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Tuesday, 15 May 1928

Mr PARSONS (Angas) .- Earlier in the debate on this clause I exhausted my time limit, but having had the opportunity of listening to later speeches, including that of the honorable member for Henty (Mr. Gullett), who has moved an amendment to the clause, I now return, invigorated and refreshed, to the debate. The honorable member for Henty has taken up the position that the wine industry does not provide the revenue with which to pay the bounty, which, he says, is provided by the consumer. That argument may be applied to many things. The honorable member may say that the land and income taxation and other rates which he himself pays, are really paid, not by him, but by the consumer or the general public of Australia. His contention is far-fetched. I should like to remind him that the grape-growing industry has provided more revenue than any other industry. The growers have not only to bear the excise duties, but also to pay the ordinary rates and taxes of the country. No other country in the world imposes excise on fortifying spirit for wines, with the possible exception of Italy, which country, I understand, makes a small charge to cover the cost of supervision, The honorable member for Henty also referred to the increased planting of doradillo vines as the result of the wine bounty; but I point out that that has nothing to do with the present position of the industry.

Mr Gullett - I am afraid that the honorable member was not in the chamber when I was speaking.

Mr PARSONS - I listened to the honorable member's speech, and made a note of some of his remarks. He really was not conversant . with his subject. Leading up to the moving of his amendment, he stated that there had been large plantings of doradillo vines since the payment of the bounty; but I would inform him that within the last few years practically no doradillos have been planted at all. Mr. Gursansky, the President of the Barossa Grape-growers' Association, and Mr. Salter, the President of the Federal Viticultural Council, are of the opinion that although the amendment may have emanated from the honorable member with the best of intentions, it would not have the desired effect, because it would be quite easy for a winemaker to keep separate any wines crushed from grapes, which, under the amendment, would be ineligible for the bounty. The wine-maker would export only wines made from grapes, for, which the fixed price had been paid, and which were eligible for the bounty. Wines made from grapes of later plantings, and in consequence, ineligible for the bounty, would be sold locally. Being aware of this and of the over-planting of some varieties of grapes, and with a view to trying to find a solution of this problem, I made a suggestion to both of these gentlemen. They agreed that perhaps the object of the amendment might be achieved by providing that the price fixed by the Government should not apply te- any grapes that were planted after a certain date. A wine-maker would then be able to pay what price he liked for those grapes, and the grower would think twice before he planted further vines. That would certainly have a restraining effect on planting, whereas the amendment' of the honorable member for Henty, if included in the clause, would be entirely ineffective. It has been said during the debate that the amount of the bounty paid has exceeded all expectations, and for that reason, should be reduced. I should like to remind honorable members that the excise received from this industry also has exceeded all expectations, and that it has practically doubled during the period that the bounty has been in operation. It has also been stated that the amount of the bounty is altogether too great considering the price that the wine-makers receive for the wine exported. That is not a fair argument. We must take into consideration the whole ramifications of the wine industry, including the Australian consumption, the quantity of grape juice that is used in the manufacture of grape brandy, and also the export trade, and compare the bounty paid with that and the excise received. If we do that, we shall find that the bounty is costing this country very little indeed. I discussed this aspect with Mr. Gur.sansky, of Tanunda, who put the views of the grape-growers before me. He pointed out that the probable yield of wine next year would be 20,000,000 gallons. Owing to the severe frosts this season, and to the weather conditions generally during vintage, there has been a falling-off in output, but there will be a bumper crop next year, because the vines that this year were adversely affected by frost, will be all the more prolific because of the period of rest. In addition, several thousand acres of vines will be coming into bearing. The position is that in a few years' time we shall produce 25,000,000 gallons of wine. The Australian consumption is 13,000,000 gallons, and about 1,000,000 gallons are exported to India and ' New Zealand. Great Britain may, in the near future, absorb 5,000,000 gallons of our wine. At present we are exporting a little under 2,000,000 gallons to Great Britain, and if this Government is to do anything at all to assist the industry, its efforts must be in the direction of increasing the opportunity of selling our wines in Great Britain, instead of reducing the bounty and making the exportation of wines to that country more difficult than it is at present. We have also to contend with the competition of South Africa, which has an arrangement with the Vine Products Limited, of Great Britain. That country is also planting at the rate of 3,000 acres a year, and will, in time, be a serious competitor with us. South Africa can land its wines at the best time on the British market, at a cost of 8s. per gallon, as against 9s. Id. in the case of Australian wines. It has been stated that the wine industry has done little, if anything, to improve the position overseas. I understand that approximately £250,000 has been expended by the wine industry during the last two years in advertising in Great Britain. That information was supplied to me by Mr. Gursansky Early in the discussions on this bill I referred to the remarks made by the Prime Minister (Mr. Bruce) when he first introduced a Wine Export Bounty Bill in 1924, and quoted him as having said that it might he asked why the excise duty should not be reduced, seeing that it was imposed as a war measure, and the war was over, but that after consultation with the industry and representatives of the growers it had been decided to let the excise duty remain, because it would provide a fund out of which to pay the bounty. When the Minister was replying he said that I had said that the excise duty was imposed as a war measure and that now the war was over it might reasonably be cut out. I made no such suggestion. I merely quoted what the Prime Minister had said. As a matter of fact I agree with those engaged in the industry that the best thing to do is to leave the excise duty where it is and leave the bounty where it is. I should not like my constituents to think that I was so ignorant of the position of the industry that, contrary to its wishes, I would favour the removal of the excise duty. In Great Britain at the present time there are over 3,000,000 gallons of Australian wine in bond. It is unsold. Honorable members on both sides of the chamber have asked why this should be. The reason for it forms one of the strongest pleas for the retention of the bounty at its present rate, and it is that the wine is not saleable at its present price. If Australian wines were receiving a great measure of benefit from the operation of the British tariff - the Minister would have us believe they are - their price on the British market would be lower than that of foreign wines, and thus they would be in a favorable position to compete with the so-called British wines; they would not be in bond, and the wine merchants of Great Britain would be anxious to get them out of bond and sell them, because they would be the best' line on the market if only the price was right. But the price of Australian wines is not right, and in consequence large quantities still remain in bond; the export trade has fallen off, and the growers are afraid of what their position will be next vear with a bumper crop. The wine consumption of Great Britain is 16,000,000 gallons a year, and 80 per cent, of that is cheap wines sold at about 2s. 6d. a' bottle. There is, therefore, a ready market for 13,000,000 gallons of low-priced wine, and the 3,000,000 gallons qf Australian wine now in bond would easily be absorbed in supplying portion of that 13.000,000 gallons if the wine sellers of Great Britain could put it on the market at a price which would enable it to compete with British and foreign wines. Several telegrams have passed between Mr. C. . S. Panton, secretary to the Federal Viticultural Council and Mr. L.N. Salter, the president of the council. I shall read them. The first, dated the 2nd May, is from Mr. Panton to Mr. Salter - "Paterson desires know whether industry would prefer honoring all genuine contracts ft,t ls. 9d. for '27 vintage or as alternative concession on whole balance '27 wine. Concession indefinite but might amount to ls. 4?d. per gallon. Cabinet discussing matter to-day. Awaiting your immediate reply by urgent wire."

