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Tuesday, 31 May 1960


Mr JONES (Newcastle) .- I think the honorable member for Canning (Mr. Hamilton), like whisky or wine, has started to mellow with age. The longer he went on with his speech the more I came to agree with him. I was very pleased to hear his comments, first on the immigration policy and programme and, in particular, his reference to the Constitutional Review Committee's report. 1 hope that the honorable member will bring a great deal of pressure to bear on the leaders of his own party and the leaders of the Liberal Party to impress upon them the necessity not only to table the report in this House but also to implement the decisions and recommendations of that committee. If they are prepared to do that, it will give to this Government and this Parliament - this is one of the things I am mainly concerned about at the moment - power to deal with the monopolies which are growing day by day in this community. So, I ask the honorable member to continue along the line he has been pursuing and to press the views he holds with regard to the Constitutional Review Committee's report. There are some things in it with which we disagree, but we are prepared to take the bad with the good. Therefore, we as a party are prepared to accept the committee's report in its entirety - not piecemeal, not a bit at a time, but as it stands. So I ask the honorable member to keep up the pressure on his party leaders.

Now I turn to some of the other points in the honorable gentleman's speech. One is his condemnation of the various State Premiers who refused to follow the lead given by this Government when it went to the Arbitration Court and stood over the men on the bench when they were dealing with the basic wage case. That is what you people opposite did. You went into the Arbitration Court and stood over the people handling the basic wage case, and forced them to peg the basic wage in the same way as the Liberal-Country Party Government did in 1953 when it brought pressure to bear on the court, which pegged the basic wage for about four years. In October last year, when I asked the Minister for Labour and National Service to go to the court and support the metal trades unions in their demand for marginal increases he said that government policy was to leave it to the court. We condemned the Government for that, because we believe that there should be given the support necessary for the granting of marginal increases which, as the court pointed out on that occasion, were necessary. I feel that the honorable member for Canning was just talking through his pocket on the subject of the Premiers not being prepared to carry out the policy, and follow the dictates, of this Government.

That brings me to the subject of company profits. Whilst the Government supports and, whenever it can, imposes wage-pegging, at no time during the period of almost eleven years for which it boasts about being in office, has it ever attempted to control profits - and control of profits is in my opinion one of the things that it is really necessary to tackle in this community to-day. The Governor-General said in the second-last paragraph of his Speech, delivered on 8th March -

The development of tendencies to monopoly and restrictive practices in commerce and industry has engaged the attention of the Government which will give consideration to legislation to protect and strengthen free enterprise against such a development.

The Attorney-General (Sir Garfield Barwick) is not in the House this evening, but I hope he will have sufficient interest in the matter that I will bring forward to examine it with a view to this Government doing something about the rubber companies in this country. These companies have got together and set up a common office to handle the distribution of tyres and to control tyre retailers. I propose to bring facts and figures forward this evening to show what these people are doing.


Mr Cope - Private enterprise.


Mr JONES - Private enterprise, yes. Honorable members opposite talk about Government monopolies, but they are the greatest instigators and arrangers of private enterprise. Whenever they get the opportunity they create monopolies and work in the interests of monopolies. I propose to show that there is in existence legislation which will permit the Government to take the necessary action against these people. I refer to the Australian Industries Preservation Act, section 7 (1.) of which reads -

Any person who monopolizes or attempts to monopolize, or combines or conspires with any other person to monopolize, any part of the trade or commerce with other countries or among the States, is guilty of an indictable offence.

The penalty, on conviction, is £500 for each day during which the offence continues, or one year's imprisonment, or both, or, in the case of a corporation, £1,000 for each day during which the offence continues.

I am not going to say that I know all the legal angles of this matter. I do not. But I suggest as a layman that, on the facts I will present to-night, it is possible for the Government to take some action against these people in order to force them to desist from the practices they are following. The Government talks about free enterprise, and in the Speech which it prepared for the Governor-General it talked about legislation " to protect and strengthen free enterprise " against monopoly development. Yet we find that four rubber companies in Australia - the Goodyear, Hardie, Dunlop and Olympic rubber interests - have got together and instead of letting the retailers conduct their own businesses as they have been doing for years - the retailers are independent people and some of them have been in business up to 30 years - are telling them what to do. The retailers have in the past made arrangements to suit themselves in accordance with the requirements of their businesses. They have been giving rebates to people whose business they want to keep. Sometimes the rebates were 25 per cent., or 33 per cent., or 20 per cent., according to how much the retailer wanted to retain a certain customer's business. Now the rubber companies have stepped in. They have set up a combine and have co-ordinated all their prices. T have here the information regardin e Good vear tyres which is contained in a leaflet issued by the Goodyear Tyre and Rubber Company (Australia) Limited to all Goodyear dealers. It is headed " Terms and conditions of trade. New tyre trading program."

