14th Parliament · 1st Session
Mr. Speaker (Hon. G. J. Bell) took the chair at 10.30 a.m., and read prayers.
– Will the Prime Minister state whether it is intended to give permanent official status to the gentleman who at the moment is discharging, apparently with every satisfaction, the duties of Australian CommissionerGeneral in the United States of America?
– What the status of this office shall he in the future is at present engaging the attention of the Government. The term of appointment of the officer who is now in New York has really expired but, in recognition of the meritorious nature of his services, has been extended from time to time. It is now subject to further extension until a definite decision has been made.
Mr. WHITE laid on the table reports and recommendations of the Tariff Board on the following subjects : -
Chain, hand forged and roller types.
Surgical gut; gut.,n.e.i.
Ordered to be printed.
– Has the attention of the Treasurer been drawn to the two very indefinite statements of the general manager of the Bank of New South Wales, in response to the announcement of Sir Claude Reading, chairman of the Commonwealth Bank Board, regarding the discontinuance of the issue of treasury-bills? Has the Bank of New South Wales indicated whether it intends to reduce its interest rate on deposits, the only ground for the raising of which was the issue of treasury-bills by the Commonwealth Bank ?
– I regret that I have no further and more specific information than is available to the honorable member himself.
– In view of the position that has arisen in connexion with interest rates, and its implication with respect to future loan raisings by Australian governments, in addition to the influence it will have upon the deficits of the States which next year will haveto be covered by short-term accommodation-, docs the honorable gentleman intend to ask the Loan Council to meet immediately to consider what steps should be taken to prevent a hardening of interest rates?
– I fail to see what influence the Loan Council could exert on the present situation. The matter is largely in the hands of the Commonwealth Bank which, not having the definite and positive means of control possessed by central banks in countries with more highly developed financial systems, has to rely to a considerable extent upon requests for the friendly cooperation of the trading banks. That friendly co-operation is readily given in most cases.
– Am I to understand that the Commonwealth Government, as a government, and that the State governments, as State governments, have no influence or authority in the determination of interest rates in Australia, and that the Loan Council, an instrument which is now provided for in the Commonwealth Constitution, is also equally impotent to affect the rates of interest which shall be paid by the Australian governments for moneys which they raise for public purposes?
– The policy of the Commonwealth Government, and the degree of confidence that it brings into the community, have a large effect on interest rates in Australia, as has been exemplified by the constant fall of interest rates during the life of the first Lyons Government, and also the second Lyons Government, until a year ago, when a very large increase of activity in the community and a consequently increased demand for money brought about a slight increase of interest rates.
– It is reported that the Treasurer intimated to certain; honorable members, who were assembled in the precincts of this building, that it is the intention of the Government to request an expert in Great Britain to visit Australia to report upon problems associated with national insurance. Will the honorable gentleman state whether that is a fact? If this gentleman is invited to visit Australia, will he report upon the reports of Sir Frederick Stewart and the two actuaries who have furnished information to the Treasury on the subject? Also, when he has made his report on those reports, will another expert be invited to make a report on his report?
– The Leader of the Opposition is pleased to he facetious.
– Not at all; I am very serious.
– No more serious, I assure him, than are members of the Government on this subject. In serious reply, I would say that the Government has under consideration a proposal to invite a well-qualified individual from Great Britain to advise it generally in the matter of national insurance. The Government, however, has not yet fully considered the matter, and a decision upon it has not yet been arrived at; but, should such an expert be invito’1 to Australia, all the work which has so far been done here will be made available to him in an effort to obtain the best possible solution of the problem.
– I ask the Prims Minister whether the Government has been in consultation with the States in regard to the Federal Aid Roads Agreement, and whether it proposes to introduce legislation this year to renew that agreement?
– I understand that arrangements have been made for a meeting of Commonwealth and State repre sentatives to be held in September next. The matter will then be discussed.
Mr. BAKER.I understand that, according to recent practice, copies of the reports of royal commissions, but not of the evidence taken by them, are supplied to honorable members. In view of the importance of the investigation being conducted by the
Royal Commission on the Monetary and Banking Systems, will the Prime Minister make arrangements for copies of the evidence taken, exclusive of that heard in camera, to be placed in the Library at least for the use of honorable members, when the investigation is completed?
– I hope that it will be possible to adopt the suggestion of the honorable member.
New Guinea Service - Manufacture of Aeroplanes - Air Mail Charges in Australia.
-Will the Minister representing the Minister for Territories state whether an ordinance has been promulgated in the Mandated Territory of New Guinea, the object of which is to merge in one organization the whole of the aviation services of the territory? If such an ordinance has not been promulgated, have instructions been issued, either by the department in Canberra orby the Administrator, that no further flying permits shall be granted to any companies other than those which are already operating?
– I shall take immediate steps to obtain the information required by the honorable member.
– In view of certain reports that have been circulated, I ask the Minister for Defence whether the Government is taking any action with the object of merging the air transport services in New Guinea into one service?
– The organization of the civil aviation services of New Guinea is under consideration at present in New Guinea itself, but whether the eventual solution will be a merger of the existing services or a licensing of the companies now operating has not yet been decided.
– I ask the Minister for Defence to make a statement regarding certain reports that have appeared in the press to the effect that the Government, being vitally interested in the manufacture of aeroplanes in Australia, is endeavouring to encourage the establishment of a large organization for that purpose. Are the reports correct, and, if so, what progress has been made in the direction indicated?
– Negotiations have taken place on this subject, but further details have to be determined before a complete statement can be made to the House on the subject. I do not expect much delay in dealing with these points.
– In view of the very beneficial effect that competitive air services have had in the Mandated Territory of New Guinea in reducing costs to people in isolated areas, and also having regard to complaints contained in a letter which I have received from some of my constituents in the far north-west of the Northern Territory to the effect that a charge of 5d. is imposed for 1/2-oz. letters, and of 3s. 4d. per lb. for parcels carried by air mail, I ask the Minister for Defence whether, as the Government is subsidizing the air mail services of Australia, he will see that steps are taken to ensure that only reasonable charges are levied on mail matter addressed to persons living in isolated parts of North Australia and the Northern Territory?
– I shall be glad to bring the honorable member’s question under the notice of the Postmaster-General who arranges contracts of the character referred to.
– In viewof the dismissal of a large number of the employees of the Commonwealth clothing factory in Victoria by reason of the completion of this year’s work, will the Minister for Defence expedite the manufacture of the new uniforms so that those who havebeen dismissed may be reemployed, and the services of others who are still engaged may be retained?
– The Government desires to keep in employment as many persons as possible. I shall make inquiries to see what steps may be taken to expedite the undertaking of additional work and prevent dismissals. I have no knowledge of any new uniforms other than those included in the year’s allotment.
– Will the Treasurer state whether the Government has arrived at a satisfactory agreement with the States for the allocation of the £100,000 which appears on this year’s Estimates for the purpose of subsidizing local government works? If so, will legislation to give effect to that agreement be introduced during this period of the session ?
– Such legislation will be introduced, if possible, before Easter, but if not, immediately afterwards.
– Can the Prime Minister say whether it is the intention of the Government to re-establish this year the interstate commission? If so, will he endeavour to secure for the position of chairman either a judge or some other person who is without political associations ?
– This matter is under the consideration of the Government. I am not in a position to say when the proposal will be placed before Parliament, but am hopeful that it will be possible next session.
-I ask the Prime Minister whether the Government has come to a decision in regard to an alteration of the method of election for the Senate? If so, will the new system provide for election on a single electorate basis, by the division of the States into districts?
– There is no proposal at present for any alteration of the existing system.
– Will the Treasurer state whether a decision has been arrived at upon the application of the Government of Western Australia for a grant from the Commonwealth for the rehabilitation of the pearling industry?
– The Government has not yet been able to give final consideration to the request, but I hope that that stage will be reached very shortly.
– I ask the Minister representing the Postmaster-General whether it is a fact that a large number of youths are employed in the Postal Department as temporary messengers? If so, is it not possible to make a considerable number of permanent appointments, thereby providing the opportunity for many youths to enter the Service who have passed the entrance examination, which otherwise they would be precluded from doing because of having reached the age limit?
– I shall make further inquiries into this matter to learn what has happened recently. While I was in charge of the department the matter engaged its attention, and steps were taken to restrict somewhat the entry of youths until those temporarily employed had been absorbed in permanent positions. I assure the House that every effort is being made to afford an opportunity to those who are in the Service to improve their position. The general prosperity of the country, which is reflected in the increasing business of the Post Office, is enabling this to be done to a greater extent now than was possible some time ago.
– I ask the Minister representing the Minister for External Affairs whether he is in a position to make available any further information arising out of the meeting in London of the Powers which were signatories to the Locarno Pact?
– The situation has not yet reached the definitive stage at which a public statement may be made.
– I ask the Minister representing the Minister for External Affairs whether it is a fact that as the result of an ordinance, known as the newspaper ordinance, promulgated in regard to Norfolk Island, and the restrictions consequent upon its enforcement, the only newspaper of Norfolk Island has ceased publication? Is it not also a fact that the Legislation Council of Norfolk Island unanimously recommended the withdrawal of the ordinance ? If that is so, why did not the Government accept the advice of that body in connexion with the matter?
– I shall obtain for the honorable member the information he seeks.
– Seeing that the British Government recognizes that an ex-soldier may suffer from blindness, even after 15 years, in consequence of gas attacks, will the Minister for Repatriation instruct the medical officers acting on behalf of the Repatriation Department to go very carefully into all requests for assistance by returned soldiers whose health has been affected by gas attack, before any application is rejected ?
– I was not able to appreciate fully the object of the honorable member’s question, but it is inevitable that the act shall fall short in some repects regarding the cover given to returned soldiers. I shall see what can be done in the matter.
Mr. SPEAKER (Hon. G. J. Bell).Yesterday the honorable member for East Sydney (Mr. Ward) asked me the following questions’: -
Has my attention been directed to numerous leaks in the roof of Parliament House discovered during the recent rains?
Will I give him the details of the expenditure from the fund provided by the Joint House Committee for roof maintenance and repairs to the House?
Is it a fact that portion of this fund was diverted to meet the cost of alterations to the Prime Minister’s offices in the House?
I was unable at the time to give the honorable member full information on the various points referred to in his questions, but I have since made inquiries, and am now able to furnish him with the following replies : -
During the recent heavy rains only one leak of any consequence was discovered in Parliament House. This was on the roof covering the press-rooms on the House of Representatives’ side of the building. This is the only portion of the roof that has not been completed under the scheme that has been carried out during the last few years As soon as the House adjourns for any length of time the work will be carried out. It cannot be done while the House is in session.
This expenditure is provided for on the estimates of the Department of the Interior, and that department is obtaining the information desired.
The cost of the alterations to the Prime Minister’s offices was defrayed from a special grant. Consequently, the vote for the repairs to the roof and other maintenance and repairs to the House was not affected.
The following papers were presented : -
Seat of Government Acceptance Act and Seat of Government (Administration) Act - Ordinance of 1936- No. 8 - Canberra Community Hospital Board.
Science and Industry Research Act - Regulations amended - Statutory Rules 1936, No. 13.
In Committee of Ways and Means: Consideration resumed from the 19th March (vide page 406) on motion by Mr. White (vide page 2044, volume 147)-
That the schedule to the Customs Tariffs 1933-
Division 2. - Tobacco and Manufactures thereof.
By omitting the whole of sub-item (a) and inserting in its stead the following subitem : - “(a) Tobacco, unmanufactured, entered to be locally manufactured into tobacco other than fine cut tobacco suitable for the manufacture of cigarettes - to be paid at the time of removal to the factory - (1)Unstemmed - per lb., British, 3s. (id. ; intermediate, 3s.6d. ; general, 3s.6d.
