1st Parliament · 1st Session
The President took the chair at 2.30 p.m., and read prayers.
Senator FRASER presented a petition from 28 electors of the State of New South Wales praying the Senate to reject the Matrimonial Causes Bill.
asked the PostmasterGeneral, upon notice -
Senator DRAKE__ The answers to the honorable senator’s questions are as follow : -
asked the Vice-
President of the Executive Council, upon notice -
– This question involves on important matter of constitutional law, which is now under the consideration of the Attorney-General. The honorable senator will be informed as soon as the Attorney-General’s opinion has been obtained.
Senator DRAKE laid on the table the following papers : -
Report of Deputy Postmaster-General, Hobart, re working of new telephone regulations and charges in Tasmania.
Return to order of the Senate of 19th June_ Customs department : Overtime.
Copies of correspondence and documents relating to the additional subsidy granted to Burns, Philp, and Co. in connexion with the mail service to the New Hebrides.
Ordered to be printed.
Notice of motion called on -
The Vice-President of the Executive Council to move, That by the courtesy of the Senate the President have leave to vote without crossing the floor of the House, notwithstanding any temporary standing order to the contrary.
– As this is a matter personal to myself, as President, I crave the indulgence of the Senate to say a few words. In the first place I ask the VicePresident of the Executive Council not to move the motion. Since it has been tabled I have reconsidered the question, and I think it would be advisable to strictly apply the present standing orders until the new ones come into force. In the latter the circumstances under which and when the President and the Chairman of Committees can exercise their votes, are strictly laid down, and I think it would be better to postpone any discussion of this question until the adoption of the new standing orders is considered. As honorable senators are aware, for some considerable time the Senate has granted to me the courtesy of voting in the place in which I sit, but I do not wish to claim that courtesy unless it is unanimous on the question.
– Do I understand, sir, that the notice of motion has been withdrawn.
– It was not moved.
In Committee (Consideration resumed from 18th July, vide page 14443).
Division IV. - Agricultural products and groceries.
Postponed item 50. - Tea, free. Tea in (packets, free.
– I move -
That the House of Representatives he requested to amend item 56 by adding, after the words “Tea, free,” thewords “and on and after 1st August, 1902, per lb., 3d.”
I thank Senator Milieu for the courtesy which he extended to me on Friday, in giving notice of this proposal on my behalf. In my speech on the second reading of the Bill, I intimated that, in committee, I should propose a duty of 3d. per lb. on bulk tea, and of 4d. per lb. on packet tea. The former, I need hardly say, is purely a revenue duty, and the additional1d. per lb. on packet tea is intended for protective purposes. The rate which I am suggesting, and which practically embodies the original proposal of the Government, is only half that which has been imposed in Queensland for many years, where bulk tea was charged6d. per lb., and packet tea8d. per lb. We found that the protective duty of 2d. per lb. on packet tea was most advantageous to the people of the State. It created a new industry, in which a very considerable number of persons have been engaged, very much to the advantage of the tea - houses in Brisbane and other centres of population in the State, and very much to the advantage of the persons so employed. Not only has it been advantageous to the packers and the vendors, but also to a number of persons who have been engaged in providing the timber for the tea-boxes, making the tins, printing the labels, and disposing of paper. Whatever happens to my proposal to levy a duty of 3d. per 1b. on bulk tea, I hope that the committee will agree to a reasonable protective duty, say1d. per lb., on packet tea, with the view of encouraging the packing industry in the Commonwealth. Honorable senators will be glad to hear that no less than 2,000 persons are engaged in the packing of tea in the different States. Financial reasons affecting my own State impel me to submit this proposal to the committee. Unfortunately we are in rather a bad way in Queensland. Iam impelled to take this course owing to the financial embarrassment of that State at the present time, and my proposal certainly materially affects Tasmania and some of the other States. Tea is a legitimate articlefor taxation. In the course of my second reading speech on the Tariff, I expressed the opinion that if there were no duty the ports of the Commonwealth would practically be flooded with cheap tea from all parts of the world, and that however desirous the Customs officials might be to protect the health of the people by preventing the use of this rubbish, I was afraid that the same amount of vigilance would not be observed as when a” duty was collected. I pointed out also that the people would not obtain the full benefit of the remission of the duty. I shall cite a few cases which came under my own observation during my recent visit to Queensland. My own household, for example - and we have a large family - has been buying tea from one firm for some years at 2s. a lb. The duty under the State Tariff was 6d. Since the abolition of the duty, my family has being purchasing for1s. 9d. per lb. the same tea as we formerly obtained for 2s. per lb., although, in my judgment, it is not as good. That goes to show that the importers are pocketing one-half of the duty and giving the consumers the benefit of the remaining 3d. per lb. The experience of my own household has been that of some of my ownneighbours. If the merchants were able to make a reasonable profit out of tea, for which they charged 2s. per lb. when they had to pay a duty of 6d. per lb. upon it, they must now be making an excessive one. The statement which I put forward on a former occasion, that the people would not obtain the full benefit of the remission of the duty on tea, and that, in consequence of its abolition, the market would be flooded with cheap rubbish, has been fully borne out. I hope, therefore, that for financial reasons in the first place, and, secondly, to protect the health and the pockets of the people, honorable senators will agree to this motion. I find that, in another place, 28 votes were recorded for the abolition of the duty, and 26 for its retention. In other words, the remission of the duty was carried by a majority of only two. I hope that if this motion is carried honorable members of another place will accept our suggestion, and that they will realize the damage which must be done to the finances of some of the States if the duty is not re-imposed. On the last occasion upon which I referred to the financial position of Queensland, I had only the estimates of the Government to guide me, and I expressed the opinion that there would be a deficit of some £500,000 or £600,000 in the State finances. The Treasurer has now dealt with the matter, and he shows a deficit of £431,939 for the financial year just closed. If we take into account the fact that Queensland has hitherto received nearly £90,000 a year from the duty on tea, and £44,000 a year from a duty on kerosene, that she will lose £14,000 a year on rice, £11,000 a year on currants and raisins, £144,000a year by the removal of the intercolonial duties, and £26,000 a year in consequence of the reduction of the duty on tobacco from 4s. to 3s. 3d. per lb. - although I do not complain so much in regard to the latter - we must see that the position is very serious. Of course, we all anticipated that the removal of intercolonial duties would involve considerable loss ; but we did not calculate that Queensland would lose so heavily in regard to the revenue obtained from the articles I have named. It is manifestly unfair that she should suffer so much, owing, I am afraid, to what was a want of consideration for the finances of some of the States on the part of honorable members of another place. Queensland has strong reasons to protest; and I ask that, in the interests of that and of some of the other States, the duty on tea be restored, as some slight recompense for the vast loss of revenue which they have suffered by joining the federation. I find that in 1900 Victoria imported upwards of 14,000,000 lbs. of tea, upon which a duty of 3d. per lb. realized £128,328,: New South Wales imported nearly 15,000,000 lbs., upon which a duty of Id. per lb. yielded £52,466 ; Queensland imported about 3,500,000 lbs. of tea, and the duty of 6d. per lb. on bulk and 8d. per lb. on packet tea yielded £87,857. During the same year, South Australia imported 3,417,000 lbs., upon which a duty of 3d. per lb. yielded £40,951. In the Northern Territory 24,653 lbs. of tea were imported, yielding, under a duty of 6d. per lb., £096. Tasmania imported 1,138,302 lbs., and with a duty of 3d. per lb., derived £14,289. In Western Australia there was no duty. The total importations of tea into the Commonwealth for the year named was 38,966,671 lbs., from which a revenue of £324,5S7 was derived by five States.
The consumption per head in 1900- was as follows: - Victoria, 7-22 lbs.; New South Wales, 8-08 lbs. ; Queensland, 7-10 lbs. ; South Australia, 9-12 lbs. ; Tasmania, 6-64 lbs. ; and Western Australia, 10*32 lbs., the consumption per head being greater there than in any other State, owing to the large adult population. The total average consumption per head in the Commonwealth was not quite 8 lbs. Therefore, if we impose a duty of 3d. per lb., it will not be oppressive, and the annual amount of duty paid per family will not be very great. According to a return furnished to the House of Commons on the 30th of July, 1897, I find that in every country, with the exception of the United States of America and Western Australia, a duty is imposed’ on tea, and that, in some cases, the tax is a very considerable one. In Russia the duty is ls. 10£d. per lb., in Germany 54d. per lb., and in Prance 9d. and lld. per “lb.
– The people of those ‘ countries do not drink tea so freely as we do. They drink beer and wine very largely.
– If I were anxious to carry on the controversy, I could show, by examining the amount of tea consumed per head of the population in the different countries of the world, that this article is largely drunk in nearly ail of them. Perhaps people do not drink tea in other countries to the same extent as we do in Australia, but still they drink a certain quantity of it. In Spain there is a duty of 7d. per lb. ; in Italy one of lid. ; in Austria one of 9d. In the United Kingdom the duties are 4d. and 6d. per lb., and in New Zealand 4d. and 2d. Therefore it is not an unreasonable thing to ask that tea should bear a certain amount of duty, and * 3d. per lb. is not excessive. Certainly I thought the Queensland duty of 6d. per IK rather high. But during all the years I was a member of the Queensland Parliament, there- was no agitation for the removal of the tea duty, nor am I aware that any member of either House of Parlia-ment has received «a mandate from the electors of the State I have the honour to represent urging the removal of the duty. I have heard scarcely a murmur against the duty in Queensland. I have not received a single communication from any elector or body of people to that effect. During my electoral campaign I was. never asked if I would endeavour to secure the removal of the duty on tea. Senator Stewart said, I think, that the cost of the collection of the duty amounted to about1d. per lb. I have communicated with the Collector of Customs in Queensland to ascertain the cost of collection. I have received a telegram informing me that, if the duty were re-imposed, the extra cost would be nothing, and nothing has been saved in consequence of the removal of the duty. I have received a letter from the Comptroller-General of Customs in Victoria, dated the 28th May, who informs me that the cost of the collection of the duty on tea in this State amounted to 10s. per £100 worth. From the revenue point of view and the protective point of view, as well as from the aspect of the health of the people, it is desirable that we should impose a duty on tea. The most important reason in favour of the duty is the revenue reason. Second in importance comes the protective aspect of the question. If there is no duty on tea in packets the consequence will be that the packing will be done in countries where labour is exceedingly cheap, andwhere the expense of packing amounts, perhaps, to1d. for every 1s. that has to be paid in this country. I have received a petition which was sent to my colleague, Senator Ferguson, signed by the whole of the tea merchants of Brisbane, as well as by numerous printers and paper-sellers, requesting the re-imposition of the duty on tea. There are about 2,000 persons engaged in different ways in the packing of tea in the Commonwealth. Their interests deserve to be considered and protected, as well as the interests of those who have invested their capital in the packing industry. Unfortunately, the petition to which I refer could not be presented to the Senate, because the heading of it was informal, inasmuch as it was addressed to the Minister for Trade and Customs. I trust that the committee will agree to my motion. If I cannot succeed in carrying a proposition favorable to the imposition of a duty of 3d. per lb., I shall move for a duty of1d. per lb. on packet tea for protective purposes.
. I shall oppose this suggestion. I do not propose to say very much in reply to what Senator Glassey has stated, because in the first place I intend to maintain the position I have adoptedall through, and to stand by the Tariff as it is. The Government proposed a duty on tea, and would have been pleased had it been carried ; but as that duty was not carried they think that under all the circumstances it would be better to wait until they see what revenue the Tariff produces. If it is found necessary in the interests of the Commonwealth as a whole, and particularly in the interests of some of the States, that there should be a re-imposition of the duty on tea, the matter will be open for reconsideration ; but, as it stands at present, we do not propose to reconsider it. The matter was thrashed out in principle, when we were dealing with the kerosene duty. Exactly the same principle applies in regard to the imposition of this duty as applied to the imposition of the duty on kerosene. I find from the records of the Senate that the proposal to impose a duty on kerosene was lost by 10 votes. There were six ayes and sixteen noes. I presume that good free-traders like Senators Charleston, Ewing, Matheson, Neild, Pulsford, and Smith will take the same view in regard to tea as they took in; regard to kerosene. [ see no difference between the two cases. What the people, not only of Queensland, but of all the States, require more urgently than anything else is, I take it, that the Tariff shall be completed. Therefore, I do not wish to take up any more time.
– I rise to support the request which Senator Glasseyhas moved. It seems to me that this is peculiarly a case in which I, as President, should exercise, not only my right to vote, but my right to speak, because it is a matter which involves the interests of my own State. This is a State House. This is a House in regard to which equal representation was given to each State, no matter what its population was, in order that the interests of the smaller States, might be kept in view by the Senate as against the mass vote of the larger States, and I conceive that it is my duty, as one of the senators from South Australia, to consider the revenue of South Australia. I have no doubt whatever that honorable senators from Western Australia and from New South Wales, whose States have an overflowing revenue, may look upon this matter from a different point of view, but from the point of view of South Australia,. I think that undoubtedly tea is a subject matter upon which a duty ought to be imposed. In the State which I have the honour to represent we have taxes of all sorts and descriptions of a direct nature. We have an Income Tax. We have in some instances actually five taxes on land. I admit that they are only exceptional instances. But, notwithstanding that, we want more revenue ; and I consider that I ought to look to the interests of the State from which I come in regard to all these fiscal questions. That has been the point of view which has appealed to my mind most strongly, not only in reference to the duty on tea, but also in -reference to other items in the Tariff concerning which I have voted. I have looked to -the interests of South Australia, and I want to look to the interests of South Australia in reference to the duty on tea. We cannot afford to give up between £40,000 and £50, 000 per annum through the loss of the duty on tea, which, as it seems to me, is a typical subject matter on which to impose a duty. Let me ask the members of the Senate what considerations ought to influence their votes as to any subject matter which is brought under consideration. First of all we ought to ask ourselves - at all events, I ask myself - will the imposition of this duty inflict any hardship upon individuals or any large class of individuals? Most certainly it will not. It will be borne by the whole community. In five States out of the six a duty upon tea previously existed, and the people did not feel that duty, because its incidence was so universal, and it pressed so lightly upon individuals that they were not subjected to -any hardship on account of it. From this point of view tea is a subject matter upon which we can fairly impose a duty. The next question I ask myself, is this : Who is going to receive this duty ; is it all going into the Treasury; or is part of it going into the Treasury, and if so, what part? Undoubtedly the whole amount will go into the Treasury. We have been forced through the exigencies of circumstances to impose duties in this Commonwealth Tariff only a part of which will go into the Treasury, and on every vote I have given I have asked myself - What part of this duty will the Treasury receive, and what part will go into the pockets of classes of the people,, and how numerous are those classes? Those are considerations which have always weighed with me, and so far as this duty upon tea is concerned, it is undoubted that the whole of the revenue derived will go into the Treasury. I know that it has been stated that we do not need the duty, that we have quite enough revenue without it, but I crave leave to differ from that statement. We have now for a considerable number of years suffered from a very severe drought, the effects of which have not even yet been fully felt. I am convinced that the estimates made even so late as three months ago of the revenue that will be received from this Tariff are not reliable, because we shall not be able to fully appreciate and feel the effects of the drought for some time to come. I therefore believe that not only will the whole Commonwealth receive less revenue from this Tariff than has been supposed, but that the revenue received in my own State of South Australia will be found to be very deficient. I have on many occasions voted for higher duties than I would otherwise have voted for from that consideration, because it has always been before me that I am a representative of South Australia, and I have a duty to the State from which I come. It is one of the duties which I have to perform to see that the finances of that State are so placed that we shall be able to balance revenue and expenditure. I am sorry to say that unless we have the revenue which may be derived from a duty upon tea, that is a result which I think cannot be realized. But even supposing the contrary is the fact, and that we shall get the revenue estimated, if we impose this duty on tea, can we not remit duties on other articles, the whole of the revenue from which will, not go into the- Treasury, as the revenue from a duty upon tea will?
– What articles are they ?
– I am not going into details. I am talking now as a man who is influenced by free-trade principles, so far as it is possible to apply them to this Tariff. In my speeches before my constituents, I told them that, as far as possible, I would apply free-trade principles to this Tariff, and I reiterated that assertion three or four times. Having said what my principles were, I said, amongst other things -
I say as far as possible because, after all, abandoning theory and principle, and coming down to practical details, I do not think there will be a very great practical difference whether the Tariff is framed by the free- trader or the protectionist.
I said also -
It would be a folly if, simply to illustrate a v theory, any gratuitous destruction of industries were to be carried out.
After having stated all the difficulties surrounding the position, I also said this :
I venture to christen the Federal Tariff by what I think, is a better name than has yet been used, I call it ‘-‘A Tariff of Necessity.” We must raise between £7,000,000 and i-!),000,000 of money. We must enforce a uniform Tariff. We must have intercolonial free-trade. We must not dislocate State finances of any of the States more than can be avoided. The Tariff will have to be framed under the compulsion of these “musts” and “must nots.” It will be a Tariff of necessity.
That was the attitude I took up before my constituents. It is the attitude I have always taken up, and which I take up now. I say that we have not only to consider the matters to which I have already referred, the persons upon whom the tax will fall, the amount of revenue it will yield, and who will receive it, but we have also to have some regard for existing industries. If I had a heart like a billiard ball, I might apply simply logical principles to this Tariff. But I think that people who have, had any experience in practical politics - and I have had a good deal, I have been longer a Member of Parliament than any other member of either House of the Federal Parliament, and the longer I have lived the more firmly I have been convinced that logical principles cannot always be applied - will recognise that we must consider not only logical principles, but also the exigencies of the position, that we must .consider human nature, and that we must have some consideration for humanity. We cannot regard all these questions simply as matters upon which to enunciate logical principles. When I find that in these States thousands and tens of thousands of people are living upon industries which have been brought into existence and fostered by various Tariffs, I ask myself would it be right, would it be fair, would it be even humane, to destroy those industries and drive the people dependent upon them into a state of destitution? I quite admit that, if we were now framing a Tariff for the first time, I ‘should probably take up a very different position ; but we must consider the circumstances as they are. We have to raise a revenue of £8,500,000 from 4,000,000 of people, and in raising that i revenue we must consider not only the circumstances of the people of- the Commonwealth, but the exigencies of the finances of the various States. In many instances I have voted in one way, and in many other instances I have voted the other way. I decline to belong to any party. I consider that it would be most improper if, in ray position, I belonged to any party. I am not a Government supporter, and I am not a supporter of the Opposition ; but in this matter I do not believe that the question of freetrade and protection has had so much influence as the question of the Government and Opposition.
