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

Senator MACFARLANE -The last speaker has shown the practical difficulties in the way of carrying out the aspirations of the supporters of the motion. Fm myself, I conceive that there is no possibility of the Federal Government entering into such a risky undertaking as trading in sugar. It is all very well to say that the sugar industry produces large profits. Sometimes it does.

Senator Mulcahy - There is an artificial price just now.

Senator MACFARLANE - Any industry which is very risky must occasionally produce large profits in order to recoup itself for bad years. But if this Commonwealth were to put itself in the position of incurring heavy risks by investing a very large amount of capital in sugar, the people would have a very severe loss staring them in the face in a very few years. Senator de Largie has accused the Colonial Sugar* Refining Company of encouraging1 the employment of coloured aliens to the exclusion of whites. I took exception to that statement, and I do so still. The company is not a cultivator of cane, except to a very small extent.

Senator de Largie - It is a land-owner.

Senator MACFARLANE -r-The company owns a considerable amount of land, much of which is leased to white people. Take Dr. Maxwell's recent report. He shows that in 1902 there were 1,521 white growers of sugar. In 1905 there were 2.681, showing an increase of upwards of 1,000.

Senator Givens - That increase did pot take place on the Colonial Sugar Refining Company's plantations.

Senator MACFARLANE - I think that it is largely due to the company's influ ence), and to the production by white people on its land on the Isis and elsewhere.

Senator O'Keefe - Has that increase kept pace with the output of sugar in Queensland ?

Senator MACFARLANE - It is extremely difficult to make a calculation of that kind. With regard to the production of sugar, the latest report issued by the company, pf which I have a copy, states -

We anticipate that the large beet crop now being taken off in Europe will make itself felt in the price of sugar throughout the world, but the markets there are now steadied greatly by the increase of domestic consumption which has followed the abolition of bounties on the Continent.

Senator Smithhas told us something about the cultivation of sugar on the Continent of Europe. I wrote a long letter on this subject to the Launceston Ex aminer some three years ago, giving full particulars. Germany alone produces 2,300,000 tons of sugar, and only consumes 700,000 tons, so that she has a very large amount of sugar available for export. In the face of that large quantity, which is partly available for export to this country, it is manifestly impossible, with the low duty of £,6 per ton, for the Colonial Sugar Refining- Company to raise the price of sugar in Australia ,£3 per ton as stated above the cost of imported sugar, or anything, like it. The price of the Colonial Sugar Refining Company's sugar is based upon the price in the world's markets, and nothing, else. As business men, of course they go as near to the world's price as they possibly can, as we might naturally expect them to do. If we were to raise the duty to £9, the simple effect would be to increase the price to the consumer. It is very clear that some honorable senators who have spoken on this matter seem to think that they are going to heLp the worker by abolishing one of the best labour-employing institutions in the country. The company has available a very large capital, and it employs labour at fair prices. The company bases its price for juice on the price of the sugar which it sells. Is not that fair? There is no attempt to create a monopoly. It is clear that if we injure the Colonial Sugar Refining Company, by taking away its refinery, we must in the first instance injure the small producer by taking away his best buyer. Honorable senators opposite say that {he company having a monopoly can pay whatever price it chooses.

That is not so. There are other refineries which purchase raw sugar. The growers in Queensland can, if they choose, establish their own refineries. They tried the experiment, but could not make it pay ; and they have no right now to turn round upon a company that does make the business pay, and say, " This is a monopoly, and therefore we must take your property. " Senator Stewart has very thoughtfully pointed out what will be the result to the country of nationalizing the industry. Honorable senators opposite advocate a non-borrowing policy. Is it likely that it will be possible to obtain several millions of money locally for the purpose of purchasing the property of the company? The thing is a chimera. Honorable senators tell us that we are not to borrow money in Great Britain or other countries abroad. Are we likely to be able to borrow it here for such a purpose as going into the sugar industry ? I know something of the trade in sugar. I have been shown, by the courtesy of Senator Givens, a selling contract carried out in Adelaide. I know that in Tasmania the Colonial Sugar Refining- Company sell their sugar, except to the manufacturers, month bymonth, in such a way that the purchasers may, any month or any day, purchase where they like. But, according to the quantities they buy, so they get their discount for cash. There is no monopoly about that. There is no attempt to force the buyer to buy from this particular company. The buyer only buys from this company because it pays him to do so. We have Poolman and Company making a very good sugar, almost as good as that supplied by the Colonial Sugar Refining Company, and selling it at a slightly lower price than that charged for the company's sugar. Buyers can buy from Poolman and Company if they please. I find from the report before me that-

