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Thursday, 11 June 1903

Sir GEORGE TURNER (BalaclavaTreasurer) - I move -

That the Bill be now read a second time.

Honorable members will recollect that, in pursuance of the policy which was adopted by Parliament almost unanimously, in order to create a white Australia, certain legislation was passed providing for the payment of rebates of excise upon sugar grown by white labour, to compensate the growers for the extra expense they might be put to in employing white instead of coloured labour. The schedule to the Excise Tariff Act. provides that the duty upon manufactured sugar- shall be 3s. per cwt. - until the 1st January, 1907, less, from 1st July, 1902, a rebate to the grower of sugar-cane and beet. The rebate in the case of sugar-cane to be 4s. per ton on all sugar-cane delivered for manufacture, and in the production of which sugarcane white labour only has been employed after 28th February, 1902." The rebate is calculated on cane giving 10 per cent, of sugar, and is to be increased or reduced proportionately, according to any variation from this standard. A similar rebate to be allowed in respect of sugarbeet - the rebate to be allowed at the rate of £2 per ton On the sugar-giving contents of the beet. All rebates to be allowed at the time .of delivery of the cane or beet on the ascertainment in manner prescribed of the sugar-giving contents, and so that it may be prescribed that the average sugar-giving contents of the cane or beet in any particular district shall be taken to be the sugar-giving contents of each lot of cane or beet in such district.

That provision has been carried into effect, and has worked well, except so far as the charging of the amount of rebate is concerned. The Bill which is now before honorable members does not in any way alter the practice. We shall still cany out the principles already laid down, and for which we have power to make necessary regulations from time to time. What we ask honorable members to consider is whether it would be better to divide the amount to be paid for rebate among the people of all the States, or to charge it according to the quantity of sugar grown by white labour consumed in each State. When the provision which I have read was agreed to, I was under the impression that the arrangement for which it provides would be an equitable one, and that the amount of sugar upon which excise was paid used in each State would probably be somewhat in proportion to the population of that State. But experience has shown, as I will demonstrate to honorable members by giving them the actual figures, that that does not occur, and that if we are to continue the practice of charging to each State the £'2 per ton allowed as rebate on the amount of sugar grown by white labour consumed in that State, some of the States will pay practically nothing, while Queensland, and, in particular, New South Wales, will have to bear almost the whole burden. This occurred in consequence of large imports of foreign sugar into Victoria and South Australia, the amount of excise sugar cousumed iia those States having been very small indeed. In these two States very considerable revenue has been derived from the import duty of £6 per ton, whilst the States which have consumed the white-grown Australian sugar have practically borne the whole burden of the charge.

Mr V L SOLOMON (SOUTH AUSTRALIA, SOUTH AUSTRALIA) - Have they not been credited as the States in which the sugar has been consumed ?

Sir GEORGE TURNER - I shall deal with that point- presently. The amount of the rebate has to be paid immediately the cane is delivered at the mill, and the £2 per ton rebate, as it is called, is then paid. I am perfectly sure that had honorable members known at the time the Act was passed of the effects that would follow from the mode proposed for the payment of the rebate, they would never have agreed to it, because it is quite certain that -as a' white Australia was designed for the benefit of the Commonwealth, whatever sacrifices have to be made must be shared by the whole of the people. I confess that the returns which have come in with regard to the consumption of sugar hai'e astonished me, and have, after full consideration, led me to the conclusion that it -would be very unfair and unjust to take any other course than to distribute, according to our population, the burden of the sugar rebates for the past year, as well as for the years over which the rebate provisions extend. There has been some misconception in Queensland and New South Wales as to the effect of carrying out our original proposal. It was thought that the whole of the rebate would be charged to the State in which it was paid. That is that New South Wales or Queensland, which produced white sugar, and sent it away to Western Australia or Tasmania, would be charged the whole of the rebate. That was never intended, because it would be monstrously unfair. The mode we intended to adopt was to use the Inter-State adjustments and credit to each particular State the amount of duty COl.ected on the sugar consumed in that State. That would resolve itself into crediting £1 per ton upon white-grown sugar, and £3 per ton upon black-grown sugar, and, therefore, Queensland and New South Wales would not have been called to pay upon anything more than for the quantity of white-grown sugar actually consumed in those States. That was the utmost extent to which we intended to go, but, as experience has shown, that system would operate very unfairly indeed. I have circulated for the information of honorable members certain tables, which I will explain, in order to facilitate an understanding of what is indeed a very difficult and complicated subject. It is really (extraordinary how some . of the sugar gets mixed up. Some is exported to other States direct, and some of the Queensland sugar is imported into New South Wales and becomes mixed with the black-grown and white-grown sugar produced in that State, and is ultimately re-exported' to some of the other States. The figures I have adopted in the returns referred to are not absolutely correct, because I cannot arrive at the exact amounts until after the 30th June. I am satisfied, however, that they are approximately correct - sufficiently so to enable honorable members to judge of the effect of the two alternative courses we have to consider, and between which we have to choose. New South Wales produced 21,000 tons of sugar, of which 18,000 tonswas grown by means of white labour, and 3,000 tons by the employment of black labour ; or in the proportion of -85 white and 15 black. I am following the figures given in the return, although later information leads me to believe that there will probably be a little over '19,000 tons of white-grown sugar, and a little less than 2,000 tons of black-grown sugar. It will be seen from these figures that in New South Wales practically the whole of the sugar produced is white grown, whereas quite the reverse is the casein Queensland at present - although we all hope that the quantity of white-grown sugar in that State will largely increase. So far as the past year was concerned the white-grown sugar in Queensland amounted to 12,000 tons, and the black-grown sugar to 66,000 tons, or a total of 78,000 tons; in the proportion of "15 white and -85 black.

