Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Thursday, 16 November 1905

Senator STEWART (Queensland) - This motion represents an attempt to deal with a question which has recently given me a great deal of trouble, and in connexion with which I have for a long time advocated that something should be done. The difficulty, so far as I can see, is that there is "no business" in the motion, which, even if carried, will leave the sugar industry in exactly the same position it is in at the present moment. I am tired of passing abstract propositions, and in my opinion the time has come when, action should in every case follow resolution. I am extremely anxious that something should be done to place the sugar industry on a sound business footing, because, otherwise, the Commonwealth, within a very short period, will become tired of bolstering the industry up, with the consequence that confusion will become worse confounded, and that a departure in a direction which may not be agreeable to some of us will be advocated in certain quarters. Therefore I think that it is of the very highest importance that some business proposition, which can not only be voted on, but carried into effect, ought to be placed before the country. The purport of the motion is that the refining and distribution of sugar ought to be made a Government monopoly ; and, if it be carried, the first step will be to buy out the Colonial Sugar Refining Company.

Senator Givens - Not necessarily; if the company refused to sell, the Commonwealth could not buy.

Senator STEWART - But if the Commonwealth Parliament passed an Act nationalizing the industry, the company would be compelled to sell.

Senator de Largie - Not necessarily; the Commonwealth could establish sugar works.

Senator STEWART - It is apparent to me that Senator de Largie has not grasped the scope of the motion,, and I question very much whether Senator Givens has. The motion declares for an Australian monopoly in sugar refining.

Senator de Largie - That is different from buying out the Colonial Sugar Refining Company.

Senator STEWART - We must buy out the company. Does the honorable senator advocate that the Commonwealth should shut up the company's works by force, and' give no compensation ?

Senator de Largie - That is a different matter. The honorable senator .said that the Commonwealth must buy out the Colonial Sugar Refining Company.

Senator STEWART - Although Senator de Largie has evidently given the matter some consideration, he does not appear to understand it yet.

Senator de Largie - Would the Com- . monwealth have to give the company any price the company liked to fix ?

Senator STEWART - I never hinted that the Commonwealth, would have to do so.

Senator de Largie - Then where does the word " must " come in?

Senator STEWART - We must compensate the company if we forcibly stop their operations. It is of no use discussing' questions of this kind in a loose, airy, profitless fashion. There has' been too much ' of that in the past, and, so far as I amconcerned, there will be less of it in thefuture. Let us suppose that the Commonwealth pass an Act nationalizing the industry, and, in fact, telling the company that they must stop business. The company would at once, of course, demand compensation, and the matter would be referred to arbitration. I shall not attempt to say what would be a fair sum, but I have a very shrewd idea as to what claim thecompany would be likely to submit. The capital of the company is £2,200,000, and' the dividends, roughly speaking, amount to- £200,000, or 10 per cent. If the Government go to any private individual, and for thecommon good nationalize the industry inwhich he is engaged, the community must in .fairness compensate that individual. That is a principle with which I thinkeven the most advanced advocate of" nationalization will agree. .If we take a man's business or land for the good of the public, justice demand's that he shall not' suffer, but shall be given reasonable compensation. I should not like to say what reasonable compensation would be; but if I were a large shareholder in the Colonial Sugar Refining Company, I should say to the Commonwealth, "You have decided to take this business out of our hands. I have shares which now yield me an annual income of £2,000, and I expect that you will make such arrangements with me as will secure to me an equal income."

Senator Pearce - That would be impossible.

Senator Givens - Capitalize their right to fleece the public !

Senator STEWART - I am simply pointing out that most likely that claim would be advanced by the shareholders. I do not say that the company either would or should agree to these terms.

Senator Pearce - That would make eternal the monopolistic right which they now have.

Senator STEWART - It is not eternal.

Senator Pearce - But the honorable senator would make it eternal.

Senator STEWART - I hope the honorable senator will realize that I am not saying ;what the company should get, but simply stating the claim which they would be likely to make. If we were to compensate them to that extent the Commonwealth would immediatetly require to raise a loan of about £7,000,000, which, at 3 per cent., would give the shareholders in the company their £200,000 a year. I do not think that the Commonwealth would be likely to agree to such terms. The capital now invested in the industry is about £2,000,000, and I estimate that the lowest compensation that the company would be awarded by any Arbitration Court would be £3,000,000.

Senator Givens - According to the company, £2,000,000 is invested in the Fiji and New Zealand business, and a considerable portion is invested in plantations and landed property which my motion does not propose to touch. Where is the honorable senator's business acumen now?

