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Wednesday, 20 May 1931

Senator THOMPSON (Queensland) , - On the general principle of the need for parliamentary approval I am in sympathy with the amendment moved by Senator Colebatch, but I am bound to oppose it, not only because it is levelled at a great industry of Queensland, which State I have the honour to represent in this Senate, but also because all the steps taken in connexion with sugar in the past - and there have been quite a number of them- have been administrative, and have not been submitted to Parliament for approval. This debate reminds me a great deal of a conversation I had at Rockhampton with Sir Sydney Henn a prominent member of the British Parliamentary Delegation to this country which the Marquis of Salisbury headed. It was brought home to me that Sir Sydney Henn was an economist, and a very good one, too, but of a very cocksure order. I am inclined to think that most economists are built on those lines, and that Very often their opinions are wrong. He asked, " What is the position of the sugar industry in Queensland? It cannot be an economic one. It is not sound." In my quiet way I tried to show him first of all that it had a direct bearing on the question of defence, which we considered a very important factor, inasmuch, as the north-eastern littoral of Queensland is easily the most vulnerable part of the continent, threatened as it is by hordes from the north or by any hostile country which for a time may obtain command of the sea. I showed him that there was no other industry capable of peopling the north in the way that the sugar industry was doing. I pointed out that in that part of the country there was particularly favorable land for sugar-growing, and that there was in no other part of Australia, so far as I knew, land of a similar character. I also used the argument that the sugar industry employed quite a large number of people, and settled a great many upon the land with all the benefits that accompany land settlement; also that a large amount of capital was involved in the industry, and that a good deal of efficiency had already been achieved. One of the most important arguments I advanced was that the sugar industry fitted in with our White Australia policy, because cane sugar is grown in other parts of the world by coloured labour. The last, but not the least, argument I impressed on Sir Sydney Henn was that the virile white population of North Queensland disproved the asser-tion of scientists and others that a white population cannot work in a tropical climate. I thought that my arguments had made an impression, but Sir Sydney Henn said, " I do not care. It is not economic ; it is not sound." I had to agree, as possibly we must ali do, that, in reality, it is not an economical proposition ; but there are many other things in this country which are economically unsound. It is a condition of affairs which is inseparable from the development of a young country, whose progress is marked by governmental actions similar to those condemned by Sir Sydney Henn. I mention briefly the wine, gold, cotton, butter, galvanized iron, and other protected industries, and cite the high protective duties we have imposed in Australia with the object of enabling the country to develop and progress. But not one of these industries has claims on such high grounds of State as the sugar industry has, and which I enunciated in my reply to Sir Sydney Henn

In the administrative step the Government has taken in regard to sugar it had the advantage of a report by a special committee. The report is very complete and valuable. It will stand as a record for many years to come of the state of the industry in Australia at the present time. It falls under three headings. First there is the section to which all members of the committee agreed. Then there is a majority report and also a minority report. I hope that the printing committee will have the three of them published as one document.

Senator J B Hayes - That is to be done.

Senator THOMPSON - As presented in the first instance it is rather misleading, because the part to which the committee in general agreed follows the minority report. There is, however, very little difference between the majority and the minority reports - practically a difference of only £d. per lb. in regard to the price of sugar, and other matters such as over-production, upon which I shall touch later. A complaint, has been made in the chamber about the personnel of the committee, but as the sugar interests had only one representative on it I cannot understand why any exception should have been taken. As °a matter of fact the committee seems to me to have been particularly well chosen. It certainly presented a very valuable report.

The value of the sugar industry to Australia is generally appreciated, especially its machinery-purchasing capacity. The agricultural implements it requires are all subjected to very high protective duties. The greatest objection to the industry is based on the high cost of sugar to individual consumers; but as each id. per lb. means only ls. 8£d. per annum for each person in the community, surely the people generally do not grudge such a trifling amount, particularly when it comes back to them again in many ways. It must also be borne in mind that the comparisons mentioned here and submitted to the committee are between foreign raw sugar and Australian refined sugar, quite different propositions so far as quality is concerned. Furthermore, foreign raw cane sugar is produced elsewhere by coloured labour. I believe that in Cuba the workers on the cane-fields get only their food and clothing. In Java the wage for a twelve-hour day is 4d. for women and lOd. for men. With the exception of butter, sugar has advanced in price from 1911 to 1930 to a smaller extent than any other household commodity, and to a less extent than the basic wage. Comparing the fixed price for raw sugar with the price of foreign sugar from 1915 to 1930, the Australian consumer has been saved about £27,500,000. That is a collossal saving, and, although I have not the means of checking it, I believe it can be proved to be accurate. Surely the people will not grudge a slight increase of cost in view of the figures I have just quoted. Further, it has been demonstrated to the committee's entire satisfaction that there is only a small margin of profit in the industry. We have also to bear in mind the concessions given by this industry in the form of world parity prices in respect of the sugar contents of exports, the allowance to fruit processors and wholesale and retail distributors, and the ' general acceptance of delivery costs to equalize the price at the various capitals, as well as the holding of large stocks for the convenience of customers in the several State capitals.