– A most impertinent observation to make.
– I have a right to my own opinion as well as any other member of the Senate. I crave leave to state that I do not consider the observation impertinent at all. Other honorable senators have made remarks of a very much stronger nature than that. This is essentially a duty upon which the full principles of free-trade can be enunciated, and I say that on the duty proposed upon kerosene, some honorable senators who wish that free-trade principles should be the issue as against protectionist principles, voted against a duty which, in my opinion, was eminently illustrative of those principles. I think, therefore,, that I am justified in making such a remark I do not desire to make a long speech, but in conclusion, I ask honorable senators to consider the somewhat difficult position in which lam placed. I have a deliberative vote, and no casting vote. That deliberative vote was given to the President of the Senate by the framers of the Constitution in order that State rights and State interests might be protected. In the exercise of that vote, I may no doubt offend sometimes one side and sometimes the other, but I think it is my duty when the interests of my State are affected, as they are by an item like this, to exercise that vote. It would be infinitely more agreeable to me, if I were in the position of most Presidents and most Speakers, of having a casting voteonly, but if I did not vote in such a case as this I should not be performing the duty cast upon me by the Constitution, which is to give a deliberative vote, at all. events in those instances in which I consider the interests of my State are affected.
– Does that account for
I the inconsistency ?
– I do not think that there has been any inconsistency. I have voted upon each particular item upon its merits, irrespective of party, and very often I daresay my friend, the VicePresident of the Executive Council-
– I rise to a point of -order. Is this a personal explanation, or are these remarks in order in discussing the proposed duty upon tea?
– There is no doubt that the honorable and learned- senator has gone into matters of a strictly personal character. I did not interfere in any way in regard to that, because I think it is desirable that every honorable senator should have an opportunity of personal explanation, so far as it can be reasonably afforded. Of course I am quite aware - and this is the serious difficulty I have in connexion with it - that it is possible that the matters to which Senator Baker has referred may give rise to future debate. But it is only from the aspect of a personal explanation that I have allowed the honorable and learned senator to proceed. Probably Senator Baker will now see his way, as far as possible, to confine his remarks to the item before the Chair.
– I bow most cheerfully to your ruling. I am sorry the objection was raised. I have spoken very little upon this Tariff. I have given many votes without any explanation as to why I voted in a particular way, because I did not wish to take part in any party debates or party discussions. Very probably in consequence of my reticence mv action has been misunderstood. I wished vo make an explanation, but Senator Clemons objects, and I bow to the ruling of the Chair.
– I do not object to the honorable and learned senator’s explanation. I object to his speaking out of order. If the honorable and learned senator desires to make a personal explanation I shall welcome it, because it will give «s an opportunity.
– I do not wish to say any more on that point, and I shall confine myself to the matter of the duty proposed upon tea. I mean to vote in favour of imposing a duty ; first, because I think that my State cannot well do without revenue; secondly, because the duty will be spread over the whole people and will not fall hardly upon anybody ; and thirdly, because all the proceeds will be paid to the Federal Treasury. I hope that the motion of Senator Glassey will be carried.
– I regret very much that Senator Glassey and I, as representing one State, do not see eye to eye on this question. I intend to vote against this motion. He asked and answered in the affirmative the very pertinent question - Is tea a fit subject for taxation ? I have examined the question as minutely as I can, and I have come to the conclusion that it is not. Tea is used very largely by the population as a whole, but mostly by the working classes. Persons in the higher grades of society do not drink nearly as much tea as do the working people. In the diggers’ camp, in the shearers’ camp, in the selector’s humpy, and all over the continent wherever workmen are to be found, tea is what might be termed the national beverage. It is a necessary of life and not a luxury, therefore it is not a fit subject for taxation. I was rather amused at the stand taken by Senator Glassey. If there is any honorable senator who is strong in his “protectionist views it is he ; but apparently he has deserted the protectionist standard in this instance, and enrolled himself under the flag of the revenue tariffists. For the benefit of the committee, and to refresh his own memory, I shall read some utterances of his in 1896, which might very well be applied to the present moment : -
While I rather favour protection sis against free-trade, I by no means agree that duty should be collected on those articles which cannot, or which are not likely to be produced in Queensland for years to come.
We do not produce tea in Australia, and I do not think it can be produced here, unless at very great cost. The tax imposed on tea does not -assist in the establishment of any industry. It does not put money into the pockets of a single working man in the continent. The only benefit that is derived from its imposition is to the Treasury. . During the same debate, Senator Glassey said -
I may refer to another article which is to be’ found in every household, that is, tea. Tea we do not grow, and are not likely to grow.
The Secretary for Public Instruction. - We can grow it.
– We can do many things. Wo could, if we were wise, have a democratic Government on those benches who would bring forward some progressive measures which would tend to assist the people as a whole. If we can grow it, although I have taken some pains to examine the various agricultural districts, I have not come across that district where tea is grown. We find that the taxpayers are called upon to pay £81,000 or £82,000 “annually as duty upon tea, and not a farthing of that is to be removed.
Senator Glassey has laid very great stress on the condition of Queensland, and Senator Baker has asked us in the name of humanity to support the proposed duty. I may tell Senator Glassey that I am just as much concerned as he is about the condition of Queensland, and I may tell Senator Baker that it is in the name of humanity that I ask that this tax be not imposed. We will admit that times are hard in Queensland and South Australia. We may go further, and say that times are hard all over the continent. When times are hard j when working men are getting very little employment ; when the worker’s income is closely approaching to zero, is not that a time when an attempt should ‘ be made to take some little portion of the heavy load of taxation from his shoulders 1 If ever there was an opportune time for taking the duty off tea, it is now. We know that the wealthier classes, although their incomes may be slightly reduced in times of depression, do not feel the pinch as the working man does ; do not have to go without a meal, to sleep out, or to see their children go about without boots, clothing, or food. Their incomes maybe temporarily lessened, but so far as the material comforts of life are concerned, they are just as well off in. bad times as in good times. If there is a necessity to impose taxation during bad times, we ought certainly to appeal to those who are able to pay, and not to those who are not able to pay. The value of the tea imported into Queensland during 1899 was £135,637, while the duty paid on the tea was £87,835, making the total cost of the tea with the duty £223,492, without the duty the turnover of the retailers would have been £1.35,000. With the duty their turnover was £223,492. It is well known that the sellers of tea charge the. same profit on the duty as on the article itself. So that without the duty the retailer would have had a turnover of £135,000 with a profit of £34,000, and with the duty he would have had a turnover of £223,000 with a profit of £56,000. The retailer in Queensland alone is, therefore, interested in this duty to the amount of £22,000 per annum. What is the saving to the people of Queensland from this relief from taxation ? In the duty there is saved about £90,000, and in the profit on the duty £23,000. The people of Queensland have in their pockets £110,000, which would otherwise be in the coffers of the Treasury, and in the pockets of the retailers. No doubt £90,000 is a very large loss to the revenue, but is there no way of replacing it. Senator Glassey said he had no mandate from the people of Queensland to take the duty off tea. I have a mandate from the people of that State to take the duty off tea. One of the planks of my platform when I sought the suffrages of the electors was an equalization of the incidence of taxation, and I shall redeem that promise by the vote I shall give on this question. We hold that it is time that some portion of that burden was taken off the shoulders of hard-working people who have little employment, and little money, and who are in a very bad way generally, and placed upon the. shoulders of those who are well able to bear it. The Queensland Government will not have the slightest difficult? in finding £90,000. It will have to tax a class who have hitherto escaped the obligations of citizenship. It will catch in its net those who have previously shirked their fair share of public burdens. Are we going to bewail that ? Are we going to continue the duty on tea simply in order that a number of men, who are well able to pay in some other fashion, may evade their- obligation to the State? Senator Glassey says that we are getting a worse quality of tea than we did when the duty was imposed.That is entirely a matter of administration, and I am not so very sure that it is the case. I have heard several vague and indefinite assertions on the subject. But when we reflect upon the money interests which the retailers of tea have in the duty, we can see perfectly well that they are likely to support the popular notion that the quality of tea is not so good as it was when a duty was paid. They have a money interest in the matter, and, therefore, we should discount their statements. It is a matter of administration. The Customs have power to test every consignment of tea, and as long as I hold a seat in the Senate, I shall always do my utmost to see that no inferior tea comes into the Commonwealth. I am sure that the Government will also do their best in that direction. The honorable senator has also said that the people are not receiving the benefit of the abolition of the duty. I think that is very probable ; but it is not the fault of Parliament. If it is the case - and I should not like to say whether it is or not - competition will very soon remedy it. The tea dealers may stand out for a time in the hope that the duty will be re-imposed) but when they find that that is not likely to take place, down will come the price, owing to the sheer force of competition. Senator Glassey put in a plea for the local packers, and urged that a duty of Id. per lb. should be imposed upon packet tea. My impression is that the cost of packing is not equal to Id. per lb. So far as I have been able to ascertain, the packers employ a considerable number of women and boys, and very few men ; they pay low wages, and, as it does not cost them more than -Jd. per lb. to pack tea, the balance passes into the hands of the packers. In Queensland a duty of 2d. per lb. was levied upon packet tea, over 3,000,000 lbs. of unpacked tea was imported per annum, while the tea in packets amounted to only 90,000 lbs. Tea is an article of commerce, which deteriorates the more it is exposed to the atmosphere. If it is sent here in bulk, and handled and re-handled, it must deteriorate ; but if it is packed in the country from which it comes in air-tight packets - as it is largely - it arrives here in good condition, and the selector or any one else in the country can buy a case, take pound after pound from it, and the last pound is as good as the first. For these reasons, I oppose the motion.
Senator MILLEN (New South Wales).The committee was favoured just now by Senator Baker with some reasons ‘why, in his opinion, the free-trade members of the Senate ought to be consistent with their principles, and vote for the motion submitted by Senator Glassey. I should like very briefly to traverse those reasons. If I understood the honorable and learned senator’s line of argument rightly, it was as a free-trader that he supported a tea duty, because the whole of the yield from it would go to the Treasury, whereas in some cases only a portion of the duty levied upon other articles would go to the Treasury, while a portion would go into the pockets of private manufacturers. All free-traders will at once subscribe to that doctrine. But Senator Baker forgot to point out that the position before us now is not a tea duty as an alternative to some of the other duties which have been imposed, but a tea duty in addition to them. If the honorable and learned senator had assisted the free-trade members of the Senate to remove some of the duties which he said were objectionable, he might have appealed to us with a great deal of force to impose a duty on tea. I am prepared to say that I prefer a tea duty to a protective duty, but I am not prepared to place a revenue duty like that now proposed on top of protective duties. That is an answer to the honorable and learned senator’s argument. The attitude of theOpposition is a complete answer to the accusation which Senator Baker madeagainst the party.
– The Opposition simply wish to get the Government out of office.
– That is the accusation to which I am about to refer. If that were our desire we should support the imposition of a duty upon tea. Senator Baker should see that free-traders who are voting with the Government on this occasionare acting in a way that will relieve them from any difficulty. The only difficulty that could be created under this itemwould be occasioned by the carrying of the motion, and if we desired tohamper the Government, we should all be found voting with Senator Glassey. That is a complete answer to Senator Baker’s accusation, and the indorsement given to it by Senator Higgs.
– Is not the honorable senator going to vote for the tea duty 1
– I have said already that I am not. I shall be prepared to vote for a duty on tea as an alternative to many o£ the duties in the Tariff when I see an opportunity to remove some of them, but I am* not prepared to superimpose upon many of the- duties in the Tariff an additional burden. I understand that some honorablesenators opposite are going to vote against the Government on this proposal. If it is to be said that the Opposition are seeking to hamper the Government, what can be said of honorable senators on the other side % It is from that side of the committee that a motion has been submitted the success of which would mean the defeat of the Government so far as this item is concerned. The accusation which has been made against the Opposition by SenatorBaker is unworthy of any honorable senator, and especially of the President. There is one thing that appeals to me more than do the lectures and arguments of Senator Baker, and that is the financial necessities of the States. “While honorable senators are called upon to consider the financial requirements of the particular States which they represent, they are under a special necessity to have regard to the requirements of the other States. Whilst J can quite believe the statement that the financial position of some of the States is somewhat serious, I cannot see that a case has been made out for the imposition of this duty at the present stage. It is admitted all round that the revenue which will be yielded by the Tariff is a matter of speculation, and until we know a little more of what it is likely to be I cannot see that I am called upon to give a vote the effect of which would be seriously to add to the burdens of the people. If after some experience of the Tariff it is found that the financial necessities of the States cannot be met without such a duty, I may be prepared to give a vote that will restore their financial equilibrium. At the present time, however, I do not think that the position has been made out to induce mo to give a vote in opposition to my previously announced intention.
– I very much deprecate the attempt which has been made to put the honorable and learned gentleman who occupies the position of President of the Senate in a false position. The honorable and learned senator’s position was exactly explained ; he has no casting vote, but he has a deliberative vote. He sits on any side that he pleases, and he has the difficult duty of showing to the satisfaction of both sides that he is perfectly impartial. His impartiality has generally been shown by voting on the side of the Opposition. But the moment the President’s sense of justice makes him feel that he cannot pursue certain lines which he thinks - and I agree with him - are rather actuated by party motives than- lofty principles of statesmanship, he. still has his duty to do. He has done it, I believe, quite apart from the opinions that honorable senators and myself may entertain on questions upon which we vote in antagonism. We have listened to a very ingenious speech by Senator Millen. I always like his speeches. The honorable senator gives such reasons for doing what he ought not to do, and one is so delighted with the man, that he forgets the fallacies of his arguments. After the tricks which have been played with the Tariff by Senator Millen and his friends, he says that it is impossible to see how it will work out ; that if it works out to the general destruction of the revenue of certain of the States we should impose a duty upon tea, but that we should not impose it until we ascertain what will be the effect of the alterations. There was a great deal in the Tariff as sent up from another place which I did not like : but I thought that certainty was better than uncertainty, and that we had better accept what was, perhaps, not just the best thing rather than have constant delay. I have always looked upon the tea duty as a bonne bouche to fall back upon to assist the free-traders in making up the loss of revenue caused by the reductions which their numbers have enabled them to carry. This would have the undoubted result of increasing the revenue, but to what extent, we have at present no means of knowing exactly.From that point of view would it not be well, as the majority of the States are going in for economies, to say to the other House - “ By the way, if you get into a fix in consequence of the suggestions that we have made, why not re-impose the duty on tea?” Surely that would be a friendly thing to do. The amendment of the House of Representatives striking out the duty on tea was carried by the barest majority.
– There was no party vote there.
-But it was carried by the votes of a party - a nice distinction without a difference ‘ It was carried by the votes of the free-trade party in combination with the extreme protectionists of the labour party. The labour party are very clever fellows. I have a great respect for them in the way they use either side for their purposes with absolute impartiality. On this occasion they happened to use Mr. George H. Reid’s side, and the result was that the tea duty was omitted from the Tariff. That fact has probably been a handicap on the free-trade members of the Senate during the discussion of the Tariff. We have before us now a matter that has not been a pressing question in Australian politics. It has been a subject of electioneering talk ; Members of Parliament have said at times that it would be a capital thing to abolish the duty on tea. But it has never been a living question in Australia. There has never been a, majority in favour of the abolition of the duty in any Parliament in Australia, except this one, -which was returned on different principles. It was never expected that the tea duty would be taken off by this Parliament. It was an extraordinary surprise to every one when it was removed. The question now is whether, as we are sending down so many suggestions to the House of Representatives, we should not take the opportunity of asking them to consider this matter. Because Western Australia does not want a duty on tea, there is no need for the representatives of that State to produce a financial crisis in the other States which do want it. Senator. Glassey’s speech was eloquent and true. The difficulties that he said would arise are arising every day. I am sorry that the Vice-President of the Executive Council has not seen his way clear to stand by the original proposition of the Government in favour of the duty. I protested against what certain honorable senators proposed to do with regard to the Tariff generally, on the ground that it would, create worry, and produce no beneficial result. But tea stands in an entirely different position. The striking out of the duty by the House of Representatives was in the nature of an accident. It could scarcely be called a bond fide vote. The amendment was carried by the barest of majorities, and there was some misunderstanding about it.
– The Government did not dare to recommit it.
– It is true that they did riot recommit it ; but it was nevertheless a fact that the carrying of the amendment was an accident, and was -effected by a combination of two entirely antagonistic parties, one of which was hearty with regard to the matter, whilst the other was luke-warm and diffident. Can we not send the matter back for reconsideration? South Australia wants the money. Are our Western Australian friends never going to consider any State but their own?
– They are always doing that.
– Then they do it so subtly that I have never been been able to discover it.
– The honorable and learned senator has not honoured us with his attendance often enough.
– Then I will try to come more frequently in future - when the honorable senator is away, if possible. I suppose that every honorable senator has made up his mind how he is going to vote, and my object in speaking simply’ was to discriminate my position from that taken up by me in regard to other matters in which I have supported the Government in maintaining the Tariff as it stood. But we do not know how the Tariff will work out, and we ought to keep the tea duty in reserve to fall back upon, if necessary. Therefore, I trust that Senator Glassey’s motion will be carried.
