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Tuesday, 14 August 1906

Mr GLYNN (Angas) . - I think we may fairly compliment the honorable and learned member for Bendigo on his very careful exposition of the position- from his point of view, and on the exceedingly good work he has done as Chairman of the Tariff Commission. Many of us must have been struck by the almost stupendous labours which the honorable and learned member and some of his colleagues have had to face in the work not only of taking evidence, but of afterwards reducing to synthetic expression the clashing opinions submitted to them. That is certainly a discharge of patriotic duty, which we, as members, can keenly appreciate. I can quite understand, at the same time, the anxiety of the honorable and' learned member for Bendigo that the recommendations of the Tariff Commission should not be disturbed. We all, of course," have a little liking for our political offspring, no matter what it may be. It is a sort of reflection on our discretion or judgment - sometimes it touches our amour propre-if even the Ministry propose to interfere with recommendations, especially after such an elaboration of purpose and adjusting of evidence as we have 'had in this instance. At the same time, I admire the wisdom of the Ministry in seeking new light on the duties proposed. I fully appreciate the view that resolutions, illegal in themselves because they have to be hurriedly introduced, are, to a certain extent, tentative. They have to be quickly conceived in order to protect the revenue, and very often the technical information that may be desirable and necessary is not available; because the Minister would have to seek expert advice from persons, who, of course, may be just those prepared to take advantage of the new schedule of duties. Without an absolute disclosure of the Ministerial proposals, any man, not a fool, could very well gauge what duties were likely to be brought down or increased from the questions submitted to him by the Minister seeking his advice. I can well understand, therefore, that the resolutions tabled about a fortnight ago by the Minister in regard to spirits, are, to a large extent, imperfect, and subject to such alteration as the Ministry may see fit in the course of the debate to make. Considering that we are still seeking light, I shall not do more than indicate the supreme importance of these proposals to South Australia, and also, of course, to the Commonwealth. This is not a South Australian matter purely. That State is very largely concerned, but the question of the purity of the spirits used in the blending of brandy is one that concerns the States as a whole. South Australia, it happens, however, is keenly interested in the matter. That fact does not altogether influence me, though it may undoubtedly stimulate me; I should not be here as a representative of that State if I did not feel, when her interests are specially affected, a higher degree of stimulus than that to which we must confess when we have before us matters which concern us purely as Commonwealth representatives. We represent particulardistricts and States, and questions affecting these we view with keener interest than we do those of general Australian application. At the same time, mere local interests do not influence me if I think that the higher interests of the Commonwealth direct another stand. I need only refer to the Australian Industries Preservation Bill, in connexion with which I had to some extent to oppose some interests of the district I represent. In the matter under discussion, if I thought it my duty to support the motion, of the Ministry I should do so ; but from the best information I could get in the last few days, as well as from reading the reports of the Tariff Commission, I have come to the conclusion that we cannot accept the duties proposed by the Government. As to the effects of a blend of brandy not made purely from grape spirit - that is, 25 per cent, of pot still, and the rest rectified grape spirit - I have only to mention that last year in South Australia there was made 956,000 gallons of spirit from wine. Figures have already been quoted showing that in Australia nine-tenths of the brandy distilled is from wine. I think that the total production of wine in South Australia last year was 2,625,430 gallons - the largest quantity ever distilled in one State. A few years ago viticulture, which ought to be one of the leading industries of Australia, considering our climatic conditions and the peculiar character of the soil, had not assumed large proportions. There were then only a few thousand acres devoted to viticulture in Australia, whereas now, according to the Tariff Commission, there are about 65,000 acres thus used. The labour employed averages about ,£5 an acre, which, therefore, represents nearly ^330,000 'a year. When we consider that this industry, as measured by the progress of the last five or six years, is still only in its infancy, we can see the enormous possibilities, under fair fiscal treatment - that is under a differentiation that does not discourage the production of the pure article - which lie before the Australian producers. The position of South Australia is further emphasized by the fact that under the inspection duty of is. per gallon on spirits used for the fortification of wine, ^45,000 was collected in 1904-5, of which, in round figures, ,£22,000 was paid bv that one State alone. This indicates the importance of this question to South Austra-Iia, and I am pleased to see that the Government suggests the remission of this duty. From the revenue point of view, it was open to every objection that could be levelled against a pure revenue duty. It was unequal in its incidence in the different States - the figures I have given show that - and besides it was irregular in its return. Whilst the total revenue received from it was .£45,000 in 1905, the total in 1904 was under ^£5,000, So that in addition to the other reasons given by the members of the Tariff Commission - and on this point there was unanimity - the disparity of incidence upon the States, and of yield from year to year, render the duty objectionable from the point of view of revenue. Hence,

I think it was a wise suggestion on the part of the Ministry that it should be abolished.

Mr Fowler - But the expense of supervision should be provided for.

Mr GLYNN - A suggestion has been made by the Commission as to how that is to be done. The suggestion is made, that there should be a pure inspection charge, and I suppose that solution is the correct one. It is stated in the report of the Tariff Commission on the wine industry in South Australia that -

Since the operation of the Commonwealth Tariff there has been in each year an increase in quantity of wine converted into spirits, and a decrease in quantity of materials other than wine used in the manufacture of spirits.

