Senate
24 January 1908

3^rd Parliament · 2^nd Session

DELIVERY OF TELEGRAMS
QUESTION
- T AS MAN I AN -VI CTO RI AN CABLE
NAVIGATION BILL
EXCISE TARIFF BILL
CUSTOMS TARIFF BILL
SPECIAL ADJOURNMENT
ADJOURNMENT

The President took the chair at10. 30 a.m., and read prayers.

page 7623

DELIVERY OF TELEGRAMS

Senator DOBSON:
TASMANIA

– I wish to ask the Minister of Home Affairs if he will request the Postmaster-General to favorably consider the suggestion published in this morning’s Argus that the French system of receiving telegrams at night at reduced rates, delivering them with letters in the morning, be adopted here.

Senator KEATING:
Minister for Home Affairs · TASMANIA · Protectionist

– Probably the suggestion has already been brought under the notice of the postal authorities, but as it may not have been, I shall draw the attention of the Postmaster-General to the matter.

page 7623

QUESTION

T AS MAN I AN -VI CTO RI AN CABLE

Senator DOBSON:

asked the Minister of Home Affairs, upon notice -

What is the present position of negotia tions between the Government and the Eastern Extension Cable Company, with reference to the proposed purchase by the Commonwealth of the cable between Tasmania and Victoria?
Is there any objection to tabling a copy of the correspondence ?

Senator KEATING:
Protectionist

– The replies to the honorable senator’s questions furnished by the Postmaster-General’sDepartment are these : -

Negotiations are proceeding, and it is not considered advisable to make any statement at present regarding the correspondence with the company on the subject.
Yes, until the matter is completed.

page 7623

NAVIGATION BILL

Senator GUTHRIE:
SOUTH AUSTRALIA

– Is it the intention of the Government to proceed with the Navigation Bill during the present session? If the Government does not intend to proceed with it this session, would it not be as well to wipe it off the noticepaper ?

Senator BEST:
Vice-President of the Executive Council · VICTORIA · Protectionist

-The honorable senator must be aware of the practical difficulties surrounding this matter. The Government has done its part, I having introduced the Bill, and moved its second reading; but, as he knows, its consideration will occupy many weeks, and unless we are to have an exceedingly prolonged session, there is no prospect, as I have already frankly told the Senate, of passing it before the prorogation. But I have undertaken that the measure shallbe dealt with early next session. To provide for contingencies it will be as well to leave it on the notice-paper.

page 7623

EXCISE TARIFF BILL

Bill read a second time, and referred to the Committee to which the Customs Tariff Bill was referred.

In Committee :

Clause 1 agreed to.

Progress reported.

Ordered -

That the Committee have leave to sit again at alater hour.

page 7623

CUSTOMS TARIFF BILL

In Committee (Consideration resumed from 23rd January, vide page 7622) :

Schedule.

– It is so stated in the following note.

Item agreed to.

Item 2 (Ale, Porter and oilier Beer, Cider and Perry), item 3 (Spirits and Spirituous Liquors), item 4 (Amylic Alcohol and Fusel Oil), item 5 (Collodion), item 6 (Wood Naphtha and Methylic Alcohol), item 7 (Spirits Denaturated), item 8 (Perfumed Spirits and Bay Rum), item 9 (Spirituous Essences, Fruit Ethers, Aromas, and Flavours, &c), item 10 (Sulphuric Ether and other Ethers), and item 1 1 (Non-spirituous Ethereal Fruit Essences, &c), agreed to.

Item 12. Wine, Sparkling, per gallon, 12s.

Senator STEWART:
Queensland

– It seems to me that the duty on this class of wine is very low - only 12s. per gallon or 2s. per bottle. This is wine that is drunk largely by the rich people of the Commonwealth. I do not think that many of the poor indulge in it. I consider that we ought to get a little more revenue out of it if possible. I therefore move -

That the House of Representatives be requested to make the duty on item 12, 24s. per gallon.

– No.

Senator McCOLL:

– If they wish to protect the wine industry they should have given distillers a fair protection. At the present time our distillers receive a protection of only 2s. per gallon. But upon sparkling wines it must be remembered that no Excise is levied, so that the amount of the duty represents the measure of protection enjoyed by our manufacturers in respect of this item. I think that we do very well when we extend to any industry the duty for which it asks. The rate proposed in the schedule is the limit for which the vignerons have asked, and I think we should be very unwise to’ alter it. To alter it would create complications and cause delay. From the revenue aspect, we should lose a great deal, and I do not think we should help the industry very much.

Question - That the House of Representatives be requested to make the duty on “ Wine, sparkling,” 24s. per gallon (Senator Stewart’s request) - put. The Committee divided.

AYES: 8

NOES: 16

Majority … … 8

AYES

NOES

Question so resolved in the negative.

– It was the highest duty that it was thought desirable to ask for.

Question - That the House of Representatives be requested to make the duty on “ Wine, sparkling,” 20s. per gallon (Senator Needham’s request) - put. The Committee divided.

AYES: 11

NOES: 14

Majority … … 3

AYES

NOES

Question so resolved in the negative.

Request negatived.

Request (by Senator Croft) put -

That the House of Representatives be requested to make the duty on item 12, 15s. per gallon.

The Committee divided.

AYES: 12

NOES: 13

Majority … … 1

AYES

NOES

Question so resolved in the negative.

Request negatived.

Item agreed to.

Item13 (Wine, Still), item 14 (Wine, Crape), item 15 (Wine, n.e.i.), item14 (Limejuice, &c.), and item 17 (Table Waters), agreed to.

Division11. - Tobacco and Manufactures thereof.

Item18. Tobacco, manufactured, n.e.i., including the weight of tags, labels, and other attachments, per lb., 3s. 6d.

Senator PEARCE:
Western Australia

– I move -

That the House of Representatives be requested to make the duty on item18, 3s. 3d. per lb.

