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Thursday, 25 May 1939

Mr ANTHONY (Richmond) .- I was impressed by the remark of the honorable member for Bourke (Mr. Blackburn) that this measure has been placed before Parliament because of the need to be prepared for any. emergency. In ensuring that excessive profits shall not be made we must not load the bill unduly, and thus seriously interfere with the efforts of the Government to provide for the effective defence of Australia. In studying this subject we have to consider first the matter of urgency, and secondly the means that may be employed to ensure that no one shall make undue profits out of the manufacture of armaments and munitions. The bulk of the money expended on defence will go not to, say, 10,000 manufacturers, but to those producing raw materials. They are the syndicates and the combines which control the metals - the zinc; the lead, the nickel with which bullets are plated, and the steel for machine guns - and the thousand and one other things that the manufacturer must obtain before he can produce those articles on which the ' honorable member for Martin (Mr. McCall) wishes to work out his 6 per cent. Under the amendment, the whole of the concentration is on the manufacturer to see that Jio does not bilk the Government of anything, but there is no means to ensure that the men who supply the manufacturers with raw materials and their other needs and possibly are profiteering thereon shall be brought within its scope. They will completely escape the net. I was impressed by the .statement made during the second reading by the former Minister for Defence (Mr.

Thorby) that the major portion of Australia's defence requirements came from about five different sources. The honorable member did not name them, but they include the suppliers of metal, rubber, oil and cement. The rubber suppliers form one huge combine in which the Dunlop-Perdriau, Barnet Glass and Goodyear enterprises are represented. A huge ring controls the fuel oils and lubricants needed for our navy, air force and mechanized army. Huge amounts are to be spent on the storage of oil. The suppliers of cement control the manufacture of fibro-cement and Hume pipes. None of them would be brought within the net by this amendment.

Mr Fadden - Of course they would. What would prevent it?

Mr ANTHONY - There is nothing in the amendment to embrace sources of supply. In the early days of a state of emergency public spiritedness may be fervent and general but it will soon dissolve and the efforts of combines will be directed to improving their own position. In New South Wales, as soon as the brick combine got things its own way, it skyrocketed prices without consideration of public welfare. There is nothing in this amendment that, would strike at the root of the trouble. The only effective protection is, as was stated by the honorable member for Lilley (Mr. Jolly) and the honorable member for Bourke (Mr. Blackburn), the sincerity of the Government in enforcing some control of profits. Any words can be put into the bill, but I guarantee that the persons against whom the words are directed will get some smart lawyer to make gaps in the legislation wide enough for a horse and dray to be driven through them. That has always been the case when the interests of big business have been threatened by legislation. The Government should consider two or three things. It should look to the source of raw materials and ensure that the manufacturer of the finished product is not charged exorbitant prices for his materials. The Commonwealth Government of itself has no power to fix prices of raw materials, but it could do so in collaboration with the State governments, which have the necessary powers. A precedent for such action exists in the collaboration that has taken place between the Commonwealth and State governments in respect of agricultural products. The amendment no doubt has good propaganda value. It suggests that something is being done. But I suggest that the honorable member for Lilley was right when he said that the 6per cent. of profit which the amendment aimed at as the maximum would become the minimum and that there would be an accumulation of six-per-cents in the cost of the finished product, whereas, had the profit fixing been left to the discretion of the Government, it might have been kept at a level lower even than that which the honorable member for Martin seeks.

Mr Brennan - The amendment is most dangerous.

Mr ANTHONY - Yes. If challenged, manufacturers would have just reason to say "We are only producing at the price Parliament has fixed in its own statute ". The amendment moved by the Deputy Leader of the Opposition (Mr. Forde) finds more favour with me than an amendment which specifics a set profit of 6 per cent., 5½ per cent., or some other rate, the method of arriving at which is a mystery to everybody.Six per cent. might be too high or too low. If it be too low it will curb enterprise and prevent the Government from receiving tenders for what it requires. The right honorable member quoted the submission of the Prime Minister of Great Britain that industry must be permitted to carry on at a profit. It sounds well to say that there must be no profit, but nothing can be done without profit. Profit taking is part of human nature. Without it industry could not. employ hands. Profit, therefore, is essential to industry. What we have to ensure is that there shall not be excessive profit. It is the responsibility of the Government of the day, whatever be its political creed, to. check profits and, to that end, the scope of the legislation under which it acts must be as wide as possible. I am satisfied that the present Ministry is sincere.

Sitting suspended from 6.15 to8 p.m.

Mr ANTHONY - Summarizing my remarks,I would say that I am satisfied about the sincerity ofthe Government to limit profits, but I am not quite convinced about the sincerity of 'those people who stand behind the Ministry - those large financial and commercial organizations to whom Ministers sometimes bow. For the reasons given, I consider that the provisions of this clause relating to the limitation of profits should be a little more iron-clad than they are,though I have to admit that I do not see what action canbe taken to this end without sabotaging the bill itself. If the amendment movedby the honorable member for Martin limiting profitsto 6 per cent. be carried, manufacturers with a turnover six times a year could show a profit of 36 per cent. per annum, or any multiple of 6 per cent. according to their turnover.

Mr Stacey - The principle of the amendment is to limit profits to6 per cent. per annum.

Mr ANTHONY - That may be one interpretation of it. But when a few legal men get together there may be another interpretation of theprovision. The Commonwealth Government should be in a position to apply all necessary safeguards. If it cannot administer this legislation to the satisfaction of the people of Australia, Ministers and their supporters willhave something to answer for when next they go before the electors. The provisions relating to profiteering should be more definite. Therefore, I propose to support the amendment indicated by the Deputy Leader of the Opposition.

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