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Thursday, 25 May 1939

Mr WHITE (Balaclava) .- In my . second-reading speech I announced that I supported the principle contained, in- this clause. I do so because I believe that it may reduce the lag in defence supplies. Later, in committee, I moved that profits be limited to 6 per cent. I chose that figure somewhat at random,-, in the hope that the Government would propose something better. That amendment was withdrawn in favour of one designed to make the 6 per cent, apply only to the value of the actual assets employed in the earning of any profit. That would prevent any business man from placing money in reserve and claiming that his profit was only*6 per cent. That rate is a maximum. Minister' after Minister has -spoken, only to reveal how palpably unprepared the Government was to do anything specific to limit profiteering. It was claimed that various proposals to that effect were unworkable. I do not say that profiteering is indulged in to any extent, although there may be profiteering. I am glad to have the support of the honorable member for Franklin (Mr. Frost) of what I said in regard to copper, as he is in a position to know. Yet the Minister floundered when attempting to deal with the matter, but no explanation has been given; we do not know whether or not excessive profits are being made. In my opinion, the standard of commercial integrity is as high in Australia as in any other country.

Mr Ward - It must be bad in some places.

Mr WHITE - My statement applies to both manufacturers and importers who tender for supplies to the Defence Department and other departments. The reason that there are no excessive profits in connexion with government contracts is that there is definite competition between tenderers. Monopolies are in an entirely different category. So faT, there has been no adequate explanation of the way in which their figures will be checked. There will be no competition for certain metals and other materials, even if tenders 'be called. Private members have no access to the figures of these concerns as has the Government. For that reason, the Government should be frank, and say de finitely that this or that, company is making only, say, 1 per cent, or 2 per cent, profit. If that were done, the air would be cleared, and honorable members generally would have more faith in the sincerity of the Government. After all, this debate was initiated by the Government. The Prime Minister (Mr. Menzies) said, and other members of bis Cabinet have repeated, that there is to be no profiteering in relation to defence supplies. This half-baked bill is brought forward to give effect to that declaration and we are asked to accept it. Because we have criticized the Government's lack of clarity we are told that we are attacking Australian manufacturers. The Government has issued a challenge to manufacturers and importers. We ask it to say how it intends to deal with the matter, but it has failed to show how profits are to be checked. The amendment of the Acting Leader of the Opposition (Mr. Forde) does not make the position any better than it was before. Instead of " arrangements for ascertaining costs and for the control and limitation of profits ", the amendment proposes to add the following proviso: -

Provided that no such determination shall exclude provision foi; the ascertainment of costs and for the control and limitation of profits in relation to the production of munitions.

What is the limitation, and how is it to be enforced? 'Some honorable members condemned the panel of accountants, but such a panel is nothing new for it was mentioned last year. I agree with the honorable member for Barker (Mr. Archie Cameron) that the Assistant Minister (Mr. Holt) admitted that there is nothing new in this bill, and that all that it seeks to do could be done under the defence powers that already exist. I remand the Government that the wartime profits tax brought £7,000,000 to the Commonwealth Treasury, because certain people exploited the public in connexion with the supply of foodstuffs and munitions. Some honorable members who were in different theatres of war know that things there were not always right. I know that valuable lives were lost through second-hand aeroplanes having been used in Mesopotamia, although that was the fault of neither Australia nor Great Britain, but of another portion of. the Empire. I thought that the Government was going to tackle this thing, but the bill contains no evidence of how it will be done. A panel of eminent accountants will give their services in an honorary capacity. No doubt they will do their work well , but it must be remembered that they will have their own businesses to attend to. I should like to know whether they will be called in to check the prices charged by monopolies?

Mr Holt - They are to check existing methods.

Mr WHITE - So far, no government, irrespective of its political faith, has dared to touch the monopolies in our midst. When I was Minister for Trade and Customs I at least made them appear before the Tariff Board. The Assistant Minister said that I approved of certain duties on copper. I did so, but only on the recommendation of the Tariff Board. When administering the Trade and Customs Department, I endeavoured to get as many men into employment as possible and I remind the House that during the six years I was in control of the department, 4,000 new factories were established and work was found for over 200,000 additional men. Those figures are a source of great satisfaction to me. It has been said that Australia's policy of protection tends to create millionaires in our midst. I reply that, if there are to be millionaires, it is better that they should be in this country than in other countries; because as residents of Australia they are taxpayers, and the Government can tax them. I do not care from what industry excess profits are made; those profits should be taxed, so that the burden of taxation on people with smaller incomes may be made lighter. Last night I read some criticism by the board that " corner " prices in Australia are too high, though there were reasons given. This is the time to check profits, not to throw men out of work. Honorable members will recollect that when I reduced the duties on cement there was an outcry; although this was to force down prices several members of the present Cabinet voted against the reduction and temporarily defeated the Government. I repeat that I regarded it as my duty to do what I could to place men in employment and develop Australia, rather than make it possible for a few persons to make excessive profits.

Mr Holt - The copper company to which reference has been made has averaged less than 6 per cent. profit for the last six years.

Mr WHITE - The Melbourne Herald has shown the profits made by that company. I do not say that there has been profiteering; it is for the Government to say that there has been no profiteering.

Mr Holt - Is the honorable member referring to the Mount Lyell Company?

Mr WHITE - No, I refer to Austral Bronze and the associated company which took it over. The Mount Lyell Company supplies raw copper. We do not know what profit it makes on that commodity, nor do we know that the panel of accountants will be able to obtain that information. As I have said, the proposed amendment of the Acting Leader of the Opposition is useless. I adhere to the proposal for a limit of 6 per cent., which the honorable member for Darling Downs (Mr. Fadden), who is an accountant said was a good amendment, although he hoped to improve on it. I disagree with those who say that it is impossible to know what profit is being made. Profits are ascertainable. No business can succeed unless its owner knows what profit he is making; otherwise he would soon become bankrupt. A constant check must be kept on stocks and costs.

Mr Hutchinson - The amount of sales is not known.

Mr WHITE - A business without a proper system of accountancy will soon find itself on the financial rocks. I admit that some firms cannot give their dividend rate for a year, but they should be able to state the cost of any item. I recommend that a statutory declaration should accompany every tender. The Government has power to provide for it by regulation. Tenderers should be required to submit a declaration, in which they swear that the profit made by them is, say, 2 per cent. or 3 per cent., or any rate below 6 per cent. Above that rate they can be rejected, or, if there are special reasons for a higher profit, special legislation can be brought down. Business is competitive, and the facts can be ascertained by qualified accountants.

The Trade and Customs Department has effective means of obtaining the information that it desires. Boarding officers cannot examine every item in the statement supplied to them by ships' passengers, but they pay particular attention to persons whom they have reason to suspect. In these cases the Government can do the same ; it has the power to check profiteering, and to save millions of pounds to the taxpayers of Australia who are now taxed heavily to pay for the defence of their country yet it will not bring forward a formula, after all its propaganda. The Government should say to the captains of industry, "Are you willing to supply defence materials at a profit of one per cent". I regret that both the Opposition and the Government imagine that something of use will result from an amendment which cannot be said to ensure that profiteering will be checked.

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