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Thursday, 24 October 1912

Senator LYNCH (Western Australia.) . - Before the Bill is given the final sanction of the Senate, I wish to make a few remarks which I had not an opportunity of making on the second reading. I confess that my experience of the sugar industry is not as great as that of some honorable senators who have taken the floor to enlighten their fellow senators. I have striven, since my entry into this Chamber, to make myself acquainted with this very intricate subject in all its bearings; but I confess that, after a lengthy period of study at the feet of such honorable senators as Senators St. Ledger, Sayers, and Chataway, I am only more mystified than ever.

Senator Millen - That may be a reflection upon the honorable senator himself.

Senator LYNCH - I am prepared to give that in. It may be due to my density or the inability of the honorable senators to whom I have referred to convey what is in their minds for the benefit of those who, like myself, are seeking information on the subject. Honorable senators from other States naturally look to representatives from Queensland for some light and leading in this matter. Under the Constitution the Commonwealth is split up into political divisions, with the view that representatives from each may be presumed to have an intimate knowledge of the industrial, social, and other matters affecting the State from which they come. Hitherto I have withheld my opinions, because I desired to listen to the well-seasoned views which one might naturally expect from the representatives of Queensland in this Chamber. But I have turned to them in vain for enlightenment. I have waited for Senator St. Ledger to tell me the true position of the sugar industry from an Australian stand-point. What do I find? The honorable senator has condemned,not merely this Bill, but the Act which preceded it, whilst, at the same time, intimating his intention to support the measure. That being so, to what conclusion am I driven? Senators Sayers and Chataway also have roundly condemned the Bill, though I venture to say that when the time comes for action they will vole in opposition to their vaporings upon it. These gentlemen are self-appointed, I might say self-anointed, exponents of the troubles connected with the sugar industry. If they do not understand its intricacies, how much less can I - coming, as I do, from a neighbouring State which does not grow a stick of sugar-cane - be expected to understand them? When they fail to enlighten me, I am puzzled to know to what teacher I may appeal for instruction on this subject. Like the false prophet, they have built their temples, not upon a rock, but upon the shifting sands of expediency and sophistry, and they have endeavoured to mystify those who desire to get an honest grasp of the position. Senator St. Ledger is supporting a Bill which he has vehemently denounced. He said that Commonwealth legislation would have the effect of tormenting the sugar industry. We know well enough that he is accustomed to the use of classical phrases. In addition to being an instrument of torture, he affirmed that our legislation would prove an element of mischief. He spoke of the " tinkering legislation " to which the industry is being subjected, and he declared that it has been productive of disastrous results. Senator Sayers was equally emphatic in his pronouncement. I do not know whether he has yet obtained his degree, but he always speaks as if he is specially fitted to enlighten us upon the sugar industry. Certainly, he has been a prominent expounder of the conditions which have obtained in the industry in Queensland from the time that the settler first put his axe into the forest until his housewife asked an afternoon visitor if he would take another spoonful of sugar in his tea. He said, in effect, that if we doubt his knowledge of this subject there is nothing left for us but political perdition. I have been living in a state of thraldom all this time, and to-day I wish to declare my independence. For evermore I am seeking after truth in regard to the sugar industry. Long enough have I burned incense before these false gods, and now I propose to strike out on a new path, with a view to ascertaining what is really happening to this enigma amongst the industries of Australia. Senator Sayers has said that the sugar industry is going back. He wishes us to believe that it is vanishing before the blighting influence of Federal legislation. He affirms that there is less land under sugar cultivation to-day than there has been for years. He went on to speak of the Excise upon sugar, and reechoed the oft-repeated fallacy that the growers pay the Excise, which is returned to them by way of bounty. Let us inquire, What was the condition of the sugar industry when nefarious Federal legislation was first enacted in regard to it? I find that the first torment was applied to it in 1902, when there was an evil design on the part of this Parliament to bring about its wanton destruction. For a long time previously the industry had been solely under the control of the Queensland Government. No mischievous legislation had been enacted in regard to it by the Commonwealth Parliament, but it had been free to work out its own salvation under the fostering care of the Queensland Government. Turning to that fell hour when Federal legislation was first enacted in regard to the industry, I find that it was not then in the flourishing condition which the honorable senators whom- I have mentioned would have us believe. According to the statistical publication issued by the Queensland. Government in 1904, the output of the sugar industry in 1902 was 76,000 tons.

Senator St Ledger - That was the year following a very protracted drought.

Senator LYNCH - Five years previously, under the beneficent influence of State control, the output was 163,000 tons.

Senator O'Keefe - Do those figures represent the average tonnage for the five years preceding Federation?

Senator LYNCH - No. T am taking the year 1902 because that was the period when the blighting breath of this Parliament was first blown on the industry. In that year the output was 76,000 tons. Five years previously - in 1898 - it was 163,000 tons. In 1902 the area under cultivation was 85,000 acres, but five years previously it was 111,000 acres. Of course, there were fluctuations in the meantime. But for the five years immediately preceding Federation the tendency of the industry was undoubtedly a downward one. In respect of area alone, the falling-off under legislation which was supposed to be helpful to the industry amounted to one-fourth of the area under cultivation. That is to say, r acre out of every 4 that were under cultivation went out of cultivation during the period in question. What has taken place since? According to the Budget-papers, which are accessible to everybody, the sugar-cane production in Queensland during the year 1903-4 was 820,000 tons; while for the year ended June last it had reached the very decent amount of 1,534,000 tons. In other words, it had almost doubled. The output of an industry is the true test of its progress. Senator Sayers, as an old miner, will recognise that when he assesses the value of a mining proposition it does not matter to him how much quartz has come out of the mine ; he pays attention to the amount of gold obtained.

Senator Sayers - Not always; the tonnage may be small, but the reef may be good, though not payable.

