1933-07-14 13 1 4 SENATE 3124 0 Senate. 1933-07-14 The President (Senator the Hon. P. J. lynch) took the chair at 10 a.m., and read prayers. 3124 Questions 3124 3124 JZ6 SOUTH AUSTRALIA 0 0 O'HALLORAN, Michael Senator O'HALLORAN - Has the Minister seen in this morning's Canberra Times a report from "Winnipeg, Canada, regarding the proposal to impose some limit, by quota or otherwise, on the wheat marketed fay various countries? In explanation, I point out that" the report states that Canadian farmers, who formerly supported an acreage restriction scheme, now prefer a scheme for the control of exportation by the -principal wheat-producing countries. Has the Minister any information to furnish the Senate in addition to that which he gave some days ago regarding the progress of the negotiations between the Resident Minister in London (Mr. Bruce), and the representatives of other wheat-producing countries? 3124 K0F 0 0 PEARCE, George Senator Sir GEORGE PEARCE - I have not seen the report, but I understand that negotiations with European wheat-producing and importing countries are still proceeding. The Government has received no advice that finality has been reached in the negotiations. 3124 special adjournment Motion (by Senator Sir George Pearce) proposed - That the Senate, . at its rising, adjourn till a day and hour to be fixed by the President, which time of meeting shall be notified to each senator by telegram or letter. 3124 KP8 Western Australia 0 0 JOHNSTON, Edward Senator E B JOHNSTON . - You, sir, in collaboration with the Leader of the Senate (Senator Pearce) were good enough to arrange for the present series of sittings to commence on a Thursday in order that senators representing Western Australia could reach Canberra, by direct through train from their State on the first day of meeting. In thanking you and the Leader of the Government for having granted this privilege, I express the nope that similar action will be taken on the next occasion. 3124 K0F Western Australia UAP Minister for Defence 1 0 PEARCE, George Senator Sir GEORGE PEARCE [10.4]. - The honorable senator's suggestion will be borne in mind ; but, at this stage, I cannot, of course, give any guarantee that the sittings will be resumed on a Thursday. Question resolved in the affirmative. 3124 leave of absence Motion by Senator Sir George Pearce - by leave - agreed to. That leave of absence be granted to every member of the Senate from the determination of the sitting this day to the day on which the Senate next meets. 3125 Questions 3125 Application to New Guard 3125 K1Z NEW SOUTH WALES 0 0 RAE, Arthur Senator RAE - (1) Has the Leader of the Government in the Senate read the newspaper reports of the speech made in Sydney on the 12th July, by the Prime Minister, under the auspices of the Sane Democracy League, wherein he is reported to have said that the Crimes Act would be invoked against communists or supposedly auxiliary organizations which advocated similar doctrines alleged to be subversive of constitutional institutions? (2) In view of that statement, what action has been taken by the Government against a body known as the New Guard in New South Wales, which, according to highlyplaced police officials of that State, is organized on military lines, and was fully prepared, prior to the last New South Wales general election, to capture Sydney by armed force, abolish the State Parliament, and 3et up a dictatorship in the event of a Labour victory? (3) Is he conversant with the cabled report that Mr. Litvinoff, the Russian Commissar for Foreign Affairs in the Communist Government of that country, and delegate to the World Economic Conference, was recently a guest of His Majesty the King at a -royal reception in Buckingham Palace? (4) Is it also a fact that trade relations between the British Imperial Government and Soviet Russia have recently been resumed, and that trade relations between that country and Australia have operated continuously for several years, largely to the advantage of the Commonwealth? (5) In view of the foregoing, will the Government consider the advisability of confining its activities to practical methods of combating existing evils instead of creating mythical bogies for propaganda purposes? 3125 K0F 0 0 PEARCE, George Senator Sir GEORGE PEARCE - I did read the report of the speech referred to, and now inform the honorable senator that the Government heartily concurs with the views expressed by the Prime Minister. No evidence has been supplied to the Government that the New Guard has done, or proposes to do, anything of a subversive character. The Government's campaign against communism will be directed against any organization which promotes subversive propaganda in the Commonwealth. 3125 Questions 3125 3125 KNZ NEW SOUTH WALES 0 0 HARDY, Charles Senator HARDY - (1) Is it a fact that arrangements have been made for the immediate conversion in London of all Australian optional stock bearing interest at 6 per cent.? (2) Is the operation to be confined to this stock, and is it proposed to make the issue a short-term one, like the last, or will it be for a long term ? (3) Is it proposed to take similar action with regard to the rest of the Australian optional stock bearing interest at over 4 per cent.? 3125 10000 0 0 Senator Sir WALTER MASSY GREENE - I am not in a position to give the Senate any information on this matter. 3125 Questions 3125 3125 KOJ TASMANIA 0 0 HAYS, Herbert Senator HERBERT HAYS - Will the Minister make a statement, before the Senate rises, regarding the prospect of establishing the newsprint industry in Tasmania, or elsewhere in Australia ? 3125 KTR SOUTH AUSTRALIA UAP Minister in charge of Development and Scientific and Industrial Research 1 0 MCLACHLAN, Alexander Senator MCLACHLAN - I understand that arrangements for the establishment of this industry in Australia are well in hand; but, as negotiations of a delicate character are proceeding, I do not deem it advisable to make any public statement at the moment. 3125 Questions 3125 3125 JYB NEW SOUTH WALES 0 0 DUNN, James Patrick Digger Senator DUNN - (1) Has the Minister representing the Minister for Health seen the press statement, appearing in the Sydney Morning Herald, that the delegates board of the Coal Miners Federation in all districts of New South Wales are meeting iia conference to discuss the vital question of coal dust in mines and the coal-dusting of miners in that industry? (2) In view of the fact that mineral coal is the wealth of the nation, will the Federal Minister, for Health appeal to the Minister for Mines in New South Wales to set up a special conference of miners, mine-owners, and government experts, to deal with the vexed question of coal dust and the coal-dusting of miners? (3) Is the Minister aware that failure to take action may lead to great loss of life and property by explosion and fire, due to extensive deposits of coal dust, and the consequent dislocation of coal supplies for interstate trade and household use. 3126 KTR UAP 1 0 MCLACHLAN, Alexander Senator McLACHLAN - I shall draw the attention of the Minister for Health to the honorable senator's question and to the press report to -which he referred, but as the matter is one entirely for the State Government, the first step must be taken by it. 3126 Questions 3126 3126 KNZ 0 0 HARDY, Charles Senator HARDY - In view of the promise of the Leader of the Senate to release the Tariff Board's report on primage and exchange, can the right honorable gentleman give the Senate any indication of the date of such release? If not, will he undertake to have copies of the report posted to honorable senators in time for them to study it thoroughly before the Senate next meets? Senator Sir GEORGEPEARCE.It is not possible either to fix a date for the release of the report or to circulate it among honorable senators after it has been laid on the table of both Houses of Parliament. The honorable senator will realize that, were the Government to decide to take action upon the report, it "would be necessary that Parliament should be sitting when its contents were made public, in order to safeguard the revenue. 3126 KNZ 0 0 HARDY, Charles Senator HARDY - Will honorable senators be given sufficient time to study the report between the tabling of it and the moving of the third reading of the Customs Tariff 1933? 3126 K0F 0 0 PEARCE, George Senator Sir GEORGE PEARCE - Yes. My impression is that there will be ample time to study the report. 3126 Questions 3126 3126 JYB 0 0 DUNN, James Patrick Digger Senator DUNN - Can the Minister representing the Treasurer say whether, in the event of a citizen of the Commonwealth tendering a Commonwealth £1 bank note, printed in the Federal Government's Note Printing Department, in payment for goods supplied, the transaction is deemed to be on the basis of Australian sterling? If not, on what basis is Australian sterling defined? 3126 10000 0 0 Senator Sir WALTER MASSY GREENE - There is no such thing as Australian sterling; the term "sterling" applies to the British pound, not to the Australian pound. The only answer I can give to the second pan of the honorable senator's question is that the Australian pound is the Australian pound. 3126 miscellaneous 3126 3126 K0F 0 0 PEARCE, George Senator Sir GEORGE PEARCE - On the 12th July, Senator Dunn asked the following questions, upon notice - How many coats of the previous and present stocks of oilskins were supplied to the Commonwealth Government for naval use by a firm of merchants named McBean, of Glasgow, Scotland, and is it not a fact that they were "tacky", worthless, and useless? Was a consignment of British oilskin coats landed and listed into the Australian Naval Stores, Pyrmont, during the last three months; and, if so, what were the number and values? How many pegamoid coats were supplied to the Royal Australian Navy by a Sydney firm named " Walder's Limited" during the last two years? I am now in a position to supply the honorable senator with the^ following answers :: - All imported oilskin coats are ordered from Admiralty, not from any firm of merchants, and no record is kept of the firm of Admiralty contractors supplying them. All such supplies are serviceable on. arrival at Sydney, otherwise they would not be accepted. It is found that some oilskin coats become " tacky " owing to climatic conditions in Sydney. No oilskin coats except two samples of the latest improved Admiralty pattern have been delivered to the Victualling Yards, Sydney, since November, 1931. None. 3126 Questions 3126 3126 K3L TASMANIA 0 0 SAMPSON, Burford Senator SAMPSON asked the Minister for Defence, upon notice - What was the percentage of strength to establishment, by battalions, in the infantry of the Commonwealth Military Forces, as at 30th June, 1933? What was the strength of the infantry arm on that date in - (a) Officers; (6) noncommissioned officers; (c) other ranks? What was the total strength of all arms of the Commonwealth Military Forces as at 30th June, 1933. in - (a) Officers: (b) noncommissioned officers; (c) other ranks? 3126 K0F 0 0 PEARCE, George Senator Sir GEORGE PEARCE - The information will be obtained, and I shall let the honorable senator have a reply as early as possible. 3127 Questions 3127 3127 K1Z 0 0 RAE, Arthur Senator RAE asked the Minister representing the Minister for Commerce, upon notice - Has any inquiry been held as to the supposed loss of the steamer Christina Fraser? What was the registered tonnage of thi3 ship and what was her age? What was the weight of the cargo carried during her last voyage, and what was the maximum load she could carry with safety ? How long is it since the Christina Fraser was overhauled, and was such overhaul carried out under the supervision of a" recognized marine surveyor; if so, was his report as to her seaworthiness satisfactory? Is the reported Statement "that the Christina Fraser was insured for £20,000, but with her cargo was worth £30,000, in accordance with fact? 3127 KTR UAP 1 0 MCLACHLAN, Alexander Senator McLACHLAN - Inquiries are being made, and a reply will be furnished as soon as possible. , 3127 Questions 3127 3127 KP8 0 0 JOHNSTON, Edward Senator E B JOHNSTON asked the Minister representing the Prime Minister, upon notice - What is the estimated cost of the proposed Australian War Memorial Museum at Canberra ? Is the Prime Minister correctly reported as having announced that the erection of this building is to be proceeded with forthwith? 3127 K0F 0 0 PEARCE, George Senator Sir GEORGE PEARCE - The Prime Minister has supplied the following answers : - The estimated cost of the proposed museum section of the Australian War Memorial is £80.000, exclusive of the cost of extension of electric light, water and sewerage services. The Government has decided that tenders for the building be invited and submitted for Cabinet's further consideration. 3127 Questions 3127 3127 JYB 0 0 DUNN, James Patrick Digger Senator DUNN asked the Minister representing the Minister for Trade and Customs, upon notice - Is the Minister prepared to issue a regulation to stop the dumping into Australia from the United States of America of American magazines featuring the stirring exploits of gang murder, the racketeer, gun molls, the gangster, gangland, booze, speakeasies, and Scar Face Capone, in view of previous customs regulations stopping the entry into Australia of other magazines and books? 3127 10000 0 0 Senator Sir WALTER MASSY GREENE - The Minister for Trade and Customs has supplied the following information : - It is not proposed to issue a- regulation as suggested by the honorable senator. It is considered that the existing regulations are adequate to prevent undesirable - publications being imported. 3127 Questions 3127 3127 JYB 0 0 DUNN, James Patrick Digger Senator DUNN asked the Minister administering the Development Branch, upon notice - Has his attention been drawn to a cable appearing in last Tuesday's Sydney Sum giving details of an agreement between the cotton textile manufacturing industry and the Roosevelt Administration in the United States of America ? Has he noticed the statement that the agreement is the forerunner of hundreds of similar agreements to place practically all American industries under complete governing control ? Is he aware whether the scheme is to absorb the unemployed, increase wages and stabilize business, and that in the cotton mills wages will be increased by 30 per cent, and the working week will be 40 hours? Did the Prime Minister, in his policy speech, promise to absorb the unemployed and stabilize business; if so, will the Minister bring a scheme for government control of industry before Cabinet for favorable consideration, with a view to applying it to secondary industries in Australia? 3127 KTR UAP 1 0 MCLACHLAN, Alexander Senator McLACHLAN - The answers to the honorable senator's questions are as follow : - I have seen the statement referred to in the Sydney Sim of 1 1th July, 1033. I have read statements to the effect that it is the intention to bring various American industries under some form of government control. No information is available which would serve to show that the proposals for rehabilitation of industry which are being adopted in the United States will eventually conduce to the permanent relief of unemployment. This question relates to matters of policy which it is not the practice to disclose in answer to questions. 3127 Questions 3127 3127 JYB 0 0 DUNN, James Patrick Digger Senator DUNN asked the Minister representing the Attorney-General, upon notice - Is it not a fact that the report of the setting up of an organization to he known as the New Empire Union, under the leadership of Sir Oswald Mosley (England), and Mr. Eric Campbell (Australia), appeared in tha overseas cable news of the Sydney Sun newspaper as well as in the Labor Daily, newspaper; if so, will the Minister correct his previous answer to a recent question on this matter ? 3128 KTR UAP 1 0 MCLACHLAN, Alexander Senator McLACHLAN - The Attorney-General has supplied the following information : - The report does not appear in the edition of the Sydney Sun received in Canberra. II it appeared in any other edition, that fact was not known at the time when the answer was given. 3128 Questions 3128 Recommendations of Emergency Committee 3128 JYB 0 0 DUNN, James Patrick Digger Senator DUNN asked the Minister representing the Prime Minister, upon notice - Is the Prime Minister prepared to carry out the recommendations of the Emergency Committee of the Australasian Council of Trades Unions for the general rehabilitation of the unemployed of Australia, the restoration of the 10 per cent, by which wages were reduced in the Federal Arbitration Court, a 25 per cent, increase in wages, and the adoption of a 30-hour week in industry? Senator Sir GEORGEPEARCE.The Prime Minister has supplied the following answer: - The honorable senator's question involves matters of policy. It is the practice not to deal with such matters in answers to questions. 3128 Questions 3128 3128 K1Z 0 0 RAE, Arthur Senator RAE asked the Minister representing the Minister for Trade and Customs, upon notice - Is it a fact that many firms conducting secondary industries enjoying a high protective tariff are using' imported oil instead of coal as a motive power, thus causing increased unemployment among coal-miners, coallumpers, and many other workers? Is it a fact that, taking the heat units produced by oil and coal, respectively, and taking the price of small coal in Melbourne at 24s. per ton, and that of oil at £4 per ton (present day quotations), coal will produce 105,000 units per penny, as against 42,000 units per penny with oil, representing a big percentage in favour of coal? If so, and in view of th'e urgent necessity of using every possible means to increase employment among the wage-workers, will he urge the Government to bring effective pres sure to bear upon manufacturers to induce them to use coal instead of oil by withdrawing tariff support from those who refuse to do so? Senator Sir WALTERMASSY GREENE. - The Minister for Trade and Customs has supplied the following answers : - 1, 2 and 3. In view of the fact that oil engines are used extensively throughout the Commonwealth, and it is not practicable to use coal with these machines, it is not proposed to take any action in connexion with this matter. 3128 papers The following papers were presented : - Export Guarantee Act - Return showing assistance granted, to 30th June, 1933. Northern Territory Acceptance Act and Northern Territory (Administration) Act - Aboriginals Ordinance - Regulations. 3128 bill 3128 3128 K0F Western Australia UAP Minister for Defence 1 0 PEARCE, George Senator Sir GEORGE PEARCE [J 0.22] .-I move- That the bill be now read a second time. This is a short bill, which is designed to give authority to the Treasurer to enter into agreements regarding moneys contributed for any purpose connected with the Australian Institute of Anatomy, and, in order to secure the accomplishment of that purpose, to appoint one or more trustees. In connexion with the Institute of Anatomy, five donations have been given with the object of founding lectureships in one or other important branch of medical or social science. These are as follow: - The Halford Oration, founded by the members of the family o'f the late Professor Halford in memory of their father, the oration to be delivered annually in connexion with the Australian Institute of Anatomy by some person who is an authority in his field of work, and upon a subject bearing some relationship to the work of the Australian Institute of Anatomy. The Anne MacKenzie Oration, representing a donation to the Commonwealth Government by Sir Colin MacKenzie of £1,000 to perpetuate the memory of his mother Anne MacKenzie, by endowing an annual oration in preventive medicine. The Kendall Oration, established by the Kendall family in honour of their father, Dr. "W. T. Kendall, founder of the Melbourne Veterinary College. This is delivered once in every three years, and is known as the " Kendall Lecture ". George Ernest Morrison Lecture in Ethnology, founded by Chinese residents of Australia in honour of the late Dr.G. E. Morrison, a native of Geelong, Australia, to be delivered annually in May at the Australian Institute of Anatomy. The Charles MacKay Lecture represents a gift by Miss Catherine MacKenzie, sister of Sir Colin MacKenzie, of £607, in memory of her grandfather, a teacher by profession, who was a native of Sutherland, in the north of Scotland, and who died at Kilmore, Victoria. This lectureship is to be an annual one on medical history. It is desirable, in the opinion of the Treasury, that legislative authority shall be given for the management and disbursement of these funds. The bill seeks to accomplish this object by means of the appointment of one or more trustees by the Treasurer. 3129 K1Z 0 0 RAE, Arthur Senator Rae - Does the measure make provision for any future legacies to the institute ? Senator Sir GEORGEPEARCE.Yes. Question resolved in the affirmative. Bill read a second time, and reported from committee without amendment or debate. Standing and sessional orders suspended, and report adopted. Bill read a third time. 3129 bill 3129 3129 KTR South Australia UAP Vice-President of the Executive Council 1 0 MCLACHLAN, Alexander Senator MCLACHLAN .- I move- That the bill be now read a second time. The Commerce Trade Descriptions Act 1905-1930 gives authority for the carrying out of the inspection and examination of all prescribed goods which are submitted for export to destinations overseas. The goods which are at present inspected and examined by regulations made under that act include meat, butter, cheese and eggs, and fresh, dried, and canned fruits. With the exception of fresh fruits, the commodities prescribed are inspected by officers of the Department of Commerce, but in the case of fresh fruits the inspection i3 carried out by State officers acting for the Commonwealth. Occasionally, temporary inspectors are engaged by the Department of Commerce during rush periods. In the act as it stands " Officer " is defined as an officer of customs, and in relation to exports includes an officer of the Department of Commerce. The bill now before the Senate provides for the cancellation of the existing definition of " Officer ", which has been found to be inadequate, and for the substitution of a new definition of " Officer " to include any employee of the Department of Commerce or any officer of a State engaged in the work of inspection and examination of goods on behalf of the Commonwealth. This is purely a machinery measure, and will, no doubt, be approved by all honorable senators. 3129 K1L Victoria 0 0 BARNES, John Senator BARNES . - From time to time, we read reports in the press regarding difficulties experienced in the marketing of Australian goods, particularly butter, in Great Britain. I should like to know if the Government is taking steps to see that some control is exercised over the disposal of graded Australian butter when it reaches the other side of the world. According to the press reports, it appears' that Australian butter is frequently mixed with inferior brands from other countries, and distributed throughout the United Kingdom, much to the discredit of the genuine Australian article. Steps should be taken to protect the interests of the Australian exporters. As the bill is of a non-contentious character, I offer it no opposition. 3129 KTR South Australia UAP Vice-President of the Executive Council 1 0 MCLACHLAN, Alexander Senator MCLACHLAN . - The matter to which the honorable senator has referred has engaged the attention of no fewer than three governments. Of course, there are legal difficulties in the way of policing the marketing of any Australian commodity in another country. Representations on this matter were made at Ottawa, and the Minister for Commerce (Mr. Stewart) is now negotiating with the British authorities with a view to remedying certain difficulties experienced in the marketing of a number of Australian commodities, including butter. I am informed that some of our choice butter is even sold under another name. Question resolved in the affirmative. Bill read a second time, and reported from committee without amendment or debate. Standing and Sessional Orders suspended, and report adopted. Bill read a third time. 3130 miscellaneous 3130 3130 KTR South Australia UAP Vice-President of the Executive Council 1 0 MCLACHLAN, Alexander Senator McLACHLAN . - I move- That the bill' be now read a second time. As the discussion on this measure usually takes place in committee, I shall content myself with formally moving the second reading. 