1951-07-06 20 01 01 REPS 1111 0 Senate 1951-07-06 Mr. SPEAKER (Hon. Archie Cameron) took the chair at 10.30 a.m., and read prayers. 1112 Questions 1111 1111 10000 0 0 SPEAKER, Mr. Mr. SPEAKER On Friday last, the honorable member for Reid asked me a question about the central heating system operating throughout this building. I inform the honorable member that the two chambers and the library are serviced by air-conditioning equipment enabling temperature and humidity to be controlled. Other parts of the building are heated by means of hot-water radiators. The honorable member asked me whether the system could be regulated so that honorable members and other persons would not be forced to undergo extremes of heat and cold. I remind the honorable member that, on the one handy I have no control whatever over the I-ow outside temperatures experienced during a Canberra winter; on the other hand, if the building were not adequately warmed I am sure that runny complaints would be made by honorable members and other persons employed in the House. I might add that the hot-water radiators with which the rooms are equipped are all fitted with valves, which can be turned off if it is felt that a room is too warm. 1111 1111 10000 0 0 SPEAKER, Mr. Mr. SPEAKER Yesterday, the honorable member for Henty directed a question to me about the making of entirely personal attacks in this Parliament, and in particular about one attack that had been made recently upon a highly respected member of the Government. I have carefully examined the statements made during the debateon the motion for the adjournment of the House on the 20th, 21st and 28th June. The statements are couched in parliamentary language and are completely within the Standing Orders and the usage of the House. They challenge the conduct of certain Ministers in 1941 and rest on two foundations, first, a newspaper article published on the 20th Kay, and secondly, certain knowledge of the events which the honorable member addressing the House claimed to have gained from another source. I do not know of any usage or procedure which would prevent an honorable member from criticizing, seeking an inquiry into, censuring, or condemning, the official actions of Ministers because of some time limit. So far as I know, there is no parliamentary statute of limitations. The scope of the debate on the motion for the adjournment of the House at the end of a sitting is very wide, but the dignity of the House was not enhanced by the statements at present under notice. It is not my duty to inquire whether the allegations are true or false, or whether their presentation to the House at this point of time is wise or unwise. I am quite satisfied that the honorable member had the right to make them, and that the language employed was parliamentary. My responsibility ends at that point. 1112 1111 N76 1 0 MENZIES, Robert Gordon Mr. MENZIES I ask that all questions be placed on the notice-paper. 1112 motion Motion (by Mr. Eric J. Harrison) - by leave - agreed to - That Mr, Speaker, Mr. andrews, Mr. Beazley, Mr. bernard Corser, Mr. Costa, Mr. Gullett and Mr. Hulme be members of the House Committee 1112 motion SECOND READING 1112 10.36 N76 Kooyong Prime Minister 1 0 MENZIES, Robert Gordon Mr. MENZIES I move - That the bill be now read a second time. In explaining this measure to the House, I desire to begin by answering one or two questions that may reasonably be put about the reasons for the introduction of such legislation. The first of them, and perhaps the main one, is "Why do we need to be prepared now and over the next few years for the emergency of war?" I have already, on former occasions, made elaborate statements to the House on this matter, in which I have indicated to the House why it is that we believe as a Government, on the information before us, that there is in the world grave danger of a major war. The happenings in Korea, Malaya, Indo-China and Persia, added to the early events in Czechoslovakia and Middle Europe, make up a pattern of planned aggression which I venture, with all moderation, to describe as no less menacing than the events which occurred from 19.15 to 1939. In the past, on the outbreak of war, once in 1914 and once in 1939, Australia has had time after the actual outbreak of war to prepare its effort, to organize its forces and to deliver them into the field. But there is nothing in recent history to suggest that we shall be given so much time again. We must, I believe, as the people of the United States of America, the United Kingdom, Canada and other countries are doing, organize our resources upon the footing that if a great war breaks out we shall need to be ready for it at once and that we shall not have to rely upon good fortune or some other circumstance to give us a year in which to make ourselves ready. For those reasons we believe, as I have previously told the House, that we must be ready by the end of 193 Not, let me repeat, because we believe that war is inevitable by the end of 1953. That is a complete distortion of our view. But we believe that if we are ready by the end of 1953 and if the other democratic powers are also ready, then war will probably not come at all. Adequate defence preparations will, I believe, quite probably mean peace. But nothing else will. The second question is "What is involved in defence preparations" That is a question that requires some thought before an answer can be given because wherever we go, we shall encounter people who, while they understand perfectly the quality of an increased defence effort in terms of sailors, soldiers, airmen, guns and aeroplanes, do not so readily understand the enormous impact that defence preparations must have on the ordinary economy of the country. That problem is not one to be dismissed by a few superficial remarks about controls or bureaucracy. It has to be looked at fairly and squarely in order to see what it means. What is involved in defence preparations? First of all there is involved in it the increasing of the trained strength of the armed forces so that effective forces will be available for instant use on the outbreak of war. There is also involved in it, I emphasize, that training and other facilities shall be available at that time to produce further forces because one does not get ready for war and for the impact of war by merely having mobilization strength. If a war breaks out we shall also need reinforcements for our civil force; which cannot be conjured out of the air. We must have training facilities in advance, accommodation, and a supply of equipment, because expansion in the event of war does not wait for any men. In addition to