Senator LYNCH - The Budget papers show that during the period of nine years the sugar industry of Queensland has steadily progressed. If the "tormenting" and " mischievous " legislation of the Commonwealth Parliament, as Senator St. Ledger describes it, has had the effect of increasing the productive area under sugar, I fail to understand what he means by mischief and torment.

Senator St Ledger - I said distinctly in my second-reading speech that the legislation had not been all mischievous.

Senator LYNCH - Apparently Senator St. Ledger is now inclined to "draw in his horns, and is rather sorry for what he said. I do not think that I shall be travelling outside my province in addressing myself to this question if I compare what has taken place in other rural industries in Queensland with what has happened with respect to sugar. There are other industries that are totally untouched by Federal legislation, except, of course, in a general way. I turn to the wheat production of the State. In the year 1901 the yield of wheat was 1,692,000 bushels. But since then something has unfortunately happened which, if we follow the reasoning of Senator St. Ledger and Senator Sayers, does not reflect credit upon the legislation under which the wheat industry is conducted. In 19 1 1- 1 2 the wheat production dropped to 285,000 bushels. That is equivalent to a drop of five-sixths of the wheat production in ten years ; or, in other words, where six bushels of wheat were produced ten years ago only one bushel was grown last year. Take hay. In 1901-2 the hay production amounted to 122,000 tons. In 1911-12 it had dropped to 94,000 tons. Those figures mark a steady decline of production. I do not know whether politicians are fed on hay in Queensland. It is an excellent food for donkeys, and I should not be surprised to learn that it was used as fodder for a type of politician that, unfortunately, is to be found there. Take next the production of oats. In 1 901-2, 42,000 bushels were produced, whereas in 1911-12 the production was only 5,000 bushels, a falling off of seven-eighths of the production; in other words, only one bushel was grown last year for eight grown ten years ago.

Senator Sayers - Dairying has taken the place of other forms of production.

Senator LYNCH - I am glad to admit that there has been an appreciable increase in dairying, but at the same time we cannot but regret that in those forms of production that employ so much labour, namely the growth of cereals, there has been such a steady falling off. Take potatoes. In the year 1901-2 the production was 22,000 tons; in 1911-12 it was 13,000 tons. What is the matter with the " spud " industry in Queensland?

Senator St Ledger - Potato production has fallen off all over Australia.

Senator LYNCH - But there was no Irish blight in Queensland. That State was immune from the affliction. Queensland has immense areas of potato producing country, and there is no earthly reason why supplies should have had to be drawn from the potato areas of the southern States. Wine production has also fallen off.

Senator Pearce - We know where the wine goes.

Senator LYNCH - The production in 1901-2 was 148,000 gallons, but it dropped to 74,000 gallons last year. These figures, should provide food for reflection for thosecritics of Federal legislation who have vainly tried to induce this Parliament to believe that we have been ruining the sugar industry. If they look closer into the. facts, they will soon be satisfied as to what has been happening. Whereas other rural industries have shown a marked decline, the industry which has been the object of " mischievous " Federal legislation has advanced. If any proof were wanted that the sugar industry is on a most satisfactory basis, and that the people engaged in it have enjoyed great prosperity, we need only turn to what has taken place in regard to land values. It cannot be denied that the value of land in all countries, and under all circumstances, truly indicates the prosperity or otherwise of the industries conducted upon that land. When we apply this test to Queensland, we find that a remarkable increase in land values has taken place in those parts of the State to which, as some would have us believe, so much mischief has been done by Federal legislation. I shall not quote partisan authorities, but authorities which stand upon an independent plane - who are not blown hither or thither by party bias or passion. We have an excellent authority in the person of Dr. Maxwell. I suppose that Senator Sayers and Senator St. Ledger will acknowledge him to be an impartial authority. He has been in charge of the central sugar industry for quite a long time. He made a report to his Ministers in 1906, and, in the course of it, he shows what has happened to land values in the sugargrowing areas. I wish to put on record what he says, because it is a very satisfactory proof that the sugar industry in Queensland is in a prosperous condition under Federal legislation. Dr. Maxwell gives a table which it will be interesting to quote -


I may remind Senator Sayers that, during the course of his speech on this subject a little while ago, I interjected that land values had appreciably increased in the district of Proserpine. The figures which I have quoted prove my statement. To sum up, we find, according to Dr. Maxwell's assessment of the value of sugar lands in 1906 - at a time, too, when the industry had not fully experienced the advantages of Federal legislation, but the rewards were great- a marked increase in. land values in the sugar areas. The total alienation value was ^54,000, and the security given back to the Government for the repayment of the capital advanced for the erection of central mills was ^528,553. In other words, the land had enhanced in value tenfold from the time it was taken up from the Crown until it was valued as security for the repayment of the cost of the central mills. 0

Senator St Ledger - Tenfold?

Senator LYNCH - Yes.

Senator Sayers - - That is quite true.

Senator LYNCH - I am about to anticipate an objection which I know will be raised in the shape of an inquiry as to what improvements were effected in the meantime. It is all-important to find out what improvements were on the lands when the valuation was made for security.

Senator St Ledger - Without a Government mill it might be worth £1 an acre, but with a Government mill it might be worth £10 an acre.

Senator LYNCH - This is what Dr. Maxwell says on that all-important point -

Between the periods when those lands were first sold and alienated, and -when they were valued at the later time as security for central mill purposes, some improvements had been made upon them. The precise value of the improvements made during that interim it is not now possible to determine, but it is indicated that that value was relatively small, compared with the great addition of improvements that followed the valuation for security, and the consequent cutting up of the large mort-6 gaged properties into farms, and the erection of homesteads by the cane-growing settlers. In individual examples that have come before the notice of the Bureau, an apparent increase of value amounting to from 10 per cent, to 20 pel cent, of the alienation price was added to the lands by the improvements put upon them. These examples are- very few, and they are, therefore, not a fully reliable indication. The value added to those lands as a whole during the interim period may have been less or more than these examples indicate. All that can now be safely said is that some value was added by improvements during the interim period, but that such added value was very small in relation to the sum of the improvements which followed upon the valuations, and upon the decisions to establish central sugar mills upon those lands.