The reply from Mr. Salter was -

Council claims all '27 and '28 made in accordance with Government regulations should receive ls. 9d. bounty.

Mr. Pantonthen telegraphed

Council's claim as stated your wire irrevocably turned down. Government desire answer to alternative proposition set out in my wire this morning. Am returning to-night. Please wire me Sydney.

The reply he received from Mr. Salter was -

Claim as stated in my wire cannot honestly be disputed. Government must take full responsibility for any alteration.

I also place the responsibility on the Government. I disclaim any connexion with the present proposal. I am absolutely opposed to it, and in that opposition I am supported by the whole of the grapegrowers of South Australia, who represent 80 per cent, of those engaged in growing grapes for the manufacture of spirit, and I think I am also speaking on behalf of a large proportion of the wine-growers of the rest of Australia. A number of comments concerning the position of the grapegrowers have been made by gentlemen who are well fitted to speak on the subject. This is the opinion expressed by one grower in Tanunda -

But ahead of us awaits the 1929 vintage, which, provided reasonable conditions prevail, should reach the 1927 total of 20,000,000 gallons for the Commonwealth. On that vintage 3,000,000 gallons cannot find purchasers, and is eating up storage charges in London bonded warehouses. If this be the case with wine exported under the bounty of 3s. per gallon, with exporters asking for only a bare margin over cost in order to attract buyers, how much of the 1929 export surplus will be unsaleable, with the makers compelled to ask a higher price in order to make up even a little of the 9d. reduction in the bounty? And, if the wine-makers see no prospect of exporting the surplus over Australian requirements of the 1929 vintage, will they be prepared to purchase more grapes than they can find a market for as wine? The position is undoubtedly serious, and, like in all crises through which the industry has passed, the grower has generally been the chief sufferer.

This gentleman also says -

The wine-maker has, to his credit, purchased more than his requirements rather than close down on his growers before the whole crop was harvested, and has found no compensation awaiting him by way of improved markets. But with prices at a high level, made compulsory by government regulation, with the general financial depression restricting trading credits, and with no prospect before him of disposing of a heavy vintage overseas, the one course open to the maker will be to buy only such quantities as will be necessary for his requirements, and, provided the London market remains as at present, his requirements will be 3,000,000 gallons of sweet wine less than can be made from grapes available. Allowing for the wine distilled to furnish the spirit for these 3,000,000 gallons, it represents in all about 35,000 tons of grapes, for which there may be no buyers.