I move this motion because facts which cannot be refuted show that the old Tariff did for the tobacco industry all that the most ardent protectionists could require of protective duties. I shall not weary the Committee with figures; but I ask honorable senators whether, in view of the Customs returns relating to the importation of manufactured tobacco, and of the tremendous increase of local manufacture, it can be said that the old Tariff failed to adequately protect the local tobacco industry ? The figures show that the importation of tobacco has fallen off tremendously, and its local manufacture immensely increased. That is a good reason for not increasing the protection given to the local industry ; but there is a further one. Protectionists combat the argument of free-traders that protection enables local manufacturers to exploit the public by saying that that is prevented by competition, the result of substantial protection being to create local competition which will keep down prices to a fair level. In the local manufacture of tobacco, however, there is no competition worthy of the name. When the present Tariff was introduced last year, the local manufacturers of tobacco immediately raised their prices. The only justification for this action would have been the increasing of the cost of their raw material by the imposition of higher duties upon it ;. but a return laid on the table of the Senate showed that, prior to the imposition of the present Tariff, the local manufacturers had cleared sufficient leaf at the old rates of duty to enable them to continue their operations for many months without making fresh importations. The local manufacturers showed their readiness to take the fullest advantage of the protection afforded to them by the change of duties, the only thing that kept their rapacity within bounds being the importation of a few lines of tobacco manufactured abroad notably such lines as the Mistletoe tobacco, which threatened to undersell the local article. Seven-eighths of the tobacco manufactured in Australia is manufactured by a Trust, which has shown that it has absolutely no regard for the consumers, and that it will always increase its prices as high as the protective fence will allow them to be increased. The two or three local competitors of the Trust do such a small business that the Trust can afford to laugh at their competition. I wish to read to the Committee a letter from an agent of an imported tobacco, which, although written by a partisan, will be seen, in . the light of the figures relating to importation and local manufacture, supplied by the Customs Department, and in the knowledge thatwe have of the action of the Tobacco Trust in increasing prices on the imposition of the new Tariff, to contain nothing but facts. This letter is dated Sydney, 20th January, 1908, and is as follows: -

In view of the evident desire on the part of many public men to restrict the monopolistic operations of what are called “ Trusts “ and “Combines,” we should like to draw your attention to the effect of the action of the House of Representatives in passing the recent tobacco duties. The apparent desire of that Chamber was to curtail the operations of the tobacco trust, so as to admit of other competitors and thus restrict undue profits ; but we venture to say that had the framing of the new Tariff been left in the hands of the trust itself the latter could not have produced anything which could have more completely played into its own hands, as we shall show. When the Tariff Commission was appointed it was fully anticipated amongst the trade that the tobacco trust was going to be checked in its profit-making capacity by a levelling-up of the Excise duty and the duty upon the imported leaf, as against the imported manufactured article, thereby introducing what the Age in a recent article described as a “ breath of healthy competition much to be desired.” The recommendations of the Tariff Commission were as follow : -

– After its own proposals, following the lines of the Tariff Commission’s recommendations, had been tabled, the Government deemed it advisable, in the light of further information, to consider whether it should adhere to them or frankly ask another place to agree to variations of them. Mr. Nevill’s recommendations to the Government resulted in their submitting the whole scale of duties as they now stand. Senator Pearce, in moving his request, has referred to other items, and it must be apparent that the whole of these tobacco duties are interrelated. . It is difficult to deal with one of them without considering the other. For instance, we propose in connexion with the item immediately under consideration that a duty of 3s. 6d. per lb. be imposed on manufactured tobacco, but the value of that duty, from the stand-point of protection, can be measured only by considering the duty imposed on the unmanufactured leaf.

Senator de Largie:

– The question is what is the reason for the increase of 3d. per lb.

Senator KEATING:

– We have to consider these items, not singly, but in relation to each other. The duty of 3s. 6d. per lb. on manufactured tobacco is not necessarily the measure of protection.

Senator Millen:

– No. But the measure of protection before was 9d. per lb. as asagainst1s. per lb. now proposed, and Senator de Largie asks the reason for the increase.

Senator KEATING:

– I am coming to that point.. The Government, before submitting their amended proposals to another place, had the advice of Mr. Nevill and others in respect to the whole range of duties from item 18 to item 25. In reporting to them. Mr. Nevill said -

The summary of my evidence before the Tariff Commission was -

He then proceeds to set out what he suggested to the Commission, and goes on to say that -

The reasons for advocating the above are fully set forth in my testimony, showing it had proven satisfactory both from a revenue point of view and as stimulating the production and consumption of the locally-grown tobacco.

Then come the words to which I desire to draw special attention -

As there pointed out the difference of 6d. per lb. between the stemmed and unstemmed was intended to make it to the interest of the manufacturer to do the stemming in Australia, -

At this time the Government proposed a margin of only 3d. per lb. between the duty on the stemmed and the unstemmed leaf-

I do not think that 3d. suggested in the proposed division will accomplish this, as it would be more than absorbed in the loss and work necessary to be done to bring it to the condition of the imported strips.

.- The remarks of Senator Pearce appear to have been entirely directed to the effect which the proposed duty will have upon our tobacco manufacturers and upon our consumers. It has been said again and again that this Parliament has decided that the Tariff shall be protective in its inci.dence. It is rather remarkable, therefore, that the moment we are asked to deal with an industry which is capable of being con- verted into a big primary industry, those who have made that statement wish to abandon their protectionist principles and to make the Tariff one more in the nature of a free-trade Tariff. I would point out that if we are going to pass a Tariff which will enhance the cost of production, the tobacco grower is just as much entitled to a little consideration as is any other .member of the community.

Senator Pearce:

– Who has proposed to lower the measure of protection extended to the growers?

