13th Parliament · 1st Session
The President (Senator the Hon.P. J.
Lynch) took the chair at 2.30 p.m., and . read prayers.
– I ask the Leader of the Senate whether, in view of the hostility of the Australian States to the 15 per cent. ‘ restriction of wheat production proposed at the World Economic Conference, the Federal Government will ‘ convene a meeting of State Premiers and Opposition leaders to discuss Australia’s wheat position, such conference to take place in Canberra within 48 hours?
– As I announced yesterday, the Commonwealth Government is communicating with the State Governments on this matter, and sees no necessity for further action at present.
– On the 23rd
June, Senator Dunn asked if the Minister representing the Attorney-General, would lay on the table of the Senate, the transcript in the matter of the Accident Underwriters Association and the Insurance Staffs Federation, heard in Sydney on the 15th June, 1933? The transcript has now been laid on the table of the Library.
The following papers were presented : -
Nauru - Report to the Council of the League of Nations on the Administration of Nauru during the year 1932.
New Guinea - Report to the Council of the League of Nations on the Administration of the Territory of New Guinea from 1st July, 1931, to 30th June, 1932.
Defence Act - Regulations amended - Statutory Rules1933, No.81.
asked the Minister representing the Minister for Repatriation, upon notice -
– The answers to the honorable senator’s questions are as follow: -
asked the Minister representing the Minister for Commerce, upon notice -
– The answers to the honorable senator’s questions are as follow: -
asked the Minister representing the Minister for the Interior, upon notice -
What is the cost per week of rations given in the Federal Capital Territory to a single unemployed man?
Senator Sir GEORGE PEARCE.The cost is 7s.
asked the Minister representing the Treasurer, upon notice -
– The answers to the honorable senator’s questions are -
In committee: Consideration resumed from the 27th June (vide page 2624).
Group 3. - Revenue items not included under any other heading.
Item 19, sub-items (a) (b) -
Tobacco, unmanufactured, entered to be locally manufactured into tobacco other than fine cut tobacco suitable for the manufacture of cigarettes - to be paid at the time of removal to the factory -
Upon which Senator Barnes had moved -
That the House of Representatives be requested to make the duties, sub-item (a1), perlb. - British, 4s. 6d.; general, 4s.6d.
Question - That the request (Senator Barnes’) be agreed to - put. The committee divided. ( Chairman - Senator the Hon. Herbert Hays.)
Question so resolved in the negative.
.- I move-
That the further consideration of the subitems be postponed.
– The honorable senator should state the period of postponement, to enable me to determine whether his motion is in order.
– Until group 7 has been disposed of. As the right honorable the Prime Minister (Mr. Lyons) has promised certain tobacco-growers in Queensland that a further special investigation will be made into the tobacco industry, I submit that these sub-items should be postponed. There has been considerable controversy among various sections of the tobacco-growing industry as to the value of the Tariff Board’s report on which these duties are based. I do not know whether that report is or is not based on sound, information; but as the Prime Minister has promised the tobacco-growers in Queensland a special investigation, these sub-items should be postponed.
– A special investigationwas promised in only one tobacco-growing centre.
– Even if it were made to growers in only one centre, or even to only one grower, the fact that such a promise was made causes some doubt as to whether the inquiry by the Tariff Board on which the Government acted examined all phases of the tobacco-growing industry. Is it suggested that we should finally agree to these duties when the Prime Minister has already arranged for a further inquiry to determine whether the growers are receiving fair treatment? There must be some foundation for the assertions that have been made. The Tariff Board stated that if the industry was not to be handicapped the total gross revenue to be received by the Government should not exceed £6,500,000. What revenue has been secured?For the firstnine months of the financial year the revenue collected amounted to £400,000 in excess of the estimate, and if collection for the remaining three months is in the same ratio, the total excess of revenue received in the form of excise and customs duties, will be £7,120,000, or practically £600,000 in excess of the estimate. As the estimate is so far astray, the committee is justified in now postponing the consideration of these duties until a further report has been received. I do not favour an increase in duty; and I have already informed the committee that I will support lower excise duties. The exportation of tobacco has been lightly dismissed by those who have spoken on behalf of the tobacco-growers as something that is probably not worth considering. I have already pointed out its national importance, and have also referred to the American balances. I do not think that the committee is aware of the exact nature of the preferences that have already been extended by the United Kingdom. It is stated in the Economic Committee’s report that -
Preferences on Empire tobacco were accorded in September, 1919, by the granting of a rebate of one-sixth of the full rate of import duty. At the time this represented an advantage of 1s. and1s. 4 5-12th of a penny per lb. In July, 1925, the rebate was increased by 50 per cent, to one-fourth of the full rate, or 2s.
Who can say that Australia will never have an export trade in tobacco? The United Kingdom is the world’s biggest importer of tobacco, yet only a small proportion of its importation comes from Empire sources. Most of the tobacco imported into Great Britain comes from North America. In 1921, Empire producers supplied 3.3 per cent, of the tobacco consumed in the United Kingdom, compared with 94.3 per cent, from the United States of America, and 2.4 per cent, from other foreign countries. In the following year ‘the proportions were respectively 6.8 per cent., 90.2 per cent., and 3 per cent. Those proportions were maintained practically unaltered until 1927, after which the supplies of tobacco from Empire sources steadily declined, notwithstanding the preference, while the supplies from American sources steadily increased. In 1928, Great Britain imported from Empire sources 19.7 per cent, of her tobacco requirements.; in the following year 13.1 per cent., and in 1930 - the latest year for which I have been able to obtain figures - 14.9 per cent. The importations of tobacco into Great Britain from the United States of America in 1928, 1929, and 1930 were respectively 79 per cent., 85.6 per cent., and 83.5 per cent. When we reflect that the United Kingdom buys tobacco to thu value of about £15,000,000 each year, and that that country has imposed a duty of 9s. 6d. per lb. on tobacco, it will be seen ‘ that there is ample scope for th» development of an export trade in tobacco from Australia. The Government has in hand £600,000, which it . has taken from the consumers of tobacco, and I suggest that it should expend that money in obtaining additional preferences from England.
– Let us first give effective preference to the United Kingdom.
– I agree with tha honorable, senator that that should be done. At present we are not giving the Mother Country effective preferences. The postponement of the sub-items would enable the investigation promised by the Prime Minister to be conducted ; it would reveal the possibility of developing an export trade in tobacco, and would prove the truth or otherwise of the charge that the reduction of the -import duty has inflicted hardship on the tobacco-growing, industry in this country. The motion for postponement should have the support of every honorable senator who has the interests of the tobacco-growers at heart.
– The development of an export trade in tobacco, which may happen in the dim future, if at all, has nothing to do with the question under discussion. This belated motion for the postponement of the sub-items, which might well have ‘been, moved before we embarked on yesterday’s discussion, does not appeal to me, because it rests on no solid ground whatever. The Prime Minister could have told the tobacco-growers at Mareeba that on the 30th October, 1931, the then Minister for Trade and Customs (Mr. Forde) referred the duties on tobacco to the Tariff Board for investigation and report, and that the board’s report was .not furnished until ‘the 3rd February in the following year. An examination of the names of the persons who gave evidence before the Tariff Board shows that one of the witnesses was Mr. Leon Macintosh Ellis, a tobacco-grower of Mareeba, Queensland. The Mareeba growers had ample time- to place their case before the Tariff Board. Advices which I have received, as we]l as press reports and telegrams, indicate clearly that the inquiry promised by the Prime Minister had reference only to the Mareeba district. The Mareeba growers complained that they had only 28 hours in which to prepare their case for the Tariff Board, whereas, in fact, they had all the time which I have indicated. The Prime Minister told the people at Mareeba, who complained that the tobacco-manufacturing companies had refused to buy useful tobacco, that their complaint would probably be referred to the Tariff Board, and also that Mr. Howell would undertake an investigation into the conditions existing at Mareeba. For the reasons which I explained yesterday, the conditions existing at Mareeba are not encouraging. The conditions there differ from those which prevail at other centres. Mr. Lyons told his audience that he was concerned about the position of the unfortunate people at Mareeba, and that he would arrange for an immediate investigation of their case, but that he could not permit another inquiry into the tobacco industry as a whole. I do not, know what special difficulties exist at Mareeba; but I understand that leaf spot has made its appearance there. This subject has been fully debated from every angle, and there is no justification for postponing the subitems merely because a further investigation is to be made into the conditions existing at one centre. The trouble at Mareeba has no bearing on the tobaccogrowing industry in Victoria, South Australia, and other places, where the growers have not complained of having been given no proper opportunity to present their case to the Tariff Board. The committee should reject the motion for postponement. The action of the honorable senator is an afterthought - something which the French call staircase wit.
– Esprit d’escalier
– The existonce of leaf spot at Mareeba is a new development, which has caused some unrest among the growers there; but, into the condition of the industry as a whole, there will be no further inquiry. The Prime Minister made that definite at Townsville.
– Evidently his promise was merely a political sop to one area.
– The attitude of the members of the Country party is to me somewhat paradoxical, because, although they refused to support the request of Senator Barnes for an increase of duty, they are now supporting a request by ‘Senator Hardy that the item be postponed, with a view to giving additional protection to the Australian tobacco-growers. I do not know whether their minds have been affected by either the flight of the Astraea over Canberra or the use of the tobacco which was distributed gratis by Senator Collings during my absence from this chamber yesterday. According to the Queensland press, the Prime Minister (Mr. Lyons) met a number of largo deputations of tobacco-growers in North Queensland, and promised them definitely that on his return something would be done on their behalf. We should do everything in our power to assist those who have had the courage to invest, their money in the tobacco-growing industry. Although the Prime Minister has promised to do something for the growers, the Government has not altered its policy of allowing American tobacco to enter this country under a low rate of duty. We have no more interest in the
United States of America than that country has in Australia. There is ample evidence to show that the American people object to anything that is Australian made. I, therefore, support Senator Hardy’s request that this item be postponed in order that the tobaccogrowers in Australia may state their case to the Government. The following is a copy of a telegram which I received today from Cairns : -
Cairns Chamber strongly supports Mareeba Chamber relative to increase in duty and decrease in excise on tobacco. Present duty enables manufacturer import lower grades at an advantage over Australian leaf. This industry, being in its infancy, requires careful nursing and every encouragement and support. Urge upon you vital importance to this part of Queensland that industry should be assisted enable it to survive, and therefore request you use every endeavour have duty increased and excise decreased.
I have also received the following letter from E. S. and R. C. Moulton Limited, of Sydney, who are the sole distributors for the Associated Tobacco Manufacturers Proprietary Limited : -
We desire to bring bo your notice the circumstances surrounding an incident thai occurred during the recent Royal Agricultural Show in Sydney. As distributors for the Associated Tobacco Manufacturers Proprietary Limited, of Brisbane, who manufacture highclass Australian tobacco, we staged an exhibit in the industrial hall at the show, and, as a back-cloth to our stand, a life-sized replica of the above sign was erected. The Royal Agricultural Society took exception to this sign, and ordered its removal.
The sign to which objection was taken was the figure of Uncle Sam leaning over a customs barrier, the whole surmounted by the query, “ Would they allow our tobacco into Virginia?” The action of the Boya! Agricultural Society in ordering the removal of that sign clearly shows that there is a sinister influence at work with a view to undermining the Australian tobacco-growing industry. Although I am not a smoker, I do nol begrudge a smoke to any of my fellow citizens, but I do object to the use of insidious propaganda to the effect that there is something wrong with the Australian-grown product. In New South Wales, a large quantity of leaf is grown at Tumut and in New England district and at other places, but there is no reason why large areas of lowgrade land in that State should not be used for tobacco cultivation. In Tasmania, along the Derwent Valley, tobacco-growing is largely taking . the place of hop-growing. In Victoria, this product is grown in the Ovens district and in the Goulburn Valley. In Queensland, it is grown at Mareeba and other places. I do not know whether tobacco is produced: in South Australia or Western Australia, but I suggest to honorable senators that, in the interest of the growers generally, this item should be postponed until the Government decides upon a definite policy for the assistance of the tobacco-growers. I am prepared to give the growers a protection of 100 per cent.
– They receive a protection of 300 per cent., under this item.
– We are protecting the British growers to the extent of 900 per cent.
– In that case, I am prepared to give the Australian grower a protection of 1,000 per cent. I am interested only in Australia, where I get my bread and butter. I am quite prepared to place an absolute embargo upon tobacco imports from the United States of America.
.- I regret that I cannot support the motion. A definite opportunity for the friends of this industry to display, in a practical way, their sympathy with it was furnished by my request, on which a vote has just been taken. This appears to be merely camouflage, to endeavour to make outsiders believe that something is being done on behalf of the tobaccogrowers. I trust that the promise of the Prime Minister to representatives of the tobacco-growers in Queensland will be honoured.
.- I agree with the Leader of the Opposition (Senator Barnes) that Senator Hardy is endeavouring to camouflage the vote that he recorded earlier in the afternoon, by making it appear that he is attempting to help the tobacco-growers in the Riverina and other parts of New South Wales. Yet I do not believe that the promise of the Prime Minister bears the interpretation placed on it by the Minister, that no matter what may be the result of the proposed investigation, the policy of the Government will not be altered. If that were the case, of what use would be the investigation? Representatives of one of the most important sections of the tobacco industry in Queensland told the right honorable gentleman that they had not been given the opportunity enjoyed by other sections to place their case before the Government.
– I can only assume that the Tariff Board did not prosecute it’s inquiries sufficiently far afield to enable these growers to present their case. It is apparent that that fact was recognized by the Prime Minister. I cannot believe that he intends that in no circumstances will the policy of the Government be altered. But, in any event, I cannot see what is to be gained by the postponement of the sub-items. Itis hoped that the whole of the tariff schedule will be completed within the next two weeks; and it would be quite impossible to obtain the additional information required before the expiry of that period. I do not propose to. fall for any of the sly tricks of the “ Cromwell of the Riverina “, as he is described by his opponents. The promised investigation can be held before the House of Representatives again has the tariff before it.
– With Senator Barnes, I have considerable doubt as to Senator Hardy’s intentions. That honorable senator declined to assist the Leader of the Opposition (Senator Barnes) to carry a request that would have given substantial protection to the Australian tobacco industry. According to the Townsville Bulletin, a very reliable newspaper, the Prime Minister admitted that the fact that the Tariff Board had not visited Mareeba was unsatisfactory, and said, “ The board should investigate the position at Mareeba again, to get at the facts. I guarantee that an independent investigation will be made “. In my opinion, the interpretation to be placed on those words is that action will be taken if the. investigation support’s the contention of the Mareeba tobacco-growers.
– The honorable senator does not favour an investigation in only one area !
– I should have a general investigation if the position were proved unsatisfactory. With Senator Dunn and a number of other good Australians, I am a strong advocate of placing an embargo on the importation of black-grown American tobacco leaf.
– The honorable senator is not in order in referring to an embargo.
– There is no doubt as to where I stand in regard to affording efficient protection to this industry.
– The question before the Chair is the postponement of the sub-items, and the remarks of the honorable senator must be confined to it.
– I am endeavouring to do that. I cannot see what is to be gained by the postponement of the sub-items until the end of the schedule, because the result of the investigation could not by then be known, and we should be no further advanced. I understand that Senator Hardy is anxious to make the retention of the present import duties contingent on the adoption of the Country party’s pet idea of the reduction of the excise duty by 8d. per lb. As it would appear, however, that he is not disposed to reveal what is in his mind, I intend to oppose the motion, from which no good could come. He did not give practical expression to his solicitude for the industry when the opportunity to do so was afforded to him. The most important -sentence in the telegram from the Cairns Chamber of Commerce reads, “ The present duty enables the manufacturer to import lower grades at advantage over Australian leaf “. That means that a great deal more tobacco will be imported.
– Why make a decision now, when a further investigation of the conditions prevailing in the industry is to be made?
– Officialdom works slowly, if surely, and by postponing the item, we shall be making no progress whatever. The honorable senator should be prepared to submit a concrete proposal. His suggestion for a reduction of the excise duty by 8d. per lb. would mean lOd. per lb. less protection to the industry than was proposed by the Leader of the Opposition (Senator Barnes), whose requested amendment Senator Hardy helped to defeat.
– My original intention was to move for the postponement of the item, but you, Mr. Chairman, require me to suggest a definite time for its consideration. Could not the committee postpone its consideration until shortly before the 1/hj.rd reading of the bill? An effort will be made in this chamber to recommit the whole of the schedule, because certain honorable senators believe that a report by the Tariff Board, which the Government is withholding from us, contains certain information regarding a reduction of duties. Therefore, what is to prevent the postponement of the consideration of this item until the day before the motion for the third reading of the bill is submitted? One, two, or even three months may elapse before this committee reassembles after the approaching recess, and if honorable members in another place follow the usual practice, they will not take more than 24 hours to consider our requested amendments. Immediately afterwards, we could deal with the motion for the third reading of the bill. In view of the promise of the Prime Minister, which the Minister in charge of the hill interprets in one way, and on which Senator Foll places a different construction, because he said that he understood there was to be a general investigation of the position of the industry-
– I said that a particular section of it’ was to be the subject of an investigation.
– The committee ought to have definite information as to the nature of the proposed inquiry.
– I shall explain the position in a moment.
– If all the growers in Australia were asked whether they desired another investigation, their vote would be overwhelmingly in the affirmative. Senator Foll accused me and the Country party of refusing to take advantage of an opportunity to reduce the duties.
– I said nothing about the Country party.
– The remark was made to me, and the policy of the party to which the honorable senator belongs is to make no alteration of the tariff unless it is supported by a report from the Tariff Board.
SenatorFoll. - The honorable senator has not heard me proclaim my belief in Tariff Board reports.
– But I take it that, as Government Whip in this chamber, the honorable senator supports the policy of the Government.
– I ask the honorable senator to confine his remarks to the subject under discussion.
– The Minister should inform the committee as to the nature of the inquiry promised by the Prime Minister. If it is to be purely a scientific investigation, I am not concerned whether it will be of a general character; but if the prices received by the growers are to be considered, the inquiry should be of a comprehensive nature.