Stemmed, or partly stemmed, or in strips - per lb., British, 4s.; intermediate, 4s.; general, 4s.”
.- I desire the Government to amend this item by increasing the import duty on both unstemmed and stemmed or partly stemmed tobacco by 6d. per lb. in each of the three columns. The Standing Orders prevent private members from moving for an increase of duties. The only method by which we can indicate our desire to the Government is to move that consideration of an item be postponed. I therefore move -
That the item be postponed.
I do this “ as an indication to the Government that honorable members desire the duty to be increased by at least 6d. per lb., in order to give additional protection to the Australian tobacco-growers.”
This would have the effect of making the duty on unstemmed tobacco 4s. per lb., and on stemmed or partly-stemmed tobacco, 4s. fid. per lb., which would ensure that the work of stemming imported leaf would be done in the tobacco factories of Australia. The Australian tobacco industry is at present in a parlous condition. I think we would all agree that it is not right that we should import unmanufactured tobacco from America to any greater extent than is absolutely necessary. In the boom period our total imports of tobacco from America were valued at about £3,000,000 per annum. In view of the fact that the United States of America imports from Australia goods to the value of only about £18,000,000 per annum, and that we were importing goods to the value of about £45,000,000 per annum from that country, there is justification for taking the step that I am suggesting. The Australian tobacco-growers have suffered severely in consequence of frequent alterations of the tariff by this Government. The import duty on tobacco was increased by the Scullin Government from 3s. to 5s. 2d. per lb., after very careful consideration had been given to the case submitted by a deputation of growers and others, on which I think all political parties then in the Parliament were represented. It was submitted to me, as Acting Minister for Trade and Customs at that time, that the Australian tobacco-growers were suffering in consequence of the heavy importations of tobacco into Australia. Much of this tobacco was grown by black labour under conditions which made competition by the Australian growers impracticable. It was in those circumstances that the import duty was increased, in December, 1930, to 5s. 2d. per lb. The result of that action was that the Australian industry received a valuable impetus. In the following year imports of tobacco leaf fell by 5,000,000 lb., from 20,000,000 lb. to 15,000,000 lb., the quantity of Australian leaf used in the manufacture of tobacco in this country trebled; the quantity of Australian-grown tobacco leaf manufactured in Australia increased from 1,000,000 lb. to 3,000,000 lib., and the local product became very popular with smokers by reason of the difference in price between it and imported tobacco. The growers were in the happy position of being able to complete negotiations with three or four manufacturers for the sale of practically the whole of their crop. There was a time when only one buyer operated in Australia. The then managing director of the BritishAustralasia Tobacco Company Proprietary Limited, Mr. Claude Reading - now Sir Claude Reading, chairman of directors of the Commonwealth Bank - in giving evidence before the Tariff Board on one occasion said -
The company realizes that it is practically the only buyer of Australian-grown tobacco leaf.
It is easily the largest buyer of it to-day ; but the tariff policy of the Scullin Government encouraged other local tobacco manufacturers to buy Australian leaf. Some of those companies have since gone out of existence. This multiplicity of manufacturers was appreciated by growers because it intensified competition among the buyers, resulting in increased prices to the Australian grower. Sir Claude Reading continued -
If we have to cater for the public taste, and as business people we propose to do so, there does not look to be very much prospect of increasing the consumption of the present quantity of Australian tobacco.
Those remarks were made in respect of the position in 1924-25 when the quantity of Australian leaf used was 1,066,763 lb., being 5.9 per cent, of a total of 18,073,037 lb. In 1928-29 the percentage was lower still, namely, 5.1. It will be seen, therefore, that with in- adequate protection there was little, if any, inducement for growers to launch out or incur any great expense either to increase the quantity or improve the quality of the leaf, and they could not look ahead for any period as the stability of the industry was not guaranteed. Requests made to the Government of the day for necessary protection were made in vain, but with the advent of the Scullin Government the whole picture changed. Adequate protection was given to the industry, with the result that the tobacco crop increased, amounting in one year to a record quantity of 12,000,000 lb., when the total importation of unmanufactured leaf was about 20,000,000 lb. As the honorable member for Kennedy (Mr. Riordan) who represents one of the most promising tobacco districts in Australia will, no doubt, be able to verify, a large number of people were forced out of the industry because of the change of policy by the present Government.
– And the growers lost a lot of money.
– That is so. Many had invested all their savings in the industry, and they purchased large quantities of galvanized iron, wire and wire netting. In fact, the meeting of their requirements caused a boom in the building trade in tobacco-growing districts. At that time there were no unemployed in Mareeba, which, in a couple of years, was transformed from a second-rate country town into a very thriving and prosperous centre. Because of the severe treatment meted out to tobacco-growers, first, by Sir Henry Gullett when he was Minister for Trade and Customs, and later by the present Minister for Trade and Customs (Mr. White) - although the present Minister is an improvement on his predecessor - we hope the Government will receive this amendment sympathetically. We have been told that all light leaf, or high quality leaf, can be sold, but it is well known that high quality production to the extent of 90 per cent, cannot be obtained in either the tobacco industry or any other industry. Consequently hundreds of growers have been forced out of the industry. I do not claim for the Labour party sole credit for assisting this industry. The Scullin Govern ment conferred on this matter with the honorable members then representing New England, Kennedy, Herbert and Indi and others who held official positions in the Australian Tobacco-growers Association. The present Deputy Prime Minister (Dr. Earle Page), before he goc into the Ministry, was very outspoken in his condemnation of this Government’s treatment of the tobacco industry. If only for that reason, I am entitled to expect that the most sympathetic consideration will be given to the growers. On his arrival in Sydney from Canberra on the 29th February, 1932, Dr. Earle Page said -
There was no suggestion of a combined move by the Country party to defeat the Lyons Government. It did seem strange, however, that the tobacco industry had been sacrificed in favour of a luxury import from America. A resolution to that effect was carried at a meeting of the party on Friday, and he would do his best to help the Australian industry.
The honorable member and a number of his colleagues are now members of this composite Ministry. I recall that the Minister for the Interior (Mr. Paterson), when a private member, once moved a tariff amendment to give a greater margin of preference to the Australian tobacco-grower; therefore I hope that he too will view with sympathy the very reasonable request that is now being made through my amendment. The number of registered tobacco producers dropped from 5,527 in 1932-33 to 3,565 in 1933-34, whilst in the same period the area under tobacco decreased from 26,272 acres to 16,304 acres, and the production from 9,700,000 to 4,300,000 lb. The quantities of stemmed leaf used in manufacture in 1933-34 were : Imported, 13,700,000 lb.; Australia..!, 3,300,000 l’b. Thus the quantity of Australian leaf used shows little advance on the 1930-31 figures when 3,100,000 lb. was used. In 1933-34, out of 3,157,000 lb. of Australian stemmed leaf used in manufacture, only 148,000 lb. was used in the manufacture of cigarettes. The total quantities of tobacco, cigarettes and cigars, respectively, made in Australia in 3933-34 were: 14,656,000 lb., 4,577.000 lb., and 259,000 lb., or a total’ of 19,492,000 lb. In addition, 52,000 lb. of tobacco. 40.000 lb. of cigarettes, and 9,000 lb. of cigars, or a total of 101,000 lb., were imported in the manufactured state. Practically no Australian leaf is used in cigars. The quantity of imported leaf cleared from bond in 1934-35 was 17,000,000 lb., ot 2,000,000 lb. more than the quantity cleared in 1930-31, and the largest quantity cleared in any one year since then. The quantities of stemmed leaf used in manufacture in 1934-35 are not available, but the increased clearance of imported leaf would seem to indicate that a smaller quantity of stemmed Australian leaf is used.
Any additional stimulus which can bc given to the growth of Australian leaf should be given without delay and I hope that representatives of tobacco-growers in this chamber will prove their sympathy for the industry by supporting the amendment.
– The amendment moved by the Deputy Leader of the Opposition (Mr. Forde) is reasonable, and I hope the Minister will be able to report favorably on it to the Government. Definite action along the lines suggested will not only benefit the revenue by some £300,000 or £400,000 a year but will also’ accomplish much good for the tobacco industry. I hope that because this proposal emanates from the Opposition, the Government will not view it in any party spirit. I have always protested against making the tobacco-growing industry a. party issue, and I cannot understand why the Government should deal with it in that way. So far as the tariff is concerned much more progress in the industry would have been achieved, and probably a better feeling would have been established among the various parties in this House, had the industry been placed on the same footing as all other industries, primary and secondary. It seems extraordinary that in this enormous tariff schedule, the tobacco industry alone is made a party issue. This is a fair conclusion to draw because on numerous occasions in this House the industry has not been considered on its merits, but some supporters of the Government have, perhaps against their better judgment, been compelled to support the Government merely in order to prevent an adverse vote. Under the Standing Orders private members have no power to move for an increase of import duties; that is a privilege reserved to the Government. Consequently we must throw ourselves upon its mercy and simply put forward arguments which we hope will win its approval. The case made out by the Deputy Leader of the Opposition is sufficiently sound to justify a reconsideration of the import duties on tobacco. If the duties are increased, as the honorable member has suggested, the effect will be to give a slight increase of the margin of protection to the Australian tobacco industry. In comparison with the record duty of 5s. 2d. per lb., which was in force about four years ago, the suggested increase will not be very substantial, but it will very nearly bridge the gap between the excise duty of 4s. 6d. per lb., and the import duty of 3s. 6d. per lb., and, for this reason, I believe it will have immediately a very beneficial effect upon this languishing industry. The strongest argument for the reconsideration of these proposals is the amount of revenue involved. In 1934-1935 the total net revenue from tobacco duties was £7,770,142, customs revenue yielding £2,S07,750, and excise £4,962,000. The effect of excise is to increase the price of the commodity to the consumer. Before the last increase the excise on tobacco wa? at the rate of 2s. 4d. per lb. It has been raised to 4s. 6d. per lb., and this means a very heavy increase of the cost, not only of Australian tobacco, but also of imported tobacco. Since the present rate of excise was imposed, no cheap tobacco has been sold in Australia, and as the actual protective effect of that change was an increase of the margin against Australian tobacco by 93 per cent., naturally the local product suffered most severely. Consumption of Australian tobacco fell enormously, not so much because of the increased price of local quality brands, but because it was placed practically on the same price level as the imported brands. The prejudice against Australian tobacco, which had been encouraged for a number of years, immediately began to operate. The result of the higher price, plus that prejudice, was that the sales of Australian tobacco decreased and many brands went off the market. I was glad to notice in the budget last year that the Government had, in a small measure, adopted the proposal of the Australian Tobacco-growers Association for a differential excise rate. Under the concession a manufacturer who put an Australian brand of tobacco on the market and certified to the customs authorities that it contained 100 per cent. Australian tobacco, was entitled to a reduction of the excise duty by 8d. per lb. making it 3s. lOd. instead of 4s. 6d. per lb. The concession was much appreciated by those engaged in the industry, but, unfortunately, it was too small. At that time about 50 per cent, of the Australian production of tobacco was being used in all-Australian brands. Those figures were given to me by the Customs Department, but I was not able to verify them. When I inquired as to where the department had obtained its figures, I was told that they had been supplied by the manufacturers. I do not suggest that the manufacturers gave unreliable information, but I admit that I was astonished when informed by the Customs Department about twelve months ago that 50 per cent, of the tobacco produced in Australia was marketed in all-Australian brands of pipe tobacco. Unfortunately, very little Australian tobacco is sold in the form of cigarettes, although it is entirely wrong to think that it is not suitable for cigarettes. I have in my possession samples of cigarettes made from Australian tobacco which compare favorably with the best imported brands. As I have said, I had to accept the figures supplied by the Customs Department because I had no opportunity fo test them. From a statement made by the Minister for Trade and Customs to a deputation in Melbourne - I have not seen a report of it, and, consequently, am speaking from hearsay - it would appear that he has information showing that now 60 per cent, of the Australian production of tobacco goes into all-Australian brands.
