12th Parliament · 1st Session
The President (Senator the Hon. W. Kingsmill) took the chair at 3 p.m., and read prayers.
The following papers were presented: -
Norfolk Island Act - Ordinance No. 10 of 1931 - Liquor.
Naval Defence Act - Regulations amended - Statutory Rules 1931, No. 139.
Post and Telegraph Act - Regulations amendedStatutory Rules 1931, No. 128- No. 132.
Seat of Government Acceptance Act and Seat of Government (Administration) Act -Ordinance No. 21 of 1931- Seat of Government (Administration).
Effect on Primary Production - Wool Sales.
asked the Minister representing the Treasurer, upon notice -
– The answers are -
asked the Minister representing the Prime Minister, upon notice-
– The answers are - 1, 2 and 3. Statements ; on these lines have appeared in the press.
asked the Minister representing the Prime Minister, upon notice -
Can the Minister assure the Senate that the Government will not lend any assistance to a reduction of the present rate of exchange on London, or until the primary products now maturing and destined for overseas consumption are duly disposed of?
– The policy of the Government is to maintain exchange rates at the present level so long as the trade balance so permits. In the event of the trade position bringing aboutany reduction in existing rates, the Government will do everything possible to prevent a rapid fall or fluctuations in the rate.
asked the Minister representing the Minister for Defence, upon notice -
Whatis the estimated coatof the proposed visit of the Controller of Civil Aviation per aeroplane from Australia to London and back again?
– Three hundred pounds, which is to include transport in both directions, and all other governmental expenditure.
– I move -
That the bill be now read a second time.
This bill, which is purely of a machinery character, will apply to any excise on wine which may be imposed by Parliament. It is the intention of the Government, at a later date, by an amendment of the excise tariff, to provide for a specific duty on wine. It is not proposed, nor is it desirable, at this stage to indicate what rate of duty will apply. In 1930 this Government appointed the Honorable
John Gunn, Director of Development in the Prime Minister’s Department, and Mr. R. McK. Gollan, of the Department of Trade and Customs, to inquire into the wine industry in the Commonwealth, and. to furnish a report. The question was exhaustively dealt with, and one of the recommendations made in the report was in these terms -
That the present method of levying taxation on wine through an excise dutyon fortifying spirit be abandoned, and that in its steadan excise duty at the rate of 2s. per gallon be imposed on fortified wine when the wine is delivered fur home consumption.
Previous to 1918, the rate of duty on fortifying spirits was a nominal one, and was imposed to pay for the services of officers of the Customs Department. It was necessary that the mixing of spirit with wine should be closely supervised, and every operation was carried out in the presence of an excise officer. In 1918, the Government was in need of additional revenue, and a duty of 6s. per proof gallon was levied on spirits used in the fortification of wine. With the exception of dry sherry, fortifying spirit is used only in the manufacture of sweet wines of the port or muscat type.Fortifying spirit is not used in the production of dry wines of the claret or hock variety. In 1925, in order to assist the growers of doradillo grapes, the duty was reduced to 5s. so far as spirit made from this kind of grapes wasconcerned. The duty on spirit made from all other kinds of grape remained at 6s. per proof gallon.
Since 1924 a bounty has been paid on fortified wine exported from the Commonwealth. Up to March, 1930, the payment of this bounty was made from the Consolidated Revenue. Last year the duty on fortifying spirit was raised by 5s. perproof gallon, and it was provided that the amount collected at this increased rate should be paid into a trust fund from which payments for bounty would be made.
The present rates of duty on fortifying spirit are as follow : -
Item 2 (J). (1) Spirit for fortifying Australian wine distilled wholly from the fresh fruit of doradillo grapes, subject to regulations -10s. per proofgallon.
Spirit fur fortifying Australian wine, n.e.i., subject to regulations -11s. per proof gallon.
In 1918, when the duty was levied on fortifying spirit for revenue purposes for the first time, it was considered that this form of collecting a tax on wine was as simple as it was efficient. At that time it was so. Later, however, there was a great change in the economic conditions of the wine industry. Returned soldiers were established in vineyards on the river Murray and on the Murrumbidgee irrigation area in New South Wales. When the vines in the river Murray districts in South Australia came into bearing, the State Government assisted the. settlers to process the grapes by financing the establishment of wineries on a co-operative basis.
Duty on fortifying spirit was at that period collected at the time of fortification. The co-operative companies found that they were unable to finance the payment of duty on fortifying spirit at the time it was mixed with the wine. At their request they were allowed to fortify the wine in bond, and it was provided that the duty on the fortifying spirit should be collected when the wine was delivered for consumption. At the moment, nearly all fortification throughout the Commonwealth is carried out in bond.
Other concessions followed this arrangement, and ultimately racking, fining, blending, and other similar operations were allowed to “be carried out in bond. As the export trade grew, wine-makers were allowed to export direct from bond. All these operations had to take place under the supervision of excise officers, and the conditions necessary to protect the revenue became so intricate and irksome that the wine-makers’ business has been considerably handicapped.
When fortified wine is exported, the duty paid on the spirit used for fortifying it, is returned to the exporter. This transaction is termed a drawback of duty. It is not possible, however, to arrive at, the precise amount of duty which was paid on any particular “wine exported. It was necessary, in the circumstances, to provide for a flat rate of drawback which covered the average amount of duty cost of fortifying spirit in each gallon of wine. The flat rate provided as the duty cost of fortifying at the present rate of duty is 2s. 4d. per gallon of wine. In some cases, this amount is more than the actual cost; in other cases the amount is less than the actual cost.
There are no fewer than seven different rates of drawback. They deal with the various rates of duty and various classes of wine. Rebates on spirit extracted from lees of wine have to be provided for, and the department has always to be on the lookout for possible revenue leakages. Referring to this matter in their report, Messrs. Gunn and Gollan said -
These drawbacks, rebates and remissions relating to wine exported are necessary in order that the wine-makers and distillers may receive equitable treatment in the matter of having the excise duty already paid returned to them when the wine is shipped overseas, lt is very necessary that effective methods be adopted to supervise the exact quantity of wine dealt with so that the correct amounts of drawbacks, rebates and remissions may be given.’ All transactions have, therefore, to be earefully scrutinized by officers to make certain that the amount of drawbacks, refunds and remissions are properly due.
– Is that report available to honorable senators?
– Yea. With the removal of the duty on fortifying spirit as proposed in this bill, there “will be no need for drawbacks or rebates or remissions. The bill provides that all persons who produce grapes for use”* in the manufacture of wine must Deregistered. There is no fee for registration. This practice is followed also in connexion with the producers of tobacco leafThis registration is “necessary so that » complete record may be kept of the material from which the wine, subject to an excise duty, is made.
The bill also provides that no perso shall make wine unless he is licensed U> <!o so. The fee for a licence to make wine has been fixed at a nominal rate. Small wine-makers who store less than 50,000 gallons of wine may obtain a licence on payment of a fee of £1 a year. Winemakers who store over 50,000 gallons of wine will pay a fee of £5 a year.
Provision is made for the licensing of persons who desire, to receive and store wine for export. This will enable a merchant who is not a wine-maker, and who has built up an export trade, to prepare and bottle wine, which is subject to excise duty, and ship it overseas. This will be of considerable convenience to those “who intend to bottle wine for shipment to Canada. Since the making of the Canadian treaty, a trade in bottled wines has opened up with that dominion, and there is every indication that it will assume very large proportions.
In providing for the payment of duty on wine delivered for home consumption, it is intended that all duty shall accrue at the winery. Payments will be made weekly or monthly as may be prescribed. The -wine-maker will have to keep certain books which will reveal details of all the wine sent out of the winery.
At the moment there are large stocks of wine containing spirit on which excise duty has been paid. A. quantity of this will be used for home consumption, and a quantity will be blended with newer wines. It is intended that duty shall not be again levied on these wines, and provision is made in the bill that if any of<it is blended with wines subject to the wine excise duty, a refund will be made.
Entries will be required when wine is removed, but an exception is made where a wine-maker wishes to transfer wine from one winery to another when both are owned by him, and also when a wine-maker wishes to transfer wine from his winery to his distillery or his vinegar factory. In order to simplify the procedure in these instances provision is made that these transactions may take place under permit.
The bill gives to officers the common police powers necessary to carry out efficiently the provisions contained in the bill, and to protect the revenue properly. Officers will have access to the premises of persons licensed under the proposed act, and to the books kept by them. They will have power to enter and search premises where there is cause to suspect that illicit practices are being carried on. On reasonable suspicion they may stop and search vehicles or boats suspected of carrying wine upon which duty has notbeen paid. They may also seize and secure any wine which they have reason to believe is forfeited.
The changing of the incidence of the taxation on wine will have an important bearing on the wine industry. Previously wine-makers -were much hampered in their operations on account of the restrictions necessary to protect the revenue when fortified wine was manufactured in bond. The part of the winery where this was done had to be kept under lock. Every at which contained this wine had also to be securely locked, and nothing could be done excepting in the presence of an officer.
An excise duty on wine will give the wine-maker absolute freedom in the making and preparing of wine for home consumption. There will be no bonds or locks, the obligation being on the winemaker to pay duty on all the wine which is delivered for home consumption, and also to account properly for the wine which is delivered for any other purpose. The provision for duty to be paid weekly will suit the convenience of the wine-maker. Of course, the department will see that, in this respect, all transactions are sufficiently covered by a substantial security.
Before proceeding with the preparation of the proposals contained in this bill, the views of representatives of the different interests of those engaged in the wine industry were obtained. In every instance the proposals have been approved, and wine-makers will find that the provisions of this bill are of the simplest kind, and do not interfere unnecessarily with the main essentials of their . liberty.
The effect of the bill will be to remove the necessity of drawback, rebates, or remissions, because all wine for export will be delivered free of duty. It is also generally believed that the standard of winemaking will be raised, because in the past the use of fortifying spirit has been restricted on account of the high duty. The use of spirit is necessary in the manufacture of high-class sweet wine of such types as port or muscat, and winemakers, on account of the abolition of the duty on fortifying spirit, will be in a position to use the proper quantity of spirit required to make a first quality wine. In this way it is considered that the industry will receive a substantial benefit.
Debate (on motion by Senator Sir George Pearce) adjourned.
– I move-
That the bill be now read a second time.
The purpose of this measure is not the production of revenue or the encouragement of local industries, which are the primary objects of an ordinary tariff, but the rectification of our adverse trade balance, which could be no longer neglected, and was threatening Australia with national collapse by default overseas. By borrowing to the utmost, the late Government was able to defer the day of reckoning, but, with the cessation of overseas borrowing, the position became acute. This Government was, therefore, compelled to make drastic - restrictions, and by imposing absolute prohibitions, by rationing and by the heavy surcharge of 50 per cent., it has not only checked the drift but also commenced to make up the leeway. Australia now has a favorable trade balance, but it will be some time before we can cancel the adverse aggregate of £78,000,000 piled up by our predecessors. In this respect it must be remembered that mere equilibrium of trade will not enableus to meet our commitments, as there is a yearly interest bill of £30,000,000 to be paid. In the imposition of restrictions, difficulty arises in what may be described as borderline cases, as, in such instances, very good grounds for exemption may be adduced. If any honorable senator desires to attack any particular item, I hope that he will point out some other item on which, in his opinion, the restriction would fall more equitably. The volume of imports had to bo lessened. The general principle which has been put into operation is that articles which are luxuries, or of a kind produced in Australia, shall be prohibited, rationed or subjected to a surcharge of 50 per sent. I submit that these restrictions must be treated as inseparable from the Premiers’ plan, as the courses of action then approved, and since adopted, were chosen with full knowledge of existing circumstances. The promise of the banks to finance the deficits of the various governments must have been made by them partly by virtue of the fact that the imposition of these special duties would relieve them of the necessity for providing finance to meet overseas governmental commitments.
Debate (on motion by Senator Sir George Pearce) adjourned.
– I move -
That the bill be now reada second time.
Honorable senators are familiar with the various proposals contained in the Premiers’ plan for the approximate balancing of budgets for 1931-32. The suggested reductions in adjustable governmental expenditure, as estimated, left a gap still to be bridged before revenue would nearly approach expenditure. The rehabilitation plan provided, therefore, for the raising of additional revenue by increasing income tax, sales tax, and primage duty on imports. This Parliament has already passed legislation to reduce adjustable government expenditure, and to, increase income tax and sales tax. It now remains for Parliament to validate the primage duty of 10 per cent, which was imposed by resolution in another place. As this is purely a fiscal measure, and a portion of the plan for financial rehabilitation has been already approved by the Senate, I trust that it will have a speedy passage.
Debate (on motion by Senator Sir George Pearce) adjourned.
Debate resumed from the 17th November (vide page 1711), on motion by Senator Daly-
That the bill be now read a second time.
– As Senators Hoare and O’Halloran dealt, in the course of their remarks, with two other aspects of this measure to which I intended to refer, I do not propose to continue the remarks which I made last night.
Question resolved in the affirmative.
Bill read a second time.
The CHAIRMAN (Senator Plain).For the information of honorable senators, some of whom may not previously have had experience of dealing with a tariff schedule in . committee, I shall state the procedure to be followed in the moving of requests for amendments. Taking the duty in’ the schedule as the starting point: when it is desired to reduce the duty the lowest duty to be proposed will be taken first, then the next lowest, and so on. When it is proposed to increase the duty, the highest duty will be taken first, then the next highest, and so on.
Clauses 1 to 4 agreed to.
Clause 5 (Validation of collections under tariff proposals).
.- I take this opportunity to utter again my protest against the procedure adopted by the Government in imposing the duties set out in the tariff proposals. I stated at the second-reading stage that, in my opinion, and in the opinion of a great many people, the Government has flagrantly violated the law which was placed on the statute-book for the special purpose of controlling the procedure to be followed by a Minister before introducing any alteration of tariff duties.
The plea of urgency to meet an emergency has been advanced in justification of the Government’s action in connexion with this tariff. If the reason for tabling *tariff schedules without complying with *the provisions of section 15 of the Tariff -Board Act was that the matter was irgent, the honorable course for the Minister to take was to introduce a short bill, either to suspend the operation of that section, or to repeal it. Instead of doing that, the Minister went ahead, and tabled schedules in defiance of both the spirit and the letter of the law. The1 clause now before us seeks to validate the action that has been taken. Since I am strongly opposed to what has been done, and at no time will be a willing party to any unlawful act on the part of any government, I cannot’ support the clause. I feel that I should be unworthy of my place in the Senate if I allowed it to pass without making the most vigorous protest of which I am capable. I shall vote against the clause.
