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Monday, 16 November 1964

Senator McCLELLAND (New South Wales) .- As the Minister for Customs and Excise (Senator Anderson) said in his second reading speech, the purpose of this Bill is to amend the Schedule to the Customs Tariff 1933-1964. We shall be dealing later with the Customs Tariff (New Zealand Preference) Bill (No. 4) 1964 and the Excise Tariff Bill 1964. Tariff Proposal No. 19 and Excise Tariff Proposal No. 1 were tabled on 1 1 th August last and give effect to the Government's decisions on matters arising out of the Budget.

In the course of his Budget Speech, the Treasurer (Mr. Harold Holt) said that the rates of customs and excise duties on cigars and cigarettes would be increased by 5s. 3d. per lb. and that the rate applicable to manufactured tobacco would be increased by 2s. per lb. The increased rates, which came into force on and from 11th August last.

Are broadly equivalent to an increase of 3d. for a king size packet of 20 cigarettes or a packet of 2 ozs. of tobacco. According to the Treasurer's Budget Speech, the additional revenue is estimated at about £14,100,000 in a full year, and at £12,500,000 in the ten months of the present financial year. This is a substantial amount. Whilst the Opposition does not oppose the Bill, I must point out on behalf of the Opposition that the increases represent quite a slug to those who regard smoking as a pleasure. 1 do not know whether a survey has ever been taken of the number of people who smoke or of the amount of tobacco consumed annually. In the fiscal year 1961-62, according to the official " Year Book ", the value of retail sales of tobacco in Australia was of the order of £126 million. Excise revenue for the same financial year amounted to £11,898,000 from tobacco, £67,488,000 from cigars and cigarettes and £640.000 from cigarette papers, a total of £80,026,000. The total quantity of tobacco in round figures on which this amount of excise duty was paid was 12,980,668 lb.; in the case of cigars, the weight upon which excise duty was paid was 156,871 lb. and for cigarettes it was 42,322,473 lb. According to my mathematics, the combined weight of tobacco, cigars and cigarettes upon which excise duty was collected is the rather staggering amount of about 24,760 tons. The total of net collections of customs and excise duties in 1961-62, both Commonwealth and State, was about £350 million, or £33 ls. 6d. a head of population.

From the figures I have quoted it will be seen that Australians are substantial users of tobacco and related products and that these proposals, which emanated from the Budget, affect a great number of people. Therefore the increases could well be dis.cribed as sectional, being imposed on a large number of Australians, lt is interesting to observe in this regard that whilst the Treasurer said in his Budget Speech that the proposals would result in an increase of 3d. in the price of a king size packet of cigarettes, consumers of cigarettes are in fact paying an increase of 4d. a packet. Prior to the last Budget a king size packet of cigarettes cost the consumer 3s. 3d. Now it costs him 3s. 7d. It seems to me to be fair to ask who is getting the increased price of Id. a packet above the increase of 3d. attributable to customs and excise duties.

Tariff Proposal No. 19 is of great significance. Indeed, it is one of the most significant indirect taxation measures to stem from the last Budget. An indirect tax is a tax paid by people in proportion to the amount they spend on a particular commodity, without regard to their overall capacity to pay. It is this type of indirect tax which normally the Labour Party could be expected to oppose. However, the Opposition does not oppose this measure because it is thought that the increased duty might induce some smokers to abandon the habit or might cause some members of the younger generation in the community not to take up the habit of smoking. I doubt very much that this will be the result, but the Government has done nothing else to induce people not to smoke. Because some members of the younger generation in particular may be influenced not to adopt the habit of smoking, the Opposition does not oppose the measure.

The abolition of duty on cathode ray tubes is another result of the Budget. This duty was imposed to help pay the costs of the national television service, but is to be abandoned. In its stead, through a provision contained in the last Budget, the Government has decided upon an increase of £1 in a television viewer's licence fee. According to the Treasurer, the additional revenue expected in 1964-65 from the increase in fees is £1,725,000, an amount approximately equal to the loss in excise revenue from cathode ray tubes. I repeat that the Opposition does not oppose the Bill. My remarks have been made by way of comment.

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