– I have listened with pleasure, as I always do to Senator Downer, but I have’ not derived much enlightenment from what he has said. I am not aware that he has put before the committee a single argument of any solidity to warrant us in re-imposing the duty upon tea. He has made statements about the smaller States, but he has not descended to figures. He has not made any statement about the revenue of South Australia. In that, perhaps, he was wise. I believe that the truth is that the revenue collected under this Tariff for the year just closed exceeded the revenue collected from Customs and Excise in South Australia under the Tariff of that State in the previous year. In regard to Queensland, there was scarcely anybody in Australia who did not know that before federation the taxation of that State was far in excess of the average taxation of the mainland States of Australia. Both free-traders and protectionists alike knew that one result of federation would be that the taxation of Queensland would be reduced, and that the finances of that State would have to be re-arranged. The duty on tea involves a total revenue of about £400,000 a year. That is a large sum. But .what would be the amount that would go into the revenues of Tasmania, Queensland, and South Australia ? Certainly not an amount which in any federal spirit would justify us in asking the States that do not need the revenue to submit to this increased taxation. In most of the States there is no need for an increase of revenue. The majority of the suggestions which have been carried by this committee, if finally agreed to, will have the effect of increasing the revenue of the Commonwealth, simply because they have been the means of removing bars which the Government have established against the importation of goods. The Government have gloried in stating that their policy would have the effect of destroying about £5,000,000 worth of imports. Senator Downer’s fellow-statesman, Mr. Kingston, claims that the Government were going’ to destroy that amount of imports. If we pass amendments in the Tariff which will reduce the destruction of imports by £1,000,000 or £2,000,000, we shall allow that amount more of imports to come in, and a larger revenue will be obtained. Some few weeks ago Senator O’Connor intimated that he would lay before the committee a calculation showing that the suggestionswhich we have made up to date would involve a loss of revenue of £119,000. He has never ventured to produce the details of that calculation. After he made the statement, I. myself went through the items one by one, and the conclusion I arrived at was that our suggestions, if adopted, would bring about an increase of revenue. When I look at these facts I see nothing to warrant us in imposing this increased burden of taxation on the people. It must be remembered that when the Tariff was originally brought into the other House the revenue came tumbl ing in at a m uch greater rate than the Government anticipated, in excessof theoriginalestimate. These statements of mine must not be taken as indicating the slightest want of sympathy with the financial conditions of the smaller States. To vote for the imposition of £400,000 of additional taxation upon the whole of the Commonwealth in order that £100,000 may be given to certain States that can do with it, and £300,000 to States which do not want it, is a proposal which does not commend itself to my judgment. Because I decline to vote for such a proposal, I am not, therefore, in any way wanting in federal feeling, or in any way short of sympathy for the smaller States. In the future of Tasmania, the smallest of the States, I have all along had, as I have to-day, a most profound faith. I believe it is the State which is gaining to-day, and will gain most from federation, and I think there is nothing to fear in connexion with the successful management and arrangement of the finances of Queensland. Senator Baker said it would be possible to remit other duties if we decided to impose a duty upon tea, So it would, but how is that going to be done? And does Senator Baker or Senator Glassey desire it? If Senator Glassey is prepared to tack on to his motion a request that, in view of the revenue to be derived from the imposition of a duty of 3d. per lb. upon tea, the duties imposed upon boots and shoes, hats and caps, and certain other duties should be abolished, I shall be with him. Will the honorable senator move in that direction ?
– No ; he will not.
– Then, as I thought at the time, there is no use in discussing the suggestion made by Senator Baker that this motion might be accompanied by an arrangement for the remittance of duties imposed upon other articles. As that cannot be carried out, I decline to be a party to imposing at the present juncture the large amount of increased taxation which this motion proposes.
– I oppose Senator Glassey’s motion on very much the same grounds as I opposed the proposal to impose a duty upon kerosene. I do not regard tea as a legitimate source of taxation, because I am not satisfied that we can grow it in the Commonwealth. I know it is claimed that we can grow it in certain parts of Queensland, and it is probable that later on it will become a legitimate subject for taxation when we can produce it ourselves. The scientific protectionist would say that tea ought to come in free. In the greatest protectionist country in the world, the United States of America, tea is admitted free. It is also admitted free in Belgium, and in Western Australia, where it is interesting to know that they have the record for the consumption of tea, running to something like 10 lbs. per head. I very much regret that this proposal did not come from a free-trader, and I take it somewhat to heart that Senator Glassey, as a protectionist, should have submitted it. It would have come far better from Senators Symon or demons who agreed with the proposed duty upon kerosene. Senator Glassey made something out of the argument that the admission of tea dutyfree will lead to a lot of inferior tea being introduced into the Commonwealth, but I cannot think that free tea means that the public of the Commonwealth are going to consume a larger quantity of inferior tea than they would if a duty were imposed upon the article. If that is so, what has become of Senator Glassey’s quotations from those who have made great observations concerning the fair sex, and what is to become of the intellect of the woman-folk of the
Commonwealth who ave the largest consumers of tea ? A similar argument might have been used in connexion with the proposals for free wheat, free drugs and chemicals, and free scientific ‘ instruments. Surely it will not be contended that we shall be protected from the introduction of rubbish by the imposition of the duty. If it will pay people to send rubbish here it will certainly be brought into the Commonwealth. The honorable senator’s suggestion is rather a reflection on the great importing industry, and I am surprised that Senator Pulsford did not tackle the honorable senator on that ground. Surely Senator Pulsford should champion the great importing industry from so gross a reflection made upon that influential body. I am inclined to think there is a good deal in the argument that we have no right to burden the general taxpayer throughout the Commonwealth in the interests of Queensland particularly, and I say that as a Queenslander. Because Queensland happens to find herself now in a bit df a difficulty from, various causes, which need not be detailed, it is proposed that the 4,000,000 souls throughout the whole Commonwealth shall pay a little extra for their tea. But I remind honorable senators that the proposal which was carried in another place to make tea duty free, and the difficulty surrounding the Government of Queensland at the present time, have led to that Government following the example of Governments in the other States of the Commonwealth ; and we now see that it is proposed to introduce an income tax in Queensland, and the revenue expected to be derived from that tax will amount to no less a sum than £100,000. If the Queensland Government would only follow the example of the Governments of the other States a little further, and take up the proposition made by Sir Samuel Griffith about fifteen years ago - at a time when Senator Drake, I believe, first went into politics in that State - and impose a land tax, they would be able to raise another £100,000, which would just about set the Government of Queensland right if they administered their affairs in an economical and satisfactory way. Some free-traders are going to support this motion, but I am sorry that it was not proposed by a free-trader, that we might see how much there is in the , statement that the free-traders hold a brief for tlie poor. I should like to know how ‘ much genuineness there is in their professed sympathy for the poorer classes in the Commonwealth.
– In voting against 30 per cent, upon boots.
– They voted against a duty of 30 per cent, upon boots, because that would help the local manufacturer, but they are prepared to vote for a duty of 75 per cent, upon the tea which will be used by the poorer classes in the Commonwealth. I took the trouble, when this matter was being dealt with in another place, to look up the quotations appearing in the daily press regarding tea; and I found that in the Age of May 23, there appeared this paragraph -
Teas. - The outlook for business in new season’s China sorts is not encouraging. Fine flavoury descriptions are likely to have a little inquiry, bub common and medium ore now outplaced by Ceylon and Indian, and importations will be very small. Sales to-day of 400 chests of Ceylon at prices ranging from 6¾d. to .LOd. Of Indian, 170 chests sold at7d. to Oct., and of China 200 half-chests common.
On the 18th of April, 1902, the following paragraph appeared : -
Teas. - Business includes about 200 packages of Cev]lon e.v recent arrivals at to 8Jd. In Indian, sales of .100 chests mentioned at 6½d. A small line of China sold at 4£d.
This small line of China tea would probably find its way into the homes of the very poorest classes in the Commonwealth. Here is a proposal to impose a duty of 3d. per lb. upon a tea selling at 4Ad. per lb., and that is more nearly a duty of 75 per cent, than anything else. I find this statement in the Argus of 10th April -
Tea. - Business has been done in Cevlon at 7d. to SAd. for 150 chests, and at lOd. to lOAd. foi- 25 packages. Of Indian, .100 chests have been placed at 6¾d. to Sd.
And on the 5th April this appeared -
Tea. - A good business has been done in Ceylon tea, sales aggregating about 700 chests and halfchests at (ijd. to 8Jd. Of Indian, 103 chests have been placed at 5½d. to 5¾d. , and 30 chests at 7$d. to 7Jd. Business in China tea covers 250 half-chests at 4Jd.. and 100 half-chests at 5Ad.
I need not give any more of these quotations to show honorable senators what is the price of the lower-class teas introduced into the Commonweal th, and it is clear that the lower-class teas will be used by the very poor people in the Common- 1 wealth. But if objection is taken on that 1 score, let us say that the average price of 1 tea is 6d. per lb. I suppose that will be considered n. fair price on the figures I have quoted, and if so the proposition is to impose a duty of 50 per cent, upon that tea. “Where, now, is the blot upon the Tariff? Is it a blot to impose a duty of 30 per cent, upon boots to protect the local manufacturer, or to impose a duty of 50 per cent, upon the tea consumed by the general public ? I desire to show that Senator Clemons, whose party, it appears, holds a brief for the poor, is prepared to vote for a duty of 50 per cent, upon an articleconsumed by the poorest classes in the community. I heard an honorable senator say that tea is not a necessity. I dare say that there is some truth in that statement so far as he is concerned. There are persons in the Commonwealth who do not indulge in tea, but drink lager beer or highpriced wines. They do not find tea a necessity, but the majority of the people - for example, the shearers, who, I believe, drink about a bucketful of tea every day - find it a necessity. In the majority of homes throughout the Commonwealth it is used at every meal. I suppose that those who are better situated in life do not use tea more than once or twice a day. At ladies’ “ at homes “ a little china cup is presented to the visitor with just enough tea in it to quench the thirst of a humming-bird. That is not 4-J-d. tea, on which there would be a duty of 75 per cent., but the highestclass tea, running into, I suppose, ls. per lb. On very many occasions I have read the quotations for tea, and it has never been quoted at half the price which used to be paid, ls. or ls. Id. per lb. being about the highest quotation T have seen for high-class teas sold at auction. It has been said that the proposed duty will not make very much difference in the price. My own experience is that it will make a difference of 3d. per lb. Tea which is now obtainable throughout the Commonwealth at ls. 9d. per lb. used to be sold at 2s. 6d., and tea which used to be sold at 2s. 3d. per lb. is now bringing ls. 6d. “Where a duty of 3d. per lb. is imposed, the price goes up by quite a third of what is paid for the article. Since we cannot produce tea in the Commonwealth, our safest course is to allow it to come in free. The drought has been ‘quoted by Senator Baker, who mentioned in that connexion the great sufferings which were being experienced by the various States, and said that he had great sympathy with them. The Premier of New South Wales has had an investigation made into the statements concerning the sufferings through the drought, and he has stated publicly - and his statement has not been contradicted yet - that the so-called sufferings have been very much exaggerated. The public are suffering mostly from the high price of meat, caused not so much by the drought as by the patriots who started the South African war. Queensland is suffering, but she will right herself by following the methods adopted by other States with regard to taxation. If the example of New South Wales in regard to the Land Tax and the Income Tax is followed, and the policy of the Government is carried out, there will be no occasion for a tea duty to make up the deficiency in her revenue. Senator Baker said that if this were a duty which would not reach the Treasurer wholly, he might be found objecting to its imposition, and he mentioned that there were imposed certain duties part of which went to somebody else. I was rude enough to ask by interjection what were those articles. He did not take up the stand which he was entitled to do - that he should not reply to disorderly interjections - but he said, “ I will not go into details.” I. am anxious to know what are those duties which do not find their way into the hands of the Treasurer. The honorable senator seems, to my mind, to confuse the issue because certain buyers and sellers choose to add to the price of the article the amount of the dutv. I know of no duty which does not find its way into the coffers of the Treasury. Take the 30 per cent, duty on boots, for example. Does Senator Baker, like Mr. Reid, mean to say that there is a pipe from the importer to the Treasurer, and that it is tapped by various persons 1 I am glad to know that Senator Baker has some consideration for humanity. He has considera-tion for humanity, and yet he is prepared to tax their tea. We generally expect a humane man to show his sympathy where it is most needed, and it certainly is most needed in the case of those whose only beverage is tea. I hope that honorable senators will allow the item to stand as it is, and a few years hence, probably when we are able to grow tea in Queensland, we can consider the advisability of imposing a duty to protect the local grower.
– The debate appears to be a lifeless one. Even Senator Higgs has not been quite so funny as usual. I suppose the reason is that we have all made up our minds on this question. For the three States which absolutely require more revenue than the Tariff is likely to yield, taking its productiveness at £9,000,000, it is a very serious question. I am not going to say that there will be disastrous consequences to Tasmania if the duty on tea is not imposed j but I do say most emphatically that her position will be very embarrassing, because she will lose from £14,000 to £17,000. I heard a very excellent address the other day, by the Rev. Dr. Marshall, on the text - “No man liveth to himself.” He gave some nasty knocks to capitalists who wished to play a lone hand, and a few ugly knocks to the labour party, who think that they should play a lone hand, separating class from class. Applying Ms remarks to this discussion, I get hold of the text - “ No State liveth to itself.” We ought to recollect that the States of Australia form one Commonwealth, and that it is of no use for two or three States to have more than enough revenue if, by our legislation, we leave three other States, containing half the Commonwealth perhaps in area, though not in wealth or population, without sufficient, revenue to carry on the government, after putting on proper taxation of all descriptions, and after reasonable retrenchment. That, I can assure the committee, is likely to be the state of Tasmania. Applying the address of Dr. Marshall further, I would say that no class liveth to itself. It appears to me that the labour party have decided this question of free tea from a narrow stand-point. They have been looking, I think, more at the class they represent than, as they ought to do, at the well-being of the Commonwealth. I deny that Senator Clemons or any one else holds a brief for the poor. I deny that the labour party hold a brief for the poor. If they know their duty, and are honestly going to perform it, they hold a brief for the Commonwealth and its taxpayers, and unless we consider the Commonwealth as a whole in adjusting taxation, we shall act badly and not wisely.
– The honorable and learned senator has never heard the labour party talk of the poor working man.
– Sometimes I have heard the labour party talk of the poor working man from morning till night. May I remind my friends of the labour party, and also my friends of the free-trade party, that there is a very interesting debate in the last number of the London Weekly Times to hand. Great objection was taken by the liberal free-traders to the proposed tax on corn. They said it would be a tax on the bread of the people, “ the first element in human subsistence,” to use Mr. ‘Gladstone’s celebrated phrase. The arguments against the imposition of the tax seemed to be very strong until the Chancellor of the Exchequer rose, and pointed out with telling effect, that the duty was not only necessary but just. He pointed out that the contribution to the sinking fund had been stopped, that the income tax had been twice raised, that the probate duties were the highest ever heard of, and that having brought direct taxation up to 50 or 51 per cent., he had to ask the general body of the people to help to pay for the war. My argument is that we have just started a federation, that we are working under a new constitution, that we are incurring some £300,000-1 believe it will be £400,000 - a year in the shape of new expenditure, and that it is only right and just that part of the taxation necessary to pay for this new form of government should be borne to some extent by the general body of the people. In this connexion’ I decline to use the word “ rich “ or the word “ poor.” If Tasmania can show that she has direct taxation, both by way of land and income taxes and stamp and probate duties, that she has retrenched as she is now doing - and no Premier has made more drastic suggestions for reform than has my honorable friend, Sir Elliott Lewis - surely honorable members of the labour party will recognise that they are doing an injustice in refusing to vote for a tax on tea? Honorable senators of the labour party are practically saying to themselves, “ The working classes must have a free breakfast table,” and they have made up their minds that there shall not be a tax on tea. Why is that unjust 1 It is unjust, because it is generally admitted by protectionists, freetraders, and revenue-tariffists alike that j there should be a tax on tea, for ; the reason’ that under it all classes con- ; tribute to the revenue in proportion to their use of the commodity. Senator Higgs i referred to the fact that tea is duty free in I the United States of America. I do not know the reason for that, but I can easily 1 imagine that in view df the enormous protective duties, shutting out the goods of the world from the United States of America and enabling the most cruel and shameful combines and corners to be established there, Congress has thrown that sop to the working people. In endeavouring to carry out their desire to obtain a free breakfast table, some of my honorable friends of the labour party have fallen into very grievous errors. Senator Higgs talked about the buckets of tea consumed by the shearers. If he knew anything about shearers he would be aware of the fact, that about eight out of every ten of them are found in rations. Therefore, the very reason for not imposing this tax, according to the honorable senator, is that an enormous proportion of it would .be borne by the rich squatters and pastoralists.
– The bulk of the shearers are not found in rations.
– I say that they are, and I have very good authority for the statement. I must have another shot at the labour corner. Senator Stewart talked of the enormous quantity of tea consumed by the poor. Has he forgotten the enormous quantities consumed by the rich ? If the honorable senator knows anything about the upper ten, he will be aware that large quantities of tea are not only consumed in their households, but wasted, and that tea is partaken of by. the family, by the visitors, and the servants.
– The fact that the servants are provided with tea and food, generally is considered in determining their payment.
Senator - DOBSON. - Of course it is, and therefore this is not an argument which the honorable senator can use. One-half of the working and servant classes have their tea and other rations found for them. I was speaking on Saturday night to a lady who told me that very often she drank nine cups of tea a day. She had oneat7 o’clock, two at breakfast, one at 11 a.m., two at lunch, one at afternoon tea, and two in the evening. I mentioned on a former occasion that the Tariff would yield for Tasmania about £164,000 less than was obtained under the State Tariff during 1900. I have since communicated with the State Statistician, who is very experienced in preparing estimates, arid he says that the shortage which Tasmania will suffer this year as compared with the revenue obtained under the State Tariff during 1900 will be £154,000. I do not say that Tasmania will have a deficit of £154,000, because in 1900 she had a surplus, but I honestly believe that for the coming year she will have a shortage of between £110,000 and £130,000. The. affairs of Tasmania are not so elastic as are the affairs of the larger States, and unless we have a very good season the revenue falls off very materially. I believe it will mean a very great strain to make up by direct taxation and reasonable retrenchment the amount that we shall require. Senator Millen used a very extraordinary argument. If I can gauge the feelings of Senator Millen, Senator Pulsford, and other freetraders, they experience some little difficulty in producing arguments to support their proposal to vote in opposition to this tax. Senator Millen said he was not going to burden the people with a tax on tea in view of the fact that so many high protective duties had been imposed. But the higher the protective duties are, and the more they take effect, the smaller the revenue must be, and the greater the reason why Senator Millen ought to vote for, instead of against, a tax on tea. Senator Pulsford has used another argument which would have some force if it had riot been fairly considered and disposed of long ago. He said that if the three smaller States required revenue which the three larger States did not need, he should not be prepared to give it. The position of New South Wales, however, should be dismissed at once, because I heard Mr. Reid and other representatives of the mother State at the Federal Convention say over and over again that New South Wales knew that she would be taxed to the extent of £1,000,000 in excess of her requirements - and none of them put it at less than £800,000 - as the price of entering the federal union. It is, therefore, rather hard for Senator Pulsford to say that he absolutely declines to give to the three smaller States the revenue which they require because of the old bogey about the position of New South Wales. The vote which the committee seem inclined to give upon this motion will have the effect of greatly embarrassing Tasmania. I agree with Senator Pulsford that Tasmania has a bright future owing to federation, but T also know that we have hardly any sources of revenue which do not come from the income derived from land and mines. When the mining industry is slightly retrogressive, unci when we have bad seasons, as we have had throughout the Commonwealth for two or three years, the revenue of Tasmania slumps verv heavily. I am satisfied that she will require the revenue from a duty on tea, which some of my honorable friends are going to refuse her.