Senator CHATAWAY:

– If we increase the cost of production throughout Australia by the imposition of heavier duties, the tobacco grower is entitled to his fair share of protection to enable him to meet that increased cost. It has been said, in effect, that “ everything in the garden is lovely,” and* that the tobacco industry is progressing by leaps and -bounds. Now, I hold in my hand the report of the protectionist section of the Tariff Commission upon this industry. It is signed by Sir

John Quick, Mr. F. Clarke, and Senators Higgs and McGregor. They say -

Generally the effect of the existing duties has been to bring about an increase in the importation of foreign leaf, with a consequent diminution in the consumption of local leaf.

That is a very clear and distinct statement. I take it that they would not have made such a definite declaration had it not been founded upon fact. They further add-

Mr. Nevill’s evidence undoubtedly points to the conclusion that when the Commonwealth Tariff was framed the interests of the manufacturers of imported leaf, and the indentors of manufactured tobacco, received more favorable consideration than those of the grower, with the result that the consumption of local leaf has diminished and the imports of raw leaf have increased. It can therefore be seen that what is intended or desired to be a protective policy proves to be so only to the manufacturer.

Senator Millen:

– But under this proposal the honorable senator would be conferring a greater benefit only upon the importer of unmanufactured leaf.

Senator CHATAWAY:

– The free-trade section of the Tariff Commission, which was composed of Senator Clemons, and Messrs. Fuller, Fowler, and Wamsley, in their conclusions upon this matter, say -

On a review of the complete evidence, we are of opinion : -

That the existing duties of Customs and Excise have not in any way assisted the tobacco-growing industry in Australia. On the contrary, they encouraged the importation of tobacco leaf by opening out to the manufacturers in the Commonwealth a large margin of profit, determined by the difference between 3s. 3d., the Customs duty on manufactured tobacco, and 2s. 6d., the total of1s. Excise and1s. 6d. Customs duty on unmanufactured leaf.

That some parts of Australia are admirably suited for the cultivation of tobacco, and the future success of the industry should depend only upon the skill and experience of those engaged in it.

These are the statements of the two sections of the Tariff Commission, and I take it that unless honorable senators are possessed of very much more knowledge than was possessed by that body, they will admit that under the operation of the old duties the importation of foreign leaf was increasing, whilst the consumption of the local leaf was relatively decreasing.

Senator Millen:

– That may be a perfectly innocent thing. It all depends on how we interpret it.

Senator CHATAWAY:

– I am expressing my personal opinion of their letter. I object to such charges. The result has been accomplished in, the other Chamber, an’d the charge practically is that the other Chamber has been induced by the representations of the Trust or Combine, to do certain things.

Senator Pearce:

– They do not say that it was improper. It might be quite a proper influence.

Senator CHATAWAY:

– They closed their letter with the following significant remark -

We, therefore, put these facts before you with the hope that you will use your efforts to bring about a reduction in the extra duties imposed on manufactured imported tobacco, which we believe have been imposed by the Lower House without the knowledge that the existing Tariff plays right into the hands of the Trust. ‘

It is only natural that these importers, in their endeavour to defend their own trade, should try to “ ..1 “ us on to some other dog, and stir up our wrath against the Trust or Combine. The evidence taken by the Tariff Commission shows that the BritishAustralasian Tobacco Company, or Combine, have been genuinely anxious to establish tobacco growing throughout Australia. They have sent men out, supplied farmers with seed, and given instructions. According to the evidence they have on the whole behaved .very well towards the grower, and apparently it is not their desire to crush out the growth of local leaf and import leaf if they can avoid it. But in the manufacture of tobacco it is necessary to establish brands, which must be made from bulk samples of leaf. You cannot import the greater portion of your. tobacco and at the same time try to manufacture from small samples of leaf obtained in the country. For that reason, if for no other, the Combine have been keen upon getting more leaf grown inside the Commonwealth. Regarding the question of stripped versus. unstripped leaf, a good deal has been said to the effect that money is going to be made out of the business owing to the duty on stemmed leaf. Mr. Nevill, in his evidence before the Tariff Commission, points out the reasons why the cost of stemming tobacco out here is fairly high - as much as from 4d. to 4½d. a lb., which is a very different thing from the statement qf importers, who probably know nothing about the matter, that it will cost only $d. a lb. In the “Old Country, the question of stripping tobacco was brought up not long ago, when Mr. Austin Chamberlain was Chancellor of the Exchequer. He then imposed a differential duty equal to 3d. per lb. upon stemmed leaf, with the idea of getting the tobacco stemmed in the United Kingdom. But what hardened afterwards? I quote this from Mr. Nevill, as showing that the business of stemming is a considerable and expensive process: -

Englandhas made this reduction at the solicitation of local manufacturers, they pointing out that England had no tobacco growing industry to preserve ; and to equip factories and train hands for the work would entail heavy expenditures, not justified by the local conditions.

Senator PEARCE (Western Australia) debating a proposal to reduce the duties on leaf, I could have understood his arguments, the whole of which have been directed to show the necessity of protecting the grower. I am prepared to increase the protection to the grower. That is the only way he can be helped. The honorable senator, in. fighting for protection to the manufacturer, will not protect the grower. Mr. Nevill, the very man upon whom he is relying, sets that out very strongly in his evidence on page 352 of the report of the Tobacco Commission, question 28371 -

Tobacco costing 6d., by the time this work is done - including cost of work - stands at about 10d., so that we see, instead of1s. 6d. protection, as intended, we really have only about 1s. protection against the imported leaf. From this it is apparent why the manufacturer prefers to work the foreign leaf. Another point is that revenue in the end must suffer from the inadequate difference between the imported manufactured and that manufactured here; to allow imports of the former 3s. 3d. on manufactured and1s. 6d.,1s., or 2s. 6d. on unmanufactured, leaves an apparent difference of 9d. ; but when we consider the duty-free ingredients that go into the locally-made product, the real difference is1s. This enables the manufacturer to exclude the imports of manufactured tobacco to a great extent, and it being the higher duty paying, the revenue will suffer in the long run, so it can be seen that the whole trend is to use imported leaf.