– It is true that the Prime Minister (Mr. Lyons) has promised an investigation, and as I was not aware of the exact terms of the inquiry when I spoke previously, I shall nowclear the matter up. When the price was 2s. 3d. per lb., the Mareeba growers were absolutely satisfied. An expert from the Council for Scientific and Industrial Research visited Mareeba last year, and found that “ everything in the garden was lovely,” amongst the tobacco planters. It appears that the inquiry promised by the Prime Minister has nothing to do with the subject of duty. The conditions of the growers at Mareeba last year were unaltered as regards costs of production, and they were more than satisfied with the price received for their leaf. I caused a telegram to be sent to the Prime Minister’s secretary yesterday, and I have received the following reply : -
Main points of Mareeba deputation were that high cost of producing superior quality leaf this district was unprofitable at present prices and that growers were in desperate position ; secondly, that Tariff Board in considering position had not been informed of special circumstances of Mareeba; thirdly, that BritishAustralian tobacco not purchasing Mareeba leaf. Prime Minister promised firstly, that immediate inquiry into production costs and economic circumstances of industry at Mareeba would be undertaken by Townsend in conjunction with Howell tobacco investigation officer Mareeba andR obi n son development branch; secondly, that if it were true that Tariff Board had not given proper opportunity for presentation of Mareeba case circumstances of this district would be referred to’ Tariff Board. Prime Minister considers that information obtained by Townsend and colleagues will be adequate for Tariff Board’s consideration. No proposal for exhaustive inquiry into industry generally.
It is quite clear, therefore, that the inquiry is to be confined to Mareeba.
– How will it be possible to give preferential treatment to Mareeba ?
– So far as I know, it is not intended to give Mareeba preferential treatment unless some special circumstances exist there. The honorable senator knows that the growers in certain districts have been given a good deal of assistance by the provision of free seed and the like. One of the most expert officers of the department has been stationedat Mareeba for the last five years for the purpose of giving the growers expert advice.
– And he is most highly respected throughout the district.
– This officer reported last year that the Mareeba growers were quite satisfied with their position, But, unfortunately, this year, in consequence of the ravages of a certain pest, they are dissatisfied. It seems wise, therefore, that the cause of their dissatisfaction should be inquired into. But this does not mean that they will be given preferential treatment. The whole trouble at Mareeba is that whereas the leaf grown last year was up to standard, the leaf grown this year is not up to standard. As usually happens in such a case, Parliament has been approached for assistance. An inquiry will be made into the circumstances at Mareeba, but a general inquiry will not be made. Houorable senators know that the Tariff Board made an exhaustive inquiry into this industry in October, 1931, on a reference to it by the Minister for Trade and Customs in the Scullin Government (Mr. Forde). The whole of the reports in the possession of the Tobacco Investigation Committee, and also the services of its expert officers, were made available to the board on that occasion. In these circumstances, another general inquiry could not be justified at present.
– If I did not know Senator Hardy so well, I should be surprised at the illogical attitude that he has adopted on this subject. He opposed the request of the Leader of the Opposition (Senator Barnes) for an increase of duty, but now he is asking for a postponement of the further consideration of the item. However, it seems to me that a case has been made out to justify the postponement of the item. In consequence of the rapid growth of tobacco culture in Australia, great changes have occurred in the industry since the last investigation was made. As no loss will be incurred by the growers through the postponement of the item, but’ benefits may follow from a further investigation into the industry, I think we are justified in asking the Government to hold its hand, at least until the promise of the Prime Minister has been fulfilled. Although it has been said that the proposed inquiry is to be confined to Mareeba, it would appear from information furnished to honorable senators that the causes of the dissatisfaction at Mareeba exist also in other districts. This may lead the Government to extend the scope of the inquiry. I ‘shall, therefore, vote for the postponement of the item.
– The problem confronting the Mareeba tobacco-growers is not confined to Mareeba. I have just returned from a visit to the tobacco-growing districts of South Australia, and I know that the problem which the Mareeba growers are facing is also being faced by the South Australian growers. While I welcome the promise of the Prime Minister that an inquiry will be made into the conditions at Mareeba, I ask for an assurance that a similar inquiry will be made into the conditions in South Australia. There is a growing feeling, among the tobaccogrowers that the tobacco manufacturers, who are protected by these high duties, are not playing the game towards the growers. The South Australian growers have grave fears that they will not be able to sell their leaf this year. The biggest buyer of local tobacco leaf in that State has announced that it will not declare its policy until August. This means that the tobacco-growers will have to keep their leaf in the cured state until August. No complaint has been made respecting the quality of the South Australian leaf. Seeing that this Parliament has formulated a definite policy for the encouragement of tobacco-growing in Australia, and is providing substantial protection for the manufacturers, it expects the manufacturers to deal fairly with the growers.
– Are the manufacturers not sending their buyers into the tobacco-growing districts, or are the buyers there, but not offering fair prices ?
– The price is not a factor in the South Australian situation at the moment. The Carreras company has said, “ We do not intend to buy any South Australian leaf this year.” It has not given any reason for this statement. The quality of the South Australian leaf grown this year is equal to that produced last year, when it was sold without trouble. Another company has said, “ We cannot tell you whether we shall purchase leaf or not. We shall determine our buying policy in August, and act accordingly.” The South Australian crop matures earlier than that of Queensland. Ours is a federation of States, and, as I and others have to pay approximately 3d. on each packet of cigarettes in order to protect the Australian tobacco industry, I am concerned about South Australia receiving a section of the trade which is available.
– Can the honorable senator name the amount of leaf that was bought last year in South Australia and the month in which it was purchased ?
– No; but I am bringing under the notice of the Minister a specific complaint that has been made to me by one of the leading tobacco-growers of South Australia; it was also communicated to Senator Badman, who asked questions on the subject in this chamber. The matter is important from the point of view of South Australia, and it should be investigated, and those engaged in” the production of tobacco guaranteed some degree of certainty as to the disposal of their crop. I propose to support Senator Hardy’s amendment, and would welcome an investigation. Without the aid of a deputation, I should like the Minister to give an assurance similar to that which was obtained by the Mareeba growers.
– Senator Foll has criticized a person whom he has described as the “ Cromwell of the Riverina.” I have read of that modern dictator in Smith’s Weekly, but I do not really know who he is. At the same time, I know Senator Hardy, of New South Wales, and, while I am not the custodian of that gentleman’s conscience, I am amazed at its elasticity, for it permitted him to vote against the request that was made by Senator Barnes for an increase of the duty on imported tobacco, and then prompted him to move the motion for the postponement of the item now before the committee. However, that is his baby, and he will have to nurse it, and explain the reason for voting against the proposed increase of the duty on imported leaf when he faces the tobacco farmers of New South Wales. I support the motion . for postponement, as I want to have a. general inquiry made into the industry, such as was promised by the Prime Minister (Mr. Lyons), and I do not wish it confined to any one State. Tobacco is extensively cultivated in the Tumut and New England districts of New South Wales, while farmers’ in the Derwent Valley district, of Tasmania, have invested thousands of pounds in the industry, and there are many growers in the Ovens district, in Victoria, and in South Australia, and in Queensland. All should have an opportunity of stating their case. I shall do everything possible to bring about a postponement of the item until a general investigation has been made into the industry; that will not in any way interfere with the protection that is given to the tobacco-growers.
[3.46]. - No good purpose can be served by postponing the item to deal with the complaint raised by Sena tor Daly and Senator Badman, that no leaf has been purchased in South Australia this year,for it is not a matter which can be referred to the Tariff Board. When complaints were made last year regarding the purchase of leaf by the tobacco companies, an investigation was carried out by officials of the Customs Department. I understand that the matter referred to by Senator Daly and Senator Badman has been investigated, and that buying this year will begin a month later than it did last year, because of the lateness of the crop in various parts of the Commonwealth, the outbreak of disease among Victorian crops, and excessive rains in some Queensland districts. Before a tobacco company sends its representatives through the widespread tobacco districts on their buying expeditions, it must determine its buying programme, to do which it must have an estimate of the probable quantity available, and also know something of the quality of the leaf. When it has gained this knowledge, it sends out its representatives. There is , no sinister motive for the delay that is incurred this year, which is due merely to the fortuitous circumstances that I have mentioned. The company intends to send its buyers to South Australia as in the past, but that will probably be a month later than usual. I have asked the officials of the Customs Department to note the criticism that has been made by Senator Daly and Senator Badman, and have been assured that the matter will not be lost sight of. I again impress upon honorable senators that no good can result from the postponement of the item.
– I do not want a misinterpretation of my remarks to appear in Hansard. My complaint was that a deputation of Mareeba tobacco-growers brought under the notice of the Prime Minister the very problem that confronts the buyers in South Australia to-day, and the Prime Minister has seen fit to guarantee to the Queensland growers an investigation.
– The Mareeba growers have not been heard yet.
– The Minister has told us that the Tariff Board has inquired into this matter, and completely exhausted it; that the last word was said before the board, and that we now should accept the board’s recommendation as the last word from it. Yet the Government Whip has just told us that the Mareeba growers have not been heard, that the industry has not been fullyinvestigated, that the last word has not been said by the growers, and should not have been said by the board. Are we to follow the leader, or to be whipped in by the Whip ?
SenatorFoll. - Follow the leader.
– Then I should like to know where he proposes to lead us. I desire to receive an undertaking from the Government that the same treatment will be meted out to the growers of South Australia as to those of Queensland. South Australia is a part of the Commonwealth, and is entitled to equal treatment with other parts of the Commonwealth. While I am a member of the Senate, I will demand equality of treatment, and I must receive an assurance from the Minister before I shall support the passage of the item.
Question - That the sub-items be postponed - put. The committee divided. ( Temporary Chairma n - Senator Sampson.)
Majority . . . . 20
Question so resolved in the negative.
Sub-items agreed to.
Items 20, 21, 22, 24 agreed to.
Items 43 (a) (b) and (c) and 100 (a) (b) agreed to.
Division 5. - Textiles, Felts and Furs and Manufactures thereof and Attire.
Item 105, sub-items (A1a), (b) (c) (d1, 2) (e2)-
Piece goods, viz. -
(1) Artificial silk, or containing artificial silk or having artificial silk worked thereon, except piece goods enumerated in subparagraph (b) of paragraph (1) of sub-item
and in sub-items (aa) and (f), ad valorem - British, 20 per cent.; general, 40 per cent.
– I move -
That the House of Representatives be requested to make the duty, sub-item (d1), ad valorem - British, 10 per cent.
It has always seemed strange to me that a heavier duty should be imposed on artificial silk textiles than on those of pure silk. Artificial silk materials can be turned out very attractively, and at a price that suits the pockets of those of limited means, while silk of good quality can be purchased only by those of greater means. Therefore, artificial silk materials are imported in very much larger volume from Great Britain than are silk materials.
– Artificial silk is a much stronger competitor of our woollen goods.
– The manufacture of artificial silk textiles has become an important industry in Great Britain. To retain their trade with Australia and other countries, manufacturers in the Mother Country have been compelled to give their attention to the production of this class of textile, and they are now turning out fabrics that hold their own with the products of any other country. In 1930-31, our imports from Great Britain of artificial silk and materials containing artificial silk amounted in value to £596,443, and our total imports to £1,302,367 ; last year, they declined to £436,365, with a total importation of £1,132,505. Approximately about one half of our importation of artificial silk textile materials comas from Great Britain. In 1930-31, we imported silk materials to the value of £1,685,121, and in 1931-32, of £1,331,719. From Great Britain, our imports of this material amounted to only £145,983 in 1930-31, and £116,727 in 1931-32, as against importations from Japan in 1930-31 amounting to £1,217,080, and in 1931-32 to £1,048,344. Yet in our tariff, we continue to penalize British manufacturers engaged in the production of artificial silk textile material while retaining lower duties on Japanese silk fabrics which, piece by piece, are not so satisfactory to the people of small means as are the artificialsilk textiles produced in Great Britain.
– Artificial silk comes more into competition with our woollen goods.
– I totally disagree with the honorable senator. In what way is artificial silk a greater competitor with woollen goods than silk material ?
– It is cheaper.
– But it is not used for the same purposes as woollen textile materials. “We have to remember that a not inconsiderable portion of this continent is sub-tropical. People living in Queensland should have the opportunity to purchase materials suitable for that climate. Woollen piece goods are not in demand in the northern portions of Australia, but artificial silk certainly is. There is a great deal of misconception among honorable senators as to the nature and quality of artificial silk goods, such as are now being manufactured in Great Britain. I have before me a range of plain artificial silk textile materials, which the manager of one of the largest firms in Australia has assured me are equal to anything that he has ever handled.
– Where are they made?
– In Great Britain. The quality of this material is such that I consider we should give British manufacturers a chance to hold their trade with
Australia as against Japan, with her silk textiles, because artificial silk is cheaper, and, therefore, more suitable for the person of average means.
– Does the honorable senator suggest that artificial silk is not manufactured in Japan?
– Of course it is.. Our imports of that material from Japan amounted in 1930-31 to £39,543, and last year to £131,413. From Great Britain in those years we purchased £596,443 and £436,365 worth respectively. Our imports from Japan of silk materials are about ten times as great as are our importations of similar materials from Great Britain, proving conclusively that artificial silk is in much greater favour with our people. If we retain the existing duties on artificial silk, we shall be doing a great injustice to British manufacturers.
– Is artificial silk as goodas real silk?
– In some respects it is better.
– Until it gets wet.
– The artificial silk textiles now being manufactured in Great Britainwill stand any amount of laundering, and are in every respect a really useful fabric, totally different from the crude artificial silk materials formerly manufactured in Great Britain and elsewhere. If wecontinue these heavier duties on artificial silk textiles, as compared with silk piece goods, we shall be doing harm to British manufacturers, and be giving foreign manufacturers of silk materials a still greater advantage.
– These are all revenue duties. I am advised that, if the reduction of. the duty is made in sub-item d1, the loss to the revenue will be over £100,000. These duties were the subject of an informal discussion at the Ottawa conference.
– Why was not silk made subject to the same rate as artificial silk?
– At the moment I cannot tell; but the Ottawa conference agreed to a margin of 20 per cent, in favour of British manufacturers. From the Australian point of view, artificial silk is one of the strongest competitors with woollen materials, whatever the honorable senator may say to the contrary. It is manufactured in a most attractive form, so as to catch the eye of the fair sex. In respect of neither utility nor value can artificial silk be compared with wool, and its use is detrimental to the woollen industry and ‘the revenue. Senator Payne has pointed out that on piece goods of silk or containing silk, the duties are 10 per cent, and 30 per cent., as compared with rates of 20 per cent, and 40 per cent, on artificial silk. I would prefer that people should wear articles of silk or containing silk rather than articles of artificial silk. At one time, men’s ties were made principally of silk and artificial silk; to-day, we can buy superior ties made of wool. For the reasons I have stated, I oppose the request.
.- No one who has been in the softgoods trade would suggest that artificial silk enters into competition with ordinary woollen textiles. Before artificial silks were produced, women had to rely largely on cotton-printed goods for light apparel, Cotton is comparatively harsh tothe skin. The trade in ordinary calico and longcloth is not nearly so great as itwas twenty years ago, and this is due mainly to the fact that British invention has produced softer materials which are more suitable. Artificial silk takes the place of silk and cotton materials, which are not manufactured in Australia. Woolhas its own uses, and we all appreciate its value for undergarments and heavy, warm piece goods; it certainly does not suffer from the competition of artificial silk goods, which are used principally for cool outer garments. I cannot ignore the Minister’s statement that this duty on artificial silk is imposed purely for revenue purposes, and I therefore suggest that silk and artificial silk should be subject to the same rates of duty. If that were done, the British manufacturer would have that’ protection against foreign competitors to which he is entitled.
Question - That the request (Senator Payne’s) be agreed to - put. The committee divided. ( Temporary Chairman - Senator Sampson.)
Majority . . 7
Question so resolved in the negative.
Request (by Senator Payne) proposed -
That the House of Representatives be requested to insert the following new paragraph insub-item (e) : - (e3) Italians containing wool, ad valorem,
British, 5 per cent.; general, 25 per cent.
Request agreed to.
Sub-items agreed to, subject to a request.
Item 106 (d1) (e1) (f1, 4) agreed to.
Item 118, sub-item (a) (Carpets, &c).
Sub-item agreed to.
Remainder of division, namely, items 120 (c2, 3) and 130 (a) (b) agreed to.
Items 181 (a2) and 197 (b) agreed to.
Division 7. - Oils, Paints and Varnishes.
Item 229, sub-items (b1, a b c, 2 a b, 3, 4 a b, 5, 6) (c) (dl, 2) (e)-
Oils in vessels exceeding one gallon -
Petroleum and shale products, namely, naphtha, benzine, benzoline, gasolene, pentane, petrol and any other petroleum or shale spirit, per gallon, British, 7d.; general, 7d.
– I move -
That the House of Representatives be requested to insert the following new paragraph in sub-item (c) : -
For many years fuel required for stationary engines was admitted free of duty. Later, when the duties were raised, a line appeared in the schedule stating that fuel for stationary engines, tractors, and farm machinery would not be subject to the duty of 7d. per gallon. This tax was raised to its present level mainly for road purposes, and the Commonwealth Government hands actually 2½d. of the 7d. to the State Governments for the construction and maintenance of main roads. With the revenue derived from the duties imposed on petrol wonderful highways have been constructed between the capital cities in the eastern States, and to this no one objects. But there is a strong feeling of dissatisfaction among those using petrol engines, auto-headers, and other similar machines, who have to pay this heavy duty, without using the roads. When a detour is made from the main highways, unsatisfactory roads are immediately encountered, and it is these that the farmers use, for the most part.
– How could such a scheme be administered?
