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Thursday, 31 March 1966


Mr DEPUTY SPEAKER - There being no objection, leave is granted.


Mr CLEAVER - The eightieth report relates to an inquiry by the Committee into the assessment of excise duty administered by the Department of Customs and Excise, and into certain aspects of the Department's administration which, although not specifically a part of the excise function as such, have an important bearing on the operational efficiency of the Branches concerned with excise duty, namely, the Excise Branch and the Petroleum Products Branch.

In the field of excise revenue, the Committee's inquiry was centred on the assessment methods adopted by the Department in refineries, breweries, wineries, cigarette factories, distilleries and match and liqueur production. In respect of the more general aspects of the Department's administration, the inquiry related to personnel, training, organisation and methods, automatic data processing, and publications. The Com mittee also has taken the opportunity to place on record a short history of excise collection in Australia dating back to the early days of colonial settlement.

Basically, the Committee's interest in the matters under review stemmed from evidence it had received from the Department of Customs and Excise during the inquiry into the Auditor-General's Report for 1961-62. In that inquiry, the Department had stated that in 1959 it had introduced a new system of administering customs and excise controls over petroleum products and that as a result, cash savings of £50,000- $100,000- per annum and a substantial reduction in staff employed had been achieved.

In formulating its approach to this inquiry, the Committee recognised that considerable advantage would be derived if evidence were taken from Departmental officers located in State regional offices as well as from the centra] administration in Canberra. Accordingly, public hearings were held in Canberra, Sydney, Adelaide and Perth. In addition, the Committee took the opportunity to make inspections of premises where excise duty is actually assessed and to discuss the procedures involved with the manufacturers and excise officers concerned. The Committee's inquiry indicated that effective control is being exercised by the Department of Customs and Excise over a wide range of excisable commodities which in 1964-65 yielded about £315 million - S630 million - of Commonwealth revenue.

However, following the introduction of the petroleum products system of control in 1959, the Department appears to have faltered in maintaining the momentum of its re-appraisement of existing procedures to other areas of excise collection. Only recently has a system of commodity control been extended to an additional industry and then only on a trial basis. The Committee feels that whatever the merits or demerits of the proposed system may be, senior officers of the Department have had an adequate opportunity to endorse or reject the proposal. We also find it difficult to accept the Department's view that, if the new system of commodity control is finally accepted, a period of several more years may elapse before it is finally implemented. Another disturbing feature of the Department's apparent indecision over the proposal is the failure to make any assessment of staff requirements necessary to successfully implement the system.

The Committee believes that certain outmoded provisions are contained in the legislation governing some detailed aspects of the Department's administration. For example, we doubt whether the present allowances in respect of the contents of beer kegs may continue to be justified. As a significant proportion of brewers currently use steel containers, the Committee considers that the legislation providing for this allowance should be reviewed. The various levels at which the cost of distillers' licences appear to have been arbitrarily fixed is also worthy of comment. The Committee considers that fees for such licences should be fixed on a uniform basis, at a level appropriate for the purposes of licensing but not less than an amount sufficient to recover the administrative expenses incurred. I commend the report to honorable members.

Ordered that the report be printed.







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