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Thursday, 11 April 1946

Mr HOLT (Fawkner) .- The poor calibre of this Government has been shockingly reflected in the offhand manner in which it regards the disastrous blow that Australian trade in the East lias suffered. I do not desire to traverse the ground that my colleagues have already covered concerning the merits of the dispute which is holding in Australian ports ships containing foodstuffs and materials that are urgently required by the Dutch Government for use ill the Netherlands East Indies. I shall confine my remarks to the trade aspect of the subject. It cannot be denied that honorable gentlemen opposite have been very slow in realizing the damage that is being done to Australian trade in the East by the dispute that is continuing on the Australian waterfront; but I am surprised that they have not realized the damage that this dispute is undoubted -. doing to industries in their own electorates. I can imagine the political storm that would have broken over the heads of honorable members on this side of the chamber had they been in office at' the time such a dispute occurred. We would have been told that industries were being destroyed, and homes blasted by the curtailment of employment which is inevitable in such circumstances. Not so long ago the people of the Netherlands East Indies were regarded as our greatest potential export customers apart from our leith and kin in Great Britain. We went to a good deal of trouble some years ago to open markets in the Netherlands East Indies. The first Australian overseas trade commissioner ever appointed was sent to that area. In the " 'thirties " Australian industrialists chartered a special boat to take Australian produce to the Dutch East Indies, and strong efforts were made to lay the foundations of a first-class export trade. We had realized prior to the outbreak of the war that a valuable market existed there, and that the productive capacity of the East Indies could supply useful goods. for Australia. Yet the Government has indicated that it regards this dispute as being outside of its jurisdiction. Ministers and also officers of the Australasian Council of Trades Unions have admitted that, more humbug and chicanery is observable' in this dispute than has been manifest in possibly any other that has occurred in Australia. It is admitted . also that the dispute has been fomented, and is being maintained, by the Communist elements in certain trade unions. Why then has the Government done nothing, in the last seven months, to force the issue?

To-day the Netherlands East Indies authorities have intimated that they have found it necessary to cancel certain orders that have been placed for Australian goods. That means, of course, that a nasty stain has been placed on Australia, because of its unsatisfactory dealings with an old and tried ally. The fact has been established that more than 250 Australian firms have been preparing orders for despatch to the Netherlands East Indies. Undoubtedly, those firms will incur heavy financial loss through the cancellation of orders, and this is specially serious at a time when they are endeavouring to convert their operations from a war basis to a peace basis. Any one who has had practical experience in business will know how adversely both small and large firms can be affected by the cancellation of orders in this way. A severe blow will also be inflicted upon the employees of those firms, for the workers will be deprived of prospects of continuous employment due to expanding industry.

The Prime Minister (Mr. Chifley) to-day made the utterly unwarranted and unworthy statement that one of the principal reasons why the Netherlands East Indies authorities had cancelled certain orders was lack of finance. I am astonished that such an argument should have been advanced. If that is the true state of affairs, Australia should havebeen prepared to grant liberal credit tothe Netherlands East Indies as an acknowledgment of .services rendered during the war. It must be remembered,, too, that the vessels which are being held up in Australian ports have been described by the Prime Minister as " mercy ships ". It would be to the everlasting discredit' of Australia, therefore, if it allowed financial considerations to prevent the despatch of these ships. Questions of financial accommodation should not be allowed to hinder the development of this trade. As the honorable member for Flinders (Mr. Ryan) has said, the Australian people will not accept the policy of the Government in this connexion. This dispute could undoubtedly have been settled quickly in its. early stages had the Government taken a firm stand against {he waterside workers. This is said to be a trade union government, and Ministers certainly could have taken disciplinary action in the matter, but apparently they were not prepared to engage in a really first-class brawl with the waterside workers on the eve of a general election. However, if the dispute is allowed to continue, chaos must eventually occur on the waterfront. and the Government will, in consequence, be incontinently turned out of office. 'I hope, therefore, that Ministers will display a little more courage in this matter.

