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Thursday, 5 December 1935

Senator ALLAN MACDONALD (WESTERN AUSTRALIA) . - Honorable senators will agree that we listened to a very interesting speech this afternoon by Senator Crawford. Coming from the honorable senator, with his wealth of knowledge, experience and interest in the production of sugar, we must accept many of his utterances as statements of fact. The honorable gentleman has an intimate acquaintance with this subject, extending over 40 years, and it cannot be denied that he made a very eloquent and urgent appeal for support of the bill. At the same time, we have to thank Senator Duncan-Hughes for an interesting diversion, as up to that time every speaker had supported the bill. He showed us another side of the picture, which warrants the attention of honorable senators. Senator Duncan-Hughes said that South Australia has ground for the suggestion that something different should be obtained from the present sugar agreement. At the same time the honorable gentleman dealt very casually, I think, with the statement of the Leader of the Opposition (Senator Collings), regarding the serious decline in the returns from income tax in Queensland. As the Leader of the Opposition pointed out, the decline in the price of sugar had a serious effect upon the industry. The income tax figures quoted by the Leader of the Opposition were interesting, and one must assume that they are a fair barometer of the fluctuation in the industry caused by the last reduction of the price of sugar by½d. per lb.. I suggest that Senator Duncan-Hughes should study the latest report of the Commission of Taxation, on page 39 of which he will find the relative assessments for the various States for resident taxpayers. One would assume, from the propaganda and references made to those opposed to the sugar agreement, that the people of Queensland represent a very wealthy section of the community; but, on reference to these figures, they do not appear to be so wealthy as some of the people of South Australia. For instance, in South Australia the number of persons receiving taxable incomes of £5,000 and over are 23, whereas in Queensland there are only nineteen. Those in South Australia receiving from £4,000 to £5,000 number fourteen, while those in Queensland number only eleven. In South Australia there are 31 receiving £3,000, and in Queensland 51. On the property side there is a different story altogether. According to our friends in Opposition, the ownership of property is not only wrong, but should be abhorred. According to these figures, it takes 31,502 taxpayers in Queensland to produce a property income of £127,000, but in South Australia only 13,894. That clearly indicates that South Australia is in a much better position in respect of the ownership of property than is Queensland.

Senator Collings - The wealth is more evenly distributed in Queensland.

Senator ALLAN MACDONALD (WESTERN AUSTRALIA) - I have just said that it takes 31,502 taxpayers in that State to produce property income of. £127,000, whereas iu South Australia that amount is produced by only 13,894. Senator Brand referred to the activities of certain paid organizers in producing an anti-sugar complex. I should like to refer to the activities in Western Australia, which are by no means caused by paid agitators. Representatives of that State have been inundated with letters from responsible municipalities and roads boards, condemning the sugar agreement, and urging us to oppose it. These .municipalities are controlled by honest and good citizens, who are very sincere in the resolutions which they have passed in condemnation of the agreement. The problem is very complex, so much so that I made it my business during the la3t recess to visit Queensland, and to study the position so far as I was able to do in the limited time at my disposal. I endeavoured to obtain first-hand information regarding the industry, which I hoped would be of benefit to me. Prior to that visit I had heard a great many discussions concerning sugar and most of the opinions expressed were condemnatory of the present agreement; but invariably, when a speaker was asked if he had ever visited northern Queensland, a negative reply was received. I travelled from Cairns to Bundaberg, and on a visit which occupied approximately four weeks I saw as much as I could of the indus try from the planting of .cane to the production of the refined article. I admit that I received many surprises, especially in view of the impression which I had obtained prior to my visit to North Queensland. The first point which impressed me forcibly was the full extent to which the land was used, especially when it is compared with land in the vicinity of Carnarvon and Derby in my own State. We have heard to-day that the population in the semitropical portion of the north-west of Western Australia is approximately 6,000^ as against a population in a similar area in Queensland of 172,000. The significance of that comparison is obvious. It emphasizes the benefit which the sugar industry has conferred upon that portion of the Commonwealth. Iu addition to the way in which the land is used, it was remarkable to find the amount of sheer hard work put into the land by the farmers themselves. It was equally remarkable to find the efficiency of the employees whom- I saw working in various phases of' the production of sugar. Even in Western Australia we have heard of the high wages paid, especially to the cane-cutters, and we had been told that, as it is a seasonal occupation, there is usually an influx of workers from New Zealand, Tasmania and other parts of the Commonwealth to engage in this .highly remunerative occupation. I saw a number of gangs cutting cane - I . cut a few stalks myself - but all of the cane-cutters I met were local residents of northern Queensland, and live adjacent to Cairns, Innisfail, Mackay, and right down to Bundaberg. I did not come in contact with a New Zealander or a Tasmanian who had come there to cut cane, with the intention of returning to his home at the end of this season. The wages paid to the cane-cutters, who are very hardy and hard-worked, are less than I should like to be paid for similar work. They are doing hard physical labour in a latitude corresponding to that of the area between Carnarvon and Derby, and, as one canecutter said, the work was really more suitable for coloured men. They were working hard and earning a very fair wage, but they earned it.

