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Tuesday, 11 December 1973
Page: 2635


The PRESIDENT -Is leave granted? There being no objection, leave is granted. (The speech read as follows)-

This Bill is aimed solely at giving effect to the Budget proposal to abolish the exemption from sales tax applicable to non-alcoholic carbonated beverages containing not less than 5 per cent by volume of Australian fruit juice or its equivalent in concentrated form. The ostensible purpose of the exemption was to enlarge the market for Australian fruit but although it has provided further outlets for some varieties of fruit, the additional returns to growers represent only a fraction of the cost of the exemption which has been running at about $25m a year. As the Treasurer (Mr Crean) indicated in his Budget Speech, this is a classic example of using the wrong instruments to achieve an objective.

The government is prepared, if the need arises, to provide funds to assist with the reconstruction of any sectors of the fruit growing industry affected by the withdrawal of the exemption. As has been announced, the fruit growing reconstruction scheme is to be extended to 30 June 1974. The Bill provides that the withdrawal of the exemption is to have effect as from 22 August 1973, the day after it was announced in the Budget. This accords with the practice, aimed at avoiding disruption of trading, that sales tax changes announced in the Budget become operative on the following day. The effect of the withdrawal of the exemption is that all carbonated soft drinks will be taxable at 15 per cent as from 22 August 1973. Since that date, manufacturers have been acting in anticipation of the passage of the Bill by charging sales tax on these drinks. A memorandum explaining the provisions of the Bill is being circulated for the information of honourable senators. I commend the Bill to the Senate.







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