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Thursday, 14 October 1971
Page: 2349

Mr WHITLAM - I direct to the Minister for Customs and Excise a question relating to a matter raised by the honourable member for Robertson a fortnight ago, namely, the loss to revenue through the practice of paying duty at the old rate on the eve of a budget. I have not since pursued my colleague's question because the Minister was reported on Saturday week as saying that he was seriously considering giving details of these transactions to the Parliament to discourage similar moves to deprive the Commonwealth of revenue in future years. I ask him: Did revenue lose $5m this year at the hands of tobacco and oil companies through this practice? Can he say whether such prepayments have been made to the same degree before every Budget or only before those Budgets in which duties are thought likely to rise? Has he been advised, as he is reported to have said, that the Commonwealth has no constitutional powers to stop the practice? If not, what steps is he taking to stop the practice which - again he was reported as saying - he was glad had come to light?

Mr CHIPP (HOTHAM, VICTORIA) (Minister for Customs and Excise) - There are 2 aspects of the honourable gentleman's question which I would prefer not to answer now in courtesy to his colleague who has 2 questions on the notice paper this morning concerning the position in past years. All of what the honourable gentleman has said is true. There have been evasions - if I may use that word - of revenue by producers and manufacturers of excisable products this year to an amount of approximately $5m. As I also mentioned in speaking to the Estimates debate last Thursday evening there were manufacturers of other excisable goods, such as beer and spirts, who gambled as did the petrol companies and the tobacco companies, but lost because the excise on those goods did not go up. I am informed that this is a practice which has gone on almost since federation on the eve of a Budget. The gambling goes on by individual taxpayers who can manoeuvre their disclosable income in anticipation of increased income tax. It goes on when the Tariff Board and Special Advisory reports are about to be released.

There seems to be nothing we can do legislatively to stop this practice. I have inquired into this matter since my appointment as Minister for Customs and Excise, and I have learned that some years ago a predecessor of mine was so concerned about it that he went to the Government and the Government, being concerned about it in principle, obtained top legal advice and was informed that constitutionally it was not possible to do anything about it in Australia. The reason my predecessor went to the Government, as I understand it, was that there is legislation in the United Kingdom. I am not a lawyer and when I asked why Britain could take action and we could not, the answer, I understood, was that we have a constitution and Britain has not. This is the difficulty that exists. However, as I said in my speech the other night, not only am I concerned at the loss of revenue, I am even more concerned that the savings gained by the gamble taken by these manufacturers are not being passed on to the consumers. I am still examining nonlegislative ways not to stop this practice but perhaps to discourage it. I will report to the House as soon as any possible solution comes up.

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