The report goes on to deal with matters to which I do not desire to refer at present, but on the question of purity, to which the honorable and learned member for Bendigo made so much reference, I should like to say that there seems to have been a great conflict of evidence before the Commission as. to whether spirits other than pure grape spirit used for the rectification of wine, are pure; whether, for instance, alcohol made from, molasses is absolutely pure. But I failed to observe that any doubt was expressed as to the purity of the spirit made from grapes. That is the point, and when we can have a pure spirit byrelying upon distillation from the grape itself, I do not see why we should be driven back upon a spirit of conjectural purity, in order that resort may be had to molasses, potatoes, or other articles. There is a great conflict of evidence, not as to the purity of grape spirit, but as to the purity of other spirits. The honorable and learned member for Bendigo has quoted the opinion of some experts, showing that it is possible to get a certain degree of purity in the rectification of molasses spirit. .It is said by some that ultimately all the spirits are pure from whatever material they may be produced. But we never get that ideal purity. As a matter of fact, it is never supplied, and if it were, there would be no such thing as flavouring. The flavour of brandy is not an idea - it is an element, the attenuation of the element to about its lowest state. Men in speaking of flavour in this connexion sometimes speak of it as though it were, to some extent, an idea like the flavour of smoking, but it is not. Wisely, I think, there is no proposition made to interfere with the provisions of the ' Distillation Act, under which wine can be fortified only by a grape spirit, but the same argument which was then urged in favour of the continuation of that provision, certainly applies with equal force to the manufacture of brandy from a pure grape spirit. At page 11 of the report of the Commission on the winegrowing industry of Australia, I find this evidence dealing with the use of various spirits for the fortification of wine. According to the Commission's report, Mr. H. D. Brown, who was quoted by the honorable and learned member for Bendigo, thought that potato spirit, if added, would interfere with the quality of the wine. Mr. Thomas Henry Norrie, analytical chemist, said it is a distinct advantage to the wine to use grape spirit for fortifying purposes. Mr. Cleland, a South Australian, considered that grape wine spirit was the best for fortifying wine. Mr. Adrian Despeissis, Horticultural and Viticultural Expert of Western Australia, was of the same opinion. These are strong opinions in favour of the view taken by South Australians, but I again emphasize the point that there can be no doubt about the purity of brandy that is made of not Jess than 25 per cent, from pot-still brandy and the balance from rectified spirit dis-. tilled from the grape. Once we begin to blend with- any inferior spirit, we shall not be getting what Australia should desire, and that is a brandy that will bear a reputation throughout the world for purity. We heard from the honorable and learned member for Bendigo that certain brandies are so pure that they are objected to. What are the brandies that are objected to? The pot-still brandy, which has to be matured for two years, because it contains the greatest percentage of oils requiring to the oxidized to make pure ethers, is not consumed in the ordinary way by the drinking public, but is mixed with another grape spirit, so as to produce a blend, 75 per cent, of which is rectified spirit taken from the grape and 25 per cent, of pot-still spirit. That is the blend in relation to which the duties are objected to as being the same as for the blend from molasses spirit. As regards purity. I have quoted from the Tariff Commission's report, but I find also that Mr. E. A. Mann, Government Analyst of Western Australia, as the result of recent tests of spirits made in Perth, has certified that all the Australian brandy he examined, without exception, appeared to be of genuine character. As nine-tenths of the brandy produced in Australia is made in South Australia from .grape spirit, that is a wide testimony to the value of the South Australian production. I do not think that in England they allow brandy which is not altogether produced from grape spirit to be used for medicinal purposes. I have no doubt that, in common with myself, other honorable members have received ,a letter on this subject from Messrs. Penfold and Company. I think that it deals only with the consumption for medicinal , purposes, but an extract is enclosed in the letter from Messrs. Penfold from the Licensing Review of 30th July and of 6th August, 1904, in which honorable members will find very high testimony paid to brandy, whether blended or not, produced altogether from grape spirit. I need not read the quotation, as it is in the hands of honorable members. There is another matter to be considered in connexion with this. If a blend of molasses spirit is permitted, and molasses spirit to the extent of 75 per cent, is used, it will completely displace the use of grapes for the distillation of spirit. There is no question about that. According to the best evidence I have seen, it costs about 4s. per gallon to make rectified spirit from grapes. Molasses spirit can be bought at is. per gallon. Estimates for it are given from 8d. up to is. 3d. per gallon. If the duty proposed were 12s., the position as regards the grape blend would be 12s. duty and 4s. cost per gallon, or a total of 16s., whilst the molasses would be 12s. duty, and is. cost per gallon, or a total of 13s. per gallon. In 0:her words, there is a difference of 3s. per gallon in favour of molasses. It would be impossible for the pure spirit to compete with it ; it would be knocked completely out of the market. What would that mean ? A few days ago I was in a part of South Australia - it is in my own district - where, within a radius of ten miles, between 10,000 and 12,000 tons of grapes are purchased every year for wine and the distillation of spirits. Let honorable members imagine farmers with acreages running from 10 to 130 or 140 having a ready market within a radius of a few miles for the sale of their grapes.