– It is being satisfactorily administered in New Zealand to-day. The customs officials are able to overcome the most intricate problems associated with machinery. For instance, they have determined that a tractor which hauls a machine should pay a higher duty than one which pushes a machine, and the Customs Department which, in the collection of revenue, is the most efficient in the world, should be able to submit an ingenious method of overcoming this difficulty. It should be able to administer this scheme, particularly as a similar arrangement is in operation in New Zealand. Farmers and others engaged in primary production should be able to get some advantages from power machinery which they have purchased, but, unless they use power kerosene as a fuel, which is very heavy, they are compelled to use petrol, which is costly for farm work. They have either to use power kerosene or to pay a heavy duty on petrol. That was comparatively easy during the period when the prices obtained for their commodities were high ; but, with the low prices now prevailing, they are facing ruin. This remission of duty should be granted, particularly as a similar concession was provided in the 1926 tariff, and remained on the statutebook until 1929. At that time it was provided that the petrol companies and the users should certify that the petrol was used for agricultural purposes. As the companies refused to grant a certificate, the law in that respect was inoperative, and the farmers did not obtain the relief which Parliament intended. Under the exemption which I have proposed, fuel used by aeroplanes would be obtainable at the lower rate. The Defence Department uses a large number of aeroplanes, and unnecessary additional expense should not be incurred for defence purposes. As certain aeroplane services in the outback parts of Australia are heavily subsidized, and the Government is about to call for tenders for an extension of these services, the cost of this form of transport should not be made higher than is necessary by charging a duty of 7d. a gallon on the petrol used. The amount of 5½d. a gallon has been fixed to ensure that there shall he no inconsistency between the product of the Commonwealth Oil Refineries Limited which is distilled in Australia, and that of other petrol suppliers. The Commonwealth Oil Refineries Limited pays 5-Jd. excise duty on its products. It has been suggested that the petrol subject to the lower rate of duty should be coloured, or that it should be sold in containers; but that is a matter which could be determined by the customs officers, who could obtain information from the New Zealand Government as to its method of making a distinction, where relief in this respect has already been granted.
– The exMinister for Commerce, Mr. Hawker, said that it was a practical scheme.
– Yes. Mr. Hawker has been a keen advocate of this distinction, and, in another place, moved an amendment on similar lines to the request I have submitted.
– Mr. Hawker, when a member of the Government, did not submit a workable proposal to administer it.
– There has never been a better Minister than Mr. Hawker, nor one who has been a greater loss to the Government; but, unfortunately, his term of office was short, and it takes a new Minister some time to get into his stride. I feel sure that, if Mr. Hawker had remained in the Government, he would have submitted a workable scheme.
– If what is suggested were impracticable he would not have suggested it.
– That is so. Mr. Hawker is a practical farmer, and proved himself a practical administrator. He is fully cognisant of the fact that men on the land are facing difficult times, and are entitled to relief. I hope that, for a change, the Government will accept the request I have moved, in order to afford the’ relief if is designed to give.
– It was the policy of the Government with which I was pre- viously associated to give effect to the principle embodied in the honorable senator’s request; but it was found to be impracticable. We believed in the principle, but, in endeavouring to apply it, found that the difficulties of administration were insurmountable, due partly to constitutional limitations, and, ultimately, had to abandon it. An amendment similar to the request now before the committee was moved in another place, but’ even before that was done the subject was discussed by Cabinet. It was also under consideration when the Bruce-Page Government was in office, but attempts to afford relief failed. The honorable member for Gippsland (Mr. Paterson), who was a member of the Bruce-Page Government, and the honorable member for Wakefield (Mr. Hawker), who were interested in the scheme, were invited to suggest a means of overcoming the difficulties, but they could not do so. In the dominion of New Zealand, that difficulty does not arise. If Senator Johnston will make inquiries, he will find that the administration in New Zealand is far from satisfactory. A similar scheme has been attempted in the United States of America, where, I understand, the device of colouring petrol was unsuccessfully tried. Although Ministers and officials in New Zealand have approached the subject in a most sympathetic way, numerous difficulties exist. An effort waa made by the Bruce-Page Government, and by the late Government, to afford some relief, but all attempts to do so failed. In 1926, the tariff proposals of the Government imposed duties of 2½d. per gallon, British, and 3d. per gallon, general, on petroleum and shale spirits, such as petrol and benzine, irrespective of the purpose for which the spirit was used. In an attempt to relieve petrol consumers who did not use petrol in road vehicles from a tax imposed for road purposes, an amending tariff proposal was introduced shortly afterwards. The amendment provided that, subject to departmental bylaws, petroleum and shale spirits used otherwise than in motor-driven vehicles, cycles, tractors, road rollers, and similar appliances using public roads should be admissible at the rates of duty previously in force, namely, ½d. per gallon, British, and Id. per gallon, general. For the purpose of protecting the revenue, the department found it necessary to require importers of petrol to lodge a cash deposit equal to the difference between the lower and the higher rates of duty, the deposit to be refunded upon submission of satisfactory evidence that the petrol had been used otherwise than, in motor-driven vehicles using public roads. The evidence demanded by the department took the form of a statutory declaration by both the importer and the user, indicating the particular purpose for which the petrol had been used. The difficulties experienced in attempts to administer the by-law were, however, so great as to be practically insurmountable. In the first place, the customs law does not enable refunds of duty to be made except to the .person who originally paid the duty. Petrol is not used by the importer, but passes through one or more intermediaries before reaching the user. Almost every country user of petrol for other than road purposes also uses petrol in a motor car or truck using public roads. With petrol users scattered in thousands throughout the Commonwealth, the oil companies were involved in considerable expense in attempts to provide machinery which would enable the refunds to be made. But they found it quite impossible to keep office records which would enable the department to satisfy itself that the refunds were properly due. Numerous discussions took place between the executive officers of the department and the principal oil importers in an earnest’ endeavour to reach a practicable arrangement, but importers finding the position, impossible, adopted the practice of paying the full duty at the time of entry, and ceased to claim refunds except in respect of petrol consumed by certain large consumers such as rubber manufacturers, aviation companies, dyers and cleaners, whose transactions in petrol could be verified. A further complication has arisen since the by-law item was first incorporated in the tariff in 1926. Since August, 1929, an excise duty has been imposed on petrol distilled in Australia, so that the further difficulty arises, in the granting of the rebate, of distinguishing between Australian and imported spirit, which are invariably sold at the same prices.
It has been suggested ‘that the difficulty of granting rebates of duty could be overcome by the colouring or tinting of petrol intended for other than road purposes. An examination of this suggestion has been made, and it is apparent that there would be very serious difficulties in the way of administering such a scheme. In the first place, the importer would present his entry at the free rate of duty, or at the concessional rate, on the ground that the petrol was coloured or tinted. At this point, the Customs Department would have no means of checking, or even of knowing, the uses to which such petrol would be put. Presumably, this lack of evidence would necessitate the collection by the department of an amount equal to the ordinary duty which would be payable. But, even ignoring this aspect of the matter, if the petrol were admitted free, or at the concessional rate, the Customs Department would have no authority to check the uses to which it was to be put. Even if it did’ check such uses, and found that some of it was being put to illegitimate uses, it could not take action against the user, because the person who entered the petrol was the importer. The first essential step, to be taken, therefore, would be to induce the .States to pass legislation making it an offence to use coloured petrol for road purposes. The policing of the scheme would then have to be considered, and it is obvious that the best scheme would present many loopholes. Moreover, the system of checking and inspecting the petrol in motor car tanks would be an exceedingly dangerous one. We therefore come back to the point that, for the protection of the revenue, the Customs Department must be assured of the uses to which the petrol would be put, and that it must, therefore, demand the ordinary duty at the time of importation. That brings us back to the refund system which was persevered with by the department for’ a number of years, and under which no refund was granted in respect of any petrol used for farming purposes. Certain aviation companies, rubber companies and dry cleaners, and boot polish manufacturers, received remissions of duty, but the main purpose of the item was to grant petrol at concessional rates to primary producers when it was used for other than road purposes.
Since the department was then unable to devise a scheme which would adequately protect the revenue, it is safe to say that with the intensification of the depression, it would be much more difficult to lay down plans which would effectively meet all the difficulties inherent in this proposal.
It is true that a scheme of rebates on petrol used for non-road purposes operates in New Zealand ; but it must be remembered that New’ Zealand has a unified form of government, with one Parliament, which has complete and full power, so that the system mentioned can be operated there with some hope of success. Such a scheme would be infinitely more costly to operate in the Commonwealth, owing to the lack of constitutional power in the Commonwealth Government. In New Zealand, the motor registration branch operates this system, whereas in Australia, motor registration is controlled by the States. When in New Zealand recently, Senator Greene inquired into the working of this system, and found it most unsatisfactory. There was friction and trouble on all sides, and a large percentage of the claims made had to be rejected. The scheme does not appear to be working successfully in the sister dominion. Nor has it been successful in the American States which adopted it. If honorable senators can suggest a means whereby the primary producers may obtain a rebate, while not leaving the way open for unwarranted claims by others, the Government would give it the most sympathetic consideration. So far, however, it has not been able to find a way to overcome the danger associated with such a system, and it has, therefore, decided to allow things to remain as they are.
Sub-items agreed to.
Division 11. - Jewellery andfancy Goods.
Item 309, sub-items (a) to (d)-
– I move -
That the House of Representatives be requested to amend sub-item (b) to read -
b ) Card Cases, Hatpins, Matchboxes, Ser viette Rings and Clips, Sovereign Purses, n.e.i. ; Button Hooks, Glove Stretchers, Shoe Horns and Lifts, Thimbles, Ivory and other ornamental figures, Feather Dusters; Beads strung or unstrung and Necklets, n.e.i.; except those made of pearls, cultured pearls, precious stones, precious metals, or imitation precious metals, ad val., British, 35 per cent.; general, 60 per cent.
The amendment is designed to overcome serious difficulties which the department has experienced in the classification, for tariff purposes, of the common sorts of beads and necklets. The requested amendment alters sub-item b; first, by deleting the word “ drilled “ which qualifies “ beads “ ; secondly, by including “ necklets, n.e.i.” which previously came under sub-item c; and thirdly, by excluding beads or necklets made from imitation precious metals.
– Why is there no intermediate tariff in this schedule?
– It is hoped that, in the future, bilateral arrangements will be made between the various dominions and the Commonwealth to meet cases which otherwise would be met by an intermediate tariff.
Request agreed to.
Request that sub-item c be consequentially amended, agreed to.
Sub-items agreed to, subject to requests.
Items 313, 314, 315, 318 (a3, 4b) (b) agreed to.
Postponed item 316 (group 1, division 11)-
Imitation, reconstructed and synthetic precious stones and pearls undrilled and unset, cultured pearls unset, ad val., British, free; general, 20 per cent.
Request (by Senator McLachlan) agreed to -
That the House of Representatives be requested to amend the item to read - 316. Imitation, reconstructed and synthetic precious stones and pearls, unset (not being beads ) ; cultured pearls, unset, ad val., British, free; general, 20 per cent.
Item agreed to, subject to a request.
Item 320, sub-item (c2, cl, 2, 3)-
Exposed or developed films -
– I move -
That the House of Representatives be requested to make the duty, sub-item (c2), paragraph (c2), per lineal foot, general, 4d.
The general tariff as set out in this item has caused much perturbation among those interested in the distribution and exhibition of picture films, and I, in common with other honorable senators from Tasmania, have received a considerable number of letters setting out the position as it appears to those interested in the motion picture industry. I have received a communication, dated the 17th June, from the Plaza Theatre, Launceston, one extract from which reads -
It is, perhaps, needless to point out that it is in the motion picture theatres that the great majority of the people find their theatrical entertainment. In fact, the cinema may justly be designated the poor man’s entertainment. Like every other industry, the motion picture business in the last few years has been greatly affected by economic circumstances - probably to a greater degree than other enterprises, and it has been only by the employment of emergency measures that the industry has been able to provide programmes without increasing prices. Even so, the considerable falling off in patronage has made it extremely difficult to carry on, and it is humanely impossible for the industry, already burdened as it is with taxation, exchange, &c, to continue the policy of cheap entertainment with any hope of success.
At the present time the output of British films is not sufficient to supply the needs of Australia, particularly in the matter of first-class feature photo plays, andit is vital to the industry that supplies of American pictures should not be cut off, for a standard has to be maintained, which, of course, is necessary to our existence. There is still a tendency for patronage to shrink. Last year, for instance, according to the annual report of the Federal Taxation Commissioner tabled recently in Parliament, the amount of admission money to picture theatres and the resulting entertainment tax dropped by 4.6 per cent. Should this tariff item be ratified, it will assuredly mean that the extra cost will be handed on to the exhibitor by the exchanges; that is inevitable, and the exhibitor will have no other alternative but in turn to pass it on.
Beyond doubt, that would cut patronage still further. The increase in the duty of 200 per cent, will demand a considerable increase in admission prices, and that is going to effect adversely all concerned - the public, the exhibitor, and taxation revenue.
The following is an extract from a letter from Frank Reynolds and Cummins, auditors, Hobart: -
Any action therefore which will increase the cost of film, such as the proposed increase of duty to1s. per foot, must re-act against the continuation of the present services, and will mean eventually more unemployment, as all the theatres could not continue to operate. If the move is intended to oust the American film companies, the Government should say so, remembering that these companies employ large staffs in Australia, that laboratories for printing films will be closed, and further unemployment result in this direction.
Greater Union Theatres, Brisbane-street, Launceston, write -
The proposal affects almost exclusively American product, and although I am essentially British, screening a large proportion of British and Australian pictures, and heartily endorse any steps taken to further the cause of the Empire product, I cannot but feel that should the proposed increase become law, it will drastically affect my business, even to the extent of closing my theatre. This last phrase, at first sight, may appear somewhat fantastic, but will simply state the case as it concerns Launceston. There are three theatres here needing about eight features per week. British and Australian product amounts to about 25 per cent, of pictures released in Australia, or approximately one hundred features. It is a matter of simple arithmetic to see that Launceston needs every available picture released to keep its three theatres going. What happens therefore if the supply of foreign film is cut down? Undoubtedly, at least one theatre will be closed, and it might be mine.
Further on they say -
The proposed increase simply means this: - a distributing company releasing (for the sake of argument) 60 features a year with an average length of 7,000 feet, will be called upon to lay out an extra £14,000 per annum. There is no company in existence in Australia to-day that can afford to carry this huge increase in overhead, which means that will be passed on to the exhibitors, who,in turn, must pass it on to the masses, by way of increased admission charges.
A letter in similar terms has been sent by the Majestic Theatre, Brisbane-street, Launceston. Mr. Kemp, the Chairman of Directors of the Avalon Theatre, writes -
Further, the new increase in duty will in no way increase the importation of British pictures, as at the present time all British product is being imported into the country and being screened, and the amount of British product available is not sufficient to take care of the number of theatres requiring service.
It would appear that there are in Australia between 1,250 and 1,300 picture theatres, but as a result of the prevailing depression many of those are probably not now exhibiting films. As a matter of fact, I am informed that about 50 of them have gone out of business recently. The high duty has surely reduced importations, and it must create a monopoly, because, obviously; the big theatre groups would make it difficult for the independent or the country exhibitor to procure programmes. Statistics have been prepared by Flack and Flack, chartered accountants, of Sydney. Some of the figures were supplied by the Department of Trade and Customs. They show that the footage of films imported, including those imported free from the United Kingdom within recent years, has been as follows: -
The customs tariff has varied as follows : -
The figures relating to the amount of duty collected are outstanding. They are as follow: -
The admission figures are as follow : -
The material drop in those figures cannot be wondered at; both the public and the corporations which own the different picture theatres have been seriously perturbed at the increase of the duty from 4d. to1s. a foot. That rise was in the nature of an invitation to showmen to import what is known as negative film, and to have it printed from in Australia. That action was taken, with the result that a considerable amount of employment was provided in this country on that work.
– What does, the honorable senator mean when he says that the showmen were “ invited “ ?
SenatorMILLEN. - They were compelled to take action to counteract the effect of the additional impost.
– That was the object of the increase.
– Obviously it was the object of the increase. I have a rather startling return, which sets out the position as it affects the distributors. It says -
The figures are for the companies connected with the Motion Picture Distributors Association of Australia, and when you realize that the drop in returns from the peak year, 1030, is over £700,000, it will immediately be seen that the cream of the business has gone, and such a drop in total earnings, of necessity, has brought about a considerable reduction in taxation. It must be realized that when the duty was increased to 4d., it compelled the Member Companies to develop the films in this country. This brought into existence several laboratories which I understand are doing very well indeed, and in wages, direct and indirect taxation, pay in the vicinity of £60,000 per year. So whilst some people may feel that the companies are saving the money in duty, they are in reality spending it in Australia. It is fair to reason that if it is the policy of the Government to compel the production in Australia, the revenue from the tariff cannot be maintained. This is the position of the film business. The returns to the distributor from the box office are 25 per cent. There are many extravagant statements made in regard to this, but after careful investigation, it can definitely be said that the film hire is approximately 25 per cent. Investigating a little further, this 25 per cent, has to carry, as far as the producer is concerned, the working expenses in Australia, income tax, duty and exchange, which is a very severe tax, and as near as it is possible for the auditors to work out these figures, out of the 25 per cent, taken from the box office, the producer actually netts 4.27 per cent. This means that the company or person who finds the entertainment obtains 9d. in the £1 for doing so.
I could deal with the matter at greater length, but I have probably placed before honorable senators sufficient information to induce them to agree to my request. A letter from the Minister for Trade and Customs was sent to the president of the Motion Picture Exhibitors Association of New South “Wales, in answer to a communication from that gentleman. This is the vital paragraph in it : - *
The effect of this practice on the importations and revenue is clearly shown in the official statistics. During the five fiscal years 1925-20 to 1929-30, the total footage of film imported ranged from 22,743,000 to 28,633,000 feet, and averaged 25,439,800 feet per annum! The revenue for the same period ranged from £134,310 to £295,004, and averaged £177,416 per an num. Following the increase in the duty on foreign films to 4d. per foot on 10th July, 1930, the total imports fell to 16,076,000 feet in 1930-31, and 5,920,580 feet in 1931-32, yielding a revenue of £147,600 in 1930-31, and £56,086 in 1931-32.
The president of the Motion Picture Exhibitors Association replied in the following terms : -
You quote the reduction in footage of film. This was brought about as a matter of public policy, and the Government cannot develop an industry within Australia and expect duty from without. Further, evidently there has been no consideration given to the increased taxation both in Federal and State, and we make bold to say, with increased income tax, primage, and State taxation taken into account, the total figures would reveal the fact that the industry is not paying less total taxation, including the duty which was paid in the years named by you.
In conclusion, as I view the position, motion pictures are unquestionably the poor man’s entertainment.
– And the country man’s.
– And the country man’s. In a period of depression, it would be a criminal act to prevent any person from taking advantage of this cheap form of entertainment, by means of which he may forget for a brief space the troubles with which he is surrounded.
