BEER DUTIES

New Zealand Herald, Volume LXXI, Issue 21906, 15 September 1934, Page 14

BEER DUTIES

PROPOSED REDUCTION CLASH WITH MINISTER MR. SAVAGE'S ARGUMENT BENEFIT TO BREWERS ONLY [BY TKLKGRAPH —SI'KCIAL RKPORTKR | WELLINGTON. Friday Arguments regarding the reason for ' reducing the beer duties led to a sharp clash between the Minister of Customs, •Mr. Coates, and the Leader of the Mr. M. J. Savage, in the 'House of Representatives to-day, when the Custopis Acts Amendment Bill was being considered in Committee. Resenting Mr. Coates' attack, the Labour Party resolved to impede progress, with the result that the clause relating to the boor duties was held up for over three hours, and was stili under fire when the House rose at 5.30 for the week-end. It had been explained by Mr. Coates that, in order to secure a market for New Zealand hops in England, it was 'deemed advisable to reduce the duty on imported beer by 3d a gallon. However, the duty on imported beer could ' not be reduced without a corresponding modification of the rate of excise duty on local beer, which from a j revenue-producing point of view was J too high. Therefore a reduction of 3d j a gallon, both in import and excise J duties, was proposed. Viewpoint Not Accepted Mr. Savage said he could not accept ! ■ the viewpoint of the Government, which could not find money for other j purposes, but could make concessions to local brewers. Mr. Savage said he failed to see why those concessions wert» necessary in order to ensure a market for our hops in England. Replying with some warmth, Mr Coates" said that Mr. Savage had -adopted a pompous attitude, and did not know what he was talking about. The question whether the brewer, . licensee or consumer got the benefit of the concession was one that could only be left to the industry. His point was '"that, on account of the high taxation on beer, there had been a terrific growth in home-brewing. He had had - proposals prepared for taxing the home-brewing industry, but it was found it would be almost impossible to . administer them, as Australia was ; finding out. In his opinion, the reduo- ~ t'~>n of duty would not result in a re- ~ di. ;tion in revenue. " Mr. F. Jones (Labour —Dunediu -South): Will it increase the revenuet I Competing with "Home Brew" Mr. Coates said it would enable 'i- ' local beer to compete better with = "home brew." He contended that Mr • Savage was wrong in his interpreta- " tion of position. If the Hons* agreed to the reduction, it would be -■ possible to make contracts for the sale of New Zealand hops, not only for thin year, but also for four or five year' ~ "ahead. That could be done only by rcdueing the duty on imported beer, but A to do that without reducing the excise h duty would be unfair to the local in- - dustry. Mr. H. Atmore (Independent—Nel--31 son) said if it was desired to make a 3 gesture to Guinness, it woidd be all " right to reduce the import duty, but it was nonsense for the Minister to say "' it would be unfair to reduce ,the imfr port duty without reducing the excise "duty too. The remission of 3d a gallon to New Zealand brewers could not be passed on unless a coin valued at one-fifth of a penny were introduced or larger glasses were " provided. No reason had been ™ shown for a gift of £112,000 to the local brewers, which was the amount of the concession, based on last year's figures. ' Complaint was made by Mr. J. A. Lee (Labour—Grey Lynn) that the Chairman of Committees, Mr. S. G. Smith, had not called on a Labour speaker to enable Mr. Coates' attack on Mr.; Savage to be answered. He ' called the chairman "a crook referee," but withdrew the term at the chairman's instruction <•'. Statement Resented X.- : Speaking after the luncheon adjourn- ' ment, Mr. Savage said that Mr. Coates had accused him of adopting a pompous -. attitude, which was the last thing of '"Which he expected to be accused He had never heard a more illogical statement than the one made by Mr. »Coates. He had also been accused by " T , Mr. Coates of being ignorant of the reasons behind the proposal. t "I will meet the Minister anywhere and we will see who is ignorant. Tho Minister wants to lay foundations for the sale of our hops overseas, so he is going to give concessions to New Zealand brewers, the competitors of the people -. who will _buy our hops. If the Minister wants to/help overseas interests, would it not be more logical to curtail local beer? The less beer we bring in from overseas the less claim have we for a market overseas for our hops. Isn't that logical? Mr. Coates: No. A high excise duty does not mean a restriction of the sale * of beer. It means the illicit sale of beer through home-brew. Mr. Savage: There is no foundrrtion to the Minister's argument. He can ---- twist it any way he likes. I say the only ones who will get anything out of ~ n this will be the local brewing interests. .. It won't reach those who consume beer. If the Minister think? that by present- / j. ing brewers with £IIO,OOO or so he is going to stop home-brewing he is play- • - mg with the common sense of this committee. I resent the personal attitude he u has taken up against me. If he adopts that attitude outside this House I will vV meet him anywhere. " The Fight Is On " - Mr. Coates: If you impute motives you will get back what you give. Mr. Savage: Well, the fight is on and you need give me no quarter, because " you will get none from me. Mr. A. E. Jul! (Government—Waipawa) said it was regrettable that there should be acrimony over the question. / Mr. C. L. Carr (Labour—Timaru): Blessed be the |)eacemakers. Mr. Jull said there were 51 breweries ..in New Zealand, and New Zealand Breweries operated nine of them, ft was not in the slightest degree possible for the brewers to retain 13s per _ hogshead, for that was what the reduction would represent. The duty on v imported beer had been increased to 3s. but two years ago it had been re-•■-dueed to 2s, and it was now proposed to reduce it to Is 9d. The excise dutv .-.on locally-produced beer should reasonably share in the reduction Air. \\ Nash i Labour—Hutt) declared that the import duty was being • "*'retinced because of some undertaking give,, l,v the Minister "- Mr Co;ites said that was not so There had been an approach by two parties. one bv people who sold KngIvh l:rer and the other by the agent . \\ air-i'"ed the contracts .Mr NVV We are giving away! ((!-• •• ■ ;••(•-j m the revenue on inlirr 'K '.•<t!uecd beer. The value of i ho'ss e.x■*<:/, d Irxt year is £23.660. If j t' 't tr;v!e ia\Troh'"d, the Minister will i ht.J be from £4O,CGO to £50,000 to the