3130 KNZ New South Wales 0 0 HARDY, Charles Senator HARDY . - I intend to draw the attention of honorable senators to certain facts in connexion with the tobacco industry, and also to refer to statements made by the Prime Minister (Mr. Lyons) in a speech which was recently broadcast from Sydney. The great number of citizens who heard that speech probably concluded that the Prime Minister wished, above all, to injure the Country party. 3130 K0F 0 0 PEARCE, George Senator Sir George Pearce - I rise to a point of order. The bill under consideration deals with excise duties, and I ask whether the honorable senator is in order in discussing any other subject. I submit that a general discussion on the tariff policy of the Government would not he in order at this stage. The PRESIDENT (Senator the Hon. P. J. Lynch). - I was about to direct the attention of Senator Hardy to the fact that the Standing Orders require him to confine his remarks to the subject of the bill. He may not refer to the Country party in any way, unless he proposes to connect his observations with the excise tariff. 3130 KNZ 0 0 HARDY, Charles Senator HARDY - I think that the Government will admit that the customs tariff and the excise tariff are closelyrelated subjects, and the attitude of the Government to the customs duties must have a bearing on its attitude to excise duties. Under the customs tariff, there are a number of revenue items which involve the consideration of the same principles as those which ought to be weighed in connexion with the excise tariff. Therefore, I submit that it is competent for me, on the second reading of this bill, to refer to the allegation of the Prime Minister (Mr. Lyons) that the Country party is adopting a policy entirely different from that upon which it was elected. According to a report in the Sydney Morning Herald, the Prime Minister stated in his speech that there had been no whipping on the tariff, and that the members of the" ministerial party had voted as they individually thought proper. 3130 K0F 0 0 PEARCE, George Senator Sir George Pearce - The honorable senator is proceeding to discuss a statement made "by the Prime Minister in relation to "whipping on the tariff". What possible connexion can that' have with this bill, which relates to duties of excise? Surely this measure has nothing to do with party discipline ! 3130 10000 0 0 Mr PRESIDENT - Unless the honorable senator connects his remarks with this bill, he will' not be in order. Reference to the Government's tariff policy is not relevant to the bill, except so far as it concerns excise duties. 3130 KNZ 0 0 HARDY, Charles Senator HARDY - I bow to your ruling, Mr. President, and shall await another opportunity to deal with that matter. No doubt, I shall be quite in order in discussing the duties on tobacco. This matter is looked upon by many persons in Australia as one of paramount importance. The present position of the industry is rather extraordinary, because it is evident, from past events, that the report of the Tariff Board was based, not on deliberately false information, but on wrong premises. This was- recognized recently by the Prime Minister on his visit to Queensland. Tobacco leaf was grown in Australia more than 75 years ago. For the four years ended the 30th June, 1914, the average annual production of leaf was 2,300,000 lb. It will be seen that the production at that time was comparatively insignificant. Practically no expansion of the industry was noted until a few years ago; and we may well ask the reason for the phenomenal expansion that has taken place since 1929. The average annual production for the 10 years ended the 30th June, 1929, was slightly under 2,000,000 lb., as against the total requirement of 23,000,000 lb. per annum. During that period, the tobacco-growers in Australia were protected by a duty under the customs tariff amounting to about 2s. per lb. An attempt has been made by that section of the Senate which represents the Labour party to raise the import duty to 5s. 2d. per lb. I refuse to agree to that proposal as I believe in the scaling down of the fiscal wall. I propose to refer to the increases that have been made since the 22nd August, 1929, in the duty imposed under the customs tariff on unmanufactured tobacco entered to be locally manufactured into tobacco or cigarettes. These increases, although only proposals, and subject to ratification by Parliament, actually operated. The collection of duties under the various tariff resolutions has been validated up to and including the 29th February, 1932. The first resolution under the Customs Tariff 1921-28, which was tabled on the 22nd August, 1929, provided for a duty of 2s. per lb. Up to the 22nd of October, 1929, the duty was 2s. 5d. per lb. On the 21st November, 1929, it was increased to 3s. Until then, there had been no phenomenal expansion of the tobacco industry, as is shown in the Tariff Board report. On the 9th of July, 1930, the duty was increased to 3s. 6d. per lb., and on the 3rd of December, 1930, to 5s. 2d. per lb. During the two years from 1929 onwards, there was a great expansion of the tobacco growing industry. If this expansion was due to the high duties, there is surely a moral obligation on the Government to protect the interests of the thousands of growers who entered the industry as a result of the encouragement offered. When the present Government came into office, it acted on a Tariff Board report recommending the reduction of the import duty from 5s. 2d. to 3s. per lb. I do not object to the duty being reduced, because I 'believe that high duties are uneconomic, and the ultimate effect of the higher duty would have been to raise the price of Australian tobacco. The mistake was made in increasing the excise duty on manufactured tobacco at the same time. Before the alteration of the Scullin tariff, the excise duty on all tobacco manufactured in Australia was 2s. 4d. per lb., and it has now been increased to 4s. 6d. Under tha Scullin Government, the duty on imported tobacco was 5s. 2d. per lb., and the excise duty on tobacco manufactured in Australia was 2s. 4d. per lb., which brought the total charges on foreign tobacco up to 7s. 6d. per lb. When the present Government came into office, it reduced the duty on imported tobacco to 3s. per lb., and increased the excise on tobacco manufactured in Australia to 4s. 6d. Therefore, the total impost on foreign tobacco was still 7s. 6d. per lb.; but the excise duty on Australian tobacco was increased from 2s. 4d. to 4s. 6d., an increase of 93 per cent. What chance has the local" industry of holding its own against foreign competition when such a crushing burden is laid upon it? When the duty on imported tobacco was increased to 5s. 2d. per lb., the industry expanded in Australia, with the result that the number of growers increased from 660 to 4,764; so that the duties closely affect the livelihood of 4,764 families. The new growers, for the most part, were not experienced men; many of them were men who had lost their employment owing to the depression, and, with the few pounds left to them, were trying to make a living by growing tobacco. They have built up an equity in their property, and have accumulated knowledge about the cultivation and curing of tobacco leaf. Now those assets are jeopardized by the policy of the Government, because local production must inevitably be discouraged by the heavy increase of the excise duty. The cash value of the Australian tobacco crop last year was £1,250,000, as compared with £92,000 for the previous year. It is surely to our advantage to develop an industry when it means that our importations from the United States of America will be correspondingly reduced. Most of the tobacco we import comes from the United States of America, a country with which we already have a heavy adverse trade balance. In Australian currency, our imports from the United States of America in 1929-30 were valued at £30,316,208, and our exports to that country at £5,233,772. In 1930-31, imports were valued at £12,867,833, and exports at £2,291,157. In the folio- lug year, the last for which figures are available, we: imported from the United States of America goods to the value of £8,966,579, and exported to that country goods valued at £4,096,410. The apparent increase in the volume of exports to the United States of America for 1931-32 was due V» the depreciation of Australian currency as compared with American currency. Our adverse trade balance with the United States of America over the last three years totals no less than £39,889,281. Even now we are growing only a small part of the tobacco consumed in Australia, and there is plenty of room for further expansion. Nevertheless, the Government, by its policy, has pronounced a sentence of death on the industry. One of the outstanding features pf the Tariff Board's report is the fear, expressed that the tobacco-growing industry may become so profitable that there will bo a rush of new growers to the industry, resulting in over-production. The Board, however, failed to take into consideration the uncertain nature of the crop. According to figures prepared by the Council for Scientific and Industrial Research, the average crop for the last ten years has been 3,000,000 lb. Foi the last three years the average crop has been 6,000,000 lb., whereas last year's crop, on which the Tariff Board based its calculations, was 12,000,000 lb. Are honorable senators prepared to have the industry relapse into the condition obtaining in 1914? Now let us consider the coming crop: According to returns prepared by the department, the Tasmanian crop in 1932 was fair, but in 1933, though the area under cultivation was greater, a large part of the crop was lost through blue mould. In Western Australia there was a fair crop in 1932, but this year the yield has been greatly reduced owing to seasonal conditions. The Victorian crop last year was 4,500,000 lb., but this year it will not exceed 2,000,000 lb. owing to frost and mould. There was a good crop in New South Wale3 in 1932, but this year half the crop has been lost as a result of heavy frosts at Tumut and hailstorms at Tamworth. In Queensland, the 1932 crop amounted to 2,750,000 lb., while the 1933 crop will be smaller by at least 500,000 lb. The total crop for this year is estimated to be not more than 6,000,000 lb., which is only half the amount produced last year; yet thu growers are to be penalized by having the excise duty increased, by 93 per cent. No industry could survive that. I heard the Minister say the other day that it was the policy of the Government to encourage the tobacco industry, so that it would supply most of the leaf consumed in Australia. He spoke with pride of the assistance rendered to the local industry by the Council for Scientific and Industrial research, and the BritishAustralasian Tobacco Company, which had granted a subsidy for tobacco investigation. How, then, does he justify the Government's excise policy? Tobaccogrowers do not work under a 44-hour week award, but rise at dawn, and, in many instances, do not retire until midnight. Tobacco-growing is infinitely more arduous than dairying, because those engaged in it have no time for recreation or relaxation of any kind. 3132 JRW 0 0 CRAWFORD, Thomas Senator Crawford - During the curing season they do not go to bed at all. 3132 KNZ 0 0 HARDY, Charles Senator HARDY - That is so. I realize that the proposal which I intend to submit will be attacked by the Minister in charge of the bill on the ground that, if adopted, the revenue would be seriously 'affected. Although the surplus for the last financial year has been given as £3,500,000, the Government still says that it cannot reduce excise duties owing to revenue considerations. How does it know how to estimate its revenue for the present financial year? Quite recently it was stated that the Government could not finalize the budget until the World Economic Conference now sitting in London had concluded its deliberations. The Government admits that, in the circumstances now prevailing, it cannot calculate its actual expenditure for the present financial year, because it does not know how much to allocate for exchange, or for numerous other liabilities. In view of that decision, how can the Minister say that it is necessary to preserve revenue at the highwater mark to which the tobacco industry has brought it in the past financial year? The Government does not know what its expenditure will be. To attempt to forecast it is to work in the dark. The next important point which I wish to discuss is the amount of revenue which the Government is entitled to extract from the tobacco industry. If any industry in Australia contributes to Commonwealth taxation, its possibilities of expansion have a very important bearing on the revenue. That is of particular importance in this instance. In dealing with the revenue aspect of the subject, the Tariff Board stated - Having regard to all the circumstances, the Tariff Board is of the opinion that it -would be unwise, during the period in which the Australian leaf-growing industry is becoming established, to seek to increase the net revenue derived from tobacco beyond the amount raised during 1929-30, namely, approximately £0,500,000. The Tariff Board definitely stated that the tobacco-growing industry should not be discouraged, and that until it was firmly established the Government should not collect from it more than £6,500,000 in revenue. What has the Government taken from this industry, and has it observed the recommendations of the Tariff Board? If it has extracted more than the board recommends, the assumption is reasonable that it is responsible for discouraging the industry. 3133 K2Z 0 0 BRENNAN, Thomas Senator Brennan - What is the date of the Tariff Board's report? 3133 KNZ 0 0 HARDY, Charles Senator HARDY - The 3rd February, 1932. The average revenue collected from the tobacco industry over a period of eleven years was £5,500,000. In 1930-31 it was £6,500,000, which is the figure at which the Tariff Board said that it should remain until the industry was on a firm basis. In 1931-32, the amount collected increased from £6,500,000 in the previous year to £7,150,000, and in 1932-33 it was £7,312,988. The figures for the last year were made up by customs duties of £2,561,445 and excise duties of £4,751,543. On a percentage basis, it will be seen that the Government is collecting an unduly large proportion of its revenue from the tobacco industry in the form of excise and customs duties. Taking the revenue figures from 1921-22 - in that period the revenue was only £4,908,683, to the present day, we find that . the special taxation which the Government ha3 imposed upon the industry has increased by 50 per cent. In view of the Tariff Board's recommendation that the amount raised by excise should not exceed £6,500,000, can the Government justify its action? If the tobacco consumption remained as at present, we could assume that this burden is pressing unduly upon the people, but consumption has not remained stationary. For the same period, the consumption of tobacco dropped by 13 per cent., while the revenue collected increased by 50 per cent. The Government is therefore collecting in excise £750,000 more than the Tariff Board recommended as a fair amount. It is impossible for the industry to carry on profitably under these conditions. I have copies of the figures which I have carefully prepared, which I shall be willing to supply to any honorable senator interested in the subject. My figures are based on an Australian crop of 6,000,000" lb. for this year. I have not attempted to estimate the revenue from this source for next year or for the following year, but have estimated on a 6,000,000-lb. crop for this year. On these figures, the total amount of revenue which the Government will secure is £6,661,764. In committee, I propose to move for the imposition of differential rates of excise on Australian and imported tobacco. I submit the following statement showing differential rates of excise duty, with the object of tobacco based on an estimated Australian encouraging the growing of Australian crop of 6,000,000 lb. : - I know that the Minister will say that it would be difficult to administer such a scheme; but I shall show him how it can be effectively policed, and how, if adopted, would be of great benefit to Australian tobacco-growers. I am willing to supply the Minister with a copy of the table which I have just quoted, and I shall be glad if he can show me where it. is wrong, assuming, of course, that it is not the desire of the Government to extract more than £6,500,000 from the industry. If it is the desire of the Government to collect an exorbitant amount of revenue from this source it should say so, otherwise it will not be able to justify its action. If, for the reasons I have mentioned, the Government cannot calculate its. expenditure, bow can it estimate the additional revenue to be received from the tobacco industry? Doubtless it will be contended that it is udt possible successfully to police the proposal which 1 have outlined with regard to the excise duties; but to make the position clear, I remind the committee that the investigation of the industry in 1932 was not the first that had been made. In 1927, the Tariff Board conducted an inquiry into it, and recommended that assistance be given to the Australian growers by means of a preferential excise duty. It is reasonable to assume that, prior to making its recommendations, the board had considered carefully any difficulty that might arise from effect being given to its proposal, and was thoroughly satisfied that a preferential excise rate could be policed effectively. It had before it alternative requests, namely, the payment of a bounty at the rate of 6d. per lb. on all marketable tobacco leaf grown in Australia, or a reduction of the excise duty on tobacco manufactured from leaf grown it Australia as against imported leaf, and came to this conclusion : - As regards the matter of reduction- of exciseduty, the main grounds advanced were that such reduction would enable tobacco manufacturers to pay growers higher prices for the leaf, and also to place tobacco manufactured from, or containing a proportion of, Australian leaf on the market at lower prices than those charged for tobacco made from imported leaf. After careful consideration had been given by the board to the requests in the light both of evidence tendered and of the information gained from other sources, the board reported - The board is of the opinion that the most satisfactory method would be by reducing the excise, with a special provision that any excise reduction be passed on to the grower. As I have observed, we may reasonably assume that the board had thoroughly investigated every possible difficulty that might 'be encountered by the Customs Department in policing the differential excise duty, and had satisfied itself that it could be administered. But, apparently, the government of the day gave heed to the representations of the manufacturers who had urged that to impose different excise duties would create difficulties for them. I admit that it would involve a certain amount of confusion ; but we have to remember that the interests of 4,000 growers are at stake. Therefore, we should do that which lies in our power to give them a reasonable chance of getting some return on their capital. Though there may be no legal obligation on the Government to assist our growers, there is certainly a moral obligation to do so, because so many of these men engaged in the industry in the full belief that governmental action to assist it would be reasonably stable. Now, unhappily, a considerable number are threatened with complete extinction. On a -former occasion when these duties were under consideration in the Senate, I moved that this item be postponed for further consideration, after a complete investigation of the industry had been made. The Prime Minister (Mr. Lyons) now admits that the tobacco-growers of Australia did not have full opportunity to present their case to the board. This admission was made 'by the right honorable gentleman during his recent visit to Queensland. In reply to a deputation at Mareeba, he said that there would be a further independent inquiry into the industry in that district. I do not wish to question the fairness of the Prime Minister in promising an investigation of the Mareeba position; but I should like to know why it is to be limited to one particular area. Why should it not also include Tumut, Tamworth, and the tobacco-growing districts in northern Victoria? Why should the promised investigation be restricted to the Mareeba district? Are we to infer that the right honorable gentleman's promise is in the nature of a political sop to the tobacco growers in that area ? 3135 10000 0 0 CHAIRMAN, The The CHAIRMAN - Order ! The honorable senator must confine his remarks to the item before the committee. 3135 KNZ 0 0 HARDY, Charles Senator HARDY - I submit, Mr. Chairman, that if I can bring evidence to show that the recommendation of the Tariff Board to impose an excise duty of 4s. 6d. per lb. on tobacco made from Australian and foreign leaf was not the result of a complete and scientific investigation into the Australian industry, my remarks are relevant. I refer honorable senators to reports appearing in the June issue of Tobacco, the official organ of the Australian Tobacco-Growers Association. Dealing with the visit of the Prime Minister to Mareeba, that journal states that Mr. S. Birrell, the President of the North Queensland Tobacco-Growers Association, in introducing a deputation to the Prime Minister, said - The Federal Government, in altering tha tariff duty, was guided by the Tariff Board; but the board did not come near Mareeba to inquire, nor were local growers given a chance of putting their case. Every one knows that the Tariff Board gave the Mareeba growers only 27 hours' notice of its intention to make an investigation the result of which would so vitally affect their future operations. At Townsville, two days after his visit to Mareeba, Mr. Lyons, replying to requests made by a deputation of local growers, said - What he had promised to the growers at Mareeba was a special investigation into the aspect affecting them, particularly because they had not had an opportunity to place evidence before the Tariff Board when it inquired into the Australian tobacco industry. He added, " I do not propose that this inquiry should extend beyond this special case of Mareeba ". If, for the reasons given, a special investigation is to he made in the case of the Mareeba growers, surely if it can be shown that growers in other areas were under the same disability, the proposed inquiry should be national in extent. 3136 KP8 0 0 JOHNSTON, Edward Senator E B Johnston - What chance did the growers in Western Australia have to place their position before the board? 