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Wednesday, 10 April 1946

Sir EARLE PAGE (Cowper) .- This measure for the continuance of the sugar agreement, to my mind, illustrates the manner in which primary industries should be dealt with, because it provides one. of the most striking examples that one could imagine of what happens to an industry with variations in the returns. The first acquisition of sugar by the Commonwealth Government occurred in 1915 at a price of less than 2d. per lb. The Fisher Government was in office, the first world war was raging, and costs were soaring. A new award in Queensland, called the Dixon award, made it impossible for the sugar-cane growers to market their product profitably at the price paid by the Labour government. As the result, about 40,000 acres of land went out of cultivation, and production fell by about 150,000 tons a year. The net result was that, in 1918 and 1919, the Government of Australia was compelled to import sugar from foreign countries - especially Java and Cuba. The sugar imported from Java cost £100 a ton, and that from Cuba cost £80 per ton, whereas the price that was being paid for the sugar acquired from the Australian producers was only £18 per ton. The only way in which the price could be maintained at a reasonable level was to bring the price to 6d. per lb. by pooling the local sugar at £18 a ton and the imported sugar at £100 and £80 a ton. That action was taken in 1920-21 and it more or less enabled the ledger to be squared. The only means of lifting the sugar industry from the calamitous position into which it had been cast by the earlier policy was that taken by the Government led by the right honorable member for North Sydney (Mr. Hughes), which fixed the price at £30 6s. 8d. a ton for the next three years. That increased price stimulated production to a great degree, and, by 1922, we were able to supply our own needs and begin to export. In 1923, the sugar agreement between the Commonwealth Government, known as the Bruce-Page Government, and the Queensland Government, came into being. It is being continued by this bill. One of the striking features of the original agreement was that the industry was given not only a guaranteed price, but also a guaranteed price for five years. Subsequent agreements have always been for three years. We considered it necessary to provide for a long-term agreement to enable the industry to get on its feet. Not only were the sugar producers assured of their position for a substantial period, but also the consumer was assured of the reasonable price of 41/2d. per lb. The manufacturers of products in which sugar was an ingredient were given a substantial discount. That applied chiefly to the manufacturers of jams, the processors of canned fruits, and so on, for sale in Australia. Manufacturers of commodities for export were given sugar at world parity. So the Australian manufacturers engaging in export trade were not penalized. The sugar industry went further than that by announcing its willingness to assist in the development of the export of canned fruits, and honorable members will find in paragraph 7 of the agreement the provision made for concessions to the manufactured fruits industry. Subparagraph g sets out the constitution of the Fruit Industry Sugar Concession Committee. It reads -

(g)   The Committee shall be appointed by the Minister of State for Trade and Customs ( in this Agreement referred to as the " Minister") and shall be composed of one representative of each of the following: -

The Commonwealth Government;

The Queensland Sugar Board;

The growers of canning fruits;

The growers of non-canning fruits;

The co-operative and State manufacturers of fruit products; and

The proprietary manufacturers of fruit products;

That committee decides on the amount of bounty that shall be paid to enable the goods covered by it to be sold in competition overseas. I am grateful for this opportunity to pay a high tribute to the late Albert Townsend, who, for many years, was the representative of the Commonwealth Government and the chairman of the committee. No one rendered greater service to Australia than he did in connexion with the sugar industry, especially in organizing the assistance that that industry gives to industries that are dependent upon it, the berry-growing industry of Tasmania, and other fruit-growing industries on the mainland. The. sugar industry activities cover a wide field. When the economic depression occurred, the Government felt it incumbent to order an inquiry into the industry. The committee set up to conduct the inquiry, which was not a royal commission, reported that the industry was efficiently managed. It is worthwhile to place on record as a testimony to its efficiency the fact that whereas in 1918-19 fourteen tons of sugar-cane was required to produce a ton of sugar, by the time that inquiry was conducted the sugar-cane growers had so improved the quality of their cane, and the millers had so improved the efficiency of their mills, that only 7 or 7i tons of cane was required to produce a ton of sugar. That demonstrates an extraordinary increase of the efficiency of the industry, in respect of both the production of the cane and its crushing in the mills. When the first sugar agreement was made in the early twenties, the machinery in most mills in Queensland was out of date because of the impoverished condition of the industry; but, by 1930, and ever since then, the mechanical, technical, and scientific efficiency of the mills has been comparable to that of sugar mills anywhere else in the world. At that time the price of sugar to the consumer was reduced from 4£d. to 4d. per lb. That price has been maintained ever since. It has been profitable to the industry only because in 1932 the Ottawa agreement was made, whereby the substantial preference of between £5 and £6 a ton on sugar was obtained from both Great Britain and Canada. When war broke out, practically all Australia's surplus sugar was going to those countries. I think it was in 1936 that I attended the International Sugar Conference in London as the representative of the Commonwealth of Australia. Whereas the price paid for sugar at that time to producers in other countries was only £5 a ton, the return to the Australian producers was £10 or £12 a ton. In addition, the sugar industry had a guaranteed home consumption price. That state of affairs has existed ever since. Fourteen or fifteen years have elapsed since the price was fixed.