Senator Gibson - Piece-work ?

Senator ALLANMacDONALD.Yes. I was pleased to see that there were a number of ex-members of the Australian Imperial Force in the various camps. The top gang in that part of the State was led by a man with the well-known name of McDougall. I made it my business to see the gang at work, and I was amazed at its capacity and the work which it performed in a certain time. The canefarmers and the cane-cutters earn every penny which they receive. That is my unqualified opinion after observing the work in the industry in northern Queensland. The same can be said of the mill employees, who are highly-trained men, and perform their work efficiently. So much for the so-called exorbitant wages paid in the industry.

Senator Grant - Did the honorable senator ascertain what they were paid?

Senator ALLAN MACDONALD (WESTERN AUSTRALIA) - I have just informed the Senate that I saw them doing their work, and I do not consider that they were over-paid.

Senator Grant - Evidently the honorable senator does not know how much the men were being paid.

Senator ALLAN MACDONALD (WESTERN AUSTRALIA) - I obtained a schedule showing the payments made to the employees in the various branches of the industry, and I knew what each class of worker received. My observations enabled me to compare the nature of the work that they were performing with the scale of remuneration.

Senator Gibson - The honorable senator's standard was the Australian standard, and not what might be called the " sugar standard ".

Senator ALLANMacDONALD.The latitude in which those men were working must be taken into consideration. When Commonwealth public servants are transferred to semi-tropical districts they receive an extra allowance for their labour.

Senator Foll - The employees in the sugar industry work for only four or five months of the year.

Senator ALLAN MACDONALD (WESTERN AUSTRALIA) - It is only fair and just that, on account of the latitude in which they are working, the employees should receive an extra allowance, similar to that made to employees on the north-west gold-fields.

Senator Gibson - Like the shearers, some of the cane-cutters may make £2 a day and others only £1.

Senator ALLANMacDONALD.That is so. I must admit my astonishment at the comparatively few aliens that I saw employed in the sugar areas. The explanation may be that I did not visit the particular districts in which the aliens are to be found in the greatest numbers.

Senator Gibson - Like Ingham.

Senator ALLAN MACDONALD (WESTERN AUSTRALIA) - I visited Ingham and Innisfail, which is supposed to be a highly-alienized centre of the sugar industry, but I saw very few foreigners. The pamphlet published under the authority of the Minister for Trade and Customs (Mr. White) states that the alien influence on the industry is very small, and asserts that the industry is by no means in the hands of foreign labour. The following figures taken from that pamphlet reveal the proportion of British to foreign workers in the industry: British born, 79.8 per cent; naturalized British, 10.1 per cent; total British, 89.9 per cent. Thus the foreign element is represented by only 10.1 per cent.

Senator Gibson -Surely the percentage of aliens is 20.2 per cent.

Senator ALLANMacDONALD.The honorable senator cannot deny that 10.1 per cent. of them are naturalized British subjects. A member of the mining section of the Australian Workers Union in Kalgoorlie or Boulder may have been born in Italy, but if he becomes naturalized, he is regarded as being British.

Senator Gibson - The honorable senator may expect the remaining 10.1 per cent. of foreigners to become naturalized immediately, as a result of the ItaloAbyssinian dispute.

Senator Foll - There has been a steady flow of applications for naturalization.

Senator ALLAN MACDONALD (WESTERN AUSTRALIA) - My figures were obtained by the committee which was appointed by the Commonwealth in 1931 to inquire as to the extent to which Italians were engaged in the sugar industry. The pamphlet states -

No Inter figures ave yet available, but action since taken in Queensland to reduce the employment of foreign cane-cutters in certain districts whilst not allowing other districts to increase such employment, has probably caused a reduction of the above percentage of 10.1 per cent, for foreigners, and increased the 79.8 per cent, for British-born persons.