3136 KNZ 0 0 HARDY, Charles Senator HARDY - None whatever. Tobacco further reports the Prime Minister as saying at Mareeba - If what was said were true, it seemed to him that there was only one thing to do. It was right that the board should investigate the question on the spot in order to get at the facts connected with the industry. Let me now recapitulate my arguments. I have shown (1) that an import duty of 5s. 2d. was imposed by the Scullin Government, and that, as a result of the encouragement thus given, the number of tobacco-growers in Australia increased from 600 to over 4,000; (2) that the production of leaf last year amounted to 12,000,000 lb., and that this season's production will be in the vicinity of about 6,000,000 lb.; (3) that, although the Tariff Board has expressed the opinion that the' revenue from tobacco duties should not exceed £6,500,000, the Government's proposals will increase the revenue to £7,360,000, representing an increase of 50 per cent over the figures for 1931; (4) that a preferential excise duty of 3s. per lb. on tobacco manufactured from Australian leaf, as recommended by the Tariff Board in 1927, will produce a revenue of approximately £6,500,000; and give to the industry the protection it requires. Finally, I have shown that even the Prime Minister himself has admitted that the Tariff Board did not give tobacco growers an adequate opportunity to present their case. Why should this section of our primary producers be denied a fighting chance to succeed? If the Government adheres to its present intention with regard to these duties, it will deal a death blow to the tobacco-growing industry in Australia, and it is my intention, at the proper time, to take whatever action is possible in this chamber to save the industry. If I, and those who support me in this matter, are unsuccessful, there will be only one course to pursue, and that is to go to the tobacco-growing districts and tell the people concerned precisely what has been done in this chamber. If the Government does not accept proposals which we intend to put before the committee at a later stage, the only conclusion we can come to' is it does not desire to see this important Australian primary industry expand, and the people engaged in it prosper. 3136 JYB New South Wales 0 0 DUNN, James Patrick Digger Senator DUNN .- Desiring to get away from the smoky atmosphere associated with tobacco duties, I invite honorable senators to give consideration to the Government's proposals concerning beer. The brewing industry is of paramount importance, considered from the point of view of revenue. Within the last few days we have been told that the anticipated surplus for the year will be about £3,500,000, and that it is the intention of the Government to give relief from taxation to certain sections of the people. Surely it is time that the consumers, including those who have a predilection for liquid refreshment, had some consideration. The brewing industry in Australia is a very important one, having extremely wide ramifications. It is of considerable importance, as it provides employment and revenue. A great number of hands is directly employed in it, including skilled tradesmen in various branches of engineering, coopers, motor drivers and others. The business employs an extensive administrative and selling staff. A great deal of employment is also given in secondary and allied trades, such as in the manufacture of bottles, the use of timber, and the manufacture of barrels, cases and crates, crown corks, printing for advertising and labels, motor and horse-drawn vehicles and their equipment, the provision of coal and electricity, and the manufacture of machinery and plant. In addition, there are associated with the industry many primary industries that grow the raw materials used in the production of beer, such as barley, hops, sugar, straw for envelopes, and other materials. In view of the fact that primary production is at a very low ebb in Australia to-day, some relief should be given to this industry. Any assistance that it receives would react to the benefit of those who are engaged in the hop, timber, and sugar industries. In committee, I shall move that the House of Representatives be requested to make the duties, sub-items a and b, ls. 4d. a gallon. I am confident that any revenue lost by the reduction of 8d. a gallon would be made good by the greater demand caused by the lowering of the price of beer, an undertaking to lower it having been given by the brewers. The excise duty has been increased by 700 per cent, since 1914, and now amounts to 3d. a pint. 3137 K7P 0 0 COLLINGS, Joseph Senator Collings - It is a pity that people buy beer. 3137 JYB 0 0 DUNN, James Patrick Digger Senator DUNN - If they did not, the Queensland sugar industry, which is strongly protected, would suffer. I have no wish to parade my virtues, but all my life I have been a total abstainer from liquor and tobacco. I am asking for this relief, not as a prohibitionist, but as one who wishes to help the industry. Beer is 100 per cent. Australian-made. The high taxation imposed is having an injurious effect on several industries, including the sugar and hop industries. Hops are .grown in Tasmania, and in the Goulburn Valley of Victoria. My sympathies are with the men who follow this occupation, because they are in a precarious position. Not long ago, I passed through the Derwent Valley in Tasmania, where thousands of pounds have been invested in the hop industry, and found that the farmers there were taking on the cultivation of tobacco in the hope that they might regain some of the prosperity that they formerly enjoyed; but in their new venture also they have met with misfortune, because blue mould, which is rampant in the Derwent Valley, has practically destroyed their crops. A reasonable reduction of the excise duty on beer would result in the price of it being reduced. Its consumption would then increase, and more employment would be provided. The duty on beer was reduced recently in England by one penny a pint, and, as a result, the consumption immediately increased. Viscount Snowden was Chancellor of the Exchequer when the reduction was made. In introducing the proposal, he said that it would assist towards the general rehabilitation of trade and commerce in England, and that the revenue would benefit from the resultant greater consumption. That is what happened. The increased consumption of beer in England has meant more work in breweries and hotels, as well as in allied industries. High taxation of the liquor trade is a form of prohibition, because, on account of the existing prices, due to the heavy duties, liquor is passing beyond the reach of the average wage-earner. The output of beer in Australia for the year ended the 30th June, 1928, was 74,663,722 gallons, but at the end of June, 1932, it had fallen to 47,670,490 gallons, a reduction of about 40 per cent. If the high price of 9d. a pint in the capital cities is maintained, the consumption of beer will continue to decline. The serious effect which the high duties have on the brewing industry must be realized. Over 40,000,000 fewer beer bottles are being used in Australia as a result, of the enormous reduction in consumption. In New South "Wales alone the reduction in the number of bottles in. 1932, compared with 1930, was 17,500,000, while in Victoria it was about 14,000,000. This has meant a vast restriction of employment. Those engaged in the manufacture of cases and crates have also been most adversely affected. In New South "Wales, in 1932, the cases made were 106,306 fewer than in 1930. In 1929, primary products to the following extent were used in the manufacture of beer in Australia: Malt,' 2,437,600 bushels; hops, 2,343,012 lb.; sugar, 34,191,808 lb. Owing to the decline in the consumption of beer, there was a huge drop in the use of those commodities in 1931, amounting to 10,000,000 lb. in the case of sugar alone, the figures for that year being, malt, 1,798,573 bushels; hops, 1,699,827 lb.; sugar, 24,503,024 lb. Can one wonder at State Governments finding it difficult to balance their budgets? The official figures for 1932 show that, so far as primary products are concerned, the position became considerably worse. In that year the decline in the use of sugar had increased to over 13,000,000 lb., while the quantity of hops used was down by 924,039 lb., and malt by 905,827 bushels, the figures being: Malt, 1,531,773 bushels; hops, 1,418,973 lb.; and sugar, 21,092,176 lb. High taxation has been largely responsible for the huge decline in the demand for bottles, cases, crates, and the ' primary products used in the manufacture of beer. In normal times, the excise duty on beer returned in revenue to the Federal Government £6,190,725. It is believed that a reduction of excise duty by from8d. to1s. a gallon, combined with a reduction in the retail prices, would result in a greatly increased consumption, and consequently the collection of additional revenue by the Treasury. It would also mean a more extensive use of barley, hops and sugar, and in additional employment in the making of bottles, barrels, cases, and crates. Statistics covering the period during which the excise tariff on beer has been increased from 3d. to 2s. a gallon, an increase of 700 per cent., reveal that the increase of revenue to the Commonwealth practically corresponds with the increase of duty until the year 1928-29, which was the peak of beer excise revenue. In that year, it reached £6,190,725, at 2s. a gallon, being an increase of 681 per cent, over the figures for 1913-14, when the rate was 3d. a gallon. Since 1928-29, the revenue has declined, and for the year ended the 30th June last, it 'had fallen to £4,767,049, disclosing a drop of 30 per cent, in three years. Honorable senators have said a good deal about the desirability of assisting primary and secondary industries. Here is a chance to give practical help to both, by stimulating the sales of malt, barley, hops, timber, and sugar, and the manufacture of engines, casks, and cases.' I commend my request to the favorable consideration of the Senate. 3138 KP8 Western Australia 0 0 JOHNSTON, Edward Senator E B JOHNSTON . - There are two outstanding items which are dealt with under the excise which contribute to the comfort and enjoyment of the average Australian citizen - tobacco and beer. Senator Hardy has dealt with the tobacco position most extensively, and I am in accord with his remarks generally on the subject. I desire now to deal with the important subject of beer, and urge the Government to reduce the excise on that product so that the public may be enabled to buy it. I am convinced that only by a reduction in the rate of excise on beer can this most palatable beverage be restored to the tables of the people. Senator Dunn has moved a request that the excise should be reduced by 8d. a gallon, and the public would be most thankful if the Government acceded to the request. I hope that there will be a reduction of excise of at least 6d. a gallon, an amount which could easily be passed on. The present rate ofexcise is 2s. a gallon, or 4d. a bottle, and a reduction of 6d. a gallon would make it possible to reduce the beer by1d. a bottle. It must be remembered that, in addition to the excessive federal excise of 4d. a bottle on beer, the State Governments also tax this and other liquors heavily. In most States, the licensing fees for hotels are heavy, and are paid in lump sums, and, in addition, varying amounts, which sometimes reach 7 per cent., are collected by the State Government on liquor purchases. It will be seen, therefore, that intoxicating liquors, and particularly beer, are subject to exceptionally heavy taxation. It would almost appear that the Federal and State Governments were endeavouring to bring about prohibition by taxation, a policy to which I am entirely opposed. Ministers in the Senate recently made the satisfactory statement that the Government was considering the desirability of reducing the rates of duty on Scotch whisky in order to obtain from this source a greater revenue as a result of increased imports. The Australian public read that statement, and were pleased; but they are asking why even greater relief should not be given to the community by reducing the rates on beer which is manufactured in the Commonwealth entirely from Australian products. The Government must have noticed the reduced consumption of beer as shown by the customs and excise figures, and I am of the opinion that, unless something is done in the direction of granting a reduction in excise duty, that downward drift will most assuredly continue. For some considerable time there has been a definite demand throughout Australia for cheaper beer. The consumer contends that wages, rents, and interest have been reduced, in addition to the price of foodstuffs and wearing apparel, and, quite naturally, he asks when the price of beer is going to be reduced. The price of this commodity to the public has always been regulated by the amount of excise duty; in other words, all increases in the price of beer have been made a3 a result of increases in the excise duty, and it is impossible to reduce the price of this article, to fall into line with the reduced spending power of the people, until such time as a reasonable reduction is obtained in the excise duty. Ministers talk a good deal about the Premiers plan, and the Government having reduced pensions and the wages of civil servants by approximately 22-J per cent. ; but I have yet to find that it has reduced charges on products such as beer by any amount at all. If the spending public is to reap any benefit under the Premiers plan, it is time that the Government reduced its taxation by 22£ per cent, in every direction, including excise. I know of nothing that would create more employment than a reduction of the burden of federal taxation. I am assured that the Licensed Victuallers Association of New South Wales has approached the Commonwealth Government, and has stated that it has no desire to gain any additional profit from the reduction of the excise duty; that it has given the Prime Minister (My. Lyons) a specific undertaking that any such reduction will be passed on to the consuming public. A similar assurance has been given by the producers of Australian whisky. Some persons do not drink intoxicating liquors to-day, because they cannot afford to do so on account of their reduced earnings. A reduction in price would again bring these beverages within the . reach of the people, which would result in increased sales. The following official figures will show the extent to which the consumption of beer has fallen off in Australia: - Those figures disclose a reduction of approximately 40 per cent, for the year ended June, 1932, as compared with that ended June, 1928.-' I have not been able to obtain figures for the current year. 3139 10000 0 0 Senator Sir Walter Massy Greene - They show a material increase in consumption. 3139 KP8 0 0 JOHNSTON, Edward Senator E B JOHNSTON - That ia excellent news; but, at the same time, I am confident that, if the Government wishes the revenue again to become normal, it must reduce the rate of excise as was done with marked success from a revenue aspect in Great Britain. It must not be forgotten that the reduction in the consumption of beer has a serious effect upon the primary producer, as the commodities used in the manufacture of this article are products of the Australian soil. Comparing the years 1927 and 1932, the decrease in the consumption was: malt, 905,827 bushels; hops, 924,039 lb.; and sugar, 13,099,632 lb. The reduction in the use of beer also has a serious effect upon subsidiary and associated industries, and upon the revenue of the railways department, as the quantity of beer forwarded to country centres has declined alarmingly, and it i3 a commodity upon which the very highest rates of freights are charged. At present many hotels are working with skeleton staffs during the major portion of the week, relying on the employment of casual labour at the week-end, when the only reasonable volume of business is done. They have been forced to do this because their business does not warrant the employment of what was in former years a normal number of employees. By increasing the volume of business, the hotelkeeper will, of necessity, have to increase his staff to cope with it. The only solution of the existing drift in the consumption of beer is the reduction in its price to the consumer to bring this into line with his reduced spending power, and that can be achieved only by a substantial lowering of the existing excise duties. Such a course would mean an increase, and not a decrease, of the revenue, because of the greater amount of beer that would be consumed. This was proved in Great Britain recently. 3139 10000 Assistant Treasurer 0 0 Senator Sir WALTER MASSY GREENE [11.59]. - There are one or two major considerations which I desire to mention, and which honorable senators should keep definitely in mind when dealing with this measure in committee. Two main objectives must be kept definitely in view. First, there is the collection of revenue,, which, from the point of view of a. Treasurer, is a matter of considerable importance; the other is that any alteration of the excise duty has a material effect on the measure of protection given to the Australian industry concerned. The two things definitely exist; but they are quite distinct. We cannot alter the excise duties without either increasing or decreasing the measure of protection given to the industry concerned, unless there is a corresponding addition to, or deduction, from the customs revenue. I do not know whether Senator Johnston, who is the greatest advocate of freetrade in this chamber, has considered that aspect of the subject. 3140 KP8 0 0 JOHNSTON, Edward Senator E B Johnston - I have. 3140 10000 0 0 Senator Sir WALTER MASSY GREENE - Does the honorable senator desire a greater measure of protection to the Australian tobacco-growing industry? Only yesterday I heard the honorable senator say that not once during the tariff debate had he voted for a higher duty, and that in no circumstances would he do so. I submit that he cannot vote for a lower excise duty on tobacco, beer, or whisky, without voting for a higher measure of protection to the industry concerned. ' 3140 KP8 0 0 JOHNSTON, Edward Senator E B Johnston - I voted for lower charges to the consumers. 3140 10000 0 0 Senator Sir WALTER MASSY GREENE - The position definitely is that the honorable senator proposes to vote for the collection of less revenue, and also, in the case of the three commodities which I have mentioned, for a greater measure of protection. I want the honorable senator to realize what he is doing. Ho says that he will never vote for a higher duty or for a greater measure of protection, and then he tells us that he proposes to do the thing which he says he will not do. The honorable senator also said something about the continuous diminution of the revenue from beer. That is not a fact, because last year the revenue from the excise on beer was greater than in the previous year. The consumption of beer is on the up-grade; last year's consumption exceeded that of the preceding year by about 1,000,000 gallons. While I do not dispute that the increase of the price of beer has definitely affected consumption, I do say that we have passed the trough of the depression ; things are gradually improving, and, consequently, we oan 'expect a gradual increase of the revenue from dutiable goods. The purchasing power of the community as a whole is greater than it was several months ago. When a Treasurer 'sets himself the task of collecting a certain amount of revenue from various sources, including excise, that revenue must be obtained if at all possible. Honorable senators have only to study the sources of the Government's revenue, and the channels of expenditure, to realize that a government which has set out to obtain a certain sum by way of revenue has not much left after it has met its interest bill, repatriation obligations, invalid and old age pension commitments, and has made payments to the States. Leaving out of our consideration for the moment the revenue and expenditure of the Post Office - a department which, more or less, pays its own way - we find that, apart from the expenditure on defence, there are only a few million pounds left with which to come and go. A certain sum must be obtained each year from excise duties, which, I submit, is a legitimate source of revenue; it has always been so regarded in every country in the world. The main thing is so to adjust the levying of duties as to get the best results. I am not in a position to say what the final view of the Government on these subjects will be; I only know that it must obtain a certain, revenue each year. It is the Government's duty to dev.ise means for obtaining that revenue. < Three suggestions have been made this morning. Senator Hardy asked for a reduction of ls. 6d. per lb. on the excise on tobacco leaf; Senator Dunn sought a reduction of 8d. a gallon in the excise on beer; Senator Johnston, who would have been satisfied with a reduction of 6d. a gallon in the case of beer, suggested a reduction of 5s. a gallon on Australian whisky. 3140 JRW 0 0 CRAWFORD, Thomas Senator Crawford - What about rum? 3140 10000 0 0 Senator Sir WALTER MASSY GREENE - He did not mention rum. On the basis of last year's consumption of beer in Australia, the proposed reduction of the duty would result in a loss of £1,622,615 on that one item alone. Honorable senators will agree that that is a fairly substantial sum. I take it that the only purpose of Senator Hardy's proposal for the reduction of the excise on Australian tobacco leaf is to increase the consumption of Australian leaf. The honorable senator is seeking a greater measure of protection to the growers of tobacco leaf in this country; he wants to see a greater consumption of the locallyproduced tobacco. If his suggestion were given effect, the loss of revenue from that source might easily amount to £1,036,174 a year. Compared with those losses, Senator Johnston's suggestion for a reduction of 5s. a gallon in the excise duty on whisky appears quite moderate, for it represents only about £33,629. Together, however, the three items would bring in £2,692,418 less revenue, if reduced as suggested. 3141 JZD 0 0 FOLL, Hattil Senator Foll - Assuming that there would be no increased consumption. 3141 10000 0 0 Senator Sir WALTER MASSY GREENE - I ask honorable senators to look at this matter from the stand-point of a Minister who is asked to make a recommendation to Cabinet. Having in mind the«heavy burden of taxation, would they recommend a reduction of the excise duty as the best way of helping their country in its time of difficulty? 3141 KNZ 0 0 HARDY, Charles Senator Hardy - The Minister will admit that the suggestions were both reasonable and just. 3141 10000 0 0 Senator Sir WALTER MASSY GREENE - Would Senator Hardy handle Australia's finances in that way? I say definitely that if the revenue from excise were reduced by £2,692,418, the Government would be crippled in its efforts to grant relief from other forms of taxation. 3141 K7P 0 0 COLLINGS, Joseph Senator Collings - Another government would probably adopt other methods. 3141 KNZ 0 0 HARDY, Charles Senator Hardy - Will the Minister explain how next year's revenue and expenditure can be estimated seeing that it has postponed certain decisions in view of the happenings at the World Economic Conference ? 3141 10000 0 0 Senator Sir WALTER MASSY GREENE - I am not aware that the Government has done any such thing. I repeat that to grant the proposed requests would be to reduce the revenue to the extent which I have mentioned. That would mean that, of the surplus at the end of the financial year just completed, less than £1,000,000 would remain. 3141 KP8 0 0 JOHNSTON, Edward Senator E B Johnston - The increased consumption would more than make up for the losses. 3141 10000 0 0 Senator Sir WALTER MASSY GREENE - It would not. I admit thai there would be some pick-up, but the amount would not in any way approach the losses. 3141 KP8 0 0 JOHNSTON, Edward Senator E B Johnston - The experience of England in connexion with the duty on beer does not support the Minister's contention. 3141 10000 0 0 Senator Sir WALTER MASSY GREENE - In the circumstances, the Government feels that it must ask the Senate to leave it free to arrange its budget for the coming year in the way which it believes will be in the best interests of Australia. There will be another opportunity to discuss these matters when the budget proposals are before us. I cannot say now what the Government may decide to do, but I cannot envisage a position in which it would be either safe or desirable to budget for any appreciable reduction of the revenue received last year from excise. We all hope that when the Government brings down its budget, it may be able to afford to the Australian public a relief which will be really worth while, and materially assist in placing this country once more on the road to prosperity. 