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Wednesday, 2 July 1941


Senator CAMERON (Victoria) . - The motion before the Senate raises the question of price fixation. I shall support the motion because it provides that a select committee be appointed to go into the whole question of the price of superphosphate.


Senator Gibson - No; only the manufacture and sale. The motion does not affect phosphate rock at all.


Senator CAMERON - It is all a matter of interpretation. I am placing my own interpretation on the motion, and am not accepting the honorable senator's interpretation. The Minister for Aircraft Production (Senator Leckie) said that we know all of the facts. I join issue with him there, because, after listening to the Minister and Senator Gibson, it is obvious that they do not know all of the facts. Further facts are ascertainable.

In any references which I may make to the Commonwealth Prices Commissioner I wish it to be clearly understood that I do not reflect on him personally. I regard that officer as one who fixes prices in accordance with instructions received, and not as a free agent. Consequently, I do not hold him responsible for the policy which he carries out. I say this now because my remarks on a previous occasion were construed to be adverse criticism of the Prices Commissioner. I assume that that officer operates on the basis of passing on increased charges to the consumer.


Senator Spicer - In what other way can increased charges be passed on?


Senator CAMERON - It is possible that the capital charges and overhead charges are capable of reduction. Into these aspects of increased costs there should be a full inquiry. It is not a sufficient reason for raising the price of any commodity to say that the price of this and that has increased, and therefore the increased cost must be passed on to the consumer. As honorable senators opposite have said that no profit is made in this industry I draw attention to the report of the Tariff Board which went exhaustively into this subject in 1929. On page 17 of its report, the Tariff Board stated -

A summaryof the results obtained ls shown in the following compilation: -

 

Although the average profit is shown as 12.9 per cent, on the capital employed, this figure is understated for the following reasons : -

(a)   The profits on which this percentage is based are derived solely from fertilizers, although in some cases portion of the capital is used in the production of industrial chemicals.

(b)   The profits include large amounts representing interest on outstanding accounts. It was shown in evidence that the interest charges range from 5 per cent, to 10 per cent, per annum, hence the profit represented by manufacture and sale must be well over the 12.!) per cent, shown in Table " L- ".

The output from the factories whose particulars are included in this table totalled 345,510 tons, and the profit per ton on sales was 13s. 2d. A reduction of approximately 3s. in price would have reduced the profits to 10 per cent., providing the output remained the same, and a reduction of 5s. per ton would have made, the profits approximately 8 per cent, on the same tonnage.


Senator Spicer - To what companies does the honorable senator refer?


Senator CAMERON - The companies referred to in the report are those which supplied balance-sheets to the Tariff Board. I have quoted from the report of that body.


Senator Gibson - The honorable senator referred to companies which are manufacturers in a big way.


Senator CAMERON - The honorable senator said that no profits were made in the manufacture of superphosphate, but if the figures in the report of the Tariff Board be correct the investigation carried out by that body proved otherwise.


Senator E B Johnston - What is the date of the report from which the honorable senator has read?


Senator CAMERON - It was issued in 1929.


Senator Gibson - Does it refer to the activities of the companies in respect of chemicals?


Senator CAMERON - The report points out that the profits are greater than those shown by the companies. In September, 1929, Mr. John Gunn, who at the time was Director of Development, directed attention to the huge amount of the debts owing by farmers to various companies. Mr. Gunn reported that the unpaid debts of farmers due to the companies amounted to £2,000,000. Apparently they can afford to lose £2,000,000 in bad debts, and still show high profits. From that point of view, it is evident that this is a highly profitable industry.


Senator Leckie - The honorable senator is comparing entirely different years. The bad debts to which Mr. Gunn referred were incurred in or about 1931-32.


