Australian Letter Effects Of The Credit Squeeze

Press, Volume C, Issue 29444, 21 February 1961, Page 20

Australian Letter Effects Of The Credit Squeeze

(Bp FRANK PUDDICOMUK. N.Z.P.A. Special Correspondent] SYDNEY. The Federal Government is not convinced that its credit squeeze and tax measures of last November are having the drastic effects which the Australian motor industry is bitterly complaining about Nor, apparently, is it impressed by cries of calamity from authorities in the hirepurchase, home building and wool broking businesses.

Motor vehicle manufacturers have dismissed nearly 8000 employees in the last three months. The total work force of the 11 major car makers fell from 89,000 on November 18 to 33,000 on February 15. Spokesmen for the car firms said the retrenchments were because of the Government's increased sales tax on motor vehicles and because of the credit restrictions imposed in November. The secretary of the Federal Chamber of Automotive Industries (Mr W. W. Daunt) said there was real concern in the ancillary automotive industries which supplied motor vehicle parts for assembly. He said there had been “considerable dismissals” in the retail firms already, and the future picture was “grim.” The New South Wales Minister for Housing (Mr A. Landa) said this week there were significant signs that home building had received a “major setback” from the Commonwealth Government’s economic restrictions. To support his statement, figures issued in Canberra showed that the value of new buildings approved for construction throughout Australia last December dropped by £l7,4oo,ooo—representing a cut of more than 28 per cent, in the building programme. Figures for January are expected to be down further. A spokesman for 10 Sydney wool brokers said the Federal Government’s credit squeeze threatened to force many brokers out of business. ♦ • * Unemployment Benefits Figures issued by the Minister for Labour and National Service last week showed there were 1824 more persons receiving unemployment benefits in January. The president of the Employers' Federation of New South Wales (Mr M. DiUon) and the Federal Executive of the Australian Council of Trade Unions called for relief from the credit squeeze. The Queensland Premier (Mr Nlcklin) said his State faced the possibility of lean months ahead because of the effects of the Federal Government’s restrictions, and engineering and metal trade unions demanded that employers eliminate overtime as a counter to rising unemployment. In the face of all this the Prime Minister (Mr Menzies) stood firm on his decisions of three months ago. Mr Menzies said he did not anticipate a “substantial amount of unemployment," but said that if it did go too far, his Government would have to take some counter-action. The Federal Treasurer (Mr Holt) said he naturally re-

gretted the effect of the economic measures on the companies and individuals concerned, but the measures had been deemed necessary in the national interest. • • • Anti-Monopoly Laws Heavy priaon sentences and fines will be provided as penalties for price fixing, tender rigging and other restrictive trade practices under the Commonwealth Government’s proposed anti-monopoly laws. Trade groups who refuse to admit new members or withhold supplies to new traders will also face stiff penalties. In the United States last week courts sentenced seven electrical company executives to prison and imposed fines of nearly £2 million on 29 companies and 44 executives. The penalties were imposed under the United States laws, known collectively as the Sherman Act. The Attorney-General (Sir Garfield Barwick), who has almost completed preparation of the Australian Government’s legislation, has made a close study of the Sherman Act It is known his legislation will draw substantially on the United States act as well as the Canadian and United Kingdom laws. Many Australian legal experts have held that the limited constitutional powers of the Commonwealth would prevent any Federal legislation having real "teeth” against harmful trade practices. But Sir Garfield Barwick, who was Australia's leading constitutional lawyer before entering Federal politics, believes his legislation will stand up to any challenge. Many businessmen have complained to the Government about restrictive trade practices. The planned legislation will also give new emphasis to evidence uncovered by State and local Government authorities about the rigging of tenders for contracts and equipment supply. * * • “Abattoirs Takeover” Allegations that a Communist nucleus was attempting to "take over” the State abattoirs at Homebush, Sydney, produced swift action from the New South Wales Government. The Minister for Agriculture (Mr Roger Nott) announced he had called for an immediate report from officers of his department and the Meat Board on, the allegations. Allegations of intimidation by Communists were made by the Metropolitan Meat Industry Board, and the Minister indicated he was gravely concerned that they should be thoroughly investigated.