So that Senator St. Ledger's point as to the enhancement of value on the prospect of the sugar mill being erected in a certain place is of no moment, in view of the concluding portion of Dr. Maxwell's statement. He says that when the mills were put there the enhanced value was beyond anything which could be compared with the position originally. After all, his statement counts for nothing on a second consideration. When those lands were valued, there was no immediate prospect of a central mill being erected, and, consequently, whatever value applied it was the value which was regulated by the open market governed by competition, and not by the prospect of a central mill being erected. That contention is given ample effect to by the concluding remarks of Dr. Maxwell. Seeing, then, that the sugar lands in Queensland have enhanced in value 500 per cent., and that, according to Dr. Maxwell, the values of the improvements which took place there may be only 10 or 15 per cent, - he said " more or less " - it is safe to conclude that the increase in. the value of sugar lands in the State from the time they were taken up for sugar-growing until 1906, was at least 400 per cent. I am prepared to allow 100 per cent., instead of 10 or 15 per cent., for the improvements which Dr.' Maxwell claimed might be the case. I am now brought to consider the question which has been the subject of so much debate in this Chamber, and which is really the subject of this Bill, and that is, what value shall be placed on the labour which combines with the land in producing sugar. It is quite clear that, taking into consideration the climate, the value of the labour in the sugar industry of Queensland has been considerably the lowest-paid of any labour in Australia. I have obtained some figures from the Department which show very clearly that the value of labour in the sugar districts is not, and never has been, on a satisfactory basis; but rather has it remained for the Federal Parliament to institute this expedient, in order to put the value of labour on a basis which will bear a fair relationship to the increase in the value of the land in that part of Australia. I have here figures showing that the value of labour in the sugar-growing areas of Queensland, both prior to Federation and even after Federation was established, has been in the neighbourhood of 3s. 9d. per day, including board, and that that rate obtained in the sub-tropical, aye, even in the tropical, portion of Queensland, as far north as Rockhampton. According to these official figures, which I can quote, the rates of pay in the industry have dropped by graduations from 3s. gd. per day, and found, in the tropical part, to 2s. 9d. per clay, and found, round Brisbane. In view of the facts I have stated, I want to ask honorable senators wherein comes the justification for this criticism against a measure which proposes to raise the value of labour ? So far as that point is concerned., it is quite clear that the value of land in Queensland for sugar-growing purposes has enhanced 900 per cent. If we take the value of labour at 22s. 6d. per week, and found, or at 25s., and compare it with the 36s. per week, which is proposed, we find the enhancement is in the neighbourhood of from 40 to 50 per cent. I am, therefore, justified in asking why certain honorable senators have stood up to criticise this legislation, which has for its object the putting of the price of labour on a fair and reasonable basis, in view of the fact that land has been enormously enhanced in value by the application of that labour ? It shows quite clearly that a man who had land to sell in North Queensland was in a very much better position than a man who had labour to sell. It shows that if one had land to sell sometimes in Queens land he would have earned something like 900 per cent, on his money, whereas if he had labour to sell he would have the trifling addition, comparatively speaking, of from 40 to 50 per cent, to the value of that labour. Wherein comes the relationship which should be observed between the value of land and the value of the labour applied to the land ? What are we now endeavouring to do? We are trying to lever up the price of that commodity, which, in the past, has been kept so low, and in doing so we are met with the strenuous opposition of those who have the temerity to oppose this measure. Land in Queensland has gone up in value, clearly proving that the sugar industry is on a prosperous basis, that those engaged in the industry are doing very well, but that labour has not advanced in value. That is the deficiency which the Bill proposes to supply, but it is opposed by Senator Sayers. As I said before, when the Federal Parliament intervened, it found the sugar industry in a very bad condition. It found the industry mostly manned by black labour. It found low wages paid in those districts where white labour was employed. In fact, it found the sugargrowing districts of Queensland the one black spot upon the industrial life of Australia. It has removed that black spot to a great extent, but in the removal of it we find that certain sections engaged in the industry have been scooping more than their fair share, while the labour applied to the lands during this period of prosperity has not enjoyed anything like a proportionate share of the reward. This Bill proposes to secure that to labour. It proposes to put labour on a reasonable basis, and to enable sugar workers to take up a piece of land as soon as possible. If I had to choose between keeping the industry going with the black slaves who were employed on the plantations some rime ago and carrying on the industry with white slaves, I should be very chary indeed about giving a vote for the continuance of the industry on that basis. We are endeavouring to remedy an evil by an expedient. We claim the right to say that before the money of the taxpayers is expended the other section engaged in producing sugar shall be raised at least to a level that will bear reasonable comparison with the people who have been enjoying handsome profits since the_ industry has been put under Federal legislation. So far as the price is concerned, it is quite clear - and the opponents of this measure have never attempted to argue this point - that the sugar industry is enjoying a very fair and ample protection. We find that the consumers throughout Australia are paying right up to the full limit of the protection which the Tariff affords to the growers. I made inquiries a few days ago, and found that the sugar which is commonly used by the consumers in Australia, and is known as i A sugar, is retailed in New Zealand at ;£i6 15s. per ton, and that the latest quotation in Melbourne is about ^22 12s. 6d. per ton, showing that the New Zealand consumer is getting his sugar at £5 17 s. 6d. per ton less than the Australian consumer is paying.

Senator Rae - What is the duty there?

Senator LYNCH - There is no duty on sugar in New Zealand. All sugars are free to enter the New Zealand market. It is quite evident that, on the sugar we consume in Australia, we pay something over and above its value nearly equal to the amount of Protection afforded by the Federal Tariff, namely, £fi per ton. To bring the matter more closely home to honorable senators, let us see what the people of Australia are paying per head or per family for sugar in the protection of the industry. I have figured it out that £6 per ton is equal to §d. per lb. At present the average consumption of sugar per head in Great Britain is 85 lbs. In European countries it is much less. But I think we can fairly set down the average consumption per head in Australia at 100 lbs. This, at 3d. per lb., means that every person in Australia is taxed to the extent of something like 5s. 6d. on his consumption of sugar, and estimating an average family at six persons, it is clear that we are paying a tax of 33s. per family for the purpose of maintaining the sugar industry very largely in the State of Queensland.

