Senate
16 May 1940

15th Parliament · 2nd Session

  1. Senate
  2. 15th Parliament
  3. 1940

The President (Senator the Hon. J. B.Hayes) took the chair at 2.30 p.m., and read prayers.

page 861

ADDRESS-IN-REPLY

presentation to thegovernorGeneral.

The PRESIDENT:

– Accompanied by honorable senators, I, this day, waited upon the Governor-General and presented to him the Address-in-Reply to His Excellency’s Speech on the occasion of the opening of Parliament, agreed to by the Senate on the 14th May. His Excellency was pleased to make the following reply. -

Mr. President,

I desire to thank you forthe AddressinReply, which you have just presented to me.

It will afford me much pleasure to convey to His Most Gracious Majesty The King the message of loyalty from the Senate of the Commonwealth of Australia, to which the Address gives expression.

page 861

LEAVE OF ABSENCE

Motion (by Senator Dein) - by leave - agreed to -

That leave of absence for one monthbe granted to Senator Grant on account of ill . health.

page 861

QUESTION

WHEAT INDUSTRY

Stabilization Scheme - Mice Plague.

Senator FRASER:
WESTERN AUSTRALIA

– In view of the statements made recently by the Minister for Commerce with regard to the wheat industry, suggesting the necessity for a restriction of production, will the Minister representing the Minister for Commerce state whether power will be taken under the National Security Act to formulate a stabilization plan that will ensure the safety of the wheat industry and give to the farmers a reasonable standard of living?

Senator McBRIDE:
Minister without portfolio assisting the Minister for Commerce · SOUTH AUSTRALIA · UAP

– That matter is under the consideration of the Government at the present time.

Sena tor ARMSTRONG asked the- Minister representing : the Minister for Commerce, upon notice -

  1. Is it a fact that a mice plague is attacking wheat stacks inthe country districts of New, South Wales? 2.If so,whatstepshavebeen taken to remedy the position?
Senator McBRIDE:

– The Minister for Commerce has supplied the following answers : -

  1. Mice have greatlyincreased in numbers in parts of New South Wales, and. wheat stacks at some stations have been attacked by them.
  2. Supervision is being maintained over all stocks in mice-infested areas. Precautions to keep mice out are being rigorously observed, and any stacks to which mice gain ingress are promptly treated with Cyanogas. Every action practicable to minimise damage is being taken.
Senator E B JOHNSTON:
WESTERN AUSTRALIA

asked the Minister representing the Minister for Commerce, upon notice -

  1. With reference to the Minister’s recent advice to wheat-growers voluntarily to reduce their production of wheat by cropping reduced areas and cutting morehay -

    1. Has the Government decided to acquire the coining harvest?
    2. Why was notwheatcompulsorily acquired for the period of the war, as were’ other primary products?
    3. Hasthe Government received an offer from the Australian Wheat-growers Federation to co-operate in devising a marketing scheme and stabilizing the industry?
    4. If so, what action has been taken towards the acceptance of this publicspiritedoffer? 2.Can the Minister in any way ‘allay the uneasiness… exiting, amongst wheat-growers withregardtotheir next crop, which is, said to have been accentuated by his recent statement?
Senator McBRIDE:

-The Minister forCommerce has supplied the following answers : -

  1. (a)A decision onthis question has not been made.

    1. The’decision to acquire the 1939-40 cropland todefer a decision in regard to later ‘ crops, was governed by a consideration of the general wheat position. Circumstances vary with different products and each one must be considered separately.
    2. and (d) The Australian Wheat-growers Federation’ has expressed its - desire to cooperate with the . Government on measures necessary for wheat stabilization. The Minister for Commerce has to-day discussed the matter with representatives of the federation.-

  2. The Minister’s recent statement was intended to bring some important facts to the attention of wheat-growers. Further facts will be brought to their notice whenever necessary,and, if advice is taken, the need for uneasinees will be greatly decreased.

page 862

TARIFF BOARD REPORTS

Senator McLE AY laid on the table reports and recommendations of the Tariff Board on the following subjects: -

Barometers and barometer movements.

Bolts;nuts, rivets and metal washers n.e.i.; screws ‘with nuts or for use with nuts; engineers’ set screws; fishbolts: rail-dogs orbrobs, spikes.

Canvasandduck, waterproofed.

Dentalinstrumentsand appliances.

Electroliers; gasaliers; chandeliers; pen dants; brackets.

Glycerine

Hoods other than of felt, hat forms of braid . and similar material.

Hoop pine for export butter boxes.

Imitation gut.

Lifting jacks for motor vehicles.

Mercerised cotton yarn.

Metal hinges, butt and tee.

Metal lea? and metal foil; foil paper; foil board.

Rugs n.e.i., and rugging.

Spectacle cases of the snap type.

Spoons and sticks for. ice cream.

Spring hinges.

Tractor cylinder sleeve assemblies and pistons.

Tractor engine units and road roller engine units.

Woodworking machinery.

page 862

QUESTION

WOOL APPRAISEMENT

Senator ARMSTRONG:
NEW SOUTH WALES

asked the Minister representing the Minister for Commerce, upon notice-

  1. Is it a fact that appraisers of German birth are handling Australian wool clips?
  2. If; so. have any stops been taken to remove such persons ?
Senator McBRIDE:
UAP

– The Minister for Commerce has supplied the following answers : - l and’ 2.470 appraisers are employed by the Central Wool Committee, This number includes three persons born in Germany ofGerman parents, who have been naturalized British subjects and resident in Australia for varying periods. This matter . is at present the subject of consultation with the Central Wool Committee.

page 862

QUESTION

MAKINE RADIO BEACONS

Senator ALLAN MacDONALD:
WESTERN AUSTRALIA

asked the Minister representing the . Minister for Commerce, upon notice- .

  1. On what dates were the marine radio beacons installed on the Victorian coast?
  2. Have reports been received from shipmasters as to the efficacy of these beacons? ‘
  3. Has consideration been given to the question of installing other beacons on the Australian coast?
  4. In view of the largeincrease of shipping using the port of Fremantle, and waters adjacent thereto,’ will beacons be erectedsoon on the Western Australian coast?
Senator McBRIDE:
UAP

– The Minister for Commerce has supplied the following answers: -

  1. One radio beacon was installed at Cape Otway, Victoria, on the 29th June, 1938.
  2. Yes. Many reports indicating the efficiency and utility of the beacon have been received from shipmasters. 3.Yes. New beacons will be installed at Cape Schanck, Victoria, and Cape Wickham, King Island, Tasmania, in the near future to form a network with the beacon already established at Cape Otway.
  3. It is the intention, when the financial position permits, to install further beacons at other salient points on the Australian coast. The necessity for a beacon at Rottnest Island andat other points on the Western Australian const will be considered.
Senator ALLAN MacDONALD:

asked the Minister representing the Treasurer, upon notice -

  1. What sum has been allocated by the Government for the purpose of assisting in the discovery and development of new gold mines?
  2. How is this assistance to be allocated as between States, and under what conditions?
  3. Have any applications for this assistance been received from any of the State governments or individuals?
  4. What amount of assistance has been given to date?
Senator McBRIDE:

– The Treasurer has supplied the following answers: -

  1. Assuming that an allocationfrom the gold tax is referred to, nil.
  2. See answer to No. 1.
  3. No, but the Premier of Western Australia has asked for a portion of the gold tax to be made available to the State for the purposes of advances to mining interests in order to increase the gold output, and conditionally upon the advances being repaid from gold won with interest and, pending repayment, full security to be given by the assisted parties ; in addition, requests have been received from mining interests for rebates and exemptions from gold tax and for loans for development purposes.
  4. Nil, but the matter is under consideration.

page 863

QUESTION

DEFENCE AND GOVERNMENT SUPPLIES

Western Australian Production

Senator ALLAN MacDONALD:

asked the Minister representing the Minister for Supply and Development, upon notice -

  1. Has the representative of the Minister for Supply and Development, who recently visited Perth to inquire into the local production of defence and government supplies, yet tendered his report?
  2. When will a copy of this report be available for perusal?
Senator FOLL:
Minister for the Interior · QUEENSLAND · UAP

– The Minister for Supply and Development has supplied the following answers: -

  1. The officer concerned has not yet submitted his report but will do so atan early date.
  2. When the report is received, consideration will be given the honorable senator’s request.

page 863

QUESTION

APPLE AND PEAR ACQUISITION SCHEME

Senator ASHLEY:
NEW SOUTH WALES

asked the Minister representing the Minister for Commerce, upon notice -

  1. Does the Government propose to modify the Apple and Pear Organization Act to provide: -

    1. State varietal pools, each State pool to be independent of the others financially ?
    2. that recognition will be given to the principle of appraisement according to values within each State pool?
    3. that advances paid on fruit not delivered to the State pool will not be a charge on the pool?

  2. Before anything is done by the Government to modify the act, will the Government undertake to call a conference of growers only so that the growers may fully represent their case?

Senator McBRIDE:
UAP

– The Minister for Commerce has supplied the following answers : - 1. (a) It is. intended toreconsider the question of State varietal pools in the near future when a review of the financial position of the scheme will be made.

  1. Any recognition of the principle of appraisement is dependent upon the action taken in regard to State varietal pools. (c)All advances are’ recoverable from the proceeds of the realization of the crop. ‘ It is not proposed to amend the provision.

    1. It is not proposed to convene a conference of growers to discuss the modification of the regulations in respectof the present crop. The Government has, however, taken action to convene a conference of all interests of the apple and pear industry at Canberra during June. Each State Premier has been requested to arrange for a preliminary meeting in his State, and for the selection of the industry representatives to the general conferencein Canberra.

page 863

QUESTION

DEFENCE EXPENDITURE

Western Australia

Senator FRASER:

asked the Minister representing’ the Minister for Defence Co-ordination, upon notice -

  1. What amount has been expended from the allocation of defence money in Western Australia for the financial year 1930-40 to date?
  2. What amount has been expended from that allocation in Western Australia for. material, labour, &c. ?
  3. What amount (if any) from the allocation for Western Australia has been expended in other States of the Commonwealth and charged to WesternAustralian defence allocation?

SenatorFOLL. - The Minister for Defence Co-ordinationhas supplied the following answers : -

  1. £1,402,473.
  1. Nil.

page 864

QUESTION

DARWIN PATROL

Senator BRAND:
through Senator Dein

asked the Minister representing the Minister for the Army, upon notice -

  1. Is it a fact that fifteen non-returned soldier privates were recently promoted to fill seventeen non-commissioned officer vacancies in the Darwin Patrol, now in camp in Melbourne?
  2. Is it a fact that the strength of the Patrol is91 men, including 15 returned soldiers ?
  3. How many applications were received from officers with active service to fill the five positions as officers in this Patrol?
  4. Is it a fact that only one officer who had seen active service was appointed?
Senator FOLL:
UAP

– The Minister for the Army has supplied the following answers : - 1.The numbers required for duty at Darwin included personnel from Permanent Military Forces, Militia Forces, and from Garrison Battalions. A total of seventeen noncommissioned officers was required - fifteen for service with Militia and two forservice with the Garrison Detachment. Generally speaking, non-commissioned officers were appointed in the ranks in which they were serving in the Militia. In other eases men who had qualified for promotion in their Militia units were promoted to the ranks for which they were qualified. The proportion of returned soldiers in the Militia quota is not known but it wouldbe small. The non-commissioned officers of the Garrison Detachment are of course re turned soldiers.

  1. The quota from Southern Command comprises 7 officers and 95 other ranks, all of whom were already serving - 8 in the Permanent Forces, 17 in Garrison Battalions and 77 in the Militia. 3 and 4. Six positions were filled by Militiaofficers already serving, one of whom had active service. The other vacancy was filled by a GarrisonBattalion officer, who is a returned soldier.

page 864

QUESTION

POWDERED MILK

Usein Military Camps

Senator FRASER:

asked the Minister representing the Minister for the Army, upon notice -

  1. Is it a fact that powdered milk is supplied to troops at the Northam camp and other camps in Western Australia?
  2. If so, in view of the plentiful supply of fresh milk, will the Minister give consideration to the use of such in the various camps so as to assist the local producers?
Senator FOLL:
UAP

– The Minister for the Army has supplied the following answers : -

  1. Yes. Milk, powdered and condensed, is issued to all troops for three main reasons -

    1. To accustom cooks, caterers and troops toits proper use in view of the fact that in war it will be the only type of milk available.
    2. As milk is particularly liable to absorb germs which spread certain diseases, notably typhoid and intestinal disorders, medical authority has urged extreme caution in the supply of milk unless delivery can be assured perfectly fresh and under hygienic conditions, and unless adequate facilities exist in camp for its inspection and protection.
    3. Until refrigeration was available to ensure the preservation of milk and until the Inspection Branch of the Supplies Service had been organized, fresh milk was not purchased.

  2. In so far as is practicable and when adequate facilities for safeguards exist, fresh milk is now being supplied in increasing quantities but certain quantities of the dried and condensed forms must always be used.

page 864

QUESTION

COMMONWEALTH MEDICAL REFEREES

Senator AYLETT:
TASMANIA

asked the Minister representing the Minister for Health, upon notice -

  1. Has the Commonwealth Government appointed a Commonwealth Medical Referee in every town or city in Tasmania?
  2. If not, are there any Commonwealth medical referees in Tasmania; if so, how many are there?
Senator McLEAY:
Minister for Trade and Customs · SOUTH AUSTRALIA · UAP

– The Minister for Health has supplied the following answers : - 1 and 2. Apart from the work of the medical staff attached to the Repatriation Commission, medical referees are under engagement to the Pensions Office and the Commonwealth Public Service Board, in Tasmania, at 51 and 31 centres, respectively.

page 865

QUESTION

FLAX FIBRE ANDTOW

Senator AYLETT:

asked the Minister representing the Minister for Supply and Development, upon notice -

  1. Has the Government accepted any tenders yet forflax fibre and tow?’
  2. If so, at what price per ton?
Senator FOLL:
UAP

– The Minister for Supply and Development has supplied the following answer: - 1 and 2. Tenders have been invited for the supply of flax fibre and tow, but so far no tender has been accepted.

page 865

QUESTION

SPORTING AMMUNITION

Senator AYLETT:

asked the Minister representing the Minister for Supply and Development, upon notice -

  1. Is it a fact that there is a shortage of stocks of ammunition held by local storekeepers in Tasmania for the needs of hunters for the coming open game season?
  2. If so, will the Minister give an assurance that sufficient stocks of ammunition will be made available to meet their requirements?
Senator FOLL:
UAP

– The Minister for Supply and Development has supplied the following answers: -

  1. I am not in possession of any data regarding stocks of ammunition held by local storekeepers in Tasmania.
  2. As it is of vital importance that every round of small arm ammunition held by the Commonwealth Government be conserved for the fighting services it is quite definite that sales of . 303 in. ammunition for commercial purposes cannotbe authorized during the present war.

page 865

QUESTION

TAXATION

Senator UPPILL:
SOUTH AUSTRALIA

asked the Minister representing the Treasurer, upon notice -

  1. If a person has a net private income of over £400 per annum, does he have to pay tax on military pay, and wife and child allowance, once he joins (a) the Militia, (b) the Australian Imperial Force, or (c) the Royal Australian Air Force - even though he has not left Australia?
  2. If his income from the above is derived from several States, does that make any difference for Federal tax?
Senator McBRIDE:
UAP

– I am advised by the Treasurer that the policy in connexion with this matter is receiving consideration by the Government and a further reply will be furnished as soon as possible.

page 865

WAR PENSIONS APPROPRIATION BILL 1940

Bill read a third time.

page 865

INVALID AND OLD-AGE PEN SION SAPPROPRIATION BILL 1940

Bill read a third time.

page 865

CONTROL OF PRICES

Ministerial Statement: Primus Stoves - Sugar

SenatorMcLEAY (South Australia - Minister for Trade and Customs). - by leave - Yesterday the Leader of the Opposition (Senator Collings) referred to the sale of primus stoves in Sydney at inflated prices. I am advised by the Commonwealth Prices Commissioner that as soon as it was apparent that a special demand had been created for primus stoves owing to the restrictions imposed in the use of gas and electricity in New South Wales, the Deputy Prices Commissioner in that State immediately sent an investigating officer to the leading suppliers in order to check their stocks and sales. The investigation showed that primus stoves were being sold at cost, plus normal profit. Old stocks, imported before the war, were small and were quickly sold out, and new stocks had been sold at a price proportionate to the higher cost. I assure the Senate that in this, as in other instances, prompt action was taken by the price-fixing authorities to protect consumers against any tendency to take advantage of a temporary increase of demand owing to abnormal conditions. In the press announcement to which the honorable senator referred, the Common- wealth Prices Commissioner had advised consumers to submit any complaints they had concerning excessive charges to the Deputy Prices Commissioner in Sydney, who would promptly investigate the facts. If the honorable senator is able to supply such information he will be assisting the price-fixing authorities in carrying out their difficult task.

The Commonwealth Prices Commissioner (Professor D. B. Copland) announced to-day that he had received applications from the Retail Grocers Association of Australia for an increase of the retail price of sugar of¼d. per lb., and individual applications for increases of the gross profit margins allowed on other commodities, notably butter and tea.

In the new sugar agreement now before this Parliament, no change is being made in the prices paid to producers under the agreement, but the scope of the wholesale discount had been widened as from the 1st September, 1940, to the degree that any person, firm or corporation complying with certain specified conditions as to wholesale trade might obtain the discount. Under this provision the way was open from the 1st September, 1 940, for retailers to obtain some relief in respect oftheir purchases of sugar. It was recognized that the retail gross profit margin on sugar was low, and that some increase of costs to the retailer had occurred since the outbreak of war; but the margin on sugar had to be considered in relation to the average profit margin to grocers on all lines. As the sugar agreement was, in general, being continued without any improvement in the remuneration of the sugar-growers and wholesalers, and the wholesale discount was being widened, it was not considered desirable at this stage to vary the cash price to consumers under the National Security (Prices) Regulations. The retail price had remained unchanged for some years before the war, when there was no official control over the retail price of sugar, though the retail grocers had been making plans just prior to the war to raise the price in order to obtain a higher profit margin on sugar.

Since the outbreak of war some increase of costs in the retail grocery business had taken place, but, on the other hand, on most groceries the percentage profit margin available remained at the pre-war level. It was not possible without inquiry to estimate the net effect upon the position of the retail grocer, but an inquiry was now being conducted with a view to examining the gross profit margin on standard lines and the effect of the war on retailers’ costs.In the light of this inquiry the whole position of margins in the retail grocery trade would be reviewed, but in view of the special position of sugar under the agreement between the Commonwealth Government and the Queensland Government, where all prices up to the retail stage were fixed by statute., no general variation would be made in the cash price of sugar to consumers under the National Security (Prices) Regulations.

page 866

SUGAR AGREEMENT BILL 1940

Second Reading

Debate resumed from 15th May(vide page 797) on motion by Senator McBride -

That the bill benow read a second time.

Senator AMOUR:
New South Wales

– I move as an amendment -

That all the words after the word “ bill “ be left out with a view to insert in lieu thereof the words “ should be referred to a royal commission for consideration and report as to the effect of the sugar agreement on -

1 ) The position of the wage-earners in the industry.

As to whether the primary producers- have benefited, and to what extent, by its operations since 1915.

As to whether the price of sugar could be reduced to the consumers in Australia.

The degree to which the Colonial Sugar Refining Companyhas benefited by the agreement.”

Through the bill now before us the Government seeks our approval for the renewal of what is commonly known as the sugar agreement. This agreement with the Queensland Government, which Las been in operation since 1915, was renewed as from the 18th April, 1940. It covers certain classes of sugar for use in Australia, and for export. It appears that the major alteration is that the conditions previously applied to the State capital cities are to apply to Darwin.I make it clear at the outset, that I have no desire to prejudice any protection which the agreement gives to workers in the industry, the producers of sugar, or manufacturers of canned fruits, who, itis alleged, have benefited under the agreement to date’. A matter that is causing considerable concern throughout the who!” of the States, with the exception of Queensland, is the effect of the operations of this agreement upon the consumers. It is generally believed in most of the States that, whilst some benefit might be derived from the agreement by the workers in the industry, the growers and manufacturers, the great bulk of the benefit has gone to one of the greatest monopolies in Australia, namely, the Colonial Sugar Refining Company Limited. It is because of this doubt, and also because since 1915 no effective inquiry has been made into the ramifications of the Colonial Sugar Refining Company Limited, that I hare submitted my amendment.

