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Thursday, 17 May 1973
Page: 2288

Mr ARMITAGE (Chifley) - I support the Bill. I do not think we can consider this piece of legislation in complete isolation. I think we have to look at the whole range of Government action on the very important question of inflation. Furthermore, I think we must realise that what is occurring in Australia is only an example of what is happening in the rest of the world today. We do not stand in isolation as the only country suffering from inflation. I think we should look at the root causes of this world-wide inflationary movement. I think that the action of the United States of America is the major root cause of this movement. I am not carrying out an an ti- American crusade in saying this but I think that America has to accept her responsibility for the excessive demand over resources that she has created throughout the world. This inflationary movement is even finding its way into countries such as Russia.

The real cause is, of course, that America has for nigh on 2 decades lived beyond her means. She has spent more than she has earned. This will have an effect upon that country and upon the economies she influences similar to that which it would have in any family group. America has spent more than she has earned because she has consistently been importing more than she has been exporting. She has been consistently assisting other countries in respect of foreign aid. We are very glad that she undertook this policy. But her assistance to other countries in respect of foreign aid meant, of course, the export of dollars. Importing more than she exported meant the export of dollars. She has exported dollars in respect of the war in Vietnam. She has exported dollars by purchasing other countries' assets and resources, buying up industries and resources such as mining. So, overall, in effect she has printed dollars and exported those dollars to the rest of the world. By doing so she has created a greater demand for resources than there were resources to meet it and accordingly a worldwide inflationary movement. Therefore when we look at this item of legislation and at the Government's pricing policies as a whole we should remember also that what we are endeavouring to do is to put a brake on a situation which has arisen because of the actions of another country far removed from here, but a country which has a reserve currency and accordingly has had a great influence and impact in regard to what can only be called its unwise policies of the last 2 decades upon all other smaller nations such as ours.

Our action, of course, as the Treasurer said, can only slow down inflation. We cannot by some magic means abolish the inflation overnight. It is not possible to do this. The Treasurer in his second reading speech on this Bill said:

The Government has already taken ... a number of measures to counter inflationary pressures - the revaluation of the Australian dollar, restraints on overseas borrowings-

To try to cut down that excess liquidity in the Australian market - domestic monetary measures including the call to statutory reserve deposits by the Reserve Bank, and the establishment of the Joint Parliamentary Committee on Prices.

I will deal with that Committee in a few moments. The Treasurer went on to say:

In the longer-term, policies in other fields - for example, on tariffs, restrictive trade practices and consumer protection - will have a favourable impact.

These proposals which have already been implemented and the future policies which will be implemented will provide for far greater efficiency in Australian industry and commerce. Of course, that efficiency will be passed on to the consumer by way of more reasonable prices. In other words, the economic policies which have been followed in this country have been laissez-faire policies which have been put forward in the hope that inflation would correct itself. But never at any stage has there been an attempt to sit down to assess what was the real root cause of inflation here in Australia or a realisation that it is a world wide problem. The world wide cause of that problem was never faced up to by the previous Government. This Government intends to do so.

Basically the policy enunciated by the Government at this stage in this legislation is part of a 2-pronged attack on prices. Firstly a Joint Parliamentary Committee on Prices has been established which will play an ombudsmantype role. I think that that would be a fairly accurate description of the function of that Committee. The Committee will receive complaints and it will be staffed, unlike most other committees of the past, by people who are highly qualified in the field of inquiry and report. The Committee will make decisions and will publicise unfair pricing tactics and unreasonable prices charged by various sectors of industry and commerce. In other words, by exposing these practices the Committee will show the utter hypocrisy of the claims that were made by the previous Government over the years - and there are men sitting in the ranks of the Opposition who must have known how untrue those claims were - that the cause of price increases was purely that of rising wages. The previous Government refused to realise that increases in wages and salaries were only a symptom of the base problem of inflation. So, the Committee will have a good effect in this regard.

The Committee also will show which individual companies are engaging in unfair price tactics. It will show that the cause of inflation in this country is not simply rising wages but also the unfair pricing tactics of various companies. Secondly, of course, the Committee then will have the power of recommendation and referral. But sitting next to this Committee in the context of the Government's pricing legislation will be the Prices Justification Tribunal. The legislation before us provides that any company that has sales of more than $20m a year will come under the umbrella of the Prices Justification Tribunal. In other words, the Tribunal will be concerned with those large companies in terms of volume - and there are 300-odd of them at this stage - which by their pricing activities have an impact on prices and costs right through the economic framework of this country. When the Tribunal, which 'again is a body staffed by very efficient and experienced people in the field of inquiry, finally makes a determination it will be able to reveal what is considered to be a reasonable price to be charged by any particular company or organisation.

Of course, the Tribunal will not exercise any punitive powers. But it will have that great power of exposing to the public as a whole unfair tactics and activities as well as incorrect prices and prices which help to create inflation in this country. Once again people such as supporters of the previous Government will not be able simply to blame wages for inflation. Having done this, one may ask how the Tribunal will implement its recommendations. We will expect industry to adopt a reasonable approach and, of course, large sectors of industry have to come to this Government at different times for assistance. I believe that those sectors of industry which are prepared to adopt a reasonable pricing policy - one which takes cognisance of the decisions of the Prices Justification Tribunal - would be more sympathetically received than those who do not. I think that this is an important instrument in a pricing policy.

I believe that there are many unfair tactics which are being engaged in today. I think that one factor which will have a big impact upon prices in the economy in the near future is the transfer to the metric system. It is a pity that I did not bring with me into the chamber the tin of pipe tobacco which 1 usually smoke. I had better not give the brand name of this tobacco because I do not want to be accused of giving free advertising. But recently, because of the change over to the metric system, I have changed from buying tins of 2 oz to tins of 50 grams which are approximately 14 per cent less tin weight than the 2 oz tins. Yet, 1 have found that the various shops at which this tobacco is sold still try to charge me 76c for the 50 gram tin, which is the same price as I used to pay for the 2 oz tin.

Mr Chipp - That is a good reason to give up smoking.

Mr ARMITAGE - I must put in a plug for the pipe. Statistics show that pipe smokers do not suffer more from cancer and heart disease than any other person. The pipe is different from the cancer sticks which some honourable members smoke. It depends on whether one likes a nice aroma.

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