Senator Chataway - -The honorable senator, I suppose, is against a duty on timber ?

Senator LYNCH - No, I voted for a duty on timber. But that has nothing to do with the argument. I may inform the honorable senator that I voted for all the duties which the Queensland representatives asked for, bar none. In doing so, I was totally unlike the honorable senator who interjects, because, with other honorable senators from Queensland, he voted for no protective duty except upon what could be produced in that State. I voted for protective duties upon almost every article that is produced outside of Western Australia, and taxed the Western Australian people to the limit in the interests of Protection. Here we have an industry largely carried on in Queensland, and to some extent in New South Wales, and the taxpayers of Australia have agreed to tax themselves to the extent of 33s. per family, as compared with the people of New Zealand, in order to assist it. Is it not quite fair, in the circumstances, that the taxpayers should exact some quid fro quo for the heavy tax they are at present willing to bear in the interests of this rural industry?

Senator Chataway - Let us put a tax on the railway from Port Augusta to Kalgoorlie.

Senator LYNCH - The honorable senator should not mention that, for his own sake. The taxation borne by the people of Australia in connexion with this very necessary item of daily consumption amongst even the humblest ranks of society amounts to no less than ^1,267,000 a year, or to, as I have said, 33s. per family. I have given my vote in favour of this taxation in the 'past, but, as I have said, I have been looking for light. [ have now cast aside the thraldom under which I have laboured in the endeavour to obtain light from Senator Sayers, Senator St. Ledger, and Senator Chataway. I am forced to confess that they represent the most blockhead trinity of teachers I have ever struck in my life. Honorable senators must remember that, side by side with this rural industry, there are many other rural industries carried on in Australia, and they have not come to the Federal Parliament for any special assistance. In the sugar industry we have a rural industry which is carried on on very rich land. The people engaged in it have been enjoying a very prosperous time, and yet they are continually asking for some additional form of Protection, whilst the people of the Commonwealth are paying 33s. per family in supporting them. Dealing with the matter equitably, I ask honorable senators whether it is a fair thing, in view of the fact that the sugar industry is carried on on perhaps the richest soils of Australia - because the sugar-producing districts of Queensland and New South Wales are amongst the richest, if not actually the richest, in the Commonwealth - that those engaged in other rural industries should, in addition to the burden of having to carry on those industries with the many drawbacks and handicaps associated with them, reach out a further helping hand to what, after all, has been the best cadger amongst the rural industries of Australia to-day ? I say that the sugar industry is a cadging industry because it is that. I can point to places in Australia where men are striving to eke out an existence on poor soil, in an arid climate, where there is not sufficient rainfall at times even to bring up the seed they sow. If they have families, they are taxed to the extent of 33s. per family for the purpose of greasing this industry of North Queensland and New South Wales, and greasing the people interested in it who are earning cent, per cent, on their investments, and, at the same time, are unwilling to give the labour employed in the industry a return approaching the enhancement in the value of their lands, or the profit made by the Colonial Sugar Refining Company and sugar-growers of North Queensland. When we consider rural industries of the Commonwealth as a whole, we find that the sugar industry stands out as nothing but a bulky, sturdy cadger, constantly at the door of the Customs Department asking for additional assistance. In the circumstances, I ask honorable senators whether it is not time that we came to the conclusion to review the situation as a whole?

Senator Chataway - Does the honorable senator mean it?

Senator LYNCH - Yes; I do mean it. Fruit-growers have to clear their land as sugar-growers have to do. Wheat-growers are going into semi-arid areas, and sometimes lose even their seed, as I have done in common with many hundreds of others in the West, and yet they are all saddled with this tax of 33s. per family to support an industry that is prospering beyond measure. It is about time that we asked ourselves whether we have an equitable adjustment of Tariff duties. We find the sugar industry specially favoured, whilst those engaged in other rural industries have to fight their way in the world of competition without help of any kind from the Customs House. We are closely approaching a time when we shall have to face the solution of a fresh difficulty. With good seasons next year, or the year after, those engaged in the sugar industry will have produced sufficient sugar to meet the requirements of the people of Australia. The production is now only about 50,000 tons short of the local consumption.

Senator Sayers - It is about 100,000 tons short, according to the Minister of Trade and Customs.

Senator Chataway - Let the honorable senator put up his Aunt Sally, and knock it down again.

Senator LYNCH - I can give honorable senators the figures if they want them, I have chapter and verse for what I say. I have tried to learn from the honorable senators who interject, but I find that I have been deluded by them, and I have started out now to seek knowledge for myself. I was directing attention to the fact that we shall soon be under the necessity of finding a market for the surplus production of sugar in Australia. I hope that time will soon come with good seasons, and I hope it will be accompanied by some indications of sweet reasonableness on the part of those who are making so much profit out of the industry. When the time comes that we are faced with the problem of disposing of a surplus production of sugar, what will be done then? Are we to take the advice of the sugar producers of North Queensland, and the Colonial Sugar Refining Company that is behind them, and put on an additional duty? Are we to send up the price of our own products for the purpose of enabling it to be sold more cheaply abroad ? We should consider that contingency of the near future when dealing with this question now. I have every confidence that if the sugar producers of Australia would adopt better methods, they might face the producers of the world in opencompetition as other primary producers in Australia are doing to-day. Let us consider the position of the wheat producers of Australia as compared with the sugar producers. We are to-day disposing of some 30,000,000 bushels per annum of wheat over and above what is required for our own use. That is sent into the markets of the world, where it jostles side by side with wheat produced by labour that is paid no higher than the labour with which the sugar producers of Australia would have to compete if the protective duty upon sugar were taken away.