Another document is headed " Confidential Volume Rebate Schedule, effective

April 26th, 1960 ". I will read that confidential schedule later to the House so that everybody can be in the know.

Dunlop Rubber Australia Limited issued a document dated 21st April, 1960, and headed " Notice to all engaged in the resale of tyres and tubes ". Hardie Rubber Company Limited issued a document headed " Advice to those engaged in the resale of tyres and tubes ". The Olympic Tyre and Rubber Company Proprietary Limited issued a notice dated 26th April, 1960, headed " Notice to all engaged in the resale of tyres and tubes ".


Mr Duthie - All printed in the same office?


Mr JONES - Not in the same office. They were not so foolish as that. These boys have good legal advice. They are not such big mugs as to do that, but they think the community are mugs and they treat this Parliament with contempt. They think that we are a pack of mugs. The Olympic people's notice, dated 26th April, 1960, was also headed "Terms and conditions of trade ".

The Dunlop people sent out a similar notice.


Mr Uren - I thought this Government was against prices control.


Mr JONES - It is against prices control when it is imposed on behalf of the people, but the great masters of free enterprise can impose all the prices control they like on the terms and conditions that they require to be observed. It is that to which I am objecting. If prices control is necessary, if wage control is necessary, as the Government seemed to think when it forced the Arbitration Court to freeze the basic wage, then I ask the Government to do something about these monopoly interests which are fixing prices to suit themselves and forcing the consumer to accept price increases. Not only do I object to their forcing the consumer to accept the price increases; but T object also to the dirty way they are going about it.

Now I have some interesting figures. Previously the retailer received a 40 per cent, rebate off the retail price list. That was his marginal profit. Within that 40 per cent, he was able to give all sorts of concessions to the large users of tyres and tubes. But now the companies have completely taken away from him that right. They have imposed very harsh conditions on the retailers. I shall touch more on that in a moment. I have a nice little circular letter here which is a beauty, in my opinion. The companies have now decided that they will fix the price of tyres. They have decided who are going to be fleet operators and what category they will come into, and how much rebate they are going to be permitted. For instance, an AA Fleet Operator will be allowed 221 per cent, rebate, an A fleet operator 1 8 per cent, rebate, and a B fleet operator 15 per cent, rebate. Another classification is listed as -

Municipals Councils (unless qualifying for higher Fleet Operator classification) and excluding Capital City, Newcastle and Launceston Councils.

So this does not apply only in New South Wales. The circular issued by Dunlop Rubber Company, dated 21st April, 1960, includes the municipal councils in Newcastle and Launceston. I believe this applies also to other States. The conditions and terms of trade laid down by the rubber companies apply to the whole of the Commonwealth. They do not apply only to Newcastle, Sydney, Wollongong or any other city; they apply right throughout the Commonwealth. I believe that the Government has power to act in this matter, and should do so.

I want to show now the way that the rebates have been treated. On many occasions, retailers gave large fleet operators practically the whole of their rebate because they valued the custom and the goodwill that existed between them. However, these rebates have now been reduced for the AA operators from 40 per cent, to 22i per cent., for the A operators from 40 per cent, to 18 per cent, and for the B operators from 30 per cent, to 15 per cent., with a H per cent, rebate on settlement. The ordinary motorist previously obtained a rebate of 15 per cent. I shall take, as an example, the man who wants to buy a tyre for a Holden motor car, which I understand is the most popular car to-day. The purchaser of a 6.40 x 13 4-ply tyre previously paid £10 and was given a rebate of 30s. To-day, that rebate is cut out because the Grand Moguls of the rubber industry have decided that no rebates will be given except the rebates that they specify. The ordinary purchaser of a tyre, therefore, is not able to obtain the rebate previously given to him, and that means a loss to him of 30s. for each tyre that he buys. This also applies to a 6-ply tyre of the same size. Previously, this cost £11 lis. with a rebate of 34s. 6d., but that rebate has now been terminated.

These big rubber companies are interested not only in the new tyre business but also in the retread business. The rubber companies have discontinued discounts of 10 per cent, and 12i per cent, recently allowed to the retread companies on " camelback ", which is the trade name given to the rubber used in retreading tyres. This means that the retreaders cannot give to their customers the rebates that they previously allowed. A retread for a tyre used on a Holden motor car costs £4 17s. 6d. The rebate of 25 per cent, meant a reduction of £1 4s. 6d. Now, the dealers are permitted to give only 10 per cent., which means a reduction of only 9s. 9d. This also applies to the AA, the A and the B operators. In some instances, the rebate previously allowed has been cut by 50 per cent. The large rubber companies have not only created a monopoly and fixed their own prices, but they have done so in such a way that the customers feel that it' is being done by the retailers with whom they deal and have dealt for years. When they buy a tyre now from their dealer and are not given the rebate to which they have become accustomed, they go away with the feeling that the dealer has deprived them of their privilege; they do not know that the large rubber combine has done this. The Motor Traders Association met in Sydney three weeks ago and determined the prices that would be charged for retreads. I feel that the Government should investigate this field and stop the growth of monopoly here.

