During World War II almost every aspect of Australian life was under the control of the Federal Government, including wages, employment, manufacturing and prices. After the war, it took some time to unravel the regulations. In August 1945 the State premiers agreed that price control should continue, temporarily under Commonwealth control. The price control referendum in May 1948 asked Australians to determine whether the Federal Government should continue to determine prices for rents, food and other commodities. It was defeated.
Because of wartime shortages of food and other goods, and to prevent profiteering, the 1939–40 National Security Act gave the Commonwealth Government the power to control prices. After the war, the States agreed to a three-year extension of Federal price control and Commonwealth subsidies for various goods.
In 1948 the Chifley Labor government, concerned at the prospect of inflation, sought to extend its centralised power over prices and rents. Chifley argued that “Any intelligent Australian would realise that price control must be operated on a Commonwealth basis if there was to be uniformity”. However, each state had its own Prices Minister and the state governments were unwilling to give the Federal Government new constitutional powers. The only way to resolve the issue was to hold a referendum.
Chifley’s government had a reasonable expectation of success after a Gallup poll in October 1947 showed that 55 per cent of Australians favoured centralised price control. However, by the time the referendum was held in May 1948, people were becoming concerned at the proposal to nationalise banks and there was a growing resistance to restrictions and controls. The referendum was defeated in all states, with around 60 per cent voting against it.
Price control continued into the 1950s, however, under state regulation. The various state ministers met regularly in an attempt to coordinate the controls. Various items were gradually decontrolled, but in 1950 it was still regarded as important to control prices of food, clothes and housing. In 1953, the food items still controlled were biscuits, lard, dripping, margarine and processed milks. The prices cafés and restaurants could charge for meals were also subject to control.
Retailers saw price control as “hampering a return to normal trading and a healthy economy based on supply and demand”. Western Australia ceased to control prices in 1953 and other states began phasing out controls over following years. By 1960 only South Australia, Queensland and New South Wales retained any price controls, and then only on a limited range of goods and services.
In 1973 the Commonwealth Government passed the Prices Justification Act which established the Prices Justification Tribunal to act as a watchdog on the price of goods and services supplied by companies.