– The discussion on this item seems to have opened out to various honorable senators who have spoken many possibilities of departing from the standing orders. As I know very well what the result of the division will be, and for other reasons equally good, I do not intend to take long in discussing the item, but I am not going to remain silent. I have often wondered why the leader of the Senate should have made the declaration when introducing the Tariff that he was going rigidly to adhere to every line of it. I begin to see now one of the reasons, at any rate, for it. We have listened in this Chamber to outbursts of indignation, to- threats of what another place would do to the Senate when any item has been touched by this side of the committee, and any proposal involving revenue has in the opinion of the leader of the Senate been threatened. But when we come to an item which represents to the smaller States more than does any other item, we have absolute silence, or what is worse than absolute silence, on the point. We hear no expression of indignation at the Senate depriving those States which are most necessitous of a large amount of revenue. But we are again, it seems, asked to regard this Tariff as a sort of sacred document upon which we ought not to lay profane hands. The Government, when they first introduced the Tariff, thought that a duty on tea was an absolute necessity. I believe they thought so, because they pretended then to have some regard for the necessities of the smaller States. If this duty were necessary then, it is just as necessary now. I go further, and say that if the Government had any backbone in this matter - and they have not any - we should have an opportunity of re-imposing the duty on tea, and the Senate would, have an opportunity of showing its position and its strength, and of proving that as the States House it .has the right to exercise some authority with regard to the way in which taxation shall be imposed. I say, without the slightest: hesitation, that if the representatives of the Government in the Senate had shown any desire to consider the interests of the smaller States, they could have succeeded in re-imposing this tea duty. So far as the duty itself is concerned, it commends itself to every one. It is fortunately a duty that has nothing whatever to do with differences in fiscal views. It is obviously a duty that freetraders can support, when revenue is required, because it has nothing whatever to with protection. There is, therefore, an opportunity for us to raise by means of the Tariff now under discussion, that amount of revenue which the States require, and which the G overn men t declared that it was necessary to raise. But while the Government talk about the absolute necessity of looking after the financial requirements of the smaller States, yet, because they were beaten in the other place by a small majority, they are afraid to make the slightest attempt to allow the Senate to enforce its way in re-imposing the duty. The result is that the smaller States are to suffer because the Government are afraid of a revenue duty, whilst the)’ have never been afraid to fight to the utmost for every sign and symbol of protection. Whenever there was a question of diminishing a protective duty to the extent of even 5 per cent, the Government fought their hardest : but when there is an opportunity of raising a large amount of revenue by a fairer and simpler means, they show no fight at all. I should like briefly to criticize statements which have been made by two or three honorable senators. Senator Pulsford has said that inasmuch as we are going to collect too much revenue for New’ South Wales, we must not collect enough for Tasmania. First of all that argument shows an unfederal spirit, and I also reply that New South Wales will not suffer any extreme hardship from having an overflowing revenue. If the affairs of New Sou ti i Wales are administered with any sort of decency she can easily dispose of her surplus revenue. She can for instance, pay off some of her debts.’ But to compare the hardship that New South Wales would suffer because she received too much revenue, with the hardships that Tasmania, Queensland, and possibly South Australia will suffer, because they collect too little, is an absolute absurdity. I regret that Senator Pulsford intends to vote againstSenator Glassey’s motion, but if he had opposed it on sounder groundsIcould have understood him. If he had said that because of the many other burdens that were to be imposed upon the people of New SouthWales in the way of taxation, he could not support a duty on tea, his argument might have appealed to me, although I should have regretted the loss of his vote. The attitude of Senator Millen pleased me much more, although I also deplore the loss of his vote. He pointed out, and with great justice, that his attitude would have been changed, and his vote would have been cast in a different direction if we had succeeded in reducing the burdens of the people in regard to other items. There I am with him ; and I thinkhe spoke with completeconsistency from his point of view, and was justified in refusing to vote for the motion. The argument has been used by Senator Baker, that his votes should be given in the direction of maintaining revenue. I do not want to discuss any of his remarks at great length, but when he says that we have been cutting down revenue because we have reduced duties, I reply that a mere tyro in fiscal matters would recognise that many of the efforts of the Opposition in this Chamber have obviously been directed to increasing revenue. For instance, in regard to his memorable action with regard to the duty on boots, Senator Baker attempted to instruct this committee by saying that he would not endeavour to reduce the duty becausehe would not assist us in doing anything to destroy revenue. But honorable senators know very well that if the 30 per cent, duty on boots were reduced, the effect would be to produce revenue by increasing importations. I have never heard from Senator Baker that he has any concern for the bootmaking industry. If he has, why did he not say so?
– He said that he did not want to destroy industries.
– But Senator Baker has said that he wants to get revenue. I have heard no other argument from him than that he wants to obtain revenue.
– It is bad policy for the honorable and learned senator to attack Senator Baker when he is going to vote on the same side.
– I do not care whether he is going to vote on my side or not. But I want to point out that, if
Senator Baker had joined with the freetrade party in endeavouring to reduce the burdens of taxation imposed upon the people, it is quite possible that we should have secured the votes of other honorable senators like Senator Millen in favour of the re-imposition of the duty on tea. Indeed, I go further, and say that I know we should have done so ; and although I am going to vote on the same side as Senator Baker now, I should for many reasons feel justified ifI joined Senator Millen. But I put my duty to Tasmania in the forefront, so far as this matter is concerned. No amount of prejudice against those who have failed us in regard to decreasing duties, or against protectionists whohave voted to impose high duties, will prevent me from doing what is my first duty, and that is so to vote as to support the finances of my own State. Therefore, I shall have much pleasure in supporting the motion.
– We have heard two or three speeches pointing out to us the position in which Tasmania and Queensland stand with regard to the duty on tea. Senator Dobson is never moreinteresting than when he has a tilt at the labour corner, but on the present occasion he was very wide of the mark.If there is one tiling that is consistent about the honorable and learned senator, it is that whenever there has been an industry to be attacked, or duties to be lowered, his voice has always been raised against duties imposed for the support of existing manufactures. Although I sympathize with the position in which Tasmania and Queensland find themselves under present conditions, I do not think, from my reading of the Constitution, that the duty is imposed upon us of financing the various States. Our duty simply is to refund to the States three fourths of the revenue collected through the Customs, and it is not within the province of the Commonwealth Government to, consider how the States are to obtain the whole of their revenue. It is true that we should to a certain extent consider existing conditions. We ought not to dislocate the revenues of the States unreasonably. But it has been clearly shown that the tea duty would be a tax upon the major portion of the people of the Commonwealth that is altogether unnecessary. The States have to. face economy, and to try to bring about a satisfactory condition of their finances.
There is a way in which that can be done. The question arises whether the States named have exhausted their means of taxation. There is very little direct taxation in Queensland, which State has a great future before her. Tasmania has no income tax, and although she has a land tax it is an imposition of the most absurd kind levied upon improvements on land. Let Senator Dobson go back to his State and advocate a tax on the unimproved value of land, and Tasmania would derive from that source quite as much as she could expect to get from a duty on tea. I need only add that my vote shall be given to secure free tea. Some honorable senators have talked of receiving a mandate from the various States in this matter, but there are some of us who for years past have made it a plank in our political platforms. When I was seeking the suffrages of the electors of ‘Victoria, I touched upon this matter, and said I should try to secure that the incidence of taxation should be upon the shoulders of the people best able to bear it. This is taxation which I think unnecessary, and I shall therefore vote with the Government for free tea.
– Having had other work of a public character to do, I have not been privileged to hear many of the speeches made uponthis very important subject. But during the few minutes in which I have listened to the debate, it seems to me that this motion is being supported by three different parties - by somefree-traderson theoretical grounds, by some protectionists on revenue grounds, and by some honorable senators on special State grounds. I do not know that I £an say very much more upon the subject than I did some time ago upon the proposal to impose a duty upon kerosene. Certainly, ever since I have be6n in public life - and long before I entered it - I have understood that a duty upon tea was properly regarded as a revenue duty, and therefore a Cobdenite free-trade duty, and as such I have always supported it in the State Legislature of New South Wales when a Tariff has been under consideration. If I could get rid of many of the duties imposed under this Tariff, which are to my mind obnoxious, I should be prepared to vote for a duty upon tea, without delaying to make a speech of any kind upon the subject. ‘ Though it is possible that this Tariff will not produce quite as much revenue for some of the smaller States as is desirable, there seems to be little doubt from the statements made by the Ministry here and elsewhere, and, in fact, from the official figures so far as we have gone, that the Tariff will produce all that is required for the purposes of the Commonwealth itself. I am, therefore, placed in this position. As a free-trader, I feel that I ought to give a vote for a duty upon tea, but, as representing persons who are of all shades of fiscal belief, I do not consider that it is my duty to place on the community a larger burden of taxation than is necessary for the purposes of the Commonwealth and the stipulated refunds to the different States. Therefore, without making a long speech about it, I feel, in this instance, I shall be doing, apparently, that which a freetrader ought not to do, in giving a vote against a duty upon tea. I regret it for two reasons. First of all, I shall be giving a vote which will be at variance with my past public career on financial matters, and also because I am compelled to do this because the necessity for further taxation is done away with by the imposition of duties which are obnoxious to myself and other free-traders. To agree to this proposal, and the one which is to follow it, would be to impose an additional burden of taxation to the extent perhaps of £500,000 a year. If the public service of the Commonwealth does not necessitate the imposition of such a burden, I can not give a vote which would place it upon the people, even though in doing so I should be acting in accordance with my own views and the views of the party to which I belong on the subject of customs taxation. I regret that I have to give this vote against the proposal, and I give it with regret for the reasons that I have laid down, that I cannot see my way to place a burden of £500,000 a year of extra taxation upon the shoulders of those who are already very heavily-weighted by this Tariff as it has passed the two Houses.
– - Some four or five years ago when the question was before the people of the State I have the honour to represent, whether they would or would not enter the Federation, I was one of those who took a prominent part in advising them to enter it. One of my chief reasons for doing so was that I knew that federation would mean a uniform Customs Tariff, and I knew that when that was brought about Tasmania would not be able to draw such a large proportion of the revenue she requires from Customs as she was then doing. Up to the time when we entered the Federation Tasmania was draw - ing, roughly speaking, 50 per cent, of her total revenue from Customs duties. Now I have a chance on this vote to say that the people of Tasmania shall be relieved of a little of the burden of taxation they have been suffering from so long. As to the financial aspect of the question, my colleagues from Tasmania, Senators Dobson and Clemons, have led members of the Senate to believe that Tasmania is in very sore straits indeed for revenue, and that she lias so framed her system of taxation up to the present time that no room is left for further direct taxation. I beg to differ with those honorable and learned senators on that point. I say it must be apparent to every honorable senator that a State which has drawn half of its total revenue from Customs taxation must have other sources of taxation left to it,- and sources which, in my opinion, will secure a more equitable taxation of the people. As a proof that my belief is shared by a large number of people in that State, and that it is shared by the gentleman, who at present controls the destinies of Tasmania, Sir Elliot Lewis, let me give a verbatim quotation from a speech made by that honorable gentleman last week in outlining the policy proposed to be pursued by the Government of Tasmania during the session of Parliament which meets to-day. In referring to the fact that Tasmania would now be short of a great portion of the revenue which she had hitherto drawn from Customs taxation, the honorable ‘gentleman said that this remission of Customs duties would make it necessary for Tasmanian politicians to look around them for other means of taxation. But he did not go to the length to which Senators Dobson and Clemons have gone, and hint that it would seriously embarrass the State. After fully acknowledging the immense benefits now being derived by Tasmania from having entered the Federation, he said -
There is no doubt, whatever, that far too much reliance has been placed in the past upon Customs duties as the main source of our State revenue ; and if by the present remission of Customs duties and the necessary increase of direct taxation some steps ave taken towards a more equitable apportionment of the burdens of direct and indirect taxation, Our financial trouble will nob be without some advantage to the people of this State. 41 c 2
That is a quotation from the written address of the present Tasmanian Premier to his constituents, in which he foreshadowed that it would be necessary during the session of the State Parliament meeting to-day to initiate some new scheme of direct taxation, which, in his opinion, will probably be a fairer system of taxation than that which has obtained in the past in that State. I shall not detain the committee at any greater length than to say that I deny that my honorable colleagues in the representation of Tasmania, who have spoken this afternoon, have a monopoly of consideration for the interests of that State. I have the interests of my State at heart equally with them, and I have the interests of the whole of the people at heart. In voting against this motion to impose a duty upon tea, I sincerely believe that I shall be voting in accordance with the wishes of 75 per cent, of the people of Tasmania, I am quite satisfied that the chief reason which induced the people of that State to enter the Federation was that there would be far less Customs taxation than there had been, and consequently more direct taxation, and that that direct taxation would almost certainly lead to the ultimate prosperity of the country. It is well known- to honorable senators from Tasmania, as well as to senators from other States, that there is room for a very great deal of improvement in our system of direct taxation. ‘ As the Premier of Tasmania says, if the remission of taxation through the Customs is indirectly the means of forcing upon Tasmania a more equitable system of land taxation, and a fairer system of valuing land, it will be one of the good results which Tasmania will have achieved from entering the Federation. I sincerely hope that the motion proposed bv Senator Glassey will not be carried. “ Senator KEATING (Tasmania).- On this occasion I cannot find myself in agreement with my honorable colleague from Tasmania, Senator O’Keefe. I sincerely hope that the committee will now take the opportunity presented to it of requesting another place to reconsider the decision already arrived at, and to re-impose the tea duties. I have before me the paper circulated in connexion with the Tariff showing the duties imposed upon the several articles in the different States, in Canada, and in New Zealand, and I find that in every one of the States, with the exception of Western Australia, there was, previous to federation, a duty of some kind or other upon tea. In New South Wales there was a duty of Id. per lb. on bulk tea and tea in packets. In Victoria the duty was 3d. per lb. on both. In Queensland it was (id. per lb. on tea in bulk, 4d. on £ lb. packets, and 8d. on 1 lb. packets. In South Australia and Tasmania the duty was 3d. per lb. on both bulk and packet teas, an din Western Australian, alone, tea was free. The unanimity which was displayed by the State Parliaments goes very far to show that there is not a desire in the minds of the people of Australia that tea should be free. Before it was decided to establish the Commonwealth, in some of the less populous States exception was taken to the bookkeeping clauses in the’ Constitution, which require the Treasurer to return to each State three-fourths of the net revenue collected in that State from Customs and Excise. It was pointed out that a much more equitable distribution could be effected on a per capita basis, and that such a process would be’ more in accord with Federal principles. The less populous States had to accept this condition because they recognized that the great majority of the electors in the larger States could not be induced to enter the union if the surplus revenue were to be distribu ted on a population basis. At the same time in giving that concession if it can be called a concession, to the people of the larger States, the people of the less populous States naturally expected that they would receive some return when the first Parliament met. It would not be a compromise if concession were on one side only. Now is really the time when the people of the more populous States can show that if the letters of the bond of union are not federal in themselves, they throughly appreciate the federal spirit, and for that sacrifice of the smaller States they will return something, so that there shall be a spirit of compromise permeating our legislation. Reference has been made to the peculiar position of Queensland, South Australia and Tasmania. Other senators for Tasmania have dealt at some length with the question of whether that State has or has not exhausted the possibilities of direct taxation. I cannot agree with what has been said by most of the previous speakers. Senator O’Keef ee would seem to indicate that Tasmania, according to the statement of the Premier, has a possibility of making up from sources of direct taxation the amount of revenue which she requires under the new regime and after she has carried out a policy of retrenchment. But Sir Elliot Lewis did not for a moment attempt to induce people to believe that such a result would be brought about immediately, or even during the bookkeeping period. It may be that Tasmania, with a growing population and an increasing extent of land held by private persons, will, in course of time, be able to recover to some extent the ground she will lose under present conditions. We know that certain sections of the Constitution which are important in this financial connexion are of a temporary or quasi-temporary character; but what is to be done by those three States during what I may call a tentative period 1 I certainly think that the representatives of the larger States into whose Treasury there is a .sufficient amount of revenue flowing from Customs and Excise duties should have some regard for the peculiar conditions during the tentative period. Senator Dobson, on the other hand, would have the committee believe that Tasmania can show that she has exhausted the possibilities of taxation by probate, stamp, and other duties. It is well known that her probate duties are, practically speaking, farcical. There is, in the first instance, absolutely no probate or succession duty on land in any case. On estates of from £100 to £50Q net personallty the duty is 2 per cent:, and on estates of £500 onwards ad infinitum., 3 per cent. So that the statement of Senator Dobson is to be taken with more than a grain of salt. There are a number of instruments, even ordinary receipts, which are not subject to stamp duty. I do not believe that the alteration of the scheme of taxation in those directions in Tasmania would be calculated to produce such a sum as to enable her to depart from the policy which she in common with every State except Western Australia had laid down prior to entering the- Union. Senator O’Connor has referred to some honorable senators who voted against the re-imposition of the duty on kerosene, and he has endeavoured to induce the committee to believe that kerosene and tea are on exactly the same plane. Certainly, they are not. I voted against the request for reimposing the duty on kerosene because I objected to imposing a duty on an article which was, to all intents and purposes, a necessary of life for a certain portion of the community only, and for’ the supply of which we were practically dependent on outside countries. So far as the source of supply is concerned the two articles may be likened, but so far as they come into the category of necessaries of life they cannot be likened, because kerosene is a necessary of life as an illuminant for only a certain, and that only a comparatively small proportion of the population. Whether we regard tea as a necessity, or as a luxury, it is the same to the whole of the community. It is used in the cities, as well as in the country towns. It is used by the pioneer, no matter how far he may be removed from the nearest centre of population. Whether it is regarded as a necessity or as a luxury, it is used, we may say, by every man, woman, and child, and the duty, whatever it may be, will press equitably on the people of the community generally. If the duty be imposed, by how much will the price of tea be increased to the consumer ? Has the price of the teas which have been retailed throughout the Commonwealth been reduced by the amount of the duty abolished ‘(
– Certainly. My storekeeper has.