– That is not quite what the honorable senator said when dealing with the Tobacco Combine on a previous occasion.

Senator FINDLEY:

– I do not know that I said anything in the nature suggested by Senator Millen, at any rate, I know that the majority of the smokers say they prefer tobacco which is manufactured from the imported leaf. The Tobacco Combine are in business for what profits they can make; and I feel sure that if the taste of Australian smokers was for tobacco made from Australian leaf, the Combine would not go to the additional expense and trouble of importing. This Tobacco Combine is a monopoly, which I hope will, in a very short time, be owned and controlled by the people as a whole; but, in the interests of the growers and those employed in the manufacture, the duties ought to remain as they are. Although there is a Tobacco Combine, we must recognise that it has been created under the protectionist policy which is of advantage to the country, as compared with the imported industry.

Senator CHATAWAY:
Queensland

.- I understood Senator Pearce to suggest that I said that Mr. Nevill proposed to increase the duty on manufactured tobacco, and that, therefore, the statement I made was not correct. I certainly should not willingly mislead the Committee; and 1 should like to quote from the report of the protectionist section of the Tariff Commission, which gives a summary of the answer of Mr. Nevill, to question 28372, as follows -

It has been proposed on behalf of Queenslandthat the old State duties should be reverted to. It is believed that the 4s. import duty would not be objected to or combated so strongly as it was in1901, for thereason that since that year the position of the trade has entirely changed. At that time the tobacco merchants controlled and encouraged the importation of manufactured tobacco, and fought, as they had every right to do, against the imposition of a rate which differentiated too greatly between the import of manufactured tobacco and the import ofleaf.

Senator Millen:

– Read on.

Senator CHATAWAY:

– That is all I think it necessary to read, but if the honorable senator desires I shall go on -

Now that aspect of affairs does not concern the merchant, owing to the fact that all brands of tobacco imported are controlled by a combination of local manufacturers and their allies - the American and Imperial tobacco companies; hence the imported leaf manufactured here will largely supplement imported manufactures. Referring to the same subject, the Premier of Queensland says : - “ When the Commonwealth Tariff was adopted it was generally understood that the preference it undoubtedly gave the manufacturer and importer over the” farmer was due to the influence exercised by the importer of manufactured tobacco. But now the importer has no interest in the matter; for he no longer controls the trade, as a gigantic trust has usurped his place.”

The rest deals with cigars, and I do not propose to read further. What I have quoted fully justifies my statement that Mr. Nevill advocated an increased duty on manufactured tobacco.

Senator MILLEN:
New South Wales

– Just now Senator Findley said it was rather remarkable that whenever a proposal was made, designed to foster Australian industries, there were always those who attempted to oppose it. It appears to me that the position is now the other way about - that whenever there is anything called a duty proposed there are certain honorable senators who vote for it without regard to the ultimate effect. It does not follow that, because a duty is imposed in a particular way on a manysided industry like this, it will necessarily improve the industry as a whole. The tobacco industry is complicated by the fact that, in contradistinction to most industries, there is an additional element. In the case of an ordinary industry we have to consider the manufacturer, the workman, and the consumer; but here we have another factor in the person of the grower. The question, it seems to me, is whether it is desirable to give some additional inducement to the manufacturer to continue manufacturing imported leaf, or whether we ought to try to do something by a readjustment of the duties, to show him the desirability, or, if honorable senators like, the necessity, of more largely relying on locally-grown leaf. The latter being the object which I and others have in view, it is unfair to say that we are taking action now in a. hostile spirit towards the industry of Australia. Senator Findley shows by the vote he intends to cast that he attaches a great deal more importance than I do to the encouragement of the local manufacture of imported leaf. My desire is to encourage the manufacture of locally-grown leaf.

Senator Findley:

– My vote will show that I am anxious to encourage the manufacture of imported leaf, as against the introduction of manufactured tobacco.

Senator MILLEN:

– To that extent I am with the honorable senator. But during the operation of the Tariff of 1902, when there was a difference of only 9d. between the duty on imported leaf, and that on the manufactured article - exactly the same difference that will operate if Senator Pearce’s request be adopted - the importation of manufactured leaf fell steadily and rapidly.

Senator Trenwith:

– The honorable senator’s desire can be achieved much more readily by increasing the duty on imported leaf.

Senator MILLEN:

– I do not think so. If we give them this additional 3d. per lb., we shall give them a larger profit by using imported leaf than they have hitherto had. Previously, they have had a margin of 9d. on which to come and go in their contest with importers, but to-day honorable senators want to give them1s. In other words, they will get 33 per cent. more than they had under the old Tariff. It does appear to me that, in allowing this larger margin, we are running a very grave risk of their returning to the old habit of importing leaf instead of looking to local growers for their supplies. It was unfair, in fact absolutely incorrect, to say that because of this contest over a complicated matter, when one section of the Committee attaches more importance to one branch of the industry than to another, we on this side are necessarily seeking to injure or destroy an Australian industry.

Senator Findley:

– I did not say that.

Senator MILLEN:

– I strongly resent the imputation. I believe that the duty as proposed by Senator Pearce would be much more likely to assist the growers of leaf, and much less likely to assist the big manufacturers of imported leaf, than the duty as proposed in the schedule.

Question - That the House of Representatives be requested to make the duty on “Tobacco, manufactured, n.e.i.,” 3s. 3d. per lb. (Senator Pearce’s request) - put. The Committee divided.

AYES: 6

NOES: 19

Majority … … 13

AYES

NOES

Question so resolved in the negative.

Request negatived.

Item agreed to.

Item 19 (Tobacco, cut) and item 20 (Tobacco, unmanufactured) agreed to.

