13th Parliament · 1st Session
Mr. Speaker (Hon. G. H. Mackay) took the chairat3 p.m.,and read prayers.
Effect Upon Mail Contracts
– Has the attention of the Postmaster-General been drawn to the drastic provisions of the New South Wales Transport Act, and their adverse effect upon Commonwealth mail contracts? Is he aware that the right to carry passengersand parcels has considerable influence upon the prices charged to the Commonwealth for the carriage of mails? Will the Postmaster- General consider the advisability of taking steps to protect, first, theCommonwealth revenue, and, secondly, the mail contractors ?
– I have received several complaints about the effect of the Transport Act upon mail contracts, and the matter “will have to be reviewed in the light of what is occurring throughout the Commonwealth. Important issues are involved, and Icannot give to the honorable member a considered reply at this stage.
– I ask the Prime Minister whether the Government has yet considered the continuance of the subsidy to New South Wales for tick eradication?
– I regret that Cabinet has not yet had time to deal with this matter.
– Has the Minister for Markets read the following news item published in the Melbourne Age of to-day : -
CASUAL HAPHAZARD CROWD.
Speakingas the representative ofthe Federal Government at the Annual Conference of Engineers, Sir George Julius said Australians were the most casual haphazard crowd in the world markets.They thought they could continue to send awaybadly packed, badly chosen, and badly damaged goods while other countries were putting it all over them. The quality of the fruit exported from Australia varied so largely that English housewives were uneasy aboutbuyingityet properly packed, it should be equal to the best in the world. With sane dairying, Australia could double her market in England.
– My attention has been drawn tothe report, and I am of the opinion that Sir George Julius has not been correctly reported ; if he was speaking as the representative of the Commonwealth Government he would not have voiced such a sweeping condemnation of Australian products. Canned fruits for export are subject toa most rigid inspection in the factories: yearly the quality has been improving, and to-day our fruits hold their own with the Californian products. That applies to dried fruits also. In regard to fresh fruits, reports from England indicate that consignments of Australian apples were never better graded than they were last season. The regulations governing the export of apples have been considerably tightened. The prices of Australian butter in relation to Danish have steadily improved. In fact, the quality and packing of our exportable products has shown a steady improvement, and I cannot help believing that if Sir George Julius used the words attributed to him, he was referring only to exceptional cases.
asked the Treasurer, upon notice -
Is the £958,763, representing interest payments . due to overseas bondholders by the New South Wales Government interest alone or interest and exchange; if the latter, what are the separate totals?
– The adjusted total of the indebtedness of New South Wales in respect to unpaid overseas interest to date is -
Losses on Admi ntstration - Canberra Watercharges.
– On the3rd March, the honorable member for Perth (Mr. Nairn) asked the following questions,uponnotice: -
I now desire to advise him as follows: -
On the 4th March, the honorable member for Gwydir (Mr. Abbott) asked me the following question,without notice: -
Will the Minister for Home Affairs inform me whether it is a fact that rural lessees in the Federal Capital Territory are charged a flat rate of1s. per . 1,000 gallons of water, while residents within the city area arc exempt from any such charge?
I now desire to advise him as follows : -
There are a number of rural lessees whose holdings are in the vicinity of the pipe line of the Canberra water supply, who at their own request have been supplied with water for domestic and stockpurposes. The charge is1s. 3d. per 1,000 gallons up to a maximum reading of 91,000 gallons for six months, any excess water being charged for at the rate of 2s. per 1,000 gallons. The charge to city residents for water is in the form of a rate which at present is6d. (water supply3½d., sewerage 2½d. ) in the £1 on the unimproved capital value of the land in respect of water supply and sewerage. Industrial undertakings in the city area pay in addition an excess rate for water consumed of1s. 3d. per 1,000 gallons.
– On the 2nd March, the right honorable member for Cowper (Dr. Earle Page) asked the following question, upon notice: -
Can the Prime Minister toll me whether the Government of New South Wales has taken any action to give effect to the recommendation of Mr. Justice Pike in regard to the settlement of returned soldiers on the land, for which purpose the Common wealth Government voted £2,400,000 in 1929?
The answer to the right honorable member’s question is as follows: -
Communications from the ‘Premier of New South Wales convey the following information : -
That the Government of New South Wales has accepted the terms suggested by the Commonwealth Government as the result of the recommcndation by Mr. Justice Pike, That the terms of the agreement have been met in New South Wales with certain exceptions relating to home maintenanceareasand that the operations of the Home Maintenance Area Board have been completed and the settlement of soldier settlors now on the land has, as far as possible, been placed on a satisfactory basis. That it has not been possible to grant home maintenance areas in all cases, as 330 settlers still require amongst them a total area of approximately 100,000 acres of additional land. That the needs of these settlers are receiving preferential consideration when suitable areas of Crown land or forfeited or vacated holdings within reasonable distance of the settlers become available for disposal. That owing to the very unstable position of land values the Premier considers it unwise to purchase land for settlement at present. That further concessions in the form of writing down indebtedness have been made to a number of settlers and that the aggregate of these latter concessions has cost the State over £150,000.
– On the 4th March, the honorable member for Dalley (Mr. Rosevear) addressed to me it question, without notice, as to whether applications for furlough, submitted by employees of the Postal Department, were being refused. Inquiries which I have made elicit, that, to a certain extent, the taking of furlough has been encouraged, especially during the acute period of depression and staff re-adjustment. It has been necessary, however, in particular branches and localities, to defer the taking of furlough where such a course would have given rise to additional expenditure in sending a relief officer.
– On the 3rd March, the honorable member for Balaclava (Mr. White) asked the following questions, upon notice: -
I am now in a position to inform the honorable member as follow : -
– On the 2nd March, the honorable member for Swan (Mr. Gregory) asked the following question, without notice: -
I ask the Treasurer when the annual report of the Commissioner of Taxation will be pre sented to the House? If the whole report cannot be presented at an early date, will the Treasurer table immediately, a return similar to schedule No. 3 in last year’s report, showing what industries arc bearing the burden of taxation ?
I am now able to inform the honorable member that the report is in its final stages, and will be in the hands of the Government Printer for printing and publication during this week. The Printer will be asked to expedite publication.
– I have received from the widow of the late Honorable John Earle a letter thanking the House for its resolution of sympathy.
– I have ascertained from. His Excellency the Governor-General that to-morrow morning at 11 o’clockhe will receive the Address-in-Reply agreed to by this House.
– I shall be glad if the mover and seconder of the AddressinReply, together with as many other honorable members as can conveniently do so, will accompany me to present it;.
Motion (by Mr. Lyons) agreed to -
That the House at its rising adjourn until 2.30 p.m. to-morrow.
The Clerk announced the receipt from the Military Secretary to the GovernorGeneral of the return to the original writ for the election of a member for the Northern Territory, confirming the certificate of endorsement on the copy writ as to the election of Harold George Nelson announced to the House on the 24th February.
Motion (by Mr. Lyons)proposed -
That so much of the Standing Orders be suspended as would prevent discussion of the tariff proposals relating to tobacco during the debate on a motion for the printing of the
Tariff Board’s report on tobacco, and would prevent the continuance of the debate after two hours under Standing Order 119.
.- If the Government desires a general direction from the House in relation to this new and important Australian industry, it will afford an opportunity for a vote to be taken, and will not merely have the debate adjourned indefinitely after the submission of a motion, and possibly, amendments thereto. Is the debate to be limited to this sitting of the House, and are members to be afforded an opportunity to vote on the question this evening; or will the debate be continued to-morrow, until the House is ready to record its decision?
– By way of explanation
– Order! The debate will be closed if the honorable gentleman replies.
– Would it not be possible, sir, for the Prime Minister (Mr. Lyons) to make a statement by leave, and thus possibly curtail the debate?
– Under a standing order the honorable gentleman’s speech would close the debate, but it would be possible for another Minister to make the necessary explanation.
– It is the intention of the Government that this debate shall not extend beyond to-day, as honorable members will have an opportunity again to debate this and other tariff proposals when these are submitted to the House for discussion and determination at an early date, which the Government expects will be shortly after the Easter adjournment.
.- I do not wish to raise any objection to the motion that has been submitted by the Prime Minister, but I should like to know why the duties on tobacco have been singled out for special discussion to the exclusion of a number of other important matters affected by the tariff. Is it that the Government has acted in a hasty and illconsidered manner and is now anxious to retrace its steps?
– Order ! I cannot permit honorable members to indulge in a general debate on the motion that is before the House. Honorable members must confine their remarks to the question, which is that certain standing orders be suspended.
– I do not desire to engage in a general discussion, but I respectfully ask whether I am not in order in inquiring of the Prime Minister why the House is to have an opportunity to discuss the duties on tobacco when honorable members are denied an opportunity of debating the tariff schedule generally. I particularly have in mind the duties on glass, glassware, cotton yarns, tools of trade-
– Order ! The honorable member must not seek to evade the ruling of the Chair.
– It is not my wish to do so, sir. I feel that honorable members have a grievance, and that they should be given an opportunity to discuss other tariff items as well as tobacco.
– Order ! The honorable member must not proceed along those lines.
– Would it be in order for me to ask whether the Prime Minister proposes to give honorable members an opportunity to discuss the duties on galvanized iron, which are of particular interest to the Minister for Home Affairs (Mr. Parkhill) and the honorable member for Swan (Mr. Gregory) ?
– The explanation of the Minister for Trade and Customs (Mr. Gullett) in reply to the request of the right honorable the Leader of the Opposition (Mr. Scullin) for information indicates that the Government merely intends that honorable members shall engage in a wordy battle, without being given an opportunity to record a decision on the question at issue. It will not be sufficient to have a division on the motion for the printing of a report. I and others are anxious to know where honorable members stand with regard to this matter, which vitally concerns the welfare of a large section of the community, and so necessarily affects the political life of many who sit in this chamber. I am in agreement with the right honorable the Leader of the Opposition that we should have an early opportunity to decide this matter. It should not be allowed to stand over until after Easter. In the meantime those engaged in the tobacco industry may face ruin, as huge quantities of the foreign leaf may come into the country, to the prejudice of our own growers. As so many are concerned, I urge honorable members to force the Government to take some definite action immediately.
.- The Minister for Trade and Customs (Mr. Gullett) has made an extraordinary statement on behalf of the Prime Minister. ‘ It indicated that members of this House have been misled during the past two weeks. They certainly understood from statements previously made by the Prime Minister and the Minister for Trade and Customs that the House would be given an opportunity to debate the action of the Government with regard to the tobacco duties. Honorable members are now informed that they are merely to have an opportunity to make a few speeches upon the subject, after which further action will be adjourned until such time as the Government is ready to proceed.- In answer to a question that was asked last week, the Prime Minister stated more or less defiantly that honorable members would have an opportunity to discuss the duties on tobacco more quickly than they expected.
– I did not say that. I said that it was proposed to give the House an early opportunity to debate the duties on tobacco.
– If the honorable gentleman will indulge in retrospection he will recall that, in reply to a question, he stated, in an aggressive manner, that this matter would be discussed earlier than honorable members expected, and it was assumed by that discussion some finality would be reached. It comes now as a surprise to honorable members to learn that all the promises that have been made by the Government with regard to this matter are merely so much shadow sparring, and that determination of the issue is to be deferred to some future and obscure date.
– What was the action of the Scullin Government when it was asked to permit the discussion of the tariff?
– It is perhaps because of my knowledge of .the delay that occurred that I am anxious to know the intention of this Government in the matter. The Government has the right to say that the tariff shall be discussed on some future occasion, or that it does not propose to allow a discussion on the tariff until it is about to go to the country, when it will introduce a validating bill.
– The Scullin Government adopted a high handed attitude with regard to the tariff.
– It received a mandate from the people, and it brought down a validating bill.
– Order ! There is a tendency on the part of honorable members to enlarge the scope of the debate. The question for discussion is simple enough ; it is whether the Standing Orders shall or shall not be suspended for a certain purpose.
– The motion provides for the suspension of the Standing Orders, to allow the debate to be continued for more than two hours; but what do two or six or any other number of hours matter if no finality is reached ? Apparently the Government does not intend to allow the House to come to a decision.
.- As a sincere well-wisher of the Government, and as one who objects to sham fights, I feel that the Government will be making a fatal blunder if it permits honorable members to waste the time of the House in a debate which cannot result in finality on this important question. The action of the Government with regard to the duties on tobacco is highly important to Australia, and, in the circumstances, I submit that the Prime Minister shall nol. hesitate to allow the House to take a. division upon it.
.- From answers given by Ministers last week, I gathered the impression that honorable members would this week be afforded an opportunity of voting on the tobacco duties. The suspension of the Standing Orders to allow honorable members to beat the air from now until tomorrow morning will not bring about the result, desired by the primary producers. The tobacco-growers wish to know where they stand. No good purpose will be served by honorable members airing their views, and then going away for the Easter holidays, leaving 4,000 or 5,000 tobaccogrowers in. a condition of uncertainty regarding the future of their industry.
– Is the honorable member in order in discussing this matter on a motion for the suspension of the Standing Orders?
– I am following the honorable member closely, and if he goes too far I shall call him to order.
– This proposal to suspend the Standing Orders is simply a trick on the part of the Government.
– No honorable member will be allowed to transgress the Standing Orders. Honorable members may argue for or against the suspension of the Standing Orders, or they may ask that the period of suspension shall he further extended.
– The suspension of the Standing Orders has been moved to give honorable members an opportunity to discuss the Tariff Board’s report on the tobacco industry. In my opinion, the time of the House will merely be wasted if the report is discussed without a vote being taken. What useful purpose can be served by suspending the Standing Orders, and talking around the subject? That will not create the confidence of which we have heard so much.
– The honorable member must not continue in that strain.
– Will the tobaccogrowers be any wiser regarding the tobacco duties after the Standing Orders have been suspended, and the Tariff Board’s report debated ? They will he no better off. This House will adjourn at Easter-
– I ask the honorable member to resume his seat.
– I wish to understand exactly what is proposed to be done. It was my belief that the tobaccoduties were to be discussed to-day in. order that a decision might be arrived at, regarding them. I understood that that was why the Government acceded to the request that an opportunity should be afforded for debating the Tariff Board’s report. Has the Government finally made up its mind on the matter of the tobacco duties, or will it allow itself to be influenced by representations made here to-day? I can understand no vote being taken if the Government’s mind is still open. In that case its attitude is quite logical, but if the Government has finally made up its mind it should allow Parliament to vote on the matter.
– I am surprised that objection should be taken to this motion, especially by members of the direct Opposition. For a period of two years, the last Government, supported by that party, laid one schedule on the table after another-
– The honorable member must confine his remarks to the motion.
– The Government is affording honorable members an opportunity of discussing the Tariff Board’s report on the tobacco duties, and in the course of the discussion they will hear in clear terms the opinion of the Government on this matter. If they are not satisfied with the Government’s attitude, they can challenge the Government by means of a no-confidence motion.
.- The Tariff Board’s report on tobacco affects, it is true, only one item on the tariff schedule, but it is an item which has aroused a great deal of interest throughout the country, and the Government has been asked that members might be given an opportunity to discuss the proposed tobacco duties. I promised the Leader of. the Opposition (Mr. Scullin), and also the Leader of the Country party (Dr. Earle Page), that time would be found for such a discussion. I said that a day would be set aside for it. The Government cannot afford to allow more time than that, because there are other urgent matters to be disposed of. As the honorable member for Darling (Mr. Blakeley) has said, the Government promised to allow a discussion; but no promise was made that a vote would be taken.
– Why not allow the House to vote?
– Honorable members will not have to wait so long to vote on this issue as they had to wait in regard to the tariff schedules introduced by the honorable member when he was Minister for Trade and Customs. If honorable members will bring this matter to a vote, the Government will not object.
In reply to the right honorable member for Cowper (Dr. Earle Page), I may. say that the Government intends to stand by its proposals. It is, however, prepared to listen to the statements that will be made during this debate, and if, in the course of the discussion, anything is said to convince us that some alteration is justified, we shall not act so stupidly as to refuse’ to do what is right. Had I not moved the suspension of the Standing Orders, honorable members would have had only two hours in which to discuss this matter, of which one hour would have been taken up with the Minister’s statement in explanation of our proposals. Honorable members, therefore, ought to be grateful to the Government for having moved the suspension of the Standing Orders. At present, we stand by our proposals, and unless very strong arguments are brought forward, we shall not agree to any alteration of them.
Question resolved in the affirmative.
Tariff Board’s Report.
– I lay on the table of the House the Tariff Board’s report and recommendation on tobacco, and move -
That the paper be printed.
Honorable members are already, I think, quite familiar with the proposed changes in duty and excise rates imposed a week or two ago upon tobacco. There are, in effect, three sets of proposals which are exercising the minds of honorable members at the present time. The Scullin Government imposed an import duty of 5s. 2d., and an excise duty of 2s. 4d. That gave to the Australian tobacco-growing industry a protection of 5s. 2d. per pound. The Government’s proposal’ regarding tobacco, which is the recommendation of the Tariff Board, is to impose an import duty of 3s. and an excise duty of 4s. 6d. ou both imported and Australian tobacco. That will afford a protection of 3s. per lb. Then there is the alternative proposal advanced by the Leader of the Country party (Dr. Earle Page) at a deputation in this House on Friday last, of an import duty of 3s., an excise duty on tobacco manufactured from imported leaf at the rate of 5s. 4d., and an excise impost of 3s. 4d. per lb. upon manufactures from the Australian .leaf.
That proposal, if adopted, would have the effect of restoring the protection of 5s. per lb.
The Prime Minister has said that at present it is the intention of the Government to adhere to its proposal, which is based on the report of the Tariff Board, but we are quite prepared to give consideration to any case for a variation that may be made by honorable members. The changes in tobacco duties that we have brought down are based upon the Tariff Board’s report of the 3rd February last,, which arose out of a public inquiry held in the closing months of last year, so that the evidence and the consideration of it are of recent date. I do not propose to detain honorable members by giving a sketch of the history of tobacco-growing in Australia, but the story of the industry has’ been a somewhat chequered one. The industry commenced more than 75 years ago, and was, over the ten years ending 1929, producing less than 10 per cent, of Australian requirements, which at its peak in our years of prosperity reached 23,000,000 lb. Nor need I delay honorable members with speculation as to the causes behind the prolonged failure of the industry to take a stronger place among the minor rural industries of the Commonwealth. AH honorable members will agree, however, that until recent years, the average Australian leaf produced, as measured by the quantity of bright leaf grown, was not of a superior quality. Then came a change, and within recent years there has been a remarkable improvement in quality. In. 1929, the proportion of bright leaf to the total crop was about 20 per cent. Last year that proportion advanced to 35 per cent. We all trust that the improvement of quality is continuing. Circumstances now definitely point to a date, not more than a few years ahead, when Australia will be able to produce all its requirements of a quality which will commend itself to smokers, with the exception of small imports for blending. We hope to be able to grow within a few years not only the whole of our pipe tobacco, but also the whole, of our cigarette tobacco. The Government takes much satisfaction in that anticipation, and will do everything in its power to expedite its achievement.
We earnestly desire tlie change-over from the imported leaf to the Australian leaf. In our view, however, that change-over must be conditioned by one vital consideration which is this: The tobacco consumed in Australia during the period of change and afterwards must continue to yield to the Commonwealth Treasury a great flow of revenue. That is indispensable. The Government at this particular time .can be no party to a development which will deprive the Treasury of a large portion of its income. The House is familiar with tobacco as a prolific medium for raising revenue. This is true of Australia as it is true of all the world, especially since the war. At present the federal income from tobacco taxes amounts to about £6,500,000, equal to fi per head of our population. So that honorable members may get an idea of the relative importance of the smokers’ contribution to revenue, I shall compare it with this year’s estimates of yield from other taxes. For instance, income taxation is estimated at £9,820,000, so that the tobacco tax is to the Treasury 66 per cent, of the value of the income tax. The land tax yields £1,800,000, and is less than one-third as valuable as the tax from tobacco. Death duties yield only £1,400,000. Behind the Government’s proposal, which is based on the Tariff Board’s recommendation, is the clearest evidence that if the rate finally adopted by the Scullin Government were allowed to . stand, the revenue of £6,300,000 would at once begin heavily to fall. The estimated loss for the coming financial year is £1,000,000 and for 1933-34, between £2,000,000 and £3,000,000. In short, unless immediate and decisive steps are taken to correct the position on the lines recommended by the Tariff Board, and endorsed by the Government, Ave shall be faced with a loss of revenue which inevitably will prove fatal to the finances of the Commonwealth, to the whole of the economy plan, and to all that is expected, and rightly expected, from the preservation of that plan. The- Government, subject to its undertaking to listen to the representations made during this debate, cannot and will not contemplate the loss of £1,000,000 from tobacco in the coming financial year and of from £2,000,000 to £3,000,000 in the following year. The cause of this anticipated loss is obvious. Under the tariff of the late Government, imported tobacco paid a total tax of 7s.. 6d. ; tobacco from locally grown leaf paid 2s. id. The Treasury, therefore, lost 5s. 2d. per lb. ou every pound of tobacco grown in Australia.
Let me indicate to honorable members what the Treasury is being called upon to sacrifice for the assistance of this industry. The average yield of the tobacco crop in Australia over a recent ten-year period ;V0S 780 lb. per acre - SOO lb. in round figures. Therefore, every acre of Australian-grown tobacco costs the Treasury £200. That is the price which we are being called upon to pay in the change-over to the tariff policy of the Scullin Government. Last year the Australian tobacco crop was 1,800,000 lb. The crop at present maturing is estimated by the Tariff Board to yield 6,000,000 lb. weight of manufactured tobacco. On the figures which I have given this represents an intrinsic loss to the Treasury of £1,500,000, compared with the return for last year. The cost of landing American tobacco into an Australian factory at this moment is, on a generous estimate, ls. per lb. In order to assist the Australian industry to the extent of £300,000, therefore, the Treasury is being asked, under the conditions imposed by the Scullin Government, to suffer a loss of £1,500,000.
– The Government could recoup itself through the Excise Department.
– The whole trouble has been caused because we have set out to do that very thing.
I want now to take a peep at the future, because it is in consequence of its apprehension of the future that the Government has been forced to reconsider the position of this industry. It is also because of our apprehension for the future that we cannot see our way clear to adopt the alternative plan put forward by the deputation of Australian tobacco-growers on Friday afternoon. Although the Australian crop of tobacco was 1,800,000 lb. last year, the estimated production for this year is 6,000.000 lb. a difference of more than 4,000,000 lb. This 4,000,000 lb. at 5s. 2d. per lb. would yield £1,000,000, and we stand to lose that- amount in the coming financial year. During the past season the acreage under tobacco in Australia expanded ten fold - from 2,200 acres to approximately 20,000 acres. Over many districts the season has been indifferent, and yields will be light, although this is not so on extensive irrigation areas. With a yield up to the average of the last ten-year period of 800 lb. per acre, the total crop this year would be 16,000,000 lb. ; but even half an average crop would give us8,000,000 lb. and a quarter average crop 4,000,000 lb. It will be seen, therefore, that an estimate of 6,000,000 lb. is conservative.
There are wide variations in the estimated yield of tobacco. The deputation on Friday estimated that the yield would be 5,000,000 lb. The departmental estimate, which was carefully made by competent excise officers is just under 10,000,000 lb. ; the Tariff Board estimate is 6,000,000 lb. I am not being unfair, therefore, in saying that 6,000,000 lb. is a conservative estimate. With a yield of 16,000.000 lb., the Government’ would have lost, on the basis of the Scullin Government’s policy, £3,500,000.
We must face the fact that very great areas have been specially cleared and are under tobacco for the first time this year, and that this must necessarily mean a big increase in the yield. Broadly speaking there is no limit to irrigation areas which are insured against drought. Everything points to the fact, therefore, that next year we shall produce at least the equivalent of the Australian need of pipe tobacco, and perhaps substantially more.
I wish to say a few words about the actions of the last Government in regard to tobacco. I cannot understand the demonstration of surprise made by honorable members opposite at the action which this Government has been obliged to take. I have abundant evidence that the Scullin Government clearly anticipated that a difficult position would arise. I do not suggest that that Government would have felt compelled to take precisely the same action as this Government has taken;but it would have had to do something like what we are doing. That the Scullin Government was aware of the situation which was developing is revealed by three steps which it took to meet the situation.
