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Thursday, 14 May 1942

Senator KEANE (Victoria) (Minister for Trade and Customs) . - On the 29th April, I replied to a question asked by Senator Aylett concerning price control in respect of the Myer Emporium Limited, Melbourne, and the question of refunds by that company. Subsequently representatives of the company called on me to seek a clarification of the position, and questions were also raised on this matter in the House of Representatives. In view of the importance of the practice adopted by me of " declaring " firms under the National Security (Prices) Regulations, and of the decisions made by the Prices Commissioner, not only in the case of the Myer Emporium Limited but also in many other cases, I wish to make a further statement on the subject.

As regards the Myer Emporium Limited, it is true, as I intimated in my original statement when this company was " declared ", that it had not adjusted its normal trading practices to the principles of price control, but it is equally true that the continuance of normal trading practices, and in particular the practice of discounting stock valuation, involved sales of goods at variance with the principles of price control. The goods were sold at a gross profit margin in excess of the- pre-war gross profit margin. It was on this ground that the company was " declared ", and that the whole of its operations were brought under the direct control of the Prices Commissioner.

This is also true of all the retail and wholesale firms that have so far been " declared " under the Prices Regulations. In the case of the Myer Emporium Limited the average amount of overcharge was not a high percentage, but the number of transactions involved was so great that the aggregate amounts of the overcharge reached the substantial figure f conveyed to the Senate in answering Senator Aylett's question. It should be mentioned, however, that the period concerned extended over two years, and that the total sales volume during that period was £12,000,000, representing 4:0,000,000 transactions. There are many other cases of " declared " firms in which the aggregate amount was much smaller but the overcharge per transaction much greater. In making a determination under a declaration of all the goods and services supplied by a particular firm, the . Prices Commissioner takes into account the amount of overcharge in the war-time period brought about by the operation of a higher gross profit margin than that prevailing at the outbreak of war. A new gross profit margin is then fixed by the Prices Commissioner under which the whole of the excess charge is refunded to the public on future trading activities. The accounts of the company concerned are continuously under review by the Prices Commissioner, and the public obtain the full benefit of any reductions. J.n the case of the Myer Emporium Limited, a substantial amount has already been refunded and the process is still going on. It is the objective of price control to keep prices as low as possible, and this practice is in line with that objective. Apart from legal difficulties involved in direct refunds to the Treasury, such a method of adjusting the position would not result in the public obtaining cheaper goods. It has been suggested that the method of declaration and of adjustment of prices under the control of the Prices Commissioner does not amount to a penalty- on the firm concerned,' and that prosecution would be more effective. That aspect of the matter has been fully considered, and whilst many traders are still prosecuted f or offfences, it has been found that, for certain breaches of the Prices Regulations, the method of declaration provides a far more effective control. Apart from the severe adjustment of prices insisted upon, the whole of the trading activities or the company, including its conditions of trade, are 'brought under the direct supervision of the Prices Commissioner, lu the case of prosecution it is necessary to proceed on each individual sale, and in the case of. a large company this would mean an enormous amount of detailed work and the presentation of many thousands of cases in order to bring before the court the total overcharges made by the company. The Myer Emporium Limited handles nearly 2,000,000 transactions a month, representing about 40,000,000 individual sales from the outbreak of war until the firm was " declared ". The overcharge on any one transaction would be small and it would be necessary to examine millions of transactions and to furnish a court with evidence on each one. This would be a colossal task, far beyond the resources of the staff available. While one firm was being dealt with on these lines, many other firms would be escaping proper supervision. Moreover, on the experience so far gained from prosecutions, the fines imposed in many cases fall far short of the total amount overcharged by the offenders. 1 remind honorable senators that the penalties for breaches of the Prices Regulations are fixed under the National Security Act and cannot be determined by the regulations. In all the circumstances, I have no doubt that the method of declaration is by far the most effective weapon at my disposal as the responsible Minister. This view, I may add, is fully shared in trading circles, and it is no exaggeration to claim that the method of declaration has been perhaps the most potent factor in giving the Prices Commissioner the authority to deal firmly with traders who otherwise might obtain overcharges on a wide range of commodities. This is not to be regarded as eliminating the need for prosecutions, and a great many prosecutions, not only in the cities but also in country towns throughout Australia, have been successfully conducted over recent months.

Senator JAMESMCLACHLAN (South Australia) [8.50fJ. - Yesterday, I asked the Minister representing the Minister for the Army whether his colleague had seen press reports to the effect that American war correspondents in Australia were debarred from transmitting news to American newspapers dealing with amendments of the Commonwealth Defence Act. I asked further whether the censor was acting in this matter under Government instructions, and, if so, why? In reply, the Minister said : -

I have not seen the reports referred to by the honorable senator. However, I have no doubt that all communications between American war correspondents in Australia and newspapers in the United States of America are subject to censorship.

That was not an answer to my question. I wanted the Minister to state whether the censorship in this instance is carried out by the censors themselves, or under instructions from the Government.

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