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Thursday, 28 July 1921

Senator RUSSELL (Victoria) (VicePresident of the Executive Council) . - I was impressed by a phrase used by Senator Lynch, namely, that certain duties appear to have been imposed without rhyme or reason. I trust that this Committee will neither act without rhyme or reason, nor for merely sentimental considerations, but that it will carefully examine the facts. Australians do not want to drink German or Japanese or other beers; the local product is good enough for any one. Before the war the retail price for Beck's German lager was about 7d. for a pint bottle. The general duty upon bottled beers is now 3s. 6d. per gallon. If that imposition is not sufficiently heavy, there is a prohibitive freight rate.

Senator GUTHRIE (VICTORIA) - At present, but not for long.

Senator RUSSELL - The difference between the Excise and the Customs duty represents the degree of protection afforded to the Australian brewer. The Government have been most careful to adjust this difference, and local brewers appear to be well satisfied. At any rate, there has been no protest, and the browns nave prospered. Senator Guthrie's proposal really amounts to a prohibition. He seeks to add ls. per gallon.

Senator GUTHRIE (VICTORIA) - Twopence per bottle.

Senator RUSSELL - In addition to the amount already imposed under the schedule. The difference between the present general rate and the Excise rate amounts to ls. 9d., which is equivalent to a clear protection of ls. 9d. per gallon ; and I emphasize that, since the Australian brewers have not protested, it may bo taken for granted that they are satisfied with the degree of protection afforded them.

Senator Wilson - If the present duty is prohibitive, what harm can follow from making it a little more so?

Senator RUSSELL - There is no doubt about the completeness of the. prohibition. With existing freights added to the general rate of duty, there is no hope of the German brewer competing in this country. If Senator Guthrie's request is agreed to, it will involve the presentation to Australian brewers of ls. for every gallon consumed, which is to say, 69,000,000 shillings.

Senator GUTHRIE (VICTORIA) - Would not that be better than to present the Germans with the money?

Senator RUSSELL - But I have already pointed out that there is no hope of the Germans competing here. Why, then, seeing that the brewers are satisfied, should the additional ls. be. given to them?

Senator GUTHRIE (VICTORIA) - The Australian sugar-grower, hop-grower, barley-grower, and bottle-maker - all will be benefited.

Senator RUSSELL - There can be no justification for giving the Australian brewer so huge and unexpected a bonus. If the increase of ls. were granted, and the Government were to make an equivalent addition to the Excise duty in order to maintain the present margin, the Excise duty would be higher than the British preferential duty.

Senator GUTHRIE (VICTORIA) - Would that not be all the better for the finances of the Government ?

Senator RUSSELL - If British beer could be imported at the rate of1d. per pint less than the cost of beer in Australia, the local industry would immediately suffer.

Senator PRATTEN (NEW SOUTH WALES) - No attempt is being made to alter the British preferential rate.

Senator RUSSELL - I repeat that if ls. is added to the general rate, that will involve an equivalent increase of the Excise duty, with the result that the British preferential rate will actually be lower than the Excise. The effect of adding ls. to the general rate would be, I repeat, to present that ls. to the Australian brewer, who ha3 neither asked for it nor is entitled to it.

Senator Elliott - Would he raise his price by a shilling? He could not.

Senator RUSSELL - I do not know; but he would have the chance to do so. I know one or two Australian brewers, and I have no hesitation in saying that they would take advantage of the opportunity to put up the price.

Senator GUTHRIE (VICTORIA) - They are not doing too well now.

Senator RUSSELL - I should like positive proof of that statement. While I agree with the sentiment that we do not want German or Japanese beer here, I warn the Committee that they will not cure Australia's troubles in this direction by giving bonuses to brewers.

Senator PRATTEN (NEW SOUTH WALES) - I most strongly object to that phrase.

Senator GUTHRIE (VICTORIA) - This is a Tariff. Nobody suggested giving bonuses to brewers.