In the first place it referred the whole subject to the Tariff Board, with very significant terms of reference. Next, the present Deputy Leader of the Opposition, who was then Minister for Trade and Customs, stressed to the board the urgency of the inquiry. In the third place, the Scullin Government appointed a special committee or group of heads of departments interested to observe and report on revenue reduction.. Taking the first point to which I have referred, I direct the attention of honorable members opposite to the fact that on the30th October last, a little over four months ago, the then Minister for Trade and Customs referred to the Tariff Board for inquiry and report, in accordance with the terms of the Tariff Board Act, the following questions : -
In dealing with question No. 2 it is desired that the Tariff Board should consider the desirability of recommending a sliding scale of Customs and Excise rates of duty which will as the production of Australian leaf varies -
– Those are good terms of reference.
– In my opinion, the Board was set an impossible task. The last Minister for Trade and Customs, who is now Deputy Leader of the Opposition (Mr. Forde), personally minuted the reference as follows : “ Please treat as urgent - F. M. F.” That shows how concerned the last Government was about this matter. The reference was sent to the board on the 30th October, and the board held its first sitting in Brisbane on the 16th November. One day would be occupied in the reference going to Melbourne, three days would be occupied in the board travelling from Melbourne to Brisbane, and seven days had to elapse after the insertion of the usual advertisement, notifying that evidence would be taken. So there is no doubt as to the fact that the last Government was just asmuch concerned as the present Ministry regarding the effect of the duties on the revenue.
Some time during last year - after the return of Mr. Theodore to the Treasury I think - the threatened loss of revenue so alarmed the last Government that Mr. Theodore set tip a committee comprising the Comptroller-General of Customs, Mr. Hall, the Assistant Secretary to the Treasury, Mr. Sheehan, and the Acting Commonwealth Statistician, Professor Giblin, to investigate and report upon the effect on the revenue of the new tobacco duties, and to make recommendations to the Government concerning them. Two members of the committee forwarded a memorandum dated, curiously enough, the 29th October, the day before the reference was sent to the Tariff Board by the last Minister for Trade and Customs, emphasizing the seriousness of the position, and clearly expressing the view that the Government was faced with a most serious loss of revenue, and that the only way in which the danger could be averted was by increasing, the excise rates. In that memorandum, the committee expressed the following opinion regarding the industry generally. -
The costs of production are heavier than in America, but not by anything approaching the amount of the duty. The Agricultural Superintendent of Victoria reckons the cost at about 1s. per lb. Evenat 3s. or 4s. per lb. then, tobacco-growing is becoming very profitable. The contrast with every other form of landproduction (except sugar), is very striking. Consequently, there is it rush by persons; fitted and unfitted’ for the enterprise, to grow tobacco on anyland, suitable or unsuitable. (Queensland is planning to supply the whole of Australian requirements in a few years, and a.landboom isdeveloping strongly infavoured areas. In other States, there is. a similar movement. Enough seedhas been distributed, chiefly through the Council of Scientific and IndustrialResearch, and the Queensland Government to plant an area sufficient to provide for thewhole of Australian consumption. Land valued are rising, vested interests are being created. All the conditions areset for a repetition of the sugar imbroglio, with, local prices even more out of proportion- to world prices.
There is ample evidence that the last Government knew precisely what had taken place. The position that was developing was brought under its attention by the consultative committee for science and development associated with the Prime Minister’s Department, and as early as the 25th August last, a memorandum upon the subject, signed by Mr. Gepp, the chairman of the committee, was forwarded to the Assistant Minister, Senator Daly. Mr. Gepp there outlined the position much as did the special committee, and again pointed out that the only way to correct the drift, even in the interests of the industry in Australia, was to increase the excise rates of duty. Senator Daly forwarded this opinion to the last Minister for Trade and Customs, and, in his covering letter, he said -
There can be no doubt thatunder existing conditions revenue shrinkage must result from the enormous expansion of the tobacco industry which is taking place. This situation can only be met by levelling up excise to compensate for loss of customs duty. If yon decide to take action to this end, I think that the process should be a gradual one, in order to enable the industry to properly establish itself.
Unhappily, the loss of revenue threatened to become of such magnitude that the Tariff Board found, and the Government agreed with it, that small successive steps would be insufficient to cope with the situation, and that the correction of the position must be immediate and substantial. Speaking in this House on the 20th October last, the Deputy Leader of the Opposition remarked -
The implication there is that the excise duties must be substantially increased. Ifthe last Government had remained in office it must have taken steps almost identical with those now proposed.
Mr.Forde. - No.
-If not, the economy plan musthave inevitably collapsed.
The growers, misled by the extravagant protection afforded by thelast Ministry, have had a miraculous escape from over-production and an almost chaotic financial position. Isubmite that, on the present acreage, either taking the past year ortheyear immediately ahead, an average crop of 16,000,000 lb. would ruin mostmen in the industry, and would bring about the total loss of a great deal of the capital that has been invested in it. The total annual consumption of pipe tobacco in Australia is now about 14,000,000 lb. If we were to produce . 14,000,000 lb. of tobacco this year, as might easily happen, that Australian tobacco would not necessarily take the place of the tobacco now being smoked. It is fairly close to the mark, I think, to say that, with the present consum ption of 14,000,000 lb. of pipe tobacco per annum, we could not absorb more than about 7,000,000 lb. of Australian leaf of the present quality, and at the sametime maintain the present rate of smoking in Australia. With the Australian consumption of tobacco at 14,000,000 lb., about 7,000,000 lb. of imported leaf would, on the present day quality of Australian leaf, be required for blending; therefore the local production in excess of 7,000,000 lb. would be sheer waste to the growers. With American leaf at its present price of 7d. per lb., the f.o.b. price of Australia’s exportable surplus would not exceed 3d. or 4d. per lb. I ask the House to realize the fate that inevitably awaits this industry if production be carried beyond 8,000,000 lb. this year, and, say, 10,000,000 lb. next year, before the quality of the leaf has been substantially further improved. The Government desires to change over to the Australian product, but only when its quality is sufficiently high to enable it to carry the heavy burden of taxation. We cannot advance this industry much further until the quality of the leaf is further improved. There is nothing to prevent Australia from growing all the pipe tobacco it requires, and an additional 4,000,000 lb. of cigarette tobacco, with the exception of a relatively small quantity to be imported for blending purposes. But if under the urge of so excessive a duty as 5s. per lb. we encourage thousands of people to rush into this industry, and raise the production beyond8,000,000 or 10,000,000 lb. without at the same time raising the quality of the leaf, many growers will beinvolved in ruin. Apart from the revenue considerations, that is what is behind the Tariff Board’s recommendation.
– That is what the tobacco combine says.
– Will the honorable member say that if production were raised to 14,000,000 lb., comprising not more than 35 per cent. of bright leaf, the whole of it could be consumed locally, and that the yield to the treasury would not diminish ?
– A bsol utely .
– Any sudden and violent change in the quality of the tobacco offered to the Australian smoker would be followed immediately by a decrease of consumption. For a time, at any rate, the tobacco could not be sold, and the Commonwealth would lose a substantial amount of revenue.
I come now to the reasons why the Government cannot accept the alternative proposal suggested by the right honorable member for Cowper (Dr. Earle Page). I am. sure, and I have advised the Government accordingly, that the Tariff Board’s prediction that 6,000,000 lb. of manufactured tobacco will be produced this year is an under-estimate. The production is more likely to be about 8,000.000 lb. The Leader of the Country party has represented that an excise duty of 3s. 4d. on a production of 6,000,000 lb. will yield approximately the same revenue as the Government is now expecting. But if the production should go to 8,000,000 lb., the revenue will decline by over £100,000. The Government cannot possibly risk such financial insecurity. Turning to next year’s prospects, assuming that the crop will reach at least 16,000,000 lb., the excise rate on the quantity consumed locally must be over 6s. per lb. A rise from 3s. 4d. to 5s. in one year would be too sudden. The Government considers that it would be wiser to advance the excise in stages, and therefore proposes 4s. 6d. this year. As the bulk of the local production increases, there will be little difficulty in raising the excise to a rate which will maintain the revenue at approximately its present level.
Apart from revenue considerations, the industry will be heading for disaster if its progress is not restrained and the recent improvement in the quality of the Australian leaf is not continued. I submit that a duty of 3s. per lb. will leave an ample margin for the growers, and place the industry in a more profitable position than any other minor rural industry. I do not pretend to say what the price will be, but with a protection of 3s. per lb. a highly satisfactory price to the growers will be assured. A member of the Queensland deputation which waited upon me on Saturday morning, said that 700 lb. of tobacco at 2s. per lb. would give a gross return of £70. He was satisfied with the Tariff Board’s estimate of £35 for working expenses; therefore, the net return would be £35 an acre. But to the owner of a 5-acrc block, the working expenses would represent wages, over and above which lie- would make a profit of £35 an acre. I do not know of any other rural industry, minor or major, which, year in and year out, yields a return, nearly so good. The price for tobacco leaf during Inst season was 3s. The chief speaker at Iiic main deputation on Friday was Mr. Temple Smith, who for many years was iiic tobacco expert in the employ of the Victorian Government. He, and many other growers, are now saying that they must have a protection of 5s. per lb., or, at least, 4s. But a prospectus issued two years ago by a company of which Mr. Temple Smith was a director, stated that, with a duty of 3s. per lb., a return of 28 per cent., after making generous allowance for reserves, and an annual profit of £53 an acre were anticipated. Before honorable members decide to oppose the recommendation of the Tariff Board, I appeal to them to measure the profits of the tobacco industry with a protection of 3s. per lb., against those of any other primary or secondary industry in the Commonwealth. Is there one other that yields so handsome a return?
– I could mention half a dozen.
– Compare the returns from tobacco with those from other minor industries. In 1929 the profits per acre derived by 91 citrus-growers were, according to a return prepared by the Development Branch - Swan Hill, £5.47; Barham and Nyah, £13.6; Goulburn Valley, £30.51; Murrumbidgee, £30.54; Curlwaa, £38.01; Cobram, £40.24; Mildura, £40.64; and Renmark, £63.82. The return from the citrus crop is not nearly so great as that from tobacco, with a protective duty of 3s. per lb., but compare the capital cost of the two industries. The citrus-growers are on expensive irrigated land, and the growers have to wait years for their first return. Since 1929 prices of citrus fruit have fallen and the profits earned by citrus growers would be considerably less to-day than those I have just quoted. The comparison I have made with the citrus-growers extends to the other irrigated industries, including the production of dried fruits and dairy farming. All arc protected industries, but to none of them has Parliament thought it desirable to grant protection nearly so great as the 3s. per lb. duty on imported tobacco leaf, which, according to the Tariff Board’s computation, i.« equivalent to from 300 to 600 per cent.
I remind those country members who are protesting against the reduction of the tobacco duty of the protection give?) to some of the secondary industries cuncerning which they have made much com plaint, in this House. On galvanized iron, for instance, the ad valorem equivalent of the present duty is 38£ per cent., as compared with the protective duty of from 300 per cent, to 600 per cent, on tobacco. If the Leader of the Country party (Dr. Earle Page) votes against the reduction of the tobacco duty, how will he ever be able to oppose any protection proposed for a secondary industry? [ Leave to continue given.”] Wo have heard a great deal about fencing wire, and we shall hear a great deal more on that subject. The present duty on that, item ranges from 16 per cent, to 22 per cent., which is an impost that the tobaccogrowers ‘have to bear. We ako heard much about agricultural machinery. The ad valorem equivalent of the present duty on a reaper and binder is only 27-1 per cent, to 28i per cent. The. Government is determined to make a great, and I hope a sustained, effort to bring about, economic sanity in Australia. Through the tariff, and indeed through all its legislation, it will endeavour to effect a better cost level, particularly in the interests of primary export industries.
I have submitted quite a limited tariff schedule to this House, in which nearly every item that is dealt with is reduced.
The Government has conformed with the desire of honorable members who constitute the corner party, and I have no doubt that those gentlemen will applaud practically every one of those reductions. Certainly they will approve every one that is associated with secondary industries. They cannot have it both ways. The Government is now bringing ina duty which represents a protection of something like 300 per cent. to the growers. The tobacco industry is in an extraordinarily progressive and profitable condition, and the Tariff Board has submitted a convincing report urging a reduction of duties, not to the galvanized iron basis of a miserable 38 per cent., but somewhere in the vicinity of 300 per cent. Yet the action of the Government meets with the objections of honorable members opposite. If honorable members will not support the Government in a tariff reduction such as this, the country may well despair of ever bringing about anything in the nature of sane tariff reform.
The case for the growers is not being enhanced by the exaggerated presentation of their case. I have been told again and again during the past fortnight that Australia sends millions of pounds a year to the United States of America to purchase tobacco. Actually that country will receive for this year’s total consumption of pipe tobacco in Australia approximately £416,000! Therefore, I hope we shall not hear any more about the Government’s policy of letting “ millions “ go to the United States of America to pay for tobacco.
Then there is the claim that the Australian tobacco industry employs some thousands of farmers, a large number of share-farmers, and about 10,000 employees.It is alleged that our tobaccoindustry maintains some 15,000 persons. The estimated area of crop planted is 20,000 acres, which would mean that threemen are employed to every four acres. It may be assumed on a couservative basis that one man can handle five acres of tobacco, except at planting and harvesting time. It is, therefore, safe to say that the presentcrop does not give an average of full-time work to more than 5, 000 hands. So that, taking the Australian crop at . 6,000,000 lb., and the revenue that the Government loses at 5s. 2d. per lb., which represents £1,500,000; the Treasury is subsidizing every man in the industry at the rate of £300 per annum !
– Why is the Government in favour of a change-over from American to Australian-grown tobacco?
– The Government is not in favour of an unconditional changeover. It advocates a change-over subject to the production of leaf of good quality, capable of yielding to the Treasury an amount of revenue similar to that which it is now yielding.
– The honorable gentleman is making a case against the Australian industry.
– I have kept the House quite a long time, and I shall only add at this stage that the Government is convinced that this change is indispensable to the preservation of our revenue, and it is in the very best interests of the growers themselves.
.- I move the following amendment : -
That the following words beadded to the motion: - “and that the Government reconsider its action with a view to affording Australian tobacco-growers the same margin of protection as that given by the previous Government;and that Parliament be granted an early opportunity to determine the question so as to remove the uncertainty now prevailing in the industry “.
I regret very much the necessity of submitting such an amendment. No one was more surprised than I that the present Government should make such a sweeping attack upon those who are engaged in this important primary industry. When the Scullin Government took office it was seised of the importance of developing our primary industries. Unemployment had increased to alarming proportions, and it was obvious to all who had studied the problem that the only solution,or partial solution, wasto settle some of our unemployed on the land, so that they could produce commodities that were previously imported. So steps were taken promptly to give the long-waited-for opportunity to the Australian tobaccogrowing industry. When the BrucePage Government was in power, the honorable member for New England (Mr.
Thompson) submitted a motion in this chamber seeking the appointment of a select committee to inquire into the Australian, tobacco industry. That was done after the honorable member had failed to induce that Government to give the industry some protection. To indicate the way in which the industry had been allowed to languish, I quote the following table :-
In its last report, which has been referred to by the Minister, the Tariff Board states -
For the four years ended the 30th June, 11)14, an annual average production of 2,300,000 lb. has attained. Since then there has been practically no expansion in the industry until the last two years. The average annual production for the ten years ended the 30th June, 1929, was slightly under 2,000,000 lb. of leaf, as against a total Australian requirement of 23,000,000 lb. per annum.
That obvious state of the decline of the industry should have caused the BrucePage Administration to take steps to stimulate tobacco growing in Australia. However, it did not want the light of day thrown on the activities of what is known as the combine,’ the BritishAustralasian Tobacco Company, and it opposed the suggestion of the honorable member for New England that a select committee of inquiry should be appointed. On the 29th August, 1929, the Minister for Trade and Customs (Mr. Gullett), who filled the same position in the BrucePage Cabinet, declared -
I hold no brief for this great tobacco trust. I reiterate that I hold no brief for this big tobacco combine.
I am reminded of the line from Hamlet. “ The lady doth, protest too much, me thinks.” It is significant .that, at the time that the Government was raising objections to the proposal of the honorable member for New England, the .legal adviser to the British- Australasian Tobacco Company was sitting behind the
Government benches. Continuing, the Minister for Trade and Customs said -
But I do not think that the interests of thegrowers are likely to be particularly served by this motion now before the House . . . 1 appeal to the honorable member for New England to withdraw his motion.
However, the motion that was submitted by the honorable member for New England was carried, and soon afterwards the Bruce-Page Government was defeated. The succeeding Scullin Administration appointed that committee, which conducted a very searching inquiry into the tobacco industry, and submitted recommendations which were, broadly speaking, adopted. As a result the industry began to find its feet. On the 4th August, 1930, the present Minister for Trade and Customs, who Avas then Deputy Leader of the Opposition, said -
The report and the evidence of this select committee are not worth the value of the paper on which they are written. In view of the Government’s fiscal policy the second recommendation is even more foolish. It reads - “ That further protection be imposed to support this industry.”
That shows clearly that, throughout he has been opposed to the establishment of the tobacco industry in Australia, and that, wittingly or unwittingly, he has been the champion of the British-Australasian Tobacco Company. Some honorable members who now sit on the Government benches made extravagant promises during the election campaign of what they would do if returned to power. -
– Some said that they would reduce the tariff.
– And others stated thai they would give greater protection to our primary industries. We have heard much talk about the undesirability of encouraging “ uneconomic “ industries. Every industry would remain uneconomic if denied the opportunity to become economic. The fundamental necessity is that a protective tariff shall, in all vital respects, protect. That is all that the tobacco-growers ask in connexion with their industry.
I shall refer the Minister for Trade and Customs to some of the pre-election promises that, were made by supporters of his party in regard to this industry. Senator Glasgow, who was then leader of’ the Nationalist campaign in Queensland, and deputy leader of the Nationalist forces in the Senate, said -
The United Australia party favoured retaining the duties against tobacco grown outside Australia hut favoured a reduction of the local excise to cheapen the cost to the consumer and thus increase the consumption of Australiangrown tobacco.
That statement was published in all the Queensland newspapers.
– Has it ever been denied ?
– No. Sir William Glasgow is in the building now, and I am sure that he would confirm the statement if he were approached. Before the election no member of the Government’s party came forward to contradict Sir William Glasgow’s statement. In the Brisbane Daily Mail, of the 8th December, 1931, the following appeared : -
The Leader of the Federal Opposition (Mr. J. A. Lyons) to-day expressed objection to the statement made before the Tariff Board by Mr. F.J. Wheeler, honorary secretary of the Meadowvale Tobacco Growers Association, that his party had no policy on the question of tobacco production in Australia. This, Mr. Lyons said, was a misinterpretation of a. communication sent to Mr. Wheeler. What he said was that the question of tobacco production had not been considered on party lines. The encouragementof tobacco-growing was highly desirable. His point was that the matter should be considered on non-party lines. Members of the United Australia party would enthusiastically support any well-planned measures to encourage tobacco-growing. On the general question of the tariff his policy speech showed clearly his party recognized the great importance of local manufacturing and the necessity of measures to support it.
What could the growers take from that except that the United Australia party stood for the protection of their industry?
– Does not the honorable member stand for that?
– I stand for the maintenance of the protection we gave the tobaccogrowing industry, together with a variation of the excise rates from time to time, so that the industry may contribute to the Treasury the same amount of revenue as it formerly did. I never regarded myself as bound to accept the recommendations of the Tariff Board appointed by the BrucePage Government. A Minister must accept full responsibility for what he does. In the Melbourne Sun of the 18th
December, 1931, the following report appeared : -
There should be a groat future for the tobacco industry if care is taken to concentrate on a high-quality leaf,” said the Deputy Leader of the United Australia party (Mr. Latham) last night. “The aim of the party would be to foster growing in every reasonable way.” Mr. Latham said that Labour candidates in the tobacco-growing districts were making desperate efforts to mislead the electors into the belief that if the United Australia party was returned drastic changes would immediately be made in the various tobacco duties. This was pure invention. The party had no designs upon tobacco duties.
In a speech delivered on the 15th December, 1931, at Sydney, Mr. Lyons said -
On the question of protection my party’s policy is plain. We are against sudden and arbitrary changes in the tariff by mere ministerial decree. My party’s policy is one of protection, applied rationally, consistently, and steadily with due regard to its effect on the Commonwealth as a whole.
The Melbourne Argus, the chief organ of the United Australia party in Victoria, in its issue of the 6th December, 1931, published the following: -
Stating that the encouragement of tobacco- growing in Australia was highly desirable the Leader of the United Australia party (Mr. Lyons) said, “Members of the United Australia party will support enthusiastically any well planned measures to encourage tobaccogrowing. In my policy speech I made it clear that measures should be adopted wherever possible to make primary production more profitable. This would obviously include those engaged in tobacco production “.
In the Brisbane Courier, of the 16th December, 1931, the following paragraph appeared : -
The assertion that if the United Australia party under Mr. Lyons was successful at the forthcoming elections the protection afforded to the Australian tobacco-growing industry would be repealed was refuted by the Premier, Mr. A. Moore, yesterday. Mr. Moore said that such an assertion against the United Australia party was made only by interested persons, but statements of that sort, were of course, absolutely without foundation and were circulated only for party political purposes. The record of the Country National party had been written plainly in the statutes of the Commonwealth, and its policy of assisting primary production had been amply demonstrated. Mr. Lyons had been quite definite that the statement of his intentions to repeal the duty on tobacco was entirely untrue. It was regrettable that for party political purposes attempts should be made to mislead and intimidate voters by endeavouring to frighten them by false and malicious statements.
A little while ago, Mr. Godfrey Morgan, Minister for Transport in the Government of Queensland, stated, while touring the tobacco-growing districts of Victoria, that the Commonwealth Government, by its tariff alterations, had played into the bands of the tobacco combine, and had thrown the tobacco growers overboard. The Melbourne Age, of the 18th December, 1931, and the Melbourne Herald, of the 17th December, published the following: -
It is stated by the Nationalist organization that Labour candidates in tobacco-growing districts are seeking to mislead electors into the belief that if the Nationalist party should be successful at the elections, drastic changes will immediately be made in the tobacco duties. This is described by Mr. Latham as pure invention. No immediate drastic changes are contemplated to any items of the existing tariff schedule. The party has certainly, he says, no designs upon the tobacco duties. The aim of the party is to foster the industry in every reasonable way.
The other day the Brisbane Courier published an article commenting upon the action of the Government in increasing the tobacco duties. In the course of that article it stated -
The tariff imposed by the Federal Government on tobacco encourages importing at the expense of home growing . . The trend of public opinion in Queensland is that this treatment will practically wipe out the industry, or at any rate, convert a promising industry into a struggling and shrinking industry. We hesitate to believe that the Federal Government intends such an inconsistent and lamentable result.
Mr. W. G. King, President of the Brisbane Chamber of Manufactures, and an ardent Nationalist, made the following statement, which was published in the Brisbane Daily Mail, on the 27th February, 1932 : -
On a cursory glance at the changes forecast it seems to the chamber that Queensland has been singled out for rather harsh treatment . . . The tobacco industry, one of Queensland’s new primary industries, upon which they were building so much hope, seemed to have been treated rather unfairly.
I leave it to honorable members to judge whether the tobacco-growers were justified in believing that protection was to be maintained or not. The amendment I have moved is a reasonable one, and I hope that honorable members will support it. In the Governor-General’s Speech - a document prepared by his ministerial advisers - there was an assurance that all possible steps would be taken to stimulate industry so as to absorb the unemployed. . Are the Government’s tobacco proposals the best it can evolve as a solution for the unemployment problem? This industry has been affording increased employment to a large number of men, and now, within a few days of its coming into office, the Government has dealt it a staggering blow. No wonder members of the Country party have criticized the Government, and I look to them to follow up their words by actions. It is a pity that they did not think sooner, and keep in office the Government which was affording protection to the primary producers.
This Government has reduced the duty on 69 tariff items, including (tobacco, cotton,soap, dried fruits, eggs, &c. The reduction in the tobacco duties comes at a most inopportune time. The tobacco industry was developing rapidly, and was providing employment, not only in the industry itself, but in other industries which supply the wants of the tobaccogrowers. Manufacturers were receiving orders for materials to be installed in flue-curing barns, and furniture and supplies were being forwarded to men going on the land. Surely the best way to solve our unemployment problem is to put men on the land growing tobacco or other profitable crops. A little while ago the Government appealed to private enterprise to absorb the unemployed, yet the Government now deals a severe blow at. one.form of private enterprise. When the Scullin Government increased the tobacco duties on imported leaf from 2s. 8d. to 5s. 2d. per lb, it did a wise thing in the interests of the industry and of the unemployed of this country.