– He is not the only one in the Commonwealth. There are some persons who have reduced the duty, and others .who have not. There are others who have announced that in consequence of the abolition of the duty they are supplying a better article at the same price. The reduction has not been universal. The average consumer is not a tea-taster, and he must take the information which is given to him by the importer or other vendor. Taking all the warehouses which have -taken tea out of bond since the duty was abolished, I venture to assert that not 1 in 50 per cent, of the instances did the consumer get the full - benefit of its remission. In some instances the price was lowered by 3d.; in others it was lowered; not by that amount, but to some extent, while in others it was not lowered at all. The circumstances of Western Australia must have been exceptional to have demanded exceptional treatment in the Constitution, and in that State alone there has been no duty collected on tea. So far as I know there has been no agitation on’ the part of the general population for the remission of the duty in Tasmania or elsewhere. Yet at one fell swoop it is taken off under circumstances which we can only regret, and taken off, too, by a very narrow majority, in the absence of certain honorable members who, if present, we had every cause to hope would have opposed its remission. I hope that the committee will look at the circumstances preceding the imposition of the Federal Tariff, will have regard for the existing duties, will not forget that we are going through a tentative financial period, and will request . honorable members of another place to reimpose this duty. I feel perfectly certain that if that course is followed the Senate will have donts for itself something which will have earned for it a greater measure of public gratitude than has anything it has done during the last two months.
– -The position of Western Australia was exceptional when the special provision in the Constitution was made, but the exceptional conditions had no relation to revenue. The exceptional situation was, that while the rest of Australia enjoyed the benefit of free representation in Parliament in Western Australia we were controlled absolutely by a dictator or tyrant. He went to the convention, followed by his tail of nominated voters. He would simply say to them, “This is what I wish, sio volo,’ and they gently voted as he directed.
– Why does not the State Parliament take off duties on goods coming from other States 1
– Under the State Constitution the majority of the people have no representation. Cattle areas, sand, and hincks have representation, but the white people who form the bone and sinew of the country are not represented, and until the Constitution has been altered and a redistribution of seats provided for, the rational people of the State will be unable to get their voice heard in Parliament. I quite agree with those who. said that this tea duty is one which a free-trader would naturally support, but these speakers have just stopped short of the position. Free-traders would naturally support this duty if there was any real necessity to collect the money. Four States out of the six do not need this revenue, and those States undoubtedly contain the majority of the population. I have no doubt that Senator Downer, thinks that I am dealing unfairly with South Australia when I say that only two States require to make up a deficiency of revenue, because he, from his interjections, is evidently not aware that its Customs revenue under the federal Tariff exceeds that for the two preceeding years. I shall give the figures for his satisfaction.
– The honorable senator can do nothing to my satisfaction.
– I dare say that I should not satisfy the honorable and learned senator, but I can quite understand his not being satisfied with the Government figures, because very often .they are wrong. But one never expected to hear that from an honorable senator who is a consistent supporter of the Government. However, I am quite ready to assume that his objection is a reasonable one. But in this case the figures are, I believe, correct. If the honorable senator will take the trouble to look into the matter when he gets back to the “ model State,” he will find that my figures will be confirmed. In 1900 the Customs revenue was £639,000. In the year 1900-1, another -six months, the Customs revenue was £662,000.
– I suppose the honorable senator pays no attention to the point, which six months 1
– In the year just passed, 1901-2, the receipts were £672,000, showing a substantial increase in the amount of revenue derived from customs in South Australia. In view of these figures, I think I may fairly say that I have proved that in four of the States - South Australia, New South Wales, Western Australia, and Victoria - the federal customs receipts are in excess of the former receipts. Therefore it is clear that, in the case of four States, no further duty is necessary. In the case of the other two States, it is regrettable that the revenue derived from customs has shown a distinct falling off. But are we expected to tax the whole community to an excessive degree in order to make up a deficiency which, regrettably, has arisen in two States 1 We are not here for that purpose, but to deal out justice from our point of view to the whole Commonwealth. We ought not, therefore, to say that one or two States shall receive special assistance at the expense of the rest of the community.
– I am sorry that the honorable senator did not talk like that before.
– The honorable senator alludes, no doubt, to my action with regard to condensed milk, and so on, but I have never taken the view that Western Australia needs special consideration. I have dealt with some matters from the point of view of the1 interest of the pioneer, and some honorable senators have turned round that expression so as to apply it to the working miner of Western Australia. I have taken such twisting of my meaning as pieces of harmless good humour. But I have never spoken upon this Tariff from the point of view of Western Australia only, nor do I intend to do so.
– The honorable senator realizes that the Tariff upon which the revenue has been collected is the Tariff as passed by the House of Representatives, and not as altered by us.
– I quite realize the honorable senator’s point, but that Only strengthens my argument. If Senator Downer had listened to the debates, he would have agreed that our proposed reductions are likely to add to- the revenue, and that is the reason why in many cases we have advocated reductions of duties.
– But still the revenue is collected upon the Tariff as passed by the other House.
– The Tariff under which the revenue was collected was that passed by the House of Representatives, and the revenue collected in the future as the result of our very moderate suggestions will be an increased amount. The honorable and learned senator has therefore assisted me by his interjection, because the point amply strengthens my argument, and supplies me with another one in favour of my view which I had- for a moment overlooked. Senator Clemons has told us very properly that the Government, when they first introduced the Customs Tariff Bill, believed that a duty on tea was a necessity. But I think he drew a very unfair deduction from the fact that the Government are not prepared to re-impose the duty now. The reason why they are not prepared to do so is obviously because the Treasurer sees that it is not necessary for the whole Commonwealth that this duty should be imposed. He sees, as we have all seen, that the revenue derived from customs is very much larger than he originally anticipated, and, therefore, that the tea duty is not required. If the duty were necessary - if it were proved that there would be a deficiency throughout the States, and that such a duty was necessary to make up that deficiency - I should be amongst those who would’ support it. But when the Treasurer has a surplus of over £800,000 I cannot see my way to support a duty which would probably give him another ±”400,000 or £500,000, which he would simply have to return to the States.
Senator PULSFORD (New South Wales). - Senator Clemons was not satisfied with the remarks I made in regard to New South Wales and Tasmania. He appears to think that we should consider the two States as being on the same level footing, and that it would be fail-, because Tasmania wants more revenue, for New South Wales to consent to pay more taxation. But I should like to point out that for every person in Tasmania there are eight persons in New South Wales, and it does not seem quite right that if one person wants a thing, and eight persons dp not want it, the eight persons should be compelled to do what the one person wants. The more federal course would be for the nine people to come together . and arrange to do what would best.suit the majority. Senator Keating is of opinion that the duty taken off at the customs has not led the retailers to sell tea cheaper. That is very likely, and I will show why. Up to this date there are no doubt hundreds of storekeepers who have in their possession stocks of tea on which duty has been paid, and until they have got rid of their stocks, they will expect to get the duty back from the public, and will not be in a position to give the advantage of duty free tea. But it is altogether unreasonable to suppose that a duty equal to from 25 to 30 per cent, can be remitted, and the public get no advantage out of it. The internal competition must lead to a reduction .in price.
Senator GLASSEY (Queensland).- We have heard a great deal about the federal spirit. Indeed we have heard more about it than we have seen acts to justify it. If there had been a little more plain speaking prior to the referendum with regard to what it was likely to lead to, I am doubtful, whether we should have secured federation. I have endeavoured to put the financial aspect of this question as it affects Queensland in the forefront of the position. I repeat that the finances of that State are in a deplorable condition, and that a deficit of about £430,000 stares us in the face largely in consequence of federation.
– Not at all.
– We lose £87,000 from tea alone. That will not be disputed. We lose £44,000 per annum on kerosene in consequence of the removal of the duty. We lose £26,000 from tobacco, £11,000 on dried fruits, and £1,400 a year on rice. We also lose £144,000 a year by the abolition of Inter-State duties.
– But that money remains, in the pockets of the people.
– If there had been as much plain speaking prior to federation as there has been since on the part of the larger States the question would have been considered from a different standpoint altogether. I yield to no man in my desire for union, but I certainly should have paused and considered very seriously before I advocated the union, had I known that our finances would be dislocated to the extent that they have been. I go the whole way with my honorable friends opposite with regard -to their advocacy of direct taxation. But if we had direct taxation in Queensland incomes have been so reduced, and land values have fallen so considerably as compared with what they have been in the past, in consequence of the drought, that the amount realized would be comparatively small. The worst feature of the position’ is that we have not yet touched bottom industrially and commercially. In every part of our coast, except a little portion in the north, we are extremely badly off. Take the town of Bundaberg, which I represented for some years in the State Parliament. That districtlives almost entirely on the production of sugar. There is, practically speaking, no crop this year ; last year the results were very, bad, and, in fact, we have not had a decent crop since 1898. The same remark applies to other parts of Queensland. I do not lose sight of the fact that we have vast and varied resources, but our present position is serious. At one time we had 20,000,000 sheep in Queensland, but to-day we have not more than 6,000,000. The position of the larger States is very much better. They have overflowing Treasuries. Some of them will have a surplus. I do not think that we are being treated fairly with regard to this matter. In the Federal Conventions we were assured again and again by the leaders of both parties that the financial condition of the various States would not be to any extent disturbed. That assurance was given in most explicit terms by the leader of the free-trade party in the Convention of 1897. He assured the Convention that the Federal Parliament, consisting of honorable men, would not do anything that would disturb the financial equilibrium of the States. Mr. Reid, speaking in reply to some statements that had been made, said -
Do not put it as a hard and fast line ; but 1 tell you this - that I believe, as a man of honour, that we in the Federal Parliament will be bound to do whatever we can for the purpose of meeting those necessities.
Again he said -
The Federal Parliament takes from each of the five colonies its almost sole source of revenue . No stronger obligation could rest on any body of honorable gentlemen….. than that of not exposing the constituent parte of Federation to insolvency - for it will be nothing less than that.
Once more Mr. Reid said -
We must believe that the Federal Government may be safely trusted to maintain the financial position of each of the States, as one of the most sacred things committed to their charge.
Yet Mr. Reid voted for the remission of the duty on tea. When he did so he must have forgotten the financial circumstances of some of the States. I regret very much that I am not likely to have a majority for my motion ; not that I wish to impose unnecessary burdens on the backs of those who can ill afford to bear them, but because the financial condition of some of the States, more particularly Queensland, at this time, is such - and will be for the next few years - that we need every shilling we can get. I should like honorable senators from New South W ales and W estern Australia to give us a little assistance in this matter, and to show a little more of the federal spirit in rendering aid to States that need it.
– For the last ten or twelve years I have been advocating a platform which included the abolition of the duty on tea. Senator Charleston, when he occupied the same platform, believed in the same proposal. Whether he is going to vote in that direction now I do not know. Of course Senator Glassey has changed his opinions in this respect, as he or any other senator is at liberty to do. Senator Glassey said that the remission of the duties upon tea would be of no benefit to the consumers.
– I did not say that it would be of no benefit, but that it would not benefit them to the extent supposed.
– The honorable senator said that it would not benefit the consumers to the extent supposed, because if cheaper tea were sold it would be of a worse quality.” J should like to put against that statement the statements made in con- nexion with other items by an honorable senator who has had much greater experience than Senator Glassey. When we were discussing the duties upon clothing, and Senator Sargood was attempting to reduce them, he said that, if a higher duty were imposed upon any article, the merchants would sell it at the same price, but would sell an article of an interior quality. The same thing must apply to tea, and if we put a duty upon tea the merchants will sell an inferior article at the same price. But that is exactly opposed to what Senator Glassey has said. I hope honorable senators are not going to be gulled into the belief that the public will not receive a very great benefit from the remission of these duties. Senator Glassey has told us that Queensland has lost over £400,000 through federation ; but who took that money from Queensland, and where has it gone to ? Does not the honorable senator know that not1d. of it has gone from Queensland? The only thing that has occurred has been that the poor people who consume tea and other articles have in their pockets a few coppers more. Senator Glassey ought to know that, and he ought not to howl about what Queensland is going to lose. Queensland may be losing £400,000 of Customs revenue, but if that money is still in the pockets of the people of Queensland, cannot the Queensland Government get at it in exactly the same way as the Governments of other States have got at the surplus that has remained in the pockets of the people in those States? I hope this motion will be defeated, and I hope that the people of Australia will enjoy, not only the benefit of cheap tea, but by the enforcement of the Customs regulations, of tea of the very best quality.
Question - That the House of Representatives be requested to amend item 56 by adding after the words, “ Tea, free,” the words, “ and on and after 1st August, 1902, per lb., 3d.” - put. The committee divided -
Ayes … … … 9
Noes … … … 17
Majority … …8
Question so resolved in the negative.
Motion (by Senator Glassey) negatived -
That the House of Representatives be requested to amend item 56 by adding after the words, “ Tea in packets, free,” the words, “and on and after 1st August,1902, per lb.,1d.”
Item agreed to.
– I propose now to ask the committee to resume the consideration of the Excise Tariff Bill.
– I should like to know whether taking the Excise Tariff Bill now will preclude our going back to the Customs Tariff Bill later on ? I desire to know whether we shall have any opportunity for recommittals.
– I can give the honorable senator one comprehensive answer as to recommittals. So far as I can help it, there will be absolutely none.
– I desire to know whether there will not be a recommittal in connexion with the duty upon starch, and the duties upon ten or fifteen other items of which I have a list. Does not Senator O’Connor desire that we shall come to some agreement upon items upon which there have been ties in division ?
– I have given my answer. There will be absolutely no recommittals so far as I am concerned.
– There is another point upon which I should like some information. I have it on good authority that there is some intention on the part of the Government to alter the regulations with regard to the standard of strength of spirit allowed in wines. I believe the Customs authorities themselves desire that, and are expecting the Government to take the necessary steps.
– If the honorable senator asks me a question upon procedure, I shall answer it, but otherwise I propose to go on with the Excise Tariff Bill.
– I am asking the leader of the Senate whether it is not true that the Government have in their minds some intention of making a change in the matter to which I have referred.
S enator O’CONNOR.- The course which the Chairman stated he was about to take of going right on with the Excise Tariff Bill is a course which commends itself to me, because it gives honorable senators the freest possible hand in dealing with both these Bills. Both Bills are before the committee, and are being treated really as one Bill, and the same power which exists to reconsider one exists to reconsider the other. I do not see that any honorable senator can claim a greater liberty than will be given by that procedure. The honorable senator asked me a question with respect to recommitals, and I have given him an answer with which I believe all honorable senators will agree. These matters have now been fully thrashed out, and I do not think that any honorable senator can wish to have them reconsidered. The honorable senator asked me a question as to the intentions of the Government with respect to the percentage of spirit to be allowed in wine. I have heard nothing whatever about it, and even if there were any intention of the kind, I should take no part in proposing any alteration in the Senate.
Senator PULSFORD (New South Wales). - I gather from what Senator O’Connor has said that, as these Bills are being taken together, we shall be in as good a position after the schedule of the Excise Tariff Bill has been considered to make alterations in Customs duties’ as we are now, and that appears to me to be quite satisfactory.
Clauses 1 to 4 agreed to.
Clause 5. - The duties of excise specified in the schedule are hereby imposed according to the schedule, as from the time of the imposition of uniform duties of excise and such other later dates as are mentioned in the schedule in regard to any particular items, and such duties shall be deemed to have been imposed at such time and dates, and shall be charged, collected, and paid to the use of the King, for the purposes of the Commonwealth on the following goods, namely : -
All goods dutiable under the schedule and manufactured or produced in Australia after the time when such duties are deemed to have been imposed : and (fi) All goods dutiable under tlie schedule and .manufactured or produced in Australia before the time when such duties are deemed to have been imposed, and which were at that time subject to the control of the Customs, or to Excise supervision, or in the stock, custody, or possession of, or belonging to any brewer, distiller, manufacturer, or refiner thereof, and on which no duty of Customs or Excise had been paid before the time when such duties are deemed to have been imposed.