3141 KMK Tasmania 0 0 GRANT, Charles Senator GRANT . - The Minister has put up an eloquent plea for the retention of the excessive duty on beer, and he has stated that even if the excise were reduced, there would be no appreciable increase of consumption. The experience in this and other countries is to the contrary, because practically in every instance in which the excise has been reduced on popular commodities, their consumption has largely increased, and the revenue has benefited considerably thereby. Every ingredient used in the making of beer in this country is an Australian product, and therefore, if we stimulate the consumption of beer by reducing the excise, we shall encourage subsidiary industries as well. The brewing of beer absorbs a considerable quantity of sugar. The figures for the year ending June, 1931, show that compared with the year ending June, 1929, there was a decrease in the production of sugar by over 13,000,000 lb., of malt by 90,000 bushels, and of hops by 924^000 lb. 3142 JRW 0 0 CRAWFORD, Thomas Senator Crawford - It must not be forgotten that last year the sugar industry made a gift of £50,000 to the brewing -industry. 3142 KMK 0 0 GRANT, Charles Senator GRANT - It is clearly evident that Queensland senators are prepared to act in the interests only of their own State. By reducing the excise duty, we shall stimulate not only the beer industry, but also the hop, barley and sugar industries, with a consequent benefit to the Government by way of income and other taxation. As the excise on beer has increased, so has the quantity consumed decreased. Although the latest figures show that there has been an. increase in consumption, it is small indeed compared with ' the consumption a few years ago, when the price of beer was considerably lower than it is to-day. The figures supplied by the Minister show that in 1920, the consumption of beer was 69,000,000 gallons, whereas last year, it was 48,000,000 gallons. If it is the intention of the Government to bring about prohibition, it should make a straightout announcement to that effect and increase the excise to, say, 5s. a gallon. Very little profit is being made to-day by either the wholesale or retail sections of the trade, and so far as I can gather, many hotelkeepers are on the verge of bankruptcy.. 3142 KP8 0 0 JOHNSTON, Edward Senator E B Johnston - The Government is bringing about prohibition by taxation. 3142 KMK 0 0 GRANT, Charles Senator GRANT - That seems to be its intention. If the excise were lowered, I do not think that the Government would lose one penny of revenue as a result. The experience in Great Britain has been that reductions of excise have brought about increased revenue. 3142 KP8 0 0 JOHNSTON, Edward Senator E B Johnston - The British Parliament reduced the excise on 'beer by Id. per pint. 3142 KMK 0 0 GRANT, Charles Senator GRANT - If the excise en beer were reduced, I am firmly convinced that the revenue from that source would be increased, and I shall, at the committee stage, vote for the amendment which has been foreshadowed by Senator Dunn. \ 3142 K1L Victoria 0 0 BARNES, John Senator BARNES . - We should do everything within our power to encourage the tobacco industry, because there is every possibilitiy of its developing into a great Australian industry. Senator Hardy has put up a convincing case on behalf of the tobacco growers, who have already demonstrated that they can supply the Australian consumers with a tobacco equal to the imported article. The Government's tariff proposals will not, by any means, give the tobacco-growers the encouragement that they are entitled to expect from this National Parliament. Senator Hardy has clearly shown that if his proposal is agreed to, the Government will suffer no loss of revenue. Therefore, honorable senators should not hesitate to accept it. Beer, like tea, is a national beverage, because about 90 per cent, of the workers of this country indulge in it to a lesser or greater extent. It is produced in every country in the world, and is usually purchaseable at a price well within the capacity of the pockets of the people who do the hard work of the country. The Government is fearful that if the excise is reduced it will be faced with a loss of revenue. Our surplus revenue this year is estimated at £3,500,000. Since it has been stated that the Government wishes to spread that surplus over the population of Australia so as to give the greatest benefit to the greatest number of people, I suggest that by decreasing the excise as proposed by Senator Hardy relief will be spread over the greatest number of people who are in dire need of it. The production of beer throughout Australia for the year ended the 30th June, 1928, was 74,600,000 gallons, but at the end of June last year it had fallen to 47,600,000, or a reduction of 40 per cent. That falling off of production can be accounted for in many ways, but chiefly because of the unemployment of a vast number of our people, and their consequent incapacity to purchase beer at any price. The British Government by decreasing the excise on beer increased its revenue, and there is no reason why a reduction of excise in this country should not have a similar effect. It should be remembered that a number of primary products are used in the manufacture of beer. In 1929, the manufacturers took 2,437,600 bushels of malt, 2,343,012 lb. of hops, and 34.191.S08 lb. of sugar; but, in 1931, owing to the decline in the consumption of beer, there was a tremendous curtailment of the use of those products in the manufacture of beer, the figures being : Malt, 1,798,573 bushels; hops, 1,699,827 lb.; sugar, 24.503,024 lb. The reduction in the quantity of sugar used was nearly 10,000,000 lb.,' and, in 1932, the decline was over 13,000,000 lb. Although the Minister who represents the Treasury in this chamber claims that the present excise duties on beer and tobacco are required for revenue purposes, the Opposition contends that the revenue position would not be seriously affected by lowering them, because this would lead to an increase of the consumption of these commodities. I find it difficult to obtain pipe tobacco made from leaf grown in Australia. Last Monday I inquired at a leading shop in my home town for the particular brand of Australian tobacco that I like, and was informed that it could not be obtained. I consider myself a connoisseur of tobacco, and I prefer the locally-grown article to any imported tobacco. The fact that tobacco made from, local leaf cannot be procured from a leading shop shows the stranglehold that the overseas interests have obtained upon an infant Australian industry. It would be in the interests of- the people of this country so to adjust the customs and excise tariffs as to increase the use of" tobacco made from Australian leaf. A number of honorable senators on the Opposition side do not drink beer, but I am not one of them. The statistics show that the finances would not be so seriously affected as the Minister representing the Treasury would have us believe, by a reduction of the excise duties on beer. The figures submitted this morning by Senator Hardy were quite convincing as to the relief that would be given to the primary producers if the excise rates suggested by him were adopted. It is well known that probably 98 per cent, of the men employed on the waterfront enjoy a glass of beer at the end of a hard day's toil, and in using this national beverage, they are helping important sections of the primary producers. The Government, by its excise proposals, is not prepared to study the interests of those who do the arduous work of this country, including those who grow hops, sugar and barley; it prefers to use a portion of its surplus revenue to relieve from taxation those who conduct big businesses in Collins-street, Melbourne, and George-street, Sydney. 3143 KTR South Australia UAP Vice-President of the Executive Council 1 0 MCLACHLAN, Alexander Senator MCLACHLAN .- The left wing of the Opposition has discharged its battery first, and at a suitable time for gaining the greatest publicity. The Leader of the Opposition, in charge of the right wing, has displayed much concern over the unfortunate primary producers; but I do not propose to reply at length to the observations that have been made. Sitting suspended from 12. J/5 to 2.15 p.m. 3143 KTR 0 0 MCLACHLAN, Alexander Senator McLACHLAN - We have been treated to some interesting observations from a double-headed political monstrosity, the Opposition in this chamber, as it is constituted to-day. I was astounded at the crocodile tears shed so liberally by the Leader of the Opposition (Senator Barnes) over the plight of the primary producers. This is the gentleman who was a member of a government which imposed so high a tariff against the commodities used by the primary producers that it has ever since embarrassed the relations between the present Government with its erstwhile friends, the Country party. Senator Hardy rejoiced my heart by voicing the sentiment which I have been praying to hear from him during the last five or six weeks. He said that the high tariff placed on tobacco by the last Government imposed on the present Government the moral obligation to protect the interests of the industry. That is the principle which has' been our guide in dealing with tariff amendments. Many industries have sprung up under the protection of extraordinarily high duties, and the Government has had to take action to prevent a crash. I assure honorable senators that this moral responsibility has been recognized and accepted by the Government in its dealings with the tobacco industry. The Leader of the Opposition made one or two interesting statements. He said that we in Australia were producing tobacco equal to that produced anywhere else in the world. That is an exaggeration, and I speak as one who has taken a part in the production of tobacco. Then he said that Australian tobacco was put on the market at a cheaper price than imported tobacco. So it should, seeing that it enjoys protection to the extent of 300 per cent. 3144 K3L 0 0 SAMPSON, Burford Senator Sampson - We also produce tobacco that is equal to the world's worst. 3144 KTR 0 0 MCLACHLAN, Alexander Senator McLACHLAN - Yes, in that respect we also excel. Senator Hardy described this as an industry of mushroom growth. That is true; but the growth has been due", not so much to the imposition of high duties by the Scullin Government, as to a realization by the people, after learning the result of expert investigations, that there was something to be made out of tobacco. Senator Hardy stated that, under an import duty of 2s. per lb., production in Australia was small, and that, when the duty was first increased to 3s. per lb., production did not materially increase. In view, however, of the fact that a period of only three months had elapsed - from August, 1929, to November, 1929 - no material increase could have been looked for. He sought to justify the import duty of 5s. 2d. per lb. by pointing to the enormous increase of production that followed upon its imposition. Let me remind him that the important thing is not quantity, but quality. Of the 13,000,000 lb. produced last year, not one-third was of the quality demanded by the Australian smoker: The honorable senator stressed our adverse trade balance with the United States of America, and pointed to it as a reason for developing our own tobacco industry, so that we would not have to import from America. He ignored the fact, however, that for years leaf was imported from America, on which millions of pounds of revenue was obtained. The value of those importations in relation, to the revenue obtained by the Commonwealth Government on them was low. In 1929-30, imports of tobacco leaf from the United States of America were valued at £1,739,423, which includes cigarette leaf. The revenue collected on this, both import and excise, was approximately £5,800,000, so that for every pound remitted to the United States of America for leaf, the Common wealth collected £3 7s. 6d. In addition to this benefit, considerable employment was provided by the importers. The honorable senator must know quite well that the reduction of the Australian crop to 6,000,000 lb. this year has nothing whatever to do with the reduction of duty. Blue mould and unfavorable seasonal conditions are alone responsible for the decline in production. As great an area is being planted to-day as ever, notwithstanding the fact that it is enjoying only 300 per cent, protection! I put it to honorable senators that the industry is sufficiently protected as it is. It is being looked . after in the only way that will ensure its becoming an economic and sound undertaking. There is hope for the industry under the existing tariff, but there would be no hope for it if we were to encourage its growth in the way that has been done in the past. It would kill itself. Senator Hardy said that we should develop the tobacco' industry. I agree, but we should not coddle it, because in that way we should encompass its destruction. In Canada, the industry has prospered with protection amounting only to1s. 8d. per lb., which it receives under the excise tariff. Senator Hardy does not disguise the fact that his proposal for varying the excise rate would, if given effect, be merely another way of giving the industry additional protection. The Assistant Treasurer (Senator Massy Greene) has addressed the Senate on the financial effects of varying the duty. I assure honorable senators that the Government has the interests of the industry at heart. We gave evidence of that during the regime of the Bruce-Page Government, and we continue to do so to-day. If honorable senators wish to bring the industry to ruin, they will insist upon a reduction of the excise duty on Australian leaf used in manufacture. Question resolved in the affirmative. Bill read a second time. In committee: Clauses 1 to 5 agreed to. 3144 Item 1, sub-items (a) (b) - By omitting the whole item and insert ing in its stead the following item: - "1. Beer- Ale, porter, and other beer, contain ing not less than 2 per cent, of proof spirit, per gallon, 2s.; Any other fermented liquors, n.e.i., containing not less than 2 per cent, of proof spirit which may by proclamationbe declared dutiable under this item, per gallon, 2s." 3145 JYB New South Wales 0 0 DUNN, James Patrick Digger Senator DUNN . - I move- That the House of Representatives be requested to make the duties, sub-items (a) and (b), per gallon,1s. 4d. I heard the Minister's reply to the arguments advanced by those who support a lower duty on this commodity, but he gave no sound reason why the duty should not be reduced. 3145 KTR South Australia UAP Vice-President of the Executive Council 1 0 MCLACHLAN, Alexander Senator McLACHLAN . - The Government must oppose this request. Excise duties have a vital bearing on revenue, and I have been assured that, if this request be agreed to, £1,672,000 will be lost to the revenue. The Government has noted the representations of honorable senators on this subject, and will give them full consideration at the proper time, but that time is not now. Question - That the request (Senator Dunn's) be agreed to - put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.) 10 18 Majority . . 8 AYES NOES Question so resolved in the negative. Request negatived. 3145 KMK Tasmania 0 0 GRANT, Charles Senator GRANT . - I move - That the House of Representatives be requested to make the duties, sub-items (a) and (b), per gallon,1s. 8d. I appeal to honorable senators to support this reasonable request. Although the Government appears to be very anxious to obtain revenue by means of customs and excise duties, it did not hesitate to agree to a reduction of the customs duties on ale and beer to the extent of threepence a gallon. 3145 KTR 0 0 MCLACHLAN, Alexander Senator McLachlan - That was as ; a result of a special agreement. 3145 KMK 0 0 GRANT, Charles Senator GRANT - Under that arrangement the price of imported ale and beer has been reduced by 3d. a gallon in bulk. and 3d. a dozen in bottles. I am submitting this request, not in the interests of those engaged in the brewing trade, but on behalf of the hop and barley growers, the timber-getters, and others indirectly and vitally interested in the production of this commodity. 3145 K3L 0 0 SAMPSON, Burford Senator Sampson - Would the beer drinker derive any benefit? 3145 KMK 0 0 GRANT, Charles Senator GRANT - It has been definitely stated by those in the brewing trade that if a reduction were made in the excise, to the extent I propose, they would pass on the whole of the benefit to retailers, and insist on that section of the trade passing it on to the consumers. 3145 KTR 0 0 MCLACHLAN, Alexander Senator McLachlan - Would they be able to pass it on? 3145 KMK 0 0 GRANT, Charles Senator GRANT - They have given a definite promise to that effect. I submit that it would be an easy matter for the Government to police it. If those engaged in the trade did not honour their promise, I should be one of the first to urge the Government to revert to the existing excise duties. I make this appeal on behalf of those producers engaged in the production of commodities used in the manufacture of ale and beer, and I trust that the committee will agree to my request. 3145 K09 Tasmania 0 0 PAYNE, Herbert Senator PAYNE .- In view of the definite assurance given by the Leader of the Opposition (Senator Barnes), Senator Johnston, and Senator Grant, that a reduction of excise would result in a heavier consumption of ale and beer, I feel compelled to vote for the retention, of the present duties. Anything that tends to decrease the consumption of ale and beer will have my support. I shall not support any proposal that may result in increasing the consumption of alcoholic liquor. 3146 10000 0 0 Senator BUNN . - I support the request moved by Senator Grant. Senator Payne should voice his criticisms of this industry to those of his constituents who are engaged in bop-growing in the Derwent Valley. Although many of them have lost their crops, they have to pay heavy rates of interest to the banking institutions from which they have obtained advances. Hopgrowing is the chief industry in the Derwent Valley, and it is only right that every assistance should be given to this and other sections of primary producers. Australians are moderate drinkers. Again I am reminded of the lines - The Frenchman likes his sparkling wine, The Gorman his lager beer; The Englishman his half-and-half, And swears it brings good cheer; The Scotchman likes his whisky neat, The Irishman likes it hot; Australians have no national drink - They like the blasted lot. 3146 KP8 Western Australia 0 0 JOHNSTON, Edward Senator E B JOHNSTON . - In reply to the question of the Minister (Senator McLachlan) as to whether a reduction of excise would be passed on to the consumer, I may say that when in Sydney last week, I was interviewed by the secretary, Mr.. Durham, and a Mr. Connolly, who, I believe, is president of the Licensed Victuallers Association of New South Wales, in connexion with this matter. These gentlemen informed me that they could give a definite assurance to the Government - I believe they have already done so in writing - that if the excise duty on ale and beer were reduced by 4d. a gallon as provided in the request moved by Senator Grant, a glass of beer for which 4d. is now charged in Sydney would be sold for 3d. 3146 KTR 0 0 MCLACHLAN, Alexander Senator McLachlan - Those engaged in the trade would have to stand some of the reduction. 3146 KP8 0 0 JOHNSTON, Edward Senator E B JOHNSTON - That may be so. The reduction proposed is the lowest that would enable them to reduce the cost to consumers in Sydney. [ imagine that a similar reduction would be made in Melbourne. It would have been much easier to pass on a reduction of 6d. a gallon,' but I know that a reduction of excise to the extent suggested would benefit the consumers in the direction mentioned in Melbourne and Sydney. Throughout Australia licensed victuallers have promised that the whole of any reduction of excise duty will be passed on to the public. 3146 K2Z Victoria 0 0 BRENNAN, Thomas Senator BRENNAN . I decline to vote on this item in order to appeal to primary producers, or to make my vote the medium of voicing social ideals as suggested by Senator Payne. This is purely a taxing provision, .and it should be considered entirely from that viewpoint. It appears from the figures that we have reached the point at which what economists term "the 'law of diminishing returns" is beginning to operate. . Instead of duties of this kind producing more revenue, they are producing le3s. I did not support the request moved by Senator Dunn, because it appeared to me that the probable loss of revenue mentioned by the Minister in charge of the bill was so great as to make us pause. But here we have an opportunity to test whether, in fact, the law of diminishing returns is operating. In this case, the risk is not bo great. 3146 K0F 0 0 PEARCE, George Senator Sir George Pearce - Is the honorable senator aware that consumption increased by 1,000,000 gallons last year? 3146 K2Z 0 0 BRENNAN, Thomas Senator BRENNAN - I am quite aware that in this, as in other matters, there- is always more than one factor to be considered. When it is said that there has been a great falling off, a part of it - probably the greater part - may be due to the fact that the purchasing power of the people has been decreased. But, the experience in Great Britain, where the position is parallel to ours, seems to show that the falling off in the consumption of alcoholic liquor has been due to the fact that there the point mentioned by economists has been reached, and that in order to produce more revenue, it has been found necessary to reduce excise duties. I shall support this request which provides for a small reduction of the duties. Senator McLACHLAN(South Australia - Vice-President of the Executive the deficiency in revenue caused by a reduction of the excise, to the extent proposed, an increase in consumption of at least 25 per cent, would he necessary. I have a good deal of sympathy with those who suggest that a reduction of excise duties might result in increased consumption; but that is a matter which the Government will have to consider in connexion with its budget proposals. 3147 JZD Queensland 0 0 FOLL, Hattil Senator FOLL .- I am in entire agreement with the proposal submitted by Senator Grant, providing for a reduction of the excise duties in order to restore revenue from this source to the point it reached some time ago, because the imposition of heavy excise duties has, in many instances, resulted in decreasing rather than increasing revenue. The Assistant Treasurer (Senator Massy 'Greene) has, however, told us that these and other duties are being taken into consideration by the Government in framing the budget. I have promised the Licensed Victuallers Association in Queensland that I will do all in my power to assist them in the direction of granting relief in matters of taxation, and I think it fair to grant relief in this direction. "We have no right to endeavour to bring about prohibition by means of taxation. "We had a very fair statement from the Assistant Treasurer when we were dealing with the import duties on whisky, and we had another fair statement to-day. I believe that the Government is endeavouring, where possible, to give relief from taxation. Accordingly, I intend to support the item. . I trust that when the budget is presented the Government will give relief to the brewing industry, which has been hit very hard in recent years. Senator Sir WALTERKINGSMILL(Western Australia) [2.47]. - I intend to support the request, because I think that it is essentially fair. Furthermore, from my knowledge of the inhabitants of Sydney, I believe that the undertaking given to Senator Johnston will be honoured. I admit, of course, that it is unenforceable, but, at all events, it will be a test of the moral sense of those whom the reduction is supposed to benefit. Believing that a reduction of the excise duty will enable the price of the commodity to be reduced from 4d. to , 3d. a glass with out endangering the revenue in any way, I intend to vote for the request. 