Mr Conroy - Are there any later figures in regard to Queensland 1

Sir GEORGE TURNER - No ; the figures given in the return are practically correct. Taking the two States together, 12,000 tons of white-grown sugar in Queensland, and 18,000 tons similarly produced in New South Wales give us a total of 30,000 tons of white-grown sugar. Queensland produces 66,000 tons of black-grown sugar, and New South Wales 3,000 tons, making a total of 69,000 tons of black-grown product, or a gross total of 99,000 tons as the year's production. I now desire to give honorable members a few figures which are not in the printed document. I wish to show them what has become of the Queensland production. Queensland yields 78,000 tons altogether. Of that quantity 6,000 tons is refined in Queensland and goes into New South Wales' for consumption there direct ; 41,000 tons of unrefined sugar is sent to New South Wales, and is there mixed with the white and black-grown sugar of that State during the process of refining; 8,000 tons of unrefined sugar is sent to Victoria. Of course, honorable members will understand that when the refining takes place no distinction is or can be made between the white and the black-grown sugar, as both classes of product are refined together, and, therefore, if we charge the States upon a consumption basis we shall have to ascertain as nearly as we can what proportion of white-grown and black-grown sugar is used. We know the proportions of white to black-grown sugar in Queensland, and also the proportions of the two classes of product in New South Wales. We know, further, that certain quantities go direct from Queensland to New South Wales, and that a large quantity is sent there unrefined, and is mixed with New South Wales sugar. The result of this is shown in the next table. The quantity of Australian sugar dealt with in New South Wales - not necessarily consumed - is made up as follows : - The New South Wales production is 18,000 tons of whitegrown and 3,000 tons of black, or a total of "21,000 tons. The quantity sent direct to New South Wales from Queensland is 950 tons of white .and 5,050 tons of black-grown sugar, making a total of 6,000 tons. The proportion in the latter case is arrived at, in view of the knowledge that the white-grown sugar of Queensland bears the proportion of -15 per cent, to "85 per cent, grown by black labour. That is how we arrive at the proportion of the white-grown sugar that goes direct to New South Wales. Then we have 6,250 tons of white-grown sugar, and 34,750 tons of black-grown sugar, or a total of 41,000 tons sent from Queensland unrefined to New South Wales. The homeproduced sugar in New South Wales and the Queensland unrefined sugar, mixed together, give us the proportion of "39 of white-grown sugar, as against -61 black-grown sugar, or practically two-fifths as against three-fifths, and we may, base our calculations with regard to it upon these figures. Honorable members will see that these figures give about the fair proportion of the white-grown as against the black-grown sugar in Queensland and New South Wales taken together. In Queensland the white-grown sugar represents "15 per cent., and in New South Wales 85 per cent., so that when the New South Wales and Queensland sugars are mixed we arrive at the proportion which we have to deal \vith so far as sugar refined in New

