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Wednesday, 28 March 1973
Page: 783


Mr WHAN (Eden) (Monaro) - The proposal to create a prices justification tribunal gives rise to the suggested establishment of this committee. The 2 must be seen together. We have heard from the Opposition a case based on the old mentality of a conflict approach. It is not even true to say that we are talking about competition between prices and wages. Wages are a component of prices and if there is a conflict it is within the various components of prices that it should be identified. It is because of the lack of knowledge of the components of prices that we have had to make the judgments of the past and it is in order to develop a body of knowledge to give us an intelligent basis for judgment that this motion has been brought before the House. In elementary terms we might consider that prices consist of the components of wages, rent, overheads and profit. One could perhaps develop different arguments for different terms but the price we pay across the counter takes into consideration those costs. It is in order to identify those costs that the Government has suggested the establishment of this committee.

The causes of rising prices can be many. They can involve any one of those components. They might be due to a change in productivity, a lack of competition in the market place, or undue rises in any one of the individual components. By attacking the whole proposal today on the basis of a competition between capital and labour the Opposition has over-simplified the position. It has oversimplified it to the point where we cannot take a comprehensive and objective approach to the whole matter. The prices justification groupthat is, the committee and the tribunal - will be collecting facts to analyse the factors influencing price rises. It will be able to identify the source of the price rises. It will be able to identify the type of market system in which those price rises take place. This identification may be enough in itself. It may point to the cause and, having revealed the cause, public action in itself may be enough. The housewife and the shopper, knowing the reasons for the price rises, will be able to discriminate in their shopping procedures in order to avoid the areas of exploitation.

On the other hand the analysis may point to the need for new legislation which may not necessarily be confined to the restrictive trade practices Acts. Such legislation may be directed towards Increasing the rate of flow of innovation into our community because quite often price rises are due to a restriction not necessarily on prices charged but on ideas that are accepted in the market place. Certain economic concentrations prevent innovators from developing ideas in the market place. It may be that such an examination of price structure will point to the need to encourage innovation in those various areas. It may be that we need to examine very carefully the relative concentration of economic and political powers in various parts of our market system. All these factors will emerge from a close examination of the prices situation in various areas. It is for this reason - the reason of illumination - that the proposal has been put before this Parliament.

In order to achieve this correctly, it is absolutely essential that the communication between the buying public and the various elements in the market system be kept open. The whole question of communication is one which requires attention not only in this field but also in many fields of endeavour in our social structure. I suggest to honourable members that one way of looking at this is to consider the need for public contact to identify areas of increasing prices and to feed back to the public information that the proposed committee and the subsequent prices tribunal determine. There needs to be a flow of information and the best way to carry out that flow and to have a sensitive contact with the community is through this House and its members. They are the people who must justify this decision to their electorate. This will be yet another area in which the communication between the member and his electors will take place in a very meaningful way. This public contact which is so essential can be achieved by the committee which we now are proposing to establish.

Having made this contact, it should be recognised that we are not fully qualified research people. We need to be able to discriminate between the issues which are placed before this committee by the public that are identifiable. We need to sift out various proposals put before the committee and pass these on to a research group. It is not so easy to identify a research group in a simple way. We must have a research group which is applied and another more fundamental in its approach to various issues. The field officers and the applied research workers should, 1 believe, be identified fairly closely with the parliamentary committee. More fundamental and basic research needs to be identified with the prices tribunal. The need for legislation and the definition of that legislation can come from the tribunal.

So, we have this transition in the communications process from members of the public who believe that they are being subjected to undue price rises, through this House and its members. We are able to act as the sounding board for their objections, sift out these objections and classify them, perhaps in terms of the type of market system in which the price rises are taking place. For example, it could be a fully competitive system; it could be a cartel; it could be a monopoly. One could enumerate various market systems. The parliamentary committee will be in a position to classify these price rises in those terms and present the prices justification tribunal with fundamental problems that arise in terms of price justification.

I believe that this will be a very important committee, not only because of its economic implications but also because of the contact that it will establish with the general public It will bring government closer to the public. It is a sensible project, both technically and politically. It is sensible politically because it removes from the arena of these discussions a great deal of emotion that is generated on the basis of labour versus capital. We on this side of the House do not need to be told that capital requires a return. We do not need to be told that people who invest in property require rent for that property. We do not need to be told that, from time to time, wage demands get out of line. But we on this side as well as on the other side of the House need to know the relative balance between each of these components in prices. To identify prices and wages as a part of the conflict is to over-simplify to the point of being completely wrong. If this argument is to be presented at all, it needs to be identified in terms of the return on capital - if you like, profit - versus wages, both pf them being a component of price.

The issue of price control has been examined by various groups and various parliaments. This Government has acknowledged the restrictions that must be placed on the control of prices. It is quite clear that restrictions on price control must exist and that is why we emphasise the concept of price justification. To talk of price control is to miss the point that we have presented for the consideration of the House, namely, the concept of price justification. Price control requires a very large bureaucracy. It is an expensive operation to carry out and, indeed, is an almost meaningless operation in the absence of an understanding of the prices themselves. It is because we realise that it is a meaningless, expensive operation that the concept of price justification is being presented to the House under the proposal to establish this committee.

I commend the proposal to the House. I believe that the amendments proposed by the Opposition have been covered in the terms of reference of the proposed committee. Item (1) (c) of the motion moved by the Treasurer (Mr Crean) is in these terms: such other matters relating to prices as may be referred to the committee by resolution of either House of the Parliament.

Such a suggestion in the committee's terms of reference obviously will give the committee the necessary scope to consider prices charged by public enterprises. It is also obvious, of course, that the cost or price structure within a public enterprise will be known to the governments controlling that enterprise. The question of access to these costings does not arise. The question of access to private enterprise costings has been the subject of Bills introduced by the Opposition when it was in government. In the Wool Industry Bill the. Australian Wool Commission was given the power to examine and request prices and costs charged by groups which were operating in competition with the public utilities owned and run by the Wool Commission. Presumably, it was not necessary when the now Opposition introduced that Bill to point to the differences between prices charged in the private sector and those charged in the public sector. The power given to the Wool Commission was restricted to the private sector. Members of the Opposition established their own precedent when they were in government and it was unnecessary to move this amendment in the light of the terms of reference which are now before the House. I commend the proposal to the House.







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