Senator STEWART - Take it at even one-half. I am not sure of the figures; but I know that a very considerable proportion of the company's capital is invested in works outside Australia. But if Senator Givens will turn up the article which appeared in the Age of 7th September last, he will find that the profits of the company were at the rate of £2 a ton for re fining, or almost equivalent to the value of the Australian consumption of sugar, ?f> that really the largest proportion of their revenues is derived from their Australian business. In any case, at the lowest estimation, even taking the honorable senator's last estimate, between £2,000,000 and £3,000,000 would be required to buy out the company's rights. Apart altogether from the constitutional aspect of the question, I ask honorable senators whether it is likely that the Parliament, as it is constituted, would' agree to go upon the market for the purpose of borrowing either £2,000,000 or £3,000,000 to embark in this industry?

Senator O'Keefe - According to the . honorable senator's figures the Common-' wealth would make a big profit, because it would borrow at the rate of 3 per cent., and get a profit of 10 per cent.

Senator STEWART - I do not think that the profit to be made by the Government would be at all equal to the profit made by the present company, because I recognise that the former would have to pay very much higher wages than have been paid by the latter.

Senator Givens - Will the honorable senator say for a moment that" cheap wages insure a greater profit?

Senator STEWART - I do not know. "The company get their labour as cheaply as they possibly can.

Senator O'Keefe - They could still pay bigger wages and leave a margin of profit.

Senator STEWART - I quite agree with the honorable senator that the company could! still pay bigger wages, and leave a very handsome margin. But I began by asking whether this is a business proposition, whether, if the motion be carried, the Parliament is prepared1 to carry it into effect. As, it is now constituted, I think there is just as much hope of the Parliament talcing up this question in a practical fashion as there is of it making a railway to the moon. I am anxious that something should be done in connexion with the sugar industry. One disadvantage attaching to the acceptance of this motion is that when I go to Queensland and advocate, as I have done for years pas.t, that its Government should establish State refineries, seeing that it has invested about £750,000 in the industry, I shall be met with the objection that there is a resolution of the Senate in favour of nationalization. I shall know that there is not the slightest hope of the Common- wealth Parliament doing anything in the matter. and that, because of the Senate's resolution, the State Parliament will not do anything. Like Mahomet's coffin, the whole question will be hung up between heaven and earth. I have no doubt that Senator Givens moved this motion with the best intentions, and, as an abstract proposition, I have nothing to say against it. I am in favour of nationalizing monopolies every time. The need for something to be done in connexion with the sugar industry is of a most urgent character. Some action must be taken in this direction. Either the Commonwealth must take the matter up, and I do not believe that it will-

Senator Mulcahy - It cannot without an alteration of the Constitution being made.

Senator STEWART - That is a point on which I do not wish to give an opinion. But if the honorable senator's view be correct, that is all the more reason why we should not pass this motion. I conceive that it is the duty of Queensland to. carry out its policy of central mills to a logical conclusion, bv establishing central refineries, as it could easily do. It has, I repeat, about £"750,000 invested in the industry, and for £"200,000 or £300,000 it could establish one or two refineries which would be in a position to refine all the sugar grown in that State and New South Wales. Let us look at another aspect of the question. Suppose that we did not establish an Australian monopoly, t»ut started a refinery or refineries in opposition to the Colonial Sugar Refining Company : where should we get our- raw sugar? There would be immediately a struggle between the Colonial Sugar Refining Company, and, if I may use the term, the Commonwealth Refining Company. We should have exactly the same position with regard to sugar that we now have in the case of the Eastern Extension Company and the Pacific Company. For a time they would, probably cut each other's throat, and end up by "pooling." So far as I can see, the Commonwealth Refining Company would be compelled to enter the market in competition with the Colonial Sugar Refining Company, and, as the latter has, a number of sugar plantations, the former would have no sure supply of raw product. The Queensland central mills would get their refining done by one company, or the other, just as it suited them.

Senator Givens - They do not get their refining done that way now. They simply sell the raw sugar.

Senator STEWART - It comes to the same thing. The Queensland central mills would send their raw sugar to the company which was paying the higher price. It would be very undesirable for the Commonwealth Refining Company to be placed in the position of a competitor with a private company.

Senator Givens - It might be a very good thing for the success of the State refineries.

Senator STEWART - It might be a very good thing for the growers of cane, but my impression is that it would be a very bad thing ultimately for the taxpayers of the Commonwealth, and certainly it would not be a very good object-lesson in the nationalistic idea. While I s.hall vote for the motion as an abstract proposition I think it is high time that we tried to do something practical.

Senator Trenwith - Can the honorable senator suggest an amendment?

