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Tuesday, 8 March 1932

Carreras Limited, which maintains a large connexion with the Australian tobacco trade, reports a record net profit of £1,285,154 for the year ended 31st October. It exceeds the total for the preceding twelve months by nearly £131,000.

Ordinary shareholders received £703,125 in dividend of 50 per cent., free of tax. The 25 per cent. capital bonus distributed at the beginning of the year ranked for this dividend, which is therefore equal to62½ per cent. on the 1927 capital.

It is proposed to allot another 25 per cent. bonus by capitalizing £351,563 of the undistributed profits, amounting to £1,140,728, shown in the latest accounts. The company has become remarkable for these regular yearly capital distributions. They are piling up fortune's even for the smallest holders of the Carreras shares marketed less than a decade ago. For example, a man who bought 100 ordinary shares at about par in 1921 and has retained his interest until to-day, finds himself in possession of 586 £1 shares, which, at their present market price of £14 eachrepresent a capital value of about £8,204. This, of course, takes no account of the tax-free cash distributions which for each of the past six years have been at the rate of 50 per cent.

The Brisbane Courier, of the 27th February, stated -

In an interview yesterday, Mr. Norman T. Walsh, director of North Queensland 'Tobacco Manufacturers Limited, said that the Federal Government's proposed alterations of tariff and excise duty on tobacco were astounding. According to the reports, it was proposed to reduce the tariff on imported leaf from 5s. 2d to 3s., and at the same time to increase the excise duty on locally produced leaf from 2s. 4d to 4s.6d. The effect of this would be to give an advantage to the imported product of 4s. 4d. per lb. The industry was practically in its infancy, but under the existing tariff it had grown steadily, and its possibilitiesas a producer of wealth and as an employer of labour, both on the primary and secondary sides, were enoromus. The imported leaf was a black-grown product, yet the Government was asking the white-grown product of Australia to compete with it at such a disadvantage. If these proposals should go through, it would mean the destruction of the industry.

In the same journal, on the same day, the following statement also appeared -

Concern over the decision in respect of tobacco imports was expressed also by the management of the National Tobacco Company Limited. The general manager (Mr. L. Dorin) said the average price of Queensland tobacco last year was 3s.9d. per lb., but the importer could import tobacco at 3s. 7d. per lb., allowing for the refund on the stalks. The Australian manufacturers could not ask the public to pay a higher price for the Australianmade article. The 4s.6d. excise and 3s. 9d. for leaf made a cost of 8s. 3d. on the Australian manufacturer, without considering the expense of manufacturing. The company used to sell at6d. per oz., but under the new conditions it would not be able to sell for less than10d. per oz., which workmen could not afford to pay. The industry, therefore, would be practically wiped out. The number of families engaged in tobacco growing in Queensland was 1.200, and there were 1,500 registered growers.

One of the statements in the GovernorGeneral's Speech was that the Government desired and intended to place upon private enterprise the onus of providing employment. That statement has been repeated in this chamber by the Prime Minister, the Minister for Trade and Customs, and other members of the Cabinet, particularly the Assistant Treasurer (Mr. Bruce), and I submit that the tobacco industry is one which is providing employment for a large numberof persons, apart from those directly concerned in the industry. I refer to those now engaged in such work as the erection of curing barns for tobacco-growers. I disagree with the Government in saying that its action will not have a harmful effect on the industry. Will confidence be instilled in those who may be in a position to employ labour when it is realized that this Government has now repudiated the decision of a previous Parliament to give certain protection to the tobacco industry? The Prime Minister (Mr. Lyons) and the Postmaster-General (Mr. Fenton) were members of the last Government, and were responsible largely for the very duties that the present Ministry has now drastically altered. The last tariff schedule was agreed to on the voices, and, therefore, those honorable gentleman have now gone back on an arrangement to which they were a party in the last Parliament. When the PostmasterGeneral was a member of the Labour party he was an extreme protectionist, and there is no doubt where the Prime Minister stood on fiscal issues when he was a member of the Labour party, before he became associated with his life-long political enemies. It illbecomes Ministers who assisted to bring the tariff schedule before the last Parliament to say that they did not give promises, because their actions over a long period show that they supported the tobacco duties without protest. An. honorable member's actions rather than his words indicate exactly where he stands.

