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Friday, 14 September 1906

The PRESIDENT - I may .mention that in America a Bill on the subject has been passed.

Senator CLEMONS - Yes. I am sorry that I cannot answer Senator Millen absolutely, but there is every reason to hope that success will eventually be achieved. I forget the name of the witness in Sydney - I apologize to him for forgetting his name - who produced a formula which would in his opinion produce methylation in such a way that the spirit could not be subsequently demethylated. We also made inquiries, and obtained information with regard to processes in America. We found that manufacturers there have been alive t© the importance of this question, for a considerable time. We were supplied with copies of an excellent American journal - the Scientific American - in many numbers, of which honorable senators will see good articles dealing with this question. I am satisfied that there are enormous possibilities for Australia in the production of industrial alcohol. I believe that it is going to take the place of kerosene, which we do not produce in this country ; and I join with every honorable senator in endeavouring to enable this country to produce something instead of importing it. Now, I desire to ,go back a little, and to make a statement in fairness to Messrs. Joshua Brothers. I make this remark lest I might be accused of holding back a certain amount of information. By no ingenuity of mine, or of any other member of the Tariff Commission, could we ascertain with absolute accuracy how much of the molasses spirit brought into Victoria was subsequently methylated. I expected that some honorable senator would challenge me to show how much was methylated, and how much was used for human consumption-. I say at once that I believe that a very small proportion of it is used for methylation. I have made every endeavour to ascertain the facts, but the only information I could get was that the proportion methylated was very small. The figures I cannot get. Although I make this statement in justice to Messrs. Joshua Brothers, I say openly - and I say it as a challenge - that nothing would give me greater pleasure than to have a statement from them, on oath, as to the quantity of silent spirit that thev have obtained altogether^ not only from the Colonial Sugar Refining Company, but from any other concerns; the quantity that they have put before the public for human consumption, and the quantity that they have used for purposes of methylation. If I could ,get information on that subject I can assure the Senate that I should be delighted.

Senator Best - Did they refuse to give it? '

Senator CLEMONS - I cannot say that they refused; but if Senator Higgs will forgive me for making this reflection upon the Commission, without asking his permission, I have to say that at the time when we took the evidence of Messrs. Joshua Brothers in Victoria very few if any of us were really alive to the significance of this question. It was not until we had heard the evidence pf Mr. Knox in Sydney that I saw how important it was. Honorable senators will well understand that the members of the Commission are not heaven-gifted men who knew all the intricacies of this particular question before they had fully inquired into it. As a matter of fact, I do not believe that the mind of any member pf the Commission became alert, or that any one of us was ready to extract additional information from other witnesses, until we had finished taking evidence in Melbourne. It was not until I had an opportunity of examining Mr. Knox - who did not give evidence voluntarily, because he had no complaint to make - that I saw the whole bearings of the question.

Senator Best - Could not Mr. Joshua have been recalled ?

Senator CLEMONS - As to recalling Mr. Joshua, I have to say that we had no opportunity. I think I can say, by way of personal explanation also, that after we had examined Mr. Knox, the Commission did not return to Victoria for the purpose of taking evidence. I had decided that nothing would prevent .me from recalling Mr. Joshua if I could induce the other members of the Commission to allow me to recall him when we returned to Melbourne. But after the sittings in Sydney, the members of the Commission went on to Brisbane. The report on spirits was prepared in my absence. Therefore, I had no further opportunity to press for Mr. Joshua's recall. If, however, Messrs. Joshua Brothers can now prove to the satisfaction of the Senate that a very small percentage of the spirit purchased by them from the Colonial Sugar Refining Companyhas gone into consumption, I shall say that they have done much to refute any arguments that I have used against them. But on the evidence which the Commission has presented, the inference is clear and undoubted. I am certain that no senator, taking the evidence as it stands, can possibly come to any other conclusion than that at which I have arrived, that Messrs. Joshua Brothers' profits do not depend for a moment upon the Tariff, but that so long as thev can obtain silent spirit from Sydney, Brisbane, and elsewhere, their profits are sure and certain.

Senator Best - Will the honorable senator deal with the point mentioned in an interjection by the Minister of Defence?

Senator Playford - I have directed attention to a statement of Messrs. Joshua Brothers as to how they have dealt with the spirit that they have received. I think they state that they tried it for the purpose of making whisky, but that it was not found to be satisfactory. They also state that they used it for methylating.

