4th Parliament · 1st Session
Mr. Speaker took the chair at 10.30 a.m., and read prayers.
Sir ROBERT WALLACE BEST made and subscribed the Oath of Allegiance as member for the electoral division of Kooyong.
Mr. McDOUGALL presented petitions from certain subscribers to telephone exchanges at Coleraine, Heywood, Penshurst, and Port Fairy, praying the House to suspend the operation of regulation 7A until the condition of the telephone service has been further considered, and the recommendations of the Postal Commission in regard to it have been placed before Parliament.
asked the Minister of Home Affairs, upon notice -
– The answers to the honorable member’s questions are these -
The other labouring work referred to is in connexion with small engineering works, such as gauge weirs, trial shafts, &c.
asked the Postmaster-General, upon notice -
– The answers to the honorable member’s questions are -
– Does the Prime Minister intend at an early date to put into plain English the meaning of the resolution carried last night in the Committee of Ways and Means? It would be a great advantage to have it explained thoroughly.
– Last night I promised the honorable member for Darling Downs that a number of examples would be prepared to- show the operation of the Government proposals; they will be available today, and will, I think, assist honorable members to understand what is intended. I move -
That the Report of the Committee of Ways and Means be now adopted.
Mr. RICHARD FOSTER (Wakefield) honorable members should know exactly the range of the Government’s proposals, and I shall therefore be glad if the Prime Minister or the Attorney-General will inform me whether the tax is to apply to ordinary Crown leases. The AttorneyGeneral said last night that the beneficial interest of the lessee of any Crown lease will ‘be taxed, but I should like to know whether it is intended to tax all Crown leases.
– Pastoral leases.
– Pastoral leases and other Crown leases. These have never before, in Australia, been made the subject of land taxation, with the sole exception of the absolutely perpetual leases, without re-valuation, which obtain in South Australia, and are subject to land tax. All other Crown leases, except where the land is in process of alienation, are exempt from taxation.
– Are the perpetual leases referred to charged a fixed rent indefinitely ?
– The absolutely perpetual lease is held at a fixed rent, and is subject to land tax.
– The matter is of considerable importance, but it will be better to discuss it when the machinery Bill is under consideration. Shortly, as I explained last night, the position of the Crown lessee under the Bill is that he will not be taxed unless the rent which he pays is so much below the full annual value of the land that the difference, if capitalized, would exceed£5,000. The honorable member’s wide experience of South Australian land laws must make him aware that practically not half per cent. of the Crown lessees will have to pay taxation. It is not for any arbitrary reason that Crown lessees have been brought within the Bill, but because of the adoption of a general principle applied uniformly.
– Will the tax apply to all Crown lessees, whether their leases are perpetual or not?
– There is no distinction. The interest of the lessees is calculated on the amount by which their annual payments, if capitalized, would fall short of the true value of the land. We cannot tax the Crown estate, and we tax the interest of the lessee only where, if he were untaxed, he would have an advantage over the. ordinary lessee.
– Under what clause are Crown lessees taxable?
– It was thought at firstthatitwouldbeunnecessarytospecially mention Crown lessees, but it has since been found advisable to draft a clause to cover them ; otherwise they could not be treated fairly, as they would not be entitled to any deduction as is the case with other lands.
– I knew that the Bill did not do what the honorable member said it did.
-Theprincipleis affirmed in clause 26, which deals with all leases commenced before the Act. That is the principle we intend to apply to all Crown leases whether commenced before or after the coming into operation of the Bill.
– Evidently this Bill has not been very carefully scrutinized before being introduced. Having looked at the relevant clauses after the inquiry made by the honorable member for Wakefield, I failed to find any provision by which the policy of touching Crown lessees could be enforced. The Bill submitted to us is one to tax freehold estates and all estates derived therefrom. The Crown estate is not a freehold, and a lessee under the Crown cannot possibly have an estate derived from a freehold, because a freeholder is a holder under the Crown. We are told that the Government, even at this early stage, are going to amend the machinery of this very widereaching Bill. I hope that this apparent change in policy - I cannot imagine that a mistake has been made in drafting, because the blunder would be a most egregious one - is not to be brought about, because it will involve a serious doubt as to the constitutionality of a good deal of this Bill. Whilst not throwing doubt upon our power to impose land taxation, if it is taxation, I must say that a doubt will be cast upon the constitutionality of this legislation if we tax Crown lessees, and through them affect the instrumentalities of the States. Surely the Government are not going to impair the propriety of. the tax by taxing a leasehold interest under the Crown? If land were held at a rent that was not fair to the State, it would be for the State itself to raise that rent at the next valuation, but, in effect, the Commonwealth Government would tax the very rental value which belongs to the State. I do not think that we can do that. I am not speaking now from the point of view of the constitutionality of such an act; I think that a State can make an arrangement under its leasehold Acts to prevent that being done. The South Australian Parliament has expressly declared, if my memory serves me rightly, that the Crown shall own the sale value represented by the difference between the rent paid and the true rent.
– Who is to settle the true rent?
– That is settled by the next appraisement. If land is held at a rental of £20 per annum, and it is found that the true rent, as settled by sales in the market, should be£30 per annum, that becomes the true rent. The idea of the Government is to tax the capitalized value at 10 per cent. in relation to the duration of the lease. As a matter of fact, some of the South Australian Acts expressly prevent that being done, because they say that in such cases the difference belongs to the Crown, and will he taken eventually by the Crown. The Government ought to leave well alone. If they are going to dismay their followers by throwing a doubt upon the whole constitutionality of a Bill of this far-reaching character, then they will not be acting in accordance with the best interests of those who have sent them here.
– That is not a question to be considered here.
– I do not wish to block the measure, but I think it would be a great pity for us to be launched again into a sea of doubt as to the constitutionality of a far-reaching measure like this, which seems to have divided public opinion in Australia to a very large extent.
– I understood the Attorney -General to say that the power to tax Crown lessees, for which this Bill does not provide, will be covered by an amending clause. If that is so, I ask the honorable gentleman to reconsider this question very carefully, for such an amendment would broaden the principle of the Bill altogether beyond the extent contemplated. I am astounded at the statement made by the honorable gentleman, that Crown leases, whether pastoral or otherwise, are to be brought under the operation of this measure. I urge him to look into the whole matter and to seek advice based on broad experience of country and not merely of city properties, respecting whatwould be the result of such a proposal.
– I think that we are correct in assuming from the statement made by the AttorneyGeneral that this Bill when amended will go further than was ever contemplated by being applied to lessees of the Crown. I agree with the ex-Attorney-General that the Government cannot do what they propose in that regard, because I think that the right of the States as owners would be asserted, and would effectually block action in that direction. Be that as it may, such a proposal would be a staggering blow at the imposition of equitable land taxation. The land tax proposals of the Government, as set out in the newspapers this morning, are difficult of comprehension, but I sincerely hope thatthe true principle of land taxation will be adhered to by the Ministry. The main principle underlying the proposal to which we expected to be asked to agree is, first of all, that a tax should be imposed on very large estates. This Bill, however, goes a great deal further, and I question very much whether it does not go so far as to he likely to bring about its own defeat. So far as I could gather last night, it seemed to me that the schedule of rates then put before us did not rise in easy gradations from1d. to1½d., and from1½d. to 2d. in the£1, andso forth, but jumped from 2d. to 3d. and from 3d. to 4d. in the£1.
– No; every pound of value takes its own gradation.
– I have had the matter explained to me by a Minister this morning, but still the whole proposition as submitted is so complicated that I ask honorable members to say whether any farmer could be reasonably expected to understand it.
Mr.mc Williams. - He is not asked to understand it. He is simply asked to pay.
– That is so. I am reminded in this connexion of the menu in French, which is often put before one, and which the waiter himself cannot explain. I know something of algebra, but I confess that I cannot understand this schedule. I do not wish to put any obstacle in the way of the passing of land taxation, but I certainly do desire that principles shall be adhered to. I desire, to see the imposition of a tax that will have the effect that we have always desired. Our intention was that we should so tax large estates as to cause them to be more closely settled than they are. I fail to see why a tax should be imposed merely for the sake of imposing taxation. The Commonwealth Parliament is placing itself in an unenviable position if, in order to return to the States £5,000,000 per annum, it has to tax the people to find that money. It would have been better to give the States just what we could afford, and leave them to impose the taxation necessary to provide the revenue requisite for their own purposes. We ought not to impose taxation merely for the sake of finding revenue for the States. My desire is that we should adhere to the principle of taxing large properties, so as to make more land available for settlement.
– I agree with the honorable member for Hume.
– What, in reference to the menu?
– The honorable gentleman’s interjection reminds me that we have it on the authority of the honorable member for Hume that Ministers know no more about the proposals they are submitting to the House than a waiter knows of the French on the menu that he puts before one.
– I did not say that.
– I cordially agree with my honorable friend. There are many matters in connexion with this proposal that need to be explained. We are treading paths that have never been previously trodden; and difficulties always arise when we enter upon paths that are expressly forbidden, not only by the Decalogue, but by the Constitution, which is our political Decalogue. However, I suppose that all these matters will be unravelled in Committee. I am surprised to hear, for the first time, that Ministers, who professed to believe with all the ardour of their political faith in the relationship of landlord and tenant, as applied to the land-owning of the country, are interfering with that ideal - perfect as it is, according to their stand-point, from an economic point of view. I am surprised that they are taking steps to disturb that relationship as it exists to-day between the Crown and its tenants. The Crown and its tenants ought to be presumed to be proceeding on a fair basis. Whether that is so or not, we have no right to interfere with their relationship, which is fixed by the
Statutes of the States. As the honorable member for Hume has said, such matters should be left to the States to control and regulate. If I understand him aright, he says that we have no right to impose this lax, except to burst up large estates.
– And for revenue.
– There should be no revenue, according to the dictum laid down by the honorable member for Hume.
– I did not say there should be no revenue.
– But the honorable member said that we ought not to tax for the sake of taxing, and that amounts to the same thing. Our primary object, he said, ought to be some other than revenue, and the honorable member is not inconsistent in his statement. My reading of the honorable member’s language on the platforms of the country is that he believes there should in no case be double land taxation.
– I do not say that.
– The honorable member has always taken up .that attitude, and never any other; he told his constituents very clearly at the last election that there ought not to be two Governments taxing the same land.
– I did not say anything of the kind !
– I think the honorable member will find a statement to that effect in many of his speeches.
– I did not make any speeches, so that I cannot have made the statement.
– I am quite :.sure I am right. I hope the Government will issue the tables, and also a memorandum setting forth clearly and concisely an explanation of the taxes ; but it should not be such a memorandum as was issued in another case and intended to be circulated through the country for political purposes. All that has been decided by the people, who may be presumed to have instructed ^honorable members opposite to proceed with the land tax up to, at any rate, 4d. in the I have not heard that the people approve of a tax of 6d. or 7d., “but it is unquestionable that they approve of a tax for the purpose of bursting up big estates.- Beyond that, I do not think the people knew anything of the intentions of the Government. We are beginning to realize for the first time the difference between propaganda on the platform and the crystallizing of the people’s desires in the
Statutes of the Commonwealth. I hope, therefore, that the Government will issue a memorandum containing as much information as possible. I also suggest that this measure ought not to be proceeded with on Tuesday next. It is altogether too early to push a Bill of this kind through before even honorable members !of the House understand it.
– I do not think there is any intention ‘to push it through.
– The Prime Minister intimated last night that the debate would commence on Tuesday, and go right on to a conclusion.
– I think we ought to be allowed to understand the measure.
– The Government ought to furnish an explanation to the country, so that the people may know exactly what is being dona. Before proceeding with the debate the memorandum I suggest should be circulated, so that we and the people generally may have an opportunity of understanding it, and submitting, in a respectful and formal way, as we are entitled “to do, their opinions on what is proposed. Especially is that the case in places like Queensland, where the bulk of the land is leasehold, and the oc.cupiers ought to be considered. Australia is a very large place, and the sooner we realize the fact the better; at any rate, we shall find it out before we are through with legislation of this kind. I strongly urge the Government to give time for consideration.
– This is only a motion preliminary to the introduction of a Bill.
– But this motion has to be considered in connexion with the Bill.
– It will be so plain that I can assure the honorable member there will be no doubt.
– I am glad that the matter is to be made plain, and the rough places rendered smooth ; but I hope the measure will not be pressed next week.
– The other Bill will then be discussed, not this one.
– We cannot separate the two.
– The matter before us has nothing to do with the machinery Bill.
– Indeed, it has, as the honorable member will find put. Crown leases are surely affected by the machinery Bill ; and I urge that this legislation should not be pressed until we have had proper time to digest the whole of its provisions.
.- I hope the Government will look carefully into these proposals, and place them plainly before the House and the country. I am quite certain that leaseholders in South Australia thought that they were exempt from this taxation. There are many different kinds of leases in that State, and the State Government, instead of subjecting them to re-valuation, passed an Act bringing them under the same conditions as freeholds, for the purposes of land taxation. In my opinion, these taxation proposals will be, to some extent, interfering with State properties, and, for that reason, they require careful consideration. Perpetual leases in South Australia cannot be transferred to any person who already holds land of a certain value, and it will be seen, therefore, that the leaseholders in that State are in a very peculiar position. And, especially, care will have to be exercised in the valuation of these lands on their rental or selling value> as freehold or leasehold. I could point to hundreds of leaseholds that have been almost doubled in value by improvements, and yet there is scarcely a trace to show what has been spent by the occupiers, who thought they were free to deal with it under the State Government, without fear of further taxation in consequence. Then, again, perpetual leases in South Australia already carry a heavy land tax, and the double taxation will prove most burdensome. Indeed, I do not think that any State will be so hard hit by the Commonwealth land tax as South Australia.