Certainly 10.1 per cent, is not a high proportion of aliens to British workers in the sugar industry; it is 'not nearly so great as we from the southern States have been led to believe.

Another criticism often levelled in Western Australia against the sugar industry relates to the .predominance of the Colonial Sugar Refining Company. During my visit to Queensland I found no evidence of such predominance. I visited the only mill owned by the Colonial Sugar Refining Company in Queensland, and found that exactly the same working conditions obtained there as in any of the privately-owned or cooperativelyowned mills. Apropos of the repeated references to the Colonial Sugar Refining Company, I shall quote an extract from the pamphlet prepared under the authority of the Minister for Trade and Customs. It deals particularly with this company's interest in the industry -

Those who endeavour to connect the company's recent increase of £5,850,000 in its paidup capital with the sugar agreement policy overlook the fact that the present limited company has been engaged in business in three countries (Australia, Fiji and New Zealand) for nearly 50 years, and its predecessor for another 30 years previously. In a prudentlymanaged business of 80 years' duration, even small annual additions to reserves ultimately result in large sums at compound interest. Moreover, a large proportion of the company's plant was purchased at low pre-war prices, and is worth much more to-day than the prewar costs as reduced by depreciation allowances.

Company's Fiji Earnings.

Store important still is the company's business in Fiji, where all the raw sugar is produced at its own mills. Since the 1931 Commonwealth inquiry investigated the Colonial Sugar Refining Company's .Australian profits, the British preference on colonial, as distinct from dominion, sugar has been increased by £3 per ton on a specified quota of colonial sugar. This increase has benefited the company on the quota proportion of its Fiji output by approximately £200,000 per annum..

This increased Fiji revenue is definitely more than the reduced returns of the company at' its seven Australian raw sugar mills consequent upon the reduction of Id. per lb. in tho retail price of Australian refined sugar in January, 1933, and the lower returns on exported Australian raw sugar since 1931. This fully explains why the company's total profits have not fallen, despite sugar earnings in Australia, which are less, for the reasons just stated, than the 7.1 per cent, (or 5i per cent, after payment of income taxes), ascertained by tho Commonwealth inquiry in 1931.

Apart' from much improved Fiji earnings in recent years due to British super-preference on colonial sugar, during the war and immediate post-war periods Fiji sugar was frequently sold at the extraordinary prices then common all over the world, except in Australia where the price was kept far below the world parity level by the Commonwealth Government. The large profits then received by the Colonial Sugar Refining Company partly account for the capitalization of reserves it recently made.

The Commonwealth Government, however, is not in the least responsible for what the Colonial Sugar Refining Company earns outside Australia, whether from sugar in Fiji and New Zealand, or from investments.

However, the Government takes good care to ensure that excessive sugar profits are not earned in Australia, and to collect all taxation due on the company's Australian profits which are closely scrutinized by the Commissioner for Taxation each year.

Unlike some other honorable senators, I do not object sometimes to receiving propaganda from either side in relation to an important matter of public concern, such as the sugar industry undoubtedly is. In the Producers Review of Toowoomba, Queensland, of the 15th October, 1935, a number of valuable references appear, which enable one to view the sugar industry in its proper perspective. That journal deals with various household commodities - meat, butter, bread, milk and sugar - and it is interesting to note that the consumption per capita in Australia of meat in 1934-35 was 186 lb. valued at 103s. 2d.; butter, 30 lb. valued at 42s. 6d.; bread, 100 lb. valued at 39s. 4d.; milk, 72 quarts valued at 38s. 10d.; and sugar (refined), 106 lb. valued at 35s. 4d. Thus the sugar consumption per head of the population was lower than that of milk, bread, butter or meat; but I have never heard of an outcry, or of the formation of consumers' organizations to urge a reduction of the price of the commodities other than sugar. Although this may be the weighted average of the Australian household, in my own home the consumption of sugar is much greater than 106 lb. This average,

