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Wednesday, 26 November 1941

Senator ARTHUR - We shall see as we proceed. A large number of growers forwarded the names of their agents. Mr. Stevenson then set about to find loopholes. Later he decreed that no agent should canvass for business under penalty of being debarred from further trading. Some growers in the Batlow, Leeton, Bathurst, Arm id ale and Kentucky districts advised their usual agents that they were despatching their apples to them. When that was reported to Mr. Stevenson he debarred those agents from further trading in apples on the ground that they were canvassing, notwithstanding that they had been in the trade for many years, some of thorn as long as 40 years. At a later date the agents were notified that they must not inform growers of the prices received for their fruit in the market.

Senator A J McLACHLAN (SOUTH AUSTRALIA) - Was that done by statutory rule?

Senator ARTHUR - The agents were notified by correspondence, and they in turn informed the growers.

Senator A J McLACHLAN (SOUTH AUSTRALIA) - Action should have been taken against the agents.

Senator McBride - The apples were the property of the hoard.

Senator ARTHUR - Because of the maladministration of a former government, the unfortunate soldier settlers in the Kentucky districts were told that their fruit was not required, and must be destroyed.

Senator JAMES McLACHLAN (SOUTH AUSTRALIA) - That is not so.

Senator ARTHUR - Is my statement denied ?


Senator ARTHUR -Fruit from that district was carted onlorries to the station of the wealthy Dangar family, where it was fed to pigs. The board was charged2d. a case for cartage.

Senator JAMES McLACHLAN (SOUTH AUSTRALIA) - That did happen with some small hail-marked fruit.

Senator ARTHUR - It was fruit which would have been welcomed in the western districts of the State.

Senator Fraser - It did not qualify.

Senator ARTHUR - The fruit was similar to that which is offered for sale in Sydney to-day.

Senator McBride -The honorable senator sets himself up as an expert in opposition to those who were appointed to judge.

Senator ARTHUR - Both Mr. Anthony and Mr. Stevenson are bananagrowers, and it was to their interest to ensure that there was a shortage of apples, so that bananas would bring a high price, as. indeed, they have done this year. At a rime when apples were being offered for sale at l½d. or 2d. each, excellent bananas were available at eighteen for 6d. That action cost the Commonwealth £1,400,000 last year. The loss could have been reduced considerably by proper administration. Throughout a portion of New South Wales people could not get apples. Indeed, they cannot be obtained cheaply to-day. No experienced man would have put the variety of apples into cold stores as was done with thousands of cases throughout Australia this year, with the result that when taken out of cold storage practically half of the apples were useless, and retailers were forced to repack the fruit before leaving the markets. In normal years a retailer was able to buy the product of certain growers, but Mr. Stevenson denied to growers the right to use their own registered number on cases containing their fruit.

Senator Herbert Hays - The fruit belonged to theboard.

Senator ARTHUR - There was no need for such action. Previously, retailers could rely on getting good quality fruit if they bought the product from reliable growers, but to-day they do not know what they are getting. Mr. H. V. Smith who is associated with the New South Wales committee and the Apple and Pear Marketing Board is also associated with the Batlow Cooperative Company, an organization of growers which is supposed to be representative of those controlling the packing sheds throughout New South Wales. However, its offices are situated in the same building as the Bananagrowers Association, and the telephone number of both organizations is the same.

This year the apple crop totalled about 15,000,000 cases compared with approximately 6,000,000 cases last year. The following table shows the quantities supplied to a number of agents last year when the season was normal, and this year when there was a record surplus : - l.'h ere has been a regular " racket " in the distribution of apples in Sydney this year. There is a registered concern in Sydney named J. Holmes Proprietary Limited, the shareholders of which arc practically identical with the shareholders in another concern called the Commonwealth Fruit and Produce Company Proprietary Limited. This year if. Holmes Proprietary Limited received 79,473 cases and the Commonwealth Fruit and Produce Company Proprietary Limited received 19,059 cases, or a total of 98,532 cases, although the normal purchases of those companies were fewer than. 40,000 cases per annum. Silk Brothers Interstate Traders Limited obtained 4S,27S cases, although in a normal year they bought only 15,000 cases. Another firm, L. T. Locke, got 39,051 cases, although their normal supply was about 22,000 cases. Mr. .]'. Jenkins, another wholesale fruiterer, whose normal trade was 4.9,000 oases, was able to secure S2,000 case?. J. Holmes Proprietary Limited and the Commonwealth Fruit and Produce Company Proprietary Limited are the controllers of a subsidiary company known as the Apex Company, which is not registered. During the last two months apples bought from the board by J. Holmes Proprietary Limited and the