– It is only 40 per cent.
– If that be so, during the last twelve months the quantity of Australian tobacco used in allAustralian brands has declined by 10 per cent., despite the excise concession of 8d. per lb. That proves that the concession was too small to be of value to the industry. In my opinion it is a sound principle that the Australian tobacco industry should stand on its own feet, if able to do so. The only way in which the local product can hold its own in competition with imported brands of tobacco is by being marketed as 100 per cent. Australian tobacco. I admit that there is something to be said for mixing Australian tobacco with imported tobaccoes, but we shall not overcome the prejudice and the evil propaganda against Australian tobacco until we are prepared to put 100 per cent. Australian tobacco alongside the imported article and allow the smoking public to judge between them.
– Why should Australian tobacco be mixed with imported leaf and sold as imported tobacco?
– The figures in relation to the actual quantities of 100 per cent. Australian tobacco sold are confusing; but if virtually one-half of our tobacco is manufactured in that form, a large proportion of the tobacco sold must be put on the market under false names. It would appear that the public is being led to believe that what is really Australian tobacco is imported leaf. A small manufacturer who operated in Queensland some years ago, told me that he bought tobacco in the district which I represent - the principal tobaccogrowing centre of Australia, which, however, has been given a bad name by the Minister for Trade and Customs-
– Not at all. I had a talk with the local growers.
– The Minister favorably impressed the growers and they regarded him as a friend; but they have since been disappointed that he has not done more for the industry. The manufacturer to whom I have referred informed me that he was buying tobacco grown in the Tamworth district, which the combine would not touch, and waa manufacturing it in 100 per cent form and selling it to retailers in Brisbane, who were displaying it in their shop windows without any name attached to it, with the result that the public bought it in the belief that it was the best imported tobacco, and came back and asked for more. That is evidence that the manufacturers are using Australian tobacco and, by placing no name upon it, are letting the public think that it is imported tobacco. That is the only way in which I can account for the large percentage of our tobacco said to go into 100 per cent. brands.
At a later stage I propose to ask for an increased rate of excise on wholly Australian brands of tobacco, but whether or not the Minister will be favorable I cannot say. He will, however, be given an opportunity to decide the matter on its merits. I believe that he is more favorably disposed towards the Australian tobacco-growing industry than he was two or three years ago. The growers are beginning to have hopes of him, and to believe that before long the industry will be back where it was some years ago.
– I am trying to improve it beyond what it was then.
– The growers appreciate the changed attitude of the Minister, resulting from his greater knowledge of the problems of the industry. I shall support the proposal to increase the import duty because I consider that it is fair. This is not a party issue, and I feel sure that all honorable members who wish to see the industry develop, will support the increase.
– From what source does the honorable member think that the propaganda against the Australian tobaccogrowing industry emanates?
– In my opinion, it emanates mainly from a powerful combine, associated with which are a number of parasites who are well paid for speaking disparagingly of Australian tobacco. ‘ I have never contended that Australian tobacco is a perfect product. The industry is still young, but with proper help it would soon pass the pioneering stages. It has had more knocks than has any other primary industry, and it would be astounding if it had been able to produce a perfect tobacco. Considering the problems confronting the growers in Australia - the prevalence of disease, and greater climatic difficulties than in any other tobacco-growing country -they have shown great heroism in persevering with the industry. But far above the discouragement resulting from natural causes has been that created by one of the world’s most powerful combines which, under the protective policy of this country, has been given 90 per cent. of the Australian market. That combine has set itself up as the arbiter of the fate of the tobaccogrowing industry of Australia. In saying that, I say nothing new, because it has already been said in the report of the select committee on the tobacco industry appointed by this Parliament. I am pleased to know that, even in the cities, there is a growing ‘belief that our primary industries should be given every possible encouragement. The tobaccogrowing industry is capable of employing between 20,000 and 30,000 rural workers. In the midst of the depression it was the only country industry which took men off the dole and gave them work, thereby enabling them to buy their own food and clothing. Yet, when the opportunity came to reward those who had put their money into the industry and provided employment at a critical time in the nation’s history, they were practically wiped out of existence by an alteration of Government policy. The present Government has adopted a more sympathetic attitude towards the Australian tobaccogrowing industry than did its predecessor, which practically told the growers that the industry was not wanted. The Government would act wisely if it increased the excise duty by 6d. per lb., because the effect would be an increased consumption of Australian tobacco which is now declining, while imports are on the increase.
– That is not so.
– I have seen figures which show clearly that the importations of tobacco are increasing in comparison with the production of tobacco in Australia. If the Minister can produce other figures I shall be glad to see them. Had any other protected industry suffered the same fate as that which has overtaken the tobaccogrowing industry, we should have to admit that, in regard to it, the protective policy had failed. If, for instance, we found that the importations of pianos or of textile goods continued to increase, while the production of pianos and textiles in Australia decreased, we should have to admit that the industries were not sufficiently protected. That the tobacco-growing industry in this country has declined is proved by the fact that there are now 2,000 fewer growers than there were some years ago. That shows clearly that a wrong policy has been pursued in connexion with this industry. For the reasons which I have given, and not out of any hostility towards the Government, I propose to support the amendment submitted by the Deputy Leader of the Opposition.
. - Being a native of New England and having as a youngster grown tobacco in that most important district, I speak with some knowledge of the industry. In my youth, the entire industry was killed; later it was revived, but I regret that progress has been most tardy, and that the industry itself is not receiving very favorable treatment. Tobacco-growing should be regarded as one of the enterprises capable of being successfully carried out in Australia under a variety of soil and climatic conditions. It can be grown in the tropical north, in southern Victoria, or in climates similar to those of Ireland and Belgium. But the southern States can produce a greater diversity of crops than can the tropical regions, which are subject to limitations of soil, climate and economic conditions. Fortunately, tobacco is one of the few crops that demand a light, semi-leached soil, and’ a dry atmosphere during the latter party of the growing season, for its most successful production. The north provides both these desirable conditions of soil and climate. If we are to take the development of our tropics seriously we should allocate to the north the right to produce a set percentage of Australia’s tobacco consumption. This committee, for reasons which I shall state, should regard tobacco-growing seriously and not as an industry that can be left, as the honorable member for New England (Mr. Thompson) stated, in the hands of a combine which is striving to survive under conditions that this Parliament should not permit, if we are to develop the tropical regions. Towards the close of last session, I asked some pertinent questions in regard to the outcome of the yearly investigations conducted into tobacco-growing by the Council for Scientific and Industrial Research. The time has now arrived when we should devote greater attention to the importance of tobacco-growing, because this year the problems of blue mould and curing are expected to be solved. Many factors, particularly climate, govern the production of tobacco; the daily rainfall in the growing season has a most important bearing upon the crop. Because of this, we have flue-curing. In view of the variations of climate from Darwin in the north to Tasmania in the south, I feel that greater freedom should be allowed the Council for Scientific and Industrial Research in the conduct of its experiments, in order that the problem of curing may be solved on a climatic basis. The grower would be relieved of much of the flue-drying if climates suitable for the drying of tobacco were selected. Let me give an illustration of my point: Coming south from Darwin, we have a graduated rainfall, ranging from 60 inches to 20 inches. The tobacco plant requires a ten-weeks growing season before the leaves commence to ripen on the stalk; but if such considerations as the daily rainfall and the daily moisture-content of the air during those weeks are not known, production cannot be successful. Cropping under such conditions is futile and foolish, apart from the expensive business of curing. A working plan is required to prove that areas exist in our tropics where the dry atmosphere following monsoonal rains could be utilized to cure the leaf practicably in the paddocks, provided that the leaves of choice varieties are plucked as they ripen, which is the practice in countries such as Greece. I am confident tha t such regions- exist in the Northern Territory. An important, consideration to be remembered is that these regions do not possess the diversification of climate, and, therefore, the wide range of crops that are found in the southern regions, which have been so handsomely endowed by nature. The question of successful tobacco-growing in the north therefore becomes one of national importance. If the cultivation of tobacco were allocated to the northern districts, we should la j a foundation for the development of the light lands in our tropics, and the sneering remarks directed against their non-productiveness would no longer be justified. Tobacco, if fostered, would be a staple crop of those parts. If Australia allocates to the northern regions the growing of tobacco, and adopts a sane policy of capitalizing the northern soil and climate by compelling southern growers to cease production of inferior cigarette leaf on unsuitable areas - a menace to northern development - the whole nation will benefit, and if the home market is nursed the Australian product will before long be able to compete with the imported. For the present, however, I endorse the remarks of the Deputy Leader of the Opposition (Mr. Forde), that Australian tobacco should be given adequate protection against the foreign-grown; and, in granting this protection, because it spells economic occupancy of tlie north, I am prepared to go to even greater lengths than those suggested by the honorable member.
.- The Minister for Trade and Customs (Mr. White) interjected that he did not desire Australian tobacco to return to the state it was in when the duty was 5s. 2d. per lb. Evidently the policy of the Minister is to get back to the years before 1929, when sufficient protection was not given to the industry. If that is his desire., his policy has been effective, as is shown by the decline of the production of tobacco leaf. In 1930 there were 6S1 growers; but, in 1932, as the result of adequate protection, the number had increased to 5,127, and in the following year to 5,600. Production in 1929 was 1,8S3,1’29 lb. Two years later it had increased to 10.160,192 lb.; to-day it is back to 2,342,000 lb. Honorable members will realize, therefore, that the production of tobacco has gradually declined as the result of the policy of this Government in lowering the protection granted to the industry. The honorable member for New England (Mr. Thompson) stated that he was surprised ‘that previous debates upon this subject should have been political, thereby restricting the freedom of action of honorable members. All matters discussed in this chamber are political. The honorable member for New England, when speaking upon the subject of tobacco in 1933, made the following charge against the present Minister in charge of negotiations for trade treaties (Sir Henry Gullett) : - lt is a. strange thing that the honorable member for Henty (Sir Henry Gullett) can never speak on the subject of the Australian tobacco industry without displaying a considerable amount of heat and venom. I am satisfied that .his protests of friendliness towards the industry are not sincere, because they are belied by his own utterances, and he takes every opportunity of throwing mud at the majority of the growers. He did so again to-night. As I have said ‘before, the tobacco combine has no better advocate in this Parliament than the .honorable member.
I ask honorable members to consider the fate of the tobacco-grower and the treatment of this industry by the Government. A Department of Commerce employing ;i large staff hak been created, and in this House there are a Minister for Commerce and an Assistant Minister for Commerce, presumably to safeguard the interests of the Australian producer and to assist in the finding of markets. Prior to 1932 the number of growers in the Cairns hinterland was negligible, but in the year 1932-33, 1,616 men were occupied in the production of leaf. If it had not been for the protection granted to this industry they would have been on the dole. To-day there are less than 300 men growing tobacco in that district. To illustrate the hardships- that beset these growers I quote the following article published in the Cairns Post : -
The Cairns Post publishes for the information of all concorned the following facts and figures, which tell their own tremendous tal«, thus -
Manufacturers of high-class Australian tobaccoes.
Toasted rough and coarse cut for pipe; toasted ready rubbed fine cut for cigarettes; superior quality twist, plug, bars and nail rod tobaccoes; blenders of imported tobaccoes.
The grower, Mr. Moses, sent his tobacco to this firm, and received the following reply : -
Enclosed please find statement and cheque attached. This is the highest price your tobacco will bring on the present state of the market.