– What about Queensland ?
– - In Queensland there are more pastoral and other leases than in South Australia.
– There are numbers of leases in New South Wales.
– I know no better authority than the honorable member for Hume, and I can accept what he says on such a matter. I hope, however, that the Government will not frighten people with a big land tax.
– It will be almost impossible for leases to come under this tax.
– At any rate, I hope they will not come under it. From freehold land the Governments have already had their money, though, I believe, not a quarter of the alienated areas are freehold to-day. It will be impossible for a man to carry out improvements on his land under the conditions contemplated, and I am afraid that land-holders may be driven to the conclusion that they had better leave the land alone if they are to be taxed in consequence of their own enterprise and foresight - which have made Australia what it is. In my own district I have known as much as £5 an acre spent in clearing and other improvements, and, m the absence of any evidence to that effect, I do not see how we are to have fair and equitable valuation.
– In view of the statement of the AttorneyGeneral that the taxation is to apply to Crown leases, I suggest that the Prime Minister prepare a table showing exactly the different kinds of tenure under which these leases are issued. The terms of freeholds and ordinary leaseholds are well known, and to these a uniform law might apply; but, in the case of Crown leases, of which there are several kinds throughout Australia, and very often several kinds in one State, difficulties and injustice must arise. A uniform tax may appear perfectly fair on paper, but, under the conditions, may prove unfair and inequitable in practice. I should suppose that the information I suggest has been found necessary in preparing this legislation, and there should be no difficulty in issuing a table.
– Every information that the Government can give will be available.
– The statement of the Attorney-Genera t is very far-reaching and disquieting. L never heard it suggested, during the elections, that Crown leases were to come under the operation of the land tax, thus affecting all the great mining and pastoral leases fromthe Crown. For instance, the great mines of Kalgoorlie are under lease from the Crown, and I suppose that in Western Australiaalone there are 60,000,000 or 70,000,000 acres under pastoral lease. Then, again, there are conditional purchase leases,, which, however, are of a freehold character, and in a different category. At any rate, a bombshell is nothing as compared’ with the proposal of the Attorney-General, and I hope the Government will take theadvice of the honorable member for Angas, and leave well alone. It has been said thatthe object of the Bill is to burst up large- freehold estates; but I do not see how that principle can be attained by taxing town lands. I do not know whether it is intended by the Government to tax the mining leases.
– The Government will never touch the miners.
– But the taxation will touch the mine owners. In most parts of Australia - certainly in Western Australia and Queensland - the mine owners are only tenants of the. Crown for a number of years, and I hope that better counselswill prevail.I wish to ask the Prime Minister to make quite clear in the Bill exactly what Ministers propose to do, so that there may be no doubt or confusion in the minds of honorable members as to what is meant. I hope they will leave the Crown tenants alone, but if they are going to include them in the Bill, let them make it quite clear so that we may know exactly where we are.
– There are in New South Wales a large number of persons who hold land on lease from a large proprietary, which would have to pay very heavily under this tax, and any tax imposed will have ultimately to be paid by the tenants. Some of these estates are well known, notably the Cooper estate. In that case, in addition to the. ordinary difficulty experienced, there is the difficulty that the owner is an absentee, and would pay under this Bill an increased amount of tax. The leaseholders who will have to pay the tax are in many cases occupying very small allotments on which they have built a villa or cottage. They will be constrained to return to the owner of the Cooper estate, not only the tax thatwould ordinarily be imposed if he were in Australia, but the double tax imposed upon absentees. This will be a very great hardship on these people, which ho Government should ever propose to inflict, but under the provisions of this measure, so far as I have been able to assimilate it, these people will be called upon to pay the absentee tax, and under the law there will be no means for them to evade it. I should like the Government to consider that question, because it interests a very large number of house and landholders in and about the city of Sydney, and I presume the same circumstances would exist in Melbourne and Adelaide.
Question resolved in the affirmative.
That Mr. Fisher and Mr. Hughes do prepare and bring in a Bill to carry out the foregoing resolution.
Bill presented, and (on motion by Mr. Fisher) read a first time.
Bill returned from the Senate with a request.
– I should like the House to take this message into consideration forthwith. The amendment suggested is a slight one, but the only point I am in doubt about is whether it exceeds the appropriation recommended by the Governor-General’s message in connexion with the Bill.
– Order. The action of the Prime Minister is rather irregular. Is it the pleasure of the House that the honorable member have leave to make an explanation ?
Honorable Members. - Hear, hear.
– The Government do not intend to oppose the amendment as a matter of policy. Clause 4 of the Bill provides for the payment of money to each State for ten years from the 1st July last, “ and thereafter until the Parliament otherwise provides”. Those words were omitted from clause 5, which deals with the special payment to Western Australia, and the Senate now requests us to include them in the clause to bring it into symmetry with clause 4.
– I noticed the omission, and thought it was intentional.
– It was not intentional. The clause, as it was passed by this House, was supposed to carry on the proportionate reduction during the whole 25 years. Unless there are good reasons why the amendment should not be made, I think the House might adopt it. It simply means that the policy of special payments to Western Australia shall continue, and that the payments shall be reduced in the same ratio so long as this Act remains unamended. The clause provides absolutely for the payments to continue for ten years, and the amendment will assure their continuance after ten years until Parliament thinks fit to alter the arrangement.
– I think it introduces a new principle.
– As there is a doubt, I move -
That the consideration of the Message inCommittee of the whole House be made an Order of the DayforTuesdaynext.
Question resolved in the affirmative.
SUGAR BOUNTY BILL (No. 2).
Debate resumed from 10th August (vide page 1381), on motion by Mr. Tudor -
That this Bill be now read a second time.
– On the last occasion I pointed out the effect of the present condition of the sugar industry on the. kindred fruit industries. Since I began to take an interest in the subject, it has always been my desire to bring the fruit-growers, on the one hand, and the sugar-growers, on the other, into more complete union than at present. It will be seen that by far the best customer to the cane-grower is the fruit-grower. If a man in Tasmania or Victoria plants out1 acre of plums or quinces, or other fruit, to be made into preserves, some one in Queensland has to plant out 2 acres of cane to furnish the sugar to convert that fruit into jam. The present condition of affairs is simply impossible. A very interesting report was prepared some time ago, showing how closely allied thetwo industries really are. It was read as a paper before a conference of fruit-growers in Victoria two or three years ago. I have laid the figures contained in it before fruit-grower’s in my own State, and they consider that, if anything, they are under-estimated so far as Tasmania is concerned. It is stated that in plums the fruit-grower usually plants out 120 trees to the acre, the average produce of which is one and a half cases; or 60 lbs., per tree. The average yield per acre, therefore, is 7,200 lbs. of fruit, which, at½d. a lb., or about 2s. 6d. a case, rather more than the average price now receivable, gives a return of £15 an acre. To transform that fruit into jam requires an equal quantity of sugar, or 7,200lbs., the duty on which, at £6 a ton, is one and a half times the total value of the fruit produced. The grower gets £4 per ton for his fruit, and the duty on the sugar alone is £6 per ton. The same thing applies to apricots, which are now being grown very largely. We are sending apricots to the jam factory, at about 2s. 6d. a bushel. The duty on the sugar is £6 per ton, and the value of the fruit is only £4.
– Has the honorable member calculated the duty per ton on jam?
– That is in precisely the same position as the duty on sugar was in Queensland prior to Federation. Directly exportation commences and production exceeds the local demand, a duty is practically worthless. I am sure that I voice the opinion of every fruit-grower in Victoria and Tasmania when I say that if the duty on sugar were reduced by £3 a ton the duty on jams could be removed altogether.
– Would the fruitgrower get more for his fruit if the duty on sugar were reduced ?
– Certainly. Prior to Federation, when Queensland sugar had to compete in the markets of the other States with that from Java, Fiji, and Mauritius, its local price was only £13 a ton. The State was then producing more than sufficient for its own requirements, and its sugar manufacturers were in the position of the jam manufacturers of Australia to-day. Replying tothe interjection of the honorable member for Denison, let me read what Mr. Peacock, of Victoria, one of the best authorities in Australia on this question, says -
Thousands of tons of fruit are specially grown for the factories. In addition, whenever fruit falls to a figure which enables the manufacturers to buy, they step in, clear the market, and prevent a further decline in prices. Take plums as an instance. The price of plums at the beginning of the season may be £9 per ton, a price which, say, we manufacturers cannot afford to pay. As more and more of the crop comes into the market, the price begins to decline, and as the market becomes stocked beyond household requirements, prices decline till they reach the level at which manufacturers can afford to operate. Say this is £4 per ton ; at this price manufacturers will then take all they can get, and consequently this controls - the price, not only for the purchases made by the manufacturers, but for all that comes into the market.
Every acre of plums or apricots planted in the southern parts of Australia for the production of fruit for jam making requires the planting of two acres of cane in Queensland for the production of sugar for preserving them.
– How much of the fruit grown is converted into preserves?
– In Tasmania, for every apricot eaten as fresh fruit, more than a bushel is converted into jam. Acres of land are planted with trees whose fruit is intended solely for jam making, and the pickers scarcely enter the orchards until the jam manufacturers are prepared to operate. The bulk of the apricots, plums, and other fruit of that description grown in Tasmania is converted into jam; but in districts like the Huon, the Derwent Valley, and Bismarck, horses and drag chains are being used to root up the currantand gooseberry bushes, and men who have spent seven or eight years in clearing land and planting fruit trees are now chopping the trees down again because of their inability to sell their fruit at a profit.
– Does the honorable member say that the price of sugar is the cause of that state of affairs?
– I do. It must be remembered that the value of the fruit which is used in the making of jam is only £4 a ton, and that of the sugar £20 to £22 a ton, making the average£12 to £13, which, of course, tells greatly against the fruit-grower. In fruit-growing districts now one may see cattle depastured in the plantations, the industry being sacrificed to the production of sugar. At the same time, the Queensland growers are not getting unreasonably high prices for cane. There is a huge monopoly standing between the cane-grower and the fruit-grower.
– Is there not alsoa jam makers’ monopoly controlling the price of fruit?
– Both the fruit-growers and the cane-growers are suffering from the oppression of monopolies.
– Why not destroy these and all monopolies by providing for free competition?
– To my knowledge, acres of orchards have been destroyed because of the little profit in fruitgrowing; but I know that the cane-grower is not getting too much for his cane.
-How many jam manufacturers are there in Tasmania who purchase fruit locally?
– Only one.
– There are, I believe, four or five purchasers. In my opinion, the Colonial Sugar Refining Company is a menace to other industries. Let me read from the original correspondence showing the position of affairs during this year. The director of the Australian Jam Company Limited, South Yarra, wrote to the local manager of the Colonial Sugar Refining Company on 27th June last in these terms -
Having no reply to the communication recently addressed to you, we would like to know if in the “new contract we are expected to purchase all the sugar that we use from your company, for it seems to us that if we are prepared to definitely contract for, say, 500 tons for a certain period, we are,at least, entitled to the same footingas a manufacturer who would use 100 tons or less.
In this connexion we may say that it will suit us very well to purchase a definite quantity straight out, and if you are not prepared to supply at£20 17s. 6d. per ton, will you kindly name a price so that we may consider it?
We notice that in the new contract you propose to give manufacturers the right to purchase other sugars of Australian production without prejudice to their contract with yourselves, and in this connexion we appreciate being placed on the same footing as merchants who, we understand, have had this concession for some time.
– That is not worth much.
– It is worth nothing. On 30th June, the managing director of the Sugar Refining Company in Melbourne wrote -
In reply to your letters of 27th and 29th inst., I would say that our offer is in respect of the whole of your factory’s requirements excepting only the purchase of other Australian sugar which you will be at liberty to make, and we regret thatwe cannot quote for a certain quantity as you ask us to do.
He wrote later -
With further reference to your letter of 29th ult., I would point out that, although we cannot depart altogether from our policy of contracting for the whole of a manufacturer’s sugar requirements by quoting you a fixed quantity at a stated price, you could, under our present offer, draw from us too tons or more during the year on the best terms offered to any other buyer; the balance of your requirements being drawn from other manufacturers of whites in Australia, whose total production this year is expected to reach between 35,000 and 40,000 tons.
The reply was -
We duly received yours of 30th June and 4th July, both of which we regard as extremely unsatisfactory. . . . For our own partwe prefer to use Australian sugars even at the slightly increased cost, but in your letter to us you pointed out that you found it necessary to import large supplies of foreign sugar for your refineries, and with an admission of this kind, we think it is just as well to import our own requirements. You further stated that your price of£20 17s. 6d. per ton was below that ruling for similar sugar in any market of the world, and which we have proved to be incorrect.
We are sending this letter in by special messenger, and unless you telephone us during the day that you are prepared to give us supplies we willhaveto shut down this factory for some time.