We have heard a good deal on this subject from the representatives of Tasmania in this chamber. I venture to say that Tasmania is in a better position in regard to sugar than any other State in the Commonwealth, since it has the acfvantage of export parity, and its export of goods in which sugar is contained is much greater than that of any other State in the Commonwealth. As to the fruit processors, I think that there has been some suggestions made, which, although not quite what is required, will meet the requirements of the processors to a greater extent than the protection they have had in the past. This matter can be adjusted by means of the £110,000 which is now available over and above the previous allowance. It should be possible to have this money distributed in such a way as to give satisfaction to the fruit processors. A long letter written by the managing director of Henry Jones and Company, of Hobart, was read in the Senate last week by Senator Sampson. I knew the late Sir Henry Jones personally, and his views on the sugar industry, as expressed to me, were very favorable to it. I venture to say that he could, in a few lines, have made out as good a case as did the gentleman referred to, who took many pages to explain his views.

As far as the wholesale and retail distribution prices are concerned, I may say that the allowance to the wholesalers is absolutely inadequate. As a merchant for many years, I had to pay cash in large sums - there was no waiting for it - for my supplies. One had either to pay cash or go without the sugar. On the other hand, when I sold to the retailers, who, very often, were country storekeepers, I had to wait a long time before I received payment. In some instances I did not get any payment at all. I have always felt that the wholesaler is not on a proper basis and that the present allowance should be increased.

Senator J B Hayes - I am sure that the retailer is not on a proper basis.

Senator THOMPSON - I shall deal with the retailer presently. The committee pointed out that in view of the terms given to retail storekeepers they should accept a share of the loss and, therefore, it did not see its way clear to grant the wholesalers an increased allowance. I dare say that the wholesaler will still go on as he has been doing in the past. The retailers asked for a 20 per cent. margin of gross profit, but a percentage of 20 per cent. on an item such as sugar, with its quick turnover, is altogether out of the question. The committee states that in "Western Australia, from whose representatives we have heard a good deal of criticism, the retailers are getting 20 per cent. If they are then, in my opinion, they are getting too much, because a commodity such as sugar cannot stand such a high percentage.

A good deal of criticism has been launched against the Colonial Sugar Refining Company. I hold no brief for that company which I think is always able to defend itself, but it is amusing to find the venue of the opposition changed from the Government to the Opposition side of the chamber. That fact I think will be appreciated in many quarters. One must pay a tribute to the efficient way in which the Colonial Sugar Refining Company has conducted its operations and also to the money and effort which it has spent in research.

Senator Sir Hal Colebatch - Whose money ?

Senator THOMPSON - Money taken out of the profits of the company. No one can say that its refining costs are greater than they should be. It was brought out in evidence that the company's profits had not been wholly derived from its refining operations. In the matter of research work the company has blazed the trail in a most creditable way, and to a greater extent than has occurred in other industries in this country. I have often felt that if the sheep-breeders in Australia, who are always complaining of the losses sustained by the ravages of diseases and pests in sheep, had contributed to a fund to meet the expense of tackling problems common to them, such as the Colonial Sugar Refining Company has done, they would have made greater progress. I know that in many respects the Colonial Sugar Refining Company has been very good to the men on the land. The company once owned a large area in the Mackay district, on which it intended to grow sugar cane, but after a time it felt that its business was more in the milling and refining of sugar and it sold the land, principally to immigrants, on very reasonable terms. Today those men are more or less quite well off by reason of the liberality of the company. The Colonial Sugar Refining Company has been 43 years in business, and surely efficient management over so long a period should result in the creation of large reserves such as the company undoubtedly possesses. The committee says that the company requires £8,500,000 of capital items annually to finance Australia's sugar requirements.

Senator Crawford - The company commenced operations in 1843, and therefore has been established for more than 43 years.

Senator THOMPSON - I am quoting the committee's figures. Presumably it is 43 years since it commenced operations in Queensland. As I have said, it requires £8,500,000 of capital items to finance the sugar requirements for a year.

As there are very few, if any, concerns in Australia which have to find so much moneyor could find it, I think that the charge for financing is reasonable. We could not find any other concern capable or willing to do the work which the company is doing as cheaply as it is. The committee also sets down the net annual profits of the company arising out of its Australian business at £472,000, which is equal to 5½ per cent. per annum. That surely is not too much for the service which the company is rendering.

I listened to what Senator Payne and others had to say with regard to overproduction. This, I admit, is a very difficult problem, but it has not escaped attention. From time to time, conferences have been held in Queensland - Senator Crawford is more acquainted with the facts than I am - and certain methods have been tried by which to overcome the difficulty. Up to the present, however, they have not been altogether satisfactory. I believe that these conferences will be continued, and I think that it is quite possible some solution of the problem will eventually be reached. The resultant £2,000,000 from the export trade is very useful to Australia in view of the present exchange position. I have heard it said that it is not of any account; but even if the sugar exported is sold at a loss it is one with which the industry bears.

Senator Herbert Hays - The home consumer bears it.

Senator THOMPSON - I have shown where the consumer stands. The low margin of profit is brought about by the loss on exports; but, as I have said, the £2,000,000 of export trade is a very valuable item to Australia at present.

I do not intend to speak at length on this subject. It is one in respect of which many quotations could be used, but I rather dislike the introduction of quoted matter in a speech. I shall conclude by saying that I am strongly in favour of the Government's action based on the majority report of the committee, and will not support any action which may jeopardize this great industry. My vote will therefore be recorded against the amendment moved by Senator Colebatch.

Debate (on motion by Senator Cooper) adjourned.

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