Usually these agreements are presented to Parliament with the enthusiastic support of some sections of the House, and the denunciation of others; but the data that that would provide members of the House with the opportunity to make a considered judgment on the question ha& generally been lacking. All that Ave have been told in a vague way, is that the workers in the industry have benefited by the stabilization of their wages, the primary producers by stabilization of the price paid for their raw sugar, and the manufacturing interests by the ‘ concessions that flow from this legislation; but although these claims have been made, it, lias never been shown that these sections of the community have received from the agreement anything comparable with what’ lias been received by the Colonial Sugar Refining Company Limited. It is for that reason that I desire the appointment of a royal commission to examine the industry,’ and ‘to determine whether the producers and consumers have received all or any of the benefits that have been derived from improved methods of cultivation, and refining, or its distribution, and use in the various industries which depend upon it. It appears to me that the principles in this agreement are the very same as were rejected in the referendum of the people of Australia quite recently. I refer to the marketing referendum. The principle of the legislation then submitted to the electors was that the Australian consumer should pay an inordinately high price for a commodity produced in Australia in order to compensate for the lower prices received for it in foreign countries. Even in the State of Queensland,” which benefits most by this legislation, the referendum proposal was rejected. The first point of interest in the agreement is the fact that the employees in the cane-growing districts shall bp entitled, at all times during the period of- the . agreement to have their rates of; wages and . conditions of employment- determined by conciliation or arbitration, if not settled by agreement; otherwise a tribunal may be established to determine these matters. This is not a new departure. This is a phase of the agreement that has operated for the past 25 years, and it is interesting to see what benefits have accrued to the workers in the industry as a result.

The Minister stated that the increase of the average of all Commonwealth and State basic wages since 1911 had been 68 per cent., but at the same time he admitted that there had been a 66 per cent, increase of the average retail price of all food and groceries required by those workers; so it cannot be argued that they have very materially benefited by the agreement.

I come now to the position of the consumer. The- Minister made great play on the fact that under the agreement sugar will be supplied to retailers at Darwin, bringing them under the same conditions as apply to the retailers in all State capital cities of the Commonwealth. He pointed out that in Darwin the public had been charged 5£d. per lb. retail, as compared with 4d. per lb. in State capital cities, and said that from the 1st September, 1941, Darwin retailers will receive supplies at the same prices as are charged to retailers in other capital cities. He also stated that the retailers at Darwin had undertaken to reduce the retail price in due proportion, but I suggest that there is nothing in his speech to indicate that the Commonwealth Government will exercise its powers, either at Darwin or Canberra, to compel retailers to sell at the prices prevailing in the other capital cities. As a matter of fact the Minister indicated that already the retail grocers’ associations in the capital cities had asked the Commonwealth Prices Commission for authority to raise the existing price from 4d. per lb. retail to 4 1/2 d. per lb. He has further stated that the agreement under consideration referred only to peace-time conditions, and that the Commonwealth is precluded by the Constitution from fixing in this bill the prices to be charged during- the war by retail grocers to domestic consumers. The Minister pointed out that this power is reserved to each of the States. This is a very frank confession that, whilst the’

Commonweal th takes the responsibility for passing this agreement, which, it is alleged, will benefit primary producers, the workers, the Colonial Sugar Refining Company Limited, and the manufacturers of canned fruits, the Government has not the authority to prevent the grossest exploitation under war conditions.

What will be the effect of this agreement on the primary producer? It has been in operation for 25 years, and yet the Minister admitted that in the latest annual report of the Queensland Commissioner of Taxes it was shown that 81 per cent. of all the sugar-cane growers had a net taxable income too low to render them liable to pay any income tax at all. That is a remarkable admission on the part of the Minister. During the past 25 years there has been an enormous improvement of the methods of cultivating sugar; the productive capacity of the land has been enormously increased; farming implements have been improved; and yet, in spite of increased and cheaper production, the only result of the operations of the agreement on the financial standing of the cane-growers is that 81 per cent. of them do not secure a taxable income! It will therefore be seen that no great material benefit has been derived by the producers of this primary commodity.

What is the position of the retailers who, after all have the responsibility of marketing the great bulk of the sugar produced and sold in Australia? It has always been claimed by these people that the margin between the purchase price and the selling price of sugar has not allowed them a reasonable margin of profit. They are caught between two fires : on the one hand, there is the whole- sa le price demanded for sugar by the sugar monopoly, and on the other, the continued pressure by the public for a reduction of the retail price. Although they perform the very important function of retailing the great bulk of our sugar, grocers are denied a reasonable profit.

The next point I emphasize is the very important part played under this agreement by the Colonial Sugar Refining Company Limited. I propose to show by figures which are unimpeachable that this monopoly has amassed great wealth out of the production of refined sugar, and that the growth of its wealth, and the enormous profits it has distributed, have been particularly noticeable between the years 1915 and 1939, during which this agreement has been operating. Although public inquiries into the operation of the sugar combine were held in 1912, 1920, 1922, and 1930, it is obvious that the financial ramifications of the Colonial Sugar Refining Company Limited have never been completely explored. I desire to make a quotation from the Wildcat Monthly which traces the history of the growth of this organization, and provides authentic information as to the manner in which its capital has grown, not from actual investments by the shareholders, but, from excess profits exacted from the public in the providing of this necessary commodity.

The journal states -

Nominal Capital: £14,000,000 in £20 shares. Paid Capital: £11,700,000 in 585,000 shares fully paid. Cash Bonuses: £528,125.

Senator McLeay:

– I rise to a point of order. There is no reference in this agreement to the Colonial Sugar Refining Company Limited. Whilst I recognize that considerable latitude is given to honorable senators in the first reading debate on money measures which the Senate cannot amend, I submit that Senator Amour is going beyond the scope of this bill.

The PRESIDENT (Senator the Hon. J. B. Hayes) . - I propose to allow Senator Amour to proceed.

Senator AMOUR:

– The quotation continues -

The Colonial Sugar Refining business was established in 1842 by the late Sir Edward Knox. Mills weresubsequently set up on the New South Wales North Coast, and interests were later extended to North Queensland and Fiji and a refinery was erected at Auckland. The present company was registered on July 1, 1887, with a paid capital of £600,000 and £901,300 of stock and debentures, and’ absorbed the Victoria Sugar Company Limited and the New Zealand Sugar Company Limited. In 1897 paid capital had expanded to £1,702,000 and Macnade and Hambledon mills and plantations (Queensland, were purchased. In 1899 the company’smills. producedover 100,000 tons of sugar, and two years later the Knockroe mill was purchased to ensure a larger supply of cane to the company’s Childers plant. Paid capital moved to the two-million mark in 1903, and in 1907 Poolman’s Sydney and Melbourne refineries were purchased; a bonus issue of £75,000 brought capital to £2,500,000. The plant of Hippie Creek mill was purchased at break-up value during the next year, when another bonus issue of £350,000 was made, followed by £150,000 in 1910, and another £250,000 five years later. A subsidiary owned and controlled by the parent took over the Fiji and New Zealand assets, £3,250,000 in 1915, and eight years later went into voluntary liquidation with satisfactory results to the shareholders mid the parent company bo which the assets returned. The Commonwealth Government purchased the Australian sugar output from 1915 to 1921, and the Colonial Sugar Refining Company Limited handled a lion’s share of the business. During the purchase period 1,500,348 tons of sugar was melted at the company’s Australian refineries, and the Commonwealth paid the company £3,150,343 refining and distribution costs (including extras) £718,523 selling charges and £1,524,270 for management, depreciation and interest COStS. From 1923 to 1932 the price of raw sugar was fixed by the Sugar Pool at around £27 per ton out of which the.Sugar Board, paid its expenses, and the embargo against the import of foreign sugar has been continued. In November, 1934, £5,850,000 of reserves was capitalized, of which £1,067,000 came from the reserve fund, £883,000 from an undisclosed source -(probably suspense accounts), and £3,957,504 was provided by writing up the book value of some of the assets.

There are some salient points in this historical record of the Colonial Sugar Refining Company Limited which I desire to emphasize in order to impress the Senate with the contrast between the benefits bestowed by the sugar agreement on the company and those that have been received by the primary producers, workers, manufacturers and consumers of sugar.

The facts are that this company was originally formed in 1887, with a subscribed capital of £600,000 aud assets in stockland debentures of £900,000-a total of £1,500,000. In 1897, the capital was increased to £1,700,000; in 1903, the paid capital was further expanded to £2,000,000, and in the same year bonus shares to the value of £75,000, representing excess profits, were distributed. Later in the same year, a further £850.000 was distributed in bonus shares from excess profits. In 1910, there was a further distribution of bonus shares, totalling £150,000, and in 1.915, the year in which the first sugar agreement was made, a further £250,000 was distributed in bonus shares. Great as had been the distribution of these shares over a period of years, a still more remarkable distribution took place in 1934, when £5,850,000 of reserves wag capitalized. From this brief recital of the facts relating to the capitalizing of this company it would appear that only £2,500,000 out of a nominal capital of £14,000,000 and a paid-up capital of £11,000,000 has been subscribed by the shareholders, the balance being excess profits that had accumulated even after the payment of dividends ranging from 6-) per cent, to 12^ per cent.

I have already indicated that the Colonial Sugar Refining Company Limited has been the principal beneficiary under this agreement. This is in part confirmed by a statement in th« Wildcat Monthly -

In Australia the sheet-anchor of the company’s earnings which accounts for half or more of the total is its contract with the Government for refining, selling, and financing all but a small fraction of the entire Australian crop on a commission basis.

In further amplification of that fact, I invite the attention of honorable senators to the following figures relating to the financial position of the company in 1915, when the agreement was first signed, and its position in 1939 : -

In its “unbounded benevolence to th«? Colonial Sugar Refining Company Limited this Government, by an amendment of the Income Tax Assessment Aci in 1935, gave to shareholders a £7,000,000 Christmas bonus share issue that was immune from taxation. Now it proposes, without a proper and searching inquiry into the effects of the sugar agreement on all parties concerned, to commit the people of this country to a renewal ot the arrangement for a further period of five years.

I feel sure that an investigation by a. royal commission, clothed with the necessary powers to inquire exhaustively into the benefits conferred by this agreement upon the Colonial Sugar Refining Company Limited, as well as to examine the effect of the agreement upon the primary producers, workers in industry, retailers of sugar, and the consumers of that very necessary commodity, will be such a revelation to the people of Australia and to this Parliament that there will be a demand, for a thorough revision of the agreement before any Government would dare, to propose its re-enactment.

Senator COURTICE (Queensland; [3.14].: - Senator Amour read his speech very, carefully. I noticed that the honorable gentleman did not give expression to any opinions of his own regarding the bill under discussion. I am absolutely confirmed in my belief, based upon close observation of the honorable senator since lie has been a member of this chamber, that immediately he wanders any distance from Bankstown he becomes absolutely bewildered. On practically every occasion when he has addressed the Senate he has had something to say in connexion with the district in which he was born and bred and in which, I suppose, he is likely to die. On some subjects that arise for discussion in this chamber, we may not all be well informed, but it is our duty to ascertain as much as we can about the matters that come under our notice. The honorable senator who dealt chiefly with the Colonial Sugar Refining Company Limited merely raised a bogy. Many people are so ill-informed that they regard this company as a great octopus that takes from the sugar industry a toll to which it is not entitled. ] point out, however, that this company has nothing whatever to do with possibly two-thirds of the production. It is concorned with, the refining of raw sugar, and, to some extent, with the export of the product.

Senator Crawford:

– What is the cost of refining it?

Senator COURTICE:
QUEENSLAND

– A definite amount is allocated to the company for the service it renders to the industry, but, even if that cost were eliminated, it would , not be possible to reduce the price of sugar by more than l-12d. per lb.

Tlie- sugar agreement was first entered into’ ‘in 1915. It is suggested that a commission’ should be appointed- to guide the Parliament in its legislation regard-. ing the industry, but various tribunals have already investigated the conditions in the industry, and, following every inquiry, no matter which political party happened to be in power, the agreement has been renewed. I am sure that the growers would have nothing to lose as the result of the fullest investigation. If every industry were as efficient as the sugar industry, fewer would be calling upon the Government for relief, as the wheat industry is doing. The large quantity of sugar that is exported from Australia at a low price constitutes a hardship to the growers, although it confers a benefit upon the Commonwealth generally, providing overseas credit to the amount of £6,000,000 a year. The growers, now receive a lower price for their product than they did in 1913-14, when the cost of labour was’ lower than it is to-day. Many of them consider that the agreement should be amended in order to give to them an increase of the price of their product, but they’ realize that, in wartime, every industry should do its utmost to assist the nation.

I should be surprised if this measure meets with much opposition. - Every honorable senator who has taken an interest. in the development ..of Australia knows that the Colonial Sugar Refining Company Limited, made profits before we : had a sugar- agreement. ‘ The agreement was opposed by this company, and one of the reasons why it was made was to control the industry in such a way as to protect it against enterprises. that might impose upon it. Of the 33 sugar mills .in Queensland, only four are owned by the Colonial Sugar Refining Company Limited. The others are owned by co-operative companies formed by the growers, themselves, and their operations would bear the closest investigation. The Colonial Sugar Refining Company Limited has. large interests in other countries, including Fiji, and I should not be surprised if it were supplying the New Zealand market to-day at about 5d. per-‘ lb. with Fiji sugar, grown by black labour. Yet consumers . in Australia pay only–. 4d. per lb. for sugar produced -.from . cane entirely grown by white labour. This agreement protects the Australian consumers, and’ the principles governing the conduct of the industry are worthy of emulation by other industries. Wages are determined by arbitration, and the value of cane is decided by a competent tribunal, representative of the mills and the growers, a nd presided over by a supreme court judge. If that principle were adopted in other industries, greater stability than has yet been reached would be secured.

I shall not attempt to trace the progress of the industry from its modest beginning nearly 70 years ago to the present day. I take it for granted that every honorable senator is aware of its progress. I recall the time when only black labour was employed in the industry, but, on the establishment of federation, Sir Edmund Barton visited Queensland and stated that the people of this country were determined to have a White Australia. The sugar industry, and the people generally, fell into line with that ideal. At the time wages were low, and t he price of sugar was low. When the change-over took place from black to white labour, white men worked 64 hours a week for a wage of 22s. 6d. a week. Gradually the people of this country realized the value of the sugar industry, and, to-day, along the coast of Queensland, 30,000 or 40,000 of the best men to be found in Australia are engaged in profitable employment. They constitute a standing army, which is prepared to take its place in industry, and is also able and willing at any moment to assist in defending this country. I remind Senator Amour that the agreement was brought into existence at the instance of a Labour Prime Minister and aLabour Premier of Queensland in 1915, and, in my opinion, it conforms with Labour principles. I am not in favour of any section of industry exploiting the people. Whatever ideas we may have regarding this matter, chickens will come home to roost. There is no substitute for work, and I believe that the sugar industry is carrying out to the full its obligations to the people. The development of the industry has been of tremendous importance to Queensland, since it has led to the building up along the coast of a growing and virile population, of which this nation may well be proud. The efficiency of the industry is remarkable. By the application of technical knowledge, sugar can be produced in Australia as cheaply as in most other countries. Although I have at my disposal a good deal of detailed information concerning the sugar industry, particularly concerning the price of sugar in other countries, I believe that as a majority of honorable senators intend to support the bill, it is unnecessary for me to deal with the subject at length. According to the statistical information available, in 43 countries the price of sugar is higher than it is in Australia. I have already referred to the fact that New Zealand consumers pay a higher price for sugar produced by black labour than that ruling in Australia.Fully onehalf of the sugar consumed by Great Britain is produced by black labour, yet the price in that country is higher than the Australian price. In consequence of policies of economic nationalism adopted in other countries, it is not now a matter of competing at world parity. Other countries contribute towards the cost. of maintaining the sugar industry to a much greater degree than Australia.

The extent of the total effective State assistance rendered to the sugar producers of certain countries by the cumulative effect of tariffs, bounties, remissions of excise, and price-fixation is indicated in the following table, extracted from the annual report of the British Sugar Beet Society, for 1934-35 : -

As other countries are subsidizing the production of sugar to a greater degree than Australia, the difficultiesof countries such as Australia, where sugar is produced solely by white labour, are intensified. Listening to the opinions expressed by some, one would imagine that other Australian industries do not receive protection. Many years ago Australia embraced a protective policy in order to build up its secondary industries, and the only way in which the Australian sugar industry can compete with blackgrown sugar is by affording protection in the form now being provided. What is the future of this essentialindustry if it is not to be given protection comparable wilh chat afforded to other industries? Effective provision has been made for the internal organization of the industry, and the present system, has proved of benefit not only to the industry, but also to the consumers. While the present system prevails the consumers can be assured that the price of the commodity will be controlled in their interests. Other honorable senators will, I am sure, adduce strong arguments to show why this industry should he afforded protection similar to thatgiven to other industries. In 1915, when the first sugar agreement was introduced, Australia was at war, and Australia was producing only one half of ils requirements, the remainder having to be purchased at ls. per lb.

Senator Keane:

– A lot of it was rubbish.

Senator COURTICE:

– Some was of an inferior quality. If adequate provision is made to conserve the interests of all concerned, no opposition should be offered to the agreement. The principle involved in this instance should be adopted in connexion with other industries. Although the growers are receiving only the same price for their product as they received in 1918 and 1914, the efficiency of the industry has been increased considerably, thus causing over-production, which has interferred with development. Hut similar conditions exist in other primary industries, particularly in the wheat industry, where there is overproduction and low prices.

Senator Clothier:

– There is always a carry-over of sugar.

Senator COURTICE:

– Senator Clothier may be antagonistic because he has not a close knowledge of the conditions under which sugar is produced. I recall that other members of this Parliament, until they had visited Queensland to investigate the position, were opposed to any assistance being given to the industry; but .after visiting the cane-fields they changed their attitude. I remind Senator Clothier that it. takes’ approximately eighteen months “to produce a crop of sugar, and that the costs involved are heavy. Sometimes growers who cannot harvest their crop allow it to remain in the hope that there may be a cyclone, say, in the district; in which Senator Crawford is interested, and which would enable their cane to be marketed later under more favorable conditions. It is of no advantage to a grower, who has taken from twelve to eighteen months to produce a crop of sugar, to allow it to stand over for a year. Had we not been at war, the Queensland sugar industry would possibly have marketed only a portion of its crop this year; but if shipping space is available, we hope to be able to dispose of all of our surplus, and in that way increase the Commonwealth overseas funds by about £6,000,000. The mills have to be assured of a profit on their operations, and that and other factors are taken into consideration when price? are fixed. The growers also have to provide for the vagaries of the seasons and the possibility of not having any crop at all. Such factors are considered by the tribunal that deals with the internal management of the industry, and the control is based on equity and fair dealing to all. It would be uneconomic to reduce the price of sugar by even id. per lb. T assure Senator Amour that if his attack upon communism is not more effective than his attack upon the Queensland sugar industry, the “ Corns.” are not likely to suffer. It ill-becomes a representative of the workers to endeavour to interfere with the stability of an industry which is of such benefit to many small producers and workers, who toil much harder than those engaged in other industries. I believe that a majority of honorable senators are conversant with the agreement, and realize that it is in accordance with the established policy of this country to afford adequate protection to secondary and primary industries. The Government, realizing that it takes nearly two years to produce cane, has brought this measure forward well in advance of the expiry of the existing agreement so that those engaged in the industry may be assured that for a- period of five years conditions will remain stable. The difficulty associated with overseas markets and prices is one- of the most serious problems with which the industry is confronted. I again remind Labour senators that some of those whom they represent will suffer severely if the sugar industry is to be subjected to unfair competition, and that it is the duty of every member of the community who desires to maintain a high standard of living for the people to build up our industries to such a degree that they will be an example to other countries.

Debate (on motion by Senator Collett) adjourned.

page 873

WAR IN EUROPE

German Invasion of Neutral Countries: Ministerial Statement

Senator COLLETT:
Minister in charge of War Service Homes · Western Australia · UAP

– by leave - read a copy of the statement which was delivered in the House of Representatives by the Minister for External Affairs (Mr. McEwen) (vide page 917).

page 873

SUGAR AGREEMENT BILL 1940

Second Reading

Debate resumed.

Senator ALLAN MacDONALD:
Western Australia

– Usually when Senator Courtice participates in debates in this chamber he is the soul of courtesy. On this occasion, however, he has come down a little harshly upon his former colleague, Senator Amour, now Leader of the Australian Labour party - nonCommunist. In securing the adjournment of this debate yesterday, Senator Amour rendered a service to honorable senators as a whole, because in doing so he prevented the debate from petering out. Usually, after the Minister in charge of a bill makes his secondreading speech it is customary for the Leader of the Opposition (Senator Ceilings) to obtain the adjournment of the debate, or at least to indicate whether he or his deputy intends to continue the debate. On this occasion, however, be remained silent. Perhaps his attitude in respect of this sugar bill can be explained by the fact that he comes from Queensland. At all events he gave no indication of what he thinks of the measure.

