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Wednesday, 24 May 1939

Mr WHITE (Balaclava) .- I am disappointed that the Government has not brought forward an amendment which would provide a workable formula to prevent profiteering. The amendment submitted by me last night was designed for that purpose, but I am willing,, to support any other amendment that will produce the desired result. I am very disappointed over the speech of the Minister for Supply and Development (Mr. Casey). He gave a full explanation as to how contracts are made with the Defence Department. We know well that little profiteering occurs where the competition is keen, but the Minister said that sometimes goods are purchased without tenders being called, and I suggested that in such cases three quotations should be obtained. It is regrettable that the Government has not drawn up an amendment to check profiteering by monopolies. I have made no attacks upon individuals, nor have I stated that profiteering is rampant, but I pointed to what happens in connexion with the prices of Australian copper, and, to some extent, of Australian zinc. Yet the Minister, after getting into deep water in explaining copper prices, omitted to say that they include the cost of sending the copper to England. Australian manufacturers pay the prices fixed by the London Metal Exchange, and to those is added the exchange. As 1 showed last night, the London price of £43 becomes £53 15s. in Australian currency. I pointed out that the steel company, although a monopoly, charges a rate for steel based on the Australian cost.

The Minister said that some honorable members suspect the manufacturers of conspiracy to defraud the Government. Actually I know that manufacturers will, be grateful if the price of their raw materials can be cheapened. He used a poor argument in abusing those whoput forward a case with the object of checking excess profits. If he attacks those who dare to criticize, he must alsocondemn his leader, for, as the honorablemember for Darling Downs (Mr. Eadden) pointed out, the Prime Minister (Mr. Menzies) has declared against profiteering, and the Melbourne Argus of the 2Sth April last published a cartoon showing, the Prime Minister in uniform as a sentry at the door of the Defence Department saying, " Exploiters keep out. This means you ". That was over theexplanatory paragraph - " Dealing with defence measures, Mr. Menzies made it clear there must be no profiteering ". All that I desire is definite proof that the Government intends to checkprofiteering. I agree with the honorable member for Darling Downs that the panel of expert accountants should- be paid for their services,, but it is absurd to suggest that profiteering is not practised when it is known that' the Taxation Department collected- £7,000,000 in respect of excess profitsmade during the last war. Some of this tax is still being collected. It is for theGovernment to discover whether it isbeing exploited. The Tariff Board, in a report on copper issued in 1930,. stated -

Copper products form hh important basic raw material for many Australian industries, and. it is essential that they shall be made available at the lowest possible prices. The hoard considers that any increase in the prices, of copper products would be prejudicial to theinterests of the industries using them, and,, as a matter of fact, is of opinion that theexisting prices should be reduced if at all possible.

I could submit other proof of the fact that the prices of metals are too high. I think that the Minister might haveattempted to bring forward some refutation of the criticism that the metal monopolies are charging too much fortheir products. It may be that they arenot. A report by the Tariff Board in. 1934 on copper and copper products contains the following paragraph : -

A general review of prices charged over a period of years leaves no room- for doubting that the policy of the associated interests has been to maintain prices for manufactured copper products at about the same level as the landed duty paid costs of importations . . The selling prices were higher than were necessary to enable reasonable profits to be earned by the manufacturing companies even while they were paying a premium for copper requirements.

I have quoted the definite opinion of the Tariff Board, which takes evidence in all States. The Melbourne Herald of the 23rd November, 1937, published the following paragraph in its financial columns : -

Big Increase in Profits of Metal Company.

A substantial increase in profit is shown in the accounts of Metal Manufacturers Limited., for this year ended the 31st July. After providing £28,042 for taxation, the profit was £92,818, compared with £79,042 last year.

Why boggle at the proposed safeguard? The Minister, in his long explanation, said that the profits of manufactures in connexion with the annexes could be checked and kept down to 4 per cent. These annexes, I admit, will be excellent auxiliaries, because they will result in efficient production at a minimum of profit; but if a profit can be checked in the annexes it should also be possible to check it on raw materials. We know that during the last war an unreasonable rate of profit was secured by some manufacturers. Yet when honorable members submit amendments for the purpose of preventing excess profits, which this bill vaguely suggests are to be controlled, they are abused by the Minister. I point out to the honorable member for Gippsland (Mr. Paterson) that the 6 per cent, mentioned in my amendment is intended to be the maximum profit allowed. Often it will be much less on account of the competition. I moved that the word " profit " should be omitted, with a view to inserting the words "net profit up to 6 per centum", and the honorable member for Darling Downs suggested that the amendment would be improved by adding " on the value of the actual assets employed in the earning of such profits ".

That is clearer, and an improvement on what I proposed rather hastily last night. I defer to the honorable gentleman's professional knowledge, although I had in mind to leave the basis of computation fairly wide so that the Government, by regulation, could make the necessary stipulation. But we get no assurance that there will be any such regulation. I hope that the Government will accept the amendment, and that there will be no need for a division. If it does go to a division, my vote shall be for a definite scheme to check such profiteering as went on in the Great War. This is an opportunity for the monopolists to show practical patriotism. The boys who join the militia show their patriotism in their way, and many other persons will show their personal patriotism in many other ways of service. Here is a way in which the captains of industry and the heads of companies who have reaped big dividends previously can give something back to the people, who will be taxed so many millions of pounds for defence in the next three years. My purpose is to make the burden of taxes as light as possible.

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