COMBINED Growers Tobacco Manufacturers Company Limited.
But the grower never received £143 10s. Excise at 3s. lOd. per lb. accounted for £94 17s. 6d. ; manufacturing costs at 9d. per lb., £18 lis. 3d.; and selling costs at ls. per lb., £24 15s., which left the grower, at that stage, a return of £10 6s. 3d. Still the manufacturer had not finished with him. Half of the net proceeds had to be paid to the manufacturer, and freight and cartage absorbed £1 lOs. of the remainder, so that the ultimate return to the grower was £3 13s. 2d. Is it any wonder that he and his family wondered who grew the 6 cwt. of tobacco?
– He sold it to the Combined Growers Tobacco Manufacturers Company, in Brisbane, which paid him 6s. per lb., the best price available. The greatest rake-off was excise, of which he paid £94 17s. 6d. on the consignment.
– The growers do not pay excise. It is paid by the manufacturers, who pass it on to the consumers.
– I challenge the Minister to investigate this complaint in order to see whether excise is being wrongfully collected, and -if so to take the necessary action.
– I shall be glad to look into the matter.
– The statements which I have made now were published in the Cairns Post, and they have not been refuted or challenged. This grower also paid £18 lis. 3d. for manufacturing costs. In the Mareeba area, growers have invested over £100,000 in the industry. Some years ago, the Government appointed a joint parliamentary committee to inquire into the tobacco industry in Australia, and that, committee made certain recommendations to the Government. When those recommendations were put into operation by the Scullin Government, so great a fillip was given to the the industry that, in the Mareeba district alone, 1,600 persons went in for tobacco production. In 1929 the total quantity of tobacco produced in Australia was .1,836,000 lb.; in 1930 the amount was 1,702,000 lb; in 1931 it was 1,000,000 lb., but in 1931-32, the first year in which the Scullin duties were in operation, the amount increased to 10,160,192 lb. After that came what is known as the Gullett agreement between the manufacturers and the growers, when an average price of 2s. 3d. per lb. was paid, representing a drop of 9d. per lb. below the price of the previous year. However, at that price the whole of the crop was sold. The next year there was no guaranteed price, and the growers were left to the mercy of the combine, with the result that most of them were forced out of the industry. We are told, of course, that the decline of the industry is due to blue mould, but the fact remains that, even when the growers produce good tobacco, they cannot find a market for it. When the Deputy Leader of the Opposition was pleading for assistance for the tobacco-growers in 1933, the honorable member for Henty (Mr. Gullett) said that he was surprised to hear the honorable member asking for support for the New England growers, who were producing rubbish at the expense of the Mareeba growers. The policy seemed to be to play off the Mareeba growers against those of New England, until the New England growers wore put out of the business ; then, all of a sudden, it was discovered that there was blue mould in Mareeba, so that itwas of no use trying to grow tobacco there either. There is undoubtedly some blue mould in Mareeba, and its presence is largely due to the policy of the Government, which made it unprofitable for the growers to harvest their crops, which were left standing in the paddocks, with the result that the plants became a prey to all kinds of diseases. However, blue mould, we are informed by scientists, will never be a serious menace in Queensland, because there the disease is out of its environment. It could never destroy whole crops as it does in Victoria. The growers have, year after year, been hoping for more adequate protection, and have looked to the Country party to help them to get it. On one occasion, the honorable member for Gippsland (Mr. Paterson) said that if the Government did not accept the Country party’s proposition for reduced excise duties and increased import duties, he and his colleagues would take steps to translate their wishes into action. However, when I look at the division which was taken in Parliament on the item, I find that all members of the Country party, with the exception of the honorable member for New England (Mr. Thompson) and the honorable member for Calare (Mr. Thorby), voted with the Government. That sort of trickery has gone on all the time. There is no sound reason why Australia should not produce all the tobacco it requires, especially in these times of depression. The opponents of the Australian tobacco industry claim that the loss of revenue on imported tobacco would represent too great a sacrifice, but when the excise duty was reduced by 2s. 3d. per lb. by the Scullin Government, the revenue for that year was greater than for the year before. I maintain that the Government is morally bound to compensate the growers who, on the promise that adequate protection wouldbe given, invested their capital in the industry. If a private firm of land agents, for instance, deceived their clients in the same way as the Government has deceived the growers, the principals would be in danger of arrest for issuing false prospectuses. I was in Mareeba when the Prime Minister visited the district, and I heard him promise the growers that he would appoint a committee to investigate the industry. Subsequently, the committee was appointed under the chairmanship of Mr. Townsend. In its report, the committee stated that blue mould was prevalent in the district, and that, in some instances, the attempt was being made to grow tobacco on unsuitable land.
– Was not Mr. Howell a member of that committee?
Mr.RIORDAN. - He was. Mr. Howell had, for the previous five years, been investigating the tobacco industry as an employee of the Commonwealth Government, and had reported favorably upon it. Nevertheless, he signed the report, which stated, in effect, that tobacco could not be produced successfully, and I believe that he did so because he feared that, if he refused, he would lose his job. No man connected with that report was more ashamed of it than was Mr. Howell. So ashamed was he that when he returned to amongst the growers where he had made the investigation he eventually faded out of the job.
– Out of the service?
– Yes, out of the service. After saying that tobacco could be grown at Mareeba, and then signing a report declaring the opposite, he resigned his position in the department where he had security of tenure and a good salary, and took up land at Mareeba for tobacco-growing.
– That sounds “crook” to me.
– Is he still there ?
– He was still there the last time I was in the district.
– Proving that the present duties are right.
– Proving nothing whatever.
– Proving that it is “ crook “. That is what is proved.
- (Mr. John Lawson). -Order!
– Mr. Howell, as the departmental’ expert, knew the value of cultivation of high-class leaf under irrigation and having sufficient capital and a thorough knowledge of tobacco cultivation, and the type of leaf required, he went into production ; but he will tell you to-day that he cannot obtain a market even for his first-class tobacco. He is hanging on in the hope that something will be done for the tobacco-growers in Queensland. What has been done to the growers would not be tolerated by miners or any compact settlement. It is only because the growers are spread over a wide area that they cannot be brought together. The only time they were brought together was when the Prime Minister arrived at Mareeba following the passage of certain resolutions of protest. Just prior to his arrival, the following telegram was sent to the Prime Minister : -
Seven hundred growers in Mareeba district emphatically protest against any reduction in tariff on imported leaf and removal of prohibition on manufactured tobacco, cigarettes and cigars, and request every effort be made to retain present duties and excise. Any interference will cripple the whole of the industry in its infancy by increasing the cost of lowgrade tobacco, and (thereby reducing consumption. It is stated by those associated with the industry here that alteration in the tariff will moan ruination in its infancy of the industry, which is supporting 3,000 persons and represents investment of £500,000 of capital.
The tobacco industry in North Queensland, even at the depth of the depression, supported 3,000 persons and provided an avenue of employment for men in the back country. I am convinced that the whole of this country’s tobacco requirements will be produced in those back areas. The growers there have no market for lower-grade tobacco and the quality of crops is dependent to a large extent on seasonal conditions.
Those honorable members who give lip service to the tobacco-growers have an excellent opportunity to-day to show practical sympathy. “We have no power to move for an increase of duties, but we ask that the item be postponed as an instruction to the Government to increase the duty on imported leaf. The Deputy Leader of the Opposition (Mr. Forde) has already moved in that direction, and I hope that his amendment will meet with the support of all fair-minded honorable members. I speak to-day not with any desire to make political capital out of the industry - indeed out of more than 60,000 persons on the Kennedy electoral roll only about 1,600 are tobacco-growers - but because I have a great regard for these people who have invested their money in tobacco-growing. If the tobacco-growers are given protection until such time as they can be placed on a solid footing, the Government will lose no revenue. On the contrary, it will place people in employment, both directly and indirectly. Protection to the industry will help towards the lifting of the wages taxes because the number of unemployed persons will be materially reduced. To the family man who is unable to find other employment for his sons tobaccogrowing presents an opportunity to place them in work. Already thousands of the most thrifty men in the Commonwealth, men with small capital who had to find work for their children, have engaged in the industry. The Government is aware of the great possibilities presented by this industry, but that has not prevented it from penalizing it and bringing t« tha brink of ruin men engaged in it. By reducing the duties it has put these men into competition with countries such as America where leaf is grown by black labour, and to the great detriment of the Australian leaf has flooded this country with the imported product.
– Order ! The honorable member’s time has expired.
– Although I did not intend to speak on this subject, I feel that because of the statements made by the honorable member for Kennedy (Mr. Riordan) some other aspects to the tobacco question should be presented to the committee Accompanied by some other honorable members, I toured the tobacco fields of North Queensland some time ago with the object of trying to discover the conditions existing and the results to the industry of the alteration of the tobacco duties. We were amazed at the state of affairs existing there. It was entirely contrary to what the honorable member has depicted.
– The honorable member was there for two hours.
– I was there for a sufficiently long period to obtain the necessary information. The conditions obtaining in Mareeba, at that time were a sure indication of the effect that uncontrolled and unbalanced introduction of tariff legislation will have upon the general population. The action of the Scullin Government in increasing customs duty on tobacco leaf to 5s. 2d. per lb., brought into the industry a group of young men imbued with get-rich-quick ideas. They were prepared to relinquish good positions in cities and even give up valuable sugar lands in Queensland to go to Mareeba. Some of these paid the inflated price of £5 an acre for land, because the area which the Crown had made available at 2s. 6d. an acre for tobacco-growing had already been fully taken up. These inexperienced young men considered that all they had to do was to walk around their land hands in pockets and see the money roll in.With the object of storing their leaf some of them erected concrete barns costing £300 each. The barns stand there to-day, monuments to the lack of experience of young men who knew so little about the job that they even had to engage other men to till their fields. There was a grading company at Mareeba and these young men, not having sufficient experience to do their own grading, paid 3d. per lb, to this company to do it for them. The statements which I am making now are borne out by the report of the Tobacco Inquiry Committee appointed by the Commonwealth Government in 1933. When the personnel of that committee was announced it was applauded by the growers in Mareeba. The rafters rang with their applause when they learned that Messrs. Townsend and Howell were to be on the committee. I challenge the honorable member for Kennedy to deny that.
Mr.Riordan. - I do deny it. They hooted.
– The committee was asked to make a report into disease prevalent in the tobacco in North Queensland. In its conclusions and recommendations it stated -
The distress of a large number of tobacco- growers inNorth Queensland, at the present time, is largely due to the widespread occurrence this season of frog-eye leaf spot (cercospora nicotianae) , for which, apparently unfavorable growing conditions were responsible.
It went on to criticize the industry. When during the remarks of the honorable member for Kennedy I directed his attention to the fact that Mr. Howell, knowing the local conditions, was a party to that report, the honorable member immediately indulged in blackguarding him.
– I did nothing of the sort.
