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Thursday, 25 May 1939


Mr CLARK (Darling) .- This is an important clause with a very wide scope. It vests in the Minister powers which may be used in any direction desired by the government of the time. There are some provisions which I fear are definitely not in the interests of the workers and others applied to vested interests which are not likely to be effective in their operation. Much of the debate has related to the method of preventing profiteering in connexion with the supply of arms and munitions. The amendment of the honorable member for Martin (Mr. McCall) is nebulous. The honorable member asks for a limitation up to 6 per cent. on the value of the actual assets employed in the earning of profit. If we were dealing with a firm whose whole activities were directed towards the production of the same sort of commodity or commodities for the Government, it would be possible to show whether or not its profits exceeded 6 per cent. on the capital invested; but as many of these contracts will represent only a small percentage of the business of the companies to which they are let, it would be unfair to allow them to charge prices which would enable them to pay 6 per cent. on the whole of their capital investment. It is a most ineffective proposal in that, although the profit on the whole of a company's transactions may not exceed 6 per cent., the profit on that portion of the business represented by Government contracts may be as high as 60 per cent., with a much lower percentage, or even loss on other undertakings. Calculations shouldbe made of the profit derived on each unit supplied. I have no faith, either, in the efficacy of the clause as it stands at present. In my opinion it will not achieve the desirable objectives of limiting profits and protecting the people against exploitation. I believe that it has been inserted in the bill merely as a gesture to the public that the Government is doing something to prevent profiteering while initiating new enterprises for the private manufacture of armaments. The history of the manufacture of arms and armaments has been one of exploitation of the peoples of the world. It is realized by every one that the armaments firms throughout the world have been the cause of many wars. This bill is of outstanding importance in that it sets up a new department and brings about a departure from existing practice of government manufacture of munitions. I remember very well the honorable member for West Sydney (Mr. Beasley), in moving the adjournment of the House some time ago, protesting very strongly against the policy which it was stated the then Government was proposing to adopt, of handing over to private enterprise the manufacture of armaments. It was contended by honorable members on this side of the House that the manufacture of armaments should be restricted to government factories, and that this country should at all costs discourage the operations of the armaments ring, which have proved such a curse in other countries. On that occasion, the then Minister for Defence (Sir Archdale Parkhill) said that the Government did not propose to depart from the policy of government manufacture of armaments. We find now, however, that this measure has been brought down for the specific purpose of stabilizing the policy for the private manufacture of armaments. To delude the public, the Government has inserted in the bill the clause now under discussion which it says gives sufficient power to the Minister to prevent profiteering. The policy of the party on this side of the chamber is thatthe manufacture of firmaments should be strictly a function of the Government and that no avenue should be left open for private exploitation of the misfortunes of the nation in time of emergency. This bill presents an opportunity for private enterprise to exploit the people of this country in a direction never open to it before. As a matter of fact, many of our captains of industry are transferring from civil enterprises to various branches of the armaments racket, in anticipation of making excessive profits. One very important manufacturer has given up his ordinary civil enterprise in order to engage in the manufacture of aeroplanes (because he believes that it will be a profitable venture. There should be no profit in the manufacture of war material. A defensive war would be fought in the interests of the capitalists of this country, and it is up to them to make their contribution to the defence of their country by not seeking to gain unfair profits out of the manufacture of war material. As a matter of fact I would go as far as to say that they should be prepared to manufacture war material at a loss, because it would be used for the protection of their property. As I pointed out in the earlier part of my remarks, it is impossible to eliminate profit from the private manufacture of armaments, because there are so many means by which profits can be hidden, even from the most competent accountants. As was pointed out this afternoon, although the dividends of semi-government undertakings, such as the Electricity Commission, and of private corporations engaged in the supply of gas, are limited to a certain percentage, it is found from time to time that the profits earned are higher than they should be, so that it becomes necessary to place the surplus into special reserves or sinking funds, or to write down the value of assets. Thus profits may be hidden in such a way that they cannot be ascertained even by the closest investigation of accounts. Endeavours have been made from time to time to prevent the continuance of that practice, but it is almost impossible to do so. While the Minister was speaking of the supply of raw materials to manufacturers engaged in munitions making, I interjected and asked whether it was proposed to limit the profits of those engaged in the supply of raw materials. The right honorable gentleman said that he would deal with that matter at a later stage. He completed his speech, however, without outlining to honorable members the methods proposed to be adopted to limit the profits of those engaged in the supply of raw materials. For instance, we have the Broken Hill Proprietary Company Limited supplying steel and some of the most important basic commodities to the armaments ring. Apparently that company will be able to fix its own price for those raw materials. The Minister has not. told us in what way it is proposed to investigate the prices of those commodities, nor was he prepared to say that steps would be taken to ensure that the producers of raw materials would charge a reasonable price to the manufacturers who turn out the finished articles. The price of metals was also discussed, particularly that of copper. It was pointed out by some honorable members that the Government proposes to pay the London price, plus the Australian exchange rate, for its copper purchases. If it be desired that London parity price should be paid, we should pay the London price less the cost of freight to London. The metal is not to be sent to London. If, for instance, metal is sold for £40 a ton in London, and the freight is £10 a ton, it should be sold in this country for £30 a ton, whereas, if we had to pay the actual London price we should be paying a price which included freight from this country.