3147 10000 Assistant Treasurer 0 0 Senator Sir WALTER MASSY GREENE [2.49]. - Again I appeal to the committee to consider the budget aspect of these excise duties. To me, it seems to be utterly wrong to deal with individual items in the schedule, and decide that the excise on this one shall be so much, and the excise on others some other amount. The Treasurer is required to produce what I regard as a balanced budget - something that will appeal to the country, and assist to keep industry going. To do this, regard must be paid to all the factors that affect industry and the revenue. If the committee of the Senate decides that the excise on beer shall be an amount less than that provided, and that the excise on tobacco shall also be less than is set out in the schedule, is it not apparent to honorable senators that much of the preparatory work in connexion with the budget will be destroyed ? If the Treasurer, when considering his budget arrangements, knows that the Senate committee has reached a certain decision in regard to the excise on some of these items, will not his position be rendered almost impossible? 3147 KPQ 0 0 KINGSMILL, Walter Senator Sir Walter Kingsmill - May no alteration of the excise duties be made by the Senate? 3147 10000 0 0 Senator Sir WALTER MASSY GREENE - I do not suggest that the Senate should not exercise its full right, subject to its constitutional limitations, but we must recognize that responsibility for the financial policy of the Commonwealth belongs to another place. I think honorable senators generally will admit that. 3147 K1Z 0 0 RAE, Arthur Senator Rae - No. 3147 10000 0 0 Senator Sir WALTER MASSY GREENE - That, at all events, has always been my understanding of the constitutional position of the two branches of the legislature. The mere fact that the Senate cannot alter a money bill is evidence of the limitation of its constitutional power. All it can do is to make requests for amendments. 3147 KPQ 0 0 KINGSMILL, Walter Senator Sir Walter Kingsmill - Which is the same thing. 3147 10000 0 0 Senator Sir WALTER MASSY GREENE - That, in itself, is definite evidence of responsibility in regard to the budget residing in the House of Representatives. I, therefore, appeal, to the committee not to hamper the Treasurer in the preparation of the budget, by carrying requests for a reduction of the excise on this or any other item, which necessarily will mean reduced revenue. I appeal to honorable senators, as far as possible, and in accordance with their conscience, to leave the Government free to arrange the budget in such a way as to be able to do the best possible thing for the country. As I stated this morning, the requested amendments forecast would, if agreed to, mean a reduction of the revenue by approximately £2,600,000, thus making it impossible for the Government to give full effect to its proposals for relief from taxation in other directions. It is desirable that, as far as possible, the Government should be free to frame its budget without any impediment, such as would be interposed if the request were carried. SenatorRAE (New South Wales) [2.53]. - If the remarks of the Assistant Treasurer (Senator Massy Greene) mean anything, they mean that, if the committee does not wish to embarrass the Government, it must refrain from making any alterations to this schedule of excise duties, because every argument that has been adduced in support of the requested amendment to reduce the excise duty on beer applies with equal force to many other items. Consequently, if we accept the argument of the Assistant Treasurer, the discussion of the schedule is a mere farce. If the constitutional position of the Senate is so weak that it is forbidden to request any alteration of the excise duties, then the Government should run the country without the aid of Parliament. Senator SirWALTER KINGSMILL (Western Australia) [2.55]. - I have every sympathy with Treasurers, because I know that their task is a -very difficult one ; but if the reasoning of the Assistant Treasurer is carried to -its logical conclusion, the committee of the Senate must not interfere in any way with customs and excise duties, or, indeed, with the Estimates, for fear of embarrassing the Government. I refuse to subscribe to that view. 3148 K0F 0 0 PEARCE, George Senator Sir George Pearce - I do not think that the Assistant Treasurer's remarks are capable of that construction. 3148 KPQ 0 0 KINGSMILL, Walter Senator Sir WALTER KINGSMILL - I cannot see how they can be construed otherwise. 3148 K0F 0 0 PEARCE, George Senator Sir George Pearce - They were not intended to be taken in that way. 3148 KPQ 0 0 KINGSMILL, Walter Senator Sir WALTER KINGSMILL - I am glad to have that assurance from the Leader of the Senate; but I repeat that, if the observations of the Assistant Treasurer are carried to their logical conclusion, and if any alteration of this schedule would cause confusion, the position would become intolerable to both the Senate and the Treasurer. The constitutional limits indicated by the Assistant Treasurer are not imposed, or sought to be imposed, on the second chamber of any Parliament in Australia. I definitely refuse to subscribe to that view of the position of the Senate. 3148 K3L Tasmania 0 0 SAMPSON, Burford Senator SAMPSON . - All that the Senate can do is to make a request to another place to alter the duties. Therefore, the carrying of this request would be merely a gesture to another place. How, then, could it cause confusion, or be embarrassing to the Government, or be regarded by the Treasurer as an impediment in the preparation of the budget? I cannot follow the reasoning of the Assistant Treasurer, and I intend to support the request. Question - That the request (Senator Grant's) be agreed to - put. Thecommittee divided. (Chairman - Senator the Hon. Herbert Hays.) 3148 3148 3148 Question so resolved in the negative. Request negatived. Sub-items agreed to. Item 2, sub-item (c) agreed to. Item 2, sub-item (d) - By omitting the whole of sub-item (d) and inserting in its stead the following sub-item: - " (d) Whisky, distilled wholly from barley malt by a pot-still or similar process at a strength not exceeding 45 per cent, over proof, matured by storage in wood for a period of not less than two years, and certified by an officer to be pure malt whisky, per proof gallon, 28s. And on and after 1st October, 1935 - Whisky, distilled wholly from barley maltby a pot-still or similar process at a strength not exceeding 45 per cent., over proof, matured , by storage in wood for a period of not less than three years, and certified by an officer to be pure malt whisky, per proof gallon, 28s." 3149 KP8 Western Australia 0 0 JOHNSTON, Edward Senator E B JOHNSTON . - I move - That the House of Representatives be requested to make the duty, sub-item (d), twice occurring, per proof gallon, 23s. This request is made because of the statement of the Minister (Senator McLachlan) in this chamber a few weeks ago, in regard to consideration being given to the reduction of the duty on Scotch whisky. It is felt that the present is an appropriate occasion to impress on the Government the fact that Australian whisky should be treated on at least as generous a basis as that on which it is proposed to deal with Scotch whisky. For the five years ended the 30th June, 1930, the average annual quantity of Australian whisky upon which excise duty was paid was 211,588 gallons. During the succeeding two years the quantities on which excise duty was paid were : 1931, 151,357 gallons; 1932, 141,429 gallons. It will be seen that the consumption for 1932 was 70,159 gallons below the annual average for the five-year period to the 30th June, 1930. The figures for the year ended the 30th June, 1933, are not yet available. They will, however, show a further drop. The position that has arisen is one of grave concern to all the distillery interests' in the Commonwealth. Some years ago there were five distilleries in Victoria making whisky, one in New South Wales, and one in South Australia. The distillery in New South Wales was closed many years ago, but three of the distilleries in Victoria have been operating full time until the last two years. The serious decrease in the consumption of Australian whisky, which has arisen from causes entirely outside the control of the distilleries, and is mainly ascribable to the high taxation on the commodity, has caused a condition of grave concern to 'the shareholders in these Australian companies, and has resulted in a considerable diminution of employment. There has been an entire cessation of whisky-distilling in Victoria, in which the industry was mainly centred. The only distilleries now operating are two small distilleries in South Australia, both of which are of comparatively recent establishment, and neither of which is a major factor in the trade. It is estimated that there is enough Australian whisky now in bonded warehouses in the Commonwealth to last for twenty years, with consumption at the present rate. If the Government wishes to improve the consumption in the interests of revenue, it is obvious that the only way to secure the release of these huge stocks of whisky that are unsaleable at the present time owing to the high prices that have to be charged to secure the excise duty of 28s. a proof gallon imposed by the Commonwealth G-overnment, is to lower the duty to such a figure as will enable the public again to consume this commodity. The figures I have given show that it is not the quality of the spirit produced, but the all-important factor of price, that has been responsible for the drop in trade. The Victorian distilleries at present wholly closed down are the Federal, Port Melbourne; Dunnstown, Ballarat; and Corio, Geelong. Two of these distilleries are equipped with the most up-to-date plant, and in the past they have given a great deal of employment. Moreover, from the point of view of the primary producer, they have been large users of grain, most of which has been produced in Victoria and South Australia. The average amount of barley and malt used in any one of these distilleries exceeds 100,000 bushels per annum, which meant a profitable outlet for the grower. In addition to the loss to the grain producer, there has also been a loss in wages, fuel, water, and other charges incidental to the process of manufacture. It is estimated that, in the Victorian distilleries alone, there was distributed in the various avenues mentioned something like £1,500 a week. The entire cessation of distilling, involving the economic loss of this expenditure, is solely due to the fact that the industry has been taxed out of existence. I believe that, if the excise duty were reduced, the . Government would receive a greater amount of revenue as' the result of increased consumption as was experienced in Great Britain. 3150 KTR South Australia UAP Vice-President of the Executive Council 1 0 MCLACHLAN, Alexander Senator McLACHLAN . - It is quite true, as the honorable senator has stated, that withdrawals of whisky from bond decreased steadily from 1927-28 to 1931-32, when they appeared to become static. The figures for last year are not yet complete, but I understand that they will probably show a slight decrease. When dealing with the customs duty on whisky for blending purposes, I indicated to the honorable senator, and to other honorable senators who were associated with him in his request for the reduction of the duty, that the matter has to be considered as a whole. Should any relief be given by way of customs duty, the excise duty will have to be brought into harmony with the position thus created. The action that I took in regard to blended whisky shows that there is a disposition on the part of the Government to assist the industry to increase its output. I shall presently propose a similar request in connexion with the excise duty. I assure the honorable senator that the matter is having the closest consideration of the Government, and I ask him not to press his request. Question - That the request (Senator E. B. Johnstons) be agreed to - put. the committee divided. (Chairman -Senator the Hon. Herbert Hays.) 3150 3150 3150 Question so resolved in the negative. Request negatived. 3150 JY7 South Australia 0 0 DUNCAN-HUGHES, John Senator DUNCAN-HUGHES . - I move - That the House of Representatives be requested to amend sub-item, (D) by leaving out - "And on and after 1st October, 1935 - Whisky, distilled wholly from barley malt by a pot-still or similar process at a strength not exceeding 45 per cent, over proof, matured by storage in wood for a period of not less than three years, and certified by an officer to be pure malt whisky, per proof gallon, 28s." My first reason for doing so is that, in 1931, the House of Representatives altered the period required for maturation of Australian whisky from two to three years, so creating a differentiation between brandy and whisky for which, on the merits of the case, there is no justification. My second reason is that the matter does not adversely affect the revenue; actually the shorter period of maturation would put forward the collection of the excise by twelve months. One might reasonably ask why different periods of maturation should be prescribed for brandy and whisky. A reference to Hansard discloses that, on the 16th October, 1931, the House of Representatives altered the period for whisky from two to three years, and since then the matter has not been referred to this committee for consideration in detail - although, I suppose, it has been covered in general terms by a validating act. The amendment was submitted by the member for Wide Bay (Mr. Bernard Corser) and supported by Messrs. Nairn, Bayley, R. Green, McGrath and Riley. The then Minister for Trade and Customs (Mr. Forde) opposed the proposal, and stated that he had received notice of it only a day or two before, and asked for permission to refer the matter to the Tariff Board for investigation and report. The honorable gentleman also pointed out that while the proposal apparently had the approval of the United Distilleries, it would prove a hardship to the smaller distilleries, particularly in South Australia, a forecast which has since proved correct. Despite- the protests of the Minister for Trade and Customs, the amendment wa3 carried on the voices, with, I submit, inadequate discussion, and mainly on the argument that maturation for three years would make Australian whisky a more palatable, healthy drink. One honorable member said that no whisky drinker would consume whisky if he knew that it had been matured for only two years, an absurd argument which I hope to refute in the few minutes that I shall need to detain the committee in connexion with this matter. 3151 K1Z 0 0 RAE, Arthur Senator Rae - Some persons would not care if it had been matured for .only five minutes. 3151 JY7 0 0 DUNCAN-HUGHES, John Senator DUNCAN-HUGHES - Of course they would not. Does any honorable senator, when going into the bar at a railway station, pause to ask the purveyor of whisky the age of the particular brand that he is providing? 3151 KP8 0 0 JOHNSTON, Edward Senator E B Johnston - I undertake that the honorable senator always specifies a brand which he knows has been matured for over two years. 3151 JY7 0 0 DUNCAN-HUGHES, John Senator DUNCAN-HUGHES - I am not speaking against adequate maturation, but wish to prove, scientifically, that it is impossible to distinguish between two Australian whiskies which have been matured, respectively, for two and three years. The argument against a 3-year period of maturation is, however, not concerned with that aspect, the main consideration being that the longer period has had a detrimental effect on the smaller distilleries. Obviously, the longer period of maturation is of advantage to old established distilleries because of the greater amount of capital that it will keep "frozen", thus discouraging new firms from beginning business. 1, personally, d'o not stand for preventing persons from putting their capital into industry merely to conserve the interests of one large concern, which has had a great start, but believe that the new firm should also be given a chance. The arguments on which I rely are first that a 2-year period of maturation was adopted in Australia in 1906 on the recommendation of the Royal- Commission on Customs and Excise Tariffs, and remained unaltered until 1931, being then altered after a discussion of about a quarter of an hour and without any sound reason having been advanced for the change. My second reason is that a term of two years is at present, in force in Canada. It is true that the period in England is three years, but I shall show from quotations that whisky matures much more rapidly in Australia than it does in the Mother Country, and that whisky that has been kept in wood in Australia for two years is equal to that which has been kept in wood for four years in England. Dr. Hargreaves, the Government Analyst and Director of the Department of Chemistry in South Australia, was given a number of bottles of whisky ranging over a period of five years, which he tested, and he found that it was not possible to detect the effect of the maturity on the spirit from year to year. In his report, Dr. Hargreaves cited not only his own experiments, but also a number of authorities, including Crampton and Tolman, the Bureau of Inland Revenue of the United States of America, and Alcohol and ils Production, by C. Simmonds. The testimony of this leading chemist, the gist of which I now quote, should finally dispose of the contention that public health is being conserved by increasing the period of maturation from two years to three years - In Australia, usually, the water goes out (through the wood) at a faster rate than the alcohol, owing to high evaporation. ... In Great Britain, water evaporates at a slower rate proportionately than does the alcohol, and there is a loss of alcoholic strength on keeping . . . Throughout all the published figures relating to American and Scotch spirits which I have seen, the outstanding evidence is that the major portion of the changes during storage occurs during the first few months, and certainly within the first year, and a general view shows that there is little advantage in storing for two years over one year, and less advantage still for storage for three years over two years. . . . I may mention that the change in alcohol, when stored in bottles, is negligible over a period of years - There is a well-defined difference between the new spirit and the one year old sample, but there are no marked differences between the one year old, the two years old, the three years old and the four years old spirits. It may be. said that the undesirable constituents in whisky that can be removed or changed by storage, are so removed or changed during the first few months, and any subsequent storage is for the purpose of improving colour, . flavour and aroma, and increasing the extra or " body ". These things depend, as already pointed out, much more upon the kind of cask than upon the timein which the spirit is stored therein. Obviously, there is no foundation for the contention that the virtues of Australian whisky are improved1 by storage for three years instead of two years. Dr. Hargreaves continues - With our greater evaporation, we should obtain sufficient maturity and concentration in half the time required in Great Britain, so that storage for two' years in South Australia should produce as wholesome spirit as would be obtained in England or Scotland in four years. . . . Speaking generally, there is no evidence, either from these samples or from the analytical data that I have seen with respect to other spirits, to show that spirits matured in wood for two years are not so good and wholesome as those stored for three years. . . . There is, however, much evidence to indicate that spirits should be kept for some months, say, up to twelve months. Beyond that the improvement is more a matter of the kind of cask than of the number of years of storage. That is the case against the alteration, made hurriedly and without adequate consideration, of the standard that had been in operation for 25 years. 3152 10000 0 0 CHAIRMAN, The The CHAIRMAN - Order ! The honorable senator's time has expired. 3152 KTR South Australia UAP Vice-President of the Executive Council 1 0 MCLACHLAN, Alexander Senator McLACHLAN . - In regard to the scientific side of the matter, Senator DuncanHughes has made out a strong case; hut, legally, we seem to have placed ourselves in a cleft stick. During 1932, this Parliament passed an amendment of the Spirits Act. In sections 11 and 12 of that statute which must harmonize with the Excise Act, were inserted provisos that, in respect of both imported whisky and whisky distilled in Australia, the period of maturity by storage in wood shall be not less than three years. Those amendments were deliberately made by the Senate, certainly without much discussion, following the amendment of the Excise Tariff. The alteration of the period of maturation was made in the House of Representatives in opposition to the views of the government of the day and the Trade and Customs Department. Certainly the change is further deferred to the 1st October, 1935, but that does not overcome the objections mentioned by Senator Duncan-Hughes or the scientific proof he has adduced that the alteration is unnecessary. However, having regard to the present requirements of the Spirits Act, we can do no more than ask the Minister for Trade and Customs if he will introduce an amending bill to reduce the period of maturation- to two years. 3152 JY7 South Australia 0 0 DUNCAN-HUGHES, John Senator DUNCAN-HUGHES . - The amendment of the Spirits Act in 1932 followed as a matter of course the alteration of the Excise Tariff. If this committee chooses to restore the old standard of maturation, there need be no difficulty in correspondingly amending the . Spirits Act. The two-year period was scientifically sound, and no adequate reason for the departure from it has been given. Indeed, the expert opinion I have cited to-day is entirely . opposed to the extension of the period of maturation to three years. Request negatived. Sub-item agreed to. Item 2, sub-item (e) - By omitting the whole of sub-item (e) and inserting in its stead the followingsub-item: - "(e) Blended whisky, distilled partly from barley malt and partly from other grain, containing not less than 25 per cent, of pure barley malt spirit (which has been separately distilled by a pot-still or similar process at a strength not exceeding 45 per cent, over proof), the whole being maturedby storage in wood for a period of not less than two years, and certified toy an officer to be whisky so blended and matured - per proof gallon, 28s. "And on and after 1st October. 1935 - (e) Blended whisky, distilled partly from barley malt and partly from other grain, containing not less than 25 per cent, of pure barley malt spirit (which has been separately distilled by a pot-still or similar process at a strength not exceeding 45 per cent, over proof), the whole being maturedby storage in wood for a period of not less than three years, and certified by an officer to be whisky so blended and matured - per proof gallon, 28s." 3153 KTR South Australia UAP Vice-President of the Executive Council 1 0 MCLACHLAN, Alexander Senator McLACHLAN .