Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Tuesday, 5 May 1987
Page: 2621

Mr McARTHUR(8.31) —I note the amusement of the Chair that a Victorian should dare to discuss the sugar cane industry in Queensland. I am supporting the Sugar Cane Levy Bill 1987 and the Sugar Cane Levy Collection Bill 1987, and I wish to raise a couple of issues because I think the changes in the cane industry augur well for rural industry in Australia. I will refer to that later in my speech. I support the Sugar Cane Levy Bill and the dollar for dollar subsidy for research in an industry which, according to the figures of the Minister for Primary Industry (Mr Kerin), generates $800m worth of income and, as we all know, $600m worth of valuable export income for Australia. I support the research and development approach that the sugar industry has taken so well in the past in the area of cane harvesting, transport-which is about 20 per cent of its costs with its very carefully worked out railway systems-its environmental protection programs, plant varieties and agricultural practices.

Of course, the great fluctuations of the industry are well known to most Australians. In 1981-82 the price according to the International Sugar Agreement was about $365, but it dropped in 1984-85 to $109. The major exporters, as other speakers have said, are Australia, Brazil, Cuba and the European Economic Community. Australia grows sugar cane which has an 18-month growing cycle whereas the EEC grows sugar beet which has only a five-month growing cycle and which has a major influence in the marketing of that product. Again the Parliament would be aware of the dumping practices of the EEC in the international sugar market. Consumers in the United States of America, Mexico, Indonesia and China have reduced their consumption somewhat, and this has created quite an imbalance on the world sugar market. In Australia we have about 6,000 farmers whose farms vary in size from 30 hectares to 120 hectares. They produce about 25 million tonnes of cane which is processed through 33 mills-that has been reduced from time to time-and which produces 3.5 million tonnes of raw sugar.

In relation to this Bill I wish to refer to the change in regulations that have taken place in this industry and the industrial relations aspects of it. Because of the international situation the sugar growers have been under great pressure. The Sugar Industry Working Party report, the Savage report, which was published in August 1985 was a ray of light in this highly regulated industry-regulated by statute, bureaucracy, governments, farmers and millers. A benchmark in the arrangements was the 1913-14 Co-operative Sugar Works Act by which a cradle to the grave mentality developed. The growers and the millers joined together under a government bureaucracy to produce sugar and have no flexibility in the market.

I have taken the trouble to look at that Act. I am quite horrified at the implications of it. I will read from one of the sections which emphasises the attitude of the Queensland Government and the cane growers since that time. The section reads:

The Cane Supplier shall not without the consent of the Corporation or its agent during the said period grow, plant, or cultivate any crop or crops upon the said land other than sugar-cane, except such crops as may be required by him for his own home consumption and green manuring.

This is the first regulation that organised the cane industry. There has been very little change until recent days. The next part of the Act indicates that the mill has the right to reject the supply of cane in any one year and hold it over until the next year. What an amazing situation was organised in those early days. There has been no change in that attitude until recent years. In 1922 there was another Act, and what was not put in the first Act was put in a whole lot of regulations about how they would organise themselves, how they would send out forms and notices, how they would manage the works-all by statute, mind you-notices to growers, how they would organise their farms and so on. Now the sugar industry comes under six Acts. Quotas are highly organised and entry into the sugar industry is restricted. For the past 50 years or so this has been the way in which the industry has been organised so that the ownership of an assignment, or a quota in other terminology, really creates a capital asset. Once we have these sorts of restrictions we have a hothouse environment in which quotas attain value, transfer creates difficulties and there is no flexibility in the market-place for the farmers or the quotas.

I have had a chance to talk to growers in the Cairns area. I was particularly interested in the whole attitude of the industry and the approach that the cane growers took. A particular grower showed me his farm that was gazetted in the early 1920s. The quota for that farm and particular individual paddocks was identified in the original gazetted area. Imagine the actual paddocks and the years in which these paddocks were allowed to be put into production being organised by a government instrumentality. This is agrarian socialism at its best. I was quite amazed to see the way in which the sugar cane farmers had organised themselves.

As other speakers have said, export prices are now down and real market forces must work. At long last there has been pressure for change. The millers, the growers, the officials and the bureaucrats have all had to adjust to this new phenomenon that the international market-place has decreed-that the cosy arrangement of quotas, or organised marketing, has to change. Land prices have dropped dramatically, farm values have fallen and, whilst there has been some change in the field, I note that the Queensland Government has not changed its attitude one iota.

