LIMIT ON PROFITS

Wairarapa Times-Age, 28 July 1942, Page 6

LIMIT ON PROFITS

POLICY OF THE FEDERAL GOVERNMENT CHALLENGED BY OPPOSITION. AS STEP TO NATIONALISATION OF INDUSTRY. (By Telegraph—Press Association—Copyright) SYDNEY, July 14. The Federal Government will meet its first real Parliamentary challenge if it persists in its proposals to limit company profit to 4 per cent, on the shareholders’ funds. The Leader of the Opposition, Mr Fadden, has vigorously attacked the proposal on the grounds that it is unnecessary, would cause inefficiency, and would be a step toward the nationalisation of industry. As a result of the mounting and wide opposition, the Government is likely to submit its Bill to the standing committee on taxation, which represents both Federal Houses and both parties. This would permit amendments being made to the Bill. Mr Fadden has described the plan as an attempt to steer a middle course between complete socialisation and the principle of private ownership. The only justification for arbitrarily confiscating legitimate profits was enhancement of the war effort, he said. If the war effort was not furthered by the plan it could only be regarded as a step toward nationalisation of industry, which some Ministers had “attempted to foist on the Australian public under the guise of war necessity.” The profit margin of companies was an indication of their efficiency. If the main incentive to work was withdrawn, efficiency would suffer. With the vote of the Independent member, the Government is believed to be able to get its profit limitation plan through the House of Representatives. However, the passage of the Bill in its present form through the Senate is problematic since the Government there is in minority of 17 to 19.