Senator Keane:

– The Leader of the Opposition was out of the chamber at the time.

Senator ALLAN MacDONALD:

– No ; he was then in his seat. I suggest that in future, when the Leader of the Opposition docs not intend to exercise his privilege of following the Minister, he should indicate his intention so that honorable senators on this side may be enabled to continue the debate. This measure is too important to every householder in Australia to be disposed of without a full discussion.

The agreement covered by the bill is the instrument by which we provide a home-consumption price for sugar, and. I th ink, this method is less clumsy than the imposition of theflour excise for the purpose of providing a home-consumption price for wheat. One phase of the agreement which has not yet been mentioned concerns the action taken by the late Mr. Lyons, when he was Prime Minister, whereby he negotiated a reduction of the price of sugar by½d. per lb. That action was most laudable, and the consumers of sugar in Australia have benefited from it for the last six years.

I should like more information in respect of certain matters touched upon by the Minister (Senator McLeay) in his second-reading speech. He said that under the agreement the Queensland Government undertook to control effectively the production of raw cane sugar. I should like to know exactly wha t steps that government, or the Queensland Sugar Board, has taken to restrict production. Has it limited plantings, or taken other action with that object in view? It is well known that one of the greatest, difficulties confronting this industry arises from the fact that in respect of the large exportable surplus the growers must accept world parity.For this reason the return to the growers over the whole of their production is considerably reduced. I should like the Minister to enlighten me on this point- Exactly what limitations are imposed by the Queensland Government in order to restrict the production of sugar?

Senator Foll:

– Every grower is now operating on a quota.

Senator ALLAN MacDONALD:

– I am aware of that but I should like to know what steps the Queensland Government has actually taken in order to restrict production with the object of reducing the exportable surplus?

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– The Queensland Government has every inducement to take action in that direction, because under the relevant clause of the agreement it stands to lose considerably should it fail to reduce production.

Senator ALLAN MacDONALD:

– I am aware of that fact also, but I should like to know exactly what it is doing in this regard and also in connexion with all transfers of licences. My reason for seeking precise information on these points arises from my discovery on my last visit to the sugar districts of Queensland in May of last year, that an increasing number of inquiries was being made by aliens for additional leases, which automatically include licences. Senator Amour suggests that one phase of the industry which requires investigation is that concerning alien ownership of leases. We cannot expect that the increasing demand by aliens for additional leases which was evident last May has suddenly ceased.

The. second point upon which I should like further information from the Minister concerns the request by retail grocers for an increase of the price of sugar in order to enable them to cover handling charges. This matter came under my notice long before I became a member of this chamber. In Western Australia volumes of correspondence have appeared in the newspapers on the subject. I am of opinion that retail grocers in that State are obliged to handle sugar at a loss. So far from the shopkeeper making a profit on the sale of sugar, he is actually making a loss, and to my knowledge has been doing so at least since 1923 or 1924 when the matter was first brought under my notice.

SenatorFoll. - That is due to bad management.

Senator ALLAN MacDONALD:

– It is of no use to make a bald statement like that. If any trader in the Commonwealth is handling, at a loss, a. commodity, the price of which is restricted, he should be given justice. It does not matter whether he is a grocer, producer, or consumer, the same treatment should be extended to him as is given to other members of his trade. It is ridiculous to say that because a trader is making a loss on one particular commodity he is mis-managing his business. I know that one of the best managed grocery businesses in Perth has consistently shown a loss in its handling of sugar. I was told that by the manager of the business, and I am prepared to accept his statement because I know that his business is a well-regulated concern. That experience is only typical of the experience of many other retail grocery establishments. If there is the slightest possibility that an injustice is being done, a re-hearing should be allowed.

Senator Lamp:

– What is the loss on sugar?

Senator ALLAN MacDONALD:

– I have not the actual figures before me, but there is a whole file of correspondence on the matter.

The Minister also said that the power to regulate prices which are to be charged by retail grocers is a matter for individual State Governments. In other words this agreement is one which deals with peace-time conditions. But we are now in the middle of the greatest war in our history, conditions to-day are not peacetime conditions, and in that regard I think that the Minister’s statement was rather weak. The realities of the war are not yet fully realized in Australia, but before long our people will fully appreciate the real significance of the present crisis. The Ministerwent on to say that the Commonwealth Prices Commissioner had indicated that, when the new agreement had been finally considered by Parliament, he would consider the protest by the retail grocers associations.

Senator Foll:

– The retail price of sugar is not covered by the agreement.

Senator ALLAN MacDONALD:

– I am not discussing that point. I am discussing the reasons for the amendment and what is actually happening in the world of sugar, not only from the producers point of view, but also from the point of view of the consumers. If one man in the sugar business thinks he is suffering an injustice his plaint should be heard. I am dealing now with the Minister’s statement that the Prices Commissioner had indicated that when the new agreement had been finally dealt with by Parliament he would consider the request made by the retail grocers associations that the retail price of sugar be reviewed. That is an ambiguous statement. If there is the slightest possibility that an injustice is being perpetrated, there is no need for the Prices Commissioner lo wait til the agreement has been ratified by Parliament. He should get on with the job now ; there is no justification for any delay. Because action by the Commonwealth Government has been impossible owing to constitutional limitations, retail grocers have been suffering a disability for years, and have not had an opportunity to take united action to secure .a remedy. For the first time Commonwealth legislation, that is the National Security Act, permitting an

Australiawide readjustment of prices is in operation. Because the Commonwealth is now paramount in the matter of price fixing the grocers think that they have a chance to obtain justice. I contend, therefore, that the Prices Commissioner need not wait until the fate of this measure is decided by Parliament. The old agreement has still sixteen months to run, and the Commissioner should start an inquiry immediately.

Senator McBRIDE:
SOUTH AUSTRALIA · UAP

– The Prices Commissioner gave his decision to-day, and it was read in this chamber. He is permitting no increase at present, but will review the matter later.

Senator ALLAN MacDONALD.More untruths have been circulated regarding the sugar industry in Queensland and New South “Wales than any other industry. I am positive that, if only for that . reason, the sugar industry would welcome a royal commission or any other inquiry into its affairs.

Senator Crawford:

– I have said so on one or more occasions.

Senator ALLAN MacDONALD:

– I have heard Senator Crawford make that statement. An inquiry would be in the best interest of the industry itself. Untruths and half-truths have been circulated throughout the length and breadth of the Commonwealth, generation after generation. No sooner is one generation convinced that sugar production is one of the best-conducted industries in the Commonwealth, and is vital to Australia, than another generation grows up and hears the same old stories. For that reason, above all others, I am sure that the industry would welcome any inquiry which would serve to dissipate the many untruths about its operations, and the extensive adverse propaganda which is being carried on throughout the Commonwealth. If an inquiry were held, the facts of the case could be dealt with in each State. For many years I have heard cited in Western Australia badly digested figures relating to the sugar industry - figures which would totally mislead any one who was prepared to hear the truth. These figures repeated year in year out, by any sort of “ tiddlywinking” organization which considers that it has a duty to protect the consumer form the basis of attacks upon the industry. I do not know whether or not there is any real or lasting cure for such misleading propaganda, but it is to be hoped that it will not continue. It is of no use to blink one’s eyes to it. Instead of wildly attacking the mover of the amendment, Senator Courtice should have welcomed the suggestion that an inquiry should be held into the sugar industry. 1, for ohe, support that suggestion, although I dissociate myself “ from many of the extravagant remarks made by Senator Amour.

Senator CLOTHIER:
Western Australia

– Having been approached by the retail grocers of Western Australia I feel constrained to say something about the sugar agreement. I think I can claim to know something about sugar, because I have relatives who own some of the biggest sugar plantations in Queensland. In an interjection earlier in this debate, Senator Courtice referred to the wheat industry, but I point out to him that whereas it is possible to carry over sugar-cane for twelve months, it is not possible to carry over the wheat crop. Sugar-cane can be left in the ground, and I know that that was done last year, because the growers could not get a price for their cane.

Senator Crawford:

– Is the honorable senator referring to the Bundaberg district?

Senator CLOTHIER:

– No; the Nambour district. I merely mention the carry-over in order to refute Senator Courtice’s arguments.

Senator Crawford:

– On occasions I have had to carry over sugar-cane because I could not get it harvested. Moat of it rotted in the ground. In the tropics cane cannot be successfully carried on to the following season.

Senator CLOTHIER:

– That was the honorable senator’s misfortune, but it was not greater than the misfortune of the farmer whose unsold wheat is attacked by mice and weavil. Some consideration should, be given to the small shopkeepers. I am prepared to leave the retail price of sugar as it is, because it is a commodity which is consumed by the working people and any increase of price would impose hardship upon them. Why should a discount be given only to firms which buy not less than £1,500 worth of sugar a month? The smaller man too is entitled to consideration. From my experience of doing the books of small shopkeepers, I know that The handling of sugar does not show a profit, but sugar is indispensable to a grocery business. I have here a statement made by Mr. M. E. Pye, secretary of the Grocers Association of Australia (Incorporated) -

Tlie retail grocery trade of any nation is linked high all over the world amongst the important industrial and financial trade sections

It is estimated that there are not less than 1,550 retailers of groceries in Western Australia and that the average retail grocer’s silio of sugar is not less than 10 per cent, of his total sales turnover.

The announcement in February by the Prime Minister that the sugar agreement with the Queeusland Government would be renewed, included a statement that the wholesale disci nuit list would be altered slightly, has led w rumours that it is intended to odd to that list some of the large retail establishments including chain and multiple stores, thus allowing them to obtain - like the wholesale houses - it discount of 2 per cent, if their monthly purchases total f 1.500.

It will be argued no doubt that several small grocers in one district could band together and buy £1,500 worth of sugar a month, but honorable senators opposite know very well that that is not practicable. Mr. Pye’s statement continues -

Thu retail grocery trade strongly objects to large, retail firms obtaining a concession of 2 [>er cent, which the rank and file of the retail trade cannot obtain and which, from experience, would enable such large retailers to use the 2 per cent, discount for cutting the retail price of standard lines which they cannot buy at any better price or discount than can the small retail grocers.

Quantity discounts made available to large buyers by some manufacturers have a similar affect as far as small retailers are concerned, because they give advantages to large retailers which the numerous small retailers cannot obtain

If it is necessary to assist the large retailers, why should not the small shopkeepers also be helped? All are in the same trade. I rose chiefly for the purpose of directing attention to the effect of the agreement on the small grocers. An examination of the records for the year 193S-89 shows that the trade balance between Western Australia and Queensland was in favour of Queensland to the amount of £545,970, of which £452,736 represented purchases of raw sugar. The retail grocers of Western Australia appealed to me, and to my colleagues from that State, to bring before the Senate their complaints with respect to this agreement. They have no feeling whatever against the sugar growers of Queensland, but they contend that they should have the benefit of the 2 per cent, discount. They do not begrudge Queensland the advantages which it obtains from the sugar industry, but every publicspirited citizen of Western Australia objects strongly to the hardship inflicted by the agreement on the export trade of that State, and the loss occasioned to retail grocers in respect of sales of sugar. I hope that consideration will be given to the position of all small grocers, whom I am anxious to help. I happened to be resident in Queensland during the time when kanakas were employed in the cane-fields, and I was very pleased indeed when legislation was passed to exclude them. I sincerely hope that the Government will reconsider certain features of the agreement, particularly that relating to the discount of 2 per cent., which the «ma.!l grocers contend should be allowed to them.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Whilst I appreciate the opportunity which has been afforded to honorable senators to discuss the sugar agreement, and intend to offer some criticism of it, I cannot bring myself to support the amendment submitted by Senator Amour. The Australian sugar industry has been the subject of very many inquiries. Some time ago I was deputed by the then Prime Minister (the late Mr. Lyons) to visit Queensland for the purpose of reaching a modus vivendi with the Queensland Government and the sugar industry, and so it became necessary to examine the complete department- al files relating to the industry. I. approached the subject with a somewhat prejudiced mind, and in the belief that the interests of Australia would be served by a somewhat lower tariff than that favoured by some of my ministerial colleagues. I had before me a considerable volume of documentary evidence, including the report of the royal commission presided over by a distinguished judge from my own State, and also had access to the encyclopaedic knowledge of a senior officer of the Trade and Customs Department - I refer to Mr. Townsend who has at his fingers’ ends the most complete details of the industry. A careful examination of all the evidence satisfied my mind on several points, and whilst it is my intention to-day to criticize one thing which the Government has done, 1 intend to support the second reading of the bill.

Senator Amour has practically launched his case against the agreement on the ramifications of the Colonial Sugar Refining Company Limited. I have no brief for that concern, and 1 may add that I do not know any of its shareholders with the exception, perhaps, of Sir Philip Goldfinch, who came before us during the inquiry some years ago; but from my investigation of the company’s affairs, and the information supplied by the departmental officer whose name I have mentioned, I came to the conclusion that the Colonial Sugar Refining Company Limited was one of the most efficient industrial units in the Commonwealth. No waste is disclosed, and no huge profits are shown, in the Australian side of its business. Senator Courtice, who, this afternoon, spoke so ably in support of the agreement, cut the ground completely from under the feet of Senator Amour, by pointing out that of the 36 sugar-mills operating in Queensland, only three are under the control of the Colonial Sugar Refining Company Limited. The turnover of this company reaches colossal figures. During the investigation by the royal commission, it was proved that it was not competent for the commission to inquire into that portion of the company’s business which is conducted outside the Commonwealth, so the inquiry was confined to its operations within Australia. If Senator Amour is seeking information concerning the operations of the Colonial Sugar Refining Company Limited, the whole of the figures are readily available to him, or to any other honorable senator. It is not necessary to appoint a royal commission, and incur expenditure on another inquiry. I have no doubt that the Minister in charge of the bill (Senator McBride) could, at short notice, obtain all the required information from the Trade and Customs Department, because it is on the files, and calculated to the decimal of a penny. At this time we should not- embark upon an unnecessary and expensive investigation, because, as [ have said, Senator Amour can obtain from the departmental files complete details of the services being rendered to the Commonwealth by the Colonial Sugar Refining Company Limited, and of what that company is getting in return. I ako remind the honorable gentleman that the agreement contained in this bill does not make mention of the company mentioned. It relates to an agreement made between the Government of the Commonwealth and the Government Of the State of Queensland. One paragraph of the agreement imposes an embargo on the importation of sugar from overseas. The price of sugar to “Various purchasers is also fixed. In my examination of the industry 1 visited a considerable number of sugar-mills in Queensland, travelling as far north as Cairns, where I was received with that hospitality which is so characteristic of the people of the northern State. I found them very concerned to maintain the sugar industry at its then high level of efficiency, and I have no doubt that my friend, Senator Crawford, will presently draw his verbal claymore and completely dispose of any objections that have been raised to a renewal of the agreement. In all seriousness I appeal to Senators Amour and Allan MacDonald not to pursue their objections to the second reading of the bill. This is no time for an expensive inquiry concerning an industry which has been so thoroughly and so often examined. “When I was settling the draft of the 1935 agreement I gave particular attention to the points that have been raised this afternoon by Senators Clothier and

Allan MacDonald. The whole of the trouble, it seems, arises from the fact that a discount of 2 per cent. is allowed to purchasers described as wholesalers, who, it is thought, are entitled to some consideration, because they are required to handle large stocks, and sometimes to give extended credit to retail grocers. Latterly another class of grocery business has come into the picture - I refer to chain stores, and other similar groups of purchasers, who operate to the detriment of the small retail storekeeper. It will be for the Senate to decide whether an alteration that has been made in one clause of this agreement will prove beneficial to the retailer as the Minister yesterday suggested. In paragraph 5 b there is this provision, relating to wholesale discount

The prices for all the above products, other than mill-white sugar and first quality mill sugar (except the prices to manufacturers) shall on and after the first day of September One thousand nine hundred and forty be subject to a discount of two per centum payable monthly to any person, firm or corporation who or which in the opinion of the Queens- land Sugar Board -

  1. provides reasonable credit facilities for retailers on a comprehensive range of groceries;

    1. keeps reasonable stocks of such gro ceries for resale to retailers; and
    2. buys not less than £1,500 worth per calendar month of sugar and other sugar products as aforesaid.

The existing agreement provides -

That the prices for all the above products, except the prices to manufacturers, shall be subject to a discount of two per centum (the whole or any part of which discount may be deferred for a period not exceeding twelve months) to persons, firms and corporations who, in the opinionof the Queensland Sugar Board (whose decision shall be final and conclusive)- -

are wholesale merchants,

purchase such products and sell them only to completely independent retailers or manufacturers in quantities not more than sufficient for their respective businesses of retailing or manufacturing.

engage to a reasonable extent in the sale of such products on credit terms, and

sell such products under conditions approved by such board.

This shows that under the present arrangement the price is subject to a discount of 2 per cent. Apparently the chain stores and other groups to which I have referred are in a somewhat different position, and do not come within the compass of this portion of the agreement; I suppose that the struggle has been going on ever since the last agreement was made. This new agreement provides that the discount of 2 per cent. must be payable monthly. Under the existing agreement it may be deferred for a period not exceeding twelve months. The retailer looks to the wholesaler to provide him with his requirements, and, therefore, I think that the agreement would operate to the detriment of the wholesale grocer. Probably the chain stores could comply with the condition mentioned in sub-paragraph (i) of paragraph 5b. Are we here to see that the retail grocers get a fair deal? They may desire to increase the price of sugar beyond a reasonable amount, but why should they not have a chance to participate in the 2 per cent. discount? Various difficulties have arisen in the past because some of the wholesale houses have proceeded to divide their discount with the retailers. Naturally, the Sugar Board has not had an easy road to travel. I suggest that, instead of increasing the price of sugar to the people, the Sugar Board might find another way out of this difficulty. I appeal to the sugar king, Senator Crawford, who is now present in this chamber, to use his influence with the board to see that the small man, for whom I have a considerable amount of sympathy in this matter, is able to get into the ring on this rebate.

Senator Courtice:

– The intention of the bill is to see that the 2 per cent. is paid to the genuine wholesaler.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– A greater service to the public than that rendered by the wholesalers is given by the small grocers who are to be found in every city, suburb and town throughout Australia. When I was interviewed in Adelaide on one occasion by the retailers, I advised them to form a co-operative company, and to purchase sufficient sugar monthly to become wholesalers.

Senator Courtice:

– Why not eliminate the discount?

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– In my opinion the wholesalers are entitled to the small profit that they make out of the handling of sugar. The clause in the agreement relating to the wholesale discount is so phrased that I doubt whether a co-operative company formed by retail grocers would be able to comply with the requirements of the clause, although, at the outset, I was inclined to agree with Senator Clothier. I support the bill, and can assure honorable senators that, coming from a State where the sugar agreement was anathema for a time, I have learnt a lesson as to the value of the industry to Australia. It keeps large areas in this country profitably occupied by strong sons of the soil. Queensland is, to a great degree, the home of the sugar industry, and I advise all doubting Thomases to visit that State and satisfy themselves of the efficiency of the industry. In certain respects it may be open to criticism. In one area, for instance, I thought that it would be advisable for the growers to pay no attention to the production of milk and butter fat; but one can only come to the conclusion that the industry is well conducted, and is deserving of all the support that Australia, in its own interests, is now giving to it.

SenatorFRASER (Western Australia) [ 4.44] . - I cannot support the amendment submitted by Senator Amour. He said that no investigation of the ramifications of the Colonial Sugar Refining Company limited had been made since 1915, but I recall that an inquiry was held by a committee nine years ago. The terms of reference were comprehensive, and the committee was a representative one. Its members were -

Honorable John Guun - Director of Development, (chairman).

C. Curlewis - Australian Sugar Producers’ Association.

C.G. Fallon -Em ploy ees in the industry.

J. Matthews - Australian manufacturers who use sugar as a raw material in their products.

Eliza Elsie Morgan (Mrs.) - The domestic consumers.

J. Short - Queensland Cane Growers Council.

A.R. Townsend - Commonwealth Depart ment of Trade and Customs.

Young - Australian fruit-growers.

Having regard to the present international crisis, I doubt whether the results that would be obtained by the appointment of a royal commission to investigate the conditions in the sugar industry would compensate the country for the expenditure that would be incurred. The report of such a commission might meet a similar fate to those of the Royal Commission on the Monetary and Banking Systems and the petrol commission. The committee which investigated the conditions in the industry in 1931 held 37 sittings, and 158 witnesses were examined. Senator A. J. McLachlan was right in saying that action should be taken by the Sugar Board with regard to the percentage allowed to the retailers. I agree with him that the services rendered by the retailer should be recognized and paid for. If the traders are not receiving the profit to which their services entitle them. . the matter should be investigated.