The factory was closed. As a matter of fact, sugar could be imported from Java or Fiji - notwithstanding the duty of £6 per ton - for £1 5s. per ton less than is. charged for it by the Colonial Sugar Refining Company. I admit that in its early days the companydida great deal for the sugar industry in Australia. Getting certain concessions from the Queensland Government, it put up mills, and greatly assisted the sugar industry. I admit, too, that part of its profits are made from its operations in Fiji, where it has large plantations and crushing mills. But notwithstanding that, the profits of the company on its Australian business are too large, judged by the price given to the grower forcane, and charged to the consumer for sugar. The company started its operations as an unlimited liability company with a capital of £150,000. In 1888 it had a paid-up capital of £648,000, which is now £2,850,000. Its debentures have been reduced since 1888 from , £901,000 to £64,000, and its reserves have increased from £318,000 to £500,000. Its profits have increased from £103,000 to £258,000, and the total of its balancesheet from £2,000,000 to £4,500,000. The value of its properties, which in 1888 was £1,767,000, is now £2,947,000, and its dividends have grown from £31,705 to £285,000, having amounted to over £4,000,000 in the aggregate since 1888, the profits being about £4,500,000. I have said sufficient to show that the position of the Colonial Sugar Refining Company is, from our stand-point, intolerable. It will not to-day give to any preserving company in Australia a contract extending beyond the month of November. That is the month in which the preserving companies really commence their operations, so that, for all practical purposes, the Refining Company will not enter into a contract with them to supply sugar. Then, again, the Company take full and complete advantage of the import duty. If we could land sugar in Melbourne, f .o.b.at£13 per ton, so that with the duty of£6 per ton the price would be £19 per ton, it would be found that the Colonial Sugar Refining Company was prepared to make a contract for the supply of its sugar at about £18 15s. per ton. It takes full advantage of the duty.
– Hear, hear; itis the only line in the Tariff in connexion with which that can be done.
– It is a matter of great importance. The Company is cutting down the price to the cane-grower to the lowest possible level, and is charging for its sugar the highest price that it can possibly obtain. It would be useless for us to attempt to deal with this question, unless wewere prepared to consider means of overcoming the difficulty. I have long held that the solution of the problem is to be found in co-operation on the part of the cane-growers. Why should they not co operate, as our dairymen have done? If the ingredients, other than the cream used in the production of a pound of butter were subject to a duty amounting to more than 59 per cent. in excess of the value of the cream, what would our dairymen say? What would be said if the duty on the preservatives used in connexion with the preserved meat industry were 50 per cent. in excess of the value of the meat used? If we could establish co-operation among the cane-growers-
– And among the fruit-growers.
– Do not let us be drawn away from the sugar question. I have spent more months than the honorable member has spent hours in an effort to secure co-operation amongst the fruitgrowers.
– No, I have spent much time in making the same effort.
– I confess that I have not succeeded, but I certainly think that it is not a business proposition that sugar grown in Queensland should be sent to Melbourne or Sydney to be refined. The cane-growers should co-operate, and refine their own sugar in the home of the product. According to the press, the Prime Minister, in reply to a deputation, which recently waited upon him, to ask for assistance in establishing refineries, said that the matter was one for action on the part of the State Government. I hold that it is a matter for the Federal Government to take up. The Federal Parliament, which has the political control of the industry, should also face the financial responsibility relating to it. The Federal Government has the sugar industry, so to speak, in the palm of its hand. We levy a 50 per cent. duty, we impose an Excise duty, grant a bounty, and regulate the scale of wages to be paid in the industry. We have taken the industry within our control, and it is our duty to face the financial responsibility devolving uponus. I am prepared to-day to support a reasonable vote - even in excess of £500,000 - to back up the cane-growers in establishing co-operative refineries, for the treatment of their own raw product, so that they may obtain the full and complete reward of their labour. That is a way out of the difficulty.I believe we should thus be able to reduce the duty to £3 per ton, whilst, at the same time,the profits to thecane-grower would be enormously increased.
– But their co-operative refinery, or refineries, would have to face the competition of the existing company.
– That is so, but, with co-operation, the cane-grower would have his own clients already at hand. If there were competition to-day, much of that of which we are complaining could not exist. All my sympathies are with the cane-grower. I have never taken up an attitude in the slightest degree hostile to him, because he is at the one end labouring under the same difficulties that the fruit-growers are at the other. Year after year international conferences on the continent of Europe have been dealing with the sugar question, and when we know that men like Mr. Chamberlain have also given the best of their time to its consideration, we ought not to think it unworthy of our attention. The sugar industry cannot continue on its present basis, for the existing system is crushing out of existence the best customer that the sugar-growers have. My object has been to bring the fruit-grower of the temperate south, and the canegrower of the tropical north, together. If we could secure co-operation on the part of the cane-grower and the fruit-grower so that both would get the full result of their labours, we should foster two great national industries, and materially aid in the settlement of Northern Australia. Some may say that such an undertaking would be an interference with private enterprise, and savour of Socialism. I think, however, that we are inclined at times to make too much of terms, and far too much of shibboleths. By legislation that we have already passed, we have altered the whole of the relations of the sugar industry, and it is up to us to shoulder our responsibilities to the very end. The result of a complete inquiry will, I believe, lead us to do so. Some people may think that it would be better to establish a national refinery, but, in that way, we might create just as big a monopoly as we have now. I do not wish the Government to secure the profit derivable from such an undertaking. My desire is that the man who has gone into the remote parts of Queensland, cleared his land, and planted it with cane, should receive the full and complete reward of his labour. That can be secured only by co-operation, and cooperation must be brought about in the near future. We have been dealing with this question in a tentative way from the early days of Federation. No one can say that the legislation we have passed has been calculated to give a sense of security to those engaged in the industry ; yet what a man desires, above all things, on entering upon a new undertaking is, that some degree of certainty shall be given him. The swing of the political pendulum might sweep away the bounty, and make other changes without giving the sugar-cane grower the benefits that he is entitled to receive. 1 hope that we shall not view this matter from a party stand-point. We are dealing with a primary industry involving the better settlement of this land of ours, and the question should be above party considerations. The sugar industry is, and must be, one of the great industries of Queensland. It is one of the means by which tropical Australia is going to be settled by white people, and we should be prepared to do anything in reason that will tend to foster it. The only difference between us is that we on this side of the House do not wish to see an equally important industry crucified in order to assist another.
– That has not been established by the honorable member.
– I think that it has. To begin with, we are imposing a duty of £6 per ton on sugar, which is the raw material of another industry. In many parts of Tasmania the small fruits industry enabled hundreds of small farmers to pay their way whilst they were clearing their lands for other crops. But to-day we see cattle turned (into raspberry plantations, and we see men cutting down their plum trees.Within a few yards of my own residence I have seen a horse with a dragchain pulling up hundreds of currant and gooseberry bushes. All this is being done because the ruling prices do not pay for cultivation and picking. Such matters deserve the earnest consideration of this House. I am not asking for any special legislation in connexion with this Bill, because I recognise that it is only of a temporary character.
– But the honorable member says that the price that the fruitgrowers obtain for their fruit is regulated by the price that is paid for sugar.
– And so it is. It is, after all, a matter of averages. One ton of sugar and one ton of fruit produce two tons of jam. The manufacturer gives £4 a ton for his fruit, and from £20 to £22 per ton for his sugar. Of that amount £6 really represents the import duty, and if that duty were removed tomorrow we should be able to land sugar in Melbourne at about £15 per ton. A saving of £6 would thus be effected in the manufacture of two tons of jam, and the manufacturer would be able to double the price that he was paying for his fruit.
-Is that the remedy which the honorable member suggests - the remission of the import duty ?
– Not alone. I believe in co-operation and in wiping out the bounty and Excise. Of course, I know that we dealt with this question previously with, as it were, our hands tied ; we were face to face with the black labour question, and the Federal Parliament and the people of Australia were quite prepared to make great sacrifices.
– And the legislation has been a great success !
– Will the honorable member say to what extent the duty is neutralized by the drawback on exportation ?
– When the product is exported the duty is neutralized. I point out, however, that the great production of jams is for Australian consumption ; we do not, and have not up to the present exported much. It may be interesting to the House to know that in one of our best markets, South Africa, a large jam preserving company is being established, which will result in practically shutting out the Australian article.
– Is not Australian pulp sent to South Africa?
– Pulp has been sent to South Africa and there made into jam; but cur policy is not to encourage such exportation. We desire to give our own people the benefit of its manipulation here.
– It evidently pays the jam makers better to sell their jam locally than to export it, although they have to pay duty on the sugar.
– Of course, it pays them better. Unfortunately for the industry, there are protective duties in most countries of the world; and it may be said that practically all the manufacturers of the Commonwealth are manufacturing for our own market. I have been asked whether the abolition of the duty is the way out of the difficulty, and I have to say that I do not advocate that policy alone. My idea is that there should be co-operation, under which the cane-grower may obtain the profit of his labour, instead of that profit going to a middleman monopoly. By abolishing the Excise and bounty, we shall be enabled to reduce the duty and put the grower in an infinitely better position, thus saving the industry from being wiped out. Or we might make some arrangement, as in Germany, where the whole of the sugar is manufactured in bond.
– And by the Government practically.
– No ; the manufacture is done by one of the most disastrous trusts there is in any part of the world. Newlands, who is one of the best authorities on the question, speaking of the heavy exports of German beet sugar to England says -
The Home consumer really maintains the industry by paying a high price for the sugar.
Under the conditions of the Sugar Trust, with its bounty and fixed charges, the German consumer is paying a high price to enable the German exporter to flood the English, market with beet sugar at an exceedingly low price. We have precedent for the Government coming to the assistance of the cane-grower in the way of establishing refineries. In Brazil, in1875, after nearly two centuries of cultivation, the Government guaranteed the interest on the cost of construction of refineries in different parts of the country ; and I believe that something of the same kind should be done in Australia in the interests of the cane-growers. I hope the House will consider the question wholly apart from the interests of what I consider one of the greatest and most disastrous monopolies in Australia to-day. The whole future of the sugar industry on the one hand and the fruit preserving industry on the other, depends on something being done to enable those engaged in the two allied industries to be brought closely together. That can and should bedone; and I hope the House will give the matter its earnest consideration. Every representative of Tasmania, and every representative of the fruit-growing and preserving districts of Victoria will bear me out when I say that, owing to the inordinately high price of sugar, the industries I have mentioned are absolutely threatened with extinction. The kindred industries of sugar-growing and fruit-growing should go hand in hand. I recommend the House to regard the question from that point of view, and to enable both industries to prosper, with incalculable advantage to Australia.
.- This is a question in which I am somewhat naturally interested, seeing that 60 per cent, to 70 per cent, of the sugar production of Australia is in my electorate ; and I may be pardoned for making a few remarks. I realize fully that this is merely a tentative measure. The Government intend, as early as possible, to ask the electors a question in regard to the nationalization of industries, and if an answer be given in the affirmative, the whole of this legislation will, of course, prove unnecessary. The honorable member for Franklin has discussed the Bill at some length, and, to a great extent, I agree with what he has said. The sugar-growing industry and the fruit-preserving industry are closely allied; and if the honorable member, or anybody else, can show that the duty, the bounty, the Excise, or any other internal arrangement is responsible for the present position, I should be quite willing to join with him in endeavouring to lower the duty or otherwise alter the arrangement. We all know, and the honorable member himself confesses, that that is not the cause of the high price, but that the cause lies in the fact that there is a gigantic monopoly, which is squeezing the fruit-grower on the one hand, and the sugar producer on the other. Until we are able to control that monopoly in some effective way, the present conditions must continue. Under the stress of commercialism, and a desire for profits, which influence this company, as they do any other company looking for dividends, we can expect no other results. However, I do not see quite eye to eye with the honorable member for Franklin; and I think that in quoting the figures he did, in regard to the advance made by the sugar industry since Federation, he was hardly fair, because although the area has not increased to a very great extent, the position has altered wonderfully. From a table prepared by the Department of Trade and Customs, and submitted by the Minister, we find that, whereas in 1902, 60.9 per cent, of the farmers employed white labour, and 39.1 per cent, employed black labour, in 1909 the white labour was represented by 93.1 per cent., and the black labour by 6.5 per cent. That is almost an entire reversal of the position, and similar figures are found in connexion with the quantity of cane produced. In 1902, the percentage of cane produced by white labour was 15.7 tons, and by black habour 84.3 tons, whereas in 1910, white labour is represented by 91.7 tons, and black labour by 8.3 tons. These figures in themselves are quite sufficient to justify the white labour legislation, so far as it has gone. This reform has been carried out at no great cost to the Commonwealth, and under circumstances which completely falsify the distressing predictions which were made regarding the difficulty and injury which might be caused in the deportation of the kanakas. We know now that that deportation was carried out in a way that reflects credit on all concerned;, and the kanakas have been replaced by white men. I admit that, assuming the production of sugar to be 200,000 tons per annum, and the import duty to be 60 I per ton, we are paying .£1,200,000 per annum more for our sugar than we should if the duty were abolished. It has been asked whether the game is worth the candle, or, in the words of the honorable member for Franklin, “ Are we paying too dearly for our whistle? 11 We have to consider two questions - one, the cost to the consumer, and the other - much more important and vital to the very existence of Australia - the populating of our Northern lands by the white race. We must look at this question from a defence point of view, as well as in a commercial aspect. Only this morning the press cables tell us that Korea, the integrity of which was supposed to be maintained by the great powers, has been annexed by a neighbouring nation.