– Senator Payne has adopted an extraordinary attitude on many occasions-, but in connexion with this clause he has eclipsed all previous records. He said that had the Government introduced legislation to suspend the operation of section 15 of the Tariff Board Act, he ‘ would have supported it.
– I did not say that; I said that that was the proper course for the Government to adopt.
– If that were the proper course, I assume that it would have received the support of the honorable senator.
– Provided that I was satisfied that’ the emergency existed.
– Surely the honorable senator does not doubt that the emergency existed? I candidly confess that I cannot understand his attitude. This clause is the usual clause, which is inserted in every tariff measure.
– It is most unusual.
– The honorable “senator will admit that the Government has had to meet a most unusual set of circumstances.
– It should have met them in the proper way.
– It did meet them in the proper way. Since the honorable senator is fond of referring to the example set us by the Mother Country, he probably knows that, in connexion with the rehabilitation plan of that country, an emergency tariff, without an inquiry, is being proposed.
– That is not contrary to the law there.
– I am dealing with principles. I deny that the Government has done anything unlawful, or inequitable, in connexion with this tariff schedule. On the contrary, it has every reason to be proud of what it has done
– Does the honorable senator say that the Government has fully observed the provisions of the Tariff Board Act?
– Of course it has.
– I thought that its defence was rum possumus.
– Excepting, in those cases in which that defence is particularly applicable, the law has been strictly observed; and even in the other instances nothing unlawful has been done. I cannot see any valid reason for rejecting this clause.
– I support the view advanced by Senator Payne, first, because the honorable senator has clearly pointed out that to increase duties without reference to theN Tariff Board is to act illegally; and, secondly, because the defeat of this clause will go a long way towards defeating the whole bill. That, I confess, is my desire. I shall, therefore, vote against the clause in the hope that it will result in the defeat of the whole measure.
.- I should not have risen again but for the extraordinary attitude adopted by the Minister (Senator Daly), who had the audacity - I use the word advisedly - to say that the Government had done nothing to warrant the suggestion that it had flagrantly violated the law. The meaning of section 15 of the Tariff Board Act is so plain that any one who cares to read it must realize that it has been broken by the Government. That section makes it mandatory for the Minister to adopt a certain procedure before he takes any action to alter the tariff. Section 15 of the Tariff Board Act reads - 1.hem Minister shall refer to the board for inquiry and report the following matters: -
I charge the Minister for Trade and Customs with not having referred these matters to the Tariff Board, and of tabling a new tariff schedule which increased the then existing duties without having received any report from that body. The facts are so plain that it is useless for the Minister to say that the lawhas been observed.
Senator Sir GEORGE PEARCE (Western Australia) [3.39]. - I hope that if the clause is passed, the Minister will not flatter himself that the actions of the Government are condoned by the Senate.
– I am concerned with results rather than with intentions.
– If we reject this clause - and I take it that the committee has the power to do so - what will be the result? My view is that if we rejected the clause that would amount to a declaration by this branch of Parliament that the duties collected during the last two years have been illegally collected, and should be refunded. Perhaps Senator Payne or the Minister may be able to explain to me the legal position which would be created by the rejection of the clause. Obviously the Government would not be prepared to refund the duties, and it would be compelled to bring down a validating bill to make legal the collections already made. That being so, we might just as well pass this clause, because we could not possibly take action which would compel the Government to refund several million pounds. I agree with everything that Senator Payne has said, but I hesitate to vote for the rejection of the clause without knowing to what its rejection would commit us.
– If this clause were rejected, the Government would become a target at which every one who has paid customs duties could fire claims for refunds.
The Government would be forced to bring a validating bill before the Senate, and the responsibility would then rest’ on the Senate either to pass the bill, or to leave the Government tofight the claims of those who felt that customs duties had been collected contrary to the law as understood by Senator Payne. That is the sort- of thing that provides work for lawyers. Litigants dispute what the law is, and, having obtained, legal advice, litigation is entered upon. I. think that Senator Pearce knew the answer to his question before he asked it, but made the inquiry for Senator Payne’s benefit. If this clause were rejected, the Senate would next week have to retrace its steps,, or it would land the country in chaos, for which it would have to accept responsibility.
.- I congratulate the Minister upon his reply; it is worthy of the profession he follows. His sarcastic suggestion that I might know the law better, than he does carries no weight with me. I know the law in this instance, because it is written so plainly that not even a ten year old child could misunderstand it, and its meaning cannot be hidden or distorted even by Senator Daly. I do not profess to have had any legal training, but I have a fair amount of common sense, and I take it that if this clause were rejected, the duties provided for in the 1921-28 tariff would apply, so that only such duties as were collected in excess of that would have to be refunded.
– That is so.
Question - That the clause be agreed to without request - put. The committee divided. (Chairman - Senator Plain.)
Majority . . 15
Question so resolved in the affirmative.
Clause agreed to.
Clause 6 agreed to.
Clause 7 (Validation of collection of certain higher duties.)
– It is the usual validating clause to be found in this class of legislation. It provides that where a duty on goods entered for home consumption is higher than would be payable under any of the tariff proposals introduced into the House of Representatives between the 21st November, 1929, and the 3rd December, 1930, such higher duty shall be paid into Consolidated Revenue, and no refund made.
– It iS now almost two years since this Government’s first tariff schedule was introduced in another place. Since then, there have been several tariff alterations, under which higher duties have been collected and paid into revenue before Parliament has had an opportunity to ratify or modify the Government’s proposals. During that time taxation, in the form of higher customs revenue, has been paid by citizens of the Commonwealth, not under act of Parliament, but under an act of the Executive. To this extent, it would appear that the authority of Parliament to impose taxation has been undermined. I doubt that we can find precedent for this state of affairs in any other part of the British Empire. But this Government has been accustomed to take high-handed action, so I suppose we need not be surprised that a period of nearly two years has elapsed between the introduction of its first tariff schedule, and the time when Parliament’ was consulted about it. If Parliament is to have any control over this form of taxation, it must be consulted within a reasonable time from the introduction of a customs tariff schedule. Two years is altogether too long a period. If the life of this Parliament were extended to five years, and if there were in power a government disposed, as this Government is, to ignore Parliament in respect of many of it* executive acts, possibly Parliament would not be consulted about tariff legislation for a period of four years, or even until the end of the statutory life of the Parliament. On many occasions, honorable senators on this side have helped the Government out of its difficulties even when its own followers had deserted it, so I suppose we shall help it on the present occasion by validating its tariff proposals. But it should not be possible for a government to impose taxation in any form and collect revenue under it for a period of two years before Parliament was consulted. I am sure that I faithfully reflect the opinions of honorable senators when I say that if this tariff is validated it will not be because the Senate approves of the duties imposed, but because it wishes to facilitate the work of the session, and to help the Government. The delay in consulting Parliament may do serious injustice to certain sections of our people. The duties on fencing wire, for example, were imposed nearly two years ago. This item may soon be on the free list again. If so, those who purchased this necessary commodity at any time during the last two years for the purpose of developing their properties will have been unfairly taxed. I cite this as an. example of the unfairness that may be caused by the dilatoriness of this Government in consulting Parliament with regard to its tariff legislation. A person who bought wire two years ago would get it free of duty. Since then the purchaser has been obliged to pay a stiff customs duty. If this impost is removed, the man who has waited to buy his wire would benefit. I feel that in this matter we are looking upon the Government with an indulgent eye, and are not inclined to mete out to it the punishment due to it; but, at the same time, I cannot avoid pointing out this unfair discrimination, and, like Senator Payne, recording my protest against it. When the electors come to realize that. this tax was imposed two years before Parliament was consulted in regard to it, they will ask what kind of liberty prevails in this country, and their question must be answered. I trust that future governments will not follow the bad example of this Government.
Clause agreed to.
Clause 8 agreed to.
Clause 9 (Deferred duties).
– Will the Minister explain what relation section 11 of the Customs Tariff 1921has to this clause ?
– If an amendment which the Senate requests the House of Representatives to make is acceded to by the House of Representatives, the alteration of rates takes effect as from the date of acceding to the request.
Clause agreed to.
Senator Sir GEORGE PEARCE (Western Australia) [4.5]. - The first prefatory note deals with the definition of “ proof “ or “ proof spirit,” and probably is correctly included in a customs tariff; but the third paragraph, which decidedly relates to a matter of administration, is one which the committee should scrutinize closely.
– The only alteration in the paragraph is the substitution of the word “ goods “ for the word “ articles.” The paragraph applies the principle that the higher duty shall prevail.
Senator Sir GEORGE PEARCE (Western Australia) [4.7]. - The third paragraph reads as follows: -
This is a new prefatory note, giving the Minister greatly increased powers. Under the existing prefatory notes he already has all the power he needs. For instance, the second paragraph provides -
The third paragraph goes much further.
– Under it the Minister can direct that black is white.
Senator Sir GEORGE PEARCE.Yes. Where an article consists of two things, one being 5 per cent, of the whole on which there is a duty of 10 per cent., and the other being 95per cent., on which there is no duty, the Minister may direct that the whole article be charged duty at 10 per cent. Some time ago a deputation waited on me in Perth representing persons engaged in the assembling of motor car chassis, and the case they presented to me regarding the manner in which they are dealt with was such that I thought it should be brought under the notice of the Minister for Trade and Customs. I could not believe that a Minister would for long countenance the procedure adopted. It is most harassing to those affected. If the whole of an importation consists of parts free of duty, the container in which they are imported is admitted free; but if it should contain one article that is dutiable - it might be a comparatively minor article such as a small pin - the container would be dutiable.
-Has a case of that kind happened?
Senator Sir GEORGE PEARCE.Yes.’ There is this further point. There are various rates of duty for motor car parts. Specific rates are provided for certain articles, while others are not dutiable. In many cases the unfortunate importer has to go right through the contents of a container in order to decide whether they are subject to duty on a poundage basis or at a specific rate. This system has been in operation for some considerable time, and although representations have been made to the department, nothing has happened. It must be obvious that such an anomaly should be removed; but nothing has been done. It seems to me that this pre- . fatory note is giving tremendous power to the Minister for Trade and Customs which he does not need. Surely the Minister has all the power he requires under prefatory note 7. This note enables the Minister to exercise further power, and, as some honorable senators have pointed out, even to impose a new tariff. If a person were to build a motor car or tractor from spare parts, it would cost him in duty about three times the actual cost of the machine. The note we are now considering will apply in cases of that kind, and it seems that it provides an opportunity to harass, not only the importer, but the unfortunate purchasers of spare parts w ho require them to replace breakages. I n less the Assistant Minister can show t Inn at present there is insufficient power in the note already passed, and that this wider power is necessary, I suggest that the committee should vote against this note.
– The case mentioned by the Leader of the Opposition (Senator Pearce) is not affected by this prefatory note. Such a case would be governed by item 408 in the schedule. To enable honorable senators to fully appreciate the difficulties confronting the customs officials, I might cite a lady’s vanity case. The department has had considerable trouble in classifying the contents of such cases or compacts, which usually contain toilet requisites and other small toilet articles. A vanity case could be admitted as one item, but it would probably contain a small bottle of perfume and other similar articles. The department, having found it difficult to assess certain articles under the proper classification, has classified them as a whole, under the most appropriate item. But some importers contend that varying rates of duties shall be charged according to the different articles forming the whole. I assure the committee that if this prefatory note is agreed ‘to, the department will continue to employ the same interpretation as in the past, and will classify goods under the most appropriate item.
– Is that the only case which the Minister can cite?
– The commodities mentioned by the Assistant Minister are in the schedule.
– Yes. Compacts may contain a manicure set, brush, comb, soap, perfume, and other toilet requisites. All that the department desires is to obtain power to declare that the interpretation adopted by it is correct. The articles will be brought under the most appropriate item. With very few exceptions, there have been no serious complaints. .The department has noticed the anomaly, and wishes Parliament to remove it.
– There are several reasons why I should object to the proposition contained in this prefatory note. In the first place, I do not think that the provision is in its proper place here. Proposed legislation to give such extreme power to the Minister for Trade and Customs should be embodied, not in a mere prefatory note in the schedule of the Customs Tariff Act, but in the Customs Act itself. I would not be speaking from the floor of the House, or vote on this matter, were it not that I look upon it as of extreme importance to the State which I assist to represent. In regard to cases such as those to which this note applies, Western Australia, has suffered greatly in the past, and I have no doubt that if this prefatory note is agreed to, will suffer still further in the future. By it the Minister for Trade and Customs is given almost unlimited power. I do not know whether that is intended. The prefatory note reads -
Whenever goods ave composed of two or more separate articles, even though such articles are specifically mentioned in the tariff, the Minister may classify the goods under such item or items, as he directs.
It will be seen that the note contains the words, “ even though such articles are specifically mentioned in the tariff “. I might include in my criticism the suggestion that prefatory note No. 7 is also wrongly placed. A little looseness in drafting, perhaps, does not matter much but there is every likelihood that, if a case went to a court, its decision would be that the whole of the schedule, or a great portion of it, is illegal. I know that the Government will obtain protection! from the fact that most citizens would shrink from the awful consequences of launching a test case in connexion with the legislation we are now considering. If a division is taken on this note, it ia my intention to vote against it.
Senator BRENNAN (Victoria) [4.20 1. - The explanation given by the Assistant Minister (Senator Daly) does not meet the point that has been raised. He cited the case of a lady’s vanity bag, which, he assumes, contains a number of articles. If it does, such a case is already covered by prefatory note 7, which reads -
Unless the tariff otherwise provides, or the Alister otherwise directs, any goods composed of two or more materials shall be deemed for the purpose of classification, to be composed wholly of the material of chief value in the goods, provided that when the respective materials are of equal value, the goods shall be deemed for the aforesaid purpose to be composed wholly of the material that would make the goods liable for the higher or highest rate of duty.
– Would the honorable senator interpret the word “ material “ to mean “ article “ ?
– There may be some difference of opinion as to the interpretation of the word “ composed but not with respect to the word “ article “. It has to be remembered that the original prefatory note No. 8 still stands. It reads -
If such extensive powers are to be given to the Minister for Trade and Customs by this simple means, the Minister can, as Senator Sampson suggested, declare that black is white, or that the parts of a motor car are really something else.
– He must find an item in the schedule appropriate to it.
