Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Full Day's HansardDownload Full Day's Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Wednesday, 26 November 1941

Mr ROSEVEAR (Dalley) . - I have not received complete replies to several questions that I have asked regarding price fixation and munitions. I shall refer first to the methods adopted by the Prices Commissioner and to the manner in which commodities used freely by the public are being cornered for the deliberate purpose of securing increases of prices. On the 5th November, and again on the 14th November, I drew attention to the fact that an artificial scarcity of matches had been created in the suburbs of Sydney. Since then I have received communications from other parts of New South "Wales, and from other States, which indicate that the shortage was Commonwealthwide until the Prices Commissioner saw fit to increase the price of matches. In the reply furnished to me I was informed that the rationing of matches had been voluntarily undertaken by the Federal Match Company, of Sydney, and by Bryant and May Proprietary Limited, of Melbourne, on account of the shortage of raw materials, principally potassium chlorate; but it is remarkable that the shortage of chemicals ceased at the time when the price of matches was increased. I was informed by the Minister for Trade and Customs (Senator Keane) that the Prices Commissioner had made inquiries into the supply of matches in order to ascertain whether traders were withholding supplies with a view to building up stocks in the event of an increase of the price, but that no instance had been disclosed of traders having withheld stocks with a view to obtaining unjustifiable profits. Any housewife knows that, whilst supplies of matches were rationed before the increase of the price, no rationing of that commodity occurs to-day. This fact seems to indicate that hoarding has taken place. The Prices Commissioner also reported that new stock was generally stacked in front of old stock, and that, as a few gross of boxes of matches were generally held on hand, old double-striker stock might only be utilized when stocks were almost exhausted. According to the

Prices Commissioner he would have us believe that the reason for the reappearance on the market of the doublestriker matchboxes was that new stocks had been stacked in the warehouses in front of the old stocks, and that only when the new stocks had been got rid of did the supply of the old stocks come to light. But it seems remarkable that the new stocks became exhausted and the double-striker boxes appeared on the market immediately the match combine struck the people for an extra 2d. a dozen boxes. If the Prices Commissioner is going to fall down on his job, as he did with regard to tobacco and other commodities that are essential to the public, the operations of his department should be overhauled, and searching inquiries should be made before manufacturers are allowed to exploit the public, as they did with regard to the price of matches.

I now draw attention to questions asked by me regarding the leasing of machine tools and the conduct of the Director of Machine Tools in the matter of controlling their sale. Colonel Thorpe, I notice, has repudiated all suggestions that any influence has been exerted by him in that direction. I admit that it is difficult to get people to make statements because they fear victimization at the hands of those interests which control the Munitions Department. However, I have sufficient proof that this " racket " is going on. I challenge Colonel Thorpe to deny that what I have said in regard to certain tools applies to some in which his firm is interested, tools which it manufactures on licence from overseas countries. The fact that the tools are not available is not due to a shortage of dollar exchange, because tools of that kind are manufactured in Great Britain. Firms requiring them have obtained quotations for deliveries from Great Britain at a date in advance of that on which Australian manufacturers have been able to promise them. Australian firms should not be allowed to put their private interests before the war effort.

I have asked in this House, but have received no satisfactory reply to my question, whether it is a fact that certain firms working on a cost-plus basis are being paid an extra ls. an hour of machine time for machines which they have rented from the Commonwealth. If this racket is going on the Commonwealth is being fleeced for perhaps hundreds of thousands of pounds every month. Early in the war, engineering shops were anxious to get machines of any kind. They were prepared to buy old machines and renovate them, and to pay any price for new ones. Now, the majority of those who want machines prefer to lease them from the Government at .10 per cent, of the price per annum, which amounts to fi 18s. 6d. a week for a machine costing £1,000. Unless the war lasts for ten years that machine will never be paid off. In my opinion, the firms are 'pretending for their own benefit that it is not desirable for them to buy the machines. They know that, when the war is over, the Government will have no use for the machines, and will sell them as junk to those in whose shops they are. Under the cost-plus system firms are allowed 5s. an hour of machine time irrespective of the value of the machine. Then they are allowed an extra ls. an hour for every £1,000 value of the machine, provided it is under ten years of age, whilst on those over ten years of age they are allowed an extra 6d. an hour. Thus, for a machine worth £1,000, they receive 6s. an hour if it is less than ten years old, and 5s. 6d. an hour if it is more than ten years old, regardless of the amount of wages paid for tending the machine. Whatever justification 'there may be for paying a firm ls. an hour over and above the ordinary 5s. an hour for working its own machine, there is certainly no justification for doing so if the machine is leased from the Government. Here is how it works out: The rent for a machine which cost £1.000 is about £1 18s. 6d. a week. If it is worked two long shifts, the firm charges for .133 hours at ls. an hour a total of £5 13s., thus making a profit of £3 14s. 6d. a week after paying the lease instalment on a machine that does not belong to it. Next comes the profit which it makes on the operator. The firm is paid 5s. an hour, plus 10 per cent., a total of 5s. 6d. an hour for the operator. Although this would be ample to pay adult skilled labour, or a technical trainee, most of the large firms have adopted the attitude that the lower the wage, the greater the margin of profit. Over and above the 5s. an hour, they receive an extra payment of ls. an hour according to the value of the machine, and above that again they receive administrative costs. A lot of the work is semi-repetitive, and if a lad can be used at a shilling an hour, the margin of profit will be 4s. 6d. an hour gross, which allows the firm a profit of ?9 I83. a week of 44 hours out of the work of one boy. This is a serious matter. I have made inquiries from people who are working under the scheme, and I am informed that the firms are paid an extra shilling an hour on machines owned by the Government. I have made inquiries from inside the Munitions Department itself, and this information appears to be correct. If this kind of thing is going on, it could be stopped within five minutes by a telephone communication to the department. It is true that the matter is to be inquired into, but in the meantime hundreds of thousands of pounds will probably be paid unnecessarily to these racketeers. For the sake of the Treasury, I hope that the information which I have conveyed to the committee is wrong, but I have checked the information to the best of my ability, and the only reason that I have not given names is my fear that my informants will be victimized.

Mr Morgan - Does this practice apply generally, or is it confined to certain favoured firms?

Mr ROSEVEAR - It is significant that, whereas in the early days of the war these people were willing to pay almost any price for machines, they now prefer to lease them from the Government. [Extension of time granted.] After a machine has worked for 40 hours, the rent is covered and for the rest of the time that the machine works - and it may be in use for three eight-hour shifts or two twelve-hour shifts a day - the firm makes a profit on a machine which belongs to the Government

Suggest corrections