Commonwealth Fruit and Produce Company Proprietary Limited at from 8s. to 9s. a case were passed over to the Apex Company, which in turn sold them to retailers at 24s. a case. No receipts were given for these sales. The committee which inquired into the apple and pear industry should have included in its report a recommendation that a receipt should be issued for every case of fruit sold in the market and that a copy of the receipt should be sent to the board so that all sales may be traced. No record is kept and no receipts are issued in respect of fruit sold for cash in the metropolitan fruit markets to-day. That undesirable practice has been continued for the last 20 years. The operations of the Apple and Pear Board this year have cost, the taxpayers of this country approximately £1,400,000; and although there has been a steady demand for apples most of them have been left to rot on the ground. In The city of Sydney to-day it is impossible to buy an apple much larger than a billiards ball for less than 2d. Apples of larger size are sold in suburban shops for Si-<). each and in some city shops for 4d. each. I.n a year of heavy crops such price? are scandalous. Mr. Stevenson collaborates with firms and individuals such as J. Holmes Proprietary Limited, Mr. J. Jenkins, Silk Brothers Interstate Traders Limited and L. T. Locke and gives them concessions that are denied to reputable dealers. Last week he went to Melbourne, probably to consult with Mr. Mills, the chief officer of the board. After the last war the State governments incurred great expense in establishing returned soldiers in the fruitgrowing industry. With the assistance of r llc' State Departments of Agriculture these settlers were able to make a reasonably good living until the war cut off their export markets. To-day. however, largely a.= the result of the operations of the Apple and Pear Board they have been forced to accept Stale relief. A grower with a wife and two children receives £6 10s. a. month from the State govern.ment and a grower with a wife and one child receives £5 10s. a month. Had these men been permitted to sell their fruit on the open market- -and the demand for fruit all over the country is very great - they would not have become a charge upon the State. I trust that this Government will see that the business of the Apple and Pear Board is so conducted in future that the enormous loss incurred this year will not be repeated. Provision should be made to acquire the surplus crop only by the payment to the growers of 2s.6d.a case at the tree and the remainder of the crop through traders in the ordinary way. Had that been done, the loss on the acquisition scheme this year would have been considerably reduced.

I propose now to discuss the important subject of the additional excise of 3d. a gallon imposed on beer. In New South Wales, as in all other States of the Commonwealth, breweries are conducted by monopolies, joist as are most of the big industries in Australia to-day, particularly the war industries. According to the Commonwealth Year-Book, the total quantity of beer and stout brewed in New South Wales in 1937-38 was 31,630,132 gallons. The additional excise of 3d. a gallon on that production would yield £395,376.

Senator Gibson - Does the honorable senator object to the excise?

Sena tor ARTHUR. - No, but I object to this additional impost being passed on to the consuming public.

Senator Allan MacDonald - The breweries have not yet been allowed to pass it on to the public.

Senator ARTHUR - They did so on two other occasions when the excise was increased. It is reasonable to suppose that the production of beer has increased since 1937-38, but no later figures are available. I suggest that, of the additional excise of £395,376, Tooth and Company Limited will pay £250,000 and Tooheys Limited will pay £140,000. The profits earned by both of these concerns are so great that they could well afford to bear this additional impost.

Senator Spicer - What is the annual profit of those concerns?

Senator ARTHUR - It is difficult to obtain a copy of the balance-sheet published by Tooth and Company Limited. The balance-sheet presented to the Registrar-General by that company is a fake. The Commonwealth should draw up a uniform balance-sheet to be presented by all companies and no large number of items should be permitted to be aggregated. The profit and loss account issued by Tooth and Company Limited contains the following item: - "Gross profit on trading, and rents and interest, after making provision for bad and doubtful debts, depreciation and contingencies, £2,251,584". It would be interesting to know what amount is written off for depreciation in an undertaking of that kind. The wealthy brewing interests have a monopoly not only over the brewing of beer, but also over its distribution. Hotels of an aggregate value of £11,000,000 are owned by brewing interests in Australia. In its published statements, Tooth and Company Limited do not disclose the value of hotels which they own and control.

