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Thursday, 11 August 1921

Senator PRATTEN (NEW SOUTH WALES) (1:17 AM) . - I am obliged to Senator Gardiner for the opportunity to continue. The profits which I have just mentioned are high, and are not justifiable; but in view of the very big figures mentioned by Senator Guthrie in connexion with the operation of two or three concerns - he stated that one Victorian factory made £100,000 in. one year, and another, I think, about £90,000 - it is reasonable to assume that the old-established - and, shall I say, respectable? - woollen manufacturers of Australia did not make an average profit of more than 20 per cent, on their capital for a few war years. Moreover, it is to be remembered to their credit that during nearly the whole of this period they were working for the Defence Department in the manufacture of cloth for military purposes. The Department directed their output, and arranged the prices they should charge, and in some cases three shifts were worked, which meant a great deal of extra wear and tear on their machinery. They did get -20 per cent.; but do honorable senators know what occurred at Bradford during the same period? The whole of the Bradford manufacturers were grossly profiteering upon the world. Mushroom millionaires sprang up there in plenty. It should be remembered that even if the Australian manufacturers did make abnormal profits, and I admit that they did, because 20 per cent, profit is abnormal, there was an excess profits tax in operation at the time, and most of those who made 20 per cent, paid a considerable amount of that back into the revenue as excess profits taxation. I put that forward in fairness to them. I wish now to refer to the report of the Bureau of "Commerce and Industry, of which the Director is Mr. Stirling Taylor, which was quoted by Senator Guthrie. I do not accept many of the statements made by Mr. Stirling Taylor, 'for the reason that he has grossly misrepresented the amount of capital that is required to manufacture woollens. In his report, speaking from memory, I believe that he fixed the sum necessary to carry out a scheme he suggests at £14,000,000. I am informed on irrefutable authority that in view of the price of machinery to-day, which is three or four times what it was before the war, the capital required to carry out that scheme would not be £14,000,000, but would certainly be over £40,000,000, and probably nearer £60,000,000.

Senator Reid - Perhaps Mr. Stirling Taylor's figures represent merely a first instalment.

Senator PRATTEN (NEW SOUTH WALES) - If that be so there was no necessity for him to mislead the public as to the capital required to give effect to his scheme. I do not consider that a gentleman who will say that £14,000,000 is required for the purpose when certainly over £40,000,000 will be necessary is a well-seasoned business man of ripe judgment and experience.

Senator Bolton - Is that an opinion, or is it the result of calculation?

Senator PRATTEN (NEW SOUTH WALES) - I assume that it is merely Mr. Stirling Taylor's opinion.

Senator Bolton - "What is the honorable senator's authority?

Senator PRATTEN (NEW SOUTH WALES) - I am informed by one of the leading men in the woollen industry that Mr. Stirling Taylor's estimate is a gross miscalculation, and is not more than one-third, if it is one-third, of the total amount that would be required to carry out the scheme, under existing world conditions.

Senator Reid - Can the honorable senator say how much money is invested in the woollen mills we have?

Senator PRATTEN (NEW SOUTH WALES) - I have informed the Committee that the money invested and ear-marked for the development of the industry amounted, according to the latest information, to £4,000,000, which covers the establishment in Tasmania of a worsted factory that will be able to supply the whole of Australia's requirements in that direction. If our woollen industry had been sufficiently extensive to have supplied the whole of the treed Australia required during the war we should not have been blackmailed to the extent we were by the high prices charged for imported tweeds. I go so far as to say that if Australia hal been producing the whole of her tweed requirements during the period of the high profiteering by Bradford manufacturers, when we were charged four, five, and six times the prices of prewar days, we might have saved two or three, guineas on every suit of clothes worn in the Commonwealth during that time.

Senator Reid - We might have saved more.

Senator PRATTEN (NEW SOUTH WALES) - I want to put the position moderately. I have no hesitation In saying that if, during the war period, this industry h'ad been developed as we hope to see it developed within a very short time, we should have saved two, three, or even four guineas a suit, which we had to pay to the profiteering manufacturers abroad. When Senator Guthrie speaks of millionaire manufacturers and of the manufacturing industry as if it were the only industry making a reasonable profit, I should like to remind him that the wool-growers aTe, on the average, the biggest individual income taxpayers in Australia. I may inform him that 11,493 of them pay an average income tax of £170 each, whilst the manufacturers pay an average income tax of less than £100. The pastoralist companies in Australia pay an average income tax of £1,100 each, whilst the manufacturing companies pay an average income tax of £250. I bid the honorable senator remember these figures when he makes so many unfair references to successful Australian manufacturers. That is all I have to say, and I have made these remarks in justice to a very reputable Australian industry.

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