1st Parliament · 1st Session
The President took the chair at 2.30 p.m., and read prayers.
Senator PLAYFORD presented a petition from the South Australian Chamber of Manufactures, praying the Senate to reconsider the duties on boilers, pumps, machines and machinery, n.e.i., and on agricultural and horticultural machinery ; also a petition from the same body, praying the Senate to request that the same duties be imposed on all importations by the Governments of the Commonwealth and of the States of the Commonwealth, as are imposed on citizens of the Commonwealth.
Petitions received and read.
asked the VicePresident of the Executive Council, upon notice -
– No, it is not the case. The information referred to was supplied by telegram at the earliest moment when it became available - a week after it was applied for. The Treasurer is always willing to supply such information.
asked the VicePresident of the Executive Council, upon notice -
Telegraph of 12th inst. , that a consignment of tea which had been passed by the analyst ut Brisbane was subsequently found to beadulterated ?
– The answers to the honorable senator’s questions are as follow-
Act1901 are carefully carried out.
Ordered (on motion by Senator Keating)
That there be laid upon the table of this Senate a return showing, regarding Tasmania -
In Committee (Consideration resumed from 22nd July, vide page 14486).
Clause5. - 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 ot the King, for the purposes of the Commonwealth on the following goods, namely : -
That the House of Representatives be requested to amend clause5 by omitting paragraph (b).
– I think I need hardly apologize for troubling the committee any longer, in view of the contents of a telegram which I shall read presently. I wish first to refer to twostatements made yesterday evening by Senator O’Connor. In the first place, he pointed out that one reason why the clause should stand as it is, is that otherwise theholders of these stocks of sugar, by having added the excise duty to the price of the commodity, will reap aconsiderable benefit.. I do not propose to dispute the statement that probably they will do so, but I submit that they ought to bc in exactly thesame position as the importers of stocks held for sale. In Sydney we have not metaphorically, but actually, two places side by side containing imported and locally-made goods. On the 8th October, the Colonial Sugar Company held in free store a considerable quantity of purchased sugar, and in the very next building a quantity of imported goods purchased for sale. The insertion of the retrospective provision in this Bill meant that on the 9th October the Customs official entered the free store and levied a duty on the goods of the company, but they did not enter the free store of theimporter and levy the import duty on the goods held in bulk. The importer will certainly add to the cost as much of the import duty, although he has neverpaid it, as the condition of the market will permit him to do. Senator Downer said yesterday that it was not possible to follow the sugar into the teapot. Nobody ever said it was, unless the teapot was of enormous size. But it was just as possible to levy import duty on the goods of the importer, held in bulk free stores, as it was possible to collect excise duty on goods held in free stores by the Colonial
Sugar Company. I stated yesterday, that while the Customs authorities collected excise duty on sugar held by the company, ihey had not acted in the same way with regard to sugar held by certain firms whom I named. The statement of Senator O’Connor, while it was not a denial of my assertion, was accepted by the committee as equivalent to a denial. What he said was, not that the duty had been paid, but that in each case a note had been made of the quantity of sugar held by the firms.
-i followed that up by saying that in every case where the sugar was afterwards removed duty had to be paid.
– I am going to refer the honorable and learned senator to a decision given by the Minister for Trade and Customs, which will enable the committee to see which of us was correct in his statement. There was a peculiar significance in the answer of Senator O’Connor to my accusation that the duty had not been demanded and paid. He said that in every case a note had been made of the quantity held by the firms. I do not know whether or not a note was made, nor do I care. What I say is that there was held in Queensland, by rival companies, a quantity of sugar on which duty had not been demanded. Last eveningI felt it was possible that my informants might have been labouring under a mistake. This morning I sent a wire asking for further details and confirmation, and from Messrs. Minter, Simpson and Co., solicitors to the Colonial Sugar Company - a firm whose reputation Senator O’Connor will be the first to admit - I have received the following reply -
Brisbane Customs informed Brisbane manager of Sugar Company that no excise duty was paid or demanded on sugar held by brewers in Queensland on 8th October.
It is absolutely certain, that the beer in a brewery is under the control of the Customs. Yet the statement made by the Customsofficialsin Queensland to the manager of the company was that no excise duty was demanded on sugar held by brewers in their breweries there. The telegram goes’ on to say -
It is absolutely certain that the stocks so held were under the control of the Customs, while thatheld by Sugar Company throughout Queensland was in free stores.
There was in Queensland breweries, under the control of the Customs, sugar which was not called upon to pay excise duty, although the clause states that it should have been, while the sugar held by the Colonial Sugar Company in free stores was obliged to pay it. If there-has been no maladministration, and it is intended to carry out the clause as it is, why was the sugar in the free stores of one holder called upon to pay excise duty, while the sugar of another individual under the control of the Customs was allowed to go free ?
– I suppose the brewers would hold only small quantities.
– The clause does not say whether the quantity is to be little or big. It says nothing about the quantity at all. Then the telegram goes on to say -
As to sugar held by specified firms, collector Brisbane declined seize this, because such seizure in free stores would be unprecedented course on company protesting in Melbourne, Comptroller stated Minister declined to confirm his instructions to seize it..
That information was obtained from the highest Customs official next to the Minister himself, and supplied to the manager of this company. It flatly contradicts the statement made by the Minister.
– Does not the honorable senator recognise any difficulty in administering a new Tariff ?
– Apparently there is no difficulty in getting an official denial to an official statement.. If the Vice-President of the Executive Council’s statement is correct, the information supplied by the Customs official to the representative of this company is absolutelywrong.
-if the Colonial Sugar Refining Company had bought 100 tons of. sugar in a free store in Sydney, would they have been called upon to pay duty upon it?
– They had to pay duty all over the Commonwealth. Sugar made out of New South Wales cane, and which had never been in a Customs bond, was pounced on, and duty demanded upon it.
– Quite right.
– Was it right to allow sugar which was under Customs control in Queensland to go free ? That very sugar was afterwards offered to the company at a price lower by the amount of the excise duty.
– If the sugar had got into a store beyond the control of the Customs perhaps it was allowed to go free. It would have been impossible to follow it there.
– If sugar held by the company could be followed into free stores, why was it impossible to follow sugar held by a Brisbane company ?
– It could not be followed beyond Customs control.
– Customs control is simply coterminous with the bounds of the Commonwealth. We have now a different statement on the part of the VicePresident of the Executive Council. Last night the honorable and learned gentleman led the committee to believe that there had been absolutely no difference between the treatment meted out to these people, and that the firms which I mentioned had been noted. If the Customs were in a position to note the quantities held by these firms, they were in a position to demand duty upon the sugar. The honorable and learned senator informed the committee that the Customs had noted the quantities held by these firms, the impression being that they had been placed in the same position as the Colonial Sugar Refining Company, but why did not the Customs demand duty from them? Why allow Queensland firms to benefit by this rebate ?
– That is all rubbish, as the honorable senator knows.
– I ask Senator O’Connor to say whether the specific statements contained in this telegram are correct or not?
– I shall deal with them in my reply.
– Two specific statements are made in this telegram by Messrs. Minter and Simpson on the authority of the chief Customs official. One is that sugar held in the free store by the Colonial Sugar Refining Company was called upon to pay duty while other sugar held by other firms and under Customs control was allowed to go free.
– Does the honorable senator say that it was illegal to levy duty on sugar under Customs control?
– Without being illegal, there is certainly no legal sanction for it, until this Bill passes. Different treatment has been meted out to holders of sugar, although the clause absolutely provides that sugar held by a manufacturer or in Customs shall pay duty. In the’ case of the brewers in Queensland, sugar has been allowed to go free, while sugar held in free stores by the company has been pounced upon. The next statement is that sugar held by the firms specified,the names of which I gave yesterday, was not seized by the Brisbane collector on the ground that such a seizure in a free store would be an unprecedented course. The Customs authorities have seized the Colonial Sugar Refining Company’s sugar in a free Store. It is only when they have to deal with sugar in a Brisbane free store that they think such a seizure would be unprecedented.
– They have got a good member to represent them there.
– I am beginning to think there is something in that. In one case sugar was allowed to go free, whilst similar sugar held by competitors of these firms was called upon to pay duty.
– They were afraid of a rebellion in Queensland !
– There are a lot of extraordinary people there. They seem to know how to work things. I desire to know why the quantities were noted in the case of some firms, whilst they were not only noted but duty demanded upon them in other instances. In dealing with the petition yesterday, the Vice-President of the Executive Council read the paragraph stating that the company had voluntarily agreed to give an increase of 15 per cent, on the price paid to the growers, if their application were granted. Senator McGregor said that they were going to give the growers something like’ 4s. in the £1 if they were successful in their application. The honorable senator did not exactly grasp the position The company has offered to give an increase of 15 or 20 per cent, on the price paid for the cane in the first place, and as that ranges from £8 to £12 per ton the percentage would run to from £2 to £2 10s.
– It is becoming a philanthropic institution.
– Perhaps it is a little more philanthropic than is’ the honorable senator, and that is not saying very much. I know perfectly well that it is only necessary to say that some one who is not a member of the labour party, and who has not to work for his living, will get some benefit by an act of justice in order to impel a number of men to do aninjustice, as my honorable friend is apparently prepared to do.
– I have given some little attention to this mattersince it was discussed last night, and I have not been able to arrive at the conclusion to which the last speaker has come. We must all concur that in the administration o”f a law all should be placed upon an equality. If it is right to charge excise in one case, it is equally right to charge it in another ; if cash is insisted upon in one case, it should be insisted upon in the other, assuming that the credit in each case is perfectly good. We have to make some allowance for the bringing into operation of a new Tariff.
– -But it is contended that there has been no maladministration.
– It is difficult to bring a new Tariff into operation ; it is still more difficult to bring six independent States into line with a new Tariff. One question is as to the administration of the law, while the other is as to whether paragraph (b) is necessary for the law. With regard to the first, I think that, taking into account the half admissions of the VicePresident of the Executive Council, there has been, to some extent, bad administration.
– I have not made any admissions of the kind.
– I think the honorable and learned senator made a statement last night that in one case a note had been taken of the quantity of sugar in stock, while in another cash was demanded.
– A note was taken in all cases. The deposit of cash was taken from the Colonial Sugar Refining Company to enable a case to be stated.
– Surely, if the evidence which has been placed before us proves anything, it proves that two sets of men have not been treated exactly alike. That I call maladministration, and I think it is undesirable. Prior to the Commonwealth there was no excise duty on sugar in New South Wales, and therefore sugar of this kind was not under the control of “the Customs. The Excise Act was assented to on the 5th October last, and under that Act manufacturers and dealers in goods subject to excise have to take out a licence or to be registered. Sections 25 and 34 deal with the question, while section 61 appears to me to define what Customs control means. It reads -
All excisable goods manufactured shall until delivery for home consumption or exportation to parts beyond the seas, whichever shall first happen, be subject to the control of the Customs. . . .
There is no limit of place or time.
– Then, every ton of colonial sugar ought to have paid excise.
– The answer is that while the Excise Act was passed on the 5th of October last, the Tariff itself was not introduced until the 8th of October last, when all sugar which up to that time had been free from excise in New South Wales became exciseable, and therefore subject to the control of the Customs wherever it might be.
– Some of the sugar had absolutely been entered for delivery.
– It would still be under the control of the Customs. It has been held in the law courts mere than once that mere entering for delivery is not deli very. Moreover, the clause in the Bill before us deals with sugar “on which no duty of excise or customs had been paid.” I would point out that under section 154. of the Excise Act provision is made for the settlement of disputes as to duty. That being the case, seeing that there is a dispute between the company and the Customs department as to whether the payment of this duty is right or wrong, it seems to me that the proper course for the company to take would have been to pay the money, and take proceedings under section 154.
– The Customs department refused to take the money in that way when it was offered.
– I know that a case arose in Melbourne in which the Customs department refused to receive the money, but they subsequently found that they were wrong, and did receive it. Section 154 lays down the procedure perfectly clearly; and, therefore, I am at a loss to understand why these words are inserted in the Bill before us. Why not let paragraph (b) stop at the words -
Which were at that time subject to the control of the Customs or to Excise supervision.
Why go on to say -
Or in the stock, custody, or possession of, or belonging to, any brewer, distiller, manufacturer, or refiner thereof.
On the 9th October these goods either were, or were not, subject to Customs control.
If they were subject to Customs control, then, subsequently to that date, they were subject to excise, and there is no necessity it appears to me, in the Excise Tariff Bill we have before us, to insert the words in dispute, because they tend to throw a doubt upon the Excise Act which is in force, and raise a suspicion that the Customs department is doubtful as to whether the Excise Act is strong enough.
– The Government may want to control the too great generalitv of the Act.
– That shows, perhaps, an abundance of caution. But, dealing with the matter before us with reference to paragraph (fi), I have no hesitation in saying that it should be retained in the Excise Tariff Bill for the protection of the revenue and of all those dealing in excise matters. Still, I am in entire sympathy with the parties referred to by Senator Millen in regard to what appears to me to be the unfair way in which they have been treated.
– As I said in my statement about this matter yesterday, I have no objection whatever to the Sugar Refining Company endeavouring by every fair means to have this measure shaped in such a way that they may obtain the sum of £19,500, and probably more. The company is a business institution. It does not exist for any public purpose, but for the purpose of making dividends for its shareholders. So long as it earns those dividends in an honest way it has a perfect right to do so. Therefore I did not object to my honorable friend, Senator Millen, bringing the matter forward, or to the company doing anything it could to have the law put in such a shape that it might be able to get this money. But I do altogether object to the tone which has been introduced into the debate by my honorable friend, and to some of the interjections that have been made by those who are supporting him. It is one thing to charge the Government with having in the administration of this new law, and in the application of it suddenly to the varied conditions of the different States, made mistakes here and there. I should be quite prepared to answer any charge of that sort. That would be fair comment. But it does seem to me that the insinuations that there has been not only negligence on the part of the officials, but some deliberate attempt on the part of the Government to injure the Colonial Sugar Refining Company are grossly unfair, unless there is some foundation for them. The honorable senator has shown absolutely no foundation, nor has he said one word which has indicated that he has any justification for making such a charge. When my honorable friend Senator Millen originally made his statement on the subject it was said that several companies in Queensland had not been treated in the same way asthe Colonial Sugar Refining Company. Names were mentioned. One of the companies mentioned was that of Gibson and Howes, at Bingera. It was stated that they had not been called on to pay duty, whereas the Colonial Sugar Refining Company, which stood in exactly the same position, had been required to do so. No statement was-‘ then made about certain Brisbane breweries. The statement was that these sugar companies had not been treated in the same way. In answer to that charge I made the statement that in a return which I have here, and which is open to be seen by any honorable senator, it is shown that a note was taken of the sugar in every factory, mill, and refinery in Queensland. A note was made of the exact quantity of sugar at every place of the kind, including the premises of Messrs. Gibson and Howes, at Bingera. I stated that they had been treated exactly in the same way as the Colonial Sugar Refining Company, because all the sugar they had was . noted as being there, and could not be removed until duty was paid. And I say now again, and I defy any one to contradict the statement, that every portion of the sugar in these premises on the 8th October had to pay duty before it could be removed. Now, Senator Millen says that there has been unfair administration. Of course he cannot answer what I have said in regard to that, but some sneering interjection was made by Senator Clemons as to sugar “being noted” in certain cases, whereas duty had to be paid in other cases. As a matter of fact what I said was - and it is the case - that the noting of the quantities of sugar in stock was done in order to determine upon what basis the excise business should proceed. In the case of breweries, distilleries, and other places, like tobacco factories, which were -already subject to excise regulations, there was machinery in existence on the 8th October. But there was no machinery in existence, on that date with regard to sugar factories and refineries. Therefore, something had to be done in . order to ascertain the quantity of sugar at these places, and that was done by the officers making a note of the quantity of sugar in each of the premises in question. That is the reason why a difference was made. There was no need in’ the- case of the breweries and other places to make a note of the quantities of sugar in stock, but it was necessary to make a note- of them in the case of the refineries and mills, because they, for the first time, were made subject to an excise law.
– Can Senator O’Connor explain more fully the cash payment by the Colonial Sugar Refining Company ?
– I am glad that the honorable senator has mentioned that, because evidently he has been under a misapprehension as to what I said. I made no statement as to one company paying cash and the others giving a certificate. The only reference I made to a deposit was in the case of the Colonial Sugar Refining Company. Under section 154 the company made a deposit of £19,500, in reference to 6,500 tons of sugar, in regard to which they said they ought not to pay excise, while the Government said they ought to pay it. The payment of the money was not a voluntary act. The company could not get their sugar out without paying’ the money.
– Then I withdraw my statement on that point.
– Has every one else paid? ‘
– Everyone else has paid before being allowed to draw out sugar.
– Then does the honorable and learned senator give a specific denial to the statement I made from this telegram ?
– Yes, I do. The statement made by the honorable senator with regard to breweries is absolutely impossible j but J. am having specific inquiries made, and if I get the information in time, I shall be able to make a further statement about the matter. But as to the mills and refineries, I can state definitely that no sugar has been allowed to be taken out without payment of the duty, and it would not have been allowed in the case of the Colonial Sugar Refining Company, had they not made the deposit referred to. As regards the breweries, as I have already-said, it seems to me that the statement made by Senator Millen cannot have any foundation. The only information the honorable senator gives the committee about it is that somebody in Brisbane was told by one of the Brisbane Customs officials that no duty had been collected in the breweries.
– That is almost impossible.
– I say that it is impossible to believe it, and until I have some direct information upon the subject I do not intend to say anything more about it. It is impossible to believe that such a thing could take place, and if it did take place, I have no doubt that there is some explanation which I shall be able to bring before the committee later- on. At present all that we have before us is a statement to the effect that something was said by some official in Brisbane, and I must take it that the committee will not credit that such a thing has happened. Of course I do not doubt the bona fides of a firm like Minter, Simpson, and Co., of Sydney, who are a firm of solicitors whose word is beyond doubt. But they only speak from information obtained from Brisbane.
– And from the Comptroller of Customs in Melbourne.
– If the honorable senator likes to put it in that “way, some person in Melbourne-and some person in Brisbane have made statements as to breweries in Brisbane. I do not believe that such a tiling could take place, but, if it did, there is no doubt that there is some reason for it, which I shall be- able to explain later on. In regard to the scope of the clause before us, a question was asked by Senator Dobson as to the sugar which could be followed under the clause. The explanation given by Senator - Downer was exactly the right explanation - that is, that the clause is in restriction of the power which is given under the Excise Act. ‘ Let me remind the committee of what the position was on the 8th October. The Excise Act was in force. That Act says that all excisable goods manufactured shall, until delivered for home , consumption or to pass beyond the seas, be subject to control by the Customs. We must take it that, under constitutional usage, Sugar, on the 8th October, was an excisable article. Therefore, subject to this law, and according to the exact letter of the law, yugar, wherever it was, could have been followed, no matter whether it was in private houses, or warehouses, or stores. That, in the first place, was unnecessary. It was also, unworkable and impracticable to carry it out with any sort of fairness. A line, therefore, had to be drawn for the protection of the revenue. Duty had to be collected upon this sugar whether manufactured before or after the 8th October, and we had to bring the law within such limits as were workable. In order to bring the law within those limits, the line was laid down in this way : It was provided that the duty should be collected upon sugar subject to the control of the Customs or to excise supervision, “ or in the stock, custody, or possession of, or belonging to, an)’ brewer, distiller, manufacturer, or renner thereof,” and on which no duty of Customs or excise had been paid. Where it was subject to the control of the Customs or to excise supervision, it could, of course, be easily followed ; but there was no use stopping there, because if that were the end of it, all the sugar refiner would have to do would be this : He might have a large stock of 40 or 50 tons in his refinery, and a few days before 8th October he could simply cart it across the street and store it in some other place, and it would then escape duty altogether, while the same sugar belonging to the same person, and stored in the refinery or in the mill, would be liable to the duty. The refiner would make the same profit out of the sugar whether it was stored in the refinery or in some other place, and there is no possible reason why the sugar which was in the store belonging to the same person should not be treated in the same way as the sugar in the refinery. Senator Sargood has asked why this paragraph does not stop at the reference to excise supervision, but the honorable senator, as a practical commercial man, must see at once that it could not stop there with any fairness, if we were to carry out the same principle in the protection of the revenue, which justifies and compels us to take the step of making sugar stored in the refineries and factories pay duty.
– Does not section 61 give that power?
– As I have pointed out, section 61 gives a much greater power, and under that section we should be compelled to follow the sugar into every store and every shop.
– This clause limits the power, then?
– Yes, this limits it. We have to administer the law, and if we did not limit its operation in this way we should be- obliged under the law to follow excisable sugar which has not paid duty into every store and every’ shop. In order to make the thing workable and fair, it is necessary to make this limitation. One refiner or one maker of sugar might the day before have sold to somebody else. On the other hand, sugar bought up for speculative purposes might have passed out of the possession of the refiner or sugar-maker, and some one else might profit by the duty. But we cannot help that. We must draw the line in such a way as to make the administration of the law practicable, though the result may be that somebody will make a profit.
– If the object had been to limit the law, should not the expression “ and in the stock, custody, or possession “ have been used instead of “ or in the stock, custody, or possession “ ?
