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Wednesday, 2 June 1926

Senator CRAWFORD (QueenslandHonorary Minister) . - The purpose of the proposed increase in duty on imported whisky is to protect those engaged in the manufacture of whisky in Australia. There are four distilleries in the Commonwealth. When this bill was introduced in another place, three had closed down, whilst the fourth was working only quarter time. Since the imposition of the duty, all the distilleries have recommenced operations, and are now employing over .100 men. They utilize Australian barley to the extent of a bushel for every 2 gallons of whisky produced, so it cannot be said that this increase is another burden on our primary producers. It is not proposed for the purpose of increasing the Customs revenue. It is considered that, since there is a demand for whisky, its production in Australia should be encouraged under conditions that will ensure the manufacture of pure spirit. Distillation is carried on under the strict supervision of excise officers. The product then has to be matured in the wood for two years.

Senator Grant - Did not the Minister mean that the spirit has .to be matured in the wood for five years?

Senator CRAWFORD - -No ; it has to be matured in the wood for two years. Supervision is not possible in the case of imported spirits, and there is reason to believe that a considerable quantity of the imported whisky, which is sold under a Scotch label, is not what it is represented to be, viz., a pot-still whisky, the product of barley.

Senator Thompson - It is claimed to be a patent, not a pot-still whisky.

Senator CRAWFORD - A good deal of it is blended spirit. Some of it is made from grain, but a considerable proportion is made from other products.

Senator McLachlan - The British excise regulations do not allow that.

Senator CRAWFORD -They do allow it; but. not, I understand, in the case of whisky intended for consumption in Great. Britain.

Senator McLachlan - They do not allow it, either, in the case of whisky for export.

Senator CRAWFORD - They do. It may be exported in bulk if it is accompanied with a certificate of description. It is then bottled in Australia and sold as something else.

Senator Sir HENRYBARWELL (South Australia) [3.25] -When I suggested just now that the Minister should state the case for the proposed, increase in duty, I certainly thought wc might get from him some information to justify the imposition of the duty. I do not think, and I believe the committee will agree with me, that the Minister has said anything to vindicate the action of the Government. He has told us that tho duty is not for revenue purposes, but to encourage the development of the industry in Australia. I know very well that the policy of the Government is to give sane and reasonable protection to efficient Australian industries. I am not going to say that whisky making in Australia is not an efficient industry. It has been established as an Australian enterprise, and, as such, is entitled to reasonable protection. But the point I wish to put is that the industry has ample protection at the present time. The Australian whisky is placed upon the market at 76s. a case, as compared with 100s. to 114s. a case for imported whisky. At per gallon the Australian product realizes 9s. to lis., as against 27s. for the imported article; and at per bottle, 7s. 6d. and less, compared with 10s. 6d. upwards for the best known imported brands. In most places it is sold by the nobbier, at, I think, 6d.. against 9d. and lOd. for the imported whisky in Victoria, and I think, ls. in Western Australia.

Senator Grant - How much is it in Queensland ?

Senator Sir HENRY BARWELL - I am informed that in Queensland a nobbier of Australian whisky costs 6d., and imported is ls. Surely that is adequate protection. I have been looking through the report of the Tariff Board and I find that that body states that the imported brands are better known than the Australian whisky. That all depends upon what is meant by being better known. I should say that the imported whisky is more favorably known. Everybody who drinks whisky knows that Australian whisky is sold at 3d. and 4d. a nobbier less than imported whisky. Most whisky drinkers, I suppose, have sampled the Australian product. I have on more than one occasion, and all I can say is that the heaviest protection possible will not make me drink it if I can get Scotch whisky. Senator Reid. - The honorable senator's taste must be demoralized.

Senator Sir HENRYBARWELL.Not at all. I think I can claim to be a judge of good whisky. Most whisky drinkers will agree with me that the Australian product cannot be compared with the best Scotch whisky. The Tariff Board also states that there is an unwarranted prejudice against Australian whisky. I do not think for a moment that there is, but it is not the same article as the Scotch whisky. I am referring to the taste. There is a general smile on the face of honorable senators, some of whom know nothing whatever concerning the subject, because they do not drink whisky.

Senator THOMAS (NEW SOUTH WALES) - Hear, hear!

