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Tuesday, 8 March 1932

Mr GULLETT (HENTY, VICTORIA) -If not, the economy plan musthave inevitably collapsed.

The growers, misled by the extravagant protection afforded by thelast Ministry, have had a miraculous escape from over-production and an almost chaotic financial position. Isubmite that, on the present acreage, either taking the past year ortheyear immediately ahead, an average crop of 16,000,000 lb. would ruin mostmen in the industry, and would bring about the total loss of a great deal of the capital that has been invested in it. The total annual consumption of pipe tobacco in Australia is now about 14,000,000 lb. If we were to produce . 14,000,000 lb. of tobacco this year, as might easily happen, that Australian tobacco would not necessarily take the place of the tobacco now being smoked. It is fairly close to the mark, I think, to say that, with the present consum ption of 14,000,000 lb. of pipe tobacco per annum, we could not absorb more than about 7,000,000 lb. of Australian leaf of the present quality, and at the sametime maintain the present rate of smoking in Australia. With the Australian consumption of tobacco at 14,000,000 lb., about 7,000,000 lb. of imported leaf would, on the present day quality of Australian leaf, be required for blending; therefore the local production in excess of 7,000,000 lb. would be sheer waste to the growers. With American leaf at its present price of 7d. per lb., the f.o.b. price of Australia's exportable surplus would not exceed 3d. or 4d. per lb. I ask the House to realize the fate that inevitably awaits this industry if production be carried beyond 8,000,000 lb. this year, and, say, 10,000,000 lb. next year, before the quality of the leaf has been substantially further improved. The Government desires to change over to the Australian product, but only when its quality is sufficiently high to enable it to carry the heavy burden of taxation. We cannot advance this industry much further until the quality of the leaf is further improved. There is nothing to prevent Australia from growing all the pipe tobacco it requires, and an additional 4,000,000 lb. of cigarette tobacco, with the exception of a relatively small quantity to be imported for blending purposes. But if under the urge of so excessive a duty as 5s. per lb. we encourage thousands of people to rush into this industry, and raise the production beyond8,000,000 or 10,000,000 lb. without at the same time raising the quality of the leaf, many growers will beinvolved in ruin. Apart from the revenue considerations, that is what is behind the Tariff Board's recommendation.

Mr Thompson - That is what the tobacco combine says.

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