Item21. Tobacco, unmanufactured, but entered to be locally manufactured into Tobacco or Cigarettes - to be paid at the time of removal to the factory : -

Senator McGREGOR:
South Australia

– In a previous speech I intimated my intention to move that the duty on unstemmed tobacco leaf be restored to1s. 9d. per lb., as recommended by the Tariff Commission. I have already stated that their object in making that recommendation was to create a greater inducement for the manufacturer to use Australian leaf. Under the old Tariff, the duty on all unmanufactured leaf was1s. 6d. per lb., and in this Tariff it has been restored to that sum. I believe that the influence which was brought to bear upon the members of another place was not only the influence of the manufacturers, but also of the workers, because the latter feared that if the duty on unmanufactured leaf were increased to1s. 9d. it would have a. tendency to increase the importation of manufactured tobacco. That is the principal reason why I voted against the amendment to reduce the duty on manufactured tobacco to 3s. 3d. But it will be seen that if the duty on unstemmed leaf is increased to1s.9d. per lb., and the Excise duty is left as it is, there will be a preference of at least 9d. to Australian tobacco made from any kind of leaf as compared with imported tobacco. Although Senator Millen is of the opinion that a preference of 6d. is quite enough, I think that it would be better to give that margin.

Senator Millen:

– I did not say 6d. It was9d. that I wanted.

Senator McGREGOR:

– The honorable senator will get a preference of9d. now, and in addition there will be a 3d. guarantee that the importation of manufactured tobacco will not increase. Whether that guarantee will have any effect on him or not remains to be seen. I move-

That the House of Representatives be requested to make the duty on item 21, paragraph a,1s.9d. per lb.

In paragraph b I also intend to submit a request.

Senator LYNCH:
Western Australia

– I desire, if it is possible, to strike out of this item the words “ or cigarettes,” for the purpose of moving that a higher duty be imposed upon unmanufactured tobacco when imported for the making of cigarettes. In my opinion it should be subjected to the same duty as is imposed on unstemmed leaf when imported for the manufacture of cigars. As the schedule stands, however, it allows the manufacturers of cigarettes to import unmanufactured leaf at a very low rate - much lower than the rate which is imp osed upon such leaf when imported for the manufacture of cigars. I look upon the use of cigarettes as a curse, and therefore I am anxious that tobacco leaf which is imported for their manufacture should b e subjected to duties of 2s. 6d. and 3s. per lb.

The CHAIRMAN:

– It will be necessary for Senator McGregor’s request to be withdrawn before the honorable senator can move in that direction.

Senator McGregor:

– I have no objection, sir.

Request, by leave, withdrawn.

Senator LYNCH:
Western Australia

– I move -

That the House of Representatives be requested to amend item 21 by leaving out the words “ or cigarettes.”

My object is to get the words “ or cigarettes “ deleted from this item, and placed after the word “ cigars “ in the next item. I do not see why we should give a special advantage to the manufacturer and distributor of cigarettes in Australia as compared with the man who imports leaf tobacco to be manufactured into cigars. But the schedule as it stands offers a special inducement to the manufacturer of cigarettes in the shape of a lower duty than is imposed on the raw material of the cigar manufacturer. In order to discourage the use of cigarettes in Australia,

I desire the duty on the raw material for their manufacture to be the same as that which is levied on the raw material for the cigar manufacturer.

Senator FINDLEY:
Victoria

.- I should like to ascertain the real object of this request. If it is proposed for the purpose of preventing the manufacture and consumption of cigarettes, I can understand it. But if it is merely proposed for the purpose of penalizing a man who engages in that line of business it is making a somewhat invidious distinction.

Senator Lynch:

– How can we prohibit the use of cigarettes otherwise than by this means ?

Senator FINDLEY:

– I am asking if the’ honorable senator’s real object is to prevent the manufacture of cigarettes, or to limit their consumption. Even if his request is submitted on those lines, he must not be unmindful of the fact that the Victorian Parliament has passed an Act which makes the tobacconist or other trader who sells cigarettes to persons under the age of sixteen liable to punishment, and, although the law may not be strictly observed, we, from time to time, read in the newspapers of the prosecution of offenders against it. Of course, like the laws against Sunday trading, it is difficult to administer, and, no doubt, many boys under the age of sixteen years are able to obtain cigarettes. If Senator Lynch desires to make cigarette smoking less prevalent, he shouldcandidly say so. If he does, he may then get more assistance than he hopes for. But it would not be right to penalize those who are engaged in the manufacture of cigarettes merely because they are in that line of industry.

Senator Sayers:

– Cigarettes should be made dearer, so that boys may not so easily obtain them.

Senator FINDLEY:

– A diminution in the sale of cigarettes would bring about an increased production of cigars. The cigar industry is of more importance than the cigarette industry, and, according to medical experts, the use of cigarettes is doing a serious injury to the rising generation. Most of the cigarettes in use are made by machines, which turn them out in millions, without giving employment tomuch labour. Most of the labour employed in the making of cigarettes, whether by machines or by hand, is girl labour, which, of course, receives a lower wage than the adult male labour employed in the making of cigars.

Until I have fuller information as to the reasons which have actuated Senator Lynch in moving1 this request, I shall not commit myself in regard to it.

Senator KEATING:
Minister of Home Affairs · Tasmania · Protectionist

– There is one aspect of the matter which the mover of the request has evidently overlooked, namely, that the import duties must be read in connexion with the Excise duties. Under the Excise Tariff Bill, the duty on machine-made cigars is 9d. per lb., and on hand-made cigars 3d. per lb., while the Excise duty on machine-made cigarettes is 3s. per lb., and on hand-made cigarettes 2s. 9d. per lb. It is obvious, therefore, that we should not make the duty on tobacco imported for the manufacture of cigarettes the same as that on tobacco imported for the manufacture of cigars. Although there has been grown in Au§tralia leaf suitable for the manufacture of pipe and cigar tobacco, I do not think that it will be claimed that there has yet been grown leaf suitable for cigarette tobacco. No doubt, when Senator Lynch reconsiders these matters, he will see that the item had best be left as it is.

