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Tuesday, 20 October 1931

Mr FORDE (Capricornia) (Minister for Trade and Customs) . - I assure the honorable member for Herbert (Mr. Martens) that Mr. Bayliss has not definitely been refused a licence to manufacture tobacco. The matter is being reconsidered. I shall bear the honorable member's representation in mind. Evidently, Mr. Bayliss has done very good work in pioneering the manufacture of tobacco in Northern Queensland. The Comptroller-General of Customs has telegraphed to the sub-collector at Townsville for further information, and I hope to let the honorable member have a definite reply on the subject within a day or so.

I remind the Deputy Leader of the Opposition (Mr. Latham) that the differing rates of duty imposed on tobacco and cigarettes existed before this Government assumed office. It was 2s.1d. per lb. on pipe tobacco, and 7s. 3d. per lb. on cigarettes, and was then increased to 2s. 4d. and 7s. 6d. per lb. respectively. The Government cannot accept any proposal to reduce those rates, as it would involve a loss in revenue. The official Year-Book of the Commonwealth of Australia discloses that the quantity of tobacco on which excise duty was paid during the years 1920-21 to 1929-30 was as follows : -


The quantity ofmachine-made cigarettes on which excise duty was paid during the same period was -


I have not the figures for 1930-31, butI presume that they would disclose a falling off in that year, due not so much to the duties as to the prevailing depression. If the Government accepted the suggestion of the Deputy Leader of the Opposition and altered the rate on cigarettes from 7s. 6d. to 3s. 9d. per lb. it would mean a loss in revenue amounting to £937,000 per annum. That is on the assumption that there would be no increase in the consumption of cigarettes. The increased consumption of cigarettes necessary to balance that loss would be over 2,000,000 lb. In view of the state of its finances the Government cannot accept any amendment which would bring about a loss in revenue. I realize that the whole matter of duties on tobacco will have to be reconsidered as our own industries develop ; that as we change over tothe Australian leaf our import duties will decrease. That is realized by the tobacco-growers themselves. For the last financial year there was an increase in the revenue derived from duties on tobacco of approximately , £1,000,000. The time has not arrived when any of that could be sacrificed.

It has been stated that a reduction in duty would result in increased employment. It is always easy to advance specious arguments when decreased duties are sought by different sections of the community. I fail to see that there would be an increase in employment if the duties were lowered. In the cigarette section of the Australian tobacco trade, 90 per cent. of the employees are females and juveniles, which results in a corresponding decrease in the cost of manufacture. The adult female weekly worker receives £2 17s. 6d., and the juvenile £1 2s. 6d. a week. These two classes mainly compose the labour involved, owing to the standardization of modern machinery, which enables a female operator on a cigarette machine to manufacture 30,000 cigarettes per hour. These machines have reached a remarkable degree of efficiency. The raw material enters atone end, and the finished product is delivered at, the other, the machine having teased the tobacco, separated the dust and inferior leaf, printed the tubes and tipped them with cork or gold leaf, and rejected the damaged or soiled cigarettes. Hundreds of hand workers have been displaced. Recently I read that by the introduction of these new machines in one factory, three female attendants were able to maintain an output equal to that of 700 hand workers. Any alteration of the duries with a view to encouraging the smoking of hand-made cigarettes would be injurious to employment. I have already discussed this matter with the representatives of the workers in the industry, andI assure the honorable member forWest Sydney (Mr. Beasley) that they are opposed to any policy that would cause a switch over from pipe tobacco to cigarettes. Only One cigarette manufacturer in Australia, Carreras Limited, has asked for the alteration of duties. That firm has made enormous profits in England. I have no hostility to it; on the contrary, I welcome its establishment of a branch business in Australia, where it is at least giving employment, to a large number of girls. Nevertheless, it is well to remember that the manufacture of cigarettes is a highly profitable business, the return per lb. being much greater than per lb. of pipe tobacco. Within the next twelve months the import, and excise duties on tobacco will have to be reviewed. Any alteration would be inopportune now, first, because of the loss of revenue that would be involved, and, secondly, because it would disturb the rapidly developing tobaccogrowing industry.

Item agreed to.

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