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Tuesday, 14 August 1906

Sir WILLIAM LYNE (Hume) (Minister of Trade , and Customs) - Iwish to make a short explanation with reference to the proposals relating to the import and Excise duties on spirits. I need scarcely say that I have been deluged with letters from various persons, most of whom wish that certain alterations shall be made in the proposals now before the Committee. As I stated previously, the proposals embody the recommendations of the Tariff Commission, with certain modifications. I also mentioned that the duties proposed by the Tariff Commission had been increased, in order to prevent a loss of revenue. An estimate has been prepared by the officers of the Customs Department, who believe that if the duties were altered in the manner suggested by the Commissdon, 204,000 gallons of imported spirits would be displaced by spirits of local production, and that£60,000 would thus be lost to the revenue. They estimate, further, that a. loss of £14,000 per annum would result from making a rebate of duty in respect to spirits under proof strength. In connexion with spirits for fortifying wine, there would be a reduction of revenue amounting to£6,500, the drawback allowed upon spirit used in wine afterwards exported would amount to £4,000, and the abolition of the duty on methylated spirits would involve a loss of £6, 000. It is estimated that the total loss of revenue would amount to , £90,500, and that would be a very serious matter. I should have preferred to accept the recommendations of the Commission, with some slight modifications, but the Treasurer naturally objects to the loss of revenue that would be involved. It is a great pity that the Treasurer cannot get along without any revenue, but he is deserving of every credit for endeavoring to maintain the returns;, so that he may be able to hand over to the States as large a sum as possible. The object of increasing the duty upon imported spirits from 14s., as recommended by the Commission, to 15s., is to obviate any loss of revenue. Honorable members will notice that the second paragraph, under the head of " Excise duties, " reads as follows: -


I am satisfied that the proposed duty does not bear a fair relation to the duty of11s. per gallon proposed to be levied upon brandy distilled wholly from grape wine. These duties have been fixed upon the recommendation of the Tariff Commission, and I shall presently read extracts from the evidence upon which the proposals are apparently based.

Mr Hutchison - They must have been the result of a mistake?

Sir WILLIAM LYNE - The first paragraph in the proposed Excise duties reads -

Brandy distilled wholly from grape wine by a pot-still or similar process at a strength not exceeding 35 per cent: overproof, matured by storage in wood for a period of not less than two years, and certified by an officer to be pure brandy, per proof gallon us.

Then comes the second proposal, under which a duty of 12s. per proof gallon is levied upon brandy which is distilled partly from .grape wine and partly from other materials, and which contains not less than 25 per cent, of pure grape wine spirit. I am urged that to make the comparison complete the duty of 12s. per proof gallon ought to be increased to 14s., because three-fourths of the brandy which is distilled partly from grape wine and partly from other materials is composed chiefly of spirit made from molasses. That is an inferior spirit, and its presence has the effect of making the whole of the brandy thus distilled inferior to brandy which is distilled wholly from pure wine spirit.

Mr Bamford - Has the Minster any evidence to support his statement?

Sir WILLIAM LYNE - Yes, I have. Further, the second proposal relating to excise offers an inducement to distillers to use spirit other than that which is distilled wholly from grape wine, because it can- be produced for about is. 6d. per gallon, whereas the better and the purer spirit cannot be produced for less than 3s. 6d. per gallon.

Mr Henry Willis - Molasses spirit can be produced for 6d. per gallon.

Sir WILLIAM LYNE - I dare say that the honorable member is referring to a recent report from the United States, where it is stated that spirit from molasses is being produced for 4d. per .gallon, and used for purposes other than human consumption. However, I am not prepared to deal with that matter at the present time. I mention it because I wish it to be thoroughly ventilated. It is a matter of very great importance that the public should be supplied with pure spirit, and it is the public interest which I regard as paramount in this connexion. Within the last few days I have had an opportunity of visiting various distilleries in South Australia, and I must say that- I have gained a very great deal of knowledge in regard to this particular question. Upon the present occasion I am simply giving the facts as they present themselves to my mind. Before we finally dispose of these resolutions, I think it will probably be found that it is advisable to make some variation in the duties proposed. That is why I emphasize the fact that the Government have submitted these resolu tions in their present form, because they embody the recommendations of the Tariff Commission. They were arrived at upon the evidence of officers - I cannot give the testimony of each officer - in the Department of Trade and Customs. Those officers were: - Messrs. H. D. Brown, Inspector of Excise, New South Wales; T. H. Norrie, Analytical Chemist, Customs Department, Sydney; W. E. Burrell, Senior Inspector of Excise, Queensland ; E. P. Clarke, Senior Inspector of Excise, South Australia; P. Awcock, Inspector of Excise and Distilleries, Western Australia. There were other outside witnesses such as Mr. E. W. Knox, general manager of the Colonial Sugar Refining Company, Sydney - there is no doubt that he is interested in the production of spirit from molasses - Dr. Fiaschi, and Mr. A. B. Holmes. In Victoria, the following gentlemen gave evidence: - Messrs. H. Brind, distiller, Warrenheip ; S. Joshua, managing director of Joshua Brothers Proprietary Limited, Melbourne; J. M. Joshua, C. P. Preston, Australian Distillery Company, South Melbourne; H. A. Preston, distiller, Abbotsford; and W. P. Wilkinson, Government Analyst for the State of Victoria. These were the principal witnesses who gave evidence before the Commission. After having analyzed their testimony very thoroughly during the past few days, it seems to me that the recommendations of the Commission are based upon, I will not say a mistake, but upon a miscalculation. But there is no doubt of one thing, namely, that the Treasurer cannot afford to lose all the revenue that would be sacrificed if we adopted their recommendations. Therefore the Government are compelled to submit proposals which otherwise they would not have made. I hope that honorable members - many of whom have particular knowledge of this question - will give this matter their very close attention. This morning I have been in consultation with the Comptroller-General, who has gone through these resolutions, and he is now framing certain alterations which he thinks ought to be made in them. These I hope to have in my possession before the debate closes.

Mr Higgins - Has the Minister no proposal to make now ?

Sir WILLIAM LYNE - I had npt much time to go into the matter this morning, but certain alterations are being drafted at the present moment ; and I should like to see them either in print or in typewritten form before I submit a definite proposition.

Mr Watson - Then we had better postpone the consideration of the matter.

Sir WILLIAM LYNE - No. I think that honorable members had better proceed with the debate, because I fancy that a good deal of information has been given to some of them concerning these questions, and it is just as well to have the matter threshed out.

Mr Higgins - We shall simply be beating the air.

Sir WILLIAM LYNE - I intend to proceed with the resolutions now, but at a later stage, when I have received the recommendations of the Comptroller-General, I will submit them to the 'Committee if I consider that they are of a justifiable character.

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