Senator CLEMONS - I can assure the honorable senator without the slightest hesitation, that we have no evidence whatever that any large quantity of the spirit is methylated. We have only a limited amount of evidence that even a small quantity is methylated. I have no doubt whatever, speaking personally, that the vast proportion of this spirit imported into Victoria was sent out for human consumption, and was never methylated at all.

Senator Best - Will the honorable senator look at question 993 ?

Senator CLEMONS - I will read that question, together with the questions leading up to it - 989. Did you handle the whole of the 182,000 gallons of Australian spirit that came to Victoria in 1903? - Practical ly the whole of it. 990. Where did it come from? - New South Wales. 901. What spirit was it? - Sugar spirit, made by the Colonial Sugar Refining Company, for whom I am agent here. 992. What did you do with it? - It was principally methylated.

It is perfectly true that Mr. Joshua gave that answer.

Senator Best - Exactly !

Senator CLEMONS - But it is put more or less vaguely.

Senator Trenwith - Messrs. Joshua Brothers claim to be merely agents.

Senator CLEMONS - Mr. Joshuacalled himself the purchasing agent. What distinction he intended to convey by that, I do not know. I simply take it to mean this - that he made an agreement with the Colonial Sugar Refining Company by means of which he became the purchaser absolutely.

Senator Best - He says that the spirit which he bought was " principally methylated."

Senator CLEMONS - He does.

Senator Drake - But read on.

Senator CLEMONS - I will read the next answer- 993. And sold? - As methylated spirit. Some of it was rum; some of it was spirits of wine supplied to manufacturers ; and a small quantity was tried in the manufacturing of cheap liquors. For instance, we were trying to make an article by adulterating the whisky with some of this molasses spirit, and selling it very cheap; but it was no good. Nobody would have it.

Senator Best - Exactly !

Senator Drake - All the expert evidence is to the contrary.

Senator CLEMONS - Honorable senators must attach their own value to this statement. There is the fact admitted, that Messrs Joshua Brothers " tried " to carry on the business of making whisky with this still spirit.

Senator Millen - The witness says "Some of it was rum."

Senator CLEMONS - As to the statement of the witness that " It was principally methylated " - I venture to say that that answer was not truthful. I make that statement without the slightest hesitation. If " principally " means that over 50 per cent. of it was methylated, I say that that quantity of spirit was not methylated in Victoria.

Senator Best - But the witness says that it was.

Senator CLEMONS - Senator Best may derive any consolation that is possible from that answer, but I invite him, or any other honorable senator, to supplement the work of the Tariff Commission, and to obtain, if he can, sworn evidence from Messrs. Joshua Brothers as to the exact quantity of the spirit which they methylated. I shall welcome evidence on the subject, whether it confirms what I am saying or otherwise. If I am doing an injusticeto Messrs. Joshua Brothers, I want to be corrected. I have every desire to do them justice. I should hate to make an accusation against them that was not well founded. I should welcome a plain statement from them showing the quantity of this spirit which they have handled, the Quantity which they have methylated, and the quantity which they have sent into human consumption.

Senator Trenwith - Does the honorable senator say that it is illegitimate to make whisky from silent spirit?

Senator CLEMONS - No. But I say that the manufacture of whisky from silent spirit disposes of the whole Question, whether it is necessary to increase the duties for the benefit of the distilling industry of Victoria. The whole point is that, owing to natural conditions, some States have been able to win in the race for business in this trade.

Senator Staniforth Smith - Cannot the Government obtain from the Excise officers an exact account of the extent of the methylation done by Messrs. Joshua Brothers ?

Senator CLEMONS - I think the Government could get us that information.

Senator Higgs - The- revenue returns would show that.

Senator CLEMONS - I think the information ought to be obtainable, and if I can get it I shall. If the Minister can furnish the information to us, I hope that he will. We want to know the amount of spirit methylated during tha last three years by Messrs. Joshua. Brothers. Nothing would please me more than to know that. I invite the Minister to obtain the particulars from the Department. I think it has an essential bearing upon this question. My own belief is that the evidence will show that the present state of affairs in the spirit industry is not due to the Tariff at all, but simply to Inter-State competition. That is the whole point. It was Inter-State competition that injured the Victorian distilleries, arid that practically shut them up, and it was not the importation of foreign spirits. I have not quoted figures to any extent, because I dislike therm; but it can be shown that, so far from our imports of spirits having increased, they have absolutely diminished since the operation of the Federal Tariff. There has, however, been a tremendous change as to place in local production. There is a matter about which, perhaps,- I have not said enough, because I think other honorable senators will address themselves to it, and that is the financial aspect of the question. It is of very great importance, and I urge honorable senators of all forms of fiscal faith, if they can see their way to avoid any loss of revenue to the Commonwealth in this connexion, to endeavour to do so.