Senator Gibson:

– The retail price was not fixed.

Senator FRASER:

– The absence of a fixed retail price is causing a great deal of dissatisfaction. Honorable senators opposite who condemned the renewal of the sugar agreement by the Scullin Government, in 1931, are now supporting this agreement.

Senator E B Johnston:

– The price has been reduced since then.

Senator FRASER:

– If the honorable senator wishes to hang his hat on that peg it will have to be a very light hat. Senator Crawford stated that the retail price to-day is less than it was in 1914-15, but that is not borne out by facts.

Senator Courtice:

– It is.

SenatorFRASER.- In 1915-16 the grower received £18 a ton.

Senator Courtice:

– Why not go back to 1913-14?

Senator FRASER:

– The price in 1923 was £27 a ton.

Senator Courtice:

– It is now slightly over £15 a ton.

Senator FRASER:

– It would appear that a majority of honorable senators intend to support the bill.

Senator Herbert Hays:

– Why complain ?

Senator FRASER:

– I am not complaining, but I am showing that about ten years ago some of those supporting this proposal condemned the Scullin Government for renewing a similar agreement. What would be the result if the retail price were increased?

Senator Herbert Hays:

– Why not place the increased cost on the wholesaler ?

Senator FRASER:

– I support the proposal made by Senator A. J. Mclachlan that the Sugar Board should investigate the matter in order to see whether some assistance can be given to the retailers. Should the Commonwealth Prices Commissioner increase the retail price of sugar by 1/2 d. per lb. the consumers would have to pay an additional £1,000,000 annually. I am not opposed to the retailers receiving a higher percentage than at present, but that should come from the wholesale price. If the. price were increased additional profits would be made by the producers.

Senator McLeay:

– The honorable senator is endeavouring to please all parties.

Senator FRASER:

– No. I am opposed to any additional burden being placed on the consumers.

Senator McLeay:

– The Prices Commissioner has fixed the price at 4d. per lb.

Senator FRASER:

– I understood that the retail price was still under consideration.

Senator Foll:

– The retail price has already been fixed.

Senator FRASER:

– An increase of id. per lb. would cost the consumers £1,000,000 annually, but as a result of such an increase those who have not made any representations would receive the benefit at the expense of the consumers.

Senator Courtice:

– The honorable senator will not get an increased price at the expense of the growers or the workers if I can prevent it.

Senator FRASER:

– I am not suggesting that.

Senator Courtice:

– There is no other way.

Senator FRASER:

– I remind Senator Courtice that the gold-mining industry is as important to the State which I represent as is the sugar industry to Queensland.

Senator Courtice:

– A large quantity of gold is produced in Queensland.

Senator FRASER:

– Yes, hut the honorable senator supported an iniquitous tax on gold production.

Senator Courtice:

– In order to prevent profiteering.

Senator FRASER:

– Honorable senators in opposition said that the profits on gold production should be taxed, but the honorable senator supported a tax on production. After the inquiry in 1931 the sugar agreement was renewed with modifications under which the assistance afforded to the fruit industry was increased from £180,000 to £315,000 by an additional grant from the sugar industry. At a conference between the Commonwealth and the industry in 1932 a reduction of 1/2 d. per lb. was agreed upon from the 1st January, 1933, until the termination of the agreement in 1936. lt was also decided to reduce the assistance to the fruit industry to £200,000.

Senator Courtice:

– The fruit-grower gets the home-consumption price for the whole of his production.

Senator Foll:

– The reduction was made by the-Scullin Government.

Senator FRASER:

– When did the sugar committee make a recommendation *

Senator Foll:

– In 1931.

Senator FRASER:

– Prior to that year the agreement provided for a payment of £180,000 per annum, and the amount was increased to £315,000. That is stated on page 715 of the Commonwealth YearBook. The agreement was signed on the 1st June, 1931, and was to remain in force for a period of five years from the 1st September of that year. In 1932 a conference was arranged between the Commonwealth Government and the representatives of the industry at which it was agreed to reduce the retail price of sugar by id. per lb. from the 1st January, 1933, until 1936. It was also decided to reduce the amount of assistance to the fruit industry to £200,000. A renewal of the agreement for five years commencing on the 1st September, 1936, was negotiated between the Commonwealth Government and the Queensland Government in July, 1935. That disposes of the suggestion that it was done by a committee of inquiry.

Senator Foll:

– I refer the honorable senator to paragraph b of the Sugar Inquiry Committee’s report of 1931.

Senator McLeay:

– The honorable sena tor should cite official documents.

Senator FRASER:

– Surely the Commonwealth Year-Booh, which is compiled by government officials under direction from the Commonwealth Government, is an official document.

Senator McLeay:

– It is, but the honorable senator does not understand it. When the price of sugar was reduced by id. pel lb., did not the fruit-growers get the benefit?

Senator FRASER:

– I am citing the figures contained in the Commonwealth Year-Boole and not those contained in the committee’s report. It has been said that the committee reduced the amount from £315,000, whereas an arrangement was arrived at between the Commonwealth and the sugar industry to reduce the retail price of sugar by £d. per lb., and at the same time the grant to the fruit industry was reduced from £315,000 to £200,000. Subsequently it was decided to increase that assistance’ by £16,000. However, the amount which the committee recommended to the fruit industry in 1931, namely, £315,000, has been reduced to £216,000, thus effecting a saving of £88,000 to the sugar industry.

Senator Foll:

– That was not the recommendation of the committee.

Senator FRASER:

– The Minister can read the committee’s recommendations for himself. They were adopted by the Government, and were generally implemented, but have been since amended, as I have stated. Have not representatives of the fruit industry actually asked for increased assistance?

Senator McLeay:

– Does the honorable senator suggest that the sugar-grower should contribute more to the fruitgrower ?

Senator FRASER:

– I am dealing with the recommendations of the committee which inquired into this matter in 1931. The retailer is entitled to a fair margin of profit. I do not suggest that the price of sugar should be increased. I have said that I am opposed to any increase of the burden on the consumer. Senator Amour dealt at length with the profits of the Colonial Sugar Refining Company Limited. The honorable senator should carefully peruse the report of the committee of 1931. Indeed, all honorable senators should study that report, before they consider any proposal for the appointment of another royal commission to inquire into this agreement. Whilst much ground exists for criticism of the operations of the Colonial Sugar Refining Company Limited, I can find nothing in the bill to which I take exception. I wish that wheat and wool could be placed upon the same footing .as sugar.

Senator AYLETT:
Tasmania

– Although Senator Amour dealt at length with the operations of the Colonial Sugar Refining Company Limited. he found ‘no fault with any of the findings of various royal commissions and committees which have inquired into the sugar industry iu the past. As has already been pointed out, the committee appointed in 1931 made a comprehensive investigation, as the result of which a Labour government ratified the agreement. In view of these facts I suggest that, particularly at the present time when we require as much money as we can raise for very urgent purposes, it would be sheer waste to incur any expenditure upon a further inquiry into the industry. The sugar industry is an asset not alone to Queensland but to Australia as a whole. When we contrast the position of the industry to-day with its position some years ago, when sugar was grown by black labour, we can readily appreciate the tremendous progress which it has made. In addition, the industry is essential if we are to defend effectively the northern portion of this continent, because it helps to populate the north with white people. Much has been said in this debate in support of the retail grocers’ request that the retail price of sugar should be increased. I am somewhat puzzled by the fact that the grocers did not squeal about the price before war broke out. Admittedly a few of them made this request before the outbreak of war, but all of the requests with which I have been inundated have been made since. If the grocers’ grievance were genuine they would have made their request two years ago.

Senator Foll:

– And, previously, the retail price of sugar was not fixed.

Senator AYLETT:

– That is so. We can only conclude that the retail grocers made their request merely in order to have the price lifted before sugar came within the purview of the Prices Commission. Senator Allan MacDonald said that the retail price of 4d. per lb. was considered by consumers to be tpo high. I do not agree with him. At the same time, I am very glad to hear that the price will not be increased. “We must remember that prices of - many other essential commodities- are rising. When one bears in mind the costs involved in the numerous phases of sugar productionplanting, hoeing, cutting, handling, manufacture and’ transport - it cannot be said that the price of 4d. per lb. is excessive. That figure appears to be very reasonable when we compare it with the price of meat, some of the more- common cuts of which cost ls. 3d. per lb. Moreover, considerably greater quantities of meat, and other commodities, such a3 butter and cheese, are consumed by the average individual. It is most unlikely that the average weekly consumption of sugar per capita would be more than 14 lb., which involves a weekly outlay of 6d. Consequently any reduction of the present price would mean only an infinitesimal saving to the average consumer.

The future of the sugar industry should be regarded from not a State but an Australian view-point. It is one of our most valuable industries, and I should not like to see its progress retarded in any way. Senator Amour should study the reports of the various royal commissions and committees which have inquired into the industry in the past. I’ feel sure that if he does so he will agree that the appointment of another royal commission at this stage cannot be justified.

Senator LAMP:
Tasmania

.- I wholeheartedly support the ratification of the sugar agreement. In recent years considerable discontent with the retail price of sugar was evident in Tasmania. However, I am not impressed by the arguments put forward by the retail grocers in favour of an increase of the price to 4£d. per pound. When the agitation on this subject was proceeding in Tasmania, I considered it my duty as a senator to acquaint myself at first hand with the actual conditions prevailing in the industry in Queensland. Accordingly, I took the opportunity last’ year to visit

Mossman, Cairns, Innisfail, Gordonvale, and the’ Herbert River, Mackay and Bundaberg districts, where I got some idea of the ramifications of the industry. I witnessed every phase of the operations, such as hoeing, burning-off; cutting, transport to the mill and manufacture. Queensland can regard the sugar industry as one of God’s blessings. Indeed, if Australian consumers were asked to pay, not 4d. per lb., but 6d. or even ls. per lb. for sugar it would be well worth while their doing so, because from a defence viewpoint alone, apart from consideration of our economic well-being generally, it is essential that the industry shall develop and prosper. Without it we should find it almost impossible to provide adequately for the defence of the northern portion of this continent. I do not think that the sugar-growing areas of Australia are suitable for any other kind of primary production. In past years- many Tas’manians migrated each season to Queensland, in order to obtain employment in cane -cutting. That work, together with their employment in the fruit industry in their own State, tided them over the full year. The grocers, who have been primarily responsible for the agitation which has taken place, claim that the agreement should not be renewed because they are unable to obtain an adequate profit from the handling of sugar. I point out, however, that sugar is one of the easiest commodities to handle. It is made up in slack periods and, when it is purchased by the consumer, it is merely handed over the counter. In 90 cases out of 100, the retailers charge for the bags as well as the sugar. The grocers are obtaining a profit of 134 per cent, on sugar, and if they desire an additional 2£ per cent., they have only to form co-operative buying agencies which would purchase wholesale £1,500 worth of sugar a month. I wholeheartedly support the agreement, and I am sorry to hear so much carping criticism of it. I hope that it will be ratified.

Senator HERBERT HAYS:
Tasmania

– Discussion of the bill itself, and of the amendment moved by Senator Amour. has hinged mainly on the retail price of sugar. That matter is of particular interest to the people generally, and is large in the minds of count rj and city retailers alike. I am well aware that the retail price of sugar is not fixed by the Sugar Board, but by the people engaged in the trade. My opinion is that there is only one way in which this problem can be satisfactorily settled. Something must he done to give to the retailer a slight reduction of his buying price, so that without any alteration of the price to the consumer, the grocer will obtain a slightly greater margin of profit. How best to achieve that objective is the problem that is largely exercising the minds of honorable senators. The sugar agreement itself can he dealt with when this measure is in the committee stage. I cannot see that any good purpose would be served by holding the inquiry suggested by Senator Amour.

One aspect of the sugar industry which has ‘been the subject of much discussion, and is worthy of very close examination, is the problem of marginal lands. The same problem exists in the wheat-growing industry. There is a movement afoot, and funds have been appropriated, for the purpose of removing wheat-growers from marginal lands and settling them on areas which have a more assured rainfall. Similarly, areas are being used to-day to grow sugar cane which are too far south for the industry to be carried on profitably, but in the northern portions of Queensland lands admirably suited for sugar-growing are . available. In fixing the price of sugar, the whole of the sugargrowing areas are taken into consideration, with the result that the wholesale price is unnecessarily high. These marginal areas affect the sugar-growing industry in the same way as they affect the wheat industry. If sugar-growing is to be recognized as an industry of national importance, as we all admit it to be, action should be taken to put it on a sound basis by eliminating marginal areas, and transferring the growers to land which is more suited to sugar-cane growing. If growers now working those marginal lands cannot be provided with more suitable sugar holdings, they should be switched to some other form of primary production. This is a matter which vitally affects the sugar industry and should be given full consideration by the Government.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– Is not that a matter for the State Government?

Senator HERBERT HAYS:

– Yes, but it is important. The price at which sugar is sold is controlled by the average sugar production of all sugar-growing areas, so that if uneconomic marginal areas are included, the price is unnecessarily high.

Another important matter is the substantial proportion of sugar that is exported and has to be sold at world parity prices. In the past parity prices have been low, and in order that those engaged in the industry might receive a reasonable return for their product, it has been necessary to keep up the homeconsumption price. In all probability, during the next few years, the demand for sugar will be greatly increased, and so the export price will be higher. That is inevitable. It is also reasonable to assume that the sugar surplus will increase as the result of improved methods of farming, and the use of more suitable varieties of cane. In that connexion I pay a tribute to those engaged in the sugar industry for the manner in which they have developed and improved every phase of it. As has been the case with many other industries to which scientific methods have been applied, both the quantity and quality of sugar produced have been substantially advanced, and the improvement has made possible a better margin of profit. If the export price of sugar does increase - it seems inevitable that that will happen - there should be a corresponding decrease of the price to consumers in this country. It is only fair and reasonable to expect that, and the Sugar Board should give consideration to that matter. The high home-consumption price in the past has been due largely to the low price received for our exportable surplus. Approximately 50 per cent, of our sugar is exported, and a substantial increase in the price overseas should result in a decreased home-consumption price.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Notwithstanding the fact that the Queensland Government has to bear any loss incurred in export?

Senator HERBERT HAYS:

– I am not aware that the Queensland Government has ever been called upon to make good any loss incurred in the export cif sugar.

Senator Crawford:

– The Queensland Government is the nominal owner of the sugar.

Senator HERBERT HAYS:

– That is so, but it has never been called upon to appropriate money to meet a loss on exports.

Senator Crawford:

– The Queensland Government is a party to this bill, not the industry itself.

Senator HERBERT HAYS:

– That is so.

Returning for the moment to the subject of marginal lands, I draw attention to the findings of the Royal Commission on the Sugar Industry. In the summary of recommendations made by that commission is to be found the following:-

That the industry take definite steps to reduce its unprofitable surplus production.

I do not know what is implied by that recommendation, but I presume that the royal commission gave consideration to the very question which has been raised here this afternoon. If marginal areas were eliminated, the sugar industry would be substantially more profitable than it is to-day.

Senator Courtice:

-What commodities does the honorable senator suggest that those people now living on marginal sugar areas should produce?

Senator HERBERT HAYS:

– It is not my province to determine that. If these people could be repatriated to areas which are more suitable for sugar production, then that should be done. Can the honorable senator justify the continuance of sugar-growing on marginal areas, when the home-consumption price of sugar has to be kept at a high figure in order to enable the export of more than 50 per cent. of Australia’s total production? It should be the responsibility of State governments to see that sugar is not produced on uneconomic areas. I repeat that in Queensland there are large areas which are far more suitable for sugar-growing than some of the lands at present used for that purpose.

Senator Collings:

– Where are these lands of which the honorable senator talks?

Senator HERBERT HAYS:

– They have been referred to by the Commonwealth Sugar Inquiry Committee and by other authorities which made investigations.

Senator Collings:

– Does the honorable senator suggest that these people should grow wheat instead of sugar, and so aggravate the difficulties which already exist in the wheat-growing industry?

Senator HERBERT HAYS:

– The problem of marginal areas exists in the wheat industry, as well as in the sugar industry, and I do not think that the Leader of the Opposition has complained about the remedial measures which are being taken with regard to wheat farming. Production on marginal areas has always been a vexed question in the wheat industry. When the price of wheat has been good, production has extended to uneconomic areas, and when the price has fallen, these areas have had to be abandoned.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– The findings of the inquiry committee placed on the Queensland Government the responsibility for eliminating marginal production.

Senator HERBERT HAYS:

– That is so. Action in connexion with this matter is recommended in paragraph 1 of the committee’s recommendations. In paragraph 2, the committee further stated that production should be reduced. Then it dealt with the price of sugar, and recommended that any reduction should he passed on to the consumer. I am not supporting the suggestion that an inquiry should be held, because I do not think that it would serve any good purpose. An inquiry such as that recommended by Senator Amour would have no bearing on the retail price of sugar. Any alteration would have to be effected either by the Sugar Board reducing the wholesale price, or by the retailers obtaining the permission of the Prices Commissioner to increase the retail price. This is not a time to advocate an increase of price to the consumers.

Senator Brown:

– Does the honorable senator advocate a reduction of the price of sugar?

Senator HERBERT HAYS:

– No; but I think there should be an inquiry to ascertain whether or not the margin between the price to wholesalers and the price to retailers is not too great. It may be possible to reduce the margin, although I am not suggesting that the industry should bear the cost of that reduction.

Senator Clothier:

– Does the honorable senator think a discount of 2 per cent. is too great?

Senator HERBERT HAYS:

-I understand that the retailers’ margin is 12 per went.

Senator Clothier:

– In some cases it is us low as 8 per cent.

Senator HERBERT HAYS:

-I should say that much depends upon the manner in which a business is conducted. I understand that in some districts in Queensland sugar is sold for less than 4d. per lb., whereas in other places the price is 4£d. per lb.

Senator Foll:

– That would depend upon the grocer himself.

Senator HERBERT HAYS:

– Yes; a retailer would be governed by the activity of his competitor in business. That is the only point which I wish to make. I do not think that any honorable senator should support action which would have the result of increasing the price to the consumer.

Senator DARCEY:
Tasmania

– I am in favour of a renewal of the agreement. Some time ago I was deputed by the retail grocers of Hobart to interview Professor Copland on this subject. After examining the statement submitted by the secretary of the Retail Grocers Association, I was satisfied that the retailers were not getting a fair profit at the price charged. Professor Copland mid me that he had to make the Hobart grocers take off id. per lb. because if he had not done so there would have been similar demands from grocers in all of the other States to be allowed to charge a higher price. It has been stated that retail grocers trade on a margin of between 9 per cent, and 12 per cent., and it has been shown that in respect of sales of sugar the margin is very small. In fact it is claimed that if some grocers had their way, they would not handle sugar at all, owing to the cost involved in bagging and weighing the commodity and the small margin of profit allowed. I visited the sugar-growing districts of Queensland last year, inspected a number of mills, and had long talks with Italian growers in the Townsville district. From what I learned during that visit I agree with Senator Courtice that the sugar industry is one of the most efficient in

Australia. Senator Herbert Hays spoke about the unwisdom of growing sugar cane on what he described as marginal lands. I happened- to be in the Northern Rivers district of New South Wales last week and saw there crops of sugar-cane 10 feet or 12 feet high. The growers informed me that it took two years to grow a crop, whereas in Queensland maturity is reached in fifteen months.

Senator Herbert Hays:

– The sugar content of the cane grown in New South Wales is lower.

Senator DARCEY:

– Well, the crops I saw in the Northern Rivers district of that State were magnificent. All that has been said this afternoon does not alter tho fact that the sugar industry has been the subject of thorough and repeated investigations so there is no necessity for another inquiry. This matter was discussed at a meeting of the Labour party this morning, and Mr. Scullin, who introduced the bill to ratify the agreement in 1931, told us that the renewal of the agreement would be very much in the interests of the people of Australia.

Senator KEANE:
Victoria

.- I intend to support, the bill and to vote against the amendment. An exhaustive inquiry into the sugar industry was conducted by the Scullin Government in 1931. All the interests concerned on that occasion were represented, and the report was one of the most complete documents relating to the industry ever presented. The Scullin Government did the right thing in ratifying the agreement, which was renewed a few years later by the Lyons Government. The salient points of the committee’s report of 1931 have been fully outlined by Senator Courtice. I compliment the honorable senator on his lucid explanation of the implication of the agreement and the importance of the industry to this country. As an industrialist, I am satisfied that all of the employees in the industry are well provided for as regards industrial awards and conditions, and I believe that any reduction of the price of sugar to retailers would not be in the interests of the people as a whole. I, in common with other honorable senators, have received from grocers’ associations throughout Australia complaints with respect to the discount of 2 per cent., but I am credibly informed that the profit margin is about 15 per cent.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Not on sugar.