– No : it is a different thing altogether. It might not be in the stock, possession, or control of the distiller, manufacturer, or refiner, and yet might be subject to the control of the Customs or to excise supervision. I do not think it necessary to take up any more time in explaining the matter. I have spoken again upon it, because I felt that a gross injustice was being done to the administration of the Customs, not so much by way of a complaint of mistakes or irregularities, but b)T way of a charge implied, rather than directly made, that there was some deliberate unfairness in the administration of this law, and especially with regard to Queensland
– And I repeat it now. The honorable and learned senator has not answered my telegram at all.
– Especially in regard to Queensland, and particularly in connexion with the sugar held by this particular company. The honorable and learned senator says that I have not answered his telegram yet, but I do not supnose I can answer it to his satisfaction.
I believe I have answered it to the satisfaction of the committee, and that is all I am concerned about. Finally, a word as to what the position really is. This company is making a claim which, if complied with, as I have pointed out before, involves an obligation on the part of the Government to refund to everybody else in a similar position the amount of duty which has been paid, and that will involve a refund out of the revenue of some £62,000 at least. That is the revenue aspect of the matter, which cannot be disregarded if the views of honorable senators opposite are to be carried out. In regard to the main mover in this matter - the Colonial Sugar Refining Company - what is the position? It is not denied that they have sold this sugar at a profit which included the duty, which, of course, they havepaid, but which they desire to have refunded to them. If they have their way they will simply be given a present of the sum of £19,500 which they have never earned. Why should they get that ? The reason given is the most extraordinary I have ever heard. They say, “ If you allow us this we will voluntarily make a present of something like £1 out of every £3 to other persons who are no more entitled to it than we are.”
– The honorable and learned senator is absolutely incorrect. The proportion is nothing like that.
– The honorable and learned senator says that I am absolutely incorrect, but I refer him to the petition. They propose to give the canegrower from 15 to 20 per cent, upon the price of the cane they bought; but if honorable senators will recollect that they paid the grower for his cane upon a certain proportion of sugar contents, they will find that the 15 to 20 per cent, will amount to something like 18s. or 20s.
– It is £8, on a selling basis of £14, with 18s. additional for every additional £1 in the selling price.
– I have no desire to haggle about a shilling. What does it amount to?
– I say it amounts to double what the honorable and learned senator says.
– Then the honorable and learned senator confutes himself, for if it amounts to double what I have said it amounts to £2 out of £3, which is 67 per cent., instead of 15 or 20 per cent., as they say.
– That is 15 or 20 per cent, on the price of the cane.
– I do not cure what it is. I decline to discuss this matter in this niggling, small way. I say that the position is that this company seeks to get this money, to which they have no right, by saying that if they get it they will share it with some other persons who have no more right to it than they have. There is no question that this money belongs to the public of Australia, and the Colonial Sugar Refining Company say - “ If you give it to us we will share it, not with the public of Australia, but with some other persons with whom we have dealt, and who have no more right to it than we have.” I hope the committee will not allow itself to be deflected from its duty in the protection of the revenue of passing this clause on such a plea as has been made here.
– I take it that, whether free-traders or protectionists, we desire to do what is fair in this matter, which is not connected at all, it seems to me, with the fiscal issue. The amount of duty, whether of excise or customs, is quite independent of the clause under consideration. What is an excise duty? It is imposed upon all goods of the class mentioned in the Bill of local production that are in existence at the time of the. passing of the measure. Therefore, on the 8th October, all sugar produced in Australia, was liable to the duty that was imposed, wherever it might be, or in whosever hands it might be. The Government found that they were in the position of taxing an article that was in large quantities in the hands of some persons who held it for purposes of profits, and in small quantities in the hands of certain consumers. In their administration the Government can only do that whichis reasonable and practicable. Therefore, they desired, I take it, to strike at large substantial quantities of sugar in whatever hands they found them. The proposal now made, as I take it, is that this duty should only be imposed upon sugar that was actually under the control of the Customs.
– No ; it is a question of time. A question of making its operation retrospective.
– The honorable and learned senator must soe that on the 8th October all locally-produced sugar, wherever it was, and whether in the hands of a private person or of a company, became liable to this duty.
– It is against that liability I am protesting.
– And it is against that liability that this clause is proposed.. The duty was imposed on all locallymanufactured sugar, wherever it might be on the 8th October, and the Government, seeing that it was impracticable to follow all the sugar, considered the circumstances in which they would find substantial quantities, and they included the class of persons who would be holding sugar forprofit. There is no doubt in the world as to who has to pay an excise duty. It is the consumer. What does it matter to me whether the Colonial Sugar Refining Company stores’ its sugar in bond or in a private store? They will, make the same profit o.ut of it when they put it upon the market. They have done so, and they have received from the customers to whom they sold this very sugar, the amount of excise duty imposed upon it. That being so, who is entitled to this excise duty? Is it to go from the pocket’s of the consumer to those of the refiner or manufacturer, or into the legitimate channel of the Treasury, the pocket of the community, us the Government desire, or is it to be handed back to a class of persons who are the manufacturers and the growers of sugar ?
– Does not that apply equally to imports held in free stores on the 8th October?
– The honorable and learned senator must know that there are always a great many hard cases as the outcome of Tariff changes of any kind. I should do every thing that lay in my power to prevent importers or any one else getting the benefit of Tariff changes, but because importers sometimes make a profit as the result of Tariff changes, that is no reason why I should give the Colonial Sugar Refining Company £-1.9,000, which they have not earned. An excise duty is always a tax upon the consumer, while an import duty may or may not be a tax upon the consumer. In this instance the consumer has had to pay this tax, and he has paid it to the Colonial Sugar Refining Company.
The company lias received the money from the public. The clause has nothing retrospective in it. It is a limitation of the liability. Without the clause all sugar would have to pay excise duty, but by reason of its insertion, the liability to pay is limited, so far as the Government are able to see, to those who held stocks of sugar for profit. No matter where it was grown, or in whose hands it is held, it is all liable to payment of duty. If the clause had for its object the bringing into the meshes of the Bill persons who were not included therein, I could understand the contention of certain honorable senators, but it has not. These persons are all within the liability, and so are many Others, but still the clause confines the liability to only those who have substantial quantities of sugar. Supposing it was altered to apply to sugar in bond, there are certain refineries which, for trade purposes, were bonded stores before the Commonwealth was formed, and are still bonded stores. The Colonial Sugar Refining Company may have had 10,000 tons of sugar in refineries which are bonded stores, and on the northern rivers of New South Wales and on the Queensland rivers they may have had thousands of tons of sugar in mills which are not bonded stores. What argument can be offered for imposing excise duty on the goods which are in the bonded stores and the goods which are outside? I submit that the clause does not impose a hardship on anybody. It lessens the burden. It makes the administration of the law practicable and reasonable. The Government could’ not follow the sugar into all the channels into which it had gone : therefore they have pursued a proper course, and I shall vote for the clause as it stands.
– In this discussion one element has been made very prominent, and that is the amount of profit which the Colonial Sugar Refining Company will gain by any rebate on sugar excise. We are continually hearing about this company, as if no other persons were involved in this question. Last night I endeavoured to bring before the committee the claims of a large number of mill-owners who grow cane to supply their own mills, and who have been injured by the levying of excise duty on the stocks of sugar manufactured prior to the 8th of October. I think it is unfair that the claims pf these persons should be kept in the background, in order to prevent the possibility of that company gaining a sum of .619,000 which, in my opinion, is their due. Is this sugar or is it not entitled to pay excise duty? I do not care whether it belongs to a wealthy company or not, because I hold that it is manifestly unjust to levy excise duty on sugar manufactured, and held before the 8th of October last. Of course Senator Playford and I differ in our views on .this point. As a Treasurer, doubtless he was anxious to get every £1 he could into the coffers of the Treasury. I .am anxious that every £1 which can be got ‘into the State Treasury in a reasonable way should be .obtained. But, however impecunious we may be, I am not anxious to sanction that which is unjust or unfair. As I said last, night, ,a number of farmers are interested in the mills in Queensland. I have received communications from the shareholders in, and the suppliers of cane to, the Moreton Mill, in the south. These persons, who are not connected with the ‘Colonial Sugar Refining Company, began their operations in July last, and of course .they had not disposed of all the sugar in their warehouse or mill by the 8th of October. I ask Senator Playford, is it fair for the Government to come> along and levy an excise duty of £3 per ton on that stock ? I regard the imposition of the duty as a manifest injustice in that case. Take the case of other mills which have been erected under the provisions of the Sugar Works Guarantee Act in our State, and which are managed by the farmers who grow the cane. It should be remembered by honorable senators that a vast number of agriculturists are engaged in the production of cane for the maintenance of themselves and their families. Is it just or moral that excise duty should be collected on the sugar manufactured and held in their mills on the 8th of October ? If the Bill is passed in its present form, it will practically preclude these people from .testing in a court of law their claim to a refund of the duty. I am not inclined to agree with those honorable .senators who suggest that partiality in administration has been shown by the Minister for Trade and Customs. I have known the right honorable and learned gentleman for many years, and I do not. believe that he would consciously do an unfair, , thing. A mistake may have been made in ope or other of the Customs-houses, but …1 am perfectly sure that the Minister would not lend himself to any improper transaction, no matter what revenue was to be obtained by the Treasury. I shall support the motion.
– As Senator Glassey has appealed to me, I rise to say a few words on the ethics of” this question. I support . the action of the Government on the ground of justice. 1 hold that it is absolutely just and moral that all these people should pay excise duty on their stocks of sugar. Unless they do pay excise duty, in what position are they placed ? By a special law they are placed in the position of being able to quietly pocket an extra £3 on every ton of sugar they held om the 8 th of October. This increased price is given to the commodity by the public act of the people’s representatives in Parliament, and undoubtedly it should go into the .coffers of the Treasury, and not into the pockets of any company or body of men. It would be manifestly unfair and unjust to the rest of the community unless the Treasurer got the money. It is our duty to see that it is paid into the Treasury for the benefit of the public, and does not go into the pockets of any individuals. I look at the question not as it affects a big company who wish to reap a benefit of £1.9,000, but sis it affects the sugar manufacturers all round. I look upon that, company in exactly the same light as I regard the smaller men in Queensland, who, if paragraph (6) were omitted from the clause, , would pocket, comparatively speaking, only a verv few pounds. I do not wish to argue the whole position, because I remember that this question was debated in the Senate some months ago. I heard all that had to be said on that occasion, and I have listened with considerable interest to-day to the statements made by Senator Millen, and the reply given by the Vice-President of the Executive Council. I contend that Senator O’Connor has put the case very fairly. We have acted legally, honestly, and fairly in what we have done, and these people have no right to complain. Even if it can be shown that there are individuals who will gain if the law is not administered to the fullest extent, those of us who have had any experience in administering Acts of Parliament know that the line has to be drawn somewhere. There may be people who purchased sugar from the company shortly before the 9th October and will pocket the amount of excise. Still it is impossible to follow every pound of sugar in the possession of different individuals in the Common wealth. This is a special clause limiting the Excise Act to certain cases specially mentioned in paragraph (6). It is .a fair proposal. I.fi would be monstrously unjust if this added money, placed upon a particular commodity by the people’s representatives for the benefit of the people, went in all cases into the pockets of individuals, and not into the coffers of the State. I shall cordially support the Government proposal.
– I must confess that I have been absolutely staggered by the audacity, by the barefacedness - I might almost say by the impudence - of this attempt on the part of Senator Millen and his friends to plunder the public Treasury. No matter how he and they may garnish it over with words, and no matter how Senator Glassey may ask, in despairing tones, that our actions shall be moral, and all the nest of it, no man can defend this attempt, either on moral, legal, or equitable grounds. It is an attempt to get at the public Treasury, which’ I think, every honorable senator ought to resist with all his strength. We know perfectly well that Senator Millen and those who are acting with him are the representatives ‘of a class of people who live by plundering the public. It is part of the business of the large importers of goods to obtain a fore-knowledge of the way in which Tariffs are going to be constructed, and to make money out of the possession of that knowledge. .
– What harm is there in that?
– That may be commercial morality ; it may be the morality of the market place, but I trust that it is not going to be the morality of the Senate. Our business is not to see that importers make huge fortunes out of a too-confiding public ; but to see that the Commonwealth receives the revenue that the laws of the Commonwealth design it shall obtain. That is my view of our position. I am astonished that any honorable senator should act here as an agent of a section of the public, when returned to represent the whole of the people. Senator Millen is not acting in the interests of the people of New South Wales who have paid this duty of £3 per ton. After the Colonial Sugar Refining Company and the other firms have obtained this £3 per ton out of the public, he wishes to assist them in getting the money back from the Government. In this case- he is not the representative of the people of New South Wales. He is the agent of several sugar companies. I trust that the committee is not going to be led off on a raiding expedition of this character. If I were to say what I think of this matter I might speak in very unparliamentary language ; bat it appears to me that the thing is so evident that no one can miss the point. I am astonished that my honorable ‘ friend, Senator Glassey, whose instinct for what is right is usually so true, should have gone so completely astray in this matter. The honorable senator asked several times - “Is it right? Is it just ?” If he had listened to the Vice-President of the Executive Council, and to the arguments adduced by Senator Playford he could have come to no other conclusion than that it was right and, just that this money should not be refunded to the companies. The position has been gone over so often that it Seems like slaying the slain for me to traverse it again. What was the position in Queensland prior to 8th October last? There was not a company or private dealer in sugar there who could obtain any more than was sufficient to carry it or him on for the time being. There was almost a sugar famine there. The Colonial Sugar Refining Company and other companies were hoarding it up ; we know now that they were hoarding it up in order to make money out of it, and Senator Millen is endeavouring to assist them. On the 9th October last the price of sugar went up by £3 per ton - the amount of the excise -duty.
– Where ?
– In Queensland. I gather that this affects Queensland more than any other State. Senator Glassey harrowed our feelings last night with a description of the dreadful financial state into which Queensland had got. I do not know whether Senator O’Connor has calculated what would be Queensland’s contribution if this money -were refunded, but I suppose it would be something like £50,000. Thus, if it is resolved to make any refund, it appears to me that Queensland will have to pay the lion’s share. After 8th October last the price of sugar in Queensland was raised £3 per ton.
The duty of £3 per ton was paid by the company and paid in turn to them by the people ; now the company are asking us to refund it. Are we going to see the public looted in this fashion? I think not. The Colonial Sugar Refining Company comes along with its allies - the sugar-growers. I have as much sympathy with the sugargrowers as any person can have, but I am not going to assist the cane-growers to exploit the public and rob the Treasury. Senator Millen said that 75 per cent, of the money which he wishes to be returned will be paid to the cane-growers.
– I did not say anything of the kind. I used those figures simply by way of illustration, and did not bind myself to 75 per cent.
– That is a most extraordinary way of illustrating a subject. As a matter of fact the Colonial Sugar Refining Company proposes to pay the cane-growers 2s. 3d. per ton of cane. At the rate of about 9 tons of cane to the ton of sugar, that amounts to about £1 per ton, or exactly one -third of the sum which the company seek to have returned to them. There is a vast difference between onethird aud three-fourths.
– But the honorable senator is wrong.
– Who is right? Senator Millen has confessed that he is wrong, that he knows nothing about the matter. If he does know anything about it he ought to be prepared to give us some information. 1 have obtained my information from a reliable source. The company has offered to give the cane-growers 2s. 3d. per ton of cane, or at the rate of about £1 per ton of sugar, and they want £3 per ton of sugar from the Government.
– That is about what the percentage named in the petition works out at.
– Exactly. I think the question has been fully stated both for and against, so that there is no occasion for me to labour it. We might well come to a vote.
Senator MILLEN (New South Wales).I should like to point out with regard to these figures, that both the Vice-President of the Executive Council and the last speaker are hopelessly at sea. The VicePresident of ‘the Executive Council asserted that the percentages set out in the petition, ranging from 15 to 20 per cent., bore out the statement made by Senator Stewart. I should like to show upon what figures that percentage will be paid. The Colonial Sugar Refining Company buy sugar on this basis : It pays the sugar grower a price per ton of . cane which represents £8, on the assumption that the finished product will run into £14. for every £1 over £14 per ton, the grower receives 18s., so that as sugar was selling on the date of the imposition of the Tariff at £17 5s. per ton, according to the latest quotation that I have been able to obtain, the amount paid to the grower of the cane would be in the neighbourhood of £11 per ton. Twenty per cent, on that is £2 4s., and that will be the amount paid out of the £3 to the grower of the cane. I think that is .an absolute answer both to the very wild assertions of Senator Stewart and to the calmer but equally erroneous assertions of the “Vice-President of the Executive Council. I have made a -statement as to the action of the Customs authorities here, which the honorable and learned senator talked around in a way which satisfied him that he had given a denial to it, but he has not satisfied me on the point. As the discrepancy between his facts and mine is so great, I feel satisfied that he would like to have the point cleared up. I shall not be content unless some further information is forthcoming. The point which I wish to refer to, and upon which I invite Senator O’Connor to make inquiry, is this : Not a statement alleged to have been made by some one in Brisbane, but a definite statement as to what the company did. The statement made is that the Brisbane collector declined to take charge of the sugar in the free stores there. The Sugar Refining Company then protested to the Comptroller of Customs in Melbourne in regard to the action to which they were subjected not being meted out to other people. There can be no hearsay about that statement, when the solicitor to the company wires that the company did. make that protest to the’ Customs authorities, and that the answer was that the Minister declined to confirm his instructions to the Brisbane officers. That shows that he had issued instructions, and that the company, having protested against the action of the Customs authorities, the Minister who had given the instructions declined to confirm them. The VicePresident of the Executive Council has not denied that. I sincerely trust, both in the interests of the Customs authorities themselves and of fair play to those whose telegram I have read, that the honorable and learned senator will have full inquiries made into the truth of the assertions in regard to these matters.
– My principal reason for rising is that I forgot yesterday evening to refer to another petition which I had in my bag. It comes from the cane growers at Burdekin. The petition is quite in order, inmy opinion, but in the most extraordinary way it was ruled out of order in the Senate. I took no notice of that ruling at the time, because I did not want to have a row. The petition is largely signed. As to the matter in dispute, I will only say that if I imported 1,000 tons of sugar into New South Wales before the excise duties came into operation, and had to pay £3 per ton upon that sugar, I should he entitled to raise the price in consequence of the action of Parliament. Why make fish of one and fowl of another ? Why pass an Act which is in favour of the man who imports 1,000 tons of sugar, whilst handicapping the cane growers and manufacturers?
Question - That the House of Representatives be requested to amend clause 5 by omitting paragraph (b). - put. The committee divided -
Ayes ………. 9
Majority … … 9
Question so resolved in the negative.
Clause agreed to.
Clauses 6 and 7 agreed to.
Beer, viz. : - Ale, porter, and other beer containing not less than 2 per cent, proof spirits -
Brewed from barley malt and hops exclusively, per gallon, 2d.
N.e.i., per gallon, 3d.
– This is an item upon which the excise might very well be increased. Honorable senators are aware that the excise duty has a great bearing upon the protective incidence of the Tariff as regards the manufacture of beer, and I do not think it is the. intention of the committee to give a greater protection to any industry than it previously had in the States unless reasons can be given for so doing. The Tariff and Excise Acts of the various States in the past have given a protection on beer to a certain extent. In New South Wales there was a duty on bulk beer of 6d. per gallon, and on bottled beer of 9d. per gallon. There was no excise in the State, and the protection therefore was 6d. a gallon on bulk beer, and 9d. on bottled beer. In Victoria there was an import duty of10d. per gallon on bulk beer, and1s. 3d. per gallon on bottled beer. There was an exise duty of 2d. and 3d. on all beer. That left a protection in Victoria - that is, the difference between the excise and the import duty - of 7d. and 8d. on bulk beer, and1s. and1s.1d. on bottled beer : the variation being according to whether the beer was brewed from barley malt and hops, or was beer n.e.i. In Queensland there was an import duty of1s. 3d. on bulk beer and1s. 6d. on bottled beer ; and there was an excise of 3d. per gallon, leaving a protection of1s. per gallon on bulk beer and 1s. 3d. on bottled beer. In South Australia there was an import duty of1s. 2d. on bulk and1s. 6d. on bottled beer, with an excise duty of 2d. per gallon, leaving a protection of1s. per gallon on bulk beer and1s. 4d. on bottled beer. In Tasmania there was a duty of1s. per gallon on bulk beer and1s. 6d. on bottled beer. The excise was 4d. per gallon, leaving a protection of8d. per gallon on bulk beer and 1s. 2d. on bottled beer. In Western Australia the import duty was1s. 3d. per gallon on bulk beer, and1s.6d on bottled beer. The excise was 2d. per gallon, leaving a protection of1s.1d. per gallon on bulk beer, and1s. 4d. on bottled. The protection given to the beer industry under the Customs Tariff and Excise Bills now before the committee is as follows : - The duty is1s. per gallon on bulk beer, and1s. 6d. on bottled. The excise is 2d. a gallon on beer brewed from malt and hops, and. 3d. per gallon on beer n-.e.i. That leaves a protection of 9d. and10d. a gallon on bulk beer, and1s. 3d. and1s. 4d. on bottled beer. Ifthe committee: will compare that protection with the protection given under the State Tariffs, they will find that the Bills before us provide for a greater protection on bulk beer than was given in New South. Wales and. Victoria, a greater protection on one class of beer than existed in Victoria, whilst there is an equal protection to. that given in Victoria on another class of beer. The protection proposed to be given on bulk beer is within 2d. per gallon of the protection given- to bottled beer in all the other States, and within 3d. per gallon of the protection given in Queensland, South Australia, and WesternAustralia on bottled beer, whilst the same protection is given as was formerly given in Tasmania. The protection given in; the States was deemed necessary when the brewers had a limited market, confined practically to their own States. The Victorian duties were largely imposed in order to prevent Tasmanian and South: Australian, beer from entering this State; whilst the South Australian and Tasmanian duties were retaliatory, for the purpose of preventing Victorian beer from being imported into their States: It is a notable fact that the brewing of beer is one of. the most profitable industries in Australia. Surely it is reasonable to assume that if the beer industry was able to flourish and pay handsome dividends when the Inter-State barriers existed, it will be. much more profitable now that there is Inter-State free-trade. We have to bear in mind that the committee has determined to make certain suggestions to another place with regard to the import duty on beer. If our suggestions are adopted, the protection will be reduced to Sd. per gallon on bulk beer and 1s.1d. on bottled beer. Assuming that the suggestion of the Senate is adopted, the brewers of the Commonwealth will have more protection than the brewers of New South Wales had in the past, and which enabled them to carry on local manufactures. If the motion I intend to propose is carried, and the suggestion with regard to the import duties upon beer are also agreed to there will still be a protection of 6d. and 7d. upon bulk beer, and of11d. and1s., upon bottled beer. That will be a greater protection than New South Wales has had. in the past, and it will be within 4d.. of the protection which Victoria has had, in. the past. The House of Representatives may not accept our suggestions with respect to import duties on beer, and the Senate may not. insist upon them. If that occurs the Tariff will revert to the position in. which it was originallyintroduced in the Senate; and there will be a protection afforded to local manufacturers of beer which was not found necessary in either Victoria or New South Wales, and which will be equal to the, protection afforded in Tasmania for the purpose of establishing the brewing industry there. Surely it is not reasonable for the Eederal Parliament to give the brewing industry the same protection as it had under a State retaliatory Tariff. If the brewers of New South Wales-could produce a large amount of beer under the Tariff in force in that. State; surely the Commonwealth brewers, with the extended, market of the Commonwealth open to them, can produce beer with the advantage of a greater protection against the outside world than the brewers of NewSouth Wales had, and. a protection almost equal to that which the Victorians brewers had ? In Western Australia the duties were 1s.1d. and1s. 4d., an altogether exorbitant protection, and the result was that in 1897 there were produced in that State 2,S17,982 gallons of beer, and in 1900, four years later, 4,015,490 gallons.