– Even if such an item is specifically mentioned in the tariff, it follows almost a fortiori that the goods may be classified under such item or items as he directs. If he cannot find an item in the tariff schedule which would honestly cover it, he can say that it shall come under some item in the tariff in order that the duty may be collected. This note appears to give the Minister the right to declare that something is what it is not. I also put it with great respect that those administering the office - I have not the slightest intention to reflect directly or indirectly upon any person administering the department, - will be entrusted with very dangerous powers. We know that even an omnipotent Minister for Trade and Customs cannot know all the details. He must be dependent upon those lower down the scale, just as those so placed are dependent upon others. Very grave dangers will arise if such wide powers are given. Unless a more satisfactory explanation is forthcoming, I shall vote against the proposed new note.
– The question to be considered is what powers does the Minister for Trade and customs at present possess? . Although, having accepted a principle, we may hesitate about extending it, we do not wish to hamper those who have to give effect to it. What does prefatory note 7, as amended, give the Minister power to do, in principle ?
– Declare that black is white.
– It does nothing of the kind. I remind honorable senators thatthey have already agreed to give the Minister power to make a certain decision in the case of “ goods composed of two or more materials “. He already has a similar power, given in prefatory note 8, in the case of “ goods composed of two or more separate parts”. It is now desired to give him the same power in respect of “ goods composed of two or more separate articles “. I cannot see why any objection should be taken to the granting of this power. Prefatory note 11 reads as follows: -
Whenever goods are composed of two or more separate articles, even though such articles are specifically mentioned in the tariff, the Minister may classify the goods under such item or items as he directs.
In my opinion, the power of the Minister is limited by that provision to articles specifically mentioned in the tariff. He could not place new items in the .tariff, as some honorable senators have suggested. If it is felt that a drafting error has been made, we may reconsider the wording of the provision; but the principle involved is similar to that embodied in prefatory notes 7 and 8. I used ladies’ vanity bags as an example, but I might just as well have taken gentlemen’s travelling bags.
– I think that something much more important than vanity cases and travelling bags is involved.
– We are dealing with “goods, composed of two or more separate articles”. I point out to honorable senators that prefatory . note 7, to which they have already agreed, relates to “goods composed of two or more materials”. Prefatory note 8, reads as follows : -
Wheneverany goods are composed of two or more separate parts any part though imported by itself shall, if so directed by the Minister, be dealt with under the item applicable to the complete goods.
– That is specific.
– Quite so. But it gives effect to the principle of allowing the Minister to classify goods in a particular way.
– But he has only a limited power to classify.
– That is true; but I again direct the attention of honorable senators to the terms of prefatory note 7, as amended, and prefatory note 8.
– Prefatory note 7 does not give a discretionary power.
– I submit that it does, for the words used ; are “unless the tariff otherwise provides, or the Minister otherwise directs “. If the committee will accept the principle enunciated in the note, I think, we may be able to find words which will express it more satisfactorily.
– I suggest that the further consideration of this prefatory note he deferred. It is obvious that there is a great distinction in principle between prefatory notes 7 and 8, and this one. The wording of this note, undoubtedly, leaves an unfortunate impression upon the mind of the reader. Undoubtedly, this prefatory note gives the Minister power to change the classification of articles. A mousetrap, for instance, may become an engine, or something else. No doubt an attempt has “been made in prefatory notes 7, 8, and 11, to . give expression to a- complete scheme. Prefatory note 7 refers to clothing, prefatory note 8 to machinery, and prefatory note 11 to other tariff items. Words could undoubtedly be found to express more effectively the intention which is behind this note.
– The position may be met if the words “ even though such articles are “ are omitted. I think the interpretation which honorable senators have suggested may be placed upon this note would be declared to be ultra vires. If the words that I have suggested were omitted, the note would be improved. It would then read -
Whenever goods arc composed of two or more separate articles specifically mentioned in the tariff, the Minister may classify the goods under such item or items as he directs.
– That alteration would not alter the meaning of the note.
– If the words “even though such articles are “ were omitted, it would certainly meet the objection of the Leader of the Opposition (Senator Pearce) that the Minister would have power to make a new tariff. The omission of the words would limit the Minister’s discretion to articles specifically mentioned in the tariff.
– I think the concluding words of the note should also be altered to provide that the Minister should have power only to “ classify the goods under either of such items “.
Prefatory notes 2 and 7 agreed to, and 11 postponed.
Division 1 - Ales, Spirits, and Beverages
Item 1 -
By omitting the whole item and inserting in its stead the following item: - “ 1. Ale and other beer, porter, cider and perry, spirituous -
– Now that we are about to begin the tug-of-war over the items of the schedule. I take the opportunity of expressing my regret that the Government has not seen fit to accept the suggestion 1 made many months ago that honorable senators should be provided with the fullest possible information in regard to every item of the schedule. I asked last August whether the Government intended to provide us with complete information in this regard. It is true that some information has been made available in respect of the amendments made in another place, and that we have been furnished with a memorandum containing a comparison of the duties provided in this schedule and those provided in the schedule about to be amended. But I am sorry that the Government has not adhered to the practice that was in vogue years ago. I invite the attention of honorable senators to a schedule which was introduced into this chamber many years ago, which gave a complete outline of the intentions of the Government down to the smallest detail. We were then furnished with a complete, list of the 430 odd tariff items, and a return giving the following information : -
Tariff of 1902 and amending acts; recommendations of the Tariff Commission ; value or quantity of imports 1900; duty paid, 1906.
The first item of that tariff was, strangely enough, “ ale and stout.” The general tariff was, bottled ls. 6d., and in bulk ls. In the second column appeared the British preferential tariff, then introduced for the first time. The tariff of 1902, and its subsequent amendments, together with the duties imposed under it, were also shown. Then followed the recommendations of the tariff commission in its majority and minority capacities, and a concise summary thereof. In another column was set out the value of the goods imported in 1906 and the amount of duty paid thereon. In 1906 the quantity of ale and stout imported in bottles was 2,143,000 gallons, and the duty paid thereon was £156,000. The quantity imported in bulk was 269.000 gallons, and the duty paid thereon £14,000. .The Senate of that day was in a position to know what duties were being asked for, and in what way the proposed tariff compared with previous tariffs. Why did not thus Government submit to the Senate information in full such as was supplied to honorable senators in 1906? The clerical assistance in the Customs Department is surely quite as good to-day as it was in 1906, and paper, pen and ink are cheap. This is the second occasion on which I have been forced to find fault with the Government in respect of its tariff proposals affectingover 400 items. If we are to do our work thoroughly and scrupulously, wemust have all the available information before us.
– I must ask thehonorable senator to confine his remarksto the item under discussion.
– This Government should have followed the precedent set in 1906. I hope that when future tariffsare being introduced, we shall have beforeus more information than has been supplied on this occasion.
– I wish to speak on item 1 of division 1. I understand that it is your intention, Mr. Chairman, to take each item separately.
– I am calling each item separately. Where items are subdivided, I shall call each sub-item. The committee is at present considering item 1 a.
– I wish to move a request for an amendment which affects sub-items A and b.
– In that case, the honorable senator may refer to both subitems.
– I move -
That the House of Representatives be requested to make the duty on sub-item (a), British preferential tariff, 2a. 6d.
If that amendment is accepted, the British preferential duty on ale and other beer will revert to what it was before the present Government took office. In the Sydney Morning Herald of to-day is a statement by the British Treasury officials to the effect that the heavy duties levied at home on ale and beer have proved the undoing of the Treasury estimates.- I can safely say that a similar position will arise in Australia in respect of this tariff. Recently, the Minister for Trade and Customs (Mr. Forde) gave some information in another place respecting the revenue derived from the tariff on British bottled beer. For the first six months of 1929, the revenue was £34,773; for the first six months of 1930, £26,039 ; and for the first six months of 1931, £12,765. There has, in addition, been a corresponding decline in revenue from the excise on beer manufactured in Australia. During the year ended the 30th June, 1930, the quantity of bottled beer imported into South Australia was 61,473 gallons; and for the year ended the 30th June, 1931, 7,325 gallons; so that there can be no doubt as to the loss of revenue that we have sustained in respect of this item.
– Why should we import beer into Australia?
– There is a good reason for importing beer, and it applies particularly to the State of Victoria, which the honorable senator represents. The quality of Australian beer generally has been considerably improved because of the advent of the Richmond process. A comparison of British imported beer and Australian manufactured beer will show honorable senators that a considerable preference is being given to tie Australian article. Prior to November, 1929, the duty on. beer was 3s. or 6s. per dozen quart bottles. There was also a levy of 4d. per dozen on the bottles, making the total duty 6s. 4d. per dozen. The Australian excise for a similar quantity of beer amounted to 3s. 6d. At present there is a duty of 3s. 6d. on stout and porter, and honorable senators know what happened in that respect.
– Stout is not mentioned in this item.
– The duty on stout and porter is at the rate of 3s. 6d., which is equivalent to 7s. per dozen bottles. There is also a duty of 4d. per dozen on the bottles, a sales tax of 6 per cent., amounting to ls. 8½d. a primage duty of 10 per cent., amounting to ls. lid. or a total duty of 10s. 2d. as against a levy of 4s. on the Australian article. Beer is placed in a different category. With the special duty of 50 per cent., or 5s. 3d., it will amount to 10s. 6d. per dozen bottles. The tax of 4d. per dozen on bottles, a sales tax of ls. lid., and a primage tax of ls. lid. bring the total tax to 13s. 10£d., as against 4s. levied on the Australian article, or a surcharge of more than 247 per cent, on the imported beer as compared with local beer. I suggest to honorable senators that we should encourage the importation of beer, having regard to the revenue, and to the necessity for keeping the Australian article to a high standard. There have been manifestations of improvement, lately in the quality of the local article, but it is very evident that our revenue from this source is suffering. If my amendment were agreed to, imported beer would be able to enter Australia, and there would be little or no interference with the consumption of the local article. People who desired imported beer would have to contribute to the revenue, and its consumption in Australia would help to improve the standard of the local article.
– If I desired to find an item with which to justify the Government’s policy of restriction of imports, I could not select a better one than that quoted by Senator McLachlan. Why should we import English beer when there is probably no better beer in the world than that which is brewed in Australia? The real point is that’ four bushels of wheat are now required to pay for the beer which a few years ago was equivalent in value to one bushel of wheat, and that we only have a limited amount of credit in London. I am reminded of a letter which was written to a Melbourne newspaper a few weeks ago by the secretary of the Federated Chamber of Manufactures, in which he suggested that the Senate might, with advantage, call Sir Robert Gibson to the bar of this House to seek his opinion as to the amount of money which is available in London for the purchase of goods for Australian consumers. Honorable senators know that the first charge on the proceeds of our wheat, wool, and other primary products, is our interest bill. and that unless we can borrow money, we cannot pay for imports. I admit that for many years we shall have to importcertain goods from other countries; but will any ho’norable senator deny that honest trading implies the ability to pay for the goods that are ordered? Even though it may be alleged that honesttrading justifies borrowing, what is the position when we can no longer borrow money? In that case, we are faced with the possibility of default. The Government realized that there were some people in Australia who, for some unaccountable reason, wished to import English beer into this country, and that, in doing BO, they were harassing the banks which, at that time, were attempting to ration credits. I frankly admit that this item was one which the Government used for the purpose of rationing credits in London.
– The Government gave a special permit for the importation of stout.
– There must be exceptions to every policy. When representations were made to the Government that the prohibition of the importation of stout would mean that many good people in Tasmania would suffer heavy losses, the Government - and I say this to its credit - brought in certain ameliorative measures in order that Tasmanian hops could be disposed of overseas. In order to assist a primary industry in Tasmania, it was necessary to permit the importation of stout.
– Guinness’s stout is not equalled by any stout produced in Australia.
– While there is something to be said in favour of the importation of stout, it cannot be argued that there is any necessity to import beer, especially if we thereby make impossible the purchase of other and more necessary articles which cannot be produced in Australia. I do not think that any honorable senator will deny that Australian ales compare favorably with the best English ales. The Government realizes that there are some people in the community who prefer imported ales and spirits, just as there are others in Australia who prefer to attend the Melbourne Cup meeting attired in English suits or French costumes. The banks advised that if the practice of importing luxuries from other countries were continued there would not be sufficient money in the coffers of the various treasuries to meet our obligations overseas. The item under consideration was one to which the Government paid special attention. Representations have been made to the Government in regard to many matters; but not one member of the Ministry has been approached by any consumer of English liquors protesting against the attempt to accustom the electors to Australian beverages. I do not oppose the amend ment, because of its effect on the revenue of the Commonwealth. Indeed, I frankly admit that the tariff has resulted in a nominal loss of revenue.
– Does not the Government obtain a considerable amount of revenue from this source?
– No. Revenue from liquors is derived from two sources - customs and excise duties. The Australian product is subject to an excise duty. Every person who drinks Australian beer pays a fairly high tax for the privilege.
– The tax is too high to produce much revenue.
– The Government does not desire to obtain revenue from the importation of English beer; what revenue it requires it prefers to obtain from Australian beer. The point is that we cannot afford to allow any of the nation’s limited resources to be used in the purchase of imported beer. Those persons in the community who desire to drink English beer have had to be coerced into consuming the Australian product, so that our resources might be kept at their maximum overseas in order to meet our commitments for interest, and to pay for other articles which could not be produced in Australia. I hope that the committee will reject the request.
– What about Guinness’s stout?
– That is not affected by this item at all, except technically. The Government had adopted other measures to protect them. In practice 50 per cent, of the duty has been taken off stout, and legislative sanction will be sought for the action taken.
.- Senator McLachlan has chosen possibly the worst item in the schedule on which to move for a reduction of duties. There is no necessity to import ales from any other country, although there are other items which we shall have to import for many years to come. In 1921, I moved that the duty on ales and stout should be doubled, and that was done. At that time we were importing large quantities of German and Japanese beer and English ales and stout. Immediately the duties were doubled, additional capital was invested in Australian breweries, with the result that there was a considerable improvement in the local product. During and since the war there has been no need to import ale and beer from other countries, because of the high quality of the Australian products as a result of the keen competition between Australian breweries. It should be remembered that Australian primary products are used in the manufacture of Australian beer, and that the bottles, labels and capsules are also produced in this country. I agree with the Minister that we should be prepared to forgo the small amount of revenue that would be derived from imported ales and beer. I intend to support the Government in connexion with this item, because I cannot see any reason why we should import any beer at all into Australia.
– The Government might well accept the request proposed by Senator McLachlan, as it would not affect the revenue to any appreciable extent. I do not think that any bulk beer or porter is imported at all. I agree with Senator Guthrie that very good beer is made in Australia, and at the present time very little beer of any kind is imported. Stout, of course, is another matter. A considerable quantity of Guinness’s stout is imported, and there is no other stout in the world which equals that famous beverage. Seeing that it is largely used for the treatment of invalids, the proposed request is, I believe, justified.
