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Wednesday, 15 May 1957

Sir WILFRED KENT HUGHES (Chisholm) . - In spite of the lateness of the hour, I want to draw the attention of the Minister for Trade (Mr. McEwen) and of honorable members to something that has been termed a storm in a teacup. The storm itself is not of very great importance, but the winds which have caused it, and the teacup itself, are. If not the teacup, then the price of what goes into it is of importance to every householder in Australia, and a very important item in the cost of living.

I know the Minister has a difficult task in administering import licensing controls, and I consider that in this particular case, namely, what is known as the case of the Formosan Tea, he has acted wisely and in the best interests of the buyer; but this particular case is only a straw in the winds which are blowing. If I erred in saying that the Minister acted against the advice of the department I am sorry, but actually I want honorable members to judge whether the inference I made was correct or otherwise; because I propose to quote a conversation which took place between Mr. A, an importer, and Mr. B, who represented himself as the tea representative of a firm which I will call " X Company Limited ". This took place in the office of Mr. A -

Mr. Bsaid that he came to see me about my application for import licence of Formosan tea and claimed that he knows all about Formosan tea which is only rubbish.

Mr. A.; Have you seen or tried a sample of our tea because we have good reports from various organizations who had done so?

Mr. B.; Don't give me that, I know all about tea. I have tried Formosan tea before. The quality is very bad.

Mr. A.; Have you tried Formosan tea recently?

Mr. B.; I tried some in 1938.

Mr. A.; 1938 is a long time ago. A lot could have happened since then. This tea must be good. Formosa is exporting big quantities to various countries now.

Mr. B.; I know all about this tea. It is no good anyway. Your import licence for . . . has to be issued in the name of X Company Limited. You can import the tea yourself. Although you can import the tea, the licence has to come through us.

Mr. A.; On whose authority are you acting?

Mr. B.; Our Sydney people rang me up a little while ago saying the Department of Trade in Sydney prefers to issue the said licence to people like X Company Limited instead of to an outsider like yourself. I have been asked to come and see you about this.

Mr. A.; If the Department of Trade wanted me to do that, won't they get in touch with me personally first?

Mr. B.; The handling of tea in Australia has been very carefully studied. The existing tea concerns have been handling the importation of tea for scores of years. Why should you be given an import licence? You are not entitled to one.

Mr. A.; If I were you, I wouldn't say things so fast. Do you know what I have been doing? I have exported several hundreds of thousands of pounds' worth of Australian goods within twelve months personally. Why aren't I entitled to the import licence? I think I am more entitled to same than a lot of firms who only imported into Australia and hardly exported anything. I am more beneficial to the country than they are.

Mr. B.; How about it? Will you agree to your import licence going through X Company Limited? I have to give your answer to Sydney by 3 o'clock.

Mr. A.; I cannot give you any answer at such a short notice. You are in business yourself. It is hardly fair to expect me to do this. Do you mind if I ring Canberra first and find out what is happening?

Mr. Athen lifted the telephone off the cradle.

Mr. B.; No, don't. You needn't ring Canberra. I will just tell Sydney your answer is " No ", that's all.

Mr. Bthen got up from his chair to leave Mr. A's office.

Mr McEwen - Is Mr. B an official or a private individual?

Sir WILFRED KENT HUGHES - I have said that Mr. B represented himself as the tea expert of a firm which I have called X Company Limited.

Two things arise out of this. First, is Formosan tea rubbish? All I can say is that I have the opinions of importing firms in three different States. The representative of one of these importing firms has said -

I must admit that the taste and flavour of tea brewed from your sample was in my opinion equal to the average blend offered by Australian tea-packers of the popular brands.

That is the opinion of one of our big retailers.' These are big retailers in their respective States. Another importer states -

We like the tea and think it has a terrific potential.

Yet another importer states -

After testing your tea, which for flavour, aroma and satisfaction we believe ranks with many teas on the market, we feel certain that a big demand can be expected.

I am not particularly interested in Formosan tea; I am interested in what is happening in the tea trade and in reducing the cost of living. The second matter I would ask the Minister to look into is how far that conversation is correct and how Mr. B knew the name of the firm that had applied for the import licence. That is very important. I should like the Minister to inquire why that information was disclosed to Mr. B. But what is more important is that the interlocking action of the restrictive licences and the hang-over from Commonwealth tea control has foisted on the public higher prices in the last two years than should have been charged. In 1954-55, the last year of Commonwealth tea control, the value of tea bought was more than 50 per cent, above one year's consumption. In 1952-53 purchases totalled £11,662,000. In 1953-54 the figure was £13,646,000. In 1954-55 it was £21,664,000, of which £18,000,000 worth came from Ceylon - no wonder the previous High Commissioner for India objected to what tea control had done in that year. In 1955-56 the figure was back to £11,186,000. The average tea consumption, I think, works out at about £12,000,000 worth, and I ask the Minister to look into what are apparently, if my information is correct, tough-guy tactics on the part of somebody in the tea trade. I do not blame the tea trade as a whole, but under this interlocking system, apparently somebody can take action of that nature.

Finally, I ask the Minister why there should be any tea import licensing at all. There is no shortage of tea in the community. It is like petrol - everybody has enough. If there is no import licensing, anybody who wants to import tea can do so and the public can select its own brands at whatever price it wishes to pay. Probably the same thing applies to coffee.

I recommend to the Ministry as strongly as I can that it should abolish import licensing on tea. This would reduce the amount of money that is being spent on tea, because I think a considerable quantity of cheaper tea would be available. At present import licensing is just to maintain our overseas balances. If we are now spending a maximum of £12,000,000 or £13,000,000 a year on tea and the public would be quite satisfied with cheaper brands, costing, say, half as much, we would have to spend only £6,000,000 or £6,500,000. There is no rhyme or reason in the continuance of import licensing for tea. If import licensing were removed the overseas payments would fall and the public would gain the benefit of cheaper tea.

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