Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Friday, 15 May 1931

Senator PAYNE (Tasmania) .- When I was speaking on this question last evening, I had arrived at the stage at which I was criticizing the value of the continued policy of over-production of sugar in Australia. I want to supplement what I said by citing what the prospects are from this over-production during the coming year. I had already said that the estimated quantity of sugar to be exported this year would be 45 per cent, of the total production in Australia. Let me show what this means to the people of Australia. For the years from 1925 to 1928, inclusive, the production cost of sugar was £20 10s. a ton, and the average price received for the exported sugar was £11 5s. a ton, leaving a net loss of £9 5s. a ton. This was equivalent to the enormous sum of £6,058,990 for the four years. It practically meant that the consumers of Australia had to make good in these four years over £6,000,000. In 1930, the quantity of sugar exported was 219,418 tons, and the total loss on it was £2,029,616. In the coming year the cost of production is estimated to be £18 12s. 9d., which is lower than the £20 10s. for the period from 1925 to 1928, and it is estimated that on the 45 per cent, of the output which must be exported, not more than £8 a ton will be received. This will mean a loss" of approximately £2,500,000. How long is this to be allowed to continue? I said yesterday that if an ordinary business man conducted his business on the same lines it would be absolutely disastrous to him. But the ordinary business man does not conduct his business on those lines. If he finds that a branch of his business is being run at an annually increasing loss he takes steps to remedy the position. It was suggested yesterday by an interjection that a reduction in the output of sugar would necessarily mean an increase in the overhead costs of production. I realize that a curtailment of the area under sugar cannot be brought about at once; that it would need to be brought about as the result of a well thought-out plan over a period of years, and that during that period certain plants would necessarily have to go out of use. But I contend that it would be more advantageous to the sugar refineries, and to the people of Australia generally, if a smaller quantity of sugar were produced, just sufficient to meet the annual requirements of Australia, and provide a decent profit, than it is to encourage an increase in the acreage, necessitating, as it does, export at a loss, which has to be made good by the local consumers.

Senator O'Halloran - Surely the honorable senator knows that the acreage is now being restricted.

Senator PAYNE - The acreage under sugar is considerably larger than it was five or six years ago.

Senator O'halloran - I doubt it.

Senator PAYNE - I have not read the report of the sugar committee from cover to cover, but in view of the fact that there has been an increase in the number engaged in the sugar industry, I gather that there has been an increase in the acreage under sugar.

Senator O'halloran - The increase in the number of employees is due to a better production per acre.

Senator Thompson - How does Senator Payne suggest that this very difficult problem should be overcome?

Senator PAYNE - It is a very difficult problem, but it is our responsibility to deal with it. It is certainly not right to allow the present position to be maintained. It is unfair to the people who have to pay the piper. Any one' who cares to read knows that the production of sugar throughout the world is on the increase. New areas are coming into cultivation for sugar in countries where labour is very cheap. For instance, during the last few years, the sugar industry has been established and extended in Central Africa. No sugar was produced in Kenya Colony a few years ago, but that country and other parts of Central Africa have been found eminently suitable for sugar production, and large areas are being devoted to that purpose. Sugar-cane can be grown cheaply in that part of the world. That is an aspect of the question we must take into consideration. It is certainly unwise to continue an industry on the basis that the more we produce, the greater the loss. Our losses on sugar are appalling, but under the sugar agreement they have to be made good out of the price paid by the ordinary consumer in Australia. We ought to make up our minds that, as soon as we can possibly manage it, steps must be taken to bring about a gradual reduction in output. Of course, provision must be made for a small carry over, because one season is more productive than another, but experience should enable us to provide a minimum carry over instead of such an enormous percentage of the whole output as has characterized Australian sugargrowing during the last ten years.

Coming to the question as it affects Tasmania, yesterday, my colleague, Senator Sampson, gave full particulars with regard to protests he has had forwarded to him by the jam manufacturers and the fruit canners, and also read a letter from the Grocers Association of Tasmania. The Sugar Committee has recommended that a committee should be appointed to control the distribution of the contribution' proposed to be levied on the sugar industry for assistance to the fruit industry. The committee, it suggests, should consist of one representative of each of the following: -

The Commonwealth Government - to be nominated by the Minister for Trade and Customs, as the Minister controlling the sugar policy.

The Queensland Sugar Board - to be nominated by the Sugar Board.

The growers of jam fruits - to be elected by growers supplying jam fruits to manufacturers, at a conference fully representative of such growers.

The growers of canning fruits - to be elected by the Australian Canning Fruit-growers Association.

The proprietary manufacturers of fruit products - to be elected by a conference of proprietary manufacturers, to be called for that purpose.

The co-operative and State manufacturers of fruit products - provided by the co-operative and State-controlled canneries.