The scope of clause 5 is indeed' pen wide. A later clause in the 'bill gives power to the Governor-General to make regulations in respect of all matters specified in clause 5. ' It is in respect of those regulations that I .see the greatest danger of abuses. Paragraph d which deals with the acquisition, maintenance and disposal of goods is a very important one for this Parliament to consider. We have only to remember what happened during the Great War as the result of regulations promulgated under the War Precautions Act. Regulations were issued under that act over which the Parliament had absolutely no control. As a matter of fact, many of the things done then by regulations were even kept secret from the Parliament. My authority for that statement .is the official booklet Rules for the Censorship of the Press, copies of which were issued confidentially to selected executives of newspaper companies during the war. Each copy was numbered and a signature was obtained for its issue. The recipient was made personally 'responsible for the pamphlet and the secrecy of the information it contained. At first the rules were taken Lightly; the press endeavoured to get round them. We found, however, after one prominent journalist in Melbourne, and another in Sydney, had been threatened with internment for contravention of the rules, that the resistance of the press was broken down and the newspapers came into line and adhered to the rules. These regulations, issued under the War Precautions Act, which were designed to prevent the disclosure to the enemy of naval or military information, were most drastic in character. The dual effects of the censorship were to remove impediments to the economic conscription of Australian youths - legal conscription being twice rejected - and to suppress facts that would reveal the profiteering in respect of war materials and services .that had gone on. Regulation 28 (ae) gave power to the military authorities to enter hy force, and, if necessary, to seize and destroy copies of newspapers containing "injurious matter." The dragnet definition of " injurious matter " covered " any matter likely to be injurious to the public safety or. welfare." The military authorities decided what was injurious matter and there was no appeal against their decision. The object of the regulation was to put the military authorities absolutely above criticism of any kind. I mention the regulations promulgated under the Wai* Precautions Act to draw attention to the possible abuses .that may follow the utilization of powers to make regulations in respect of this clause. There has been much discussion in this chamber lately about the powers of the Parliament being usurped by the Executive. This clause will enable the powers of the Parliament to be still further encroached upon by the Government. During the war we had experience of the rationing of sugar, butter toad other commodities produced in this country. That rationing was carried out for the purpose of profiteering on the overseas war markets. The wool-growers of this country alone lost approximately £500,000,000 on the war transactions. Section 3, sub-section 21 of the War Precautions Act provided that the publication of oversea quotations for wool and of prices obtained for wool shipped overseas should be prohibited.


The TEMPORARY CHAIRMAN (Mr Nairn - The honorable member's time has expired.







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