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Wednesday, 3 June 1942

Mr CHIFLEY (Macquarie) (Treasurer) (4:47 AM) . - I move -

1.   That a charge be imposed on all rabbit skins exported from the Commonwealth after the commencement of the act passed to give effect to this resolution and on or before the date to be fixed by Proclamation as the date upon which the Rabbit Skins Export Charges Act 1940 shall cease to be in force.

2.   That the rate of charge be as prescribed by regulations made under the Rabbit Skins Export Charges Act 1940, as amended by the Act passed to give effect to this resolution, after report to the Minister by the Australian Rabbit Skins Board constituted under the first-mentioned act, but that the rate of charge do not in any case exceed Two shillings and sixpence for each pound of rabbit skins exported.

This motion is introduced for the purpose of amending the Rabbit Skins Export Charges Act 1940. That act imposed a charge on the export of rabbit skins to provide funds for the administration of the marketing scheme, which it was found necessary to introduce in June, 1940, in order to ensure supplies of skins to Australian hat manufacturers at fixed domestic prices for the production of military and civilian headwear. The scheme works thus : In collaboration with the Prices Commissioner, the Australian Rabbit Skins Board appointed under the National Security Act prepared a list of prices at which the numerous grades of rabbit skins normally used in hat production would be made available to Australian hat manufacturers. At the commencement of each winter buying season - April to September - the board allocates to each hat manufacturer the quantities and grades of skins which he 's permitted to purchase month by month under the scheme for his requirements. This phase of the scheme is very closelycontrolled to ensure that hat-makers dc not secure an undue advantage. They buy their quotas of skins at open auction and are paid compensation from the board's funds to the amount of the difference between the fixed domestic prices and the ruling auction market prices on the day of purchase. The export levy imposed under the Rabbit Skins Export Charges Act provides the funds from which the compensation is paid. This modified control of a difficult industry has functioned very smoothly and efficiently under a small organization incurring very light overhead expenses. The board's only real embarrassment for some time has been in respect of finance, and this is solelydue to the extraordinary heights to which the prices of rabbit skins have risen. Last year, with heavy exports and with an increase of. the fixed domestic prices of skins, the board managed to balance its budget with the export levy at the maximum rate of 9d. per lb. provided in the existing act. This year exports will be lighter as supplies are not so plentiful. The main reasons for this are two consecutive years of very heavy trapping, seasonal conditions, and depletion of man-power in country districts. Lessened export quantities mean lower collections at the same rate of levy, and on present indications the board has little possibility of obtaining this year from an export levy of 9d. per lb. sufficient revenue to meet its liabilities for compensation payments.

Normally the extra cost might be passed on to the buyers of civilian hats, and I would not regard this as any great hardship in war-time. However, the demands for military hats are such that our factories are not making civilian hats at the present time. Any additional cost of production of military hats would, of course, become a direct charge on Commonwealth funds. In fact, any deficit in the board's accounts must be made up in one of the following ways : -

(1)   By an increase of the rate of export levy;

(2)   by increasing the cost of military hats at the Government's expense; or

(3)   by a direct grant from Commonwealth revenue.

In view of the very great benefits which this industry has obtained under war conditions, it would be impossible at this stage for the Government to countenance any increase of the prices of military hats, whilst a direct contribution from Commonwealth revenue is out of the question. The alternative is an increase of the export levy. Any increase of the rate of export levy means a corresponding decrease of market values, and ordinarily I should be very diffident about sponsoring a bill which would have that effect. However, after an examination of all the facts and with the knowledge that the alternative is to impose an additional burden on Commonwealth revenue, I am satisfied that the way to meet the problem is in the manner proposed in the bill.

Beyond question, the rabbit skins industry has been allowed to enjoy war-time benefits such as no other industry in Australia has been permitted to receive. In the immediate pre-war year, 1938-39, the value of the Australian rabbit skins catch was under £600,000, whilst last year it was over £4,000,000, an all-time record. The figures speak for themselves. A reasonable increase of the export levy will not affect trapping activities. Prices are too good. It may interest honorable members to know that the Commonwealth Government compulsorily acquired rabbit skins during the last war, and the highest price payable to suppliers for the best grades was 20d. per lb. Last week in the Sydney market it was 123d., even though skins had not reached top winter quality and an export levy of 9d. per lb. operated. When the 3 940 act was introduced, it was apparently thought that 9d. per lb. was a reasonable maximum, but the heights which skin prices have since reached upset calculations. The maximum of 2s. 6d. per lb. now suggested is relatively high, but it is not probable that this rate will have to be reached. The actual rate is regulated by the market prices and the quantities available for export. No attempt is made to provide a surplus in the board's fund, the aim being to obtain only sufficient revenue from exports to meet compensation payments and cover the running expenses of the scheme. I commend the motion to honorable members.

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