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Thursday, 3 December 1936

Senator E B JOHNSTON (Western Australia) . - I congratulate the Government and the Minister directing negotiations for trade treaties (Sir Henry Gullett) upon the completion of this trade agreement. I have had occasion to criticize the Government very severely in connexion with its trade policy directed against another nation, but I commend it for the spirit it has shown in the negotiation of this very satisfactory agreement - a spirit which it should emulate in its dealings with other good customer nations. France is one of our best European markets for a large number of our primary products. l.t has agreed to accord the minimum tariff duties on twenty items of Australian exports, including wool, hides and skins, wheat, barley, apples, meat, metals and a number of other products. This is an entirely satisfactory provision. It has been pointed out that, according to the Australian statistics, Australian exports to France last year were valued at £5,157,000 sterling, whilst imports were valued at only £790,000 sterling. However, the "French statistics show rather a different picture, and one more favorable to Australia, because they reveal that, largely clue to indirect imports of wool, Australian exports to France were valued at the equivalent of £8,S90,000 sterling, whilst imports of goods into Australia from France were worth only £600,000 sterling. These figures are typical of the favorable trade balance which Australia has had with France for several years. I think that the balance has been more than eleven to one in Australia's favour. The Minister has pointed out that, under the treaty, the Commonwealth undertakes, amongst other things, to accord France the mostfavored foreign nation treatment with respect to customs duties. In view of the satisfactory trade balance that we have with France, that is a very proper action to take. But when I peruse the schedule, which shows the benefits which we are giving to France, I am struck with the treatment which it receives from us with regard to spirituous liquors which are made in France and exported to Australia. As a matter of fact, we are according France, in regard to its liquors, much more favorable treatment than we afford to Great Britain in regard to spirituous liquors which are made in that country and exported to Australia. I am always glad to see a reduction of duties, even when, as in this case, what are regarded as being necessary revenue duties, have been lowered. Under the agreement, the duty on French brandy is reduced from 41s. to 36s. a gallon, and primage is reduced by 3s. a gallon when the product is valued at 30s. a gallon and by 4s. when the product is valued at £2 a gallon.

Senator Hardy - 'What is wrong in that?

Senator E B JOHNSTON - I am not complaining, but I wish to see the reductions of duty and the remissions of primage extended to Great Britain.

Senator Collings - Then why labour it?

Senator E B JOHNSTON - Because I want to know whether the Government intends to extend this policy by giving similar relief to British and Australian distilleries. The total reduction of duty on French brandy is at least 9s. a gallon. -The excise charged on brandy of Australian manufacture, from the product of the Australian grapegrower, is 26s. a gallon. We have given a reduction of 9s. to France if the liquor is worth £2 a gallon. I want to know whether a corresponding reduction of excise is to be granted to the Australian manufacturer of this product-

Senator Collings - There is nothing in the bill dealing with Australian brandy.

Senator E B JOHNSTON - That is so, but I have a right to draw attention to the fact that we are making a big remission of duty to France, and to ask that a similar excise concession of 9s. a gallon on spirits be given to Australia. I want to see the existing protection for the Australian producer retained. Brandy is necessary for the protection of the health of our people, and I do not want to see the Australian trade suffer through any alteration of the existing position. The duty on French liqueurs has been reduced from 42s. to 31s. a gallon, in addition to which primage of 6s. a gallon, on an average price of £2 15s. to £3 a gallon, is" also waived. Therefore a concession of 17s. a gallon is being granted to the producers of the many high class French liqueurs. Are the Australian manufacturers who produce an excellent range of liqueurs also to receive a concession on the excise of 28s. a gallon now paid to the Commonwealth ? Are they to receive a reduction equivalent to the 17s. a gallon granted to the manufacturers of French liqueurs in order to assist the development of the local industry? I urge that this should be done. The average value of French sparkling wines for customs purposes is 30s. a gallon. Excise of 20s. a gallon is charged on artificially sweetened wine. Under this agreement the duty on French sparkling wines is to be reduced from 38s. to 30s. a gallon and primage of 3s. a gallon is also to be remitted, thereby conferring a benefit of lis. a gallon on French manufacturers or exporters. Champagne is a luxury consumed only, I believe, by the wealthy, and from which the Government receives a considerable revenue. As it is forgoing some .of this revenue, I trust that it will extend similar sympathetic consideration to the manufacturers of British spirits, which are not perhaps the same type, but subject to similar duties. The remissions which the Government has made in this agreement will create extraordinary anomalies, particularly when revenue duties are compared with those imposed on spirituous liquors imported from Great Britain. For instance, the duty on British whisky is 40s. a gallon and primage 10 per cent., which may be 3s. or 4s. a gallon according to the quality of the spirit. When we compare the duty on Britishwhisky of 40s. a gallon, plus 4s. primage, with the duty of 36s. a gallon imposed on French brandy, it will be seen that unless the duty on British whisky is reduced to an amount equivalent to that imposed on French brandy and the primage is also reduced, we shall be encouraging the Australian people, on the basis of price if not of taste, to transfer their patronage from the product of the Motherland to the product of France. We should compare the duty of 40s. a gallon on British gin and primage of 10 per cent. with the duties imposed on French liqueurs which have been reduced by 17s. a gallon. On blended rum a duty of 37s. a gallon is imposed and primage of 10 per cent. when imported from Empire countries. The concessions given to France under this agreement should be given in the form of reduced excise on Australian spirits, which have to compete with the French products. Under the Ottawa Agreement we agreed to reduce the primage on British exports as soon as the finances permitted. Under this measure we are reducing substantially the duty and wholly abolishing the primage on French liquors, but so far have failed to reduce the primage, or the duty on the spirits produced in the Motherland. If primage was waived as it has been on French brandy, champagne and wines, it should not be imposed on British whisky and gin, particularly when we remember that the Ottawa Agreement provides that primage should be reduced on British products so soon as the Government could afford to do so. Had the financial position of the Commonwealth not been satisfactory these concessions could not have been given to France. In these circumstances, I trust that the Government will extend similar consideration to the distillers of British spirits. French brandy which has been treated so generously competes with the Australian product in this market, and unless the Government acts in the direction I suggest, what is its object in reducing these duties? This agreement will assist to popularize the consumption of French brandy at the expense not only of Australian brandy, but also of Scotch and Australian whisky and British gin. The policy of the Go vernment of waiving revenue obtained from French luxury items should be extended to the British distillers, and to the Australian distillers, and grapegrowers. To be consistent the Government should reduce the duty and primage on British whisky and gin to the rates it has agreed upon in respect of French brandy and liqueurs. I urge the Government to reduce the excise of 26s. a gallon on Australian brandy to correspond with the reduction of 5s. a gallon and 10 per cent. primage, which represents a reduction of 9s. a gallon on French brandy. Although these duties have been regarded primarily as revenue dutiesthe protective incidence of the tariff should be retained. The excise on Australian brandy and liqueurs, which will meet with intense competition from French brandy and liqueurs, should be reduced by 9s. a gallon, which would be equivalent to the reduction granted on the French product. If these reductions were made the revenue would not suffer; when the excise on beer was reduced by 3d. a gallon the revenue from that source actually increased. A reduction of excise does not necessarily mean a reduction of revenue, and the benefit would be passed on by the retailers to the consumers, as was done in connexion with beer. I support the measure, but I protest against a higher duty being imposed on Scotch whisky than is to be imposed on French liqueurs and brandy. I trust that the relief of 8s. a gallon given in respect of French brandy will also be made in respect of the excise on Australian brandy, whisky, and other spirits.

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