Senator MILLEN:
New South Wales

– Senator Lynch has expressed the desire to place the manufacturer of cigarettes, and the manufacturer of cigars, . on the same level. At the present time locally-manufactured cigars pay a duty of 3s. 3d., and locally-manufactured cigarettes a duty of 4s. 6d. per lb., so that if Senator Lynch really wishes to secure equality he ought, instead of proposing to increase the import duty on cigarette tobacco, to propose to reduce it.

Request negatived.

Request (bv Senator McGregor) proposed -

That the House of Representatives be requested to make the duty on item 21, paragraph a, is. 9d. per lb.

Senator KEATING:
Minis’ter of Home Affairs · Tasmania · Protectionist

– Senator Sayers was quite right when he said that these duties -were framed after the Government had had the advantage of the advice given by Mr. Nevill, the Queensland tobacco expert. In speaking earlier in the day on the first item amongst the tobacco duties, I indicated that after the first Tariff proposals of the Government had become the property of the .other House, the Government took the opportunity of conferring with Mr. Nevill and going into the whole question very fully. The whole of these duties, from the first to the last, are corelated. They are also related to the duties of Excise upon different classes of tobacco. I said then, and the argument was repeated by other honorable senators, that a disturbance of a single one of these duties would probably entail a reconsideration of the whole of them. Mr. Nevill was brought down from Queensland to assist the Government when this subject was under consideration in the other branch of Parliament. In a report to the Government, he spoke of the effect of certain rates of duty in Queensland. But, as Senator Sayers has pointed out to Senator McGregor, the rates of duty to which he was particularly adverting at the time were the rates proposed in respect of manufactured tobacco. In Queensland, the duty on manufactured tobacco ran, I think, up to some’.hing like 4s. per lb. Mr. Nevill, in one of his reports to the Government, wrote -

I would, therefore, suggest that the following rates be adopted : - Strips, 2s. per lb. ; leaf. 1s. 6d. per lb. ; Excise,1s. per lb. ; imported manufactured, 3s.9d. or 4s. per lb.

This1s. 6d. on leaf does not mean a gain to the importer of 6d. over the strips, as the loss in weight and cost of work will probably absorb 4d. to 4½d. of the difference, so practically the above means a protection of9d. to1s. per lb. I believe the above would safeguard all interests concerned.

It proved so in the Queensland Tariff, and resulted in an increase in the consumption of local tobacco between 1896 and1899 of338 per cent., and at the lime of Federation 46 per cent. of the tobacco consumed in that State was of local product.

He speaks there of strips being dutiable at 2s. per lb.,leaf1s. 6d. per lb., and Excise 1s. per lb. In the item we provide for duties of1s. 6d. and 2s. per lb. on unstemmed and stemmed tobacco respectively ; while the Excise duty on the machinemanufactured article is1s. per lb., and on the hand-made 9d. per lb. The duty that we propose on manufactured tobacco is not as high as that which prevailed in Queensland, nor even as high as Mr. Nevill recommended. But it is obvious that in suggesting a duty of about 3s. 9d. or 4s. per lb. on manufactured tobacco, and a duty corresponding to what we are now proposing on stemmed and unstemmed tobacco for manufacturing purposes he had in mind that such rates had been productive of an enormous increase in the consumption of locally-grown tobacco in Queensland. Considerable attention has been given in the various States to the growth of tobacco, but although we are endeavouring, under the Bounties Act, to still further stimulate and encourage the production of high-grade tobacco to be manufactured into cigars, no sustained or consistent effort has yet been made in that direction. Even if there were considerable advances in our output of tobacco, I do not think we should be able for some years to supply more than a small proportion of the leaf required for local consumption. The duties now proposed of1s. 6d. per lb. on unstemmed tobacco and of 2s. per lb. on the stemmed leaf, judging by the experience of Queensland, will afford sufficient protection to our local growers, and lead to a largely increased demand throughout the Commonwealth for the locally produced article, In the circumstances, having regard to the fact that these items have been carefully thought out, that they are interrelated and are bearing on the Excise duties, the Committee would do well to allow the proposal to stand.

Question - That the House of Representatives be requested to make the duty on “unstemmed Tobacco”1s. 9d. per lb. (Senator McGregor’s request) - put. The Committee divided.

AYES: 14

NOES: 11

Majority … … 3

AYES

NOES

Question so resolved in the affirmative.

Request agreed to.

Request (by Senator Keating) agreed to -

That the House of Representatives be requested to amend item 21, paragraphb, by inserting after the word”stemmed,” the words “ or partly stemmed.”

Request (by Senator McGregor) agreed to-

That the House of Representatives be requested to make the duty on item 21, paragraph b, 2s. 3d. per lb.

Item 22. Tobacco, unmanufactured, but entered to be locally manufactured into Cigars - to be paid at the’ time of removal to the factory : -

Senator PEARCE:
Western Australia

– I move -

That the House of Representatives be requested to make the duty on item 22, paragraph a, 2s. per lb.

Should the Committee agree to make that request I shall subsequently move that the House of Representatives be requested to make the duty under paragraph b 2s. 6d. My object is to assist the cigar-making industry. The whole of the cigar-makers of Western Australia have asked for a substantial reduction of the proposed duty, which they claim will, if allowed to stand, involve the extinction of the industry in that State. No contradiction of this statement has been made by any manufacturer of cigars in Western Australia, nor has any protest against it been made by any body of workers in the industry there, and it may therefore be assumed that it is well founded. I am aware that the same, disabilities have been felt by cigar manufacturers in the other States. What is proposed in this Tariff is a tremendous increase in the duty on cigar leaf, which under the old Tariff was dutiable at the same rate as leaf . imported for the manufacture of tobacco. It should not be forgotten that while there is a considerable quantity of tobacco leaf grown in the Commonwealth there is scarcely any, if any, cigar leaf grown here. Honorable senators should bear in mind also that we recently passed a Bounties Bill under which we set aside a certain sum by way of bounty to encourage the growth of cigar leaf in Australia’. In view of that fact there is not the same justification for the enormous duties here proposed for the protection of locally-grown cigar leaf. Let me further add that the rate of duty which I suggest is equivalent to an ad valorem duty of too per cent., since the average value of cigar leaf is from is. 6d. to as. per lb., and that should certainly give adequate protection to local growers’ of cigar leaf. The contention of the cigar manufacturers of Western Australia is borne out by the evidence given before the Tariff Commission by cigar-makers in the other States, and especially, by ‘ Mr. Allertof South Australia, and Mr. Kirwan, of Victoria. All state that if these heavy duties are imposed on cigar leaf they will be. handicapped in their competition against the outside world. If honorable senators will turn to the report of the freetrade section of the Tariff Commission thev will find that thev say -