– This clause which regulates the collection of excise duty is divided into two parts. Paragraph (a) refers to the collection of duty on goods manufactured within the Commonwealth after the 9th October, the date on which the duty was supposed to become operative. Under paragraph (6), which makes the operation of the Bill retrospective, the authorities proceeded to levy, as it was intended by its terms that they should, excise duty on one commodity only - the sugar manufactured within the Commonwealth prior to the 9th October. Even in doing that the Government, by inadvertence or otherwise, did not act fairly as between all the holders of sugar. They proceeded to collect the duty on sugar held by certain persons while they refrained from collecting it when the sugar was held in other interests. I quite understand that as large sums are involved Senator O’Connor will refer to the effect which my amendment, if carried, will have on the revenue; bub I submit that no legislative body, much less the Senate, will allow a consideration of that kind to weigh against tlie manifest justice of the case I hope to make out. Some of the sugar on which excise duty was levied had been purchased by those in whose hands it was found on the 9th October. Although they happened to be manufacturers of sugar, they were merely merchants so far as the sugar they had purchased was concerned. They were in exactly the same position as would be a grocer or a merchant who might buy from the manufacturers with a view of reselling to others. I ask honorable senators to bear in mind the great distinction I am seeking to set up between sugar purchased by the Colonial Sugar Company, with the view of selling it, and sugar which it had manufactured. The Sugar held by the company on that date consisted of two classes. Of the 2,584 tons of white sugar on which excise duty was levied, 2,000 tons were held in Sydney, and were the produce of New South Wales cane, and had been recorded in the books of the Customs department as available for delivery whenever the owners liked to apply for it. As regards the balance of the sugar, there were 600 odd tons held in Sydney, but made from Queensland raw sugar ; and 824 tons held in Brisbane, and made from Queensland sugar. I contend that the completely manufactured article ought to be duty free, not only because I am opposed to retrospective legislation, but because the Government refrained from collecting duty on exactly the same class of sugar held by several other people. Duty was not collected on similar sugar which was held in Queensland by the Millaquin and Yengarie Company - which I understand is really the Queensland National Bank - H. E. and A. Young, Gibson and Howes, and by Wood Brothers and Boyd. These people, I understand, held between them 8,000 tons, and while that quantity was allowed to .go free of excise duty, a quantity of 2,584 tons held by the Colonial Sugar Company was charged duty. I can quite understand that the Government might have pleaded as a reason for exempting from the duty certain sugar that it was in insignificantly small parcels ; but here we have a case of 8,000 toils being allowed to go free, while 2,584 tons were levied upon. In the absence of a specific denial of my statement, I venture to say that even Senator O’Connor will not attempt to defend an act of administration which shows such partiality or discrimination.
– There was no duty levied on sugar in stores, but the sugar in all factories and refineries was levied on.
– Of course a great deal depends on what is the definition of a store. In this particular case a duty was levied On goods which were in a store, and not in a bond at all.
– I draw no distinction between stores and factories. Sugar in stores not connected with factories or refineries was allowed to go free.
– I do not care whether ib was in a store or other building, these people did hold a considerable quantity of sugar on which no attempt was made to levy tlie duty. In the same way, there were very considerable stocks held by the breweries, and under Customs control, on which there was no attempt to collect the duty. As proving further the contention that the holders of a large quantity of sugar were given an undue ad vantage as compared with the Colonial Sugar Company, I am at liberty to say that the holders of some of the sugar, finding that they had nob to pay duty, absolutely placed under offer to the company a considerable quantity of stocks which they held at £3 less than the company could afford to place their sugar1 on the market, having paid the duty. The administration has been such that certain .holders of sugar have been given a distinctly unfair advantage as compared with that company. The quantity of raw sugar held by the company amounted to 32,000 tons. Of this quantity nearly 15,000 tons had not been manufactured by the company, but purchased from other mills. The contract under which they purchased, while providing for immediate payment, also provided that if there was any benefit resulting from the Tariff, the purchasers should pay that over to the vendors. This quantity of 15,000 tons was purchased under contract signed in May 1901, some months before the Tariff was brought in. There was no contrary clause which enabled the company to demand from the vendors any compensation should they be called upon, as they were, to pay excise duty. So that to the extent of 15,000 tons the company, merely as traders, not as manufacturers, have been penalized by the excise duty. There is neither rhyme nor reason in charging the company duty on those 15,000 tons no more than there would be in charging a merchant or storekeeper duty on a parcel of sugar which he was prepared to resell as opportunity offered. So far as I can find out, there is no precedent for taxing, either by import or excise duty, goods held in second hands. Much as the Government may desire to obtain revenue, it is an extremely dangerous thing to attempt to come in and levy a duty on goods which have passed from the manufacturer into other hands at ordinary market rates. The balance of the raw sugar - some 18,000 tons - was made by the Colonial Sugar Company at its mills. A large quantity was not under Customs control - and never had been - at the date of the attempt to levy the duty. A great deal of it was in transit. At the same time it was all levied upon, or, where not levied upon, seized by the Customs authorities, who declined to give it up until the duty was paid. The company has agreed with the growers of this large quantity of cane to rebate them out of the excise duty such percentage as represents the interest which they had in the manufactured article. Assuming that the company’s interest, as compared with the growers’- interest, is as 25 to 75, it promised to give them their due proportion. In other words, for every £100 worth of manufactured sugar, there will be a certain amount paid in excise duty, and out of that money, the company say to the growers of the raw sugar - “ We shall give you three-fourths, and take the balance,” which, I submit, is an absolutely fair arrangement. Out of. the sugar held by the Colonial Sugar Company, 91- pei” cent, was purchased from farmers, and only per cent, was grown by the company itself. The small men are to obtain the great bulk of the amount I ask the committee to agree to refund.
– Will they still get it if it is not exacted by the Bill ?
– If the clause stands they will lose it.
– They will lose nothing.
– To put it in another way, if we strike out paragraph (6) they will gain something. Does the PostmasterGeneral deny that ? But when the honorable and learned senator tells me that they will lose nothing, he is only playing with words when he admits that if paragraph (b) be struck out they will gain something. I will pass by the act of partiality as shown by the fact that the Customs department has only applied this retrospective legislation, to one company, and will put the matter to honorable senators in this way : Supposing the Customs Bill, as it reached the Senate, had contained a proposal that import duties should not only be levied on goods introduced into the country after the Tariff was introduced, but also on every item referred to in the Tariff, which could be found in a warehouse. I want honorable senators to place manufacturers, and others liable to pay excise, in the same position as importers of goods. We have been told that the Opposition are the friends of the importers. I now ask that the local manufacturers shall not be any worse treated than the importers. Why should a manufacturer holding a quantity of sugar on the Sth of October, be called upon on the 9th of October to pay excise into the coffers of the country, whilst immediately alongside him is an importer holding an equal quantity, who is not called upon to pay a similar amount ? There is no justice in that position. It is desirable that we should get revenue ;. but, if it is desirable in the case of the local manufacturer that duties should operate retrospectively, it is equally desirable to make duties on imported articles retrospective likewise. This provision simply means a tax on a particular form of property, or on particular individuals. It is not a general tax. If it had applied generally, I should not have raised my voice against it. I have shown that the Government hesitated to adopt in their Customs Bill the retrospective provision which is embodied in their Excise Bill. But further than that, they did not attempt to make the duties of Excise retrospective with regard to tobacco, beer, spirits, and so on. If retrospective legislation is sound in the one case it must be sound in the other. But the Government are not prepared to apply it in that way. If they believe in retrospective excise duties, why not apply them to tobacco, beer, or spirits? They have only applied their retrospective legislation to sugar ; and I venture to say - and if my assumption is correct it is not creditable to the Government - that it has been levied in this case, because the sugar has been held by a big corporation. I have put the matter as one of justice and equity. First of all, is the committee in favour of retrospective legislation? If so, should not the customs duties be made retrospective also? Assuming that the answer to that question will be in the negative, I put the further proposition that if honorable senators do not propose to support retrospective customs duties, ought they- to apply such legislation to sugar only ? As to the statement I have made that the duties have been collected on certain sugar, and not on other, I admit at once that that is not provided for in the Bill. It is an act of administration concerning which I shall listen with much interest to any explanation the VicePresident of the Executive Council may have to make. I move -
That tlie House of ‘Representatives be requested to amend clause 5 by omitting paragraph (6).
– Senator Millen has brought forward a very important subject for discussion, and one that interests largely, and seriously, the Colonial Sugar Refining Company. But although that company is’ largely interested - is, in .fact, principally interested - in the matter which has been brought forward, I do not in any way blame that corporation for the action they are taking, because a very serious amount is involved,- so far as they are concerned. I do not think anyone will deny that they are a corporation who have carried on their business in such a way as to have conferred an immense benefit upon Australia, and particularly on Queensland. Therefore they have a perfect right on every ground to come here and see that they get that to which they think they are fairly entitled. But at the same time they are not entitled to te placed in a different position from any “other body, or corporation, or individuals, and I propose to deal with the subject simply as if it were an individual who thought he had a right to some redress for some injury. Senator Millen has, I think, admitted that he has mixed up two things. He has done so rather adroitly, whether it was intentional or not. That is to say, he has mixed up the question of administration in which this company is concerned, and the general principle of whether this paragraph should stand part of the Bill. Because we must remember that we are dealing with this question as one of general policy, and as one that applies not only to sugar, but to all excisable articles. Although the honorable senator has dealt with it particularly in regard to sugar, it is equally applicable to any other excisable article. Therefore, I propose to deal with the question first from the stand-point of the application of the provision to the protection of the revenue generally. In the first place, a provision of this kind is not unusual, and I shall be able to point to at least two cases in English legislation where such a section has been introduced into an Excise Act. The reason for it is this. It is necessary to protect the revenue, and we know that it constantly takes place, that where you have an excise, or a customs duty, imposed by new legislation, you must have a hard and fast line between the time when it is imposed, and the time when it is not in force. That you are able to do in many cases wi thout any retrospective effect. But in other cases, in order to get the benefit of the duty for the Treasury, and for the public, it is necessary to make the legislation retrospective. To take this particular’ case - we all know that the supply of locally grown sugar in Australia is less than the demand, and the excise duty is put on to the price of the sugar. We all know that immediately this excise came into force £3 per ton was put on to the price of all sugar which was produced within the Commonwealth.
– I have the best possible evidence that it is so. There may have been individual instances, where, under special terms, and under certain special conditions, a departure was made from the general rule, but, speaking generally, immediately the excise of £3 per ton was imposed the price went up by £3.
– That certainly was the case in Queensland.
– For how long 1
– It does not matter for how long. The point is, that the price went up by £3 per ton, the amount of the excise duty ; and therefore every holder of sugar was enabled to get £3 more per ton for the sugar he had in his possession. If that £3 per ton had actually to be paid, the holder of the sugar simply passed it on to the person who bought it from him ; but if the excise had not to be paid, who w-ould have got the benefit of the £3 per ton 1 The holder of the sugar. Because he would get the £3 per ton from the consume]1, even though he had not had to pay the excise at all. That is precisely what takes place in all cases of this kind where people hold stocks, which are subject to excise. Immediately the excise duty is put on, up goes the price by the amount of the duty, and the person who gets the benefit is not the purchaser, but the person who holds the excisable article. In this case the Government had to take care that the excise duty was collected in such a way that the persons who paid the excise should get the benefit, and that no person should be allowed to make money merely by speculating for a rise without having paid any excise duty at” all. The Government were in this position - that if they allowed this duty to apply only to sugar made after a certain date, and not to sugar made before that date, the holders of the sugar would make a clear profit of £3 per ton upon it, and the public would not benefit in any way; whereas if the duty were put on retrospectively the holders of these stocks of sugar would not lose anything, but would pass on the duty which they had to pay in the price which they charged to the public. That was the position which this Government had to face, and which any Government has to face that has to impose taxation. Therefore, what they did was to follow legislation in similar cases and to make the provision that so far as concerned any sugar under their control they would take care that the duty applied in such a way that it was fairly passed on to the public. I have referred to legislation which the Government had before them in dealing with the question. The first measure which I will quote is an Imperial Act, the 21st of ‘Vic, chapter 15. It was an Act providing for excise duties, and was passed on the 11th of. May, 185S. It provided that duties of excise should be charged on spirits “which on and after the 19th of April, 1858, shall be distilled,” and so on. It will be observed that this measure, which was passed on the 11th of May, 1858, provided retrospectively for the imposition of excise duties upon goods manufactured after the 19th of April. There is another Act, the 23 and 24 Vic, chapter 129. It is an Excise Act also. It was passed on the 28th of August, 1S60, and it provided that there should be an excise duty on spirits which were distilled on certain dates, and the dates mentioned were the 29th of February, 1S60, in regard to one class, and the 17th July, in regard to another el iiss of spirits. So that this Act passed on the 2f th of August, 1860, was retrospective as to some portion of spirits distilled from the previous February, and as to another portion from the previous July. The honorable senator has made some comment with regard to the period. It makes no difference as to the principle. The cases I have quoted show that it was found necessary in these cases, as we have found it necessary, that in order to have anything like fairness in the administration of an Excise Act which comes suddenly into force it must be made to a certain extent retrospective. Following that line of legislation, the Government made this enactment and laid down the policy that all goods which were under the control of the Customs, as described in paragraph (b), should be made liable to duty ; that is to say, goods which are -
Dutiable under the schedule and manufactured or produced in Australia before the time when such duties are deemed to have been imposed, and which were at that time subject to the control of the customs or to excise supervision or in the Stock, custody, or possession of or belonging’ to any brewer, distiller, manufacturer, or refiner thereof , and on which no duty of customs or excise had been paid before the time when such duties are deemed to have been imposed.
Although this Bill was not in force at the time when the Government laid down that as their policy, they acted under
Constitutional usage exactly in the same way as they acted in regard to the Customs Bill, relying upon the passing of the measure by Parliament, and on the ratification by Parliament of what had been done. The policy upon which the Government acted, and which is embodied in this Bill, was a perfectly right policy. It was the only policy which could have been followed for the protection of the revenue ; and if it had not been followed, it would have resulted in putting into the pockets of all these sugar holders who held stocks of sugar a large profit, which they would have got out of the pockets of the public, whilst no benefit would have been conferred upon the revenue. It was in anticipation that some such profit would be obtained that large accumulations of stocks were made by the company which has been referred to. It appears that the company were buying from different people. I presume that it is their business to buy for the purpose of refining. They appear to have held the sugar with a view to the profit which they expected to make out of it when the price of sugar went up by reason of the duty. It was for the express purpose of making that profit that these accumulations took place.
– That is not correct, because they had agreed to hand the profit
On to the vendors.
– We know very well that there are several ways of dealing with that. First of all, the company buys from the cane-growers. They do not seem to have made any agreement with the cane-growers. What they say in their petition with respect to the cane-growers is this -
That your petitioners are under engagements entered into a year since to return to the millOwners, from whom a large proportion of the Stocks of sugar so seized was purchased, any gain derived from the establishment of the Federal Tariff, and that your petitioners have voluntarily promised to the farmers in Queensland, from whom cane was purchased last year, an increase from 15 per cent, to 20 per cent, in the price paid for such cane, if the sugar so seized on 8th October be treated as free of duty.
They are under a contract with the millowners from whom they purchased sugar; but when that contract was arranged we all know that they did not enter into an arrangement of that kind to share any benefit derived from the Tariff with the millowners for nothing. In the contract it will probably be found that there is some provision as to the benefit which the Sugar Refining Company would get in exchange for the promise to return to the millowners any benefit which might be derived under the Tariff. When we come to consider the position of the can&-grower, we find that they have no contract with him at all, but in this petition to Parliament it is said that they have voluntarily promised to give him this advantage. And why ? Partly, no doubt, from principles of mere benevolence ; partly from a consideration of doing’ what is right, and, I think, to a certain extent, from a certain knowledge that it would perhaps make their way easier in obtaining what they claim in Parliament if it was known that part of what they would get was to be distributed amongst the canegrowers. What does this mean ? It means that they say to Parliament - “ If you allow us to make this out of the public, we will divide it with the cane-growers, although we are not bound to give them anything at all.” Although, as I have said before, they ‘ are perfectly right in protecting their own business, we. have an> equally good right to point out what the meaning of this petition is. It is a most direct statement that if we allow them to put into their pockets that which comes from the public, and which they have never earned at all, they, on their part, will be willing to distribute what they receive over a larger area than their own particular interests. Of course, it is for the committee to say whether they are going to be prevented by any such consideration from enacting what is a right, fair, and just policy for tlie whole of the Commonwealth. This is a question involving a very large amount of revenue. lj is difficult to state exactly the amount of revenue involved, but, undoubtedly, if the sugar in the hands of the Colonial Sugar
Refinery Company is allowed to escape payment of this duty the Government will be bound to put all holders of sugar who have paid excise duty in the same position, and if that is done the amount involved altogether will be no less than 20,760 tons in the different refineries and mills, which will represent duty to the amount of some £62,000. The question is brought really to a very narrow point, and it is this : Shall we make the Colonial Sugar Refining Company a present of this large profit which they claim, when we know that if we do we shall have to refund altogether some £62,000, or shall we allow the £62,000 to go into the Treasury of the Commonwealth to be distributed amongst the different States? That is the position, and there can be no question at all that this kind of legislation is justifiable, that it is the only kind of legislation that will protect the revenue under the circumstances I have indicated, and which it is perfectly just to apply. So much for the general principle in favour of which it appears to me an unanswerable ease is made out. If we had no question of the Colonial Sugar Refining Company and no question of administration introduced, honorable senators would see that we are adopting the same principle as that which is adopted in many instances throughout the Tariff when we have had to draw hard and fast lines. We must stick to a certain principle, although it may happen that some individuals may gain and others may lose by its application. To give an illustration, I willtake the case of imported sugar in bond, and we know that there was a great quantity of sugar in bond. Before the introduction of this Tariff the sugar in bond in New South Wales, for instance, was liable to a duty of £3 per ton, but on the passing of this Bill it could not be taken out of bond without the payment of duty at the rate of £6 per ton.
– Because it was in bond.
– Exactly ; because it was in bond. The sugar was owned by the person importing it, and he might at any time before the 8th October have withdrawn it from bond on payment of duty at j the rate of £3 per ton ; but immediately after that date, although it was the same sugar, j imported perhaps three months before under ; a duty of £3 per ton, he had to pay £6 per ‘ ton to take it out of bond. He might very j well have said that it was not fair to him that, having imported sugar dutiable only at the rate of £3 per ton, and being willing to pay storage for it in bond, the law should suddenly be so altered that he should have to pay £6 per ton- to take it out of bond. That might be hard, but it is necessary for the protection of the revenue that a hardandfast line should be drawn.
– He would not pay an “excise duty on sugar imported from beyond the seas.
– The honorable and learned senator is trying to confuse the matter, but the analogy is perfectly plain. The man who imported sugar from Fiji, or anywhere else beyond the Commonwealth, three or four months before the introduction of the Tariff, under a law under which the duty chargeable was £3 per ton, would have had on and after the 8th October to pay duty at the rate of £6 per ton if he- desired to take that sugar out of bond.
