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Friday, 2 July 1915

Mr HUGHES (West Sydney) (AttorneyGeneral) . - I move -

That this Bill be now read a third time.

When moving the second reading of this Bill I was prevented, owing to pressure of time, from dealing with au important phase of the measure; I refer to the regulation of prices. When these proposals were first submitted to this Chamber no suggestion was subjected to more hostile criticism than that which related to Governmental regulation of prices. What ridicule the Leader of the Opposition poured upon this proposal ! It is true he did not understand Avhat precisely was proposed, but he was bitterly opposed to it, and he even, went to the length of reading history to show how futile such a proposal must be. He told the country that the Roman Emperor Domitian had tried to do this absurd thing, and bitterly regretted it ; that King Henry of England had also tried it, and also had failed not less miserably. In short, the Leader of the Opposition said that wherever it had been tried it had always failed. Now, because my honorable friend did not understand it, he went about the country making grotesque misrepresentations of it. In spite of this, and much more, the people only rejected this proposal by a bare 8,000 votes, and there were 87,000 informal votes upon it. Since that time events have moved very rapidly, and public opinion with them, and that which the right honorable member a few months ago declared to be impossible is now an every-day occurrence. Eood Boards arc regulating prices. It is obvious, therefore, that whatever may be said of the project, at least it is not impossible. In 1913 the honorable member for Parramatta said, in a speech at Wagga-

As to regulating prices, that was impossible for any Government. To tinker with prices would not accomplish the object aimed at. It would be simply playing into the hands of the speculators.

But, as I have said, prices are now being regulated, and after more than six months' experience it is evident that whatever .may be said as to the manner in which this has been done, no one can say it is impossible. Food Boards are reviewing prices, and in some States are effectively regulating them. I shall not deal with this matter at any great length, but bofore leaving it I desire to lay down 'clearly what really is contained in our proposal, and what, in our opinion, ought to be done. In order that I may do that as shortly as possible, I propose to read an extract from my speech in introducing the referenda proposals in 1913. Oh that occasion I said -

We have adopted the principle that a fair and reasonable return must be given for labotir, embodied it in our legislation, and havo established State and Federal tribunals to regulate wages and conditions of work. These tribunals say to every man that comes before them, " Your labour is worth, on the whole, so much, and you must be paid so much." That is an interference with what is called the natural law of supply and demand.....

What does a man work for? Not for £2, or £3, or £4 a week - so many sovereigns placed in his hand - but for a given quantity of commodities; he sells his labour for what he requires to eat and wear, and what is necessary for the maintenance, education, and recreation of himself and family. If the prices of these essentials to civilized man are raised by persons who have absolute control of the supply of them, if there is no competition for the salu or supply of such things, what becomes of the policy which has received the benediction of the Opposition and the approval of every elector, or. 99 out of every 100 electors, in tlur country? If prices are fixed by rings, and wages by law, then to raise the wages helps very little, for increased prices will always absorb every increase of wages.

We have to lay down the principle that wherever the assurance of a fair and reasonable wage to all men is interfered with by anything which prevents the consumer getting the benefits of free competition, and by means of which the prices of the necessary commodities and services are fixed by private individuals for their own benelit, then this Parliament ought to have the power to remove therestrictions and insure either free. competition,, or, at any rate, fair prices. That is the principle and the position. When we interferewith the law of supply and demand in wages we must necessarily interfere with the law of supply and demand in other directions. Wages are only another side of prices. If I receives £3 a week when prices are 100, and .prices, increase to 120, my wage is no longer £3. It has been reduced by 20 per cent. So far from confining ourselves to monopolies in thismatter, I lay down the broad principle that where there ' is free competition there is no> necessity to attempt, and we ought not' to attempt, to regulate prices, -which are then naturally, brought down to that margin of profit above the cost of production, which pays a man to engage in the business. Trusts and combines, as Hobaon has put it, are not satisfied with the fair profit received from a fair competitive price, but raise their prices so as to extort an excessive profit. There is just the difference between such exploitation of the public and fair profit that there is between interest and usury. We do not object to a man receiving a fair return on his capital any more than we object to a workman receiving a fair return for his labour; but when it is left to private individuals to fix the prices of the necessaries of life of every man, woman, and child in the community, is there to be no power to review, to consider, or even to inquire into the. circumstances under which they fix those prices? That is an intolerable and impossible state of affairs.

That statement, made in 1913, needs no amplification. It sets forth clearly what the position is: that where free competition exists prices will regulate themselves, but that where these prices are fixed by . combines and monopolies tribunals authorized by Government should have power to review, and, if necessary, regulate them. I may now say a word as to how far prices can be regulated. The limitations on the regulation of prices are obvious. By no device or expedient, legislative or" other-' wise, can prices be reduced below the average cost of production. .If an attempt is made to do this, although it may succeed as to goods already produced, it obviously can have no effect on future production, for it is clear that no men will produce goods if they .are to lose money for their pains. The producer, is entitled to a fair return for his labour and capital. But the trouble in the modern world, as Hobson points out, is that the Trust is not satisfied with this fair profit, but demands and gets_ more. The manner in which it operates is well known ; it limits output, waters capital, manipulates the market until the community is at its mercy. It is against these methods that the Labour party sets its face, and for this purpose, and to the extent I have pointed out, that we desire to have the power to review, and if necessary, regulate prices. Here, then, I have set forth clearly the position in regard to the exercise of the power under this proposal so far as it relates to the regulation of prices; what it is we propose to do, how far we think it desirable to go, and how far it is possible to go. These points having been made clear, I have now to submit the motion.

Question - put.

And no honorable members voting with the " Noes," and the following honorable members voting with the " Ayes " : -

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