– But the population had largely increased.
– The population had’ largely increased; but Senator Styles will be interested to know that while in 1897 our breweries employed 322 hands to produce the quantity I have stated, four years later, when there was nearly double the production of beer, they employed only 364 hands, an increase of only 42 in the number of persons employed. It will be seen, therefore, that the persons who benefited by the increased production were the brewing companies and not the persons employed. I know,” as a matter of fact, that one of the breweries in Western Australia, a Melbourneowned brewery established in Perth, has been paying very large dividends for manyyears. I contend that they can very well stand a share of the large burden of taxation we are placing upon the shoulders of the people. We know very well that there is not going to be very much of the ordinary kind of beer imported. The figures quoted when we were discussing the import duties proved that it is chiefly bottled beer that is imported, and, not beer that comes into competition, with the locally-made article. Honorable senators will not contend that the imposition of an extra1d. per gallon in the excise duty upon, beer is going to raise the price to the consumer. The extra duty will come out of the profits of the brewing companies, and this is, therefore, legitimate taxation. All parties recognise that all intoxicating liquors are fair game for- taxation, and it is only a question as to what is a just duty to impose. If the Victorian brewers could carry on with the protection I have indicated, and with only the local market, they can surely carry on with a little less protection when they have the markets of the Commonwealth open to them, and can send their beer into all the States, with the exception of Western Australia, free cf duty. I move -
That the House of Representatives be requested to amend the schedule by adding to the duty, “Beer, viz., . . . Brewed from barley malt and hops exclusively, per gallon, 2d.,” the words, “and on and after 1st August, 1902, 3d.”
– I hope the committee will not disturb this item. I do not think honorable senators are likely to do so. We have already made a suggestion to the House of Representatives to cut down the protection given by the import duties very considerably. We have proposed the reduction of the duty upon bottled beer from1s.6d. to1s. 3d., and on bulk beer from Is. to10d. Not satisfied with that, Senator Pearce now wishes to reduce the protection still further by imposing a heavier excise duty. It appears to me that, having carried the suggestion to cut the protection off on one side, it is rather hard that it should be attacked now on the other side. If there is one industry more than another which, from an industrial point of view, deserves a reasonable amount of support, it is this beer industry. I fancy there is a sentiment underlying Senator Pearce’s motion which is something more than fiscal. I dare say it would satisfy the honorable senator very much better if the excise duty in this case were fixed at Is. Gd. instead of 3d. per gallon. I honour and respect any honorable senator who holds teetotal views ; but I do not think this is the place in which to carry them out. This is a very substantial industry, and, looked at from the industrial point of view, it is one that deserves a reasonable amount of encouragement. The effect of increasing the excise duty as proposed, would be to cut down the protection afforded to the local manufacturer to such an extent as to let in more imported beer, or to make the quantity of beer sold less than it is now. The whole matter has been thrashed out in connexion with the import duty, and as I think this is a fair arrangement, I hope.it will not be disturbed.
– During the passage of the Tariff through the Senate reference has been made to “ the great beer-im porting industry “ soof ten, that the phrase has become somewhat hackneyed. Those who have spoken of “the great beer-importing industry” have already duced the amount of protection proposed for the local manufacturers, as against the manufacturers of beer imported from Germany and England, where the wages paid are ridiculously low as compared with the wages paid in the industry in Australia, . I know that men employed in the breweries on the gold-fields in Western Australia are well paid, and there is no more contented set of men working for wages on the gold-fields than those who are working in the breweries. When we consider the wages paid in this industry in England and in Germany, the protection proposed for the industry here is not too much. We have also to consider the duties which are imposed upon hops and. barley and other raw materials used in the manufacture of beer. These duties have been considerably increased, and the protection to the industry has been reckoned.in that way. If the amount of protection under the Customs duties had been allowed to remain at 1s. 6d. and1s., there would not have been the same objection to an increase in the amount of the excise duty. Butwhenwe have suggested a reduction of the import duties, it seems to me altogether unfair to suggest an increase in the excise duties as well. I raise my voice in this matter on behalf of Australianmade beer, as against the great beerimporting industry of other countries.
– As we expected, we have heard from Senator O’Connor some more remarks about protection, but we have not heard a single word from the honorable and learned senator upon the revenue aspect of this item. Whenever an opportunity arises for an alteration of the Tariff in order to raise revenue, Senator O’Connor is silent on the subject if the question of protection is involved. Whatever else honorable senators may think, they must, in this case, agree that an increase in the excise upon beer will produce more revenue. There is one other aspect of the question which Senator O’Connor entirely overlooked, and which the committee seems to be inclined to overlook, and that is the differentiation made here between two kinds of beer. We are now discussing beer brewed from barley, malt, and hops, upon which there is an excise duty imposed of 2d. per gallon. On the ordinary beer included in “n.e.i.,”the duty imposed is 3d. per gallon, and, as Senator O’Connor has said, nothing upon the subject, I may point out that what is really meant is an Attempt to encourage the production of lager beer. An increased protection is to be given to the production of lager beer as distinct from ordinary beer.
– Is not that a good thing?
– Not necessarily. I admit that if the effect were to increase the amount of pure beer manufactured in the Commonwealth it would’ be a good thing, but a similar course was followed under the Victorian Tariff by making a difference in the duty upon beer brewed from barley malt and hops, and the ordinary land of beer, and it entirely failed if its object were to increase the amount of beer manufactured from barley, malt and hops. That being so, the only reason for this differentiation between the two kinds of beer is gone. All the facts are against us, therefore I see no reason why there should be a difference in the Tariff. I do not know what we are going to do with beer, n.e.i., dutiable at 3d. pergallon,but whatever we may do with that item, we ought to raise the duty on beer brewed from barley, malt, and hops exclusively. There is no reason why we should endeavour to stimulate the manufacture of one class of beer, if, at the same time, we do not increase the total quantity of pure beer manufactured in the Commonwealth. “ So far as I can judge, it was not done by the Victorian Tariff. For that reason, as well as for the reason that I am desirous of getting revenue at the expense of protection, I support the motion.
– There is some ground for giving the motion consideration and, I think, support. Very few honorable senators will accuse me of want of sympathy with protection, but I am inclined to think that if this increase is made it will not in any way injure the protective industry, and at the same time it will yield some revenue. On referring to the statistics, I find thatQueenslandcollected in 1900 £6,000 on hops. In the future the bulk of our hop supply will come from Tasmania, so that there will be little or no revenue obtained from that source. There is room, therefore, for imposing an additional1d. excise duty on beer. For these reasons, I shall support the motion.
Question - That the House of Representatives be requested to amend the schedule by adding to the duty “ Beer, viz.: - Brewed from barley, malt, and hops exclusively, per gallon 2d.” the words “and on and after 1st August, 1902, 3d.” - put. The committee divided -
Ayes … … …8
Noes … … … 17
Majority … … 9
Question so resolved in the negative.
Starch, per lb.1d.
– I move -
That the House of Representatives be requested to amend the schedule by adding to the duty. “Starch, per lb.,1d.” the words, “and on and after 1st August, 1902, l½d.”
It. will be in the recollection of the committee that we on this side suggested a decrease on the import duty on starch to ½d. per lb., and that the motion was lost because the voting on each side was equal. Obviously, if the excise duty is increased as I propose there will be a distinct gain to the revenue. If we were justified in making our proposal to decrease the import duty, we are abundantly justified in suggesting an increase in the excise duty by this amount. Years ago it was the practice, as in England, to import a pound of starch in a pound packet, but owing to the local competition here which enabled the local manufacturer to send out 1 lb. gross, the English exporter or the local importer was at a distinct disadvantage. Colman, the chief exporter from England, adopted the Australian practice, and made his pound of starch include the weight of the package. Under the existing arrangements the import duty per lb. is levied on the gross weight of the packet, but the excise duty is levied on only the starch in the packet. Assuming for the sake of argument that the exporter pays the duty, Colman has to pay import duty on every pound packet of starch that he sends into consumption, so that he pays really more than his fair share of duty on the contents. After excise duty has been collected on about11½ozs. of starch, it is put into a packet and sold as a pound of starch. In other words, in the case of a half ton. of starch import duty has to be paid on 560 lbs., and excise duty on 465 lbs. If Harper and Company, or any other local manufacturer, sell 560 so-called lbs. of starch, they do not pay to the excise revenue 560 pennies, but 465 pennies. The wording of the item is misleading, because excise duty is collected, not on the gross weight, but on the net weight, and, of course, it means a very great loss to the revenue.
– The effect of this proposal would be to reduce the protection on starch-makingto½d. per lb. I have not been able to follow the argument of Senator Clemons, but apparently it is that the import duty is paid on the quantity of starch in the package, plus the weight of the package, whereas excise duty is charged on only the weight of the starch in the package. That objection applies to the excise duty on sugar or tobacco - in fact, to everything. An import duty is charged upon the contents for the reason that they are made abroad and should contribute to the revenue, while there should be a certain amount of protection to the local industry ; and an import duty is charged upon the package for the same reason. We make our own packages, and it is an advantage to the Commonwealth to have them manufactured here. Certainly it seems to be a most extraordinary reason to allege, for reducing the amount of protection, that the difference between the excise and the customs duty is really a little greater than it appears on the surface. Of course it is ; but that is compensated for by the fact that the starch manufacturer here has to make his packages locally, and should have some slight protection in that work. The honorable senator has not brought forward any argument to show that the protection should be reduced. He has referred to the question of revenue. If the protection is reduced to½d. per lb., I have verylittle hesitation in saying, in view of what we have heard and what we know of this industry, that there will be very little starch-making in Australia. The result will be to bring in a little more revenue from imports, but on the other hand to destroy an industry and displace a number of persons now in employment. The policy we have followed all through has been to endeavour to combine revenue with protection to industries. If we are to protect this industry we must give it a protection of at least1d. per lb. If we are going to impose a protective duty let it be sufficient. The excise on starch seems to be a reasonable one. The protection is the lowest which can be given, and I hope the committee will pass the duty as it stands.
-I wish to point out to Senator Clemons something which he may or may not know. The Customs department have no objection to the manufacturers of starch in the old country putting11b. of starch into a packet, so that they shall becharged only1d. per lb., just as the manufacturers of starch have to pay duty here. They can also send their starch out in bulk, and put 11½ ozs. into packets in the same way as Senator Clemons says the local manufacturers are doing. In that way they would escape the calamity that is likely to fall on the importing industry. I hope that the excise will not be increased.
– The statement made by Senator O’Connor was not quite accurate in all its details.
I do not think that the starch industry of Australia will disappear if the protection is reduced as proposed. It may be well to look at two or three simple figures. Australian starch is, I believe, made wholly from imported rice. Australia has no great interest in imported rice, and I do not suppose it is desired to tax Australians specially to increase the trade in the Japanese product. Rice that is used in starch making is worth, I believe, something like £12 per ton, and taking the generally recognised European values, the manufactured starch is worth about £22 per ton. The difference between the value of the rice and the manufactured starch is consequently only £10 per ton. That is very little more than1d. per lb., and if the protection be reduced to½d. per lb., there will remain a protection of about £4 16s. 8d., or we may call it £5 per ton, further increasing the value of the rice by £10 per ton. Practically, that is 50 per cent, protection on the added labour. I do not suppose that we wish to increase the value of the Japanese rice as rice. All that it is desired to do is to leave some protection for those who turn the rice into starch. If we adopt the amendment, we shall still leave a protection of about 45 or 50 per cent., and if that is not sufficient to keep the industry going, in addition to the natural protection, I should like to know what is considered necessary. I think it is ample. By making this change we shall increase the revenue by some few thousand pounds per annum. That will be acceptable, and will not lead to any increased cost to the people.
Question - That the House of Representatives be requested to amend the schedule by adding to the duty, “ Starch, per lb.,1d.,” the words “ and on and -after 1st August, 1902,1½d.” - put. The committee divided -
Ayes … … … 11
Noes … … … 12
Majority … … 1
Question so resolved in the negative.
Sugar, per cwt. of manufactured sugar, 3s., until the 1st January, 1007. . .
– The subject of the sugar duty is one of very great importance. I doubt if there is another article in the whole of the Tariff, customs or excise, of greater importance than this, and I earnestly desire the committee to give some consideration to the position created by the Government, for I doubt very much if any more reckless arrangement of finance with regard to any article of commerce was ever put forward by a Government, some at leastof whose members were believed to be in a state of sanity. The total consumption of sugar in the Australian Commonwealth is about 180,000 tons per annum. The Customs duty is £6 per ton. That is paid by the consumer on every ounce of sugar consumed in Australia, whether it be imported or grown in Queensland or New South Wales.
– That is so at present.
– 180,000 tons of sugar at £6 per ton represents £1,080,000 taken out of the pockets of the consumers in the Commonwealth. That is rather stiff. What does the Government scheme mean ? A rebate of £2 a ton is proposed, and with that I have no desire to interfere. We will take the Australian production of sugar at 150,000 tons per annum,and if £2 per ton be paid to the producers of that sugar, it will involve a sum of £300,000. Let that stand for the present against the question of white labour. It still leaves a sum of £780,000 out of the total of £1,080,000. Of course with bad seasons we are not producing so much, but ordinarily we may expect an annual production of 150,000 tons, so that there remains only 30,000 tons to be imported in order to meet the demands of the Commonwealth ; £6 per ton on the quantity yields £180,000. That amounthas to be paid by the people, but every penny of it goes into the Treasury. When it is deducted from the £780,000 there still remains a balance of £600,000 which istaken out of the pockets of the people in addition to the £300,000 taken out of their pockets to pay for the substitution of white for black labour. What becomes of that amount 1
– It goes to pay white labour in opposition to black labour somewhere else.
– I do not desire in any shape or form to meddle with the arrangement for the £2 per ton rebate. But I draw attention very earnestly to the fact that when this is done there still remains a total of £600,000; which will be taken year by year out of the pockets of the people, and will, not be used for their benefit. In New South Wales we have produced sugar for many years, and for a long time the protection in that State did not exceed £3 per ton. The Colonial Sugar Refining Company had professed themselves quite willing and able to carry on with that protection. Now they are to have £6 per ton. Of course I do not believe in any protection whatever, but I particularly want to know why an amount like this is to be taken out of the pockets of the people, and is not to go into the public Treasury. Therefore I urge the committee to consider the desirability of increasing this excise from 3s. per cwt. to 4s. 6d. per cwt., which will leave a protection of £1 10s. per ton on sugar in addition to the £3 rebate.- That in New South Wales would give the sugar producers £4 10s. per ton protection, and would leave only £1 10s. to go into the Treasury, which would be a very paltry amount. Surely an excise of 4s. 6d. per cwt. is not too much, and the protection remaining should suffice for the most ardent protectionist. As to the revenue, I ask the committee to take notice of certain features. Of course, no sugar was imported into Queensland. All Queensland gets out of the sugar duties must necessarily come from excise ; and as the consumption of sugar in Queensland is about 28,000 tons per annum, it means that the people of Queensland pay about £168,’000 in addition to the cost of the sugar owing to the imposition of this duty. But the whole amount that can go into the Queensland Treasury at present is £1 per ton - that is £1 out of £6 that the public pay. In other words the Queensland Treasury can only get ,£28,000 out of the £168,000, which the people pay, and after -a, little while even that £28,000 disappears. So ‘that after a time “the people of Queensland will be paying year by year about £168,000, and will actually be receiving not one farthing of that into their Treasury. Consequently, although the people of Queensland seem in one way to be gaining a good deal by the general scheme of the Government in regard to sugar, yet as far as thenrevenue is concerned, they will be hit very hard indeed. On the other hand, we have a similar state of affairs with regard to Victoria. I wonder whether the framers of the Tariff and those who manage the business of finance for the Commonwealth foresaw what would @owe about when there was a shortage of Australian sugar. Victoria being the furthest State from Queensland naturally is the State that will receive the bulk of the imported sugar that comes to the Commonwealth when there is an Australian shortage. There has been a material shortage during the past year, and during the coming season it is a certainty that there will be a still greater shortage. While Queensland and other States are losing the bulk of the revenue that is obtainable from sugar this year, Victoria has had an enormous gain. I will give the figures. The Federal estimate of revenue was that Victoria would receive from imported sugar £60,000 per annum. That, of course, is £45,000 for nine months. But instead of receiving £45,000 during nine months, Victoria has actually collected no less than £172,000, or an excess df £127,955. On the other hand, there has been a shortage from excise of £44,000. So that by the extraordinary operation of this scheme of finance, actually the position of Victoria is that her revenue has received a’n unexpected and extraordinary accretion of nearly £100,000, owing to tlie fact that there has been a general shortage of sugar production in Queensland in the past financial year. If the Queensland crop had been a large one, the revenue from sugar in Victoria would have been nearly £100,000 less than it has been during this period. I want honorable senators to bear in mind the marvellous changes that come about in State revenue, owing to the differences which take place between good seasons and bad seasons in the importation of sugar from abroad, or the use of Australian sugar. In New South Wales we produce sugar, and on its sale everybody pays the full £6 pelton, whilst the State only gets £3. As we are next to Queensland, New South Wales probably comes first in getting supplies of sugar from that State. So that we only get the excise collected ; and, again, both items are subject to the deduction of £2 per ton rebate. So that the amount of revenue left for the New South Wales Treasury out of the vast sum paid by the people is very paltry. ‘I submit that taking a calm view of the whole situation, in allowing this £300,000 to stand for rebate - which was agreed to in connexion with, the white labour question - the margin which I propose to leave is more than ample in the form of ordinary protection, it is a small matter to ask that out of the gigantic sum of a million sterling or more which the people of Australia ave called upon to pay, £1 10s. per ton, or £225,000 per annum in an ordinary year, when the production of sugar reaches a fair normal average, shall be paid into the Treasuries of the States. There is one great advantage in the proposal I make, and it is this : That while it will in a normal year give the revenues of the Australian States about a quarter of a million of extra money, it will not add one farthing to the taxation of the people. The people are already paying to the very last farthing the £6 per ton, and under my proposal only a portion of that will go into the various Treasuries. In New South Wales it seems to be a monstrous thing to give the rebate proposed by the Government on sugar grown by white labour, ‘because already the bulk of the sugar grown there is produced by means of white labour. Clearly, therefore, as far as New South Wales is concerned, my proposal must commend itself to the judgment of the committee. The whole amount of capital said to have been embarked in the Queensland industry is £7,000,000. I suppose that that would be the full amount, because it is the sum stated by people interested in the industry. If Australia bought out the whole sugar industry of Queensland, and paid 3^ per cent, interest on the capital, that interest would only amount to £245,000 per annum, while the proposals of the Government not only give to the industry that amount of interest, but run up to threequarters of a million in excess of that sum.
