers the Minister for Defence to make determinations to provide the legal cover for approved changes, without relying on what have proved in the past to be timeconsuming processes associated with the amendment of regulations. Work has proceeded apace under the new arrangements, and by the end of March all but a small proportion of increased entitlements already awarded will have been paid. The new arrangements required some time to be put fully into operation; but they will ensure that changes will in future be put into effect much more quickly than was the case before November 1979.

As regards the second point, it is acknowledged that in each of the three Services the number of suitably qualified persons available to man certain musterings and categories is below our needs. This situation will be exacerbated by the enhanced defence effort to which I have already referred; and retention of highly trained manpower will assume greater importance. Priority is being given to an examination within the Department and the three Services of the specific areas of retention difficulty, as well as to the more general question of overall levels of remuneration. As necessary, the Committee of Reference for Defence Force Pay will be asked to investigate promptly and make recommendations in these areas.

I turn now to the subject of defence cooperation with our neighbours, about which the Prime Minister spoke in his major statement last month. My Department has been instructed to provide in the program for funds to facilitate an expansion of such activities. I would expect these mostly to take the form of an increase in the already significant amount of project aid and training that Australia provides, and further combined exercises where these can be arranged.

As I reminded the House last year, the professional reputation of the Australian Services stands high in our region. The number of bids for places at our training institutions, and for the services of our instructors and technical experts, always exceeds our capacity to respond. We intend to increase that capacity. Action is already under way to determine what more we can do. A training team returned last week from consultations with the defence authorities of several South East Asian countries, about their priorities in respect of an increased Australian training effort. The Secretary to my Department will be visiting South East Asia in the near future, for consultations about a range of matters affecting defence interests that we have in common with our neighbours. As the House will be aware, the senior Service and civilian officers in the defence administration of Papua New Guinea recently visited Canberra. This was part of the program of regular consultations between our two countries. The Government attaches considerable importance to consultations of this kind, and will continue to foster them.

I want this House to be under no illusion that the efforts we are now setting in train will make heavy demands upon the time and skills and experience of our defence administration. This Government holds itself to have been well served by that administration in recent years, under difficult circumstances where, on Government direction, compromises had to be made with previous plans so as to serve the overall economic interests of the nation in the war on inflation. Fine judgments had constantly to be exercised, hard and often unpalatable advice offered on what could be done, and on the practical consequences of this or that course of action.

The Government offers the defence administration no relief: Indeed, its burdens will increase. I hold it to be important, however, that the defence administration not be required to divert even more of its energies and its best manpower than has been the case in the recent past to support sombody's review of this, or investigation into that, or inquiry into something else. These activities are important. But they must be kept in proper proportion to the prime task, which is administering our defence effort. The Defence administration in Australia was subjected in the 1970s to the most profound reorganisation in its history. I want it to be entirely clear that on the whole the Government is satisfied with the results. It is seen by senior Service officers to be an improvement on what we have had in the past, although of course some further evolution is bound to be necessary. The new organisation needs full opportunity to settle- and to channel all the energies of its best people, all the time, into the large and exacting tasks ahead of it.

I do not mean to suggest by this either that there are not a number of areas of continuing concern, or that complacency should be allowed to develop. The quality of complacency is the last quality to be found in senior Service officers and their civilian colleagues. As to areas of concern, and their continuous review, I might remind the House of, for example: The Army reorganisation, about which I have already spoken; the two-tiered review, external and internal, which is currently being conducted in respect of the defence science and technology organisation; the continuing examination of procurement procedures; the review of the RAAF last year; the command and control review of the RAN, completed in 1978, which is now being followed by a supply and support review, due for completion later this year. I mention only these major matters in the continuing process of appraisal and re-appraisal that is taking place in the Department and the Services. This process of close scrutiny and change is a major continuing feature of our defence administration.

Finally, I should report to the House briefly on my recent visit abroad. My visit to the United States provided me with an opportunity to observe at first hand the change in mood thereand that country's determination to meet its global responsibilities. Although the primary purpose of my visit to Washington was to attend a meeting of the ANZUS council in company with the Foreign Minister, I also had the benefit of discussions with senior authorities in the Pentagon. I have already referred to some of the matters discussed in Washington- the fourth FFG, the TFF and the memorandum of understanding on logistic support.

As the House is aware, the timing of the ANZUS meeting was advanced and the venue changed from Wellington to Washington, in view of the new international situation stemming from the Soviet invasion of Afghanistan. I would emphasise the particular importance for Australia's security that attaches to a meeting of the ANZUS partners in present circumstances. The Foreign Minister will be reporting on the close agreement of the Council members on the implications, not just in the short term but also over the longer haul, of the Soviet Union's recent flagrant violation of the integrity of an independent sovereign state. It was particularly valuable at this stage for there to be an opportunity for exchanges of views at ministerial and high military levels. These exchanges will enable officials to go forward in the development of planning, and for governments to take decisions on the various options which military planners can provide.

I have described in more detail the principal elements of the expanded defence program announced by the Prime Minister on 1 9 February. But I have by no means encompassed all the detail of the changes and adjustments contained in that program. In essence, the program provides for the acquisition of some major items of equipment earlier than previously planned; for more comprehensive modernisation of improvement in the capabilities of some equipment already in our defence inventory; for development of our defence infrastructure; for an increase in our defence manpower; and for a higher level of operational activity.

These adjustments result from one simple fact: Future events are less predictable than was the case even six months ago. The balance of power has been fundamentally disturbed, by an aggressive and grasping nation, in an area which for centuries has been a pivot for relationships between the major powers. The strategic reverberations of this disturbance are world wide. Our defence effort must respond to the new uncertainties.

It has been and will remain the Government's firm endeavour to secure peace throughout the world. We will use all of our resources towards that end. We will contribute to that end in whatever way we can. The Government is deeply convinced that human aspiration can best be fulfilled when peace exists. The Government holds strongly to the view that the great problems which face humanity in so many parts of the world can best be settled when men and women live in peace with one another. The goal of peace is a great one and to attain that goal must command the respect of all people of goodwill. Yet power remains a sanction in dealing with potential conflict. Where power exists and commands respect it will seldom if ever be used. That is a reality from which none of us can shrink. And, it is a reality from which this Government will not shrink.

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