– The best thing that ever happened for Australia. It will satisfy the ambition of Japan !
– I venture to differ from the honorable member, but I shall not discuss that matter now. We undoubtedly require population ; and sugargrowing is the only productive industry by which a white population can be maintained in northern Australia.
– And there should be small holdings.
– That is another effect of our sugar legislation. In 1901-2 they were nearly all large holdings, and what were known as the sugar planters were very much in evidence. The small fanner did not exist to any great extent. The position has now been reversed, and the Colonial Sugar Refining Company have found it is not so profitable to grow cane as it is to make sugar and refine it. They have consequently cut up their estates, which are now nearly all in small holdings. I do not think the company are growing any cane on their estates, which are all leased on the purchase system, and the farmers are growing for the mills. That has been brought about by our special sugar legislation, because the large companies would not depart from the old system, and grow cane by white labour. They were so imbued with the idea that white labour was utterly useless in the field, and that nothing but coloured labour was of any service to them, that immediately our legislation came into operation they began to get rid of their land and put the white fanner on small plots. That result is undoubtedly a considerable factor in the defence question. By making the holders more numerous, and giving them a living area, and so increasing the white population, we are doing what we must do if we are to retain our hold upon that part of Australia at any rate. The honorable member for Franklin also raised the question of the loyalty of the grower to the White Australia policy. I am willing to admit that the small holder is loyal to a degree, but a very bad example is being set by the Colonial Sugar Refining Company, who are employing coloured labour wherever they can. I have a return on that subject, but unfortunately, thinking that this debate would not be resumed until next week, I have not my notes with me, and am speaking a good deal from memory. The company in all their mills and on their tramways, in getting firewood for the mills, and in clearing the land which they do for the subsequent lessee who is purchasing on terms, employ coloured labour wherever possible, so long as it does not vitiate their claim for bounty. That bad example should not be indorsed by this Parliament.
– What else is the coloured labour to do if it is refused employment in the sugar industry?
– Why do the Colonial Sugar Refining Company employ it? I presume if it was not employed in the sugar industry it would go elsewhere.
– That is not the question. I am speaking of the loyalty of these people to the White Australia policy. They employ coloured men because they are cheaper. The honorable member for North Sydney perhaps assumes that the coloured labour consists of kanakas who are not deported. That is not so. It comprises Malays, Japanese, Filipinos, Javanese, and others, all, I admit, legally in Australia. I wish to see an example of loyalty to the White Australia policy set by the company, but the example they do set does not induce other people to be loyal, except where they are compelled to be so from the fear of vitiating their bounty claims.
– I suppose the honorable member would starve the coloured men out.
– Personally, if I could roll them all into one and get them collectively by the back of the neck, I should drop them in the Pacific Ocean.
– The honorable member should run in double harness with the honorable member for Darling.
– Yes. The honorable member refers ‘to “ drowning the scab.” He was not drowned, but only washed. I make no secret of my principles in that direction. I am a White Australian from the top of my head to the soles of my feet.
– The honorable member is not loyal to Karl Marx.
– The brotherhood of man is all very well in theory, but practically it does not work out, with me at any rate. The honorable member for Franklin also wanted to know why there had been a reduction in the acreage since 1907. That was the record year in Queensland ; 1896 had previously been the record ; but in 1907 we produced just about as much as we consumed.’ Since then there has been a falling off in the acreage under sugar cane; but that falling off was not confined to this industry alone. It was discoverable also in the wheat area. In 1906-7 there was, in Queensland, 114,575. acres under wheat, and in 1908-9 there had been a reduction to 80,898 acres. This shows that there was some influence other than what the honorable member suggests at work, to account for the difference in the acreage. Sugar is in a different category from any other crop. A man may grow a cereal crop hundreds of miles away from where he has to sell it, but sugar has to be grown within a reasonable distance from a mill, because it would not pay for carriage, and if carried very far would be so depreciated in the process that it would not be worth crushing when it reached the mill. It must be grown within a given radius of the mill; tram lines are run out, and the cost of the carriage has to be added to the cost of the cane. That is a feature which militates against the production of the cane at any great distance from the ‘ mill. A great deal of land close to the mills has been worked out by excessive and continuous cropping, and will not produce sugar cane now in payable quantities.
– Is it not possible to rehabilitate that soil with manures?
– It is possible, and is being done in some cases on a small scale; but where virgin land is cheap and accessible it is less costly to take it up than to rehabilitate the old areas, which also become covered with noxious weeds so that it is rather an expensive process to bring them into cultivation again. That means that the growers have to get further out; the tramways have to be carried further, there is an enhanced cost for the carriage of the cane, and all this, to some extent, accounts for the reduction of area and production. There is a pest known as the grub, which, in a few weeks, will devastate hundreds of acres of land. In some seasons it is much worse than in others. In some areas the frosts are very severe, and that is another feature which tends to reduce the acreage under cane. In country where cane is being produced on what I may call a small payable basis, such as the northern districts of New South Wales, the areas under cane are becoming smaller and smaller each year, and I believe that one reason is the frosts, and another that it pays better to use the land for dairying purposes. All these features combine to account for the reduction of the area under cane. The crushing power is another feature of the problem. This year it is quite probable that it will be hardly equal to taking the crop. They are having an excellent crop this year in North Queensland, and the milling power will be tested to its utmost capacity to deal with it. _ We have, too, even in tropical areas, occasional spells of dry weather, which is another factor in reducing the areas under crop, and the production of cane.
– They, want to work on Sundays.
– I believe they have applied to the Minister for permission to work on Sundays, but I am sure that no honorable member, least of all myself, would indorse a request of that sort. The honorable member for Franklin emphasized the fac! that the Commonwealth has really the whole and sole control of the sugar industry by means of the Tariff and the Bounty and Excise Acts. I am heart and soul with the honorable member in his desire to see the Commonwealth take up the industry, but the sacred document known as the Constitution precludes us from doing anything of the sort. So far as cooperation is concerned, it is all very well to talk about co-operative dairying and co-operative fruit growing, but when you come to cooperative refineries you are dealing with such a big thing that you could not get the growers and the millers to combine in such a way as to make it practicable. Only a little while ago, in the Mackay district, where there are ten sugar mills, a scheme was evolved for the starting of a cooperative refinery. The sugar millers who produced the raw sugar, and also the growers, gave their adherence to it, but, owing to reasons which it would take too long to particularize, it fell through. In the first place, sufficient capital would not be forthcoming for a co-operative undertaking of that kind. A great deal of capital is required to erect a refinery, get it into working order, and compete with the Colonial Sugar Refining Company, already in existence. But I should not in any case have indorsed the principles which underlay the Mackay scheme, because, while the Commonwealth was to be asked to further it by means of a vote of money, it was to have no control over the mill. Wherever the Commonwealth advances money for such purposes, it should have, if not absolute control, at least sufficient control to direct the internal management of the concern. If a co-operative scheme could not be made a success in the largest sugar-growing district in Australia, I do not think it could be made to succeed anywhere else.
– Has not the ownership of some of the co-operative mills passed to the Colonial Sugar Refining Company?
Mr. BAMFORD. Not yet. The cooperative mill system was, on the face of it, admirable, but in practice the objections which apply to the principle of co-operative refineries apply to it. The Government had no control over the mills until some of them became financially involved, when it had to step in, and in every instance whenthat occurred, mills which had been going- from bad to worse were made a success under Government control. The defect of the co-operative system is that some of the farmers gradually buy out the others, and there is evidence that the co-operative mills will in time squeeze the growers just as the private mills are doing. The sugar industry cannot be put on a definite basisas was suggested by the honorable member for Franklin. No industry dependent on a protective duty can be dealt with in that way. If the position of political parties were reversed, the duty on sugar would probably be reduced to £3 a ton.
– The Excise duty would also disappear in that case.
-The Excise duty does not interfere with the price of sugar. Were the Commonwealth to control the industry, it could be put on a definite basis, but in the present state of parties, there can be no certainty. I am confident that, were this Parliament to provide for the payment of a bounty for a definite term, future Parliaments would feel bound to leave our legislation unaltered.
– The measure under discussion is ‘amending a definite arrangement.
– Yes, but it will place the sugar industry on a still more secure basis. The bounty should originally have been made interminable. I was always in favour of that, and opposed to the reduction by gradation. I advocated the imposition of a fixed bounty for at least ten years, and had that been done, we should” not have our present troubles. No doubt the Bill will meet with the approval of honorable members, but it can be regarded only as a temporary measure, and later we shall have to deal with the whole subject in a more comprehensive way. The honorable member for Franklin said that the Brazilian Government guarantees the interest on the cost of sugar mills, and I should be prepared to support a proposition to enable our Government to do the same, if it were to have control of the mills. In Queensland the State Government advanced money on interest for the -erection of meat works, but it had no control over the works, and was not represented on the board of directors, nor was any officer connected with the industry in its employ. The money was merely advanced on the security of the -works. Such an arrangement would not find favour with the Labour party here; we should demand in return for advances certain definite control. The monopoly with which we have to deal is the Colonial Sugar Refining Company. The only information available regarding its opera- - tions is contained in the profit and loss ac count and the statement of assets and liabilities which are published every halfyear. No doubt the New South Wales law is complied with, but the information available to the public is very meagre. We do not know how many shareholders there are. The profits for the present halfyear exceeded £175,000, making more than £”350,000 for the year. Among the liabilities are included the sums due to the employes’ provident fund, and the employe’s’ benefit society. The contributions to these funds are made largely by the employes, and the funds should not appear as a liability to stand against the assets. Apparently the company owes nothing on its properties. For years past it has been paying constant dividends, at the rate of 10 per cent, per annum, although it has twice watered its stock. Within the last three years its shareholders have received £1,600,000 by the watering process, making the calculation on the market value of the shares, not on their far value.
– What interest is earned on the capital invested?
– I have not had time to work that out. The dividend is 10 per cent.
– On the paid-up capital.
– On the watered stock.
– To what extent has the stock been watered ?
– Very considerably; but, notwithstanding that there have been two waterings within the last three years, the dividends have not been reduced, nor has the price of the shares fallen. Shares whose nominal value is £20 are now being quoted at £44 10s. <?jr-dividend, and have been as high’ as £47 CM?«-dividend. As the information contained in the balancesheet may be of use to honorable members, I will read it -
I had a good deal of matter prepared, regarding the employes’ provident fund, but, unfortunately, it is not at my command at the present moment. The employes are not fairly treated in the matter of this fund, which is managed wholly by the company, and to it are attached certain conditions, affecting men who leave or are dismissed, which are unnecessarily drastic. Here are some further particulars -
The company is one of those which maylie said to be on financial velvet. It is very good to its shareholders, of whom I believe there are less than 2,000.
– We were told yesterday by the honorable member for Capricornia that- there were about 1,400 shareholders in the company.
– Two years ago there were nearly 2,000 shareholders, and no doubt in a few years hence the whole concern will be in the hands of a very few individuals. If there are now only 1,400 shareholders, honorable members will admit that the dividends of the company are going into very few pockets. When this matter was being discussed on a previous occasion, one honorable member declared that to do anything in the direction of nationalizing the industry would be to do injury to hundreds of poor widows. I should like very much to know how many “poor widows” hold shares in this company which arc paid up to £20. The “ poor widow “ shareholder, so far as the Colonial Sugar Refining Company is concerned, is doubtless non-existent. She exists only in the imagination of honorable members opposite, who use the “poor widow “ cry to excite the sympathy of members on this side of the House. This measure is of only a tentative character, and I trust that a year hence we shall be debating one of far more reaching importance - a Bill for the nationalization of the industry of refining and distributing. I have heard the most extreme statements made regarding our intentions in that direction, and I wish it to be distinctly understood that we propose to go no further than to nationalize the work of refining and distributing the sugar. It has been suggested to many cane-growers lhat the Labour party, in connexion with the nationalization of the sugar industry, would take their farms from them. It has even been said that we would put convict labour on their farms. They have been told that we wish to produce the raw sugar—
– But the Labour party want to control the farmer.
– The Federal Parliament is controlling the cane farmer at the present time, and, recognising that it is to his own advantage, he likes to be so controlled. In support of my statement, let me inform the House that at the last general election I was opposed by a gentleman who desired to .remove the cane farmers from the controlling influence of this Legislalure. He was an ex-president of the Australian Sugar Producers’ Association, which came into existence for the express purpose of bringing about the abolition of both bounty and Excise. It was specially organized for that purpose, and was supported by a newspaper known as the Sugar Journal, all the literary ability of which was devoted to the one object of impressing upon the farmers the desirableness of doing away altogether with the Excise and bounty. But what was the result of that opposition? My presence here, Mr. Speaker, was the outcome of it*
Notwithstanding that my opponent had behind him the Australian Sugar Producers’ Association, having branches, strong numerically and financially, in every sugar district in Queensland, the desire of the farmer that this legislation should be continued was so keen that in six of the seven sugar-growing districts in my electorate, I secured a majority. That surely proves conclusively that the farmers wish the bounty and Excise regulations to continue, as they are now, and, as ‘I think, they will be continued. On this question no one should have more influence upon this Parliament than the people who are directly interested - the farmers who recognise the advantages of the bounty system, and freely admit that by its agency they have been put upon their feet. The impartial canegrower will admit that, notwithstanding the restrictions imposed, the conditions under which he is working now are better than ever they were before Federation.
