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Tuesday, 19 May 1936

Senator A J McLACHLAN (SOUTH AUSTRALIA) [8.20]. - We all regret the absence of Senator Hardy from the chamber this evening. It is impossible for me to accede to the request made in his behalf. I believe that it would have the very opposite effect from that intended. It implies that excise shall be levied on the total output. Therefore it would operate as a reduction from the 4s. 6d., which is now being levied on imported tobacco, to 3s. 10d., to the extent to which imported leaf is used in blend with local leaf.

Senator Duncan-Hughes - And a very good thing, too.

Senator A J McLACHLAN (SOUTH AUSTRALIA) - I have no doubt that Senator Duncan-Hughes would support the request for very different reasons than those advanced in favour of it. If the request were agreed to, numerous difficulties would arise. I ask Senator Abbott to reconsider the whole subject. I do not wish to reiterate the details of the Government's tobacco policy, but I remember vividly a previous discussion we had on this subject when a stout fight was made by Senator Rae for a reduction of the excise duty on- Australian leaf. Certain honorable senators among the allies of the Government also moved for a reduction of1s. 6d. per lb. I remind the committee, however, that the Government has made two reductions of excise duty: First, a reduction of 8d. per lb. on tobacco manufactured wholly from Australian-grown leaf; and, secondly, a reduction of1s. 4d. per lb. on plug tobacco made wholly from Australiangrown leaf for use by Australian aborigines. A remarkable consequence has followed these reductions, the object of which was to promote the sale of Australian-grown leaf, which had been lagging. The Government anticipated a loss of £90,000 in revenue in the first twelve months. We have now had some experience of the operation of the new duties. The departmental estimate of the use of Australian-grown leaf for the year following the introduction of the new duties was 1,700,000 lb., but on the present basis of use, the total will be 1,930,000, which will represent a revenue loss of considerably more than £90,000.

I wish to make it quite clear that the Government keenly desires the development of the tobacco-growing industry on sound lines, and will take all necessary steps to encourage the production of smokeable bright mahogany leaf. It cannot, however, see its way clear to go further than it has already gone. In 1931, the whole of the usable leaf grown was purchased at remunerative prices, and prices at a considerable increase on world's parity have been offered ever since for all usable Australian leaf. Notable advances have been made in the control of crop infestation as the result of the expenditure of £20,000 provided by the Government for scientific research.

The Government cannot accede to either the request moved by Senator Abbott, or the foreshadowed request of Senator Collings.

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