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Wednesday, 29 August 1973
Page: 517

Mr COHEN (ROBERTSON, NEW SOUTH WALES) - If honourable members opposite have finished their little argument I shall direct a question to the Minister representing the Minister for Customs and Excise who will recall that just after the 1971 Budget was presented I asked the then Minister for Customs and Excise a question about the practice of oil and cigarette companies of paying duty on excess goods prior to the Budget, which enabled them to make a profit of about $5m to which they were not entitled. Will the Minister inform the House whether the same practice was continued prior to the presentation of thu Budget and whether steps are being taken to end this obnoxious practice of profiteering?

Dr J F CAIRNS - Yesterday the Minister for Customs and Excise, whom I represent in this matter, made a statement in the Senate. I tabled it in the House last night. It was a statement about the excess clearances on high duty goods that are made, as a rule, in the weeks before the 'Budget is introduced. Senator Murphy pointed out that under existing legislation this practice cannot be prevented. He further pointed out that this year it appears that no excess clearances were made by oil companies of petrol and similar products in the pre-Budget period but, between the middle of July and the Budget, duty was paid on significantly greater quantities of both tobacco products and spirits than would have been normally required by consumers. During this period the volume of tobacco products in the hands of distributors and retailers had been increased by the equivalent of approximately 3 weeks normal requirements. The information available at present suggests that the 3 major cigarette companies have not attempted to make windfall profits as a consequence of the higher Budget duties. However, the distributors and retailers of Rothman products on the day before the Budget were holding, on the average, approximately 5 weeks' excess stocks, and ' distributors and retailers of products manufactured by W. D. 6 H. O. Wills and Philip Morris were holding slightly under 2 weeks' supply in excess of their normal stock holdings.

Excess clearances of spirits were greater than those of tobacco products. Spirit merchants, distributors and retailers are holding approximately 5 weeks' supply in excess of their normal requirements although this figure varies sharply between products of different companies. Senator Murphy's statement went on to relate that in the case of both tobacco products and spirits the overall pattern of excess clearances is similar in all States and similar to that which has occurred before every other Budget, whoever leaked the secret. These figures indicate that, on average, higher prices should not be charged for cigarettes and tobacco until early September, and for spirits until the end of September. I stress that. Given the quantities that the companies have withdrawn in the pre-Budget period, higher prices should not be charged for cigarettes and tobacco until early September and for spirits until the end of September. I have stressed the words 'on average'. There will, of course, be retailers and distributors who run out of old stocks of some lines earlier than the dates I have suggested. There will also be many others who will have some stock paid at the lower rate of duty for several months from now. This will be particularly true of many brands of spirits.

Mr McLeay - You are making a farce of question time.

Dr J F CAIRNS - It is important, I think, that this should be known. I know that those interested in spirits, like the honourable member for Boothby, might not want this information to be known, but I suggest that the honourable member have the same kind of respect for me that I will give to him, and 1 promise to repay him in similar coin. Senator Murphy went on to point out that steps will be taken to change the legislation to endeavour to prevent this happening in subsequent years.

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