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Thursday, 25 November 1965


Mr McEWEN (MURRAY, VICTORIA) (Minister for Trade and Industry) - Normally I would not be familiar with evidence given before the Tariff Board, as it is beyond my capacity to keep abreast of all that evidence, but the honorable member was good enough to let me know that he proposed to ask this question and this led me to ask for a copy of the evidence which was given. I find that Mr. Wilson of Fibremakers Ltd. was asked, amongst other things, what return on capital he thought was proper for his company, and he said repeatedly in reply to the Deputy Chairman of the Tariff Board that he was not prepared to give an answer to that question in public but that he was prepared to advise the Tariff Board confidentially. Under further questioning he then appears - I am speaking from memory - to have said: " Well, similar companies in the United Kingdom and other countries secure a return of 20 per cent, on their funds." I cannot really read that as indicating that Mr. Wilson was saying that his company should get that return. Indeed, one needs to know whether the 20 per cent, referred to was obtained before tax or after tax. We should bear in mind that in recent times the rate of tax imposed on company earnings in the United Kingdom has been in excess of 10s. in the £1, so that a gross return or a return before tax of 20 per cent, could lead to a return after tax - the significant return from the point of view of- the shareholders of the company - of less than 10 per cent. I feel therefore that there is no basis on which I could reply to the honorable member's second question.







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