– At any rate, while the honorable member was speak ing the honorable member for West Sydney (Mr. Beasley) interjected : “ That sounds ‘ crook ‘ to me “. The charges levelled by the honorable member for Kennedy must have produced on honorable members the impression which the honorable member for West Sydney expressed in words. The honorable member is now declaring that he did not do so, but by insinuation and innuendo he produced on this committee the same effect as direct charges would have produced. He said that Mr. Howell had signed the report against his good judgment and then, in shame, had faded out. He went on to tell us that Mr. Howell was now engaged in growing tobacco at Mareeba. If a man knowing the conditions existing there takes up land in that district to produce tobacco and if he is still there it is obvious that he is satisfied with the existing rates of duty. [Quorum formed.] Some time after my visit I made inquiries from various gentlemen who had participated in the investigation. I went even further and corresponded with successful tobaccogrowers in the locality - unfortunately, I have not their letters with me - who understood the work and who were not included in those induced to take up land by the excessive duties imposed. The honorable member for Kennedy said that if an agent had attempted to do what the Government had done, he would have been brought before the court. The conditions existing in the tobacco-growing industry in Queensland were brought about, not by this Government, but by the Scullin Government, by its action in increasing the import duty to 5s. 2d. per lb., thereby influencing men, as I have already said, to take up land, not only at 2s. 6d. an acre, but in some instances at £5 an acre. In their ignorance, they thought that all they had to do was to do the necessary planting and they would become rich overnight. I commend the present Government for the attitude it has adopted in connexion with this industry and for the effort it has made to place it upon a sound basis. At the time of which I am speaking, the duty was 5s. 2d. per lb. when Virginian leaf could be landed duty free at11d. a lb. The type of leaf then being produced at Mareeba could not be regarded as of first-class quality. I agree with the honorable member for Kennedy that some growers in his electorate are producing excellent leaf, and that the prospects of production on a satisfactory basis are favorable; but the growers need to be instructed in the proper method of production, and should not be content to produce quantity and not quality. They cannot expect to effect sales of inferior leaf. The action of the Government in restoring the industry to an economic basis is worthy of commendation.
– I support the amendment moved by the Deputy Leader of the Opposition (Mr. Forde), because I consider that a good case has been made out on behalf of the tobacco-growers. No doubt we shall hear further statements similar to those of the honorable member for Wentworth (Mr. E. J. Harrison) in opposition to the amendment.
– I do not know anything of the conditions in the south; I spoke of what I saw at Mareeba.
– There is a certain amount of substance in the arguments adduced by the honorable member for Kennedy (Mr. Riordan), in connexion with the trials and tribulations of the growers at Mareeba, who are endeavouring to eke out an existence in producing tobacco. There are many instances in which growers, after devoting careful attention to the production of tobacco, have been able to sell only the higherquality leaf, and have had the balance of their product rejected as valueless. An effort should be made to assist growers to dispose of the rejected leaf. The honorable member for Kennedy gave particulars of the experiences of some growers in disposing of their product, and reasons why additional assistance should be afforded to them. If the duties were increased, as proposed by the Deputy Leader of the Opposition, the additional burden would have to be borne by tobacco producers in the United States of America - a country disinclined to engage in reciprocal trade. Tobacco produced in the United States of America, largely by coloured labour, is exported to Australia, where it comes into competition with Australian tobacco, produced by men working under conditions superior to those in any other part of the world. The United States of America is anxious to export to Australia everything it possibly can, and in return to take as little of our goods as possible. For the information of the committee, I submit the following account, received by a tobacco-grower: -
– What is the name of the company ?
– The account was rendered by the Combined Tobacco Manufacturers Company Limited.
– A Queensland organization.
– Yes. As stated by the Minister, growers do not pay excise, but it is deducted from the proceeds of the sales made by the tobacco producers. It would be a gracious act on the part of the Government to reduce the excise by ls. per lb., and thus render some slight assistance to the growers, who have invested their capital, and taken all the risk in producing this commodity.- The case I have quoted is not by any means unusual. I am willing to support those who have taken up the cudgels on behalf of the tobacco-growers in an endeavour to see if something cannot be done to assist in the disposal of rejected leaf. I have also received a letter in connexion with the sale of rejected tobacco from which I quote the following: -
I consigned 47 bales of rejected leaf on behalf of three growers to that company to be manufactured. The statement of accounts made on 28th February, 1935, shows that the leaf forwarded has been manufactured, and the excise duty paid to the Customs Department. The particulars of the three consignments are -
The three items amount to £1,417 15s.6d., derived from the rejected and unsaleable leaf. The sum of £12 2s.10d. was the total amount received by the three growers for the 47 bales of tobacco leaf.
– Was that tobacco handled by the same company?
– It was produced at Tumut.
– Does the honorable member know of any other company adopting such a reprehensible practice? That information, however, has no bearing on the duties under discussion to-day.
– I realize that.
– It is a reprehensible practice, and evidently by a shady company.
– I am glad to have this opportunity to bring these facts under the notice of the Minister, and I trust that something will be done to assist the growers, possiblyby a reduction of the excise. The honorable member for Kennedy (Mr. Riordan) referred to a vote which was taken some time ago, when this subject was under consideration, and to the attitude adopted by the members of the Country party. Although the honorable member is usually impartial and accurate in the assertions he makes, he is incorrect in saying that only two members of the Country party voted with the Opposition against the Government on that occasion. The honorable member for New England (Mr. Thompson), and the present Acting Minister for Commerce (Mr. Thorby) voted as the honorable member states., but a perusal of the records will show that, when the excise duties were under consideration, the members of the Country party, in co-operation with the Opposition, agreed that the Government should have time to reconsider the matter. Later, when a vote was taken, and when some members of the Opposition were absent from the chamber, the proposal was defeated by two votes. At a later stage we shall have an opportunity to discuss the excise duties.
.-I support the amendment moved by the Deputy Leader of the Opposition (Mr. Forde), because I am anxious to do all in my power to encourage the production of tobacco in Australia, and by that means assist in providing additional employment for many deserving Australian citizens. I am surprised at the attitude adopted by some members of the Country party, who apparently are not prepared to assist a certain class of producers.
– The honorable member must confine his remarks to the item before the committee.
– In the Derwent Valley, tobacco production is being undertaken, and, if the industry has an opportunity to develop, employment can be provided for a large number of persons. Every year thousands of youths and girls are leaving school, and if this industry is given sufficient encouragement, work can he provided for many who are now in need of it. In order to absorb many of our workless youths who, to-day, have so little before them, the Government should give consideration to the formulation of a policy designed to bring about an increase of the production of Australian tobacco. The American tobacco combine, which, as is well known, is one of the most prolific profit-producers in the world, has killed a growing Australian industry. I support the contention of the honorable member for Hume (Mr. Collins) that we should not grant to this combine opportunity to exploit the Australian market at the expense of the growers and tobacco users of Australia. One of its means to defeat the successful growing of tobacco in Australia is to buy first-grade Australian leaf, mix it with imported leaf and place it on the Australian market as whollyimported tobacco. It is remarkable that it should have so many friends to speak on its behalf when it is well known that the United States of America, from which we buy so much, will not take any of our primary products to help bring about a more favorable balance of trade between the two countries.
The Government is reputed to be attempting to solve the unemployment problem. The tobacco industry offers wonderful opportunity for the employment of our youths. The argument is frequently advanced that no industry should be afforded such high protection as that provided for the tobacco industry. I am prepared to protect any industry in its infancy, and to continue that protection until it is in a position to compete with the products of other countries in the home market on a fair basis. Through the tariff policy of the Scullin Government tobacco-growing in Australia received a great impetus. Growers put large areas under cultivation and a new avenue of employment was opened.
– The growers struck a very good year, but disaster immediately followed.
– The death blow delivered at the growers was the action of this so-called humane Government in reducing the duty and allowing the poor unfortunate tobacco-growers to be thrown to the wolves. Many growers were so bard hit that they were forced on to the dole. The people will want to know why this was done, and this Government must accept responsibility. It is willing and even anxious to protect other primary industries and to grant them financial assistance to carry on, yet one of the most promising primary industries is thrown to the wolves. An illustration of how assiduously the United States of America protects its own industries is furnished by the experience of a Tasmanian merchant who shipped a consignment of potatoes to the United States of America. On arrival in the United States of America, the customs authorities,, on representations by local merchants, immediately imposed a prohibitive duty on the consignment on the ground that its admission would prejudice their supplies. The result was that the potatoes were taken to Canada for sale. If that is done by the American people, it is surely just that we should do the same. “What is sauce for the goose should be sauce for the gander. We must look after the interests of growers engaged in what is one of the greatest money-spinning industries in the world, for to-day almost every man and woman is a smoker. I appeal to the Country party members to consider the value of the Australian market, and to discourage competition by a foreign nation, with which we have nothing in common. Surely it is better for all the tobacco consumed in Australia to be grown by Australian producers paying Australian wages and employing Australian workmen, than to import the produce of the industry of a foreign country employing black labour. I do not think that the Minister for Trade and Customs (Mr. White) has any sympathy for the unemployed youth of Australia. He gives them not one ounce of consideration.
– Order ! The honorable member must discuss the question before the Chair.
– The Minister must accept responsibility for the tariff policy of the Government. I am completely at a loss to understand how Country party members can continue to sit in an unholy alliance with members of the United Australia party and oppose the humane efforts of the Deputy Leader of the Australian Labour party to improve the conditions of the Australian tobaccogrowers.
.- Honorable members opposite are unfortunately once again indulging in their old game of trying to pull the tobaccogrower’s ]eg. for that is exactly the effect of the amendment. The tobacco-growers have so often been made the pawn in party political squabbles that they are entirely sick and tired of it. In addition to pulling the grower’s leg honorable members opposite are once again pumping the parish pump. No attempt has been made to justify the amendment moved by the deputy Leader of the Opposition (Mr. Forde). If the duty on tobacco had been 4te. we would still have had an amendment for 4s. 6d. Had it been 4s. 6d. honorable members opposite would still not have been satisfied, and the same old story would have been repeated. Nobody can deny that the industry to-day is in a much better position than it was some years ago when, as the result of the high duty imposed by the Scullin Government, there was an enormous rush of prospective growers, many of whom planted tobacco on unsuitable land in areas with unsuitable soil. Capital amounting to thou- sands of pounds was dissipated, and many hundreds of growers were ruined. The responsibility for that state of affairs rested on the Scullin Government.
A thorough investigation was carried out in connexion with the tobaccogrowing industry, particularly in northern Queensland, and a most adverse report was presented to this Parliament. The honorable member for Wentworth (Mr. E. J. Harrison) said that when the Prime Minister (Mr. Lyons) announced at Mareeba that Mr. Howell had been appointed to investigate the industry, the announcement was greeted with cheers, the growers in that district having absolute confidence in Mr. Howell. Yet the report, of the investigation, so disappointing to the growers, was a unanimous one, showing that Mr. Howell’s views coincided with those of his fellow investigators. The committee reported that conditions operating in the tobaccogrowing industry in northern Queensland were not conducive to its successful establishment. Many growers who were endeavouring to work unsuitable areas have now abandoned their attempt, and the industry is now settling down on a more stable basis.
The honorable member for Kennedy (Mr. Riordan) has mentioned the case of a grower who, having sold his leaf to a certain company, was charged excise on the leaf. The honorable member knows very well that the excise on tobacco is levied on the manufacturer who, in turn, recoups himself by charging it to the public. The Minister for Trade and Customs (Mr. White) has referred to that as a reprehensible practice, I would go further and say that it is an unscrupulous practice for a buyer to offer the grower what seemed to be a satisfactory price but which was found to include expenses such as excise. It is possible that the buyers only half tell the growers what they are going to get out of it. But even if the excise duty were 5s. or 6s. the same thing might happen. I regret that the honorable member for Kennedy has endeavoured to give the committee the idea that growers are held responsible for the payment of the excise duty. [Quorum formed.]