– Provision is made elsewhere for stout.
– Let us get the matter on a proper footing, and have it provided for here. We shall then be sure of it. Seeing that the brewing industry has developed so well under the BrucePage tariff, we might very well revert to the duties which then prevailed.
– Senator Daly seems to think that this request has been influenced by overseas interests. As I see the matter, however, we should consider these duties entirely from the point of view of revenue. If people want to buy French champagne or British beer, why not let them buy it, so long as the Government gets its share of revenue. The very moment we are discussing this matter, steps are being taken in London by the liquor interests to obtain from South Africa the supplies of wine which they have hitherto been buying so freely from Australia. Those who know something of the ramifications of the liquor trade overseas, and of Guinness’s in particular, recognize that we cannot stand alone in regard to these matters. If we impose on British imports a duty which is tantamount to prohibition, we must expect some form of retaliation. These new duties, together with sales tax, primage duty, and the duty on bottles, amount altogether to 13s. 10£d. a dozen on English beer, or 247 per cent, more than the excise duty on local beer. As a matter of fact, the Government would be well advised to reduce the excise duty and the custom* duty at the same time, and I should be prepared to support such a proposal. If the Government does not want revenue from this source, why not prohibit importations altogether? The Minister does not seem to understand that this branch of the customs is concerned primarily with obtaining revenue. The consumption of Australian-brewed beer has fallen off very considerably since the recent increase in excise. For the half-year ended the 30th of June, 1931, the excise revenue declined by over £300,000, as compared with the previous half-year, and by nearly £600,000 as compared with the half-year before that. When duties are too high, the people will not drink beer. If we are temperance reformers, and do not want the people to drink, no doubt we have reason to be pleased with the result of our efforts; but I take it that, in this matter, we should be actuated bv business motives.
– I support the request of Senator McLachlan, and I do so foi the reasons .already adduced, and for one additional reason, namely, that it make* British preference a real thing, instead of a sham. If the request were agreed to, it would accentuate the preference iri favour of Great Britain. At this time, when the customs tariffs of most portions of the Empire are in the melting pot, it would be a friendly gesture, and, indeed, a very sensible thing to agree to this request, and show that Australia, at any rate, recognizes her duty to the Mother Country.
– I oppose the request proposed by my colleague from South Australia, Senator McLachlan. Of the 400 odd items on the tariff schedule, the honorable senator has chosen the least suitable for his proposal. The breweries in every State of the Commonwealth have abundantly demonstrated their ability to produce beer of a quality and quantity suitable to the tastes of the Australian people. Nevertheless, prior to the imposition by this Government of the present duties, so great was the prejudice in the minds of some people against Australian goods, that large quantities of beer and similar beverages were imported from overseas. Much has been said in this chamber recently about loss of confidence in Australia, about our inability to borrow abroad, and the imminent danger of default. Nothing would be more calculated to destroy confidence in the minds of overseas investors who are seeking to find out why we had found it necessary to export millions of pounds of our gold reserve to balance our trade accounts, than to learn that in 1928-29 no less than 549,016 gallons of ale and other beers to the value of £193,670 were imported into this country.
– Does that include stout?
– No. Practically £200.000 was sent out of Australia in that year to buy beer. It was that sort of thing which caused people overseas to lose confidence in the country. I can imagine nothing worse than having to confess that we were not able to produce even enough beer to assuage our own thirst. Under the present tariff, importations of ale and beer have almost entirely ceased. If stout were affected by this item; something might be said for the request proposed by Senator McLachlan, but the committee has already been assured that stout will be covered by another item. Those interested are quite satisfied with the arrangement made by the Government regarding the importation of stout. Indeed, the Government has concluded an agreement, which is most advantageous to Tasmania, regarding the disposal of the hop crop. I trust that the committee will not agree to the request of the honorable senator, but, recognizing that much good has already been done by these duties, will support the Government.
Question - That the request (Senator McLachlan’s)be agreed to - put. The committee divided. ( Chairm a n - Sena tor Plain . )
Majority . . . . 1
Question so resolved in the affirmative.
Request agreed to.
– I move -
That the House of Representatives be requested to make the duty on sub-item (b) British preferential tariff, 3s.
– Since one honorable senator from Tasmania has decided to disregard the claims of that State in connexion with the hop industry, I now appeal to senators representing Victoria to support the Government in the interests of the bottle manufacturing industry in that State. I hope, later, to have sub-item a recommitted with a view to reversing the decision of the committee.
– The bottle manufacturing industry in Victoria is an important one. There are also breweries in practically every town of importance in that State. This industry leads to decentralization, and as it gives employment to a large number of people, -it should be encouraged.
There should be no need to import beer of any description. The Minister has already indicated that the Government intends to submit fresh proposals relating to stout. Guinness’s stout for invalids is a most useful beverage, and its importation should not be prohibited. Bottled beer is in a different category. I intend to vote against the amendment.
– Honorable senators should not be told that this item does not apply to the importation of stout, although it is true that another proposal relating to stout will come before us in due course. When it does, we can deal wilh it as we think fit. Every gallon of stout imported is affected by the duties under this item. I object to the misrepresentation of Senator Payne in connexion with the vote on the previous subitem. He voted for a reduction of the British preferential duty on a commodity for which Tasmania supplies the raw material.
– .1. agree with Senator Johnston that the committee is free to take what course it thinks best in connexion with any of these duties. I have already given honorable senators an assurance that the Government proposes to introduce a measure, dealing with the duty on Guinness’s stout, on lines indicated by me earlier in the debate. By voting for this item honorable senators will give some assistance to Tasmanian hopgrowers, and they will be consistent. It is not fair to expect Australian breweries to carry the impost represented by the embargo on sugar, and then give a larger measure of preference to manufacturers of English beer. Nor is it fair to ask the Government to assist the paper pulp industry in Tasmania, and withhold assistance to other industries.
– A nice way to bribe the tariff through!
– I ‘am not offering bribes in order to pass the tariff. All I am suggesting is that honorable senators should face the facts. They know, as well as I do, that this Government has been obliged to husband its financial resources overseas, and that to do this it was necessary to prohibit the importation of certain luxury commodities. The irritating tactics adopted by some honorable senators whose States have been benefited by Commonwealth legislation is annoying, and it is to be deplored. I hope that a greater spirit of friendliness will be displayed during the remainder of this tariff debate, and that we shall be able to pass those items which, in the opinion of the Government, are necessary to secure the revenue.
.- I should not have spoken upon this subitem but for the fact that the Minister made some observations regarding my vote upon, the previous sub-item. My vote on all items relating to duties on spirits and alcoholic beverages is influenced by my sympathy with the temperance movement, and my desire to do something to decrease the consumption of alcohol in this country. I shall never be a party to any movement to encourage its manufacture or consumption in Australia, because I firmly believe that, unless measures are taken to check it, we shall eventually have great difficulty in minimizing the evil.
– Senator Payne has offered an extraordinary explanation for the vote which he gave on the previous sub-item. As a believer in temperance, he was, I have no doubt, actuated by worthy motives; but it is amazing that this chamber should be invited to engage in a “temperance crusade, or a blue ribbon drive, by reducing the cost of alcoholic beverages. In my view, the most effective means to that end would be to increase the cost of all alcoholic liquors by taxation imposed in a measure of this nature. I hope, therefore, that the honorable senator will give this subject more mature consideration, that he will reverse his vote on this sub-item, and also support the Minister when he moves to recommit the previous sub-item with a view to rectifying the mistake at the earliest possible opportunity. But .1 oppose the amendment on much broader grounds. This sub-item relates to duties on ale, beer, porter, &c, which is sold in bottles manufactured in this country. If we are to drink beer, it is, from the stand-point of employment given and national solvency, advantageous that we should drink that which is sold in Australian containers. The main purpose of the Government in increasing the duty on ale and other similar beverages imported in bottles is, I understand, to encourage the brewing of these beverages in Australia, because of the employment it affords. The manufacture of the containers and the cases gives employment to miners, who mine the manganese ore, to sawmillers, who supply the timber for the cases, and to nail-makers. Australian ale and beer are produced from barley, largely grown in South Australia, and hops, largely grown in Tasmania. In recent years South Australian farmers, recognizing the value of the rotation of crops, have gone in for the production of barley, but have found difficulty in disposing of their product. Any restriction on the production of Australian beer will result in a reduced consumption of barley. The whole of the hops used by Australian breweries are grown in Australia. “We have recently been obliged to give a concession to the Guinness brewing firm in order to provide a market for the surplus hop crop of Tasmania, and if we decrease the production of Australian beer by giving a greater incentive to importations, we shall still further increase the difficulties of Tasmanian hop-growers. Beer made in Australia is also sweetened by Australiangrown sugar. A decreased production of Australian beer will, therefore, increase the difficulties of the sugar cane growers ; they will be obliged to seek a market outside Australia for the quantity of sugar which is now used locally in the brewing of beer. The preferential duty applies to ale and beer made in Great Britain from hops and sugar imported duty free.
– Hops are grown in England.
– When last year we were dealing with a bill relating to hops, we were informed that considerable quantities of hops were imported duty free into Great Britain from Belgium and other European countries. I hope that the Senate will recognize these facts and reverse its previous decision by rejecting the honorable senator’s request.
Question - That the request (Senator McLachlan’s) be agreed to - put. The committee divided. ( Chairman - Senator Plain. )
Majority . . . . 1
Question so resolved in the affirmative.
Request agreed to.
Item agreed to subjectto requests.
Item 3 -
And on and after the 13th May, 1931-
. - This item originally provided for higher rates of duty to apply to brandy not bottled in bond under customs supervision, but after the 13th May, that distinction seems to have disappeared. Higher duties, however, must have been collected prior to the 13th May, and I should like to know from the Minister whether this committee is called upon to deal with the item as it was set out prior to that date.
– The original intention of the Government to impose a duty of 5s. per gallon on brandy bottled out of bond was defeated in another place. Duty had been collected on that basisup to a certain date, and it is now necessary to give legal authority for the Government’s action up to the time when the alteration was made. Unless the committee desire to reduce the duties, the first portion of the item can remain in its present form.
– I propose to move a request.
– Surely sub-item 2 a is still operative?
– That sub-item ceased to have effect as from the date mentioned.
– If the position is as the Assistant Minister (Senator Daly) states, a re-arrangement of thesub-i tems is necessary. It appears to me that sub-item 2 a, which was operative up to a certain date, still stands.
– Perhaps, during the dinner adjournment, the Assistant Minister (Senator Daly) will confer with the departmental officers with a view to a more satisfactory arrangement of the subitems. I suggest that the difficulty could be overcome by a re-arrangement to whichno objection could be made.
I wish to make a request in regard to the sub-item. I move -
That the House of Representatives be requested to make the duties on sub-item (a) (1) (second occurring), British, 40s.; intermediate, 40s.; general, 45s.
I intend to submit a similar request in regard to sub-item b of the item.
Consideration of sub-item postponed.
By omitting the whole of sub-item (b) and inserting in its stead the following subitem: - “ (b) Whisky, including liqueur whisky -
1 ) When not exceeding the strength of proof -
When exceeding the strength of proof -
– I move -
That the House of Representatives be requested to amend sub-item (B) (1) by leaving out -
If bottled in the Commonwealth under Customs supervision subject to such conditions as to the bottling and as to the strength of the spirits as are prescribed by departmental by-laws per gallon
If not bottled in the Commonwealth under Customs supervision.
The distinction that has been made between whisky bottled in bond, and whisky not bottled in bond should be eliminated. I doubt, whether there is need for me to discuss this subject at great length, for honorable senators have had the pros and cons of the case put before them on a number of occasions. The position has not been materially altered from what it was some time ago, although an attempt has been made to make it appear that an alteration has occurred. Various interested parties have been issuing propaganda in regard to the subject; but the plain fact remains that the whiskyconsuming public is being called upon to suffer a measure of taxation which is not being imposed upon brandy consumers. Brandy may be bottled anyhow; but whisky, we are« told, must be subjected to all kinds of restrictions. All the talk about bottling in bond assuring some measure of protection to the consumers is so much moonshine. This was made quite clear in. the circular which was placed in the hands of honorable senators some little time ago. Nothing could have shown more clearly that the idea of bottling in bond providing a safeguard to the public was nonsense. In any case, it is not our business, in this measure, to insure the purity of liquor. The action of the other place in allowing this provision to remain in the schedule has merely had the effect of protecting the interests of certain manufacturers who, early in their business history, embarked upon a certain course. It is rather remarkable that certain negotiations have lately led to interests which formerly were at variance becoming allied, and both are now advocating that this extra burden should remain upon the consumers of whisky. I shall show that the steps which have been taken by those interests, with the object of enforcing their will upon the whisky consumers of Australia, will be detrimental to the people. We should not grant a monopoly in the supplying of this spirit. I have documents in my possession which show beyond any doubt that there is no foundation for the arguments used in favour of the higher duties on whisky not bottled in bond. It has been said that all the members of the Wine and Spirit Merchants Association of South Australia are favorable to this higher duty, but I shall show that that is not so.
– The Wine and Spirit Merchants Association of Victoria is favorable to it.
Sitting suspended from. 6.15 to8 p.m.
– I think that the case against the imposition of this additional duty is well summarized in a circular issued by an association of those who are most vitally interested in this subject; I refer to the United Licensed Victuallers Association of the Commonwealth of Australia, which body, I understand, is acting on behalf of the whole of the liquor associations of Australia. The circular which contains a short history of the discussions that led to the imposition of this penal duty of 5s. per gallon on spirits bottled out of bond, states -
The penal duty referred to applies to certain spirits (imported as well as Australian) not bottled . in bond, and was imposed in November, 1929. Immediately this duty was imposed the retailers of Australia protested emphatically against the imposition, and several deputations waited on the Hon. E. G. Theodore and the Hon. F. M. Fordo early in 1930, in furtherance of those protests.
On 18th March, 1930, a conference was held in Sydney between representatives of the United Licensed Victuallers Association of Ken’ South Wales and Queensland and representatives of the Scotch whisky group, at which we requested the whisky group’s cooperation in our efforts to have this penal duty removed. Mr. A. Box, the Australian representative of the Scotch whisky group, stated that -
The Scotch whisky group would not raise any objections to the removal of the duty provided it was removed from Australian whisky as well as imported whisky.