The tobacco-growers relied on statements made by the Attorney-General (Mr. Latham), who was referred to by my political opponent at the last election as "my leader." At Ingham, this gentleman, Mr. Grosvenor Francis, read telegrams that he had received from the Attorney-General, whom he described as his leader. He was quite as satisfied to recognize the Attorney-General as his leader as some persons are content today to admit that the Assistant Treasurer is the real leader of this House. If certain definite promises had not been made from the public platform, the result of the last election would have been different in a number of electorates. I venture the opinion that the honorable member for Indi (Mr. Hutchinson) would not have won his seat had the electors any doubt regarding the position that he would take up regarding the tobacco duties. The tobacco-growers have many difficulties to contend with, and, like the sugar " barons " that I represent, are, for the most part, in poor circumstances. If a general election were now held, the people in rural constituencieswould show their strong disapproval of the attitude of the present Government to Australian industries. In my opinion, the Government is not " playing the game " in regard to its election promises.

The Prime Minister denies having made promises to the tobacco-growers; but these promises were implied, and the press that supports him announced, with big headlines, that the United Australia party, together with the Country party, could be trusted to do the right thing by the primary producers. In the near future, when the tariff schedule is before the House, members of the Country party will doubtless seize every opportunity of taking any action it can against the interests of the industrial workers. That party is always in favour of protecting a primary product 100 per cent.; yet it objects to protecting the industrial workers. That is what it calls scientific protection. No good object can be served by the Government's action in altering the tobacco duties. The Government might well have waited until the present tobacco crop had been disposed of. The fair course to adopt was to warn the growers that, after they had delivered their present crop, an alteration of the duty would be made. Men with capital ranging from £200 to £1,000 have invested every shilling they possess in the tobacco industry, and have undertaken obligations which they will find it hard to meet.

Sir LITTLETONGROOM (Darling Downs) {10.10]. - It has been suggested in the course of the debate that the Government is guilty of repudiation of obligations to the tobacco-growers, and of a breach of faith, charges which I think can hardly be sustained; but at the same time, in my opinion, the Government made a serious mistake in altering the duties. Those producers who,_on the strength of parliamentary action in the past, launched out on this industry have grievous cause of complaint because of the way in which those changes have been introduced, and because of the time when this action lias been taken. So far back as 1901, when the first tariff was brought down, Parliament discussed the establishment of the tobacco industry in Australia. It was generally admitted, even at that time, that in many parts of Australia the industry could be successfully carried on. Mr. Neville, the Queeusland tobacco expert, was brought to Melbourne to advise us. Efforts were made from time to time to establish the industry on a satisfactory footing; but, for reasons which I need not now elaborate, the industry did not progress as was expected. In recent years, however, the prospects have improved, and governments have been giving assistance to the producers, some of the State Governments having appointed tobacco experts.

Increased interest was given to the subject by the appointment of a select committee of this House to investigate the position of the industry, and, finally, the Parliament saw fit to impose substantia] protective duties, which gave the industry a hope of success. We have to look at the matter, not from a party angle, but from the view-point of the man outside, who was told that at this period of great depression it is necessary to establish new industries where possible and provide employment. It was the duty of the Government to take action to adjust the balance of exports and imports. It was admitted by all parties that the Government was justified in taking drastic action to substitute Australian goods for imported articles and to control imports. Specific duties were imposed by this Parliament, and producers were also encouraged by State Governments, which made land available so that new industries might be launched. In view of these facts, men embarked upon the new industry of tobaccogrowing. But there happens to have been a change of government in the federal sphere, and before many new tobaccogrowers could harvest their first crop, drastic tariff changes were suddenly introduced. The growers feel that the whole foundations of their structure are crumbling. That is why, throughout Australia today, so many meetings of tobacco-growers have expressed consternation over the new duties. Chambers of manufactures, associations of growers, and even returned soldiers' associations have passed resolutions dealing with this matter. A communication that I have received from the Queensland branch of the Returned Sailors and Soldiers Imperial League reads as follows : -

I am directed by my State Council to advise you that on behalf of returned soldier tobaccogrowers in Queensland, we desire to offer a rigorous protest against the tariff duties in relation to tobacco as proposed by the Commonwealth Government. It is not suggested that the new industry of tobacco-growing should he unduly bolstered up by favorable duties, &c., but it is felt that it is very unfair that an industry which has but just started in Australia should be crippled by the tariff. whereby many of the mcn that we hu ve offered to represent will undoubtedly bc, most seriously handicapped in their efforts to make a. success of this new industry.

