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Tuesday, 13 October 1970

Mr CHIPP (Hotham) (Minister for Customs and Excise) - in reply - 1 compliment all speakers in the debate for the constructive comments that have been made about the 4 Bills before the House, particularly because most of them involve provocative and challenging subjects. I will comment briefly on some of the issues raised. The theme of the member of the Australian Labor Party who led for the Opposition seemed to be that the taxes in question were hidden taxes, indirect taxes, to which the Labor Party was categorically opposed as a matter of political and fiscal philosophy. This might sound fine as a speech theme. As a piece of philosophy it does sound good to the body politic, but promises have to be examined in the light of performance. I do not have at my disposal the current break-up of the percentage of indirect taxes raised in proportion to direct taxes under a Liberal-Country Party Government but I would be astonished if it rivalled the performance of the last Labor Government which, in its last year of office, raised 52 per cent of its total tax income from indirect taxes. This was the highest incidence of indirect tax raising by any government since Federation.

Mr Crean - Any Commonwealth Government, but what about the States?

Mr CHIPP - We happen to be in a Commonwealth Parliament, and if the Opposition is going to challenge the Government on questions of policy I would have imagined it could be speaking from a position of strength if its own performance measured up to what it promises to do. The honourable member for Kingston (Dr Gun) did not challenge the right of the Commonwealth to collect additional revenue. I appreciated that attitude expressed in his speech. It was a responsible attitude. But the honourable member did oppose a tax on wine as did other members of the Labor Party. It seemed to me to be rather odd that members of the Labor Party, the confessed champions of the working class, the self-confessed champions of people in lower income groups, most of whom drink beer, should throughout the whole of the debate make no mention at all of the excise on beer. On the one hand we had the view put that they did not challenge the right of the Government to raise additional revenue but on the other hand there was not one word of criticism about the excise on beer.

Mr Hurford - Are two wrongs supposed to make a right?

Mr CHIPP - No. not at all, but one presumes from what has been said by speakers from the Labor Party that wine drinkers should not be taxed although it is perfectly all right to tax beer drinkers. I thought this was a rather odd consensus coming from members of the Australian Labor Party who are supposed to champion the rights of the working class. We on this side of the House believe that there is no equity, if excise is to be charged on alcoholic liquor, to charge the beer drinker and not charge the wine drinker. We cannot see the logic in that at all. But when we look at the figures - and I would not like to be held to a cent or two because these charges vary from State to State - the beer drinker pays 19c excise on a bottle of beer which costs him about 45c and the wine drinker pays only 8c excise on a bottle of wine. One would have thought that from the self-confessed champions of the working class, the beer drinkers, that at least some mention would have been made of the rights of the beer drinker. But there was not one word of it. All the criticism was simply related to the principle of taxing wine drinkers.

Mr Clyde Cameron (HINDMARSH, SOUTH AUSTRALIA) - Is the excise 8c or 7c a bottle?

Mr CHIPP - It is approximately 8c. Then we had the spurious argument, if I could say that with respect, that all of the money that is raised from the excise on petrol should be spent on roads. I suppose before a Senate election, or for any other devious political purpose, it is always opportune for an Opposition to raise this kind of argument. But does the honourable member for Swan (Mr Bennett), who knows that I hold him in great respect, seriously suggest that this principle should be followed to its logical conclusion? Does he suggest, for example, that all the excise we rise on tobacco should be spent for the benefit of cigarette and cigar smokers? Does he seriously suggest that all the excise we raise on whisky should be spent on whisky drinkers? The proposition has only to be stated to be exposed in the absurdity in which it lies. May I refer briefly to the speech of the honourable member for Angas (Mr Giles)? I thought, because of the position in which he stands and because of the State from which he comes, it was a speech of real courage. The honourable member for Angas knows as well as anybody in this House the problems of the wineries but, more particularly - and I concede this point that has been raised - the problem of the grape growers, and he has been quite vigorous in his representation of those interests. But he put the matter in its proper perspective. He said: 'Let us look at the effects on the wine industry and on the grape grower.' I have given an assurance on behalf of the Government thai it will look at the effects of this new tax as a responsible government should look at all new taxes.