– The position is apparently something like this: A certain company approaches a tobacco-grower and says, “ We shall give you 6s. or 7s. per lb. for your leaf, but you will have to pay ail expenses “. The grower thinks that this is a good price, being at least double what other firms offer him, so he accepts it without inquiry as to the meaning of paying “ all expenses.” The action of this company is most reprehensible, and the Government should take such steps as it can to slop the practice, or, at least, it should circulate through the growing areas information as to the tactics adopted. The British-Australasian Tobacco Company is regarded by some people as almost an infamous combine, but, in my dealings with it, I have always received the utmost courtesy and attention. To the best of my knowledge the growers’ association in my electorate does not support the charges levelled against the company. I have heard it said by leading growers that, if this corporation is to be slandered every time the Government is approached, they will have nothing to do with the attack. Generally speaking, the association in Victoria, is more or less satisfied with the treatment received from the company. The industry is now in a healthier condition than previously. It is true that a certain number of growers have gone out of it, and it may be said that the industry is all the better for their leaving it, for they were carrying on their operations under conditions that made success impossible. At the present time, the industry has the right men in it, and they are operating on suitable land. This statement is borne out by the improved quality of the Australian leaf. A few years ago it was below 30 per cent., as compared with the highest-grade leaf, and to-day it is over 50 per cent.
When I was in the United States of America last year, I interviewed officials at the Agricultural Department at Washington, and made investigations regarding the conditions prevailing in the American tobacco industry. I found that the average wage paid on the farms was somewhere between $1 and $1.50 a day, and I was told that it would be more correct to place the figure at $1.50, because the employee who received only $1.00 would get something in addition to his wages, such as free housing, or a certain quantity of provisions. It has been said in this chamber that the industry is carried on in that country with nigger labour, and that the wages paid are shockingly low. In Australian currency a dollar is worth about 5s., so the average wage would be roughly 7s. 6d. a day. Therefore, the rate of remuneration is not so low as honorable members may have been led to believe. At the time of my visit, the price paid for leaf ranged between 15 and 19 cents per lb., and it was alleged that at that price the producer could make ends meet, although, of course, he was not making a fortune. Obviously this Parliament is giving a reasonable amount of protection to the Australian industry. During the last couple of years when local crops have been severely affected by the ravages of blue mould, and enormous losses having been suffered in my electorate, I represented to the Government that an increase of the import duty would be of assistance to the industry. I have been held up as its enemy, but I think that I can claim, without boasting, some credit for the slight increase of duty that was made. I have always tried to give the industry sound leadership and not merely striven for political popularity.
The investigation of blue mould and other diseases, for which the sum of £20,000 was allocated, has been of real value, and I am. confident that it will prove more beneficial to the industry in the long run than an increase of the duty or a reduction of the excise. If the industry produces leaf of high quality, free from disease, its success is practically assured. Certain claims have been advanced . to-day in regard to the industry, but no attempt has been made to substantiate them. Listening to the debate, one might imagine that the tobacco-growers were heading for extinction. The Australian usings of pipe tobacco have risen from 1,206,436 U>. in 1929-30, to 3,179,314 lb. in 1934-35. The percentage of Australian usings to the total consumption has gone up from 8.7 per cent, in 1929-30, to 26.2 per cent. That is a very substantial increase, and it has been progressive every year since 1929-30. I believe that more and more of the Australian leaf will be brought into consumption. In the last budget, the Government gave furtherassistance to the industry. It reduced, the excise by 8d. per lb. on tobacco and 6d. per lb. on cigarettes, when the leaf was wholly Australian. This, I believe,, will be of some value, but not so helpful as some people may imagine. We all know that tobaccoes are blended, and for this particular assistance to be of real, benefit we must produce within this, country tobaccoes suitable for blending. A certain number of them are being grown, but the bulk of the leaf now smoked is a blend of imported and local leaf. In the United States of America, it is customary to blend a certain percentage of foreign tobacco with the leaf produced in that country. Cigarettes sold in the United States of America, particularly, almost invariably contain a percentage of Turkish tobacco. I found, it impossible in that country to buy cigarettes containing tobacco that wasnot so blended. It may be possible tosecure a satisfactory blend made entirely from Australian leaf, but the majority of it will be used with some imported leaf, and so the concession granted1 is not as valuable as appears at first sight. It is satisfactory to know, however, that all usable Australian tobacco has been sold during the last few years, and, as I have said, thequality is improving. The percentage of Australian leaf used in manufacture is also on the increase, so there is no indication that the industry is in dire peril. Its difficulties to-day are mainly attributable to the prevalence of blue mould. If there is any difficulty about gettingAustralian leaf into consumption I can give growers an assurance that in the future the Government will act in their interests. In this matter the Government will have my support. The position, of the growers will, I am quite sure, always receive sympathetic consideration.
.- Manyhonorable members have growers of tobacco in their electorates, and it seems to me that there is something in whathas been said by the honorable memberfor Indi (Mr. Hutchinson) that some- times political action is taken to curry favour with certain sections of the producers who hope to get an advantage. This amendment is really placing some of us in a cleft stick. We have to decide whether we shall support the Government and do what we consider is the fair thing, or support the amendment, the purpose of which is to secure an additional advantage for & section of tobacco-growers in our electorates. I have no hesitation in stating definitely that I intend to support the Government because I consider that it is doing the fair thing. The history of the tariff in relation to tobacco-growing is well known. Some years age, when the Scullin Government enforced a tariff of 5s. 2d. a lb. on imported tobacco, large numbers of persons from all sections of the community, many without any rural experience, gave their attention to tobacco-growing in the belief that, with the extreme protection afforded, they would be able to get rich quickly. Later, because of the probable effects of increased Australian production upon the revenue, the Tariff Board was asked to inquire into the industry which, it was feared, would he developed uneconomically There was also the fear that largely increased production would seriously interfere with Commonwealth revenue, and render necessary the imposition of other forms of taxation in order to make good the loss sustained through reduced customs collections on imported tobacco. The decision of the Lyons Government to reduce the duty from 5s. 2d. to 3s. a lb. was resisted by Country party members on the ground that growers who had been induced to engage in the industry following the imposition of high duties by the Scullin Government, had entered into financial commitments which they would be unable to meet. Not a single crop had been harvested under the protection that was promised when it was planted. We declared that the sudden alteration of the tariff savoured of repudiation, and that more consideration should have been given, and we urged that the position could be met by the imposition of excise on a sliding scale for two or three years, thus giving growers a chance to recoup themselves, and gradually placing the industry on an economic basis.
It was argued at that time the best Virginian leaf could be brought to Australia at lid. per lb., and that a tariff of 3s. per lb. gave Australian growers a good margin; and members of the Country party who advocated moderation in tariff legislation in respect of secondary industries but fought for an extreme tariff in respect of the tobacco industry on the ground that it was not fair to reduce the duties so suddenly, had to meet the charge of being inconsistent.. I submit, however, that our attitude was quite consistent and that our plea for a sliding scale of excise duties had, as its objective, the protection of the growers from collapse and the gradual stabilization of the industry. We were not successful in our representations but the Government gave us an assurance that the matter would be reconsidered. I took the trouble, at that time, to interview a number of tobacco-growers in my electorate and also paid a visit to Mareeba. There I learned that if growers could get 2s. per lb. for their leaf they could carry on. Many were, however, receiving considerably more than 2s. and I gathered that they were quite satisfied. About that time blue mould made, its appearance, and also the frog leaf disease, owing to a wet summer, the result being that a considerable proportion of the crop was believed to be unsaleable. I obtained a number of samples of affected leaf in order to get expert advice from officials of the BritishAustralasian Tobacco Company, but later learned that the growers had been successful in disposing of almost the entire crop of second quality leaf, so that although their prices had suffered somewhat, their actual losses were much less than had been anticipated.
Later, as honorable members will recall, there was a special inquiry into the condition of the industry, and a report was presented ; the fact that Mr. Howell, who was one of the investigators, has since engaged in the industry itself and is a grower at Mareeba, is an indication that, in his opinion at all events, the position of the tobacco-growers is by no meansso hopeless, with present protection, as some people would have us believe. Following representations by Country party members and after the Government had reconsidered the position, the import duty was increased by 6d. per lb. I pointed out to the Minister that, after allowing for the “ stem “ rebate, the protection on the 2 oz. tin was still insufficient to encourage Australian production. Since then, as the result of requests made by a deputation of growers, there has been a further reduction by Sd. per lb. of the excise duty on tobacco manufactured from purely Australian leaf. Tins means that with a tariff of 3s. 6d., growers now have the additional advantage of 6d. in the tariff against imported leaf, and Sd. in the excise, as well as a further concession in respect of tobacco intended for sale to the aborigines. We should also bear in mind that, whilst best Virginian leaf could have been bought for lOd. or Hd. per lb three years ago, it now costs about ls. 8d., or ls. 9d. per lb., so that growers now have a 2s. per lb. better opportunity to sell their leaf than they had three years ago.
Growers in my electorate complained that they could not get a buyer to inspect their crop; but as it was comparatively small - representing about thirteen or fourteen bales - the tobacco company was naturally reluctant to incur the expense of sending a buyer from Melbourne or Sydney to the Murrumbidgee irrigation areas. Eventually, the company sent a man out, and I learned later that the growers were well satisfied with the way in which they were treated.
Much of the trouble that has occurred in the industry is due to the quality of the leaf not coming up to the standard desired by Australian smokers. I therefore commend the Government for its decision to set aside £20.000 for investigation of the problems that beset the industry, and I feel sure that the work that is being done by the Council for Scientific and Industrial Research will he of immense advantage to growers. The experiments being carried out by the council are distinctly encouraging. Seedling sections that have been treated with benzol are producing strong and healthy plants, and I feel sure that, in the not distant future, the council will have gone far to solve the problems that have caused so much loss and trouble.
I was rather surprised to hear some honorable members assert that the amount collected in excise duty is paid by the growers. No excise is paid on the production of tobacco leaf; the duty is collected only on manufactured tobacco, and is paid by the manufacturers to the Customs Department. If there were no excise it would not add to the price of leaf, but would merely reduce the price to smokers. I have also heard it said that the growers have contributed the huge amount of £7,000,000 to the national revenue; but, as I have explained, the contribution is made not by the growers, but by the Australian smokers. The increase of the tariff by 6d. per lb. on imported tobacco and the excise concession of 8d. per lb. on Australian tobacco represented an adjustment which aided the industry to the extent of £900,000. According to figures which Mr. Paul Jones compiled recently, there were in Australia, in 1933-34, 3,565 growers, so the loss of revenue through tariff and excise advantage was equivalent to £252 for each grower, and, on an acreage basis, it was equivalent to £50 an acre. In 1932-33, again taking figures compiled by Mr. Jones, there were in Australia 5,527 growers cultivating 26.272 acres; the production was 9,700,000 lb., and the loss of revenue, due to the concessions already mentioned, was £2,002,000. This worked out at £362 for each grower, and an average of nearly £80 an acre.
I consider that the Government has now made amends for the definite hardship suffered by growers who were induced to engage in the industry by the high duties imposed by the Scullin Government. Practically any commodity can be produced at a price, but it is sometimes unwise, and I doubt whether any honorable member would approve of the imposition of 2s. a gallon on petrol for the sake of establishing the petrol industry in this country. If such an attractive proposal were made by the Government, numerous companies would be anxious to establish hydro- genation plants for the extraction of oil from coal, and petrol from shale, but the industry would be on an uneconomic basis. “We have to realize that loss of revenue resulting from such a policy must be made up by some other form of taxation.
Australian tobacco-growers now have tariff protection of 3s. 6d. per lb., an additional advantage of8d. by a reduction of the excise duty on all tobacco made solely from Australian leaf, as well as a further concession in respect of tobacco intended for the aborigines; and having regard to the fact that the cost of imported leaf is so much higher than it was three years ago, I consider that the Government is doing the fair thing by the industry and I will support it.
.- This proposal concerns an industry which, I think, all honorable members will agree has great potentialities in regard to the provision of employment in Australia - probably our first consideration to-day - and the establishment overseas of a more favorable trade balance than that which now exists. In a recent debate, honorable members opposite expressed very grave concern at what they regarded as the unsatisfactory position of the trade balance, and Government members gave every indication of a desire to make the preservation of a satisfactory trade balance one of their foremost considerations.