– Supposing we gave them the bounty without the Excise?
– That would make no difference. The story which my opponent poured into the ears of my constituents was that the cane-growers paid the Excise, but their minds were soon disabused of that idea. . Any one save an economic baby would know perfectly well that it is the consumers who pay the Excise. They are, of course, pleased to get the difference of £r per ton between the Excise and. the net bounty, but they do not ask for the abolition of the Excise. I am confident that honorable members generally -are desirous of helping the sugar farmers of Australia, and of having Northern Queensland peopled by white men.
– The bounty is helping in that direction.
– It has been of considerable assistance. Prior to the introduction of the bounty system, the white population of Northern Queensland was not increasing. I regret that, owing to the change made in the order of business this morning, which resulted in the consideration of this measure being suddenly resumed, I had not at hand, when I rose, the somewhat exhaustive notes that I had prepared on this subject. I had prepared a return showing the advances made by the Mackay district since the passing of this legislation, as compared with the period 1891-1902, but, unfortunately, I am unable to give the figures at this stage. Between 1891 and 1902, although the planter had been able to exploit every avenue of cheap labour, including those offering, not only in the Pacific Islands, but in Italy and Spain, the town of Mackay went back. Its population decreased, the value of its rateable property declined, and the number of names on its ratepayers’ and parliamentary rolls likewise decreased. I obtained from the RegistrarGeneral figures pointing conclusively to that fact, and also another set of figures, showing that since 1902 there had been an advance right along the line. Since then the population of Mackay has increased, and the number of houses, the rateable value of property, and the number of electors on the ratepayers’ and parliamentary rolls have all expanded. This proves conclusively that the bounty system has been most beneficial to that particular district. I did not take out the figures relating to any of the other sugar-growing districts, but I am satisfied that an investigation will prove that the same story may be truthfully told of the whole of them. I selected Mackay for the purposes of illustrating the effect of the bounty system, because it is the largest, the most settled, and the oldest of the sugar-growing districts. The largest amount of capital in the industry has been invested there, and it has in its neighbourhood the largest area under cane. These facts ought to be sufficient to satisfy a man with an unbiased mind that the bounty and Excise system has been productive of much good.
– Would the price of sugar be reduced if the bounty were removed ?
– I do not think so, but it would be reduced if the import duty were removed. A great deal of raw sugar is now being imported from Java, and, ‘as we do not differentiate between the raw and the refined article, a duty of £6 per ton is being paid upon it. If that duty were removed, no doubt sugar would be selling for £6 per ton less than it is at the present time. I would remind honorable members, however, that in all parts of the world - in all the States, with one exception - sugar has always been regarded as a commodity upon which the imposition of a duty is justifiable. Even in freetrade England, a duty of 40s. per ton is imposed on some classes of sugar; and the duty runs up to as much as £7 per ton on certain articles in which sugar is used as an ingredient. That being so, we are following a wellbeaten course in imposing a protective duty on sugar; we have followed the example of other countries. We know what the duty on sugar is in the United States, and that the Government of that country will not allow one ton of sugar to be exported from Cuba, except to the land of the Stars and Stripes. I shall not discuss this question further at the present stage, save to say that it is of the deepest interest to me, and to my constituents, and that I trust this Bill will be passed.
Sitting suspended from 1 to 2.1 § f.m.
– ‘By a strange coincidence I find I am following the honorable member for Herbert, whom I followed in the discussion on this question when it was first before the Commonwealth Parliament. I must compliment the honorable member on the extreme fairness with which he puts his views, representing as he does the growers in the great sugar-producing centre of Australia. We all agree that he presents his case very strongly, and I sympathize most with him when he says that he is not asking for benefits exclusively for the growers, but admits that there are other interests that ought to be considered, and alludes broadly and fairly to what, I think, is an accepted fact, namely, that we have, and must have, the one desire to protect this magnificent industry, and to hold and conduct it on White Australia principles. The only difference between us is as to how this is to be done. My own difficulty is that the question has never been adequately considered in all its bearings, though masses of facts are available in all directions. Seeing that the present scheme has been in force for eight or nine years, we should have an additional body of information acquired under the operation of the laws we initiated to govern and support this industry, to lead us to definite conclusions, which we could regard as of a more permanent character than the fiscal legislation of the past was ever likely to be regarded by, I venture to say, either side of the House. The question immediately before us is the second reading of this Bill; but by tacit consent, I understand, we are allowed to deal with the whole question of the sugar industry, the existing legislation in regard to it, and what means outside of that legislation might be taken to supplant it in the better interests of the whole of the Commonwealth. I am not here exclusively to represent the sugar planters, much as I think , the sugar industry is worthy of the utmost support by those who know anything of it ; nor am I here to represent, as I have had to represent in the past, the interests of those manufacturers largely engaged in the consumption of sugar in their factories. I know the case of the latter probably as well as any man in the Chamber or out of it, having beat connected with a manufacturing industry, though I have now practically retired. There are, however, broader interests which I can satisfactorily represent in this House, and which are near and dear to my heart, namely, the interests of the general taxpayer and the consumer. In addition to the Bills immediately under our purview, there is the further question, which was debated yesterday, and which will come up again, of the appointment of a Royal Commission to deal with the great mass of information available now throughout the Commonwealth for the guidance of the Government. It would have been wise during the discussion yesterday, or in the debate to-day - and I waited some time in hope of the event - if a member of the Government had told us what is intended in regard to this matter. Do the Government intend to assume what I consider a reasonable attitude and appoint a Royal Commission to institute a non-political inquiry - an inquiry, as far as possible, scientific, the only aim of which will be to elicit the actual facts, or do the Government intend to simply go on with the Bill now before us, and the other Bill that is immediately to follow ? If the second is to be the attitude, the House will have the right to demand from the Government some exposition of the principles underlying the policy they have determined to adopt. This Bill was introduced a fortnight ago by the Minister of Trade and Customs; and I was surprised that a gentleman in that position should submit to the House a proposal for departing entirely from a policy that was adopted in 1905, and re-enacting, as it were, legislation which was limited by the 1905 Act, without some explanation of that determination. When we decided to give this assistance in the first instance, many honorable members who know something of the industry and its entanglements with many other industries, and other honorable members, who were sensible of the burden of taxation we were imposing on the consumers and general taxpayers, but still more largely on the poor, wished to see “the legislation limited or tapering off in its incidence, so that at some time or another those concerned, particularly the poorer classes, could be free from the burden of carrying this industry, magnificent though it may be In the eyes of all who are able to judge of the chief industries of Australia. The attitude that I take to-day is that we should not depart from the position of 1905 without some clear view, and the consideration of reasons why the departure should be made. I ask now, what is the policy of the Government with regard to the sugar question? We have had no reply. The Minister of Trade and Customs, introducing the Bill the other day, briefly referred to the fact that everything was looking well - according to him, everything in the garden is lovely “ - and the Prime Minister has told the sugar planters arid others in Queensland that, whatever the Government do, they will protect the interests of everybody concerned. I do not know that the honorable gentleman mentioned the consumer and the taxpayer, but he promised to protect the interests of everybody connected with the industry. We have a right to know how that is going to be done. Is this Bill, with the one to immediately follow, sufficient to protect the interests of everybody? Do the measures protect the interests of manufacturers who have to use sugar as a raw material ? Do the Bills do justice to the taxpayers of the country ? The Labour party is charged, more than any other party ever has been, can be, or will be, with the protection of the interests of the poorer classes ; and I ask whether they can justify the continued imposition of heavy duties without grave reason ?
– The honorable member knows that the Bills do not add a fraction to taxation or to the price of sugar.
– I may tell the Prime Minister that he and I differ most diametrically on that matter, as I think any one with knowledge of the subject must differ from him. “It is a most extraordinary attitude to take up that this legislation does not impose burdens on the people; and before I have finished I hope to be able to show the position in such plain terms that the whole of the taxpayers will know what is being placed upon them by a Labour Administration, supposed to be here to protect the interests of the very poorest classes. In the past, Protectionists naturally assented to this legislation In order to protect a great industry. Free Traders, swallowing their convictions, likewise assented for the realization of the great ideal of a White Australia. Further, some of us sunk our individual interests. I myself voted against my own interests in supporting this duty on sugar, with the Excise and bounty; but we did it willingly to achieve a great national object. So far as legislation to bring about a White Australia is concerned, we have done all that we can do, and no one is proposing anything further to confirm or extend the policy. When we passed the original legislation, we did so with the idea in the minds of most of us that it would come” up for review again in a few years, as, indeed, it did in 1905. When the Bill was then before us it was contended, not by Free Traders or Protectionists, but by a combination of both, with extreme Labour men, acting in the interests of the consumers and taxpayers, that there ought to be some tapering off policy with regard to the duties, Excise, and bounty. That was a policy that I enunciated at an early stage of the legislation. I contended that whatever we did, if we guaranteed a bounty of £”3 or £4, and an Excise duty of a somewhat similar amount, we should not fix it for all time or leave the matter open, but should let those interested in the industry know that there would be a tapering off side by side with a constant diminution of the Customs revenue. I admitted even then, as a Free Trader, that some measure of Protection was absolutely necessary to support a tropical industry like this under white labour conditions in Australia ; but I contend that a duty of £6 is not, and never was required. If we, for other purposes of the legislation, had to impose an Excise duty in order to pay the bounty, or rebate as it was called in the first instance, there was a logical conclusion in our minds that the legislation should be based in a tapering-off policy, by which we should reduce the Customs duties and the Excise and bounty until they were cleared away altogether In 1905, when the measure came on for reconsideration, Mr. McCay, who then represented Corinella, proposed, as the basis of the Bill we are now asked to repeal, that the duties should diminish in a certain number of years to two-thirds, and subsequently to one-third, finally passing out of existence. That proposal was supported by members of all three parties - Free Traders, Protectionists, and Labourites. It was brought forward by a Protectionist, supported by me, a Free Trader, and supported also by two members of the present Administration. The present Minister of External Affairs proposed the mb- tion, in the absence of Mr. McCay, and the honorable member for Kalgoorlie, now an honorary Minister, seconded it. To show that the present Minister of Trade and Customs was not so very much opposed to this way of looking at the question, he held the view that it was possible to make the Excise greater and greater, until it got up to the point of the Customs duty, showing that he did not, at that time, consider that the industry was entitled for all time to the high protection then proposed. What should be the attitude of the Labour party on the financial and fiscal operations of this measure? I take it that the members of the party have full freedom to deal with all questions affecting their fiscal beliefs, but no Labour, man is free, and I am not free, to act unjustly to the taxpayers of this country. No Labour member is free to heap the burdens of a measure of high policy upon the shoulders of the labouring class. Yet that is what we are doing with the taxation at present before us. In this measure we are recognising that it takes ,£300,000 or .£400,000 a year to support the policy of a White Australia, and we place that measure of taxation mainly on the shoulders of the poor. We go further than that. We not only get that amount paid in the form of. revenue, but we put another burden of .£600,000 or £700,000 on to the shoulders of the poor, by reason of the fact that we have enhanced the price of sugar, without getting any equivalent into the Treasury of the State. I shall endeavour to explain that that must operate as a fixed law.
– Would the poor be any better off if they could get black labour sugar from Java?
– They would be better off if they got sugar die price of which was regulated by a lower Customs duty than we now impose. All the measures that we took for securing a White Australia were in the direction of ceasing to receive coloured aliens for labour in our tropical industries, and deporting those we had already brought in for that purpose. We stopped the arrival of coloured aliens, and deported all we could legally deport. No member of the House, and no political organization outside, has ever proposed to go further. We all looked upon this policy as absolutely finished when we had done those two things ; yet, what are we doing ? Some sort of ethical conviction should be at the base of the politics of any party, but we now say to the coloured aliens who are in our midst, and cannot be legally deported, some of them having been here for a long time, and married, and settled down - “ We decree, by our fiscal legislation, and by no other law, that you shall not work in the sugar cane fields of Australia.” For what good. purpose is that done? Let us look dispassionately at the question. The honorable member for Herbert said, to-day, that if he had his way, and could roll all the coloured aliens into one, he would gladly get them collectively by the scruff of the neck and pitch them into the Pacific. I hope, for the honorable member’s own sake, that he meant he would put them 011 to an island in the Pacific.
– I meant it figuratively, of course.