- I move- That the House of Representatives be requested to amend sub-item (e) as follows: - By inserting the word " Australian " at the commencement of sub-item (e) (twice occurring), and by adding the following new paragraph: - " (2) Blended whisky, n.e.i., distilled partly from barley malt and partly from other grain, containing not less than 25 per cent, of pure barley mult spirit (which has been separately distilled by a pot-still or similar process at a strength not exceeding 45 per cent, over proof), provided that the blended whisky contains not less than 15 per cent, of Australian purebarley malt spirit and contains not more than 20 per cent, of spirit upon which import duty has been paid, the whole being matured by storage in wood for a period of not less than two years, and certified by an officer to be whisky so blended and matured, per proof gallon, 28s. And on and after 1st October, 1935 - (2) Blended whisky, n.e.i., distilled partly from barley malt and partly from other grain, containing not less than 25 per cent, of pure barley malt spirit (which has been separately distilled by a pot-still or similar process at a strength not exceeding 45 per cent, over proof), provided that the blended whisky contains not less than 15 per cent, of Australian pure barley malt spirit and contains not more than 20 per cent, of spirit upon which import duty has been paid, the whole being matured by storage in wood for a period of not less than three years, and certified by an officer to be whisky so blended and matured, per proof gallon, 28s." This request is moved in order to make the sub-item harmonize with the Customs Tariff. Request agreed to. Sub-item agreed to, subject to a request. Item 2, sub-item (f) - By omitting the whole of sub-item (f) and inserting in its stead the following sub-item : - " (f) Sum, distilled 'wholly from sugar, sugar syrup, molasses, or the refuse of sugar cane, by a pot-still or similar process at a strength not exceeding 45 per cent, over proof, matured by storage in wood for a period of not less than two years, and certified by an officer to be pure rum - per proof gallon, 30s." 3153 K6P Queensland 0 0 BROWN, Gordon Senator BROWN . - I move - That the House of Representatives be requested to make the duty, sub-item (f), per proof gallon, 28s. Notwithstanding that the speech of the Assistant Treasurer (Senator Massy Greene) might convey the impression that this chamber is a chamber of robots, I still believe that, in dealing with the excise duties, we should give expression to our views. I regard a duty of 30s. a gallon on rum as another injustice to a Queensland industry, because most of the rum manufactured in Australia is produced in that State. Prior to the Ottawa Conference, rum made in Australia enjoyed a protective margin of11s. a gallon over imported rum. Now that margin is only 6s. a gallon. The protective margin is 18s. a gallon in the case of brandy, and 17s. a gallon on both whisky and gin. Why should it be only 6s. a gallon on rum? We are told that rum is a spirit of lower quality than whisky or brandy, and that its use should not be encouraged. I point out, however, that rum has to mature for two years, and is quite as good a beverage as other spirits which enjoy a greater measure of protection. Nelson gave rum to his men, and the troops at the Great War were supplied with a rum ration. Australian gin, which is manufactured almost entirely in Victoria, enjoys a protective margin of 17s. a gallon, although it has not to mature in the wood for two years. Although the rum industry does not employ a great number of workers there is no reason why it should be treated unfairly. I hope that the committee will agree to the request. 3153 KTR South Australia UAP Vice-President of the Executive Council 1 0 MCLACHLAN, Alexander Senator McLACHLAN . - The proposed excise duties on both standard and blended ruin represent an increase of 2s. a gallon on the 1921-28 excise tariff. Actually, the higher duties have been in force since the 22nd August, 1929, when they, in common with the excise duties on other spirits, were raised by the Bruce-Page Government to meet the financial exigencies of the time. The proposed rates are the same as those imposed by the Scullin Government. There has been a marked decline in the demand for rum, with the result that the distilleries, which are confined mainly to Queensland, have been unable to dispose of their output. The rum-producing interests have engaged in extensive propaganda against both the customs and the excise duties. The first contention was that the Government's action in extending the British preferential rate to rum which is the product of British colonies had adversely affected Australian production. An examination of import statistics covering the period subsequent to the Ottawa agreement showed that the imports were practically negligible, and definitely established that this contention was entirely fallacious. The rum-producers then argued that the disparity between the excise duties on whisky and rum - the excise duty on rum is 2s. a gallon higher than on whisky - was responsible for the decline in the demand for rum; but an analysis of the figures covering the customs and excise clearances of spirits from bond in recent years, which form a reliable guide to the quantities of the respective spirits going into consumption, does not support this contention. Taking the customs and excise clearances for 1928-29 as a basis of comparison, we find that the consumption of whisky has declined 57.2 per cent., whereas the drop in the consumption of rum is only 48.3 per cent. During the last fiscal year 283,000 gallons of Australian rum were cleared from bond, compared with only 142,000 gallons of Australian whisky. It is also interesting to note that 71 per cent, of the whisky consumed was imported whisky, which carried customs duties ranging from 45s. to 53s. per gallon. On the other hand, almost the whole of the rum which went into consumption was of Australian origin, dutiable at 30s. a gallon. Imported rum comprised less than 9,000 gallons out of a total consumption of 292,000 gallons. Furthermore, the reduction of 2s. a proof gallon, when applied to sales in the nobbier, is so small that it could not be passed on to consumers. It is, therefore, difficult to see how the desired reduction would increase the demand for rum. When it is remembered that rum is produced from molasses, a by-product in the manufacture of sugar, and that whisky is produced from primary products, such as barley and other grains, which it is impossible to produce at anything approaching the price at which molasses is obtainable, it will be evident to honorable senators that the rumproducers are in a most advantageous position in the matter of costs, and are, therefore, in a position to carry the higher impost. 3154 JRW Queensland 0 0 CRAWFORD, Thomas Senator CRAWFORD . - It has been argued that the small margin of protection given to rum as compared with that given to other spirits is justified because of the cheapness of the raw materials used in its production, but I would point out to honorable senators that similar circumstances exist in other countries which produce rum. The Minister has failed to make out a good case for retaining this small margin of protection. 3154 KTR 0 0 MCLACHLAN, Alexander Senator MCLACHLAN - My comparison was between rum and whisky produced locally, and not between local rum and the product of other countries. The manufacture of whisky is a complete process, whereas rum is merely a byproduct. 3154 JRW 0 0 CRAWFORD, Thomas Senator CRAWFORD - A similar position exists in Jamaica. The local manufacturers of rum should receive something approximating the protection given to the local manufacturers of whisky. Mention has been made of the propaganda circulated by the Queensland distillers of rum, but I have not seen or heard of it. I admit that I have received letters from Thomas Brown and Sons, and from a Bundaberg distillery, but no complaint can be made about that, because it is only natural that they would bring under the notice of their Queensland representatives in this chamber the disabilities under which they are suffering because of the small margin of preference given to them under the customs and excise legislation of the Commonwealth. 3154 JYB New South Wales 0 0 DUNN, James Patrick Digger Senator DUNN . - The excise on Australian brandies and whiskies is 2s. less than it is on Queensland rum, and if the request of Senator Brown is agreed to the excise on those three commodities will be brought into line. Previously, Australian rum enjoyed a marginal difference of lis. a proof gallon over foreign rum, the respective rates being 30s. and 41s.- a gallon. The recent decisions at Ottawa reduced the import duty on foreign rum, including that from the West Indies, to 36s., and in the short time that has elapsed since then there has been a considerable increase in the importation of rum notwithstanding that it is the product of black labour. 3155 KTR 0 0 MCLACHLAN, Alexander Senator McLachlan - The official figures show that there has been no increase of importations. 3155 JYB 0 0 DUNN, James Patrick Digger Senator DUNN - At any rate, the Ottawa agreement has left the door open for the importation into Australia of rum from the West Indies produced by black-sweated labour. Australian brandy enjoys a marginal difference of 18s. a gallon over imported brandy, and gin and whisky have an advantage of 17s. a gallon. In the case of rum, however, the marginal difference is only 6s. a gallon. Those rates give an unfair preference to the other spirits, and place rum at a disadvantage. Queensland is the only place in the world in. which rum is produced by white labour. Not only the rum itself, but also every ingredient used in its manufacture in Australia is produced by white labour. I hope that the committee will agree to the request of Senator Brown. 3155 KOZ South Australia 0 0 HOARE, Albert Senator HOARE . - I wish to explain my attitude on this item, which may seem to some honorable senators to be inconsistent. I voted against a reduction of excise on whisky, but I intend to vote for a reduction of excise on rum by 2s., because I consider that both commodities should be subject to the same excise. Question - That the request (Senator Brown's) be agreed to - put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.) 13 15 Majority . . . . 2 AYES NOES Question so resolved in the negative. Request negatived. Sub-item agreed to. Item 2, sub-items (G) (h) (i) agreed to. Item 2, sub-item (j) - By omitting the whole of sub-item (j) and inserting in its stead the following sub-item: - (1) Spirit for fortifying Australian wine, distilled wholly from the fresh juice of doradillo grapes, subject to regulations, per proof gallon, 10s. Spirit for fortifying Australian wine, n.e.i., subject to regulations, per proof gallon,11s. And on and after 25th May, 1933 - Spirit for fortifying Australian wine, subject to regulations, per proof gallon,9s. 3155 KTR South Australia UAP Vice-President of the Executive Council 1 0 MCLACHLAN, Alexander Senator McLACHLAN . - I move - That the House of Representatives be requested to amend sub-item (j) to read - " (j) Spirit for fortifying Australian wine or used in fortifying Australian wine, subject to regulations - Spirit used in fortifying wine prior to 13th March, 1930, and entered for home consumption on or after that date - Distilled wholly from the fresh juice of doradillo grapes, per proof gallon, 5s. N.E.I., per proof gallon, 6s. Spirit used in fortifying wine on or after 13th March, 1930, and entered for home consumption prior to 25th May, 1933- Distilled wholly from the fresh juice of doradillo grapes, per proof gallon, 10s. N.E.I., per proof gallon, 11s. Spirit for fortiying wine or used in fortifying wine on or after 13th . March, 1930, and entered for home consumption on or after 25th May, 1933, per proof gallon, 9s. ' The duties imposed by this sub-item apply to the spirit whether, at the time of entry for home consumption, it is mixed or not with wine. If the spirit is mixed with wine, the quantity for duty is the total quantity of spirit which has been added to the . wine." This request is made for the purpose of making it clear that the duty of 9s.a gallon applies to fortifying spirit entered for home consumption on or after the 25th May, 1933. Some doubt existed as to the construction of the sub-item, and the department considers it necessary to put it into the form that I have proposed. Request agreed to. Sub-item agreed to, subject to a request. Item 2, sub-item (o) agreed to. Item 6, sub-item (a) - By omitting the whole item and inserting in its stead the following item: - "6. Tobacco- *Tobacco, hand-made strand, per lb., 4s. 3d. Provided that, in the case of tobacco to which this sub-item applies which lias been manufactured partly or wholly from imported tobacco leaf upon which import duty at the rate of 5s. 2d. or 5s. 8d. per lb. was paid, the duty payable under this sub-item on that proportion of the hand-made strand tobacco which has been made from such imported tobacco leaf shall be at the rate of 2s.1d. per lb." *Hand-made Tobacco. - " Hand-made tobacco " shall mean tobacco in the manufacture of which all operations are entirely carried on by hand without the aid of machine tools or machinery other than that used in the pressing of the tobacco. 3156 KNZ New South Wales 0 0 HARDY, Charles Senator HARDY . - I move - That the House of Representatives be requested to amend sub-item (a) to read - Tobacco, hand-made strand - 1 ) Made from imported leaf, per lb., 4s. 6d. Made from Australian-grown leaf, per lb., 3s. Made from an admixture of imported leaf and Australian-grown leaf- On the proportion of imported leaf contained therein, per lb., 4s.6d. On the proportion of Australian-grown leaf contained therein, per lb., 3s. and proviso. The object of my request is to provide for a differentiation of1s. 6d. per lb. between the excise rate on tobacco made from imported leaf and that on tobacco made from Australian-grown leaf. The Minister in charge of the bill denied that there was any moral obligation on the present Government to the Australian tobacco-growers because of what was done by the Scullin Government.. Let me draw a parallel to show that the Minister was wrong. Suppose one Government encouraged migration on a large scale, and a succeeding government, opposed to migration, sought to wash its hands of all responsibility with regard to those migrants who had been encouraged to come to Australia. Would the Minister say that the succeeding government had no moral obligation in the matter? The more we study the history of tobacco-growing in Australia, and the sudden expansion of the industry in recent years, the more convinced we become that a great deal of the development - I do not say all of it - was due to the Scullin tariff. The Minister smiles, and he reminds me of the "smile on the face of the tiger". No doubt, he will claim that the Scullin duties were in operation only for a limited number of months; but even that was sufficient to cause a tremendous number of primary producers and others to take up tobacco-growing. It is easy to perceive what has happened by noting the development of the industry, even in my own district. It has been said that an excise duty of 3s. a lb. affords ample protection to the growers. The Minister has declared, without hesitation, "It is 300 per cent, protection ". How did he arrive at that figure? The average price paid to the growers last year was from 2s. to 2s. 3d. per lb., and the import duty . to-day amounts to 3s. per lb. The Minister has said repeatedly . - and the statement is also made in the Tariff Board's report - that the protection afforded to this industry amounts to 300 per cent.; but how can that be so when the average price realized last year for 8,000,000 lb. of the Australian crop was about 2s. 3d. per lb. Taking the difference between that price and the import duty of 3s. per lb., the protection amounts to only 50 per cent. I realize that the Government will win or lose, on this issue, on the ground that the revenue- would suffer if the excise were lowered. I anticipate that certain honorable senators who represent primary producing States are not prepared to support my request. They say, " We must not interfere with the revenue required by the Government ". The revenue received from tobacco in 1932-33 amounted to £7,300,000 ; but the Government did not budget for that amount. It planned to receive from that source only £6,100,000. What right ha3 the Government to extract from those who use tobacco an additional £1,212,988? In view of the estimate of £6,100,000, it cannot be contended that a reduction of the excise on Australian leaf to 3s. per lb., thus reducing the revenue for 1933-34 to £6,600,000 odd, would greatly embarrass the Government. The position of the tobacco-growers of Australia is serious, because 4,000 or more of them are faced with ruin. The Government claims that their deplorable position is due to an act of Goi ; but we have, to consider the price they will get for their diminished crop, and the bigger that price is the better chance they will' have of recovering from the set-back they have received through bad seasonal conditions. Taking the industry as a whole, I think that it may be said that the season just past was the worst that has been experienced by the growers. I submit my request for the reason that the year's revenue will not be affected by it for more than three months, and also on cbe ground of justice, because the high duties previously imposed encouraged the growers to invest their small savings in growing tobacco leaf. The Government might well give them a fighting chance of success until the industry gets safely upon its feet. T/ie hour being 4 p.m., Question put - That the Chairman do now leave the chair. Question resolved in the negative. 3157 KTR South Australia UAP Vice-President of the Executive Council 1 0 MCLACHLAN, Alexander Senator MCLACHLAN .- Since February, 1932, no fewer than 23 schemes have been submitted to the Government for the revision of these duties on tobacco, and each would have involved the sacrifice of very substantial amounts of revenue. Senator Hardy's proposal is for a differentiation in the excise. The specious plea has been advanced that the purpose is to cheapen tobacco to the Australian smoker, but it is in reality nothing more than an en deavour to obtain greater protection for an industry which is already highly protected. It is true that, for the last year, the total revenue derived from narcotics increased substantially, and is about £800,000 above the amount of £6,500,000 which the Tariff Board suggested should be obtained from tobacco during the period in which the Australian leafgrowing, industry was becoming established. However, an analysis of the position shows that this additional revenue has not been obtained at the expense of the leaf -growing industry. The additional revenue has been obtained as follows: - Thus, out of the increase of £830,000 which has come about in the revenue, only £232,000, or 28 per cent., is borne by the Australian smoker of locally-grown leaf. This, fact is very important, and puts a vastly different complexion on the board's statement with regard to the limitation of revenues on narcotics, so that the Government cannot take the basic figure of £6,500,,000 as being a fair comparison. It must also be borne in mind that the increased revenue returns will not be maintained when increased quantities of Australian leaf go into consumption. The duties encouraged manufacturers to place the Australian leaf into maturation instead of immediate consumption, and this i3 all to the good. If the rates had not encouraged maturation, it is certain greater quantities of Australian leaf would have been marketed last year, and revenue returns would not have been nearly so great. Although an immediate increase in revenue is being experienced, the ultimate result will be a loss of revenue, as the crop of 11,000,000 lb. of Australian leaf which was produced, purchased, and placed into maturation last year,, is gradually released and placed on the market. ' For every pound so used, 3s. impart duty will be lost. On next year's budgeted usings, Senator Hardy's proposal for a reduction of1s. 6d. per lb. on tobacco manufactured from Australian leaf would involve a loss of £323,000. As the very . object of his request is to ensure a greater use of Australian- leaf, it is apparent that the loss would be much greater than this. If a swing-over to 1,000,000 lb. of Australian stemmed leaf, additional to that budgeted for, occurred, the loss would be £560,674. If a swing-over to 2,000,000 lb. of Australian leaf occurred, the loss would be £798,424; if 3,000,000 lb., it would be £1,036,174. These figures indicate how our carefully planned finances could be so easily wrecked. Honorable senators might consider these calculations somewhat academic, but that they are very real and practical. Quite early after, the changed duties were brought down in February, 1932, growers' representatives, and others interested, said that the department was in error in estimating that year's Australian crop at from 10,000,000 lb. to 11,000,000 lb. The growers' estimate was 6,000,000 lb. The actual crop was 13,000,000 lb. And so with these revenue figures the department advised the previous Government that its proposed amendments would defeat themselves. At that time, revenue from tobacco was £6,500,000 per annum. The previous Government decided that it wanted another £1,000,000 from tobacco. It never got it. Instead, it received £6,300,000. Diminished consumption was not the sole reason. The point which was overlooked by the last Government was that the time had arrived when increased excise duties had to be imposed in order to maintain the revenue, let alone the securing of an additional £1,000.000. The present duties on tobacco are fixed at such a level as will permit the industry to develop along sound, economic lines, and, at the same time, ensure that the revenue will be maintained. The granting of further protection, either by an increased duty on imported leaf, or by a reduction of excise on Australian leaf, would mean that the production of darker grades of leaf, for which there is only a limited demand, would be reverted to, and the industry would relapse into that chaotic condition from which it was rescued last year. Any sincere claim for additional protection of Australian-grown leaf must start from the point that Australian growers are not obtaining satisfactory prices. No evidence has been submitted to prove this. Last year's prices were exceedingly satisfactory, and all the crop was sold. This year's results of auction sales were also very satisfactory, as the following figures show:- It is evident that every pound of good quality tobacco leaf produced in Australia finds a ready and profitable market. If some growers persist in growing dark leaf, and do not sell it, the manufacturers cannot be blamed, nor can the Government be held responsible. In the final analysis, the smoker is the person who insists upon the production of quality tobacco. His taste must be respected, and no organization of growers, nor the Government, can balk this fact. Finally, no Government can afford to lose hundreds of thousands of pounds in revenue to assist growers who do not produce the class of tobacco demanded by Australian smokers. If this request is agreed to, revenue will undoubtedly be lost. Tobacco is regarded as one of those commodities which may legitimately be taxed by governments for revenue purposes, and if the honorable senator's proposal is accepted, other primary producers, who are more deserving, may have to suffer. The increase in the production of tobacco in Australia has, in many instances, been responsible for unduly inflating land values. Tobacco-growing is the most profitable primary industry in Australia. 3158 KNZ 0 0 HARDY, Charles Senator Hardy - The Minister is quite wrong. 3158 KTR 0 0 MCLACHLAN, Alexander Senator McLACHLAN - Those who have not invested money in, or have been closely associated with the industry, are not conversant with all the details. I know that the returns from properlymatured tobacco leaf are better than those from any other Australian primary product. 3159 JZ6 0 0 O'HALLORAN, Michael Senator O'halloran - The Minister should produce the figures. 