Senator Sir HENRYBARWELL.The honorable senator is not qualified to speak upon this subject.

Senator THOMAS (NEW SOUTH WALES) - I am listening to the honorable senator's words of wisdom.

Senator Sir HENRY BARWELL - I trust the words of wisdom will have some weight with honorable senators who know nothing whatever about the subject. I notice in the returns to hand that from the beginning of September to December, 1925, when the higher duties were in force, importations of whisky fell off to the extent of 101,000 gallons. During the same period the production of Australian whisky was increased by 26,000 gallons, and the total consumption decreased by 75,000 gallons. I can understand Senator Thomas saying that that is very desirable, but the reduced consumption does not mean that people who have ceased drinking whisky have become teetotallers. They are probably drinking something else that is not as pure as whisky. On medical advice, I consume whisky to the exclusion of any other alcoholic liquor.

Senator Crawford - Perhaps the people are drinking more Australian wine.

Senator Sir HENRY BARWELL - I do not think a whisky drinker would substitute wine, excepting perhaps at meal times. The increased duty is penalizing consumers.

Senator McLachlan - In two ways.

Senator Sir HENRY BARWELL - The honorable senator is quite right. It is said that 90 per cent. of the Australian whisky is sold in bulk, and that 95 per cent. of imported whisky is bottled and cased in Australia, which means that this work provides employment for a large number of persons. Employment is given to those engaged in the manufacture of bottles, cases, cardboard packing, and straw envelopes, in addition to those actually employed in bottling. So far as I can see, the intention of the Government is to prohibit the importation of whisky, if that were possible, simply by making the price prohibitive. The extra duty is not required to encourage local production or for protection purposes. The Minister for Trade and Customs (Mr. Pratten) stated in another place that 500,000 bushels of barley were required this year in connexion with the manufacture of Australian whisky. Any one who knows anything at all about the subject will realize the absurdity of such a statement. From 1 bushel of barley 2½ gallons of proof spirit is distilled, so that from 500,000 bushels of barley 1,250,000 gallons of proof spirit could be distilled, which is equal to the total consumption of whisky in Australia. The returns show that the quantity of Australian whisky taken from bond last year totalled 127,000 gallons, which would absorb only 60,000 bushels of barley - a mere bagatelle as compared with the total output of Australian barley. If the Australian industry should be further encouraged it would be preferable to reduce the excise rather than increase the Customs duty as is proposed. Every case that comes before us for increased duties should be based upon a just principle. No case whatever has been made out by the Minister to justify the increase, and, before we can be expected to support any increase, the Minister will have to prove that it is necessary.

Senator THOMAS (NEW SOUTH WALES) - Does not that apply to every item?

Senator Sir HENRYBARWELL.Not by any means. I am in favour of reasonable protection, and I believe that in the schedule there are instances where the increased duties are reasonable. In this instance the additional duties are not required for revenue purposes, and are certainly unnecessary to protect the industry. I asked the Minister to state the case for the Government on this item, as I was in the dark as to the reason actuating it in submitting such a proposal, but his statement shows that additional duties are not required for the protection of the Australian industry. Even if three distilleries were closed, and a fourth was working only quarter time, before the rates were raised the Australian whisky producers had a margin of from 24s. up to nearly 40s. a case and from 3d. to 4d. a nobbier to work upon.

Senator Crawford - The present protection amounts to only 4s. a gallon, whereas Australian wine is protected to the extent of 12s. to 15s. a gallon.

Senator Sir HENRY BARWELL - Surely that is no argument. The question is whether this industry needs increased protection. I maintain it does not, since it has a fairly wide margin on which to operate. It cannot be said that they cannot compete because the protection is insufficient.

Senator Crawford - Evidently it was not profitable to sell at the price mentioned.

Senator Sir HENRYBARWELL.They could increase the price by 10s. to 12s. a case, or anything up to 20s. a case, or by 2d. per nobbier, and still be able to undersell the imported article. I do not intend to vote in the dark for increases of this nature. If the Government can show that any of these additional duties are necessary to provide reasonable protection to any established industry, it will have my support. I trust honorable senators will stand up to the principles which they enunciated on the second reading of the bill, and decline to support higher duties which cannot be justified.

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