On the afternoon of the same day (18th March, 1930) another conference was held at the same place between the United Licensed Victuallers Association representatives and Messrs. Cody and Taylor (representing the Federal Distilleries Proprietary Limited), the object being to endeavour to secure their cooperation, also, in the “removal of this penal duty. Mr. Cody’s reply was as follows: -
We are not opposed to the removal of the duty from imported whisky, but we will not agree to its removal from Australian whisky.
The question naturally arises, why were the Federal Distilleries Proprietary Limited so anxious to retain this penal duty on Australian whisky not bottled in bond? The following facts may throw some light on that important point.
The Federal Distilleries Proprietary Limited were face to face with strong opposition from the Corio Distillery, which had been inaugurated by the Scotch whisky group to manufacture their products in Australia, and under Australian conditions. The Federal Distilleries Proprietary Limited anticipated that this opposition distillery would release their product in bulk only in about twelve months from that date (March, 1931), and, as this new Australian whisky was to be of a type which the Australian public were more accustomed to, it can readily be seen that anything that would hamper the opposition would be to the distinct advantage of the Federal Distilleries Proprietary Limited. The 5s. per gallon penalty against the Corio Distillery for not bottling their product in bond was designed to strangle that concern, and keep their product off the market for another three years (at the end of which period it was anticipated that the new whisky would be issued to the public in bottle under a definite label).
The facts as to what transpired at the conference referred to herein are indisputable, and cannot be challenged, as we can produce statutory declarations from those present at the conferences to verify the authenticity of what is stated. These facts were placed before the Hon. F. M. Fordo at a deputation at Canberra on 1st May. 1930, in the presence of a large number of senators and members of the House of Representatives.
There is no denying the fact that this imposition was introduced as a result of direct representations from the Federal Distilleries Proprietary Limited, and in order to camouflage their real object they put forth a smoke screen, which includes such bogies as (1) protection to the public. (2) protection to the revenue, and (3) additional employment. Our reply to these bogies is given in our letter of 29th April, 1931, and in the extract from the Licensed Victuallers’ Gazelle, dated 15th September, 1931, whilst the amount of protection to the revenue is demonstrated in the official reply to the question asked by Senator Johnston as late as the 12th inst. The amount stated, £7,000, is a mere drop in the ocean as far as the’ total revenue is concerned, but nevertheless it has been collected as a result of an unfair burden placed on the hotelkeepers and the public.
Having dealt at length with the part played by the Federal Distilleries Proprietary Limited, the question may naturally be asked: Who are the people behind this concern? It was pointed out to the Hon. F. M. Forde at Canberra on 1st May, 1030, that the controlling interest in the Federal Distilleries Proprietary Limited was held by a subsidiary company known as the C.W.L. Proprietary Limited, who held 48 per cent, of the shares. This subsidiary company consisted of ten shareholders,’ totalling 270,000 shares, and the principal holders were as follow: -
John Connell (Melbourne) 10,742 Honorable members can judge for themselves whether this penal duty was to benefit the consuming public, or indirectly benefit the shareholders in C.W.L. Proprietary Limited, who controlled the Federal Distilleries Proprietary Limited.
The whole of the foregoing matters refer to the position as it was at the time the duty was imposed, and as it whs during the few months immediately following the introduction of the duty. But what is the position as we find it to-day, nearly two years after the duty was imposed. Much has happened in the intervening period, and wo now find that the Scotch and Australian whisky interests have merged into one great combine for the manufacture of whisky in Australia, and the Scotch section of the combine (notwithstanding their statement at the conference on 18th March, 1930) are now standing behind the Australian section in an endeavour to maintain this unfair penal duty. The lion and the lamb are now lying down together.
Honorable members have been inundated with letters, telegrams, &c, from wine and spirit associations in the various State Brands Protection Society, &c, whilst representatives of the Scotch and Australian whisky interests have been frequent visitors to Canberra with a view to satisfying honorable members that their case is an excellent one, and one no- doubt that honorable members can justify to their constituents.
Honorable members may recollect an incident in scripture where the following words are spoken : “ It is the hand of Esau, but it is the voice of Jacob.” The meaning of these words may well be applied in this ease - the letters, telegrams, &c, may have come from the various wholesale organizations, but behind them all is the voice of the combine, who are directing their actions and have instructed their agents in the various States to get certain resolutions carried, and letters sent to honorable members.
We do not propose to reply at length to the statements appearing in these letters and telegrams, as most of them have already been dealt with in other communications. We will, however, deal only with one or two salient points. In a three-page statement, headed “The Bottling of Spirits under Government Supervision,” reference is made to (1) illicit stills, (2) breaking down spirits with fortified wine, and (3) additional employment. With regard to No. 1, wc desire to state that the question of illicit stills has no bearing whatever on the subject at issue, and is merely another smoke screen, thrown out in an effort to further cloud the issue. With regard to No. 2, wc desire to state that experts will admit that the idea of reducing whisky .with fortified wine is impracticable and absurd. With regard to No. 3, we desire to state that a return issued by the wine and spirit merchants of New South Wales shows that in March of this year there were 229 employees in bond and bottling warehouses, as compared with 350 in November, 1929 - a decrease of 121.
In a letter from the Brands Protection Association of New South Wales (which again represents the voice of the combine), a very important admission is made, showing how the small distiller and the hotelkeeper who does his own bottling is. penalized. The combine here candidly admit that bottling under customs supervision is a very costly procedure, inasmuch as alterations to premises are necessary in order to conform to customs requirements, and, moreover, the warehouse licencefees and the overtime rates for customs officials cost a considerable annual sum.
The Brands Protection Association also refer to the number of convictions obtained in New South Wales for refilling or substitution. Here, again, we have evidence as to why the majority should not be penalized for the alleged sins of the minority. The figures show 91 convictions in three years - an average of 30 a year. When it is realized that there are close on 2,150 licensees in New South Wales, it will hu seen that the trouble they complain of is a mere bagatelle, and shows that the overwhelming majority of hotelkeepers play the game with their customers, and give them what they ask for.
The United Licensed Victuallers Association, which represents the large army of hotelkeepers in Australia, who arc in closer touch with the consuming public than any other section of the liquor trade, therefore earnestly appeals to you to refuse to agree to ratify this penal duty, which is only for the benefit of the select few who have financial interests in the whisky combine.
The fact that there were 91 prosecutions in three years is used as an argument why we should, in the interests of pure spirit, ensure that whisky is bottled in bond. But, strangely enough, those prosecutions were in respect of bottled spirits. Any man who is unscrupulous enough to interfere with whisky will prefer to do it, not in respect of whisky in bulk, but in respect of whisky in the bottle. Therefore, the suggestion that the bottling of whisky in bond affords some security to the public with regard to the purity of the spirit, is absolute nonsense.
– Does not the honorable senator believe in pure spirit ?
– Everybody believes in pure spirit. Is it suggested by the Wine and Spirit Association that the whole of the licensed victuallers, or any large section of them, are going to enter into unlawful practices in respect of the sale of spirits? There is nothing to prevent them from doing exactly what was done in New South Wales. Another circular distributed among honorable senators sets out the names of those who favour this penal duty.
The honorable senator’s time has expired.
– I sincerely hope that the debate on this contentious item will rise above the level of a feud between certain conflicting interests in the liquor trade. I am not concerned about what the so-called whisky combine says of the United Licensed Victuallers Association, or vice versa. It is obvious that this duty was imposed by the Government before the so-called combine came into existence. One of the reasons why I rose early in the debate was to disabuse the minds of honorable senators of the idea that anybody outside the Cabinet had influenced it in the imposition of this duty.
– What is the object of it?
– I am not concerned for the moment with the point raised by the honorable senator; what I am concerned about is my own integrity and that of my colleagues in the Cabinet. I certainly resent the suggestion that anybody has influenced Cabinet in respect of the imposition of this duty. Naturally, there is divided opinion upon it; but its object is twofold. In the first place, we bad to consider the growing army of unemployed in the bottling industry in Australia.
– Does it take more bottles to bottle whisky in bond than out of bond?
– It takes more Australian bottles to bottle whisky in bond than to bottle it out of bond, because if the whisky importers were given the opportunity they would import whisky in bottles.
– Oh, no!
– A mere denial of my statement proves nothing. If the honorable senator desires statistics, they will be furnished to him. When Senator McLachlan was a Minister in the Bruce-Page Government, a committee was appointed to inquire into this matter, and when the present Government came into power it attempted to give effect to the best of the recommendations submitted by that committee to the previous Government. One of the committee’s recommendations scarcely coincides with Senator McLachlan’s statement here tonight.
– To what recommendations does the honorable senator refer?
– The recommendations of the special committee. The Government has no cause to be ashamed of its action in this connexion. The Minister for Trade and Customs made his recommendation honestly, in the belief that he was doing something to assist the States to ensure that only pure whisky would be offered to the public. Whether he was right or wrong, is a matter for Parliament to decide. The Senate is entitled to hear stronger objections than those which have been voiced by Senator McLachlan before it takes the serious step of amending this item.
, - My remarks on whisky are based on an experience of 40 years in the wholesale whisky distributing trade. In my opinion, the duties should be reduced, bottling in bond should be abolished, the preference duty of 5s. should be discontinued, and only mature whisky should be offered to the public. The public requires good liquor, and only by giving it to them will the revenue be increased. It will be remembered that when the BrucePage Government increased the duty on whisky from 30s. to 35s. a gallon, I strongly advocated the retention of the lower rate. I should like to see the duty lower than it is; I suggest a reduction of at least 5s. a gallon. The public should have the choice of a number of palatable whiskies at reasonable prices, and that is the way to give it to them. The increased sales would bring additional revenue. During recent years, there has been a reduction in the quantity of Scotch whisky imported into Australia. There has also been a reduced consumption of Australian whisky, although relatively not so great as in the case of Scotch whisky.
Bottling in bond - an innovation which has not been adopted outside Australia - is driving the bulk trade out of existence. It has been said that it is in the interests of the distillers to confine the sales of whisky to the better known brands, of which there are several. The influence which the proprietors of certain brands of whisky can bring to bear is shown by the fact that they insist on whisky .being bottled in bond. Are the distillers giving the public better whisky than was supplied to them before the system of bottling in bond was introduced? From long experience, I answer, “Unquestionably, no. “ In New South Wales’, spirits are 30 per cent, below proof, and in Queensland, 25 per cent, below proof. No one will say that whisky 25 per cent, below proof is good whisky. In the old days, when the bottling of whisky Was left to the wholesale wine and spirit merchants, it was customary to have whisky 15 per cent, below proof. Those merchants always saw to it that the quality of the whisky was maintained. Certain wholesale houses in Australia were given bottling rights by famous distillers in Scotland who were prepared to entrust their reputation to Australian firms, knowing that it was in good hands. There was also the safeguard that unless the wholesale merchants supplied good whisky to the public they would get no repeat .orders. Many hotelkeepers in town and country, with excellent reputations, always bottled whisky under house names. Any unscrupulous man who supplied whisky of an inferior quality soon lost his trade. My sympathy goes out to the private consumer of whisky. Before my domestic arrangements were upset by my election to the Senate, I always kept two gallons of whisky in my cellar. We are preventing that from being done today by imposing a surcharge of 5s. a gallon on whisky. A person living at, say, Avon Downs, who wanted to avoid that additional duty would have to pay railage and road carriage on the added water, cases, bottles and capsules. In the ‘nineties, and until the beginning of the present century, a number of Central Queensland bulk houses had a reputation for pure whisky which was not excelled elsewhere in Australia, but to-day the public is forced to buy bottled whisky which is so far below proof as to be unworthy to be called good whisky. At one time, my wine and spirit manager informed me that it was useless to take further agencies for bottled spirit, stating that it was difficult to sell bottled spirits since all tha consumers of whisky were asking for draught whisky. I should like to get back to the days of draught whisky. I despise the liquor we are asked to drink to-day after having had Clynelish, the best whisky of Scotland. I am in a peculiar position in that I have been asked by the Wine and Spirits Association of Brisbane to advocate the retention of this iniquitous charge, while leading merchants in Brisbane, Rockhampton and elsewhere have urged me to vote against it. I desire to quote from a. letter which I have received from a leading Queensland firm in order to show its attitude towards this matter -
One of the small but most irritating things we wish to draw attention to is that iniquitous extra 5s. per gallon charge upon whisky and other spirits that are not bottled in bond. Whilst this imposition may benefit two or three distillers, it has the effect of irritating and confiscating the profits of thousands of other wine and spirit traders, and causes a good deal of unemployment in the wine and- spirit business. Surely, seeing it is such an irritating and unjust charge, this will be a good opportunity to redress this wrong, and to delete from the tariff this 5s. per gallon extra charge when merchants and hotelkeepers prefer to bottle their own good whisky. Why should such a monopoly be placed in the hands of just a few distillers at the expense of hundreds of others, who are made to suffer unfairly? No one oan speak with greater authority and with more knowledge of the facta than you can, and we sincerely hope this irritating and unjust charge will he removed from the tariff.
With, a view to showing how the people in the country are affected, I desire to make this further quotation from a letter from the same company -
Surely this extra duty on imported whisky is going to act very unjustly towards the country dealer, as well .as the consumer.
No doubt you are aware that whisky bottled in bond is diluted to the extent of 25 per cent, of water, but the hotelkeeper and the private consumer have always good rain water at their command, whether in Longreach, Windorah, Boulia, or any other far distant townships, and why in tho name of justice should these people who live in the never-never be called upon to pay 5s. per gallon, making 50s. in all on bulk proof spirit unless they accept the bottled spirit under bond. Has it occurred to tho legislators that the cost of bottling cases, bottles, corks, labels, capsules, &C., is a large additional charge on whisky; but when it is considered that the railage on spirits is a higher schedule, fancy the added cost when the hotelkeeper or private consumer is compelled to pay anything over £15 per ton on 25 per cent, of added water.
These people have a very hard row to hoe, but to compel them either to take bottled whisky, with all its attendant charges, or pay 5s. per gallon (equal to £9 per quarter cask) is another nail in the coffin of the unfortunate hotelkeeper, who at present is overwhelmed with difficulties, and finds it almost impossible to pay his way.
I have said sufficient to show that the abolition of the present charge of 5s. on whisky bottled out of bond is justified. I desire now to say a few words regarding the desirability of selling only mature whisky. My firm never sold to the trade whisky which was less than five years old, and I urge that that period should be required to elapse before whisky can be sold to the public. Contrast the whisky which we obtained in bulk from Scotland for special customers, which was always at least ten years old before it was sold, with the inferior liquor we get to-day under conditions which permit it to be sold at 30 per cent, or 25 per cent, under proof !