I wish now to refer to the decision of the Government to terminate the operation of National Security regulations on the 31st December. A bill designed to achieve that object was passed by the House earlier this afternoon. The Prime Minister, however, has indicated that certain controls will be continued after the act ceases to operate, and that legislation to this end will be introduced, though not at an early date. In fact, the right honorable gentleman has told me, and has stated publicly, that such legislation will not be introduced until after the elections. Australian trade and commerce, therefore, is to be left in a state of suspense as to the form that the legislation will take. "We know that the Government intends to continue some control over prices, capital issues, rents, and real estate transactions. Thepeople are entitled to information about the nature of the controls that will operate. The Associated Chambers of Commerce and Manufactures have submitted to the Government certain views on this subject, and they have also indicated their dissatisfaction with existing controls. The need for some measure of prices control has been, admitted., but the manner and extent of it requires careful consideration. The war-time prices control regulations were designed to restrict competition and to divert the resources of the nation to war purposes. That policy is now in reverse, and certain inflationary tendencies are already observable in this country. The reason for this is that insufficient goods are being manufactured and marketed to meet the demands of people with money to spend. The answer to an inflationary situation of that kind is the production of the necessary goods ' in sufficient volume to meet the demand. Production in that volume cannot be achieved if the incentives which make it possible are stifled. Prices control is one of the impediments to reconstruction in Australia. It is not a popular subject to debate, because there is always the easy and cheap political argument about profiteering and so forth. Properly understood, profit, at a time when competition is in full force, merely represents the difference between efficiency and inefficiency in the conduct of a business. In Australia, 'businesses with a virtual monopoly of production so far as the local scene is concerned have had merely tariff protection against the production of other countries. Consequently, such profits as they were able to make represented the efficiency of their businesses compared with the relative inefficiency of others. Therefore, rather than condemn them for making a profit, we should welcome it as a sign of efficiency in Australian industry. But so much of prices control in the hands of this Government has become profit control that we have the thoroughly anomalous situation of one class of goods, produced by one manufacturer, carrying a different price from that of the same goods produced by another manufacturer; because, by limiting the profit of the one you place a premium on the inefficiency of the other. That is not a way in which to encourage production. If profits are made, tax is paid on them. It has been estimated that SO per cent, of all the profits earned by companies goes back to the Treasury in the form of tax on the companies or on the incomes of the individuals when the dividends have been distributed. ' Five months ago, the Associated Chambers of 'Commerce of Australia placed their story before the

Minister for Trade and Customs (Senator Keane), who promised to supply an answer to the case they had made out. They have not yet had that answer. It would appear from the Government's official announcement that we are not to learn what its policy on prices is until some time after the next general elections. Answering me at question time, the Prime Minister admitted that if goods were in adequate supply in a competitive field prices control would be unnecessary. Yet to-day those goods that are in the most highly competitive field are carrying the greatest burden in regard to prices control; because in the competitive field, normally, businesses producing a multiplicity of articles of many varieties, and having to contend with all the paraphernalia and rigmarole of the prices control machinery, are placed at a much greater disadvantage than a firm which manufactures one or two standard lines. I hope that the Government will not defer until after the elections the hopes that have been entertained in regard to the modification of prices control. I urge the Prime Minister to instruct the. officers of the prices administration to put into effect the policy that he enunciated when he said that if goods are in adequate supply in a competitive field, -prices control is no longer necessary.

I turn to another matter which I believe to be hindering the supply of housing for the people of the Commonwealth. The protracted continuance of a war-time control is having repercussions, r refer first to what is palpably an injustice against one section of the community, namely rent control. I realize that votes are not won by advocating increased rents for property-holders. But we should not be concerned merely with vote-catching; we should have some regard for fair play and equity in the application of Commonwealth regulations or legislation. The rents pegged at the 1940 level are still continuing. This is an utterly unwarranted discrimination against one class of holder, which is not shared by holders of many other kinds of assets. From time to time, adjustments have been made in respect of wages, with a view to counter-balancing increases of the cost of living.' But there has been no adjustment ill respect of the 'property-holder, who pays tax at property rates on the income that he derives in that way. The return from his property is based on the utterly false premise of the 1940 valuation. Tenants have had their wages secured by cost of living adjustments; therefore, these have not been pegged in the same manner. In order to reveal clearly the absurdity of the position, let us take a return of 8 per cent, in 1940 on a house valued at £1,000, namely £S0. To-day, the same house would certainly cost at least £1,500 to construct. A return of S per cent, on that amount would be £120. That is a gross return, from which rates, depreciation and other outgoings have to be met. Consider also the sale prices of properties to-day, which reveal an equally absurd anomaly. Prices of property are pegged at the 1942 level. A home that could be built for £1,000 in 1.942 could not be built for less than £1,500 to-day. Probably the 1942 construction would be the more valuable, because it would contain better materials. This would more than counterbalance the depreciation that would have taken place during the last four years. Yet, under the regulation -, the treasury must refuse consent to th. sale of the 1942 home at more than the then value of £1,000, but must allow the 1946 house to be sold at £1.500. The Government may not feel very greatly concerned at the effect on the property-holder. I suggest that it might feel concerned at the effect on those who desire to purchase homes, because undoubtedly a direct consequence of this policy is a freezing of the supply of homes throughout every State. Thousands of owners of properties to-day will not sell them, even though they could do so, because they know that the present cost of a new home, or one bought on the black market if they were obliged to purchase in that quarter would be very much higher. In existing circumstances, two blackmarket transactions are involved. The owner of a house sells it at the black market price, and if he has to acquire another home he has to pay the black market price for it. Those who fall within this category must represent only a small fraction of those wishing to sell and purchase homes, because the majority of the people desire to abide by the law. Therefore, it is not sufficient for the Government to tell Australia that these controls are to be continued indefinitely, and that the future form of control will not be disclosed until after the general elections. I am certain that some of the controls that I have mentioned - prices, rents, land sales, capital issues - and others which to-day are having a restrictive effect on the Australian economy, could be modified with great advantage to the community as a whole. The essential principle could be maintained, and they could be applied where they could be -shown to be still essential. Every one engaged in industry to-day is convinced that they are being applied where they are not merely unessential, but are also having a harmful effect on the Australian economy. I hope that the Minister who represents in this House the department which administers so many of these controls, will , be able to reply satisfactorily to my comments.

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