, - Honorable senators generally have doubtless been inundated with a mass of propaganda, which to me appears to be of foreign origin, in relation to the duty on films. I ask them to pay no more regard to it than the statement which I am about to make will show is warranted. Obviously, the whole of the agitation proceeds from the headquarters of the importing interests, and showmen in the country are being used as a medium for representations in the direction of a lowering of the duty, because it is believed that they will be given a readier hearing.
– That is not correct.
– The department has in its possession circulars which, to me, point to the fact that they originated with those who import films.
This matter must be regarded, first, from the revenue point of view. If, having regard to the facts that I shall place before them, they consider that these films should not contribute to the revenue in the present proportion, it will be for them to indicate from what source the Government may obtain what it needs to conduct the affairs of this country. The protest against the increased duty relates to films that are imported for copying purposes. The exhibitors themselves are not acquainted with the position as between the importing firms and the Government. It is commonly said that the hire charges would have to be increased by 200 per cent., but I think that I can show that that statement is not. correct. “While this duty is imposed primarily for revenue purposes, it seems to me that it should be regarded also as a means for improving the tone of the pictures exhibited in this country.
In the five years prior to the imposition of the duty of 4d. per foot on foreign films, the average annual footage of foreign film upon which duty was paid amounted to 23,480,000 feet, and the revenue received therefrom averaged £177,400 annually. Except for the period from the 22nd August, 1929, to the 30th June, 1930, when the duty was 3d. per foot, this revenue was derived from a duty of ltd. and 1¾d. per foot. “When the duty was increased to 4d. per foot on the 10th July, 1930, during the last Government’s period of office, the imports of foreign film upon which duty was paid dropped to 8,930,000 feet in 1930-31, and to 3,401,000 feet in 1931-32, and the revenue received from these duties decreased from an annual average of £177,400 to £148,000 in 1930-31*, and £57,000 in 1931-32. For the last financial year, the loss in revenue amounted to £120,000, as compared with the average collections in previous years. The drop in revenue amounts to 68 per cent.
The revenue received from, films during 1929-30 was £295,000. This revenue was collected mainly with a rate of 3d. per foot. There were special circumstances accounting for the high revenue received in that year; I refer to the change over from silent to sound films, which necessitated the importation of films of both kinds. But even- assessed on the average annual revenue return of £177,000, the increase of the duty from lid. to 4d. per foot imposed by the Scullin Government failed to yield the increased revenue which that Government anticipated would be collected. Instead of reaching a higher figure, the revenue, on account of the importation of a single copy of film pictures only, fell to £14S,000 for 1930-31, and to £57,000 for 1931-32.
The principal reason for the marked decline in the importations of foreign films, and in the revenue derived from them, is that importers, instead of importing the number of copies of the same film required for screening purposes, have adopted the practice of importing a single negative, or soft positive, and printing from it the number of positives required for screening purposes. The new practice has resulted in a heavy loss of revenue, without compensating benefits, as the total wages paid in the filmprinting industry, plus the revenues derived from duty on the raw film stock, and various other forms of State and Federal taxation paid by the printing industry, represent only 46 per cent, of the lost revenue. At the same time, the spreading of the duty over all the screening copies made from a, single imported negative largely nullified the preference of 4d. per foot accorded to British films. That preference was practically whittled away. In addition, it very materially reduced the protection which the. duties gave to Australian feature film producers.
– Has that injured anybody?
– One object of the duty was to build up a healthy sentiment among our people by providing them with, pictures of educational value, and another purpose in view was to obtain necessary revenue, Whether the feature films which are now shown are educational value is a question I leave honorable senators to answer for themselves. In effect, the duty, instead of being 4d. per foot, became, on the eight copies usually printed from the negative, something like a halfpenny per foot. Under the recent tariff amendment, practically the only films subject to the increased duty of ls. per foot are feature films, imported from foreign countries for copying purposes. The duty of ls. per foot will still leave it more profitable to import the negative, and have the copies printed in Australia,- than to pay the duty on each copy required for screening purposes. Negative film imported for- exhibition purposes, as distinct from film imported for copying purposes, is still admissible at the same rate of duty as formerly. Topical and scenic subjects, travel-talks, and similar films, serials and “ shorts “ of 2,000 feet, which are recognized as having a limited earning capacity, have also been exempted from the increased duty.
Importers are in a position to.spread the incidence of the duty, which is payable only on the film imported for copying purposes, amongst all the exhibitors to whom the subsequent copies are hired. Consideration of the incidence of the duty will show that there is not the slightest necessity for any substantia] increase in hire charges. The increase of 8d. per foot on the negative of a feature film of 6.000 feet amounts to £200., In the past, from six to eight copies of the negative have been printed in Australia. When the increased duty is spread over these copies, it amounts to £33 a copy, if six copies are printed, and to £25 a copy if eight are printed. One copy is usually supplied to each State, with an additional copy for the larger States. Even if the increased cost is passed on, it should be infinitesimal when spread throughout the State, over all the exhibitors to whom the picture is hired.
Actually, the total duty which will be paid in the future by importers of films, assessed on importations for last year, should not exceed £120,000. This figure is £57,000 less than the average collections for the five years prior to the increase of the duty to 4d. per foot. There is, therefore, no reason why the charges to exhibitors on account of duty should, in the aggregate, exceed the charges in the years prior to the change in the practices of importers. , From a detailed examination of the trading results of the film printing companies, it is quite evident that a contraction of the high profits in this section of the film business could absorb a substantial proportion of the slightly increased costs due to the recent alteration of the duties. Indeed, the aggregate net profits earned by the film printing companies during their last complete financial period represented 46£ per cent, of the whole of the capital actually invested in the film printing industry, while for every £3 paid out in wages to employees, the industry declared net profits of £2. The Government has given full and careful consideration to the representations made to it by the various interests concerned, and it cannot accept the requested amendment which has been submitted.
The increased duty on films was imposed at the beginning of March last. Despite, immediate threats on the part of distributors of foreign films in Australia that they would have to pass the increased duty on to the exhibitors, no specific case has been brought under notice showing that any increase has been made in hire charges to exhibitors by reason of the increase of the duty. From the figures which I gave earlier, it must be evident to honorable senators that the increased cost of each copy exhibited will range from £25 to £33 only, and this cost would, if passed on, need to be spread over the whole of the exhibitors in the State in which such copy was to be exhibited. I ask honorable senators to attempt to assess the increased cost to each exhibitor on this basis. At the most, it would only mean a matter of pence in the total cost of each programme. The result of inquiries, moreover, shows that the film printers could divert some of their high profits towards reduced charges for printing. If this were done, then the costs to distributors should be considerably less than those quoted.
Finally, let me say that if remissions of taxation are to be made in aid of those primary industries which are so sorely in need of some measure of assistance, it is essential that we should exercise our mature judgment in matters involving remissions in other directions. Above all, we should be careful not to yield to the pressure of a campaign organized by foreign interests, who have not put the position frankly to honorable senators. A certain variation has been given to the terms of the communications which have been addressed to honorable senators; but the same spirit is displayed throughout the whole of them, and it is shown in some of the statements from which Senator Millen has read extracts this afternoon. Even Ministers have not been immune from the fire of correspondence. Despite this propaganda, I ask honorable senators to remember that, apart from the fiscal and revenue aspects of this matter, we should try to encourage British and Australian films.
– The honorable senator has exhausted his time.
.- I was under the impression that the Leader of the Opposition in this chamber was accorded certain precedence over other honorable senators. Although I had given notice of the same request as that submitted by Senator Millen, I did not receive the call.
– The practice that [ have adopted since I have had the honour of occupying this chair has been to call on the Leader of the Opposition after a proposal has been submitted by a Minister;’ but the committee is now dealing with tariff matters on which there is not unanimity amongst members of the Opposition. The procedure in dealing with requests for the amendment of the tariff has always been to take the lowest amount first. After Senator Millen had been given the call from the chair, and had announced his intention to move a request for the reduction of the duty to 4d. per foot, Senator Barnes rose, and in reply to my question, said that he intended to move a request for a similar duty. I appreciate the honorable senator’s position as Leader of the Opposition, and recognize, with every other honorable senator, that he has certain rights. But on a subject like the tariff, in respect of which there are many opinions, ever among the members of any one party, difficulties arise. I assure the honorable senator that, in giving the call to Senator Millen, I had no intention whatever of showing him any discourtesy.
– I am sure of that, Mr. Chairman ; I merely wished to know where I stood. I support the request for a duty of 4d. per foot for, as I have already said, I had intended to move a similar request. I have been inundated with correspondence and telegrams on this subject, and have also had many interviews on it. One letter that I have received, which is typical of many others, is from the Benalla Soldiers’ Memorial Hall and Public Library, and reads as follows : -
Benalla, 23rd June, 1933.
We wish to protest against the proposed increase of duty on American film brought into this country.
We are exhibitors of film in this town, and any profit made by us is used to reduce the debt on our soldiers memorial hall. If this increase in duty comes into force it will greatly reduce our profits, as all contracts with the film exchanges have a clause inserted giving them power to pass the increase on to us. It is impossible for us to raise the prices of admission in view of the present difficult times, therefore we must bear the increase ourselves. We look to the Government to protect our interests.
– How often does that organization show pictures?
– I am not sure. The letter puts a view which the Government should consider, though I believe that there are grounds for thinking that such organizations as that to which I have referred are somewhat needlessly alarmed.
– They have been purposely alarmed.
– That may be so. Although many exhibitors handle only small amounts of money, the money is important to them, for it represents their living. Any increase of taxation is, to such persons, like a mountain, and it is not surprising that they are fearful of the result of this increase of duty. The case has been put by one of those concerned in the following words: -
If this proposal is ratified, the following effects must be felt in the Australian film industry: -
1 ) The American and other film distributors will not allow this duty to rest on their shoulders, but
Will hand it on, in turn, to the exhibitor. The exhibitor in Australia at the present moment is working on a very small margin of profit, and in a large number of cases with no profit at all. This is due to -
Payment of big film hire.
Payments that have to be made on equipment installed for the reproduction of talking films, and - the servicing of same.
Increased taxation generally.
Loss of box office patronage owing to the decreased spending power of the public.
The exhibitor will hand this new burden on to the public.
The public, with a very limited spending capacity, is, at the present time, paying high prices to view films. Any further rise in the prices of admission must mean decreased patronage at picture houses throughout Australia.
The writer of that statement has taken a sane view of what is likely to happen. The Scullin Government, which was in much greater need of revenue than is this Government, endeavoured to increase the amount received from the taxation of picture films by increasing the duty of 4d. per lineal foot. It expected to obtain an aggregate amount of 2s. per foot from this duty, because up to that time the importers were importing six copies of each film. But when the new duties became operative, the picture producers tricked the Government, and actually reduced its revenue by importing only one copy of each film. The duty which the Government is now seeking to impose will undoubtedly make a bigger call upon the exhibitors of pictures, and they will endeavour to pass the impost on to the patrons of picture shows. The result may be that the price of admission to picture shows will become so high that the poorer people will not be able to pay it. This would cause a fall in revenue from several sources, including the entertainment tax. It is astonishing how much the picture show business has fallen away in the last few years. In 1929, which was the year in which the Scullin Government imposed the tax of 4d. per foot, film importations totalled 31,000,000 feet annually, but in 1931, the importations had fallen to 16,000,000 feet ‘ annually. The duty collected in 1929 was £148,000. The Scullin Government sought to increase this by increasing the tax from 1¾d. to 4d. per foot, but the result was that the aggregate amount of duty received fell to £58,000, or only a little more than one-third of the amount collected under the lower rate of duty. The admissions to picture shows have also fallen off. This, of course, is a reflection of the financial position of the people. In 1930, just after the depression struck Australia, nearly 7,000,000 paid admission annually to the picture theatres of Australia, but in 1932, the number had fallen to a little more than 2,000,000. The amount received in amusement tax fell from £9S,000 in 1930, to £28,000 in 1932. The people plainly have not now the money that they had formerly to spend on picture shows. I am afraid that if any increase of duty is made at this stage, there will be a further falling away in the attendances.
I realize that revenue must be obtained by the Government, but think it should be obtained from some other section of the community. The picture show is always looked upon as the amusement of the poor people, and it is desirable that the price of admission to picture shows should be kept as low as possible. An increase of duty will undoubtedly mean an increase in the price of admission. For this reason, I feel that the Government should explore some other field of taxation. I suggest that instead of increasing the duty on picture films, the Government should seek to build up the film-producing industry of Australia. I have been informed from a reliable source that in consequence of the flood of American picture films into England, and the consequent reluctance of the British people to invest their money in film production, the Government of the United Kingdom adopted the quota system, and required that 30 per cent, of the films exhibited at every theatre in the United Kingdom should be of British origin. The result has been that the British’ people have been induced to invest their money in film production. There is now more than £30,000,000 invested in the film-producing industry of Great Britain, and I am informed that very shortly the British films will practically oust the Hollywood productions from British, theatres.
– I suppose the honorable senator knows that the quota system cannot be enforced in Australia by the Commonwealth Government because it is unconstitutional?
– I was not aware of that. I still think that the- Government could do something to encourage the production of more and better Australian films for this great continent, which, with its variety of life and natural conditions, and its wonderful scenery, is undoubtedly adapted for film production. I suggest that this subject should be referred to the Tariff Board for consideration.
– The honorable senator’s time has expired.
– I am concerned for the welfare of the majority of the people who attend picture shows. I should ‘ like to see the moving picture industry socialized. The provision of this form of amusement should be made a public service like the post office and the supplying of water, light and power, and there seem to me to be substantial reasons why it should be socialized. It has been stated by one honorable senator that under present conditions, the great majority of . the men and women of Australia find it difficult to provide the money to pay for their admission to picture theatres. Personally, I shall not lose any sleep should certain people be inconvenienced by the fixing of this duty at 4d. per lineal foot. The Minister in charge of the bill told us that the proposed reduction of the duty would result in a loss of revenue amounting to £140,000. The honorable senator has asked how that could be made up, and I shall assist him with a few suggestions. Australia owes bondholders in the United States of America approximately £47,000,000, on which it pays interest to the tune of £4,000,000 per annum, which works out at 6 per cent, sterling, or, on a goods exchange basis at present values, 9 per cent. If the Government insisted on paying only 3 per cent, to those bondholders, that would save £2,000,000 a year. Here is another suggestion. We learn from the press that the Government has accumulated a surplus of £3,000,000-
– The honorable senator must connect his remarks with the request.
– I am merely repeating what I have read in the newspapers, and am about to suggest methods, which would assist old-age pensioners, who cannot afford to go to the pictures, and by the way, have not been robbed by the Lang party of which I am a member.
– Order ! The honorable senator must not refer to extraneous subjects.
– As I have said, the pictures are the poor man’s amusement. Ry remitting land taxation, the Government has given relief to wealthy squatters and other land-owners in the city and country, and the. unfortunate workers are expected to build up the revenue by patronizing picture theatres.
– Picturegoing is not confined to any one class.
– That may be so, but the friends of” my esteemed colleague, Senator Duncan-Hughes, prefer to go to expensive entertainments, such as operas and the legitimate theatre, for which a ticket might cost 12s. 6d. I have no objection to a wealthy man indulging in such luxuries, but I do object to the system which permits the creation of millionaires.
– And I object to the poverty of the poor.
– As an economic philosopher, Senator Collings must agree that that is due to our present system. The splendid pictures that are made at Elstree, in England ; by the U.E.A. Company, in Germany; an Italian company, at Milan ; in Soviet Russia, and by Pathe Freres, in Prance, demonstrate that Hollywood is not the only pebble on the beach. If I had my way, I would see .that Australian actors and producers were given a better opportunity to compete with the world. Have we developed an inferiority complex that we are afraid to give the Australian picture industry reasonable opportunity to establish itself? We have a country admirably suited to any class of picture production, and all that is necessary to the success of local production is a little encouragement. If the Government rejects my suggestions, and, in consequence, gets a headache, I can still assist it by suggesting as a cure that it go across Prince’s bridge, Melbourne, to the aspro factory.
[6.5]. - This is the second occasion on which we have had a demonstrationinforce, and an exhibition of clever, but unscrupulous tactics, by the foreign picture interests in this chamber.
– I think they are right, too.
Senator Sir GEORGE PEARCE.They were said to be right on a former occasion. As the tactics they adopted during their “ Save our Amusements “ campaign brought about the defeat at the elections of a number of men who were formerly members of this chamber, I wonder at the shortness of the memory of those honorable senators who are now coming to the rescue of the American picture-producing industry in regard to that result of the intervention of these foreign interests in the politics of this country. Let us examine the facts. During the last few months these foreign picture interests have saved themselves the payment of approximately £100,000 of taxation through the customs. But that saving has not been passed on to the Australian exhibitors. Owing to the way in which their contracts are drawn, the film producers are able to pass on to the exhibitors all additional taxation, but have not given them one penny of relief in respect of the saving to which I have just referred. These foreign companies are able to make such contracts because they hold the Australian exhibitors absolutely in their power. The latter are merely creatures in the hands of these foreign companies, which extract from them the uttermost farthing. Under their awful contracts these foreign companies “ graciously “ permit Australian exhibitors to screen American film trash, and those awful sex pictures that .are demoralizing so many, of our younger people, on condition that they hand over to the producers 50 per cent., not of the profits, but of the gross takings! When this Parliament, in its desire to ensure the screening of cleaner British pictures, imposed a higher rate of duty on foreign films, these foreign interests, for a little while, were obliged to pay the higher duty. But with that ingenuity which distinguishes so many of their commercial undertakings, those controlling the American picture industry soon found means to circumvent the tariff. What did they do? They discovered that, by importing only the master picture and printing copies of it in Australia, they were able to defeat the intention of this Parliament. In this way they evaded payment of the higher duty except in respect of the master film, and thus saved £100,000, which previously had gone into the Consolidated Revenue.
– By the means which I have described they have avoided the payment of that tribute which this Parliament declared that they should pay, less the cost of printing the copies, which is a very small item.
– Some thousands of pounds have been spent in developing that side of the business.
Senator Sir GEORGE PEARCE.But the Government determined to make another attempt to compel these foreign picture interests to refund to this country some of the enormous profits which they have been taking out of it for so many years. It imposed a duty of ls. a foot on foreign films. Then what happened? Were direct representations made by the foreign picture interests against this new duty ? Oh, no ! Again they brought pressure to bear upon the exhibitors - those people who were compelled to do all the squealing on the previous occasion - they were the monkeys who had to pull the chestnuts out of the fire. Again they applied the thumbscrew. Under the contract which these foreign companies have made with the Australian exhibitors, they are able to apply the thumbscrew with telling effect upon exhibitors. The telegrams and letters with which honorable senators have been inun dated are ample evidence of the forces at work in this matter.