Senator Sir HAL COLEBATCH (Western Australia) [8.30]. - Until this evening. I had heard only one reason advanced in favour of this iniquitous attempt to subject the public of Australia to the exploitation of a whisky combine. To-day, a fresh reason was advanced, namely, that bottling in bond would cause more Australian bottles to be used. I suppose it would, because, if the public could not get whisky in bulk, they would have to buy it in bottles, but why they should have to pay ls. a bottle more for their whisky in order that a few more bottles may be made in Australia passes my understanding. I have in front of me a list of firms which have circularized members of the Senate, appealing to us to support this duty of 5s. a gallon. I doubt whether there is a name on this list that did not also appear on a circular issued two years ago condemning the duty of 5s. a gallon as something calculated to bolster up a monopoly. Now those firms have, apparently, become interested in the monopoly, and range themselves in support of something which they formerly condemned as dishonest and unjust.
We have been told that bottling in bond tends to ensure the purity of whisky sold to the public. That is the most ridiculous argument of all. Members of the Government must know that the moment liquor passes out of the control of the customs authorities it passes out of the control of the Federal Government. Under section 113 of the Constitution, liquor, after it leaves the control of the customs authorities, becomes subject to State laws, and State laws only. It is well known that it has been a common practice for importers to bottle spirits in bond in order to obtain the advantage of 5s. a gallon rebate, take the whisky to their stores, and pour it into vats again, and there is nothing that the Commonwealth Government can do to prevent that. It is the duty of the State authorities to ensure that the public get pure spirit, and the members of the Government must know that. This tale that the imposition of an extra 5s. a gallon duty on spirit not bottled in bond will ensure the purity of the liquor sold to the public is absolute bluff, and nobody knows it better than the Minister. The Commonwealth is specifically debarred by the Constitution from interfering in the control of whisky once it passes out of the hands of the customs, authorities. If we pass this item, we are simply granting a monopoly to certain firms, by means of which they will be able to exploit the public to the extent of ls. a bottle on all the whisky they. sell. There is no other trade, either here or in any other part of the world, “that is so ready to impose on the public when it gets the chance. These things always happen when monopolies are created under the protection of a high tariff wall. In this instance, however, exploitation is carried to the last extreme. Let any one who doubts this go into the Hotel Canberra, in the capital city of. Australia, and ask for a whisky and soda. He will get a little drop of whisky that does not cost more than 2d., and a dash of soda that does not cost more than Id., and he will be charged ls. 4d. That 13 absolutely dishonest trading; nothing more nor less than a fraud on the public. Such things are made possible by duties of this kind.
– Much has been said on this subject by persons who know nothing about whisky; who are so virtuous that they never touch it. I propose to say a word for the reason, among others, that I do touch it. In my opinion, there cannot be too many safeguards to ensure the purity of spirits sold to the public. It lias been said that bottling in bond does not do this. It does, at any rate, make it more difficult for the illicit still operator to dispose of his product. It is idle for any honorable senator to suggest that this provision is useless because the Commonwealth Government has no control over spirits after they leave the customs authorities. The Federal Government can work in co-operation with the State Governments, and if a standard of purity is laid down by the Commonwealth authorities, inspectors can take the necessary action to see that that standard is maintained.
An Honorable Senator. - Does the Government propose to appoint inspectors?
– The Government will do everything it can to protect the public. If the Commonwealth Government does not possess the’ necessary power-
– The honorable senator knows very well that it has not the power.
– I do not know it, but suppose for the moment I admit it.
If Senator Colebatch were a member of a State Government, I should not hesitate to approach him, seeking his cooperation in whatever action was necessary to ensure that pure spirits were sold to the public, and I am convinced that he would help me as far as he could.
I have been informed that, while I was absent from the chamber, some speakers insinuated that improper influences have been brought to bear to secure the imposition of this duty of 5s. per gallon on whisky not bottled in bond. I have seen no evidence of such influence, and I do not think that the charge is merited.
– The Government is standing behind every monopoly in Australia.
– When this Government stands behind a monopoly, it does so in the interests of the public. Senator Colebatch complained the other night about the sugar embargo. That embargo was imposed because the Labour party was able to persuade the Government of the day that only by such means was it possible to ensure a White Australia. The coloured island labourers had become a menace to the white population in Queensland, and it was necessary to get rid of them. The Labour party did not hesitate to take a stand on that occasion in the interests of the public, and this Labour Government is actuated by the same high motives in connexion with this duty. We are not so much concerned with the revenue that may be received as a result of the duty, nor do I think that the slight extra cost for which it may be responsible concerns the consumer of whisky, so long as he knows that he is getting what he pays for. I would far rather pay an extra 5s. per gallon for good whisky than run the risk of being sold some concoction distilled in the hills of Gippsland.
– Excessive duties are the chief cause of illicit stills.
– We are endeavouring to convince the public that a paternal government is taking such steps as are necessary to ensure that they shall be sold only whisky which has matured for at least three years. That is the whole story. All whisky drinkers are willing to pay the additional duty to ensure the purity of the product
Senator Sir GEORGE PEARCE (Western Australia) [8.47]. - As one who does not drink whisky, I arn not personally interested in the quality of the product; but I am concerned about any proposal that has for its object the building up of monopolies under the shelter of the tariff. The Leader of the Senate (Senator Barnes) has suggested that if we vote against the item Ave shall be doing something to encourage the illicit distiller. I do not agree with the Minister. The way to make that business unpopular is to make it unprofitable by lowering the duties. I am afraid, also, that the reason advanced by Senator Daly in support of the duty, namely, that it will benefit the bottle-manufacturing industry of Australia, will not stand examination. According to the Commonwealth Overseas Trade Bulletin, No. 27, of 1929, our imports of bottled whisky totalled in value only £40,000, whereas whisky imported in bulk amounted to not less than £1,175,000. Senator Daly also said that, there seemed to be an atmosphere of suspicion about this proposal. There is. 1 am suspicious.
– The honorable senator has no reason to be suspicious of the attitude of the Government.
– I am suspicious, and I propose to give the reasons for my suspicion. In my position as Leader of the Opposition in this chamber, I am provided with a private secretary, and, therefore, I am able to keep a. register of all cOrrespondencE received. I find that during the last eighteen months or two years I have received a great deal of correspondence relating to these duties. My file also shows that certain firms and persons, who originally objected to these duties, are now strongly supporting them. The reason is plain. Formerly they were not in the whisky combine; now they are. I am suspicious because this item was not referred to the Tariff Board. Many honorable senators, in the course of this debate, have declared that they intend to vote against any item which was not referred to the board. Well, this item is one that was not sent on to that body for inquiry, and, consequently, the board has made no recommendation in connexion with it. Senator Daly, in explanation and in defence of the Government on this point, raised the plea of urgency.
– Did the Government, of which the right honorable senator was a member, refer the whisky duties to the Tariff Board?
Senator Sir GEORGE PEARCE.No.
– Yet it imposed a duty of 2s. a gallon.
– We did not impose any duty upon whisky bottled in bond. Senator Sampson knows that quite well. The Minister, I repeat, stated that the Government’s proposals relating to the duties on whisky were not referred to the Tariff Board because the matter was urgent, and because of the need to correct the adverse trade balance. That argument does not hold good. These duties were not imposed to correct the adverse trade balance. They were imposed, so we are now informed, to encourage the Australian bottle manufacturing industry. The fact that the proposal was not referred to the board makes me suspicious. The next ground for my suspicion is to be found in a letter addressed to me on the 16th instant, by Mr. J. G. Durham, the general secretary of the United Licensed Victuallers Association of Australia. As it has been read by Senator McLachlan, I do no! propose to read it again, but I should like to direct attention to the following statement contained in it: -
Having dealt at length with the part played by the Federal Distilleries Proprietary Limited, the question may naturally be asked, “ Who are the people behind this concern ?” It was pointed out to the Honorable F. M. Forde, at Canberra, on the 1st May, 1930, that the controlling interest in the Federal Distilleries Proprietary Limited was held by a subsidiary company, known as the C.W.L. Proprietary Limited who held 48 per cent, of the shares. This subsidiary company consisted of ten shareholders, totalling 270,000 shares and the principal holders were as follows: -
That is reason No. 2 for my suspicions. Knowing the part that Mr. John Wren has played in Australian politics, I am frankly suspicious of anything in which’ he has a hand. I am also suspicious because the Government did not refer this matter to the Tariff Board.
– I take strong exception to the statement just made by the Leader of the Opposition (Senator Pearce). It is most objectionable to me, as a member of the Cabinet. The right honorable gentleman has stated that, because of the part played by Mr. JohnWren in Australian politics, he is suspicious of the action of this Government. Politics should be played as a game of cricket. I was invited to observe the rules this afternoon. I now suggest that the Leader of the Opposition should do likewise.
Senator Sir GEORGE PEARCE.Quoting from a letter which I have received from the United Licensed Victuallers Association, I referred particularly to Mr.Wren’s association with the Federal Distilleries Proprietary Limited. I re-affirm that I am suspicious of any political move with which he is associated, because I know the sinister part which he has played in Australian politics. The company ‘controlled by Mr. Wren and the other persons whose names have been quoted, originated this application, and the duties were imposed by the Minister without reference to the Tariff Board. For this reason, I shall vote against it.
– I regret the tone adopted by the right honorable the Leader of the Opposition (Senator Pearce). His antipathy against Mr. JohnWren is related to the role which that gentleman played in what was probably one of the vilest incidents in the political life of this country - the deportation of Father Jerger.
The CHAIRMAN (Senator Plain).Order! The matter mentioned by the Minister has nothing whatever to do with the duty on whisky.
– Surely I shall be allowed to defend the honour of the Government?
– The Leader of the Opposition did not impugn the honour of the Government.
– He advanced, as one ground for Ms suspicion, the alleged association of Mr. JohnWren with this Government. To whom does the suspicion attach? I challenge the Leader of the Opposition or any other senator to prove that Mr. JohnWren has had any influence with the Scullin Government in this or any other action it has taken. I hope that there will be no repetition of these statements.
.- I am not interested in the dispute as to the influence of Mr. JohnWren or any other individual. There is another side to this question. One would imagine from the remarks of some honorable senators that it is impossible for any one but the whisky combine to import whisky. That is quite wrong. On the payment of a duty of 50s. a gallon, whisky can he imported by any individual, and no supervision is exercised over the bottling of it. But if it is bottled in bond, and many of the importing companies have, at considerable expense, set up bond bottling establishments, the importer gets a concession of 5s. a gallon. My informant, who is outside the combine, and controls a bond bottling establishment, obtains the benefit of the 5s. a gallon. His whisky is bottled and sealed under the supervision of a customs officer. A seal is put on each bottle. If the seal is broken the general public can readily detect that the bottle has been refilled. So long as that seal is unbroken the purchaser of a bottle of whisky, which bears on it a statement that it has been bottled under the supervision of the Customs Department, has a guarantee that the contents are pure spirit.
Senator McLachlan has ridiculed the idea that bottling in bond has no connexion with convictions that have been secured against persons for retailing whisky not true to label. Other honorable senators have said that when the whisky leaves the bond the Commonwealth ceases to exercise supervision over it, and that control passes to the State authorities. I am informed that out of every vat a sample bottle is taken, and that it is sealed and kept in the custody of the Customs Department. When a State inspector visits an establishment where whisky is sold, he can order the vendor to supply him with a bottle from the shelves, and if he is not satisfied as- to its contents, lie can compare a sample of them with those of the sample bottle kept in the custody of the Customs Department.
Senator McLachlan, who has ridiculed this concession on whisky bottled in bond, must have forgotten that in Melbourne on the 25th May, 1927, he presided over the fourth conference on uniform standards for foods and drugs which passed the following resolution : -
The conference reaffirms the resolution of the conference of 1013, which was reaffirmed by the conference of 1022, that, “All spirits imported in bulk to bc sold in bottles under the label or name of any distiller, manufacturer, or agent, outside the Commonwealth, should bc bottled in bond under customs supervision, and should be labelled ‘ bottled in bond by ‘ ( here adding tho name of the manufacturer or of the agent within the Commonwealth).”
– Who were present at that conference?
– The Commonwealth and tho States were represented in the following way : -
New South Wales.
Honorable J. G. Farleigh, M.L.C., a member of the Pure Food Advisory Committee, commercial representative.
John Irwin Moore, M.D., F.R.C.S., D.P.H., Commissioner of Public Health; J. Brownlie Henderson, O.B.E., F.I.C., F.A.C.I., Government Analyst.
Heber Green, D.Sc, Lecturer in Chemistry, Melbourne University, a member of the Food Standards Committee.
Honorable J. M. MacFarlane, M.L.C., a member of the Advisory Board, commercial representative.
That was probably the most representative gathering of health officers that could be got together in Australia, and it advocated the very step which this Government has taken. These gentlemen placed some value on the restriction now proposed. They evidently believed that it would help them to ensure a supply of pure spirit to the people of Australia. Are those honorable senators who scoff at the idea. that the public will derive any benefit from this proposal, greater authorities on public health matters than the gentlemen who passed the resolution I have read? Canada has gone even further than Australia. In that country whisky is not allowed to be sold unless it is bottled under the supervision of the Government, and every bottle bears a label placed on it by a government officer. The Canadian Government evidently believes that some protection is afforded to the public by having whisky bottled under government supervision.
– Is not the honorable senator aware that the Canadian Government is the wholesale distributor of wines and spirits in Canada?
– –‘1’h nt does not affect the position. The Canadian authorities evidently place some value on the fact khat when a seal is affixed to a bottle by a government officer, it is a guarantee of the purity of the contents. I am satisfied that the public health officers of Australia would not pass a resolution, such as I have read, unless its adoption was likely to prove of some value to the Australian public. A tremendous number of people in Queensland drink whisky, and I shall give my vote to safeguard the quality of the spirits they consume. In this respect I shall follow the advice of the leading health officers of Australia.
Certain Scotch distillers have established a distillery at Corio, which is as wellequipped and up to date as any other distillery in the world. They are spending a great amount of money in Australia, and employing a lot of labour. In this distillery, Australian products only are used. For instance, it provides a home market for our barley. These people are producing and marketing, at little more than half the cost of the imported article, a better gin than can be imported, and there is no reason why they should not produce an excellent whisky. I shall always vote for the establishment and expansion of Australian industry. The best policy for this country to pursue is to import as little as possible. The distillers, wholesale merchants and members of the Licensed Victuallers Association of Victoria are in favour of whisky being bottled in bond. Mr. John Wren, whose name has been mentioned during the debate, has disposed of his interest in the whisky business, and, I understand, has not made money out of it, though he was the pioneer who established the industry in Victoria. The establishment of industries in Australia, which I shall always support, means the introduction of capital into this country, the employment of our own people, and an increased home market for commodities of local production. Every branch of the trade in Victoria, including some wholesale distributing houses of very high standing which have been in operation for close on a hundred years, are in favour of whisky being bottled in bond.