Senator CAMERON - . This industry made high profits in 1932. Since then, its output has increased. We are justified in assuming that its profits have increased proportionately. The minority report of the Tariff Board, at page 33, stated : -

One of the most unsatisfactory phases of the fertilizer industry in Australia has been the high cost of mixed fertilizers. This has been particularly true in Queensland, where all the ingredients except organic nitrogen for mixed fertilizers are either imported from overseas or obtained from the other States. To the consequent high prices has been added the high charge of £1 per ton for mixing. The prices of the resultant mixtures have been so high as to greatly discourage their use, and production has thus been retarded. This is now being recognized, and although we have no record of the actual reduction in cost of mixed fertilizers, we understand that the prices are being lowered.

According to the minority report, every advantage was taken at that time to increase prices with the object of increasing profits. To date it can be assumed that from 1929 to 1932 the position of the industry has improved as the result of the increased use of superphosphate and, incidentally, that the profits of the manufacturers have increased proportionately. A large portion of those profits have been capitalized. I think that Senator Gibson made some reference to the capitalization of profits although he did not actually use those words. When the Prices Commissioner investigated- this matter, he was shown where increased costs were incurred. The Commissioner and the Government have yet to inform us to what degree, if any, they have investigated capital charges and unnecessary overhead charges.


Senator Leckie - They have been investigated very carefully.


Senator CAMERON - If that be so they have never informed us of all of the facts. The Minister says that all the facts are known. I say that all the facts in connexion with capital charges and unnecessary overhead charges are not known to the members of this Senate and I doubt very much indeed whether they are known to the Prices Commissioner or even to the Government itself.


Senator Leckie - The Prices Commissioner said in his report that he had investigated them. He told us by how much they 'had increased.


Senator CAMERON - That is true, but he did not go into the matter as thoroughly as the Tariff Board. Under cover of the war, production is being restricted.


Senator Leckie - By whom?


Senator CAMERON - By the demand and possibly by the Government's action in reducing the acreage on which wheat may be sown. Production will no doubt be restricted if the Government adopts the policy of rationing superphosphate. The point is that, whatever happens, the profits of the manufacturers of superphosphate are not being reduced. If superphosphate be rationed and wheatgrowers are not able to cultivate their land as they have done hitherto, they will, for all practical purposes, be driven off their land. If that be done do the Minister and Senator Gibson propose to provide other opportunities for displaced wheat-growers to earn a livelihood for themselves and their families?


Senator Leckie - Of course we do.


Senator CAMERON - I view the position with a good deal of alarm, and I am challenging it now so that it cannot be said after the war is over that honorable senators on this side of the chamber acquiesced in the Government's policy or, not knowing what waa going on, failed to rise in protest.


Senator Leckie - That has nothing to do with the motion.


Senator CAMERON - The motion provides for the appointment of a joint select committee to inquire into the whole of the ramifications of the industry with the object of assisting farmers to obtain their requirements of superphosphate. To-day, as the result of the increased profits made by the manufacturers, farmers cannot obtain the superphosphate they require. The Minister would leave the position as it is and say that it is irrelevant for honorable senators to deal with the position of those who will be penalized. I maintain that a discussion of the effects of the high price of superphosphate is relevant to the motion. I go farther, and say that it is a major issue.


Senator Leckie - The motion was submitted by a member of the party to which the honorable senator belongs. In view of that, why was not provision made in it for the proposed committee to inquire into these matters?


Senator CAMERON - The motion asks for the appointment of a joint select committee of the Parliament to inquire into and report upon all matters related to the manufacture and sale of superphosphate in Australia. The wording of the motion is all-embracing. It refers to " all matters " which includes the displacement of wheat-growers from their land because of their inability to purchase superphosphate. It could not have been, worded in clearer or more convincing language. It proposes a thorough and all-embracing inquiry into the manufacture and sale of superphosphate, and the way in which farmers will be affected by the high price of superphosphate.


Senator Leckie - The motion refers to " all matters connected with the manufacture and sale of superphosphate".


Senator CAMERON - It reads, " All matters related to the manufacture and sale of superphosphate ".


Senator Fraser - The Minister is merely quibbling.