– By a proper method.
– That is so. I suggest that something in the nature of a check upon the imports of tobacco would be a correct course to pursue. The latest figures published by the trade bulletin show that during the last five years no less than £4,560,000 of Australian money was sent to the United States of America, a country that practically declines to trade with us, for the purchase of tobacco, a commodity which we have demonstrated we are quite capable of producing.
– Imported by the same people who manufacture our leaf, and charge exorbitant prices for the tobacco.
– That is an interesting comment. This tobacco was imported from a country which places every conceivable obstacle against the importation of anything that Australia produces. It declines to take from us a single lamb, a pound of butter, or a case of fruit, and places an exorbitant duty upon our wool. It is known by everybody who has a knowledge of affairs, that even the latest representations to the United States of America to take a larger quantity of our produce were rejected with as little consideration as had been given to previous representations. Perusing the figures in the trade bulletin, I find that during the last five years Australia imported from the United States of America, goods to the value of £45,401,000, and that the United States of America reciprocated by taking from us goods to the value of only £15,834,000. In short, during that period we have experienced with the United States of America an adverse trade balance of practically £30,000,000, and that during a time when Australia was passing through the most severe trade depression it had ever experienced. It is upon the basis established by a recognition of these facts that I wish to approach the consideration of this matter. In view of those facts, one is perfectly justified in claiming that consideration should be given to it by all members on a non-party basis. In approaching the consideration of the well-being of an Australian industry with such vast potentialities for the provision of employment and the correction of an adverse trade balance with the United States of America, it would be entirely wrong for any honorable member to be biased by party sentiment. I do not intend to consider the matter on any basis other than that governed by the merits of the proposal before the committee, and the needs of the industry. My view is that there is rather more scope to give the necessary degree of preference to this industry through the medium of a greater difference in the differential excise duty than has been adopted by the Government, and at a later stage I intend to join with other members of the Country party in a move in that direction. The policy of a differential excise duty, which has been adopted during the last year, should be further extended for the greater benefit of the industry. But while my thoughts turn to the extension of the differential principle, I have no hesitation in supporting the proposal of the Deputy Leader of the Opposition (Mr. Forde). It has additional merit in my eyes by reason of the fact that any loss of revenue in which the Government would be involved by a reduction of the excise, would be offset; increased revenue would be provided and the Government would be enabled later to extend greater preference to the industry by a further reduction of the excise without any real net loss of revenue. I should say that the degree of preference which the industry is enjoying to-day, and which it may enjoy, and any feelings we may have in the matter, do not represent the greatest obstacle to the present-day success of the industry. From my experience and observations there is not much doubt that the greatest handicap to the success of the industry at the moment is the number of diseases which are adversely affecting the quantity and quality of tobacco leaf grown. I would add to that the adverse seasonal conditions experienced by tobacco-growers, within recent years. As the honorable member for Indi (Mr. Hutchinson) has said, the Government has voted to the Council for Scientific and Industrial Research a considerable sum for the conduct of scientific investigations into the disease problems of this industry. I am glad to note that those investigations have been crowned with a very considerable measure of success. To-day, the principal enemy of the tobacco-growers - blue mould - has, I think we can safely say, been mastered in the seedling stage. While nothing has been done to solve the problem of blue mould in the paddock, I think we may conclude that, while the seedlings remain in the seed-beds, the benzol treatment will prove completely successful.” I have little doubt that further investigations by this excellent body, with the complete co-ordination of the growers, will result in a sufficient mastery being obtained over the diseases which constitute the problem of the industry. I believe that we are within measurable distance of that desirable state of affairs. But we still have to deal with a major disability, in that in Australia to-day there is only one really effective buyer for the Australian leaf. To-day that disability is inherent in the industry, and until the growers and the Government, in co-operation, are able to take some steps to offset it, there is little hope of the industry being established on a really stable basis. Although it scarcely comes within the scope of this debate, I express the hope that at no late date there will be co-ordination between the Government and the growers in the establishment of a marketing organization which will enable the growers to offset that very grave disability.
A good deal has been said about the merits and demerits of the very high protective policy applied to the tobacco industry by the Scullin Government, but whatever may be said on that score, it ought to be recognized that whether the duties were wise or unwise, they were applied by a government elected by the people. It is not right that a subsequent government should, in those circumstances, deal an economic death-blow to the people who were encouraged to enter the tobacco industry by the previous government. If a subsequent government, felt that the protective policy had been carried to too great an extreme - and I will -confess that that is my thought - there should be a gradual retreat, but the industry should be afforded adequate protection to maintain itself during the period of re-adjustment to the new circumstances. The tobacco-growing industry is in dire need of adequate protection to-day, and will remain so until such time as the disastrous disabilities due to pests, and the unsatisfactory situation with regard to marketing, have been overcome.
We had some interesting information given to us to-day, first by the honorable member for Kennedy (Mr. Riordan), and next by the honorable member for Hume (Mr. Collins), respecting growers who had produced a substantial quantity of leaf and placed it in the hands of a certain Queensland selling organization for disposal. It was shown that in one instance the growers had received a trifling return for their product and in another had actually been furnished with debit accounts. The view was expressed by the Minister and by other honorable gentlemen that that particular organization was by no means a “ clean potato “. One of the great disadvantages of the tobacco industry of Australia is that there is only one really effective buyer of tobacco leaf. The direct effect of this has been referred to by several speakers during this debate. The buyers for this particular organization visit the homesteads of the growers, buy part of the crop, and leave the remainder behind, although it is often quite as satisfactory in quality and otherwise as the leaf that has been purchased. I have had authentic cases of this description brought under my notice. Growers have told me that a certain quantity of tobacco produced on a property under the share-farming system has been divided equally between the two parties and placed in different barns. When the buyer has visited the district he has, in certain instance.1^ purchased the leaf in one barn, but told the owners of the identical leaf in the other barn that it was of a quality and description not suitable to the requirements of the buying organization, notwithstanding that it was exactly similar to the leaf which the buyer had purchased from the other share-farmer. Such a state of affairs opens the door for unscrupulous operators to carry on a business that might easily turn out disadvantageously to the growers. I can imagine the servants of such an organization coming along to growers who have been unable to sell their product and saying to them : “ If you cannot sell your tobacco leaf, let us manufacture it for you and dispose of it and we will divide the proceeds “. That, on the surface of it, appears to be an attractive proposition to the growers, but if the buyers adopt unscrupulous methods, and after getting hold of the leaf dispose of it really to itself under another name, or to some other company acting in conjunction with it, it is easy to see how the growers may be left lamenting. A state of affairs such as I have outlined would dovetail into the story that has been told to us to-day. and the whole difficulty can be traced back to the fact that only one effective buyer of tobacco leaf is operating at present within the Commonwealth. It is for this reason that I strongly urge the Government to do something to enable the growers to form an organization to overcome the disability. The need for some Government assistance for the industry is readily disclosed by the comparison of the registered number of tobacco-growers in Australia to-day with that of a few years ago. I have not been able, myself, to obtain the exact number of growers in Australia last year, but the honorable member for Riverina (Mr. Nock) said that there were 3,000 odd, and I have no doubt that his figures would be accurate. The number of registered growers in Australia on the 1st October, 1933, was 6,329.
– The official figures are 5,600.
– Will the Minister inform me whether the figure mentioned by the honorable member for Riverina is correct ?
– The latest departmental figures are 4,388.
– Many men registered as tobacco-growers are not now growing tobacco.
– That is a point which must be considered. Many persons who grew tobacco some years ago have retained their names on the register in order that they may be entitled to dispose of unsold leaf still on their hands. I do not think that any honorable member will dispute that within the last two or three years thousands of persons have been forced to sever their association with this industry, with the result that they have lost ‘ hundreds of thousands of pounds in the aggregate.
A few weeks ago I visited the Ovens Valley, and inspected numerous tobacco plantations near Myrtleford and the adjacent small towns along the Valley. I was greatly struck with the growth of these towns since my last visit to the Ovens Valley six years ago. I was assured that this growth had been due entirely to the increase of tobacco-growing in consequence of the tariff stimulus given to the industry a few years ago. A very great deal of hardship has been experienced in these towns and also in the surrounding districts due to the relapse of the industry since the reversal of the tariff policy of the Government. I believe that if honorable members generally would look at the proposal now put forward as one calculated to assist the industry, increase employment in it, and also contribute to the correction of our adverse trade-balance with the United States of America, they would agree to it.
– A non-geographical outlook on it would also be useful.
– The honorable member for Riverina quoted certain figures which I wish to review. He said that the concessions in customs and excise reductions to the tobacco industry recently had amounted to about £360 for each grower or £80 to the acre cultivated for tobacco. Those figures may be worked out to disclose that result, but I do not think the honorable member took sufficient care in explaining to those people, who will most likely read his speech, that these concessions were not, as he described them, gifts to the growers, equivalent to £360 a grower, or £S0 an acre. Reductions of excise and tariff duties may assist the industry, but that assistance is not reflected to the extent suggested by the honorable member. The actual beneficial result to the individual grower, or to the industry, is very small compared with the figures quoted. Later, I intend to support a. proposal for a further reduction of excise duty on tobacco, and I suggest that the Government, in anticipation of that proposal, may be very glad to avail itself of the additional revenue involved in the amendment now before the committee.
.- As it has been before the Parliament since November, 3933, and it is time finality was reached in regard to it, the Government cannot agree to the postponement of this item. Honorable members have had ample opportunity to know whether the tobacco duties are adequate or not. It was rather interesting to hear the last speaker (Mr. McEwen). He represents a. country district in Victoria, and I suppose he joins in the chorus for lower duties for secondary industries, and supports the Tariff Board in its findings. I may inform him that the Tariff Board considered that an import duty of 3s. was adequate on tobacco leaf, but the Government fixed it at 3s. 6d. because, at that time, revenue was required to provide relief to primary producers and regard was had for the undoubted difficulties of tobacco-growers. Fully aware of the distress which they had suffered, the Government has aided every section of primary producers by means of bounties and home-consumption prices and in other ways, and so far as secondary industries are concerned, they have been helped whilst ensuring that they were not given that degree of protection which would permit them to exploit the consumers. Their requests for higher duties are submitted to the Tariff Board, and the rates of duties recommended by the Tariff Board have been in most cases accepted by the Government. Despite all these facts, some honorable members make a special plea for the tobacco-growers. I point out that these growers have had the benefit of extra protection as the result of the recent reduction by Sd. per lb. of the excise duty on Australian leaf used purely in Australian manufacture. With this concession the minimum protection is now about 220 per cent. How many secondary industries enjoy protection to that degree.
I cannot understand the attitude of the honorable member for Echuca. One expects the Opposition to ask for the highest possible duties that can be imposed, and honorable members opposite are consistent in that advocacy, but it is quite illogical and wrong for honorable members to be actuated solely by agricultural or geographical considerations and to become, in effect, agricultural or geographical protectionists. Australia has to be developed as a whole. We cannot properly develop it by encouraging one industry to the neglect of another. Industries must be developed as a whole, the primary and secondary industries moving ahead hand in hand. Only by diverse production shall we achieve the greatest measure of prosperity and progress. We have, therefore, to look at this matter in its true perspective. I repeat, that the duty proposed on tobacco is higher than that recommended by the Tariff Board. Furthermore, excise has been reduced on all Australian leaf, with the object of encouraging sales, and a further reduction of ls. 4d. per lb. has been made on the darkest grades of tobacco, which are sold to aborigines. The Government has also taken steps to assist the sale of some of the darker grades that were left on the hands of the growers. Honorable members have delved into the history of the tobacco tariff. After all, history is the best philosophy, and we should have regard to it, recent or ancient. I suggest that honorable members recall the regime of prohibitive tariffs, in the time of the Scullin Government, which imposed a duty of as. 2d. per lb. in favour of Australian tobacco. “What was the result of such a policy ? It should give those who believe that prohibitive duties constitute the shortest road to prosperity a shocking example of the reaction of such policy. The Scullin tobacco tariff reacted most harshly upon growers with very little capital. Whether or not the members of that Government were aware of the fact, its policy encouraged land speculators. For instance, land in Victoria, not worth 30s. an acre, was sold for tobacco-growing at £30 an acre under grandiose prospectuses issued by various promoters.