– That is not so. The president of one association was dismissed for making such a statement.
-I have received two telegrams from Victorian organizations assuring me that the Council of the Licensed Victuallers Association endorsed the decision of the State conferences to support the imposition of a duty of 5s. on whisky bottled out of bond.
– By whom are they signed?
– By Mr. Grant and Mr. Liston, both of whom are gentlemen in whom I have the greatest confidence. Seeing that this impost has the support of the whole of the organizations interested in the trade in the State which I assist to represent, it is my intention to support the Government.
– Those opposing this duty appear to be doing so in the public interest, regardless altogether of those engaged in the trade. Those in the business look at matters of this kind from their own viewpoint; but we are aware that the liquor interests always object when asked to contribute additional revenue, in the shape of increased customs duties demanded by this or any other Government. There was a time when whisky was dutiable at 14s. a gallon, but the rate as proposed is now 45s. In the interim protests have been received from those engaged in the trade, notwithstanding that they did not bear the imposts, but simply passed them on to the public. They have done so in this instance. We have had a liberal supply of literature from rival sections in the trade, but I have not seen a single protest from a representative of the consumers. I do not think that those in the trade should be considered, because if this impost is continued the consumers will still bear the burden of it. If the object of this proposal is punitive in character, the more expensive we make the commodity in question the closer shall we get to our objective. I disagree with the contention of Senator Payne that in order to encourage temperance liquor should.be made as cheap as possible. That is a most illogical way in which to stem the tide of intemperance. I was inclined to vote against the Government’s proposal until I heard Senator Foll state that certain experts had, for the second time, favoured a policy identical with, that which the Government has embodied in this schedule. Until an effective answer iB given ‘to their contention, I shall feel inclined to support the Government.
If we can discourage combines, which have been frequently mentioned during the debate, we shall be making a step forward, but I do not know if, in this instance, we are tilting against combines or a controlling section of trades people. According to a circular which I have received from New South Wales, there are no fewer than fifteen firms in that State engaged in the bottling trade. On the one hand, we are asked to oppose this proposition in order to break up combines, and on the other it would appear that there are no combines in this business in New South Wales.
– The firms to which the honorable senator refers are only distributors for the combines.
– They are engaged in the bottling trade. A portion of the circular reads : “ These firms who comprise all the principal bottlers in New South Wales …” If there are fifteen firms engaged in the bottling trade in New South Wales, it is safe to assume that there are 40 or 50 firms so engaged throughout the Commonwealth. If we oppose the duty we shall be interfering with the operations not of combines but of at least 40 or 50 independent firms engaged in the bottling business. I believe in temperance in all things, but I do not expect the whole community to become total abstainers. Those who are not total abstainers are no worse than those who are. I should infinitely prefer a man who sometimes becomes rolling drunk in public to a smug-faced person who, behind a drawn blind, would do infinitely more damage to himself and to society. Until it can be shown that there is nothing in the strong recommendation advanced by the scientific authorities which Senator Foll quoted, I am forced to the conclusion that I am doing right in supporting the Government’s proposal.
– A number of circumstances have conspired to make me break, for a brief period, the silence which I hoped to maintain on this subject; but, having broken it, I should like to comment upon some of the observations made. One great mistake which the Government made waa that it did not accept the advice of Lord Melbourne, who, after a Cabinet meeting, once declared: “It does not matter a- - what we say, so long as we all say the same thing.” Unfortunately, the Ministers who have sought to support this proposal have made entirely different statements. At the outset, the Assistant Minister (Senator Daly), who resented very much what he regarded as an allegation against the honour of the Ministry or against various Ministers, said that the Ministry had considered nothing but the merits of the proposal. I am concerned only with its merits. Senator McLachlan’s remarks were not intended to be taken as they were.
– It was the letter whichSenator McLachlan read.
– The source of the suspicion does not matter. I do not think that there was anything in that letter which necessarily reflected on any Minister. No one can suppose that the Minister for Trade and Customs (Mr. Forde), whom I know very well and respect very much, especially for his great industry, sat down and evolved this proposal from his inner-consciousness. It must have emanated from somewhere - from some persons in the trade. The chances are that it. emanated from those engaged in the business, who would have something to gain by its adoption. It is not likely that it came from any other source. Those who first get the ear of any person whose responsibility it is to decide matters of this kind are likely to have traversed a good part of their journey. That is what I imagine was in the mind of Senator McLachlan in making the observations he did. Senator Daly’s second observation that this duty would increase the trade in bottles was not supported by anything which he subsequently said. Any proposal designed merely to make work without any consideration of its economic effect is thoroughly unsound. If this proposal is submitted in order to provide work in the bottling trade, and that is the only ground upon which it rests, I cannot support it. If such a policy can be justified there are no limits beyond which we can go. The Commonwealth Government, which has control over trade with other countries and among the States, could make unlimited work available by providing that all interstate commerce must be shifted from the wharfs in barrows. That would provide work; but it would not bc of an economic nature. The* viewpoint expressed by another Minister was that this imposition enables the consuming public to secure good whisky. I am sorry that the Minister, who dealt more particularly with that phase of the subject, is temporarily absent from the chamber. I venture to say that he, in common with other men who consume whisky, however limited the quantity may be, are able to test its quality themselves. The general principle to which I object is that of the Government taking upon itself the duty of nurse, wet or dry, to a community which is capable of looking after itself. The disadvantage of any government undertaking this work is that it destroys the independence, energy, enter2>rise, and initiative of the people. I propose now to make a convert of Senator Lynch, because he said that if any one could effectively answer the arguments advanced by Senator Foll, he would oppose this duty. Senator Foll read an extract from a report compiled by certain gentlemen whom Senator Lynch described as experts. They arc experts in their own line, which is concerned with the purity of foods and beverages; they are not experts in politics, and this is a political and not a health question. The securing of the purity of whisky is a matter of politics; it is not a matter upon which health authorities, however notable their degrees may be, cun speak as experts. No doubt they wished to ensure that only good whisky should be sold; but, as several honorable senators on the front bench opposite have said, this provision will not achieve that object, for once the whisky passes out of the control of the customs officers the Government loses all power over it. In that respect it differs from every other article of commerce that we deal in. The Federal Government has control, so the lawyers tell us, of all foodstuffs so long as they remain in their original packages, with the single exception of fermented, spirituous and distilled liquors. Over these they have no control at all. Regardless of what happens to the whisky while it is in bond, it may be adulterated to any extent after it has been taken out of bond.
I have also been impelled to speak owing to the observations of my colleague, Senator Guthrie, with whom I am sorry to disagree. Wc are all acquainted with the old adage, “ In the multitude of counsellors there is safety”; but we have had such a multitude of counsellors on this subject that I do not know on which side the greatest number is to be found. I am, therefore, forced to find out for myself the rights and wrongs of the proposal, without paying any attention to those who can shout the loudest. Having regard to the arguments of those who have spoken, and to the change of front of those interested in this business, and considering the matter as an abstract proposal, I can find no reasons why I should vote in favour of the extra duty. Nothing in the report read by Senator Foll touches the question, for that report dealt merely with the desirableness of ensuring to the people a supply of good whisky.
– It was quitesilent in regard to the duty.
– That is so. If this extra duty is agreed to, an additional burden will bo placed upon the men outback, and the farther outback they are. the heavier will be their burden. While I regret to find myself opposed to ray colleagues, I must vote against the Government’s proposal.
– The issue before us has nothing whatever to do with the purity or maturity of whisky. I point out, also, that there can be no question of interference with business, for a provision similar to that which I desire to have deleted in relation to whisky was deleted in another place in relation to brandy. If publicans or dispensers of liquor desire to act dishonestly, it seems that they may do so without interference when they are dealing with brandy, rum or any other spirituous liquor except whisky. I stress the point made by Senator Brennan, that our acceptance of the Government’s proposal will mean the placing of an additional burden on country people. On a previous occasion, in discussing this subject, I pointed out that many whiskysellers bought large quantities of whisky for distribution, particularly in country districts in South Australia. There is also in that State a well-known whiskymanufacturing firm which sells the whole of its product in bulk. If this provision is agreed to, it will be forced out of business. Senator Colebatch alluded to a certain circular printed on tho letterpaper of the Wine and Spirit Merchants Association of New South Wales, which contained a list of the wine and spirit merchants associations of Australia favorable to the retention of the existing provision. But I have received a letter to the .effect that that circular was not authorized by some members of those associations. Honorable senators should recollect that the whisky is bottled by the people who import it, and that many of the firms to which reference has been made to-night are merely distributing agents. No other country in the world has a provision of the kind that I am now resisting. In my opinion, the circular to which I have referred is n0 fair propaganda, for it is not signed, and has been repudiated by prominent men whose names appear in it. I have received a telegram from the largest wine and spirit retailers in South Australia, Messrs. Crawford and Company, absolutely repudiating the circular. Senator Toll said that anybody can import whisky. That is quite true, and there are whisky firms in Scotland which will send out any quantity of whisky in bulk to private individuals in Australia; but we know very well that unless such people had facilities for bottling in bond they would be obliged to pay this penalty of 5s. per gallon on their imports. I have already pointed out that quite half the whisky that is at present bottled in bond is poured into wood immediately it is removed from bond. It cannot be said, therefore, that bottling in bond affords any protection whatever to the general public. The Government may say, “We will put the customs brand on the whisky. We will seal it with the customs seal, and superimpose upon the seal the photograph of the Minister for Trade and Customs (Mr. Forde) and the Comptroller-General of Customs “. But of what use would that be? If traders are unscrupulous enough to interfere with the purity of whisky, it would be childish to place such useless obstacles in their way. I have been waiting to hear some honorable senator say something concrete about my alleged change of front on this subject. I have, of course, matured somewhat since 1926, but I have no recollection of ever subscribing to the principle enunciated in this sub-item. I presided at the opening of the conference to which Senator Foll referred, because it was a courtesy to the health officers from . the various States that a Minister should preside over their gathering, and the Minister for Health of the clay Avas unable to do so.
Does it not strike honorable senators as extraordinary that as the proposal referred to by Senator Foll was approved in 1913 and re-affirmed in 1922 and 1926 it Avas never made effective? The reason for that, of course, Avas that it Avas not within the power df the Commonwealth to make it effective. Senator Colebatch and Senator Brennan have shown quite clearly that this is so. While the gentlemen responsible for these recommendations were no doubt excellent health officers, they were not constitutional authorities. The position in Canada is entirely different from that in Australia. The Canadian Government has absolute control over the liquor business. But there is an inhibition or prohibition in section 113 of our Constitution which makes it illegal for the Commonwealth Government to interfere Avith the liquor laws of the States. We should leave the States to control their own business in this regard.
Are we to understand that the Customs Department pays attention only to bottled whisky and not to bulk whisky I If that is so, it is remiss in its duty. We have to remember that the whisky interests of this country are continually policing their business. They.hare their minions travelling throughout the country continually testing whisky to satisfy themselves that its quality is in accord with the quality of whisky that should be in bottles bearing certain brands. It is beyond all reason to suggest that if the provision to which I am objecting were eliminated the public would not be protected. As has been pointed out, 90 convictions for selling impure whisky have been obtained in New South Wales in the last three years. Even if whisky were sold under the guarantee of the Minister for Trade and Customs, we should have no certainty that dishonest traders would not attempt to sell adulterated liquor. Why should this additional burden be placed upon people who desire to carry on a legitimate business? It cannot be said that the imposition of this extra duty of 5s. per gallon will bring any large amount of revenue to the Government, and, as Senator Brennan has pointed out, the provision is entirely uneconomic. In these circumstances, I cannot understand why the Government is fighting for it’. I do not believe that its heart is in the job. In view of all the facts, the Government would be well advised to abandon its untenable position.
Senator Lynch’s arguments are not apt. There is no similarity whatever between the conditions here and those in Canada. It would be quite impossible to give effect to the recommendations of the officers of health without an amendment of our Constitution.
– Senator Lynch would be the first to oppose the transference of this power to the Commonwealth.
– I am sure that Senator Lynch would not favour the repeal of section 113 of the Constitution in order to give the myrmidons of the Customs Department authority to travel throughout Australia policing the liquor business. The States can well be left to do their own work in. this regard. It is not the business of this Commonwealth to duplicate the policing of the standards of spirituous liquors in the community; that is the business of the States, and I venture to say that they carry out that work satisfactorily. Apparently, there has not been much abuse of the law.
– The combine itself is carrying out much of the policing work.
– I have already said so. The combine rightly looks after the standards of spirituous liquors, and if it finds that a man is abusing the law, it deals fittingly with him.
Why should decent traders who import spirituous, liquors in the wood be penalized, as against others who live in thecities and have bonding facilities. I invite Senator Lynch to sympathize with the man outback who wants real good whisky, Think of the expense to which a country publican at Kalgoorlie is put if he has to obtain from Perth whisky which has been bottled in bond and broken down to the extent permitted by law.
– Cannot he purchase draught whisky?
– Only if he pays an extra 5s. a gallon. In addition to paying the freight on whisky bottled in bond, he has to pay freight on the water added to it, and on the bottles. I have already given the illustration of a man in a remote part of South Australia who distributes whisky throughout that State, and even into the Western District of Victoria. Previously he purchased whisky in bulk, but he has now either to buy bottled whisky or to pay an additional 5s. a gallon.
– Does not the bottling of whisky in bond protect the man outback by preventing the publican from selling him a liquor which is not true to label.
– He has thai protection now. The combine is policing the whole of Australia. Once the capsule is taken off the bottle, there is the danger of adulteration, no matter whether the whisky has been bottled in bond or on the premises.
– I intend to oppose the proposal of the Government because it imposes a penal duty of 5s. per gallon on whisky and other spirits which are largely used in the country. For many years many hotelkeepers, clubs, and even private individuals, have been regularly importing whisky of high quality from small good distilleries in Scotland, and some of those distilleries will not sell whisky unless it is five years old. When the importer gets that whisky to the Australian seaboard, he cannot, although it is five years old, and of excellent quality, bring ii through the customs unless he pays an additional duty of 5s. per gallon, assuming, of course, that he has not his own bond store, and that it would not pay him to establish one. On the other hand, the unscrupulous man can, and does, under the law, bring in whisky that is only two years old, and by bottling it in bond, under customs supervision, escapes the penal duty of 5s. per gallon. If the Government were sincere in its desire to protect the consumer against the sale of inferior or immature whisky, it would impose the additional duty on whisky that is two years old, and not on whisky that is five years old. Section 113 of the Constitution states -
All fermented, distilled, or other intoxicating liquids passing into any State or remaining therein for use, consumption, sale or storage, shall hu subject to the laws of the State as if such liquids had been produced in the State.