We accept the portion of the evidence in the report of the Chairman, in which report, however, the statement of the following four witnesses concerned in the manufacture of cigars are altogether ignored : - A manufacturer in New South Wales (Hirschman, page 520 Minutes of Evidence); the President of the Cigar Makers Industrial Union of Australia (Kirwan, page* 511 Minutes of Evidence); the accredited representative of the South Australian branch of the Cigar Makers Mutual Association of Australia (Whitford, page 4QS Minutes of Evidence); and a cigar worker in South Australia Barnett, page 472 Minutes of Evidence).

All were in agreement with the other trade witness (Allert) mentioned in the Chairman’s report that the great bulk of Australian leaf was not satisfactory at present for the manufacture of cigars, particularly by hand.

The members of the Commission in their report give the numbers of the questions at which this evidence is to be found, but

I need not quote them. They go on to say - ‘

Two of the witnesses were very definite on the question. One stated - “After years of experience, I say, most emphatically, that the tobacco leaf grown in Australia is most unsuitable for cigar-making purposes.” - (Kirwan, Q. 79019.) There were, he said, fifty small makers (;?5 licensees) in Victoria who dared not use even a portion of Colonial leaf. The other witness said he was decidedly of opinion that Colonial leaf was worthless for the purpose of manufacturing cigars. “ I go further,” he continued, “ and speaking as a result of 24 years’ experience, I contend that it is totally unfit for consumption in the form of cigars(Barnett, Q. 32160.) -The Cigar Makers Union had fought tooth and nail against it, and its use in South Australia had ruined the industry in that State. - (Barnett, Q. 32217.)

– It may not; but the fact that these duties have been considered and dealt with as part of a complete scheme should be known to the Committee when honorable senators are asked to alter them.

Senator Pearce:

– What is thepercentage of protection represented by a duty of 2 s. 6d. per lb. upon unstemmed tobacco ?

Senator KEATING:

– I am informed that it takes 1 1-9 lbs. of leaf to manufacture 1 lb. of cigars. Assuming that one-half of the 1 1-9 lbs. of leaf imported consisted of unstemmed tobacco, and the remainder of stemmed tobacco, the duty payable in respect of the former would be 1s. 42/3d., whilst the duty payable upon the remaining half, at 3s. per lb., would be 1s. 8d. Thus the total duty payable upon the 1 1-9 lbs. of imported leaf - assuming that half of it consisted of stemmed leaf and the balance of unstemmed leaf - would be 3s.02/3d. As the manufactured cigars would be dutiable at 3d. per lb., the total duty payable would be 3s. 32/3d. If, however, the cigars were machine made, the

Excise would be 9d. per lb.The import duty upon the like quantity of cigars manufactured abroad and coming into the Commonwealth under these proposals would be 7s. 6d. The protection afforded would therefore be, in the case of handmade cigars, 7s. 6d. per lb., less 3s. 32/3d. per lb., or 4s. 21/3d. per lb., and in the case of machine-made cigars, 75. 6d: per lb., less 3s. 92/3d. per lb., or 3s. 81/3d. per lb.

Senator Pearce:

– The declared value of the leaf at the Customs House is10d. per lb. What I desire to know is the measure of protection which a duty of 2s. 6d . per lb. would represent?

Senator KEATING:

– The leaf would come in at varying values, I presume. But we must not overlook the fact that upon manufactured cigars a fixed duty is levied, irrespective of values. One leaf might be five times as valuable as another, and one box of cigars might be five times as valuable as another, but each would pay the same amount of duty. That is a fact which we must bear’ in mind in considering any proposals for the imposition of a duty upon the unmanufactured leaf imported for the purpose of being converted into cigars. Assuming that the Australian manufacturer will import stemmed and unstemmed tobacco in equal quantities, his net protection at the rates at present operative would be 4s. 21/3d. per lb. in the case of hand-made cigars, and 3s. 81/3d. per lb. in the case of machine-made cigars. If we lower these rates, we shall certainly be open to. the charge of Senator Pearce that we are giving to those engaged in the manufacture of cigars very much more protection than we should extend to them. I think that the protectionafforded them under the Government proposals is a fair one, always assuming, of course, that they use stemmed and unstemmed tobacco in equal proportions.

Question - That the House of Representatives be requested to make the duty on “ Tobacco, unmanufactured, but entered to be locally manufactured into cigars - unstemmed,” 2s. per lb. (Senatorpearce’s request) - put. The Committee divided.

AYES: 12

NOES: 12

AYES

NOES

Question so resolved in the negative.

Request negatived.

Request (by Senator Keating) agreed to-

That the House of Representatives be requested to amend item 22, paragraph b, by in- setting after the word “stemmed” the words “or partly stemmed.”

Item 23 (Tobacco destroyed for manufacture of sheep-wash, &c), item 24 (Cigars), item 25 (Cigarettes), and item 26 (Snuff), agreed to.

Division III. - Sugar. - Item 27 (Glucose), item 28 (Cane Sugar), item 29 (Invert Sugar and Syrup), item 30 (Sugar, n.e.i.), item 3t (Golden Syrup and Sugar Syrups), and item 32 (Molasses), agreed to.