Is there either rhyme or reason in such a proposal 1 Was a scheme of taxation so mad ever before submitted to a Legislative Assembly? I earnestly desire the attention of the committee and of all Australia to this proposal. It is one of an extraordinary character. I do not believe that it is at present understood. I do not think that any State, from Queensland in the north to Tasmania in the south, is aware of the character of the proposal of the Government. In regard to the small State of Tasmania, the extra ls. 6d. per cwt. which I propose to hand over would, in average years, mean an increase to the State revenue of about £10,000 a year, and it would not take another penny out of the pockets of the people. The people of Tasmania would pay just the same as they ave paying now, but the £10,000 would be detained in their Treasury. It is a singular thing that Tasmania has hitherto paid on sugar a duty of £6 per ton, which is the very rate that has been adopted by the Commonwealth. But the effect of the duty being collected by the Commonwealth as compared with its collection by the State of Tasmania itself, means a difference of from £40,000 to £50,000 to the revenue of Tasmania. But when the further scheme of the Government has effect and- there are normally good crops of sugar Tasmania, under this arrangement, will be almost minus any revenue from sugar. If the proposal I put . forward, which is a very moderate one, be adopted, at least £10,000 per annum will be saved to Tasmania out of the general wreck. I should like honorable senators who are anxious about the revenue of Queensland to consider the Consequences of the proposal of the Government in regard to the finances of that State. I draw the honorable senator’s attention to the fact that the consumption in Queensland amounts to about 28,000 tons, and £1 10s. upon that would bring the Treasury over £40,000, which is a very important sum. I also draw attention to the fact that the people of the Commonwealth at the present time are paying the whole customs duty of ±’G per ton on every ounce of sugar they consume. It is worth while to notice what took place in Queensland during the few days before the introduction of the Tariff and immediately after it. I took the trouble yesterday to look through a file of the Brisbane Courier, and I found that in the Courier of 2nd
October it was reported that the price of white sugar was £1G per ton, and that in some cases £18 per ton was received. A day or two after it was reported that the holders of sugar had advanced their prices by from 10s. to 20s. per ton. Further reports were that the holders of sugar had withdrawn their quotations altogether, and were waiting the advent of the Tariff. Then, after the Tariff was introduced, it was announced that the Colonial Sugar Refining Company had issued a fresh list of prices, and that their prices for white sugars ranged from £21 to £22 per ton, a rise of nearly the full £6 per ton in the course of about ten days. That shows conclusively that the consumers are paying, practically, the full £6 per ton customs duty throughout the length and breadth of Australia.
– What about the honorable senator’s last vote 1
– I know to what the honorable and learned senator refers, but what did I say last night 1 I say the same thing still, that-the practice in regard to duties is that when a duty is imposed those who hold stocks of the article gain the benefit of it. I have always asserted, as I asserted last night, that we should in consequence beware how we impose fresh duties, and a wise Government would have taken care not to introduce a sugar duty just after a sugar crop had been received, and when there were tens of thousands of tons of sugar held by all sorts of people. ‘ The Government in the same way proposed a duty upon tea when Australia was full of the new season’s teas. That does not appear to me to be a wise method of conducting the Government. That is by the way, but I say that the position is that every consumer of sugar in Australia is now paying the full import duty of £6 per ton, and when the-‘ full scheme of the Government is in operation, unless there is a little importation, not one penny, of this duty will go into the public Treasury. I therefore ask the committee to adopt the suggestion I make, which will save out of the enormous sum of £1,000,000 some small modicum for the use of the public who contribute the whole. I move -
That the House of .Representatives be requested to amend the schedule by adding to the. duty “Sugar, per cwt. of manufactured sugar, 3s.,” the words, “and on and after 1st August, 1903, 4s. 6d.”
– I do not intend to follow my honorable friend in his application of his general arguments on freetrade principles to this item. I have listened to them now as applied to item after item for something like four months, and I hope, therefore, that the honorable senator will not think it discourteous upon my part if I do not follow him upon this occasion.
– I have reciprocated, remember.
– Undoubtedly. We have sat opposite each other for nearly four months, and the honorable senator is still as far from convincing me as I am from convincing him! He made reference to some facts with regard to- imports of sugar into Victoria, but I do not see what bearing they had upon this question of the duty. I see in the reference no argument whatever against the imposition or in favour of the alteration of this duty. The estimate to which the honorable senator referred is an estimate for a normal year, and the reason for the discrepancy he pointed out is that the sugar season in Queensland this year has been abnormal. If the ordinary season had obtained there in this year, no doubt there would have been a much larger supply of Queensland-grown sugar to Victoria than there is now. The real fact of the matter is that the sugar trade of Australia is practically in the hands of the Colonial Sugar Refining Company, and when they have to import sugar, they find it better and cheaper to send it to Victoria and South Australia than to the more northern States. That accounts for the difference to which the honorable senator has referred, but I see no inference, that can be drawn from it. The same thing must happen in regard to any article of production in Australia which depends upon climatic conditions. Passing from “that, I have one answer, and a complete one, to any suggestion to alter this excise duty. It is found in the same reason which prevented the alteration of the import duty. It is that the question of both the import and excise duties upon sugar is not merely fiscal. It involves the. reasonable settlement of the policy of a white Australia which has been adopted by the Commonwealth.
– Is that not covered by the rebate of £2 per ton 1
– Certainly not. as I shall show in a moment. It was part of that policy to pass a law which undoubtedly did seriously interfere with vested interests representing something like £7,000,000, and with the employment of” a large number of persons. It was thought right to give some kind of compensation in the fiscal policy by securing to those affected a certain amount of protection against foreign imported sugar. That was the basis of this settlement, and I say it is a basis that cannot be touched without such a disturbance of the wholearrangement which secured a white Australia at the expense, to a certain extent, of individuals ‘and interests in Queensland, as would be unjust. That is the view which was taken when the matter was before us here. It is the view which was taken in another place, and I venture to say that it is a view which will be affirmed now by the committee. The honorable senator says that the rebate is a compensation, but the rebate only touches one portion of the interests affected. The rebate gives an advantage to the grower of sugar by white labour over the grower of sugar by black labour. That is for the purpose of encouraging the growing of sugar by white labour. But what are we to do for the man who is compelled by his obligations and agreements to go on growing sugar by black labour ? The rebate upon sugar grown by white labour does not benefit him. On the contrary, it places nim at a disadvantage, and we can only compensate him by giving him the fair amount of protection which consists in’ the margin between the excise and the import duty. If Senator Puslf ord’s view were carried out, we should leave him with so small an amount of protection that it certainly would not be anything like fair compensation for what he has been called upon to pay and endure for the sake of bringing about the completion of the policy of a white Australia. If the honorable senator’s views were to be carried out, it would put the grower of sugar by black labour in this position : He would have first of all to put up with the interference with his contract for the cheap labour which disappears at the end of a certain number of years ; he would be at a disadvantage as compared with the grower of sugar by white labour, and half the margin of protection which he already has would be’ taken away from him. This would be so grossly unjust, and such an interference with “the basis upon which the question of a white Australia has been settled, that I do not think the committee will-entertain the proposal for a moment.
– The sugarexcise duty and the arrangements .generally proposed with respect to sugar are very bad indeed for the welfare of Australia. To begin with, in the districts south of Rockhampton, including the Rockhampton district, the Bundaberg district, and the New South Wales district, sugar has been produced for many years, and has competed on even terms with sugar produced in every other part of the world. Those districts not only held their own in open competition, but they were making great headway.
– There has been a heavy import duty on sugar for a great many years in New South Wales, and in Queensland also.
– That does not affect the statement I make in the least, because the sugar-growers of Queensland sold their sugar in Victoria, South Australia, Western Australia, Tasmania, and even in London. That proves conclusively that the sugargrowers of Queensland did not require any assistance. They were making great headway against the production of sugar in other parts of the world without the assistance of a duty, and we now impose a duty of £6 per ton. What is the effect of that duty ? It . certainly greatly handicaps the jammaking industry and the other industries which are affected by the high price of sugar.
– The jam maker uses chiefly sugar imported from Mauritius.
– The jam maker uses cane-sugar if he knows his ‘ business. I am contending that the Government went out of their way to impose this duty. The arrangement made by the Government is a wild, unbusiness-like one. Regarded from any stand-point, it is a very bad business arrangement for the welfare of Australia. The men who really need some consideration are those in the north. Owing to climatic conditions they cannot grow sugar by white labour. These men get little or nothing from the Tariff.
– They get a substantial protection.
– Certainly they can raise the price of sugar a little, because the import duty is pretty high. Hitherto, without any advantages, they competed in the markets of the world, but with an advantage of £3 per ton they are treated infinitely worse than are the men in the south, because they cannot grow sugar without black labour.
– That is all the more reason why we should not reduce their margin.
– I agree with Senator O’Connor in that respect, but what a jumble it is to put a vast sum into the pockets of those who do not require it, and did not expect it, and to put only a little into the pockets of the men in the north. The industries of Australia are greatly handicapped b)’ the arrangements made with regard to the sugar business. Had it been left alone for a session or two the public would have understood the largeness of the question, and the members of each House would have been in possession of much better information to enable them to legislate. I should like to vote for this proposal if my convictions would allow me, but I cannot do so, because I know that the men in the north will’ require all they get to enable them hold their own.
Senator PULSFORD (New South Wales). - I do not know that Senator O’Connor has said anything which discounts the remarks I made about the character of this financial legislation. I do not think that Australia is fully cognisant of what the Government arrangements with regard to Sugar are to cost. £1,000,000 is a very big sum. We are told that the Tariff is to yield a revenue of £8,000,000 or £9,000,000, but I have said here many times that it does not cover by any means the amount which the Government propose to take year by year out of the pockets of the people. In this matter we have a very notable example of their taxation measures. Every year £1,080,000 is to be taken out of the pockets of the people on behalf of the sugar industry. The Government certainly hav.e never told us that it needs £1,000,000 a year to sustain the industry. They have asked for a rebate of £2 per ton as a special payment on account of white labour. No one proposes to disturb that arrangement ; whether it was wise or unwise, we let it go. Outside that amount there is involved a sum of £750,000, the bulk of which, as the sugar production increases, is to be gradually absorbed - by whom, and for what purpose? Australia will want to know by-and-by what it all means, and as the burden of this taxation grows, an answer will have to be given. I propose to read an extract from a ‘leading article in the Brisbane Courier of 9th October with regard to the question of the duty and the burden on the people. It ans wers the point raised by Senator Drake, who told us just now that the duty in Queensland was a protec.tive one. He must know very well that it was not a protective duty ; that it was an absolute dead-letter in every shape and form. I have given the market quotation of sugar in Queensland before the federal duty was imposed and after its imposition, showing that £6 a ton was added to the value, and that confirms what- the Brisbane Courier says in a leading article the day day after the Tariff was introduced, from “which I quote the following passage : -
In point of fact, the burden of the new duty will be felt in Queensland as nowhere else, if we except Western Australia. Foi- owing to the export of sugar from this State, the duty standing on our Queensland Tariff has been in operation foi- many a year, and our people have long been accustomed to get their sugar practically free of duty. Now that the Commonwealth takes the place of the State, the duty imposed will be operative so long as the sugar produced .is not sufficient to call for export.
That states the position beyond the question of a doubt, and the result of the imposition of this duty is that the people of Queensland must pay on their sugar taxation to the tune of about £168,000 a year. Do honorable senators know what that means ? For weeks and months we have been haggling about hundreds and thousands of pounds, but now we are dealing with hundreds of thousands of pounds. It is something big. It is something that Australia must take cognizance of, and it is not to be swept aside, as Senator Drake proposes, with a few airy words. I confess that I had not much hope of carrying the motion, but I did feel sure that I should be able to draw public attention to the character of- this very excessive taxation. I doubt if people in Australia generally know how they are burdened in the matter of sugar. At the present time fine white sugar can be bought in Europe at a little over £7 per ton, and the corresponding- quality is being sold in Australia at nearly £20 per ton.
– Is that the reason why they are giving £250,000 to the Jamaica planters ?
– Australia would be able to give £250,000 ever so many times over out of this taxation. We are proposing to give £300,000 in the way of rebate, and here are hundreds and hundreds of thousands of pounds more involved. £250,000 is a comparative trifle for Great Britain to pay, but £1,000,000 is a big sum to Australia,
– The European sugar market is controlled by the price of bountyfed sugar.
– It does not amount to £10 a ton. If we added £2 or £3 a ton to the value of sugar in Europe, we should have a figure which is about onehalf the rate ruling in Australia. I urge the committee to accept my proposal as a measure of fair justice to all concerned, leaving an enormous protection to all those who are engaged in the industry, and a large protection over and above the special sum which, for labour considerations, the two Houses have been willing to grant.
– I shall be merciful, and not say more than that I shall oppose the motion.
– I rise to draw the attention of the committee to the words “ until the 1st January, 1907.” I see no reason whythe words should be left in, unless the Government is so satisfied with itself that it can legislate not only for this year, but up to the end of 1906. I do not think it can do so satisfactorily. I shall not be a silent party to legislation which is to operate until that time. I cannot see what real difference will be made if the words are omitted. If they are retained, there will be a sort of moral obligation, I suppose - in fact, in his second reading speech, Senator O’Connor recognised it in that light - to allow the excise duty to remain in its present condition until that date. If that is so, I earnestly invite the committee to consider the position. Are we justified in specializing this item in the Tariff, and saying that whatever else may happen to other items in succeeding years up to the end of 1906, it is the express desire of this Parliament that nothing shall be done in regard to the sugar excise duty until the 1st, January 1907. I do not care whether they are provisions made from my point of view or from those of the Vice-President of the Executive Council. I say it is bad legislation. There is nothing whatever to warrant it, and all these provisions which are intertwined with the Alien Immigration Restriction Bill and the Pacific Islands Labourers Bill, have nothing whatever to do with the matter. For these reasons, I am going to divide the committee on thequestion. I move -
That the House of Representatives be requested to amend the schedule by omitting from the duty, “Sugar, per cwt. . . . 3s. . . . , “ the words, “ until the 1st of Januarv, 1907.”
Senator HIGGS (Queensland). - I object to these words perhaps for a reason somewhat different from that held by other honorable senators. I take it that we are riot going to get rid of coloured labour on the plantations for some time to come. I hope we shall get rid of the kanakas in a few years, but some of the planters in Queensland, and those who desire to use the available coloured labour throughout Australia, will endeavour to keep the Hindoes, Chinese, and Japanese up there. What do the Government propose to do at the end of the six years with the farmers who are growing cane with white labour?
– There will be a Parliament to look after them.
– Yes, but we know the changes which takes place in politics, and the words as they stand mean that at the end of six years the sugar-growers employing white labour will be placed on a level with those employing coloured labour.
-I am surprised that the VicePresident of the Executive Council has not given reasons for the position taken up by the Government, because I know that they intend to stand by their Bill. I should like to direct the attention of honorable senators to the fact that the Senate is now deliberately proposing, by its legislation, to ensure that the full benefit of whatever import duty there may be on sugar shall enure to the sugar grown in the country. At the present time we are making an important change, and saying to the sugargrowers - “ We want you to get rid of black labour entirely, and in order to enable you to tide over the difficulties which must ensue, we intend to give you the benefit of a £5 per ton duty instead of £3 per ton if you do not continue to use black labour. As soon as you have tided over your difficulties, however, we intend to continue the duty of £6 per ton, and give you the absolute benefit of it, instead of giving the benefit of any change which might then be made to the people of the country.” Senator Pulsford has pointed out what a very heavy tax it will be on the people of Australia, and Senator O’Connor himself pointed out that this was part of the arrangement which had been made with the Queensland planter in legislating to compel him to get rid of black labour. Yet we are proposing that after the planters have got rid of all their difficulties - for although Senator Higgs may speak about the Hindoos, I do not think there is much cause for apprehension - we are going to give them the full benefit of the £6 per ton duty. Itis unreasonable to enter into such an arrangement now ; it would be far better to strike out these words and leave it to a future Parliament to determine whether it will make any arrangement in regard to this matter. The probability is that in the course of four or five years’ time this Tariff will bereconsidered in some respects, and if it be then determined to reduce the duty on sugar, the question of rebate might very well be considered also.
– It can in any case.
– If we carry legislation of this kind fixing the excise duty for a certain number of years, we shall make a clear bargain with the sugar planters, and we shall have no moral right to interfere with that excise or rebate, whatever we may consider necessary to be done with regard to the import duty itself. It would be far better to leave a future Parliament entirely unfettered in this respect.
Senator FRASER (Victoria).- With the exception of one statement, I agree entirely with what has been said by Senator Gould. If we do not limit the time it might very reasonably be said hereafter that it was intended that this provision should apply for all time. We shall thus be jumping out of the frying pan into the fire. I agree with the principle laid down by Senator Gould, that it is unwise to bind a future Parliament, but I think it is better to do that than to strike out these words, with the result I have indicated.
– I object to this motion on the ground upon which I objected to the last one - namely, that the whole of this proposed legislation is to cany out the basis of the arrangement upon which the laws providing for a white Australia were passed. It is quite right to say that Parliament has at any time the privilege of altering legislation, but we wish to have the whole terms of this arrangement written on the face of a statute. The terms concern not only the persons in Queensland whose interests have been disturbed, but the Commonwealth itself. It would have been a much greater protection to them if we had given them the whole benefit of the £6 per ton customs duty without any excise duty. But in the early days of the Commonwealth it was impossible to do without the revenue which had been obtained from sugar, and therefore it became necessary to have an excise duty. It is to secure that revenue that this excise duty appears in the Bill. It serves a double purpose. In the first place the margin is secured to the grower of sugar with white labour, and will continue until 1907 it also serves the purpose of giving us revenue. But in 1907 we have every hope that the finances of the Commonwealth will be upon a more certain foundation than that upon which they exist at present. We shall know then what the course of trade is what is the effect of production upon revenue; and we shall be altogether in a better position to deal with the question than we are at the present time. It preserves us the right to revenue in the meantime. I quite agree that this is only a moral obligation, but I have no doubt that any future Parliament would consider itself to a certain extent morally bound to fulfil the terms of this arrangement. If these words were not inserted the growers of sugar, whether by white or black labour, would not have the same amount of certainty from year to year as to what our legislation is going to be as they have at present. If our legislation is to embody the settlement of this question it ought to embody it in such a way as to bind, as far as we can, all Parliaments for someyears to come. If Senator Gould’s doctrine were carried out it would be impossible for Parliament ever to enter into any compromise or arrangement. It is only by exercising our power in such a way as to show upon the face of a statute the form of the agreement we have made that we can make this arrangement.
– I am struck with the opinion which Senator Pulsford has expressed, that few public men recognise the enormous loss which the States will suffer by the arrangement in regard to sugar. When I see that to get rid of 8,000 kanakas within five years, instead of in a natural way–
– What does- the honorable, and learned senator mean by “ a. natural way “ t
– To let. the trade die out by stopping, importations. I desire to do justice to the poor kanaka on the’ one hand and to the planter on the other, but I. wish to have some regard for the- revenue -of the States. I do not want to fetter. Parliament for the next six years. I. do not believe that we shall- recognise, until we see the actual figures, .theenormous compensation that we are going to give the planters. While I con:sider that the. planters in the nouth are entitled to it,, we know. that, those in the south are not entitled to so much,, and that the planters in New South Wales are practically entitled to nothing. If sugar can be grown by white labour there they have no right to this rebate, and there will be plenty of time- within the next six years for us to devise some method, which will not be a brea’ch of the Constitution. We may have an amendment of the Constitutionbefore the end -of that period. We may find that the figures work, out so unjustly, giving to the southern planter more than he is entitled to and to the northern planter less than he deserves, that we may devise some method which will, do greater justice; T noticed the argument made by Senator .Eraser, that to. strike out this limitation might convey the impression that we were- going to adhere to this arrangement for all. time ; but I do not quite agree- with it. I think the best thing to do is to affirm that the planter shall have justice, and not to tie ourselves up to a financial arrangement which may be more than tlie States can afford,, and which we know to be more- than some of the people- who have been compensated are entitled to receive.
Senator MILLEN (New South Wales).So far as the rebate proposed, in this exemption paragraph is concerned, I am in entire agreement with it as being, although cumbersome, probably the best way that can be .devised to get rid of the kanaka difficulty. I am not at all certain, however, that the words “until, thefirst of January, 1907,” are necessary. Parliament before 1907 -may desire to alter the excise without disturbing the arrangement which has been made with the growers of sugar. At present the import duty is £,6 per ton, and the excise £3. Parliament may decide in. the future to make these duties respectively £8 and £4. That would not be a breach of faith with the growers o£ sugar, because the same margin would be left. It seems to me that the words objected to apply only to the 3s. per cwt. excise, and it is really absurd .for this Parliament to desire to say what excise the next Parliament, shall impose-. I venture to think that the words ought to be struck out, and unless I hear better arguments than have been brought forward on. the- question, I shall vote with Senator Clemons.
Senator Major GOULD (New South Wales). - Senator O’Connor has pointed out that it is- to a. certain extent a. moral obligation that the excise- shall last until 1907, subject to a rebate in the case of growers of sugar by white labour. But the import duty of £6 per ton is in no wise limited, and not only might be increased to £8, but might be decreased to £4 or £5 per ton, so far as the wording of the Customs Act is concerned.. That measure makes no stipulation that there shall be a difference of £3 between the excise and the import duties. If this matter be looked upon in the light of an implied understanding with the sugar planters to protect them, so far as an import duty is concerned, because they grow sugar by white labour, Senator O’Connor’s statement as to the difficulties of the growers in the early days of the operation of the duty, and as to tlie necessity of getting revenue, is a s’trange reason why an excise should be charged; so that during the time the sugar-grower is experiencing his greatest difficulty he will be taxed by this Parliament, whilst when he has overcome his difficulties he is to have the full benefit of the import duty, whatever it may be. I hope the committee will see the wisdom of striking out the words objected to by Senator Clemons.
