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Wednesday, 19 September 1906

Senator CLEMONS (Tasmania) . - If Senator Playford will compare the matter under discussion withclause 11 of the Spirits Bill, he will see that, whereas we are here providing that brandy which is distilled wholly from grape wine by pot still, and has been matured by storage in wood for not less than three years, shall be dutiable at 10s., we provide in the Spirits Bill that spirits distilled in Australia shall not be delivered from the control of the Customs - which means the Excise authorities - unless they have been matured in wood for a period of not less than two years, but with the proviso that the provision shall not come into operation until 1st January, 1908. How does that proviso affect this schedule?

Senator Playford - We find that we have not the stocks of Australian spirits to supply the demand if they are to be kept for two years.

Senator CLEMONS - Let us assume that this measure comes into operation on the 1st October. Although this Bill provides that the brandy which pays 10s. must have been matured for two years, clause 11 of the Spirits Bill provides that the two years' period shall not operate until 1908.

Senator Playford - It means that we are continuing the present system until 1908 simply because if Australian spirits were immediately to be compelled to comply with the two years' condition there would not be sufficient to supply demands.

Senator CLEMONS - I cannot accept that as a proper explanation. The position is that in the interval between the 1st October, 1906, and the 1st January, 1908, the condition that spirits shall be matured in wood for two years would not apply.

Senator Playford - That proviso is in the Spirits Bill, with which we are not now dealing. It does not affect the ques tion of whether the Excise shall be 10s. or us. That is the point under consideration now. The question whether we shall extend the period will not arise until we deal with clause 11 of the Spirits Bill.

Senator CLEMONS - It is dangerous to pass the proviso that the spirits must be matured in wood for a period of not less than two years if we are to understand that that proviso is to be held in abeyance until the 1st January, 1908. That was not what the Tariff Commission meant. I am most anxious for the production in Australia of a brandy that we shall all be proud of. That, I believe, was one of the reasons which induced the Tariff Commission to propose this great premium for the production of pure grape brandy in Australia. But if clause 11 of the Spirits Bill is to remain as it stands, we shall in the interval between, say the 1st October, 1906, and the 1st January, 1908, allow brandy which has been distilled wholly from grape wine, to go into consumption, though it has not been matured in wood for more than ten hours. I am sure that if the Chairman were free to speak, he would state that that was never contemplated by the Tariff Commission.

Senator Playford - I am informed that if Ave do not pass clause 11 of the Spirits Bill, there will not be sufficient stocks of Australian brandy to supply the market. The Customs authorities tell me that.

Senator CLEMONS - I cannot help thinking that Senator Playford's authority is not so accurate as it would desire to be. I cannot believe that there is not in Australia sufficient brandy that has been two years in wood to meet requirements.

Senator Playford - There is some,- of course, but not enough. Unless the proviso to clause 11 of the Spirits Bill were passed, it would! disorganize the whole trade.

Senator CLEMONS - I find myself unfortunately in this position. I am. anxious to offer a reward for the production of a pure brandy in Australia that will gain for itself a reputation not only in the Commonwealth, but outside. I am hopeful that we shall be able to produce in Australia a brandy which will be able to take its place amongst the best brandies in the world. For that reason, I am prepared to offer an Excise duty of. only 10s. on such brandy- But I do think that the conditions ought to be safeguarded, as thev would be on the face of this Bil] if it were not affected by clause 11 of the Spirits Bill.

The CHAIRMAN - I may state that if the Tariff Commission had contemplated the two years' interval provided for in clause 11 of the Spirits Bill, it would never have recommended the duty of 10s.

Senator CLEMONS - I am glad that Senator Higgs has made that remark even from the Chair. I am very pleased rn~ have his support. If the Tariff Commission had thought that this 10s. Excise duty was to be imposed in cases where the brandy was going into immediate- consumption, without maturing for two years, it would never have made the recommendation.

Senator Playford - It is singular that the. point was not raised in another place.

Senator CLEMONS - I am afraid that the question was not well considered in another place, and shall be very glad for the Senate to rectify such errors.' We provide that imported brandy shall be matured for at least two years in the wood, but we pre. pose to make a difference in the case o.t Australian brandy until 1908. I point out that the exceptions with regard to Geneva and schnapps have nothing to do with this question. They are made for other reasons.