Senator STEWART - No; because I rea l.ize that if the resolution of the Senate involves the expenditure of money the Commonwealth will not move hand or foot. It is absolutely necessary if the sugar industry is to be placed upon a proper basis that the immense profits which now go into the pockets of the Colonial Sugar Refining Company - or a portion of those profits - should go to the growers. Otherwise the men in the fields cannot be properly remunerated ; nor can the men in the mills, nor the farmers, nor, indeed, any one in connexion with the industry. As I have pointed out dozens and dozens of times during the last few years in Queensland, the Colonial Sugar Refining Company takes the cream of the industry. But this motion does not strike at the monopoly at all. It does nothing that is practicable. Even if we carry it, the effect will merely be as if we stood in the middle of a street, and waved a. flag. It may, as I have pointed out, even have this bad effect - that it will divert the attention of the people of Queensland to the Commonwealth, instead of inducing them to put pressure upon the State Parliament to take some action in the way of establishing State refineries.

Senator Givens - Why does the honorable senator propose to vote for the motion if it will have a bad effect?

Senator STEWART -I think that Senator Givens must see that it may, and probably will, have the effect which I have suggested.

Senator Trenwith - If it probably will have that effect, the honorable senator certainly ought not to vote for it.

Senator STEWART - Does any one expect that the Commonwealth Government will take immediate action in this matter as the result of the carrying of this motion? If not, what is the use of carrying it? It will be one of those harmless motions which are very nice to read, and ail that sort of thing, but which do not take us any further forward. That is my objection to it. The Commonwealth is not prepared to embark in an industry of this kind.' Some people .raise the constitutional objection, but even if that disappears there remains this other objection - that -a large number of the members of the present Parliament object to borrowing money for any purpose whatever.

Senator Trenwith - If both Houses ofthis Parliament carried such a motion, does the honorable senator think that the Commonwealth Government would take over the industry?

Senator STEWART - I do not think so.

Senator de Largie - The honorable senator thinks that the Commonwealth Parliament would not insist on something being done. He used the same argument in connexion with the iron industry.

Senator STEWART -The honorable senator does not know what I think on this or any other subject, except so far as I express my thoughts. I am not fond of passing airy resolutions which mean nothing, which can end in nothing, which cannot be fruitful. I want to see some real progress made. What is the use of talking about Socialism and nationalization, if we do not do anything?

Senator Trenwith - That is very just criticism, if we do nothing ; but the honorable senator wants to do something. Let him tell us what he wants to do.

Senator STEWART - I want the State Government to take this matter in hand. I have for years advocated the establishment of State refineries.

Senator Givens - I moved a similar motion to this over four years ago, but could not induce the State Parliament to accept it.

Senator STEWART - If it* is difficult to induce the State Parliament to do it, it will be much more difficult to induce the Commonwealth Parliament. I have pointed out some of the difficulties. Senator Givens smiles. I know that with his bright optimistic temperament, he sees no obstacles in his path.

Senator Givens - I have stumbled over the honorable senator as an obstacle.

Senator STEWART - I told the honorable senator the very day he put this motion on the paper what I thought of it. '

Senator Trenwith - Though Senator Stewart thinks it is bad, he will vote for it.

Senator STEWART - I do not think that it is so much bad as useless. It is a mere pious expression of opinion to which I .ha ve no objection. Indeed, I believe in nationalization. Every man who knows me. if he speaks the honest truth, knows that I have always during my career as a politician advocated the nationalization of monopolies.

Senator de Largie - By throwing cold water on definite proposals.

Senator STEWART - There are some people who are so narrow-minded that if any other person does not see exactly as the}' see, they call motives in question. I am content to bear all that. But I wish' Senator de Largie to know that I have given much more attention to this question than he has ever been called upon to give to it. I advocated that the State should establish refineries from dozens of platforms in Queensland, as Senator Givens knows.

Senator Givens - Hear, hear.

Senator STEWART - I am merely criticising this motion, because I consider it to be nothing, more nor less than fireworks.

Senator de Largie - What does the honorable senator call platform orations?

Senator STEWART - They are not fireworks with me. -

Senator de Largie - Efforts to catch votes.

Senator STEWART - t am not a votecatcher. I never concealed my real opinions to get votes. I do not know whether* the honorable senator has done that. I hope he has not. It is a most immoral thing to do, and one that no honest man would dream of doing. I am sure that I have never attempted it, and I think that, no matter how long mv connexion with politics may last, though they say that after a man has been a considerable time in politics he becomes demoralized, if I feel like doing anything in the nature of cadging for votes I shall come to the conclusion that it is time I got out of politics. I have said several times, and I repeat, that I really wish to see something, done - something substantial - in connexion with the sugar industry, and that I consider that it is almost a pity that a motion of this character has been submitted to the Senate.

Senator MACFARLANE(Tasmania).It seems to me .that both the mover of this motion and Senator de Largie have approached it entirely from the socialistic stand-point. As they are Socialists we might naturally expect them to do so.

Senator de Largie - We are practical Socialists at that.

Suggest corrections