– We are getting scores of them.
– What about the British interests ?
– I am astounded that any member of this Senate should have been induced tq move a request for an amendment of the duty, and that any other honorable senator should give hig support to a proposal, the. effect of which, if accepted by the. House of Representatives, would be to enrich the foreign picture interests more heavily. Not one penny of the relief which the foreign interests would get by the lowering of the duty would be passed on to the exhibitors. Moreover, if this request were agreed to, these foreign interests will not import a greater number of films, as one might imagine, but will continue the practice of importing only the master picture, and printing copies of it in Australia. The saving of customs duties thus made possible will not benefit Australian exhibitors to the extent of one penny. All this sympathy that is being poured out by honorable senators, and the tactics to which they are lending themselves, from mistaken motives I admit, are really so many covert moves linder the direction of the American picture interests. They are the people who will reap all the benefit from a successful attack on this higher duty. Not one penny of it will go to Australian exhibitors. Even a returned soldier organization, which is exhibiting pictures for the purpose of getting revenue to pay off the debt on its memorial hall, has been induced to join in the appeal. I ask honorable senators to consider the conditions that make it possible for these foreign picture interests so to tie up a body of men that they allow their voice to be. used in this attempt to further the interests of the foreign picture producers against British picture producers. These foreign interests will not pass on to. that returned soldiers’ organization any benefit that they may gain from a reduction of the duty.
– They will levy increased toll on exhibitors if we agree to the higher duty.
– No, they will not. I invite honorable senators to read again the letters which they have received. I assume that they have received letters similar to those which have come to me. I have in mind, not only the letters written by exhibitors, but also communications sent to some of the exhibitors, one of whom was innocent enough to forward to me a copy of a letter which the distributors had sent to him. I wonder if honorable senators have read that letter?
– We have had dozens of them.
– The letter to which I refer is so ingenious and contains so many “ innocent “ suggestions that I should like to place it on record. It was written by the United Artists Australasia Limited, Sydney, under date the 6th June, and reads as follows : -
We wish to draw your attention to the clause in our contracts-
This is the evidence of the thumbscrew - wherein we reserve the right to pass on any additional duty or taxes imposed by the Government in respect of the films covered by such contracts.
Owing to the newly imposed duty of1s. per foot on all feature length films, it now becomes necessary for us to exercise our right under your contracts. The increase in duty amounts to approximately 200 per cent., and it is absolutely impossible for this company to carry same as an overhead expense.
The letter makes no mention of the saving effected by the printing of films in Australia. It merely intimates that it will pass on to the unfortunate exhibitor any additional duty, without saying anything about savings effected through the dodging of the duty.
We regret exceedingly-
What crocodile tears! that we are forced to adopt this procedure, as we realize that the additional expense is going to make the operation of your theatre even more difficult than it is under the prevailing conditions.
In keeping with the general attitude of the foreign picture interests, a sob should be indicated at this stage of the letter, as a suggestion that this is where the exhibitors should start the agitation
We have not yet decided upon the date from which this new charge will operate, but you will be advised in due course. Naturally, in the event of the duty being reduced, you will receive the full benefit of any reduction.
Honorable senators will note that these foreign picture interests are going to be generous in future! When, by the print- ingin Australia of copies of the master film they were able to save £100,000 in customs duty, they did not send a circular letter to exhibitors, saying that the relief would be passed on to them. So I say that, if we give heed to this criticism that has been so carefully planned on behalf of the American picture interests, these people will be able to say that this is the second time that they have been able to “bulldose” the Commonwealth Parliament. Having succeeded in their “ Save our Amusements “ campaign, doubtless they believe their efforts on this occasion will not fail.
Sitting suspended from 6.16 to 8 p.m.
– I greatly enjoyed the speech of the Leader of the Senate (Senator Pearce) as a display of dialectics, but I cannot say that the effort was entirely without its weak points. I do not deny that there is in this material with which we have been supplied something which smacks of organized propaganda, and I mistrust organized propaganda as much as does any member of this Senate. I believe that, in some respects, we are an over-organized people, and that organizations move sometimes without the support of their own members. But, in spite of that, we have to face the simple fact that here is a proposal to increase the duty on films by 200 per cent. Therefore, when it is clear that a storm has been provoked by that step on the part of the Government, it is not necessary, I suggest, to look around for explanations why it has happened; the very act of the Government was calculated to arouse this storm, even had the organization not been so active as the Leader of the Government has said.
– The storm took some time to gather; it was a monsoon of a new type.
– So far as I am concerned, it has been growing for some weeks. Naturally, the agitation had to be got into fighting form to be in readiness when this item came before the
Senate. I do not like to criticize a man of the standing and experience of the Leader of the Senate, hut I do think that his reference to foreign influences would have come better from the chartered libertines of debate - I shall not define them more specifically - who sit in another part of the chamber. Let us look at the facts of the case, and see whether, apart from the association of this powerful organization with the agitation, there is any substance in the case it puts forward. We must ask ourselves whether this new duty will be borne by those against whom it is directed, or whether it will be passed on. There seems to be an easy answer to that question, for this reason: Admittedly, in the contracts that are current, there is provision for passing on an impost should one be levied, and, by the postulate of the Leader of the Senate, this organization is of such a kind that, whatever it can pass on, it will. It is neither illegal nor immoral to pass on a tax imposed on you so long as you do it by lawful means.
– Customs duties are habitually passed on.
– Exactly. Any tax imposed on a class may be avoided if the necessary action is taken in accordance with the law. If a heavy impost is laid on land, it may be evaded by subdividing the land, and thus distributing the burden. Therefore, the film organization is at liberty to pass on any tax if it may legally do so. These contracts have usually a currency for one year. We may take it, therefore, that the tax will be passed on, having regard, particularly, to the character given by the Leader of the Senate to this combine. Suppose the tax is passed on, what then ? According to the current contracts, it will be passed on to the exhibitors, who, in turn, must either bear the impost or pass it on. Are they likely to be in a position to pay the tax themselves? Is this a time when any industry is being carried on with such a margin of profit that it can afford to bear an additional impost of £60,000, which, it is said, this tax is expected to yield ? If the exhibitors do not bear the impost, they must pass it oh, and to whom?They must pass: it on to a section of the community, which, as Senator Millen pointed out, is least able to bear it. I, too, have received letters in the same terms as those referred to by the Leader of the Opposition. It is clear that many persons conducting picture shows are working on very narrow margins of profit. Sometimes their object is to build memorial halls, and sometimes, perhaps, to found mechanics institutes. What happens if the tax is finally passed on to the public? In order to find out, it is only necessary to observe what has actually happened as the result of the heavy impost already placed on the industry. I admit that, for the figures I propose to cite, I am indebted to the Cinematograph Exhibitors Association, through its secretary in Melbourne. One paragraph of the memorandum I have received is as follows: -
The position of the industry can be seen from the entertainment tax figures which show that in the year ending the 30th June, 1930, the federal entertainment tax figures alone were -
Whereas in the year ending the 30th June, 1932, the admissions were -
Do not these striking figures indicate that, if taxation is further increased, and passed on to the public who patronize picture shows, the effect must be to reduce attendances? The Government must then lose revenue, as- less will be paid in entertainments tax. In so far as this is an effort on the part of the Government to encourage the British film industry, I am entirely with it. In this regard, however,one must depend for information on outside sources, because there are few of us who are experts on all subjects that come before the Senate in the course of a tariff debate. The position, I understand, is that the British producers are able to supply only onethird of the pictures required by exhibitors, and the rest must be imported from American sources. If there are any defects in the American pictures, that is not a matter to be dealt with in the tariff schedule, but is one rather for the censorship. A depression has been defined as a time in which we learn to do without those things that our fathers never had’. It may be that our fathers never had picture theatres, but we must admit that the picture theatres provide a cheap and, on the whole, an edifying form of entertainment. They supply recreation for a class of people who cannot afford to pay high prices. It seems to me that this impost will hit those who are least able to bear it. For these reasons, therefore, reluctant as I am to oppose the Government which is charged with the responsibility of piloting this schedule through Parliament, I must support Senator Millen’s request.
SenatorRAE (New South Wales) [8.12]. - I do not propose to repeat the profound arguments of other honorable senators, because I know that there is nothing more tedious than to repeat in poorer language what others have said more eloquently. I do think, however, that the Leader of the Government in the Senate (Senator Pearce) was somewhat inclined to get on the high horse when discussing foreign influences. We are all of us heartily sick of the way in which we have been treated by the foreign influences referred to, namely, by the business section of the American people. I am not one of those who entertain prejudices against any race or nation as such; but, undoubtedly, Australia has nothing to thank American legislators for in the way they have treated this country. It would be most admirable, from that point of view, to be able to dispense altogether with the services of the American film producers. The fact remains, however, that what the Leader of the Government in the Senate had to say against foreign influences did not touch the essentials of the position as referred to by Senator Brennan. The fact that these interests successfully evaded a great portion of the taxation formerly directed against them, and will attempt to do the same again, is not remedied by abusing them. The denunciation of the American film producers, or of the organization which represents them in this country, can do nothing to relieve the situation.
– Does the honorable senator not think that this will help to encourage the Australian industry?
SenatorRAE. - Abusing the Yankees will not help.
– No ; but the imposi-. tion of this duty will.
SenatorRAE. - In my opinion, something should have been done years ago to encourage the Australian filmproducing industry.
– The local producers are responding to the present encouragement.
SenatorRAE. - I do not think that this is the best way of encouraging the industry, and, in the meantime, a considerable section of the community will suffer. The effect of imposing any duty, even one of 2s. 6d. a foot, would not be to promote the production of pictures in Australia, unless some more direct assistance were offered by the Government.
– But the groundwork has been going on for the last five or six years.
SenatorRAE. - Yes; but very slow progress has been made.
– There has been remarkable progress within the last twelve months.
SenatorRAE. - The progress during the last twelve months cannot be due to a duty only recently imposed. Behind the organized propaganda which has deluged honorable senators with letters and telegrams during the last few days, there is a legal agreement by which the distributors can pass on to the exhibitors any additional tariff imposts. The enforcement of these legal rights, while we are waiting for the development of a filmmaking industry in Australia, will inflict hardship on the exhibitors and their patrons, and the latter will be a diminishing number because of their inability to pay the higher charges. The Government has attempted to defend the increase of duties on two grounds. The first is the iniquity of the American organization in evading former taxation by passing it on to other sections of the trade. The second is that the Government does not know where it will make good the revenue that will be lost if this duty be reduced. For months past we have been told that the Government proposes to reduce considerably the taxation on one of the most prosperous sections of the community. The large land-holders are to be further relieved.
– Order! The honorable senator may not pursue that line of argument.
– The Government having asked how it will obtain the revenue which will be lost through the reduction of this duty, I am surely entitled to show where money can be saved or additional revenue raised. Some of the pastoralists who are supposed to be “ on the rocks “ have been able to spend during the last few days £23,000 on new rams for their flocks. The Government occupies an anomalous position; it has so much money that it is planning to relieve the wealthier sections of taxation, and yet it is imposing additional taxation which will further penalize the poorer sections, or compel them to abstain from a popular form of amusement. The picture shows are so universally popular that we should consider seriously before doing v anything that will reduce the number of people who can enjoy this form of amusement, and cause ruin to many exhibitors. One method of promoting the development of the film-making industry in Australia would be the application of a quota, and the subsidizing of a powerful company which should be able more rapidly to increase the number of locallymade films available for exhibition. Action on those lines would be a more straight-forward and a speedier method of developing the Australian industry than the indirect method which the Government has adopted. As for the revenue considerations, we are told that economic and financial conditions are improving, that one government has saved a particular State, and that other governments are preparing to save other States. With the boasted genius of the Commonwealth Government for restoring prosperity at short notice, there should be no difficulty in raising sufficient funds to supply the needs of the nation. I wonder why the present Commonwealth Government always chooses the most cowardly method conceivable of raising revenues. Why does it always attack the poorer sections - the invalid and old-age pensioners, the soldiers, and the civil servants - in order to obtain further revenue or to effect economies?
– And now it is attacking the American film combine !
– The brunt of this attack, allegedly on a foreign combine; will be borne by innocent parties. If; because of their rights under a legal agreement, the American film distributors were able to pass on the duty of 4d., what is to prevent them from similarly passing on the tax of ls.? The lofty statesmanship by which Australia is to be freed from foreign domination, is revealed in the imposition of a tax which we all know the American combine will be able to pass on immediately to the exhibitors. This ferocious onslaught on the American octopus is ludicrous. It is a pity that the Government cannot pass on to the various States and other countries some of its surplus genius so that by the wider application of its beneficence, restoration may be substituted for depression throughout the world.
– The honorable senator’s time has expired.
.- When speaking on the second reading of the Customs Tariff, I dealt with some aspects of the duties on films. Undoubtedly all is not well with the picture film industry, and not long ago I advocated the appointment of a commission to inquire into all its ramifications. The Leader of the Senate stated that the distributors are exercising their power under a legal agreement to pass the whole of the increased duty on to the exhibitors, and so compel them to appeal to honorable senators for relief. I admit that the distributing houses have a tremendous grip on the picture exhibition industry. A letter sent to me by the Motion Picture Exhibitors Association of Queensland states that not only do the distributors compel the exhibitors to pay any extra charges resulting from tariff variations, but, in some instances, they actually refuse to allow the showmen to reduce the prices of admission to the public below ls., although it has been represented that lower prices of admission would lead to increased attendances. Senator McLachlan stated, by interjection, that the increased duties on films has been operating since March last, and that the storm which has now burst has been brewing ever since. It is obvious that in the first three months of the operation of the increased duties, the distributors did not exercise their right to pass it on ; they bore the additional burden, probably expecting relief from this
Parliament. By letters and telegrams I have received representations on this matter from practically every part of Queensland; and I find that the complaints of showmen are against the distributors of British and Australian films as much as against the distributors of American films.No more consideration is shown to the exhibitors by British than by American companies or agents. Therefore the contention that the increase of the duty from 4d. to1s. will encourage the distribution of British films, or the manufacture of Australian films, fails. About 95 per cent, of the films now produced in the United Kingdom are distributed in Australia, and yet they represent only a fraction of the films required for exhibition in this country. The film producers of Great Britain cannot meet the requirementsof Australian showmen.
– They cannot meet the requirements of showmen in Britain itself.
SenatorFOLL. - Australians are not particularly keen on obtaining films or other things from America; they go to see pictures produced by American companies because such pictures provide them with the kind of entertainment they like. I have here a letter from a returned soldier exhibitor of picture films, who writes in the following strain concerning the Australian picture, On Our Selection : -
With the Australian production, On Our Selection, I was asked to pay 50 per cent, of my gross takings as hire, and, in addition, had to sign for at least thirteen British pictures mostly of an inferior type. I will buy British and Australian pictures when their quality is as consistent as the American, and if their treatment is within reason; but, as stated, I have already contracted twelve months ahead, and must carry out that contract. How can I do it when my gross takings will only cover film hire?
It is useless to pretend that this duty will encourage the manufacture of pictures in Australia. In my second-reading speech, I gave an instance of the way in which one British firm of producers - Gaumont Gainsborough Studios - treated an Australian distributing company. At the expiry of the period covered by the original contract, it took from the Australian distributing company the sole right of distributing its pictures in Aus tralia, and gave it to the Fox Film Corporation, an American concern, which had invested large sums in the British company.
It has been said that these duties are not . being passed on to the showmen. Senator Brennan, however, has pointed out that, wherever it is possible to pass on taxation, that course is followed. As honorable’ senators know, the contract with Dorman, Long and Company for the construction of the Sydney Harbour Bridge contained a provision that any increase of wages under arbitration court awards would not have to be met by the contractors, but would be passed on to the taxpayers.
– A similar provision is embodied in every building contract.
– That is so. These duties are being passed on to those who are least able to bear them. I hold no brief for the distributors of American films; but I realize that they are not in a position to carry this additional burden. When a government, without any investigation or inquiry whatever, increases the duty on an article by 200 per cent., it must expect a reaction similar to that which has occurred in this case. It is useless for the Government to say that it did not realize that the revenue from the duty on films would fall. It ought to have known that, instead of importing several copies of a film, distributors were having films copied in Australia. I visited one of these film laboratories last Monday, in company with a number of other honorable senators, and together we discussed the matter fully with the company concerned. Mr. Dan. Carroll, representing the picture show proprietors, was present, as was also Mr. Wicks, the head of the laboratory. We were shown a letter from Mr. Bruce, when Prime Minister, in which the right honorable gentleman admitted that laboratories were being erected in Australia in order to copy films. When a protective duty causes a local industry to spring up, a reduction of the amount paid in import duties on the articles involved becomes inevitable, sooner or later. Our customs returns are less to-day than they were in boom times, simply because things which were then imported in large quantities are now being made in this coun-try. That applies also to negatives. Copies are made here instead of being imported from the country of origin. Having visited the laboratory referred to in order to ascertain the position for myself, I wrote to the Minister for Trade and Customs (Mr. White) on the 21st June in the following terms: -
In company with a number of senators yesterday, I visited the Wicks Film Laboratories to see the work of copying films from negatives imported into Australia. Mr. Dan Carroll, representing the picture-show proprietors, was also present, and we had a heart-to-heart talk with this gentleman.
I am satisfied that the increase of film duty to ls. per foot is too heavy a burden to place on the industry at the present time, and we Queenslanders are being- approached from every centre in our State urging some relief be granted. I have gone very fully into this matter, and am of opinion that the increase from 4d. to ls. is not only too heavy, but, furthermore, is inequitable. I recognize the necessity of protecting the revenue; but to charge all negatives ls. per foot regardless of the number of copies to be taken and the earning capacity of a film, is not a sound basis of taxation.
I would respectfully suggest to the Government that the duty be fixed at 4d. per foot with an excise of id. or fd. per foot on each foot of copied film. Then where twelve copies are token, the total tax will be at id. excise, lOd. per foot, or, at )d. excise, ls. Id. per foot- -and if a film is only worth copying six. times, at id. excise, 7<L per foot, will be the tax, and at fd. excise, 8d. per foot. If the duty stays at ls., the pictures imported will drop away very considerably, and will throw the Australian showmen into the arms of the very rich American producers, who alone will be able to pay the big cost of bringing their product to Australia. There is a number of distributing houses which cannot operate at all now.