Messrs. Poolman and Company have for many years been engaged in sugar refining in Melbourne, but are now about to erect a small refinery in Sydney, and will commence work some time next year.

That discloses no monopoly. If it will pay Poolman' and Company to import sugars and refine them, it will pay others to do the same. As a matter of fact, the industry is carried on so admirably, and on such a very small scale of profit, that it is verydifficult to .induce capitalists to embark further in it. Before they will do so, they must see their way to run great risks, and must have a large! trade balance to keep them going. Naturally they must expect, in some years, to make a heavy loss. I understand that last 'year the Colonial Sugar Refining Company made some low contracts, and in consequence of the very high prices (ruling for Java and other sugars, they had to sell their sugar at an actual loss. They raised their prices it is true month by month to the ordinary customer ; but recently they have been reducing the price month by month. So they will continue to- be guided by the markets of the world in the price they charge to the consumer here. That is a perfectly legitimate business, honestly carried out, and possibly profitably carried out also; but it is certainly a first-class business for the consumer.

Senator Walker - They pay only £9 7s. 6d. on the capital invested.

Senator MACFARLANE - I understand from Senator Walker that the company do not get a return of even 10 per cent, on the capital invested. Not very many years ago the company were not carrying on at a profit at all. Perhaps I ought not to refer to that, as it is no concern of the Senate. It is sufficient to say that the business is extremely risky. Some friends of my own in Queensland entered into the! business of refining sugar, and very soon lost from £60,000 to £80,000. That is an indication of what the Government may expect if th'ey take up an industry of this kind, and attempt to work it in competition with the world. This is a very different matter from that to which Senator Trenwith referred. The honorable senator explained at great length the wonderful benefit which followed from the taking over of the Glasgow tramways by the corporation of that city. There were particular reasons accounting for the benefits arising in that case. The business was commenced with horse trams, and the introduction of electricity has made a wonderful difference. It must not be forgotten that Senator Givens is asking that the Government should undertake a manufacturing business, and it will not be found to be a business in which there are all profits and no returns. Senator de Largie admitted that cultivation bv white labour is decreasing rather than increasing.

Senator de Largie - What I said was that cultivation by black labour is increasing.

Senator MACFARLANE - Cultivation by white labour is not increasing in proportion.

Senator de Largie - Yes, it is.

Senator MACFARLANE - Whitegrown sugar represents one-third of the total production, leaving two-thirds to be produced bv black labour. If honorable senators will read Dr. Maxwell's report, quite recently issued, they will find* that he says that white labour progresses almost wholly within the southern and central districts. The black sugar areas are in the hands of 750 large growers, or farmers, in the northern, and of plantation owners in the district of Bundaberg and southern districts. His statement is to this effect -

If the bonus is continued for seven years more without increase, it would tend to fall below not to exceed the cost of substituting white labour for black, because it was based on the cost of labour and conditions existing when the bonus was first fixed. With the progress of white production, white labour must increase in cost, and therefore 1o terminate the present bonus on the sliding scale would be to assume the great experiment approaching maturity, and confirm the larger growers to hold lo the employment of aliens.s I would suggest that the duty of £6 per ton should not be increased, as-it would tend to encourage stagnation and slovenly ways of production, but I would suggest the raising of the excise to £4.

He says that the production of sugar by black labour in the north is increasing, or is not being taken up by white people, as we anticipated. In certain of the districts it is found that some of the small white farmers will not work themselves, but will employ white labour. In the northern districts, they cannot obtain white labour, and they have to employ black labour.

