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Thursday, 7 October 1971
Page: 2112

Mr CHIPP (Hotham) (Minister for Customs and Excise) - As promised I shall take a few moments only of the Committee's time. I compliment the honourable member for Maribyrnong (Dr Cass) upon the remarks that he made concerning marihuana and the sincerity that he showed in making them, although I join with my colleague, the honourable member for La Trobe (Mr Jess), in vigorously and violently disagreeing with him in his views and deploring the views that he has put. The only other matter on which I want to comment, because of the shortage of time, is that raised by the honourable member for Robertson (Mr Cohen). I believe that the honourable member has done the House a service in raising this perennial problem of companies and people gambling on budgetary items. As an aside - I do not think, it is unimportant - I deplore the way in which he has done it, and I want him to know that, person to person. If he wants to interject and ask me why I deplore it I shall tell him, but I suggest that he may not want to do so.

Mr Cohen - Well, I will ask why.

Mr CHIPP - The honourable member knows. Last week in the House the honourable member asked me whether there had been any basic change in procedures, to which I replied that there had not been. The situation is that every year companies and individuals gamble on what will be in the Budget. Every person who takes excisable products out of bond takes a punt. If he takes goods out he takes a punt on whether excise will be increased, knowing that if he did take them out and excise did not go up he could sustain a heavy loss because of the interest on the money. Big money is involved. In the case of petrol another element is involved in loss by evaporation. Over the years some people and companies have had their fingers burnt badly, and in other years they have had a windfall. But gambling is not limited to the Budget.

Mr Barnard - It is still a gamble.

Mr CHIPP - I think everybody gambles. I think some of us would gamble oy buying a little more grog for our cellars before Budget time if we suspected that there would be an increase, or we might buy cigarettes and other commodities. The same thing happens when there is a reference before the Tariff Board. If people suspect that tariffs will be increased they place their overseas orders accordingly. The same applies also when there are references to the Special Advisory Authority. Some people gamble on the rates of income tax that will apply. Some fortunate taxpayers - not parliamentarians - can regulate their amount of assessable income by including sales of land. Primary producers may anticipate taxes being increased in the following year and include income earned but not received to achieve a tax saving. The punting game has been going on since Federation.

This year, as in all or most years, there was punting on all excisable items - all of them. To cite some figures for the honourable member for Robertson, excise of $lm in excess of the normal pattern was paid on beer, but in the Budget the excise on beer was not increased. On spirits $1.8m more than usual was paid. Companies were out of pocket beyond their normal outlay on spirits because the excise on spirits was not increased. The outlay on petrol above the average excise paid to the Department of Customs and Excise was $14.6m, and on other petroleum products it was $lm. The figures which 1 am stating relate to the 5 days before 17th August, when the Budget was brought down. For cigarettes and tobacco S3 1.9m more than average was paid.

In regard to the so-called saving on petrol which the companies might have made, I announced to the Press on the day on which the honourable member for Robertson asked the question a figure of SI. 3m which I said was approximate. I now have the figures from outposts in Australia, and I think the honourable member would realise that it is a most complex matter to get these figures from all over Australia because there are many outposts. The net savings to petrol companies were approximately $1.9m. We have investigated the legality of this action, but what these people do is perfectly legal. These products are theirs and they are in their bond stores. We can do nothing if they say to the Department of Customs and Excise: 'We want our products. Here is the excise cheque.'

I think it is fair to say that one of my predecessors put to the Government his concern on this. The Government was sympathetic but ran into the barrier of legal problems. When I became Minister I was concerned about it. I investigated it because I was interested in the English legislation, which the honourable member for Robertson might know about. The English authorities can and do prevent this. To put it in simple terms, I am told by my legal friends that they can do it for the very good reason that Britain does not have a constitution and we have. However, I conclude as I began by saying that the honourable member for Robertson has done a service to the Parliament by raising this matter. I am still looking at ways and mean's - not necessarily legislative ways and means - of stopping this practice which I depore not only because it prevents the Government from collecting revenue - that is perhaps bad enough - but because the saving of revenue is not passed on to the consumer. Frankly, the latter aspect is the one that bothers me most.

Proposed expenditures agreed to.

Department of Education and Science

Proposed expenditure, $134,134,000.

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