3159 KTR 0 0 MCLACHLAN, Alexander Senator MCLACHLAN - I have the figures for last year in my possession. Growers, of course, have to contend with climatic conditions and pests, but the returns of many growers have been highly satisfactory. If the excise duties are reduced, the result in Australia may be as it was in the United States of America. In the early stages of tobacco growing the producers in that country were asked to contribute a fair share to the revenue, but there was such a clamour that they escaped paying their fair quota, and, even to-day, the revenue derived from tobacco in the United States of America, as compared with that received from other sources, is lower than it should be. I shall oppose the request in the interests of the tobacco-growing industry, because I believe that in doing so I shall be assisting to place it on an economic basis. 3159 JZ6 South Australia 0 0 O'HALLORAN, Michael Senator O'HALLORAN . - I would not have spoken but for the extravagant and inaccurate statements of the Minister (Senator McLachlan). When replying to the debate on the second reading of the bill he said that the Australian tobacco growers enjoy a protection of 300 per cent. They enjoy no such protection. What are the actual facts? The manufacturer of imported tobacco has to pay about ls. per lb. to land the leaf in Australia, and a customs duty of 3s. per lb., making a total cost of 4s. per lb. to cover the cost of the raw material and customs duty. To that is added a flat rate of excise of 4s. 6d. per lb., making the total cost of the raw material and customs and excise duties 83. 6d. per lb. On the other hand, what has the Australian manufacturer to pay for the right to manufacture and market Australian tobacco? The average price of Australian tobacco last year was 2s. 3d. per lb., but to that we have to add an excise duty of 4s. 6d. per lb., making a total of 6s. 9d. per lb. for raw material and excise duty. The difference between 8s. 6d. per lb. and 6s. 9d. per lb is not 300 per cent., as the Minister stated, but only 33 per cent. 3159 KTR 0 0 MCLACHLAN, Alexander Senator McLachlan - That is a novel way of arriving at the true position. 3159 JZ6 0 0 O'HALLORAN, Michael Senator O'HALLORAN - It is the only basis upon which it can be argued. Before, one ounce of imported or Australian tobacco can be sold the manufacturer has to buy the leaf and pay the customs and excise duties imposed by this Parliament. The only protection that the Australian tobacco-grower enjoys is approximately 33 per cent. But granted that the Minister's figures are correct, what have he and the officers of the Customs Department been doing to permit manufacturers to charge the prices they do? I have found it difficult to obtain Australian tobacco, but I have tried three different kinds and found that it compares favorably with the imported leaf. The actual difference in the retail price of imported and Australian tobacco is id. per oz. Where does the 300 per cent, come in? I believe that the quality of Australian tobacco is equal, if not superior, to the imported. I have been informed by experts that the peculiar properties of certain tobacco which make it more palatable to some smokers are due to the soil in which it is grown, and also to the climate in which it is produced. Twelve months ago when Dr. Dickson, the Commonwealth tobacco expert, delivered a most interesting lecture on tobacco in the Senate club room, he said that even if we imported the best tobacco plants from overseas and adopted overseas cultural methods, we could not produce tobacco with the same aroma as the imported leaf owing to the difference in soil and climate. Australian smokers have become accustomed to the taste and aroma of the imported tobacco, and the only way to encourage them to smoke Australian-grown leaf is by reducing the price of the Australian product. The proposals of this Government, unlike those of the previous Government, will not assist in that direction. I support the request moved by Senator Hardy. 3159 KNZ New South Wales 0 0 HARDY, Charles Senator HARDY .- The Minister (Senator McLachlan) stated, a few minutes ago, that between the time of the alteration of the duty and the present day, 23 different schemes for the assistance of the industry had been submitted to the Government for consideration. Bearing in mind that there are approximately 4,000 tobacco growers in the various States, the fact that they had presented to the Government the number of proposals mentioned by the Minister is very definite evidence of discontent and dissatisfaction with the Government's action in increasing excise and reducing import duties. Notwithstanding the subtle arguments advanced this afternoon by the Minister, and other attempts to camouflage the position, it cannot bedenied that Australian tobacco growers have been, and will continue to be penalized so long as the present impost of 7s. 6d. per lb. remains on foreign-grown tobacco, and the excise on the Australian product is 4s.6d. instead of 2s. 4d. per lb. That is tie position in a nutshell. It is of no use for the Minister to endeavour to side-step the issue. The reason for the lament of Australian tobacco-growers is that they know that the present duties will not encourage manufacturers to buy their product.. The Minister has repeatedly stated that it is the intention of the Government to encourage tobacco growing. Apparently its relation to the industry is that of a foster-parent to his child. If this correctly describes the relationship, and if this 93 per cent, increase of the excise duty represents the initiative of the Government on behalf of the growers, we cannot blame them if they look upon the Government as an anaemic scarecrow that is patiently awaiting decent burial. SenatorMacDONALD (Queensland) [4.23]. - I should not have risen but for the somewhat extraordinary observations of the Minister (Senator McLachlan), in criticism of Senator Hardy and other honorable senators who are endeavouring to secure justice for Australian tobacco growers. The Minister declared that he viewed Senator Hardy's remarks as " a specious plea " with a view to cheapening the cost of Australian tobacco. Senator Hardy's request is merely an attempt to obtain for Australian tobacco-growers that measure of assistance which he outlined when last this subject was discussed in this chamber. The honorable senator indicated that he did not intend to support the request submitted by Senator Barnes when the import duties were being considered, because he hoped to secure the necessary assistance for the Australian industry by carrying a request to alter the excise on tobacco manufactured from Australian-grown leaf. I took the honorable senator up on that point, and endeavoured to persuade him that, if his proposal were adopted in preference to that submitted by Senator Barnes, the loss to the Australian grower would be10d. per lb. There is no secret about the position at all, and I consider that the Minister went just a little bit too far in his drastic criticism of the honorable senator. I do not wish to allege more than I know, but I hope, as I said in an interjection few minutes ago, that the Minister has not got the division list on this item in his pocket, though his attitude was so confident that I should be surprised if what I am saying is not borne out by subsequent events. 3160 KNZ 0 0 HARDY, Charles Senator Hardy - Our turn will come. 3160 KS9 QUEENSLAND 0 0 MACDONALD, John Valentine Senator MacDONALD - -It may. It seems to me that there is some 'support for the rumour which has reachedmy ears that, when the vote is taken on this item, there will bo defections from the ranks of those who, it was believed, would support the cause espoused by the Labour party and certain Country party senators. I may add that Senator Hardy's request does not go far enough to satisfy honorable senators on this t side. We should like to see a much greater measure of assistance given to the growers. When this subject was under discussion in another place, the attitude of the Country party members there, in submitting a proposal identical in every respect with the one now before the committee, was considered by Labour members as calculated to cloud the issue.; and members of the Country party were reminded that they could not expect, from this Government, better treatment for the tobacco-growers of this country. The position of the Labour party throughout this tariff debate in the Senate has been quite hopeless. All its requests have been unsuccessful. 3160 KP8 0 0 JOHNSTON, Edward Senator E B Johnston - The Country partry has had much the same experience. 3160 KS9 0 0 MACDONALD, John Valentine Senator MacDONALD - Not quite, because several requests by Country party senators have been accepted. On many occasions, the Government has depended on Labour senators for its majority. This induces me to say that, if the temptation offered to us by other people had been accepted - there is no doubt that temptations "were offered - we should have seen the House of Representatives back six weeks ago, and probably there would have been a continuous session until next Christmas. 3161 KNZ 0 0 HARDY, Charles Senator Hardy - The trouble with the honorable senator'3 party is that the manufacturers, whom they were endeavouring to help, stabbed them in the back. 3161 KS9 0 0 MACDONALD, John Valentine Senator MacDONALD - My attitude to the manufacturers of this country has always been stated quite frankly. Undoubtedly, they did let us down at the last election. I hope that the air of confidence, with which the Minister spoke a few minutes ago, when putting the case for the Government against Senator Hardy's request, will not be justified when the division is taken. 3161 K7P Queensland 0 0 COLLINGS, Joseph Senator COLLINGS . - I rise to discuss this question only because of the provocative speech of the Minister. It cannot be said that honorable senators on this side have obtruded unduly into the debate to-day, the reason being that they have been aware of the desire to complete the business. The Minister said that if care were not exercised, the tobacco industry would destroy itself, because it would proceed along wrong lines and not produce the quality of leaf required. In reply, I point out that the Queensland Government is sending out its instructors among the tobacco-growers, to advise them exactly as to what to do and what not to do, what to expect and what to avoid, in regard to seed, cultivation methods, and other factors. The Minister also said that one of the unsatisfactory results of the encouragement given to the industry by the Scullin tariff was speculation in land values. That suggestion can be dismissed with a lordly wave of the hand, similar to that with which the Minister dismissed all the difficulties of the industry. That honorable gentleman and his party stand for the exploitation of land values and of everything else out of which profit may be made, and never' in any circumstances have a word to say against the practice. "We who sit on this side do not stand for the exploitation of land values. We believe in 'the land tax, which the Government has already promised it will take off the backs of ite wealthy friends. Senator SAMPSON(Tasmania) £4.33]. - During the last twelve months, we have been inundated with literature explaining the pros and cons of the tobacco industry. Those of us who represent States in which tobacco is no't grown to any extent - in Tasmania it ha3 been grown for many years, but not in any quantity - may be regarded as outsiders or spectators who, it is generally believed, " see most of the game." The study of Tariff Board reports and the different statements put out by tobacco-growing associations and other bodies, is rather informative. 'Some interesting statements have been made during the course of this debate. "On the one hand it has been said that the tobacco-grower is threatened with industrial extinction, and that he is &t present scratching along almost on the breadline. On the other hand, it has been said that he has been on a very good wicket in a most profitable occupation. It it most difficult to reconcile those statements. I' believe that there is not the slightest doubt that last year and the year before, a largs number of persons were tempted by the profitable returns to grow tobacco. Then, the problem of marketing arose. I think it can be said that it was the definite policy of the Australian manufacturers last year - and that it still is - to use Australian leaf to the greatest possible extent. That is proved by the appreciable variation that has occurred in the quality of well-known brands of tobacco, due to the fact that a fairly large proportion of not quite suitable leaf has been mixed with the imported leaf. Consistent smokers must have noticed that variation. I have been a smoker for 30 odd years, and during the last twelve months, I have had to chop and change among the different brands. Some Australian tobacco is excellent, some is fair, and some is perfectly horrible. That, of course, applies also to tobacco grown in other countries. For six or seven years, I lived in Rhodesia, where I attempted to grow tobacco. The problem in that country has been the marketing of what is not first-grade leaf. The Australian manufacturer has used a large proportion of Australian leaf; but there are limits to 'its use.', The ultimate success of both the growing and the . manufacturing, branches of the industry in Australia rests- with the smoker, about whom we have not heard much during this debate. The quality of the tobacco marketed must be so high that it will be palatable to him. The Government could, of course, follow the lead given by France and other countries, and permit only certain tobacco to be smoked; but God forbid that wi should ever be placed in that position! The less said about the quality of the government monopoly tobacco in France, the better. The Australian industry is more or less in "the experimental stage. Tobaccogrowing must be undertaken in areas that are suitable in regard to both soil and climatic conditions. I have carefully read the case put up to the Government, the reports of the Tariff Board, Dr. Dickson's statements, and anything else dealing with tobacco that I have been able to lay my hands on during the last twelve months. If one believed the statements of those who are opposed to the Government in this matter, one could only come to the conclusion that it is stark, staring mad; that it has no intelligence, brains or sense. Can it be said that the Tariff Board is absolutely ' mad, and that it has acted stupidly? The principal thing to be avoided in this industry is overproduction,' particularly of leaf that is not suitable for smoking purposes. A tremendous percentage of the crop comes under that head. If we had a big glut' of poor quality leaf, we should be in the same position as Rhodesia occupied in 1928, when it could hardy give away 19,000,000 lb. of leaf on account of the poorness of its quality. Even if we over-produced leaf of excellent quality we should have the utmost difficulty in disposing of it. We certainly have an over-production of sugar, but its quality is, probably, better than that of any other sugar. If we continued to do as we did last year in the tobacco industry, we should be landed with an overproduction of leaf of varying qualities, of which we could not possibly dispose, and the last stage of the Australian tobacco industry would be much worse than the first. I have endeavoured, after full consideration of the facts, to arrive at a fair and proper appreciation of the matter, my conclusion being that; I must support the action/of the. Government. 3162 JYH Victoria 0 0 ELLIOTT, Robert Senator ELLIOTT .- I have listened attentively to all of the arguments that have been advanced both for and against, and, after most careful consideration, have decided, in the interests of the tobacco-growers of Australia, to vote against the request that has been moved by Senator. Hardy, and to support that which Senator Rae proposes to move if this request is negatived. 3162 K2Z Victoria 0 0 BRENNAN, Thomas Senator BRENNAN . - I was astonished at the novel method enunciated by Senator' O'Halloran of calculating the amount of protection which an industry receives. I do not know how it was arrived at, nor, do I think, does anybody else, including the honorable senator. The position that he makes out is that the manufacturer has to pay 3s. per lb. for imported leaf, the landing cost of which is approximately ls. per lb., which makes a total of 43. prior to manufacture. The manufacturer hae to pay an average of 2s. 3d. per lb. for Australian leaf, so that, on the honorable senator's figures, the margin represents a difference of ls. 9d. on a pound of leaf which costs under ls. - a protection of about 17-5 per cent. Senator Hardy has advanced the theory that, certain persons having been induced to embark upon the industry of tobacco-growing by imposing extravagantly high duties, the Government is now under an obligation to carry them in future. I regret that I cannot accept that as being the duty of the Government. Persons who embark upon any industry are obliged to take ordinary precautions. Growers knew that the tariff could be altered, and were aware of the conditions under which the Scullin schedule was imposed. I am sick and tired of explaining that it is not a tariff, but a resolution that was laid on the table of another place by one, Francis Michael Forde, under which the Government proceeded to collect the duties which it provided. If it is to become the duty of the Government to afford protection to sections of the community against their errors of judgment, I do not know where the thing is to end. 3163 KNZ 0 0 HARDY, Charles Senator Hardy - The claim is that this Government should not, because of the results of the error of one government, employ shock tactics against those who are involved in the catastrophe. 3163 K2Z 0 0 BRENNAN, Thomas Senator BRENNAN - Surely it cannot justly be urged that this Government is expected to save the tobacco-growers from the consequences of their own impetuosity. I should be conserving my own interests best if I plunged for further privileges for the growers, who are, probably, more numerous in Victoria than in any other State. 3163 K7P 0 0 COLLINGS, Joseph Senator Collings - We are not asking for further privileges; but that what the growers have shall not be taken away. 3163 K2Z 0 0 BRENNAN, Thomas Senator BRENNAN - Which means that, once a government has granted a privilege, it is to be regarded as immutable; that this Government should not alter duties imposed by its predecessors, as they are considered to be rights, and not privileges. I repeat, so far as my personal interests are concerned, they would be best served if I joined in the cry that high protective duties should be granted to this fairly solid and numerous Glass of voters in my own electorate of Victoria. However, I have, in this debate, consistently stood for lower duties, arid in the fight for them I have been associated with those who. represent the rural interests of Victoria; and, to adopt the words of the Acting Leader of the Country party on this matter, I cannot blow hot and cold. If honorable senators of the Country party want lower duties generally, they must be prepared to accept them in cases which adversely affect their constituents. They cannot have it both ways. 3163 KNZ 0 0 HARDY, Charles Senator Hardy - Does the honorable senator class excise duties as internal costs? 3163 K2Z 0 0 BRENNAN, Thomas Senator BRENNAN - I do not think that that has anything to do with the matter. I classify tobacco as an item which is regarded in every country of the world as a proper one upon which to impose both customs and excise duties. That is what we are doing in Australia, and, according to statements of the Minister, the reports of the Tariff Board, and in the opinion of Senator O'Halloran, a margin has been left to the Australian tobacco-growers, which, at a conservative estimate, is over 100 per cent. I fail to see how I can raise my voice in favour of extending that privilege, and I must support the Government in this matter even at the risk of antagonizing a section of voters which is numerous, wellorganized, and extremely vocal. Question - That the request (Senator Hardy's) be agreed to - put. The committee divided. (Temporary Chairman - Senator Reid.) 8 15 Majority . . 7 AYES NOES Question so resolved in the negative. Request negatived. SenatorRAE (New South Wales) [4.54]. - I move - That the House of Representatives bo requested to amend sub-item a to read - a ) Tobacco, hand made strand - 1 ) Australian leaf content, per lb., 3s. 7d. Imported leaf content, per lb., 4s. 3d. and proviso. I propose also to move a similar request to sub-item b, which relates to manufactured tobacco. The purpose of these requests is to establish a margin between the duties chargeable on Australian leaf and imported leaf respectively. This proposal is identical with one submitted in the* House of Representatives by the Acting Leader of the Country party (Mr. Paterson). The fact that it was rejected in that chamber by only two votes shows that it had the approval of a large proportion of those who have taken a deep interest in the Australian tobacco-growing industry. The purpose is primarily to assist the growers of tobacco by providing an incentive to smokers to use Australian-grown leaf. It is a question of deciding how a cheaper smoke can be provided for the man who has been hit hy the depression, without causing a loss of revenue to the Government. We believe that th a t -can be done. The secretary of the Victorian Tobacco Growers Association has submitted a proposal which would permit Australian tobacco to be sold for Id. less per 2-oz. packet than the present price, and for blended tobacco to be sold at rates ranging from those now charged to slightly lower prices. That would increase the difference in price that now exists between Australian and imported tobacco <o at least 1½d. for a 2-oz. packet, and would give a considerable incentive to smokers 'Jo acquire a taste for Australian tobacco. It would also lessen the difficulties associated with the disposal of Australian leaf. I shall not traverse the ground already well covered by Senators Hardy, 0'Halloran. and others; but I submit that the resultant loss of revenue from the adoption of Senator Hardy's proposal would be much less than the estimate of the Minister. My .proposal is for a very much smaller alteration than that desired by Senator Hardy. The maximum drop in the revenue which the adoption of Senator Hardy's proposal would cause would be about £300,000, not allowing for the increased consumption of tobacco which would ensue from the cheapening of this commodity. In times of depression, men are forced to place a limit on their use of luxuries. That the cheapening of a commodity in general use always increases the consumption of that commodity has been proved many times in the case of bread; as the price has fallen, so has the consumption increased. We have, therefore, to deduct from the possible losses the additional revenue which would be derived from the greater quantity of tobacco consumed. Senator Brennan, in a rather cold-blooded manner, sard that persons who invested their cash on the strength of action taken by a government through the customs house, accepted the attendant risk with their eyes open, because they 'knew that a future government could alter the duties. I dissent altogether from that view. While it must be admitted that governmental aid is a purely artificial way of stimulating industry, there can be no justification whatever for giving a sudden impetus to a new enterprise, and then bringing down the axe on it just as suddenly. Any such action must necessarily dislocate industry and destroy confidence in governments. As a general rule, one government feels bound by any undertaking entered into by its predecessor, even when that undertaking is not backed by statute law. I know that there are exceptions to that rule, but 'Other than in special circumstances it is followed. Ordinarily, we have no more right to induce people to embark on an enterprise, and then suddenly to withdraw the support given to them, than we have to borrow money under false pretences. I contend that, whatever difficulties there may be in the way of producting a high-class tobacco leaf, because of attemps to grow it in unsuitable soil, or in districts not climatically suited to its culture, the fact remains that a large proportion of the land now under tobacco is well suited to the production of high-class leaf. This industry is, therefore, not one which can be dismissed, with a shrug of the shoulders, as being of no account. On the contrary, it is an industry in which a considerable amount of capital has been invested, and the adoption of any policy which might plunge the greater number of those engaged in tobacco production into financial difficulties would be a scandalous thing to "do. A good case has been made out on behalf of the tobacco growers, who were induced by previous administrations to engage in this form of production. Moreover, in these times of depression, smokers are entitled to a better deal than they are now getting. They should be offered some inducement to acquire a taste for Australian tobacco. It is useless to argue that, if Australian tobacco were of first-class quality, smokers would be glad to smoke it without any special inducement. Quality is largely a matter of individual taste. A person who, over a period of years, Las acquired a taste for a certain commodity, is not easily persuaded that another commodity is equally good. The way in which we can best help the tobacco-grower is to increase the demand for his product; and, if he is given a margin of protection over the foreign grower such as I propose, it will enable the locally-grown tobacco to be Bold at a price slightly lower than that of the imported tobacco, and therefore stimulate its consumption. A logical case has been made out on behalf of the Australian growers. This impost . should be permanent, but as the demand for the Australian tobacco increases, and that of the imported correspondingly diminishes, there should bo a readjustment between the customs and excise duties so as to suit the changing circumstances. I trust that the committee will agree to my request Question - That 'the request (Senator Rae's) be agreed to - put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.) 