South Wales is concerned - whether it is used there or sent to other States. The sugar which goes direct from Queensland toNew South Wales bears the same proportion in regard to white and black-grown sugar as that which is sent to the latterState in an unrefined condition. By adding together, the figures which I have mentioned we arrive at a total of 6S,000 tons. Of that quantity 8,000 tons appearto be sent to other States, the proportions being - -Western Australia, 1,200 tons whitegrown and 1,800 tons black-grown, or a total of 3,000 tons ; Tasmania, 1,800 tonswhitegrown and 2,700 tons black-grown, or a total of 4,500 ; and South Australia, 500 tons. As the figures for the last-named State are so small, I have not attempted todivide the quantity into its proper proportions of white and black-grown sugar. Therefore, that leaves New South Waleswith 60,000 tons of sugar for her own consumption, of which 22,200 tons is whitegrown and 37, SOO tons is black-grown. I have endeavoured to show the proportions in which the black and white-grown sugar would be consumed by the various States. I do not say this would all be consumed during the present financial year, because there would be a certain quantity - about 7,500 tons - which would have to be carried forward to next year ; but as the rebate has to be paid as soon as the sugarcane is delivered at the mill, it is only failthat, in calculating the proportion of rebate, we should take the whole quantity produced for the season, whether it be consumed this year or in the earlier part of next year. I have shown honorablemembers the proportions of the 60,000 tons consumed in New South Wales. Victoria imports practically the whole of her Australian sugar from Queensland n the proportion of 1,250 tons of white-grown and 6,750 tons of black-grown. Queensland uses 23.000 tons herself, and sends toSouth Australia 500 tons. Western Australia receives 3,000 tons from New South Wales, and Tasmania receives 4,500 tons also from New South Wales. Therefore, we find that out of the 99,000 tons of sugar produced in Australia, about 30,000 tons may be taken to be white-grown, and 69,000 as black-grown, distributed in the proportions shown in the figures I have laid before honorable members. The approximate amount of the rebate paid is £60,000. This sum may be increased by £500 when we have the .complete figures. £36,000 is paid to the growers of New South Wales in respect to 18,000 tons, and £24,000 to the growers of Queensland in respect to 12,000 tons. The money has actually been paid in those States, but would be distributed if we were to adopt the consumption basis in a certain manner which I have pointed out, and in a somewhat different manner if we were to choose the population basis. I now propose to show the effect of the two distributions, so that we can judge from a financial stand-point, leaving out the Australian point of view, what will be the result in each particular State.

Mr Ewing - Has the Treasurer fairly set down the quantity which each State actually consumes 1

Sir GEORGE TURNER - I shall supply the information later on. The figures I have given show the rateable consumption of the total quantity produced this year, and I propose later on to show the actual amount consumed in each State. If honorable members will look at the next table they will see figures set out showing the amount that will be charged to each State on a consumption basis, and also upon a population basis. I do not wish to weary honorable members by giving details. If we adopt the basis which we regard as fair est to the States, namely, that of a population basis, New South Wales would get £22,758 more than on a consumption basis, and Tasmania would gain £894. These two amounts, totalling £23,652, would be made up by contributions of £16,286 from Victoria, £S62 from Queensland, £5,658 from South Australia, and £846 from Western Australia. But whether the burden be distributed upon the basis of consumption or of population, I think that at the end of the financial year, speaking roundly, the amount, so far as Tasmania, Queensland, and Western Australia are concerned, would be just about the same, and that South Australia and Victoria would each apparently lose considerable sums, which would go to New South Wales. I say " apparently " lose, because we cannot declare that these sums really represent a 'loss. It has been the good fortune of these two States to receive a very large amount of revenue from imported sugar - an amount far more than I anticipated, and much in excess of that which will probably be derived from the same source in ordinary years. A considerable sum has been paid by way of excise in Queensland and New South Wales during the past year. Queensland sends her sugar supplies principally' to New South Wales and Victoria, whilst New South Wales exports pretty largely to Tasmania and Western Australia. I have already informed honorable members of the proportion in which the mixed sugars would work out. Possibly some of the representatives of South Australia or Victoria, or even the Governments' of those States, may think it is hard that they should be called upon to repay this money. It may be so for this particular year, but it is only an act of simple justice to the other States that the burden imposed upon the Commonwealth by the adoption of the policy of a white Australia shall be equitably distributed amongst the different States, lt is only fail- and logical that the expenditure incurred in this connexion should be based upon the population of the States rather than upon their consumption of sugar, which may vary from year to year. These two States have received very large revenues from imported sugar - very much more than could possibly have been estimated at the beginning of the year. At the same time we must not forget that the distribution of foreign-grown sugar is entirely in the hands of the importers, and practically under the control of one company. It is just possible that this year it may have suited that company to send its imported sugar to Victoria and South Australia, whilst next year its purpose may be served by sending it to New South Wales, Western Australia, or Tasmania. If we are to deal with the question upon a consumption basis, honorable members will see that the more foreign sugar is imported into any particular State, the less will be the quantity of excise sugar used, and the less the rebate paid.

Mr Glynn - Practically all the sugar previously consumed in South Australia was imported.