Senator Chataway - Will the honorable senator say whether he is in favour of reducing the duty on sugar?

Senator LYNCH -I shall not shirk any question by the honorable senator, or any other honorable senator. When he asks me whether I am in favour of reducing the duty on sugar, I say that unless those engaged in the sugar industry are prepared to do a fair thing by those whom they employ, I shall be in favour of reducing the duty on sugar. I say that we have specially favoured the sugar industry, and it must be remembered that the producers of sugar will experience no unusual treatment when they are pushed out into the field of open competition, and made to sell their surplus products there. Let me inform honorable senators that wheat production in Australia employs, approximately, 240,000 people, as against 30,000 to whom the sugar industry gives employment. Those engaged in the wheat industry send their surplus products to the markets of the world, and engage in the fierce competition they find there. Wheat is grown in Queensland as well as in other States, although I notice that- the production of wheat in that State is declining, whilst the production of sugar is increasing. Our surplus wheat sent to the London market is brought into competition with wheat produced in India by labour that receives no more per day than is received by the men engaged in sugar production in Fiji, the men who are so much dreaded by sugar producers in Australia. I say that the wheat-farmers of Western Australia to-day occupy the same position in the markets of the world as is occupied by the Indian fellahs, and by the low-priced labourers in Roumania and Bulgaria. That being so, is there anything particularly wrong with a proposal that the same markets shall be thrown open to the Australian sugar-producer? As far as wheat production is concerned, I find that the world is supplied by the Argentine with 83,000,000 bushels, by Australia with 31,000,000 bushels, by British India with 30,000,000 bushels, by Bulgaria with 10,000,000 bushels, by Canada with 36,000,000 bushels, by Roumania with 64,000,000 bushels, by Russia with 132,000.000 bushels, and by the United States with 77,000,000 bushels. This list contains only three high-priced labour countries, namely, Australia, the United States, and Canada. These countries supply only 144,000,000 bushels out of a total of 463,000,000 bushels of surplus wheat which was available in 1906. Seeing that these three high-priced labour countries have to jostle in the markets of the world against the Indian fellahs, and that they can successfully hold their own there, I am led to inquire, "Why should not the Australian sugar-grower be compelled to face the same fate?" These high-priced labour countries supply only one-third of the surplus stock of wheat that is available. The low-priced labour countries supply the other two-thirds, and yet the wheat-producers of Australia are holding their own. Turning to sugar production, we find that in Germany the surplus stock which was available in 1906 was 1,193,000 tons, in Austria it amounted to 728.000 tons, in France to 276,000 tons, in Belgium to 207,000 tons, in the Netherlands to 159,000 tons, and in Russia to 92,000 tons. The total contributed, therefore, by these beet-producing countries which employ white labour was 2,655,000 tons. The export of the coloured-labour countries may be thus stated: - Cuba, 1,180,000 tons; Dutch East Indies, 981,000 tons; British Guiana, 115,000 tons; the Mauritius, 183,000 tons; and the Philippines, 127,000 tons. So that the total export of these cane sugarproducing countries which employ black labour was 2,586,000 tons. That total was, therefore, less by 65,000 tons than was the surplus stock which was produced by white labour. Seeing that white labour in Europe is successfully holding its own with the coloured labour of the world in the matter of sugar production, and that it is contributing more to the surplus stock of sugar in the market, what is wrong with the proposition that the Queensland sugarproducer should no longer enjoy the protection of a Tariff, but should be obliged to fight for his existence, just as the wheat-producer has to fight for it, whilst he is bearing upon his back the sugar-grower of Northern Queensland ?

Senator Chataway - That is a vile attack upon Queensland by a mean Western Australian, and Queenslanders will remember it.

Senator LYNCH - I am content to pay the price necessary to support the industry, but I am not content that we should contribute a solitary farthing towards sheltering it, if I find that the persons who are engaged in it are underpaying their employes.

Senator Chataway - Would the honorable senator like us to treat the pearling industry on the same lines?

Senator LYNCH - With the exception of the sugar industry, every rural industry stands upon its own bottom.

Senator Sayers - Does the apple industry?

Senator LYNCH - Yes. The applesand grapes which are grown in Western Australia are finding their way into the London market, where they are beating out of sight similar products even from thecheaplabour countries of Europe.

Senator Chataway - The figures of the Statistician of Western Australia do not prove it.

Senator LYNCH - I have drawn attention to the highly-favoured position which is enjoyed by the sugar industry. I have endeavoured to show that, but for the willingness of the Australian taxpayers to bear a heavy burden, it would not be in existence to-day. They have saddled themselves with a voluntary impost for the purpose of putting it on a fair basis. Yet we find that, whilst land has risen in value by 400 per cent, in the sugar-growing districts of Queensland, the price of labour has not advanced by more than 20 per cent. In these circumstances, I say that, until the labour which is applied to that land is paid a little more, we are not justified in extending to the sugar industry any more Protection than we extend to our other primary industries. I have shown that the wheat-growers, the fruit-growers, and the dairymen of Australia are obliged to hold their own in the markets of the world, whilst the pampered sugar industry is crying out for more and more Protection. People in other rural industries have to eke out a livelihood in places where the rainfall is scanty, where pests are supreme, and where labour is dear. Why should they be taxed to support an industry which is located upon the fat, rich, and fertile soils of Queensland?

Senator Chataway - I am sorry to hear that the soils of Western Australia are so bad.

Senator Sayers - That is why Western Australia requires a transcontinental railway.

Senator LYNCH - The people of Western Australia are not indebted to the honorable senator for the transcontinental railway. I propose now to say a few words upon the sugar Excise. We have been told by the three Jeremiahs from Queensland who have been prophesying evil, that it is the sugar-growers of that State who pay the Excise of £4 per ton.

Senator Sayers - Why is it that the mills are willing to pay 2s. 2d. per ton more for their cane if the Excise and bounty are abolished?