If I was disappointed with any speech made in this debate I was disappointed with that of the honourable member for Riverina (Mr Grassby). One would have thought that he has some basic knowledge of the wine industry - but his speech was delivered for political purposes only and did not attempt to get at the basic problems facing the industry. He criticised the Government for the concession it gave to home wine makers. He said that 400 gallons a year was excessive and not consistent with the Government's decision to cut the industry back, whatever that means. Does the honourable member for Riverina want this concession to be abolished? He has written vigorous letters to me and disclosed to the Press personal correspondence from me to him on his advocacy of concessions to home brewers of beer. Does he suggest that we should not give a concession to home wine makers? Does he not know that this concession in itself assists in taking up the grape crop each year? Does he not know that traditionally - and in his electorate of all electorates there are so many migrant families - groups of families band together in co-operative schemes, and 400 gallons a year split among 5, 6 or 7 families is certainly not an excessive concession?

It seems rather odd that the honourable member for Riverina should be criticising a concession the Government has given to hundreds of his own constituents. I would hope that this aspect of the speech of the honourable member for Riverina is brought home to his constituents. Does he not know - we have been at pains to explain it - that this concession has had severe conditions placed upon it? If anybody who has that concession breaks the conditions once - in other words, sells one bottle commercially of the wine that he makes - then that concession is cancelled not only for that year but forever. So we do propose to police this concession-

Mr Clyde Cameron (HINDMARSH, SOUTH AUSTRALIA) - Can he sell what he made the previous year?

Mr CHIPP - No, he cannot. He cannot enter into any commercial transaction. The honourable member for Riverina also tried to appeal to the emotive sentiments - rather cheaply I thought - of his constituents, as opposed to the approach of the honourable member for Angas. The honourable member for Riverina stated categorically that this excise would lead to a fall in demand of 20 per cent. But again he did not produce one shred of evidence to indicate how that 20 per cent fall in demand might come about. I would like to place before the House some interesting figures concerning wine. In the 4 years since February 1966 the retail price of sherry and port, for example, has increased - these figures are based on South Australian bottle prices - from 58c a bottle to 75c a bottle as at July 1970. Claret might be an easier example to quote. In February 1966 the price of a bottle of claret in Adelaide was 50c. Today one cannot buy that bottle of claret for less than 95c or SI. The point I am making is that in 4 years the price of claret has increased 100 per cent. During those 4 years sales of wine have increased by at least 33 per cent.

Mr Giles - Is this price sensitivity?

Mr CHIPP - The honourable member for Angas has asked whether this is price sensitivity. I hasten to state that 1 am not blaming the grape grower or the wineries for this rapid increase in the price of wine. This increase has occurred because of other elements. But this does not invalidate my argument that the wine industry is a very viable industry. After this kind of price increase and the kind of increase in demand it is rather strange to hear the honourable member for Riverina say that because we are putting a 50c per gallon or 8c a bottle excise on wine, this will suddenly mean a diminution of 20 per cent in demand. I think the spurious nature of his argument is rapidly exposed. 1 ask the wine industry with great respect - not all of the industry fed the honourable member for Riverina with figures which for some reason he swallowed - why did it, immediately after a 50c a gallon excise was announced by the Government, increase the price of wine by 62.5c a gallon. When it was complaining, legitimately as it might, about the 50c excise why did it suddenly add another 12.5c to that excise? lt is the industry's right to take this action, but if it increases the price has it then the right to say that because of the added excise demand will diminish by 20 per cent? Certainly, no comparison can be made between the wine industry and the petrol industry. I would suggest that the petrol industry is not notorious for being kind hearted to the consuming public. The excise proposed in the Budget and which is contained in the Bills before the House will increase the excise on petrol by 3c a gallon and the price of petrol has been increased by exactly that amount whereas the excise on wine has been increased from nothing to 50c and the increase in price made by the industry has increased by 62.5c. Again, I thank those honourable members who made a constructive contribution to this debate.

Question put -

That the Bill be now read a second time.

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