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Tuesday, 19 May 1936

Senator BROWN (Queensland) - Senator Follhas put up a specious argument. He knows the severe blow which has been delivered at the tobaccogrowers in the Mareeba district, in Queensland, who had invested their life savings in the industry, only to be turned out to starve by the action of this Government. Yet the honorable senator tells us that the industry is not worth a loss of revenue amounting to £200,000 a year. I am rather surprised at that attitude on the part of the honorable senator, because, generally speaking, he is a good Queenslander.

Senator Arkins - What has this to do with putting the industry on its feet?

Senator BROWN - We on this side of the chamber are anxious to put all Australian industries on their feet, and we believe that it can be done in the case of tobacco-growing. Good tobacco can be produced in Australia. The Minister (Senator A. J. McLachlan) has informed us that 11,000,000 lb. of foreigngrown leaf is imported, and only 4,000,000 lb. is grown in this country. Surely, then, it is time an impetus was given to the Australian industry by the adoption of the differential rate of excise suggested by the Leader of the Opposition (Senator Collings). If Senator Hardy's request had been agreed to, it would have meant that, if only1/4 oz. of Australian leaf were blended with imported leaf, the duty on the whole of the mixture would have been reduced to 3s.10d. per lb. No satisfactory statement was made in regard to the proportion of Australian leaf and imported leaf used in manufacture which would bring the blend under the lower rate. The request meant that practically the whole of the blend could be of imported leaf, and the manufacturer would get the advantage of the reduced excise duty of 3s.10d. Naturally, the Opposition could not support such a proposal.

Now the Minister informs us that there is a technical difficulty, inasmuch as excise is charged after the tobacco is manufactured. I do not regard myself as an expert in these matters, but I see no reason why this differentiation should not take place when the leaf enters the factory for manufacture. I agree, however, with the Leader of the Government (Senator Pearce), that it would be better to increase the import duty. But the Government will not do that. On the contrary, it has reduced the import duty, and destroyed the Australian industry, whereas the Labour Government gave an impetus to the industry, and showed clearly what could be done in Australia in the matter of growing tobacco.

Senator Collingscontends that an excise duty of 3s. per lb. on Australian leaf used in manufacture would be a practical incentive to the use of Australiangrown tobacco. The margin between 3s. and 4s. 6d. per lb. should be sufficient to assist the Australian industry materially. Some honorable senators have scoffed when we on this side have spoken about the Australian leaf. Senator Sampson may be regarded as a connoisseur in this matter, because he is a tobacco-smoker; but I point out to him that, if an incentive is given to the consumption of Australian-grown tobacco per medium of a differential excise duty, the Australian tobacco-growers would make a bid for the favour of the smoking public by producing leaf which, when manufactured into tobacco, would suit popular taste.

Senator Dein - There is an advantage now of 3s. 6d.

Senator BROWN - The excise duty is 4s. 6d. on imported leaf, and 3s. l0d. on Australian leaf. The margin is only 8d. per lb.

Senator A J McLACHLAN (SOUTH AUSTRALIA) - The tobacco companies have to pay 3s. 6d. per lb. customs duty. The Government has increased the customs duty by 6d. per lb.

Senator BROWN - The committee is now dealing with the excise duty, and not with the customs duty.

Senator Brennan - The honorable senator is dealing with the protection of the tobacco industry. The industry may be protected either through the excise or by direct protection through the customs.

Senator BROWN - I am discussing the point at issue, which is a request moved by Senator Collings that the excise duty on Australian leaf used in manufacture should be reduced to 3s. per lb. I commend that request to honorable senators because, in my opinion, it will give a fillip to the development of the industry, and will assist in the rehabilitation of hundreds of tobaccogrowers in Queensland. If we are good Australians we shall do everything possible to encourage the tobacco-growing industry in Australia, so that the whole of the tobacco leaf used in this country will be grown by good Australians for good Australians.

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