A number of the smaller film houses have been unable to operate since the duty was increased. My letter to the Minister for Trade and Customs continues -
It would be quite easy to police such excise duty in similar manner to distilleries, tobacco factories, and so forth.
I do not know whether these suggestions are likely to meet with the approval of the film interests, but they seem to me to be most practicable, and an equitable manner of assessing this tax.
I submit this proposal for the consideration of the Government.
If the Government is not prepared to agree to a reduction of this duty to 4d. a foot, and if it thinks that the copying of films in Australia will seriously affect the revenue, it should meet the position by charging an excise duty of, say, £d. a foot on film copies made in Australia, rather than make all imported films, irrespective of their earning capacity, bear a duty of ls. a foot. Some films are not worth copying twelve times; they have not the same earning capacity as other films, and, therefore, they should not be taxed the same. If the duty were reduced to 4d. a foot, and a small excise duty - say, £d. a foot - imposed on each copy, the tax would have some relation to the earning capacity of the film. An excise duty operates in relation to the products of our distilleries, wineries, and tobacco factories, and all that would be necessary in the case of films would he to have an officer present to see that no evasion of duties was attempted.
– The honorable senator has exhausted his time.
– Many interests are affected by the duty on films. The distributors, the duplicators, the exhibitors, the general public, and t.he unionists engaged in the industry are all concerned with it. From what I can gather, the exhibitors are in favour of a reduction of the duty, as are also the distributors and the duplicators, while the local producers of pictures appear to be indifferent. A duty on films was originally imposed with the object of assisting the local production of films. We on this side believe in Australian production, and we would like to see the Australian picture industry develop so that there would be no need to bring in any American pictures, many of which are not worth looking at. I have visited many picture theatres, and have seen pictures Which have disgusted me. Were the people connected with the exhibition of pictures to devote themselves to educating the people, they would achieve something worth while; but, unfortunately, their only aim is to make money. A picture combine has no sentiment whatever. Throughout Australia there is a difference of opinion regarding the relative merits of American pictures and those from other countries. Naturally, each section uses the argument most suited to its own cause. We cannot blame it for doing that. The combine is out to gain as much as it can from the public, and at present is squealing and using the exhibitors in order to obtain a reduction of duty. It is obvious that it will use the duty of1s. a foot on films to bring pressure to bear upon the exhibitors, and the question from our point of view is what must be our attitude in order to safeguard the interests of hundreds of exhibitors throughout Australia. There is ample room for inquiry into this matter. In the meantime, if the request of Senator Millen is agreed to, the item will be later discussed in the House of Representatives, and perhaps additional details will be revealed. I was surprised and interested when listening to the speech of the Leader of the Senate (Senator Pearce). It was certainly refreshing to hear his attack upon the combine, particularly in view of the fact that the party to which he belongs works in the interests of modern capitalism, which, after all, must inevitably develop towards combines. Yet we had the spectacle of the Leader of the Government in this chamber, the representative of capitalism, making an attack upon a combine.
– And the honorable senator is supporting that combine.
– I am not. I am opposed to all combines, but I recognize that this industry, like many others, is developing one complete control.
– Does the honorable senator object to the sugar combine?
– I do not support combines as such. I hold with the policy of the Labour party that there should be a development towards the best form of organization in every industry in order to hasten the time when we, as a people, shall be able to utilize that organization in the interests of the people as a whole; in the case of the picture industry, not for the purpose of making profits for the United States of America, but in order to educate, interest, and amuse our people for their own betterment. We on this side see in the development of the picture industry in Australia a step in the direction of our objective, which is to control industry in the interests of the people. Meanwhile, I deplore the fact that this combine has been able, by its economic organization, to bleed the people and to exploit the smaller men connected with the industry.
– The duplicators are making a profit of 46 per cent, on their capital.
– That fact should be applauded by the honorable senator. If an industry is so capable and efficient as to have paid a dividend of 46 per cent., it should certainly receive the plaudits of the honorable senator and his colleagues who are the spokesmen of capitalism.
– It is now receiving the plaudits of the honorable senator instead of mine.
– The position is the reverse. The vitriolic attack of Senator Pearce upon the combine was much appreciated by honorable senators on this side of the chamber, and we hope to have the pleasure of listening to him attacking other combines in the same wholehearted manner. There was much truth in his attack, because the combine does utilize its power in order to control the exhibitors. The following extract is taken from a letter which I have received from an exhibitor: -
The organization just mentioned - the Motion Picture Distributors Association - has an enormous financial backing in various filmimporting companies comprising its membership - few in members perhaps, but well organized and strongly co-ordinated, and we exhibitors know only too well and too tragically that the mandate issued by the several and separate companies embrabed by this association has been sent to us only after collective deliberations and decisions, and that they are determined to pass the load of this extra duty on to our shoulders if it is passed as now proposed.
There is no doubt that this extra imposition will have to be borne by the exhibitors. The combine is strong, and the exhibitors are weak. Every combine, whether financed by American, British, or Australian capital, invariably utilizes its power to gain the greatest profit. There is no sentiment in business, and it is ridiculous for honorable senators to mention sentiment in this matter, because any company, whether financed by Australian, American, or British capital, will make money if the opportunity to do so presents itself.
-We all do that so long as we do it within the law.
– No doubt most of us have seen the play Within the Law, and therefore know that the phrase “ within the law “ covers many tragedies, and that many workers have had to suffer because of profits being made within the law. Great Britain imposes a duty of 5d. a foot on Australian films, but British films enter Australia free of duty. If it is the desire of the Government to obtain additional revenue, why does it not impose a duty upon all films from Great Britain in excess of one positive? In that way, we should assist, not only the duplicators in Australia, but also from 100 to 200 employees in the local industry.
– The duplicators here obtain a profit of £2 for every £3 expended in wages.
– That position is to be deplored. This Government is in control. Why not tax the excess profits?
There is another aspect to this matter. It has been admitted, coolly and calmly, by Senator Brennan, that there may be Something in the agitation which has arisen within the last few days, and that the picture companies are suffering certain disabilities. We know that any additional taxation imposed upon the companies will probably be passed on to the public ; and if the public have to pay greater admission fees fewer people will attend the picture shows, which, of course, will reduce the amount of revenue collected from the amusement tax. Several States in Australia are suffering certain disabilities, and this Government has had to assist them. I understand that last year South Australia’ collected £89,000 by means of the amusement tax, and, if, as a result of any action on our part, the. number of people who attend picture shows decreases, the revenue of that State will be reduced, and it’s disabilities become greater. I urge the Government to agree to the request submitted by Senator Millen in order that the House of Representatives may have a further opportunity to discuss the item. We are all whole-heartedly in favour of the development of the Australian picture industry.
– The honorable senator has exhausted his time.
– I intend to support the request of Senator Millen, and am rather surprised at the attitude of the Government. I have been a member of this chamber for four and a half years, and during thatperiod only on two occasions have I seen the Leader of the Senate (Senator Pearce) in a state of hysteria. When I was in control of a Supply Bill two years ago, I heard the right honorable senator deliver a speech on all fours with that delivered by him this afternoon. Hysteria is something which has baffled the best of physicians, and it would be presumptuous on my part to attempt to diagnose the cause, but on the previous occasion the right honorable senator did divulge the secret.
– The honorable senator must confine his remarks to the item before the Chair.
– I am trying to ascertain what is behind the Government’s attitude. There are two hypotheses upon which its action can be explained. One which I propose to deal with in. a few minutes was raised by Senator McLachlan, and the other by our esteemed and hysterical friend, Senator Pearce. On the previous occasion to which I have referred the Leader of the Senate painted a picture - and honorable senators will remember it - of Senator Dunn flirting with Mary Pickford on a hoarding in Sydney, and he complained bitterly about the conduct of Douglas Fairbanks. It was then disclosed that his real complaint was that he imagined that the motion picture interests, by some mysterious influence, had brought about the downfall of the Bruce-Page Government and the election to office of the Scullin Government. This afternoon his speech rather suggested that he would apply his prohibition principles even to the exhibition of pictures. I am not prepared to join him. Like every prohibitionist, he does not understand the use, and he pays too much attention to the abuse. I hope that the reason which he advanced for the retention of the Government’s proposal will not be adopted as a principle by this national parliament.
I come now to the hypothesis upon which the Minister in charge of the tariff (Senator McLachlan) explained the Government’s action. As he visits picture theatres more frequently than does Senator Pearce, he is probably able to distinguish between good and bad pictures. His explanation was that this is a revenue item. I point out, however, that if the existing duty led to the organization of film importers, that organization would still continue under the new proposal, and a fewer number of films would beimported. Every one knows that the exhibitor is having a very lean time. A limited sum is available for amusement purposes, and the picture theatre proprietors receive only a proportion of it. If the exhibitor has to pay this additional duty, and in turn is compelled to raise his prices, one may expect a falling off in the number of his patrons, and eventually, the closing of a number of theatres and the cutting out of imported films. Senator Pearce went further, and said that the Scullin Government’s action was really in the nature of a gratuitous act in return for some great favour, and that, as a result, some honorable senators were defeated at the polls.
– Senators did not face the music on that occasion.
– Of course they did not. It is but an example of the hysteria of the right honorable gentleman; he did not know what he was saying. It is idle to suggest now that, in order to avoid the destruction that awaits those who do not prohibit American films, we should support the duty of1s. I cannot see how this will assist the Government to increase its revenue. But, assuming that it will do so, why tax further those who at present are bearing more than an equitable share of the burden? Does not the person who indulges in any form of self-gratification, whether it be by means of tobacco, liquor, or a picture show, pay double the tax paid by those who do not? The smoker of cigarettes contributes 3d. to the revenue whenever he purchases a packet. The Government admits that it will have a surplus of approximately £3,000,000 this year.
– Due to the suspension of our interest payments by the British Government. .
– I am not concerned with the causes. I am always fearful of governments having too muchrevenue. I have known Labour governments to leave the Treasury with a surplus of £7,000,000, and return to find it empty.
– That is right away from the question before the Chair, and the honorable senator is not. in order in referring to it.
– This isa revenue item, and I am pointing out that the Government should not be permittedto obtain a greater amount of revenue from it, because it might spend it as unwisely as other revenues have been spent by its predecessors. I hope that the’ proposal of the Government will be defeated, and that Senator Milieu’s request will be agreed to. The industry has established laboratories, it has selling organizations, a large amount of capital isinvested and many men are employed in it. I trust that it will be allowed to continue to organize itself, and that the Government will hearken to the representations’ that have been made from both sides of the chamber, and revert to the rates fixed by the Scullin Government.
– I should like the Government toconsider the case of country showmen. Any one who is acquainted with the back parts of Australia knows what a godsend picture shows are to’ them. I have personal knowledge of districts in the Never Never which, prior to the advent of the picture show, had no. other form of entertainment than local concerts. The population of these districts is limited and scattered, and the exhibitors barely exist, although their admission charges are fairly high. The distributors take at least 50 per cent, of the gross receipts, leaving the whole of the expenses to be met out of the balance. If a portion of this additional duty is passed on to those exhibitors-
– The country exhibitor will have to pay the whole of if.
– He is not in a position to pay much more than he is paying now. The distributors may refrain from passing it on because of the fear that if the theatre is not kept running they will get no return. The showmen . will be burdened with as much as they can bear. American, British and Australian producers are alike in that respect.
The distributors have knowledge of the seating accommodation and the admission charges of the theatres in which their films are exhibited. The motion picture combine has always been able to repel attacks upon it. The Governments led by Mr. Hughes, Mr. Bruce and’ Dr. Earle Page, and Mr. Scullin, endeavoured to curb the activities of the importers, but were unsuccessful. This higher duty will not achieve that object, because it will be passed on. The Government may obtain additional revenue in one direction, but it will lose revenue in another. It must also be borne in mind that the American companies control the majority of the picture-show houses in Australia, especially in the cities, and are thus able to compel exhibitors to make up the principal part of their programme with their 1 productions, British films being used merely to fill up. That is a matter which the Government might well take in hand. Another possible result is the screening of inferior productions by the smaller shows.
– . They could not be worse than they are now.
– Perhaps they could not; but the majority of the first-rate productions are reserved for the cities, which also have first use of the inferior class before they are sent to the country. If British picture production were assisted by the higher duty, one might be tempted to support it. One of the causes of our present trouble, however, is that the number of British pictures produced is not sufficient to meet Australia’s requirements. The majority of the showmen that I know personally are as anxious as any honorable senator to screen British films, but these cannot be procured. The Leader of the Government in the Senate made rather a strong speech against the importers, but did not go right to the bottom of the matter. He denounced them as the instigators of this propaganda. Very likely they are; but the fact remains that they will pass this extra impost on to the showmen.
– How much dare they pass on? “
– As much as the showmen can bear; This question was first raised in 19.21. Senator Greene can speak of the troubles that he experienced when silent pictures were screened, and the Americans had the field to themselves. To-day, it is true, with the advent of “ talkies “ their income is not so great as it was then, but nearly all the “ talkie “ apparatus belongs to a certain American company, and almost every picture showman is still indebted to that company for instalments of purchase’ money still unpaid. From what I have heard from electricians, the charges of this company constitute one of the biggest “ take-downs “ in connexion with the industry. No silent pictures are now manufactured. The showmen are obliged to install “ talkie “ apparatus, although many of the picture halls, particularly in the country districts, have not a sufficiently large patronage to justify the expenditure involved. The _ moving pictures and the motor car have revolutionized life in the back country, and country people are deserving of greater consideration in regard to picture films than is any other section of the community. If it is possible to do so, the Government should ascertain exactly what are the admittedly high profits made by these companies. There are two which have the showmen at their mercy, and, if the Government wishes to obtain revenue from films, it should devise means of making these companies pay more than they now contribute to the revenue in return for the enormous sums that they are. obtaining from this country.
– I listened with interest to the speech of the Leader of the Senate (Senator Pearce) in support of this duty. He referred to senators who had been defeated at the polls by the foreign picture interests; but no such thing occurred. It is true that a few members in another place stood for the picture interests at the election in 1929; but no senators were up for election at that time. Surely, apart ‘from that, no action taken by the picture interests at an election is a sufficient reason why they should be penalized under the tariff by this or any other government. Yet that is the idea which the Leader of the
Senate expressed by bis argument in this debate. I hope that the tariff will never be regarded as a weapon for political retribution, to be used against those whose policy is opposed to that of any government in an election fight. That would be a new policy in Australia, and one that I, having in mind a recent poll in Western Australia, would strenuously oppose. If I had no other reason for voting for Senator Millen’s requested amendment, which I shall support on its merits alone, I should certainly do so as a. protest against the policy of retaliation which was suggested by the right honorable gentleman’s remarks.
What is the reason for a 200 per cent, increase of this duty? I have listened to the whole of this debate, and I do not know why the increase came about, if it were not in pursuance of the policy of retaliation. If the Tariff Board recommended it, the Minister has kept the fact quietly to himself. We are told, among other reasons, that the picture interests had certain honorable senators defeated at the polls two years ago, and here we have the duty on foreign films increased from 4d. to1s. a foot. We are informed that the Government has made a loss of £100,000 a year over this matter ; but the Government, by its policy of high protection, has made possible the establishment of laboratories which give employment in the copying of films in Australia. Apparently, that is the kind of thing that the Government has been trying to do by its tariff policy generally. We have been told that this is beneficial, when we have urged tariff reductions, and have pointed out the great burden which the tariff imposes on producers and consumers alike. Has not this high tariff had the result of providing employment in the copying of films in this country? Yet the Minister complains that the picture interests have made profits up to 46 per cent. If we could get the true figures relating to the profits of all the over-protected industries that the Government has been propping up by means of the tariff, against the wishes of the Country party, it would be found that similar profits have been earned by many of them under the shelter of high duties.
– By Australian monopolies and combines.
SenatorRae. - Not “ earned “.
– Well, secured. The attendances at picture theatres have decreased from 6,671,000 in 1930 to 3,838,000 in 1931, and to 2,142,000 in 1932, with a corresponding diminution in the amount of amusement tax collected. Naturally, the Government cannot have it both ways. It has put up the duty on films to a tremendous extent, thereby making possible the establishment of laboratories, which give employment to Australians in copying films, and now it complains that that result has been achieved. It is interesting to compare the rate of1s. a foot with the rates in operation in other countries. In Great Britain, with its huge population, the duty on negatives is 5d. a foot, and the earning power of films in Britain is, ‘ of course, several times greater than it is in Australia. In Britain, the film interests have only one tax to pay, and one government to deal with, whereas in Australia they come in contact with several governments, and have numerous taxes to meet. If the duty of1s. a foot is maintained it will seriously affect, not only the distributors and the laboratories, but also the picture theatre proprietors throughout the Commonwealth. There are 1,300 theatres in Australia, and with such a heavy duty as1s. a foot, unquestionably, . a considerably smaller number of films will be imported. The number of prints made in Australia will be reduced, and thus fewer films will be available for the theatres.
A further reason for the reduction of the revenue obtained from films has been the policy adopted by the Government. The greatly increased number of British pictures coming in free of duty must of necessity affect the revenue. I should be pleased if the revenue from foreign films had entirely disappeared, because that would connote a greater increase in the importation of British pictures. I should like to see British pictures control the whole of the market. Of course, I should also welcome more Australian pictures ; but, in the meantime, I am glad to know that the proportion of films coming from the Motherland is increasing. British picture producers have made tremendous strides in the last few years.
I draw attention to the position with regard to news reels. These are of educational value, and they are brought from all partsofthe world. They deal with items of,public interest, and under the present tariff, they will not be available to anything like the same extent in the future, because the duty of1s. a foot will keep them out.
– The1s. duty does not affect them.
– If they do not come from Britain, the1s. a foot duty is charged if they are to be duplicated or copied.
– The honorable senator is wrongly informed on that point. ‘ Those films are covered by an item in another group.
– In any case,I shall support the requested amendment.