Looking at the international scene in which some growers are hopeful that there may be some salvation, we observe that the European Common Market has made no change in its policies. It will continue to sell beet sugar on the world market at dumped prices as it suits it. The example of the Organisation of Petroleum Exporting Countries oil price collapse indicates that cartels can never hope to maintain their positions, as signatories to the International Sugar Agreement are hopeful that it might maintain its price. I refer again to the Savage report which tried to bring about some changes in the industry. I am sure the Minister, who is at the table, would have been supportive of a number of those changes as 80 per cent of the market is export oriented and a more flexible approach is required. The report suggested that a sugar industry authority be established and that local millers and growers be allowed to handle their product at the local level with an industry overview. With the industry trying to bring about some of those changes, slow though they may be, at least there is a ray of light in that this very agrarian socialist organised industry is now making some adjustment to international pressures.

Another area I wish to refer to is the pressure by the international market on industrial relations in this industry. At long last we are seeing that the industry and the people in it have to react to productivity considerations in utilising the crushing plants. The Savage report made some very good recommendations about the operations of these crushing plants and these recommendations have been referred to by other honourable members. Again, I have had a chance to look at one of these mills at South Johnstone-an area which has been in the news in recent times-where the crushing takes place and the sugar is processed before the final product is taken to the coast. The need to establish mills in the local area, so that the cane can be transported by a very complex network, makes for some difficulty in making the operations of the mills flexible and adjustable and, of course, parochial views are generated. But I am encouraged by the change in attitude and by the possibility of change tomorrow in the industrial relations arrangements. In this very difficult area of industrial relations in this tightly organised industry the Savage report recommended that there be rationalisation of milling operations, continuous crushing by mills, extended harvesting hours and multi-skilling of labour.

Those were the issues that were looked at and the working party actually recommended-and this is very much in line with the Liberal Party's industrial relations policy-that trade unions be consulted at an early stage of proposals for restructuring or reorganising industry operations. Secondly, it was recommended that trade unions, millers and growers enter into negotiations for the introduction, where appropriate, of continuous crushing so that the capital plant of those mills that are owned by growers, and sometimes by private companies, could be run more efficiently and more effectively. What could be more sensible than the unions and the workers coming to an agreement to utilise this plant structure for seven days a week during the harvesting time, when it is important to run the plant continuously? The important recommendation that emerges right now which gives me encouragement that there are changes around in rural industry is that tomorrow an application will be heard in the State Industrial Commission in Queensland from the millers for a five-day week to be spread over seven days to allow the cane mills to crush continuously for seven consecutive days throughout the crushing season. It seems a very flexible, sensible, commonsense approach that, at a time when the cane industry is suffering from economic difficulties and when there is a rationalisation of mills, the work force come to an agreement with management for a more flexible arrangement of the spread of hours so that those mills can operate effectively and efficiently over the whole seven days.

This approach to the Commission will be made tomorrow and, if the State Industrial Commission, in its wisdom, grants this flexibility in approach, this will be, in my view, a major breakthrough in the agricultural area where we require this sort of flexibility to handle the seasonality of agricultural production. Obviously the cane crushing goes on for only a few months of the year and, disregarding the elements, during that time the mills need to work at full capacity. I am sure that if the Industrial Commission uses its intelligence and common sense it will grant this application tomorrow in the court. Of course, this will spread to the tourist industry in Queensland and to other rural industries which are seeking this sort of flexibility. Just as it is important in the case of the shearing industry that the shearers be allowed to work when the weather is right, when the sheep are dry, so too is it important in the sugar cane industry that the members of the union be allowed to work when the conditions are right.

I finish by saying that I support the Bill. I support the concept of research and development in the cane industry. Whilst I wonder where the sugar industry's future markets might be, hopefully with a more flexible approach its output will meet market demands in a more private enterprise way, and it will not be covered by government subsidies. I hope there will be more flexibility within the industry and the industrial relations approach that has been advocated by the Liberal Party will come to pass through the Queensland Industrial Court. Also I hope job opportunities will be maintained and there will be flexibility in the labour force in north Queensland which will help the sugar industry to return some profitability during very difficult times.