– Supposing it to have been cleared by the 8th, could we then have followed it, and demanded the £6 per ton ?
– Followed it into the private stores ? Certainly not, and that is exactly what was not done here. I shall come to the question of administration in a moment. If the committee- wish to do justice, the question of legislation must be kept separate from the question of administration. I have been dealing hitherto with the question of legislation, and I have been giving an illustration in order to show that it is the same class of legislation here proposed that we applied in other cases for the protection of the revenue. There is another illustration of it. Honorable senators will remember that there was a good deal of discussion on the second reading of the Customs Tariff Bill as to what should be done in the case of refunds, where a duty had been altered and goods had been made free. It seemed very hard that people should have to pay duty under a constitutional procedure equal to law, to the extent of £2, £3, or £4 per ton, or whatever it might be, when the day afterwards, the duty having been suddenly taken off, their competitors might come in and take out the same goods without the payment of duty, and so undersell them. No doubt it seems a very unfair position for people to.be placed in ; but it is necessary for the protection of the revenue that it should be done. The duty upon tea and the duty upon kerosene are other illustrations of the same kind all tending to show that in Customs legislation it is necessary to draw a hardaudfast line between the time when a duty is payable and the time when a duty is not payable. In the same way, and on the same principle, it is necessary in the. case of excise duties to make them retrospective, otherwise we cannot do justice. Now, with regard to this matter of administration, ‘ Senator Millen was altogether at sea in his facts. I have stated the policy which the Government had laid down for themselves, and that was to make the duty retrospective in respect of all goods manufactured before the 8th October, because it was impossible to follow up the goods. As to all goods which were at the time subject to the control of the Customs or to excise supervision, we, all know the definition of the term “control of the Customs,” and with respect to the definition of “ excise supervision,” honorable senators know that under the Excise Act we have made all these factories, distilleries, refineries, and breweries factories under the Act, and that all material and manufactured goods stored . there are subject to the supervision, and are under the control of the Customs. Iri regard to all goods under Customs control the Government have a means of ascertaining what they are, and of definitely, ear-marking those which ought- to be subject to a duty. Paragraph (b) goes on to say -
Or in the stock, custody, or possession of, or belonging to, any brewer, distiller, manufacturer, or refiner thereof.
It is quite clear that if we are to follow up the goods which are in the possession of a refinery, a distillery, or a brewery, we are equally entitled to follow up- those goods when they are in the store of the refiner, the distiller, or the brewer. If we do not do that, the law may be . evaded at once. If the brewer, or the manufacturer, or the refiner wished to evade tlie duty he would only have to send his carts to the distillery or refinery, and cart the goods to a store 50 or 60 yards away, where they would not be subject to duty at all. The only way, therefore, to protect the revenue is to place the store of the refiner or the distiller in the same position as the distillery, and that is why this provision -is inserted in the Bill. It has not only to be in the brewery or the distillery, but it has to be in the store of the brewer and distiller where his goods are kept. In all these respects it may be said that those places are under the control of the Customs or Excise officers. That was the policy which was laid down. In pursuance of that policy the Government took steps to cany out the law. They placed their officers in all the refineries and mills where any sugar was -being made or refined, and the officers took a note, on the 8th October, of the amount “of sugar, raw or refined, in the establishment. There was no exception to that course taken by any one. It must have been the ease that there were large quantities of sugar which had been sold to persons in the town or in the country, and which had gone beyond the control of the Customs authorities. It would have been impossible to follow sugar or any other substance after it had once passed beyond Customs control and supervision. Up to that point it was followed with absolute impartiality everywhere. In every establishment where sugar was manufactured or refined a note was taken of the quantity, and no portion of it was allowed to go out of tlie place without payment of duty. I have a record of the different places at which a note of the quantity of sugar held on the 8th October was made by the officers. Queensland and New South Wales were practically the only places in which there was any sugar at the time. There were some 50 or 60 sugar-mills at Brisbane, Bundaberg, Mackay, and Cairns. In most of these places the product was raw sugar, which was sent to the refiners. In some of them, where they had the latest plant, they produced the sugar themselves. But in all cases a record was made of the raw sugar and the white sugar in stock. The quantity of sugar in all these places amounted to 2,366 tons. Besides that, the Millaquin Refinery at Bundaberg held 7,713 tons. Senator Millen has said that some of this sugar was allowed to go out without paying duty. No doubt he has made that statement On information supplied to him, but it is absolutely incorrect. I have ascertained from the Queensland officer who is in attendance that every portion of the sugar in that mill was nOted, and no portion of it was allowed to leave without payment of duty. In the premises of the Colonial Sugar Refining Company in Queensland therewere 6,019 tons of sugar manufactured, and ISO tons in the process of manufacture. In New South Wales this company held 4,482 tons of sugar on that day. These are facta. about which there is no question, and I think Senator Millen will see that if there was any sugar omitted, it was sugar which could not be followed, and that within the limits over which we had power there was no sugar which was not noted and kept under control until the duty was paid. The honorable senator has mentioned the case of Gibson and Howes. In this table the case is numbered 44, and it is stated that at Bingera, Gibson and Howes owners, the stock of sugar at midnight on the 8th October, 1901, was 339 tons 5 cwt. The other cases are recorded in the table too. The honorable senator may rest assured that in regard to each case the same process was gone through. All these people, except the Colonial Sugar Company, have paid the duty, some under protest, some without protest. The Colonial Sugar Company have made a deposit of £19,500 as duty upon 6,500 tons which they have delivered, and which they dispute, and they, I presume, had intended to make an application to the Law Courts to have the question fought out there. With regard to all the other persons who are interested, I do not know of one who has taken the same step as has been taken by the company, which, of course, was perfectly justified in doing what it did. It is managed by experienced business men, and they have thought that it would give them “a better chance if they made this deposit on the supposition that no such clause would be passed. On the other hand, we would consider them exactly in the same position as the 50 or 60 other mill-owners. If we had not taken the step we did we should have done an injustice to the public by allowing the company to put into their pockets a large sum to which they were not entitled. The only way of doing justice to the public is by passing the clause as it is, and I feel sure that honorable senators after listening to my remarks will acquit the Government of any wrong-doing.
SenatorFR ASER (Victoria).- Iam sorry that I cannot approve of the principle which is contained in the Bill and in the Acts to which Senator O’Connor has referred. It draws a distinction between men who hold the same description of property. A man holding a quantity of sugar in one building is treateddifferently from another man holding a similar quantity of sugar’ elsewhere. The principle is wicked and unfair. Senator O’Connor has not proved to me that it was necessary, at any rate in regard to sugar, to make the Bill retrospective. I would support the clause if I thought it was necessary for the protection of the revenue. But there is no necessity for retrospective legislation to protect the revenue so far as I can judge.
– We shall lose £60,000 if we do not.
– I do not care two straws whether the amount involved is £1 or £60,000. If the Minister says it is because £60,000 is involved that they have gone out of their way to introduce a vicious and unfair principle, then I shall not go with them one inch. An Act of Parliament should be fair to all persons, whether they are millionaires or paupers. I hold in my hand a great number of petitions which in some cases were declared informal, but which in my humble judgment were quite formal. Here is a petition from the Plane Creek Central Mill Company, Limited, near Mackay, in which it is stated -
That on the8th day of October, in the year of our Lord, one thousand nine hundred and one, the honorable the Minister for Trade and Customs introduced into and laid upon the table of the honorable the House of Representatives a schedule of the intended duties of Customs and Excise, to be imposed. Contained in the said schedule was an item of three pounds sterling per ton, as excise duty, upon sugar manufactured within the Commonwealth.
That at that time there was in the hands of the said company, as well as in the hands of other manufacturers of sugar, brewers, distillers, and refiners, sugar which had been manufactured, prior to the time of the laying on the table of the said House of Representatives, of the said schedule.
That this sugar was seized by the Customs departments in the various States, ‘ and excise duty charged thereon.
That we and other persons have suffered considerable loss therefrom, and we respectfully beg to protest against the retention by the said Minister for Trade and Customs, of the excise duty on such sugar.
That we consider such retention is contrary to equity, it being inequitable to make duties retrospective.
The petition contains 61 signatures, and it winds up with a prayer in the usual way.
– They got the increased price. They are not injured at all. They paid the excise duty and got it back from the customer.
– Would it be fair, for instance, to put an excise duty on flour, and to follow up the flour which was ground last year, and say that it should be subject to the- duty ?
– Yes, if it had not gone into consumption.
– If the Government say that they are going to impose an excise duty on any goods, have they any right to go back over an indefinite period and to impose the duties on goods found in any warehouse or store? If it were necessary I would agree at once, but in this case there is no pretence that what has been done was necessary. Another petition received is from the Australian Estates and Mortgage Company Ltd., at Mackay. It is signed hy the chairman of directors. Another petition is from the Proserpine Central Mill, signed by about 70 cane growers. Another is from the Pleystowe Central Mill, signed by 20 signatories. A further petition is from the Racecourse Central Sugar Company Ltd., carrying on business at Mackay. All these petitions were intended to be presented to the Senate in the , usual way, but they were ruled out of order owing to an informality in regard “to the prayer. I think they were treated with scant courtesy. The Senate ought not to stick to trifles in regard to its dignity when a petition is presented which may not be exactly in accordance with the wording prescribed by May. Some of these petitions are from people who are not very well informed about parliamentary procedure, and they ought to. be received. There is too much starch, red-tape, and nonsense drifting into our affairs. It seems to me that the Government have been very hard upon the cane-growers in this case. Possibly the fact that the Colonial Sugar Company is a powerful and wealthy corporation may have influenced the Government in endeavouring to exact the full amount of revenue from them. I know that the Government would not take such a course wilfully; I acquit them of till conduct of that kind. But human nature is human nature. The canegrowers would undoubtedly have got the benefit if the Government had not insisted upon payment of the excise, and I do not see why they should not have been allowed to get that benefit. I do not blame the sugar company for holding their sugar. Who is better entitled to hold sugar than the man who grows it and the manufacturer who makes it ? It is better that they should have held it than that it should have been passed on to Tom, Dick, and Harry, so that the benefit would possibly have been derived by merchants throughout the States, from whom the Government would not have been able to exact retrospective duties. Other traders have done their best to make a profit out of Customs alterations. I know that there were barges on the Murray filled with free goods, and there were stores in New South Wales and Victoria that were filled with similar commodities.
– Because they had passed out of Customs control.
– Take the case of imported sugar. Say the importer has a quantity of sugar, in his store in Sydney. He may have neglected to clear it in the belief that the Commonwealth Government would reduce or abolish the duty on sugar, and that he would reap a profit. But, through his neglect to pass his entries, he finds that his sugar is taxed. That is fair enough. It is quite clear that there were quantities- of tea in the warehouse which would not have been taken out of bond had it been known that the Federal Parliament would abolish the duly on tea. Of course, importers in cases like that must take their chance. There was nothing wrong in a sugar company holding their stocks of sugar in the expectation that they would get an advantage out of it. It was an advantage they were entitled to. Somebody must hold the sugar. Sugar grown to-day cannot be eaten to-morrow, and there is always a supply of sugar in stock. I trust that honorable senators representing other States will see to it that the Queensland; and New South Wales growers get their just rights in this regard, and . that the paragraph complained of is either amended or struck out.
– I do not think that the Vice-President of the Executive Council was very happy when he attempted to bring forward precedents for this kind of legislation. I am not concerned with any particular company nor am I concerned in the least degree about the particular application of the clause in question. I object to it generally because I consider it to be bad legislation. Let me allude to the VicePresident’s attempted examples of similar legislation in England. What was obvious when he gave us those quotations was that the time limit was extremely short - in the one case fourteen days and in the other from one month to six. I have not had an opportunity of looking at the statutes he cited, but I should not be surprised to find that what really happened in those cases was that Bills were made retrospective simply as far back as the date of their introduction.
– There is nothing in the Acts to show that. “What these measures provide for is this - they fix the date tit which the goods are to be in possession, and the goods may have been manufactured Or distilled any time before that date.
– Does the VicePresident of the Executive Council say that the- legislation which he cited as an example for this extraordinary aberration in our Tariff was retrospective for all time, as this clause is ?
– As regards the (manufacture I believe it was ; but as regards the date of possession, that was fixed.
– Even if that legislation is retrospective for all time, all the
Articles that were brought under the scope of the English legislation were articles that had always been. subject to excise. Of that ‘ there can be no doubt. But, in the case we are considering, some of the articles made subject to excise were not so subject previous to the introduction of this Commonwealth Tariff. There is, therefore, a very great distinction. But apart from that, I want to put it to the committee whether, if it is right to have this retrospective legislation in regard to excise, it must not be equally right to have it with regard to customs duties 1 I admit at once that if this, or any other Parliament, were to bring in a Customs Bill made retrospective for all time, such legislation would be immediately scouted. No one would dream of it. No sane Parliament would think of making customs duties retrospective. But I am prepared to admit that, if this Parliament chose to tax tlie furniture that is in my house, and that I might have had in my possession for five years, it could do so. I do not deny the right, but no Parliament in the world would ever dream of making such a provision. .
– It does not matter how long ago the sugar was manufactured if it is still in bond.
– This sugar, as I understand, was never in bond. If honorable senators will imagine such a clause being inserted in the Customs Bill they will 41 d 2 see the absurdity of it. If such a provision would not be adopted in any Customs Bill, I know of no reason why it should be considered right in regard to excise, All that we have lizard about loss of revenue, and of allowing the manufacturers of sugar to make a large profit is ridiculous, when we consider what we have done under this Tariff. Let us take the case of people who imported goods free of duty into New South Wales prior to the 8th of October. What would be said if it were argued that it was unjust, that those people should reap a profit on goods imported prior to the 8th of. October, when goods imported after that date had to pay duty ? The amount in dispute here is £60,000. It will be safe to say that there would be £600,000 in dispute if such a provision were applied to goods imported into New South Wales prior to the 8th of. October. But with regard to those free imports the Constitution Act itself makes a direct provision. Section 92 of the Constitution provides that if goods imported into one State are taken from that State into another State for the first two years they shall pay duty. But while the Constitution contains that provision with regard to imported goods, it is absolutely silent on the subject of excise. With regard to import duties, what we practically said was, that no State should benefit, to the prejudice of another State, by reason of the fact that prior to federation, it had a free Tariff, and so for the term of two years the goods imported by that State should not be transported to another State without payment of duty. I direct the attention of Senators O’Connor and Drake to the last portion of this paragraph (i>), which reads - and on which no duty of customs or excise had, been paid before tlie time when such duties are deemed bo have been imposed.
I ask Senator O’Connor how any duties of excise can have been paid upon sugar manufactured in New South Wales when we know that there was no excise duty existing in New South Wales prior to federation 1 Some sugar held in stock in New South Wales was grown and manufactured in that State, and it could not possibly have been subject to an excise duty prior to the Sth October, because there was no excise duty in existence there:
– This does not apply to sugar’ only, but to tobacco, beer, and other things.
– It also applies to starch, but I have serious doubts whether the clause has been applied to starch. I should like to know how much has had to be refunded on account of Harper’s starch under this clause. There was a certain amount of sugar grown and manufactured in New South Wales which could never have had to pay excise duty, because there was no excise duty upon sugar in that State, and I ask how can we carry out this clause under those conditions. In this case we are simply saying that the operation of the Commonwealth Tariff is such as to totally annihilate the State Tariff, and with what justice can we contend that this duty should be retrospective upon sugar which was not liable to an excise duty at all 1
– It is done every day.
– It is not done every day, and I venture to say that similar circumstances have never previously arisen. 1 venture to say, also, that under the Constitution it was never anticipated that they would arise. The Constitution practically implies that no such clause as this would ever be contained in any Federal legislation. I object to the clause because it is bad, and though the Vice-President of the Executive Council has had time to amplify the precedents he desired to cite, I say that this is quite without precedent. There is no precedent for retrospective legislation which goes back ad infinitum. In the cases which Senator O’Connor has cited there is a limit. I put the matter to the committee in this way : I believe that sugar will keep a long time. Suppose a manufacturer had sugar in stock which had been manufactured five years previously, and before the Commonwealth Constitution had been settled, is it contended thatthis clause should be exercised against that 1 I say that section S6 of the” Constitution Act seems to me to be in serious conflict with it. On the other point, I say, without the slightest hesitation, that it is absolutely impossible for the present or any other Government to administer such a clause impartially. It is quite certain, and Senator O’Connor himself admits it, that there are many persons at the present time in the Commonwealth who have escaped the operation df this clause, and who always will escape it. I feel quite certain that starch, which is now subject to an excise duty of Hd. per lb., has not been brought under the operation of this clause.
– We shall see that all are treated alike.
– This is a question of administration, and Senator O’Keefe will not have it in his power to see that there is impartiality in the administration of this clause, because neither this Government nor any other can make certain that it will be so administered. When we know beforehand that it is impossible within the limits ‘ of human fallibility to do justice in the operation of a certain clause, we should hesitate before we pass such a clause
– We shall do as well as we can.
– I say that it is extremely bad legislation which compels us to say that we shall do as well as we can, when we know that it is impossible, as in this case, for us to do as well as we can without doing badly. I am sure, and Senator O’Connor has already admitted it, that there arc innumerable instances in which it has been absolutely impossible to enforce this clause. Perhaps the honorable and learned senator, out of the fulness of his knowledge of the administration of the clause, will be able to say how much revenue has been obtained by the operation of the clause in the case of Harper’s starch. I should like to know also how much revenue has been derived by . the operation of the clause from breweries and distilleries. The clause is ‘ one for which there is no warrant in precedent, andwe should hesitate before we put it into the Bill, even though it does bring in some £60,000 of revenue.