– I propose to do so. The Minister, aware that he had committed a grave blunder by robbing the tobacco-growers of the protection which the Scullin Government had afforded them, tried to shelter behind the fact that he was acting on the report of the Tariff
Board. On a previous occasion he blamed me for referring this matter of a duty on tobacco to the Tariff Board. In another breath he criticized me for not referring everything to the Tariff Board. I told him that it was impossible always to do so before taking action, but that I invariably referred such matters to the board either before or afterwards. The board is the creature of this Parliament. It is comprised of human beings who are just as liable to make mistakes as are other persons. The Scullin Government declined to have its tariff policy shaped for it by a board which had been appointed by a government tinged with freetrade ideas. The Minister for Customs, seeking to justify his action, said that I should not blame him for initiating these changes, because he had merely accepted the recommendation of the Tariff Board, to which body I had referred the matter for inquiry. I make no apology for having done so. Our Government, when it imposed the increased duty on imported tobacco leaf, realized that when the swing-over to locally-grown leaf had reached a certain stage, the local leaf would have to pay in excise duty something like the same amount as theTreasury had been receiving from customs duty. The growers understood this, too, and the deputation which recently visited Canberra stated that they had no desire to evade the payment of their fair proportion of revenue amounting to £6,500,000 or £7,000,000. They objected, however., to the duty being imposed in such a way as to retard the development of the tobacco-growing industry in Australia, and hand the growers over to the tender mercies of the manufacturing combine. We referred the’ matter to the Tariff Board. I may say that direct and indirect representations were made to me by the tobacco combine to reduce the duty. I refused to do so, because the Scullin Government’s policy was to encourage the production of tobacco in Australia. We decided to refer the issue to the Tariff Board for investigation and report, in. the hope that it would make some reasonable and practicable recommendation in the form of an. increased excise duty, and at the same time maintain the protection given to the tobacco industry. But I am disappointed with the board’s report. The fact that the Scullin Government did not treat this matter lightly, and referred it to the Tariff Board, redounds to its credit. The Minister for Trade and Customs (Mr. Gullett) has endeavoured to place the blame for the proposed reduction of duties on the Scullin Government, because of its action in referring the issue to the Tariff Board, but I maintain that this Government must accept full responsibility for what it is doing.
– Did the honorable member say that the duty on tobacco should be reduced?
– I said that the excise duty on tobacco should be increased to meet the swing over from American to Australian leaf. That is in accordance with the advice given by the Select Committee on Tobacco, which was composed of members from both sides of the House.
– Did the honorable member say that the import duty should be reduced ?
– I was opposed to a reduction in the import duty. It may be that in the statement to which the honorable member is referring, the words “ import duty “ are used by mistake instead of the word “ excise.”’ I informed the tobacco combine that I was opposed to a reduction in the import duty, and that I believed that the revenue should be augmented by increasing the excise duty. That is my belief to-day. Mr. Gepp, the consultant of the Commonwealth Government, in his recommendation, said that the only way to correct the position was to increase the excise. This Government has substantially reduced the import duty, and increased the excise to such an extent as to place a burden upon the local industry without any reduction taking place in the price to the consumer. The excise has been increasedfrom 2s. 4d. to 4s. 6d. on Australian leaf, and the import duty has been reduced from 5s. 2d. to 3s. For years the manufacturing of tobacco in Australia has been practically a monopoly in the hands of the BritishAustralasian Tobacco Company Limited, which,in 1929, made a profit of approximately £1,000,000, and paid 11 per cent, ordinary rate and 6^ per cent, preference rate. For the year ended 30th October, 1931, the company paid S per cent, on ordinary shares. Are we to allow the tobacco-growers to be again at the mercy of this combine, or shall we continue on the lines of the protectionafforded by the Scullin Administration to the industry? The Tariff Board in its report stated -
The accounts of other Australian manufacturers, Chat is, other than the British Tobacco Co. Aust. Ltd.. and its subsidiaries, support the board’s conclusion that there is room for a substantial reduction of the profits made by manufacturers of tobacco.
The tobacco companies are making fabulous profits, and there is plenty of room for a reduction in the price of tobacco to the consumers, without reducing the return to the growers. The Government should insist on the continuance of the protection which the Scullin Government gave to the growers. Before the Government takes definite action on this issue, 1 hope that it will give consideration to some of the alternatives that have been put forward. A discussion like this leads, us nowhere, because we can arrive at no decision which will give to the growers- the protection that they previously enjoyed. Let us compare the total revenue under three different scales of duties: - the Scullin-Forde tariff, the Gullett, tariff, and the duties proposed by the growers* The growers, suggest that an, excise duty be imposed of 3s. 4d. per lb. on tobacco from Australian leaf, and 5s. 4d. per lb. on tobacco from imported leaf ; import duties, to remain, as at present, 3s. per lb. on tobacco leaf, an:d 5s. 2d. per lb. on cigarette leaf. Taking 17,165,000 lb. ms the basis of consumption, that being the quantity on which excise revenue va3 collected for 1929-30, the total excise and import revenue under the Scullin tariff was £6,732,165 for 1930-31. The increased import duty of 5s.. 2d, per .lb. operated only from the 4th December, 1930, a period, of slightly less than seven months. Had it operated for the whole twelve months,, the revenue for that year would have1 been increased by £698,033’, making the total gross revenue £7,530,198, or £286,494 more than- the total gross revenue for the previous year, 1929-30:. Under the
Gullett tariff the total revenue,, according to the estimates supplied by him, would be £6,804,167. Then, under the alternative scheme proposed by . the growers, to impose an excise duty of 3s. 4d. per lb. on tobacco manufactured from Australian leaf, and an excise duty of 5s. 4’d. per lb. on tobacco manufactured from imported leaf, the total revenue would be £6;S40,167, which is £36,000. more revenue than under the Gullett tariff. Of course all kinds of objections have been raised to the proposed differential rate, but the Tariff Board, iu its report of March, 1927, recommended a differential rate of excise. It recommended a reduction of 6d. in the excise on all leaf grown iri Australia. Its report stated -
Thu board recommends that tlie excise duties payable on all lemon-coloured and bright mahogany and dark mahogany tobacco leaf supplied by a grower to a manufacturer for use in the manufacture of tobacco be reduced by (id. per lb.
Surely the Government could accept the alternative suggested by the growers. This Government has treated the tobacco-growing industry haphazardly. It has accepted the Tariff Board’s recommendation without giving proper consideration to its effects upon the industry. The Government has introduced its proposals to avoid, as it says, a loss of £1,000,000 in the revenue from tobacco this year consequent upon an increase in production. The estimate of tlie growers is that the production this year will not exceed 5,000,000 lb. The Tariff Board, on. page 30 of its typewritten report, says -
If the duties- now in operation, namely. 5s. 2d. per lb. ou imported leaf and 2s. 4d. per Hi. excise on manufactured tobacco were retained, the net revenue would not fall below £(i.o00,06o until the production of leaf in Australia exceeded (i.000,000 lb. weight per annum.
The- local production for 1928-29, the latest year for which statistics are available,, is 1,S3S,592 lb., and the board says that there will be uo loss of revenue until the production exceeds 6,000,000 lb. It is estimated:, on the most reliable authority, that the production- this year will not exceed 5’,000j000 lb. The growers, when they purchase seed, purchase much more than they actually require. The seed is sown’ in rotation beds, and there- is a big chance of loss: through blue mould and other disease. A percentage of the plants fails to strike in areas which are not irrigated. The local production, therefore, is not likely to reach 6, 000,000 lb. for the coming season, and there will, therefore, be no falling off in revenue. Indeed, it was estimated when we increased the export duty to 5s. 2d., and imposed an excise duty of 2s. 4d., that an additional revenue of £1,000,000 would be derived in the following year. That would have brought the revenue to over £7,000,000. The total net revenues for the last three years were-1928-29, £6,006,772 ; 1929-30, £6,641,563; and 1930-31, £6,159,482. There has, therefore, been no loss of re venue. The growers have put an alternative proposal to the Prime Minister and the Minister for Trade and Customs, and I wish to know why it has not been accepted. We have been given no valid excuse. This action must increase unemployment in Australia. The Government came into office ostensibly to solve the unemployment problem by encouraging private enterprise. This action is a direct blow at a great primary producing industry of Australia, which is employing approximately 10,000 people. The Government is adopting an antiAustralian attitude, which will redound to its discredit and deprive it of a good deal of support throughout Australia.
.- I second the amendment of the honorable member for Capricornia. (Mr.Forde). I am disappointed with the attitude of the Government regarding this discussion on tobacco duties. The motion before the House will get us nowhere. It is only so much eye-wash and time wasted. This country is faced with tremendous unemployment, and it is our task to encourage the development of industries so as to place Australian boys in occupation as soon as they leave school. The proper development of the tobaccogrowing industry would eventually place 50,000 people on the land. We have heard a good deal from members of the Country party regarding the necessity to encourage our primary industries, and they in conjunction with members of the United Australia party who represent rural areas now have an opportunity to show some practical sympathy to the growers of tobacco in this country by forcing the Government to accept, the amendment before the House.
Our people have been encouraged by various governments in the last few years to undertake tobacco cultivation on an extensive scale. I suppose not less than £500,000 has beenspent on Australian manufactured goods, such as iron and steel, wire, and other materials, and in giving employment to people throughout the Commonwealth, in order to build up this industry. I remind honorable members that the tobacco industry is of concern to practically every State in the Commonwealth. If the policy of this Government is adhered to, the people who have invested all their capital in this industry will be ruined. We have been told that there is good authority for the statement that the tobacco-growers could make a fair profit if they get 2s. 6d. per lb. for their product. I should like to know the authority for that statement.
The Minister for Trade and Customs (Mr. Gullett) has protested that the Government has acted in accordance with the report of the Tariff Board. Possibly the honorable gentleman thinks that this will be a sufficient excuse for anything that he may do, for when he was in opposition he roundly criticized his predecessor in office for not acting on the recommendations of the board. But we want more information than has been given to us so far to convince us that the view of the Tariff Board on this subject is sound. As a matter of fact, the board was instructed to investigate the subject only from the revenue stand-point. We, on the other hand, are more concerned about the wider outlook. This industry is of great value to the Commonwealth, and the Government should follow the precedent set by the previous government and give it adequate protection. If it seriously impairs the efficiency, or retards the development, of this industry it will cause a disastrous reaction in the various States, for State revenues will be reduced by reason of the reduced incomes of the tobacco-growers and their employees. There will also be a repercussion in other directions. The land on which tobacco is grown is usually of poor quality, and practically useless for other purposes. Some land which is at present producing good crops of tobacco would 1.10t graze half-a-dozen kangaroos throughout the year. The Labour party put into operation a policy which converted this waste land into a valuable asset for the Commonwealth.
The honorable member for Darling Downs (Sir Littleton Groom), the Assistant Minister for Defence, the honorable member for Moreton (Mr. Francis) and you, Mr. Speaker, in common with other representatives of Queensland, will have to face this issue squarely. During the recent federal election campaign, the statement was made from almost every platform from which anti-labour candidates spoke in Queensland that the tobacco duties would not be tampered with. In consequence of these statements, the secretary of the Tobacco Growers Association in the electorate of Moreton, telegraphed to the Assistant Minister (Mr. Francis) to the effect that the tobacco-growers had been the victims of a confidence trick. The Assistant Minister replied that he and the Government had the fullest sympathy with the growers. But men who have invested anything between £SO0 and £1000 in their tobacco farms are not likely to be satisfied with sympathy. They invested their money to make a living, and not to gain sympathy. I trust that every honorable member who represents a Queensland constituency will do his best to force the Government to a definite decision on this subject before the House adjourns to-night. We should not be content to allow the question to remain in abeyance until the tariff schedule is dealt with, for that might, mean a delay of anything up to eighteen months. In fact a tariff schedule may be held up from one Parliament to another, if a validating bill is passed. There are already between 4,000 and 5,000 tobacco farmers well established in. this country, and if the industry is given proper treatment we may even see 50,000 tobacco farmers here. Can the Government in these circumstances disregard the interests of this industry? Has it no thought about the repudiation of the promises made to the primary producers? The Country party has been clamouring for several years for a reduction of duties; but I agree with the Minister for Trade and Customs that it cannot have protection for primary industries and freetrade for secondaryindustries. Surely the honorable members of this party must realize, as I myself told them long ago, that they connot have it both ways. If our primary industries are to flourish, we must have secondary industries in operation to use the raw materials which are produced. The best market that our primary producers can have is the home market. Do not honorable members of the Country party realize that the primary producers are getting a raw deal from this Government? The Government began its career by “dumping” the leader of the Country party, who desired the Trade and Customs portfolio. The right honorable gentleman says that he is opposed to the reduction of these duties. If that is so, I ask him to force the subject to an early decision. Surely he may rely on the support of the honorable member for Indi (Mr: Hutchinson), the honorable member for Darling Downs (Sir Littleton Groom), and the honorable member for Moreton (Mr. Francis).
The action of the Government in reducing these duties is one of the greatest “ ramps “ in our parliamentary history. I do not exclude even the tin-hare or Sleeman episodes, which, in the opinion of a section of the press which supports the Government, arc not half as- obnoxious as this one. The Minister for Transport in Queensland (Mr. Morgan) has stated in the press that “ the tobacco combine operating in Australia must possess an enormous influence over the Federal Government “ to have caused a reduction in the duties. That gentleman, who was a member of the deputation which waited on the Government yesterday, assisted United Australia party candidates in Queensland during the election campaign. I know that the United Australia party members masquerade in Queensland as the Country-Progressive-National party, but that does not alter the facts. The same gentleman stated that “the alteration in duty and excise would enable the combine to smash one of the most important and promising agricultural industries in Australia.” Another member of the same deputation is reported to have said -
One can only wonder what influence has been at work to induce tlie Government to bring forth the proposals. One would expect any self-respecting government to feel rather ashamed to collect 4s. 6d. per lb. on all tobacco manufactured, whilst the grower, who has all the expense aud risk, lis asked to bc satisfied with about 2s. to 2s. 6d.
I again ask the Minister for Trade and Customs for -his authority for the statement that the tobacco-growers are -on a good footing so long as they can get 2s. per lb. for their crop.
It is not only the Queensland newspapers which are attacking the Government for its mal-administration of the Customs Department. The Melbourne Age, in a recent issue, asked the Country party to define its attitude. In this connexion the article to which I have referred read -
The leader of the Country party has already made complaint. Although the Minister reiterated the Government’s concern for the prosperity of the primary producer - a. coneer.u all citizens fully share - it is difficult to see that the primary producer’s interests will bc promoted by repealing the prohibition against the importation of goods such as eggs, lard, preserved meats, pork, milk, onions, peanut butter, &c.
This Government was elected to restore confidence, and the Country party undertook to help it to do so. It will now have a,u opportunity to show its bona fides. I remember that when the present Deputy Leader of the Opposition (Mr. Forde) was Minister for Trade and Customs, the honorable member for Warringah (Mr. Parkhill) sneered at him because he sawfit to make an inspection of the Newcastle iron and steel works. What has that honorable gentleman to say about the two visits which a representative of this Government has paid recently to the tobacco manufacturing works of the American tobacco combine? When honorable gentlemen opposite “were sitting on this side of the chamber they were all “ Simon Pures “. Are we still to under.stand that the finger of mistrust must not bc pointed at them? The Government will find it very difficult to remove the impression that has been created that undue influence has been brought to bear upon it.
– Let some one make a straight-out statement; let us have done with innuendoes.
– The Prime Minister and the Minister for Trade and Customs were hot under the collar the other day .when they appealed to the deputation of tobacco-growers’ representatives to look at the subject from the Government point of view. One member of the ‘deputation quoted a newspaper report of » statement by the Prime Minister (Mr. Lyons), taut only a portion of the statement was used by members of the Prime Minister’s party. I do not accuse anybody of deliberately making a misleading statement, yet .members of the. Prime Minister’s party did not quote .the full text of the report. That is the sort of sharp “practice which is indulged in by the Country-Nationalist party.
The tobacco-growers have had certain promises made to them by members of this House. The honorable member for Wide Bay (Mr. Corser) has said definitely that he is prepared to vote against the Government, if it persists in imposing the present duties, and I understand that .a member in another place has expressed Ids intention of standing fast in support of .the growers’ request. If those members who are fighting in the interests of the growers have to wait lui til the tariff schedule is discussed, I am afraid .that before relief can be given, the tobacco-growers and their dependants will be out of business. Members of the United Australia party who represent country constituencies in winch tobacco is grown will be able to show their sincerity in sending reassuring telegrams to the Tobacco Growers Association by helping to obtain a just vote on this issue, and supporting -the amendment submitted by the Deputy Leader of the Opposition (Mr. Forde). Members of the Country party and other members from rural constituencies now have an opportunity to stand hy their election promises to uphold the primary producers. The honorable member for udi (Mr. Hutchinson) was heckled at Wangaratta, Victoria, on Saturday night because the tobacco-growers there said that he had repudiated his promises to the electors; but I point out that the members of the Ministry made precisely similar promises.
The Mareeba district, which is in my electorate, produced 65,227 lb. of tobacco last year, and the growers received £11,814: 9s. 9d.; or an average of about 3s. 6d. per lb. This was cigarette tobacco, from which is manufactured a cigarette equal to any made from imported leaf.. Up to the present time, the tobacco grown at Mareeba has had to be used in an immature condition, but leaf which has been held for two years or more at the experimental farm at Mareeba has been converted into cigarettes equal, if not superior, to any imported cigarette that I have ever smoked.
– The duties with respect to cigarette tobacco have not been altered.
– The alterations affect all tobacco. Making an allowance of 12£ per cent, foi’ wastage and stemming, the Mareeba district produced last year 57,056 lb. of leaf. Excise duty has to be paid on 106 lb. for every 100 lb. of leaf used in manufacture. Although the growers received an average price of 3s. 6d. per lb. for the whole crop, the manufactured article was sold to the public at 10s. 2d. per lb., leaving a rakeoff of nearly 7s. per lb. I claim that the new duties will effect no reduction of the cost of tobacco to the consumers. I aru rather inclined to think that the new duties will result in even increased retail prices. Tobacco is fetching low prices in the United States of America this year, and with a good market in Australia, growers in the United States of America will be able to readily dispose of their black-grown leaf, while Australian women and children slowly starve on the dole, which is costing the taxpayers of this country £13,000,000 a year. How does the present Government, which was returned to power to restore confidence, intend to relieve the present situation, if protection is not to be afforded to Australian industries so that people may be kept in employment on the land ? All the theories regarding the solution of the unemployment problem will be of no avail until we settle more people on the land, which is the source of all production. The paragraph in the Governor-General’s Speech about the need for the restoration of confidence is most illuminating, when considered in connexion with the Government’s action with respect to the tobacco duties. The Government claims , that it wishes to give a lead to private enterprise, but what confidence can any section have in a Government which callously re pudiates promises made to the tobaccogrowers on the eve of their crops being marketed? This Ministry reduced the value of the crop 24 hours before it was to be sold, and made the combine a present of 2s. per lb.
In the tobacco industry, one-man farms can be successful. One farmer can cultivate up to five acres of tobacco land. A profit of £35 per acre, which the Minister stated was a fair return, would return only £175 a year to a man on a 5-acre block. Even if he made a clear profit of £75 per acre - the- amount stated by the Minister to have been supplied to him by a member of the deputation which waited upon him on Saturday - an income of £375 a year would be a very modest one for a man who had to maintain a wife and, say, three children. In providing the necessary drying kilns, apart from house, fencing, and other improvements, a five acre farm would necessitate an outlay of about £800, and surely the tobacco-grower’s capital ought to be protected as well as that of the bondholders. All tobacco farmers are required to have their names registered. Many have taken up tobacco cultivation on a fairly extensive scale on the share system. Are the interests of all these growers to be sacrificed, despite the undertaking given to them a year or two ago that they would be amply protected? They now .declare that the Prime Minister has destroyed the confidence of all tobaccogrowers in the United Australia party. I appeal to the Prime Minister to show the same consideration for the claims of the tobacco-growers as for those of the tobacco combine, and to allow the old duties, to remain at least until after the present year’s crop has been sold.
In a district where, two years ago, only 25 or 30 persons were engaged in tobaccogrowing, SOO growers are now registered and employed in the - industry. Are their interests to be sacrificed by a Government that is supposed to be concerned with the restoration of confidence? If these hard-working producers are to be ruined owing to the attitude of the present Government, I hope that the primary producers generally will join forces with the organized workers, abolish Parliaments, and establish a dictator to look after their own interests.
.- I thank the Government., which controls the business of the House, for making this early opportunity to discuss the tobacco duties. This action is justified by the fact that during the last two years the tobacco industry has been the best antidote to unemployment. In many districts, including Shepparton, Wangaratta, Ashford, and Inverell, the local unemployed have been absorbed, and I understand that of 153 heads of families or single men at Attunga, who, eighteen months ago were on the dole all but three are now fully employed. Therefore this industry deserves prompt attention when action has been taken which is calculated to jeopardize its expansion and even continuance. I have no hesitation in recommending the encouragement of the industry, because it fulfils all the requirements to be expected of an industry which is receiving support from the Government by tariff or bounty. It is increasing its efficiency. Even the Minister for Trade and Customs (Mr. Gullett) stated that the quality of the locally-produced tobacco leaf is steadily improving, and that a substantial proportion of the crop is of the finest bright leaf. Moreover, the industry is not exploiting the public under cover of the protection afforded by this Parliament. Australian tobacco is being sold at from 4s. to 5s. per lb. less than imported tobacco. In that respect, the industry differs from the galvanized iron industry, which is taking from the public the maximum that the protective duties allow. The tobacco-growers are returning to the public almost the full equivalent of the assistance they receive in the lower price, as compared with the imported leaf.
– That is a new argument.
– A comparison of the prices of 100 varieties of Australian and imported tobaccoes shows that the average prices for a 2-oz. tin are 1s. 4d. and1s. 10d., respectively, a difference of 3d. an ounce. The Australian article is selling at about 10s.8d. per lb. as compared with 14s. 8d. for the imported. The maintenance of that margin is one of the principal reasons that will ensure the con tinual expansion of the demand for Australian leaf, and if that margin is not destroyed, a public taste will be cultivated which will eventually enable the whole of the local requirements to be supplied by our growers, with the exception of a relatively insignificant quantity needed for blending. The Government, however, has imposed an additional excise of 2s. 2d. per lb. on Australian tobacco, while leaving the indirect customs duties unchanged, which means that the whole of the additional taxation comes from the Australian industry. Beforelast Thursday week, the duty on imported tobacco was 5s. 2d., and the excise duty 2s. 4d., making a total of 7s. 6d. To-day, the duty is 3s., and the excise duty 4s. 6d. on the same total of 7s.6d. The charge of 2s. 4d. on Australian tobacco has been increased to 4s. 6d., the Government aiming to obtain the additional revenue it requires wholly at the expense of the local industry. The Country party admits the desirability of obtaining revenue to enable the budget to be balanced; it concedes also that a luxury is undoubtedly an appropriate item for additional taxation. But it supports the contention of the growers, that a reasonable and just method would be to increase the charge on Australian tobacco by1s. per lb., and on imported tobacco by 10d., thus distributing the burden equitably between the two. I appreciate the Government’s difficulties. The Minister for Trade and Customs has declared that additional revenue is essential to enable the budget to be balanced, and the Premiers plan to be implemented.
– The Government is trying to retain its present revenue.
– That is a laudable endeavour, but the Government’s action may possibly result in a decrease rather than an increase of revenue. Since the former Government imposed a duty of 5s. 2d. per lb. on imported tobacco, increasing the total charges by1s.8d., the amount of revenue received has diminished considerably. In 1929-30 the revenue was approximately £6,600,000, and last year, during only seven months of which the increased charges operated, £6,149,000. The Tariff Board’s report points out that one of the causes of the loss of revenue is the decrease in the consumption of highpriced tobacco.
– Unemployment has been a factor, too.