Senator KEANE:

– Those figures were supplied to me officially, and I have no reason to doubt their accuracy. Sugar is only one of a multitude of lines handled by retail grocers and there is no risk whatever, because it is readily saleable at a price which, as Senator Courtice has shown, is lower than that paid by people in New Zealand and in other countries. I am also impressed by the fact that in Queensland the area under cultivation exceeds 300,000 acres. As the average holding is 40 acres, approximately 8,000 growers and their families are engaged in the industry, which employs no fewer than 21,000 men, including 9,000 cane-cutters, engineers, and mechanics. I am informed that 90 per cent, of the men in the industry are British subjects.

Senator Collings:

– The latest figure is 98 per cent. British.

Senator KEANE:

– The Italian canegrowers are as good unionists as any Australian workers, so no objection can be raised on that account. The total capital employed in the industry is £16,000,000, including machinery and equipment valued at £8,000,000 or £9,000,000. The Government has done the right thing in submitting this bill for the renewal of the agreement. The Scullin Government, of which I was a supporter in 1929-31, held an exhaustive inquiry into every aspect of this industry and I believe that a great majority of the members of the chamber are in favour of the agreement. It is not necessary to refer the agreement to a royal commission for inquiry, because, as has been stated so often this afternoon, it has been the subject pf numerous inquiries. Conditions have not altered since the last report was presented. The industry was really stabilized by State and Federal Labour governments - the Ryan Government of Queensland and the Fisher Government of the Commonwealth - and it enabled the people of Australia to get their sugar at a price that compares favorably with prices in other countries. Secondary industries have protection through the customs tariff, and the workers are protected by arbitration awards covering wages and conditions. Our wheat-growers have benefited to the amount of £14,000,000 in the last eight or nine years. The embargo on sugar is necessary, and in the interests of Australia. We have succeeded in eliminating black labour from the industry, which is now carried on by white labour under regulated conditions. I approve the ratification of the agreement.

Senator WILSON:
South Australia

– I listened attentively to the mover of the amendment (Senator Amour) and his supporter, expecting them to give some reason to justify the proposal to appoint a royal commission to inquire into the sugar industry. Neither honorable senator gave reasons. As royal commissions are extremely expensive, good cause must be shown before the Senate could approve the adoption of the amendment. Already four inquiries have been made into the industry - the royal commission of 1912, the royal commission of 1920, the Sugar Concession Committee, of 1922, and the Sugar Inquiry Committee of 1931. Thousands of pounds of public money has been expended on investigations of this industry. Senator Amour has failed to advance any good reasons to justify the expenditure that the appointment of a royal commission would involve. I oppose the appointment of such bodies in other than exceptional circumstances. Ample evidence is available to honorable senators in the reports already presented to enable them to satisfy themselves as to the conditions prevailing in the industry. It is interesting to observe how the cost of 4d. per lb. for sugar is arrived at. The retail grocer gets .443d. per lb.; the discount to the wholesale merchant is .049d. per lb. ; the concession to the fruit industry is .124d. per lb. ; the Colonial Sugar Refining Company Limited receives for refining, .444d. per lb.; the cane-growers get 1.902d. per lb.; and the raw sugar mills are paid .815d. per lb.

The main attack on the industry has been founded on the colossal profits that have been made in the past by the Colonial Sugar Refining Company Limited; but it is pf no use to talk loosely on the matter, or to imagine that any reduction of price to the consumer is possible from that source. The total sum received by the company for refining and profit is under id. per lb., and wo have no coinage in circulation in Australia under id. Even if the company not only made no profit, but also paid nothing to its employees, no reduction of the price to the consumer would be possible from that source. Nobody suggests that the price to the grower should be reduced. When we examine the whole of the reports that have been submitted, we must admit that, apart from an increase of the price of sugar overseas, or a reduction of the quantity of sugar produced, there is no likelihood of a reduction of price to the Australian consumer. As to the future world price for our exports of sugar, I agree . with Senator Herbert Hays that everything points to a possible increase of the price overseas, but a reduction of the quantity of sugar produced in Australia would be most undesirable. This industry is building up valuable export credits for Australia at the present time. I heard an announcement over the air to-day that, owing to a failure of the sugar crop in the West Indies, sugar is to he severely rationed in London. Therefore, everything possible should be done to assist the Australian industry to increase its exports of sugar for the duration of the war, even if, later, production might have to be restricted.

Senator CRAWFORD:

– The mills have been asked to begin operations two weeks earlier than usual, because of the conditions to which the honorable senator lias referred.

Senator WILSON:

– Yes. I mentioned that the Colonial ‘Sugar Refining Company Limited has been paid under a id. per lb, for the whole of its work. This represents nearly £1,000,000 a year. Although that company has made exorbitant profits in the past, the Government’s financial measures contain proposals for the imposition of heavy taxes on such companies. If particular companies are making exorbitant profits wo have the remedy in our own hands.

Senator E B Johnston:

– This company’s profits amount to £1,000,000 a year.

Senator WILSON:

– It has many sources of income other than the refining of sugar, and its interests are not con fined to Australia. The appointment of another royal commission would involve a waste of public money.

Senator ARMSTRONG:
New South Wales

– The elimination of black labour from the sugar-fields, if viewed in its proper perspective, would be regarded as the finest achievement standing to the credit of Australia, not excluding the establishment of federation. My sympathies have always been with the sugargrowers, and the amendment submitted by Senator Amour shows that his sympathies are with the growers and the workers in the field. The debate has related mainly to the operations of the Colonial Sugar Refining Company Limited. Senator Amour showed that the worker in the industry is very little better off to-day’ than he was in 1915.

Senator Collings:

– Wages are higher in Queensland than in any other State.

Senator ARMSTRONG:

– But what is their present purchasing power compared with that in 1915? Senator Amour pointed out that only 19 per cent, of the cane-growers have taxable incomes.

Senator McLeay:

– Does the honorable senator suggest that the price of sugar should be increased?

Senator ARMSTRONG:

– If a commission were appointed, it could find out how the position could be remedied. Another point taken by Senator Amour was that an investigation would show whether the price of sugar to the consumers could bc reduced.

Senator McLeay:

– The honorable senator desires to give more to the growers, and to charge the consumers less?

Senator ARMSTRONG:

– Yes. I have in mind what the wheat-grower gets for his product and what the working man has to pay for his bread.

Senator McLeay:

– What section of the sugar industry is getting too much?

Senator ARMSTRONG:

– A commission could find out that. The statement has been made that the Colonial Sugar Refining Company Limited is paid so little for the work of refining sugar that it is practically doing it for love of Australia. Its remuneration is .444d. per lb., but the total sum received amounts to £1,000,000 a year. It has been said that most of the profits of this company are made outside Australia. From Dobson’s Digest I find that it has. an output of 756,000 tons of sugara year in Australia, and 149,000 tons in Fiji. It seems, therefore, that most of its profits come from Australiangrown sugar. The Colonial Sugar Refining Company Limited is engaged in producing commodities other than sugar, from which it derives considerable profit. For instance, it controls a distillery, and in its factory at Pyrmont it also produces canite, -which is sold in large quantities to the Defence Department. If the company’s profits from such sources were ascertained, it would be found thatits total profits would be increased by perhaps £500,000. In view of these facts there is every justification for an investigation. According to Dobson’s Digest the shares of the Colonial Sugar Refining Company Limited have risen in value in consequence of the renewal of the sugar agreement. If the agreement is of no benefit to the company it would be interesting to know why the price of the shares has risen since the agreement was signed. Senator Amour has submitted several important questions which should be answered either by the Minister or some other honorable senator who has a knowledge of the company’s operations. We should like to know the conditions under which the employees work, and the degree to which they benefit under this agreement.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– The Arbitration Court looks after wages and industrial conditions.

Senator ARMSTRONG:

– That may be so. When an industry receives such substantial protection wo are entitled to ask why only 19 per cent. of those engaged in it are in receipt of taxable incomes, and whether they have that measure of comfortand remuneration to which they are entitled. When the imposition of a flour tax was under consideration, it was said that there was a discrepancy of £24 a ton between the amount which the wheat-growers receive for their product and the price at which bread is sold. A full investigation would be of benefit, particularly to the consumers, many of whom think that in view of the profits made by the Colonial Sugar Refining Company Limited the price whichthey have to pay for sugar is too high.

SenatorE B. JOHNSTON (Western Australia) [6.8]. - Having, over a period of years, visited North Queensland on three occasions and made inquiries into the ramifications of the Queensland sugar industry, I am convinced that it is most valuable and of the utmost importance to Australia.

Senator Armstrong:

– That is admitted.

Senator E B JOHNSTON:

– In North Queensland there is a huge well-watered and rich province, capable of carrying a much larger population, particularly in that portion in which sugar is produced, than it is carrying to-day. Every kind of tropical fruit and vegetation grows luxuriantly, and one cannot help sympathizing with those who are anxious to make their homes and produce sugar on those fertile lands but are prevented from doing so because they cannot obtain the necessary permit.

Senator Allan MacDonald:

– There is an over-production of sugar at present.

Senator E B JOHNSTON:

– Yes ; but a valuable commodity is being produced. During one of my visits to northern Queensland I met men who showed me beautiful cleared fields adjacent to the sugar mills, and who toldme that they could not obtain a permit to grow sugar. One man informed me that if he could obtain a permit and the mills would take his cane his land would be worth up to £100 an acre. He could engage in dairying, but there was then little local market for dairy produce.

Senator Courtice:

– The sugar mills can deal only with a certain quantity and an additional mill would cost £250,000.

Senator E. B. JOHNSTON. Yes ; but there must be something wrong with our economic system if wonderful fertile lands, such as are to be seen in northern Queensland, cannot be developed sufficiently to enable them to carry a much larger population. Sugar-growers, who are primary producers, enjoy a handsome home-consumption price for their product, and that is really the object of the sugar agreements which have been made over a period of years. It is regrettable that some of the foremost champions of the sugar industry are most active in their opposition to a home- consumption price for wheat. Tea, sugar and bread are essential commodities in every Australian home.

Senator Collings:

– We have always supported a home-consumption price for wheat.

Senator E B JOHNSTON:

– When listening last night to the eloquent speech of the Leader of the Opposition on the financial proposals of the Government, I heard him state most emphatically that t he flour tax should be repealed.

Senator Collings:

– I said how the amount involved should be made up.

Senator E B JOHNSTON:

– No one knows better than the members of the Opposition that the only means by which a home-consumption price can be assured to the wheat-growers by federal action is by means of the flour tax.From my inquiries in northern Queensland, admittedly a few years ago, it did not appear to me that the growers were receiving more than a fair price for their product, particularly as they live in isolated localities in tropical areas where in summer t he climatic conditions are severe. I found that settlers, especially recent arrivals, objected strongly to the restrictions imposed by the Queensland Government and the Queensland Sugar Board in regard to planting new areas with sugar cane. The sugar industry has been the means of establishing a large and prosperous population in north Queensland, but I regret that that population is not more British in character.

Silting suspended from 6.15 to8 p.m.

Senator E B JOHNSTON:

– Before the sitting was suspended I expressed regret that British population was not more in evidence in certain districts of northern Queensland. It may be that many of the foreigners who reside in those districts are naturalized; but the fact remains that one foreign language particularly is spoken quite generally. The preponderance of foreigners in those parts is a source of national danger, which may early become more evident should a certain European nation enter this war against the Allies.

Senator Crawford:

– Communities of foreigners exist in Western Australia also.

Senator E B JOHNSTON:

– That is so. However, when I last visited northern Queensland in company with prominent Australian sugar-growers, the latter were greatly perturbed over the penetration of aliens, particularly as so many of them were acquiring sugar farms.

Senator Aylett:

– What is the percentage of foreigners in those districts ?

Senator E B JOHNSTON:

– I do not know. A large number of them have been naturalized, but I cannot say to what degree their naturalization papers, which are so generously issued to them by this Government, would influence them in our favour in the event of differences arising between Australia and the country from which they come.

SenatorFoll. - It is only fair to those people to say that the great majority of them have, on many occasions, passed resolutions declaring their loyalty to the British throne.

Senator E B JOHNSTON:

– I am glad to hear that. Of course one must admit that in the sugar districts are to be found some of the sturdiest people who pioneered those districts under very great hardship. We are fortunate in having in Senator Crawford and Senator Courtice direct representatives of British pioneers in those districts. However, though some of us decline to take the advice of those honorable senators on this bill, we nevertheless assure them that the efficient sugar industry would have nothing to fear if an investigation were conducted by a royal commission, as has been suggested by Senator Amour. In any case, such an inquiry is now justified, because the last inquiry into the industry was held nine years ago in circumstances which differ considerably from those existing to-day. As a matter of fact, although I listened very carefully to the Assistant Minister’s speech, I do not quite know how the details of this agreement were arrived at. Apparently, the Government took the view that as the agreement was in operation, it would be quite all right to renew it practically as it stood. I am notsatisfied that the Government gave sufficient consideration to the matter, or that it sought such expert advice as it should have done seeing that it was about to renew an agreement so important to the nation. The Assistant Minister gave no indication of whether the various prices fixed are just, in the circumstances existing to-day. Neither did he explain the urgency for the renewal of this agreement, in view of the fact that the existing agreement would not ordinarily expire until September, 1941; that is, fourteen or fifteen months ahead, and during that period a general election will be held.I urge the Government to be cautious in committing the country to too great a degree in regard to matters which, in ordinary circumstances, should not be considered until after the next general election is held.

We are being asked to give to the industry a monopoly of the Australian market. I can see no objection to that. The industry is efficient., and every phase of it, right from planting to refining, seems to be skilfully carried out. Whilst admitting those facts, however, we should have evidence of whether the retail price of 4d. per lb. in State capital cities is justified, or whether it is possible to reduce that price without doing an injustice to those directly engaged in the industry. Indeed, since hearing the Assistant Minister’s speech, a doubt has arisen in my mind as to whether the present price of 4d. per lb. in State capitals is to be adhered to after this agreement is ratified by Parliament. I do not want to see the price increased to 4½d. per lb. When the sugar agreementwas last renewed by the Lyons Government, an assurance was given on behalf of the Government that the price of 4½d., then existing, would be reduced to 4d. in State capitals. At the same time, however, this understanding was not legally covered in the agreement itself. The reduction was effected, and it stands to the credit of the Lyons Government that its undertaking was fully honoured. Consequently, it is useless for the Assistant Minister to take the stand that the retail price of sugar is not covered in the agreement. That issue is morally a part of the agreement. The Minister for Commerce said -

I might say, however, that the Commonwealth Prices Commissioner has under consideration requests by various retail grocers’ associations for retailors to be allowed to obtain a larger gross profit on sugar by increasing the present capital city price from 4d. to 4¼d. per lb. The Commissioner has indicated that he will consider this matter when the new sugar agreement has finally been considered by Parliament.

That statement gives rise to a doubt in my mind as to whether the price of 4d. in capital cities is to be retained. I fear that those remarks foreshadow an increase of½d. per lb., which would mean an additional cost of £1,000,000 annually to the Australian consumers of sugar.

Senator Keane:

– The honorable senator did not howl about the increase of the flour tax, which meant an extra burden of £3,000,000 on the consumers of bread.

Senator E B JOHNSTON:

– The feature of this proposal is that we renew an agreement which has operated for the last five years. I have no doubt that the agreement will be renewed, but we have not yet had any assurance that the price of 4d. in capital cities will not be increased. I hope that the interests of sugar consumers in Australia will be adequately protected by the Government when this agreement is ratified. The interests of the growers are fully safeguarded under the agreement.

Another reason why a royal commission should be appointed to inquire into the agreement - althoughI think that the matter could be investigated more effectively by the Tariff Board - is that such an inquiry would serve to allay the suspicion in the community that the Colonial Sugar Refining Company Limited is receiving far more than its fair share of the benefits resulting from the agreement.

Senator Collings:

– The facts concerning the operations of that company have already been stated.

Senator E B JOHNSTON:

– One unanswerable fact is that the profits of this company during the last three years were as follows : - 1937, £1,036,336; 1938, £1,060,786; and 1939, £1,005,670; whilst during that period it paid in dividends amounts ranging from £804,000 to £877,000.

Senator Keane:

-From what is the honorable senator quoting?

Senator E B JOHNSTON:

– From the Wildcat Monthly, but those figures are taken from the official balance-sheet of the Colonial Sugar Refining Company Limited.

Senator Aylett:

– Did the company make all of those profits out of Queensland sugar?

Senator E B JOHNSTON:

– If a royal commission were appointed it could find out how and where those profits had been made.

Senator Collings:

– No royal commission could find out that information.

Senator E B JOHNSTON:

– That is news to me. In 1934, the Colonial Sugar Refining Company Limited distributed £7,000,000 by way of bonus shares, and the Commonwealth Government of the day, by a special provision in the Income Tax Act, exempted that money from tax. I take the following figures from the balance-sheets of this company for the periods ending 1920, 1925, 1980, and 1939 : -

The point I wish to make is that until the end of 1939 the fortunate shareholders of this company had paid £2,425,000 in cash into the company, and had received in bonus capital £13,175,000. The total scrip issued was £15,000,000, and the capital return, apart from dividends, amounted to £3,900,000, which is an increase of more than 50 per cent. over what the shareholders had paid into the company. In effect, they received all of their money back and half as much again-.

Senator Fraser:

– Do those figures refer to profit made entirely from sugar growing?

Senator E B JOHNSTON:

– They refer to the profit made by the Colonial Sugar Refining Company Limited. According to certified balance-sheets the company is making more than £1,000,000 a year. These are facts which justified Senator Amour ‘ in moving his amendment. There is a general desire among the people of this country, and among sugar-growers, to know whether or not the profits disclosed by these balancesheets are excessive. There . is another matter with which I should’ like to deal, and that is the repeated complaints made to members of this chamber by grocers’ associations and similar organizations, to the effect that the grocers retailing sugar do not receive a fair remuneration for the handling of that commodity.

Senator Foll:

– Does the honorable senator think that the price of sugar should rise?

Senator E B JOHNSTON:

– I do not, and I. hope that it will not. When the sugar agreement was being reviewed, ‘I never dreamt that an increase of the price to the Australian consumer was contemplated, especially in view of the fact that the overseas market for sugar had improved - I hope that it will improve much’ more. Until I heard “the Minister’s speech; I’ was,’ not’ aware that the passing”on’of an extra½d. per lb. to the con- sumer was under consideration by the Prices Commissioner.

SenatorFoll. - The matter was raised by the grocers themselves.

Senator E B JOHNSTON:

– We are being asked to ratify this agreement without being given any official information, and in the absence of important details. Consequently I intended to move an amendment, but I was forestalled by Senator Amour. My amendment would have been in these terms -

That all the words after the word “ that “ be omitted with a view to the insertion in lien thereof, the words “ that the bill be withdrawn, and the proposed sugar agreement and the position of the sugar industry generally, be referred to the Tariff Board for inquiry and report with particular reference to-

1 ) The desirability of decreasing the price of sugar to the Australian consumer;

Whether excessive profits are being made by the Colonial Sugar Refining Company Limited; and

Means by which the Colonial Sugar Refining Company Limited should allow a fair profit to grocers and other retailers of sugar without extra cost to the consumer.

I do not think that it is competent for me to move my amendment now, but I do strenuously object to an increase of the price of sugar to the consumer. It would be far more preferable to refer these matters to the Tariff Board than to a royal commission. I have very little faith in royal commissions, unless I know exactly how they are to be constituted. The Tariff Board is an efficient and impartial tribunal, and is charged with the responsibility of deciding what measures of protection and assistance are to be given to Australian industries, particularly secondary industries. I believe strongly that the Tariff Board is the right tribunal to inquire into the sugar agreement, but a I am not now in a position to move my amendment under the Standing Orders of the Senate, I. shall support the amendment moved by Senator Amour.