– There is an additional reason why the words objected to should be struck out, and that is that this 3s. per cwt. excise contains ls. which is desired for- revenue, whilst only 2s. of the 3s. is to be given back as a rebate; What we are asked now to do is to affirm up to the 1st January, 1907, the proposal that we desire to have £1 per ton excise revenue derived from sugar. I must say that I consider that to be a very wide sirable thing to affirm at ‘this moment. If it had been arranged that the whole of the 3s. per cwt. was to be given as a bonus to the grower, there might have been something in the argument to give the grower some security in the way of a time limit. But that is not the case. The £1 per ton is going to be used for revenue, and I cannot see that that revenue is at all necessary. Parliament may very likely consider it desirable to strike that £.1 off before very long. If Parliament desired to do so, it would be hampered by the phrase, “until the 1st January, 1907.”This is a very serious question. We are told that the revenue is necessary, and. yet in the very same breath we hear that it is absolutely proposed to do away with that revenue after 1907. I see no reason why we should tie up this particular duty fora particular termany more than we have tied up other customs duties. All the duties belong to the same category. They are for the purpose of securing revenue. Why should we take out this individual item and very illogically say that the duty shall last for a fixed term, and. no longer?
Question, - That the House of Representatives be requested to. amend theschedule by omitting from the duty “ Sugar: . . per cwt., 3s. .. . “ the words “ until the 1st January, 1907 “ - put. The committee divided -
Ayes … … … 12
Noes … … … 15
Majority … … 3
Question so resolved in the negative.
Tobacco, viz : - Manufactured, per lb.1s.; cigars, per lb.1s. (id.; cigarettes, including the weight of the outer portion of each cigarette, per lb., 3s.; snuff, per lb.-, 2s.
– I move -
That the House of Representatives be requested to amend the schedule by adding to the duty “Tobacco, viz. - Manufactured, per lb.,1s.” the words, “and on and after 1st August, . 1902, 1s. 3d.”
If I followed my own inclination in doing what I think would be the best for my State, I should certainly move that the excise duty on tobacco be increased.from.ls. to1s. 6d. I have not the slightest hesitation in saying that that ought to be done. But I’ recognise that we have to consider practical politics, and therefore I move that the excise duty be increased from1s. to1s. 3d. I may say at once that by increasing the excise to1s. 3d. the protection that would be given to the tobacco manufactures would be just the difference between 3s. 3d. and1s. 6d. plus1s. 3d. In other words the difference would be 6d. The duty on unmanufactured leaf is1s. 6d. By making the excise on unmanufactured tobacco1s. 3d., we bring the total duty paid to 2s. 9d., and as the import duty on unmanufactured tobacco is 3s. 3d:, the difference on the face of the Tariff would be 6d. But most honorable senators know that the difference is really greater than it appears, because it was not so very long ago since the VicePresident of the Executive Council; in answering; a question in this Chamber, showed quite clearly that owing to. certain deductions and differences the margin of protection between customs and excise is really greater than it appears to-be. Personally I have no hesitation in pointing out to the committee that in the motion I suggest, making the excise on tobacco1s. 3d., the margin would be 9d. per lb. I recognise that at this very late stage of the discussion, on the Excise Tariff Bill, when we are all weary, sick, and disgusted with these duties, I cannot expect honorable senators to give any item proper attention. But when I point out that this item of tobacco means to the revenue of the smaller States, and especially to Queensland and Tasmania, more than any other item in the whole Tariff, perhaps I shall have done my duty, and if the item fails to secure proper attention it will not be my fault. I suppose the motion will be opposed simply and solely on the ground of protection. There can be no other ground. If revenue be the chief consideration, we should level up these excise duties to the amount of the import duties. The reason why we do not is because we admit that, although the smaller States want revenue, the Government desire to give protection to the tobacco manufacturers. While there may be a certain amount of sympathy on the side of the protectionists for many of the industries of the Commonwealth, I utterly fail to understand why they extend any sympathy towards the tobacco industry. The employment is not very satisfactory. The industry finds work for a lot of boys and girls at not very remunerative wages. In fact, it does not employ much labour in proportion to the capital invested in it. Further than that, there are at present in the Commonwealth large tobacco companies who are making immense sums of money out of this very difference between customs and excise.
-Col. Neild. - Has the honorable and learned senator been a shareholder in one of them ? I have, and I got back 5a. 3d. in the £1 of my capital.
- Senator Neild’s private affairs do not interest me. I am concerned with the revenue of Tasmania. I atn going to prove that these tobacco manufacturers make immense profits. I say again that the tobacco companies in Australia are making enormous profits. If- we had not so great a margin between the excise and customs duties those profits would not be made, ‘and a large amount of the money would go to the revenues of the different States. It is not right that so much revenue should be diverted from the States for a reason which cannot be considered very satisfactory, even by protectionists. It is not satisfactory to me in any circumstances, I frankly admit, but even protectionists recognise that this is an industry which does not employ labour satisfactorily, and having some regard for revenue, as Senator Playford has, I wonder how, with all his protectionist views, that honorable senator can support so great a margin between these duties. I can give figures and names insupport of my statement that enormous profits are being made in this industry. I say that the firm of Cameron Brothers, with a capital of £50,000, last year made £50,000 profit. I say that they paid in dividends 20 per cent., and carried to a reserve fund the other SO per cent, of the profit. I say further that the accumulated profits of that company made from the tobacco industry amount to £.100,000 to date.
– In what State are they working ?
– I am not concerned with that.
– It is a matter of importance, in view of the duties previously existing.
-I am concerned with the margin of difference between the excise duties we are considering and the customs duties on tobacco. During the discussion upon the Tariff the word “ compromise” has been very frequently used, and I regret that I have never paid sufficient attention to compromise. If in the interests of Tasmania I had properly regarded compromise, this proposal would have been carried, but I did not, and we shall presently have the- notable spectacle of some so-called free-traders voting for high protection on tobacco, simply in order to prevent Tasmania and some other States getting revenue, and with the excuse, probably, that the industry concerned is carried on in their own State. No consideration of that sort would ever induce me to vote for protection to start with : and if I thought ‘that by killing protection I could secure an increase of revenue at the same time, I should be spurred only to additional effort. While these remarks may apply to honorable senators who sit on this side, and are nominally supposed to be free-traders, they apply also to the Vice-President of the Executive Council. I point out that this is absolutely the most important item in the Tariff, so far as the revenue of the smaller States is concerned. The Government have time after time repeated the assertion that they are anxious to maintain the financial stability of the smaller States, but, so far . as tlie duty, on tobacco is concerned, they make no effort to do it. By every fiscal party tobacco and spirits have always been properly regarded as essentially items from which a large amount of revenue should be derived. There are no other items in the Tariff from which anything like the same revenue should be derived, yet the Government here make no effort to secure revenue which they could easily get. To point out, in a simple way, how much may be lost under this item, I say that upon every pound of tobacco manufactured in the Commonwealth, and sold in any of the States, the revenue will lose to the extent of1s. at the least. When it is considered what that means to asmall State like Tasmania, honorable senators will understand how important this item is to that State. I point out this further objectionable aspect of protection from my point of view : If we assume that all the unmanufactured leaf that is manufactured into tobacco in the Commonwealth has been imported under this Tariff, at least 1s. on every pound of tobacco sold will be lost to the revenue, but if any home-grown leaf is used in the manufactured tobacco, the loss, of course, becomes still greater. Protectionists who are anxious to preserve this margin between the duties must surely be thinking of protecting not the growth of tobacco, but the manufacture of tobacco leaf into the commercial article. No matter what we do with this excise duty, so far as the growth of tobacco is concerned, there is a protection of1s. 6d. as against 5d., because the full value of tobacco leaf is 5b. per lb., and there is a duty of1s. 6d. upon imported leaf. As apart from every other form of protection, the home-grown tobacco is protected to the extent of1s. 6d. as against 5d., I hope we shall not have any arguments based on the ground that this is a national industry, because it will be seen that they are abundantly met in the Tariff as it stands. Though I wish to speak neither in anger, nor with indignation, about the vote which is to be taken, there is no failure to carry a motion from this side which I shall regret more than the failure to carry this motion. To Tasmania, it will be the most serious of all the blows from which she is suffering under the Tariff. Arguments, I know, are perfectly useless to convince those who have made up their minds. I am concerned with votes, and not with arguments. But I do venture to say that, if these excise duties on tobacco are maintained in the Tariff, before three years have elapsed we shall see, if we are alive, one huge tobacco trust in the Commonwealth. I know that there are some honorable senators on my left who think that when a huge private monopoly is started the time will be opportune to make the manufacture of tobacco a State industry. Much as I hate State socialism in every shape, rather than have a private tobacco trust in the Commonwealth I can conceive it possible that I should sooner see the industry in the hands of the State. Even that argument I know will not change any votes, and, so far as I am concerned,a division may be taken at once.
SenatorO’CONNOR. - I do not think that there is any reason to join in the melancholy foreboding in which Senator Clemons has indulged. But if a tobacco trust should come about, all I can say is that it was infinitely more possible before Australia was federated than it is now, and when it occurs I hope that there will be sufficient legislative resource to deal with it as trusts will have to be dealt with in other industries. There is no doubt that the question of how to deal with trusts is becoming one of the problems of the day, and that if it should turn out that the public are robbed by a trust, some alteration in the law will be made. But that does not touch the question before the committee. We have here an industry which brings in a large amount of revenue. That has to be conserved.
– Could it bring inmore ?
– I do not think that more revenue could be raised except at the risk of destroying the industry. As we have done in a great many other cases, we have to see that the Tariff serves the purposes of bringing in a reasonable amount of revenue and of not destroying existing industries. There can be no question that the industries dealing with tobacco’ are very large and very important, employing a considerable number of persons.. When we are dealing with the question of whether these industries ought to be interfered with or not, surely it is very important to examine the fiscal, conditions under which they have grown up in the States. With a duty of 3s. 3d. per lb. on imported tobacco, and a duty of 1s. 6d. per lb. on imported leaf to be manufactured into tobacco, and an excise duty of’ 1s. per lb., we give the maker of tobacco from imported leaf a protection of 9d. per lb.
– Some months ago the honorable and learned senator admitted to me that we must add to that about 3d., because of certain deductions.
– I do not make any admission of the sort. Although the manufacturer has to pay on certain ingredients which add to the weight of his product, he does not pay that percentage on its whole weight. He pays excise duty on the tobacco which he turns out. Therefore, on the face of it, the whole of the protection which he gets here is a net protection, and for that reason I do not propose, in making this estimate of 9d. per lb., to make any deduction for the duty he has to pay on the ingredients - .molasses, spirits, flavouring essences, and a number of other articles. I leave them out of consideration. I am merely dealing with what he pays on the leaf, which is ls. 6d. per lb., 4ind what he pays in excise duty, which is 1 s. per lb., and the difference between what he pays in these two ways and the import duty on manufactured tobacco leaves a margin of 9d. per lb. That margin, compared with the protection which has existed in States where there has been an excise duty, is certainly not an. undue amount. In New South Wales the protection was ls. 9d. per lb. in the case of tobacco manufactured from the locally-grown leaf, .and 9d. per lb. in the case of tobacco made from the imported leaf ; so that, in that free trade State, the difference which gave the protection to the manufacturer was just the same as we propose to give. In “Victoria there was a marginal difference of 2s. 3d. per lb. where the locally-grown leaf was used, and of ls. 3d. per lb. where the imported leaf was used. In Queensland there was a protection of 3s. per lb. where the locally-grown leaf was used, and of ls. per ‘lb. where the imported leaf was used. In South Australia there was a protection of 2s. 9d. per lb. where the locally-grown leaf was used, and of ls.,4£d. per lb. where the imported leaf was used. Taking the four States in which excise duties have existed, in New South Wales the protection was the same as that which we propose to give, while in Victoria.it was 6d. more, iu Queensland 3d. more, and in .South Australia 7$d. more. Under these circumstances, when we are framing a policy which it is admitted ought not unduly to interfere with existing industries, surely it is a very fair exemplification of that policy to give, in the difference between the excise duty and the import duty, the lowest protection that was given in any State, the same as was given in free-trade New South Wales, and much less than was -given in any other State where excise duties existed. We have no right, on some problematical view as to the large profits made by manufacturers, to give a lower amount than was given in the State which gave the lowest amount of protection before the Commonwealth was formed. Senator Clemons proposes to cut it down to 6d. per lb. That would be altogether unreasonable. Something more than the manufacture of imported leaf is involved. The question of the growth of tobacco leaf is involved.
– The customs duty protects that.
– I know that there is a protection, but I think the honorable and learned senator will realize that we have to take this business as a whole. Everything depends upon keeping this industry in a fairly flourishing condition. Our experience shows that there is every reason to believe that we should not go below the lowest protection which ruled in any of the States. If we do we run great risk of destroying the industry altogether, and its destruction means depriving our own local growers of the opportunity to have their products worked into tobacco to be consumed in Australia. The duty, as it comes from another place, really represents an agreement arrived at after a great deal of consideration, and we ought not to disturb it. As to the fears expressed by my honorable and learned friend that fortunes may be made by individuals and trusts, we may fairly leave that matter to be dealt with when it arises.
Senator MILLEN (New South Wales).The Vice-President of the Executive Council has correctly stated that, in considering this as in considering other items, we have to regard both the revenue aspect of the question and the condition of the industries existing at the present time. The argument would appeal to me very strongly, as one coming from New South Wales, that where the Tariff extended no greater measure of protection than prevailed in an admittedly free-trade State, free-traders might very well be content, and but for two considerations I should be inclined to vote ‘ against the motion. We cannot shut our eyes to the fact that the Tariff as it stands, and many of the alterations which have been made in it, seriously affect the revenue of the smaller States, and particularly of Tasmania, which, I understand, is without any local tobacco manufactories. The consequence will be that while the revenue may go into the Customs through the excise, the difference between the excise and the import duties will be a distinct loss to the Treasury of T,ismailia
The greatest gain to Tasmania would be secured by making the excise equal to the. import duty, but that is not proposed, and it seems to me that between the financial requirements of the States and the condition of existing industries Senator Clemons’ proposition is a very fair compromise. Senator Clemons mentioned one tobacco manufactory that has made enormous profits, and Senator O’Connor has, without definitely denying the statement, attempted rather to discount it.
– Let me say that in all the States but New South Wales there was a, very much heavier protection to the manufacturer than is now proposed.
– I do not know anything about the profits of the tobacco manufacturers, but when they ask Parliament, as they are doing, to assist them, it rests with them to make out a case for our consideration. Some little time ago some gentlemen employed by the Cameron Tobacco Company interviewed me, as well as most other honorable senators, and said that it was not possible to carry on the industry with a lower margin than 9d. per lb. between the excise and the import duties. I asked them to convey to tlie management of the company the assurance that if they liked to put before me figures to show that it was impossible for them to make a reasonable profit with a margin of less than 9d., I should be prepared to give a vote against the reduction of the margin. That was a very fair challenge, but, needless to say, I have never heard a word from them since. The only conclusion I can draw is that it is impossible for them to put forward figures which would stand examination, and show that any increase of tlie excise would be followed by consequences disastrous to the industry. In these circumstances they cannot find fault with me if I vote in the way I have indicated. I am sure that even the protectionists whatever the result of their policy may be, do not desire to adopt duties that would have the effect of enabling manufacturers to earn undue profits. If we enable them to earn fair profits they cannot complain, and as one of the largest manufacturing firms has failed to avail itself of an opportunity which I extended to it to show whether its profits are reasonable or unreasonable, I can only arrive at the conclusion that protection to
41 1 2
the extent of 9d. per lb. is more than sufficient. I propose to vote in a way that will increase the revenue, and particularly that of the smaller States.
– There are one or two points in the speeches made by Senator Clemons and Senator Millen, which require to be answered, and I propose to traverse them, in order, if possible, to place the matter before the committee in a very different light. The first objection raised by Senator Clemons was that we would suffer a loss of revenue under the Government proposal. I am prepared at once to admit that, if we carry out his wishes, we shall certainly obtain more revenue, but at the same time we shall destroy the industry. So far as that matter is concerned, there is a great gulf between us which cannot be bridged. Senator Clemons desires as much revenue as possible from tobacco, and I wish to see as much revenue obtained as possible, consistent with the preservation of the industry. Another reason given by the honorable senator in support of his proposal is that enormous profits are obtained from the manufacture of tobacco. I do not think that statement is correct. For the last ten or fifteen years quite a number of those engaged in the manufacture of tobacco in Victoria and in New South Wales have .gone into liquidation. During the last six months Messrs. Moss, White, and Co., one of the largest manufacturers of tobacco in Victoria, did so, and the same thing has occurred in other States. Senator Clemons also said that Cameron Bros, and Co., with a capital of something like £50,000, had made a profit of £50,000 during the last year. If that statement were correct, any one who desired to invest money would be anxious to put it in this class of industry, but I scarcely think it is. Senator Clemons did not give us any authority for his information. I should like to point out to him that the capital of Cameron Bros, and Co. is not £50,000. It started with that capital twenty years ago, but my information is that its capital at the present time is £300,000. For ten years it never paid a dividend, and if it has paid one since it has been because of the protection enjoyed under the Victorian Tariff, which provided for a differential rate of ls. 3d. per lb. I am not prepared to accept Senator Clemons’ statement, because my authority is unimpeachable. Another argument put forward byhim was that this was a miserable industry, because it employed very few people. In that assertion he was also wrong. I find that in Victoria alone there are 702 persons employed in the manufacture of tobacco, apart from those engaged in the manufacture of cigars and cigarettes. I am satisfied that there are quite as many, if not more, employed in New South Wales ; and I am sure that the total for all the States is a very respectable one. Taking the aggregate number of persons employed in manufactures throughout the States - and of course, in degree we are a very small manufacturing community - it is clear that the industry is not an insignificant one.
– Who said it was insignificant?
– The honorable and learned senator said it was a small industry. The trend of his remarks was, that the industry was of such a character that it was not worth fostering, and that it would be far better to reduce the output of the locallymanufactured article and import to a greater extent, thereby increasing the revenue. The honorable and learned senator also spoke about the shockingly bad wages paid in the industry.
– I did not use the term “ shockingly bad wages.”
– Did not Senator Clemons say that the employes were miserably paid ? I think he will find from his speech, when it is reported inHansard, that he spoke of the bad condition so far as wages were concerned, and stated that a large number of boys and girls were employed. Possibly there might be an improvement so far as employment is concerned. I should like to see better conditions prevailing in the tobacco industry. But the course the honorable and learned senator has taken will not in any way assist us in getting better wages for our own people. He will have an opportunity of joining with us later on when it is proposed to make the tobacco industry a Commonwealth monopoly, as Senators Pearce, Smith, and others are prepared to do. If the statements as to the enormous profits made by the tobacco manufacturers are true we shall then be able to take these profits for the benefit of the Commonwealth as a whole. As to bad conditions, what do we find with regard to America ? I learn that nearly the whole of the work in connexion with tobacco manufacture is done by negroes working from seven a.m. till six p.m., and we know that they work for a miserable pittance.
– What does the honorable senator call a miserable pittance ?
– About one quarter of what our people obtain in the same industry.
– Then the honorable senator will be surprised to find that the black men in America get nearly as much as do the workers here.
– I certainly should be surprised to learn that, and I want something more than the assertion of the honorable and learned senator to back up the statement. We have in this country quite a number of tobacco-workers who have been employed in America, and who know something about the conditions of labour there. Let him ask their testimony. The duty proposed by the Government can be supported on different grounds from those which have already been urged.For a good many years in the various States of the Commonwealth we have been trying to grow tobacco. Up to the present we have not produced a very high-class article, but in the future I hope it will be possible to grow leaf of such a character as can be used in the industry. Therefore, I do not want to sweep away the protection that is necessary for that purpose. It would be a great thing for the States of the Commonwealth if that result could be achieved ; but it will not be achieved by throwing away the protection that is enjoyed at present. I intend to resist to the utmost the suggestion that has been proposed.
SenatorFRASER (Victoria). - It was my intention, I confess, to vote for the excise duty as proposed in the Bill ; but after the statement made by my honorable and learned friend, Senator Clemons, which has not been contradicted in any sense, and after learning a little more about the question outside since the discussion started, I have come to the conclusion that it is my bounden duty to vote for the increase proposed. If I thought the industry would be endangered, and the employes would suffer by my act, I should not dream of voting for the increase. But if £50,000 can be made on a capital of £50,000 - or if even half that amount can be made - when money is going begging at 4½ per cent., it is time that we opened our eyes. It is not right that the States should lose an enormous amount of revenue in the way now proposed under the rate of ls. The hands employed in Victoria number 700 odd. The profit made out of the investment appears to be sufficient to pay them what they now receive ten times over. The smaller States, Tasmania and Queensland, would lose an enormous amount of revenue from the rate proposed by the Bill. As Senator Clemons says, there will only be one great tobacco factory in the Commonwealth, and thus there will be further monopoly and additions to the already huge profit. Under these circumstances I conceive it to be my bounden duty to change my vote.
– It will not be the first time the honorable senator has changed his vote.