Mr Batchelor - There is no bonus for the production of grapes.

Mr GLYNN - Absolutely none. According to the season, these farmers get from £>2 t0 £5 a ton for the grapes. But suppose that they were paid £2 a ton, as they were last year. It would mean the purchase of 10,000 tons of grapes from the very class of men who ought to be encouraged, if there is anything in all this talk about democracy. But what is the position in that district? There are four of the leading distillers ready, in the intervals between seasons, to make advances on the crop of grapes, and without interest, I am told; so they really act as Mr. Joshua, the total quantity of molasses devoted to the production of spirits in 1904-5 was 7,000 tons, but the total production of sugar was 196,000 tons, so that the demand created for molasses by allowing brandy to be blended to the extent of 75 per cent, with molasses spirit is comparatively insignificant in relation to the total product of the sugar industry. I have told 'honorable members what this .proposal will mean to the small vine-growers in a district of South Australia, and within a radius of "ten miles. But let me now push the matter home. Are we driven to leave molasses alone? Will it remain a waste product if this preference be not given - a preference which might injure the reputation of our wine or brandy? On the 28th May, the American Senate passed a Bill allowing the use of spirits made from wood, potatoes, molasses, and other such materials for industrial purposes. It provides that it is to be denatured or adulterated - both) words are used - under Government inspection, and then it is freed from excise. The matter was fully discussed in the Scientific Amencan for July and previously. A few nights ago I read the articles, which fully explained the actual cost of production, and the uses to which the spirit can be put. On that point I should like to quote the evi- dence of a periodical showing that in their experience the very best way to break down the monopoly of such bodies as the Standard Oil Company is. to encourage, by freeing from duty, the use of spirit when denatured for industrial purposes, because, for cleanliness and other qualities, it is likely to supersede for many purposes the use of kerosene and other oils for supplying light, heat, and power. The quotation, which is taken from an American trade journal of about six weeks ago, reads as follows : -

On 24th May the Senate passed by a unanimous vote the Bill which provides for the freeing from taxation, after 1st January, 1907, of denatured alcohol used for industrial purposes. The Bill had previously been passed by the House, where it was opposed chiefly by the manufacturers of wood alcohol. This substance is to be used as an adulterant, however, to make the alcohol unfit for drinking. According to the provisions of the new law, the adulteration, or denaturizing of the alcohol is to be done in the various factories under the supervision of an internal revenue officer. By removing the tax from industrial alcohol, our Government has effectually put a stop to the domination of the oil trust over the use' of liquid fuel for light, heat, and power. In Germany and France devices for using denatured alcohol for these purposes have already been perfected, and placed in actual use, and their adoption in this country will no doubt come quickly as soon as industrial alcohol is on the market. As this fuel can be produced from many vegetable products that have heretofore gone to waste, and that, too, at a very considerably lower price than is obtained for gasoline and kerosene to-day ; there need never be any fear of lack of fuel, even should the coal measures all become exhausted, and the supply of natural oil cease. The new fuel, besides being cleaner and less volatile, will, when used in suitably-designed internalcombustion motors, develop about as much power per gallon as will the old, while for light and heat it is far superior. Its introduction will create a new market for the farmers of our country, while they will benefit directly from it also by using it themselves for the production of light and power.

Sir John Quick - That is all dealt with by the Commission in its report on industrial alcohol.

Mr GLYNN - The quotation is not the less valuable on that account. I was going on to mention that that recommendation has been made by the Tariff Commission, so that all we have to do is to get the Minister to adopt it; and, as far as there is any necessity, therefore, to allow distillation from molasses, the spirit could be devoted to a use which would lead to a far greater consumption than one which might mean the death of the great wine spirit industry. I think I could quote from several witnesses before the Tariff Commission to show the advisability of keeping our blends pure. As to the price of the molasses, it is somewhat significant that, in speaking of a scale of protective duties, Mr. Joshua talks about a duty of 2s. per gallon on molasses spirit, but a duty of 6s. per gallon on grape wine spirit, showing a bigger differentiation in cost between grape spirit and molasses spirit than I gave for the purpose of the comparison. I would strongly put it to the Committee that, by preventing the use of molasses spirit for the purpose of blending brandy, or, at all events, by so adjusting the duties 'that we do not differentiate against grape spirit, as is the case at present, we shall help the extension of a primary industry which ought ultimately to give a reputation to Australia. It is not a matter affecting a few men such as control the sugar industry ; in some districts there are hundreds of farmers engaged in grape-growing. I ask that reasonable opportunities be, given under the Tariff for the continuation of the development of this industry, which, during the last four years, under which the old Tariff of us. Excise on grape brandy, and 13s. on n.e.i., has made a tremendous advance, but which, if the blending provided for by the Government is allowed, will be destroyed, because growers will be unable to get rid of their grapes. That is why the representatives of South Australia are displaying an anxiety in regard to the matter which, although it may have distracted the honorable and learned member for Bendigo, is justified in view of the possible effect of the new duties.

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