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Wednesday, 2 June 1926

Senator CRAWFORD (Queensland) (Honorary Minister) . - When moving the adoption of this item, I stated that the purpose of the proposed increased duty was not to increase collections of revenue from the Customs, but to encourage the production of Australian whisky. I should like now to place before the committee certain figures which indicate .the effect which this increased duty will have upon the revenue ; because, whilst the purpose of the increased duty is not to obtain additional revenue, incidentally it will have that effect. In 1924-25, our importations of whisky totalled 1,147,011 gallons, which, at 30s. a gallon, yielded £1,721,978. In the same year, Australian whisky cleared from bond amounted to 127,291 gallons, upon which excise at 26s. per gallon was paid, amounting to £165,479, or a total from import duties arid excise of £1,887,457. Assuming that in the year 1926-27 there will be a total clearance from bond of 500,000 gallons- of Australian whisky, and that the same quantity of whisky is consumed in Australia, that would give us 774,302 gallons of imported whisky, which, at the increased duty of 35s. per gallon, would yield £1,355,028, and 500,000 gallons of Australian whisky at 26s. a gallon excise would yield £650,000, or a total of £2,005*028, or an increase for 1926-27, as compared with 1924-25, of £117,571. We are assuming that the consumption of

Australian whisky will increase from 127,000 to 500,000 gallons.

Senator Thompson - Another estimate makes the loss £294,000.

Senator CRAWFORD - It has been suggested that the same object might be accomplished by reducing the excise duty to 21s. If that were done, there would be a loss in revenue of £201,004, or a total loss of £398,571, compared with what is estimated will be the result under the Government's proposal.

Senator Thompson - After allowing for an increase in the consumption of Australian whisky?

Senator CRAWFORD - Yes, allowing for the same increase, but reducing the excise by 5s. a gallon instead of increasing the Customs duty by 5s. The reduced duties on other items for which the schedule provides, it is anticipated, will mean a decrease in Customs collections of between £750,000 and £1,000,000 sterling, so that it would be a serious matter if the committee decided to decrease the excise duty on Australian whisky instead of increasing the duty on imported whisky. Senator Thompson said that it was impossible to make whisky of the same quality in Australia as that which is manufactured in Scotland, because Scottish distilleries obtain their water from peat wells. If the honorable senator is correct, I am surprised that Australian water is used for breaking down Scotch whisky.

Senator Thompson - The honorable senator cannot put that over us.

Senator CRAWFORD - I understand that water used for breaking down imported whisky is either distilled or boiled. There are some people who condemn all whisky. I read recently of one man who said that all whisky should be called " distilled damnation." I do not know if honorable senators are prepared to go as far as that. I have never before heard it argued that Australian manufacturers should not get increased protection because they are not taking full advantage of existing import duties. The real difficulty confronting the Australian distilleries is not the price at which they have to sell, but the limited demand which exists for their product. If the output of existing distilleries can, with the assistance of nigher duties, be increased to 500,000 gallons a year, it may become profitable for others to engage in the industry. I understand that a prospectus has already been issued for the establishment of a distillery in Sydney. No opposition was raised when it was proposed to increase the import duty on brandy from 30s. to 35s. a gallon two years ago. The reason for increasing the duty on whisky is just as sound only it affects a different class of people. The barley growers in Victoria are likely to benefit by an increased duty on whisky, but the growers of doradilla grapes in other States benefited chiefly by the additional duties imposed on imported brandy. More Australian brandy is being manufactured and placed on the market than was the case two years ago, and less imported brandy is coming into the country. Senator Barwell says that the quality of Australian brandy is better than that of the imported.

Senator Sir Henry Barwell - No. I said the Australian prefers the Australian brandy. It suits his palate.

Senator CRAWFORD - An honorable senator, who is regarded as an expert, said that if two or three glasses of whisky of different brands were placed before some persons they could not detect the difference by the taste, but an expert could tell by the bouquet. Objection has been taken to higher duties on whisky on the ground that there is a combination of whisky distillers in Australia, but it is common knowledge that a larger and wealthier combination of Scottish distillers is in operation which is spending very large sums of money in advertising in Australia and in other countries. Their propaganda probably costs as much as does the whisky they sell there. Higher duties are necessary in order to meet this strong competition and the prejudice that a great many native born Australians have to the products of their own country. It is considered practically impossible for the Australian distillers to make any satisfactory progress unless this additional protection, which is small when compared with that given to other indus.ri es, is afforded. Wine, for instance, is protected to the extent of 12s. 6d. per gallon, which on an ad valorem basis would be equivalent to 200 per cent.

Senator Lynch - What is the percentage of the duty on whisky?

Senator CRAWFORD - With a 4s. margin it is from 15 per cent, to 17 per cent., but under the proposed duty it would be equivalent to 27-J per cent. This is about the only Australian product upon which protective duties have not been increased when compared with pre-war rates.

Senator Thompson - Is it not a war increase which has not been removed?

Senator CRAWFORD - There has been a greater increase in the excise than in the import duties so that the Australian distillers are in a worse position than they were before the war.

Senator Foll - But they are still able to sell bottled whisky at 3s. 6d. below the imported price. .

Senator CRAWFORD - They are practically compelled to sell at present prices owing to the prejudice against the Australian spirit. No one suggests that the Australian distillers are making much profit at the prices at present charged.

Senator Ogden - Why should there be prejudice against the Australian product?

Senator CRAWFORD - There is prejudice amongst a lot of persons in Australia, not only against local whisky, but against Australian productions generally. That is one of the difficulties with which the Australian manufacturers have to contend.

Senator THOMAS (NEW SOUTH WALES) - I have never heard any one complain of Australian sugar.

Senator CRAWFORD - There is no room for complaint, as it is 100 per cent, pure. Some honorable senator said that neither the Minister nor the Tariff Board had made out a good case for the proposed increased duty on whisky; but I think a much better case has been made out in support of the increase than has been made by those who are opposing it.

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