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Wednesday, 23 March 1927

Senator CRAWFORD (Queensland) (Honorary Minister) . - I move -

That the bill be now read a second time.

When the Wine Export Bounty Bill was passed in 1924, sections of the grape-growing industry were in a parlous condition. A large number of returned soldiers who had been settled on the' land by the State Governments were growing doradilla grapes for spirit making, the sale of which is dependent on the wine-making industry, as the spirit from that grape is used principally in fortifying wine. The decision to grant a bounty was mainly with a view to help the growers of doradilla grapes. The bounty has had a marked effect on the grape-growing industry. Previously doradilla grapes brought about £3 per ton or even lower. Under the Wine Export Bounty Act, the Minister intimated that he. would not regard anything less than £5 per ton as a reasonable price, a nd this ensured an absolute minimum of £5 to growers of doradilla grapes. Since the passing of the act, the bounty has been paid on approximately 2,500,000 gallons of wine. As a result of the bounty, an export trade in fortified wine has developed, and these wines have been favorably commented on in London. The bounty paid under the 1924 act expires on the 31st August of this year, and the Government has, therefore, decided to extend it for a further period of three years. The bill further provides for a reduction in the rate of bounty as an indication to the industry that it must set up an effective organization for its marketing arrangements, so that it will be in a position to carry on when the bounty is withdrawn. The bill also extends the provision of the original act which assured a reasonable price for doradilla grapes to all grapes used in the production of the wine or the fortifying spirit used in wine. The bill, therefore, deals with three matters - (1) The extension of the period of the bounty; (2) The rate of bounty; (3) Benefits to grape-growers. The trade must realize that the bounty cannot go on for ever, and must ultimately carry on with the assistance of a refund of the excise duty of ls. 3d. paid on the fortifying spirit. The Government is of opinion that the trade must be properly organized, and that three years is a reasonable time for the trade lo set its house in order. The rate of bounty proposed is ls. 9d. per gallon, which, with the drawback of ls. 3d. allowed on fortified wine, makes a total of 3s. per gallon. When the 4s. rate of bounty was fixed, Australian fortified wine paid 4s. per gallon duty on entering Great Britain. On 1st July, 1925, this duty was reduced to 2s., and producers have since that date received this further advantage. Australian wine is sold at from ls. 6d. to 2s. per gallon f.o.b. Australian ports. It must, therefore, be realized that a bounty of ls. 9d. - approximately the sale price of the wine - is a very generous contribution from the public revenue in the interests of the industry. Under the act, as I have already stated, the Minister intimated that he would not regard anything below £5 per ton for doradilla grapes as a reasonable price. Where that price was not given, payment of bounty was withheld. It has now been decided to authorize the Minister to withhold the bounty unless he is satisfied that a reasonable price is being paid for all grapes and fortifying spirit used in the production of fortified wine in respect of which bounty is paid, or in the production of the fortifying spirit contained in such wine.

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