LIMIT ON PROFITS

Waikato Times, Volume 130, Issue 21653, 13 February 1942, Page 4

LIMIT ON PROFITS

AUSTRALIA’S ACTION

OPPOSITION CRITICISM j FIXING OF PRICES I | (United Press Assn.—Elec. Tel. Copyright) CANBERRA, Feb. 11 j The measures announced by the , Federal Government to implement its new wartime economic plan will not operate until the regulations have been gazetted, probably by the weekend. It is authoritatively stated that the fixing of profits at four per cent will apply to partnerships and pri- ‘ vate concerns as well as to public companies. i The Government expects that the ) limitation of profits on capital to four j per cent will be achieved largely by the price-fixing machinery- This I machinery will be employed to force I down the profits, exclusive of taxes, to the maximum of four per cent. An amendment of the Company Tax Legislation is likely to compel companies which still make a net profit of more than four per cent to hand over the surplus to the Treasury. Although regulation of preference dividends is under review, the plan announced by Mr Curtin made no provision for the pegging of dividend rates generally. Such pegging is regarded in some Government quarters as almost inevitable. Test for Government The Daily Telegraph says the Government will probably be involved in a test in Parliament on the question of profits. The paper recalls that during the last session the GovI eminent had to compromise on companies’ tax because of the risk of an opposition attack in the Senate, where the Government is in the minority. While he agreed that far-reaching steps were necessary, because of the desperate phase of the war which Australia had entered, Mr A. W. Fadden, Leader of the Opposition, pointed out that the Government’s economic plan coincided to a considerable degree w’ith certain planks of the Labour Party’s platform. A Government spokesman, commenting on Mr Fadden’s statement, said it could be taken as definite that the Government did not intend to use the national emergency for political advantage.