I presume, is taken on the basis of the Australian arbitration award - a man, wife and two 'children. With the reduction of id. per lb. the saving on the consumption of sugar a year in my household would be less than 13s. Other figures aire quoted in this paper, including a comparison between the prices of various household commodities in 1911, and those ruling in June of the present year. The index figure for food and groceries shows an increase of 42.5 per cent., but the increase of the cost of sugar per lb. was only 33 per cent. In other household commodities substantial increases were recorded - beef 32.6 per cent., butter 23.4 per cent., jam 55 per cent.., milk 28.9 per cent. These statistics reveal that sugar is by no means the expensive item that critics of the industry lead one to believe, while the increase of the cost of sugar is far less than that of many other household commodities. In my investigations in northern Queensland I made it my business to interview all classes of people associated with the trade, including mill managers, foremen, an industrial magistrate, sugar chemists, and so on down the scale, and I state, unhesitatingly, that my conclusion was that this was one of the most efficient industries that I have ever examined in Australia. At one time it was thought to be almost impossible to organize the producers, but in Queensland, I found that the producers engaged in sugargrowing were excellently organized; and I admired them for their efforts. Tt is easy to suggest that there should be a reduction of the cost of a household commodity such as sugar, but it is difficult to show how it could be brought about. I should be only too willing to join with Senator Duncan-Hughes in advocating an all-round reduction of id. per lb. in the price of sugar, provided that the honorable senator could demonstrate that the suggestion was practicable in that the industry could bear the reduction. A suggestion to reduce the price of sugar is on all-fours with a general proposal for a low tariff. Without a technical inquiry into tariff items, how could this. Parliament say whether the duties should be high or low? It is all very well to make these airy suggestions; but the effect of putting them into operation needs to be considered. I would gladly support the holding of a proper inquiry into the sugar industry, and if, as a result, a reduction of the price of sugar were shown to be justified, I would willingly assist to bring about that reduction. On one of the farms which I visited in northern Queensland, I met a valiant son of Scotia who demonstrated that he was operating his sugar lands for the first time on an overdraft. The figures quoted by the Leader of the Country party (Senator Hardy), showing that the number of liens and mortgages on , sugar lands has increased during recent years, confirm what I, myself, realized when in Queensland. Following my visit to that farm, another honorable senator went to it; and when I met him subsequently he informed me that the farmer was greatly perturbed because I had suggested that the price of sugar might be reduced by id. per lb. despite the fact that the farmer had an overdraft. It is true that, in the course of conversation, I mentioned a possible reduction of the price of sugar, but, after hearing the grower's side of the case and the opinions of other farmers, my views were somewhat modified. There is a great deal to be said for retaining this industry, and, therefore, we should hesitate before doing anything which might injure it. The figures quoted by Senator Crawford as to the population of the sugar areas were illuminating, because they show that in the tropical and semi-tropical parts of Queensland there are approximately 250,000 people, or more than the population of Tasmania, which has six representatives in this chamber. Had it not been for the sugar industry; the northern portion of Queensland would compare more nearly with the north-west district of Western Australia, where there is no sugar industry and, where, perhaps, sugar could not be grown because of the inadequate rainfall. That portion of Western Australia contains some excellent soil, which I have heard praised from one end of Australia to the other; but having a. rainfall of only a few inches a year it cannot be cultivated profitably. Like Senator Johnston, I should like to see sugar produced in Western Australia; but this is probably a vain hope, because the economic position of that State must be taken into consideration.

Senator E B Johnston - Beet sugar could be grown in the southwestern portion of Western Australia.

Senator ALLANMacDONALD.Yes. I was astonished to learn to-day of the handsome profits made in Victoria front the production of beet sugar. Some time ago a number of gentlemen in Western Australia contemplated the formation of a company to grow beet for the production of sugar and its allied products; but the information supplied to them regarding, the production of sugar from beet at Maffra was totally different from that which has been stated here to-day. I daresay that they will give further consideration to this subject in the light of what has been stated here. It may now be practicable to produce beet sugar in Western Australia, and also the valuable fodder bi-products of beet.

I repeat that I should like to support an amendment along the lines suggested by Senator Duncan-Hughes, but, until it can be demonstrated to me that a reduction of the price of sugar would not materially harm- the industry, I shall not be able to do so. I therefore commend the bill to honorable senators, in the hope that honorable senators from Queensland will show an equal regard for the wheat industry, which is of vital importance to Western Australia, and is in dire need of assistance.

Senator Collings - The honorable senator can rely on the support of the three Queensland senators on this side of the chamber.

Senator ALLANMacDONALD.There should be reciprocity in these matters, and an exercise of common sense. I confidently look to Queensland senators to assist the wheat industry of Western Australia, because in the past they have granted assistance to it ungrudgingly. During the last four years that industry has received valuable assistance from the National Parliament, and at all times our Queensland friends in this chamber have been in the forefront in supporting such measures, as, indeed, they have been in assisting needy primary industries generally in the several States. I shall support the bill.

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