Senator COLLINGS:
QueenslandLeader of the Opposition

– It seems a pity that there should be any more talk in connexion with the ratification of the sugar agreement. I had seriously considered not adding to the already large volume of talk, but it appears to be impossibleto convince those whodo not know anything at all about the sugar industry that certain things are . facts, and certain other things are con trary to facts. Therefore, I consider that it is essential that somebody who knows the industry intimately, has been associated with it since its inception, and hat taken a personal part in every phase of its development, should say something about it. I should first like to congratu late my colleague (Senator Courtice). who also has a very intimate knowledge of the sugar industry because of his long years of service and hard toil in connexion with it, both as an employee and as an employer, on the splendid job he made of his statement in this chamber this afternoon. I know that this agreement is going to be ratified. Practically every member of this chamber is in favour of it. This is the third time that I have had an opportunity in this Senate to take part in the debate on a bill containing the sugar agreement, and I consider it almost a tragedy that so many honorable senators are not sufficiently interested between times to make themselves acquainted with the facts of the industry. Every time that an agreement comes before us for ratification, we who have knowledge of the industry have to repeat the storyofitsdevelopment.Butsure with - the statements made in the course of this debate with regard to the Colonial Sugar Refining Company Limited. I propose to say a word or two about that aspect of the debate. The Colonial Sugar Refining Company Limited is rendering a service to the greatest primary industry of this country.

Senator McBride:

– Oh !

Senator COLLINGS:

– That is a fact. If it were not for the development of the sugar industry in the northern portion of Queensland, this Government’s defence problem would be twice as difficult in that part of the continent as it is at the moment. The Assistant Minister for Commerce (Senator McBride) knows that. The defence problem would be more difficult because, without the sugar industry, the portion of Queensland now under cultivation for sugar cane would be practically uninhabited, and there would not be in northern Queensland sufficient man-power to put up any sort of defence against invasion. Therefore, I repeat that the sugar industry is a most important Commonwealth primary activity, and that the Colonial Sugar Refining Company Limited is rendering a very important service to the industry and the country. This fact will not be denied except, perhaps, by those who are totally unacquainted with the true position or too mentally indolent to make themselves acquainted with it. Why Senator Johnston aud other honorable senators who have spoken in this debate against the ratification of the agreement want to read all those wearisome details about the profits made by the Colonial Sugar Refining Company Limited passes my understanding, because the agreement has nothing whatever to do with the company. That enterprise finances the crop, which, this year will require at least £8,000,000 at a lower rate of interest than any financial institution in this country would be prepared to accept even under the agreement. It is true that while the industry was carried on* in Queensland by kanaka labour, the Colonial Sugar Refining Company Limited made very heavy profits. One of the reasons for the original agreement was to make it impossible for the company to continue making such large profits from the handling of the crop. To-day,” that company is not making huge profits out of the Australian portion of its business, despite what other honorable senators may say. Those honorable gentlemen who presented U3 with n wearisome set of figures this afternoon and this evening have been told a dozen times that if the Colonial Sugar Refining Company Limited made no charge at all for all that it is doing for the sugar industry, the cost of sugar would be affected to the extent of only 1/12 of a penny per lb. Some critics have said that the company has made millions of pounds out of the industry. That is not true. The important point to stress is what the company has put into the industry. As I have stated, it not only finances the crop, but it also refines the sugar - a process which, I have long contended, takes the best out of the sugar. But it must be refined, otherwise it will turn to molasses in the bag3. The grade of sugar commonly known as millwhites is sugar partially refined, but it does not meet the needs of the industry bo well as the complete process of refining.

Besides financing the crop, the Colonial Sugar Refining Company Limited also keeps a full staff of scientists who carry out important laboratory experiments with different qualities and varieties of cane in order to determine their sugar content and reaction under certain conditions. All this information is made available to the growers free of charge. The Queensland Government, too, employs an army of scientists and experts to watch every stage of the industry from the planting of the cane to the refining of the sugar. Although the Colonial Sugar Refining Company Limited renders this valuable service to the industry, we have to listen to honorable senators, who ought to be better informed, making unjustifiable charges about the company’s profits and operations. It is true that the company is a monopoly, but objection to it on that score does not apply to its activities in connexion with the sugar industry in this country, though there may be grounds for criticism of the company in connexion with banking and shipping. Whether that is so, I do not know. The ramifications of the company are widespread beyond the borders of the Commonwealth. But we are not concerned with that aspect of its business. We are to-night debating the bill for the ratification of the sugar agreement.

We are proud of the fact that Australia, under normal conditions,- is one of the most favoured countries on God’s earth. To-day, having regard to the conditions in Europe, it is infinitely more favoured. In the light of the present world situation I need not enlarge on that matter. Those of us who were privileged to take part in pioneering social legislation in this country have good reason to be well- satisfied with the results. We have succeeded in establishing in this country - I do not attribute credit to any particular government because. I am not making any claim for party advantage, although I shall show, what Labour has done - industrial conditions and a standard of living that are not enjoyed in any other land. The Labour party was responsible for the White Australia policy, which has long since been adopted as tlie national policy of Australia.

Senator MCBRIDE:
UAP

– The Labour party was not in existence when the White Australia policy was adopted.

Senator COLLINGS:

– I expected the less informed member of the Ministry to make that remark. I do not propose to reply to it, but I shall mention a little of the history of this aspect of Australian policy.

Senator MCBRIDE:

– Stick to facts then.

Senator COLLINGS:

– If I were as careless of the truth as the Minister so often is, I should not get much credence in this chamber; but I can claim that whenever I rise to speak I, at least, have the respectful ‘ attention of other honorable senators. I recall the earliest phase of the movement, when thousands of good Australians, including’ myself, took their lives in their hands in defence qf what is now known’ as the White Australia policy. I remember the time when the Queensland sugar industry was in the hands of the kanakas; when blackbirding ships visited the islands .to steal kanakas from their homes, to tear them from their wives and children, and bring them, herded, as pigs would not now be herded, to work oh bur sugar plantations. It has been said that the sugar-fields in Queensland are fertilized by the dead bodies of kanakas who were employed in the initial stages of the industry. This is not an exaggeration. It is not a juggling with facte. It is the sober truth. In the time of which I speak, and that is many years ago, we who became interested in the movement to exclude the kanakas, decided that there should be no more of this slavery in the sugar industry. By 1907, ‘after a .vigorous agitation had been carried on by the working classes of Queensland, we were able to put on record .the fact that the kanakas had almost entirely disappeared from the . cane-fields. Of course, we had been told .that it could not be done: that we should . never be able to get the white man to work satisfactorily in. .the tropics. , We are hearing that story. even! to-day. There are people at this., moment declaring that we cannot possibly develop this country to its fullest extent “‘without the aid of ‘coloured people.

For some months past, I and other honorable senators have been receiving propaganda urging that the development of central and northern Australia be carried out with cheap coloured labour under white supervision. As I have said, we had to meet all these objections in our fight against the continued employment of kanakas in the Queensland sugar-fields. But we stuck to our guns, and events have amply justified everything that we had said. After three generations of white workers in the sugar industry, we have demonstrated that white men can not only stand the work in the tropics but also that they can do their work more efficiently than black labour ever did. Statistics for the tropical portion of Queensland indicate a higher standard of health there than in any part of Australia. This is a complete vindication of our White Australia policy. We have had this policy supported in high places. The late Sir Edmund Barton, one of the founders of federation, made it the theme of one of his greatest orations. I also remember well an eloquent speech delivered, by Sir John Latham, the present Chief Justice of the Commonwealth, shortly after his return from the goodwill mission to Japan some years ago. In this building, on the eve of his leaving politics, Sir John Latham told us some details of his visit to the East. I shall never forget what he said on that occasion. I differed from the right honorable gentleman on many occasions, but I cordially agreed with his last speech in this building. After describing- -his visit to Japan and other eastern countries - he spoke in words so eloquent as to impress a most vivid picture on our minds’ - he told us that he was leaving the hurlyburly of politics to take up work in another sphere, and he urged members of this National Parliament of all shades of political opinion never to abandon the White Australia policy. We had to resort to all kinds of tactics to put that policy into operation. In every centre in Queensland the conditions were disgusting and’ ‘ degrading. Nobody in the industry took any trouble to see whether the employees received decent food or clothing. In the streets of Mackay and Bundaberg, no white woman was safe after nightfall because the kanakas were really ‘savages!

I have witnessed the development of the industry from the time when the conditions were rotten. I saw Tully before an axe was put into the jungle that grew where the town now stands. Formerly it had a rotten grog-shop, and the conditions generally were evil. In the company of Mr. Theodore, who was then a prominent member of the Labour party, and Premier of Queensland, I was shown through one of the finest sugar mills in the world, and the most complete in the Southern Hemisphere. The cost of establishing it was £750,000. It is now surrounded by hotels that have hot and cold water laid on to every room. There are concrete roads and footpaths and every other indication of a high standard of civilization. This progress has been repeated in a dozen different centres, and it is all due to the conversion of this great industry from black to white labour.

Some years ago a visit was paid tq Australia by a member of the staff of the International Labour Organization. He was born in “Western Australia, and secured a position in the Secretariat at Geneva as the result of a competitive examination. After spending some years there, he applied for holiday leave to visit his . parents in “Western Australia, and he was given extended leave to enable him to inquire into the legislation under which the sugar industry of Queensland is conducted. He was sent to me because I had taken some part in putting sugar legislation through the Queensland Parliament. He told me that in most’ countries some of the principles of the Queensland legislation were in operation, but he desired to know what had led to the great success of the sugar industry under white labour conditions. He remarked that the almost universal opinion was that white men could not work in the tropics, and I told him of what had been accomplished in Queensland. Professor A. Grenfell Price, C.M.G., Mitt, F.R.G.S., of the University of Adelaide recently stated -

Most important of all. we are beginning to realize that the greatest barrier to white settlement in the tropics is neither climate nor sickness, but the presence of vast masses of colored peoples, who, as we know from the history of the Kanakas in Queensland, lower the standard of living, create reservoirs of disease, and- form the means by which the whites can shirk doing the essential physical work.

From Washington to the Equator, every American scientist I encountered said: “You Australians are the wisest people on earth with your ‘ White Australia Policy,’ “ and this dictum rests on indisputable facts. The health of white people in the Southern United States suffers appallingly from the presence of millions of negroes, while the West Indies and Central America are steadily going black. Jamaica, for instance, which once had thousands of white settlers, is now colored to 90 per cent.

All of this indicates the necessity not only for standing four-square for a White Australia, but also that White Australia should stand behind the sugar industry.

Reference was made by ‘ Senator Johnston to the percentage of aliens employed in the sugar industry. It is high time misconceptions were removed and untruths contradicted. The 1933 census returns showed that the population of Queensland is still from 96 to 98 per cent. British, including Australians born of British parents. I was surprised to hear Senator Johnston repeat timeworn untruths. Certainly, in some of the sugar areas, one sees persons of various nationalities. Innisfail, for instance, has a polyglot population. There one may see Chinese, Italian, Maltese, Indians and members of other races, but all of them do not work in the sugar industry. Their presence in Queensland is a responsibility, not of the State Government, but of the Commonwealth Government, which controls the immigration laws.

The birth rate in the tropical areas of Queensland is higher, and the infant mortality lower, than in any other part of Australia. The population’ has increased in northern Queensland during the last 25 years by 100 per cent., and that record is not equalled in any other part of Australia. According to the Minister for Health. (Mr. Thorby) the vital statistics of Australia present an appalling prospect. I have said that the Labour party has a national policy on which all parties are agreed, and even the Government will allow me to say that it, also, is in sympathy with the ideal which Labour has’ set out to realize, of creating for every body a higher standard of comfort than is enjoyed in any other part of the world; Even our opponents agree that that is ari admirable ideal, and they sometimes try to promote it.

During the comparatively short period of 150 years, Australia has built up one of the most wonderful dominions attached to the British Commonwealth of Nations. Its development has been more rapid than that of any other country having a similar population. This has been achieved because successive governments have had a definite policy designed to achieve that result. Of course, the Labour party has endeavoured to travel this road at a much faster rate than any other party. For instance, it stands for a policy of high protection, believing that to be essential for the encouragement of both primary and secondary industries. I was astounded to find that Senator Johnston and several other honorable senators are, apparently, prepared to do anything that will injure the sugar industry, the success of which has such an important hearing upon the economic development of this country. I was also surprised at the temerity of Senator Allan MacDonald. He did not commence to flagellate me until I had left my seat, but, when I reached the curtains, I happened to hear him mention the Leader of the Opposition, so I waited to hear the horrible tale that he poured out about my conduct in the chamber last evening. I know that it would give Senator Allan MacDonald some satisfaction if I told him a little story of what occurred last night, and if I said some unkind things about my two misguided friends who have recently become associated with a new political party; but I do not propose ‘to do so. I assert most definitely that I do not intend to ask Senator Allan MacDonald for his advice as to when I shall leave this chamber or return to it, or what my line of conduct shall be while I am here, because he is the last person whom I would ask for advice. I am not in the habit of hitting below the bell ; but I did say somewhat heatedly this afternoon that the honorable senator would not wait to hear what I had to say in reply to the charges which he made. T am pleased that he is now in the chamber, and that my remarks do not upset .him. His .onslaught upon me was vigorous; but any skill I have acquired in the fisticuffs of debate is due to long practice against critics of his type.

During the debate a good deal has been said concerning the poor grocers and the degree to which they suffer as a result of the price at which sugar is retailed. I have every sympathy with struggling tradesmen. I have every reason to be sympathetic, because for a number of years I was one of them. There is no phase of this iniquitous financial system under which we live that I have not been through, and in which I have not been wrung almost dry. I worked for employers for half a century, very often under rotten conditions, and subsequently in improved circumstances and for better wages, but when I was elected to this chamber I received the highest remuneration and enjoyed better conditions than I had ever experienced previously. So I realize fully the bitter plight of thousands less fortunately placed. What are the facts with respect to those engaged in the grocery trade? It is well that those who advocate the claims of certain sections of the trading community should realize that the agreement we are discussing has nothing whatever to do with the retail price of sugar. It is true that it contains a provision which liberalizes the definition of “ wholesaler “. It is interesting to note that no honorable senator was bombarded with literature by the combines of grocers in our principal cities and towns until this great international conflict appeared imminent, and it was thought that our primary products were to be disposed of overseas. These people then came into the picture, because they wanted to be in on the “ rake-off “. I do not, of course, include the small grocers. If honorable senators study the letterheads on the correspondence they have received, they will see how many small grocers had any hand in the agitation. We all know how these rackets are worked up. No grocer stocks sugar because of the profit he makes on it. Drapers do not stock calico because of the profit derived. Sugar and calico are lines in common demand which storekeepers must stock. Some one asked this afternoon what would happen if grocers refused to sell sugar. Shopkeepers who refused to do so would losetheir trade, because cus- tomers wouldgo to those stores where they could obtain their requirements. Sugar is handled more easily, perhaps, than any other commodity in the grocery trade. Fifty years ago I was employed in a shop, and whenever the assistants were idle the boss would tell us to get busy and parcel up sugar. The sugar would be tipped into the bins and then done up in packages of varying weights. If a customer wanted 1 lb. of sugar it would be obtained from the lower shelf, if a 2-lb. packet was required it would be taken from another shelf, and so on. Sugar was parcelled at slack periods and no additional cost was involved. Those who speak of the small profit made on sugar do not tell us that a grocer’s stock of sugar is turned over at least once a week, or 52 times a year, whilst the balance of his stock is not turned over at anything approaching that rate. There are some commodities for which there is only an occasional demand, but for which money has to be expended in order to provide a. stock. Under the agreement a bona fide wholesaler must buy each month in the year sugar to the value of £1,500, and pay cash for it. Sugar has to be delivered in every capital city - Darwin is now included - at the same price. An honorable senator asked what would be the position of a grocer 600 miles from the railhead. Every one knows that in exceptional cases a higher price is charged. The price at Camooweal, say, is not 4d. per lb., because the cost of transport is heavy. The average retail grocer selling sugar at 4d. per lb. is making a profit of 15 per cent. That is the gross profit, and includes overhead. But surely he does not saddle his sugar purchases with an overhead equal to that of other commodities which he turns over only once in a season. Some one said that the late Mr. Deakin was the only orator who had the capacity to make figures interesting, but I am convinced that Deakin’s mantle did not fall on Senator Johnston because he made his recital of figures excruciating agony. One honorable senator said that since 1915 the price of sugar has increased by 68 per cent.

Senator E B Johnston:

– I did not

Senator Amour:

– I did not.

Senator COLLINGS:
QUEENSLAND · FLP; ALP from 1937

– The facts are that since 1915 the price of all commodities in Australia has risen 68 per cent., but in that period the price of sugar has increased by only 33 per cent.

Senators should not overlook the fact that Australia is now at war, and one of the greatest needs of the nation in its hour of trial is primary products. The British Government has asked Australia to export more sugar than in recent years, and to increase its production. Senator Johnston said that he had seen fertile lands adjacent to sugar mills lying idle because the owners could not obtain a permit to grow sugar. That is evidence of the statesmanlike way in which the industry is conducted. It was essential, in the interests of the industry, that production should not be expanded unduly, and the Labour Government in Queensland, in conjunction with the Commonwealth Government, took steps to prevent overproduction. When a settler takes up land adjacent to a sugar mill he knows that he cannot grow sugar, or have 1 oz. of cane processed, until he obtains the necessary permit. One honorable senator referred to Nambour, which is not a good sugar district, but in that locality the growers have never been able to produce sufficient cane to keep the mill fully occupied. Under normal conditions, every ton of sugar exported reduces the financial return which the growers receive. The greater the quantity sold at world parity the smaller the amount available for distribution amongst the growers.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Is not that covered by clause 10 of the agreement?

Senator COLLINGS:

– Yes; but whether it be clause 10 or clause 110, when a similar agreement is submitted for ratification the same bedtime stories will again be told, and some one else will perhaps have to do the job which I am doing to-night. I know that as a result of the development of the industry hundreds of miles of main road have been constructed in the sugar districts, and that general improvement has resulted from associated activities. I know the privations experienced by those who pioneered the industry. To-day we are aware of the degree to which conditions have been improved. If unholy, misunderstanding, and ill-informed interests get their hands on this industry, even to the degree of preventing the ratification of this agreement, tremendous harm will be done to not only the individuals in the industry, but also the nation itself. To-day, the more sugar we export, the more quickly shall we level up our overseas trade balance. We can do that job effectively only by exporting more, and importing less. In any case, I should have imagined that the present time was the least opportune for any honorable senator to select in order to harm this valuable industry.

I am certain that when the vote is taken on the question now before the Senate, an overwhelming majority will be recorded in favour of a continuance of this industry, which is proving for the first time in the world’s history the capacity of the white man to work in the tropics. When Lord Lothian, who is now the British Ambassador to the United States of America, visited Queensland in 3938 and was told of what we were doing in the sugar industry he said, “Ah, yes, but wait until you get to the second and third generations, and see how they deteriorate “. To that observation I replied, “ The third generation is now at work in the cane-fields “. I then gave him the health statistics which I have just given in a general way to honorable senators. Again, I say that this is ‘the least favorable opportunity for any one to attempt to injure the great sugar industry. It is impossible to get the price of sugar lower than it is, because none of the costs in any section of the industry can be further reduced without injury to the growers, workers, business generally, and the nation. My final word to honorable senators is to remember that, whenever they are handling this great industry, they are handling the only industry in the wide, world which has yet been covered through all its ramifications by legislative enactment, based on agreements like the one which we are now asked to ratify, from the time the cane is planted until the last ounce of sugar is refined and ready for transport to those who wish to dispose of it.

Senator CRAWFORD:
Queensland

– I have spok,n, usually at length, upon every occasion that the sugar industry has been discussed in the Senate during the last 23 years. I was strongly inclined not to take part in this debate, but, owing to the position which I occupy as a cane-grower, a shareholder in a farmers’ co-operative mill, and an official in a strong employers’ organization of sugar-growers and mill-owners, I am afraid that were I to remain silent on this occasion, my conduct would be misunderstood. I congratulate most sincerely Senator Courtice on his excellent contribution to this debate. His speech was comprehensive and lucid, and in every detail it was strictly accurate.

So far as it has proceeded, the debate has been more favorable to the sugar industry than any previous debate which I have heard on sugar. That should certainly he so, because undoubtedly the sugar industry has rendered great service to Australia. Notwithstanding that fact, however, hostile criticism of the industry was recently voiced from an unexpected quarter. I refer to the remarks made over the national broadcasting network by Mr. E. A. Mann, who is more generally known as “ The Watchman “. Among other things, he said that it was wasteful to produce sugar in Australia because if we bought it from other countries we should save sufficient to pay for the whole of the petrol which we now import. As honorable senators are aware much discussion has taken place recently on the subject of rationing of petrol, chiefly with a view to improving our dollar exchange. Bearing that fact in mind, what effect would the importation of sugar from, say, Java or Cuba, have upon our dollar exchange? At the present time we are producing annually for home consumption sugar which would cost us about £7,000,000 to import. If we imported it, we should be obliged to export other goods to a corresponding value. ‘ At the same time we export sugar to the value of about £6,000,000 annually, and consequently our exchange position and trade balance are improved to that degree. Therefore, if we were importing sugar instead of producing it in Australia for home consumption and for export, we should be approximately £13,000,000 worse off. However, another important factor has to be considered in this connexion: Experts say that this sum of £13,000,000 is turned over ten times, thus increasing the sugar money annually in circulation in Australia to £130,000,000. We can visualize what would be the effect of withdrawing this money from circulation.. So soon as I wa3 informed of the statement broadcast by Mr. Mann, I protested, because I regarded such criticism as an abuse of the position he occupies, as a commentator for the Australian Broadcasting Commission. I was very glad to learn subsequently that Mr. Mann will not again be permitted to bear false witness against a great industry over our national stations.