Senator LYNCH - The honorable senator merely re-echoed the old fallacy that the growers pay the Excise. He has reversed every principle which has been laid down by political economists from the time of Adam Smith.

Senator St Ledger - Quote what I said from 'Hansard.

Senator LYNCH - The honorable senator, after referring to the tinkering to which he alleges the sugar industry has been subjected, and to the mischief which has been wrought upon it, said -

It is part of the history of this section that the Excise duty on sugar is paid by the consumer.

Upon the motion for the second reading of this Bill, Senator Sayers said -

The Commonwealth pays no bounty in reality.

Evidently, we are to regard that pronouncement as the last word upon the subject. Senator Chataway, I presume, holds the same view as that which was expressed by his two colleagues from Queensland. In regard to the Excise, there has been a good deal of controversy since the new school of economic teachers has arisen in connexion with the sugar industry. Excise is simply a charge imposed per ton on so much of the definite product as goes into consumption. Ever since this method of taxation was invented it has been regarded as a charge upon consumers, though some honorable senators ask us to believe that it is paid by a section of those engaged in the industry. Adam Smith, in his Wealth of Nations, wrote as follows concerning Excise : -

No tax can ever reduce for any considerable time the rate of profit on any particular trade which must always keep its level with othertrades in the neighbourhood. The present duties upon malt beer and ale do not affect the profits of the dealers in those commodities, who 'will get back the tax with an additional profit in the enhanced price of their goods.

It is clearly shown on the authority of that great economist that an Excise does not fall upon those who pay it, but is borne by the general community through the enhanced price charged for the goods subject to Excise. Blackstone, the celebrated jurist, says that Excise " is the most easy and indifferent levy that can be laid upon the people." It is not, according to Blackstone, a levy upon a section of producers, as represented by some honorable senators, but a levy upon the whole people. He adds -

From its first original to the present time the name has been odious to the people of England.

Yet Senator Sayers has the awful foolishness to allege- that it is the grower whopays the Excise on refined sugar in Australia. I could quote several other authorities on the point, but shall confine myself to a member of the Opposition party. I' shall quote Mr. Stumm, who stood for flection in opposition to Mr. Fisher. This is what he had to say on the question of Excise -

He was aware that the Federal law secured to the grower a fixed payment of 6s. 6d. per ton for the present year which no one could take from him. It was said, on the other hand, that if the Excise and bounty were removed the millers would give more than that for their cane. That was not his experience, however, of the law of competition. They might give more, but the chances were they would give less.

It is quite clear that Mr. Stumm does not share in the belief which has been voiced from the Opposition side. The view that lie puts forward is rational and wellgrounded, that if there were a reduction of the Excise the advantage would not go to the grower but to the miller.

Senator Sayers - We have positive proof that Mr. Stumm was wrong, and he would acknowledge that now.

Senator LYNCH - I have a number of other authorities to the same effect, but , need not quote them.

Senator St Ledger - Is the honorable senator in favour of abolishing the Excise?

Senator LYNCH - I should like to see the Excise and the bounty put on the same plane. But if the present remnant of coloured labour remains in the sugar industry, by all means let us make a differentiation. Two questions are involved. One is the removal of coloured labour from the sugar industry. There is no need to refer to that at length, because it is now a dead question. Under the operation of Federal legislation the black man is a vanishing quantity in the cane-fields of Queensland, though in New South Wales it is not so. In Queensland the proportion of coloured people employed has been reduced from something like 90 per cent., so that the figures are now exactly reversed. That opens up a cheering prospect for the industry, which has now been placed upon a white labour basis. Dr. Maxwell has some instructive remarks concerning the Excise. He was appointed by the Federal Government to inquire into the condition of the sugar industry, and to report upon its several phases. Amongst other things, he referred to the incidence of the bounty and Excise legislation. As I said before, Dr. Maxwell is undoubtedly an impartial authority. He stands, as it were, upon a mountain-top, uninfluenced by: any political party. He can be trusted to record his impartial opinion, and it is an opinion of great value upon an industry which he has studied for many years. In his report, he refers particularly to the increase which took place in the payment of bounty on the 1st January, 1907. Up to that time, the bounty paid was £2 per ton, and the Excise was £3 Per ton upon the sugar produced. In 1905 an Act was passed increasing the bounty and Excise £1 per ton, the increase taking effect on the 1st January, 1907. A great impetus was given to sugar production in Queensland as the result of the extra £1 paid. On page 12 of his report, Dr. Maxwell refers to this matter, and says -

The revised Act, i.e., 1905, was enacted, and the "reducing scale" was included. From that time a reduction in areas began. This was due to old areas going out of crop, and to the area of new plantings being diminished. The fact was the growers had become used to the situation under the Excise and Bounty Acts. They had become assured of the high advantage they were realizing under those Acts, which is indicated by the increase of areas up to the time that the revised legislation became enacted. After the revised legislation became law, and provision was made for gradual abolition of the Acts, the confidence of the growers was disturbed.