bad. If the hops are given away and the duty kept the same, we will be far better off. presuming consumption remains the same. Mr. Coates said that in his remarks the Leader of the Opposition had imputed motives. Mr. Savage: I did not impute motives. Mr. Coates: Well you left it in the air and asked what are the reasons for what has been done. Labour Members- We all want to know that. Mr. Coates said no brewing interests in this country had approached him, either directly or indirectly. It was incorrect to say that the Government would lose £i 12,000 in revenue as a result of the proposal. He was not so certain that the figures would not balance at the end of the year on account of extra consumption. He added that (59 applications from hotelkeepers in Wellington had been dealt with by the Mortgagors' Koliof Commission. Mr. Lee: Thov have been trading on goodwill that does not belong to them. Quoting from the latest price-list issued, Mr. Coates said the proposed reductions were now being passed on. There had been a reduction of 13s oil per 54-gallon cask of beer, 9s on 36 gallons, 4s 6d on 18 gallons, and Is 3d on 10 gallons. On large-size bottles o ale and stout the reduction was Gd per dozen, on small bottles 3d per i dozen, and on nip bottles lid i Mr. A. J. Stallworthv (Independent Eden): It is clear from those figures that the reductions won't bo passed on to the consumers. Scope for New Industry Mr. Coates said it would be utterly unfair to the brewers if a reduction of 3d a gallon were made on imported beer and the excise duty were allowed to remain the same. The arrangement, if carried into effect, would open up an entirely new industry. If the reduction were made, he believed the revenue would catch up as a result of the increased quantities used. Mr. W. ,T. Jordan (Labour —Manukau): We will drink ourselves to prosperity. Mr. E. F. Healv (Government — Wairau) saul Mr. Atmore would have a big hurdle to face in explaining to his hop-growing constituents the atti- j tude he had adopted in the debate. Mr. R. A. Wright (IndependentWellington Suburbs) said brewery ■ shares had risen by 4s immediately the ! Government's intention to lower the duties became known. Mr. Lee said he was the only former publican and therefore the on!} sinner m Parliament. He claimed that the brewing industry should wait for remissions until other sections of industry were given remissions. When Mr. Savage had said that Mr. Coates had charged him with being pompous and ignorant— Mr. Coates: I did not say ignorant. Mr. Lee: The Minister's outburst when explaining his proposals to the House almost suggests that his conscience was uneasy. Mr. W. J. Poison (Government — Stratford): Would not the hon. member get hot under the collar if motives wte imputed to him? Marketing Difficulties The Hon. W. Downie Stewart (Government —Diuiedin West) said the hor industry had always found it very difficult to establish an export market. If the door were opened to an export market, the hop industry would be very valuable to the Dominion. He detailed difficultirs that were encountered when an effort was made to establish a market in Ireland, in return for which Irish brewing interests soyght a reduction in the duty on their products in New Zealand. Mr. R. Semple (Labour —Wellington East) referred to the attack made by Mr. Healy on Mr. Atmore and added, "If you go into any hotel in Blenheim — Mr. W. A. Bodkin (who had relieved Mr. Smith in the chair): Order, order. Mr. Semple sought to finish what he was going to say in spite of the Chairman's admonitions, and ignoring him for the moment, carried on, "if you go into any hotel in Blenheim you can ask for a Tim Healy, and if you want to know what it means, they will tell you the biggest mug in the house." Mr. Bodkin ordered Mr. Semple to resume his seat. The suggestion was made by Mr. Stallworthy that the proposed reduction of 3d be reinstated and the equivalent be used to restore to old-age pensioners the full 10 per cent cut, retrospective from April 1. Treatment of Pensioners Mr. Coates: Will you vote for this 3d reduction if the old-age pensions go back ? Mr. Stallworthv: If the Minister will promise to restore the full 10 per cent in old-age pensions, 1 will vote for this. It is estimated that £24.000 is required to give back 5 per cent for half a year, so about four times that will be needed to give 10 per cent for the whole year, so, with another £12,000 or £13,000 added to this beer duty, the Minister could restore the pensions, especially if we have the surplus of £1,000,000 the Minister of Lands has talked about. Mr. Savage said he wanted to help the hop growers, but the Government's (jroposal would not do that. He had not lad it in mind to make any insinuations that any undue influence had been brought to bear on the Government. Mr. H. G. Dickie (Government — Patea) said he regretted that the Government had seen fit to mnke its first remission in taxation to the brewing interests. He would sooner have seen relief given to small tradespeople. Mr. Jull referred to the price list issued by New Zealand Breweries, announcing the reductions in the price of beer. Mr. W. K. Barnard (Labour — Napier): What is the date on the letter ? Mr. Jull: It is dated September 15, that is to-morrow (loud laughter). I presume it will be circulated to-morrow if this clause is retained. Mr. Barnard: It is very useful to-day for purposes of debate. Mr. Lee said that if the letter had been written two days after the original customs resolutions had been passed the Government would have had a strong argument. However, the letter was now an argument against the Minister The subject was still under discussion when the hour of the adjournment arrived.