Of course, I shall not vote for the amendment proposed by Senator Amour. I hold no brief for the mill-owners or the Colonial Sugar Refining Company Limited. Nearly 30 years ago I was a member of a royal commission appointed by Mr. Andrew Fisher when he was Prime Minister, and after that commission had made a most exhaustive inquiry into the industry, I presented a minority report in which I referred to the Colonial Sugar Refining Company Limited as follows. -

Tlie evidence reveals that the Colonial Sugar Refining Company Limited occupies a commanding position in the industry secured by steadily pursuing for a long course of years, a policy which has won for it the confidence and goodwill with practically the whole of those with whom it has had any business dealings. There is nothing to indicate that any of the company’s transactions have been in the slightest degree of a predatory character. Amicable relations exist between the company on tlie one hand and the manufacturers of raw sugar and the purchasers of refined on the other. That the company earns large profits both within and without the Commonwealth, appears to be entirely due to the volume of its business, command of adequate capital, complete utilization of hy-products, thorough organization. able administration, and high efficiency in’ every department.

I do not think that more could be said in praise of any other industry or business organization in Australia to-day. Although my report was published nearly 80 years ago and has since been ‘in circulation, no successful -attempt has been made to refute the remarks which I have just quoted.

During the last war, sugar was sold in Australia at a lower price than in any other part of the world. That, of course, greatly assisted those who required sugar as a raw material for manufacture, including manufacturers of jam, canned fruits, confectionery, soft drinks and beverages which are more or less intoxicating. Those manufacturers were thus enabled to conduct their businesses very profitably. We find that shares in canning, jam manufacturing, confectionery and brewery companies, are quoted at prices substantially above par. At the present time, the price of sugar in this country is lower than it is in any other country. It appears., therefore, that there is nothing to complain of, and I am glad that honorable senators appreciate that fact. Something has been said with regard to the effect which the industry has had on population. According to the latest census figures, the tropical part of Queensland carries a population of more than 240,000 people of European descent. Of that number, 96,000 are under 21 years of age, and it is fair to assume that at least a large proportion of those young people were born and bred north of the Tropic of Capricorn. In comparable latitudes in Western Australia and the Northern Territory, there are fewer than 10,000 white people to-day. The Leader of the Opposition said that from infancy upwards the health of the residents of north Queensland compared more than favorably with the health of residents in other parts of Australia. I shall give an example of that fact: A few months ago two intimate friends of mine celebrated the 72nd anniversary of their wedding, and they are still in good health-. Our district is under some obligation to these people because our co-operative mill company employs two of their sons, one as general manager and the other as’ chief engineer. I have no doubt that nt present many skilled tradesmen are being trained in the sugar mills of Queensland, because every one of those mills has a comprehensive workshop in which apprentices are employed. A number ‘.of these apprentices are available now to help provide the. skilled labour necessary to enable us to make a proper war effort. A misrepresentation which i3 frequently made with regard to the sugar industry is in connexion with the amount which that industry has received by way of bounty. I point out that to date, the sugar industry has not received a penny piece by way of bounty. For some years after federation an excise of £4 a ton was collected on all sugar manufactured in Australia, and if the producers observed the labour conditions laid down by the Minister foi Trade and Customs, they received a rebate of £3 a ton. The result of that legislation wa3 that the difference between the excise paid by the producers, and the rebates which they received, amounted to no less than approximately £2,692,000. In 1916, while the Commonwealth Government was handling both the purchase and sale of sugar, a profit of more than £4100,000 was paid into Consolidated Revenue, so that in a few years, instead of receiving anything from the Federal Treasury, the sugar industry directly contributed to it more than £3,000,000. Yet it has been said that the sugar industry was bountyfed.

Only passing reference has been made to the benefit which the fruit industry receives under the present arrangement. The Emit Concessions Committee consists of one representative of the Queeusland sugar industry, one representative of the Commonwealth Government, one representative of the fruit-canner3, one representative of the jam manufacturers, and two representatives of the fruit-growers. The sum which has been set aside to assist the fruit-growing industry is administered by this committee upon which the sugar industry has only one representative. Referring to the benefits accruing to the fruit industry from this contribution by the sugar industry, a report of a statement by Mr. Feil, one of the representatives of the fruit industry on the Fruit Concessions Committee, stated -

Especially may T stress its importance to the berry fruit-growers of Tasmania., as it ensures the continuance of special concessions in the price of sugar to the fruit industry.

As an illustration of the value of these concessions, Mr. Feil cited a year’s bounty of £10 a ton on berry pulp ex- ported overseas. This permitted from 500 to 700 tons of otherwise unsaleable pulp to be exported, thus clearing the local market of embarrassing surplus stocks. It is noteworthy that no complaint whatever in regard to the sugar agreement has been made by the fruit industry, cither on the manufacturing side or the. growing side. I am satisfied that the renewal of the agreement in its present form is desired by all who are depending upon the Australian industry for the sugar they require in various forms of manufacture.

Senator CUNNINGHAM:
Western Australia

– It is not my intention to support the amendment moved by Senator Amour. For a number of years I have followed very closely the various inquiries made into the sugar industry of Queensland, and t think that there is sufficient information available already to guide honorable senators in casting their votes for or against the renewal of the agreement. At the same time, 1 welcome this discussion because there ar« many aspects of this agreement, and many phases of the sugar industry with which I at least was unacquainted until this debate. The Leader of the Opposition (Senator Collings) took us to task for not having in our possession the information which he has at his fingertips owing to his long association with the industry. I point out to Senator Collings that some honorable senators have not had the same opportunity to examine the operations of this industry as he has had through long residence in the State in which most of Australia’’! sugar is produced. For that reason, perhaps Senator Collings will excuse our comparative ignorance of this subject. 1 have endeavoured to keep in touch with the findings of the various tribunals, but. after all, there is a vast difference between reading the findings of royal commissions, and having been associated- with an industry from its infancy. Like other honorable senators who have spoken, during this debate, I take great pride in the f actthat we have in Australia a sugar-growing industry - cane sugar, too - ops/rate’.! solely by white labour. That is a wonderful achievement. I remember well i.b«controversy which raged throughout Australia in pre-federation days concerning the possible repatriation of black labour then employed on the Queensland sugar.fields. The removal of tlie kanakas from this country was a condition of the union, and as a young Australian, I was most anxious at that time to see this country made, and remain, a white man’s country. The remarks of honorable senators during this debate have brought home to us the fact that even to-day there are difficulties associated with this industry which is responsible for providing Australia with best grade sugar at a price less than that ruling in most, if not all, countries of the world. It is true that sugar from large refining countries such as Cuba and America can be landed in England at 3d. per lb., but I point out that, under war conditions, the people of Britain cannot buy sugar at that price. In fact, it is costing them 5 1/2 d. per lb. It is obvious, therefore, that we can pride ourselves on having a white-produced sugar which is supplied at a reasonable price to the people of Australia. The Senate is now asked to renew the sugar agreement, and I am prepared to support the bill, realizing that in casting that, vote, I have to satisfy not only myself, hut the people whom I represent, that the agreement is an equitable one. In years gone by the agreement was frequently misrepresented, and I regret thatmuch of that misunderstanding was due to the activities of certain people, interested in politics, when the agreement was about to be signed. When Mr. Scullin entered into the agreement in 1931 the Labour party was attacked from one end of Australia to the other. It was stated that the Labour Government had inflicted an injustice upon the people of this country. Of course, the allegations were made purely for political purposes. We know that the Governments of the Common wealth and Queensland are doing the right thing in asking this Parliament to ratify the agreement for a further term. It is just as well to stress this fact in order to avoid future misunderstandings. I say this because, when the secession movement was sweeping over Western Australia, one of the; outstanding complaints against federation was the heavy subsidy being paid by the Commonwealth for the privilege of having a sugar industry carried on by white labour. The people of Western Australia were told that they were paying a high price for the maintenance of Queensland sugar-growers in a profitable industry, and that if the State were not in the federation its people would be able to buy sugar from Java or elsewhere for £14 a ton.

We must view this industry from the Australian point of view. I hope that the vote in the Senate to-night will give evidence of a national outlook, and 3 shall expect the Senate later to adopt the same attitude in connexion with the development of the iron ore deposits in Western Australia, or the assistance of gold-mining or any other industry in thai State. Let us, in this Parliament, develop an Australian outlook in respect of all these things. If we do not, we shall continue to live in watertight compartments, and the people of Western Australia will remain out in the cold. They have been in the cold long enough. They desire now to share a little of the economic warmth engendered in the eastern States through the establishment of successful secondary industries.

Senator Amour raised a number of issues, such as the conditions and rates of pay in the sugar industry, using them as a reason why there should be an investigation by a royal commission. I also have examined the available material which, as honorable senators know, is ample, and I am aware of the provisions covering award rates and conditions of labour. I intend to vote against the amendment.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– This is the second opportunity I have had to take part in a debate on the sugar agreement. On the first occasion I approached the subject with somewhat mixed feelings, because the State which I assist to represent in this chamber did not have a very kindly feeling towards the sugar industry. But during recent years I have been privileged to visit Queensland, and I gave particular attention to the sugar industry, visiting a number of mills and making other investigations. As a result of my inquiries I am satisfied that the agreement is in the best interests of the people, and I intend to support, the hill. I admit that the amendment submitted by Senator Amour has some merit. As the honorable gentleman now speaks as the leader of a party representing about 50 per cent, of the Labour representation of New South Wales in this chamber, I assume that he would not make statements without some warrant. Nevertheless, I do not feel disposed to support his amendment for the simple reason, as has been pointed out already, that an investigation by a royal commission would be expensive as well as unnecessary. Already three comprehensive inquiries have been made, and all the requisite information is available for any revision of the agreement which Senator Amour may consider desirable. In this debate we have heard a good deal about the operations of the Colonial Sugar Refining Company Limited. The Leader of the Opposition (Senator Collings) stated that the agreement had nothing whatever to do with the company. He then went on to tell us that the company financed the sugar crop from the planting of the cane to the production of the sugar. This being so, I take it that the company has a good deal to do with sugar growing. The honorable senator also pointed out that if the Colonial Sugar Refining Company Limited did all this for nothing, the difference in the price of sugar would bc less than $d. per lb.

Senator Collings:

– It would represent one-twelfth of a penny per lb.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– The honorable gentleman also said that it would not make any difference to the price of sugar. I cannot follow his argument. It may be true., as he has stated, that if the work were done for nothing, the price of sugar per lb. would not be materially affected, but in the aggregate the amount involved ‘ would represent £1,000,000. Therefore I submit that it is idle for any one to argue that if the Colonial Sugar Refining Company Limited rendered this service to the industry for nothing no difference would be made to the price of sugar.

Senator Collings:

– The profit of £1.000,000 comes out of the other operations of the company.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– ; What ai-o its other activities?

Senator Collings:

– It is interested in banking and shipping.

Senator JAMES MCLACHLAN.Nevertheless, I do not think my calculations are wrong. I also wish to say something in defence of the grocers of Australia. This agreement fixes the wholesale price for sugar, and therefore it affects retail grocers. Despite what the Leader of the Opposition said about the grocers coming into the field as profiteers because of the war-

Senator Collings:

– I did not say that. I said that we did not hear of these complaints from the grocers until war was looming.

Senator JAMES McLACHLAN.The honorable senator said that these complaints from the grocers would not have been heard except for the war. We are proud of our White Australia policy and our standard of living. The Leader of the Opposition made a boast to-night that between 96 and 98 per cent, of the sugar-growers in Queensland are British. I tell him that 99 per cent, of the grocers in Australia are British, and are as much entitled as is any other section to a reasonably good standard of living.

Senator Collings:

– I agree.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

-Two honorable senators to-night declared that retail grocers in Australia were making 15 per cent, profit on the sale of sugar. I deny that statement emphatically. If any grocer is making 15 per cent, on sugar, the sooner an inspector of weights and measures visits his establishment the better. This talk about a profit of 15 per cent, is sheer nonsense. The agreement should contain a provision enabling retail grocers to obtain some advantage from the fixed price for sugar instead of the rebate allowed to what may be termed “ wholesale buyers “. In order to attract other trade, the larger grocers in our capital cities practically give sugar away. This practice is unfair to suburban grocers who have to handle sugar as an every-day commodity. If they do not they lose trade because customers goelsewhere. The Prices Commission should fix both maximum, and minimum prices. .1 do not think it is fair that this protected industry should be., made: the plaything of tradesmen or politicians.

Complaints voiced by the retail grocers should have the earnest consideration of the Government or of the Sugar Board. I cannot support the amendment, for the simple reason that the appointment of a commission would be a waste of money, and also because I believe that the agreement is in the best interests of Australia.

The Leader of the Opposition, speaking on another measure a few days ago, stated that he would like to see the flour tax abolished. If I were to take the same attitude to this agreement which benefits so greatly the sugar industry of Queensland, the honorable gentleman would feel somewhat disturbed, as I was disturbed when I heard him speak in such a hostile manner about the flour tax, which confers a benefit on the wheatgrowers of this country.

Senator Collings:

-Wehavealways supported requests from the wheatgrowers for assistance.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– Then why did the honorable senator say that he would like to sec the flour tax a bolished ?

Senator Keane:

– In order to give some relief to the workers and to compel honorable senators opposite to support our policy on banking.

Senator JAMES McLACHLAN.The wheatgrowers have as much right to consideration as have workers in other industries. If it is right to subsidize the sugar industry, it is right to impose a flour tax for the assistance of the wheatgrowers.

Senator LECKIE:
Victoria

.- My only criticism of this bill is that, in my opinion, the grocer is entitled to a little larger return than he now receives for handling sugar. I regret that the Leader of the Opposition (Senator Collings) made a violent attack on grocers generally. If some assistance could be given to them without -inflicting hardship upon the consumers, that should be done. From many sources we hear of the high cost of the sugar lands of Queensland. No doubt the interest charges on the high-priced lands on which sugar is grown affect the cost of production. I desire to know whether, if the growers could get their land at more reasonable rates, they would be able to produce sugar at a lower cost, and thus get more for themselves out of the industry. Is the permit system, which operates in Queensland, bolstering up the price of sugar lands? As in the case of other primary producers, I think that a good deal of trouble has arisen in Queensland from the fact that, when the price of sugar overseas has risen, the growers have been induced to pay prices for land beyond those justified by its productive capacity. If I could be re-assured on this point, I should have no desire to do anything likely to interfere with the living conditions of the sugar-growers. I have been told that the cost of land on which sugar is now grown was ?3 or ?4 an acre, when it was used for grazing. The price has now increased to ?100 an acre.

Senator Courtice:

– Grazing land will not produce sugar.

Senator LECKIE:

– Originally, of course, some of the sugar land was mostly scrub country. We should not renew the agreement from time to time, if its effect is to force up the price of this land against the interests of the growers.

Senator SHEEHAN:
Victoria

– The debate has been most interesting and illuminating. It is contended in various quarters that the sugar agreement has a detrimental effect upon two sections of the community. We frequently hear that the sugar monopoly in Queensland is responsible for the exploitation of the worker, because of the enormous profits made in the industry. It has been said that the Colonial Sugar Refining Company Limited participates greatly in the profits that come from the industry; but, during the discussion, we have been informed that the operations of this company play a very small part in determining the price of sugar. The Minister for Trade and Customs (Senator McLeay), in his remarkable secondreading speech, suggested that the conditions of the growers in Queensland are not so rosy as one might imagine. We have been told by those best able to inform us on the matter that the agreement has brought security to those employed in the industry, and has eliminated coloured labour. The withdrawal of kanaka labour from Queensland was strongly opposed, and it is gratifying to know that the development of our sub-tropical areas with white labour has proved a success. I whs particularly pleased to note the -p iri red manner iu which Senator ( Crawford addressed himself to this bill, lie acquitted himself in a manner that surprised me. A glowing picture has been painted of the remarkable progress of the sugar industry and the stability that has come to Queensland as a result of this agreement, yet the Minister informed us that over SO per cent, of the cane-growers are on the verge of bankruptcy. He said that 81.3 per cent, of the growers had no taxable income. Although we are told that the industry is worth millions of pounds to Australia, we are assured that the growers would become bankrupt if the price of their product were reduced by id. per lb. Can the Minister’s statement be true? Does the wonderful picture which has been painted for us depict the real conditions existing in Queensland? “Which side of the story are we to believe? Tt has been suggested that we should not believe the propaganda which has been placed before us by the retail grocers, that their story is not deserving of credence, chat these people are mercenary, and are simply taking advantage of the fact that the nation is at war. I suggest that we have as much reason to believe their story as that presented to us by the other side.

As a member of the Labour party, I am interested in this matter, particularly from the point of view “of. two sections of the community; and the Labour movement as a whole should be equally interested on behalf of those sections. “We believe that no man should be obliged to sell his labour at less than a fair remuneration. No tradesman should be asked to work at a loss. The man who is performing the useful function of distributing various commodities, should be adequately repaid for his labour. The retail grocers have not now requested an increase of their margin of profit on sugar because we happen to be at war, but because this Parliament is now reviewing the agreement, and unless action be taken at this stage nothing can he done towards meeting their request for at least another five years, which is the duration of the -agreement.

Senator Collings:

– The agreement does not touch upon the retail price.

Senator SHEEHAN:

– The point I emphasize is that in spite of all the praise which has been bestowed upon this measure, the consumer - and he is the person in whom every Labour man should be interested - is not protected under the agreement which will become the law of the land.

Senator McLeay:

– Is not the honorable senator aware that constitutionally the Commonwealth does not possess power to fix the retail price?

Senator SHEEHAN:

– That, of course, is tlie argument advanced by honorable senators opposite. I point out, however, that under the National Security Regulations the Commonwealth has empowered a commissioner to fix prices. We appreciate the fact that the National Security Act, and the regulations made by virtue of that legislation, will remain valid only for the duration of the war and one year beyond. But for the duration of the war, at any rate, this Government has been given far greater powers than it possesses in a time of peace. Consequently, during the period of the war, and for one year after it, the price-fixing commissioner can increase the price of sugar. What I now desire to obviate Ls the possibility of the consumer eventually being compelled to meet the demand that is now being made by the retail grocers for an increase of the price in order that they may be enabled to sell sugar at a price fair and reasonable to them. I wish to prevent such a development for two reasons: First from the viewpoint of the consumer; and secondly, from the viewpoint of industry as a whole. Consumers fall into two classes. An increase of the price of sugar will possibly not affect one ,of these classes. However, if such an increase be made it will affect industry generally. One section of consumers is comprised of workers whose wages are governed by awards of the Commonwealth Arbitration Court. These will not be affected by any increase of the price of sugar because, should any increase occur, a corresponding adjustment of the wages of these workers will be made quarterly, and the increase will thus be made good to them. The Commonwealth Statistician estimates that an increase of Id. per lb. of the price of sugar will mean an increase of the basic wage by ls. a week. An effort is being made to stabilize our economy and to counteract the evils of war-time conditions. Yet, in this particular measure, by failing to provide some provision whereby the- request of the retail grocers can be met, we arc running the risk of incurring an increase of the basic wage and, consequently, as t have said, dislocation of our economy.

The wages, or incomes, of the second set of consumers are not determined by wages boards or arbitration courts. No fluctuation takes place in the incomes of such classes as old-age and invalid pensioners, and those who, to-day, are on sustenance rates. We can also include in this group of consumers those who derive a fixed income from investment. I refer now, of course, to those who derive only a very limited income from such sources. Any increase of the price of sugar will not be made good to these classes.

Senator COURTICE:

– The price of sugar will not be increased.

Senator SHEEHAN:

– The fact is that, up to the present, an increase of the price has not been granted; but that does not mean that the price will not be increased. The Prices Commissioner is not prohibited from increasing the price of sugar. He could increase that price to-morrow, if he thought fit. I am fearful that unless something be done while this measure is under consideration by this Parliament, in order to meet what I believe to be the just request of the retail grocers for an increase of the price of sugar, the hurden of any increase that may be made will fall upon the consumers of this country.