In that paragraph it is clearly indicated that Dr. Maxwell admits that the addition of £1 per ton bounty meant an advantage to the growers of sugar in Queensland. I ask those who have been taking the contrary view : If that increase of £1 per ton was an advantage to the growers, at whose expense was the advantage gained? As a rule, when a person reaps an advantage he does not reap it from his own exertion, but by reason of the action of somebody else. In this case, the advantage was conferred by the extra £1 paid to those producing sugar, and it was conferred at the expense of the community. Dr. Maxwell also refers in this report to the working out of the bounty and Excise. In order to give honorable senators a reasonable idea of what he means, I had better quote the figures which he furnishes. He says that the Excise payable on 1,188,871 tons was £3,969,408, but that the Excise paid - which was different from the Excise payable - was £3,545,884. The reason for the difference of some £400,000 was that the Customs Department had departed from the practice that obtained for the first few years, and' required the Excise to be paid on sugar which was up to a certain standard, namely, 88 per cent. N.T.. After a few years the standard was raised to what was known as the refined basis. By raising the standard to the refined basis, instead of ad- hering to the 88 per cent., the Federal Treasury lost to the extent of ,£423,524. It is clear how that came about. In the first place, the bounty was paid according to a certain standard, that is, 88 per cent, sugar contents, and 10 tons of raw material went to make up a ton of sugar; but after the first few years of receiving the bounty on this basis, the standard was made higher, with the result I have stated to the Treasury. It is quite clear that that amount had to be accounted for in some way. Different standards were adopted at first in paying the bounty on the one hand, and receiving the Excise on the other hand, and the difference between these two systems accounted for the loss of no less than £423,524 to the Treasury during a period of seven or eight years. Dr. Maxwell set himself to work to discover who had got this money, and how it was divided. As a man who had a lengthy experience in the management of the Central Mills of Queensland, his opinion on this subject is, of course, worth paying attention to. On page 17 of his report he says -

It is seen from the above table of figures that there is a difference between the " Excise payable" and the "Excise paid" of j£423>524 covering the period 1902-3 to 1908-9 inclusive.

The Excise is collected when sugars go into consumption and not at the time of manufacture. This makes it difficult to compare the sugars paying Excise in any one year with the sugars upon which the bounty has been paid. It is impossible to come at exact figures without knowing the amount of the sugar of a given year's production upon which the Excise has been collected, and the proportion of the same year's sugar which is still in bond. If, however, the total " Excise payable " (upon 88 deg. N.T. basis) and the total "Excise paid," covering the seven years are taken, it is then possible to arrive at a close approximation, of the actual situation arising from the present " methods of Excise collection." The figures indicate that the Federal Treasury has directly lost somewhere about ,£423,000 in seven years on Excise collections. That sum is about 11 per cent, of the total collections, and that percentage represents approximately the difference between sugars of 88 deg. N.T. upon which the bounty was paid, and refined sugars. The loss results from payment of bounty on the "raw" 88 deg. N.T. basis, and collection of Excise upon the "refined" basis. The "loss" to the Federal Treasury has resulted in a " gain " in other quarters. The " gain " has remained with the refiners, unless it can be shown that it has passed on to the consumer.

That is a point to which I would particularly direct the attention of Queenslanders, because they have repeatedly and stubbornly asserted that any reduction in the Excise duty goes straight to the producers, that is to say, that the producers pay the

Excise, and, therefore, when the Excise is wiped out partly or wholly, the producersare liberated . to that extent. Here is an instance showing that where a reduction in the Excise took place, the amount of the reduction did not find its way into the pockets of the producers -

On the several State mills of Queensland,, there were under the control of the writer from 1904 to 1909 inclusive, one of those made white (refined) sugars that were sold direct for consumption. At that mill (Nerang Central Mill), the Comptroller made white sugars for two reasons : - First, to secure the refiner's profit,, in order that the small mill might be able topay its way ; and second, as a working example and test, with the object of ascertaining approximately the cost and profit of refining. The Excise upon those sugars was paid by the mill upon their going into consumption. The Comptroller, therefore -

That was himself. was able to compare the known amount of bounty paid by the Federal Treasury upon theknown tonnage of cane delivered by the growers at the Nerang Mill, with the actual amount of Excise paid by the mill upon the "sugars made"and sold into consumption. The differencebetween " bounty paid " and " Excise collected " representing the "loss" in the transaction tothe Federal Treasury was over 12 per cent.

In another portion of his report, which I donot wish to quote, Dr. Maxwell says the loss of 12 per cent., which he found from actual experience in the control of the Nerang Mill in South Queensland, went directly into the pockets of the refiners, and never reached the growers of sugar, ashonorable senators opposite seek to makeout.

Senator St Ledger - It went to the refiners.

Senator LYNCH - It went to swell their profits.

Senator St Ledger - We find now, according to Mr. Knox, that the refiners donot care whether sugar is put on a FreeTrade basis or not.

Senator LYNCH - That is another argument in favour of my contention that, according to Dr. Maxwell, where a reduction in the Excise took place, as was discovered on the payment of this amount short, the money found its way directly into,the pockets of the refiners and millers of Queensland, and has remained there to this date. Dr. Maxwell tested the matter by examples. He compared the price paid for raw sugar and the price at which sugar was sold in the market, and found that the reduction which the rest of the sugar, sold in Queensland enjoyed never- found its way into the pockets of the growers, but went to the refiners and millers.

Senator St Ledger - Is not that an argument for the abolition of the Excise?

Senator LYNCH - I am contending all the time that the Excise is paid by the consumers, and not by the growers. Yet when a reduction was made the money did not find its way into the pockets of the growers, but was intercepted by the millers and refiners. Dr. Maxwell is my authority for my statement.

Senator St Ledger - Yes, but what about the conclusion? That is the point which is troubling us all.

Senator LYNCH - During my speech I have mentioned that certain sections engaged in this industry have been reaping far more than a fair share of the huge expenditure with which the taxpayers have saddled themselves in order to keep the industry alive and thriving. In regard to the Colonial Sugar Refining Company and other refineries, a very fierce light is thrown upon their operations by Dr. Maxwell in this report, and it is a matter for surprise that some action was not taken before what appears to be his discovery.

Senator Sayers - Why do not the Government do something, seeing they have charge of the bounty?