Progress reported.

page 7652

SPECIAL ADJOURNMENT

Motion (by Senator Best) agreed to -

That the Senate, at its’ rising, adjourn until half-past 2 p.m. on . Wednesday next.

page 7652

ADJOURNMENT

Weather Reports from Tasmania.

Motion (by Senator Best) proposed -

That the Senate do now adjourn.

Senator MACFARLANE:
Tasmania

– I wish to call the attention of the Minister of Home Affairs to a reply which he gave to a question asked by me yesterday regarding weather reports received from Tasmania. My question was misunderstood to refer to weather forecasts sent to Tasmania. At the General Post Office yesterday a public notification was posted up that no weather reports had been received from Tasmania. I made inquiries, and found that the Meteorological Department had received reports from Tasmania, but claimed that it was not responsible for what appeared at the Post Office. There is evidently some want of co-operation between the two Departments. I ask the Minister to make inquiry, and to remedy, if possible, the present state of affairs.

Senator KEATING:
Minister of Home Affairs · Tasmania · Protectionist

– I did not quite seize the significance of the question asked by the honorable senator yesterday, and hesitated to communicate with the

Commonwealth Meteorologist until this morning. The first thing this morning I caused to be forwarded to that officer the proof slip of the honorable senator’s remarks, as recorded in the official debates. He furnished me with a reply, which I handed to the honorable senator to-day. I had no time to re-read what the honorable senator had said, tout I understood him to refer to weather information going to Tasmania. I do not know of my own knowledge anything of the circumstances to which the honorable senator now refers, but I shall certainly have inquiries made into them.

Question resolved in the affirmative.

Senate adjourned at 3.43 p.m.

Cite as: Australia, Senate, Debates, 24 January 1908, viewed 22 October 2017, <http://historichansard.net/senate/1908/19080124_senate_3_43/>.

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Senate24 January 1908

DELIVERY OF TELEGRAMS

Senator DOBSON:TASMANIA

Senator KEATING:Minister for Home Affairs · TASMANIA · Protectionist

QUESTION

T AS MAN I AN -VI CTO RI AN CABLE

Senator DOBSON:

Senator KEATING:Protectionist

NAVIGATION BILL

Senator GUTHRIE:SOUTH AUSTRALIA

Senator BEST:Vice-President of the Executive Council · VICTORIA · Protectionist

EXCISE TARIFF BILL

CUSTOMS TARIFF BILL

The CHAIRMAN:

Senator Best:

The CHAIRMAN:

Senator Dobson:

The CHAIRMAN:

Senator Lynch:

The CHAIRMAN:

Senator Millen:

The CHAIRMAN:

Senator McGregor:

The CHAIRMAN:

Senator MILLEN:New South Wales

Senator Best:

Senator MILLEN:

Senator MACFARLANE:Tasmania

Senator Millen:

Senator Keating:

Senator STEWART:Queensland

Senator Needham:

The CHAIRMAN:

Senator FINDLEY:Victoria

Senator KEATING:Minister of Home Affairs · Tasmania · Protectionist

Senator NEEDHAM:Western Australia

Senator ST LEDGER:Queensland

Senator Millen:

Senator ST LEDGER:

Senator Findley:

Senator ST LEDGER:

Senator Keating:

Senator ST LEDGER:

Senator Guthrie:

Senator ST LEDGER:

Senator Guthrie:

Senator ST LEDGER:

Senator Needham:

Senator ST LEDGER:

Senator McGREGOR:South Australia

Senator MILLEN:New South Wales

Senator McGregor:

Senator MILLEN:

Senator STEWART:Queensland

Senator Lynch:

Senator STEWART:

Senator Sayers:

Senator STEWART:

Senator Dobson:

Senator STEWART:

Senator St Ledger:

Senator STEWART:

Senator St Ledger:

Senator Chataway:

Senator STEWART:

Senator McCOLL:Victoria

Senator Keating:

Senator McCOLL:

Senator Stewart:

Senator McCOLL:

Senator KEATING:Minister of Home Affairs · Tasmania · Protectionist

Senator TRENWITH:Victoria

Senator Guthrie:

Senator TRENWITH:VICTORIA · IND

Senator Millen:

Senator TRENWITH:

Senator Findley:

Senator TRENWITH:

The CHAIRMAN:

Senator TRENWITH:

Senate
24 January 1908

Senator DOBSON:
TASMANIA

Senator KEATING:
Minister for Home Affairs · TASMANIA · Protectionist

Senator KEATING:
Protectionist

Senator GUTHRIE:
SOUTH AUSTRALIA

Senator BEST:
Vice-President of the Executive Council · VICTORIA · Protectionist

Senator MILLEN:
New South Wales

Senator MACFARLANE:
Tasmania

Senator STEWART:
Queensland

Senator FINDLEY:
Victoria

Senator KEATING:
Minister of Home Affairs · Tasmania · Protectionist

Senator NEEDHAM:
Western Australia

Senator ST LEDGER:
Queensland

Senator McGREGOR:
South Australia

Senator MILLEN:
New South Wales

Senator STEWART:
Queensland

Senator McCOLL:
Victoria

Senator KEATING:
Minister of Home Affairs · Tasmania · Protectionist

Senator TRENWITH:
Victoria

Senator TRENWITH:
VICTORIA · IND

Senator PEARCE:
Western Australia

Senator W RUSSELL:
SOUTH AUSTRALIA · ALP

Senator W RUSSELL:
SOUTH AUSTRALIA · ALP

Senator W RUSSELL:
SOUTH AUSTRALIA · ALP

Senator W RUSSELL:
SOUTH AUSTRALIA · ALP

Senator KEATING:
Minister of Home Affairs · Tasmania · Protectionist

Senator FINDLEY:
Victoria

Senator MILLEN:
New South Wales