11 11 AYES NOES 3165 10000 0 0 CHAIRMAN, The The CHAIRMAN - There being eleven " Ayes " and eleven " Noes ", I declare the question resolved in the negative. Request negatived. Sub-item agreed to. Item 6, sub-item (b) : - By omitting the whole item and inserting in its stead the following item: - Tobacco, manufactured, n.e.i, made either from imported leaf or Australian-grown leaf or an admixture of imported leaf and Australian-grown leaf,' per lb., 4s.6d. Provided that, in the case of tobacco to which this sub-item applies which has been manufactured partly or wholly from imported tobacco leaf upon which import duty at the rate of 5s. 2d. or5s. 8d. per lb. was paid, the duty payable under this sub-item on that proportion of the manufactured tobacco which has been made from such imported tobacco leaf shall be at the rate of 2s. 4d. perlb." Request (by Senator Hardy) proposed - That the House of Representatives be requested to amend sub-item (b) to read - 1 ) Made from imported leaf, per lb., 4s. 6d. Made from Australian-grown leaf, per lb., 3s. Made . from an admixture of imported leaf and Australiagrown leaf - On the proportion of imported leaf contained therein, per lb., 4s. 6d. On the proportion of Australian-grown leaf contained therein, per lb.. 3s. and proviso. Question put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.) 8 14 Majority . . . . 6 AYES NOES Question so resolved in the negative. Request negatived. Request (by Senator Rae) proposed- That the House of Representatives be requested to amend sub-item (b) to read - "(b) Tobacco, manufactured, n.e.i., - Australian leaf-content, per lb., 3s.10d. Imported leaf-content, per lb., 4s. 6d." and proviso. Question - That the request be agreed io - put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.) 10 12 Majority . . . . 2 AYES NOES Question so resolved in the negative. Request negatived. Sub-item agreed to. Items 7, 8, 11 to 17 agreed to. 3166 10000 0 0 Senator FOIL .- I move - That the House of Representatives be requested to add the following new item: - " 18. Cinematograph film other than home kinematograph film printed or copied from imported film of a class used for exhibition purposes, per lineal foot, id." I am submitting this request because of the position in which I find myself owing to the action of the Senate in requesting the House of Representativesto increase the customs duty on films from foreign countries from 4d. to 1s. a foot. I contend that it is not equitable to charge1s. a foot irrespective of the number of copies to be made. Some films are not worth copying more than three or four times, while no fewer than twelve or fifteen copies may be taken of films that are in popular- demand. 3166 10000 0 0 HAYS, Herbert The CHAIRMAN (Senator the Hon Herbert Hays - Under the Constitution, the Senate may not amend a bill imposing taxation. Section 53 provides that in dealing with a bill of this class, the Senate may request the House of Representatives to omit or amend any item or provision therein, but the honorable senator has moved that a request be made for the insertion of an entirely new item. It. is not competent for the Senate to prefer such a request. 3166 JZD 0 0 FOLL, Hattil Senator FOLL - Might I inquire from the Minister whether the Government views this proposal sympathetically? 3166 KTR 0 0 MCLACHLAN, Alexander Senator McLachlan - It is plain that the Government cannot do what the honorable senator asks, but the suggestion will receive consideration later. Title agreed to. Bill reported with requests. Standing and Sessional Orderssuspended, and report adopted. 3166 adjournment Tariff Debate : Congratulatory Remarks - W heat Restriction : London Negotiations - Overseas Transport : Blue Star Vessels. 3166 K0F Western Australia UAP Minister for Defence 1 0 PEARCE, George Senator Sir GEORGE PEARCE [5.35]. - I move - That the Senate do now adjourn. I desire to express the appreciation of the Government on the manner in which honorable senators have co-operated in bringing the business of the Senate to a conclusion this week. I also wish to congratulate the Senate on the close consideration which has been given to the tariff schedule. I have been in this Parliament now for 30 years. I saw the first tariff schedule put through, and all subsequent schedules, but never before has such close attention been given to any schedule in the Senate as has been given to this. Both sides of the Senate will agree with me, I am sure, in expressing our appreciation of the way in which the presiding officers, and the Chairman of Committees, have performed their duties, as also have the members of the Hansard staff and other officials during the strain of the session. They have all concentrated on doing their duty, and I express my thanks to them. Last, but not least, our thanks are due to my worthy colleague, Senator McLachlan. There are reasons, with which honorable senators are no doubt familiar, that would have made it invidious for me to have taken a prominent part in putting this tariff through the Senate. Senator McLachlan has done his job well, with little assistance from his fellow Ministers, because Cabinet has been sitting much of the time. 3167 JZ6 South Australia 0 0 O'HALLORAN, Michael Senator O'HALLORAN . - In the absence of my leader (Senator Barnes), I desire to join with the Leader of the Government in the Senate (Senator Pearce) in expressing appreciation of the splendid work which has been done by the responsible officers of this chamber during the passage of the tariff schedule. The Chairman of Committees and the officers of the Senate have performed their duties in a most praiseworthy manner. The Minister (Senator McLachlan) who has piloted the bill through the Senate has at all times been most courteous and considerate, and has never hesitated to give the fullest information on all subjects, even to those who frere, for the time being, opposed to him. He is a colleague of mine from South Australia, and, therefore, it is perhaps not fitting for me to praise him too highly, but I feel that I must express my personal' appreciation, and that of my party, for his assistance to all honorable senators during the tariff debate. To the customs officers who assisted the Minister, the best thanks of the Senate are due, as also to the Hansard staff, and those associated with them in the" compilation of the permanent record of proceedings. The manner in which the Senate has dealt with this tariff schedule has enormously increased its prestige. It has silenced many critics who formerly looked upon the Senate as a replica of its master's voice in another place. I now desire to refer to the negotiations in which the Resident Minister in London (Mr. Bruce) is at present engaged on behalf of the Australian Government with respect to the restric tion of wheat-producing acreage. A number of contradictory newspaper reports have been published in Australia during the last two or three weeks from which it is difficult to gather the actual lines upon which the World Economic Conference is proceeding. I realize that the Government is in an extremely delicate position, and I am not going to criticize the Leader of the Government in the Senate (Senator Pearce) for tha meagre nature of the information conveyed to honorable senators. But I desire to utter a warning to the Government because this is the last opportunity that we shall have, at least for a brief period, to speak on behalf of the respective States and of the wheat-grower* of Australia generally, as to the consequences which may accrue from the adoption of an agreement which may not be considered in every detail. In this respect I call to my assistance no less a personage than the honorable member for Wakefield (Mr. Hawker), a former Minister in the present Government. In discussing the proposals to limit the export of wheat from Australia, at a pleasant Sunday afternoon gathering held in Maughan Church, in Adelaide, on Sunday last, Mr. Hawker made the following declaration :- To ask Australia to join in a conspiracy to stint the hungry so that she and other wheat-exporting countries may obtain higher prices for their wheat from people -who are already well fed seems to me to be entirely wrong in principle. I agree with Mr. Hawker. The adoption of such a proposal would mean stinting the hungry, not only in other countries, but also in Australia unless some mean* is provided to compensate the farmers in this country for the wheat they would not be permitted to sell without imposing an additional burden on the consumers of bread in Australia. I was perturbed in reading a paragraph in the Canberra Times this morning, in which it is suggested that Canada favours a restriction of wheat acreage and wheat export. I do not believe in a restriction of acreage or df export, but according to the paragraph in the newspaper mentioned, it is proposed to overcome this difficulty by an international plan. The individual grower would be under no restriction as regards acreage and production, but the maximum quantity he could market from any crop would he fixed and the balance would be left entirely on his hands. That may appeal to Canadian growers. I have some knowledge of the conditions existing in the wheat-growing areas of Australia, and the idea of leaving marketable wheat on the hands of the average Australian farmer is anathema to me. In the. Commonwealth we have two kinds of wheat-growing districts. We have safe districts where farmers can produce wheat almost any season because the rainfall, soil and other natural conditions are admirably suited for its production. In other districts tremendous areas have been developed at great expense by State governments concerned, where rainfall is doubtful, and where other important factors enter into consideration. In these districts frequent failures are experienced in the growing of cereals. I ask the Government that all these matters shall lie seriously considered. In South Australia we have what is known as the fringe country, comprising 13,000,000 acres of land which produces probably one crop in three years. On Eyre's Peninsula, which has been described as South Australia's new province, there is a tremendous area of land which has been developed at great expense to the State, but where the rainfall and other conditions are such that periodical failures occur; If restrictions are to be imposed full consideration must be given to all these factors and their possible influence upon the finances of not only individual farmers, but also the State governments concerned. I urge that the most serious consideration be given to the matter before any final agreement is entered into by the Resident Minister in London on behalf of the Government. I recall our unhappy experience under the Ottawa agreement, which this Parliament was practically forced to ratify. I do not wish a similar set. of conditions to occur so that there shall be any restriction on the planting of wheat or of its export from Australia. 3168 KP8 Western Australia 0 0 JOHNSTON, Edward Senator E B JOHNSTON .- On behalf of the members of the Country party in this chamber, I join in the expressions of appreciation which have been extended to you, sir, for the way in which you have presided over our deliberations, and also to the Chairman of Committees and the officials of the House, including the Hansard staff. This is the first tariff schedule which .Senator Herbert Hays has handled as Chairman of Committees, and I think that we all agree that he has carried out his work with conspicuous ability and fairness. Members of the Country party also desire to thank sincerely the Vice-President of the Executive Council (Senator McLachlan), who piloted through the Senate the very comprehensive tariff which has just been disposed of,, for his unfailing courtesy and good temper, and for the fund of information which he always had at his disposal. Although we opposed the Government on many items, and endeavoured unsuccessfully to carry requests for lower duties, we appreciate the good spirit which ,the Minister showed throughout the debate, and thank him for his courtesy to us, even when we were attacking the Government. 3168 JYB New South Wales 0 0 DUNN, James Patrick Digger Senator DUNN . - Speaking for myself and Senator Rae, who constitutes the " rank and file," but who is also deputy leader of the Lang Labour party in this chamber, I offer thanks to my dear friend, Senator Herbert Hays, who, as Chairman of Committees, so patiently watched over the tariff debate during the last six weeks, when all honorable senators were dealing out their political " patter ". Being politicians, I suppose we all display, at times, evidence of the ego that is in us. Even you, Mr. President, on one or two occasions succeeded in getting in your little bit of " patter ", some of it secondhand, on behalf of the people of Western Australia. It was, I think, significant that, in the discussion of this main schedule, we ended on the item, " goods, second-hand ". Possibly, after a weary tariff debate, lasting more than six weeks, the majority of honorable senators were in what might be termed a second-hand frame of mind, and were glad to end the discussion. I join with the right honorable the Leader of the Senate (Senator Pearce), the Deputy Leader of the Labour party (Senator O'Halloran), and the Leader of the Country party (Senator Johnston), in thanking the Minister and all the Senate officers, as well a3 members of the Hansard staff, for their assistance. I include, also, representatives of one of our national institutions, the members of the press gallery. In newspaper parlance, these press " bird* " have been sitting in the gallery above us, daily watching over our deliberations, accepting and publishing, from time to time, those contributions of political chaff which they considered worth recording in the press of this country. To our fellow slaves in the pres3 gallery, I give my thanks for the many little kindnesses they have shown tO' us. I understand that the right honorable the Leader of the Government (Mr. Lyons) has returned to Canberra from Sydney, and I should like to know if the Leader of the Senate (Senator Pearce) ha3 any information to give with regard to the recent application by the Blue Star line of steamers to share the Australian overseas trade with vessels included in the Overseas Transport Association, about which there has been some argument of late. The addition of vessels of the Blue Star line to that trade will, I believe, be of material benefit to our primary producers; but, judging by reports that have appeared in the Sydney Morning Herald^ the Labor Daily, and. other 'newspapers, it would seem that the shipping companies connected with 'the overseas- shipping ring, have formed what may be called a mercantile KuKluxKlan. They object to. ships belonging to other companies taking part in the trade, because of the possibility of rebates in freights being demanded. Every consideration should be given to the proposal made by the Blue Star line for permission to enter the 'magic circle' that has been built around Australia's oversea trade. I understand that a deputation representing the Blue Star line interests will wait on the Prime Minister on Tuesday next, and I should like to know if the Loader of the Senate can indicate what the Government proposes to do in this matter. 3169 KOJ Tasmania 0 0 HAYS, Herbert Senator HERBERT HAYS . - I take this' opportunity to thank the right honorable the Leader of the Senate (Senator Pearce), the Deputy Leader of the Labour party (Senator O'Halloran), the Leader of the Country party (Senator Johnston), and Senator Dunn, for their very kindly references to me in the discharge of my duties as Chairman of Committees during the debate on tariff items. I also express my thanks to honorable senators for their consideration and courtesy, and desire to pay a tribute to the Clerk and Clerk-Assistant of the Senate for the valuable assistance which they rendered to me throughout the long discussion, which ended this afternoon. During the last five weeks I have had many opportunities to observe the thoroughness with which these officers discharged their duties, and the smoothness with which the tariff debate was conducted was due largely to their attention, to all the details of their work, which, I may add, begins before the Senate assembles, and continues for some time after it adjourns. 3169 KTR South Australia UAP Vice-President of the Executive Council 1 0 MCLACHLAN, Alexander Senator MCLACHLAN . - I thank my leader (Senator Pearce), the Deputy Leader of the Labour party (Senator O'Halloran), the Leader of the Country party (Senator Johnston), and Senator Dunn for all the kind things which they have said about me. I agree with my leader, whose expression of opinion was echoed by Senator O'Halloran, that the examination by honorable senators of the many tariff items was very minute indeed - far too much so for my comfort, I may say, for while I prepared myself for the criticism which I expected would be directed against certain of the items, and tried to anticipate the various heads under which discussion would develop, I overlooked the possibility of a close examination of the 1921-30 tariff rates. If, therefore, I stumbled over some of the fences, I am sure that honorable senators will forgive me. This was my first experience of tariff-making. Doubtless, honorable senators will expect me to say that I hope it will be my last, but I am afraid that I must disappoint them. At the moment I have no such wish. I desire to thank the Chairman of Committees (Senator Herbert Hays) and the Clerk and ClerkAssistant, who were always anxious to helD me,, and by their advice, greatly facilitated the passage of the tariff. I also wish to thank those officers of the Customs Department who, for the last seven weeks, have been at my beck and call, and have never through any fault of their own failed me in any respect. I should like honorable senators to realize how extremely grateful I am for the consideration that they have extended to me, as well as for having allowed to pass without debate, certain items upon which I had prepared magnificent orations. Senator Sir GEORGEPEARCE (Western Australia - Minister for Defence) [6.1]. - I assure Senator O'Halloran that the Government will watch most closely every step that is taken in connexion with the wheat question, recognizing as it does' that the well-being of Australia is largely wrapped up with that' of the wheat industry. A substantial rise in the price of wheat would help the industry, and we should not be backward in accepting any reasonable scheme that would attain that end. Senator Dunnhas referred to the application of the Blue Star Line' for admission to membership of the Australian Oversea Transport Association, which is a loose confederation of the various shipping companies that are engaged in overseas transport to and from Australia. During the regime of the Scullin Administration, this body was given some sort of recognition by an alteration of the Australian Industries Preservation Act and a shipping committee was set up. The question of the Blue Star Line being admitted to membership of the association is one, not for the Government, but for the association itself. 3170 JYB 0 0 DUNN, James Patrick Digger Senator Dunn - Why, then, is a deputation from the Blue Star Line to interview the Prime Minister (Mr. Lyons) on Tuesday? 3170 K0F 0 0 PEARCE, George Senator Sir GEORGE PEARCE - So far as I understand the position, there has merely been an intimation to the Government by the Blue Star Line, that it has made the request that it be permitted to become a member of the association. If that permission were refused, the necessity for action on the part of the Government might arise, but so far no such action is called for. The PRESIDENT (Senator the Hoa. P. J. Lynch). - It is worth while to have lived through the last six weeks of strongly contrasting viewpoints, and the clashing of opinions, and to arrive at the stage at which the dominant note is harmony of the best type. That should be the position in a free democracy; because it must be recognized that there are as many opinions held in regard to the proper control and government of a country as there are brands of tea. So long as one generously acknowledges the right of one's fellows' to hold a different opinion with freedom equal to one's own, so long will the spirit of goodwill, tact, and tolerance prevail. I heartily agree with all that has been said concerning the conduct of the business of the Senate, but disclaim any right to share in the praise that has been bestowed. I have lived in the reflection of the light shed by the Chairman of Committees, upon whose shoulders has rested the major portion of the work. For a beginner, the honorable gentleman has discharged his duties with courtesy and uncommon efficiency, and has given satisfaction to all interests, even when tha flashpoint has been most brilliant. Snob an achievement betokens the possession of rare qualities. I have not had the experience of the Leader of the Senate, but I can say that the manner in which the tariff has been handled on the present occasion compares more than favorably with the circumstances that have attended the passage of any previous tariff with which I have had the privilege of being associated. The whole' tariff, and not a part of it only, was dealt with, and linked up with it were considerations affecting affairs in other parts of the Empire, whereas former tariffs have involved only the less complex aspect of Australian affairs. Needless to say, that has made the work of handling this tariff much more arduous and painstaking. The officers of the Senate have, as usual, fulfilled expectations by having performed their duties with efficiency, courtesy, and conscientious endeavour. In that, they have achieved the double purpose of having satisfied themselves, and, at the same time, harmonized the opposing views of honorable senators. I wish honorable senators the best that fortune can place in their hands. Question resolved in the affirmative. Senate adjourned at 6.10 p.m. till a day and hour to bo fixed by the President