As a matter of fact, the State Licensing Department has an efficient body of inspectors who travel throughout the country regularly inspecting liquors. The penalty for breaking the law is severe, the licence being liable to forfeiture after the second offence. Therefore, the worst enemy to the liquor trade is the dishonest publican who has been convicted twice, and he is quickly run out of any decent hotel, and out of the business altogether.
– That may be so in regard to any decent hotel.
– In Western Australia the hotels conform to a high standard. During the last few years the hotels-have improved considerably as the result of the strict administration of the liquor laws by the State departments. The country man who imports whisky five years old has either to bottle it in bond or to pay an additional duty of 5s. per gallon. If he bottles it in bond, and adds water to the extent permitted by law, he has to pay freight on that water and on the bottles. In States like Western Australia and Queensland the whisky may have to travel 500 or 600 miles inland, and a heavy steamer freight may be incurred in addition to rail freight. The firms who are clamouring for this additional protection are using their bond stores to evade the payment of the duty. I have that information on the authority of the Minister for Trade and Customs. There is no protection given to the public at all, because the importer, after bottling the whisky in bond, may and does pour it back into casks, and send it into the country. He thus saves the penal duty and considerable freight over long distances. Some time ago I asked! the Minister the following questions: -
On the 12th of this month I received the following replies in the Senate: -
The Minister has admitted that the practice of clearing the spirits in bottle and emptying the spirits into casks is being carried on to some extent, and also that the practice of selling large quantities of whisky in casks to avoid railway freight on bottles is also being followed to a limited extent. I first brought this matter before the Minister in July last. The Government has been considering it ever since. It is still considering what steps are necessary to prevent evasion of the duty. The facts show clearly that the customs regulation is being evaded, and that the duty of 5s. per gallon is frequently imposed on whisky which is much superior in quality to some of that which is bottled in bond.
Senator Sir HAL COLEBATCH (Western Australia) [9.5S]. - I Lave heard with alarm _the remarks of Senator Lynch, not as applying particularly to this item, but as indicating a drift on the part of the honorable senator which I am sure will be viewed with the deepest anxiety by his constituents. I have heard him, with the greatest pleasure and profit, fulminating over and over again against the tendency of the Federal Government to usurp State powers. The protection of the public health is, and always has been, a State matter. Industrial conditions are also a State matter, excepting so -far as they are dealt with in paragraph 35 of section 51 of the Constitution. It may be remembered that on one occasion the Commonwealth Parliament endeavoured, under cover of the Customs Act, to legislate in regard to industrial conditions, but that the High Court properly held that it could do nothing of the kind. Now, under the cover of the Customs Act, the Government proposes to legislate in regard to health conditions. It proposes to usurp a function of the States, and it is amazing to mc to find Senator Lynch among those who approve of this improper use of the customs power in order to intrude into the rights of the States and to do something for the protection of the health of the people. I do not know that it has been suggested that the State authorities are incompetent to protect the health of the people in the matter of the sale of spirituous liquors. Under the Constitution, the control of the health of the people is specifically reserved to the States. Senator Foil’s remarks relating to the committee of experts have been effectively dealt with by Senator Brennan. The committee probably thought that the Commonwealth Government has the power to follow the spirit from the bond store to the consumer. It has not that power. Once the spirit leaves the bond, the person who takes it out can do what he likes with it, subject to the control of the States. Senator Lynch referred to the publican in the back-blocks with a bottle of whisky on his shelf. Competent State inspectors have the right to inspect that bottle. They have their own tests, and should there be anything wrong with the contents of the bottle, the person in whose possession it is found is liable to be prosecuted. Senator Foll also referred to conditions in Canada. I remind him that the control of liquor in the sister dominion of Canada is very different from what it is in Australia. The people who are clamouring for this extra duty would hold up their hands in holy horror if it were suggested that the liquor business in Australia should be subject to the same control that is exercised in Canada. Under the Constitution of Canada the central authority can do what it likes; State legislation is subject to its approval. That is not so in Australia. Any honorable senator who supports this additional taxation in the belief that he is thereby protecting the health of the people is voting to transfer what is now a State power to the Commonwealth. My disinclination to do anything of that kind is my principal reason for opposing this imposition.
– I am grateful to Senator Colebatch for his advice, although I feel that it is not needed. My support of the proposal of the Government does not mean that I am false to my principles in the matter of the division of powers /between the Commonwealth and the States. The control of the food and drink of the people is in the hands of the States, whose inspectors travel around the country in order to see that certain standards are maintained. Everything may be all right when the inspectors call ; but what happens between their visits! I know of one person engaged in the liquor trade who, when asked how he got on when the inspectors visited his premises, replied that the inspectors always sent him word of their intended visit. I have seen bottles which have been tampered with, and, perhaps, other honorable senators have seen the same thing. If, by means of the Government’s proposal, every consumer of liquor becomes his own policeman, in that he has the right to demand that the contents of the bottle shall conform to the sample of the spirit taken when it was bottled, he is given a greater measure of protection than he now has.
– Doe* the honorable senator suggest that each person who purchases liquor should be able to demand that it shall be taken from a new bottle?
– Honorable senators who oppose the Government’s proposal assume that, because things are found satisfactory when the inspector arrives, they are always satisfactory. The trouble is that that is not so. By accepting the Government’s proposal, we shall be protecting the mcn in the back-blocks by ensuring that the contents of each bottle are up to standard. Only by keeping a constant watch on the persons engaged in the liquor trade can wc ensure that the standard of the liquor they offer for sale will be maintained. It is useless to attempt to evade the fact that, between the visits of the inspectors, things which ought not to be done sometimes are done. Not infrequently the capsule is taken from a bottle which is half empty, and put on another bottle.
– This proposal will not prevent that.
– He would indeed be a soft individual who would allow that to be done.
– To avoid that, there would have to be a fresh bottle for each customer.
– The whole thing is perfectly simple and plain. When the bottle leaves the bond, it wil’l have distinctive marks on it, which before long the public will get to know. The man in t tie back-blocks will know whether or not the hotelkeeper has broken the law.
– He will not be breaking the law.
– We have not yet reached that ideal state of society in which this world will become a Garden of Eden without the serpent. The temptation to do wrong will always exist. The Government’s proposal will assist to destroy the serpent of temptation, for it will enable the man in the back-blocks to be certain that the whisky offered to him is pure. Senator McLachlan attempted to belittle the finding of the men who were called together with the object of conserving the health of the community. Were they called together for an idle purpose, or were they deputed by their respective State Governments? Possibly the Government of which Sir Hal Colebatch was a member appointed a representative
– The Government refused to adopt the recommendation because we did not transfer the power to the Commonwealth.
– If we are to take no notice of the findings of that body of men, why was the conference held at all? The Western Australian representative went to the conference with the idea of doing something to safeguard the health of the people of Western Australia. Now Senator Colebatch says that the findings of the conference are all humbug, and that we should pay no attention to them. If that was the opinion of the Government which sent its representatives to the conference, why did it waste money in sending them? I was particularly surprised that Senator Brennan should refuse to accept scientific opinions; he is usually so sound in his reasoning. If we cannot accept scientific advice, to whom are we to look for guidance? The men who attended this conference were the best in their profession, and their opinions are worthy of respect. If we reject their findings, we are taking upon ourselves a grave responsibility. The man in the back-blocks must be his own policeman, and it is a great comfort to him to know that when a bottle is put before him on the bar, the stuff he gets out of it is true to label. Without some such provision as this, he would probably be served with bad liquor, and the label would have done duty many times before. He will, if this item is passed, be able to thank heaven that there arc such men in the Federal Parliament as Senator Sampson and Senator Foll, not forgetting, of course, Senator Lynch. As for Senator Colebatch, our friend from the back-blocks will say that that honorable senator served him well in many particulars, but failed him in this.
– Last night, I said that there were two things which should be outside party politics - defence and the tariff. Tonight’s debate has confirmed my belief. I have been highly amused by listening to this debate. I cannot remember when I have enjoyed an evening. in the Senate so much. It is always interesting to watch the somersaulting and mountebanking which goes on when matters of this kind are under discussion. I do not know how many honorable senators remember the debate which took place in Melbourne, in 3926, on this very subject’ of whisky, lt has been said that one reason why “we should not support this item is that %he Tariff Board has not reported upon it. When the previous Government increased the duty on whisky in 1929, was a report obtained from the Tariff Board? No. The Leader of the Opposition (Senator Pearce) to-night read out a list of shareholders in a certain company, which has been defunct for a good while, and he said that he was filled with suspicion because the name of one gentleman figured as a very large shareholder. Five years ago, when we were in the Parliament House in Spring-street, Melbourne, my mind was also filled with suspicion when I saw what I believed to be an absolute ramp with regard to whisky duties, in connexion with which the Minister for Customs himself was engaged in some very strenuous lobbying. At that time I was suspicious because of the holdings of a certain gentleman in a whisky company, but the present Leader of the Opposition in the Senate apparently entertained no suspicions at all. However, that aspect of the matter is not relevant now. The company mentioned is no longer in existence, and I understand that the gentleman referred to has no interest in whisky companies.
In regard to this item, as, indeed, in regard to most items, honorable senators have been bombarded with arguments from right and left. We get a whizz-bang from Sydney, followed closely by a ninepointfive from Melbourne, while a min.newerfer from Tasmania lands just outside my dug-out. But what put the cap on it so far as I am concerned was a telegram I received from a Tasmanian association to-day. That message contained what amounted to a threat, and I strongly resent its tone. It may not be a logical attitude to adopt, but, knowing the people who sent that telegram, I am convinced that this provision for the bot- *tling of whisky in bond must be right. I am not going to be a party to increasing the consumption of bad grog, and that, I think, is what the opponents of this proposal may help to do. Senator McLachlan to-night characterized the arguments in favour of this proposal as moonshine. I had to drink moonshine when I was in Africa twenty years ago. Outside one or two towns, one drank what was offered at one’s own risk. The stuff was put up in the right bottles, but there was no guarantee as to what it was. I do not pay much attention to this fantastic story that whisky is bottled in bond, and then emptied back into casks. It may be done sometimes, but it is ridiculous to suppose that it is the usual practice. .
I have had sent to me a lot of circulars from the Licensed Victuallers Association in South Australia, and also some from the association in Sydney. I have 2-ead them carefully, but I do not think that the Sydney association is composed of philanthropists. As a matter of fact, the Licensed Victuallers Association in Sydney is a fairly effective combine on its own account. Five years ago, a large quantity of Tasmanian beer found a market in Sydney. Then the Executive of the Licensed Victuallers Association in Sydney brought out a. new retail price list which increased the price of Tasmanian beer from Sd. to ls. 4d. a pint. The result was that Tasmanian beer was put off the market, with the exception of one or two houses where it is still sold. When I get a long screed from these people complaining of the Government’s iniquitous proposal - though why it is iniquitous, I do not know - I naturally begin to delve into their record. I am convinced that they are actuated by selfinterest, I am quite satisfied, judging by the quarter from which this propaganda emanates, that the Government’s proposal is sound, and for that reason I intend to support it.
– Much has been said about the supply of impure spirits to people living in country districts. I have followed the somewhat lengthy arguments this evening, and I fail to see how the Government’s proposal will ensure purity i* quality to consumers at country hotels.
– There will be samples of all whisky bottled in bond to enable tests to be made by inspectors.
– Does the Minister suggest that every man will carry a sample in his pocket, so that he may compare the quality of the whisky supplied with that which has been drawn from the vat in bond? In practice, the whisky drinker in country towns, as elsewhere, must depend upon the honesty of the publican who, in his own interest, will see that whisky supplied by him to his customers is pure. The practice has been to send out whisky in bulk, and break it down in country towns. People living in country towns will be penalized under the Government’s proposal, because they will be called upon to pay freight on 30 per cent, of water. If a country publican does not supply a good article his trade will suffer. Bottling in bond will not be an absolute guarantee of purity, because, as honorable senators know, there is nothing to prevent a dishonest publican from removing the capsule from a bottle and refilling the bottle with inferior spirit. I intend to vote for the amendment.
Senator Sir WILLIAM GLASGOW (Queensland) [10.25]. - I agree with Senator Sampson that, whenever we are discussing whisky duties, we are bombarded with a great deal of literature from both sides, and we have to decide to what extent it is prompted by selfinterest. It is the duty of honorable senators to see that the public is supplied with pure and good spirit, and I suggest that the ordinary trade safeguards are adequate.In the first place, the publican knows that if he sells an inferior article his business will suffer. The average whisky drinker also is a judge of quality, and certainly would know if the spirit had been adulterated. Then there are the authorities who administer the PureFoods Act in the various States, to say nothing of the firms dealing in the various brands of whisky. Senator- Sampson mentioned the position which arose in Sydney not so long ago in connexion with the sale of Tasmanian beer. May Icite also an incident connected with the sale of whisky in one of the largest country towns in Queensland? At that time the trade was insisting upon whisky being measured out to customers, and as one hotelkeeper declined to do this, the other licensees in the town brought pressure to bear upon wholesale houses, to withhold supplies from him because he was attracting their trade.. What is the position of a hotelkeeper now? If he wants to sell bulk whisky he is compelled to pay an extra 5s. per gallon for it. When the man of whom I am speaking imported his own whisky, an endeavour was made to block him by refusing to supply him with aerated waters, and he was compelled to build his own aerated water factory. It, shows how persons in control of any commodity try to force their will on those who sell it. In Queensland bottling in bond is restricted to a few seaport towns. Many of the leading hotels of Australia have their own house whiskies, and have built up their trade on them. It is only reasonable to allow them to continue that practice, but the hotels in inland towns are now prevented from putting their own labels on their bottled whisky unless . they pay an extra 5s. per gallon for the privilege of doing so.
Question - That the request (Senator McLachlan’s) be agreed to - put. The committee divided. (Chairman - Senator Plain.)
Majority . . 1
Question so resolved in the negative.
Motion (by Senator Baumes) agreed to -
That the Senate at its rising adjourn till to-morrow at 11 a.m.
Senate adjourned at 10.43 p.m.
Cite as: Australia, Senate, Debates, 18 November 1931, viewed 22 October 2017, <http://historichansard.net/senate/1931/19311118_senate_12_132/>.