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Wednesday, 15 May 1957

Mr McEWEN (Murray) (Minister for Trade) . - I wish to refer to a matter that was raised by the honorable member for Chisholm (Sir Wilfred Kent Hughes). I refrained from replying to him immediately, because I understood that another honorable member wished to discuss the same matter.

Mr Pollard - Speak up! We cannot hear the Minister.

Mr McEWEN - The honorable member is not doing me any harm. All I want to do is explain briefly the facts that bear on import licensing as it relates to tea. The House will remember that tea was under strict control during World War II., and, indeed, after the war, for a different reason, until 1955. It was controlled by a Commonwealth Tea Controller during the war, and imported tea was handled by a limited number of those importers who had been in the trade before the war. After the war, when the Government wished to continue the payment of a subsidy on tea, which, as honorable members will recall, totalled, on occasion, £7,000,000 a year, the same kind of control was deemed to be necessary, and the same panel of traditional importers continued to handle it until 1955. Whether or not that is arguable, it at least explains why, until two years ago, the handling of imported tea was confined to a limited group of people. Since 1955, tea has not been controlled.

I can speak of licensing only with respect to the last twelve months. The intensity of import licensing in the last year is well known. All importers have been severely restricted. In those circumstances, the Government has felt that, although it was severely restricting the importing opportunities of business houses, it could not issue licences to newcomers in a trade which could be permitted within the set money ceiling only by further restricting the licensing and trading opportunities of those who were already in business, and who, of course, were already being very severely restricted. In the last twelve months, no new licences have been issued. There may be a few exceptions in relation to some commodities, owing to unusual circumstances, but, broadly speaking, no new licences have been issued to enable newcomers to enter into business.

That brings us to 1st April last. On that date, as the House knows, the general levels of import licensing were relaxed. A few days ago, the honorable member for Chisholm came to me in support of an application that had been made, or was about to be made, for the importation of some Formosan tea. To the best of my knowledge, that was the first application made by an intending newcomer in the tea importing business since the relaxation of import licensing restrictions, and it had the special aspect that it was a proposal to import tea from Formosa. As the honorable member knows, I indicated that I would interest myself in all that was implied in the application and I did so forthwith. I asked Mr. Crawford, the Secretary of the Department of Trade, and Mr. Rattigan, the senior officer who is in charge of licensing, to advise me on the policy implications. That is a normal thing for me to do, and I certainly offer no apology for having done it. Without direction by me, although I support what it did, since the application was supported and sponsored on the ground that there was to be a trial of Formosan tea, the department, at some level, made inquiries - very properly, in my opinion - as to whether Formosan tea was in fact being imported and was known in this country. It could not ascertain that from a better source than from people in the tea business. The answer to the inquiries was, quite simply, that Formosan tea was not being imported. Formosa is a country with which we have friendly relations. We hope to develop an extended trade relationship with it, and, on that ground, the department recommended to me, without any prompting, that a licence should be granted, in the terms of the request, for, I think, from memory, £3,000 worth of Formosan tea. The licence was granted in that normal way, and that is the end of the story.

It. is a matter for great regret that the honorable member for Chisholm should have announced publicly to the press, without consulting me, that I had acted contrary to the advice of the department. That allegation is not correct, and that is all there is to it. It is regrettable, but there it is. Having said that, I regard that as the end of the matter. It is as simple as that. The tea will be imported. If it proves to be desired by the Australian community, more licences will be granted in due course.

The fact of the matter is that we are licensing tea under the administrative control, which means that we allow into the country as much tea as is consumed here. But it is a different thing from having no control on the importation of this commodity, because it may be imported for two purposes - for consumption and for stockpiling. Where the Government licenses imports, for practical purposes without restriction, it retains the system of licensing so that our limited overseas exchange will not be frozen in the form of an accumulation of vast stocks which could have been built up only by using funds to the detriment of the importers of other commodities. Up to the present time, licences have been restricted, for the reasons that I have given, to the people who have been in the tea business for years. That is a policy which will not be continued. This is the first application since the relaxations of 1st April with respect to which we have found it possible to depart from that policy. The department is now in the process of trying to correct many of the anomalies that have arisen within the structure of import licensing. This is rather a long, difficult, and complex process, and the department's efforts are being directed, in the first place, to correcting anomalies as between existing traders. As soon as we can get round to it - and we are on the point of doing so now - we shall extend the examination of this problem of the correction of anomalies to the issuing of licences to newcomers into the business. I hope that that may be done soon.

Sir Wilfred Kent Hughes - Does the Minister really think that there is any necessity for import licences for tea at the present time?

Mr McEWEN - Only for the reason that I have mentioned: In our present circumstances it is necessary to license for the single purpose of avoiding excessive stockpiling in this country.

Mr Falkinder - That is bureaucracy.

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