– If I were a member of the Parliamentary press gallery, and at all romantic, I should be inclined to send a message to my newspaper that, while snow lies heavily on the highest mountains,’.surrounding Canberra, snow is also tobe found at the feet of this Government, judging by. its chilly reception of the requested amendment submitted by SenatorMillen. During the dinner adjournment, I have undertaken a little research, and I find, on turning to Hansard of the 14th September, 1922, that at that time, the right honorable member for Flinders (Mr. Bruce), then Federal Treasurer, was window dressing for the ejections. Speaking on the Entertainments Tax Bill, he moved-
That in lieu of the rates of tax imposed by the Entertainments Tax Act 1910-1919 upon payments for admission to entertainments, there be imposed upon such payments as from the. second day of October, One thousand nine hundred and twenty-two, a tax at the following rates, namely: -
Then he proceeded to quote the rates,and he subsequently stated -
I have heard the suggestion made outside, and even in this chamber, that the budget is’ an electioneering budget.
Mr. Charlton. That is true.
Mr. BRUCE. I regret that that suggestion has been made, because it shows a fundamental misconception of that for which the National party and the National Government stand. We are in the unique and enviable position in this House of representing all classes in the community, and of necessity, in our endeavours to do justice to all, our remissions of taxation have fallen upon all classes. The suggestion that ours is an electioneering budget is nothing less than an outrage and a gross misconception of the whole position.
Mr. Austin Chapman. I hope that the Treasurer will not prevent the humble supporters of the Government in this corner from saying that.
Mr. BRUCE. No one would prevent the honorable member from saying anything. It is only natural that one who propounds Nationalist doctrines and Nationalist principles should take every opportunity of pointing out how the Government are applying them.
But while we are endeavouring to help every class, we are, in the first place, giving relief so that it may aid and assist in development and production. This, I believe, we are doing in our present proposal; because we realize that the best production is secured when those who are primarily concerned in producing get what I may describe as invigorating relaxation. If the industrial classes, who are those most concerned, have an opportunity for that relaxation which is so necessary if they are going to give us of their best, we should get the maximum of production.
– I ask the honorable senator to connect his remarks with item 320.
– It has been suggested that the exhibitors will charge less for admission to their theatres if the tax on films is reduced from1s. to 4d. per foot.
– The honorable senator must confine his remarks to the item.
– The extract from which I am quoting proceeds -
The other side of the picture, of course, is that the remission of this taxation will help in providing opportunities for education to those of small means and to the children of this country. We have had many great scientific developments of recent years, and the removal of the tax upon low-priced tickets should offer more abundant facilities for education to those who are best able to profit by them. The remission of the tax as proposed will benefit those who are least able to bear the charge upon the tickets which they have to purchase for entertainment which may be either relaxation or education to them.
Mr. Watkins. If the picture show proprietors still refuse to reduce the prices of admission, will the Treasurer take notice of the fact?
Mr. BRUCE. , I should certainly take notice of it, but I would be in a considerable difficulty as to how I could cope with it, though, no doubt, I should make a great endeavour to do so. These, broadly, are the reasons that have actuated the Government in submitting this motion. In my opinion, an entertainments tax is one of those things in which a. Federal Government, with a broad national policy, should not be concerned, and it was nothing but the obligations of the war that brought the Commonwealth Government into this field of taxation.
The right honorable member for Flinders (Mr. Bruce) made those statements in 1922 in his capacity as Prime Minister, when he was doing some window-dressing.
During the dinner adjournment, I examined the report of the debates on the Supply Bill, which occurred in the period from the 18th June to the 17th July, 1930, and I direct the attention of honorable senators to certain remarks made on the 26 th June, 1930, by the present Leader of the Senate (Senator Pearce) speaking then as the Leader of the Opposition, a position which, by the way, I hope he will be occupying at the end of the next fourteen months. The extract that I have made reads as follows: -
During their campaign speeches, both Mr. Scullin and Mr. Theodore announced that the policy of the Labour party was “ Hands off the amusements of the people “. As a result of the Labour party’s attitude towards the taxation of. the film companies, the Nationalist and Country parties, who, in their innocence, hoped to use the hoardings throughout the country in the interests of their candidates, found that every hoarding in the Commonwealth had been fully booked.
The right honorable gentleman suggested that the Labour party had obtained a monopoly . of the hoardings. Now that the Government finds itself with the shadow of defeat hanging heavily upon it, just as the snow is hanging heavily upon the Australian Alps to the south of Canberra, it is interesting to read these remarks. The extract continues -
On inquiry, they learned that those hoardings had been booked by the people represented by Mr. Stuart Doyle. Electors who previously had seen on such hoardings pictures of Douglas Fairbanks, Mary Rickford and other Hollywood celebrities, were somewhat surprised to see instead pictures and advertisements in favour of Labour party candidates.
Incidentally, the right honorable gentleman “put me in.” rather badly at that lime by remarking that Mary Pickford appeared to be coquetting on the hoardings with Senator Dunn. The report of the right honorable gentleman’s remarks continues as follows : -
The hoardings invited them to “Vote for Labour and save our amusements “. Candidates opposed to the Labour party found it utterly impossible to advertise on any hoardings throughout Australia; the picture in’terests were so grateful to the Labour ‘party for its promise to exempt them from taxation that they monopolized them all.
– Order ! The honorable senator must confine his remarks to the item. He will realize that he has had considerable latitude.
– I shall respect your direction, Mr. Chairman. I am simply replying to the arguments advanced by the Leader of the Government when he was sitting in Opposition in 1930. The’ Labour party had no monopoly of the hoardings on the occasion to which the right honorable gentleman referred. Probably now that the Government is facing defeat at the hands of its own supporters, in respect to its proposed duty on films, it is looking for all the cover that it can find. If I were a pressman in the gallery, and were at all romantic, I should be pressing the lead at top speed through my gold pencil sending messages to my paper that the Government was about to be defeated on the duty on films.
In Camperdown, a plant has been installed at the cost of ?80,000 for the printing of positive films from the negatives that are imported. About 150 people are employed at those works. I suppose similar, establishments have been set up in the other States. The Government, apparently, sees itself in a jam, and wishes to get. out of it; but I do not think that it will succeed. I ask honorable senators to deal with this proposal in a spirit of fair play. It is an attack upon an amusement which benefits the great majority of salaried people in the city and country. The time has arrived when the Australian film industry should have a reasonable chance to establish itself and make good, and the Government should support any scheme that will lead to the attainment of that object.
– It is desirable to put. one or two considerations to honorable senators before they make up their minds on this important matter. There appears to be a good deal of sympathy with the request that has been moved by Senator Millen because of the claim that has been made that it is intended to impose some charge on what is termed the poor man’s entertainment. In common with every other honorable senator I have no desire that any further levy should be imposed upon picturegoers, and I venture to suggest that this propaganda under the guise of protecting the poor has as its object the protection of the rich.
Senator Brown has referred to the amount of employment given by the firm which duplicates films that are imported I have already explained that this company makes a profit of 46¼ per cent, on the whole of the capital invested in it, and that for every £3 that it pays in wages it earns a net profit of £2. And that is the industry which some honorable senators seek to protect ! Senator Barnes has pointed out that when the Scullin Government placed a tax of 4d. a foot on imported films, it was tricked by the importers. It is the opinion of many that the people who have established the duplicating industry in Australia are an offshoot of the foreign film distributing companies. This is merely another way of extracting tribute from the poor man, about whom some honorable senators appear to be so solicitous.
– Why not get after the rich man and leave the poor man alone?
– These people have not yet increased their charges against the distributors. The following extract from the correspondence on the subject reveals the naivety resorted to by these persons. It reads -
Naturally, in the event of the duty being revised you will receive the full benefit of any reduction.
The suggestion is that the showmen should approach their representatives in Parliament with a view to persuading them to advocate a lowered duty, in order to protect the showmen from an impost that has not yet been applied to them; for not one penny has yet been exacted by the distributors on account of the additional duty, nor have they any moral right to exact one penny in the future.
SenatorFoll. - The distributors nave let the showmen off so far.
– But they have used the exhibitors to bring political pressure to bear on honorable senators. Senator Brown said something about the development of the British and Australian industry. The departmental records show that the British industry is making excellent headway, and that if matters are allowed to continue as they are, they will make still further progress. But what is even more pleasing is the splendid chance there is of establishing a worth-while Australian industry. Honorable senators who support this request are actually helping the combine, which is importing films and duplicating and distributing them in Australia.
Senator Johnston and Senator Brennan. quoted figures regarding the effect of the entertainments tax. Those figures have been tabulated by the film industry. According to figures taken from the report of the Commissioner of Taxation for the years 1928-29 and 1931-32, and covering the Commonwealth taxable admissions during those financial years, admissions to picture shows have decreased from 3,183,606 in 1928 to 2,142,734 in 1932. I remind honorable senators that they include only admissions priced at 2s. 6d. and over, as no entertainments tax is levied on lower-priced tickets, and, therefore, do not cover the huge bulk of admissions which are at lower prices. Undoubtedly, the picture shows have been hit considerably by the depression, but are we to carry this old man of the sea round our necks for all time? Senator Reid indicated that the Bruce-Page Government was taken down by this combine, which, according to Senator Barnes, also tricked the Scullin Government. Now, when a legitimate attempt is made to levy a duty in a way that does not justify any burden being passed on to the general community, honorable senators allow themselves to be bluffed by the suggestion that the charge ‘ will be passed on. I repeat that not one copper of this levy has yet been passed on, and I venture the suggestion that if that had been done it would have meant considerable trouble.
– Does not the honorable senator think that it would be to the advantage of the exhibitors if we could encourage the Australian and British film industry ?
– That is the very thing that the Government is trying to do. There is a movement afoot to do the very thing to which the honorable senator has referred; it has considerable backing, but, naturally, those concerned are keeping a still tongue on the subject.
One honorable senator asked why the Australian industry is not doing something. A film industry cannot be established in a day. The impost of” ls. a foot was placed on imported films only in March last, and I know that, even now, concerns are moving in both New South Wales- and Victoria to establish filmproducing centres in those States.
– And moving rapidly, too.
– Yes, and in closer proximity to this centre than most people think. Suggestions have been made that the quota system should be adopted, and various other proposals have also been put forward. The Minister for Trade and Customs was good enough to send me a copy of the letter which Senator Foll addressed to him on the subject of excise. I have had that letter examined very carefully by officers of the Customs Department, and I have come to the conclusion that those engaged in the Australian filmproducing industry might well say, “ Save us from our friends “. It would be found that the levying of excise duty on foreign films would be far more inconvenient to them than the levy proposed by the Government under the customs tariff.
– I am not concerned with their convenience.
– It would he very difficult for them to have excise officers exercising ordinary excise control over their business. The suggestion made by Senator Foll was that an excise duty should be imposed on prints made from imported negatives, in addition to the old import duty of 4d. a foot. He suggested that the excise rate should be Jd. or f d. a foot. I do not think that the industry itself would willingly move in the direction of having an excise duty imposed, as it would be necessary to place an excise officer on the premises of each printing establishment, and submit the processes of manufacture to all the restrictions necessitated by the proper protection of the revenue. These restrictions are inseparable from an executive revenue control, and would prove particularly irksome in the case of the filmprinting industry. The way in which the honorable senator’s proposal would work out in comparison with the present import duty of ls. a foot is illustrated in the following table: -
The practice up to the present has been to make from six to eight copies of feature films in Australia from imported negatives. It will be observed from the figures quoted that, if eight copies are made, the loss to revenue as compared with the present proposal would be £d. a foot, if the excise were -Jd. a foot. If the excise rate were fd. a foot, the loss would be ¼d. a foot. If seven copies were made, the loss would be .64d. a foot and 3Sd. a foot respectively. If six copies were made, the’ loss would be .833d. a foot and .583 a foot respectively.
Honorable senators, in their anxiety to do justice to what they claim as the poor man’s entertainment, are allowing the distributors to get away in the smoke. There is no justification for penalizing the showmen except to a very small extent, and there is no justification for the showman to pass the impost on to those who attend his show, because it will be so very small. I do not think that the duty will ever be passed on to the showmen at all. Senator Rae asked why, if we propose to place this extra duty on the film industry, the Government should not re-impose that portion of the land tax which was recently remitted. In answer to that, I ask honorable senators to choose between the land-holders and those controlling the cinema industry. If they do so impartially I have no doubt what decision that they will arrive at.
.- I am not prepared to accept the statement of the Minister that, if this duty is imposed, it will not be passed on to the exhibitors. So. far as I know, every tax laid on the distributors has been passed on to the exhibitors.
– The present duty has not been passed on, although it has been in operation since March.
– If it becomes a permanent charge it will be passed on.
– Did not the distributors think that it would become permanent when it was imposed in March ?
– They knew that the matter was to come before Parliament, and they hoped, perhaps, that it would not be agreed to. A great deal of correspondence has been received by honorable senators on this subject, but I do not believe, from the tone of the correspondence, that there has been any conspiracy on the part of exhibitors to bring pressure to bear on members of Parliament.
– The letter was read in this Senate in which the exhibitors were asked to bring protests before the senators.
– The protests would probably have been made in any case. Many exhibitors are in a bad way now. I have seen letters from accountancy firms which handle the affairs of exhibitors, and it is clear from them that many exhibitors are finding the greatest difficulty in making ends meet. The reduced attendances account for this, and these in turn, are due to the reduced spending capacity of the people. No matter what we may say regarding the class of picture which, unfortunately, is sometimes exhibited, the people have been forced to patronize this form of entertainment because good music and good acting on the legitimate stage have been put out of their reach by high prices. I deplore as much as any one many of the films which are exhibited, but I am no more favorably disposed towards some of the literature to be found on the shelves of our libraries. No one suggests, however, that a special duty should be placed on this kind of literature. We have appointed censors to see that undesirable literature is not offered for sale in the Commonwealth. I doubt that the imposition of this heavy duty will have any effect upon the class of American films distributed in Australia. We must rely upon our censors to reject pictures which should not be shown before Australian audiences. I have been wondering whether, in view of the need for revenue, the Government has given consideration to any other proposal for the control of the motion picture business in Australia. In New Zealand, for example, films are not subject to import duty, and the Government obtains its revenue from licences issued to registered exhibitors who pay fees according to a scale prescribed by regulation. I have been unable to ascertain how the system is working in the dominion ; but as it has been in operation for some years, I assume that it has proved satisfactory, and it has occurred to me that similar action might be taken by this Government.
– The authority of the Commonwealth is limited by the Constitution. We have power to levy import duties, but not to exercise control over films after they have passed through the customs.
– Probably that limitation of power would prevent this Government from adopting the course followed in New Zealand. I am afraid that the imposition of this higher duty will not result in additional revenue being received by the Government, because the importing interests will continue the practice of printing in Australia from the positive film, and if the industry in Australia does not develop, the additional 8d. a foot duty charged to importers will be passed on to exhibitors, with the result that many people will be thrown out of employment. Further taxation on exhibitors, especially in the smaller centres of population, will, I believe, force many of them to close their theatres.
– Like other honorable senators, I have been deluged with telegrams and letters, relating to the higher duty imposed by the Government. One man states definitely that if this tax is imposed he will be forced to close his theatre. Others declare that exhibitors will have to reduce their staffs or increase their prices for admission. The Motion Picture Exhibitors Association of Queensland, in a letter to me, states! -
We are entirely in the hands of the distributors regarding what assessment they may make to cover any increase of duty. Distributors state that if ls. per foot is imposed, the extra 8d. per foot must be passed on to exhibitors, but we have been unofficially informed that if the duty is fixed at not more than Od. per foot, they will carry it themselves.
I go a long way with the Government in this matter because I believe that the Scullin Administration attempted to do what this Government now proposes to do, but the combine discovered a way by which it was able to dodge the duty. The whole of the picture industry in Australia is in the hands of a combine, necessitating drastic action to control it. I listened attentively to the remarks of the Leader of the Senate (Senator Pearce) who attacked the combine in terms which could hardly have been excelled by Senator Dunn or any other honorable senator on this side of the chamber whose objection ta monopolies and combines is so well known; and I was in full sympathy with all that the right honorable gentleman said. But, when we look at this matter closely, we must ask ourselves whether the combine will not succeed, as it did on a former occasion, in dodging this duty. Many exhibitors are poor men. Despite the statement of the Minister in charge of the bill (Senator McLachlan) that we on this side were trading on our sympathies with the working classes, we naturally feel that it is our duty to look after their interests. The problem facing the Government bristles with difficulties. I would vote for the item if it could be shown that the Government would collect this higher duty from the combine; but we know, from what the exhibitors have told us, some of them being quite frank about the matter, that they are helpless,- and I am afraid that the Government’s proposal will not be of very much assistance to them.
– We are stopping up one of the leaks, at all events.
– To effectively deal with this monopoly, the Government should impose a drastic special profits tax of 10 per cent., 15 per cent., or 20 per cent. To me that would seem to be a straightforward way of dealing with these foreign picture interests, and if the Government brought forward a proposal on those lines, I would give it my hearty support. The requested amendment would, if carried, be referred to another place, which apparently passed this important item practically without discussion, and I should like to know what would happen then. Doubtless the item would be referred back to the Senate, and we should certainly have more light on the subject than we have had Up to the present time. . I should like the Minister to tell us what this duty of ls. a foot would mean per programme to the ordinary country exhibitor - the man who is in the position of an ordinary working class trader, and whose profits, I imagine, are in the neighbourhood of £5 or £10 per week, though I doubt that some of them make so much as that. Even £1 a week additional taxation would mean a good deal to a man in that position. At the moment we are without the necessary information to guide us. If the suggestion made. by Senator Barnes, to refer the matter back to the Tariff Board, were adopted, we should then get the fullest information. Personally, although as a rule opposed to the practice of appointing royal commissions, I would go so far as to support the appointment of a royal commission, which would make an investigation in much the same way as the petrol commission is now inquiring into the operations of the major oil companies in Australia; because I am satisfied that this foreign picture combine should be dealt with in a drastic manner. From my knowledge’ of certain gentlemen who are interesting themselves iD this matter., I feel confident that the combine has very good advocates in this
Parliament and elsewhere, and its influence, although disguised in various ways, is felt in this chamber. I hope that when the Senate’s request is dealt with in the House of Representatives the matter will be fully debated, so that our knowledge of the film industry in relation to public policy may be widened. Notwithstanding the ad misericordiam pleas of the distributors regarding the small trade they are doing during the depression, I do not see why the price of admission to picture theatres should not be reduced.- During the boom period, one could obtain a seat in the cheaper parts of the house for not more than 6d. No doubt the advent of the sound films necessitated increased expenditure on plant, and in improving the acoustic properties of theatres. I have heard that the cost of installing sound apparatus in. some of the big theatres has been as high as £40,000, but this figure is supplied by the . exhibitors who, no doubt, desire to impress the public in order to strengthen their claims to higher prices for admission. To-day, the cheaper seats cost ls. 6d. and 2s., and on Saturday nights one has to pay 5s. 9d. for a good seat in a city picture theatre. That is almost equal to the price formerly charged for high class drama performed by the best companies that visited Australia. A few years ago, one could purchase a seat in the back stalls for 2s. 6d., and hear a first class dramatic production, but the talkies have almost ousted other forms of entertainment, and now we are almost compelled to accept the fare which the Americans offer.