– Undoubtedly it is another factor. But if the taxation of this luxury be carried too far, the yield will begin to diminish, as has already happened in connexion with certain other taxes. We shall then have to look elsewhere for revenue. But granting that it is possible to secure additional revenue from the tobacco industry, let us compare the Government’s method with the alternative submitted by the growers. The Government’s duties are expected to return £6,750,124. The proposal of the Country Party would return £6,785,000. The Minister for Trade and Customs has said that if the local production this year is about 6,000,000 lb., the revenue which the Government is seeking will be obtained, but that if the production is increased to S.000,000 lb., the revenue will diminish by £200,000. Which of the two proposals is more equitable and likely to produce the required amount of revenue? We are told that the Government has followed the recommendations of the Tariff Board. That is not so; it has adopted only a portion of the board’s report. The alternative proposals of the Country party and the tobacco-growers also are based on a Tariff Board report of 1927, in which the board stated that the right method of encouraging and improving the tobacco industry was to differentiate between the excise duties on imported and Australian tobaccoes. Therefore, if this House is to follow slavishly the Tariff Board’s reports, the two methods of taxation now under consideration have in this respect equal authority. The Minister has stated that the policy of the Government is designed to keep the industry from growing too fast. That is the most extraordinary reason ever given by a government for a tariffproposal. This is the first occasion on which I have heard a Minister express concern lest the investors in an industry might lose their money.
– It is a pity that that atti tude was not adopted in the past.
– It may be proper; I am pointing out merely that this solicitude for the investor is a new phase of tariff policy.
– Does it apply to secondary industries, too?
– I wonder? The Tariff Board, in reporting on refrigerators, referred to the possibility that nineteen out of twenty firms which engaged in the manufacture of these machines would lose their capital. But I did not hear any of those who are now supporting the Government, or the last Government for that matter, suggest that that was a good reason why this Parliament should stay its hand. In passing, I may say that I am not concerned with the quarrel between the Government and it’s predecessor in regard to the responsibility for acting according to the findings of the Tariff Board. If action in accordance with a report of the board is wise, it needs no apology; if it is not wise it should not have been taken. I am surprised that the Government should be apologizing for its policy, and attempting to shift to the shoulders of the previous Government the responsibility for initiating the latest inquiry by the Tariff Board. The former Minister for Trade and Customs (Mr. Forde) also apologized for having started the investigation ; but if it should lead to wise action, nobody need apologize for it.
– We have not apologized for having referred this matter to the Tariff Board ; that was the obvious duty of the Government of the day.
– The matters referred to the Tariff Board were - 1.The amount of protection necessary for the economic development of the Australian tobacco leaf growing industry so as to protect the revenue, while at the same time giving adequate protection to the Australian tobacco-growing industry.
In dealing with question No. 2 it is desired that the Tariff Board should consider the desirability of recommending a sliding scale of customs and excise rates of duty which will as the production of Australian leaf varies -
The alternative proposals that were submitted to the Government last week by the Country party are in closer conformity with the issues that the Tariff Board was asked to determine than are the proposals of the Government. It cannot be claimed, with accuracy, that the new duties give the Australian grower the effective protection that previously existed. There is no doubt that the revenue would be maintained under the suggestions that have been made to the Government by the Country party and the growers, and that the proposals will “ add as little as possible to the price now paid by the Australian consumer for manufactured tobacco and cigarettes “. The existing excise duty of 2s. 4d. per lb. on Australian tobacco is being increased to 4s. 6d., whichapproximates 1¾d. an oz. That must be carried by somebody, and I maintain that, substantially, it will be carried by the growers, for in anumber of places the report of the Tariff Board insists that the price of tobacco should not be increased.
I have already pointed out that the margin of difference between the price of Australian manufactured tobacco and the imported article is 3d. an oz., or 4s. per lb. The Government proposes to take away 2d. of that 3d. margin. Honorable members know that, before our industry can reach the proportions we desire, it is necessary to overcome the predilections and prejudices that have grown up over a number of years. That can be done onlyby maintaining a substantial difference between the prices of the two articles. It is ridiculous to suggest, at a time when the crop is being harvested, and no more seed can be planted until September or October next, that the removal of the duty can alter the output of Australian tobacco this season. It takes six months for a crop to mature, so that it will be next March or April twelve months before a further harvest is made. In the circumstances, the alteration of duty must in evitably act as a deterrent against the production of Australian tobacco.
– Does not the right honorable gentleman consider that it would be a good thing if the duties acted as a deterrent to Australian production?
– The whole tenor of the report of the Tariff Board is that, within a reasonable number of years, Australian tobacco should capture practically the whole of our market, and in addition that there should be some for export. The Minister himself expressed that hope.
I should like to deal with the suggestion that the high duties that are being superseded brought about an exploitation of the public by the tobacco industry and a huge increase in the value of land used for tobacco-growing. The greatest expansion that has taken place in the industry has occurred at Mareeba, in Queensland, where tobacco is grown on Crown land which is made available to those who desire it at, 2s. 6d. an acre. I admit that when the industry received its stimulus some two years ago, the Government of the day was dilatory in opening up available Crown lands which, as the ‘honorable member for Kennedy (Mr. Riordan) pointed out, was useless for any purpose other than tobaccogrowing. During the time that the Government refused to open up these Crown lands, a certain amount of speculation in. private lands went on, but now that that country is available there can be no exploitation of the public. The great bulk of the land that is suitable for tobacco-growing in Australia has not enhanced in value. I am aware that in Texas, where I have had some personal experience, tobacco lands bring from £10 to £12 an acre, but they include some of the best grazing flats belonging to different sheep and cattle stations and arc contiguous to water. The exploitation was on the part of city investors and big speculators who issued attractive prospectuses, and I am glad that some of those go-getters are at present cooling their heels in gaol.
The opening up of this country for tobacco-growing has given a stimulus to other industries. Many hundreds of tons of galvanized iron have been purchased for the new holdings, and considerable activity has been shown in the irrigation plant business. The boom costs that are referred to by the report of the Tariff Board are really the £28 and £29 a ton that is charged for galvanized iron, which can be bought overseas for £13 a ton.
– And tobacco leaf can be purchased in the United States of America for 6d. per lb.
– It is quite impossible for the honorable member to camouflage the position. Had there not been a shortage of tobacco revenue we should not have had an opportunity to deal with the position so expeditiously, and there would have been no alteration of the tariff schedule. Tlie tobacco industry is being used as a revenueproducer, and rightly so, but I refuse to be persuaded that the mere juggling with customs and excise figures, leaving an indirect charge of 7s. 6d. per lb. of tobacco whichever way it goes will do anything vo establish or disestablish the revenues of Australia generally.
I make no apology for defending an industry of this sort. I never hesitate to support any worth-while industry, be it primary or secondary, although some of my calumniators maintain that I am a freetrader. I am prepared to encourage the establishment of any industry, primary or secondary, if it has a chance of exporting its products, and if it will increase its efficiency and output per worker. I believe that there are great possibilities for the tobacco industry. I have always supported the establishment of our iron and steel industry, which I regard as a national basic industry worthy of encouragement, and which, if my policy wore adopted, -would also be exporting. For the information of honorable members I quote the following extract from the speech that I made in Sydney on the 30th November last, expounding the policy that resulted in the election of members of my party to this chamber. It reads -
The Country party’s fiscal policy oan be summed up as “ Sane protection for sound primary and secondary industries “. Where it is proved that reasonable . protection is necessary to retain or establish primary and secondary industries which are necessary to the prosperity of the community we shall unhesitatingly support it. This’ has always been our policy, as evidence in the dairying, maize, tobacco, and dried fruits industries, all of which absorb a large rural population.
I go further and say that, after a careful survey of the industries of Australia I am satisfied there are only two hig industries in sight which bid fair to absorb, without any excessive expenditure of additional capital, many of our unemployed. They are the tobacco and dairying industries. That will be done not merely by providing employment in the fields, but by creating work for carpenters and artisans generally, in erecting sheds and so forth.
– Will the proposals of the honorable gentleman afford the same high degree of protection as was given by the duties introduced by the Scullin Government?
– They will have an identical effect, for they will preserve the margin that exists between the price of local and American leaf. The report of the Tariff Board summarizes the history of the tobacco industry in Australia, and emphasizes the necessity for some protection which the industry has never exploited. It points out that for many years the duty was 2s. a lb., and that, with that protection, the annual production rarely exceeded 2,300,000 lb., and after the war tended to decline. Even when the duty was made 3s. a lb. in 3929, the total amount of tobacco produced in Australia was less than 1,000,000 lb., and fell short by 20,000,000 lb. of our requirements. When the duty was 3s. a lb. the price given by buyers for approved leaf was ls. 6d. a lb. When the duty stood at 3s. 6d. the price for the leaf was ls. 9d. a lb. Now, when the duty is 5s. 2d., the average price given by the buyers in Australia is 3s. It is rather extraordinary to find that the Tariff Board report claims that the right way to make certain that the tobaccogrowers will not plunge headlong into ruin is to reduce their protection against imported tobacco leaf, while, it also claims that the right way to prevent tobacco manufacturers overproducing and bringing down the price is to increase the protection that is given to imported manufactured tobacco. That, surely, is a. most contradictory argument at tin* moment when there is an opportunity to develop the industry to produce for
Empire as well as for Australian use, it is suggested that we should neglect it. The Tariff Board report points out that i he total amount of Empire tobacco used in Great Britain is about 20 per cent, anc! that it has gradually grown from 3 per cent, in 1921. That is largely because of the duty of 9s. 6d. a lb. that is imposed under the general tariff, and a preference of 2s. a lb. that is granted to the dominions. Under that preference our sister dominion. New Zealand, which does not enjoy any better conditions for producing tobacco than we do, has been able to establish a fair export trade to Great Britain. The Tariff Board envisages our selling a material amount of our tobacco in Great Britain in the future.
– At what price must the tobacco be sold in England in order to compete in the market ?
– It already enjoys a preference of 2s. per lb. At. the present time American fine, bright leaf is selling at ls. per lb., so that we ought to be able to get 2s. or 8s. per lb. I trust that, when the Acting Treasurer (Mr. Bruce) is in Ottawa he will be successful in having the British preference to Empire-grown tobacco increased. This industry provides a great deal, of employment, and inexperienced men can be trained quickly in it. Much of the work required can be done under the supervision of the man actually running the farm. It has been said that one man can handle five acres under tobacco. That is absurd. Any one who has seen tobacco being grown and harvested by the new flue-curing methods, knows that one man alone cannot, manage five acres. It would be nearer the mark to say that one man can look after two or two and a half acres. When reports are published in the press once in a while to the effect that a tobacco-grower has received a return of £30, £40. or £50 an acre from his farm, some people talk as if he had discovered another Klondyke
– He might not, get a penny an acre the next year.
– That is so; tobacco is a most uncertain crop. Tobacco in this country is affected by a disease known as blue mould. In the United States of America np to the present the growers have not been troubled with this pest, although, fortunately perhaps for Australia, but unfortunately for the American growers, it is reported to have made its appearance there now. Owing to the ravages of this disease and of a multitude of other pests, re-planting is frequently necessary, and I have heard of an instance in which a crop was re-planted twelve times. Circumstances seemed entirely favorable at the beginning of- this season for a big production, but during the last three months exceptionally dry weather has prevailed throughout, all the tobaccogrowing districts from Mareeba in Queensland, to Wangaratta and Shepparton in Victoria. As a result, many of the growers who, on the advice of the Agricultural Department and of the manufacturing companies, planted their tobacco on light, sandy ridges in order to produce the desired quality of leaf, are threatened with the entire failure of their crop. The estimate of the growers that this years crop will be 5,000,’000 lb. is much nearer the mark than S,000,000 or 10,000,000 lb., which has been frequently mentioned. It is easy for the Customs officials to be misled when forming an estimate. When the growers are circularized at the beginning of the season, they put down an acreage usually beyond that, which they ultimately harvest, because they make allowance for failure. One can usually divide the Customs estimate by two, and then be fairly near the mark.
The proposal of the Government is that the duty on imported leaf shall be 3s. per lb. The Minister has said that if this amount of protection proves insufficient he is ; prepared to impose an embargo or a partial embargo, to ration imports and to fix the price of tobacco in Australia. I am surprised that the Minister should choose such a complicated way of protecting the industry when he might have followed the simple, businesslike method of protection through the customs. The Minister’s proposal, if followed, would involve the setting up of most complicated administrative machinery, and will involve the creation of price fixation, and appraisement boards, and ultimately, in effect, a compulsory pool. [Leave to continue given.]
The Minister has declared that the industry is already being protected to the extent of 600 or 700 per cent., but even he still seems doubtful whether that degree of protection will be sufficient, judging by his accompanying statements. He has said that if it does not prove sufficient, the Government is prepared to grant protection, not to the extent of a mere 600 or 700 per cent., but to the extent of imposing an embargo, which is an infinity of protection. I fear that if the Minister’s alternative is adopted, and the price of tobacco has to be fixed and continually discussed in this House, this industry will become more and more the pawn of politics. Tariff items are sufficiently troublesome when they have to be considered only every four or five years, but if they come up for review every six or nine months the situation will be impossible. It seems to me that the Government would not only have to fix the price, but would have to arrange for the formation of a compulsory pool as well, when the supply has grown considerably, and that is something which the Government and its supporters never contemplated with equanimity or enthusiasm.
The Country party’s proposal would enable the ordinary customs machinery to be used as at the present time, and the price of local tobacco would fix itself according to the law of supply and demand. I may say here, that I do not join in the general condemnation of what some honorable members call the “ tobacco combine.” From my perusal of the Tariff Board’s report, and of the evidence presented to the select committee on tobacco growing, I am forced to the conclusion that the BritishAustralasian Tobacco Company has tried to deal in a generous way with the growers, and to encourage the development of the tobacco-growing industry in Australia. The company even went to the length of paying a special bonus of1s. per lb. for leaf of the best quality. It paid 2s. per lb. for ordinary leaf, and 3s. for the fine, light coloured leaf. For some time past it has been paying 3s. per lb. for good, average quality leaf. I admit that there may be some difficulty under our proposal in regard to the differentiation between the excise duty on locally-grown tobacco, and the import duty on foreign tobacco. This may require the setting up of special machinery, but the Government, even under its own proposals, will create a situation in which special administrative machinery will be required. The board has recommended that all tobacco should be allowed into Australia at a flat rate of 3s. per lb., but the Government proposes that the duty on pipe tobacco shall be 3s. per lb., and that on cigarette tobacco 5s. 2d. per lb. In order that the customs may not be defrauded, the department already finds it necessary to have in each big manufactory its own customs officers. The officers being already there they may, without much difficulty, extend their activities to differentiating in the matter of excise between Australian-grown and imported leaf.
– It can be done.
– I do not think that there is any insuperable difficulty. It is evident that the Government had in mind that it would be necessary, in order to safeguard the revenue, to make the excise duty and the import duty approximate each other. It asked the Tariff Board to arrange a sliding scale of duties. We propose that, as production increases - and it will increase by probably 3,000,000 to 4,000,000 lb. a year at the outside - the excise duty on locallygrown leaf should be gradually increased so as to approximate the duty on imported leaf. I move -
That the amendment be amended by omitting all the words after “ that “, first occurring, with a view to insert in lieu thereof the following: - “in the opinion of this House the Government should reconsider the proposals submitted by the tobacco-growers that the rates of excise duty should be, on
Tobacco manufactured from Australiangrown leaf, per lb., 3s. 4d.
Tobacco manufactured from imported leaf, per lb., 5s. 4d.
Sitting suspended from 6.11 to 8 p.m.
– The Government should reconsider the suggestion of the tobacco-growers that the rate of excise duty should be 3s. 4d. per lb. on tobacco manufactured from Australian-grown leaf, and 5s. 4d. per lb. on tobacco manufactured from imported leaf. I ask for support for this proposal because it would be essentially just and fair to both the local’ arid- importing interests. It would preserve the present selling margin between the imported and local tobacco, and also observe that spirit of caution in any changes of tariff which was mentioned in the Governor-General’s Speech. It would permit Australian tobacco to be sold to- the consumer at about Id. an oUnce less than is possible under the Government’s proposals. It would thus not only be of real advantage to the consumer as well as to the grower, but would also enable the greater revenue that the Government considers necessary to be obtained. It would permit the easy increase of the excise as production expands and improves. Our suggestion is that, as the Australian production approximates the total consumption there should be a continual increase in the Australian excise to’ ensure that the necessary revenue is obtained. If the statement of the Tariff Board that the’ manufacturers can absorb some of the increase in excise is correct, then tinder my proposal the increase iu the price of tobacco produced from either Australian or imported leaf would not be more than -Jd. an ounce. It is possible that there might bc rio increase in the price of either local or imported tobacco, and if that were so, the necessary revenue would be obtained for certain from the tobacco industry because consumption would hot be impeded. It is worth mentioning that the Tariff Board recommends that while the margin of protection to the growers should bc reduced by 40 per cent., the margin of protection afforded the tobacco manufacturers, which is an increase of 280 per cent. on the tariff schedule of 1921-28, should be retained. I shall quote two paragraphs of the board’s report, dealing with the protective duty on cut manufactured tobacco as distinct from that on imported tobacco leaf. In 192S the duty was 5s. 7ci. per lb.; to-day the proposed duty is 93. ‘3d. The board states-
Tlie actual margin of protection against imported manufactured tobacco if the board’s recommendation is adopted, will, however, bc considerably more than ls. Od. pdr lb., been use it is assumed the local tobacco manufacturers will use a large proportion of Australian leaf, and that it is unlikely that the price paid for such leaf will be anything like equal to the Cost of American leaf plus duty, lii actual practice it will probably be found that local manufacturers will have a margin of protection against imported manufactured tobacco, somewhere’ near 3s. 6d. per lb. . . . The extension of the margin of protection from ls. 3d. to approximately 3s. Gd. per lb., and thus the removal of the possibility of any appreciable overseas competition, would appeal at first sight to improve the facilities for local manufactureers to earn unduly high profits. The board has already pointed to the desirability f6r manufacturers reducing their scale of profits, and it considers that the altered local conditions will supply a pressure in this direction which will for the time being be more effective than the pressure of outside competition.
It will, therefore, be seen that what I said earlier is correct, that the board’s remedy for any possible exploitation of the protective duty, so far as the manufacturers are concerned, is to impose a still higher duty. But protection is being denied the grower because of the fear that he may exploit it. In regard to the future’ position, the board says that there is likely to be a large and rapid expansion unless three things occur. The three suppositions are set out on page 6 of the report, and are as follow: -
Unless something is done to rectify the position or unless disease attacks the crop, or adverse climatic conditions are experienced, it appears certain that there will very soon be serious over-production of leaf, arid a heavy loss to many growers who have been tempted to expend money in the cultivation of tobacco under conditions which cannot be regarded as economic.
Serious climatic conditions have already been experienced during this present year, and have been responsible for the great diminution of the total crop. I am certain that many inexperienced growers who have suffered the vicissitudes of this industry will practically cease cultivation after this year, and only experienced and keen growers will remain in it. I urge the Government to accept my amendment. I find difficulty in supporting the amendment of the Deputy Leader of the Opposition (Mr. Forde), because it is too general in its terms, and if adopted might hot yield the revenue that the Government desires. The amendment that I have moved will enable that revenue to be obtained. If the Government will not accept my amendment, I trust that it will at least do something to protect the growers who have already produced their crop, because there will be little possibility of marketing it at a profit if the protection that the grower has en joyed is diminished to any extent during the next two or three months. Tobacco is harvested from February to May, and is planted in September or October. Therefore nothing in the world can alter the production of the present season. The Government, whatever it may do, should protect the growers who have grown tobacco leaf on the understanding that they would obtain a certain amount of protection. Their crop has already been harvested, and is still to be marketed.
– I second the amendment of the right honorable member for Cowper (Dr. Earle Page) pro forma, and reserve the right to speak later.
– The Minister for Trade and Customs (Mr. Gullett) has dealt extensively with the merits of the Government’s tariff proposal affecting tobacco, and I do not intend to repeat what lie has said. I shall deal with this proposal from the stand-point of its general effect upon the finances and the provision of adequate encouragement to the tobacco-growing industry. The Deputy Leader of the Opposition (Mr. Forde). who moved the first amendment to the motion before the House, entertained us with a certain amount of comparatively ancient history in connexion with the Australian tobaccogrowing industry and the tariffs of past governments. He read a few quotations in the hope that they might be politically useful to his party in the near future, perhaps in Queensland. He endeavoured to show that the Deputy Leader of the Government (Mr. Latham) and myself had pledged ourselves to maintain the amount of tariff protection that was previously in existence, but he failed to substantiate that. In fact, no declaration that I have ever made can be read in such a way. I have promised adequate protection to this industry, and I am carrying out my pledge under the proposals submitted by the Minister for Trade and Customs.
– That is not so.
– - The Attorney-General, when making a public announcement on this subject, promised adequate protection to the industry, and said that there would be no sudden changes except after investi gation and report by the Tariff Board. Never at any time did he make any statement that did not include those words, because those words were essential, being part of the policy speech that I delivered on behalf of my party. The AttorneyGeneral knew and I knew that that was a vital part of our policy, and that neither of us could depart from it. On this occasion we are not departing from it. The Deputy Leader of the Opposition expressed his regret at the necessity for having to move an amendment to the motion. He showed apparent sincerity, but his case in the main rested upon quotations, a declaration of the policy of the party to which he belongs, and an appeal to the supporters of that party.
– The Prime Minister should not lower the tone of the debate.
– This debate was from the beginning placed definitely on a party plane. We are prepared to investigate every case put forward, and to obtain the fullest information on the subject. If any real case has been put forward, it is that made out by the Leader of the Country party (Dr. Earle Page). Yet surely it is extraordinary that the Leader of a low-tariff party should make out a case on behalf of a high-tariff party. The members of the Opposition proper, who will go to any length to ensure tariff protection, will be glad of the assistance of the right honorable member for Cowper in their efforts to give an absolute peak to the tariff policy of this country. . The Deputy Leader of the Opposition lias said that the growers understood from my statement that I was prepared to maintain the tariff on the basis that existed previously. I challenge anybody to read into my actual words the statement that I encouraged any section of the community to believe such a thing. I carefully refrained from doing that, and when asked directly to give such a promise, I knew that I could not give it.
No government or party could retain the Scullin tariff, and surely those who talk about maintaining the industry on its present basis are misleading the growers, either intentionally or otherwise. In view of the statements that have been made as to what different honorable members said on this subject during the election campaign, I feel justified in quoting some remarks which the Deputy Leader of the Opposition made in this House while he was Minister for Trade and Customs. His words, which were quoted by the Minister for Trade and Customs (Mr. Gullett) this afternoon, were as follow : -
I realize that the whole matter of duties on tobacco will have to be re-considered, as our industries develop : that as we change over to the Australian leaf, our import duties will decrease. That is realized by the growers themselves.
While the honorable member for Capricornia (Mr. Forde) was waving his hands and saying this, that, and the other thing about the tobacco industry, he was asked definitely whether he had uttered the words which I have just quoted; but he dodged every way in order to avoid making a direct reply. Still, his words are onrecord, and the responsibility for having used them cannot be avoided by him. The honorable gentleman made it quite clear when he was on this side of the chamber that as the consumption of Australian-grown tobacco leaf increased, the excise duty would have to be adjusted in order that the revenue might be safeguarded. If that is to be done, how on earth is the margin of preference to the total production to be maintained? The honorable gentleman’s declaration is “the best reply that could be made to his own arguments. I leave it to honorable members generally to judge whether he or the Government has misled the tobaccogrowers.
It has been said that if the Government’s policy is put into operation the tobacco-growers will be practically ruined.
– So they will.
– I am interested to hear that interjection from a member of the Country party, who, day in and day out, has fought high duties in this House. The honorable gentleman, in common with others who sit in his corner, has expressed the view, on more than one occasion, that an industry which requires protection to the extent of hundreds per cent. is not worth maintaining. There is soundness in such a declaration; but if it is to apply to one industry it must apply to others. When any primary or secondary industry requires protection of this extraordinary nature, it is necessary that stock should be taken of the whole position. If we had been protecting this industry in a small way, and had withdrawn the protection, there might be some justification for the protests that have been made; but we have granted the tobacco industry very high protection, and are still prepared to do so. Yet it is said that if we can only see our way clear to give it a miserable protection of from 300 per cent. to 400 per cent., we shall destroy it. Adverse criticism of the Government which rests upon argument that the degree of protection given to the tobacco industry is inadequate, will not bear investigation.
