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Friday, 26 November 1965

Dr DUTHIE (WILMOT, TASMANIA) - In Tasmania. I am sorry that we have these short-cut merchants in our State who want to take it out of the hides of the poor old consumers through this massive collusive tendering system. The report continues -

In brief, restrictive trade practices may have two effects on prices; some cause prices to be higher 'because profits are higher than they would be in a competitive situation and others cause prices to be higher, because costs would have been lower if inefficiency were not protected by the trade arrangements and agreements. ' -

That is well stated. Then the Commissioner said-

Restrictive trade practices also have an impact on the balance of payments. Evidence was adduced of trade practices which caused buyers to seek supplies from overseas. The elimination of these restrictive trade practices would not only tend to reduce imports, but in so far as it moderated the rate of price increase it would assist exporters, particularly the primary producers, whose products are sold on competitive world markets.

That is an outstanding report. The findings are there in black and white. The Tasmanian Government will do its best to implement those that it can. The Tasmanian royal commission has gone a long way to show us in this Parliament just what is going on at the grass roots level of business in Australia as a result of collusive tendering and the use of horizontal and vertical agreements, as they are called, and of unilateral practices.

Finally I should like to mention another matter which is not covered by the Bill. It is the Government's failure to meet the serious difficulties threatening Australia's exports, and in particular its failure to counter the licence arrangements and agreements entered into by Australian manufacturers associated with overseas companies which prevent or restrict exports. This is a serious omission from the Act. There are two types of Australian manu facturers in this category. The first is the Australian company which, by reason of an agreement to pay royalties or licence fees, obtains from an overseas manufacturer or company the right to manufacture in Australia a product of a design which carries a well known brand name. One of the conditions of such an agreement is that the Australian company cannot export that article which in fact is an Australian made article.

The second type is the company which is a wholly owned or partly owned subsidiary of an overseas company and which, as a matter of company policy, cannot export, or, if it is permitted to export, is able to do so only to a restricted area. I have evidence from the Department of Trade and Industry which indicates that there are 650 Australian firms which are subsidiaries of or have manufacturing agreements with United States companies. Only 275 of these recorded an interest in export. The evidence which I have discloses that many of the companies had agreements which restricted the export of the goods they manufacture here under licence from their American counterparts. The evidence I have states -

Of the 650 Australian companies with which tha Department of Trade corresponded-

This was in 1960-61 - 71 with British connections reported that they had signed agreements to limit or to restrict exports. As was the case with the companies having United States connections, most companies did not report any interest in exports for the obvious reason that they did not want to disclose the fact that they had signed agreements restricting their right to export.

That is, to export goods made here. I have evidence relating to an amazing number of manufacturers of stoves, grillers, boilers, washing machines, and refrigerators who have signed agreements restricting the export of their products to Australian controlled territories. The Commonwealth Statistician has revealed that in the 12 months ended 30th June 1963, Australia exported 1,326 mechanical type refrigerators. Of that number, 515 went to New Guinea. Others were exported to Papua, New Zealand, Fiji and Borneo. Of the 1,326 refrigerators exported, 1,071 went to Australian controlled Territories. Only 20 per cent, of them were allowed to be exported overseas. Their export was restricted by agreements made with overseas manufacturing companies. As to non-mechanical refrigerators exported, only 23 per cent, were exported to areas outside Australiancontrolled Territories. The Minister for Trade and Industry has stated that 700 Australian companies were parties to 1,100 agreements which restricted the export of their goods and that with 40 per cent, of our manufacturing industries under foreign control, these restrictions were becoming serious. Unfortunately, a way to prevent or restrict this sort of operation is not provided in the Bill.

I hope that when we become the Government we will put in the Act a section to limit this type of agreement which restricts our exports of vital products to overseas countries. I support the amendment moved by the Deputy Leader of the Opposition and hope that the Bill is agreed to by the House.

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