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Thursday, 6 December 1973

Senator LAUCKE (South Australia) - Many provisions in the Bills which are before us are anathema to me as one who believes in promoting and encouraging productivity and as one who believes in encouraging the little man to work hard and to aspire to a better place in the sun. I would like to oppose all the measures before us now. I would do so purely on the basic business principle of the need to encourage production and to give the small man a fair go. It has been said by Senator McManus and Senator Maunsell that the rural industries have been hit to leg by the provisions of this legislation. The abolition of the investment allowances, the very heavy intrusion into previous depreciation allowances, the decision that the cost of conserving water on farms in dams and so on is to be depreciated over 30 years and that sort of thing indeed paint a pretty dismal picture overall. The measures which have been taken by the Government in respect to the raising of moneys are in themselves not conducive to the creation of wealth as such in the first instance.

I want to make particular reference to my concern about what is being done to the grape growing and wine making industries. In the decisions it has taken to raise revenue from the operations of those industries the Government has failed to take into account the background to those industries or to think through just what effects the measures which have been taken are going to have on them. For many years the grape growing industry has enjoyed a system of stock evaluation which has enabled it to go ahead quietly. I know how it has gone ahead quietly over the years, having been brought up amongst the vineyards of the old wine making families of the Barossa Valley. This industry is said to be one of great affluence and great wealth. I know how generations of families have ploughed their profits back into it over the years. They have not been dividend payers; they have been builders and pioneers. Before those families could really achieve the strength aimed at the Government has imposed upon them a variation of the system of determining what taxes should be paid.

I refer to section 31a of the Income Tax Assessment Act, which requires the declaration of stocks at selling values and not at the figures which have been allowed since 1953 or 1954. The previous system enabled the industry to meet its requirements in respect to the slow turnover of its product. It also enabled it to make quality wines and brandies, which has enabled a better industry to be built up on the home market and the overseas market. It is an industry which embraces many growers and many employees. It is a labour intensive industry insofar as growing is concerned. It has been a disappointment to the industry to be told of the abolition or phasing out of the taxation allowance. It has been a disappointment to it to be told that there would be a phasing out over 3 years of a provision which gave brandy a little edge over other spirits. That provision was introduced initially to meet a very serious situation in the grape growing industry, to enable clearance of great stocks. The slight advantage which has been given to locally produced spirits over the years has been of enormous assistance to the industry. It is to be phased out. Then there is an increase in the actual duty.

I have said before that the very wrong impression has been gained that the grape growing and wine making industry is in the hands of millionaires. A small section of the industry certainly is now controlled by interests which are not the original pioneers of the industry. But in the main it is still in the hands of the proprietary companies of the families who have ploughed back all the money they have made over the years and who have built up something which is an asset not only to themselves- in my opinion they have been very selfless people- but also the districts in which they are situated. They have been providers of employment over the years. I deplore the lack of thought that has gone into the decisions which have been taken in respect to the various forms of taxation imposed upon the rural producer. I am citing in particular the grape growing area of rural production.

I have to say again, as I have said before, that the Government has not been honest in meeting the election undertakings it has given. In the debate yesterday on the States Grants (Schools) Bill reference was made to the per capita grants which were promised prior to the election and after the election and which have not been forthcoming. In respect to the imposts upon the grape growing and wine making industries, I must refer again to an undertaking given by the Premier of South Australia, Mr Dunstan, who has been horrified by the let down occasioned to him by the Australian Government in respect to promises that he made in full expectation that they would be fulfilled, because he was told that they would be fulfilled. It will be recalled that an excise duty of 50c a gallon was imposed upon wine by the previous Government and subsequently reduced to 25c a gallon. Before the last election Mr Dunstan, as Chairman of the Australian Labor Party's Federal Election Finance Committee, was authorised to make certain promises to wine makers. He contacted them by way of letter, a copy of which I have before me. In it he said:

You have suffered from the impost placed upon the industry of the excise duty to which I have referred. If you return us to power we shall abolish the excise and not replace it with a sales tax or any other imposition.

Senator Jessop - Who said that?

Senator LAUCKE - That was said by Mr Dunstan, who had written to the winemakers. I shall read more of the letter to define more clearly to honourable senators the whole meaning of the promise given and the repudiation since then of a promise which was given in good faith by a man who I believe to be genuinely interested in the wellbeing of the industry. The Premier of South Australia has been hurt deeply by what has happened. He has said that he feels ashamed that he has been let down by his own Party in this respect. There has certainly been a breach of the undertaking given. In his letter the Premier of South Australia said:

The future of the vine industry has become an issue at the forthcoming federal elections. The Australian Labor Party believes, and its Federal Executive has stated, that the only solution that will guarantee continued prosperity for the wine industry and the many thousands of growers who supply it is complete abolition of the excise and its non-replacement by a sales tax or any other imposition.

I seek your financial support for the ALP Campaign for the federal elections. You have already spent many tens of thousands of dollars on the wine tax and on collecting the information required by the Customs and Excise Department. The election of a Federal Labor Government will save you these costs in the future.

You may be sceptical about the intentions of an Australian Labor Party Government regarding the excise. Accordingly, the attached form provides the opportunity for you to:

(a)   forward a donation forthwith of

(b)   pledge a donation to be paid only after the Federal Leader of the Australian Labor Party, Mr Gough Whitlam has given an unequivocal assurance during the campaign that a Government led by him will abolish the excise and not replace it with a sales tax or any other imposition.

That unequivocal undertaking has not been honoured.

Senator Jessop - Did not Mr Grassby make some statement at a public meeting in Berri on the same question?

Senator LAUCKE - I was present at a meeting in Berri when the member for Angas, Mr Giles, said in the public forum: 'I will support any move for abolition of the excise if you will give me now an unequivocal undertaking that no alternative impost will be charged on it'- and that was not forthcoming in the way it should have been at the time. It was devious. But thereafter an undertaking was given- and publicly- that the excise should be abolished. I have raised these matters because I feel it is my duty so to do in the interests of good and decent fulfilment of undertakings given, the lack of which is leading now to very great hurt and harm to this industry. In the same way there is a lack of appreciation of the needs of other sectors of rural industry before they emerge from the situations of adversity which they have gone through for years because of overseas prices and so on. I condemn these measures. They are part of the Government's overall planning and policies and one has to accept them for the time being. But I point out these things in disgust and dismay.

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