It has also been argued that this industry gives a large amount of employment, and that if anything is done to interfere with it, the volume of unemployment in Australia will be increased. My reply is that if we were to deal with the unemployment problem in the same way that we are dealing with the tobacco industry, the whole economic and financial structure of the nation would he destroyed. We might be able, temporarily, to cope with unemployment in this way, but in doing so we should bring the country to bankruptcy. I am sure that some honorable members do not realize what the tobacco industry is costing Australia. On the basis of a consumption of 6,000,000 lb., the Minister for Trade and Customs pointed out that in making possible the use of Australian leaf, instead of imported leaf, we were giving the industry assistance to the extent of £1,500,000 under the conditions of the Scullin tariff. This amount would be sufficient to make a grant of £150 per annum to 10,000 unemployed. And those unemployed would think themselves “ made “ ! Even on the basis upon which this Government is prepared to assist this industry, it will be spending enough money to provide £150 a year for 6,000 unemployed in this country! In these circumstances, can it honestly be said that we are not prepared to assist the industry? Any other primaryproducing industry in Australia would think itself on a wonderful footing if it could obtain government assistance to this extent.
When tlie Assistant Minister for Trade and Customs was at Wangaratta recently he inspected a number of tobacco properties. He visited one splendid property of 123 acres, and was told that 32 persons were employed on it. That seems a considerable number of people to be employed upon a comparatively small property. But on the basis of a production of 800 lb. per acre, the Government is actually subsidizing those 32 employees to the extent of £14,760 per annum. If we could spend that amount of money in some other direction we should be able to assist far more than 32 people. Looking at the difference between the costs of imported and Australiangrown tobacco leaf, our assistance to that property works out at £120 per acre. If we could deal with our unemployment problem along these lines we could soon solve it. It surely cannot be said, in the light of facts like these, that we are not prepared to encourage the tobacco industry.
It has been soundly contended that we should not attempt to establish the tobacco-growing industry upon an artificial or abnormal basis, for to do so would eventually bring disaster to the growers.
– That is nonsense!
– The honorable member is not prepared to look at the facts in a reasonable way. I have heard him protest against the granting of a protection of 30 per cent, to some secondary industries. In one case, apparently, 30 per cent, is top great, while in another 300 per cent, is too little.
I have a vivid recollection, as have some of the senior members of this Parliament, of a difficulty that arose during and immediately after the war in connexion with the production of hops in Tasmania. During the war an embargo was placed upon the importation of hops, and, gradually, the hop-growers secured complete control of the situation. They eventually formed themselves into what was practically a combine, with the result that, the price of hops rose steadily until it reached 7s. 6d. per lb. In those days everything went well, and the industry was in a wonderful position. Everybody who had a spare patch of suitable ground put it under hops, just as to-day everybody who has a few acres of suitable land puts it under tobacco. In the hopgrowing industry the time soon came when we were faced with a ridiculous position. The stores everywhere around Hobart were stacked full of hops, some of it three seasons old. It was impossible to find a market for it. The hop industry in- those days was in a desperate condition, and the Assistant Treasurer (Air. Bruce) and the Leader of the Country party (Dr. Earle Page) must very well remember the plea that I and others made on behalf of the unfortunate hop-growers for government assistance. The honorable member for Gippsland (Mr. Paterson) probably knows better than any other member of this House how desperate the plight of those people was.
– How does all this talk square with the cry that we ought to increase production ?
– The honorable member for West Sydney is touching quite a different subject. I am giving an instance of the difficulties that arise if unlimited protection is given to an industry. In that case the trouble was confined almost to Tasmania, but we are now facing a situation in the tobacco industry which may cause difficulties in every State in Australia. In the circumstances I am sure that all honorable members must realize that it would be a mistake to establish this industry under a policy of prohibitive protection, for to do so would be to mislead both the growers and the public. Honorable gentlemen who are free in their criticism of the sugar industry should pause before supporting any step which might give rise to similar complaints later about the tobacco industry.
Let me remind honorable members that the present position has arisen chiefly because of the desire of the Government to carry out its undertakings, and also the undertakings of the previous Government, to balance the national budget. We were faced with the almost certain prospect of very heavy revenue losses if we continued to support the tobacco industry on the present basis. I remind honorable gentlemen also that the Government declared during the recent, election campaign its intention to make full use of the expert and independent services of the members of the Tariff Board. Either that policy hud something to recommend it or it had not. It was adopted by the people. The Government, therefore, referred this whole subject to the Tariff Board for investigation. Although we are not compelled to give effect to every recommendation of the Tariff Board we are under obligation to be guided to a large extent by its findings. We felt that we could not regard with equanimity the prospect of losing very large sums of revenue. While we were prepared to encourage the expansion of the tobacco industry in Australia, we had also to take cognizance of the fact that, as larger quantities of Australian-grown leaf came into consumption in Australia the revenue would suffer. The action which the Government has taken, therefore, in conformity with the recommendation of the Tariff Board, is designed to meet and prevent a financial crisis later on.
The Leader of the Country party (Dr. Earle Page) has said that his proposal would give the Government practically the same amount of revenue as the Government’s own scheme; but that statement is only partially correct. I do not pretend to understand in detail the proposals of the right honorable gentleman, but even if there would be very little difference between the effect of his proposal and the Government’s proposal on a consumption of 6,000,000 lb. of Australiangrown tobacco leaf, there would certainly be a very great difference if the Australian crop should reach 7,000,000 lb., or up to 10,000,000 lb., and the estimates of our departmental officers indicate that it may reach anything from 6,000,000 lb. to 10,000,000 lb. In these circumstances the Government cannot, for revenue reasons, accept the alternativewhich the right honorable gentleman has proposed.
– The Government will then increase the excise on the local product.
– That is what we are now doing. As the production of Australian leaf increases, it will be necessary to vary the excise from time to time. Is it not better, in view of the certainty of increased production, to take gradual steps year by year, than to deal with the position now in such a way that next year much more drastic action would have to be taken? The Government will be faced at the end of the present year with another problem in regard to the finances, and I am sure that nobody acquainted with the whole position would hesitate to do exactly as the Government has done in regard to the tobacco industry. If the last Government had still been in office, it would have been forced, in view of the financial circumstances of Australia, to do practically the same as this Government has done. We havegiven the House this opportunity to discuss the position of the tobacco industry, so that all arguments may be placed before us. We have heard the claims advanced on behalf of the growers, and it will be admitted that their case has not been understated. So far as the employment provided by the industry is concerned, it is clear that the case has been absolutely overstated.
– That is not so.
– Of course, the honorable member for New England knows everything about the matter.
– He ought to know more about it than most of us.
– But he cannot know the exact number of persons employed in the industry, and exaggerated statements have been made on that point.
It was desired to give members generally an opportunity of stating the case for and against the action of the Government. While the criticism has been offered that we have not the tariff schedule before us, did not the last Government let months, and almost years, go by before the House had an opportunity of discussing tariff alterations? Within the next few weeks the Government will bring down the tariff schedule, and then honorable members will be able to consider various tariff matters, including the tobacco duties.
– Why did the honorable gentleman bring this matter forward for discussion to-day?
– Because a definite request was made for an opportunity to discuss it. The Government is anxious to encourage the industry generally, and proof of that is afforded by the protection that is being given to it. There is no other industry in Australia that would not be satisfied with the amount of protection that the tobacco industry receives. We have given the growers an assurance that we will watch their interests from time to time, and take care that no opportunity to exploit the producers is given to the manufacturers, who are severely condemned by some honorable members, although the select committee that inquired into the industry did not condemn them. Certain powers are wielded by the Minister for Trade and Customs, and these will go a long way towards preventing any exploitation. So far as the Government can do so, it will insist on the growers receiving an adequate price for their product.
– What is the attitude of the Government to the amendment?
– The Government has promised to consider the arguments advanced during this discussion; but it will not take directions from either the Opposition or any other section of the House. We have given an assurance to the growers that every aspect of the new duties will be considered fully, and that assurance has been repeated in the House to-day. I will not have the administration of the affairs of this country taken out of the hands of the Government.
Certain honorable members have suggested that by varying the tariff protection, the Government has been guilty of a breach of contract with the tobaccogrowers. There were 60 or 70 items in the schedule recently submitted, and in practically every ease a tariff reduction was provided for. If a reduction of duties cannot be effected without a breach of contract in the case of the tobacco industry, the same argument must be applied to all the other industries concerned in the recent tariff alterations. Is the Government not to be permitted to vary a tariff schedule in a downward direction? If it had not such a power, the policy advocated by members of the Country party could not be put into operation. That policy is being partly carried out bythe Government today in its proposals for a reduced import duty on tobacco. I repeat the assurance already given that the Government will do all it possibly can to encourage and maintain the local industry. There is power in the hands of the Government to provide that the industry obtains a fair deal from those who purchase and manufacture the product of the growers, and this will be used in a proper way.
– Can the Government give an assurance also that the Tariff Board will at once inquire into the position of the industry generally ?
– The members of the select committee appointed by this House had an opportunity of investigating the conditions in the industry, and although charges had been levelled against the manufacturers, nothing appears in the committee’s report to bear out those charges. The Tariff Board has further investigated the matter, and the Government is acting on its report.
– There was one charge in the report of the select committee, and that was that the manufacturers were making too large a profit.
– The tobacco industry is fairly well organized, according to the representatives that recently interviewed the Minister for Trade and Customs and myself.
– They cannot be blamed for that.
– I was glad to note that organization. The Government will be only too delighted if the association will keep in touch with us, so that from time to time we may discuss the interests of the industry, and understand the difficulties of the growers. The Government will be prepared to help the industry, so far as possible. The House must realize that reasonable consideration is being given to every aspect, of the case, and that the Government may be relied upon to consider the claims advanced, even the arguments put forward by the Country party.
– Does the right honorable gentleman say that these will be further considered?
– I have said that.
– I approach this subject, not in any spirit of enmity towards the Government, but in a friendly way, with a strong desire to assist the Ministry, if it desires any help in the matter. I am quite satisfied, however, from the trend of the debate, and the attitude adopted by the Prime Minister (Mr. Lyons) and the Minister for Trade and Customs (Mr. Gullett) towards the deputation of growers which waited on them last week, that they do not want assistance. It seems that the Government, whether it is right or wrong in the action it has taken, intends to stand to its decision, and take the consequences. Such a spirit does not conduce to co-operation, and members like myself, who represent tobacco-growers and know something about this industry, are forced to stand up to the responsibility placed on them by their constituents, most of whom are primary producers. If the Government does not intend to adopt a more sympathetic attitude than it has already shown to the industry, I shall not be afraid to do whatever I can towards bringing about a prompt settlement of this difficulty in the interests of Australia. The Prime Minister has remarked that the Government has broken no contract with the growers. Nobody pretends that it has; but it is guilty of an absolute breach of faith. Certain statements were made on behalf of the Government, but not by the Prime Minister; nobody could pin him down to any statement. The Attorney-General (Mr. Latham) who, the Prime Minister declared from every platform at the last election, shared the throne with him, definitely announced that nothing would be done to injure the tobacco-growers, and that statement was disseminated by the press throughout Australia.
– I admit that the Attorney-General did not go so far as to say that the Government would not alter the duties - he could not promise that, because his party was not then in office - but United Australia party candidates were bombarded from every part of Australia with questions as to whether they, if returned to .power, would do anything to injure the tobacco-growers. From the candidates were received the most sympathetic assurances, and from the present Attorney-General a definite promise that the position would be reviewed with a desire to help rather than injure, the growers. I can furnish proof of that. The Prime Minister recognized that it was necessary to reassure people who thought that their interests might be disastrously affected by a sweeping alteration of the tariff, and in his policy-speech he said -
Thu electors will bear in mind that on the Opposition (United Australia party) side of the House, there is no whipping on the tariff.
From that definite statement he apparently has already departed. On this tariff issue that has turned rural Australia upside down-
– This is a financial issue.
– I regard all the talk about the need for conserving the revenue as merely a smoke screen behind which the Ministry is hiding. The Prime Minister’s assurance has been deliberately ignored. Ministerial members who represent tobacco-growers, and are’ anxious to do right, have been coerced, so that if a division is taken they will have to support the Government. Three months after assuming office, the Government, al its first attempt to deal with a matter affecting the problem of unemployment, gets itself into bad odour throughout Australia. Were not the electors assured that unemployment was the principal problem to which the Government would apply itself? Yet when we of the Country party offer to help the Government to do its job, how does it respond? Although we have given the House an assurance that the industry employs a certain number of men, and that if the Government persists in its policy thousands will be thrown out of employment, Ministers refuse to accept our evidence. We have brought the growers to Canberra to present their own case. Their facts cannot be disturbed by Ministers, who are merely repeating the arguments of treasury and customs officials and the tobacco combine. We asked the Government to examine our representations, but without doing so, it declared that they are wrong, and, in any case, it intends to continue the course upon which it has started. Witnesses from all over Australia came to Canberra and definitely assured the Government that approximately 15,000 people were employed in the tobacco-growing industry. That may sound ridiculous.
– It is, and the honorable member knows it.
– The Minister for Home Affairs (Mr. Parkhill) knows nothing about the industry; he does not even know what the country looks like.
Several honorable members interject
– I warn honorable members not to interject incessantly. More than ordinary latitude has been allowed in this debate, because of the importance of the subject, but the Chair will not have its calls to order ignored. I ask the honorable member for New England (Mr. Thompson) not to take notice of interjections.
– There are 4,000 registered growers; every man who registers must be a grower, even if only in a small way. Tobacco cannot be grown without labour, and if there are 4,000 growers, there must be two or three times as many employees. In my own electorate where twelve months ago. not more than 30 or 40 men were growing tobacco, there are to-day between 700 and 800 growers. Farmers who went out of this industry have returned to it, and are employing a large number of men. One employs 40 hands. In the final stages of the crop when the labour has to be increased, and curing undertaken, a man cultivating five or ten acres will employ four or five men. Queensland representatives have assured the House that thousands of men are growing tobacco in the Mareeba district, which previously was almost uninhabited. At Ashford, near Texas, in my own electorate - which was a district practically without population two years ago - 400 men are employed in growing tobacco. There are no unemployed in the district; all the men who previously were on the dole have been absorbed. During the recent election campaign I met men who had been dismissed from the Sydney bus services, and were engaged in tobaccogrowing, in the hope of making a few pounds to give them a new start in life. Honorable members need not doubt the reliability of our evidence regarding the amount of employment which this industry affords. It is the only new industry that can furnish definite proofs that it is absorbing the unemployed; it is a rural industry, yet it is selected by the Government for its first smashing blow. The Prime Minister gave to himself a lot of kudos for the introduction of an amending tariff schedule, and indulged in the usual gibes about the Country party wanting duties reduced on all commodities that did not affect their constituents. Can the Government justify reducing by 40 per cent, the protection given to a new industry? Can he point to a similar cut iu respect of any other industry? If he believes that it is just, I invite him to apply it to the highly-protected secondary industries. I do not pretend to be a “ know-all “ on this’ subject, as the Prime Minister suggested, but I remind the House that I was chairman of the Select Committee on the Tobacco Industry; that I have lived in a tobacco-growing district for many years ; that I have been the recognized advocate of the growers ever since I have been in this Parliament, and that for years I was president of the Australian Tobacco-Growers Association. Having had that experience I am entitled to claim some knowledge of the industry. We are told that the industry is given protection equal to 300 per cent. That is not true. If honorable members will consult the report of the select committee - not the foolish report of the Tariff Board - they will find that the manufacturers gave sworn evidence that they could pay a duty of 3s. 6d. per lb. on American tobacco and still market it at a margin of -Jd. per lb. below the Australian article. They said that the local tobacco leaf is heavier, and has a higher moisture content, and that by the time it is ready for manufac’ture, so much wastage has occurred, that they find the imported article more profitable, notwithstanding the duty. The select committee probed that astounding statement and ascertained that the wastage was due entirely to the manufacturers, for whereas American tobacco is matured for four years, the Australian article is bought from the farms and rushed into the factories. Witnesses admitted that until Australian production can be so increased that manufacturers can purchase a surplus for storage, maturing in the American manner will be impossible. A consideration of the facts disposes of the contention that the industry receives a protection of 300 per cent.
– What protection did it get under the Forde tariff?
– When the ‘duty was 3s. 6d. per lb. the manufacturers paid for the leaf only an average of ls. 6d. or ls. 9d. per lb. The growers have had no chance to test the Forde duties. This is the first season in which they have had an opportunity of marketing their product at a decent price. The action taken by the present Government has destroyed the market, and the growers are faced with a reversion to the days when manufacturers could reject a big proportion of the crops and offer” ls. 6d. or ls. 9d. per lb. for the balance.
The House has been told exaggerated stories of the profits earned in the industry. . Many growers get a crop only once in three years. More risks are associated with this industry than with any other of which I have knowledge. I am moved almost to tears when I see young Australians, not Chinamen, crawling on hands and knees about the plants to remove cut-worms, grubs, and other pests. One man had to replant twelve times- before he was able to beat the pest and obtain a crop. Growers pay £1 a thousand for tobacco plants, and they need 5,000 to the acre, so that a man might spend £20 or £30 on a farm before his plants struck, and were clear of pests. The tobacco plant is subject to attack by blue mould, the deadliest enemy of the Australian tobacco-grower. I assure honorable members that the idea of growers making tremendous profits is altogether wrong. A man may make £100 an acre this year, but for the next two or three years his earnings might not be 2s. an acre. It is because tlie average profit is so small, and the present conditions of the industry are so precarious, that our growers require a considerable margin of security. I do not accept the report of the Tariff Board in any particular, because I am satisfied that it3 procedure is wrong in principle. I have appeared before the board on three occasions, and I know that much of the sworn evidence that is given before it is untested by crossexamination, and, therefore, has little value. Many of the recommendations of the Tariff Board are based. an foundations too insecure to justify a National Parliament in forming determinations upon them which may vitally affect the interests of tens of thousands of people. 1 sincerely trust that the Government will reconsider the constitution of the board, or possibly, appoint a body that will at least make reliable and ac- curate recommendations upon which this Parliament may act.
– Order ! The honorable member must confine his remarks to the motion. He is not in order now in discussing the Tariff Board as an agency of Parliament.
– I shall give honorable members an instance of my experience with the board, which relates directly to the tobacco industry. Some years ago the board went through tobacco-growing districts, and took evidence from growers. Although I was allowed to advise the growers, I was not permitted to appear for them and ask questions. After taking the evidence from the growers, the board found itself unable to unravel the position, and I was told by members of that body that unless I went to Melbourne and stated the case of the growers they did not know what would happen. I prepared the case, went to Melbourne, and appeared before the Tariff Board. Although a number of represents fives of the tobacco combine were present, I was not crossexamined; but as soon as my back was turned those representatives gave evidence contrary to mine, which was quoted at length by the board in its report. The statements of the combine representatives were accepted and mine rejected, without either being tested by cross-examination.
The revenue position is being used by the Government purely as a smoke screen. If that were not so, the Government would evince a greater desire to consider the whole economic position. Is it to be expected that the tobacco industry is to effect the financial rehabilitation of Australia? Already it is contributing £6,500,000 per annum. Is that not enough? It is the only one of our new primary industries that is absorbing unemployed. From £400,000 to £500,000 of new capital has been sunk in it, and thousands of persons are depending on the industry this year and in years to come as a means of income. The Government rejected an alternative scheme that was submitted by the Country party, and it accepted the statements of Treasury and customs officials. I know that those officers try to do their best. A number of them gave evidence before the select committee that inquired into the tobacco industry, and I found that they were very much in the dark as to the economic position of a number of industries with which they dealt. All that concerns them is bow the revenue of the country may be affected.
The Prime Minister referred to the heavy bounty that would have to be paid if the Government adopted the suggestion of the Country party, and kept these men on their farms. He did not mention that every acre under tobacco cultivation produces a revenue of £1S0. Is it not better to have that tobacco grown here by our own folk than to import the negro-grown product of the United States of America? If the Government will re-establish the select committee on tobacco, with mc as chairman, I undertake to prove that the policy of the Government can result only in taking the bread out of the mouths of Australian farmers and children and putting it into the mouths of American negroes.
My party does not wish to make political capital out of the issue. I am most upset to think that the Government should make such a tremendous blunder so early in its career. Only a little while ago the people in the country districts were most enthusiastic as to the future of Australia under the new government. Now they are plunged into despair, and actually cursing the Government. Many who voted for this Administration now pray that it will be defeated, because they fear that otherwise their bread and butter will be taken from them. I assure the Government that if the general election was re-fought to-morrow there would be a tremendous revulsion of feeling in country districts. I should not like to go out and face the tobaccogrowers after this act of repudiation. Wherever I went during the election I was asked by growers what I thought would be the position if the Scullin Government were defeated. I assured them that it would be all right, that the tobacco industry was well established in Australia, and that no government would close it down. Invariably I heard the reply, “ Well, we are afraid of Mr. Gullett “. They had good reason to be afraid of that gentleman.. It is not the Prime Minister, his Government, or the party he leads, that has done this thing, but the honorable ment-, her for Henty, the Minister for
Trade and Customs (Mr. Gullett), who has throughout shown himself the implacable enemy of the Australian tobacco industry. That can be proved by a reference to Hansard. My efforts would have been unsuccessful when I moved for tlie appointment of a select committee to inquire into the tobacco industry had not the numbers been behind me. This is the only new industry in Australia that has been of value to the country in the last three years, yet this Government, not three months in office, selects this useful primaryproducing industry and deals it a smashing blow, which cannot be justified by any process of logic. There are other ways of raising revenue-
– The honorable member would like to see a further cut in old-age pensions, perhaps.
– That certainly is not my desire. I assure honorable members that the tobacco-growers do not want to escape their obligations. The Government has selected the tobacco industry to carry the whole of the load of this additional taxation. It will find its purpose thwarted. Its revenue calculations will be proved to be wrong, because the industry will go phut; instead of 4,000 there will only be 400; or perhaps only 40 persons engaged in tobacco-growing. I remind honorable members that when the Great War broke out Australia found itself unable to import tobacco, with the result that the manufacturers sent their representatives around the country urging all and sundry to grow tobacco. They bought anything that looked like tobacco. I have been told that they even prevented growers from wasting sweepings. When the war was finished the attitude of the manufacturers underwent a change; once more they had access to their old source of supply. If a war broke out in the Pacific, and our trade routes were interrupted, we should again be short of tobacco, for it could not be produced in a night. For the last 25 to 30 years the tobacco manufacturers have been able to regulate the prices that they pay to the growers for their leaf, and they have made £1,000,000 a year out of the Australian smokers. Now that we have the position in our own bauds this Government that the country people helped to put into power conies along seeking to smash the industry. It is a tragedy. I warn the Government that it would be wise to retreat from its position before it is too late.
.- The Deputy Leader of the Opposition (Mr. Forde) i3 a dyed-in-the-wool prohibitionist, and, in showing an almost wanton unfairness by not quoting all the relevant portions of the statements of various members of the Government which he read, hegave a speech that was true to form. The Leader of the Country party (Dr. Earle Page), in a most moderate and conciliatory way, advanced an alternative proposal to the Government’s, and did so in a manner which demands for it serious consideration. That consideration it will receive. The honorable member for New England (Mr. Thompson), however, under a cloak of professed friendliness, and behind a profession that he did not desire to make political capital, delivered a speech which was full of venom, and in many particulars inconsistent with his previous utterances. His was a speech which makes one understand why the New State movement, which is capable of doing much good in Australia, has remained sterile. When it is supported by men who change their opinions to suit their political needs, one can understand what a liability they must be even to a cause as sound as the New State movement.
It is not very long ago since another primary industry experienced an unhealthy boom after it had received very generous help from this Parliament. I refer to the doradillo grape-growing industry, which concerns more particularly South Australia. Dyring the war prices for these grapes had been high. There was a rapid expansion of the industry, and generous treatment was meted out to it by the Government. In the course of time it became evident that this assistance was leading the industry into trouble by creating an artificial boom. The Deputy Leader of the Country party (Mr. Paterson) introduced a measure which I now regard as having been justified, although at the time I criticized it.
Owing to the increased preference granted by Britain, a bill was introduced reducing the bounty payable on wine exported. The honorable member for Capricornia (Mr. Forde), speaking on that bill, said -
The Minister knows that this bill will bring ruin to thousands of grape-growers in Victoria, New South Wales, and South Australia. They will not be able to lind a profitable market for their fruit.
The comment from the honorable member for New England was “ bunkum !”
– I ask the honorable member to withdraw that statement. I never used the word.