Senator Givens - Who cannot obtain white labour? Why does not the honor - n DIe senator speak about matters of which he knows something?

Senator MACFARLANE - White farmers cannot obtain white labour in the northern districts.

Senator Givens - They can get any amount of white labour.

Senator MACFARLANE - Is the honorable senator a better authority than Dr. Maxwell ?

Senator Givens - He does not say that thev cannot get white labour.

Senator MACFARLANE - Yes. he does. He says that white labourers do not return the second year. In a report before me, I find this statement made -

At some of the mills it was not possible, owing to the crushing finishing early, to judge of the effect of the increasing heat upon the steadiness of the men, and upon their daily output, but in every case (excepting at Hambledon, where the white men work in short spells in the hot weather), in which the season extended well into December, there was a falling off in the tonnage delivered. From Macknade it was reported that the white men presented a pitiful sight after the season's cutting, and it is recommended in the event of white men only being employed, that the harvesting should be so regulated that crushing will be completed by the end of November at the latest.

I commend that to Senator Givens as the recommendation of one of the mill managers. Further -

The experience generally in 1903 was anything but promising for an increase in the area of white grown and harvested cane. The only locality in which the employment of the white labourer in the canefields is looked upon with favour is the Isis and it is reasonable to assume after the experience in '95 and '96 seasons that this class of labour can be successfully worked there - despite the poor results of last year - provided the men are controlled. Another point in favour of white men in this district is the large number of local people who undertake work in the canefields. This advantage is also possessed by Homebush.

One of the greatest drawbacks to the employment of white labour experienced at Macknade, is the great difficulty in keeping men for more than two or three weeks at ordinary cane cultivation work - especially weeding and thrashing - during the early months of the year, when the weather is very trying. Other features noticeable last year which tell against the white men were their absolute refusal to cut light crops, excepting at exorbitant rates, and the indifferent quality of the work performed, especially the thrashing.

From all this it is very clear that we are being asked to attempt something against nature in forcing white men into this industry to undertake work in the tropical north which can only be accomplished by natives of the tropics.

Senator Givens - I rise to a point of order. My motion has no reference whatever to the cultivation of sugar-cane in Northern Queensland. I ask whether the honorable senator's continued references to this subject are in order?

The PRESIDENT - I cannot say that they are out of order. I think that several honorable senators have made such references.

Senator- Givens.- With all respect, I think they were all out of order.

The PRESIDENT - I called honorable senators to order, but they did not .seem inclined to obey me. I do not think that Senator Macfarlane is. out of order. In discussing a motion which suggests that the Commonwealth should undertake a work iia connexion with the sugar industry an argument as to the way in which sugar-cane can best be grown is, I think, a relevant argument.

Senator MACFARLANE - I was endeavouring to show that if the Government took over the sugar refineries, there would be difficulty in obtaining sufficient sugar produced by white labour. If Senator Givens had shown that it was possible to get sufficient sugar of the kind1 for the purposes of a large refining business, he would have done good service to this country ; but, so far as I can see, there is no prospect of such a desirable achievement. Nature is against the production of sugar by white labour ; and1 in this connexion, the figures of Dr. Maxwell are very valuable. The employment of white labour decreases the further north the industry is carried on. I do not know that I have anything further to say, except to emphasize the fact that the price of sugar is entirely dependent on the price prevailing throughout the world. In the report from which I have already quoted, it is stated that the large beet crop in Europe will make itself felt in the price of sugar throughout the world. There is no monopoly on the part of the Colonial Sugar Refining Company) and no effort to fleece the small consumer or any consumer. A perfectly legitimate business is carried on. and I am perfectly sure that the Commonwealth could not conduct the enterprise bv any means as cheaply as it is conducted by the company.

Senator Mulcahy - Do the company not keep the price up to the highest limit?

Senator MACFARLANE - I 'know that the company do not go beyond what is fair, compared with prices elsewhere. I ask leave to continue my remarks on another occasion.

Leave granted ; debate adjourned.

Suggest corrections