– A similar development is taking place to-day in respect of goldmining.
– That may be true, but the position which I have described actually arose as the result of the tariff policy of the Seullin Government, in which the Deputy Leader of the Opposition was Minister for Trade and Customs. I emphasize that point. That policy encouraged land speculators, and many men resident in the cities, with a little capital, were enticed to pay a deposit on a piece of land which they could not afford to buy, and which would never become their own. On such land they commenced growing tobacco which, as honorable members are aware, is one of the most difficult crops to cultivate. There was a tremendous increase of tobacco-growers in all the States of the Commonwealth. Men tried to grow tobacco from Cape York to Tasmania, and from the Leeuwin to Port Jackson. In 1928-29 the total number of tobacco-growers in Australia was 668; when the Scullin Government introduced its prohibitive duties - which were to pave an easy road to wealth - this number had increased to 2,990 in 1931, and 5,127 in 1932.
– - Hear, hear !
– Yet the honorable member has just told us the sad story of what happened to these growers when they found that they had bought land which speculators had sold them at rates which would never allow them to own it. The present Government had to clear up this hereditas damnosa. The Government has had to look after these poor fellows, and help the industry in a reasonable way. It did not use pied-piper methods, and invite them to “ follow the Government to prosperity”. It amazes me that an otherwise intelligent member of this committee - I refer to the honorable member for Echuca - who knows the rights and wrongs of these things, should have allowed his sentiment to be played upon to such an extent as to cause him to suggest that we should get back to the conditions of 1931. If that, were done, and the duty raised to 5s. 2d. per lb., we might expect another rush to the land to grow tobacco and make a fortune in a day.
– I did not suggest that.
– Not only does the honorable member want higher import duties, but he also wants the excise duty to be lowered. Let us see whether or not the industry to-day is better off than it was. Many of the growers of tobacco who, we are told, were forced off the land, had either insufficient knowledge of tobacco-growing or insufficient capital, or were trying to grow tobacco on unsuitable land, or have since returned to their normal occupations. Recently I visited Shepparton, in the electorate of Echuca. I do not wish unduly to pay attention to that electorate, or to its representative; I refer to the honorable member only because his attitude, unlike that of the Labour Opposition, is not consistent in urging higher rates of duties. It is anomalous that he should support the amendment. At Shepparton I was the guest, of the Chamber of Commerce. The tobacco-growers attended the gathering in -force, and asked a number of questions, which I answered, although not always to their satisfaction. In conversation with those present, I found that, in the days of the tobacco boom, many local business men had engaged in tobacco-growing. They had grasped the opportunity to make fortunes by planting an acre or two with tobacco; but, having found the experiment unprofitable, they returned to their shops and other businesses. They are typical of the tobacco-growers, who, the Opposition says, have been forced off the land by the ruthless and thoughtless policy of this Government.
– Many of them are better off in other industries.
– That is so. In these more prosperous times, they have returned to their former avocations, and are no longer being led by the will-of-the-wisp ideas placed before them by egregious politicians. In case it is still thought that, in some way, the tobacco-growers have suffered unduly, I shall quote figures relating to the importations of tobacco. The quantity of leaf imported varies from time to time. Of late, largely due to returning prosperity - and in prosperous times a man feels that he can smoke more than in times of depression - the importations have been large. More and more Australian tobacco is being used, because the Government has not imposed excessively high rates of duty on tobacco, but has helped Australian growers to produce tobacco of better quality. When considering this subject, we should remember that quality, rather than quantity, should be the aim. The figures contained in the accompanying table will, I think, prove of interest to honorable members -
The table shows a steady decline of usings of imported leaf, and an increased using of Australian leaf. It will be seen that, despite the action for which the Government has been criticized, and the fewer growers, the using of Australian leaf last year constituted a record. The reason is that the men who were inveigled into tobacco-growing have now returned to their usual occupations, and that those who still remain understand the business of tobacco-growing and curing, and are able to sell their product.
– Do the figures for 1935 show an improvement over those for 1931?
– Yes; there has been a gradual improvement. During 1931 the purchases of leaf were particularly heavy, because the Government of the day arranged for the purchase of the whole crop, so that the improvement over the figures for that year is not great. Each year arrangements have been made with the manufacturing companies to purchase the usable crop, but, of course, there has been leaf unsold, some because it has not been usable, and the remainder because seller and buyer could not agree as to price.
– Some has been held over for maturation.
– Yes. The figures which I have given to the House have been obtained from the manufacturing companies which pay the excise duty.
– Do the figures include the sales of recently grown leaf?
– This year all the tobacco of good quality will be sold, as indeed, has been the case ever since the present Government came into office.
The subject mentioned by the honorable member for Kennedy (Mr. Riordan)
Las loomed rather larger than is justified, because it has no bearing on the present duties. It had not been brought under my notice before, because the communications were purely departmental. I have since searched the files and find that it was brought under the notice of the department by Senator Crawford, who submitted correspondence from Headricks Proprietary Limited, Cairns, Queensland, stating that leaf had been sent to the Combined Growers and Tobacco Manufacturers Company Limited, and that only a trifling sum had been received for a large quantity of tobacco. Excise, which, of course, the manufacturer, not the grower, pays to the Government, was included in the charges.
– The grower did pay it?
– The tobacco company paid the bill and charged the account to the grower. I do not propose to endeavour to minimize the shadiness of the whole deal, because I consider that the company acted most reprehensively.
Honorable Members. - Hear, hear!
– It was for that reason that I expressed my pleasure that the honorable member for Kennedy had mentioned the matter.
– Is it not necessary for the company to obtain registration from the customs department?
– Tes, and the department will consider whether or not it is advisable to continue the registration. The committee should know, however, that the tobacco was sent to the company to be sold on a basis to which the grower had agreed. After freight, excise and other charges had been deducted, the grower was to receive the balance. According to the report of Headricks Proprietary Limited, which investigated this transaction, the leaf had been rejected on more than one occasion by buyers in the country, and later, failed to find a buyer at a Brisbane auction sale. Therefore it was virtually the last hope of the grower to consign the leaf to this company, and the form which I previously mentioned was signed in connexion with its disposal ; for instance, deductions were to be made for leaf that had been injured. When the reduction of excise was made by the Government, I stated in this House that the manufacturers would be expected to pass on the reduction to consumers. For that reason it was made 8d., so that -Jd. an ounce at least would go to the consumers, but some trouble has been experienced with this company. I can assure honorable members that this matter will be investigated, but I have mentioned, in extenuation of the company’s action, that the tobacco was evidently left-over stuff that had been refused by buyers and at auction. An honorable member to-day attacked the British-Australasian Tobacco Company Proprietary Limited. I do not propose to defend it; it also is a trading company and should be quite capable of defending itself. But in view of the fact that it has been eulogized by the growers themselves, it is evident that the company, although termed a repacious octopus, gives a better deal to the growers than do certain other enterprises which profess to purchase only Australian-grown tobacco.
The protection of the Australian leaf ranges from 220 per cent, ad valorem upwards, and even while the Roosevelt plan _ prices operated in 1934-35, the protection was equivalent to 138 per cent. In addition, in an endeavour to assist the growers to overcome cultural difficulties, the Commonwealth Government has made available a sum of £20,000 per annum for a period of five years. This money is being devoted to research into disease problems affecting tobacco, to tests of smoking quality and to field investigation and demonstrational and experimental work. Honorable members will be gratified to learn that this grant has been availed of and that in experiments that are being carried out in conjunction with State authorities the benzol treatment of seedlings gives promise of success. All bright leaf of good quality is assured of a ready and remunerative market in Australia. This year it has been sold at prices up to 4s. per lb. I do not say that this rate can always be obtained, but good bright leaf can always be sold at profitable prices. Most important of all, the percentage of bright leaf grown is increasing. When the ‘Government assumed office the production was less than 30 per cent., and that is why the honorable member for New England (Mr. Thompson), who is such a champion of the growers, had cause to make so many complaints in regard to unsold leaf. I think that he will admit that in the district to which he referred, there was unfortunately in earlier times, a preponderance of dark tobacco. But to-day, bright leaf, including inferior bright leaf, forms 50 per cent, of the total Australian crop. This, in itself, is a vindication of the Government’s policy for stabilizing the industry; the growers themselves are also acquiring more experience in the production of the better quality leaf. The success of the industry lies in the direction of producing a leaf of good quality, and if growers desire the industry to prosper, they must recognize this fact. The Government sincerely believes that its case is a good one. Consumption of Australian leaf is now greater than at any previous time; importations of tobacco leaf are considerably lower than in former years ; scientific research and investigation are proceeding apace; prices for reasonably good leaf are profitable; prices for manufactured tobacco to the consumer are reasonable; and employment in the industry is safeguarded and the national revenue is assured.
– What is the standard of wages in the industry?
– That is a matter for determination by the State and Federal Governments. Doubtless the honorable member for Melbourne Ports (Mr. Holloway) can supply the honorable member with information on that matter.
I now propose to furnish honorable members with a definite statement of the policy of the Government, which I think, should appeal to them. As various speakers have said, this matter should be non-political. The Government desires to help the tobacco industry and every measure will be taken to ensure the sale of all good quality leaf. Despite criticisms that have been made, the fact remains that all usable leaf has been bought since the first Lyons Government came into office. At certain periods trouble has been caused by pests, but leaf of good quality has been sold at remunerative prices which have been hundreds per cent, above world parity. It cannot be denied that crop infestation has been the biggest handicap to extended production. The Government will at all times give careful consideration to the production and consumption of tobacco in order to ensure that all usable leaf is absorbed. Whatever scheme or schemes may be adopted to ensure the consumption of any increased production of Australian leaf which may result from the successful control of blue mould, the Government must protect its revenue interest in tobacco. I am pleased to say that this principle has been endorsed by the growers’ organizations. At present only about one-quarter of the quantity of tobacco smoked in the Commonwealth is grown here; but with the increasing use of the home product the Government will rearrange its taxation to keep up its revenues and protect the grower. A review of all of the developments in the tobacco-growing industry since 1932, and the action of the Government in insisting upon the purchase of leaf at reasonable prices, should satisfy honorable members, growers, and manufacturers of the Government’s earnestness and sincerity in this matter.
– Does the Minister still insist upon the sale of tobacco at what he would call a reasonable price?
– The Government endeavours to arrange that. The declarations which I have now made should allay any apprehension which growers or manufacturers may have had in regard to the sale and consumption of Australian leaf.
Assent to the following bills was reported : -
Financial Relief Bill 1936.
Wheat Growers Relief Bill 1936.
Primary Producers Relief Bill 1936.
Apple and Pear Bounty Bill 1936.
Orange Bounty Bill 1936.
Prune’ Bounty Bill 1936.
Meat Export Control Bill 1936.
Loan (Farmers’ Debt Adjustment) Bill 1936.
.- I move-
Cite as: Australia, House of Representatives, Debates, 20 March 1936, viewed 22 October 2017, <http://historichansard.net/hofreps/1936/19360320_reps_14_149/>.