– It is in Ilansard, volume IIS, page 4,328. The Leader of the Country party has just said that it was a new experience for a Minister representing’ any Government to say that it was a good thing for assistance to be reduced so as to check a boom. The present Deputy Leader “of the Country party, when he was Minister for Markets, did not express himself explicitly in those terms, but he gave a vivid account of the ruin facing the doradillo grape-growers as a result of the over-expansion of their industry. He said -
In 1924 a crisis occurred in Australia in the doradillo grape-growing industry. During the war period the production of doradillo grapes had been a highly profitable industry, and many returned soldiers were settled on blocks by the State governments, and encouraged to produce doradillo grapes. In a very short while the production of these grapes became greater than the demand, and as they are practically a distillation variety used almost wholly for the production of spirits, and not particularly suitable for the production of wine other than for spirit purposes, there was a glut of this spirit on tlie market, and the industry was faced with ruin.
I am not criticizing the original bounty of 4s. a gallon paid by the Government nf which the right honorable member for Cowper (Dr. Earle Page) was Treasurer, but that Government did right to reduce the bounty when it became evident that the industry was experiencing an unhealthy boom.
I take particular exception to the statement of the honorable member for New England that the alteration of the tobacco duties by this Government amounts to repudiation. The Deputy Leader of the Opposition (Mr. Forde) quoted a published statement of the Attorney-General (Mr. Latham), but omitted a relevant sentence. I have here Mr. Latham’s statement as published in a booklet issued by the Colonial Tobacco-growers Proprietary Limited, of Myrtleford. The statement is as follows: -
Tariff Changes not Contemplated.
In view of statements made by the Labour candidates, particularly in Queensland that, if returned to power, the United Australia party would make immediate and drastic changes in tobacco duties, the Deputy Leader of the party (Mr. Latham) issued a statement yesterday in which he emphatically denied the assertion. Mr. Latham said that the United Australia party did not contemplate drastic changes to any item in the existing tobacco schedule. As Mr. Lyons had said in his policy speech, no changes of importance would be made except upon the recommendation of the Tariff Board. The party wanted, in every reasonable way, to foster the tobacco-growing industry in Australia.
The Deputy Leader of the Opposition may have quoted from a different paper, but he certainly omitted the very important portion of Mr. Latham’s statement which refers to action after report by the Tariff Board.
– The proposals of the Government differ from those of the Tariff Board only to the extent of increased protection for Australian tobacco suitable for cigarette making, and that is a class of tobacco the production of which it is most desirable to encourage. Both the Country party and the Opposition have put forward suggestions which they say will safeguard the revenue if the duties are altered as they propose. In the opinion of treasury, customs and excise officials those proposals will not result in the same revenue being obtained. In the event of certain estimates of the Australian crop proving correct, the revenue received will be very much reduced. The burden of their argument is that the additional revenue can be obtained by still further raising the duty on imported leaf, either in the form of customs duty as proposed by the Labour party, or by an additional excise dutywhich is in effect the same proposal in a more complicated form - as put forward by the Leader of the Country party (Dr. Earle Page). Either of these proposals, if adopted, would result in the aggregate tobacco bill to the consuming public being increased. Various estimates, ranging from a little under1s. to1s. per lb. have been made of what it costs to land American leaf in Australia. Last year the price paid to the Australian growers averaged 3s. per lb. The Tariff Board had access to the actual accounts of the buyers, and it ascertained that the price paid was in the region of 3s. per lb. averaged over the whole crop.
– The growers admit that.
– If the protection remains the same, and there is an increase in the use of Australian leaf, the public will have to pay approximately 2s. per lb. more on every additional lb. of Australian tobacco used. The idea in both amendments is to keep the total revenue approximately the same as it was last year, and over and above the revenue which the Australian consumers must find, there will be paid for the Australian-grown leaf 2s. per lb. more than is being paid, including exchange and freight, for the imported leaf to the American exporters or, as the honorable member for New England (Mr. Thompson) said, to the negro growers. I do not think, however, that many pence find their way to the negroes. Assuming that the consumption of Australian tobacco increases from 2,000,000 lb. to 6,000,000 lb., the consumers will have to pay an additional £400,000 for their tobacco. That is the extra cost of protection as distinct from the revenue impost, assuming that consumption remains the same, although it is almost certain that the additional cost will result in some reduction.
The right honorable member for Cowper pointed out that the Australian tobacco-growers were not taking full advantage of the protection amounting to 5s. 2d. per lb. Whether the quality of their tobacco is good enough to enable them to do so is, of course, open to debate ; I do not offer any opinion on that, not being a smoker. It is quite evident that there is a considerable margin on which to come and go. Of course, a reduction of duty will naturally force down the price to some extent, but according to the estimates given by the Tariff Board, and by the Minister for Trade and Customs (Mr. Gullett), there would be a certain limit to the reduction in price, probably from 8d. to 9d. per lb., which is not a smashing reduction. What is important from the point of view of a representative of the primary producer is whether that reduction is so severe that it will put the industry out of existence, or whether the industry cannot stand a relatively smaller protection of 3s. per lb. which still secures to it a price two and a half times the value of the leaf landed in Australia, certainly much in excess not of the negrogrown leaf only, but also of the Canadiangrown leaf. We have also to consider whether the amount of employment that the protection provides is really worth .the additional tax upon the community generally. There is abundant evidence in the Tariff Board’s report to the effect that over a period of years a price of 2s. per lb. would be quite profitable in districts suited for tobaccogrowing. There is in the report a great deal of evidence showing that people are rushing into this experiment in a great many places in which nothing has beer done up to the present to demonstrate that the land is suitable for tobacco-growing. In those districts there will be failures whatever the price may be. The growers cannot expect to make a success of tobacco cultivation in every district and it is unfair to the taxpayers and consumers to impose a duty in an attempt to make this possible regardless of cost. If that were possible they would hopelessly overproduce.
– We could then export.
– How on earth does the honorable member think that we can build up an exporting industry if it cannot carry on to-day under a duty three times greater than that operating in Canada, a country which is right alongside of the United States of America ?
– We are exporting today to New Zealand and the South Sea Islands.
– -It must be under the dumping system or one similar to that of marketing sugar produced in Australia. We could export almost any product if it were subsidized heavily enough. We must reduce costs, not only in this industry but also in all industries. I appeal particularly to members of the Country party to reconsider this proposal. Surely they do not contend that because an industry is a rural industry it is fair to give it extreme protection to enable it ito raise its price even to three times its world value. In that event what chance would we have of bringing do”wn the Australian cost level? If that level is not brought down, what chance is there for this industry to build up an export trade? What chance is there for our exporting industries to continue to export ? What would be the position of the wheat-growers if they were able to raise their price, not three times, but merely one-third, above world parity? This year the wheat industry has been passing through a difficult period of reconstruction. The bounty of 4£d. a bushel is undoubtedly of some help. It is about 12 per cent, of the world price. We cannot afford to increase bounties to the big industries, yet their claim is infinitely greater than that of this industry, because if those industries were given the assistance asked for by this industry, they would absorb nearly all our unemployed. For instance, if mixed farming were subsidized by trebling the price of meat, the additional work in fencing and effecting water improvements would absorb a huge number of unemployed. I appeal particularly to the members of the Country party not to turn from the one road which does hold some hope of recovery to Australia, particularly to the wheat, wool, and dairying industries, the bigger industries that are worth while.
– I thought that the honorable member was advocating tariff reform.
– Tariff reform is the way to bring that about. I have on occasions co-operated with the members of the Country party and no one regrets more than I do that one of their number is not occupying the position that I now hold in the Ministry. I have believed that they are sincere in the crusade to relieve the burden of costs, to assist the export industry, and to help this country out of the existing depression. But if they persist in their attitude I shall be seriously disillusioned. I am satisfied that they, as well as the Government, will give further consideration to the proposals which have been put forward in all sincerity .as a part of a comprehensive scheme to bring down the Australian cost level, and to place this country on the road to prosperity.
.- Tlie Minister who has just resumed his seat has stated that the report of the Tariff Board contains evidence to the effect that a price of 2s. per lb. for tobacco leaf would be a paying proposition. There are two instances of such evidence being given. I was a member of the Select Committee on Tobacco which took evidence for some months throughout the Commonwealth, and I believe that evidence to that effect was given at Wangaratta. But few witnesses agreed with it because of the impossibility of guaranteeing an annual return from the tobacco crop. I know of no crop that shows as many possibilities of ruin as the tobacco crop. It is a delicate crop to rear, and, therefore, the growers should get a better price for their leaf when it is harvested. The Minister quoted the statements of two men. One lived at Texas, and was not in the tobacco business or did not give evidence, and the other was Mr. Gray, whose evidence was largely ridiculed by other growers, in 1929 there were in my own electorate one or two tobacco-growers. To-day there are about 480 registered growers engaged in tobacco cultivation in areas surrounding Cairns, Townsville and Mackay. I do not know what acreage is under cultivation, nor do I think does anybody else ; but this year many of the growers will harvest no crop at all. A serious mistake was made by the Queensland and Victorian Governments, when they induced people to go on the land in large numbers to engage in tobacco cultivation, without first having received tuition. As a member of the select committee I was associated largely with men who had made a special study of the tobaccogrowing industry, and their advice should he available to those who intend to seek a livelihood on the land from tobaccogrowing. In -the early stages at Mareeba, on the tablelands of Queensland, that system was adopted by the Queensland Government. In 1930, that Government, on the advice of Mr. Howell, the representative of the Commonwealth, limited the number of people to be settled on the land. It settled 25 or 50 persons on the land, and instructed them regarding the production of crops. Those growers, in turn, were able to assist others to settle in adjacent areas. To-day the number of growers registered in Queensland is 1,663 as against 48 in 1929. Those figures, which were supplied by the Customs Department, show that there is a great desire on the part of many people to keep off the labour market. The majority of those settlers had from £200 to £1,000. They invested their money in the undertaking, and secured financial assistance to enable them to build curing barns and to effect other imporvements. This adverse tariff will have the effect of ruining many of those, people.
Like other honorable members I have received many telegrams and letters from growers pointing out that they have invested money in the industry, and that it will he impossible for them to carry on under the new duties. The Minister for Markets (Mr. Hawker) has stated that no promise was made to the growers that the existing protection would be continued. But the latter part of the statement read by him did not appear in a Queensland newspaper, for a very obvious reason. The total yield of tobacco in Victoria, according to the Tariff Board’s report, page 7, over a ten-year period was 544 lb. to the acre, and for New South Wales 950 lb. to the acre. The Minister lumped those two items together and took the average poundage produced per acre as from 700 lb. to 800 lb. I suggest that that is not a fair estimate at all. A few years ago a greater acreage of heavy tobacco was planted. The select committee, during its inquiry, learned that one of the difficulties confronting the BritishAustralasian Tobacco Company was its inability to obtain the quantity of bright leaf necessary to enable it to purchase the whole of the crop. A heavy tobacco leaf naturally has a greater weight per acre than bright leaf. The estimate of the Queensland production is 520 lb. to the acre. As a matter of fact last year in Queensland rarely did the weight per acre reach 600 lb. In any case, the Tariff Board was prepared to use those figures. But the fact that a lighter leaf is now being grown means that a lighter crop is being harvested. Those who are well acquainted with the tobacco-growing industry know that the leaf grown to-day is very much smaller than the leaf of years ago. The tobacco combine wants the smaller bright leaf, aud, therefore, the growers produce it.
The Tariff Board deals, on page 25 of its report, with the alleged unsuitability of some districts for tobacco growing. Itsays -
The unsuitability for tobacco growing of some of the districts in which production was attempted, together with the faulty cultural practices and the comparative slowness on the part of growers to adopt flue curing, combined to make the average quality of Australian leaf unsatisfactory, and thus reduced the demand for Australian leaf.
The evidence which the select committee obtained on this subject was to the contrary effect. Except in the case of a few Chinese growers, the settlers occupied suitable land. Years ago the tobacco combine took all the tobacco that was produced, whether it was sun-dried or not; but subsequently, when a request was made for a different grade of leaf, the growers, as the officers of the combine admitted, immediately set about carrying out, the wishes of the combine. It was only after the combine said that it was not prepared to purchase heavy dark leaf that any definite attempt was made, or was necessary, on the part of the growers to produce a different quality of leaf. The company’s officers admitted that as soon as a request was made for flue-cured tobacco, the growers built fluecuring barns, and did their best to produce an improved quality of leaf.
The next extract which I shall quote from the Tariff Board report reads as follows : -
The growers contended that the protection of 2s. per lb. was not sufficient to turn the demand to Australian leaf, and that the company manufacturing a very large percentage of the tobacco in Australia made little attempt to encourage the demand for the Australiangrown produce.
Against this statement it was claimed on behalf of the British-Australasian Tobacco Company Proprietary Limited that by its generous contributions, financially and otherwise, towards the cost of experiments and investigation in connexion with tobacco growing and by its undertakings to purchase locally-produced leaf at prices favorable to growers, the company had given every encouragement to the local industry.
I suggest to honorable members that by far the largest proportion of the money contributed by the tobacco combine ostensibly for the purpose of encouraging the tobacco-growing industry was used to provide certain individuals with good jobs. These gentlemen travelled from one end of Australia to the other. No doubt they imagined that they were doing something to assist the tobacco industry; but in the doing of it they had a -good time and incurred heavy expenses. I do not think that the tobacco-growers themselves received much benefit from the expenditure of this money, although, possibly, the combine expected that they would do so. 1 told several officers of the company, including Mr. Swinson and Mi1. Bentley, that the combine could have exercised a much more effective supervision over the expenditure of the money than it did. I do not deny that the combine contributed a fair amount of money in one way and another; but we had ample evidence of the way in which the money was spent iu a statement of receipts and expenditure placed before us by the Secretary of the Development and Migration Commission.
At the foot of page 5 of its report, the board made the following statement: -
The board has sought the advice of the various departments of agriculture in the States, as to the extent of plantings for the present season, but full particulars arc not yet available from al! States. Calculating on the basis of the various estimates submitted during the inquiry, it appears probable that from 20,000 to 25,000 acres have been planted for the 1932 harvest. It must not bc overlooked, however, that apart from the . normal risks due to adverse climatic conditions aud disease, a considerable additional percentage of failures must be anticipated on account of the inexperience of many growers, and the fact that many of the areas planted have not been previously tested as to their suitability or otherwise for the growing of tobacco.
While it is recognized that no reliable estimate of the acreage, under tobacco for the 1932 season can be made, it is quite certain that the area is very large indeed. Given favorable conditions, the seed sown is capable of producing leaf sufficient to manufacture a very large proportion of tlie tobacco normally consumed in Australia.
There is room for a difference of opinion as to whether much unsuitable land was placed under tobacco cultivation. The same comment may also be made on the statement of the board that the area under cultivation for the 1922 season is “ very large indeed.” It appears to me that the estimates made of the area under cultivation have been based on loosely collected information. We have not had one definite estimate put before us. I do not think that the area of land under tobacco cultivation in Australia is anything like so great as we have been told. I doubt whether half the estimated area under cultivation has been planted, or is likely to bc planted.
The board deals, on pages 8 and 14 of its report, with the statement that an inflated value has been put on land suitable for tobacco culture, but no instances of such inflation of values are given. A member of the deputation which waited on the Prime Minister and the Minister for Trade and Customs on Friday challenged the Government to give one instance of inflated land values. Except in the case of “go-getting” organizations, respecting which the people of Australia and tlie Governments of Queensland and the other States were warned by the chairman of our select committee, I know of no cases of inflated land values. The prospectuses issued in two States contained the names of two government experts, and these may have had the effect of causing some inflation of land values in the districts concerned; but to my knowledge there has been no inflation in the value of land suitable for tobacco culture in Queensland. In order to fortify my opinion on this point I telegraphed the authorities in Queensland for information, and to-day I received the following telegram from the Land Administration Board : -
Crown lands at Mareeba made available tobacco homesteads at 2s. (id. per acre payable over ten years. Personal residence of applicants required in order prevent speculation. Three hundred twenty-nine blocks comprising 51,000 acres settled on these terms. Large number of blocks still available at 2s. Gd. A few blocks were auctioned without conditions by Crown, highest price realized as freeholds under £3 per acre payable ten years at five per cent.
The select committee obtained expert evidence to the effect that the tobacco lands of Queensland were equal to those of any other part of Australia. Mr. Tregenna, who was then and still is, I think, the tobacco expert of the New South Wales Government, referred to Mareeba as “ the Virginia of Australia “. He said that there was no doubt that it produced the best leaf in the Commonwealth, but there has been no profiteering in the tobacco lands of that State. In order to prevent such speculation, the Government made it a condition of the lease that th’i successful applicant must reside on the property until he had fulfilled the contract which he entered into. In these circumstances it can hardly be argued with justice that speculation is likely to occur. The Queensland Government determined that the settlers on its tobacco lands should be citizens and not speculators.
On page 10 of its report the Tariff Board states that -
The price offering for leaf will be governed also by the consumption of the manufactured tobacco, and in this connexion there is a danger that if tlie change over to Australian leaf is brought about too precipitously the consumption will fall off. Should this happen, the demand for leaf will be reduced and the price will fall, irrespective of what duty is operating on the imported leaf. With so many factors affecting the price it would be futile to attempt to state the price at which leaf would be sold under any given rate of duty.
I remember that on the first occasion on which I spoke in this House in favour of the appointment of a select committee to investigate the tobacco-growing industry the same old Aunt Sally was set up. We were told then that it was unlikely that we would be able to produce first-class tobacco leaf in Australia for many years, owing to the likelihood of the crop being impregnated with eucalyptus; but that fear has been definitely overcome. The only reason why the Australian people do not smoke Australian tobacco leaf exclusively is that there is not sufficient available for them to do so. To say that the tobacco industry should not be given too much assistance in its development is like saying that our growing children should not be given too much food and fresh air.
On page 13 of its report the Tariff Board says -
It is generally recognized that the tobacco industry is a legitimate source of revenue, but those opposing any increase in excise duties consider that the maintenance of the existing total taxation on tobacco will reduce consumption which, in turn, will tend to cause a contraction of revenue. Against this, it may be pointed out that in the United Kingdom, where until recently tobacco leaf was dutiable at the rate of 8s. lOd. per lb., the total revenue from tobacco, and its products for the year 1929-30 was £62,000,000, equivalent to 27s. 2d. per capita.
Ithas never been denied that the tobacco industry is” a legitimate source of revenue “. The select committee, even after it had concluded its investigation, was frequently called into conference by the Government of the day to discuss with the Minister for Trade and Customs and the representatives of the tobacco combine proposed action with the object of encouraging the industry. It was pointed out then, and more than once during the investigation by the committee, that the diminution in revenue from import duties due to the increase in the production of locally-grown tobacco would naturally lead to an increase in excise duties in order that revenue needs could be met. Everybody appreciated, even at that time, that the revenue could not be allowed to suffer unduly. When the Australian tobacco industry became self-supporting through having secured the local market, it was realized that the excise duty would have to be sufficient to meet legitimate revenue needs.
I wish now to refer to the financial position of the manufacturing side of this industry. Although the select committee showed clearly that certain interests were making very large profits from the industry, I find nothing to that effect in the report of the Tariff Board. It is necessary, therefore, that I should quote two or three newspaper extracts in this connexion. The following report is taken from a column in the Melbourne Herald of the 23rd January, 1930, conducted by Mr. Harold Burston : -
Declared net profits for the British Tobacco Company (Australia) Limited exceeded the million mark for the first time in the year ended 31st October. The popular belief that this dominating organization in the Australian tobacco trade had been prospering to a greater extent than its dividend rates indicated, was confirmed in the1928 financial year, when subsidiary reserves were drawn upon for the huge amount of £2,324,131 to pay a bonus of 40 per cent. on scrip.
From the Melbourne Age of the 23rd January, 1931, I have taken the following report: -
Accounts of the British American Company for the year to 30th September last are to hand by this week’s mail from Loudon. Net profit was £6,501,560, or £143,788 more than for 1928-29. Dividend on the ordinary shares again is 25 per cent., and takes £5,895,180. Preference capital was increased in the year by an issue of £6,000,000, and dividend on preference shares requires £555,000.
Profits shown do not include the proportion of the undivided revenue of the subsidiary and associated companies. Sir H. Cunliffe-Owen, one of the directors of the British-American Tobacco Company, is on the board of the British Tobacco Company (Australia) Limited, Melbourne.
In the Melbourne Herald of the 14th January, 1930, the following report appeared : -
Carreras Limited, which maintains a large connexion with the Australian tobacco trade, reports a record net profit of £1,285,154 for the year ended 31st October. It exceeds the total for the preceding twelve months by nearly £131,000.
Ordinary shareholders received £703,125 in dividend of 50 per cent., free of tax. The 25 per cent. capital bonus distributed at the beginning of the year ranked for this dividend, which is therefore equal to62½ per cent. on the 1927 capital.
It is proposed to allot another 25 per cent. bonus by capitalizing £351,563 of the undistributed profits, amounting to £1,140,728, shown in the latest accounts. The company has become remarkable for these regular yearly capital distributions. They are piling up fortune’s even for the smallest holders of the Carreras shares marketed less than a decade ago. For example, a man who bought 100 ordinary shares at about par in 1921 and has retained his interest until to-day, finds himself in possession of 586 £1 shares, which, at their present market price of £14 eachrepresent a capital value of about £8,204. This, of course, takes no account of the tax-free cash distributions which for each of the past six years have been at the rate of 50 per cent.
The Brisbane Courier, of the 27th February, stated -
In an interview yesterday, Mr. Norman T. Walsh, director of North Queensland ‘Tobacco Manufacturers Limited, said that the Federal Government’s proposed alterations of tariff and excise duty on tobacco were astounding. According to the reports, it was proposed to reduce the tariff on imported leaf from 5s. 2d to 3s., and at the same time to increase the excise duty on locally produced leaf from 2s. 4d to 4s.6d. The effect of this would be to give an advantage to the imported product of 4s. 4d. per lb. The industry was practically in its infancy, but under the existing tariff it had grown steadily, and its possibilitiesas a producer of wealth and as an employer of labour, both on the primary and secondary sides, were enoromus. The imported leaf was a black-grown product, yet the Government was asking the white-grown product of Australia to compete with it at such a disadvantage. If these proposals should go through, it would mean the destruction of the industry.
In the same journal, on the same day, the following statement also appeared -
Concern over the decision in respect of tobacco imports was expressed also by the management of the National Tobacco Company Limited. The general manager (Mr. L. Dorin) said the average price of Queensland tobacco last year was 3s.9d. per lb., but the importer could import tobacco at 3s. 7d. per lb., allowing for the refund on the stalks. The Australian manufacturers could not ask the public to pay a higher price for the Australianmade article. The 4s.6d. excise and 3s. 9d. for leaf made a cost of 8s. 3d. on the Australian manufacturer, without considering the expense of manufacturing. The company used to sell at6d. per oz., but under the new conditions it would not be able to sell for less than10d. per oz., which workmen could not afford to pay. The industry, therefore, would be practically wiped out. The number of families engaged in tobacco growing in Queensland was 1.200, and there were 1,500 registered growers.
One of the statements in the GovernorGeneral’s Speech was that the Government desired and intended to place upon private enterprise the onus of providing employment. That statement has been repeated in this chamber by the Prime Minister, the Minister for Trade and Customs, and other members of the Cabinet, particularly the Assistant Treasurer (Mr. Bruce), and I submit that the tobacco industry is one which is providing employment for a large numberof persons, apart from those directly concerned in the industry. I refer to those now engaged in such work as the erection of curing barns for tobacco-growers. I disagree with the Government in saying that its action will not have a harmful effect on the industry. Will confidence be instilled in those who may be in a position to employ labour when it is realized that this Government has now repudiated the decision of a previous Parliament to give certain protection to the tobacco industry? The Prime Minister (Mr. Lyons) and the Postmaster-General (Mr. Fenton) were members of the last Government, and were responsible largely for the very duties that the present Ministry has now drastically altered. The last tariff schedule was agreed to on the voices, and, therefore, those honorable gentleman have now gone back on an arrangement to which they were a party in the last Parliament. When the PostmasterGeneral was a member of the Labour party he was an extreme protectionist, and there is no doubt where the Prime Minister stood on fiscal issues when he was a member of the Labour party, before he became associated with his life-long political enemies. It illbecomes Ministers who assisted to bring the tariff schedule before the last Parliament to say that they did not give promises, because their actions over a long period show that they supported the tobacco duties without protest. An. honorable member’s actions rather than his words indicate exactly where he stands.