Senator Playford - It has to do with the question that it is proposed to allow a certain time simply because the stocks are so small.

Senator CLEMONS - My answer is that we are now dealing with the duty on pure wine brandy. The moment the two Bills are passed, there will be a Customs duty of 14s. on brandy, and it cannot bp put into human consumption within a period of less than two years. We are not applying the provision in regard to maturing to locally-distilled brandy until 1908. Will the Minister agree to increase by is. the proposed Excise duty of 10s. on all brandies which ' are put into human consumption before the 1st January, 1908, and to levy the 10s. rate afterwards - in other words, to insert in the Excise Tariff Bill a' provision corresponding exactly with the provision in the Spirits Bill ? I think that I am going a long way in making that suggestion to the Minister, but if he cannot accept it now, I ask him to postpone the first item. It is reasonably worthy of hi= serious consideration.

Senator Playford - We can strike out clause 11 of the Spirits Bill.

Senator CLEMONS - That is not a fair way in which to treat the Committee.

I think it is an excellent thing to provide that-

Spirits distilled in Australia shall not be delivered from the control of the Customs for human consumption unless they have been matured by storage in wood for a period of not less than two years.

That is,I think, one of the most valuable provisions which the Tariff Commission has suggested, and I could not consent to its omission. If the Minister will agree to strike out the proviso that the clause shall not come into operation until the1st January, 1908, I shall support the proposed Excise duty of10s. It is the proviso which will operate unfairly. It is utterly against the spirit of the Commission's report, and I do not think that it will be agreed to by this Committee.

Senator Lt.-Col.GOULD (New South Wales) [10.20]. - I think that the suggestion of Senator Clemons that we should place the different spirits in a position of equality as regards the time when they should be allowed to pass into human consumption, is correct. But I am not satisfied that we should consent to accept an Excise duty of 10s. a gallon. With the present duty of11s. per gallon, there is a difference of 3s. between the Excise and Customs duties. From their report, it is very clear that half of the Commission thought that 3s. would be a fair difference between the two duties, while other commissioners were willing to make a difference of 3s. 6d. I am perfectly prepared to give a fair consideration to local distillers of spirits, but there must be some moderation with regard to the difference between the two duties. Four commissioners recommended a reduction of the Customs duty from 14s. to 13s. per gallon, while two of them were willing that it should be reduced to 13s. 6d., so that clearly there were six commissioners who asked the Government to submit a Bill which would reduce the Customs duty to either 13s. 6d. or 13s., and to leave the Excise duty at 10s. as recommended. The Government introduced a Bill in which they proposed not to decrease, but to increase the Customs duty, but the other House declined to assent to the proposal. That shows quite clearly that that House thought that a Customs duty of 14s. per gallon on spirits was ample. I believe that prior to Federation a number of its members had had considerable experience of the effect of a very high duty on spirits. If we are going to pay any attention to the recommendation of the Commission, who say that the difference should not be more than 3s. 6d., although I think it should not be more than 3s., we ought not to agree to the proposal of the Government. During the operation of the Excise Tariff the production of grape brandy has increased very materially. Does not that fact prove that there has been a fair amount of protection given to the producers of that article? If it could be shown that itsproduction had almost been wiped out the Government would have a strong case for a greater difference between the two duties. But that is not so, because in their report the Commission point out that in South Australia and New South Wales there has been an increase in the production of grape spirit. Does not that show that there is a sufficientmargin between the two duties at the present time? It cannot be reiterated too often that we shall have to face a decrease in our revenue? Whether it will be compensated by increased prosperity to certain individuals I do not know. If such an increase of prosperity be brought about it will be made up to the Commonwealth by the consumption of dutiable goods in another direction.

Senator Playford - Does the honorable senator propose an increase in the Excise duty ?

Senator Lt Col GOULD .- Yes.

Senator Playford - That is the way to test it.

Senator Lt Col GOULD .- When I look round the Chamber I do not see how it can be tested at the present time. I ask honorable senators to bear in mind that we shall have to face a falling revenue and increasing liabilities, and that each State will have to suffer accordingly. Fortunately New South Wales has an overflowing revenue, and will not be affected injuriously. WhatI propose to do, unless another amendment be submitted, is to move that the proposed duty be increased in order to leave a difference of 3s. between the Customs and Excise duties.

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