providing trained forces and equipping them, which is an enormous task in modern times, we must strengthen the whole national economy to meet wartime and war preparation demands, We all know that if it is the tragedy of this world to fall into another war, the weapons that will be used will be far beyond many of the weapons that were used in World War II. Those who do not believe that to be so should familiarize themselves with the facts. The development of jet aircraft has resulted in more effective and faster machines which, in the Korean campaign, have largely out-dated piston-engine aircraft. Although we must have these modern aircraft, because of their intrinsic efficiency, we must realize that the jet fighter is immeasurably more expensive to produce that the old-type fighter aircraft, not only in terms of money, but also in terms of man-power and materials. It may very well be, that to produce an equal numerical strength of jet fighters for another war will engage the attention of perhaps three or four times the number of skilled people and the quantities of 'are and special materials. Therefore, if we are to have more strength we must have more man-power, more materials, more plant, and more resources. Those things do not come in answer to a whistle. They can come only if they are planned for and only if such proper steps as are needed are taken to see that the economy of the country is not distorted into entirely inconsistent directions. We cannot have the, skill that we need for defence preparations and at the same time allow the same skill to be used without any impact from us on purely labour undertakings. I venture to say that it is basically wrong to think that the problems associated with defence preparation, the development of basic industries and new resources, and the stabilization of the currency are separate and distinct. In truth, we cannot accomplish defence preparation unless we do something about each of the other three problems. There can be no neat division of our life into water-tight compartments. I shall provide a single example to support that contention. We cannot have sufficient munitions production unless we have coal, iron and steel, industrial plant, buildings and skilled man-power. Apart from other weighty causes, we cannot have enough of these things for munitions if less essential or non-essential trades are competing for them and getting them on an inflationary market. A skilled man cannot be divided into two with the facility with which the atom may he split. If we have a limited supply of the men and the plant that we need, we cannot employ it at one and the same time to get this country into shape and to cater for the demands that inevitably arise on an inflationary market. We cannot defeat inflation while there is a large unsatisfied demand for labour and basic materials side by side with growing competing demands by less essential or non-essential industries. I repeat the truism that inflation is really the product of over-competition by a superfluity of money for a scarcity of goods. It is useless to think that we can all get The man-power and the materials that we all need. I venture to say that, if that were the position, there would be no inflation at all at this moment. If the man-power and the materials available were adequate to meet the demand, how could there be inflation It is because there is a scarcity of both and a clamant demand for both that we are experiencing this enormous upward pressure on the price level. That pressure can very well be increased out of all knowledge by defence preparations unless we adopt reasonable and sensible ways and means of reducing the demand for non-essential goods and services so that we can concentrate upon the jobs that really need to be done. We cannot develop coal and hydroelectric power, as we need, without doing what we can to concentrate men, plant and materials to that end. One of the absurdities of our pro-cut economy is that we may have new demands for power, multiplied day after day, by industries that have no reel relation to the strength of this country, while the production of the power upon which those industries depend is being steadily stifled by a shortage of man-power and materials. We may have great power enterprises dragging their weary way along because of shortages of skilled men and uncommon pieces of plant, while at the same time there is a growing demand, very frequently by non-essential industries, for the power that those great enterprises are designed to produce. In short, and I mention this because it is something that every Australian must have in his mind during the next few months, if we try to do all the things that we are trying to do to-day, and have no effective organization for putting first things first, we shall not have defence preparations, development or stability, but we shall have delays, waste, rising costs, rising prices, inadequate real production and a disintegrating economy. That is a basic truth that we must have clearly in our minds and by which we must test whatever falls to be done in this country during the rest of this year. What is the Government doing or aiming to do There are two very short answers to that question. I shall mention them only to complete the picture before I deal with the really difficult problem. We are increasing the armed forces. Honorable members know the increases that have been announced. Those increases will cause, to a degree, a reduction of our available labour force. We are increasing the production of equipment and supplies. Quite recently, the Government told the departments concerned that an additional E50,000,000 had been made available to them for expenditure while new programmes were being produced. That sum, of course, in the long run, will be a mere fraction of the additional expenditure that will be required; but at the moment it is additional to the existing programme. The Joint War Production Committee, in association with the Services, the Department of Supply and the Department of Defence Production, are busy now converting government factories to full-time defence work, arranging for additional production from private industry and undertaking procurement overseas of items that are not readily available in Australia. Those are the three great sources from which we can secure what we need for the defence of the country—our own production in government factories, production in private industry and procurement overseas. All these things involve immense preparation. New forms of production cannot be undertaken in defence pr private factories without long months of tooling-up, design and preparation