A few years ago, quite a number of independent traders operated in my electorate. Stead's and Super Tyres have been taken over by Beaurepaire Tyre Service Proprietary Limited, which is the Olympic Tyre and Rubber Company Limited. Harrison's Tyre Service and Stock's have been taken over by the Goodyear Tyre and Rubber Company (Australia) Limited. Lindgren's Tyre Service Proprietary Limited has been taken over by the Hardie Rubber Company Limited, which in turn has been taken over by the Golden Fleece Petroleum Products. National Tyre Service (Newcastle) Proprietary Limited took over Gurton's, and in turn Dunlop Rubber

Australia Limited took over the lot. The general movement to obtain complete control not only of the manufacture of tyres but of the distribution of tyres is evident. These large companies will derive the benefit of all the profits available in the rubber industry.

I previously mentioned the matter of volume rebates. All of the agreements that 1 have here and to which I have referred contain identical clauses. They are not necessarily in the same sequence, but the answer is always the same, and that is that, unless the retailer sells at the price specified by the rubber companies, they will terminate their agreements with him. [ should like to give the House some information on the confidential volume discounts which are effective from 26th April, 1960. I do not propose to read the whole of the schedule, but I shall give some idea of the rebates. They are set out in the following table: -

 

That is the confidential information that was circulated to the retailers concerning volume rebates. The figures are particularly important, because the volume rebate is given in addition to a rebate of 5 per cent. The 5 per cent is allowed in the first place and the additional volume rebate is determined according to the value of the tyres sold. This agreement has been used already against one retailer, and I shall mention this matter in a moment. The terms and conditions of trade contain the following statement -

These terms and conditions form the basis of orderly trade between Goodyear and its dealers. Goodyear dealers traditionally have maintained a reputation for fair dealing and although we cannot overemphasize the seriousness of forfeiture of rebate privilege under the program, we are confident that Goodyear dealers will adhere to these terms and conditions.

To show how fair the Goodyear Tyre and Rubber Company (Australia) Limited is, I shall refer to the instance of the retailer whose agreement was cancelled. The same stringent conditions are laid down by the Olympic Tyre and Rubber Company Proprietary Limited. Clause 6 of its terms and conditions of trade states -

Any Trader who

(a)   Commits any breach or non-observance of the Company's Conditions and Terms of Trade, or

(b)   Sells or supplies Olympic goods at other than Trade List Prices to any other Trader who has become ineligible to receive volume discount. shall become ineligible for volume discount and shall be supplied at Trade List Prices only.

The company also reserves the right to supply any order in part or in full. These companies intend to rule the whole of the rubber trade with a rod of iron, and any retailer who steps out of line will be put out of business. They are not averse to using dirty, snide tactics and will put stooges into a business to catch a retailer. I have given some idea of what is taking place and how these companies are trying to dominate the industry. The documents that I have show that the companies I have mentioned have no concern for the consumer. Their concern is for their profits, and they have no concern for the system of free enterprise that we often hear mentioned most glibly.

I hope that the AttorneyGeneral (Sir Garfield Barwick) will use what power he has to deal with this matter. If he has not the necessary power, we should implement, as early as possible, the recommendations of the Constitutional Review Committee which I believe would give this Government and future governments the power to deal with those who introduce monopolistic and restrictive trade practices such as those that I have outlined.

I mentioned co-ordination earlier, Mr. Deputy Speaker. The coordinator is B. W. Loder and Company, chartered accountants, 74 PittStreet, Sydney. Before any dealer can give a plant operator's or a fleet operator's rebate to any one, he must first write and get the permission of Mr. B. W. Loder and his company. These papers which I have show that before a rebate can be granted to any operator approval must first be obtained from the secretary of the New South Wales Tyre Manufacturers Association, who happens to be Mr. B. W. Loder, of the firm of B. W.

Loder and Company. That firm is the coordinator for the four tyre and rubber companies that I have mentioned.

I shall tell the House what was done to one trader. Last Saturday week, a circular was sent out to most of the tyre people. It was headed " Tyre Manufacturers Terms and Conditions of Trade ", and stated -

I am instructed to inform you that

F.   E. MALING

333 ChurchStreet Parramatta is no longer eligible for volume discount.

Yours faithfully, B. W. LODER, Secretary,

N.S.W. Tyre Manufacturers Association.


