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Thursday, 30 April 1936

Senator HARDY (New South "Wales) . - I was very interested in the suggestion made by the Leader of the Opposition (Senator Collings) that the Government should repent of its political sins in regard to the tobacco industry by increasing the import duty by 6d. per lb., in order to afford reasonable protection to the industry. Had I been asked what I regarded as a certainty in connexion with this debate, I should have answered that the Leader of the Opposition would move for higher duties on tobacco. I am astounded at the change of attitude on the part of the Labour party since 1933. In that year the then

Leader of the party in the Senate (ex- Senator Barnes) in moving for a restoration of the Scullin duties said that unless a duty of 5s. 2d. per lb. was placed on tobacco the industry would go to the wall. The present Leader of the Opposition has not moved for a restoration of the higher duty, but has practically agreed that the existing protection is reasonable. I admit that it was a big temptation to the members of the Country party to vote for a higher duty on tobacco in 1933, because, at that time, the growers were in serious straits. Throughout Australia, men in the grip of the depression tried to recoup their fortunes by growing tobacco, with results that are well known. On that occasion I said -

Throughout the debate on the tariff I have consistently taken up the attitude that I am not prepared to support the increasing of any duty, because I believe that what Australia requires to-day is a gradual scaling down of the tariff.

When a division was called, the attempt to restore the Scullin duties was defeated. The Country party thereupon moved that the then existing duty of 3s. per lb. be retained, with a different excise in favour of Australian tobacco, namely, 3s. as against 4s. 6d. per lb. Members of the party went to some pains to show that its proposal would not mean any loss of revenue to the Crown. Ex-Senator Bae of the Labour party recognized that the arguments of the Country party were logical, because he moved a further amendment that the Australian excise be 3s. 7d., and the excise on imported tobacco 4s. 3d. per lb. - a difference of 8d. per lb. His amendment, which was supported by tb, Country party, was lost, but I am glad to say that, subsequently, the system which we then advocated has been adopted by the Government, with beneficial results, to the industry. Although it is now proposed to increase the duty by 6d. per lb. above the recommendation of the Tariff Board, and to reduce the excise in favour of Australian leaf by 8d. per lbthere is still a serious anomaly which should be removed. The recent small reduction of the excise on tobacco made wholly from Australian leaf is really of little benefit to the Australian industry, because Australia is no exception to the general rule that practically all countries in which tobacco is manufactured have found it necessary to blend different kinds of leaf in order to get the best results. Therefore, by confining the reduction to tobacco which is 100 per cent. Australian, a large quantity of good Australian leaf which is blended with imported leaf is excluded. If the Government wants to make this preference effective, it should extend it over the whole field, and not debar Australian tobacco, which is used for blending purposes. The Australian tobacco-growing industry is gradually getting on its feet, and the percentage of Australian leaf to the total consumption is steadily increasing. Moreover, thai increase is along sound lines. If, however, the Government wants to do the industry a service without penalizing the consuming public, it should make the Sd. preferential duty apply not only to tobacco which is 100 per cent. Australian, but also to Australian tobacco used for blending.

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