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Friday, 6 December 1935

Senator Sir GEORGE PEARCE (West ern Australia) (Minister for External Affairs) [10.8].- -I move-

That the bill be now read a second time.

I appeal to honorable senators, in view of the general desire that we shall conclude our business to-day, to avoid as far as possible in their speeches going over the ground that was covered last night during the debate on the Wheat and Wheat' Products Bill. This bill deals with only another phase of the same subject. Commonwealth and State Ministers, meeting as the Australian Agricultural Council in October last, passed a resolution approving of the Commonwealth plan for securing a homeconsumption price for wheat, and urging that, if insuperable obstacles should unfortunately delay the implementing of the plan for the coming harvest, the flour tax should be temporarily re-imposed to enable a home-consumption price to be paid. The Commonwealth Government has all along desired that a homeconsumption price should be obtainable for the present harvest, and its policy has been directed to that end. In order to bring this about, however, it was necessary that complementary legislation should be passed by the State Parliaments. In fact, the State legislation is much more important to the scheme than the Commonwealth legislation. The Commonwealth gave an early earnest of its desire to put this scheme into effect when it introduced the necessary legislation into the Parliament, ' but it became . obvious that it was useless to proceed with the legislation until the necessary complementary legislation had been introduced in the State Parliaments. Up to the present, New South Wales and Queensland have passed their legislation, and the New South Wales act fixesa date next year when it shall come into force. I remind honorable senators that this date was fixed not at the request of the Commonwealth Government. The Victorian Government has introduced its bill, which has passed through the lower House, but it was not introduced in time to be passed through both Houses. In the South Australian Parliament, the bill has been read a first time. In the Western Australian Parliament, the bill has been introduced, while Tasmania has not taken any action. It has become obvious, therefore, that the scheme cannot be put into operation for the present season, but that is not the fault of the Commonwealth, nor was it the result of any delay on the part of the Commonwealth. In view of these facts, it is proposed in this bill, and in the associated taxing bills, to re-impose the flour tax temporarily.

The bill provides for a continuance of the flour tax after the 6th January, 1936, its present date of termination until a date to be proclaimed. By this flexible provision the flour tax can be made to terminate upon the inauguration of the Commonwealth plan without special legislation being introduced for that purpose.

Several alternatives were considered. One of these was to extend the flour tax for a fixed period, say, to the 30th June, 1936, subject to termination by proclamation at an earlier date, if desired. The weakness of that would lie in the possibility that the Commonwealth plan would not be ready for inauguration upon the expiration of the fixed period. Another alternative proposed was that the flour tax should apply to all flour produced from wheat harvested prior to the 1936-37 harvest, which harvest should mark the initial application of the Commonwealth plan. Upon examination, this proposal proved to be impracticable owing to the position which would arise through confusion of wheat and flour stocks during any concurrent marketing of 1936-37 and 1935-36 wheat. To-day products produced from the wheat of this and the previous harvest are being sold simultaneously, and as a similar position is likely to recur next year, it would be impracticable to determine in which season the flour used in any goods had been gristed. Therefore, this latter alternative would be administratively impracticable.

There is an amendment in clause 5 of the bill for the repeal of sub-sections 7 and8 of section 24. These sub-sections authorize refunds of tax paid on flour held in stock at the close of business on the 6th January, 1936, the terminating date of the present tax. No provision is made for the authorization of refunds of tax paid on flour which will he held in stock on the date to be proclaimed for the termination of proposed tax, because the proposals in this bill are essentially associated with the Commonwealth wheat plan, and they must be regarded as the first step taken in a continuous scheme to secure a home-consumption price for wheat for an indefinite period of time. The continuity of that scheme would be broken by any provision for the refund of tax paid on closing stocks of flour.

This bill, of course, provides the same extension of the tax on imported goods as on flour produced in Australia. Opportunity is also taken to provide for two minor matters, viz. -

(a)   An amendment of section 14(1) (k) of the principal act to ensure the retention of the exemption from tax of flour used in the manufacture of foods for infants and invalids, this amendment being necessitated by the Sales Tax Exemptions Bill, which will shortly come before the Senate.

(b)   An amendment of section 24(2) of the principal act to make fully effective the original intention to refund tax paid on flour used in the manufacture of goods which are subsequently exported.

Several cases have arisen in which, owing to intermediary transactions between the manufacturer and the exporter, it has not been legally possible to make the intended refunds. Honorable senators will see that the general purport of the bill is to continue flour tax to secure revenue from which grants can be made to the States for the relief of the wheatgrowers, and to continue such grants until a more permanent relief is provided by the fixation of a home-consumption price. It is desired to avoid a hiatus between the old and the new schemes of relief.

Legislation embodying the principle of a flour tax having already been placed on the statute-book I anticipate that there will not be a lengthy discussion on this measure, as this would involve going over ground which has already been covered ; and I assume that no party in this chamber desires to see a hiatus between the termination of the old system and the inauguration of the new system of providing relief for the wheat-growers. The new system is to be made to apply to the new harvest.

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