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Friday, 25 September 1942


Mr FADDEN (Darling Downs) (Leader of the Opposition) -The Opposition does not oppose this measure. We recognize that, since it is part of the Government's financial policy to leave surplus spending power in the hands of the community, so that the people are bidding against one another for a limited supply of goods, some form of legislative action must be taken to prevent black marketing. However, the bill requires careful consideration, and possibly amendment in the committee stage, in order to remove the fear that business people of sound reputation and integrity may be implicated because of misdemeanours with which they have had nothing to do. A business of moderate size, with branches all over a State, or even the Commonwealth, presents a problem. It would, be a physical impossibility for those in control to watch the actions of all their employees in all parts of the country, and it would, therefore, be unfair to make them responsible for those actions. It would be equally illogical and unfair to render Ministers of the Crown liable at law for the delinquencies of departmental officers, including juniors, who perform acts of administration all day and everywhere.


Dr Evatt - That is so. We shall make provision for that possibility.


Mr FADDEN - I am pleased to have that assurance. The bill may make criminals of reputable business- people, large and small, whose honesty has been proved by years of trading. Under this legislation men of unquestioned honesty may be imprisoned for technical offences which they were unable to prevent. In making that statement, I do not wish it to be thought that I have any sympathy for the dishonest trader who takes advantage of existing circumstances to profiteer and create black markets. For those persons, imprisonment is not an adequate penalty. But we must safeguard the innocent trader who may become liable for prosecution as the result of an action of an employee. The bill may cause business people of untarnished reputation, in selfprotection, to step down from their offices in order to avoid exposing themselves to the risk of being imprisoned for a technical breach. That would not be in the best interests of the community. By the application of harsh laws, the Government can endanger the prospects for postwar rehabilitation, which must depend to a large degree upon the continued honest conduct of thousands of businesses, large and small, to provide employment for Australians. It is impossible for men in charge of even small businesses to regulate to a precise margin the rates of gross profit on trading over a period of weeks or months. Until stocktaking verifies the results, they cannot know exactly what gross profits have been earned, over millions of separate transactions. Changing conditions, fluctuating prices, and a scarcity of commodities cause profit margins to vary from hour to hour. Yet traders with an unblemished record may become criminals in the eyes of a nation as the result of the application of this legislation in a harsh or partisan manner.

The bill is aimed at the " blacketeer ". who works in the dark and who is hard to discover. With this man, the Opposition has no patience. He should be prosecuted with the utmost rigour of the law. The operations of the bill, however, will inflict hardship and injustice upon the decent and honorable trader whose transactions are above board, but who may be unable to be personally responsible for the actions of his employees, no matter how. careful he may be in issuing instructions to them. Under the trading conditions of the past year, many traders have found it impossible to avoid an increase of turnover, because of the pressure of public spending power. Honorable members will recall the manner in which the public rushed the shops a few months ago and demanded goods which, in many instances, traders did not desire to sell quickly because of replacement difficulties. Moreover, in some cases where substantial profits have been made, the trader does not get the benefit because those profits are subject to taxes totalling 18s. in the £1. The trader merely becomes a collector of revenue for the Crown.

It is unfair to make the operations of the bill retrospective to the 20th February, 1942. About that time, the Government foreshadowed its intention to take all profits in excess of 4 per cent, on capital employed in a business. Not until the end of July were traders advised by government announcement that this plan would not be put into effect. Until then, they could only assume that they were, in a large measure, collectors of revenue for the Crown. Now, legislation has been introduced which may make criminals of business people and their employees because they earned substantial profits in past months. In many instances, they were unable to prevent that profit-making and were even advised by the Government that all profits in excess of 4 per cent. would not belong to them. Whilst the Opposition does not disagree with the principle of imposing the most severe penalties upon any trader who is guilty of profiteering during the war, it has a definite responsibility to protect the honest and honorable man who may be victimized by this legislation. For that reason, I shall move at the appropriate time two important amendments to the bill.

There should be no political association with the administration and control of this most important, far-reaching and, in certain circumstances, dangerous legislation. A committee comprising representatives of the Attorney-General's Department, the Prices Branch, and the Departmentof Trade and Customs, or the Rationing Commission, should be appointed to decide whether certain traders should be prosecuted. If that course were adopted, the whole matter would be removed from the atmosphere of political control. This committee would conscientiously weigh all the circumstances, including government policy, and have regard to changing conditions since the outbreak of war.


Mr Morgan - Does the Leader of the Opposition propose that the committee shall have authority to prosecute?


Mr FADDEN - No, the committee would recommend to the AttorneyGeneral that action be taken against a trader. The committee would remove from the right honorable gentleman an onerous responsibility, and the possibility of being accused, of political partisanship in connexion with the launching of prosecutions. My second proposal is that profits earned by traders shall be regarded as the amount which remains after the deduction of income tax, so that traders may not be branded as criminals for earning profits that are taken by the Crown.


Mr Brennan - Does the Leader of the Opposition mean that the public shall pay the income tax of traders?


Mr FADDEN - I do not know who else is paying the tax to-day. In the final analysis, the producer and the worker pay all taxes. During the budget debate, some honorable members referred to companies that made profits of £40,000, after providing for depreciation totalling £17,000. Those statements must not be accepted at their face value. From the profit of £40,000 must be deducted taxation, and the net profit may be only £20,000. For that reason, the basis for determining " blacketeering " should be the amount that remains after the deduction of income tax.


Dr Evatt - That goes back to the administration of the Prices Regulations.


Mr FADDEN - Yes. It is an excellent reason why the Attorney-General should adopt my suggestion to appoint a committee. The Prices Commissioner knows all the facts.


Dr Evatt - The right honorable gentleman means that, before prosecutions are launched, those circumstances should be considered.


Mr FADDEN - Yes. The Opposition agrees that this legislation is necessary. At a time when our manhood is fighting so that we may hold the title deeds to this country, any profiteer or " blacketeer " should be shown no mercy. Even imprisonment is not an adequate punishment for such a crime.







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