During the- war the cost of production rose considerably. First, the labour available was much less skilled because of the enlistments that took place among the cane-cutters and the mill hands. As an instance of the reduced efficiency of the cutters owing to the infusion of less experienced hands to replace those who had gone into the various branches of the armed forces, I cite the fact that thousands of tons of sugar-cane was left standing in the field in the Clarence district at the end of the last season. The same thing happened in 'the electorate of my colleague the honorable member for Richmond (Mr. Anthony). There were two reasons for that. First, there were insufficient cutters, and, secondly, they were not nearly so efficient .as were the men whom they replaced. The less efficient workers had to be paid practically the same wages as were paid to the more skilled. Many other additional costs have been incurred on the sugar-cane farms. The price of machinery, fertilizers, and all sorts of other things needed in the cultivation of sugar-cane have risen. Another item of increased cost which has never been properly assessed is the loss of time caused through the growers not being able to replace parts of broken-down tractors. That is due to the absence of blacksmiths to repair and recondition the growers' machinery. As the result of the lack of attention, the machinery frequently breaks down, and the growers thereby lose many working days. The position must be reviewed. The sugar-producing area in New South Wales is included in the arrangement, although the agreement is specifically between the Commonwealth Government and the Government of Queensland. Clause 4 provides -

That the Queensland Government shall purchase all raw sugar manufactured from sugarcane grown in New South Wales during the seasons of 1946-47, 1947-48, 1948-49, 1949-50 and 1950-51.

The growers in. New South "Wales have succeeded in continuing production, despite shortages of labour and material. As the honorable member for Balaclava (Mr. White) has shown, the export of sugar from Australia has seriously declined, but production in. New South Wales has been maintained because of the tenacity, pertinacity, skill, efficiency and patriotism of the producers. But they have pointed out repeatedly that the accounts of the sugar industry are gradually moving from the credit to the debit side of the ledger. The growers in 'New South Wales state, " We do not desire to alter the main provisions of the agreement, but if externa] costs continue to increase we should be paid a subsidy iii order to enable us to make ends meet ". The Government must not overlook the importance of this industry. When a previous government failed to keep the industry profitable, the production of sugar declined, and thousands of acres of land upon which cane had been grown became idle. Then Australia was compelled to import sugar at a time when prices were exceptionally high. The explanation of the soaring values was that sugar-growers in other countries had ceased production. For nearly five years after the war of 1914-18, the price of sugar in many countries, especially in Europe, was £50 a ton. The retail price in Australia, 4£d. per lb., was about equivalent to the wholesale price in some other countries. One honorable member suggested that the agreement should be reviewed only if the export price of sugar falls. In my opinion, an investigation should be conducted immediately for the purpose of determining whether conditions in Australia necessitate a review of prices in order that growers may be able to continue production. Great Britain showed during the last six years that, in order to secure a continual surplus of food, an " incentive " price must be offered to the producers. I hope that the Government will heed my representations. If we neglect this industry serious difficulties will arise in the next two or three years. We must ensure that the growers, and many of their sons who, on being discharged from the services, desire to engage in sugar-growing, shall receive a price that will cover the cost of production and allow a reasonable standard of living.

One aspect requires emphasis. The sugar industry is the principal inducement to people to live- in northern Queensland. If the industry were to collapse, between 100,000 and 150,000 people would move from that area to other parts of the Commonwealth. By settling in that vast area, those people are strengthening the national economy and defences. They are really garrisoning northern Queensland, and are entitled to at least the same justice as other primary producers receive. For economic and defence reasons, we should act promptly to prevent any failure within the industry. Experience has* shown that often it requires very little assistance to prevent the beginning of an economic " slide ", but once an industry begins to fall into the abyss, infinitely greater measures are needed to save it. One interesting feature about the population of northern Queensland is that, since the sugar industry became prosperous during the last twenty years, the gain of births over deaths has been greater than in any other part of Australia. Yet one would expect northern Queensland, being situated in the tropics, to have an uncongenial climate. The Government should make it possible for those healthy, virile people to continue to occupy that portion of the Commonwealth.

During the last 30 years, sugar-cane growers in New South Wales have insisted that they are an integral part of the arrangement under discussion, even though the agreement is between the Commonwealth and Queensland. They contend that if, by improved methods of production, they are able to increase the output of sugar from the acreage under cultivation, the size of their area should not be reduced. Instead of being penalized in that manner, they should be encouraged. Therefore, I urge that in any consideration of this matter, the needs and rights of these growers should be heeded. At present, a review of the conditions is urgent, so as to enable all sugar growers in Australia to enjoy reasonable prosperity.

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