– And I hope it will not be the last. Does the honorable senator impugn my honesty in regard to the change ? I have given my reasons for so doing. They are conscientious reasons. Two hours ago I had intended to vote for the Tariff as it stands in this respect, and I told other honorable senators that I meant to do so.
– We will keep the debate going two hours longer so that Senator Eraser may turn again.
– I am not so easily turned as that, but I do not say that I should not change if the statement of Senator Clemons could be contradicted. If it can be contradicted I will change this moment. But seeing that the contradiction lias not been attempted, I dare not vote in any other direction than for the proposed suggestion.
– The tobacco duty is one that we ought to safeguard very ca’refully, because there is no duty which offers a more stable revenue than that on tobacco. It may be relied upon to bring in year by year the estimated revenue with more certainty perhaps than any other article that can be named. A man, however great his trouble may be, gives up his smoke last of all. I am not saying this on mere surmise, but as the result of the investigation of statistics. After the troubles in Victoria in 1893, the revenue from a great many of the duties in Victoria fell off very materially. The ordinary ad valorem duties fell oft” about 50 per cent., for instance.
But the revenue derived from tobacco did not fall off quite one-half of that amount. Therefore it is desirable that all wise statesmen should safeguard this important revenue item, and take care that it is not whittled away in various directions. We have dealt with other duties at rates pelton. Only here and there has there been a duty at so much per lb. But in the case of tobacco we have duties running into shillings per lb. A shilling per lb. is equal to £112 per ton; 3s. per lb. is £336 per ton. So that the figures are very vast. It should te borne in mind that there is. one large manufacturing firm in Australia which boasts that it produces and sells in Australia 1,000 tons of tobacco per annum. If that firm has a margin of only 9d. per lb., the income for a year would be £84,000. If the margin were ls. per lb. - and we can see by the rate on cigars and cigarettes that it runs up to several shillings per lb. - it might very well be that the total that the firm had to play with would be from £150,000 and upwards per annum. These are very large figures. I do not wish to be understood as saying that because there is this large amount it can be all annexed by the manufacturers. I wish to guard myself against that statement.. - When I was speaking this afternoon about sugar, I unhesitatingly affirmed that every penny of the £6 per ton import duty was added to the value of the article. But there is protection and protection. These matters vary. The amount of the duty can be added to the full when the articles are what may be called interchangeable. In the case of sugar, the local and the imported article are practically the same. It does not matter whether the purchaser gets imported or locally-made sugar. Sugar is sugar ; and, if the locally-made sugar is equal to the imported article in the matter of colour and quality, it fetches the same price. But I recognise that that rule does not apply to some other commodities. A duty that runs up to 500 per cent, does not raise the value of colonial wines one iota, I wish it to be understood that I do not affirm that the existence of a duty of 5s., 6s., or 7s. per lb. upon cigars and cigarettes enables the local manufacturer to obtain the full benefit of the full amount of that duty at once, because there are prejudices and tastes in the matter of tobacco. The position in this matter is that in the two main States of the Commonwealth, New South
Wales and Victoria, there has been, owing to the difference that has existed between customs and excise duties, a growing ability on the part of the local trade to oust the imported article. The revenue derived in New South Wales from customs duties upon manufactured tobacco in 1896, was £142,000. In the next year it was £139,000, in the following year £139,000, in 1899 £129,000, and in 1900 £129,000. Having fallen during that period by some £13,000. The revenue from cigars had risen by some £9,000, while the revenue from cigarettes had risen by only about £1,000, and practically remained at a standstill. I ask honorable senators to look now at the noteworthy figures of revenue derived from excise duties, because the excise duties in New South Wales are an index of the growth of the local trade in tobacco. . In 1896 the revenue was £150,000, in 1897 £160,000, in 1898 £178,000, in 1899 £193,000, and in 1900 £214,000. The growth of the local trade, as represented by these figures, it will be admitted is very marked. If we take cigars and cigarettes the revenue derived in 1896 was £22,00.0, and it rose to £24,000, £29,000, £38,000, and finally in 1900 to £47,000. That is a very marked growth, due, not to ,the larger margin which existed in Victoria, but under the smaller margin existing in New South Wales. Those figures show what has been done in New South Wales with the different margin existing there, which appears to be 9d. per lb., but which I shall be able to show is really considerably more than that. Now with respect to Victoria, the revenue derived in 1896 from customs duties on imported manufactured tobacco amounted to £163,000. In 1899 it was £136,000, and in 1900 it was only £112,000, showing a very material falling off. The revenue from cigars rose by about £5,000, and from cigarettes from £3,000 to about £6,000. Let us now take the figures for the excise duties in Victoria. In 1896 there was derived from excise duties upon locally-manufactured tobacco a revenue of £68,000 ; in 1899 the revenue had increased to £107,000, and in 1900 to £141,000. I must admit that in 1900 a portion of the revenue received was due to the approach of federation, and to the expectation that there would be some addition to the duties. There is no doubt that trade in 1 900 was accelerated a little on that account, but making every allowance for that, it is evident that the growth of the local trade was proceeding in as marked a degree in Victoria as in New South Wales, and it was in- each year to a greater extent ousting the imported tobacco. On cigars, the local revenue from excise rose by a little under £1,000, and on cigarettes it rose from £11,000 to £18; 000, showing again the tendency of the local trade to oust the trade in the imported article. With regard to the difference which exists between one form of duty and another I should like in the first place to read a little extract from a minute by the Minister for Trade and Customs which will give the committee a clearer idea of the way in which tobacco is manufactured. -
The collector may, on the application of a manufacturer, permit the following excisable goods, and goods liable to duties of Customs, namely, glucose, spirits, glycerine, liquorice, sugar, spice, starch, starch flour, flavouring essences, and essential oils, to be delivered free of duty for use in tlie manufacture of tobacco, cigars, cigarettes, and snuff.
These are all materials used in the manufacture of tobacco. Honorable senators must remember also that when the locallyproduced tobacco is used, it is free of the first form of taxation through the Customs, and just as the proportion of locally - produced tobacco is increased, so does the margin which the manufacturer has to work upon naturally increase. I give the figures for New South Wales for 1900 : In that year the weight of tobacco on which excise duty at the rate of ls. 3d. per lb. was paid amounted to 2,178,000 lbs., and of cigars to 374,000 lbs., or a total of 2,552,000 lbs. Of that weight the quantity of leaf upon which duty was paid as a raw material of manufactured tobacco was 1,550,000 lbs., showing that 997,000 lbs. of adulterants were added. In round figures, 1,000,000 lbs. weight of local leaf and various other things were added to .1,500,000 lbs. of imported leaf tobacco. The consequence was that, instead of there being a margin of only 9d., the margin was increased to 13-ljd., or to nearly 14d. per lb., which clearly is a very important difference. In Victoria, although the margin between the imported and the local article appeared to be greater than in New South Wales, I do not think it actually was very much more, because the Victorian manufacturers had not command of local tobacco to the same extent as the
New South Wales manufacturers had. They used more imported tobacco leaf, and, therefore, the manufacturers in the two States were very much on the same footing. The position now is altered, and colonial tobacco, grown in New South Wales or Queensland, will be available for use in the Victorian factories. I should like now to deal with the matter from the point of view of its influence upon the revenues of the States. I take the position of Tasmania for one reason, because that State had only one duty of 3s. per lb. upon tobacco, whether it was the manufactured article or the leaf. The consequence was that Tasmania, year by year, was obtaining a very substantial amount of revenue from this duty. It will be remembered that the duty of 3s. per lb. in Tasmania is 3d. per lb. less than the import duty charged under the Federal Tariff; but in 1900, from that duty of 3s. per lb., Tasmania received a revenue of £52,556. On cigars, with a duty of 7s. per lb., the revenue received was £7,441, and on cigarettes, at the same rate of duty, the revenue received was £6,436, or a total revenue on tobacco and the allied lines of cigars and cigarettes of £66,783. Now, what do the Federal Government estimate as the revenue tq be received by Tasmania under the arrangement of the duties they have proposed 1 Their total estimate of revenue for tobacco for Tasmania is £53,060, or between £13,000 and £14,000 less than that State was previously receiving. From the returns showing the revenue actually collected for the first six months under the Commonwealth Tariff I find that there was received in Tasmania through the Customs £20,858; and from excise only £373. It is clear that the course of business in Tasmania has scarcely yet begun to to affected. The change has yet to come ; but whereas the Government anticipated that, from the excise duties at the low rate they propose, Tasmania would receive a revenue of £-8,400 in the year, she has only received revenue, at the rate of £740, or less than one-tenth of the Government estimate. Honorable senators will see that if only the expectations of the Government are realized, the revenue Tasmania will receive from tobacco must be very largely reduced. It cannot be otherwise. Honorable senators will do well to bear in mind the tendency . towards centralization which we have seen since the Tariff has been introduced. One large firm has closed a factory in Melbourne, and is about to close another in Brisbane, with the view of concentrating its operations, I think, in Sydney, while another firm has closed a factory in Adelaide with the view of concentrating its operations there. All this points to the concentration of tobacco manufacture in the hands of a limited number of persons. In this state of affairs there is a certainty that their travellers will over-run the outlying States, and gradually obtain that hold of the trade which might be expected from the price at which thev are able to offer the article, and gradually as their sales increase, so gradually will the share of revenue which falls to Tasmania diminish. We. have been told, I think by Senator Barrett, that one or two firms have got into difficulties. Is it any wonder that they have? The tobacco business is one which requires a giganticcapital to provide the enormous sums which are required to pay duties, and to compete one with another. In a competition between giants it is no wonder that now and then we hear of one being beaten in fight, but that does not say that there is not a large margin of profit to those firms who thoroughly understand their business, and by command of capital, free advertising, and the use of a few able agents have been able to obtain a hold of the trade, and toenlarge their business. I have in my hand a statement from a Sydney firm which confirms all that is said about Messrs. Cameron. My correspondent writes in these terms -
I do not know whether any of the other factories in Victoria are limited companies or not, and so cannot say whether this statement, re dividends, is correct or not; but I do know that Camerons, of Melbourne, with a capital of £50,000, made a net profit of £50,000 in .1900, of which they put -640,000 to a reserve fund, which, together with that sum, then stood at £100,000. Whilst this company has been making such enormous profits it is easily seen there has been small chance for the “smaller factories to compete with them. If the Government were to give double the protection to the manufacturers which they now enjoy it could do no good to the small people.
In another part of his letter he says -
The other factories named were started without sufficient capital, and were necessarily failures, for tobacco manufacturing is a business which nowadays requires large capital to thoroughly equip the factory with all up-to-date machinery, and also for the purchase of large stocks of imported American leaf tobacco, which- must be used if a manufacturer is to make a success of his brains in competition with the established ones.
For these reasons, I think I am justified in claiming the vote of the committee for the small increase of the duty which has been proposed by Senator Clemons. The’ reduction of the margin is only nominally from 9d. to 6d. per lb. It is, I believe, from something over ls. to something under ls. per lb., and I think there can be no doubt that the large margin that will be left will be far more than sufficient to enable large factories to retain and enlarge their trade.
– This question is one to which I have given considerable attention, and I am sorry to say that I cannot follow out the line of reasoning which has been adduced by Senators Clemons and Pulsford, in support of a reduction of the duty. I happened to be a member of the Legislative Assembly of New South Wales when an excise duty on tobacco was first proposed. I represented a district which was largely interested in the growth and manufacture of colonial leaf. It was originally proposed to levy an excise duty of ls. 3d. per lb., but representtations were made to the Government to which I sat in opposition, that it would be too severe a strain on the industry, and the result was that it was fixed at ls. per lb. The district which had produced a large quantity of leaf found its leaf in the hands of a few buyers, and the result was that prices were reduced very considerably. Of course there may have been other circumstances which contributed towards producing that result. It was stated that another portion of the State produced leaf equal to that which was grown in the Hunter River district, and sold it at a very much less rate, the cultivators at that time being Chinamen. It was recognised at once that it was only the larger firms who would be able to withstand the pressure of the excise duty. The smaller firms, which manufactured colonial leaf alone, found their operations hampered, and they ultimately had to close their factories. There were several factories in Sydney, and I believe it was a very severe struggle for some to remain in existence. Some of them succumbed, while others survived, and I believe still exist. That no doubt was due largely to the fact that they had command of larger capital, and their management was of a very keen character. These factories battled on, and put themselves into a satisfactory condition. At this time there was a differential duty of 9d. per lb. in New South Wales, and of ls. 3d. per lb. in Victoria. The statements which have been made as to the enormous profits made by certain factories seem to resolve themselves round the profits made by Cameron and Company. We have been told by Senator Clemons that on a capital of £50,000 they were able to make a profit of £50,000. But Senator Barrett has attempted to discount that statement by saying that the capital had to be materially increased. I recognise that a differential duty of ls. 3d. per lb., and a differential duty of 9d. per lb., are two very distinct things. But if certain industries can carry on with a differential duty of 9d. per lb. the industries which get an additional differential duty of 6d. per lb. on an article such as tobacco, if they have any thing like a trade, must necessarily make money rapidly, and become wealthy. I can readily understand the position which would have been taken up by many honorable senators if it had been proposed to continue the differential duty of ls. 3d. per lb. I certainly should not have been prepared to vote for such a duty, but when I find that the Government propose a differential duty the same as that which has existed for many years in New South Wales, which we know has striven hard in the direction of free-trade, I feel that I am not very far wrong when I support, the Ministerial proposal. Senator Pulsford has pointed out how the growth of the trade of that State has increased. Naturally whether we are protectionists or free-traders we desire to see our State prospering. I certainly never recognise the position of a free-trader as the position of a man who prefers to import everything instead of having anything manufactured in the country. As a free-trader I have taken up this position that I shall not give what I regard as undue- and unfair advantages to local manufacturers at the expense of the community at large. In the present case I do not think I should be acting fairly and consistently in the interests of the people of this country if I did not vote for the Government proposal, although one honorable senator has seen fit to speak about what he terms the so-called free-traders being prepared to vote with the Government.
– I was referring to the honorable and learned senator.
– Honorable senators have had an opportunity of seeing how far I have been consistent in carrying out my avowed principles of free-trade. I have had the honour of being a member of Parliament for nearly nineteen years, andhad the privilege of occupying a seat in Parliament when Senator Clemons was running about in knickerbockers. I presume I have therefore had a little more experience about political matters than he has had. If he is really consistent in his desire to obtain the largest possible amount of revenue from this industry, the simple course to adopt is to make the excise duty equal to the import duty. Senator Pulsford has pointed out that 1,500,000 lbs. of tobacco leaf paid import duty, and 2,500,000 lbs. of manufactored tobacco paid excise duty. There is a difference of 1,000,000 lbs. to be accounted for. While 1,500,000 lbs. of leaf may go into a factory, even if no colonial leaf be used, it will come out weighing probably 2,000,000 lbs. in consequence of the moisture and other ingredients added. So that the excise duty is paid not only on the tobacco leaf, which has paid import duty, but on the moisture which has caused the additional weight. It is quite true that a large number of dutiable goods on which no import duty is chargeable are allowed to be taken into the factory and worked in with the leaf, and that will account very largely for the difference, but not altogether. Unquestionably a large amount of colonial leaf is used in our factories, and that certainly is no detriment to the farming industry. They have been called upon to produce that leaf, and they have got the market price for it. I know that the remarks I am making are distasteful to some honorable senators. I have pointed out that the question as to the large amountof money made by Cameron Brothers and Co., was due, no doubt, to the excess amount of 6d. per lb., which was allowed for the manufacture in Victoria, and I have here a letter written certainly by one of the members of a big manufacturing firm, in which he refers to the differential rate. He says -
As proof that less than the 9d. per lb. differential will not permit of the manufacture being continued in Australia, it is very well known that, of the three firms then in existence in this State, Cameron’s here sold out bo Heyde, Todman, and Co., who had been their distributers,showing that it did not paythem, and Heyde, Todman, on the other hand, followed this up by selling out - or perhaps I should rather say by amalgamating with - Wills, of Bristol, who had a considerable export trade to Australia., which they handed over to the local company.
I quote that extract simply to show that certain of the firms which were in existence when the excise duty was placed on tobacco did not manage to carry on without some kind of assistance, gained either by selling out to stronger firms, or amalgamating with others. The writer also says -
The Eagle Company, which succeeded Say well, continued an unprofitable business for some years, when the fire took place, when they made up their minds there was not sufficient inducement for them to start again, and did not even realize anything approaching their capital. Saywell made another attempt to start on his own account, and had to give upagain
I think cases like these show that the difference between the duty paid on the locallymanufactured article and that on the article imported in a manufactured state was not of such a character as to sustain all the firms that were manufacturing tobacco before an excise duty was imposed. That” is all that I feel I am called upon to recognize at present in dealing with this matter. Even the honorable and learned senator who has proposed this difference admits that it is just as well to allow these industries tocontinue. His argument in favour of making a differential rate is that it will bring a larger revenue to the State, and that it will not injuriously affect the industry. That is what I understood him to sav.
– If the honorable and learned senator were capable of understanding what I said he would have understood something different. I said that I moved the highest duty that I could hope to carry.
– Then I assume that Senator Clemons moved the highest duty he could hope to carry, regardless of whether it would have any injurious effect upon industries already established. Possibly I do not understand him again. I have pointed out the knowledge I have gained during the many years that I have watched this industry, and I have also made myself acquainted with the industry from other sources. I quoted the extract which I read just now in the best of good faith. I have a personal knowledge of the writer, and so high a regard for him, that I feel assured he would be incapable of misrepresenting the facts to me. His firm has a capital of something like £300,000 invested in the industry, and a very large return is necessary in order to pay ordinary interest upon such a sum. I hope the committee will take the view that the differential rate proposed by the Government is not more than a reasonable one. If we admit, as we appear to have admitted, that it is necessary to make some differential rate, we must impose one that will enable the industry to be carried on fairly and equitably without throwing enormous profits unnecessarily into the hands of the manufacturers. I do not believe in any duty that would unnecessarily give enormous profits to individuals, but I wish to enter my protest against remarks which have been made from time to time, both in this Chamber and in another place, that a man who is a free-trader becomes a foreign trader, and prefers the foreigner to his own people. I shall not assist in imposing duties that will unduly tax the people in order to put money into the pockets of individual manufacturers. I have expressed my views, and it is just as well to say that those who sit on the same side as I do have known for some time past that I hold very strong opinions upon this question, and that I was not prepared to take the course of action they propose.
– I am sorry to have to occupy the attention of the committee for a few minutes, for I know that we are all anxious to conclude the debate on the whole Tariff, and that the country is equally anxious that we should do so. But it would be an injustice to those who are endeavouring to act fairly between the people, the manufacturers, and the importers if a reply were not made to Senator Millcn’s utterances. I like an honorable senator to express his opinion clearly and freely, but the statements that have been made by Senator Millen have converted Senator Fraser to his way of thinking, and it isan injustice to an industry that the whole truth is not told in regard to it. Senator Millen told the committee that he had challenged Messrs. Cameron Brothers and Co. to prove to him that their industry could not be carried on with a margin of less than 9d. per lb. between the excise and import duties. Would the honorable senator expect Cameron Brothers and Co. to put all their ledgers and day-books into a trolly and bring them to the Senate.
– They could have invited me to their establishment.
– Did the honorable senator tell the committee that when he extended this challenge to the firm they invited him to their establishment to inspect their books ?
– If they say that they did so, it is an absolute falsehood.
– I know that the firm told him what I dare say any other firm would have said, that it was unfair for any public man to expect them to disclose all the secrets of their business. But if they said he could visit their establishment, and that they would produce figures that would satisfy him, what more could he have desired 1 The honorable senator did not give the firm an opportunity to satisfy him.
– I say that I did.
– Then he tells the committee that he made a challenge to the firm, and that they did not accept it. There are always two sides to every question, and when an honorable senator endeavours to make capital out of a challenge he should tell the truth, the whole truth, and nothing but the truth. When an honorable senator endeavours, as Senator Millen has done, to mislead the committee with respect to the relationship which existed between him and any firm, he seeks to influence honorable senators by putting before them only half the information that he could and should have given. I hope that those who have not already been influenced by statements of this description will beware before they take into consideration information that is given in this way. I have every desire to be fair. If there is anything I have said that is wrong, I shall be quite willing to apologize, but so far as my knowledge goes I have not said anything that is not absolutely correct. Senator Millen cannot deny that the offer was made that the firm would show him different figures which would convince him.
– I say it is an absolute falsehood.
– If the honorable senator was not satisfied with anything less than an examination of every ac count in connexion with the business, that was unreasonable. I hope that, whatever vote we give, ultimately it will be to the best interests of the people. We have to consider the revenue; the interests of those who have invested hundreds of thousands of pounds in industries of this description, and the hundreds of men who are making a living in industries such as this. I hope that before we give a rash vote on a question of this kind we shall seriously consider what the result will be.
Senator MILLEN (New South Wales).If 1 understand the purpose of the remarks of the last honorable senator it has been to accuse me of having made a statement to mislead the committee.
– A half-statement of the facts.
– A statement which I knew did not contain the whole truth. I interjected when Senator McGregor was speaking that the statement was a falsehood. I repeat it. There is not a vestige of truth in the assertion of the honorable senator. Whether he has made it knowing it to be false I do not know, but his insinuation against me is worthy of the man who made it.