and the accumulation of the necessary materials. But the new phase of defence preparedness to which this bill is primarily directed is not either of those tasks because we have been doing them under our existing power. The new phase is primarily directed to building up our industrial and economic strength which is the foundation of all military plans. Despite the fact that we have more people in Australia and a greater industrial capacity in terms of machines and factories than we had in 1939 our economy, paradoxically enough is in certain respects weaker now than it was in 1939. The things that I am about to mention will, perhaps, not at once be appreciated, but all of them represent a relative weakness because all of them represent a limitation upon our capacity to expand and that capacity, in time of crisis, will determine the speed with which we can do the job. We have no reserves of manpower or of productive capacity. Man-power is overstrained. We have jobs for hundreds of thousands of people who do not exist. Our factories and machine power are overstrained because the demand for them far exceeds the supply of them. Therefore, we enter this period overstrained in two aspects on which we were undertrained in 1939. We have not yet, of course, in the second place, overtaken the arrears of maintenance suffered by our transport systems and other essential services during the war. Honorable members do not need to be reminded that whereas in 1939 Australia's railway systems were tolerably deficient and in good shape, they ran down of necessity during the war. In that period, also, there was no capital replacement and maintenance was not neglected but, was deliberately by-passed because of the need to concentrate on war matters. The result to-day is that the railway transport systems, to say nothing of the poor battered roads of this country, are in a state of relative debility. In the normal course of events it would he the responsibility of the nation to concentrate upon these things and to restore them to their former efficiency, but in order to be able to do that we require in large measure the very materials that are now scarce. Consequently, we are confronted by the problem of not only preparing our defence and increasing our supplies of power, which themselves will enquire immense public works, but also of getting our transport systems in order. In other words, here is another vast problem which of itself will impose heavy demands on man-power and materials in addition to those flatly superimposed on the matters to which I have referred. While all those demands have arisen, our production of coal, iron, steel and electric power has not nearly kept pace with the increasing demand. I ask honorable members, in considering all these matters, to have in mind not only their immense significance from the point of view of getting the country into shape to defend itself, but also their significance as explaining the terrific economic distortions which are producing such rapid rises in price levels as we sit here. Again, we have committed ourselves to a large immigration programme, accompanied by important developmental and housing programmes. These programmes of course, will make us very much stronger in the long run, but in the short run they make substantial demands upon the nation's resources. They are an added demand upon the already ill-supplied material and labour market. Finally, there is world-wide inflation of prices. This is not peculiar to Australia, though it is at the moment at disturbing proportions in this country. That world-wide inflation of prices impedes defence preparations by drawing off productive resources into less essential uses. Let me emphasize that point and perhaps explain It a little, if it calls for an explanation. If there is a rapid pressure of inflation there tends to be also a superfluity of money, Money becomes a sort of universal commodity. If there is a superfluity of money in that sense, a demand for luxury or not-essential goods is inevitably created. The whole pressure of that demand is such that we draw away, from the real industries of the country their capacity to obtain the things that they need in order to produce. This problem as I will show, has been carefully considered in other countries of the world with an instinctive approach to such matters, and with the results that I shall indicate, the Government is taking stock to correct those weaknesses up to a point. This measure will enable other steps to he taken, but I should first point out to honorable members what steps have been taken so far. First, it is not possible to stab blindly at this problem. It requires immense study in order to determine the factors involved, their weight, their quality and their quantity. The Government lets set up a board of a highly representative kind in order to bring the total problem into instant consideration. I refer to the National Security Resources Board which has now been sitting for some time and which advises on the allocation of resources as between defence and other national tasks, and on the co-ordination of military and industrial mobilization for defence. Secondly, we have called the States into consultation. They have agreed with us to set up a series of sub committees to consider the measures necessary to prepare the Australian economy against the danger of war. The fields in relation to which those committees are being established have been agreed upon. Committees dealing with transport, electric power generation, water supply, coal and the allocation of materials are already in process of operation. On the proposal of one of the States, we are conducting a special inquiry into the present alarming diversion of resources into luxury and nonessential production. Through the Australian Agricultural Council, a special examination is being made of the measures necessary to prepare our agricultural industries to meet the great demands that would be placed upon them in the event of war. In this connexion, wo have initiated consultation with the United Kingdom on food production as a factor in defence. We have reinstituted the control of capital issues in order to divert capital investment into industries in which an expansion of capital equipment is needed on broad defence grounds. We are cooperating with other governments in the International Materials Conference at Washington, at which arrangements are being made for an equitable allocation of certain materials that are in short supply throughout the world and are vitally needed for defence preparations. 