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Wednesday, 22 August 1973
Page: 263

Mr GILES (Angas) - During the Budget Speech yesterday it became apparent that the Government, whilst believing in keeping prices down - although it did nothing of any significance to stop inflation - in one area of great concern to my electorate put prices up. I refer to soft drinks - that commodity which is so important to all school children, to mothers with families and to everyone else. By removing the sales tax exemption yesterday the Government will force up the price of soft drinks by 5c to 6c for a medium sized bottle when the exemption becomes completely applicable. I point this out because I do not think that many people realise yet that this is one of the ruboffs of that action. That is a general remark. The Government has put up the price to the consumer very significantly by removing the 15 per cent deduction from sales tax that was applicable to all fruit soft drinks - in fact, all non-alcoholic beverages. The only two drinks that were not affected by the sales tax exemption were soda water and tonic water. All other non-alcoholic beverages have contained Australian fruit juices. This deduction, which used to encourage the use of fruit juices, was lifted by the Government in its Budget yesterday.

To the growers at the top end of my electorate this means that Washington navel oranges - they cannot be used for fruit juice because of their slight bitterness, as compared with Valencias, and can be used only in soft drinks and cordials - may well be put on the scrap heap. As honourable members with knowledge of the citrus industry will know, all these Washington navels come in in one seasonal flush, as distinct from the Valencia oranges that come in throughout a reasonable period of the year. So these Washington navels will be flung on the scrap heap if no alternative outlet is found for them. This will cost the citrus growers in my area in the region of $500,000 during the first year. I make this comment because 1 noted that the Treasurer (Mr Crean) in passing said in his speech yesterday that the exemption from sales tax gave no significant return to the primary producers. In that one small pocket of my area if alternative outlets cannot be found for Washington naval oranges, the growers will be short of 5500,000 in the first year. This is a terrible blow to the electorate of Angas.

Mr Morrison - Not as big a blow as their member.

Mr GILES - The Minister for Science and Minister for External Territories may be whimsical, critical or humorous if he is capable of being so, but this is a serious matter to my electorate, and I hope that he will regard it as my right and responsibility to point out in this Parliament the effect that the Budget will have on people in my electorate. I have mentioned the consumer and the increasing prices of these products brought about by Government action. I have mentioned the loss from the pockets of growers in my electorate caused by that action.

I would now like to mention a much mere important matter. In my electorate there are co-operative factories, not the least of which is Berri Fruit Juices Co-operative Ltd. This company has taken up the challenge flung to the citrus industry on American trends and figures and today produces more than half of the total juice requirements of this nation, lt does so not out of imported products but out of Australian fruit growers' raw material. This matter is so serious that that modern, first class factory is now threatened financially in a very real way. It currently holds stocks worth about $500,000. The orders placed for wholesale purposes and soft drink manufacture are considerable but nobody knows which way to go. One of the purposes of my rising to speak tonight is to try to impress on the Government that not only will individual growers suffer real loss, not only will the consumer have to pay considerably more for soft drinks, but there is also a very real problem whether the co-operative factories - the factories owned by farmers in these communities - can remain solvent. A great deal of finance is required to ensure that alternative outlets of growing importance for fruit juice are kept open and encouraged in some way to operate efficiently and capably for the sake of the nation.

I would like to mention a fourth matter which may strike home even more forcibly to honourable members. When the proposed legislation comes into effect about 95 per cent of soft drinks produced will not contain fruit juice as a natural food. What is the alternative? Unquestionably this short sighted action by the Government will mean that in order to remain solvent many soft drink manufacturers will immediately search for an alternative product. It does not require much imagination to realise that they will turn away from a natural foodstuff to some form of artificial colouring, flavouring and so on.

Mr Morrison - It is all artificially coloured.

Mr GILES - I am acknowledging that. My point is that as an alternative to pure fruit juices alternative artificial commodities will be used. There is no question about that. They may not be used in the first week or two after the legislation is passed but the encouragement is provided by this Government virtually to subsidise research into alternatives. That might sound like a wild statement but it is the main fear of people in the community from which I come who think about these matters.

I do not have time now to go into another dire matter that will affect my electorate. It concerns brandy. The brandy producers in my electorate provide about 92 per cent of the brandy produced in Australia. They have now been hit by the valuation of stock laws but I will not debate that now. One can argue either way. They have been hit also because the differential they have had all these years as against Australian gin, rum and vodka is to be removed over a period of years. People might say: 'Fair enough. Why not?' I remind the House that the grapes with which I am concerned have only 2 production outlets - wine or brandy. There are no alternative outlets. That restriction does not apply to the raw materials for Australian rum, vodka and whisky. In the production of those liquors the by-products of major industries can be used.

Away back in 1953 the Government of that time made the same mistake as this Government has made. It tried to equalise the excise on brandy with that payable on competing products. The industry fell into a state of complete disrepair in a very short time and the differential had to be reintroduced. I have put these matters forward as calmly as I can but they are matters of very great moment to the people involved in the industries concerned. The sales tax exemption applies across the apple, pear and soft fruit growing areas in the other section of my electorate but that problem will remain for discussion on another occasion.

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