– I rise to a point of order. I am not thin-skinned, but when an honorable senator directly connects me with a thing which he has admitted himself is a falsehood, and then couples me with an endeavour to make it a personal matter, I must object. I have made it no personal matter, and it is not right to connect me directly with a falsehood. My information may be false or true.
– Iaccept the statement of Senator McGregor that he does not indorse the assertion that he has made here.
– How can I tell ?
– That being so, what sort of a contemptible creature is he who launches a statement of that kind against me, when he admits that he does not know whether it is true or not.
The CHAIRM AN. - I ask Senator Millen to withdraw that remark.
– Of course, I have to withdraw it according to parliamentary usuage. I only regret that there should have been sufficient justification for it.
– The honorable senator must withdraw it unreservedly.
– I do. I ask honorable senators to enter judgment on his action. We have had Senator McGregor affirming that I told only half the truth, and he says now that he does not know whether the statement is true or not.
– I did not say that.
– The honorable senator said - “ How can I tell?” I told the committee everything without any reservation whatever. I said to those who told me that they were employed in the factory, “I shall not give a vote to reduce this duty if your employers will show to me that they cannot carry on with less duty than that proposed by the Government.” But neither from them nor from anyone else did I have the slightest offer to furnish me with the information I required.
– Was not the honorable senator asked to go to the factory, where they would show him the figures ?
– No. When I saw the same people here I said to them, “ You have not given me that information yet.” Some other conversation followed which showed me that I was not likely to get it. I resent altogether the suggestion that I would come here and make a half statement of that kind.
– I believe the statement the people made to me.
– Now we have the position. The honorable senator did hear it from them. The committee has either to accept my direct statement or the hearsay statement that Senator McGregor cannot vouch for. I am quite satisfied to leave the matter to the judgment of the’ committee.
– After my researches with regard to this item, I think I can give the committee some information on the very important point as to what themanfacturers are making out of the enormous difference between the excise and the import duty.
– What difference does the honorable and learned senator refer to ? The difference of 9d., of 2s. 3d., or of1s. 3d.
– I am speaking of the difference which obtained in the past. We can also easily compare the profit made under that difference with what is likely to be the profit. We can also estimate what is derived by the manufacturers from the increase of the excise duty which Senator Clemons proposes. In the course of my reading upon this question of the tobacco duties, I found that the Treasurer was asked repeatedly in another place if he could give any facts from his own knowledge which showed that the duty proposed by the Government and the excise which they submitted would give only a fair protection to the tobacco manufacturers. My right honorable friend, the Treasurer, said more than once that he was quite unable to obtain from the persons interested any information as to their profits which would enable him, as the Minister in charge of the financial measures, or would enable the Minister for Trade and Customs, to answer the very proper inquiries made by honorable senators. I thought that was a very extraordinary thing, but I looked upon it as one of the disadvantages of protection - that men who ask the general body of the ratepayers deliberately to submit to a duty, not for the purpose of obtaining revenue, but to put money into the pockets of manufacturers, should not supply the Treasurer with information as to their profits. Of course I could quite understand that a man would not be very anxious to disclose his profits if the)’ were large. But in coming to Parliament and expecting honorable mem: bers in accordance with their conscience and their judgment to give him a fair and reasonable amount of protection, it is a man’s bounde’n duty to disclose his “balance-sheet and let us see what protection his industry wants. If we are here to consider the revenue on the one hand and to give a fair amount of protection to . established industries on the other, we ought to have this information. I was so struck by this statement of the Treasurer that I went to him direct and said - “Have you now got what you said you could not get when this matter was before the House of Representatives V My right honorable friend, Sir George Turner, said - “ No, it has never been given to me to this hour.” Compare that with the statement of Senator Millen, who has very properly said that lie would vote for a difference of 9d. instead of (id. between the excise and the customs duty if those interested in the industry could show him that it was wanted, but that he could not get the information from the trade. The inference is that the large tobacco manufacturers are deliberately keeping back and refusing to disclose their profits at a time when it is their bounden duty to let us know what those profits, amount to. But there are a certain number of shareholders and directors in this country, some of whom may have a more tender conscience than others, when they have been twitted with not disclosing the information required and have been asked by honorable member’s in another place what their profits were. “Will honorable senators be surprised to hear that in one year one company made £50,000? Will the protectionists, including Senators McGregor and Barrett, be surprised to know that last year they made about £62,000 ?
– Is it true ? Senator DOBSON. - If it is not true my statement can be contradicted to-morrow morning, if honorable senators are not in a position to contradict it now.
– Can the honorable and learned senator state what profits the importers have made ?
– That has nothing to do with this question, which is whether the excise shall be increased by 3d. per lb., giving a further revenue of about £119,000 per annum, and increasing the estimated revenue of £940,000 to£l,065,000. Tasmania being a State which sadly wants revenue will gain several thousand pounds per annum if Senator Clemons’ motion is carried. I am therefore bound to support it. While I desire to conserve a reasonable degree of protection to industries that are not flourishing, the information I have is that the motion of Senator Clemons, if adopted, will give to the large manufacturers a most reasonable protection, under which they can carry on their business at a very good profit. Senator Barrett will “ poke me up “ with the fact that two or three tobacco manufacturers have gone insolvent. That may appear to him to be a conclusive argument against the case I am advocating. To me it appears to be nothing of the kind. It is simply history repeating itself. We have had the same thing over and over again when the imposition of enormous Customs duties have induced men without capital, without brains, and without technical skill to embark upon industries. In a few months they went insolvent, their bills were dishonoured, and the bankruptcy court was full of them. There are failures in every trade. Bear in mind that the protectionists have been in the habit of “ collaring “ the Parliament of Victoria for a long time past, and by means of high duties this State has encouraged men to enter into industries for which they had neither the capital nor the brains to qualify them.
– To the benefit of the consumer.
– It was not to the benefit of the consumer, nor of the State, to establish industries upon a false basis, and drive those who established them into the bankruptcy court. Senator O’Connor says that the tobacco manufacturers have to pay duty upon some of the ingredients which are put into the manufactured leaf. But I have it from Dr. Wollaston himself that a considerable quantity of the ingredients which are put into the leaf are free. Therefore the duty paid by the manufacturers is not so great as it would otherwise be. Then I am told that under an express decision of the Collector of Customs the whole of these ingredients when imported by tobacco manufacturers are admitted free. Therefore I think that Senator 0’Connor was a little out in his facts.
– I stated exactly what the position was - that the duty is charged not on these ingredients, but upon the quantity of tobacco which the manufacturers make. That is to say, all that they add to the tobacco is charged against them. I pointed out also that I did not take the ingredients into consideration in any way in considering the margin.
– The fact remains that these ingredients are admitted duty free, and therefore it cannot be said that the manufacturers pay duty upon the ingredients which enter into the manufacture of the tobacco leaf, and help to make a larger quantity of tobacco from a smaller quantity of leaf. Then when Senator O’Connor was trying to argue in favour of his contention that the excise should stand “,s proposed, he said that the duty in New South Wales was 9d. in the £1, the same protection as the Government are now asking for.
– I did not say that ; I said that the margin of difference was 9d.
– But the margin of difference in New South Wales was upon a duty of 3s. 3d. per lb., whereas the difference here will be upon a duty of 3s. per lb. The honorable and learned senator forgets that the extra 3d. per lb. makes all the difference. By taking off the extra 3d. we shall greatly enlarge the number of purchasers, who will then be able to afford to buy more of the cheaper tobacco. Therefore the large margin of 6d., which Senator Clemons proposes, is quite as effective on 3s. as is 9d. on 3s. 3d., simply because there will be more purchasers of the colonial article under the lower duty. Then it has been stated that Messrs. Cameron Bros, are large importers. These statements are made with a view of influencing tlie votes of honorable senators. In legal matters, when we have a brief put before us, we always assume that it is true until we have heard the other side; and I daresay that Senator Barrett, who has had a good many briefs put into his hands lately by the protectionists - and has made admirable use of them - has come to see that a great many of the points contained therein are absolutely incorrect.
– Has the honorable and learned senator had any briefs from the importers ?
– I have nothing to do with the importers! We have been considering the importers to a large extent up to the present, but now Ave have the manufacturers of tobacco to consider. I have been told that Messrs. Cameron Bros, do little or no import business, and that almost the whole of their profits are made out of manufactured tobacco. It is greatly to be regretted that statements of this kind should be made.
– Where do they get their leaf 1
– They import the Virginian leaf of course ; and that brings me to another . point. The imported leaf is far better than the local leaf for the manufacture of tobacco. I have seen figures showing that the growth of local leaf is falling off. It is not so good as it Avas thought to be, and is not so largely used as it formerly was. Yet here are our protectionist friends trying to back up an industry when the common sense of the manufacturers tells them that although the local leaf can be mixed Avith the imported leaf it is not so good in quality. I hope Ave are not going to put up Avith a reduction of our revenue for the purpose of increasing the profits of tobacco manufacturers which have been going up by leaps and bounds. When I come to think of the loss from the duties on tea,, sugar, kerosene, and tobacco, I really donot know where my State is going to be. All- 1 can say is that it is not statesmanship, and it is not justice to the different States. While Ave are talking of justice and mercy to one particular industry, why should we altogether drive from our minds all idea of justice to a whole State and its people who cannot carry on unless we give them the revenue they require ?
– I propose first of all to deal with a statement I have heard made in reference to the profits made by Cameron and Co. I very greatly deplore any necessity to introduce into legislative debates the fortunes of any firm or- any factory. I do not know .that I can be charged with ever having done it myself before, and I do it now only by way of answer to statements which have been made.
– What about the brushmakers ?
– I have never before, except by way of answer, introduced the name of any firm or individual trader. Perhaps the honorable senator who has asked me that question may find that he and I may be sailing along the same track to-night. That is an event which is possible, because politics, like adversity, makes us acquainted with strange bedfellows. Senator Fraser has stated that he intends to vote for the motion submitted by Senator Clemons, because a certain statement made with reference to the affairs of Cameron and Co. met with no contradiction. I found, upon making inquiries at no great distance from the chamber, that it was possible to obtain some very definite information upon this point, and during the progress of the debate I have obtained that information from the fountain-head of knowledge with reference to the affairs of this particular company. I find that instead of a profit of £50,000, having been made upon a capital of £50,000 as alleged, that profit was made upon a capital of £250,000.
– Is not all that accumulated profit ?
.- Mr. Chairman, I draw your attention to the noise in the chamber. I think, that perhaps no higher honour could be paid to a member of any house of Legislature than an attempt to shout him down. What he is saying must be effective or there would be no occasion to try and shut him up. Honorable senators have made statements on one side, and I have obtained from the most authoritative source a statement in reply which I propose to submit to the committee. I take it that the committee is not so prejudiced that it will not hear both sides. I believe honorable senators are not afraid to hear the truth. I do not think that a British audience is afraid to hear the truth. The statement made to-me from this authoritative source is that the invested capital of the company is £’250,000, and that there have been for some eight or ten years no dividends whatever paid until last year.
– That is how the capital has grown.
.- Surely that is not a crime? We are dealing, not with the profits of a series of years, but with the profits alleged to have been scooped in in one year. It matters not how the capital is arrived at, whether by subscription or accumulation of profits. We have to consider, in view of the statement made to the committee, what the profit was in a particular year, and upon what capital. The capital in this case, I say, represents an investment of £250,000, and a profit of £50,000 in one year upon that amount of capital is, I admit, a very handsome profit. It amounts to 20 per cent. That is a gigantic profit, but still a profit of 20 per cent, is surely a very different thing from a profit of 100 per cent., as alleged ?
– What are the accumulated profits ?
.- My honorable friend is really doing discredit to his own intelligence.
– Sir George Turner asked for their balance-sheets, and they refused to supply them.
.- If the honorable senator will only possess his soul in patience for a few minutes, I shall satisfy him on that point from ‘first-hand information. I grant that- a profit of £50,000 is a profit of 20 per cent, on £250,000, but that is very different from the profit of 100 per cent., as alleged by Senator Clemons.
– I say that the honorable senator’s statement is absolutely inaccurate.
.-I have no desire to drag the names of persons into the debate, but I may say that I have this information first-hand from Cameron and Co. I shall deal with all the points to which honorable senators have referred, and they shall find that I am not going to scamp the matter. I come now to the question whether Cameron and Co. were willing to have an examination on the subject. One statement has been made by Senator McGregor which has been point-blank denied by Senator
Millen, and I think I shall be able to supply the missing link which will explain the difference between those two very high authorities. I may say that the information I have was not given me by way of explanation of the difference of opinion between those two honorable senators, as it was given to me before Senator McGregor spoke. The fact is that tlie offer made by Cameron and Co. to Senator Millen-
– No offer was made.
-Col. NEILD. - Perhaps it was not conveyed. It was a verbal message, I believe.
– No message reached me.
-Col. NEILD. - I can only say that I am informed on the best authority that Messrs. Cameron’s offer was this : Send an accredited public accountant, or some other independent authority, and he shall examine the books and see for himself.
– No message of that kind or of any other kind ever reached me.
– I accept my honorable and learned friend’s statement implicitly. I have no possible reason to suppose that either Senator McGregor or Senator Millen would make any misstatement in this matter, but where messages have been passing, it is the easiest thing in the world for a misapprehension to arrive, and the exact conditions of an offer to be misunderstood. Now, as to this £50,000 profit. Did Cameron and Company make £50,000 profit in any one year except last year ? Will that be alleged ? Last year the profit made was not made in manufacturing at all. This unusual profit was made as the result of speculation connected with the introduction of an entirely new system of customs and excise taxation. That is the whole explanation of the abnormal profit of 20 per cent, made by this firm last year. When Senator Clemons was speaking - with the recollection of a few years ago in my mind - I asked him the question - “Were you ever a shareholder in a tobacco company 1” I got a reply which indicated that I was an interested party in the tobacco .business debate. I do not desire to pursue the matter any further than is necessary.
– It must be owing to the honorable senator’s” extreme susceptibility. I may say at once that I never meant anything of the sort.
.- Although I have been a quarter of a century in public life, I have not cultivated so pachydermatous a hide as some people possess naturally. I may in this matter reply to Senator Pulsford to a certain extent.
– The honorable senator had better give us his protectionist views now. He is voting protection, and he knows it.
– I think that is a very improper observation. If it is not improper it is at least impertinent. My honorable and learned friend, need not be- so sore. We have voted often enough together. He need not be so previous, because I have not said yet how I am going to vote upon this motion. Let me say that I am not going to be dragooned into voting, whatever vote I give. Senator Pulsford made the statement that tobacco factories had not been a success when the capital invested had not been sufficient. There was a very profitable tobacco manufacturing business in Sydney some twelve or fifteen years ago. It was floated into a large public company with apparently abundant capital, and having as directors some of tlie best known men in Sydney mercantile life. I had not been a member of the Federal Parliament long enough then to lose my money, and I invested a little in this company. I took some shares when the company was floated, and held them long enough to sell at a profit. Some relatives of mine, on my recommendation, put money into the same affair, but with what result ? With the resuit that whilst acting under a power of attorney, and subsequently as an executor a,nd trustee, I drew what refund of capital there was in a hopeless break down ; and on behalf of those whom I represented I drew the splendid sum, so far as my memory serves me, of 5s. 3£d. in the £1 on several hundred pounds’ worth of shares. That convinced me in the most practical manner that a tobacco business in apparently wise and experienced hands need not be all gold, no matter how much it may glitter on big posters at railway stations. I have not been a shareholder in any tobacco company for at least a dozen years, and I do not possess the remotest possible interest in connexion with the industry. In New South Wales a couple of years ago every man who was not either a fool or an idiot knew perfectly well that the establishment of federation meant the abolition of its national free-trade policy. I was one of those who opposed the acceptance of the Constitution Bill on account of its containing the
Braddon Wot, and its absolute destruction of the policy which was dear to us. . We were urged by its advocates to accept the measure. Why ? Because though we were to lose our fiscal policy, that loss would be made up to us by the splendid factories which were to stud every acre or square mile of the State, and to make for our national prosperity. That did not humbug me, but it humbugged thousands into giving a vote which they would not give to-day if the)’ had the chance. The moral of my observations is that the free-traders from New South Wales have to accept a policy which is so highly -protective that we have been deliberately proposing duties of 20 and even 25 per cent, ad valorem, and 300 per cent, specific. When free-traders will advocate and vote for duties as high as 300 per cent., what paltry nonsense it is to profess that we are now to be seized with a spasm of free-trade virtue, and hack to pieces the few industries that are left to a State which has suffered more than any other by the reversal of its fiscal conditions and the destruction of ite traditional policy ! I am not going to do it. It may be said by some extremists that I am not true to freetrade. I am aware that as a free-trader what I am saying is heteroclitical, but I cannot help that, because I have had taken from me the policy in which I believed, and now it is a question of degree, and not a question of principle. I shall not vote in favour of protection for the industries of Victoria and other’ States, and deliberately set to work to take away every shred of fiscal advantage from industries which flourish in New South Wales. I heard an honorable senator ask to-night whether tobacco leaf is grown in New South Wales. It is grown very largely, and the quality of some of the leaf is so high that it fetches, I am informed by reliable authority, as much as ls. per lb., and most unquestionably that price is paid by manufacturers. It stands to reason that if we make the business of manufacturing less, and decreasingly unprofitable, we in the same manner reduce the interest and the advantage of the local grower. One of the reasons which have been given in favour of this motion is that more revenue is wanted. . Some of those who voted with me yesterday not to put a duty on tea because additional revenue was not necessary are to-day advocating the absolute need for increasing the revenue by means of a higher excise on tobacco. I cannot change as quickly as that. I must have a little more than 24 hours in which to “jump Jim Crow.” I had the honour of voting with the same honorable senators a week or two ago on another item of the same class. We would not put any further duty on kerosene because it was not right to place an additional and unnecessary burden on the people. Yet suddenly it seems that some of these honorable senators have discovered that it is the most justifiable thing in the world to place a further burden on the people in the form of a higher excise duty on tobacco. I am not going to stultify my votes with regard to tea and kerosene by giving a vote which means an increase of burden on the people, and an absolute attack on one of the large natural industries of my own State.- During the consideration of the Tariff, I have moved more motions for a reduction of duty than perhaps has any one else in the Chamber except Senator Symon. But what support did my motions receive t I doubt if I was able to find one honorable senator who would vote with me to reduce the duty on oatmeal below 45 per cent. Again when I desired to reduce the duty on biscuits, Senator Millen made a splendidly fervid speech in opposition to my motion - why? - because he said that since a certain amount of dutiable sugar was used in the manufacture of biscuits it was but right that there should be a countervailing duty on biscuits. I do not know that the percentage difference in that case would be any less than the difference between the import duty and the excise duty on tobacco. By way of interjection, Senator O’Connor answered a proposition of which I had a note, and that was in answer to Senator Pulsford on the free introduction of a large number of assorted articles used in connexion with tobaccomaking. I certainly had no idea that tobacco contained perfumery, glucose and starch, and a dozen other things. Senator O’Connor very accurately pointed out that these articles, if they come in duty free, do not leave the bonded warehouse except on payment of excise duty. Surely no one wishes to tax an article twice. There is a vast difference between taxing the articles which are to be used in a bond in the production of an article which is subsequently to pay an excise duty and the free importation of articles which are to be used in the making of . goods such as boots, shoes, or hats, which are’ to pay no excise duty. I have some information, obtained from the Customs department, which throws a side light on the profits of Cameron Bros and Co., of which we have heard so much. As showing the margin of difference that obtained under the old States Tariffs of customs and excise, I would point out that in New South Wales there was a margin in favour of the locally-grown leaf of1s. 9d. per lb., and of 9d. per lb. in favour of the imported leaf. In Victoria in favour of the locally-grown leaf there was a margin amounting to 2s. 3d. per lb. That was something for Cameron Bros, and Co. to work upon, while in favour of the imported leaf the margin of difference was 1s. 3d. per lb. In Queensland the margin in favour of the locally-grown leaf was no less than 3s. per lb., and that in favour of the imported leaf but1s. per lb. In South Australia the margin. in favour of the local leaf was 2s. 9d. per lb., and that in favour of the imported,1s. 4½d. No figures appear to exist in regard to Tasmania and Western Australia. Perhaps at the time’ I speak of there was no manufacture of tobacco and no leaf grown in those States. If we take Victoria, Queensland, and South Australia, we find that the average margin of difference in favour of the locally -grown leaf amounted to 2s. 8d. per lb., while that in favour of the imported leaf was1s. 2½d. per lb. These figures show that there was a margin of difference in the past, at least as substantial as is proposed in the Tariff as it reaches us from another place. This particular proposal, like others, is fathered by the Government, but it is really the decision of another place. While I am prepared to stand up for the rights and powers of the Senate to the fullest extent where it is justifiable to do so, I am not prepared actually to trail my senatorial coat and beg honorable members of the House of Representatives to come and tread on it, in order that I may have a row with them’. I am not prepared to seek a conflict with the other Chamber upon a complex question of this kind, which involves acustoms duty and an excise duty, and all the varying conditions of production and manufacture in the different States. I am not prepared to seek a conflict in a matter which is one eminently for considerate adjustment, and not for mere theoretical pounding, particularly as we are not at this stage called upon to deal so much with broad principles as with the details of the exigencies of the position and circumstances in which we find ourselves. In my speech, possibly, I have given offence to some honorable senators, who have such extravagant notionsof free-trade that they will stick to, and scramble for any rag that happens to fill their thoughts as a representation of principle. But I cannot help it. I have already laid down, and if need be, I must, in self-defence, re-enunciate it, we have reached a stage in the discussion of the Tariff, and of the excise proposals, in which the broad lines of principle have so disappeared, under the whittling influences of” expediency, that I am prepared to accept that position as being one which I have not created ; but to which I have been compelled most unwillingly to bow, as the decision of the great constituency of the Commonwealth, against which I cannot struggle for ever. I am as positively true to the principles of free-trade as I can possibly be, and no protectionist will accuseme of having played a protectionist game of any kind here. I have been rational in my. free-trade principles, and I am not going to take up an entirely different attitude suddenly, and shout and how] for a principle which I know I have ho power to put into force.