Senator LYNCH -The Government strove to put an anti-trust law into operation, and with what result we all know. We are waiting for the electors to give this Parliament ample power to deal with this question. With its limited power it cannot act. Referring to the millers of Queensland, and the special advantages which they enjoy in sugar production, on page 25 of his report Dr. Maxwell makes a comparison with other countries, notably with America and the United Kingdom. Taking the figures from eighty-two weekly market statements, from January, 1907, to July, 1908, he shows that in Great Britain the price of raw sugar from beet and cane was from £10 15s. to £11 4s. 8d. a ton, and the price of refined sugar' £15 7s. In New York the price of raw sugar mixed - that is, beet and cane - was £18 2s. 7d., while the pries of the refined article was £22 1 is. 7d. In Australia the price of raw cane sugar was £14 7s. 6d., to which had to be added another price, which is charged by the refiner, raising it to £19, and a further addition of £2, which is not explained by Dr. Maxwell, but which raised the price of refined sugar in Australia to £21 - a rather low figure I may state at the time of the calculation. Then, taking the three countries together, he shows that the difference in price between raw sugar and refined sugar in Great Britain was £4 is. nd. ; in the United States, £4 9s. ; and in Australia, £6 12s. 6d. This clearly shows that the refiners and millers in Australia, compared with the experience of refiners and millers in Great Britain and the United States, have been enjoying 50 per cent, more profit. That is, I think, quite enough for me to cite in order to present an additional proof for my statement that the millers and the refiners have been getting far more than their fair share of the profits of the sugar industry at the expense of the general taxpayer. In reference to the alternative to cane production in Australia, Dr. Maxwell reveals a very bright prospect of what we may expect from the development of the beet-root industry. Speaking of the beet sugar industry, this is what he has to say at pages 38 and 39 of his report -

The value of the by-products is very great, and can enormously add to the value of the dairying industry; or it can create a new industry in the special fattening of store cattle. These results are well known in beet-sugar countries, and have been recently reviewed by the writer in California.

The production of beet sugar never raises the question of the colour of labour where it is grown. It is capable though of assisting to decide the question of coloured labour where cane sugar is produced. It is wholly a white man's occupation, and a part of modern progressive agriculture. Where it is introduced and 'becomes established it also becomes indispensable; for the additional values given by the more highly-cultivated beet to other crops make all these other crops to that extent dependent upon the beet. Wherever the beet crop comes it comes to stay.

Senator St Ledger - Beet sugar cannot live without a bounty as against cane sugar.

Senator LYNCH - As the honorable senator should be aware, the bounties in European countries have been broken up very effectively lately by the Brussels Convention. Dr. Maxwell's concluding sentence in reference to the beet sugar industry is very significant.* He says -

In less than twenty years beet sugar production in the United States has grown from little more than 10,000 tons to 490,000 tons, which mas the crop of 1909. The cane-sugar industry of America thought that beet sugar could not succeed. To-day the cane sugar produced is about what it was twenty years ago - some 350,000 tons, while the beet sugar crop is already upon the half-million tons' mark.

Senator St Ledger - From what has the honorable senator quoted?

Senator LYNCH -From Dr. Maxwell'sreport presented in 1910.

Senator St Ledger - That was when they were trying to establish the beet industry in Victoria.

Senator LYNCH - It is quite clear from the quotation I have made that in America the people are largely dependent upon the extended production of beet sugar for their supplies. When we find that such a change took place in twenty years in the production of sugar from beet, whilst the production from cane was practically stationary, a wide field of speculation is opened up to us as to what may yet be done in Australia. The question arises whether we should continue to support the sugar industry of Queensland as we have done in the past, unless it is put upon a very much more satisfactory basis. It might be better that we should take steps to encourage the production of beet sugar, which is a purely white man's industry. The sugar industry has had my hearty support in the past. I am prepared to continue that support upon conditions. As a representative of a State in which no sugar is grown, I am able to say that the people there, in addition to bearing the burden of their own industries, with the handicaps and risks incidental to them, are willing to keep the sugar industry going as they have shown themselves to be in the past by the votes of their representatives in this Chamber. But if we are to look upon the Queensland sugar industry as but slightly improved from what it was when black labour was largely employed in it at poor wages, and are to recognise it as an industry in which white people receive but poor wages ; if we are. in short, to be given to understand that the change in the industry has been only a change fromthe employment of black slaves to the employment of white slaves, we shall have to seriously review the whole position. Personally, I say that if there is no change on the part of those who are conducting the industry, it will not have my support in the future.

Senator St Ledger - Will the honorable senator maintain the duty on beet sugar?

The PRESIDENT - Order ! When Senator St. Ledger was speaking, and the

Minister of Defence made one interjection, the honorable senator said that it was his privilege to be heard without interruption by the Minister, or by any other honorable senator. I point out that he is now continually interjecting during the speech of Senator Lynch, and I ask him to cease his interjections.

Senator LYNCH - I say that I have found it necessary to review my attitude towards the sugar industry, especially in view of the unwillingness exhibited by sections of those engaged in the industry to do a fair thing by those whom they employ. I have said that the value of sugar lands has gone up, and the profits derived from the industry are very great, whilst the rate of wages has remained stationary, or has only been slightly increased.I am forced to the conclusion that, unless a change is made in the direction of giving that indispensable element of production, labour, a fair reward, I must review my attitude towards the industry in the future. It will be conditioned entirely upon the giving of a fair reward to the labour employed, because I am quite convinced that that has not been done in the past. I am keenly alive to the necessity of peopling the tropical and sub-tropical areas of Australia. We have a vast continent, and the bulk of our very rich lands lie under sub-tropical skies. I agree that it is necessary that the residents of the temperate portions of Australia should pay a good price, and even a high price, to try the experiment to discover whether white men can be domiciled and can prosper in the tropical regions. But if we find that those regions are being exploited by people who are not prepared to do a fair thing, it will be doubtful whether it is worth the price to send people into those regions who will act as those engaged in the production of sugar have acted. I am prepared to abide the result here or elsewhere. I have been sent to this Parliament to support Australian industry. That is a position I shall maintain, but I regard the sugar industry as the one and only rural industry that has come forward and asked for help, and has been helped by the general taxpayers, and yet those carrying it on have not done what is fair by the labour which is so important an element in the production of sugar. My attitude towards the industry in future may be summed up by the statement that if those engaged in it will do what I consider a fair thing in assessing the value of the labour they employ, it will have my support, but on no other condition.

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