The tobacco-growers relied on statements made by the Attorney-General (Mr. Latham), who was referred to by my political opponent at the last election as “my leader.” At Ingham, this gentleman, Mr. Grosvenor Francis, read telegrams that he had received from the Attorney-General, whom he described as his leader. He was quite as satisfied to recognize the Attorney-General as his leader as some persons are content today to admit that the Assistant Treasurer is the real leader of this House. If certain definite promises had not been made from the public platform, the result of the last election would have been different in a number of electorates. I venture the opinion that the honorable member for Indi (Mr. Hutchinson) would not have won his seat had the electors any doubt regarding the position that he would take up regarding the tobacco duties. The tobacco-growers have many difficulties to contend with, and, like the sugar “ barons “ that I represent, are, for the most part, in poor circumstances. If a general election were now held, the people in rural constituencieswould show their strong disapproval of the attitude of the present Government to Australian industries. In my opinion, the Government is not “ playing the game “ in regard to its election promises.
The Prime Minister denies having made promises to the tobacco-growers; but these promises were implied, and the press that supports him announced, with big headlines, that the United Australia party, together with the Country party, could be trusted to do the right thing by the primary producers. In the near future, when the tariff schedule is before the House, members of the Country party will doubtless seize every opportunity of taking any action it can against the interests of the industrial workers. That party is always in favour of protecting a primary product 100 per cent.; yet it objects to protecting the industrial workers. That is what it calls scientific protection. No good object can be served by the Government’s action in altering the tobacco duties. The Government might well have waited until the present tobacco crop had been disposed of. The fair course to adopt was to warn the growers that, after they had delivered their present crop, an alteration of the duty would be made. Men with capital ranging from £200 to £1,000 have invested every shilling they possess in the tobacco industry, and have undertaken obligations which they will find it hard to meet.
Sir LITTLETON GROOM (Darling Downs) (10.10]. - It has been suggested in the course of the debate that the Government is guilty of repudiation of obligations to the tobacco-growers, and of a breach of faith, charges which I think can hardly be sustained; but at the same time, in my opinion, the Government made a serious mistake in altering the duties. Those producers who,_on the strength of parliamentary action in the past, launched out on this industry have grievous cause of complaint because of the way in which those changes have been introduced, and because of the time when this action lias been taken. So far back as 1901, when the first tariff was brought down, Parliament discussed the establishment of the tobacco industry in Australia. It was generally admitted, even at that time, that in many parts of Australia the industry could be successfully carried on. Mr. Neville, the Queeusland tobacco expert, was brought to Melbourne to advise us. Efforts were made from time to time to establish the industry on a satisfactory footing; but, for reasons which I need not now elaborate, the industry did not progress as was expected. In recent years, however, the prospects have improved, and governments have been giving assistance to the producers, some of the State Governments having appointed tobacco experts.
Increased interest was given to the subject by the appointment of a select committee of this House to investigate the position of the industry, and, finally, the Parliament saw fit to impose substantia] protective duties, which gave the industry a hope of success. We have to look at the matter, not from a party angle, but from the view-point of the man outside, who was told that at this period of great depression it is necessary to establish new industries where possible and provide employment. It was the duty of the Government to take action to adjust the balance of exports and imports. It was admitted by all parties that the Government was justified in taking drastic action to substitute Australian goods for imported articles and to control imports. Specific duties were imposed by this Parliament, and producers were also encouraged by State Governments, which made land available so that new industries might be launched. In view of these facts, men embarked upon the new industry of tobaccogrowing. But there happens to have been a change of government in the federal sphere, and before many new tobaccogrowers could harvest their first crop, drastic tariff changes were suddenly introduced. The growers feel that the whole foundations of their structure are crumbling. That is why, throughout Australia today, so many meetings of tobacco-growers have expressed consternation over the new duties. Chambers of manufactures, associations of growers, and even returned soldiers’ associations have passed resolutions dealing with this matter. A communication that I have received from the Queensland branch of the Returned Sailors and Soldiers Imperial League reads as follows : -
I am directed by my State Council to advise you that on behalf of returned soldier tobaccogrowers in Queensland, we desire to offer a rigorous protest against the tariff duties in relation to tobacco as proposed by the Commonwealth Government. It is not suggested that the new industry of tobacco-growing should he unduly bolstered up by favorable duties, &c., but it is felt that it is very unfair that an industry which has but just started in Australia should be crippled by the tariff. whereby many of the mcn that we hu ve offered to represent will undoubtedly bc, most seriously handicapped in their efforts to make a. success of this new industry.
That attitude of a non-political body, anxious to see its members re-established in civil life, is indicative of the impression which the alteration of the duties has made on the community generally. From the Department of Agriculture in Queensland I have received by telegram the following particulars regarding the progress of the industry in that State : -
This department contributed tobacco seed sufficient for 12,000 acres. Planting has not been completed in several districts, and owing to climatic and other conditions the following are given as approximate anticipated acreages under tobacco for current season: - Northern Queensland, 3,200 acres; Central Queensland, 3S0 acres; Southern Queensland, 2,000 acres; total for the State, 8,550 acres.
It is obvious from those figures that the people of Queensland have responded substantially, not to an appeal by a political party, but to the apparent desire of this Parliament. The development of the tobacco industry is not a party matter. All through the last Parliament I viewed this matter from outside, and I was pleased to notice the co-operation and agreement of parties in the encouragement of this industry, because it offered a new avenue of employment, and would be likely to attract people from the cities into the country. I do not remember any previous action of this Parliament to that end achieving such a measure of success. Now those who have in good faith interpreted the wish of this Parliament feel that they have been overwhelmed as by an avalanche. Apart from the rights or wrongs of the Government’s policy. I contend that whatever opinion Ministers may have of the protection given by their predecessors, they should not have reduced that protection so suddenly. Although they may have thought that the Scullin Government’s policy wa3 unwise, they should have asked themselves whether a sudden reversal of policy, which would mean ruin to many men engaged in the industry, would be wise. In circumstances such as exist in connexion with this industry the Government should have stayed its hand until a more favorable period. It certainly could not have chosen a more inopportune time than the present for a drastic reduction of duties. In regard to the impetus which has been given to tobacco cultivation in Queensland, I am familiar with developments in the Texas area, which has been mentioned during this debate. The industry has extended into the Warwick district, where I know of one large landowner who has converted a considerable area to tobacco cultivation on the share system. On suitable land settlement is taking place. The growers in this district, in conjunction with the local Chamber of Commerce, recently held an indignation meeting to protest against the reduction of duties, and Mr. J. B. Higgins related to the gathering his experience. He stated that the equipment of a tobacco plantation with barns, drying sheds, pumping plant, &c, cost up to £30 an acre; that was apart from the actual cost of working the land. Farming 15 acres, he and his brother had employed niue men at picking during the last three weeks, and probably- another six weeks would be required to complete the work. That is an indication of the employment that this industry provides. Illustrating the effect that the new duties would have on tobacco prices, Mr. Higgins stated that a representative of a buying firm had called at his farm on the previous day and presented to him a schedule of prices, but warned him that the list was good only if the tariff were unaltered. If the duties were amended as proposed, schedule prices would be reduced by ls. per lb. That grower had launched his industry presumably in the belief that prices would be maintained, but suddenly, through the action of the Government, schedule prices were threatened to be reduced by ls. per lb., thus undermining the financial foundations of his undertaking. This catastrophe has happened to growers throughout Australia. The causing of such distress was unnecessary and unfortunate. I suggest that even now the Government might stay its hand and allow the present season’s crop to be marketed under the old conditions. If necessary, the Government could submit other proposals later. That course would be fairer to those engaged in the industry. The Government’s decision may mean life or death to many of the growers, and I hope that the Government will not persist in this act of injustice. I am not charging the Government with having committed a breach of faith, but Parliament having deliberately created a set of conditions in relation to an industry which was intended to be permanent, a sudden change of policy without warning is at least unjust.
– Certainly not. The Government has acted with similar precipitancy in regard to the cotton industry, thereby causing consternation to growers.
– The Government acted on the Tariff Board’s report.
– Is the Government not to have regard to considerations of justice and right? I am criticizing not the Tariff Board, but the Minister’s administration. The Government should certainly have regard to the board’s report, but it was not bound to propose a drastic alteration of policy at this stage. It could at least have waited until the present crop was harvested.
– Would the growers have been satisfied if an alteration had been proposed then?
– They would not have been so dissatisfied as they are now, because they would not have suffered the same injustice. Radical changes in policy, if found to be necessary, should be introduced in such a way as to create a minimum of disturbance and hardship. Obviously in time, as the industry became fully established, the duties introduced by the previous administration would have been revised. Tobacco, being a luxury, is a fair and proper subject for taxation for revenue purposes, and any Parliament would be entitled to look to the industry for a substantial contribution towards the cost of government. The object of the Scullin policy was to bring about a rapid transfer of consumption from the imported to the local leaf, and the success of that policy would involve a considerable loss of revenue, to recoup which the excise duties would, in due time, have to be increased.
The proposals now under discussion, we are told, are of a twofold nature. They are said to give effective protection to a new industry and provide the necessary revenue. We. may be asked what we regard as “ effective protection.” My interpretation of effective protection is such protection as would give the tobacco industry efficiently carried on an opportunity to compete successfully with the importations, and at the same time, to expand. I understand that the aim of the Government is to assist the development of the tobacco-growing industry; but at the same time, itwishes to obtain sufficient revenue to meet the country’s expenditure. Those concerned have pointed out that these proposed duties are insufficient to protect the industry.
– They are still from 300 to 500 per cent. higher than they were some time ago.
– The Minister must admit that if the duties are effective, there must be a shortage in revenue. The best proposal appears to be that submitted by the growers, who are naturally seeking to protect the Australian industry, which, they recognize, must be revenue producing, and capable of expansion, and of providing further employment in Australia. As their proposal has so much to commend it, I trust that the Government will reconsider its decision. The scheme put forward by the growers will provide the necessary revenue, and will, at the same time, permit a rapid expansion of the industry, relieve unemployment, and increase production. I do not think, for a moment, that the Prime Minister (Mr. Lyons) would exercise any improper influence upon honorable members with respect to the course they should follow on this important subject.
I am sure it is not intended to make this important industry a political football. I trust that the Government will admit the right of members to act in the way which they consider to be in the best interests of the industry. Important subjects of this nature should be considered by this deliberative assembly on their merits. I urge the Prime Minister carefully to study the suggestions made by the growers and sub- mitted by the Leader of the Country party _ (Dr. Earle Page). It has been suggested that if effect were given to this proposal the difficulties of administration would be insurmountable. Having had experience in the customs and other departments, I believe that the administrative task would not be impossible ; that the departmental officers could readily find effective methods of doing what is desired. I trust that these definite proposals will be thoroughly investigated, and that the request made by the deputation will not merely be noted. If thorough consideration is given to the growers’ proposals, they will feel that they have received some consideration at the hands of the Government.
Mr. Prowse and Mr. Scullin rising together,
– The honorable member for Forrest (Mr. Prowse).
.- Mr. Speaker–
– I am reluctant to take a point, of order; but I feel that it is due to the House and to the right honorable the Leader of the Opposition (Mr. Scullin) that I should ask why you, Mr. Speaker, have given the call to the honorable member for Forrest. I do not, of course, desire to prevent that honorable member from contributing to the debate; but it is the traditional practice, and has been the invariable rule in this Parliament, that Ministers on the one side, and the Leader of the Opposition (Mr. Scullin) on the other, shall be given priority of ordinary members. Further, the right honorable the Leader of the Opposition, should have priority, because he is an ex-Prime Minister.
– I assure the honorable member that no discourtesy whatever was intended to the right honorable the Leader of the Opposition, who rose at the same time as the honorable member for Forrest (Mr. Prowse); but I considered it my duty to give the call to the latter, and I am glad that this point has been taken, because it allows me an opportunity to declare my reasons for doing so, and to state the practice that I intend to follow .in the future. The present debate is an exceptional one. Quite a large number of members on both sides of the chamber think it their duty to express their opinions on the subject before the Chair, and only this one day is to be given to the discussion. When the debate commenced this afternoon, the Deputy Leader of the Opposition (Mr. Forde), I understood, in opening the debate for his party, took the place of the Leader of the Opposition. There have been, so far, three speakers of the Opposition party, two representing the Country party, and only one private member from the party on my right.
– And three Ministers.
– I spoke of private members. There are five parties in the House. The party on my right comprises nearly one-half of the. total number of members, and there are two parties on my left of almost equal strength, and a party of five, and another of three. If members were called from each party in turn, honorable members on my right would receive only one call in every five. That would be entirely unfair. I have decided, therefore, to call honorable members on my right and on my left alternately. It is, however, the duty of the Chair to call Ministers in preference to private members sitting behind them, and to give the Leader of the Opposition priority over honorable members on my left. But in view of the exceptional circumstances attaching to the debate, and as the Leader of the Opposition gave his right to open for his side to his deputy, I consider that I am justified in ^calling members of the different parties alternately
– I should like to know if the traditional practice of recognizing a government and an opposition side of the House is to be followed, or whether recognition is to be given to members as belonging to a number of independent parties ?
– I intend to follow, in this matter, the practice of my predecessor in office. When the honorable member for Hindmarsh (Mr. Makin) wa3 Speaker, he gave recognition to the parties on his right and left, but he also recognized the rights of the individual parties.
– I did not recognize any party.
– The honorable member is misconstruing my remarks. The honorable member, when Speaker, gave recognition to the Nationalist party, the Country party, and the Beasley party in turn.
– The Labour party.
– That appears to me to be the proper course to pursue if all shades of opinion are to be expressed in this House. When giving the call to an honorable member I desire to be absolutely fair to each individual concerned, and to the House as a whole. I recognize that there are five different parties in this chamber, the members of all of which are entitled to express their opinion.
– I support the amendment of the honorable member for Cowper (Dr. Earle Page). I recognize that tobacco is essentially a commodity from which revenue should be collected. That is acknowledged in most countries. Foi instance, freetrade England imposes on tobacco a duty so heavy that it puts ours into the shade. How would honorable members vote if it were possible to obtain the necesssary revenue from Australiangrown tobacco, and at the same time give the people the local product at a cheaper price than that charged for the imported article? It is quite reasonable to suppose that everybody who considers the welfare of Australia would vote to kill the two birds with the one stone.
The Scullin Government betrayed the wheat-growers by making promises of support in connexion with their 1930-31 crop. Now this Government intends to do likewise in connexion with the tobaccogrowers, who were misled into believing that they could depend upon a government’s promises.
The Prime Minister, for whom I have a great deal of respect,- tried to make me and others believe in the desirability of reducing the tariff to accomplish a reduction in the cost of living. I refer the honorable gentleman to the position in regard to sugar and other commodities. Honorable members will recall that the Prime Minister was a member of a Labour Cabinet, and that he was one of a committee of three appointed to formulate a scheme to protect the tobacco industry and, at the same time, raise revenue for the Government. He was a party to the schedule that the Government is now altering. The whole thing is on a par with the promises that were made to the wheatgrowers, and broken. On the assurance of this Government, State administrations have made land available in order that the tobacco industry might he developed. The Government now proposes to wreck the industry.
If the honorable member for Henty (Mr. Gullett) continues as at present, he will go down to posterity as the tragic Minister for Trade and Customs. His opinions on this issue are entirely prejudiced. He said that 20,000 acres are under tobacco culture and that there is a risk of overproduction, as growers will average 800 lb. per acre, with the result that we shall have a harvest of 16,000,000 lb. .The Tariff Board states that the harvest will be 6,000,000 lb., which averages only 300 lb. to the acre. It is evident that the honorable gentleman views the subject with a jaundiced eye. He reckons the profits of the tobaccogrowers on the basis of 800 lb. per acre, whereas the average is 500 lb. I know the tobacco-growing industry from A to Z; I grew tobacco in the earliest days of the industry in this country. An over-production of tobacco in Australia would give the industry an excellent chance of being satisfactorily established. Australian tobacco has not been fully appreciated in the past because we have not been able to set aside sufficient quantities for proper maturing. Australia is capable of growing tobacco which will compare with the best product of any other country. The Prime Minister (Mr. Lyons) probably thought he was correct when he spoke of a duty of from 300 per cent, to 500 per cent. In reality, the duty is not nearly so great as that. From the duty of 5s. I deduct the lower price of 4s. per lb., which is charged to the consumers of the locally-grown commodity. The Minister for Trade and Customs (Mr. Gullett) said that galvanized iron had a protection of only 22 per cent, whereas, in reality, that commodity is protected to the extent of. 100 per cent. A ton of galvanized iron sold f.o.b. London at £13 and landed in Australia for £27 14s. 5d., - was quoted in the Sydney Morning Herald at £29 10s. per ton. We get no excise from the locally-produced galvanized iron. Instead of the manufacture of galvanized iron in Australia being a source of revenue to the country, it is an extraction of revenue, and a handicap to those who have to purchase it. “Many growers of tobacco hoped to pay for their galvanized iron, of which they use considerable quantities, out of the proceeds of the present year’s tobacco crop, but they will not now be able to do so. These growers are not in the satisfactory position that some honorable members would have us believe. “When we reflect that American leaf costs ls. per lb., that the duty is 5s. 2d. per lb., and the excise duty 2s. 4d. per lb. - a total of Ss. 6d. per lb. - and that tobacco of average grade costs 17s. 4d. per lb. retail, the difference of Ss. lOd. per lb. being the cost of manufacture by the combine, is it a matter for wonder that the combine is able to declare huge profits - bigger profits during this depression than ever before? It- is no wonder that they are able to sell Australian tobacco at 4s. per lb. less than imported tobacco. Were a proper inquiry made into the tobacco combine, it would be found that the people of Australia are paying from 4s. to 53. per lb. too much for their tobacco. The Government appears to have the interests of the tobacco combine and the importers of tobacco at heart. Believing that the party now in office was sincere, and would protect their industry, the Australian tobacco-growers built kilns, and incurred other liabilities, but just when their crop was ready for picking, they were wickedly betrayed. Had the Government introduced proposals which would have reduced the cost of living by a general reduction of the tariff as we were led to expect from the remarks of its supporters when sitting in opposition, I should not have hesitated to accept these duties as sufficient. Instead, it has lowered the duties on imported leaf, and raised it on the local product, while not removing the burdens placed on those engaged in tho tobacco and other industries. The Government is not consistent. In an attempt to influence those who know little about this industry, the Minister for Trade and Customs (Mr. Gullett) asked the House to point to any other industry which could show a profit of from £35 to £50 an acre. The Minister for Home
Affairs (Mr. Parkhill) took up that point eagerly. The return per acre is no true indication of the income derived by a primary producer. One man can deal with a crop of 500 acres of wheat without assistance other than at harvest time. If he makes a profit of £1 per acre he is better off. than is a tobaccogrower who makes a profit of £50 an acre from 4 acres.
– It is a question of the capita] outlay..
– It is a question of the amount necessary to maintain a man and his wife and family. I assure honorable members that lt is a full-time job for one man to look after 4 acres of tobacco. The industry is suitable to men with small holdings. It does not harm his children to do a little work on a tobacco plantation after school hours. Tho Government is making a great mistake in treating an infant industry in this way.
– -By giving it it protection of 300 per cent.
– If the whole of the tobacco consumed in Australia were imported and the required revenue collected therefrom, the consumer would pay more for his tobacco than if the whole of it were grown in Australia and paid the same revenue to the Treasury. Surely we should support our own people. The tobacco combine has been a serious hindrance to the development of the tobacco-growing industry in this country. The action of the Government is putting that combine back into its former advantageous position. During the war, the members of the tobacco combine urged the tobaccogrowers of Australia to grow more tobacco, but since the Armistice they have imported their leaf and treated the Australian growers shamefully. I was present in the home of my nephew in . N Mv South Wales when he received a telephone message from the only tobacco buyer in the district saying that he would “ be out to-morrow “. For weeks he had been trying to get the buyer to look at his stock, which was picked and cured, and ready for inspection. Farmers are busy men. He did not know what hour the buyer would arrive, because no hour had been fixed. He went into the field to do necessary work. Later on the buyer arrived at the house, and was told that the owner could be found in a quarter of an hour. The buyer said that he had given notice of his intention to call, and that, as the owner was not present, he would go, and call back again in three weeks’ time. That is the sort of thing the farmers had to put up with at the hands of the combine when there was no competition.
I had hoped, when this Government was returned to office, that it would administer the affairs of the country in such a way as to benefit Australia as a whole. In reducing the tobacco duties, without making similar general tariff reductions the Government has committed a grave error. It would have been better if the Prime Minister (Mr. Lyons), when he was a member of the committee of the Cabinet of a former Government, had said : “ We will not give the tobacco industry any protection at all.” That would have been better than granting it protection for a limited time, and then, when the industry, in response to that protection, had begun to develop, to withdraw the protection before the crop was sold. The tobacco industry has been delivered into the hands of the combine.
It is proper that the Governmentshould get revenue from tobacco, but the right honorable member for Cowper (Dr. Earle Page) has suggested a means whereby the revenue might be obtained, and the industry assisted as well. If the Australian tobacco industry developed as anticipated, the Government could, by means of a sliding scale of excise and import duties, keep the revenue at approximately its present level. Eventually, when the Australian growers supplied the whole of the Australian market, the locally-grown tobacco would provide the whole of the revenue. It will not matter whether the amount grown is 6,000,000 lb., 10,000,000 lb. or 20,000,000 lb. No other assisted industry promises to return anything like the same amount of revenue. The sugar industry costs the population of Australia £1 a head to maintain.
– The honorable member must not talk on sugar.
– The Prime Minister gave me a lead, and it is only just that
I should refer to the subject for purposes of comparison. The Minister for Trade and Customs (Mr. Gullett) referred to other industries by way of comparison. He asked honorable members to name other industries receiving assistance, and when I did so, you called me to order. The sugar industry costs the people of Australia £1 a head, but it pays no excise duty at all. No revenue is received from it and there is no likelihood of ever receiving any ; nor. is there any likelihood of receiving revenue from the cotton industry, the iron and steel industry and several other industries which are receiving assistance. I am not wedded to the interests of primary industries as such. There are secondary industries natural to the country, and they ought to be developed, just, as the great primary industries which are natural to Australia should be fostered in the interests of all the people.
Under the £34,000,000 development scheme, group settlements were established in Western Australia. Borrowing under that scheme was stopped by the last Government, and rightly so, I consider. The group settlers were promised markets for their products, but those markets were closed to them because of the high production costs prevailing in Australia. The right honorable member for Flinders (Mr. Bruce) knows that well ; he has been on the spot. The settlers were virtually down and out. and the State and Federal Governments had to write off much of their indebtedness in order to keep them on the land. When increased protection was granted to the tobacco industry, many of the settlers took up tobacco growing, and there was a prospect of their doing well. There was a chance of repaying the amounts they owed to the Government, and of having something over for themselves. Now the duties are to be reduced, and the industry is to be left to shift for itself.
I entertain no ill-will towards the Government; I have always voted according to my convictions, and I shall do so now. I represent one of the biggest timberproducing districts in the Commonwealth, and yet I voted for the removal of the duty on soft timber, because Ave had. none in this country. The course of the Government is clear before it in regard to the tobacco industry. It must get revenue from the industry; it can do so without crippling the industry, and it is its bounden duty to do so.
.- This subject has been very well debated, and it has been a most interesting debate. Honorable members have been afforded an opportunity of expressing their opinions on a matter which has created lively interest throughout Australia. As the honorable member for Darling Downs ( Sir Littleton Groom) said, the proposal of the Government to reduce the tobacco duty has aroused considerable feeling among those who have engaged in this new industry. The honorable member for Darling Downs spoke as one representing tobacco-growers, just as did the Deputy Leader of the Opposition (Mr. Forde), the honorable member for Kennedy (Mr.Riordan), and the honorable member for Herbert (Mr. Martens). The tobacco-growers responded to the invitation of the Government and this Parliament to establish what is practically a new industry in Australia.
– It is an old industry.
– As an industry it was crippled. I agree with the Minister for Trade and Customs (Mr. Gullett) who said that it has had a. chequered career. For 75 years it has been struggling to be an industry, but not until this year could it be called one. It has struggled against many difficulties in the past, and was still struggling until the last Government came to its rescue, and gave it an opportunity to establish itself. As previous speakers have said, those men who took up land, purchased plant - perhaps mortgaging their homes to do so - cleared the land, some of which was not suitable for anything but tobacco growing, and put in their crops, had every right to believe that this Parliament meant what it said. Parliament passed the tariff schedule introduced by the last Government. This House passed it without a division. The tobacco duties were agreed to with practically no dissent. When these duties were passed in this House with practically no dissent, people spent their money in the establishment of this essential primary industry confident that the duties would last, particularly as they knew that the Leader of the present Government was a member of the former Government, which imposed them. The Prime Minister prefaced his remarks to-day, by saying that there was no sincerity among those opposing the Government, and that the Deputy Leader of the Opposition (Mr. Forde) spoke as though he did not believe in what he was saying.