– I- have a word to say in reference particularly to the statute I cited. I do not regard any of these precedents as of very much importance, because if there were no precedent at all we should have to make one. We have had to make precedents before, a,nd we have made some very good ones. I hope we shall always have originality enough, when it is a question of protecting the revenue, to make precedents for ourselves. I have referred to precedents because I know my honorable and learned friend’s regard for the past and for ancient traditions, I know his conservative cast of mind, and therefore I thought, in submitting a precedent to the committee, I should be doing something which would satisfy him. I find that the precedent is very much stronger than I thought, and I am very glad Senator Clemons has called my attention to it. Let me compare the two cases. In this legislation we make the date of possession the 8th October. That is the date when the duties were collected. We say that these goods, which were in the possession of the sugar refiner or manufacturer on that date, are liable to excise duty, and it does not matter when they were manufactured. I find that the English statute dealing with the goods liable to duty deals with those - which on and after the several days respectively hereinafter mentioned were or shall be distilled within tlie United Kingdom, or which, having been distilled within the United Kingdom, were on the said several days respectively in the stock or possession of any distiller, or in any duty-free warehouse, or removing to such warehouse, and were or shall be on or after the said several days respectively taken out for consumption for the United Kingdom, the several and respective duties following …. in Heu of all other duties of excise now chargeable on such spirits.
So that the date of possession is fixed there some considerable time before the date of the Act, and the manufacture or distillation may have taken place at any time within years before that date. So here the date of possession is fixed as the 8th October, and the manufacture may have taken place months or years before.
– This matter seems to me to involve simply the question of whether any duties of excise are to be imposed at all. If duties of excise are to be imposed, for whose benefit are they to be imposed ? Are they to be imposed at the expense of the public, or for the benefit of the Government? Senator Millen’s proposal is practically that the Government shall get no benefit from it.
– That is bunkum.
– It will work itself out as naturally as possible, and, as the honorable and learned senator will see, beyond all possibility of question. Here there was a customs duty of £3; then came an excise duty of £3 per ton, and the import duty is made £6 per ton. Is sugar made any more valuable by reason of that protective duty being imposed ? If it is not, there is something in what my honorable and learned friend says. If it is, then to that extent the public ought to benefit, and not the manufacturer, who has nothing to do With it, but is simply a portion of the public in respect of whom the duty has been imposed.
– Why not apply it to importers ? .
– It applies to everything. The importer brings out spirits which he places in a bonded store, assuming that the duties will be the same as before. All at once the duties go up, and there is no question that he has to pay the increase.
– Those are goods under Customs control. Part of this sugar was never under Customs control.
– To my mind that is not a matter worthy of consideration. It is a mere question of administration. I have said that we cannot follow the tea into the teapot or the teacup. There must be some sort of economy in our administration. If it would pay us to do it we should do it, but it does not pay us, and therefore we do not try to do it. But where we can get at the goods in large quantities there is no reason why we should not do it.
– Is it only a matter of the quantity we can get at ?
– It is a question of whether we can do it at all. It is a question of administration. If we take the case of goods in bond Senator Pulsford will admit that no particular injustice is done, though people may have imported the goods and placed them in bond quite harmlessly. A merchant imports goods and places them in bond under the assumption that the duties will not be altered. The duties are altered and increased, and he has to pay tlie increased duties before he can get his goods out of bond. These other gentlemen have private bonded stores of their own in which they kept sugar stored. The particular company of which Senator Millen has been speaking, reasonably knowing that in the ordinary course of Commonwealth development there would be an extra import duty - I do not suppose they thought so much about the excise duty at the moment, and that is the nuisance - got large quantities of sugar into stock, whether b)arrangement with the producers or not, I care not. Then says the Commonwealth Government - “You shall have the protective duty you- had before, and an excise duty of £3 per ton,!:’ and they are no worse off than they were before. They are in identically the same position. The only question is who shall get the benefit, and it is represented as a flaming injustice that the Commonwealth, which has increased the import duty for the purpose of protecting a local industry, and imposed an excise duty for the purpose of taking care of our own internal government, should seek to collect duty at the rate of £6 per ton. These people, through Senator Millen, say - “You shall carry on your government without any assistance from us.” To me this seems so injudicious that, although I have listened to very good speeches, and have admired Senator Millen’s speech very much, I am unable to understand that there is any other side to this question than that somebody must get the benefit of the duty of £3 per ton somehow or other. Who is it to be? Is it to be the man who has already manufactured the article, or the merchant who deals with him, or is it to be the consumer? There is the whole question, and the consumer is the general public, and the revenue represents the consumer. These are my views upon a matter which, I venture to think, is beyond argument.
– The discussion which has taken place tonight ought to be of very great value to all who desire to study the operation and effect of customs and excise duties. If the’ views which Senator Dow.ner has just expressed were carried out to their logical conclusion there would forthwith be an absolute end to the whole of the protective system. The honorable and learned senator has affirmed that no private individual has any right to a pennyworth of property in a customs or excise duty, and that if a duty is imposed upon any article it ought to be for the benefit of the revenue. So I and all free-traders believe. It is a standing argument with every free-trader ‘that the Customs ought only to be used for the benefit of the community, and -not for the benefit of the individual. But goods in stock are held tobe free of duty, and when in England last year, or the year before, a duty of from £2 to £3 per ton was imposed upon sugar, to assist in raising revenue for the expense of the South African war, there was held in England an immense quantity of sugar, the duty upon which would represent between £1,000,000 and £2,000,000, and all that money went into the .pockets of the holders of the sugar. Every one knew that that would be the effect, and there was no avoiding it. In this matter, directly it was found that there was to be this uniformTariff introduced, and that the framing of the Tariff was in the hands of a protective Government, speculation was loose in all directions. We had importers speculatively importing all sorts of things. I know men who have lost tens of thousands of pounds by importing speculatively, and I know firms who in the bare item of interest on the large stocks which they have carried have lost thousands of pounds. The retail community pf Australia were trying to get as much out of the wholesale people as they could. The wholesale people will tell us that they have had to renew retailers’ bills repeatedly to keep them going. The retail people desired to participate in what was going on, and the wholesale people had to buy large quantities of goods to supply their wants. This is one consequence of this system of duties, and it is a great condemnation of unnecessary and illegitimate duties. Now that the system is inaugurated, and the duties are imposed, and we knowingly permit certain sections of the community to take advantage of them - if we do not see our way to preventing importers taking advantage of them, how are we to step in in this case? Let us take other items of excise. Every honorable senator knows that prior to the introduction of this Tariff, the. Victorian excise duties upon tobacco, brandy, and spirits were lower than those proposed under this Bill, and for a lon” time the Victorian manufacturers of tobacco were turning out as much as ever they could under the lower rate of excise then existing, it being a common secret that the excise which would be proposed by the Federal Government would be considerably higher. All the retailers of tobacco were anxious to get a stock, and it was the same with spirits manufactured in Victoria. The excise upon spirits in Victoria was only 8s. per gallon, and the consequence was that there was as large a production of spirits in that State as the distillers were capable of producing, and every gallon was duty paid at 8s., and became available for sale afterwards at the market value. I ask honorable senators if we are to make fish of one and flesh of another? I feel myself in somewhat of a dilemma in this matter. For ten or fifteen years I have, in season and out of season, tried to show the people ofNew South Wales how much the protective system in connexion with sugar costs, and.how much it was to the interests of the Colonial Sugar Henning Company and such people that such ti system as protection should exist. I therefore feel that I must be very careful now. I do not desire to do any injustice.to this company. The Government are proposing to give enormous advantages to all sugar producers, as I shall show when we come to deal with the schedule of this Bill, but I cannot help but see that under the clause we are now discussing it is proposed to take from this company, and one or two similar companies, advantages which admittedly hundreds and thousands of other people are allowed to participate in to the full.
– It seems to me that this matter is a very simple one, and I cannot in the least understand why honorable senators seem to find so much difficulty in dealing with it. The matter of tea in Western Australia supplies a very good example to show that such a clause as this cannot possibly be applied to import duties, and I therefore believe that it is unfair to apply it in the case of exciseduties. In Western Australia tea was duty free ; and, no doubt, people there speculated in importing tea, in the belief that a duty would be imposed upon it by theFederal Parliament, and they cleared their tea. They simply took it out of bond and put it in their private warehouse, If this principle was a just one, the bulk consignments of tea which had been warehoused in Western Australia by the importers, should have been followed, and the import duty should have been collected in order to prevent the importers from getting a profit which Senator O’Connor says should be pursued and appropriated by the State.
– How could we follow them after they had either paid duty or taken the tea out of the Customs control ?
– There was no duty to pay. They simply took the tea away from the control of the Customs officer, and put it in their own store. That is exactly on a par with the position of a greater part of this sugar. In those States in which no excise duty prevailed, the sugar was taken and put in the warehouse, and it was out of the Customs control.
– That is begging the question. The manufacturer’s store was just as much under tile continual supervision of the Customs officer as was the manufactory itself.
– There it comes down to a quibble. It is stored in a different building, but to suit his purpose the Minister says it was just as much under Customs supervision as was the manufactory itself. I call them all free stores, because there was no excise duty in force. The holder had become possessed of the sugar in the open market - for speculative purposes if you like- and he put it into his store. The Minister says it was under the control of the Customs officer. He could have sent the Customs officer after the tea in the same way - just as logically, but he did not. If this argument had not been aimed solely at the sugar people, it is obvious that to carry out his plan of action, stock ought to have been taken of all the beer, spirits, tobacco, and starch in the hards of the manufacturers at the date when the excise duties were imposed, in exactly the same way as he informed us particular pains were taken to take stock of all the sugar held by the sugar manufacturers. Do we find that this has taken place 1 Not a word has been said on the subject, nobody has complained, and the very strong assumption, amounting to a certainty, is that no steps were taken in connexion with all the other articles subject to excise duty. Why ?. Simply because the Government were solely desirous of depriving this special class of speculators of their particular profit. The Minister has not attempted to say that the same course of action was applied to the manufacturers of starch or to the manufacturers of spirits. They never thought of that, and obviously they never intended to do it. As this clause applies to all dutiable articles, it is perfectly just to look at the excise duties which prevailed in other States at the time the federal duties came into force, and see what the result would havebeen if the clause had been applied logically to all articles subject to excise duty. Spirits distilled from wine paid an excise duty per gallon of 14s. in New South Wales, Ss. in Victoria, 10s. in Queensland, 9s. in South Australia, and nothing in Tasmania or Western Australia. What would have been the effect of the operation of the clause on brand)’ ? Except in Tasmania and Western Australia the distillers would pay an excise duty, and from varying sums have been relieved of any liability to pay the federal excise duty. In those two States, if a distiller had in his custody or possession, quite apart from
Customs control, stores of brandy on which no revenue had been- collected because there was no State excise duty, he would be liable to pay the federal excise duty, though if the same stuff had paid only Jd. per gallon excise duty, and was in the same store, he would have had to pay nothing. Does not that expose tlie ridiculousness of the clause if it is applied logically? The long and short of it is that it was not intended to be applied logically, or to be applied to anything but. sugar manufactured. I shall support the motion for a request to omit paragraph (b), because I think it is a most iniquitous provision. In Western Australia I have had some experience in retrospective legislation. On one occasion, believing that it was to tlie’ advantage of a State, I voted for a retrospective clause, which I otherwise should not have done ; and I have never ceased to regret my vote. In subsequent legislation it always cropped up as a most inconvenient precedent to have set. Year after year, when legislation of the same sort was brought in, in nearly every case it was thrown out on account of the inconvenience which had arisen from the retrospective Act which had been passed in connexion with mining claims. At the time it was passed, everybody thought it was the only thing to do ; but a year afterwards everybody said that it was the greatest misfortune which could have happened to the State. I appeal to the committee to bear that case in mind, and not to start our legislative career with retrospective legislation.
– Certainly the further we go into this question, the more difficult of coinprehension it seems to get. The question has arisen - Why was not the same principle applied to tobacco, spirits, and starch ? Tobacco is manufactured under Customs control : spirits are distilled under Customs control, and starch always has been manufactured under Customs control. There was no necessity to take stock of those commodities on a given date, because at that very time they were under Customs control, and the manufacturers were under a very heavy bond, to pay whatever duty was legal at the time when the articles passed into consumption. The question is whether sugar which was grown in New South Wales, and which was not subject to excise duty, was under Customs control? To elucidate that point, we have to refer to the Excise Act which we passed some time since. I feel sure that it will be found to define, very fully, tlie meaning of the phrase, “ subject to the control of the Customs.” I believe that the Customs control extends considerably beyond the manufacturing building. I have an interesting recollection that it refers to stores, among other buildings. It would clear my mind very much if Senator O’Connor would refer to the Act, and let us know exact] v how we stand. If this sugar was in accordance with our Excise Act under tlie control of the Customs, then clearly this clause is right. I shall be very glad to be enlightened on the point.
– An excise duty of £3 per ton on 20,000 tons of sugar is involved in this motion. Right through the consideration of the Tariff, I have been contending for a reasonable amount of revenue for Queensland. At the same time, I have been trying to protect the interests of those who are engaged in various industries in the Commonwealth, and although Queensland needs all the revenue she can get, provided that it is got honestly, if the excise duty collected on that sugar is retained as provided in the clause, I think that it will have been got dishonestly. From the south, the centre, and the north of Queensland, I have received numerous communications from persons whom I know to be perfectly honest and sincere, and who are engaged in the production of sugar. If this principle is enacted, and the previous collections retained, it will mean a loss to a considerable number of persons I have the honour to represent. In my judgment, the money has been obtained wrongly, and I shall not be a party to its retention. It has been said that this is a question which affects the Colonial Sugar Company. An effort has been made to prejudice honorable senators against the company, on the ground that it is likely to derive a benefit from the remission of the duty. It has been suggested that it is reasonable and fair to levy a duty on a rich company. I take up a different position. I do not care whether the company is capable of paying the duty, or whether it ought to pay the duty ; the question with me is whether the duty is just or fair. It is neither just nor fair, and I shall not be a party to its imposition. It has also been contended that, inasmuch as large quantities of sugar have gone into consumption, or are likely to do so, people are being charged extra prices. I have token considerable pains to ascertain -the truth on this matter. I have consulted-, buyers and retailers of sugar. The competition among the sellers, particularly in my State, has been such that the price has not been increased to any appreciable degree except in some instances. Senator O’Connor was at considerable pains to make out that the Colonial Sugar Company and the mill-owners had entered into a certain contract, and that any benefit which’ might accrue would accrue to the company and mill-owners, and not to the growers of the cane. My reply is that in Queensland many of the mills are owned by the growers of the cane. Out of fifteen of such mills no less than thirteen were erected under the provisions of the Sugar Works Guarantee Act of 1894, and these mills are entirely owned and controlled by small men who grow tho cane. I wrote to the directors of the Central Mills, and to merchants on the subject, and in every case I have been assured that the growers of the cane would participate to the ‘full in any benefit which might accrue from a refund of this duty. I am contending for justice, not for tho millowners, or the companies, or the merchants, but for the growers of the cane. It was manifestly unjust to collect the duty as it has been collected, and it would be manifestly wrong to pass the clause in its present form toreturn that.duty. It would have been justas reasonable to go to the merchants’ warehouses and collect an import duty on goods which we had made dutiable, as to levy an excise duty on the sugar that was stored in the warehouses and other places on the 8th October last. It has been urged that a number of persons have entered into a speculation with the view of getting some benefit out of - this excise’ duty on sugar, anticipating that an Excise Bill would be passed. There are some persons who may have taken that course, but there is a vast number who have not entered into any speculation, and who are merely carry ing on their ordinary avocation. I allude to the growers of cane on the Mosman, the Russell, at Cairns, Mackay, at Namboord, and other places in my own State. Every one of these people will be unjustly treated if this Bill posses in its present form.
– Some statements have been made which I think I should answer at once, as to the administration of this measure and its application toother industries besides that of sugar manufacture. As a matter of fact, the measure was applied equally all round, but the circumstances under which it was applied in the case of sugar were different from the circumstances in the other cases. In the cose of the distilleries,’ there were officers there already under the provisions of the Excise Act, which enables officers to- enter distilleries, and compels manufacturers to keep certain books and information, so that the excise officers may know the exact amount of the manufactured stuff in these places at any time. No matter how long it has been there, excise has to be paid upon it . before it is allowed to go into general consumption. The same remark applies to the breweries. The officers were there, and. had records of the quantity of goods manufactured, the amount of material in stock, and all other matters affecting the manufacture; and beer was not allowed to go out for consumption until it had paid duty. Everything thus manufactured after the 8th of October had to pay the increased excise if there were an increased excise. The difference between those cases and tho case of the. sugar manufacturer was this - that there had been no machinery for collecting excise on sugar previous to this date, and therefore, it was necessary on the 8th of - October to have a record made of the sugar in the premises of the refiners for the purpose of collecting excise. For that purpose the particulars referred to were taken. Starch has been treated in exactly the same way as other excisable commodities, and duty has been collected on starch manufactured. But it will be recollected that on the 8th . of October the excise on starch had npt been passed. It was not passed for some time after. At the time when it was passed the manufacture of starch in the Melbourne factories had ceased for some - months, for the reason that a duty had been put upon rice, which is used in the nr. ami-‘ factum of starch. Existing stocks hod been acted upon, and there was really no stock in regard to which the provisions of the Bill could be carried out. The only difference between starch and sugar, and spirits and beer, was that there being no machinery in existence for dealing with sugar and starch, it had to be set in motion in the way I have pointed out. Senator Sargood has said something about supervision. The position is that all goods manufactured are under tho control of the
Customs until they are delivered for home consumption, or for export . purposes. So that all dutiable goods may be. followed. We applied on the 8th of October the constitutional usage which has always been followed in similar cases. We treated - the sugar as though there were a law in existence making sugar excisable, and wherever these goods were found under Customs control and had not paid duty, they were made to pay.
– What about sugar not under Customs control upon which duties were levied 1
– That is not correct. The honorable senator may have a different meaning for the term “under Customs control “ than I have, but what I mean is this - that whatever goods were in the possession of the distiller or renner, ‘ or in any store, distillery, or refinery, while they remained there they were excisable, and could be followed under the Excise Act and were liable to duty.
Senate adjourned at 10.14 p.m.
Cite as: Australia, Senate, Debates, 22 July 1902, viewed 22 October 2017, <http://historichansard.net/senate/1902/19020722_senate_1_11/>.