– That is not an attitude that could possibly be adopted by this House, or any body of humane persons. We have never considered, much’ less passed, any legislation for getting rid of those men, and in the name of humanity, we have no right to forbid them to labour in that particular line of work to which they are most used, and to do which many of them were brought here. If we had that right, and if it were not as inhuman and disgraceful as it is to stop these men labouring in the sugar-fields, on what grounds of reason or common-sense could we defend it ? What good is effected in the interests of the white labourers themselves? We are not here to legislate in the interests of any particular body of workers, such as the labourers in the canefields, as opposed to the labourers in the maize-fields or the mines or the workshops. We are here to look after the interests of labour generally all over the Commonwealth. If these men are forbidden, or prevented by our fiscal legislation, which is th* same thing, from labouring in the sugar industry, they must work elsewhere, or thieve, if they are going to live. If we force them away from one class of work they must seek it in other directions, and to the extent to which they succeed in getting it elsewhere, they must interfere with’ other white labourers. On grounds of reason and common-sense those who advocate this policy would be beaten at every point of the argument, and driven back to the inhuman conclusion that these people who are allowed to be amongst us, shall not be allowed to work to earn their living. That is a sad commentary upon the Labour party’s attitude with regard, not only to ethics, but also to common-sense and reason in these matters. If it is requisite to protect the white labourer against the possible competition of the black in the sugar 01 any other industry, take some steps to do it, but do not take the inhuman, unreasonable attitude of saying that men who are allowed to stay here by our own act shall be prevented from earning their living. The position in which we put diem to-day is a sort of theological hell, an eternal punishment, without cause or reason, and without effecting any good purpose. There must come a time when the conscience of our young nation will awaken to the fact that we cannot afford to be guilty of an action of that sort in the interests of any body of people - least of all ii: the interests of the workers of Australia. You must have absolute justice at the bottom of everything you do, and humanity under that; but this course is neither just nor humane.
– What does the honorable member suggest?
– I shall endeavour to show the honorable member what I suggest, but neither he nor I would undertake to pronounce straight off how the problem is to be dealt with. All I can do now is to suggest certain avenues of thought and directions for looking for information. Anything is better than the policy of drift which the Ministry are inviting us to follow. I have heard it said here many a time that Protection does not raise the price of commodities, that it may in the first instance cause a rise in price, but that as soon as the industry becomes established competition for possession of the home market will so regulate prices that they will come down even a little below the old level. The Minister of Trade and Customs, however, admits to-day that this policy had been a conspicuous failure in regard to the sugar industry. Our object in dealing with the matter was to benefit the people, but if we cannot create competition by our legislation we have no right to retain a fiscal regulation, which, by the admissions of honorable members opposite, simply plays into the hands of a gigantic monopoly. Ministers who are putting forward this legislation cannot show us that it is in the interests of anybody but the capitalists - the Colonial Sugar Rening Company and the sugar millers.
– The Colonial Sugar Refining Company do not want this legislation.
– The Colonial Sugar Refining Company have never wanted anything. Years ago, at this table, I pointed to the fact that every time this question came up, the company used to state, through its officials and at its public meetings, that Federation meant the ruin of the sugar industry. Yet I have shown that at each important epoch which brought Federation nearer, up went the price of the Colonial Sugar Refining Company’s shares, and that they still rose after Federation was accomplished, showing that Federation certainly did not ruin the industry.
– But Protection will keep the money in the country, and enable us to deal with any monopoly, which we could not do before.
– I have heard of that argument, and of Adam and Noah and other ancient people. I differ from the honorable member, for I do not want the money in the country. So long as we have happiness and comfort and wealth in the country, the money can go where it likes. The honorable member is not awake if he thinks a country is to be made prosperous by keeping the money in it. We must have something more than money in it. At a time when Spain had more money pei head of the people in its coffers than had any other nation, it was the poorest country on the face of God’s earth. It is only in the diffusion of wealth and comfort throughout a people that you will find prosperity. But there is another aspect of the question. The world’s price of sugar has gone up during the period that our legislation has been in operation.
– It has gone up in Australia because of the monopoly.
– The price of sugar in Australia has also gone up all the time. ‘ The honorable member for Hume says it is on account of the monopoly here, but I say it is on account of no such thing. If we had had three refineries in Australia during all that time the price of sugar would have been precisely the same. But what honorable members opposite are wanting to bring about would have happened - the growers would have received a better price for their raw material. The price of sugar would have been the same as now, because it is inexorably fixed by the price in the world’s markets, plus the duty which this Parliament, in its wisdom, imposed on its importation.
– A good Free Trade argument.
– I do not care whether it is a Free Trade or a Protectionist argument ; I want the House to consider the facts. I have taken from last week’s Argus or Age-
– From the Argus, of course.
– What would it matter? The commercial intelligence of both journals is pretty much the same, and the quotations which they publish, and which I am about to give, are furnished by the Colonial Sugar Refining Company. They are from last Saturday’s Age, when sugar was selling at the following prices : -
Tablets,£27 2s. 6d. per ton.
Icing,£28 12s. 6d.
Caster, £26 12s. 6d.
IB,£24 2s. 6d.
IX, £232s. 6d.
IA,£23 2s. 6d.
No. 1 (ordinary),£22 17s. 6d.
No. 2, £22 7s. 6d.
For the purpose of comparison I will take the “ IX “ sugar, which is the quality commonly in use in the homes of the people, and is largely used by manufacturers. Its price last Saturday was £23 2s. 6d. a ton. But to enable a comparison to be made with London prices certain discounts have to be made, because foreign sugar is sold “ net f.o.b.” London or Hamburg. Deducting these discounts, the price of Australian IX sugar last Saturday was £21 19s. 4½d. per ton net.
– Who gets the discounts?
– Manufacturers and wholesale grocers dealing with sugar. The market price of sugar to them last Saturday was £21 19s. 4½d., or, in round figures, £22 a ton. On the same day the London market quotation for German raw beet sugar, 88 degrees, was 14s.11d. per cwt. The German beet there referred to is a thick liquid, which is exported to England to be refined there, and at 100 per cent. would be worth, roughly, about 17s. a cwt. The German sugar most nearly approaching in quality our IX sugar is known as the “ first marks granulated,” and was quoted at 17s. 6d. a cwt. Sugars vary so much that in a cargo of 100 tons there might be fifty different samples. But at present quotations the value of the foreign sugar most closely approaching in quality our IX is 17s. 6d. a cwt., or £17 10s. a ton. There is now an actual difference of £5 2s. 6d. a ton between the net price of the Australian and that of the foreign sugar. It is notorious that sugar is dearer to-day in the world’s market than it has been for some time past. The reasons for that I need not inquire now. It is enough to know that it has not been sohigh since the operation of the duties imposed to meet the war tax. I operated in sugar for ten years previous to nine months ago, and I have noticed that the Australian price is invariably from £6 to £6 10s. per ton higher than the world’s price. If that difference is not caused by our import duty, I should like to know to what it is due.
– To the existenceof a monopoly.
– If there were three sugar-refining companies in Australia they would not sell their sugar for a lower price than that at which foreign sugar could be imported from abroad.
– Can the honorable member tell us why the Colonial Sugar Refining Company the other day increased the price of sugar by £2 per ton ?
– I have shown that the world’s price for sugar is higher now than it has been for some time previously; the Colonial Sugar Refining Company increased its price in conformity with the increase outside. It is the price of sugar in the world’s markets that regulates what we have to pay for it here. If there were three refineries in Australia, the price of sugar would still be what it is, because it would still be governed by the world’s prices, and would be dearer in Australia by the amount of the duty. The price of Australian sugar is always kept about £6 higher than that of the world’s sugar.
– The difference isgenerally about £5.
– I have shown that at present it is £5 2s. 6d., but my personal experience is that the difference has been more often £6 than a smaller sum.
– Has the cane-grower received more for his cane as the result of the increase in the price of sugar?
– I shall not conclude my speech within a reasonable time if I answer all the questions that are addressed to me. My object is to inform my honorable friends of the Labour party of the facts of the case. The working people of Australia are being unduly and inequitably taxed to support the sugar industry. The only thing that would reduce the price of sugar to the consumers of Australia would be the reduction of the import duty. Nothing else would effect that end. I admit that if there were competition in the refining business the growers might get a better price for their cane, but I do not .admit that the consumers would get cheaper sugar ; because the price of sugar is regulated abroad.
– The Colonial Sugar Refining Company has increased the price of its sugar by £2 a ton, although the cost of production has not increased.
– If the honorable member buys an article for ,£10 he does not sell it for £11 when he can get £.15 for it. Similarly the Colonial Sugar Refining Company charges for its sugar what it can get, and it can always. get, in Australia, the world’s price, plus our import duty of j£6 per ton.
– The profits might be more equitably divided with the consumers and the growers.
– I am greatly in favour of the division of profits, hut how can it be brought about in this case? I wish to draw the attention of honorable members to the statistics relating to the use of sugar in the Commonwealth for the years 1902-3 to 1909-10, and the estimate for the present year, 1910-11. The quantity of sugar on which import duty was paid in those years, less drawbacks and refund on quantities exported, was 377,142 tons, while the Australian grown sugar amounted to 1,382,112 tons, making the local consumption 1,759,254 tons, exclusive of the sugar used in manufactures exported to other countries. If I am right in assuming - and no one has shown me that I am wrong - that Australian consumers Pav Per ton more for their sugar thai they would have had to pay if there were no duty, the extra cost of sugar to them during the period with which I am dealing has been £10,555,524. During the same period the Treasury has received in Customs revenue ,£2,470,840, and in Excise revenue £;4>837.-9io, or, in all, ;£7,3°8»75°We have to deduct from the Customs and Excise collections the cost of the deportation of kanakas, which was .£13,903, the bounty and its expenses ,£2,831,915, and 3 per cent.j which is the cost of collection
– That is about 2.12 per cent.
– For the purposes of my comparison, I do not think I shall be far out in taking it at 3 per cent., or £219,262, making the total deductions ,£3,065,080, and bringing the net receipts of the Treasury to ,£4,243,670. Deducting the Treasury receipts from the extra sum paid by the public, we have left £6,311,854. The people must pay taxes of some kind, and the net amount which has been received by the Treasury must be deducted from the extra cost which I have mentioned to show the net extra cost to the taxpayers, which is ,£6,311,854, or about ,£800,000 a year. That is what it costs to uphold the White Australia policy, and it is not a halfpenny too much; but the wrong persons are paying. Why should the cost of the White Australia policy be tome mainly by the poor? Should not the rich pay more towards it than they do, and the tax be made proportionate to means to pay? Why select an article like sugar to pay for this necessary national policy? To check the figures which I have given, let us now deal only with the estimates of the Treasurer for the present year. It is estimated that receipts from Customs duties for 19 10- n will be £^286,628, and from Excise duties £676,558, a total of ,£963,186. From that must be deducted for bounty £573,102, for expenses in connexion with the payment of the bounty ,£6,031, and for the collection of the excise and import duties ,£28,905, a total of ,£608,038. This leaves the net gain to the Treasury from this heavy taxation of the people of £355,148. The extra price paid by the consumers for the sugar consumed in the current year may be estimated at £1,269,288, being £6 a ton on 211,548 tons. I admit that sugar should bear some taxation, but not the excessively heavy burden that we have imposed upon it. It is true, as the honorable member for Herbert said this morning, that it has been, and still is, taxed in most countries ; but the honorable member did not tell us that in only one State was a duty of .£6 per lon imposed prior to Federation. In New South Wales, a sugar manufacturing State, the duty was only ,£3 per ton.
– It had been £6 per ton.
– For four or five years immediately preceding Federation it was only .£3 per ton ; yet the. sugar industry there did not pass out of existence. There is the further curious anomaly that sugar growers in New South Wales, who did not employ black labour to any extent, and who, prior to Federation, had a protective duty of only £3 per ton, under our wise system of legislation received not only the increased protection of a duty of £6 per ton, but a net bounty of £i per ton j although they never required that assistance, and never asked for it.
– Still, land there is going out of sugar cultivation.
– We have to consider . this question in all its bearings. The sugar industry is undoubtedly a magnificent one, and it is essential that we should buttress it up, not only because of its own value and importance, but in order that we may have the tropical north settled and peopled by white races, who will be ready to defend it in the hour of danger. But do not let us work blindly, and without any system. Let us get at the facts. Let us see whether there is not some other way of carrying out our object than that of placing the whole burden on the shoulders of the poor. The latest figures I have given show that, deducting £355,148, the amount that reaches the Treasury, the amount that the people have to pay in excess of the world’s price, is £914,000 per annum. That enormous sum is annually paid more by the poor than by the rich ; more by the young than by the aged ; more by women than by men, in violation of every canon of taxation that has ever been enunciated. A proposition for a polltax, coming from either side of the House, would be regarded as most extraordinary; but, after all, what is this legislation but a poll-tax? Is it not, indeed, worse than a poll-tax ? A poll-tax, if it were imposed foi war purposes, would give the poor the satisfaction of knowing that they were paying no more than the rich. The burden of our White Australia policy, however, is thrown upon the poor, and if they pause to think, they must know that:, although the average burden placed upon them is 6s. each, they are probably actually paying 7 s. ; while the richer classes are paying only 5s. per head. I ask honorable members opposite who, like myself, are supposed to be, and, I hope, are here to protect, mainly, in the first instance, the poor and the struggling, if we should not consider whether it is worth while continuing this legislation, which does so grave an injustice to those least able to bear it. I have been asked how I would approach the solution of the problem. I confess that 1 am not omniscient on the subject of sugar, or anything else. I am further ready to confess that the difficulties which perplex any one who tries to deal with the sugar question are greater than are those which confront one in dealing with almost any other subject of which I know. The difficulties of the money problem with which we were dealing recently seemed great, and I dare say that we were all surprised to find how little we really knew of the question when we were brought face to face with it, and bound to arrive at a determination. But this problem of the sugar industry, although it may seem much simpler, is, to my mind, almost as complex as is the money and paper currency question. The net revenue from sugar to be received by the Treasurer during the current year is estimated at £355,148, and the estimated revenue from the import duty at £286,628. If we reduced the import duty to £3 per ton, abolished the Excise, paid, a bounty of £1 per ton on the sugar contents of the cane, direct to ‘the growers, and made it a condition of the payment of the bounty that fair wages should be paid, and free employment given to everybody, irrespective of colour, race, and origin, we should bring about two important changes. I say that free employment should be given to everybody, irrespective of colour, origin, or race, because, as we have allowed coloured people to remain amongst us, that is the only course that we can fairly take in regard to them, but we must bring them up to our wages standard. By these changes we should tend to satisfy the grower and the labourer. So far as I know, under present conditions, the other party concerned in the industry does not want looking after. The Colonial Sugar Refining Company has been gaining money under our legislation. Honorable members who have been buttressing up that company by legislation have been doing nothing for the labourers, and nothing for the planters. They have been putting everything into the pockets of this already rich and wealthy corporation, and the only way t.o prevent it making more than it ought to make is to reduce the import duty to £3 per ton. Let us abolish the Excise altogether; and if the planters must be assisted, assist them by a direct bounty, making it a condition that fair wages shall be paid. If the import duty were reduced to £3 per ton, it would, of course, make some difference in the amount of Customs duty collected during this year. A certain amount of duty would be collected ; but, if my theory were put into practice, and were successful, it would be so little that it could be treated as a negligible quantity.
