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Tuesday, 14 August 1906


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - The Ministry have good advice within call.


Sir John Forrest -We have used it.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - The Minister may have used it in deciding to introduce one set of proposals, but to-day he told us that in all probability he will substitute for them an altogether different set.


Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - Who has given this advice ?


Sir John Quick - Some clerks in the office.


Sir John Forrest - The advice was given by officers who know more than some honorable members.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - The Minister told us that he had taken advice before submitting his proposals, and he professed to regard the advice as reliable. But why does he now tell us that he will probably alter the proposals founded upon that advice? I may say, in passing, that it is very objectionable to have to deal with first one Minister and then another in connexion with a. measure. I realize that sometimes a Minister cannot help being called away from the House, but the Minister of Customs is continuously away when, measures of which he is supposed to be in charge are before Parliament.


Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - He is away electioneering.


Mr Hutchison - The honorable member's leader is to blame for that.


Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - My leader is not paid £2,000 per annum to look after the public business.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - The Minister of Trade and Customs introduces measures, and when the most difficult and delicate stage is reached, he suddenly disappears. In connexion with three or four measures this session, we have had to deal first with one Minister and then with another.

Mr.McCay. - In this case, he has left the matter with some one who understands it.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - That may be. I hope that the Treasurer will demonstrate it. Then, again, it is rather extraordinary that we should be asked to delay our decision until the Minister of Trade and Customs has had time to consider certain matters which are likely to cause him to alter his opinion, and that then the Minister should go right away, and apparently abandon all consideration of the question. With regard' to distillation generally, I am rather in favour of the policy of New Zealand, which has abandoned local distillation. It was recognised that the amount of labour employed in the industry was exceedingly small, and that not one penny more was paid for agricultural produce in consequence of local distillers carrying on business. The prices of products such as wheat and barley were ruled by the rates prevailing in outside markets, which were equivalent to those offered for grain for local distillation purposes. . It was realized further, that imported spirits were the source of such a large amount of revenue that it was not desirable to interfere with them, and it was also felt that the extra revenue that might be obtained from the duties on imported spirits, were there no distillation, could be applied in such a manner as to confer greater advantage upon the community than would be derived from the small amount of employment that might be afforded by the distilling industry. I regard the matter in very much the same light, but Ido not propose to go deeply into it now, because I recognise that we are dealing with a proposal to increase the import duties, and that the question to which I have been referring is connected more directly with the Excise duties. The Minister of Trade and Customs claimed that if the import duties were increased by1s. per gallon, no loss of revenue would result.. He pointed out that under his present proposals - we do not know what they will be eventually - there will be the same difference between the Excise and import duties as under the proposals of the Commission.


Mr McCay - The Government do not themselves know what shape the proposals will eventually take ; they wish to obtain a few hints as to what honorable members desire.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - It looks very much like that. The Government are, in effect, saying to honorable members, " Gentlemen, tell usyour opinions, and we shall decide when we have ascertained the feeling of the majority." The Minister of Trade and Customs maintains that the proposed increased import duties would not result in any reduction of the revenue. I would point out, however, that if theincr eased import duty lead to a larger consumption of locally manufactured spirit, there must be a loss of revenue. Although, under the Minister's proposal, the same proportion is preserved between import and Excise duties as under the recommendation of the Tariff Commission, the latter stops short at the present level, so far as the import duties are concerned. Apparently, the Commission considered that if they increased the duties upon imported spirits, a reduction of the revenue would ensue. The Minister's conclusion cannot be supported,because the increase of the import duties to 15s.per gallon may so reduce the profit of those who sell spirits, and who say that they are now very heavily handicapped, and have gone as far as they can, that there, will be a far heavier run upon locally produced spirit. Consequently, the revenue might be much more reduced underthe Minister's proposal than under that of the Commission. I admit that it is difficult to arrive at a conclusion in this connexion; but I would point out that the right honorable member for Balaclava, who was one of the most reliable Treasurers that Victoria ever had, did not, after his experience of the 15s. per gallon duty that was levied in Victoria, share the opinion of the Minister of Trade and Customs. Although the revenue did not increase when the duty was reduced to 12s., it maintained about the same level.


Mr HUME COOK (BOURKE, VICTORIA) - The honorable member must recollect that the times were very had.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - That may have had something to do with the result. I have looked at the figures, and I find that, although under the 12s. per gallon duty the revenue did not increase, there must have been a larger consumption of imported spirits, because the revenue was maintained at practically the same level.


Sir John Forrest - The Victorian duties were increased by 25 per cent. - from 12 per cent, to 15 per cent.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Then the duties were reduced from 15s. to 12s., and I am speaking of the period that followed the reduction. Although the figures in. my' possession do not show that a much larger revenue was produced, by the duty of 12s. per gallon, they do show that there must have been a larger consumption of imported spirits, otherwise the 12s. per gallon duty could not have produced practically the same amount of revenue as was collected under the 15s. per gallon rate.