1116 KYC 0 0 POLLARD, Reginald Thomas Mr. POLLARD Does that include wool? 1116 N76 1 0 MENZIES, Robert Gordon Mr. MENZIES There is to be a conference on wool. The Minister for Commerce and Agriculture (Mr. McEwen) was discussing that matter a few days ago. 1116 KYC 0 0 POLLARD, Reginald Thomas Mr. POLLARD The Government has sold out on it already. 1116 N76 1 0 MENZIES, Robert Gordon Mr. MENZIES The honorable member for Lalor (Mr. Pollard) is quite wrong. The wish is father to the thought in his case. There is to be no selling out in the matter of wool. We understand that position perfectly, and are quite resolute in our approach to it. The honorable member need not stay awake at night thinking about it. The International Materials Conference is really a series of conferences which is operating through committees on various matters. For example, we have recently been discussing tungsten, through the International Materials Conference. Australia produces some tungsten for which there is a very great demand throughout the free world. In those various matters, every attempt is being made on the highest level to secure such an allocation of the production of the democratic countries as will reasonably satisfy the needs of all. 1116 K8B 0 0 CURTIN, Daniel James Mr. CURTIN Will the matter of tinplate he considered? 1116 N76 1 0 MENZIES, Robert Gordon Mr. MENZIES An immense variety of materials is being considered. We are also co-operating in the stockpiling of strategic materials. In fact, we have provided £30,000,000 for the stockpiling of strategic materials in Australia. Although I do not propose to go into the particulars of all those things, I may mention that substantial stocks of certain critical items have already been procured. That is a brief summary of the kind of thing that has been done. Why, then, do we require special legislation—uncommon legislation—of the kind that is now presented to the House? The Government already possesses extensive powers under the Defence Act and the Supply and Development Act for the raising and training of forces and for the production and procurement of equipment and supplies. However, those acts do not provide adequately for all the measures that must be taken to strengthen the economy against the danger of war. The Government does not consider that it is necessary, in the present circumstances, even if it were possible constitutionally, to take emergency powers on the scale that was necessary in time of war under the National Security Act. We do not think that it is, necessary, and, quite obviously, we have not the power to do such a thing at a time when, as the High Court of Australia has recently held, there is neither a major war nor, in its view, an imminent danger of a major war, though it is my misfortune to think, on the latter, that there is. But we do consider that it is necessary to supplement the Defence Act and the Supply and Development Act by it Defence Preparations Act, which is legislation of a kind that has never previously operated in this country in a time to adopt another phrase used by the High Court, of ostensible peace. This Government has no love of rigid controls. Nor have the people love of rigid controls. There has been much bitter experience of the potential abuses of many controls, and, therefore, we shall rely, as far as possible, on voluntary co-operations to carry through the necessary adjustments of the Australian economy. But legislation must be available to permit the use of compulsion if, unhappily, in the absence of co-operation, that proves to be necessary. I can illustrate the position by a simple case. We have vital materials, which are scarce. We need them for defence preparations and for some vital basic industries. Some other industries that are not vital would also like them. Are we to sit by helplessly and allow those vital materials to be brought in for non-essential materials and at the same time allow vital defence and civil industries to be starved, or to be slowed down for the want of them? I am as strongly opposed to regimentation as it is anybody in this place, but I should think that it was a shameful thing for any government, or any parliament, to sit by and allow genuinely vital materials to be put to uses not relevant to the immense problem with which this country is confronted. So, what we are saying is that if we cannot secure effective control over vital material by an arrangement with the people who have it, or who produced it, we must be in a position to compel them to disgorge and it allow the material to be diverted to the right use. Before explaining the contents of the bill, I want to make a brief reference to what is going on in three other countries. In the United Kingdom, in January of this year. The Prime minister, Mr. Attlee, said - The government does not believe that war is inevitable. But they believed that peace cannot be assured unless the defence of the free world are made sufficiently strong to deter aggression. Honorable members will observe that that is, in paraphrase, identical with the statement that I have repeatedly made in this place. Over the three-year period, 1951-54, the United Kingdom Government purposes to spend 4,700,000,000 on defence and to increase the number of men under arms to nearly 900,000 by 1952. In order to carry through that defence programme the united kingdom government which, of course, has no problem of constitutional power, will use its existing controls to reduce the consumption of clothing and fabrics, radios, domestic equipment, pottery, glassware and other household goods; to reduce investment in building; to cut down export production to some extent; and to make an absolute reduction in the average level of civilian consumption. Measures are also being adopted to ensure that manufacturers give priority to defence orders and that sufficient raw materials are diverted to defence production. That is a most formidable series of controls, but they are being either continued or instituted in a country which knows that it would be in the front line of a war, and which has not hesitated to mortgage its financial resource to the enormous extend I have indicated and to plan for an army of a magnitude previously unknown in times of peace in its history. The United States of America has the same democratic, turbulent, instinctive resistance to controls that we have in Australia. The Americans are a people by no means unlike ourselves in that respect. Neither of us is disposed be extremely docile under the gentle hand of bureaucrat. Last year the united State Congress passed a special act, known as the defence production act, which gives to the President considerable powers to meet immediate defence needs and to build