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Thursday, 5 December 1935

Senator J V MACDONALD (QUEENSLAND) . - I do not wish to be guilty of boiling cabbage twice, but from' the remarks of Senator Duncan-Hughes, it would appear that he was not present when Senator Collings gave to the Senate some official figures relating to the sugar industry.

Figures extracted from the report of the State Income Tax Commissioner for Queensland, give the following results -

Comparing the taxation year 1934-1935 With 1933-1934, it is found that the -

Number of taxpayers generally - increased 4 per cent.

Number of cane-growers who are taxpayers - decreased 26 per cent.

Net income of all taxpayers - increased 10 per cent.

Net income of cane-growers who paid tax decreased 30.05 per cent.

The taxable income of all taxpayers - increased 13.9 per cent.

The taxable income of cane-growers - decreased 32 per cent.

The total tax assessed for all taxpayers - increased 20.5 per cent.

The total tax assessed for cane-growers - decreased 41.3 per cent.

Honorable senators speak as if a reduction of the price of sugar by½d. per lb. were a small thing, but it is a big proportion of 4½ per lb. A gradual scaling down by½d. per lb. at a time and a reduction of the term of the agreement to two or three years, will, if the process be continued long enough, destroy the sugar industry.

Senator Duncan-Hughes - That did not happen when the price was reduced on a previous occasion.

Senator J V MACDONALD (QUEENSLAND) - The figures quoted by Senator Collings show what would happen if these things were done. Senator Duncan-Hughes discussed the agreement in moderate terms, and I hope to follow his example. It is my intention to state the facts as clearly as possible, in order that the people of Australia may thoroughly understand what the renewal of the sugar agreement means to the Commonwealth as a whole, having particular regard to the maintenance of a "White Australia policy through the effective settlement of the fertile lands in the tropical coastal belt of Queensland. I have long had the impression that many people in the southern States are convinced that Queensland is one of the richest States in the Commonwealth.

Senator JAMES McLACHLAN (SOUTH AUSTRALIA) - The honorable senator has made that suggestion on more than one occasion.

Senator J V MACDONALD (QUEENSLAND) - I suppose that at times we all " boost " our own State and indulge in a certain amount of sales talk.

Senator Arkins - The honorable senator will not, I suppose, deny the potentialities of Queensland?

Senator J V MACDONALD (QUEENSLAND) - No ; it contains a large area of fertile land capable of immense production, and I like to think of it as one of the more important States of the Commonwealth. But it is not so incomparably rich, either actually or potentially, as to be able to withstand the onslaughts of southern opposition to its principal primary industry. I had an opportunity to visit Western Australia early this year, and during my stay there I was much enlightened as to the position of that State in the federation. A study of the last report of the Commonwealth Grants Commission, which examined the applications made by South Australia, Western Australia and Tasmania for financial assistance, has convinced rae that, whilst the three States named are justified in claiming a measure of financial relief from the Commonwealth for the disabilities which they suffer under federation, Queensland, which the investigation showed was in a condition of balance - that is to say, it has not benefited so enormously as New South Wales and Victoria - is also deserving of sympathetic treatment from the other States in respect of its major primary industry if it is to maintain a condition of solvency. Southern opponents of the sugar agreement would do well to bear in mind that the maintenance of the industry in Queensland is to that State a compensating advantage of federation, enabling it to avoid appealing to the Commonwealth for financial assistance. If through the scaling-down of the return to sugar-growers by the fixation of a lower retail price for sugar the industry were destroyed, Queensland's finances would certainly be in such an unsatisfactory state as to justify an appeal to the Commonwealth for financial aid. If honorable senators will analyse the figures contained in the report of the Commonwealth Grants Commission they will discover that Queensland is not the marvellously rich State which some southern people believe it to be. It is, I repeat, in a condition of balance in relation to the Commonwealth. By this is meant that, whilst New South Wales and Victoria have benefited enormously from federation, Queensland has not; on the other hand, it has not, so far, been reduced to such a condition as to render necessary an appeal to the Commonwealth.

The PRESIDENT (Senator the Hon. P. J. Lynch). - I ask the honorable senator to relate his remarks to the subjectmatter of the bill.

Senator J V MACDONALD (QUEENSLAND) - J shall not intentionally trangress your ruling, Mr. President. My purpose is to show that if, by any action in this Parliament, Commonwealth support were withdrawn from Queensland's major industry, that State then would, in all probability, join the other claimant States, and Commonwealth payments to South Australia, Western Australia and Tasmania would be correspondingly reduced. On page 33 of the report of the Commonwealth

Grants Commission appears the following comment with regard to financial adjustments and disbursements under federation : -

It is assumed, for example, the States would have been certain to make substantially the same payments for pensions and relief to wheat-growers that the Commonwealth made. The table shows that Queensland is in a position of balance, and that New South Wales and Victoria make substantial contributions which benefit the other three States.

The tables of relative prosperity that appear in the report show clearly that the southern States receive a definite quid pro quo for the protection which the Queensland sugar industry secures under the agreement. In the financial year with which the report deals, South Australia received from the Commonwealth grants amounting to £1,400,000,Western Australia £600,000, and Tasmania £400,000. On a population basis, Queensland contributed one-seventh of that sum. The report sums up the compensating advantages of federation under the heading " General advantages," as follows : -

(a)   A common defence policy.

(b)   The operations of the Commonwealth Bank and the Australian Loan Council.

(c)   A common policy in external affairs.

(d)   Immigration policy, leading to uniform standards, such as a White Australia.

(e)   The general effect of the financial agreement, under which the credit and organization of the Commonwealth support borrowings of the States.

(f)   Common policy in banking, currency and credit.

(g)   Services and investigations of the

Health Department, the Council for Scientific and Industrial Research, and other departments.

(   h ) Exchange benefits to exporters.

I do not desire to labour this point, but I invite all honorable senators who are interested to study the report. If they do this, they will realize that Queensland is not such a rich partner of the federation as to be able to maintain its position as one of the major States of the Commonwealth, if its sugar industry is destroyed. I agree with Senator James McLachlan that we Queenslanders do put out our chests, and declare that Queensland is a great State, and by so doing invite, when such things as the sugar agreement come up for consideration, other States to "have a piece of us " in order that Queensland might be brought down to the level of the weaker

States. The general tenor of speeches of honorable senators who adversely criticized this measure, reminds me of a poverty competition. One is given the impression from their remarks that each State should be constantly on the lookout to see where it can fleece some benefit from another State in order to make the more fortunate States poorer. They, apparently, hold the idea that by this course aid can be given to the weaker States. I support the remarks of my leader (Senator Collings) and Senator Brown regarding the advantages which other States receive from Queensland to compensate for any concessions which they make to the northern State under the sugar agreement. Senator DuncanHughes quoted an estimate that the excess cost of the sugar industry was nearly £6,000,000 annually. That figure has been challenged.

Senator Duncan-Hughes - I said that Professor Giblin estimated the cost of the sugar industry at £5,100,000 annually.

Senator J V MACDONALD (QUEENSLAND) - At any rate, that figure has been scaled down to£4,000,000. Figures advanced by honorable senators in this respect seem to vary according to the authors of them. For instance, Senator Duncan-Hughes said that the wheat industry received a benefit of only £2,000,000 annually. When I heard that figure my memory gave a twitch, and I immediately recalled that on one occasion a grant of £4,000,000 was given to the wheat industry.

Senator E B Johnston - That grant was made last year.

Senator J V MACDONALD (QUEENSLAND) - That is so.

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