Senator Playford - We tried to do so.

Senator CLEMONS - I give the Minister my assurance that I shall help him all I can in that direction.

Senator Trenwith - That cannot be done in the Senate in the way Ministers have tried to do it.

Senator Higgs - We could make a request.

Senator CLEMONS - It can be done by an increase of the Excise duties, and that is the invitation I throw out! to every member of the Senate, no matter what his views on the fiscal question may be. Having regard not only to the protection of local manufacturers, and to the question of the interests of labour in the industry, I urge honorable senators to be prepared to consent to such alterations of these proposals as will secure to the Commonwealth, and consequently to the States, the advan tage of some increase of revenue from the taxation of an article indulgence in which- I have more than once referred to as that sort of luxury which borders on a vice. I earnestly ask honorable senators to take that course. To do so will not have the effect of destroying the industry of distillation in the Commonwealth, though it may affect the operations of the industry in a particular State.. I believe that the industry is firmly established. I believe that the changes brought about by Federation, while they may have had the effect of altering the locality of successful local production, have largely benefited the industry in the Commonwealth .as a whole. I say that, even if we increase the proposed Excise duties, we shall not hurt the industry, and if we do increase them, as every honorable senator knows, that will be a source of extra "revenue.

Senator Best - That is to say, the Excise duties recommended by the Commission will not injure the industry.

Senator CLEMONS - There is no question that they would not injure the industry. I may frankly admit, that, on reviewing them carefully, I am inclined to think that they might be made a source of revenue. At the last moment, speaking not as a Tariff Commissioner, but as a senator, I say frankly that I shrink from doing anything, individually or conjointly with any one else, which will impose a loss upon the Commonwealth of from £60,000 to ,£80,000. I invite honorable senators, if they are concerned, as they should be, in the Tariff on revenueproducing articles, and if they are concerned abouti a possible loss of revenue to the Commonwealth, to consider this matter carefully before this Bill leaves the Senate-

Senator Higgs - That isi, to increase both the Excise and import duties?

Senator CLEMONS - If I believed that that would have the effect desired, I should support it. Senator Higgs is aware that, if an import duty is increased to too great an extent, the effect is to destroy revenue. It is difficult to fix an arbitrary duty, and to say that, if we go beyond it, the result will be a loss of revenue; but I invite the concurrence of the Senate in the statement that import duties may be increased to such ani extent as to lead to a loss of revenue. I think that the existing import duties on spirits are high enough, and I am supported in that view by the best Treasurer Australia has produced. I refer to Sir George Turner, who has expressed the opinion that an import duty of 14s. on spirits is as high as it is safe to go, if we desire to secure revenue from this source.

Senator Playford - Revenue has been obtained in some of the States from a duty of 15s. per gallon.

Senator CLEMONS - I have stated the opinion of Sir George Turner. If we desire to increase our revenue from this source, it is important that we should see that the Excise duties are not too low, especially as I believe that Australia is entering upon an enormously increased production of spirits. The prospects of the industry are such that it promises to be amongst the most prosperous industries in the Commonwealth, and I believe that, without a jot of protection, it is in a position to hold its own against competition from any part of the world. It is an industry into which the question of difference in rates of wages does not enter. It is in no way handicapped in the matter of the cost of labour. If the labour engaged required consideration, it should have my sympathy; but I can assure honorable senators that they are free to deal with this industry with a certain knowledge that they will not be injuring labour conditions in Australia, or doing any harm to a class of individuals whom they wish to befriend. There is no industry affected by the Tariff which will have to be considered by the Senate in connexion with which that statement can be accepted more completely than it can in this case. Honorable senators might increase these Excise duties to such an extent as to leave scarcely any difference between them and the import duties, without injuring labour to any extent, and without depriving twenty men in the whole of the Commonwealth of their wages. That is my honest opinion. The wages paid, such as they are, in the opinion of Mr. Joshua himself, are practically the same as those paid in the industry in England and Scotland, the chief competing countries.

Senator Trenwith - Either that, or they are so insignificant as not to constitute a factor worthy of consideration.

Senator CLEMONS - Precisely. I am glad that Senator Trenwith agrees with me. As he very properly says, they are not a factor worthy of consideration. Finally, I would say, with regard to my attitude on this Bill, that I shall welcome any proposals which the Ministry may, make to provide to secure an increase of revenue from this source, and I shall lend my assistance to any member of the Senate who has any proposals to submit to safeguard our revenue.

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