Senator CLEMONS (Tasmania). -We must all be tired of talk, especially when it is turgid, and I am not going to make a. long speech. I make this statement with the full knowledge of what I say, that the capital of Cameron Brothers and Co. consists of £50,000 in 50,000 shares of£1each. I do not refer to the so-called capital that they may have saved, and which simply represents the accumulation of profits, but to capital in the proper sense of the word.. It is known that they had made £100,000 of additional profit on their £50,000 of working capital up to the end of 1900, and I can quite Gonceive that they have sincemade larger profits, which would bring their total amount of available money up to £200,000, or possibly £250,000. I wish to, read the following letter : -
Department of Mines and Agriculture,
Sydney, 28th June, 1901.
Date of letter under reply. - 21st of June, 1901.
Subject. - Asking the price realized ‘by local growers of tobacco for best medium and lowest sorts.
Reply. - The Chief Inspector of Agriculture reports - “As far as can be ascertained, last season’s prices were 4d., 2Jd., and Id., but local best is at present time practically unsaleable at any price.” ‘
The letter is signed by Mr. D. C. Mclachlan, then under-secretary for the department, but now Public Service Commissioner for the Commonwealth. Having quoted the price of home-grown leaf, I simply wish to point out that we have an import duty of ls. 6d. per- lb. on the imported leaf - a protection which the local article must always have if the excise duty be £10 or 10 farthings per lb.
– At this very late hour I do not propose to go into the matter at any great length, but there are one or two points which I think should receive particular attention. One is that Senator Dobson and Senator Clemons appear to be always crying out about the loss which Tasmania, is likely to suffer: but that State will secure as much as will any other State of the benefits which must undoubtedly accrue from the establishment of the Commonwealth. For the purposes of illustration I would point out that we have imposed a duty of 6d. per lb. on hops, which I believe can be grown in no part of the Commonwealth save Tasmania.
– We imposed that duty to encourage the growth of hops in Victoria.
– Tasmania has the whole of the Commonwealth market, and that has a great deal to do with its prosperity in the future. These honorable senators talk as if Tasmania were going to the dogs, but two industries alone - her fruit and jam trades - are likely to be a source of :great prosperity to her people. Senator Clemons predicts that if we encourage the local manufacturers of tobacco to the extent proposed in the schedule, a gigantic trust will be formed. If these various manufacturers combine in one huge trust, is it not better that -we -should have them amongst us, so that we may control and regulate their business or take it over as a States and a Commonwealth monopoly than that they should combine outside? The committee has been appealed to by tlie local tobacco operators, and surely the 2,500 who are engaged in the Commonwealth in the manufacture of tobacco, apart from cigarettes or cigars, deserve some consideration. Senator Millen and certain other honorable senators are prepared to do these workers an injury, because, undoubtedly, they will be thrown out of employment if the margin is reduced. The margin proposed in the schedule is the lowest in the whole civilized world. Do honorable senators ever take the trouble to go into a tobacco factory and see the operatives at work ? It is a most uncongenial, and to a large extent, an unhealthy occupation ; but the operatives have to follow it, either because they cannot obtain work in other avocations, or because thev took to it originally on account of advantages, real or supposed, which the industry was believed to possess. These operatives will, undoubtedly, have their wages reduced in some cases, and in other cases they will be turned out of employment altogether. If the free-traders will at any time join us in endeavouring to make the manufacture of tobacco a State monopoly throughout the Commonwealth, we shall be glad of their votes. But since we cannot expect that from them we must do our best to protect the local manufacturers and enable them to compete against foreign makers. The debate has occupied a long time. Senator Neild took up a considerable portion of that time, but we welcome him and his colleague, Senator Gould, as at last assuming a reasonable attitude with regard to the Tariff. Both honorable senators are now adopting the protectionist platform, and have been speaking on behalf of local manufactures. Once before, in connexion with the soap industry, they ventured into the protectionist fold, and we welcome them once more in connexion with tobacco. “There is more joy over one sinner that repenteth than over ninety-nine just persons who need no repentance.” Senators Millen and McGregor have had a slight passage of arms with regard to Messrs. Cameron Brothers. Whether Senator Millen is right or wrong I do not know. It may be that what Senator McGregor has said is not literally correct.
– Nor is i.t correct in effect.
– When Senator Millen denied Senator McGregor’s statement this evening, I was sent for by Mr. Stanley and Mr. O’sullivan, one of whom is the president, and the other a member of the Tobacco , Workers’ Association. They have signed this statement -
We, the undersigned, hereby declare that, on behalf of Messrs. Cameron Brothers, we invited
Mr. Millen to go to Messrs. Cameron Brothers with an accountant, or any other person who desired to receive full information of the cost of the manufacture of tobacco by that firm.
– It is an impudent lie. I say that they are impudent liars.
– I would point out to Senator Higgs that Senator Millen has already given a denial to that statement, and that denial must be accepted.
– Personally, I should prefer that the honorable senator should be allowed to make his statement, ,and I shall claim the right to say a few words afterwards. -Senator HIGGS. - Senator Millen characterizes this statement as an impudent lie, and so forth. But he reflected to a considerable extent on Senator McGregor. “Was I going to stand by and say nothing when I was sent for by two men who are prepared to come to the bar of the Senate, or to make an affidavit as to the truth of what they have said 1
– I can only refer the honorable senator to the usual parliamentary practice, which he knows.
– Does it apply in a case of this kind ?
– It is only charitable to say that I am prepared to believe that a mistake has been made. I am not willing to characterize these two men, one of whom holds a responsible position in his trades union, being president of the Tobacco Operatives Society - and he would not occupy that position unless ho had the confidence of the fellow members of the trade - with making an untrue statement. But at the same time, I am willing to believe that there may have been a mistake, and that Senator Millen did not understand that he was invited to go to the factory of Messrs. Cameron Brothers. I do not intend to occupy any more time, as these speeches are not calculated to turn any one’s vote. Senator Pulsford has given us such a mass of figures, and has twisted and turned them about in such a way that one might have shut one’s eyes and imagined him to be dressed up in stars and spangles and juggling with figures like a conjurer in a circus. The .majority of honorable senators will probably be influenced by other considerations. I trust that, however narrow the majority may be, we shall succeed in securing the duty proposed by the Government. 41 k 2
– I must say that I have taken much to heart the statement made, and repeated tonight, concerning me. Since the statement was originally -made, I have been thinking over the events, and as the result I have been enabled to call to mind two or three incidents which absolutely confirm, not only to my own mind, but to the mind of any fair man, the statement I have made. What I say is that neither of these men told me that they had a message to convey to me from Messrs. Cameron Brothers. It is quite clear that they could not have given me a message from Messrs. Cameron Brothers. After my first interview with them, on one or two occasions I saw them in the lobby outside the Chamber, but they never approached me, or spoke to me at all. I saw them several times, and on one of these occasions I went up to them and spoke to them. If they had had a message to give me from Messrs. Cameron Brothers, they would have brought it to me ; and the very fact that they never spoke to me until I went up to them and spoke to them, clearly proves that they never had a message to give to me.
– Several things have been said, to which I think it is desirable that at least a brief answer should be made. I want to say something about New South Wales tobacco. Senator Neild is quite mistaken in the remark he has made. I would refer honorable senators to the Statistical Register of New South Wales, where they will see that the quantity of New South Wales grown tobacco used in that State is decreasing year by year. In the year 1900 the quantity of New South Wales tobacco used was less than in any one of the preceding ten years.
– Does the honorable senator think that that is something to gloat over ?
– That brings me to the matter which Senator O’Connor himself has been dealing with, and about which it appeared to me that he was trying to throw dust in tlie eyes of the committee. I stated that nearly 1,000,000 lbs. of local tobacco and other materials was added to the imported tobacco when manufactured, and that this material did not pay anything in the way of import duty. Consequently, I urged that the difference between the duty paid by the importer and the excise was not simply 9d., but nearly ls. 2d. per lb. This is the exact fact ; and the statement of New South Wales tobacco grown and used in the year which I originally mentioned, and which Senator O’Connor attempted to ignore, is confirmed by the figures in Coghlan. In regard to Messrs. Cameron Brothers, Senator Neild stated just now that it was not to be expected that any firm would produce its accounts for inspection. I think it is reasonable to expect that when firms are willing to receive what is practically public charity, and when they wish to reap from the State certain advantages, the State shall be entitled to ask them for the fullest information. This information has not been forthcoming, and has been continuously refused. Senator Neild has stated also that when New South W ales entered into federation there was no one in the State who did not know that New South Wales had thrown over free-trade. On behalf of one free-trader in New South Wales, I utterly repudiate that statement. The New South Wales freetraders intended to fight as hard for their principles on the broader freehold of Australia as they had fought previously in the smaller field of New South Wales. Certainly, in the electoral campaign in New South Wales, Senator Neild professed himself to be a free-trader, and was elected on the expectation that in the Senate he would, on all occasions, assist myself and others in obtaining as near an approach to free- trade as we possibly could get.
Question - That the House of Representatives be requested to amend the schedule by adding to the duty, “Tobacco, viz., Manufactured, per lb.,1s.,” the words, “and on and after 1st August, 1902,1s. 3d.” - put. The committee divided -
Ayes … … … 9
Noes … … 11
Majority … … 2
Question so resolved in the negative.
– I do not desire to delay the committee more than three minutes in submitting the motion, of which I have given notice. I move -
That the House of Representatives be requested to amend the schedule by adding to the duty - “Tobacco, viz., Manufactured, per lb.1s.,” the words, “and on and after 1st August, 1902, that an allowance of 3d. per lb. in the excise on tobacco be allowed as a rebate where such tobacco is the product of Australian-grown leaf, or a proportionate allowance to the amount of leaf used; such rebate to be allowed on the production of a certificate, signed by an officer duly appointed, to the effect that the leaf has been grown by white labour in Australia, and a certificateby the excise officer that the leaf has been used in the manufacture of the tobacco for which the rebate is claimed.”
Although Senator Pulsford has declared that the tobacco industry has gone down to some extent in New South Wales, we know that in Victoria it has gone up to some extent. According to the statement of some honorable senators, the price obtained for tobacco leaf grown in NewSouth Wales has been only from 4d. to 5d. per lb; but I know of some tobacco leaf grown in the King River district which has been sold to a tobacco manufacturer in my own State at 8½d. per lb. That shows what can be done when the proper people are engaged in doing it. As Senator Pulsford is probably aware, the growing of tobacco in New South Wales is chiefly carried on by Chinese and other aliens. I believe that white people would be more successful in the growth of tobacco, because they better understand the treatment of the leaf after it has been grown. I do not think I need go into the merits of the case. The question of the relative merits of white and coloured labour has already been dealt with in connexion with the sugar industry. I propose this motion for the purpose of giving our own tobacco growers, our own producers, and farmers engaged in the industry in Victoria, South Australia, and some few in New South Wales, some encouragement. I have no doubt there is plenty of room in other States for the growth of tobacco by white labour, and that will be encouraged if the rebate I suggest is granted.
– We all recognise the honorable senator’s motive in moving this motion, but I think it is not practicable to carry out what he proposes at the present time. In the first place, this principle of rebate is rather unusual in legislation, and is rather difficult of application. It was applied in the case of sugar-growing for the express purpose of encouraging the growth of sugar by white people, and to encourage those who employed kanakas to get rid of them at the earliest possible moment. It was to aid the solution of that particular problem in Queensland that this remedy was applied. In applying it in the case of sugar we were dealing with an established and flourishing industry, and there is no difficulty in the application of the principle in that case. We were also dealing with an industry in connexion with which there are already employed a large number of officials who can perform the duties connected with the application of this principle of rebates, in addition to the other duties which they have to perform. The case here is very different. The tobacco-growing industry is in a very critical position in some of the States. Its success depends largely upon the nature of the seasons, and in the State of Queensland at the present time it is in a somewhat critical position. The effect of a restriction of this kind upon the production of tobacco would undoubtedly be ‘to very greatly hamper the operations of theindustry, and I am very much afraid it would have a detrimental effect upon the whole tobacco industry. I am afraid that in New SouthWales, where the industry is not in a flourishing condition, this proposal would not be found to be successful. I may mention that in the matter of administration it would be somewhat costly to cany out such a proposal, because it would be necessary to have officers stationed on all the little patches of country in Australia on which tobacco may be grown, and consequently the expense of administration would be altogether too great. When the growth of tobacco assumes much larger proportions, as I hope it will, and the industry becomes established, it may be possible to apply this principle. But at the present time, for the reasons I have stated, I think it is quite impracticable.
– I do not altogether agree with Senator O’Connor that it is impracticable to carry out this proposal. In the State of Queensland we grow a considerable amount of tobacco, and a large part of it is grown by Chinese labour. It is not a desirable thing to encourage that class of labour, and it is desirable to encourage our own white people to engage in the various avenues of production and manufacture.
– We must allow the Chinamen we have in the country to go into some occupation.
– That is true, but if we can encourage the growth of tobacco by white labour, by carrying a motion such . as that now before the committee, it is our bounden duty to do so. We have in Queensland several districts where the cultivation of tobacco has been carried on for a considerable length of time. Its cultivation was increasing very largely up to the time when the excise duty was increased. ‘ We tried in Queensland a higher excise duty, but it absolutely failed, and we had to go back to a reasonable duty. The question as to how best to encourage the cultivation of tobacco by white labour is one which has for some time baffled those engaged in public life in Queensland, but I think the motion submitted by Senator McGregor will, if carried, have a stimulating influence in that direction. We have, according to the laws in force in Queensland, certain officers appointed to carry out inspection connected with the excise, and licences have to be taken out. These officers could look after this matter of rebates as well, and the additional cost of administration would be infinitesimal. I do not see that there is anything impracticable about it, but I think it is an excellent proposal which should be accepted by the committee with a view to encouraging white men to engage in this particular branch of agriculture.
Question - put. The committee divided -
Ayes … … … 10
Noes … … … 11
Majority … … 1
Question so resolved in the negative.
Motion (by Senator Clemons) put -
That the House of Representatives be requested to amend the schedule by adding to the duty, “ Cigars, per lb.,1s. 6d., the words, “and on and after 1st August, 1902, 3s. 6d.”
The committee divided -
Ayes … … … 9
Noes … … … 11 .
Majority … … 2
Question so resolved in the negative.
– I move -
That the House of Representatives be requested to amend the schedule by adding to the duty, “ Cigars, per lb.,1s. 6d.,” the words, “and on and after 1st August, . 1902, 2s. 6d.”
The import duty on cigars may be taken at about 7s. per lb., and the import duty on the leaf, and the excise duty, even supposing that all imported leaf is used, come to only 3s. per lb. In the case of. tobacco we have been fighting about a difference of 9d. per lb. between the import duty and the excise duty, but in the case of cigars, I propose to leave the enormous difference of 3s. per lb.
Question put. The committee divided -
Ayes … … …10
Noes … … … 11
Majority … … 1
Question so resolved in the negative.
– I suppose it is absolutely unnecessary to call for a division on a motion for arequest to reduce the duty on cigarettes. I certainly think that in the interests of revenue it ought to be increased, but I do not intend to go through the farce of calling for a division when there is always a majority against my side. I believe that in connexion with the manufacture of cigarettes there are special reasons why even honorable senators who cannot get additional revenue by increasing the excise duty on other forms of tobacco may, perhaps, expect to get additional revenue by increasing the excise duty on cigarettes, but I do not. intend to submit a proposal. .
Schedule agreed to.
Bill reported without amendment report adopted.
– I am sure that I shall have the assent of the Senate in moving the suspension of the standing orders. There is nothing more left to be done with regard to the Excise Bill except the formal motion for the third reading. I move -
That so much of the standing orders be suspended as would prevent the Bill from passing through its remaining stages at the same sitting.
– I object.
– No honorable senator can object unless there is an absolute majority against the motion.
– In view of the attitude taken up by the Senate on former occasions when the suspension of the standing orders has been moved, we arc entitled to some explanation for the course now proposed. I am not prepared to say whether I object to the motion as submitted, but I claim that we are entitled to know the facts which have induced Senator O’Connor to take this extraordinary course.
– If the Vice-President of the Executive Council is of opinion that we can finish the business to-night, I think the motion might be allowed to go, but if he believes that it will be necessary for us to come here to-morrow I fail to see why we should sit any longer.
– When we entered upon this debate it was considered that the Customs and Excise Bills should practically form one measure and be token together. I think it is desirable that the Excise Bill should not be finally disposed of. We should keep the Excise Tariff Bill within the power of the Senate.. Therefore, I object to the suspension of the standing orders.
Senator CLEMONS (Tasmania). - I should like to draw the attention of the Senate to the standing order in question which begins -
In cases of urgent necessity any standing order or orders of the House may be suspended.
I have reason to concur in the remarks made by Senator Millen, and out of courtesy to the Senate, Senator O’Connor should show us what the case of urgent necessity is. I agree that there may be many members of the Opposition who would be inclined to support the motion if a good reason were given for it.
– The reason is that we want to get ridof the Bill.
– That is not the reason. If the Vice-President will show that by suspending the standing orders we shall finish the business-to-night, I will join with’ him, but so far as I can gather from the remarks made by Senator. Glassey, he cannot give any such promise.
– We know that the Government are anxious to clear up the business so far as possible, in order that the Senate may take a short recess, while another place is dealing with our suggestions on the Customs Tariff Bill. But that measure and the Excise Tariff Bill are to a certain extent running together. We have made certain requests in regard to the Customs Tariff Bill which may or may not be accepted by another place. We have requested, for instance, that on tobacco and cigars a specific rate, higher than thatproposed by another place, shall be imposed. The House of Representatives may refuse that request, and that may inducehonorable senators to reconsider the position in regard to the excise on tobacco. There is no reason’ why weshould rush the Bill through the third reading stage while the Customs Tariff Bill is incomplete. The last-named Bill’ will come back to us three weeks’ hence, and if we can arrive at an agreement with another place as to the form which it is to assume, the third reading of that measure and the third reading of the Excise Tariff Bill may be taken on thesame night: I urge honorable senators, apart from’ all other considerations, not to consent to the suspension of the standing orders for this purpose. I would urge them also not to-pass the third reading of the Excise Tariff Bill, until we know . what is done with the other measure. I hope that weshallpass the third reading of both simultaneously.If certain things happen, they will necessitate the re-consideration of some clauses of the Excise Tariff Bill, and although it has been reported, we can recommit it on the motion for the third reading. I am adopting this stand only as a matter of fairness, and I think the Senate will see that it is a reasonable one.
– I wish to point out to Senator Gould and others, that when the Excise Tariff Bill and the Customs- Tariff Bill came up to the Senate, the second reading of each measure was taken separately, and I assume that the third reading of each must be taken separately.
– But on the same night.
– As soon as the second reading of the Customs Tariff Bill had been concluded, a request was made that the second reading ofthe Excise Tariff Bill should be taken, so that both measures might go to the same committee.
– I want to keep them together now.
– No, the honorable senator does not. It is in connexion with the Excise Bill that the House of Representatives will consider Our amendments in the Tariff Bill, and it would give rise to a most peculiar position if we were now to hold back the former. In courtesy we should send the two Bills together, and when they come back we can judge as to what to do with them.
– The point raised by Senator Gould is one of groat importance, and should not be disregarded. The. two Bills do not stand on the same footing, because in one Bill we have mode amendments, whilst the other has been left without alteration. Had both Bills been amended, there might have been some reason for the proposal of the Government. For the purpose of adjusting differences between the two Houses, it may beadvisable to recommit the Excise Bill, and I do not see why we should deprive ourselves of the power.
– I did not anticipate that anything more would be required than to formally submit the motion, when it would be carried as a matter of course. But the question of whether the Excise Tariff Bill can be sent to the House of Representatives until we have finally dealt with the Customs Tariff Bill requires some consideration. I do not wish to go into the matter now, but to-morrow I shall be able to give strong reasons why theExcise Bill should be put into force as soon as possible. However, since this discussion began, the House of Representatives has adjourned, and as we have to meet to-morrow, I ask leave to withdraw the motion.
Motion, by leave, withdrawn.
In Committee (Consideration resumed from 22nd July, vide page 14469).
Resolved (on motion by Senator O’Connor) -
That the Chairman report -
That the Committee recommend that this Bill be returned to the House of Representatives, with a Message conveying the requests pf the Senate to the House of Representatives to make certain amendments in the Bill, as set forth in a Sched ule to the Message ; and
That the Committee have leave to sit again on receiptof a Message from the House of Representatives.
Semite adjourned at 11.15 p.m.
Cite as: Australia, Senate, Debates, 23 July 1902, viewed 22 October 2017, <http://historichansard.net/senate/1902/19020723_senate_1_11/>.