Senator Spicer - What was the net profit earned by Tooth and Company Limited ?

Sena tor ARTHUR. - Approximately £870,000 was disclosed. One item in the balance-sheet published by that company under the heading" Assets " reads : - "Breweries, freeholds and leasehold properties, at or under cost, plant, machinery, rolling stockand motor vehicles, at cost, less depreciation, £6,706,279 ". Freeholds and leasehold properties obviously consist of hotels and breweries. For some reason best known to the company, the total value of the hotels owned by it is not disclosed. The company usually leases its hotels for a period of three years at a rental adjusted to return the capital value of the property every twenty years. The brewery authorities insist that the agreement entered into by the lessee shall contain a provision whereby the lessee is obliged to keep the property in repair and in good condition at his expense. The general manager of that company has done much travelling to Canberra and Melbourne since the budget was introduced. I urge the Government to prevent that company and similar concerns from passing any further increases of excise on beer on to the public. It passed on the first increase of excise duty by compelling hotel-keepers in New South Wales to use smaller glasses. The cost of effecting that change amounted to from £50 to £100. That expenditure represented an excellent subsidy to the glass combine. The increase of 3d. of excise duty should be borne equally by the hotel-keepers and the brewers. The Government should not allow the price of draught beer to be increased, although it might be fair to allow an increase of Id. a bottle of the price of bottled beer. Tooth and Company Limited have also increased the price of CO2 gas by ls. per cylinder, thus obliging hotel-keepers to pay on the average an additional amount of £3 or £4 a week for that gas which is a by-product of the brewery. The hotelkeeper must also pay a deposit of £1 on each gas cylinder. We can imagine, therefore, the dead money which Tooth and Company Limited is holding to-day, even in respect of that small item. Whilst breweries in New South Wales do not disclose the value of their hotel properties, that information is given by similar companies in Victoria under the Victorian Company law. In that State, Carlton and United Bireweries Limited, in 1939, held properties valued at £1,871,281, and tlie Castlemaine Perkins Brewery Company Limited held similar properties valued at £1,512,162. In 1939 Tooth and Company Limited made a net profit of £855,709 and paid a dividend at the rate of 12 per cent. Its assets in that year were valued at £9,134,288, and its paid-up capita] was £6,182,657. It is, therefore, one of the largest public companies in Australia. How has it been built up ? In 1910 its capital was £900,000, but since that year it has made six issues of bonus shares to the value of £2,150,000. Thus the rate of dividend of 12 per cent, in 1.939 was actually a rate of 33 per cent, upon the original capital. Yet we find some honorable senators opposite appealing on behalf of poor widows because the Government proposes to increase the tax on shareholders in these big companies. Let me now deal with Tooheys Limited, In 1940 that company paid a dividend at the rate of 9 per cent., and its assets were valued at £4,117,615. In Western Australia Swan Brewery Company Limited paid a dividend of 25 per cent., its assets being valued at £1,611,332. Through Colonel H. E. Cohen, a gentleman who resides in Victoria, that company is linked with the metal monopoly in Melbourne.

That gentleman is associated with the Electrolytic Zinc Company Limited and Zinc Investments. The firms comprising Carlton and United Breweries Limited include Carlton Brewery Limited, Melbourne, Shamrock Brewing Company Limited, Victoria Brewery, Foster Brewing Company Limited, and Castlemaine Brewery Company Limited. The Government should ensure that the breweries do not pass increases of excise on to the public. They are making enormous profits because they enjoy a monopoly of brewing and distribution. Yesterday the report of the royal commissioner who inquired into the expenditure of secret funds was tabled in the Senate. That report contained certain findings against the president of the Coal Miners Federation, Mr. Nelson. Personally, I disagree with the report. The evidence submitted at that inquiry would not hold in a court of law in any part of the British Empire. However, I am reminded that not so long ago it was a common thing in New South Wales to pick a particular judge, Mr. Justice Pring, and to appoint a certain barrister, Mr. Lamb, to conduct inquiries into any matter in which the interests of the Nationalist party, which is now known as the United Australia party, were involved.

I take this opportunity to give to the Senate some details concerning the operations of companies associated with the coal monopoly to which honorable senators opposite made a present of £S00,000 when they forced the Government to accept an amendment to the War-time (Company) Tax Bill which was considered in this chamber yesterday.

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