– The Prime Minister was a member of the Cabinet sub-committee of the late Government, which agreed to the duties.
– That is so. These duties were imposed while I was abroad, and the present Postmaster-General (Mr. Fenton), who was then Acting Prime Minister, and the present Prime Minister, who was then Acting Treasurer, were members of a sub-committee which went into this question, not only with a view to establishing an industry, but also with a view to securing revenue. In such circumstances the people who have embarked on tobacco-growing would naturally expect the tobacco duties then imposed to last. The present Prime. Minister, who was one of the leaders of the last Government during my absence abroad, now suggests that the persons on whom the responsibility rests for the fact that many have launched out in tobaccogrowing are those who imposed the duties. Well, he was one of them !
– I admitted it. But it was honorable members opposite who led the growers to believe in the permanency of the duty.
– The margin of protection given to this industry should be kept as stable as it is possible to get it.
– Why was not the matter referred to the Tariff Board?
– I shall come to that point. The Minister for Trade and Customs (Mr. Gullett), spent a considerable amount of the time allowed to him in reading extracts from reports of subcommittees, and other documents and the minute in which the Minister for Trade and Customs referred the matter to the Tariff Board. He seemed to think that he was scoring thus over the Opposition.
– The right honorable gentleman was afraid of these duties as soon as they were imposed.
– My Government was not. All that the Minister proved by his quotations, and all that the Prime Minister proved in following up his Minister, was that the last. Government was vigilant in regard to the revenue and finances of Australia. There is not one word which the present Government has said about the need for revenue that I do not endorse, and it was unnecessary for the present Ministers to flog that aspect of the question. The Treasurer of the last Government (Mr. Theodore), appointed a committee consisting of the ComptrollerGeneral of Customs, the Assistant secretary to the Treasury, and the Acting Statistician to report to the Government upon the effect of these duties on the revenue, and the then Minister for Trade and Customs followed this up by referring the whole matter as one of urgency to the Tariff Board. We stand to-day for the same vigilant care of the finances. In fact, on that point, I shall never take up an attitude different from that which I took up when I was a member of the Government. I deny,the assertion of the Prime Minister that if I were in office to-day I should be obliged to do what the present Government has done in regard to these tobacco duties.
– Would the right honorable gentleman have ignored the Tariff Board?
– Yes. We should have altered the excise duties as the industry grew so that the revenue would not suffer. I agree entirely with the Minister for Trade and Customs, that tobacco is one of those things from which we are entitled to get revenue. In Great Britain, where tobacco is not grown, the duties are 9s. 6d. per lb. That is higher than our import duties plus excise. And just as Great Britain is entitled to tax tobacco for revenue purposes, so we are entitled to get revenue from tobacco. When the late Government saw the wonderful strides the industry was making, and the wonderful response of growers, and that this great development was calculated to bring about a loss of revenue, it immediately set to work to examine the position. That does not mean that it proposed to remedy the revenue position by destroying the tobaccogrowing industry, which hadbecome so well established. There were many ways in which the revenue position could have been restored. I do not agree entirely with the formula suggested by the right honorable the Leader of the Country party (Dr. Earle Page), but I see very little difference in effect between his suggestion and what we proposed, except perhaps, in the matter of administration. But the loss of revenue does not seem to have been the only consideration of the present Government. It seems to have become alarmed at the progress of tobaccogrowing in Australia, and at the possibility of having 6,000,000 lb. of tobacco grown locally. For many years Australia produced only 10 per cent. of its tobacco requirements. This year we seem to have provided one-third. Ministers hold up their hands in horror at the possibility of Australians being able to grow enough tobacco for their own requirements, at the same time providing work for the unemployed.
It is true that as the industry grows there must be some re-adjustment of the duties, otherwise there will be a loss of revenue, possibly £1,000,000 or £2,000,000. My Government referred the whole position to the Tariff Board. I do not agree with the honorable member for New England (Mr. Thompson) who said that we should not have done this. The Tariff Board is a body which has been set up to get evidence and collate it and present it to the Goverment of the day and the Parliament of the country. The report it presented on this subject was a valuable one, as it contained much useful information, but it is absurd to suggest that because a government refers a matter to this board for investigation and report it is bound to accept its recommendation. If that policy is to be followed we may as well declare that this Parliament, so far as tariff duties are concerned, does not exist, and that all tariff matters will be handled by the board. I suggest to the Minister for Trade and Customs, who makes it a virtue that he is following the recommendation of the Tariff Board, that he is following only that part of its recommendation which suits him.
– The other part would have cost the country £400,000.
– But that is nothing to the honorable member.
– I say that the Government was perfectly right in not following that portion of the Tariff Board’s recommendation. Is that nothing to me? Does a Leader of the Opposition lightly tell a Government that it is doing the right thing? Yet I am telling Ministers that they did perfectly right in refusing to follow the Tariff Board’s report on that item. But if that part of the report of the Tariff Board which was likely to result in a loss of £400,000 should not have been followed, what reliance can be placed on the other part of the report?
– That saves us money.
– Very well, let us deal with the matter from the revenue aspect. The first act of the present Government was to make sure of the revenue by reducing the import duty from 5s. 2d. to 3s. which, according to the figures worked out from the report, represents a loss of £750,000 from import duties. Its first act to correct the revenue position was to throw away £750,000, and it proposed to recover that loss by making an addition to the excise duties, the effect of which is to hit hard the local industry.
– How can we lose when we are increasing the excise on tobacco manufactured from imported leaf?
– I have pointed out that the first thing Ministers did was to lose £750,000 in the shape of import duties. Had they retained the higher import duty they could have made up the revenue they required by a very much smaller excise duty. By throwing away £750,000 of import duties, and putting a higher excise duty on tobacco leaf manufactured in Australia - whether the leaf be imported or grown locally -they get about £600,000 of additional revenue at the expense of the Australiangrown tobacco. While they talk about the need for getting millions of pounds in the shape of revenue, not one extra penny will be paid on the foreign tobacco under the present Government’s proposals. The whole of the increase will be borne by tobacco grown in Australia. That is how Ministers suggest that an industry should be established in this country ! The Tariff Board reported that there would be no loss of revenue until the local production exceeded 6,000,000 lb. As soon as the production exceeds 6,000,000 lb. in weight, and the industry starts to grow, it will be quite simple to work out a formula determining how much the excise duty must be increased. It should be increased, not in big lumps, but gradually, according to the growth of the industry, until we swing over from imported tobacco in the main to Australiangrown tobacco, the industry carrying sufficient taxation to provide us with the revenue that we require.
But is revenue the only thing that concerns this Government? The Government that I led was concerned about the revenue position. We referred the issue to the Tariff Board, and asked for facts, and from those facts we intended to build up our own case. We should not have slavishly followed a recommendation to abolish the margin of protection. The question has been asked to-night : Why is it that this industry requires such a large margin of protection? When it has been pointed out that it is not using the full protection, and that Australian tobacco is being sold at 4s. per lb. less than the price of the imported tobacco, we have been asked: Why then do they need that full protection? I do not smoke, but for the last sixteen or seventeen years I have watched with interest attempts to extend the production of tobacco leaf in Victoria. There is no doubt that the growers have been handicapped and discouraged by the great tobacco combine of Australia. All who smoke say that a taste for Australian tobacco has to be acquired. I have friends who, because of circumstances, have been forced to buy Australian tobacco, and they now say that they would not smoke imported tobacco. The Australian industry, with many obstacles in its way, faced with a prejudice against the locally-grown leaf, with propaganda against it to the effect that it smells of eucalyptus and has other objectionable qualities, required for the first few years of its establishment a good margin of protection so that the local tobacco could be sold more cheaply than the imported article. The industry is progressing. If there were’ any evidence that the Australian growers were exploiting the protection given to them, and were charging exorbitant prices, we should be only too ready to review the whole of the tariff duties. The Prime Minister (Mr. Lyons) gave us a lecture on hops, and we had one on wines from the Minister for Markets (Mr. Hawker). The cases to which they referred are not analogous to this. The tobacco-growing industry this season will provide us with but one-third of our requirements; yet this Government claims that the reduction in the import duty will bring about a miraculous saving from over-production. The Government stated, in the GovernorGeneral’s Speech, that its policy was to encourage industry and private enterprise so as to absorb the unemployed. If there is one thing that will help us to solve the unemployed problem it is the iu tensive cultivation of land. This is essentially one of the industries which lends itself to intensive cultivation. The basis of a nation’s prosperity is the intensive cultivation of its land, and the building up of its secondary industries under a scientific and effective protection. The Minister has said that we are escaping in a miraculous way from overproduction. That is being done by encouraging importation and removing the margin of protection to the local growers ! This industry is growing. It is admitted by the Minister that the quality of Australian tobacco has improved ; it will continue to improve. The efficiency in the industry will become greater and competition within Australia will regulate the price. Does the Government complain that the price paid to the grower is too high ? If not, why this attack upon the margin of protection? Its contention is that a duty of 3s. is sufficient because the price is 3s. If conditions in this industry were normal, if it were like an ordinary manufacturing industry, that argument might be sound. But while there is a prejudice against Australian tobacco the industry should have a margin of protection to enable it to become firmly established and to grow a leaf which the people of this country will smoke.
I turn now to the amendment of the right honorable member for Cowper (Dr.
Earle Page). He made a first-class protectionist speech, on which I congratulate him, and I hope that we shall hear more from him on similar lines. The right honorable gentleman moved to amend the amendment of the Deputy Leader of the Opposition (Mr. Forde), and in speaking to his amendment he said that it really retained the margin that existed under the previous duties. That is quite true. He said, however, that it gave us a specific alternative to the . Government’s proposal. The Deputy Leader of the Opposition, in moving his amendment, deliberately refrained from giving a specific instruction to the Government. The wording of the amendment was least calculated to take business out of the hands of the Government. “What, then, is the use of the members of the Ministry saying that this is a political move on our part to get into office? Even if we were to defeat the Government in the House we would not have the strength to form a Cabinet. The motive behind the amendment is to obtain direct expression of this Parliament upon the question whether this industry is to retain the margin of protection which it has enjoyed for over twelve months. We are agreed that we must adjust the duties so as to maintain revenue. All we ask for is the maintainance of the margin of protection for this industry and the provision of the required revenue. The right honorable member for Cowper has asked for exactly the same thing. Every party in this House is agreed that we must obtain revenue, and, therefore, all the arguments about balancing the budget go by the board. There is no opposition to that. If the Government were to accept the amendment of the right honorable member for Cowper, and next year there were increased production in the industry, there is not the slightest doubt that the figures contained in the amendment would have to be reviewed. For that reason the Deputy Leader of the Opposition did not place any specific instruction in his amendment. This Parliament should content itself with an expression of opinion to the effect’ that the margin of protection that the industry has enjoyed for the last twelve months should be retained. Since the right honorable gentleman has moved his amendment on our amendment, his takes: first place, and as it expresses the same principle, “we intend to support it. Let me add that if he expects to get some political and party advantage over us, he is quite welcome to it, but actually no advantage would be gained for tobacco-growers by carrying his amendment instead of that submitted by the Deputy Leader of the Opposition, and for the same reason we do not see what advantage would be gained by carrying our amendment against his. The party which I have the honour to lead in this House is not out to play ducks and drakes with the tobacco-growers of this country. Accordingly, we shall not allow this Government or anybody else to play off one section of the House against the other. I hope that honorable members will give an untrammelled vote on the amendment, and declare emphatically that those growers who have pioneered this new industry shall continue to enjoy the margin of protection which we gave them over a year ago.
Motion (by Mr. Mark) put -
That the debate be adjourned.
The House divided. (Mr. Speaker - Hon. G. H. Mackay.)
Majority . . . . 26
Question so resolved in the affirmative.
Tobacco Duties - Business of the House - Tick Eradication - New Zealand Trade - Unemployedrelief.
Motion (by Mr. Lyons) proposed -
That the House do now adjourn.
.- Will the Prime Minister inform us when the debate on the tobacco duties is likely to be resumed?
– When the tariff schedule is under discussion.
– Earlier to-day I asked the Prime Minister whether the motion for the printing of the report of the Tariff Board on the tobacco industry would give Parliament a real opportunity to express its opinion on the tobacco duties. I understood that that was the object of the debate. The only way in which Parliament can express itself is by recording a vote. Two amendments to the Government’s motion have been proposed, neither of which is framed in such a way as to destroy the Administration.
– I am sorry that I cannot allow the. Leader of the Opposition (Mr. Scullin) to make any further references to the debate which has just been adjourned.
– I have no intention to refer any further to that debate. I only wish to know when it is likely to be continued, and what will be the order of business to-morrow. If the motion for the adjournment of the debate was intended to shelve the discussion, can it be said that the Government was in earnest in inviting honorable members to express their opinions on the new duties? I know that the honorable member for Ballarat (Mr. McGrath) would like to say that there are many other items in the tariff schedule, and that the Scullin Government allowed the last tariff schedule to lay on the table for a long time before it was discussed. But it can now be seen that there was very good reason for its action. This Government has shown that it is proposed to use a big axe on the tariff policy of this country. My Government was justified in taking the course it did, and in preventing the members of another place from getting their hands upon the last schedule. At least we corrected the adverse trade balance of this country, and assisted to provide employment in industry. In keeping the schedule on the table for so long, the last Government was able to prevent honorable gentlemen opposite from getting their ruthless hands upon it and pulling it to pieces.
– I wish to record my impression of what has just happened. A few minutes before the conclusion of the discussion on the tobacco industry the Prime Minister gave me his personal assurance - repeating what he had already said when speaking to the motion - that the representations which have been made today by honorable members would receive the early and urgent consideration of the Government. It was on that understanding that I crossed the floor of the House.
– Did not the right honorable member intend to vote for his amendment ?
-I did, and still do; but I think it is reasonable that all the members of this Parliament, and particularly those who represent tobaccogrowing districts, should have an opportunity to participate in the debate on the subject before they are called upon to record a vote upon it. I am not concerned whether the Labour party, the United Australia party, or the Country party get kudos out of the discussion; but I am concerned about the welfare of the tobacco industry. I desire to see this industry stabilized at the earliest possible moment. I take it that the assurance given to me by the Prime Minister was an honorable un dertaking given by an honorable man, and that it will be carried out in an honorable way.
– I have allowed a good deal of latitude to the Leader of the Opposition (Mr. Scullin) and the Leader of the Country party (Dr. Earle Page) ; but I cannot allow the debate on the tobacco duties to be re-opened at this stage. I trust that honorable members generally will assist me in carrying out, the Standing Orders.
– I wish to question the procedure which is being followed this evening. It, appears that an entirely new method has been adopted of conducting the business of the House. It is surely the right of honorable members generally to know the intention of the Government in regard to any matter upon which they are called to record a. vote. It is quite a new thing for tick-tacking methods to be adopted here. Evidently whispering has gone on between different sections of honorable members as to what the Government proposes to do. That practice, so far asI know, is entirely new in the history of this Parliament. The members of the Government have always asserted that they havenothing to hide, and that the light of day may always be thrown upon their actions. In these circumstances, it is strange that we should find them participating in an episode which is one of the worst exhibitions of its kind in the history of this Parliament, and is entirely discreditable to the Government. I. did not participate in the debate on the tobacco duties, because I felt that it was fair to honorable members who represent tobacco-growers, that they should have the fullest opportunity to ventilate their opinions. I was satisfied to leave the subject to them. But I am interested in the measure of employment that may be made possible through this industry, and I fully expected that we should be given an opportunity of reaching a decision on the matter to-night. I protest very strongly against the action of the Government in postponing this debate as it has done. I hope that further practices of this kind will not be followed in the Commonwealth Parliament.
– Recently the Prime Minister has been asked several questions about the eradication of tick. Only this afternoon the honorable gentleman stated that the subject was still receiving consideration. 1 point out that several weeks have elapsed since attention was first directed to the serious position which has arisen through the spread of tick beyond the quarantine area of New South Wales. The welfare of the cattle industry, not only in New South Wales, but in the dairying districts of Victoria and South Australia, is being menaced, and it is high time that the Government decided to do something to meet the situation. We arc facing a national peril which demands prompt, action in the interests of the dairying interests of Australia. If the tick menace spreads, as it undoubtedly will unless steps arc taken to prevent it, the dairying industry, which is one of the biggest of our exporting industries, and provides employment for a greater number of people than any other industry in Australia, will receive an enormous setback. If the mortality is no greater than 80 per cent., we shall be extremely lucky.
I intend to “put a sting” into the Government in regard to another matter which has been ventilated to-night. If it proposes to devote to the tobacco problem the same consideration that apparently it has given to the tick menace, I am afraid that, as I have suspected since the Minister for Trade and Customs (Mr. Gullett) said early this afternoon that the Government’s mind was made up, the debate to-day has been absolutely futile. 1 sincerely hope that consideration of the tick menace will not be shelved indefinitely.
– I desire to make a personal explanation in reply to certain of the remarks of the honorable member for West Sydney (Mr. Beasley), and others that were made during the taking of the division on the motion for the adjournmentof the debate in connexion with the tobacco industry. The Leader of the Country party (Dr. Earle Page) informed mc that the Prime Minister (Mr. Lyons) had asked him if the Country party were prepared to support the adjournment of the debate,, as the Government desired to consider the position in the light of the speeches that had been made. The right honorable gentleman asked me if I thought that that was a fair thing; and I replied that it was, on the condition that the Government afforded us the earliest possible opportunity of resuming the debate. I understand that that undertaking was given to the Leader of the Country party; and it was on that understanding that I voted for the adjournment of the debate.
.-.! understand that under a new standing order it was decided to economize time by having replies to questions on notice handed to the member concerned, instead of being read out in this House. Over a fortnight ago I placed on the notice-paper what I conceived to be an important question ; but the Prime Minister has not yet answered it. It is in the public interest that it should be answered. It deals with the comparative relationship between the trade prosperity of New Zealand and Australia. I have spoken to the Prime Minister twice on the matter, and hope that, no further delay will occur.
.- I congratulate the Queensland members of the Country-Progressive-National party up011 the consistency of their attitude in regard to the protection of certain industries in that State. This afternoon, when the debate on the tobacco-growing industry was commenced, I was under the impression that honorable members would be given an opportunity to cast a vote that would show where they stood in relation to the duties that have been imposed by this Government; yet to-night we are no further advanced than we were this afternoon.
– Order ! The honorable member for Kennedy knows perfectly well that he is quite out of order in referring to a debate that has been concluded. He must have heard me give a ruling more than once on this matter. I hope that he will now observe the Standing Orders by refraining from any further reference to that debate.
– I thought that I might refer in passing to personal explanations and apologies that have been made by other honorable members. I should he lacking in the observance of my duty if I allowed this opportunity to pass without drawing attention to the throwing out of employment of thousands of people. There are men walking from one end of the country to the other. They are being railroaded out of Canberra because the Government hold’s the view that it is not its responsibility either to find them work or to feed them. It has advanced the theory that private enterprise should be encouraged to absorb the unemployed. What encouragement has private enterprise received as a result of the action of this Government?
– Order ! The honorable member has twice ignored my warning. Next time I shall name him.
– I am not referring to to-day’s debate, but to the actions of the Government since it assumed office. As a very careful student of the standing orders of this House, I was under the impression that, on the motion for the adjournment, honorable members were entitled to discuss any matter under the sim. I have heard members ramble all round the globe without exception being taken to it. I arn concerned about the unemployed position. It is the duty of this Parliament not to leave the matter in the hands of private enterprise, but to deal with it in a statesmanlike way. When honorable gentlemen who now sit opposite were on this side, they flogged the Scullin Government every day ; yet in the two years that that Government was in office, it made available the sum of £2,500,000 for the partial relief of unemployment. Out of the last grant, the sum of £17,000 was spent in my electorate before Christmas.
– It must have been thought that the honorable member was going to be defeated.
– That is not so. Had that been the belief, the £17,000 would not have been spent in my electorate; because the officials who controlled the expenditure were not “in my tent” and would have seen that the money was diverted to some other electorate. They did their best to prevent the expenditure of the money until after the election.
Mr Archdale Parkhill interjecting.
– There was not a “redder” man in the last Parliament than the present Minister for Home Affairs (Mr. Parkhill) ; Schelley was a fool to him. When I read of the probability of his introducing a bill into this Parliament to deal with Communists, I thought that if the Minister ever sat on the Opposition side again, the Government of the day would be justified in deporting him. Any action likely to throw men on the unemployment market is opposed to the interests of the people.
– Very tiresome 1
– No more tiresome than to-day’s proceedings, which furnished the greatest exhibition of political shadow-sparring that I have witnessed for many a long clay.
– All the material required to furnish a reply to the question of which the honorable member for Forrest (Mr. Prowse) has given notice, is, I regret, not yet available; but I shall see that the matter is expedited. No discourtesy to the honorable member was intended.
The Leader of the Opposition (Mr. Seullin) wishes to know when the debate that has taken place to-day will he resumed; but it is not necessary to ask that. I said at the outset, and no honorable member misunderstands the position, that the Government would devote a day to the discussion of the tobacco duties, and both the Minister for Trade and Customs (Mr. Gullett) and I pointed out that, as early as possible, the tariff schedules would be brought down, and the House would have ‘an opportunity of coming to a definite decision upon them.
– Before Easter?
– If the Deputy Leader of the Opposition (Mr. Forde) were now Minister for Trade and Customs, he would not have the schedules brought down within the next two years. The noise and nonsense from that honorable member by way of interjection goes to show how absolutely inconsistent he is. I have given an assurance, and I will carry out my undertaking. Unlike the honorable member and his leader, who tonight prided himself on the fact that he had evaded Parliament with respect to tariff matters, this Government will not dodge its responsibilities, or evade Parliament. As I have already inti- mated to the Leader of the Country party (Dr. Earle Page), we will give honorable members an early opportunity to deal with the tariff.
– Why is not an undertaking given to the House?
– The House knows that it will have an opportunity to deal with the tobacco duties when the tariff schedules are presented. I have carried out my undertaking to grant a full day for the discussion of the matter.
– What did the Prime Minister tell the Loader of the Country party ?
– If the right honorable gentleman thinks that anything improper has occurred, it emanates only from his own imagination.
– What was the whispering that took place between the Prime Minister and the Leader of the Country party ?
– There was no whispering between us. The leaders of parties frequently confer.
– The honorable gentleman did not consult me when he was whispering to the Leader of the Country party.
– It is imposssible for the Prime Minister to address the House if he is to be subjected to repeated interruptions. He has the right of reply, and I ask honorable members to show respect for the Standing Orders by maintaining silence.
– The right honorable member for Cowper asked me when we proposed to conclude the debate to-night on the tobacco duties, and I said that it was intended to adjourn it at about 11 p.m. He remarked, “ When you are moving the adjournment, will you be prepared to repeat the assurance given to me that full consideration will he accorded to the points raised in this debate”? I said, “ There is no necessity for me to do that ; I have given that assurance. I have given it publicly in this chamber, and every member is aware of it “. The Minister who moved the adjournment did not refer to the matter, because there was no need to do so.
– What was the assurance ?
– I gave it when I spoke, and that is the assurance which the Leader of the Country party has.
– Then why did he not withdraw his amendment?
– If there is anything objectionable in the leader of one party discussing a matter with the loader of another party, the honorable member for West Sydney (Mr. Beasley) cannot expect any other party leader to discuss any matter with him.
In reply to the honorable member for Richmond (Mr. R. Green), if the cattle tick pest is spreading, as he has suggested - and I believe that his statement is correct - it is not due to the inaction of this Government, because the system that has been followed for some time past has not been departed from in any way. No reduction of the subsidy to assist in the eradication of the pest has been made. The matter referred to is under consideration ; but there are so many urgent and important matters with which Cabinet is now dealing that some have necessarily to stand over. The cattle tick problem, however, is receiving the close attention of the Minister for Health, and a decision will be reached by Cabinet at an early date.
Question resolved in the affirmative.
House adjourned at 12.5 a.m. (Wednesday).
Cite as: Australia, House of Representatives, Debates, 8 March 1932, viewed 22 October 2017, <http://historichansard.net/hofreps/1932/19320308_reps_13_133/>.