Tasmania occupies a somewhat peculiar position, inasmuch as it produces five-sixths of the small fruits of Australia, and the growers of small fruits are small settlers, who should receive our special consideration. That, they are en.titled to some consideration has been recognized by the Sugar Committee. It has recommended that, in addition to the amount already provided by the sugar industry, an amount of £110,000 should be made available for distribution amongst certain producers. The method of distribution is to be determined by the committee. The majority report suggests that the proposed committee should, out of this fund, continue to pay the home consumption rebate, which is now £6 5s. Id. per ton, to the manufacturers of fruit products, provided only that such manufacturers might be required by the committee to pay such prices to the growers for their fruit as the committee declared to be reasonable. There is every justification for the protest made by the firm of Henry Jones & Company with regard to this proposal. The committee might fix a price which, in the opinion of the committee, was reasonable, but it might absolutely preclude the marketing of the finished product. For example, the price to be paid for strawberries might be such as to close the whole of the mainland market for Tasmanian strawberry jam. In that case the small growers would certainly lose heavily because of the arrangement. The writer of the letter to which I have already referred suggests that the money should be paid to the fruit-growers on the certificate of the jam manufacturers.

Senator Thompson - Surely the whole business could be adjusted without any difficulty ?

Senator PAYNE - As I have already shown the decision as to the price to be paid would rest with the committee, if the manufacturers wished to participate in the extra amount which would be provided by the Sugar Board.

Senator Thompson - That recommendation could be varied.

Senator PAYNE - It has been accepted by the Government, and 'all I am asking now is that it shall be varied. The writer of the letter goes on to state -

It is well understood that the grower is the man who is to get the benefit of this lower price for sugar supplied to the manufacturer for the processing of fruit products, and he can get this benefit, of course, in either one or two ways, i.e., increased price for his fruit (which encourages further production of fruit), or greater distribution at a lower price of jam and canned fruit, which works surely, though slowly, in the direction of a balanced situation in the production and consumption of jam and canning fruits in the Commonwealth. It is not so well realized, apparently, that he has had this benefit for some years past . . .

Referring to the special aspect of the manufacturers' comparative positions in the price of fruit, take strawberries. These are grown in Victoria, Tasmania, and Queensland in the main. The committee would be called upon to fix a price for strawberries satisfactory to the growers. A different variety of strawberry is grown in each of these States. In fact, several varieties are grown in Victoria and Tasmania, but practically one type only in Queensland, and some of these varieties are much cheaper to grow than others. In Tasmania all strawberries are cheaper to grow than any strawberry in Queensland, for example. Again the cost of delivery to the factory varies according to the type of container in which the goods arc delivered, and also the value of output to the factory for jam-making purposes varies by as much as 25 per cent, in accordance with the condition of the fruit and the type of container in which it reaches the factory.

Whilst a high price for strawberries might appear advantageous to many Tasmanian strawberry-growers, if it meant that they finally lost the sale of strawberry jam to Victorian or Queensland strawberry-growers, or on the other hand, lost their market through having a too high comparative price for strawberries, as against the price for apricots, plums, &c, then the grower's last state would be worse than his first. This could easily occur through any attempt at artificial regulation of prices to be paid by the manufacturer to the growers.

That puts the position in a nut-shell. It would be better to pay this additional £110,000 as a bonus to growers for the production of fruit, instead of arranging for its distribution under conditions to be determined by the committee.

Senator Herbert Hays - It would not be advisable to encourage the production of more fruit than the market could absorb.

Senator PAYNE - This is what the writer of the letter has to say on that point -

If the sugar industry really desires to help the fruit industry of Tasmania, the simple plan is the best, i.e., increase the amount of £6 5s. Id. per ton of sugar used by Tasmania's share of the extra £110,000 based upon the actual sugar used by processors and jam manufacturers in Tasmania, and continue the supply of sugar for export purposes on the present basis.

There is a good deal of force in his contention.

Although I freely acknowledge the generous help which honorable senators from other States are ready, at all times, to extend to Tasmania, Ave must bear in mind that certain difficulties are peculiar to that State. No one will deny that the prosperity of the jam manufacturers depends on the prosperity of the fruitgrowers. Consequently it is to their interest to see that the fruit-growers receive all the encouragement it is possible to give them.