That attitude of a non-political body, anxious to see its members re-established in civil life, is indicative of the impression which the alteration of the duties has made on the community generally. From the Department of Agriculture in Queensland I have received by telegram the following particulars regarding the progress of the industry in that State : -

This department contributed tobacco seed sufficient for 12,000 acres. Planting has not been completed in several districts, and owing to climatic and other conditions the following are given as approximate anticipated acreages under tobacco for current season: - Northern Queensland, 3,200 acres; Central Queensland, 3S0 acres; Southern Queensland, 2,000 acres; total for the State, 8,550 acres.

It is obvious from those figures that the people of Queensland have responded substantially, not to an appeal by a political party, but to the apparent desire of this Parliament. The development of the tobacco industry is not a party matter. All through the last Parliament I viewed this matter from outside, and I was pleased to notice the co-operation and agreement of parties in the encouragement of this industry, because it offered a new avenue of employment, and would be likely to attract people from the cities into the country. I do not remember any previous action of this Parliament to that end achieving such a measure of success. Now those who have in good faith interpreted the wish of this Parliament feel that they have been overwhelmed as by an avalanche. Apart from the rights or wrongs of the Government's policy. I contend that whatever opinion Ministers may have of the protection given by their predecessors, they should not have reduced that protection so suddenly. Although they may have thought that the Scullin Government's policy wa3 unwise, they should have asked themselves whether a sudden reversal of policy, which would mean ruin to many men engaged in the industry, would be wise. In circumstances such as exist in connexion with this industry the Government should have stayed its hand until a more favorable period. It certainly could not have chosen a more inopportune time than the present for a drastic reduction of duties. In regard to the impetus which has been given to tobacco cultivation in Queensland, I am familiar with developments in the Texas area, which has been mentioned during this debate. The industry has extended into the Warwick district, where I know of one large landowner who has converted a considerable area to tobacco cultivation on the share system. On suitable land settlement is taking place. The growers in this district, in conjunction with the local Chamber of Commerce, recently held an indignation meeting to protest against the reduction of duties, and Mr. J. B. Higgins related to the gathering his experience. He stated that the equipment of a tobacco plantation with barns, drying sheds, pumping plant, &c, cost up to £30 an acre; that was apart from the actual cost of working the land. Farming 15 acres, he and his brother had employed niue men at picking during the last three weeks, and probably- another six weeks would be required to complete the work. That is an indication of the employment that this industry provides. Illustrating the effect that the new duties would have on tobacco prices, Mr. Higgins stated that a representative of a buying firm had called at his farm on the previous day and presented to him a schedule of prices, but warned him that the list was good only if the tariff were unaltered. If the duties were amended as proposed, schedule prices would be reduced by ls. per lb. That grower had launched his industry presumably in the belief that prices would be maintained, but suddenly, through the action of the Government, schedule prices were threatened to be reduced by ls. per lb., thus undermining the financial foundations of his undertaking. This catastrophe has happened to growers throughout Australia. The causing of such distress was unnecessary and unfortunate. I suggest that even now the Government might stay its hand and allow the present season's crop to be marketed under the old conditions. If necessary, the Government could submit other proposals later. That course would be fairer to those engaged in the industry. The Government's decision may mean life or death to many of the growers, and I hope that the Government will not persist in this act of injustice. I am not charging the Government with having committed a breach of faith, but Parliament having deliberately created a set of conditions in relation to an industry which was intended to be permanent, a sudden change of policy without warning is at least unjust.


Mr Gullett - If that view were adopted, a downward revision of tariff duties would be impossible.







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