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Thursday, 25 May 1939

Mr ROSEVEAR (Dalley) .- When I was interrupted I was discussing the price of copper, a metal indispensable for munitions. Though it is to a certain extent refined whenacquired by,the munitions factories, it is still essentially a raw material. I point out to honorable members that it will be very difficult to control profits on manufactured goods when such flagrant profiteering is actually taking placein regard to the supply of copper. The average Australian might assume that the cost of copper to the Australian Government, particularly for defence purposes, would be the cost of mining, smelting and refining it,plus a reasonable profit. We find, however, that even the Commonwealth Government has to pay the London ; price for the Australian copper which it buys in Australia. This includes freight on copper which never goes to London, plus exchange on the purchase price in sterling, in order to convert it to Australian currency. All those charges are added to what the Australian citizen would consider a fair price for a commodity produced in Australia. Therefore, when the Government is exploited in respect of this essentialraw material, I should like to know what method it proposes to adopt to prevent excessive profit-making by manufacturers. As a matter of fact, the Government has not yet stated what it considers to be a fair rate of profit. The only indication we have had is the statement of the Minister regarding goods manufactured in defence annexes. The Government, in order to encourage private manufacturers to interest themselves in the manufacture of munitions, has offered to provide them with the necessary machinery and buildings, to give them contracts, and to allow profits at the bond rate of interest. These annexe manufacturers will probably be on a good wicket. The work will be provided for them, and they will be allowed a fair rate of profit on all their undertakings. It is extremely difficult, however, to know How the Government proposes to control the profits of private manufacturers outside the annexe scheme. It has set up a panel of accountants to advise it . on the matter; but the members of that panel will have no responsibility to the Government. They will be giving their services voluntarily, and as they are all themselves in a large way of business, they willbe able to devote to government workonly such time as they are able to spare from their own business activities.

Defence requirements are not by any means confined to shells and guns; they include practically everything from a needle to an anchor. The Government will have to buy foodstuffs, boots, uniforms and other items of accoutrement. So far, honorable members seem to have concerned themselves only with controlling the profits of those engaged in the manufacture of actual munitions of war, but it will be just as necessary to control the profits of those supplying every other kind of defence requirement. Those who, during the war, made fortunes out of the manufacture of munitions, have been justifiably condemned, but not so much has been said about those who made fortunes out of supplying to the various belligerent governments putrifying foodstuffs. Little has been said of the fortunes made by those who provided clothing and other necessaries for the soldiers during the Great War. The point I emphasize is that the supplies of raw materials, in which there might be exploitation of the Government in a time of emergency, cover such a wide range that it will be practically impossible for the advisory panel of accountants, who are to give their time voluntarily and, therefore, will probably make a spare-time, instead of a full-time job of their work, to see that the Government gets a fair deal in the contracts it lets. In these circumstances the safeguards which the Government proposes to establish in order to prevent exploitation are totally insufficient. Furthermore, the Government has not satisfied honorable members as to what it considers to be a fair rate of profit in respect of contracts apart from those to belet to the annexes. After all is said and done, the issue to-day is simply whether or not the Government should leave all of this work to private enterprise. Up-to-date, we have, happily, been able to supply all of the requirements ofour Military Forces, and, as I believe the possibility of invasion to be remote, existing factories operating under government control should be able to supply pur probable defence requirements for many years to come. For this reason, I am totally opposed to this measure, particularly the provisions of this clause. Theyare unnecessary. Furthermore, the

Government is not sincere in its attempt to limit profits in connexion with these contracts. I repeat that it has not yet made a statement as to what it considers to be a fair rate of profit, whilst it has also failed to provide any definite machinery for the purpose of assessing costs and profits in the industries concerned. For these reasons, I shall support the amendments moved by the Acting Leader of the Opposition. Whether it be workable or not, it will, at least, make it mandatory on the Government to do something which it now only proposes in a nebulous way to do.

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