Sir GEORGE TURNER - South Australia appears to import direct. It may suit the company to which I have referred to send a certain portion of its imported sugar to South Australia. But that is looking at this question simply from a provincial stand-point, and I ask honorable members not to regard it in that light. We ought rather to remember that, when we declared in favour of a white Australia, we distinctly affirmed that the adoption of that policy must not be at the expense of any particular State or States. South Australia has no cause to grumble so far as the receipts are concerned, because the duty formerly imposed upon sugar in that State was only £3 per ton. In Queensland, it will be seen that it makes very little difference this year in which way the amount of the rebate is distributed, but as the production of sugar by white labour increases there, so the total rebate, which has to be paid to the cane cultivators, will increase. Another difficulty in the way of distributing this payment upon a consumption basis is that Victoria, by importing direct from Queensland, gets only15 of white-grown sugar, and consequentlywill pay on that quantity only, whereas Tasmania and Western Australia, which obtain40, will pay on that quantity. As between these States, that can hardly be said to be a fair adjustment. But if we look forward to the year 1906-7, we shall be forced to the conclusion that those who have sugar will hold it back till after 1st January, 1907, in order to avoid paying excise, whilst in the meantime the rebate will probably have amounted to much more than it represents at present. It would be manifestly unfair to expect the two States which grow the sugar to pay the rebate and to obtain no excise whatever. But that is what would happen if we did not adopt a different method from that which now obtains.

Mr Cameron - They are getting the benefit.

Sir GEORGE TURNER - It is true that the growers get the benefit of the money expended there, if honorable members intend to regard this question purely from a State point of view. But I think that the House will decline to adopt that attitude, seeing that for the benefit of the whole of the Commonwealth we have declared in favour of a white Australia.

Mr Ewing - The cane growers have to substitute white labour for black labour before they obtain any rebate.

Sir GEORGE TURNER - In my opening remarks I pointed out that this rebate is given to the growers to enable them to bear the burden imposed on them by the employment of white instead of black labour.

Mr Glynn - In New South Wales sugar was previously produced by white labour.

Sir GEORGE TURNER - That is so, and New South Wales will derive a benefit from that. But we have no means of discriminating between New South Wales and Queensland, or any other State. In the course of a few years I trust that Victoria will be producing beet sugar, and I am perfectly certain that the people of this State would consider themselves very harshly treated if they were then called upon to pay the whole of the rebate of £2 per ton upon their production, because the beet was grown by white instead of coloured labour. What applies to New South Wales at the present time, may possibly apply to the other States later on.

Mr Glynn - South Australia is sacrificing about £100,000 a year for the purpose of carrying out the policy, and for that she receives no return.

Sir GEORGE TURNER - South Australia is not giving up much at the present time. Eventually, of course, all the States will have to make a sacrifice.

Mr Glynn - It represents about£7 00,000 a year upon the basis of the figures produced.

Sir GEORGE TURNER - That is on the assumption that Australia produces all the sugar required for its own use. If honorable members will look at the last table, they will see one startling effect which the present year has disclosed. In New South Wales11,000 tons of sugar were imported, from which a revenue of £66,000 was derived ; in Victoria 47,000 tons were imported upon which £2 82,000 was collected . In Queensland the imports of sugar totalled 1,000 tons, the revenue from which was £6,000; in South Australia 16,000 tons were imported, the receipts from this source aggregating £96,000. Western Australia imported 7,000 tons, upon which she collected £42,000 ; whilst Tasmania imported 3,500 tons, representing a revenue of £21,000. Honorable members will, therefore, see that Victoria and South Australia - the two States which, under this proposal, will have to contribute a certain sum to assist in carrying out the white Australia policy - have received very large sums of revenue from imported sugar. Turning to the next column, honorable members will find that New South Wales consumed 56,000 tons of sugar, upon which an excise duty at the full rate of £3 per ton was charged, thereby collecting £168,000, whereas Victoria consumed only 8,000 tons, has derived a revenue of £24,000. South Australia practically is not affected, and the two other States of Western Australia and Tasmania received fair amounts both from excise and import duties. These figures show the varying proportions in which the various States consume Australian sugar and imported sugar. It is clear, therefore, that it would be unreasonable to make a distribution in the manner which was originally proposed. The time has now arrived when, in the light of the experience of the past twelve months, we ought to consider whether we did not make a mistake - as I believe we did - and whether we should not remedy that mistake by providing that the distribution from a national point of view shall be upon a population basis. Judged by the way in which the revenue is now coming in, the hope which has been expressed that eventually we may be able to abolish the excise duty upon sugar may yet be realized. The excise was imposed for the purpose of assisting the white Australia, movement, and because some of the States could not afford to forego the duty. If we could possibly have avoided it, we should not have imposed an excise duty upon sugar any more than upon Australian wine. Had it not been for the financial difficulties of the States, Parliament would have been very glad to enact that no excise should be charged in regard to Australian sugar.

Mr Glynn - We are surrendering about £800,000 a year in revenue.

Sir GEORGE TURNER - My honorable and learned friend desires to open up a discussion in regard to the wisdom of the adoption of the policy of a white Australia - a question which has been . already decided. That matter has been settled by this House, according to the mandate received from the people, and no good purpose will be served by re-opening it. If any loss is occasioned to the Commonwealth by the adoption of that policy, the States have to make it good.

Mr Glynn - I voted for the proposal, but we are paying too much for it.

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