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Thursday, 23 August 1973
Page: 375

Mr CREAN (Melbourne Ports) (Treasurer) - I would like to reply briefly to two or three of the honourable gentlemen who tonight have raised matters that impinge upon my responsibility. My friend from Angas (Mr Giles) claimed that he was more emotional tonight than usual. 'He certainly was no more rational than usual.

Mr Giles - That is only in your judgment.

Mr CREAN - I think his was not the best digested case, if I might say so, and a little politically biased. In relation to his remarks and those of the honourable member for Murray (Mr Lloyd) and my friend from Wilmot (Mr Duthie) about the question of carbonated fruit drinks, I should simply like to ask them to reflect upon the words in the Budget Speech. They will have an opportunity later, when the necessary Sales Tax Bill comes before the House, to argue this matter in more detail. In the Budget Speech I indicated that the previous scheme was giving minimum benefit to the fruit growers and maximum benefit to other .people. I do not often name commercial products but in my view one of the world's worst drinks is Coca Cola. Merely to come within the provisions of a 5 per cent content of fruit in order to escape the sales tax I think is typical and indicative of how concerned some companies are about the fruit growers and how concerned they are about their own pockets.

What I pointed out the other night was that these drinks should be treated in the same way as drinks that have no fruit content. If anybody in this House can argue that Coca Cola is better because it has a minimum of 5 per cent fruit content rather than none, I would be happy to have the explanation. But because these drinks have the minimum fruit content the fruit growers are able to sell $5m worth of fruit juice and I lose $25m in revenue. I have indicated that I would prefer to give $5m directly to the fruit industry. It would be much better to sell pure fruit juice than adulterated fruit juice, which is what it is. It was for that reason we chose to do what we did. I described the previous arrangement as a classic example of trying to do the right thing in the wrong way.

Mr Martin - Will this be $5m each year?

Mr CREAN - If the fruit industry can show that it has a detriment to that extent, yes, but I would be surprised that if it did not use a little more initiative it could not sell the product on its own merits. There is still no sales tax on drinks that contain more than 5 per cent of fruit content. If the Coca Cola company would less adulterate its product and make it 10 per cent fruit content it would sell twice as much and I might be prepared to look at this situation on that basis. What I am saying is that the company has sailed within the minimum confines and has received the maximum benefits. What we want is a scheme that will give the maximum benefit, and I am sure that all honourable members who have spoken tonight are really more concerned about the fruit industry than they are about the carbonated drink industry. I think that once certain tax benefits are perverted by certain areas of industry we are entitled to take steps to correct the position. That is what is being done.

I am willing, as one of my colleagues said, to receive any representations and I hope that they will be adequately documented. I think one of the best drinks in the world is 100 per cent apple juice. Some companies include a 5 per cent fruit content in their product simply because the Government has provided a concession? Why was the percentage as low as 5 per cent? Products containing 25 to 50 per cent pure fruit are not taxed. We regarded the concession as a lurk which is being used not to the advantage of the fruit industry but to the advantage of these firms, many of which are of the multi-national variety. I have heard all sorts of stories about what happens if one puts a silver coin in a bottle of Coca Cola. I have never wanted to go that far because, to begin with, I think it is overcarbonated and not 'fruitised', if I may use that expression. At least this is one of the things that we have recognised.

On the question of brandy, I do not think the industry is really struggling as much as the honourable member for Angas (Mr Giles) suggests. Rum producers in Australia at least now think that I have given them some equality in respect of brandy.

Mr Giles - You have given them an advantage. It is a pure by-product of another industry.

Mr CREAN - They say it removed a disadvantage. Here we are at the point of semantics but if the brandy industry at some later point of time can show me that it has been battered to the ground as a result of this action, which would greatly surprise me, I will be prepared to hear representations. But I do not like belly-aching in advance. I can understand it because if one does not howl first one is sometimes not taken notice of eventually. At least no detriment has as yet been suffered by that industry. It imagines that it might.

Mr Giles - It has a case before the Tariff Board yet you are saying that a disadvantage is not being suffered.

Mr CREAN - All I am saying is that a very marginal difference has been made to that industry. This is indicative of many situations that exist in the community. People who might survive otherwise are surviving better than they would because subsidies are being given to them. Sometimes there are cases for subsidies but I believe that all subsidies, when they are given, should be revealed rather than concealed. The Coombs Report has revealed comprehensively for the first time the way many things have been concealed over a long time. Many years ago there was a reason for doing certain things but there is not necessarily the same necessity in 1973 to preserve them. Some of the Government's proposals will not begin to have impact until later this financial year. If people find that they have suffered detriment to the point where they are likely to be exterminated, I will be willing to listen to them, but I think many are receiving benefits that were introduced many years ago which they no longer require. Insofar as they do not require them and they are being maintained, they are getting them to the disadvantage of other sections of the community. The purpose of the Budget has been to try to strip away many of the these provisions.

Ohe of the greatest difficulties in improving welfare payments has been what was described in the Budget speech as the erosion of the tax base. People's taxable income was being reduced considerably by varoius types of devices about which, whilst they once may have had some validity, there is doubt whether that validity exists any longer. I simply say that in defence of the action that has been taken. I have noted the statements made tonight and if well documented cases are put to me showing detriment, I will at least look at them sympathetically.

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