Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Full Day's HansardDownload Full Day's Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Thursday, 25 October 1973
Page: 2723

Mr COHEN (Robertson) - I would like to make some comments about tariff cuts and the effect that they have not had on our economy, or the effect that they were expected to have and have not had. Some few months ago this Government slashed tariff cuts by 25 per cent. At that time there were great predictions of doom from our opponents on the opposition side of the House. Memories are extremely short, but those who now quote the Liberals' prediction of economic doom in the future ought to remember the similar forecasts that they made at the time of revaluation and at the time of the tariff cuts. We were told that the country would be flooded with cheap imports from low wage Asian countries. This, we were told by the economic clowns of the Liberal and Country Parties, would send thousands of businesses to the wall and produce massive unemployment. It is now 9 months since the first revaluation, and nearly 3 months since the tariff cuts, and the same experts have been noticeably quiet since the news was released that only 25 people had applied for assistance available to those who were made redundant as a result of the tariff cuts.

The same Liberal and Country Party economists who put 130,000 people out of work when they said that it could not happen are the same ones who predicted bankruptcy for primary producers and miners on revaluation, and economic chaos after the tariff cuts. We are now asked to believe their forecasts about impending doom due to inflation. The Liberals have been trying to highlight excessive wage demands and government spending as the cause of inflation. Inflation causes wage demands, not the other way around. What they never want to look at is profits and one of the greatest scandals has yet to be unmasked to the general public. As I said before, because of Australia's massive balance of trade surplus overseas the Australian Government revalued twice and did not follow the United States dollar down when that country devalued. The tariff cuts were a bold step to reduce the price of imports and make Australian business more competitive.

Mr Corbett - Did they?

Mr COHEN - Just control yourself for a moment and you will hear what I have to say. The incredible increase in consumer demand has had the effect of taking up any slack that might have occurred in Australian secondary industry and at the moment the majority cannot even keep up with demand. Any retailer in the country will tell you of the unique experience of being unable to obtain stocks and having to place orders months ahead. In many areas, housing, clothing and automobiles, the position is particularly acute.

The scandal I want to refer to, because it is in a field with which I am very familiar, is what is happening in the clothing industry, for it illustrates clearly how unprincipled some businessmen can be and what a mockery they make of the Liberals' claim that they could contain excessive profiteering by co-operation. These events have been recounted to me by a 'well known and substantial local manufacturer and importer. I shall not mention his name because it could ruin his future business relations with the companies with whom he does business. It was obvious to everyone in the clothing trade that the reductions in prices caused by revaluation were not being passed on to the consumer. Retailers, particularly the large ones, were in touch with the importers within hours of the announcement of the revaluation to insist on reductions in goods they had placed on order. That was the end of the reduction. Anyone who doubts that the extra profit went into the pockets of the retailers need only look at the massive increase in profits announced by major retailers in recent weeks. I want to quote from an article in the Australian' headed 'Myer Beats Rivals with 31pc Boost'. The article states:

Myer Emporium Ltd has bounded past its major retail rivals to post a 30.8 per cent or $5. 9m rise in earnings for the year to July 31.

To mark the strong improvement, directors have raised dividend from 7c to 9c a share and will recommend a one for two bonus issue to shareholders.

Directors yesterday reported that net trading profit rose from $19,097,000 to a record $24,985,000 on a 19.3 per cent rise in sales to $623.9m.

Higher profit reflects the boom in retail spending over the past 6 months and better profit margins.

Underneath those words is a table headed: How the retailers compare'. It shows that Myer had a net profit of $25m - an increase of 30.8 per cent; Coles, $15.3m - an increase of 24.2 per cent; Waltons, $8.4m - an increase of 49.3 per cent; and Grace Brothers, $5m - an increase of 12.2 per cent. Woolworths balances on a different date from the rest of the firms, so its figures cannot be included.

Mr Graham - You will be kind enough to tell us that they paid tax on all that profit, will you not?

Mr COHEN - If the honourable member uses that as a yardstick, he will accept any form of profiteering on the ground that everyone pays tax. When the Government did not allow the Australian dollar to follow the United States dollar down, there was little effect on the clothing industry. The majority of cheap imported clothing comes from South East Asia, Hong Kong, Taiwan and South Korea. The 25 per cent tariff cuts were the next move that should have sent prices of clothing down even further. The Australian manufacturers certainly were made more competitive, and within days of the tariff cuts being announced many importers received visits from Customs officers who asked to see the importers' invoices in order to satisfy themselves that the tariff reductions were being passed on. Apparently, they made it perfectly clear to importers that if they did not pass on the reductions they could well face the loss of their import licences. Once again the retailers were on the backs of the importers to see that they received the maximum reduction. Once again the reduction stopped with the retailer. The consumer never saw it. The national Government's hands were tied because it lacked any powers over retail prices. The threats it could make to the importer could not be made against the retailer, and the retailers know it. The States held the powers and there was no way that Sir Robert Askin, Mr Hamer and Mr BjelkePetersen were going to act against their business mates in the 3 big States where 80 per cent of retailing is done.

The fact of the matter is that these goods which were being brought in from these countries were being marked up with high profit margins of 50 per cent to 100 per cent. They are now, as recounted to me, being marked up by minimum margins of from 100 per cent to 150 per cent. I have proof of that. Affidavits are being prepared to be given to the Minister for Overseas Trade (Dr J. F. Cairns). The only problem is that the people making the affidavits cannot come out into the open because they would risk their future business relations. However, they are prepared to give affidavits.

Mr Fisher - Whose mate is Ken Myer?

Mr COHEN - What has that to do with this matter? I am no mate of Ken Myer. If Ken Myer wants to support the Australian Labor Party, that is his business. He probably does not even know what is going on amongst his buyers in his own department stores.

Mr Graham - Fair enough.

Mr COHEN - The honourable member for North Sydney interjects every time the word profit' is mentioned. I might point out that very few of the honourable members who sit on the other side of the chamber and pride themselves on their support of big business have had any business experience at all. Most of those who got on to the boards of companies got there because they were accountants or lawyers. I do not know one of them who has had any real experience in business. The last person in the Liberal Party who was a genuine self-made businessman was Sir Allan Fairhall and he left in disgust. When honourable members opposite start talking about business they should first of all find out something about it. Many of the small businessmen who sit on this side of the chamber really understand it from the grass roots.

Suggest corrections