Senator Sampsonyesterday made reference to the sugar position in Tasmania. I supplement his remarks by saying that the existing arrangements are not at all satisfactory. The people in all the States should be placed on exactly the same footing with regard to the purchase of sugar ; there should be no differentiation between one State and another. All should have tho same facilities. The Grocers Association, of Tasmania, has always taken a keen interest in this subject, and I presume that all honorable senators have, from time to time, received communications from that body. It declares emphatically that if the people of Tasmania are to be placed on an equality with the people in other States, a sugar depot should be established in Tasmania. Refineries are established in the capital cities of all the other States, so there is no danger of a shortage at any time. Tasmania does not possess a refinery. The whole of our sugar requirements have to be shipped from either Sydney or Melbourne, and, as honorable senators are aware, until quite recently, for six or even years in succession industrial dis putes at the busiest season of the year caused a complete suspension of shipping services, sometimes for several months on end. The Sugar Committee remarks that there has not been a shortage of sugar in Tasmania for the last two years. I believe that is true, but there is no guarantee that, should a dispute occur in the shipping industry, sea communications between Tasmania and the mainland will not again be dislocated. In the circumstances, it is only reasonable to urge that a sugar depot should also be established in Tasmania.

Senator Thompson - Any part of Tasmania is nearer to Melbourne, where there is a refinery, than is Townsville to Brisbane.

Senator PAYNE - The honorable senator knows, as well as I do, that for many years it was a common experience to find all shipping communications between Tasmania and the mainland suspended because of industrial disputes. If we could have a guarantee that our transport services would be uninterrupted, as is the case in all the mainland States, we should be in a much better position; but, unfortunately, we have to depend entirely upon sea communications, and because of what has happened in the past, we are fully justified in protesting against the absence of a sugar depot in that State. The merchants of Tasmania have been informed that if they will give a guarantee, through their banks, a certain amount of sugar will be stored in Tasmania and be available at any time. It should not be necessary to provide a guarantee. The Sugar Board should make the necessary provision for the convenience of the traders and people of Tasmania.

I sincerely hope that the Government will give favorable consideration to the requests made by the Grocers Association of Tasmania. As one who is keenly interested in the smooth working of the Commonwealth Constitution, I hope that steps will be taken to remove at least some of the disabilities from which we are suffering. There is a growing feeling among the people in Tasmania that the State would have been better off had it remained out of the federation. We do not want to encourage the growth of that feeling, and while we do not suggest that Tasmania should receive special' favours from the Commonwealth, we contend that it should receive at least reasonably fair treatment.

Senator Thompson - Is there any State that derives a greater advantage than Tasmania from the export parity?

Senator PAYNE - That is not the question. The honorable senator wants me to get away from the subject with which 1 am dealing. The Tasmanian fruit industry has been considerably handicapped by the high price of sugar; and when in addition the ordinary consumer is faced with a possibility of supplies being cut off, the request for the establishment of a depot, which would impose only a moderate expenditure on the sugar interests, is eminently reasonable.

I intend to support the amendment of Senator Colebatch, provided that he is prepared to strike out the reference to the duty.It is desirable that Parliament should always have the opportunity to decide such important matters as this, rather than leave them in tho hands of the executive. I want the sugar industry to be run on sound, business-like lines, and to remove the burden of the high price that is unnecessarily imposed on the people of Australia at the present time. I hope that the amendment will bc carried.

Senator Sir JOHNNEWLANDS (South Australia) [12.34].- On behalf of the housewives of South Australia and the other States, I regret that no action can be taken by the Senate in tho direction of cheapening the price of sugar. Everywhere meetings are being held, and resolutions are being passed urging federal members to see that sugar is provided at a more reasonable rate in the future than it has been in the past, so that jammaking, which was such a prominent feature of domestic economy for so many years, will be restored to the position in the household that it formerly held. I: have listened with a good deal of satisfaction to the extracts that have been read by Senators Sampson and Payne from the communications of that wonderful jam-making concern, Henry Jones and Company Proprietary Limited. The manager of that firm has an unexcelled knowledge of its operations, and can speak with authority. If his requests were complied with possibly the people of Australia as a whole would benefit. It is not my intention to plead the cause of that firm ; its financial resources are sufficiently strong to enable it to discharge that function. A reduction in the price of sugar will not be brought about by the carrying of this amendment; but the door will be opened to a further consideration of the matter by this Parliament. No other subject that I can call to mind comes up so frequently for consideration. I hope that the question will be re-opened at an early date, and that Parliament will be enabled to fix the price.

Senator Thompson - If the housewives reduced their visits to picture shows by one a week, they would save more than they would gain by a reduction in the price of sugar.

Senator Sir JOHNNEWLANDS.That would not enable them to purchase more sugar. I am not advocating that housewives should attend picture entertainments frequently; but I do contend that sugar should be made available to them at a price that would make home jam-making profitable. Sugar should be dealt with under the customs tariff, and this Parliament should have a voice in fixing the price of it.

I commend Senator Colebatch for having raised this matter, because of the opportunity that has been afforded us to express an opinion upon it. I cordially recommend the acceptance of the amendment.

Debate (on motion by Senator Thompson) adjourned.

Suggest corrections