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Tuesday, 26 July 1921

Senator EARLE (Tasmania) .- I move. -

That after sub-paragraph (i) of paragraph (h)of sub-clause 1 the following new subparagraph be inserted : - " (iA) failing to prevent unnecessarily high prices being charged to the consumer' for goods manufactured by him; or".

My object is to prevent the middleman making exorbitant profits upon goods which are Australian made. Of course, it may be argued that the manufacturer can- exercise no control over goods after they have left his factory.

Senator Benny - Neither can he.

Senator EARLE - I think that he can. If the dealings of a manufacturer . with his agents were open to inquiry by the Board, he would necessarily include in his contract of sale a provision that the goods purchased from him should be sold by the middleman at a reasonable profit upon the price which the latter had paid for them. We can just as easily insure that result as we can insist upon the manufacturer selling at a reasonable profit in the first instance. In the absence of such a provision, the entire object of the Bill will be defeated. Laws are passed for the purpose of controlling the dishonest citizen, not for the purpose of controlling, the honest one. If everybody would do the right thing, there would be no need for Acts of Parliament. The latter are intended to act as a deterrent to people who are prone to wrongdoing. If the manufacturers' responsibility is to cease the moment his goods leave his own factory,' what virtue is there in the Bill ?

Senator Crawford - Does the honorable senator propose to make the manufacturer responsible for the acts of his agents ?

Senator EARLE - I propose to insure that goods produced by Australian manufacturers shall be sold to the consumer at reasonable prices. '

Senator Crawford - The honorable senator wishes to provide that goods manufactured in Melbourne shall be sold at a reasonable price in the Northern Territory.

Senator EARLE - I do not suggest that it will be possible to give effect to my amendment in cases in which only small quantities of goods are sold by the manufacturer. But merchants usually purchase in large quantities, and it will be quite easy for the manufacturer to insist that, in their distribution, the retailers shall be content with a reasonable profit. In. the absence of some such provision, what would be easier than for a manufacturer to sell his goods to a merchant at, say, a. profit of 10 per cent, upon the cost of production, and to agree to permit the merchant to make a profit of 50 per cent, or 100 per cent., which they should share between them?

Senator Russell - If the manufacturer does that there is power in the Customs Tariff Bill under which the Minister may reduce the duty upon any article.

Senator EARLE - But would the manufacturer be likely to come to the Minister and tell him of such a conspiracy? The Board can only prevent the result which I fear by carefully watching the prices charged by retailers for any particular class of goods. .

Senator E D MILLEN (NEW SOUTH WALES) - The honorable senator's amendment would make the manufacturer police the retailer.

Senator EARLE - Very largely. The Minister has power to instruct the Board to inquire into the question of whether a manufacturer is charging unnecessarily high prices for his goods. That presupposes that the purpose of the Bill is to prevent the public being exploited by the manufacturer, who- has been protected by the Tariff. In the absence of some such safeguard as that which I propose, the manufacturer would be able to charge exorbitant prices for his goods. I am aware that under our Constitution we cannot directly control the middleman.

Senator Crawford - There- is provision in the Bill that the manufacturer must sell his goods to anybody who is prepared to purchase them.

Senator EARLE - The provision in the Bill is that the Board may be empowered to inquire into any instance in which a manufacturer refuses to sell to a particular individual. If my amendment be adopted, the manufacturer will not be : compelled to supply even £50 worth of goods to a retailer or merchant unless he has their assurance that they, in their turn, will sell those goods at a reasonable profit. I believe that tradespeople should be allowed to make a reasonable profit. But whilst affording every protection tothe manufacturer against the competition of cheaper goods from the outside world, it is the duty of this Parliament to see that the general public are not robbed.

Senator PRATTEN (NEW SOUTH WALES) - Will the honorable senator be good enough to define what is meant by " unnecessarily high prices " ?

Senator EARLE - I cannot lay down any hard-and-fast rule. Considerable elasticity must be allowed. This Parliament cannot say what would be a reasonable price to charge for any article. -The question of the capital employed in the industry', the cost of the raw materials, and other factors, would require to be taken into consideration. Consequently the Board, in making its report, would have to exercise the widest discretion. I regard my amendment as a very important one, because if some effort be not made to. prevent the exploitation of the people, the Bill will prove ineffective. I recognise that if I were speaking in opposition to the amendment I could raise many objections to it. I could urge that it would be impossible to follow the goods into general consumption, inasmuch as they might change hands several times before they left Flinders-lane. Nevertheless, if protection is to be granted to the manufacturer, some endeavour should be made to protect the interests of the general consumer.

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