up the strength of the United States of America and of friendly nations to resist aggression. Under that act the President, in this instance representing executive government, has power to oblige manufacturers to give defence contracts priority over any other contracts and to require manufacturers to accept defence orders. He can allocate materials according to need. A national production authority has been established by the President to control the use of scarce materials. The same act empowers him to impose controls over prices and wages. Special agencies have been established for these purposes. Under the act, the President has appointed Mr. Charles E. Wilson as Director of Defence Mobilization, with extremely wide powers. Those honorable members who have had the opportunity to read the remarkable first report by Mr. Wilson, which has been printed under the title, Building America’s Might, must have been immensely impressed not only by this analysis of the problem involved but also by his account of the steps that have been taken already to deal with them. In Canada an emergency Powers Act has been passed for the following express purposes: - To enable measures to be taken as urgently required from time to time, to carry out adequate defence preparations, to regulate the economy of Canada to meet the needs of defence, and to stabilize the economy and to safeguard it from disruption. Those are extraordinarily general terms. 1118 DTN 0 0 EVATT, Herbert Vere Dr. EVATT Has the right honorable gentleman a copy of that act? 1118 N76 1 0 MENZIES, Robert Gordon Mr. MENZIES Not at the moment, but I shall have copies made available. The Canadian Government is already cooperating closely with the United States Government in the allocation of scarce materials, and it is taking other steps to develop the preparedness of the Canadian economy. Having discussed the intrinsic nature of the problem and having mentioned what is being done in other countries and in Australia, I turn now to a brief consideration of the bill which I am explaining. The preamble sets out the main considerations that the Government was in mind in proposing the legislation. They will, in effect, afford an explanatory background for what otherwise would appear to be extremely, broad powers not necessarily related particularly to the problems that I have mentioned. The nature of the general problem has been sketched in broad outline in the preamble, which I shall now summarize for the benefit of honorable members. Australia is pledged to support collective action for the purpose of resisting international aggression. There is a state of international emergency which requires special preparations. The first emphasis in defence preparations must be on the misng, equipping, and provisioning of our armed forces and on contributing to the equipping and provisioning of the forces of countries that would be our allies in the event of war. I pause here. Do not let us suppose that this business of having allies is just a matter of one-way traffic. We may very well have to look to some of our powerful friends for some of the vital instruments of war in the event of an outbreak of war, and countries allied with us would have an equal right to look to us for the things that we can provide. It is also an essential part of defence preparedness, under the new modern concept of war, that provision be made for the maintenance and sustenance of the civilian population and for assistance to be given to our allies in the maintenance of their civilian populations. For example, the provision of food shipments to a particular area at a particular time aught affect the whole course of a war. For all these purposes, our production capacity must be expanded. We shall require, as the preamble points out, the diversion of certain of our resources for defence preparations and we shall have to adjust our economy overall in order to meet the threat of war and to avoid, as far as we can, economic dislocation and instability. The principal operative part of the bill, which honorable members will find in clause 4, provides authority for the Government to make such regulations as are necessary for, or in relation to, defence preparations. This is a very general power, and sub-clause (2.) of the clause sets out a series of special types of defence preparations on which regulations may be made. Honorable members will see that they express with some clarity tile kind of things that may be dealt with. I shall read them through without comment. They are as follows:— the expansion of the capacity of Australia to produce or manufacture goods, or to provide services, for the purpose of defence preparations or for the purpose of enabling the economy of Australia -to meet the probable demands upon it in the event of war; the diversion and control of resources (including money, materials and facilities) for the purposes of defence preparations; the adjustment of the economy of Australia to meet the threat of war or the avoidance or reduction of economic dislocation of instability caused by, or impeding, defence preparations; measures to secure the maintenance and sustenance of the people of Australia in the event of war or to contribute towards the maintenance and sustenance of the people of countries associated with Australia in defence preparations. Obviously, under those powers, a great sweep of provisions may be envisaged, but certain matters are explicitly excluded, as is set out in sub-clause (3.) of clause 4. They include taxation, Commonwealth Government borrowing, compulsory direction of labour and compulsory military service. They are excluded, not because these matters may not at some time become involved in the defence effort, but because each of them is of such a special character that if a government has any proposals to make in respect of them they should be included in special legislation. Someone may ask why is it necessary to take power to make regulations for this purpose. I can answer that question briefly. In the first place, it may be necessary to move quickly in circumstances that are not sufficiently grave to warrant a calling of a special session of the Parliament. It is not always practicable to call a session suddenly, as we know from experience. Circumstances might arise which would require instant executive action that could not be deferred until a special meeting of the Parliament was called. Indeed, the circumstances might not, of their own nature, be sufficiently important to justify Convening of a special session. In the second place, as honorable members will understand the measures that would be necessary are likely to be rather