– And our people would be exposed to the products of the cheap labour of Fiji.
– A duty of £3 per ton was considered enough in New South Wales when the honorable member was a member of the State Legislature.
– It was the honorable member’s leader, Sir George Reid, who reduced the duty from £6 to £3 per ton.
– The honorable member was then in the State Legislature, and he knows that the reduction of the duty did not wipe out the industry there. It still exists, and receives the Federal bounty.
– Sir George Reid said that if the industry could not maintain itself on a duty of £3 per ton, the sugar-cane lands in New South Wales ought to be devoted to dairy farming.
– That is being done, and the people would do much better by devoting that land to dairy farming. In Northern Queensland the position is different. What I complain of is the want of thought given to our legislation, as shown by the fact that we absolutely made a present of the bounty to sugar-cane growers in New South Wales who were not employing black labour, and who had previously carried on their industry with a duty of only .£3 per ton. The honorable member for Hume says that to admit sugar under a duty of only ,£3 per ton would be to expose our growers to the competition of the black labour of the world.
– Of Fiji and Java.
– Did not the gentlemen who represented the sugar growing districts in this House in the first instance tell us, time after time, that the difference between the cost of white and of black labour was £2 per ton? That statement is to be found again and again in
Hansard. It appears in Dr. Maxwell’s report, and also in reports of meetings of cane-growers and others. I think that the cane-growers say that the difference is £2 4s. per ton; but, roughly speaking, the difference in the cost of growing sugar by white and black labour was taken in the first Parliament to be £2 per ton.
– That is in Australia.
– It does not matter materially where it is.
– It certainly does.
– Then what were the wages paid to black labour on the cane-fields ?
– £fi a year, and their keep.
– If we add that to the total, what difference does it make? The men could not labour for nothing, so that, even if we take “all these considerations into account, they do not, materially alter the main proposition, that it costs £2 per ton more to produce sugar by white labour than it does to produce it by black. Then, again, we have to take into account freights, insurance, and the cost of handling, in connexion with the importation of sugar from Fiji, which constitute a further protection. I admit that, with a duty of ,£3 per ton, we should not have such a measure of protection as would enable a colossal institution like that of the Colonial Sugar Refining Company to be built up ; but we should at least be able to establish the industry on such a basis that manufacturers could make an honest 7 per cent, or 8 per cent, out of it. Manufacturers who entered into an industry carried on upon a large scale, and returning 7 per cent, or 8 per cent., would be in a very satisfactory position. It was generally considered that the original’ system of granting a rebate direct to the growers was the most satisfactory; but it was unconstitutional, and we had to substitute for it the payment of a bounty, which would come within the ambit of the Constitution. With the expiration of the Braddon section, however, we shall be able to pay the bounty direct to the grower of the cane, and so make sure that he receives it, and that at the same time he pays a reasonable wage. Supposing that we paid a’ bounty of ,£i per ton on sugar-
– What for?
– To support the industry. If we did that, abolished the Excise, and lowered the duty to £’3 per ton, we should reduce the cost to the taxpayers. If the legislation which I suggest were successful, we should get no revenue from the import duty, because Australia must shortly produce the 200,000 tons per annum which she requires for her own consumption. Thus a bounty of ,£r. per ton would mean ,£200,000 per annum paid direct to the growers, or a total loss to the State - since it would have to give up its present Customs revenue - of £500,000. That would be the total cost to the State of putting the sugar industry on a sound footing. At present the taxpayers and consumers are charged £1,000,000 a year, but under the system suggested the cost would only be £500,000, and probably the rich would pay more than they do at present.
– Does the honorable member think that sugar would be cheaper under such conditions?
– I am absolutely certain of it. We should not be governed by a monopoly then, and a manufacturer or wholesale merchant could send to Java, China, the Mauritius, or England for sugar at the world’s price, subject to a duty of £3 instead of £6, and the company would be compelled to reduce their price accordingly. This company, gigantic monopoly as it is, is one of the finest mercantile institutions south of the Equator. It has been built up by indomitable pluck, wonderful perseverance, great ingenuity, and by the most careful management that could be exhibited. In the early stages, it was doubtful whether the shareholders would not lose every penny they had invested, and at certain periods they were in dire straits; but they conquered without help, and made fortunes, which, by our legislation, have been doubled. Under all the circumstances, we can certainly extend our respect to the institution; but we have now to consider whether it is wise for us to continue legislation which pours gold into their coffers, or whether we shall adopt some other system, resulting in less profit to the company, but relieving the poor and the taxpayers of this country from the very heavy burden they have now to bear. We can relieve the poor only by reducing the Customs duties, the grower only by a bounty, and the labourer only by insisting that he shall have fair wages and conditions. If these latter conditions be attained, the meanest amongst us can afford to be just and humane to the few thousands of coloured aliens we have here by giving them a fair field in which to earn their living where they can best find it.
Debate (on motion by Mr. Higgs) adjourned.
Mr. SPEAKER reported the receipt of a message from His Excellency the GovernorGeneral, recommending an appropriation for the purposes of the amendment which the Senate had requested the House of Representatives to make to clause 5 of the Surplus Revenue Bill.
That the foregoing message be considered1 forthwith in Committee of the whole House.
In Committee (Consideration of GovernorGeneral’s message) :
– I move -
That it is expedient that an appropriation of revenue and moneys be made for the purposes, of the amendment which the Senate has requested the House of Representatives to make to clause 5 of a Bill for an Act relating to the Financial Relations between the Commonwealth and the several States.
The object is simply to cover a small amendment suggested by the Senate, with which the Government, and, I think, the Opposition, agree.
.- It is clear that a mistake has been made in the drafting.
– This is the first I have heard of it.
– The fact struck me on comparing the Bill with the Bill of last year. We ought to have provided for twenty-five years, and not ten years.
– I noticed that.
– Under the Bill of last year, the provision was subject to the alteration of the Constitution. We provided for a payment to Western Australia of £250,000, declining by £10,000 a year for twentyfive years. ‘ Under the Surplus Revenue Bill we provide for £250,000, declining by the sum of £10,000 each year for only ten years, and, in order to get over the difficulty, the Government suggest that the arrangement shall be permanent until altered by Parliament. Even as a matter of mathematics, the clause is incorrect; and at the end of the twenty-five years we should have to commence again. The clause ought to be altered and made consistent with the intention.
– The matter will be all right so far as this Bill goes.
– I do not think so, or it will be right in a wrong way. What we intend is that the payment shall become extinct in twenty-five years, and why not say so, instead of permitting an incongruous expression?
– It cannot go wrong.
– If the Government like tu take the responsibility for the mathematical puzzle I do not desire to press the point.
.-I understand that to adopt the suggestion of the honorable member for Angas would involve difficulties which the Prime Minister desires to avoid. The honorable member, however, has shown that the alteration of a word would fulfil the whole undertaking in regard to Western Australia, free the clause from ambiguity, giving us good draftsmanship and a sound policy. On the other hand, we are offered a phrase which, in its ordinary interpretation, does not convey what we mean, and may call for further legislation at a later date. If the Senate is still sitting the suggestion of the honorable member for Angas could be carried out at once.
– I understand that the Leader of the Opposition desires that the same terms used in clause 4 should be used in clause 5. The same provision will go on in regard to Western Australia as if it were incorporated in the Bill.
– Only for ten years, when it will come to a stop.
– The reduction by £10,000 will go on.
– It is clumsy grammar.
– At any rate, my legal advisers are satisfied on the point, and I would rather honorable members allowed the motion to pass.
.- I should like to have placed on record a simple statement of what we all mean. Let me suggest that the Prime Minister should tell us that the intention of the clause is to give effect to the payment of £250,000 for twenty-five years, reduced each year by the sum of £10,000, and that this drafting is intended to accomplish that purpose.
– We cannot, of course, say what future Parliaments may do, but we desire to place Western Australia on the same basis as the other States.Unless Parliament sees fit to intervene, the intention is that the £250,000 is to be reduced by £10,000 each year for twenty-five years.
Question resolved in the affirmative.
Resolution reported and adopted.
– I ask the House to consent to the Senate’s requested amendment being considered forthwith.
– The Standing Orders expressly provide that certain notice shall be given before a resolution of the House is rescinded, but the Prime Minis ter now asks that the mere sanction of the House shall be sufficient. It is a bad practice, and I hope it will not be taken as a precedent. I have been requested to put the question to the House, and I can only do so ; but it is a method of doing business which should not be too frequently indulged in. Is it the pleasure of the House that the requested amendment of the Senate shall be dealt with forthwith?
Honorable Members. - Hear, hear !
In Committee (Consideration of Senate’s message) :
Clause 5 -
The Commonwealth shall, during the period of ten years beginning on the first day of July, One thousand nine hundred and ten, pay to the State of Western Australia, by monthly instalments, an annual sum . . .
Senate’s Request. - After “ ten,” line 3, insert “ and thereafter, until Parliament otherwise provides.”
Motion (by Mr. Fisher) agreed to -
That the requested amendment be made.
Resolution reported ; report adopted.
Motion (by Mr. Fisher) agreed to -
That the Bill be now recommitted to a Committee of the whole House for the reconsideration of clauses 4, 8, 13,18, and 30.
In Committee (Recommittal) :
Clause 4 (No State Notes to be circulated after a proclaimed date).
.- I move-
That the following new sub-clause be inserted : - “ (3.) Proceedings for an offence against this section shall only be instituted by the Attorney-General or by a person acting under his authority.”
That is a safeguard, so that a State bank shall not be attacked by any secondary person. Action must be taken by the AttorneyGeneral.
Amendment agreed to.
Clause 8 (Disposal of Proceeds of Notes ; Powers of Investment).
.- I move-
That the clause beleft out and the following inserted in lieu thereof : - “(1.) The moneys derived from the issue of Australian Notes and any interest thereon shall be placed to the credit of an account called the Australian Notes Account which shall be a Trust Account within the meaning of the Audit Acts 1901-1906. (2.) Part of the moneys standing to the credit of the Australian Notes Account shall be held by the Treasurer in gold coin for the purposes of the reserve provided for in section nine of this Act, and the Treasurer may invest the remainder or any part thereof -
on deposit in any bank, or
in securities of the United Kingdom, or of the Commonwealth, or of a State. (3.) The Treasurer may sell or dispose of any securities in which any moneys to the credit of the Australian Notes Account are invested. (4.) The moneys standing to the credit of the Australian Notes Account may be expended -
in the redemption of Australian Notes, and
in the payment of the expenses of the administration of this Act.”
This is a re-draft, to bring the clause into conformity with the express wish of the whole House. It now puts what is intended clearly, concisely, and definitely. The only material alteration is that we have brought in the stock of the United Kingdom. I do not think there is likely to be any objection to that.
– What is the reason for it?
– Because it may be possible to buy British Consols at an advantage. I do not see why we should be debarred. The honorable member shakes his head, but, looked at from an Imperial stand-point, no one can take exception to it.
.- It seems to me that this alteration defeats one of the main objects of the Bill - that of providing money to carry on the affairs of the Commonwealth.
– Paragraph b says the money may be invested in securities of the United Kingdom “or of the Commonwealth or of a State.”
– But there are no Commonwealth securities to be dealt with, and so the money must be invested in the United Kingdom or State stock. What Commonwealth securities are there?
– Any money that may be raised by loan.
.- Apparently sub-clause 5 of clause 8 has not been re-enacted. It was most important. Is there any reason for leaving it out?
– Sub-clause 5 is re-enacted in a much better form. I am glad the honorable member has raised the point, because it enables me to point out that a Trust Fund is to be created, so that the matter will no longer be in doubt.
.- The Treasurer seems to be carrying out the suggestions that we made the other night, which shows the beneficial effect of the in terplay of a little criticism. But for that, I am afraid the States would have had the benefit of the proceeds of the note issue to a greater extent than they, perhaps, expected. I understand from the Treasurer that the money is to go into a Trust Account. That prevents a lapse, or an unexpended balance going as surplus revenue to the States. So far, so good. Under the first part of the clause provision is made for the investment of the money until expended, and sub-clause 4 gives the Treasurer power to expend it only in the redemption of notes and the payment of the expenses of the administration of the Act. The clause gives two powers, one to invest and the other to expend, and under the operation of the Surplus Revenue Act the Treasurer cannot expend the money on anything else.