Senator Courtice:

– Does the honorable senator believe that the price should he increased ?

Senator SHEEHAN:

– I believe that the present margin of profit to the retail grocer is not sufficient.

Senator Courtice:

– That means that the price should be increased.

Senator SHEEHAN:

– Is it not possible to devise means whereby the retailers’ request can be met, at least to some degree? The Assistant Minister, in his second-reading speech, referred to an alteration of the method for the granting of bonuses in order to remove the cause of a good deal of dissatisfaction because of unfair trading. Notwithstanding the drastic powers conferred upon the Queensland Sugar Board, that body wa.= unable to adjust this matter satisfactorily. Under this measure, it is proposed to grant to semi-retail establishments certain rebates.

Senator Collings:

– That will not cause an increase of the price.

Senator SHEEHAN:

– I consider that the arrangement which we are now considering stops short of the problem, so far as the claims of the retail grocers are concerned. The Government should have gone farther. All of us desire to do the fair thing by the sugar industry. We wish to do everything possible to encourage its development. At the same time, I urge that we should treat fairly the claims of that section of the community which is engaged in the retailing of this commodity.

Senator Foll:

– For many years past everybody has been satisfied with the. margin of profit given to the retail grocer, and during that period, when the price was not fixed, no request was made for an increase.

Senator SHEEHAN:

– The contention that the retail grocers have always been satisfied with the price of 4d. per lb. is very seriously disputed by them. The Minister has said that under this measure it is proposed to grant a certain rebate to persons, firms or corporations who. or which, in the opinion of the Queensland Sugar Board -

  1. provide reasonable credit facilities for retailers on a comprehensive range of groceries; (ii) keeps reasonable stocks of such groceries for resale to retailers; and (iii) buys in each calendar month not less than £1,500 worth of sugar and other sugar products.

The Minister claimed -

That this arrangement, which defines the basic functions of a wholesale merchant, is expected to enable all existing anomalies to bc adjusted. Wholesale merchants are essential in the grocery business, but the two governments consider it should be their own affair, or the affair of their associations, as is the ease in regard to practically all commodities other than sugar, to devise means of preventing their members from giving .away part of the sugar discount or other equivalent concessions on sugar orders, to retail buyers.

That statement suggests that it is possible for one set of retailers to receive advantages over another set of retailers.

While this agreement is now under review, why does not the Government go further into the matter in order to see whether it is not possible to ensure a position under which it will be impossible for favours to be bestowed on one section and not on another. It would thus place the distribution of this commodity on a proper basis, and every section interested in the handling of sugar would be satisfied. I repeat that the Government should have gone further with the object of doing justice to the retail grocers. I hope that when the measure is iu committee, some effort will be made to rectify this anomaly. All of us desire to do the fair thing by the industry. We admire . the wonderful strides it has made, and appreciate its value to Australia. As I have already said, however, we do not wish to see it developed at the expense of any one section of the community.

Senator Courtice:

– Is there any trouble in connexion with the production of beet sugar in Victoria?

Senator SHEEHAN:

– In order to enable the Queensland sugar industry to nourish it has been provided that beet sugar can be sold only in certain portions of the State. The producers of beet sugar at Maffra complain because they are not allowed to send Victorian sugar to other parts of the State where it would compete with the Queensland product.

Senator Courtice:

– The Queensland sugar producers would have no objection if the beet producers would shoulder their share of the burden in respect of exports.

Senator SHEEHAN:

– The Victorian Government has decided that Victorian beet sugar can be sold only in one part of the State. It is admitted that the Queensland sugar industry is conducted efficiently, but there is a strong desire that retailers should receive a fair and reasonable profit, and that any increased price which they may receive shall not be at the expense of the workers in the industry or the consumers. I trust that during the committee stage the bill will be amended to overcome the objections which I have raised.

Senator McLEAY (South AustraliaMinister for Trade and Customs) desire to say that the amendment moved by Senator Amour cannot be accepted.

Question put -

That the words proposed to be left out (Senator Amour’s amendment) bc left out.

The Senate divided. (The President - Senator the Hon. J. B. Hates.)

AYES: 4

NOES: 29

Majority 25

AYES

NOES

Question so resolved in the negative.

Original question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 906

QUESTION

NEW BUSINESS AFTER 10.30 P.M

Motion (by Senator McBride) put -

That Standing Order No. C8 be suspended for the remainder of the present sitting to enable Orders of the Day, Nos. 3, 4, and 5, to bo proceeded with after half-past ten ‘o’clock at night.

The PRESIDENT:

– There being an absolute majority of senators present and no dissentient voice, I declare the question resolved in the affirmative.

SAXES TAX BILLS (Nos. 1 to 9) 1940.

Second Readings.

Senator McBRIDE:
South AustraliaAssistant Minister for Commerce · UAP

– I move -

That the bills be now read a second time.

Honorable senators were advised in the financial statement which I made earlier of the Government’s proposal to increase the rate of sales tax from 6 per cent as at present to8 per cent., i.e.,1d. in each shilling. The additional revenue which is estimated to be obtained from this action will amount to £5,000,000. The revenue estimated to be collected if the existing rate were maintained in the year 1940-41 is £13,000,000. At a rate of 8 per cent. it is estimated that £18,000,000 will be secured.

It may seem to some honorable senators that the additional revenue to be derived from sales tax could have been obtained by methods other than an increase of the rate, and if one considers simply the bald fact that, for the financial year 1940-41, the total sales of Australian commodities has been estimated to amount to approximately £750,000,000 it would seem relatively simple to impose sales tax on sufficient of those goods to enable a relatively small rate of tax to be maintained. It is true that of the total of £750,000,000 only £215,000,000 will be subjected to sales tax. Attractive as the proposal appears at first sight, upon closer examination it proves to be fallacious. The total field of £750,000,000 contains exports amounting to £165,000,000; basic foodstuffs, £128,000,000; primary products, not including exports of foodstuffs, £26,000,000 and sales to Government departments, £40,000,000. These items represent a total of £359,000,000.

Honorable senators will appreciate that basic foodstuffs, exported goods, and the other items which I have mentioned could be made subject to sales tax only in the last extremity. It will be seen, therefore, that the maximum amount of expansion which could have logically been made by the. Government in preference to an increase of rate is represented by the difference between the estimated taxable field of £215,000,000 and the field remaining after the deduction of the £359,000,000 to which I have previously referred. The difference is £176,000,000, and it might be well for us now to consider of what this £176,000,000 is composed. First, there is fuel, light, and power, amounting to £61,000,000. This item is not confined to fuel, light, and power used for business purposes, but includes all sales of such services. It includes the firewood which is used in private dwellings as well as the electric current and the gas with which the private homes of the citizens of the Commonwealth are supplied. Much of the two last-mentioned items is supplied by government bodies, semi-government bodies, or local governing bodies not concerned with profit making. The Government does not consider that the goods supplied in the course of rendering these services arc suitable subjects, at least at this stage, for the imposition of sales tax, and accordingly it does not propose to ask Parliament to impose sales tax on them.

Then there is the sum of £17,000,000 represented by beer and other such beverages, tobacco, cigarettes, films, etc., all of which are already subject to special duties of customs or excise and are considered to bo proper subjects for those imposts rather than sales tax. It is thought that whatever extra taxation the Government considers those goods can or should bear should be imposed as duties of customs or excise.

The remaining £98,000,000 is based as follows -

  1. to avoid taxing foodstuffs and goods which directly increase the cost of living such as tea, coffee and cocoa, pastry, scones, footwear, &c, £24,000,000.

    1. to give assistance to industries which otherwise might have to receive direct help, viz., agricultural machinery, mining machinery, building materials, equipment for the fishing industry, £48,000,000.
    2. to avoid raxing articles used in medical, educational, charitable, philanthropic and religious activities, £12,000,000.
    3. to obviate the necessity for tax ing the containers used to market exempt goods ; to place manufacturers’ consumable aids on the same footing as raw materials; and to avoid taxing small manufacturers. £14,000,000.

The ‘alternatives facing the Government resolved themselves finally into a question of the re-imposition of sales tax on the goods comprising this amount, coupled with a relatively small increase of the rate, or allowing the exemptions to remain and obtaining the whole of the requirements by an increase of the rate. The Government has chosen the latter course in the belief that the claims to exemption of the goods comprising the available £9S,000,000 are sufficiently strong to justify increasing the rate further before bringing them back into the taxable field.

There are many people in the community who have strongly urged the imposition of a low rate of tax on the whole available field. I hope that the particulars which I have given to honorable senators of the composition of the total field will make it clear that whilst the present form of sales taxation is retained on the statute-book, such a course is not feasible. There are others in the community who advocate a multiple turnover tax at a very small rate. 1! do not think it is necessary for me to thrash OUt the relative virtues of each form of tax at this stage. It may be sufficient for me to say that all competent experts who have inquired into t,he incidence of multiple turnover taxes, wherever they have been tried, are convinced that there are greater disabilities from every one’s point of view in that form of tax than in the form which wo have at present.

The increased rate is designed to operate from the 3rd May, 3940, and traders have already had suitable notification given to them of the intention of the Government to introduce this measure so that the proper steps might be taken by them in the matter.

I conclude by saying that the increased revenue which it is now proposed to obtain from the sales tax is due wholly to the unprecedented expenditure with which the Government is faced in connexion with the conduct of the war. Though the increase is substantial, I have no doubt that it will be accepted as part of the hurden which is inescapable if the principles for which we stand are to be preserved.

Debate (on motion by Senator Collings) adjourned.

page 908

ESTATE DUTY ASSESSMENT BILL 1940

Second Reading

Senator McBRIDE:
South AustraliaAssistant Minister for Commerce · UAP

.- I move-

That the bill be now read a second time.

The proposals in this bill form part of the general scheme adopted by the Government to finance the war. The Government considers that it i3 necessary that the revenue from estate duty should be increased as part of its scheme. However, in framing the proposals, care has been taken that the increased, duties shall not be of a severe or onerous nature, having regard to the probate duties imposed by State governments on estates of deceased persons.

The Government’s proposals are estimated to produce an additional amount of £850,000 in estate duty in a full assessment year, but will probably not produce more than £500,000 during the financial year 1940-41, even taking into account the fact that they will apply to the estates of persons dying during the remaining few weeks of the present financial year. The smaller yield for the financial year 1940-41 is due t;o the fact that there is an unavoidable lag in the issue of assessments. Honorable senators will appreciate that an estate duty assessment cannot be issued within a few days of the death of a person. Executors have to be given a reasonable time within which to lodge a return- - the law allows three months - and the Commissioner of Taxation has to examine, and carefully check, such returns, particularly the valuations placed upon the assets of the estate.

The Government’s proposals involve a revision of the rates of duty, and an extension of the range thereof, together with a re-arrangement of the concession granted in respect of estates passing to the widow, children, and grandchildren of the deceased. This re-arrangement has increased the value of the concession in respect of estates in the lower ranges where it is really needed, while tapering it off as the value of the estate increases, and the need and justification for a concession lessens.

The main purpose of this bill is to give effect to the Government’s intentions in regard to this concessional exemption. The new rates form the subject of a separate measure which will come before this chamber subsequently and will then be fully explained to honorable senators.

The exemption granted in the existing act is the sum of £1,000, and it ceases if the estate exceeds this value. For example, an estate of £1,001 pays duty upon £1,001 and not upon £1 only. The benefit granted under the existing act in regard to estates passing to widow, children, or grandchildren is to assess them for duty at two-thirds of the rate imposed upon other estates. No regard is had to the question of whether the financial position of the estate warrants any such concession; that is, it is granted equally to the estate of £200,000 as well as to the estate of £2,000. Honorable senators will undoubtedly agree that while a concession is fully warranted in respect of the latter estate, in the case of the former, the beneficiaries would be in such comfortable financial circumstances that no justification could exist for any special concession which would lessen the duty payable on the estate. Consequently, the Government decided upon a complete overhaul of the concession granted to estates passing to the widow, children, and grandchildren of the deceased in order to make it more scientific and justifiable. In the bill the concessional exemption has therefore been framed to achieve this end. It is proposed to provide now alternative exemptions of decreasing amounts for estates passing to the widow, children, and grandchildren and for estates not so passing. In the latter case the exemption is £1,000, diminishing upon a sliding scale until it disappears when the value of the estate reaches £10,000. In the former case, namely, where the estate passes to the widow, children, or grandchildren, the exemption is £2,000, diminishing on a sliding scale until it disappears at £12,400. Appropriate provision has also been made for the estate passing partly to the widow, children, and grandchildren, and partly to others, so that the exemption granted in that case will be relative to the circumstances of the case. The effect of these provisions is to give a concession in duty to estates in the lower ranges, passing, or partly passing, to the widow, children, or grandchildren of the deceased, while at the same time confining it to the class of case in respect of which a concession is justified.

The bill also contains a provision to exempt from duty the estates of members of His Majesty’s Forces, or of the forces of an ally of theBritish Empire, who may die on active service during the present war, or within one year after its termination, if the value for duty of the estate does not exceed £5,000. The existing act contains a somewhat similar provision in regard to the estates of persons who died during the 1914-18 war; that provision, however, exempted the whole of the estate regardless of its value. While not prepared under the changed circumstances regarding the financing of the present war to grant the full exemption previously granted, the Government has decided to exempt such estates if they are in what might be termed the lower ranges.

There is a provision in the bill amending the section in the existing act which gives executors power to apportion the duty between the beneficiaries. The provision is consequent upon the altered method of assessment of estates passing partly to the widow, children, or grandchildren and is a machinery provision not affecting in any way the assessment of such estates.

The bill will come into force upon the day upon which it receives the royal assent. I commend it to honorable senators.

Debate (on motion by Senator Collings) adjourned.

page 909

ESTATE DUTY BILL 1940

Second Reading

Senator McBBIDE (South Australia-

Assistant Minister for Commerce) [11.0].- I move-

That thebill be now read a second time.

This bill contains the principal portion of the Government’s proposals to obtain increased revenue from estate duty, of which I gave an outline in my second - reading speech on the Estate Duty Assessment Bill. It contains the schedule which will, if approved by this chamber, impose the amended rates of estate duty upon the estates of persons dying on or after the date upon which the bill receives the royal assent.

In the proposed new schedule, the rate of duty commences at 3 per cent, and rises with the increase of the value of the estate until it reaches its maximum of 20 per cent, on estates of £500,000. In the existing act, the rate of duty commences at £1 per cent., and increases by one-fifth of £1 for every £1,000 of value, or part thereof, until it reaches its maximum of 15 per cent, for estates in excess of £71,000. If the estate passes to the widow, children and grandchildren the maximum is, however, only 10 per cent. The rate of 3 per cent, will, it is proposed, be imposed without any increase upon all dutiable estates up to a value of £10,000. Thereafter it increases by 3/100ths of 1 per cent, for every £100 by which the value exceeds £10,000 up to a value of £20,000, on which the rate will bo 6 per cent. Thereafter it increases by 3/200ths of 1 per cent, for every £100 up to a value of £100,000, upon which the rate will be 18 per cent. Thereafter it increases by l/200ths of 1 per cent, for every £1,000 up to a value of £500,000, where the maximum rate of 20 per cent, is reached. The proposed new schedules will apply to values of estates as ascertained after taking into account the new statutory exemption, of which I gave honorable senators a full explanation on the assessment bill.

The proposed exemption, it will be remembered, is £1,000, diminishing on a sliding scale until it disappears at £10,000, and in the case of estates passing to the widow, children and grandchildren, it is £2,000, disappearing when the estate reaches a value of £12,400. The combined effect of these proposals is to cause an effectual rate of duty, graduating upwards from approximately 1 per cent.

The proposals of the Government correct existing anomalies and provide a more equitable and scientific method of taxation than does the existing method. Although the. general effect of the proposals is to increase the rates of duty, care has been taken to avoid imposing the increases at too early a stage on estates in the very low ranges. In fact, the Government’s proposals lighten the burden on estates which pass to the widow, children and grandchildren in those ranges. Whereas previously such estates of a value in excess of £1,000 were dutiable, under this bill such estates are completely exempt from duty up to a value of £2,000. Also, they pay less duty than formerly up to a value of £2,600.

Honorable senators will agree that the proposed new schedule is not in any measure oppressive, when I explain that in addition to the fact previously mentioned, namely, that estates of a value of £2,000 passing to the widow, children or grandchildren will pay no duty, such estates of a value of £3,000 will pay only £33; estates of a value of £5,000 will pay only £99, estates of a value of £8,000 will pay £198, and estates of a value of £10,000 will pay £264. Having regard to the value of the estates, the imposts, I suggest, are very reasonable. The existing rates of duty, especially in the higher ranges, are low, and the proposed increases are, in the Government’s view, fully justified as one of the measures designed to finance the war.

Debate (on motion by Senator Collings) adjourned.

page 910

ADJOURNMENT

Establishment ob Commonwealth Bank - National Register: Turners and Fitters

Motion (by Senator McLeay) proposed -

That the Senate do now adjourn.

Senator DARCEY:
Tasmania

– I was glad when. some days ago, Senator Leckie brought under my notice the fact that I had inadvertently done an injustice to Mr. King O’Malley in a speech which I delivered in this chamber on the 18th April last, when I said that he was not a member of the Ministry when the hill to establish Hie Com- . monwealth Bank was passed. I was speaking from memory, and as the act was passed 29 years ago, I may be forgiven for the error. I now wish to put the matter right. Mr. King O’Malley was Minister for Home Affairs in the Fisher Ministry which passed the Commonwealth Bank Bill. I wrote to him, expressing my regret for the mistake, and I received the following characteristic letter from him: -

Brother d’Arcy,

In your speech of the 18th April, 1940, you inadvertently declared in answer to Brother Herbert Hays, that King O’Malley was not a member of the Labour Ministry that established the Commonwealth Bank. If he were not, will you please name the man who put up a fight from 10 o’clock in the morning until a quarter past six o’clock in the evening and, after21 members went to dinner, won it by one vote.

Yes! ! Brother.!! I was there in the Fisher Ministry, and put up the all-day fight and was the only man who voted for the creation of the Commonwealth Bank.

I am enclosing for you my booklet in which you will read the whole story of the fight on the 5th October, 1911. I forced the Government to put it in the policy that year. That iswhy you will findthatI offered £10,000 to charity if any’ member of the Labour Ministry ever made a speech in favour of the bank up to the 5th October, 1911.

Will you kindly read the booklet and will you also have this letter put in Hansard.

Cordially yours,

The booklet which he mentions is entitled -

Big Battle byhon.kingo’malley (Founder of the Commonwealth Bank of Australia)tosaveitfromdestructionby thepoliticaltoolsofcapitalism. [Published in 1939.]

I hope that Mr. King O’Malley will accept my apology.

Senator AYLETT:
Tasmania

– There is one matter to which 1 wish to direct the attention of the Government. Under the national register taken last year, I understand that employees were asked to give complete particulars of their classes of employment. The purpose of the national register was to enable the Government to tabulate the categories of tradesmen and craftsmen, with a view to their utilization in connexion with war activities. It has been brought to my notice that turners and fitters have enlisted in the Australian Imperial Force and have left Australia. In view of the grave situation which now confronts us, following the latest developments of the war, there is a possibility of a serious shortage of skilled tradesmen for our defence factories. I urge the Government, if it has not already done so, to arrange for a close scrutiny of the tabulated information, with a view to ascertaining to what extent Australia’s requirements may be met.

Senator Collett:

– The Australian Imperial Force will want a large number of fitters and turners.

Senator AYLETT:

– No doubt it will, but I urge the Government to see that sufficient skilled operatives are kept in Australia for Australia’s home defence. If fitters and turners have been despatched overseas in Australian Imperial Force units, they will be available there, and Australia will be without the services of men who may be urgently required.

Senator McLEAY:
Minister for Trade and Customs · South Australia · UAP

– in reply - I assure the honorable senator that the matter which he mentioned will receive the close attention of the Government.

Question resolved in the affirmative.

page 911

PAPERS

The following papers were presented : -

Commonwealth Public Service Act - Appointment - Department of Civil AviationG. D. Vines.

Lands Acquisition Act- Land acquired at Rosemount, Queensland - For Defence purposes.

Nationality Act - Regulations amended - Statutory Rules 1940, No. 69.

Medical Research.. Endowment Act - Report by National Health and Medical Research Council on work done under the act during the year 1939.

Senate adjourned at 11.11 p.m.

Cite as: Australia, Senate, Debates, 16 May 1940, viewed 22 October 2017, <http://historichansard.net/senate/1940/19400516_senate_15_163/>.

View PDF View XML View in Voyant