Senator RUSSELL - I am telling the Committee what the effect of the proposal will he. Is the Committee prepared, while increasing the import duty in the general Tariff by1s., to add1s. also to the Excise duty on Australian lager? I am not suggesting that as a remedy, but if the Committee does not adopt, that course it will increase the effective protection on the Australian article by ls. a gallon. The most effective protection we have had against foreign beer has been the embargo on imports.

Senator GUTHRIE (VICTORIA) - That will not last as long as the Tariff.

Senator RUSSELL - I think that what is done in the future will depend on in- ternational agreements when peace is finally declared.

Senator GUTHRIE (VICTORIA) - That relates only to German lager. What about the American or the Japanese?

Senator RUSSELL - I do notthink any comes here from America or Japan.

SenatorGuthrie. - I have drunk lager from both countries.

Senator RUSSELL - My information is as follows : - " The great bulk of imports is, and has been always, British. Prior to the war Germany supplied about 20 per cent, of the total imports. During the war a small proportion of Danish beer was imported. The small imports in 1917-18 and 1918-19 are due to the prohibition of imports dated 10th August, 1917."

Senator Drake-Brockman - If the bulk of the imports is British, your argument about the price going up here has not very much in it.

Senator RUSSELL -No; but if we allow a margin of1s. 9d. per gallon on Australian beer, and the proposal to increase it by1s. is adopted-

Senator Drake-Brockman - This proposal is not to interfere with the rate in the British preferential column.

Senator RUSSELL - The Excise Tariff Bill, which the Senate has yet to consider, fixes the Excise on beer manufactured in Australia at1s. 9d. a gallon. If we increase the import duty in the general column by1s. a gallon, and do not increase the Excise duty by1s., that will mean an increase of the margin by1s.

Senator Drake-Brockman - -That is in comparison with the import duty in the general column, but not in connexion with the British preferential column, and you say that the bulk of the imported stuff is British.

Senator RUSSELL - If we leave the Excise duty at1s. 9d., we shall be giving the Australian brewer 1s. per gallon more protection than we think he is honestly entitled to.

Senator PRATTEN (NEW SOUTH WALES) - As against German lager beer only, but not against British.

Senator RUSSELL - If we increase the Excise duty to meet the difficulty about the German article, it will make the Excise in Australia1d. per gallonmore than the import duty on British beer.

Senator PRATTEN (NEW SOUTH WALES) - These . are purely import duties. The Excise duty is not in question.

Senator RUSSELL - Does the honorable senator suggest that the import duties have no relation to the Excise duties?

Senator PRATTEN (NEW SOUTH WALES) -.- The only question is : Are we going to increase the difference between German and British lager beer in our Tariff?

Senator RUSSELL - The honorable senator wants to alter a basic principle. We must consider, in respect of all these articles, the Excise duty in its relation to the import duty to ascertain what encouragement is given to the Australian industry. The Government propose a protection of1s. 9d. a gallon to the Australian article. If the import duty in the general column is increased by1s., it will mean a protection of 2s. 9d. per gallon.

Senator PRATTEN (NEW SOUTH WALES) - We are giving a difference of1s. 3d. between the Excise duty and the British preferential duty.

Senator RUSSELL - I am speaking of the general Tariff rate. Senator Guthrie's proposal is to make the import duty 4s.

Senator GUTHRIE (VICTORIA) -Four shillings per gallon in bulk and 6s. in bottle.

Senator RUSSELL - That is even worse than I thought. It will increase the margin by1s.

Senator GUTHRIE (VICTORIA) - The margin in favour of Australia against Japan.

Senator RUSSELL - Not necessarily against Japan.

Senator GUTHRIE (VICTORIA) - I propose to give the, Australian brewer a protective rate of 4s. a gallon against foreign countries, as compared with a protective rate of 2s. a gallon against the British article. I am not proposing to interfere with the British preferential rate.

Senator RUSSELL - If1s. 9d. a gallon is a sufficient protection to enable the Australian brewer to command this market-

Senator GUTHRIE (VICTORIA) - But it is not.

The TEMPORARY CHAIRMAN (Senator Buzacott - Order! The honorable senator has exhausted the time allowed under' the standing order.

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