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Thursday, 20 September 1906

Senator CLEMONS (Tasmania) . - The suggestion is that the Committee should pass this item on the promise of the Minister that he will recommit clause 2 in order that we may make the alteration indicated. I think we are perfectly safe in permitting the item to pass on such an understanding. But I would point out that if - brandy made from grape wine is put into human consumption at any time before 1907, and it has not been matured by two years storage in wood under Excise supervision, it will be subject to an Excise duty of ns. The provision will utterly and entirely defeat the object that the Tariff Commission had in view when it framed its recommendation, which has met with the cordial approval of a large majority of the Committee. I am convinced that if we permit raw spirits to go out immediately under a duty of its., it will be sent out by the distillers in preference to storing it for two years in wood. In other words, the Australian distiller will much prefer to pay an Excise duty of ns. on his raw spirit, and send it out for consumption as brandy than to keep it maturing in wood for two years, and then have to pay an Excise duty of only 10s. I wish to make him store it in wood in order to secure a good name for Australian brandy. The members of the Tariff Commission are at one that unless the distiller stores his spirit in wood for two years, he will not do what we desire he should do. I am going to suggest later on that we should make him pay an Excise duty of 13s. if he desires to put his spirit at once into consumption, with the alternative that if he keeps it in wood for two years we will let him take it out of bond at an Excise duty ot 1 os.

Senator Lt.-Col.GOULD, (New South Wales) [8.32].- The reason assigned for not allowing spirits to be distributed without maturity is that it might be injurious to the public health. It has been assumed that distillers will be prepared to pay an extra duty of is. per gallon in order to get their spirits into consumption at once, and Senator Clemons has said that if the Excise is made 13s. per gallon or a difference of 3s., -he will not object to spirits that have not been matured going at once into consumption. If it is really a tion of preventing the consumption of immature spirits in the interests of public health, the difference between 3s. and is. per gallon should not be considered by the Committee. Whilst immature spirit distributed for consumption might not be so palatable or so good as spirit matured for two or three years in wood, no evidence was given before the Commission to show that its consumption has been responsible for any injury to the public health, and if spirit is fit for human consumption;, there should be no special or undue restrictions placed upon it. Of course if it is unfit for human consumption, steps should be taken to prevent its being placed on the market.

Senator Stewart - Why stipulate for two years in bond in any case?