Sir John Forrest - We propose an increase of only 7 per cent.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - It is not the increased consumption that we have to consider, but how far the Government can absorb the profit to an extent which can be withstood by those engaged in the trade. If it be absorbed we may be sure that they will not cease to sell spirit, but that they will be forced to sell a cheaper article. That would have the effect of reducing the revenue, even if Excise were paid upon it. The Barton Government, of which several members of the present Ministry were members, deliberately resisted a proposal to increase ' the duty upon imported spirits to 15s. per gallon. The reason which they urged for their action, was that such a high duty must lead to a reduced consumption of imported spirits, and consequently to loss of revenue. The present Government have abandoned the position which was taken up by a previous Administration., of which a number of Ministers were members. Now, I come to the Tariff Commission. I feel very disinclined to dissent from the decision of that body, which has taken a vast amount of evidence all over Australia, and which has given the matter the fullest and most careful consideration. In this connexion we must recollect that the Commission was composed of members of opposite fiscal views, . and, seeing that they have arrived at a unanimous decision, I am reluctant to disturb their recommendations. I recognise that upon that Commission weremembers who would give full attention to the possible financial effect of their recommendations, as well as to other considerations. I realize also that they were not of one way of thinking fiscally, and consequently were not all biassed in one direction. It is evident from their reports, too, that they had the health and well-being of the community in mind when they were framing their recommendations. Under these circumstances - unlessthe Minister can show that the Commission was absolutely wrong, and that he is right.I am very reluctant to depart from its finding.


Sir John Forrest - The members of the Commission were not bound to take into consideration . the effect of their recommendations upon the revenue.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - I am perfectly sure that they did take that matter into consideration.


Sir John Forrest - It ought to have been included in their commission, but it was not.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Does the Treasurer mean to tell me that sensible members of this House who were appointed to the Tariff Commission simply dealt with the matter as children would deal with, it; and not as experienced members of Parliament? Does he mean to imply that they said, " We will do this and that," without considering the effect of their recommendations upon the revenue?


Mr Fisher - I do not think that it was any part of their duty to consider it.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - If the honorable member had been appointed to a Commission1 of that character, would he -when it was dealing with matters affecting the finances of the States and the Commonwealth - have absolutely failed to take into consideration the effect of its recommendations upon the revenue?


Mr Fisher - I think that I should always have been looking to that, but I say that the matter was not delegated to the members of the Commission.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Would not the honorable member himself have taken it into consideration?


Mr Fisher - I think that I would.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Certainly he would. I give the same credit to those honorable members of this Committee who were members of the Tariff Commission. Other members of that body might not have deemed it necessary to give the. matter the same amount of consideration, but I am perfectly certain that those who have to deal with our Estimates and with our Ways and Means made no recommendation without first considering what would be its effect upon the revenue. The honorable and learned member for Bendigo has shown by his speech to-day, that that aspect of the question was considered. I should now like to say a few words in reference to the amendment of the honorable member for Bland regarding the Customs duties upon imported spirits. I fear that he submitted his amendment with too little consideration, and that if it be enforced at once a most serious position will arise. He practically proposes that no spirits shall be admitted into the Commonwealth unless they have been matured in wood for two years. It is really ridiculous to spring a surprise of that sort upon a trade which Parliament has had under its control for years. If the amendment were adopted, what would happen? A quantity of spirits are now in bond - not in wood, but in bottle. A large quantity are upon the sea in bottle, and a large quantity have been ordered in bottle. How can these spirits be matured in wood for two years? The Prime Minister, I think, will recognise the difficulty to which I refer. If he sees any difference between my reading of the amendment and his own, he might inform me of it. My reading of the proposal of the honorable member for Bland is that spirits must be matured in wood for two years before they are permitted to pay the import duty. How can such a proposal be applied to bottled spirit which is in bond, or- upon the sea, or which has already been ordered ?


Mr Deakin - That is merely a. temporary difficulty. It will only continue for two years.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - I am pointing out that the amendment of the honorable member for Bland, ,if enforced immediately, would create most serious anomalies, and bring about a most improper state of things.


Mr Deakin - I called attention to that matter when I addressed the Committee. I am now asking the honorable member if he can foresee any difficulty after the period of two years has elapsed?


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - I do not see any difficulty in giving effect to the proposal then.


Mr Glynn - Or if it is necessary?


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Or necessary. L shall refer to that in regard to rectified spirits at a later stage. In the absence of proper notice, the proposal of the honorable member for Bland would practically lead to the confiscation of the spirits to which I have referred. In reply to an interjection which I made whilst the honorable member was speaking, he stated that the spirits to which I have alluded could be kept in bond for two years. Has the honorable member any idea of the cost of keeping anything, and especially volatile articles such as spirits - which diminish by evaporation - in bond for two years? The cost would be so exceedingly heavy as to amount practically to the confiscation of a large proportion of the 'goods from- people who had done no wrong, but who, on the contrary, had been importing their spirits for years under a different Government system, and surely ought to receive due notice before any alteration in that system is made.


Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - Why should they any more than the implement manufacturers, receive notice of an increase of duty ?


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - I am referring only to notice of the departure from what has hitherto been the practice. An attempt is to be made to cause importers to do that which is impossible, by providing that spirits shall have been matured in wood for two years before duty is paid upon them. Spirits might come out in cases and might have been matured for four or five years, but no satisfactory evidence of that could be given to the Department, and consequently a great deal of their value would be forfeited.


Mr Fisher - There would be no intention to do that.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - The honorable member for Bland replied, in answer to an interjection, that the spirits could be kept in wood in bond for two years.


Mr Fisher - Rubbish ! Did the honorable member mean to say that they should be taken out of the bottles and put into wood?


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - I do not know. But as, I have said, the keeping of spirits in bond for two years would be a very costly proceeding, and, before we required that to be done, we should give due notice to those Concerned. Another reason why we should be very careful in adopting this proposal, both in regard to spirits that are the subject of import and of Excise duties, is that if it were at once rigidly inforced, the revenue would go down very rapidly, since there would not be sufficient spirit available which could be shown to have been matured in wood two years.


Mr HUME COOK (BOURKE, VICTORIA) - there is such spirit.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - I do not know of any quantity.


Mr HUME COOK (BOURKE, VICTORIA) - There are 600,000 gallons.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - What are 600,000 gallons as compared with our annual consumption.


Mr HUME COOK (BOURKE, VICTORIA) - But the figures I have mentioned relate to only one firm.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - That may be, but. the other spirit to which reference has been made is not that which is generally consumed.


Mr Fisher - A chemical would be used to produce on the spirit the same effect as that which maturing in bond for two years would have.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - But the Minister would not allow such a chemical to be used. We need to look at this proposal very carefully, and to consider whence we should obtain the stock necessary to supply the wants of the community. If proof were at once required that all spirit, whether Australian or imported, had been in wood for two years, that proof would not be forthcoming.


Sir John Quick - Does the honorable member think that notice ought to be given of the proposed two years' limitation?


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - If the change is made, notice ought to be given so as to avoid- complications which would be improperly injurious to those who have been engaged in this business for some years


Sir John Quick - I think it was intended by the Commission that notice should be given.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - I am referring to the proposal of the honorable member for Bland, that the motion should be amended by the insertion of a provision that spirits shall have been in wood for two years before duty is paid.


Sir John Quick - I understand that he made that proposal because the Government were not prepared with a definite proposition.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - We are awaiting definite proposals by the Government.


Mr Deakin - In what respect?


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - In regard to both the import and Excise duties. Whatever may be the intentions of the honorable member for Bland, his amendment, iri the bald form in which it is proposed, would practically be wrongfully injurious to a large number of traders. It would almost be impossible to carry it out without largely stopping the supply of spirits, and consequently reducing, the revenue to a very serious extent.


Mr Fisher - Provided that notice were given, the proposal would be no innovation from the stand-point of a Customs Department.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Quite so. There is another point worthy of consideration. I do not profess to know whether rectified spirit is more wholesome than is a spirit containing ethers ; but it has been stated by scientific men of high standing that the former, whether it be worse or better than that produced from the potstill, does not improve by maturing.


Mr Deakin - That, in fact, it does not mature.'


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - That is so. I saw a communication addressed to the honorable and learned member for Angas, which he has, perhaps, put before the Committee, and in which it is stated that rectified spirit actually deteriorates bybeing kept. I know nothing as to the correctness of that statement ; but, according to high scientific authorities, a rectified spirit cannot be further matured. ' On the other hand, it is said that the maturing of spirit containing ethers is necessary, since it would be injurious if used soon after leaving the pot-still.


Mr Fowler - In commerce there is no absolutely rectified spirit. It is an exceedingly difficult matter even for chemists to get an absolutely rectified spirit.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - I arn not putting any dogmas before the Committee.


Mr Fowler - The so-called rectified spirit is only partially rectified.


Mr Glynn - Otherwise there would be no flavour.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Flavours are often introduced to satisfy the wants of the man who desires brandy or whisky. High scientific authorities say that, whether the effect of rectified spirit, as compared with pot-still spirit, be ill or good, it does not improve by maturing.


Mr Fowler - -Practical experience contradicts that.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - I cannot say anything in regard to that point, but Ministers, who have the departmental experts to advise them, should consider the question, and decide whether each of these spirits should be treated in the same way. I have already said that I prefer the duty of 14s. proposed by the Tariff Commission to the duty of 15 s. proposed by the Ministry. I have that preference largely because I am informed, by the best authorities I can consult - including the honorable member for Balaclava, some members of the Barton Ministry who refused to raise the duty when asked to do so, and also the Tariff Commission - that a duty of 14s. is more favorable as regards revenue than 15s., and will lead to a less use of, I shall not say inferior spirit, but, at any rate, of the cheaper spirit, which has not realized the same revenue as has the imported article.







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