detailed in character, ani more appropriate, therefor, to become the subject of regulations than of an act of parliament. We now come to the third reason why it may be desirable to deal with the situation by regulations, and it is by no means the least important reason. In eases where it is necessary to introduce some measures of economic control, action must be taken promptly without giving undue notice to those who might wish to evade the control. Nothing could be more foolish than to give people a month's notice or six months' notice that some commodity is going to be controlled. At the end of the period of notice there would be nothing left to control; it would all have gone "under the counter", as I believe the expression is. Where speedy action is necessary it can best be taken by regulation. All regulations made under the act will be subject to parliamentary review in accordance with the usual procedure, and they may be disallowed by either house. The act will be of limited duration. It will expire on the 31st December, 193. If the Parliament then chooses to extend its operation it can, but without further enactment the legislation will expire on the date specified. [Extension of time granted.] Should the international emergency pass before that time, it will be possible, under this bill to terminate the operation of the net by proclamation before the end of 1953. Last night I spoke of Communist tactics in the cold war which has been designed to disorganize and divide the democracies. To-day, I am dealing with the urgent need to treat defence preparations on the home front just as seriously as a general must treat problems of strategy or tactics on the field of battle. Honorable members will not fail to notice that many of the steps that will have to be taken to strengthen the economy against the danger of war will also provide firm foundations for future national development and for a stable, prosperous, and peaceful community life. These measures will not be wanted. Very few in this house or out of it will relish either the departure from normal legislative processes or the invasion of normal individual freedom of choice which are involved, or maybe involved, in this bill. But the crisis cannot be ignored. Freedom must still be purchased at a great Price which includes those matters to which I have referred. The Government is confident that our people who have responded so splendidly to several challenging national demands in the last 40 years will cheerfully co-operate in what must be a national effort to protect the national inheritance. - Debate (on motion by Dr.EVATT) adjourned. 1120 motion SECOND READING Debate resumed from the 5th July (vide page 1085), on motion. by Mr. Eric J. HARRISON— That bill be read a second time. 1120 11.23 KYC Lalor 0 0 POLLARD, Reginald Thomas Mr. POLLARD This bill has been introduced for the purpose of renewing an agreement between the Australian Government and the Queensland Government. The agreement will expire on the 1st August, 1951. After hearing a ease submitted .by the Queensland sugar-growing interests and by the Premier and the Deputy Premier of Queensland, the Australian Government has seen fit to introduce this measure and to provide that the new agreement shall take effect as from the date of the Royal assent. I presume that the Royal assent could be given at any time in the 24 hours following the passage of this measure through the Parliament. It is quite obvious that when the Australian householder realizes that the endorsement of this agreement will result in an increase in the price of sugar by lid. Per lb., there will be considerable consternation. The householder will think of the Promises, the propaganda and the stories told by the Government parties during the general election campaigns in 1949 and 1951. During those election campaigns members of the anti-Labour parties sought the votes of the electors by promising without qualification that if they were returned to office they would take effective action to reduce the cost of living and to increase the purchasing power of the Australian £1. However, the necessity for the introduction of this bill and the measure to increase postal rates and charges emphasizes the complete failure of these political parties to honour their promises. Adverting for a moment to the Post and Telegraph Rates Bill, I point out that the increased charges provided for in that measure are the greatest that have ever been made in the history of the Postal Department. The need for making such a big increase is that costs of all kinds have increased out of all proportion, and the reason for the enormous increase of costs lies in the ineptitude of the present Government to grapple with the economic factors that menace our stability and in the defeat of the former Chifley Government's proposals when a referendum was held on control of rents and prices. Another reason for the increased cost of living is the sharp increase of prices that has taken place overseas, a matter over which the present Government has no control. The measure now before the House proposes to make the greatest increase that has been made in the price of sugar since 1915, when the agreement was completed between the Commonwealth and the Queensland Government. The consternation that will prevail in the minds of Australian consumers when they realize the significance of this measure and feel the full impact of the increased price can be imagined. On behalf of the Opposition I say at once that if the Government had honoured its promises it would not have been necessary to make such a substantial increase of the price of sugar as is proposed in the bill. I point out that when the Curtin and Chifley Labour Administrations reviewed the price of sugar it was never found necessary to increase that price by more than d. per lb. Even the statistics cited by the present Government in support of the proposal in this bill show that from 1941 to 1947 it was not necessary to increase the price of sugar at all, which indicates clearly that while Labour governed the country its economic policy was effective in protecting the people from exploitation of the kind that is now being practised. 1120 JSI 1 0 BROWN, Geoffrey William Dr. BROWN Rubbish! 1120 KYC 0 0 POLLARD, Reginald Thomas Mr. POLLARD In reply to the contemptuous interjection of the honorable member for McMillan (Mr. Brown), I point out that the assertion which I have just made is supported by documentary evidence, and I hope that the honorable gentleman's constituents will take notice of that fact and, more particularly, of the evidence available. It is true, of course, that in 1947 the Chifley Labour Administration agreed to an increase in the price of sugar of 1/2d per Lb. - 1120 KDH 1 0 EGGINS, Eldred James Dr. EGGINS That is when the stable door was opened. 