Senator Lt Col GOULD .- If the honorable senator had followed the remarks I made on the second reading of the-Bill, he would know that I indicated that I see no necessity for requiring these spirits to be matured for two years in wood under Customs supervision. I explained that a Committee of the House of Commons, after taking the evidence of men skilled in questions concerning the public health, came to the conclusion that there was no necessity to make any restriction. Of course there is always the power to prevent the distribution of spirits shown to be unfit for human consumption. That power will still be reserved, and if there is any ground for supposing that certain spirit is unfit for human consumption, and the analyst gives a certificate to that effect, the Minister will decline to allow it to go out of bond except as methylated spirit. I have referred' to this matter because it is intimately associated with the question of revenue to which I propose to refer, and because if I had not done so, my position might be misconceived. In the report of the Tariff Commission, it is shown that the distillation of brandy has increased in South Australia, New South Wales, and Victoria, and if that be the case, there should be no necessity to reduce the Excise duty as proposed, in order to protect the industry, and put more of the money of the people into the pockets of the distillers. I should like honorable senators to bear in mind that local distillers pay duty only on proof spirit, which is a decided advantage, although I suppose importers get over the difficulty in most cases by importing spirit at proof or over proof, and then breaking it down. It might be said that if local distillers are given a greater amount of protection, that will lead to the employment of a larger number of persons in the industry, but the fact remains that distillation in the Commonwealth has increased under existing conditions with a protection of 3s. per gallon. If that be the case, we have a right to consider the interests of the revenue. The Minister said that he had been advised by his officers that probably there will be a loss to the revenue of from £70,000 to £80,000 or £90,000 a year. That is, I know, a calculation which has also been made privately, assuming that only a small proportion of imported spirits be replaced with locally distilled spirits. It should be borne in mind, however, that if that is likely to be the loss of revenue in the first year, and we are to encourage a larger amount of distillation, it must increase year by year, and before very long we shall be called upon to face a loss of twice £80,000 or £90,000 a year, and possibly, as years go on, treble the amount.' It was suggested by an honorable senator the other day that when that time did arrive, we might then very well take action. That is one way of dealing with the matter, but I wish to impress upon the Committee that while the revenue is gradually decreasing the expenditure is steadily increasing. In a day or two we shall be called upon to consider a Bill which provides for the payment of £500,000 in bounties, at the rate of £50,000 or £75,000 a year, during a period of years. The enactment of the Bill would make an additional inroad upon the revenue. Then the Government propose to introduce penny postage, which, if adopted, would involve a loss of £120,000, or possibly more, per annum. In the face of those proposals, we are now called upon to cut down the revenue from the spirit duties, and at the same time to give an additional benefit to the local distillers, although it has been proved that at the present time they enjoy ample protection for their industry. It has been pointed out here by their representatives that both Tasmania and Queensland need to get as large a revenue as possible through Customs and Excise 'duties. We have been resisting very strongly a proposal to spend £20,000 upon a railway survey ; but here is a proposal which, if adopted, would affect the amount of the revenue year by year. I asl* honorable senators to pause before they consent to throw away more revenue, especially when it has been shown that that sacrifice is not necessary in order to promote the interests of local manufacturers. Although it is true that every industry gives employment to additional men, still it is always possible to pay too high a premium in order to secure that result. I do not propose, however, to submit an amendment until I have heard an expression of opinion from honorable senators. I have no wish to injure existing industries, which I know from the evidence and the report of the Tariff Commission, have greatly improved. Four members of that body suggested that the Customs duty on spirits might be reduced to 13s. a gallon, in order to make a difference of 3s. between the two duties, while two others were prepared to ' reduce the Customs duty, by the sum of 6d.

Senator McGregor - Will the honorable senator mention the conditions?

Senator Lt Col GOULD .- The conditions were that we should levy the Excise duty which is now proposed, and reduce the import duty, in order to bring the two duties more in accord with1 one another.

Senator McGregor - No.

Senator Lt Col GOULD .- If the honorable senator will refer to the report, he will see what the Commission recommended. So far from agreeing to that recommendation the Government submitted a proposal to increase the Customs duty to 15s., and increase the protection to 5s., but it was rejected by the other House. The proposal of a proportion of the members of the. Commission, I understand, was to fix the difference at 3s. or 3s. 6d. per gallon.

Senator McGregor - On the condition that the imported spirit was to be kept in bond for two years.

Senator Lt Col GOULD .- The Bill provides that imported spirit shall be kept in bond for two years before it goes into human consumption.

Senator Playford - No; it provides for the production of a certificate that it is two years old.

Senator Lt Col GOULD - The object in requiring the production of this certificate is not I assume to penalize any one, but to insure that matured spirit shall be sold to the public. Clause 10 of the Spirits Bill provides -

After the twenty-eighth day of February, One thousand nine hundred and seven, no imported spirits shall be delivered from the control of the Customs for human consumption unless the Collector ' of Customs for the State is satisfied that the spirits have been matured by storage in wood for a period of not less than two years.

Clearly, the object of_the provision is to protect the interests of the consumer.

Senator McGregor - It would have to be guaranteed to be pure malt spirit or pure grape brandy ; but there is nothing of that kind imported.

Senator Lt Col GOULD .- The Select Committee of the House of Commons, after listening to the evidence of experienced chemists, came to the conclusion that the rectified spirits which were introduced into brandy or whisky were of a pure character, and that, even when they were introduced without being sufficiently ma- tured, the flavour was improved. There is no reason to make a distinction unless it be on the ground of protecting the public health.

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