Senator CAMERON - That is so ; but his dialectic acrobatics will not influence me. It has been estimated by Senator Fraser - and he has based his estimate on the best of information obtained from Western Australia - that, if the increased price of superphosphate has to be paid, the added burden on wheat-growers in Western Australia will be between £360,000 and £400,000. We know perfectly well that before the price was increased the position of the farmers was desperate. That has been admitted by the Government over and over again and by the best authorities on the subject. It follows that if this additional burden be imposed, their position will become even more desperate. Then we may have rationing of superphosphate, which means that an increased number of farmers will be either starved off or driven off their land. That, in turn, means that those wheat-farmers who possess the largest areas will have a monopoly of wheat-growing. What will happen in Australia if that be done is what has already happened in the United

States of America. There we find that, for all practical purposes, primary production has been monopolized practically 100 per cent. Freehold farmers, sharefarmers, tenant farmers and individual farmers do not exist to anything like the degree that they did before this monopolization of industry took place. Millions of them to-day now constitute a permanent army of unemployed with nowhere to go and no means of earning a livelihood. They depend solely upon the charity of the Government in order to live and bring up their families. That state of affairs has arisen in the United States of America as the result of the very policy which this Government has adopted. It is a policy to restrict the growing of wheat, rationing, and other ingenius and insidious devices adopted for the purpose of driving the smaller man off the land and concentrating control and ownership in the hands of a few monopolists who, in most cases, are financial institutions. "When this has been achieved the whole of the industry is mechanized, and fewer men with uptodate methods are able to operate large areas that formerly supported thousands of small families. Yet the Minister is satisfied and says that nothing should be done to interfere with the Government's policy. He claims that all the facts are known and that we, too, should be satisfied. We would be remiss in our duty if we did not point out these things. The time is overdue, I submit, for the appointment of a select committee to inquire into this industry. In fact, if the Government were prepared to take the action it should take, it should not have to wait for a select committee to say how this question should be settled. It should take immediate action to ensure that all our primary producers are at least given an opportunity to earn a decent livelihood. It is well within the realm of practical politics. The Government, however, has refused to take action along those lines. It proposes wherever possible to raise barriers in order to prevent anything from being done for the relief of the wheat-growers. In view of the facts we already know - and we do not know all of the facts - and in view of the way in which the war is being used as a cover *in order to maintain increased profits at the expense of the farmer, a select committee should be appointed to inquire into the industry. We must also bear in mind that the farmer is obliged to sell his product at the minimum price, whilst he is compelled to buy superphosphate at the maximum price. Such a committee could, go into the matter even more thoroughly than did the Director of Development in 1932 and the Tariff Board in 1929. We are expected to rely upon what the Prices Commissioner has told us. I have no intention of reflecting upon that gentleman, but I remind honorable senators that the Commissioner is responsible to the Government. He is a Government servant, and carries out the Government's policy ; but a parliamentary select committee i3 under no obligation to the Government, particularly when it includes members drawn from this side of the chamber. The only obligation we recognize is our direct obligation to the farmers, who will be victimized by any increase of the price of superphosphate. How can we reasonably be expected to accept what the Commissioner says, or even what the Governmentsays in view of its policy of private monopolist ownership of primary production? Briefly, that is the policy of this Government.


Senator E B Johnston - Several of the companies in Western Australia are co-operative companies.


Senator CAMERON - They are cooperative in name. Real co-operation cannot be achieved when farmers are hamstrung. Farmers, or any other section of the community, can co-operate only within the limits of the present economic system. Men 011 the basic wage may co-operate for the purpose of purchasing bread and meat, but their cooperation is restricted by their purchasing power. That is not co-operation in the broad sense of the word, which itself is used merely to camouflage the real position, and to mislead people who do not know better. Nobody knows better than Senator .Johnston the restrictions and obstacles that are placed in the way of the primary producers of Western Australia. They can co-operate as much as they like, but until they co-operate to change the Government and its policy they will not get very far under existing conditions. All that their present cooperation will do will be to prolong the agony.- So long as I have an opportunity to protest against this iniquitous and infamous method of driving men off the land, and depriving them of their livelihood under the cover of war and patriotism, I shall protest as strenuously as I am doing now, and even more vigorously in future.







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