The Government has fixed the price of grapes. There is an old saying that you can take a horse to water but you cannot make him drink. I am entirely in accord with the policy of fixing the price of grapes, but if the wine-maker has no outlet for his wine, he will only buy sufficient grapes at the fixed price to produce the wine for which he has an outlet. The balance of the grapes will be left ou the vines. Of what use is it to get a better price for one's grapes if one can dispose of only three-fourths of them ? If the export trade becomes entirely unprofitable, the only course open to the wine-maker will be to cut out his export trade. With the cutting out of the export trade away goes the only hold the Government has on the wine-maker to compel him to pay a fixed price for the grapes he buys; the wine-maker not being in receipt of any bounty will be able to pay what he likes for his grapes.

Mr Foster - And the growers will be in the old position again.

Mr PARSONS - That is so. Quite recently I was in conversation with a wine-maker, whose advice was to " Out the bounty out altogether." I asked him what that would mean. He said - "We will get back to normal." I asked what that meant, his reply was - " Ordinary normal conditions." I wanted to know how the grower would be affected, I was informed that the grower would get " a reasonable price for his grapes," and when I asked what the wine-maker considered a reasonable price for grapes, the reply was - "£5 a ton for doradillos; £6 a ton for lexias; and £7 a ton for shiraz grapes." The prices for these grapes at the present time are £6, £8 and £10 10s. respectively. That will be the position of the growers when this bill is passed. Another prominent grower of Tanunda has expressed himself in the following words : -

Now, if we get a slump next year, the Murray people will be yelling for help; it is a way they have when anything goes wrong -

I do not agree with that -

All irrigation lands are government leases, not freehold. Millions of public money are locked up in the irrigation settlements, and in addition to this, the soldier settlements are a government pledge to provide returned soldiers with a reasonable livelihood. If a slump comes, the Murray will be the first to suffer, as, instead of purchasing spirit from the Murray distilleries, the wine-makers in Barossa will have sufficient grapes at their door to provide for their needs.

I do not want to keep slogging at this matter. Surely the Minister has heard enough to convince him that he has made a false step. It is better to retreat from a false position than to butt your head against a stone wall, because you have not the moral courage to beat a retreat. " To err is human; to forgive, divine." If the Minister will admit that he has erred, we shall excuse him because he is human, and he will have the divine forgiveness of the whole of the vine producing districts of Australia. I want to give the committee the real reason why this reduction in bounty has been made and my authority is the Treasurer. After a visit to the grape districts of Victoria where he interviewed many grapegrowers, the Treasurer returned to Canberra and said that the grape-growers realized that at a time when the Commonwealth was in a financial difficulty the reduction of the wine bounty was inevitable. The comment by the Murray Pioneer of Renmark was -

Hitherto we have been assured that the proposed reduction had nothing to do with the financial position, but was being made because the industry, and especially the working wine-makers, were making excessive profits.

If the Treasurer had gone into the grapegrowing districts of South Australia his eyes would have been opened; he would have found that, so far from this agitation having been promoted by the winemakers, the growers were united to a. man. Grower after grower at Waikerie said to me - " What has gone wrong with Mr. Paterson? I never thought he would do such a thing against the primary producer." That remark was first made to me by a member of the Country Party, and one of the keenest supporters of the Minister for Markets in the Murray valley. When a man's friends turn from him he should accept that as an indication that he has taken a wrong step. I appeal to the Minister and to the committee to realize that the growers are reasonable men, who know their business, and are working hard to stabilize their industry. They honestly believed that the bounty was fixed at ls. 9d. for three years. The Growers' Cooperative Distillery at Waikerie has a large quantity of wine which it cannot export. These co-operative distilleries are in the worst position because, unlike the proprietary companies, they have not great financial resources to support them during a temporary cessation of the export trade. The growers who were relieved by the Commonwealth of indebtedness to the amount of £200,000 because Parliament realized that they could not afford to pay it, and who were forced to approach the State Government for advances after the disastrous frosts of last year, will be unable to export their wine because the Government's action in reducing the bounty is placing them in a worse position than they occupied in 1924. As the years go by a man's adaptability diminishes, and he is less capable of turning to new methods of earning a livelihood. The Government would have been more humane had it forced these growers out of the industry in 1924 instead of encouraging them to fight on for four years and then letting them down.

The TEMPORARY CHAIRMAN (Mr Watkins - Order! The honorable member's time has expired.

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