– That is what I wanted to convey.
– I heartily congratulate the Treasurer on accepting the suggestions of the Opposition, particularly that of the honorable member for Angas, to place this money in trust. Apart from the reason that it would rescue the money from a possible claim on the part of the States, it was the right thing to do to constitute a Trust Fund of some sort, so that we could have some feeling that the money would be respected, and applied to the purposes intended. I wish the Treasurer had been able to go further, and agree to have the fund removed as far as possible from the action of future Parliaments. We have demonstrated that the Opposition has a useful function to perform.
– There were plenty on this side who urged the same amendments.
– I wish that a number of them had combined with us to press the Government to concede that point also. The Treasurer undertook to consider it, but, apparently, he has decided that it is not worth adopting. I cannot see what objection there is to it. It would have prevented the fund being made use of to meet mere temporary emergencies. The Treasurer, in his official position, has authority over the fund by his power to sell debentures or Treasury bonds, in which the moneys could be invested. If we had removed the fund as far as we could from the control of Parliament, we should have put some sort of sacredaegis over it, and have protected it from being touched except after the most careful consideration by Parliament.
– I am tightening the provision more than anybody has ever proposed.
– As the clause stands now, it is open to the Treasurer to apply the money in any direction that Parliament decides, simply by placing it on the Estimates.
– At any rate, i t is a more simple process to apply the fund to any purpose that Parliament may have in view for the time being, than it would have been had we removed it from the immediate control of Parliament.
– The matter must come to Parliament.
– It would have been a good thing if both sides of the House had agreed to put the money as far as possible outside their own control, al though they could not do so altogether. It would have indicated the view of this Parliament that the money should be used only for great national purposes, and not for merely temporary requirements, which could be met out of revenue.
Amendment agreed to.
Clause13 (Bank to keep Record and furnish Return of Bank Notes in Circulation).
– I move -
That the following new sub-clause be inserted : - “ (2.) This section shall not come into force until the day on which the Bank Notes Tax Act 1910 commences.”
As the honorable member for Richmond pointed out, until the banks have a sufficient number of notes to go on with, they ought not to be called upon to undertake the difficult task of recording the issue and re-issue of the Australian notes.
Amendment agreed to.
Clause 18 verbally amended.
Clause 30 negatived.
Bill reported with further amendments.
– I draw the attention of the Treasurer to the use of the words “trust account.” I think that the expression in the Audit Act is “ trust fund.”
– A trust account is an account kept under a trust fund, and is liable to all the conditions imposed by the Trust Fund Act.
.- As we are approaching the last stage of the consideration of this measure, I again ask the Prime Minister to consider the propriety of increasing the gold reserve. On the second reading I urged that, at any rate until the reputation of the note issue had been firmly established, the reserve should be kept at half the value of the issue. As that was rejected I now ask that it be made at least one-third the value of the issue. A reserve of one-fourth is about the lowest for which there is precedent.
– At any rate, to increase the reserve will impose no disabilities on the Government. The issue of £7,000,000 worth of notes will give the Prime Minister the command of more money than he can need.
– No. The Government would have to get a Bill passed before it could touch any of the money received for the notes.
– The honorable gentleman is in the happy position at present of being able to get support, from his own side at least, for any measure that hemay present. To increase the reserve to a third from a fourth would make little difference to the Government, but it would substantially increase the confidence of the public and the value of the measure. I move the omission of the word “ fourth “ in clause 9, with a view to the insertion of the word “ third.”
– It would be better for the honorable member to move first the recommittal of the Bill.
– I do not object to that.
Motion (by Mr. Deakin) agreed to -
That the Bill be again recommitted to a Committee of the whole House for the reconsideration of clause 9, paragraph a.
In Committee (Second recommittal) :
Clause 9 -
The Treasurer shall hold in gold coin a reserve as follows : -
Amendment (by Mr. Deakin) proposed -
That the word “ fourth “ beleft out, with a view to insert in lieu thereof the word “ third.”
– - I make no complaint about the action of the Leader of the Opposition in this matter, but he will find no authorities worthy of the name who say that a reserve of a third, or anything like it, is needed for a note issue of this kind. The nian who has had more experience than any other living person in Australia in connexion with a Government note issue, the general manager of the Queensland National Bank, which has dealt with over £3,000,000 worth of Queensland State notes during the last seventeen years, without ever presenting a note to the Treasury for payment, says that that issue, with its reserve of 25 per cent, is the strongest paper currency in the world. He has not hesitated to make that statement publicly. I amended this clause, and strengthened it, when the Bill was last in Committee. To say that the reserve should not be less than one-fourth practically means that the Treasury would have to hold one-half of the gold received for the notes. I want honorable members to keep in mind the meaning of the words “ not less than.” They mean, for instance, that if there were £6,000,000 of Australian notes in circulation, and the Treasurer had in his possession only £1,500,000 in gold, he could not legally cash the first £1 note presented over the counter. Honorable members will recognise, therefore, the enormous gold reserve for which provision is made when we say that it shall be not less than one-fourth of the note issue. The Treasurer must keep a margin above one-fourth to meet any emergency, so that he could not cash a £5 note if he had in his possession a gold reserve only £4 in excess of the minimum of 25 per cent. I mention these illustrations to show the honorable member for Ballarat that, by having behind this note issue the larger gold reserve that he suggests, we should really defeat the purpose that we have in view. I remind him, too, that we have laid down the principle that no Government shall gain a single penny towards its annual income or expenditure from this system. He would, therefore, defeat the object that we have in view, namely, that of making legitimate use of the balance of the gold reserve which can be properly invested. Legitimately invested, it will yield a return that will go to a sinking fund that will, I hope, be not only used in years to come for the protection of this currency, but will prove such a -financial backing, that it will be unneces sary to have unsigned Australian bills held over as a double currency, With great respect, therefore, to the honorable member’s opinion, I cannot accept his motion.
– - We are very glad of what the Prime Minister has already done in tightening up this issue, but I would point out to him that his closing remarks related to something foreign altogether to the purposes of this Bill. I hope that he will not shut his mind altogether to this proposal, notwithstanding the optimistic report of the manager of the Queensland National Bank. There are other bankers in Australia who take another view.
– The banks have never had anything against these notes.
– There are in other parts of the world Treasuries which have gold against their notes. In Canada, for instance, they have from 66 per cent, to 70 per cent, of gold coin and bullion as against their Dominion notes, and they have in addition 60 per cent, of guaranteed securities. Mr. A. B. Stewart, a Sydney bank manager, in a very excellent paper on the question of currency, some time ago made that statement. I do not wish to say more at this stage, but I think that the Prime Minister would strengthen his Bill immensely if he agreed to the substitution of the words “ one- third “ for the words “ one- fourth. “ I should like to explain that we make this proposal to-day because we had no opportunity to submit it when the measure was last before us. We had intended to put it before the Committee, but the amendment moved by the honorable member for Lang providing for a reserve of 50 per cent, was put in such a form and so worded that we could not do so. I strongly urge the Treasurer to consider these further points, and to tighten up the issue in the way we propose.
– I regret that the Treasurer has not seen fit to accept the very reasonable proposal made by the Leader of the Opposition. His own figures as published in Hansard show that this paper currency will be backed up by a gold reserve lower than that of any country of importance. The honorable gentleman has referred this afternoon to a gentleman from Queensland, who, no doubt, is a very eminent authority, but if I remember rightly, the joint letter for.warded to the Treasurer from the leading bankers of Australia laid special emphasis on the fact that the proposed gold reserve was far too low. The Treasurer’s own figures show that it is altogether inadequate in the light of what is done by older and more experienced countries. The honorable gentleman quoted figures showing that the percentages of reserves in other countries were as follows : - Bank of England, 108 per cent. ; Scotland, 76 per cent. ; Ireland, 47 per cent. ; France, 82 per cent. ; Germany, 87 per cent.
– As against what ?
-As against the notes issued. Russia has a reserve of 136 per cent., Austria 80 per cent., and Switzerland 50 per cent. Switzerland has a Government note issue, and although it may be said that the law of Austria - where there is a purely Government issue - provides for a gold reserve of 40 per cent., the experience of that nation is that there is usually a reserve of 80 per cent.
– The honorable member is including deposits on call.
– No. Austria has a purely Government issue, and the Austrian Bank has the exclusive right to issue Government notes, I scarcely think that Australia is in a position to set up a standard of her own against the teachings of every nation in the world. I have always been sympathetic towards the Government controlling the national currency, but we cannot ignore those plain fundamental principles which mark the only path of safety. I am sorry that the Treasurer cannot accept the amendment.
.-! desire to make only one quotation to show how reliable the statements of the honorable member for Parramatta are. It is ridiculous for that honorable member to say that Canada has a gold reserve of 60 per cent, for notes, as is made plain from the following quotation from the Dominion Banking Act - . . the Minister of Finance and ReceiverGeneral shall always hold, for securing the redemption of such notes issued and outstanding, an amount in gold or Canada securities, guaranteed by the Government of the United Kingdom, equal to not less than 25 per cent, of such notes, at least 15 per cent, of the total amount of such notes being held in gold; and provided, also, that the said Minister shall always hold for the redemption of such notes an amount equal to the remaining 75 per cent, of the total amount thereof in Dominion Debentures issued by authority of Parliament.
– The honorable member for Mel bourne is fond of using the word “ ridiculous,” but if anything is ridiculous it is the language he has just used. His figures show nothing, except that in Canada the banks are compelled by law to hold an irreducible minimum, whereas I quoted the actual coin held against the note issue.
.- I admit that the provision mentioned by the Treasurer materially strengthens the position ; and, further, that, after a few years, we might be safe with a gold reserve of 25 per cent. For a few years, however, we do not know what may happen j and it would be just as well to accept the suggestion of the Leader of the Opposition. With the fund that is being built up, provided that Parliament does not touch it in any way - and as to that we have no guarantee - we may, as I say, in a few years find a gold reserve of 25 per cent, sufficient.
– There will be the same guarantee of the honesty of representatives that there is now.
– I am not casting any aspersion on the honesty of representatives ; but emergencies may arise and induce Parliament to do what it would not do if the opportunity were not there. I would sooner see- the whole matter free from the atmosphere of politics.
.- I do not propose to further argue this question. If honorable members will be good enough to refer to the argument I endeavoured to follow on the second reading, they will understand why I am now advocating a gold reserve of one-third, since a reserve of one-half is not obtainable. I have not altered the opinion that a much’ smaller reserve would do, and more than do, in ordinary periods; but the panic test which has ruined every paper currency that has been ruined, and there have been many, should be provided against. We can afford to put aside such a reserve, and thus place our issue beyond, all suspicion or doubt, and create an impression which will stand us in good stead, not only in this country, but outside. This reserve would really cost us nothing, and call for no sacrifice worth mentioning. We can well afford it, and it would be to the permanent gain of .the reputation of Aus.tralia. As to the Queensland currency, it has never had to stand the panic test, or any test, since the notes were issued.
– I desire to express my appreciation of the manner in which this question has been dealt with. The responsibility, of course, rests with the Government.
– But we have a responsibility.
– I quite admit that. I feel my responsibility, and I venture to repeat what I said on the second reading: that this is a measure which errs on the side of caution, rather than on the side’ of recklessness.
– In ordinary times, yes.
– On no occasion in Queensland has there been a demand in excess of11 per cent.
– But there has never been the slightest suspicion of a panic.
– I know; but I venture to make the forecast that in the most extreme panic in Australia there will never be a demand that will bring the reserve under 25 per cent., or doubtfully near 25 per cent. ; for, obviously, a gold reserve of 25 per cent. means from 25 per cent. to one-third. I admit freely that there is no special providence watching over Australia, and we can look for no special exemption from financial crises, which do, and will, occur. But strong as the Northern State note issue is, with a reserve of 25 per cent., a Commonwealth issue, with the same reserve, will, for obvious reasons, be doubly strong. I am sorry that I cannot accept the amendment, which I regard, of course, as intended to make assurance doubly sure.
Question - That the word proposed to be left out stand part of the clause - put.
The Committee divided -
Ayes … … … 28
Noes … … … 13
Majority … … 15
Bill returned from the Senate with a message intimating that it had agreed to the Bill as amended at its request.
Mr. FISHER laid upon the table the following papers : -
Audit Act. - Treasury regulation96d amended. - Statutory Rules, 1910, No. 72.
Invalid and Old-age Pensions. - Statement in accordance with section 54 of the Invalid and Old-age Pensions Act 1908.
. -I move -
That the House do now adjourn.
The first business on Tuesday will be the Land Tax Assessment Bill.
– I have ascertained that, in connexion with the discussion on the Land Tax Assessment Bill, we may take advantage of the facts and figures supplied by the Government in connexion with the measure which accompanies it.
Question resolved in the affirmative.
House adjourned at 4.20 p.m.
Cite as: Australia, House of Representatives, Debates, 26 August 1910, viewed 22 October 2017, <http://historichansard.net/hofreps/1910/19100826_reps_4_56/>.