– And we have to take it through their noses.
– If American voices, as well as American charges can be improved, I shall be pleased. The Minister has not touched the real problem. He has endeavoured to persuade the committee that the distributors dare not pass on the increased duty.
– Yet the Leader of the Senate said that the last increase of duty was passed on.
– Yes, and that will happen again; indeed, Senator Brennan has said that it is bound to occur in the ordinary course of business. I am entirely in. sympathy with the remarks of Senator Pearce regarding the desirability of compelling the American combine to disgorge some of its profits, but” I am afraid that the combine will be able to pass’ on any taxation that is levied upon it.
– It has not done that so far, and it is not game to do it. But are we game to stand up to the combine ?
– I am game enough, but I am influenced by the frankly-expressed views of the exhibitors. I believe that even the so-called Australian producing companies are in the hands of the combine. After all, a company that desires to exhibit’ either a play or a film is entirely at the mercy of those who control the theatres. The metho’d of attacking the combine adopted by the Government will merely result’ in the tax being passed on to the masses who will have to choose between paying higher prices for their entertainment or refraining from patronizing picture theatres. The Government should reconsider its policy, and endeavour to get the revenue it requires by a drastic special tax on the profits of the film combine.
– I congratulate Senator MacDonald on having tried to be fair. He said that this matter bristles with difficulties, but it does not appear to me to be more difficult than many other items in the schedule. Honorable senators have had no compunction about supporting increases on other imported goods, and the only real problem that I see in relation to films is that the increased duty will not be popular. We may be told that the films are the rich man’s pleasure. On the other hand, Senator Millen has said that they are the poor man’s amusement; whilst Senator Crawford has stated that they are practically the only entertainment available to the rural population. I do not concede that films are the particular amusement of any one section of the community. Pictures are patronized by all sections in the city and the country alike. Senator Dunn Said that the rich patronize the opera. If they are wise they will go to the opera, if there is one to go to, but I have found in both Melbourne and Sydney that it is difficult to find a play to attend. The newer form of amusement has practically displaced what, in my opinion, is a far superior form of entertainment. Almost every person in the community attends the motion picture theatre. I do so occasionally, although probably not so frequently as do most honorable senators. One morning recently, when in Melbourne, I attended the screening of Cavalcade. I looked with what I believe to have been an unbiased eye at the hundreds of people who were pouring into the theatre, and I did not form the impression that they were poor people ; and, therefore, I cannot agree with the suggestion that this duty is an attack upon the poor in the community.
I do not wish to associate myself in any way with the attack which has been made on the companies concerned. They have not badgered me. In that connexion, I have no criticism whatever to offer. They have approached me in a reasonable way.
I have also receive’d a number of letters from country exhibitors. I think that the Minister was a little unfair when he suggested that these complaints have been fomented by the distributing companies. I do not think that they were. Rather am I of the opinion that the distributors felt that they would be hard hit, and that they protested for that reason. It is said that this duty is a revenue tax, and it is argued that a revenue tax is not justified when a surplus of about £3,000,000 is expected. That is an argument which has so frequently been ignored by honorable senators opposite that I did not expect to hear it from them to-day. The Government has to think of balancing its budget, and to that end it is entitled to consider what taxation it is reasonable to impose on the community. Invalid and old-age pensions cost this country between £10,000,000 and £11,000,000 a year, whereas the duty on these films in 1929-30 was approximately £300,000; in the following year it was under £150,000, and for 1931-32, it was slightly over £50,000. There is no reason why the people who go to see motion pictures whether rich or poor, or city or country dwellers - should not make some small contribution towards these pensions, or to the other outgoings in which the country may be involved. Since this is a revenue tax, and the Government is primarily the judge of the revenue it re quires, and, further, since no one has objected to an increased tax on lace, carpets and other goods for the purpose of raising revenue, 1 see no reason why amusements also should not be taxed. Amusements are in the nature of luxuries; no one is forced to attend the theatre against his will. I regard the duty as sound because it encourages British and Australian industries as against American industries. For some time there has been a growing feeling in South Australia in favour of British films rather than American, yet there is no need to disparage the products of the American film houses. Cavalcade, which I mentioned, was produced in the United States of America. Nevertheless, numbers of Australians prefer British films ; ‘ they like their sentiment, they find them better than American films, and they greatly appreciate the English accent. > I shall support the Government in this duty, and I do not care that it happens to be an unpopular course which the Government is taking. I have no desire to be hard on any section of the people, particularly those in conntry districts in the matter of their amusements, but it does not appear to me that this is >an unreasonable tax. Amusements should pay their fair contribution towards the general fund to meet the needs of the community
– They are doing that, and more.
– That is a matter of opinion. If the honorable senator believes that the people who attend picture theatres are paying more than their fair share of taxation, he is entitled to vote against the Government’s proposal. In my opinion, the tax on amusements cannot be regarded as excessive, particularly in view of the fact that, even in, these hard times, large numbers of people are found in our picture theatres every night. I shall support the Government, because I feel that amusements should pay their share of the expenses of the country. .
– I shall support Senator Millen’s request because I consider that the patrons of picture shows are paying all that they ought to be asked to pay towards the expenses ‘ of government. Senator Duncan-Hughes omitted to mention that those who attend picture shows pay amusement tax and other imposts, which in the aggregate amount to a fairly considerable sum. That ground has already been covered so well that I shall not traverse it again. I resent the statement of the Minister in charge of the bill that the Senate does not dare to stand up against the picture combine. If the Minister is prepared to introduce a bill to deal with combines, I am prepared to support him, but I shall not support a proposal for higher duties, which I know will be passed on at once to the patrons of the moving picture shows.
– How does the honorable senator know that the duty will be passed on ?
– It is clearly understood that as soon as this higher duty receives parliamentary sanction the pictureshow proprietors will be called upon to pay more for their films.
– The duty has been in operation since March last.
-That may be. It is probable that action to pass on the duty to the patrons of the picture shows will not be taken until Parliament has come to a final decision on the subject. So soon as the Parliament ratifies this duty, the prices to the public will be increased immediately. We cannot blame the distributors for taking such action, because under the Commonwealth customs law no contract can be voided if tariff increases are passed on. Any increased taxation in this direction, therefore, will have to be borne by the people who attend picture shows. If the Minister can evolve a scheme under which relief will be given to the exhibitors of films I shall be prepared to support it; but I am not prepared to support this increase of duty because, if agreed to, it would have to be borne by the people who attend the picture theatres. The following is an extract from a letter which I have received from a small pictureshow proprietor : -
As an example of this, I would mention that in one class of seat alone, should I have toincrease the price by1d., the public will have to pay 5d. so as to meet the additional State and Federal taxation.
I do not quite follow those figures, but assume that they are correct. Therefore, any increase of duty would increase the cost of attendance at the picture shows.Fewer people would attend, and the amount collected from the amusement tax would fall considerably. The Commonwealth will lose revenue by the imposition of this duty. It will kill the goose that lays the golden egg.
– This goose does not lay much of a golden egg for the Commonwealth.
– The figures show that in 1930 the Commonwealth obtained £98,670 from the amusement tax. Surely that is a nest egg worth having.
– There is no Commonwealth tax on entertainment tickets costing under half a crown.
– The figures show that the Commonwealth has derived considerable revenue from this source, and that during the last two or three years the revenue has been gradually decreasing because of the heavy taxation imposed upon the people. Picture patrons are using the cheaper seats, and in that way are not contributing anything towards Commonwealth revenue in the form of entertainments tax. I regret that I have to vote against the Government on this item, but I must do so really to ensure that the Commonwealth receives sufficient revenue under this item. I am informed that the supply of British films is at present not nearly sufficient for our requirements in Australia; but I would be prepared to consider the imposition of a deferred duty later on in order to give the British industry an opportunity to establish itself.
Motion (by Senator Rae) negatived -
That the committee do now divide.
– I wish to refer to one or two points which I do not think have been mentioned in this debate. I am diffident about disagreeing with the Government on what is known as a revenue item. I understand that this is mainly a revenue item.
– That is so.
- Senator DuncanHughes has referred to the unpopular course, but I haveno recollection of ever having been worried about taking either an unpopular or a popular course. When the Leader of the Senate (Senator Pearce) was speaking, he stated that this extraordinary mass of correspondence with which honorable senators have been inundated during the last three or four weeks, was from one common origin. I take it that he meant that it emanated from the Yankee picture interests. I do not dispute that some of it may have come from that source, but much of it did not. I have been in close touch with many of the smaller exhibitors who operate in the country towns of Tasmania. I have known them intimately for years. In one town in Tasmania a picture show has been operated once or twice a week by an estimable lady whose husband gave his life for this country. She has written to me, and I have seen her personally. She has placed before me copies of the contracts which she has had to sign, not one, as was referred to by the Leader of the Senate to-night, but dozens; and they affect not only the Yankee picture distributors, but also British and Australian d distributors. I assure honorable senators that the small country exhibitors, whether be shows Yankee, British or Australian pictures, gets it in the neck. He is the toad beneath the harrow “ who “ knows where each point of the harrow goes.” “When Senator Duncan-Hughes was speaking, the Minister in charge of the bill interjected that the Commonwealth does not derive any considerable revenue from amusements, because the entertainments tax- does not apply unless the tickets cost over 2s. 6d. Let me give an actual illustration of the tickets sold on Saturday, the 17th June, by one exhibitor in a country town of Tasmania. There were 55 tickets sold at ls. 8d., which returned £4 lis. 8d. The Tasmanian Government took 18s. 4d. in amusement tax. There were 78 tickets sold at ls, 6d., returning to the exhibitor £5 17s.. from which the Tasmanian Government took 19s. 6d. in amusement rax. There were 29 tickets sold at ls., returning to the exhibitor £1 9s., from which 2s. 5d. was taken by the Tasmanian Government in amusement tax. The gross takings amounted to £11 17s. 8d., of which the Tasmanian Government took £2 Os, 3d,1 I have a certificate to that effect signed by the Taxation Department’s inspector. Allowance has to be made for the sum of £4 or more paid for the pic tures, as well as for the cost of lighting, door-keepers, machinery, and other items. There is precious little in it for the exhibitor. This letter was not inspired by Yankee interests, as the Leader of the Government in the Senate would suggest that all such correspondence is, but is a personal communication to me, dated the 20th June last. I am with the Government in its desire to deal with the foreign picture interests ; but* it has placed itself in an untenable tactical position. The endeavour has been made to convince honorable senators that the Government is out after those who have been evading taxation. I predict that this bomb or broadside will miss its target. The extra duty will have to be found by the exhibitors, who, according to their contracts, are bound hand and foot to the distributors. How are they to pay it? They must pass it on to the public by way of increased charges, because, from what I know of the business, they cannot stand any more. They have been in the most serious position for two or three years. The extra duty will not achieve the object intended. The certified figures supplied by the Taxation Department, and by chartered accountants, show that there has been a drop in attendances, gross takings, and so on, with a duty of 4d. The rate was increased from 3d. with the idea of obtaining additional revenue, but that purpose has not been achieved; revenue from this source has declined. Can anybody in his sober senses, contend that an increase from 4d. t6 ls. will produce more revenue? There is such a thing as saturation point, and it has been reached. The Government will not “ get at “ the American picture interests, hut will “ give it in the neck “ to good Australians like the lady I have mentioned. I have received another letter, also from a member of the fair sex, who runs a picture show in the Tamar Valley, in Tasmania. She was not instigated by Yankee picture interests, but acted on the principle of self-preservation. For the last seven or eight years, to my knowledge, she has been making a somewhat precarious living as a picture exhibitor. She exhibits every” Saturday, sometimes on a Wednesday, and perhaps for a whole week at Christmas time. She is a good Britisher, and wishes to screen British pictures, but the best that the British film distributors could do for her was to supply her with sixteen productions during a period of twelve months. I have the contract before me. To make up her programmes, she has to obtain foreign films; and, if we agree to the duty proposed by the Government, she will have to pay it. She has supplied me with her last year’s income tax return, certified by a chartered accountant in Launceston. On the figures that she has submitted, she has not “ Buckley’s “ chance of making a living if she has to pay this additional charge, and consequently she will have to get it out of the rural population that patronizes her theatre; and you, Mr. Chairman, know as well as I do what sort of a spin the Tasmanian applegrower has had for some considerable time past. I am very much averse to voting against the Government on a revenue item. I wrote to my correspondents declining to commit myself, and stating that I would hear the Government’s case before I came to a considered opinion. I have heard all that has been said on the subject to-night. I listened with the greatest interest to the Minister in charge of the schedule, and to the Leader of the Government in the Senate.Up to a point, I agree with many of the remarks of the latter gentleman; but I must join issue with him concerning the pernicious nature of many of the American productions. I regret that criticism on that score can be directed, not only against the Yankee, but also against British productions. I have seen some British “ talkies “ of which I was heartily ashamed, and that I would not like a lady friend, for whom I had any respect, to see. On the other hand, I have seen beautiful British works of art, in which the acting was restrained and natural. I have also seen some very fine American productions. An honorable senator to-night expressed the wish that the day might soon come when we would have nothing but Australian “ talkies.” I cannot agree with him. These pictures are an expression of art, and I should like productions from all over the world to come to Australia. Some pre-war French and German pictures that I saw wereexcellent works of art.
If the Government must have additional revenue from films, I suggest that it be obtained in some way other than by placing the heavy duty of1s. per ft. on foreign films. I am convinced even by the case presented by the protagonists of this high duty that under it the small exhibitor will be penalized, because he is bound hand and foot to the film companies, which means that in the last analysis the public must pay. The entertainment of the people is already taxed up to the hilt. I have shown that in a small picture theatre in a country town, where the nightly takings amount to only £11 odd, the tax collected by the State Government amounts to over £2.
– The honorable senator has exhausted his time.
Motion (by Senator Dunn) agreed to -
That the committee do now divide.
Question - That the request (Senator Millen’s) be agreed to - put. The committee divided. . (Chairman - Senator the Hon. Herbert Hays.)
Majority . . . . 15
Question so resolved in the affirmative. Request agreed to.
Motion (by Senator McLachlan) agreed to-
That the House of Representatives be requested to amend the sub-item, paragraph 2, by adding to sub-paragraph (c) the following: “(4) Film exposed in any territory of the Commonwealth, per lineal foot, British, free; general, free.
Sub-item agreed to, subject to requests.
Division 12. - Hides, Leather and rubber.
Item 331 (a) agreed to.
Item 334 (c1, 2) (f1, 2) (v) (x) agreed to.
Item 359 (d4) (Vehicle parts).
SenatorMcLACHLAN (South Australia - Vice-President of the Executive Council) [11 p.m.]. - I move -
That the sub-item be postponed.
The Tariff Board has submitted a recommendation in connexion with certain paragraphs of item 359g which, if accepted, will require some amendment of paragraph d.
Motion agreed to.
Articles of an advertising character which would not otherwise be dutiable at a higher rate of duty under any other heading including all articles which would be free but for their advertising characteristics, ad valorem, British, 45 per cent.; general, 65 per cent.
.- The increase of duty on this item over the 1921-30 tariff is 20 per cent British and 30 per cent, general. Such a heavy increase should be explained before the item is agreed to.
– The goods entered under this item are recorded for statistical purposes under the items applicable to such goods hearing advertisements, and no information is therefore available regarding the extent of imports. These duties were increased by 20 per cent by the previous Government for revenue purposes. A further increase of 10 per cent, has been made in the general tariff rate to conform with the Ottawa agreement formula. The duties are in accordance with the ad valorem rates in respect of manufactures of paper or partly of paper having advertisements thereon. The object of the increase is to provide additional revenue, although in some of the lines covered by the item the incidence of the duties may be protective. As the importations are not recorded separately, no estimate can be given of the additional revenue which is likely to accrue from the higher duties.
The increase in the present rates above 1921-30 rates are, ad valorem, British 20 per cent., general 30 per cent. At times, pamphlets are enclosed with certain goods, and so also are certain articles for advertising purposes such as knives, pipe lighters, corkscrews, andso on.
.- The explanation of the Minister is not satisfactory to me. I am not prepared to endorse the view that such a heavy increase of duty is justified simply because certain imported goods may have enclosed with them attractive advertising matter for display purposes in retail shops. As the Tariff Board does not seem to have investigated this item, I move -
That the House of Representatives be requested to make the duty, ad valorem, British, 25 per cent.
Citrus Fruit Trade with New Zealand - Restriction ofWheat Production.
Motion (by Senator Sir George Pearce) proposed -
That the Senate do now adjourn.
SenatorRAE (New South Wales) [11.6]. - I ask the Minister representing the Minister for Trade and Customs whether the Government has received any further communication from the Government ofNew Zealand regarding the embargo on the importation on citrus fruit from Australia?
[11.7]. - A cablegram has been received from the Government of New Zealand within the last two or three days to the effect that it is not prepared to discuss this matter any further with the Australian Government until it has . concluded its negotiations with America.
– In view of the mystery that seems to have enveloped the proposals submitted to the World Economic Conference in London for the restriction of wheat production, I ask the Leader of the Government in the Senate (Senator Pearce) whether any further cablegrams have passed between Melbourne or Canberra and London on this subject, and also whether a statement can be made to clarify the position ?
[11.9]. - I have no further statement to make on this subject. I repeat what I have said on other occasions that, before any action could be taken which would involve Australia, the State Governments would have to be consulted, because they would have to implement any arrangement made for a restriction of production.
Question resolved in the affirmative.
Senate adjourned at 11.10 p.m.
Cite as: Australia, Senate, Debates, 28 June 1933, viewed 22 October 2017, <http://historichansard.net/senate/1933/19330628_senate_13_140/>.