1121 KYC 0 0 POLLARD, Reginald Thomas Mr. POLLARD However, that increase was made only after a sound case had been adduced by the Queensland Government. At that time some degree of inflation was already occurring, and in order to ensure a continuance of supplies of sugar it was necessary to agree to a small increase of the price. Two years elapsed before it was necessary to make any further increase of the price, and I remind the honorable member for Lyne (Mr. Eggins), who has just interjected, that the need to make a further increase then of the price of sugar arose largely out of the defeat of the Chifley Administration's proposals at the referendums on prices and other economic controls. The honorable gentleman and his colleagues were very largely responsible for the defeat of those referendums. Subsequently, the Queensland Government submitted facts and figures which impelled the Chifley Administration to agree to a further increase of Id. per lb. Look at the tremendous increase, judged on a percentage basis, that has occurred since the Chifley Labour Government left office in 1949. Yet the parties opposite promised the people during the 1,949 general election campaign that if they were returned to office, they would keep prices down and give the pound more effective purchasing power. But now we find that the Parliament is presented with a request, backed by figures that are apparently foolproof, for an increase of the price of sugar in order to allow the Queensland sugar industry to be conducted as efficiently and profitably as it should be conducted. This request is supported by the Government's endorsement of an agreement for no less an increase of the price of sugar to the consumer than 1d. per lb. The history of this increase provides another illustration of the uncontrolled inflationary trend in this country. Last March the Queensland sugar industry submitted a case to the Government in favour of an increase of the price to the consumer by id. per lb. Had that request been acceded to the new price would have operated from about last May. The request was not acceded to because of the double dissolution of the Parliament. Between the period that that request was made and now, it has become necessary for the industry to ask for an additional increase of Id. per lb. in the price to the consumer, making the total increase between the Government's election to office in 1949 and the date that this agreement will become effective, lid. per lb. I know that the thoughts that will be uppermost in the minds of the Australian housewives when they have to pay this increase will be concerned with the failure of the Government parties to honour their 1949 election promises to keep prices down and restore purchasing power to the Australian £1. The Government parties have failed shockingly to keep their promises, although that fact is no reason why the Queensland sugar-growers should not receive, in the existing state of affairs, such remuneration for their work as will enable them to maintain the Australian standard of living in every phase of the industry. Reluctantly, therefore, we have to say that in the existing state of affairs we shall allow the Government to put this measure through this Parliament. If we did not agree to this proposal, the Queensland sugar growers and the employees engaged in the Queensland sugar industry would be placed in an impossible position. As an Opposition, we have a certain responsibility, and we recognize that in the circumstances we cannot, as a party which has the national welfare at heart, allow a very great national industry to be impoverished and even, perhaps, to face complete extinction. After all, it can be demonstrated that in this particular instance it is practically impossible to challenge successfully the figures that have been submitted in justification of a price increase. I have always been a supporter of the great Queensland sugar industry, even when support of it was unpopular, but I think that the Australian people, particularly those in the southern States, should know in respect of this increase that the Queensland sugar industry has had, and still has, under governments of every political faith, the paternal guidance of both the Queensland Government and the Australian Government, and also that parallel with that paternal guidance and protection there has been protection for the consumers. Let us examine the situation briefly. The Queensland Government controls every phase of the sugar industry. In fact, under the agreement, the Queensland Government technically, although perhaps not physically, owns all the sugar produced in Queensland, and, acting through the machinery of the agreement, and through various State instrumentalities, it can take almost any action that it believes to be necessary in the interests of the industry. For many years, of course, the Queensland Government has been a Labour administration, and the workers throughout the Commonwealth may rest assured that any price that is recommended to an Australian Government, even though it be a conservative administration such as the one now in office, will be equitable, to consumers, and will give a fair return to growers and millers. Therefore, this request for an increase of the price of sugar cannot be regarded in the same manner as would be a request by some self-seeking profiteering private monopoly in this country. I do not suggest, of course, that the Queensland Government is entirely devoid of a very natural partiality towards this great national industry, but there will be general acceptance of the fact that the protection of the Australian public from exploitation is adequate. 1122 KDH 1 0 EGGINS, Eldred James Dr. EGGINS What about control of the New South Wales section of the industry? 