Mr Uren - The address of the retailer mentioned is in the electorate of the AttorneyGeneral.


Mr JONES - That is so. When I spoke to Mr. Maling about what had taken place he told me that he had been in the rubber and tyre trade almost all his life and that he had been in business for a long time. He said that various tyre companies had encouraged him to undercut other traders. They had encouraged him in that practice, but as soon as it suited them they imposed these terms and conditions of sale and told him, " Cut it out. If you do not, we shall discontinue the supply of tyres to you." These tyre companies do not even themselves adhere to the conditions that they lay down under which a trader will lose his volume rebate. They have put Mr. Maling out of business. He has now sold his business and got out altogether because the tyre companies were not prepared to supply him with tyres even at the full retail price. He could have got tyres only by buying them over the counter from other dealers and paying the same price that any member of this House or any other person who bought a tyre would have to pay. This happened to him because he had the audacity to stand up to these tyre companies. It is a pity that there are not more people in the community willing to stand up to companies like this, tell them off and let them see that they will not be allowed to dictate the terms of trade in this community.

I propose to tell the House of the dirty way in which the tyre companies went about their treatment of Mr. Maling. One of his men went off work. Another Good year dealer, whom I am prepared to name, said, " If you are short of staff, I know a fellow who will come in handy ". The replacement was planted as a stooge for the big tyre firms and he topped off Maling. That is the sort of rotten tactics that these big firms adopt in imposing their terms and conditions of trade. As I have said, the result is that Mr. Maling has now sold his business and got out of the game. He has given it away completely.

But the tyre companies are not satisfied only with this sort of thing. I hope that I shall be able to tell the House something about two other examples of their tactics before my time expires. In the next instance, the tyre companies were not even prepared to put their requirements in writing, because the whole thing was too hot. The retailers were advised in these terms -

Advise State Tyre Committee-

That is a committee of which Mr. B. W. Loder is secretary - of any contracts they may have with -

Municipal Councils

Shire Councils

Semi Government Agencies.

Fleet operators or any consumer accounts covering either New Tyres, Tubes or Retreading which are at variance with the Terms and Conditions of Trade.

Date of Agreement

Date of Termination

Materials Covered

Whether discount quoted was based on Retail or Trade Price at the time of acceptance.

This means that the tyre companies now will have full particulars of traders' clients of the clientele that they have built up over the years. The tyre companies will know whether a trader has made a contract with the Newcastle City Council, the Maitland City Council, the Lake Macquarie Shire Council or any other council to retread tyres at a certain charge, and the big companies will be able to send their stooges along to get under the guard of the people with whom the dealer has entered into contracts. If this is fair trade, I thank God I am a socialist.

In the other case that I want to mention, the tyre companies tried to tighten up a little further. I have a copy of a form which was recently circulated. Indeed, the one that I have was received in the mail yesterday afternoon. The retailers are requested to have the fleet operators complete this form, which has to be signed before a Justice of the Peace. It is headed " Fleet Application Form " and is in these terms -

The Manager,

Dear Sir,

Application is hereby made for inclusion in the Register of Fleet Owners in a classification appropriate to our holding of motor vehicles and in accordance with the conditions as set out hereunder, which I have read and accept.

In support of this application, I.............. being Manager of................ whose address is.................. do solemnly and sincerely declare: -

1.   That the following self-propelled vehicles set out hereunder (cross out whichever not applicable) on the attached list are owned by and registered in the name of that company/firm in New South Wales and are operated exclusively in its business.

The fleet operators have then to give full particulars of the vehicles which they own, including type, registration number and loadcarrying capacity. The form continues -

2.   That the following motor vehicles are owned in New South Wales in the name of, and operated exclusively by which is a wholly or substantially owned subsidiary of the above company.

Once again, particulars of type, registration number and loadcarrying capacity have to be provided. The form concludes in these terms -

AND I make this solemn declaration conscientiously believing the same to be true and by virtue of the Provisions of the Oaths Act, 1900.

Declared at in the State of this day of 19 Before me: J.P.


Mr Duthie - This is free enterprise.


Mr JONES - This is free enterprise. These are the things that the big tyre companies are prepared to do and the lengths to which they are prepared to go in order to create a monopoly. Where is the healthy competition that we hear so much talk about, Mr. Deputy Speaker? In Newcastle, the big companies have practically destroyed the independent firms engaged in the retailing of tyres and tubes. They have bought many of them out. What is happening, as the House well knows, is that the oil companies are now interested in moving into the tyre trade, and they are buying out the independent firms. We have seen how the Golden Fleece interests took over the Hardie Rubber Company Limited, and we know that other oil companies are interested in other tyre and rubber companies. So the move towards greater monopoly control is on. Nobody can truthfully say that the profits made by these companies are not exorbitant and more than are reasonable.







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