1122 KYC 0 0 POLLARD, Reginald Thomas Mr. POLLARD Under the agreement the Queensland Government purchases all the sugar produced in New South Wales, which is not a very large quantity. Because of the implicit trust that even the tory sugar-growers of New South Wales have in the Queensland Government, they willingly honour the agreement. However, I know from my long interest in public affairs that, amongst sugar consumers in the southern States, there has always been a mistrust of the sugar industry. There is a general impression abroad that the only people who benefit from legislation of this type and from the industry generally is the Colonial Sugar Refining Company Limited, but an examination shows quite clearly that that assumption is entirely false. The payment made to the Colonial Sugar Refining Company Limited is object to a substantial measure of moral and legislative control. The company's share of the proposed increase of £12 8s. a ton will be infinitesimal. The major portion of the increased payment will go to the growers and to the millers, co-operative and private, whose costs have increased out of all proportion since 1949. The following table emphasizes the complete inability of Labour's political enemies to honour their election promises: - In view of those increases, a higher price for sugar is inevitable if the industry is to survive. The Australian people generally, but particularly those in the southern States, have never fully appreciated the immense benefit that this country has derived from the sugar industry. I know that Victorians, for instance, object strenuously to what they believe to be exploitation of the sugar consuming public. I remind the House that almost all the manufactured goods that Queensland requires are provided by the secondary industries in the southern States. In return, the people of the southern States are substantial purchasers of Queensland sugar, so that mutual benefit is enjoyed. 1122 KDH 1 0 EGGINS, Eldred James Dr. EGGINS In what year was the sugar agreement made? 1122 KYC 0 0 POLLARD, Reginald Thomas Mr. POLLARD It was made in 1915. I know something about this industry, although perhaps not as much as does the honorable member for Lyne. I am a friend of the industry, although a critic of the Government. The indirect benefits that the sugar industry has conferred upon the Commonwealth generally include the populating of the great coastal strip of Queensland where it has been demonstrated that it is a white man's industry. The sugar industry, and also the cattle raising industry, have been very Important factors in increasing the population and thus making more secure from a defence point of view part of the Queensland coast of this great continent. By and large, the sugar industry in Australia has been reasonably efficient. It has developed along reasonably efficient lines and is striving further to increase its efficiency. I have seen examples of the attempt to secure greater efficiency in the experimental stations of the industry, and I have some knowledge of the research work which is taking place to improve productive efficiency. Many Australian people whose memories are not long will probably be staggered to know that in 1920 the cost of sugar in Australia was only Gd. per lb. In 1933 it was 4d. per lb. to Australian consumers, although outside Australia it was sold at a substantially higher price. Between 1933 and 1947 sugar was never more than 4d. per lb in Australia. To-day, despite the greatly increased costs of production, it is going to be increased to only 6d. per lb. If that price is considered in conjunction with generally prevailing world prices of commodities, it will be seen that it is a great tribute to the efficiency of a great industry. Since its establishment, the Australian Labour party has continually given this industry every possible support, both legislative and otherwise. That was done despite the fact that from time to time criticism of our attitude from certain elements in this country was hot and strong. Together with other liberal sections of the country, the Labour party was in the vanguard of the resistance to the employment of Kanaka labour in the sugar industry. When the slave drivers and cheap labour proponents strongly asserted, and provided what they averred was scientific proof, that the industry could not be carried on in Australia by -white labour, the opposite view of the Labour party prevailed. To-day iii Queensland there is a reasonably prosperous, efficient sugar industry. Although I have seen many schedules of costs, I have not yet seen details of what proportion of this and other increases will go or has gone to the Colonial Sugar Refining Company Limited in respect of the refining of sugar. I believe that the Australian public is entitled to know what amount that company gets from any increases granted. Those figures can probably be produced by the honorable member for Dawson (Mr. Davidson), who is an authority on the sugar industry. If they could be produced, that would have the greatest possible effect in setting the minds of the consumers at rest. The people would certainly know whether an increase of price was justified if they knew exactly how much of the increase was to go to the Colonial Sugar Refining Company Limited. After all, the Australian consumer, whatever may be his political beliefs, looks upon the Colonial Sugar Refining Company Limited as the big bad wolf. That attitude has unfortunate repercussions upon the cane growers. I hope that somebody will throw some light on this matter, and I assure the House that if that is done the Australian people will accept more readily the fact that the sugar industry should be protected, preserved, and assisted. 1123 11.50 KCA Dawson 1 0 DAVIDSON, Charles William Mr. DAVIDSON I confess to a certain amount of surprise at the arguments adduced by the honorable member for Lalor (Mr. Pollard) at the commencement of his speech. One could well have been listening to an electioneering speech in which he was trying to attribute to this Government all the ills of the sugar industry that have been accumulating over a long period of years, the full effect of which the community is only now commencing to feel. He said that the present application by the sugar industry for what he called a "tremendous" increase in the price of refined sugar could be attributed to increases in costs which have taken place since this Government assumed office. He forgot to draw attention to the fact that the Government has been in power for only a short time, and that for the major part of that time it was prevented, in another place, from carrying out the reforms that it wanted to introduce and which would have had some effect in arresting the price increase. The honorable member for Lalor is aware that in 1949 the Chifley Government granted an increase of Jd. per lb. in the price of refined sugar. The reason for that was the increasing costs of the industry. The honorable member knows that hardly had that increase been granted before the major part of it was consumed by costs which were then steadily increasing. He also knows that in 190, before there was any possibility of our legislation having any effect, the Commonwealth Court of Conciliation and Arbitration gave a judgment in which the basic wage was increased by £1 a week. He knows that the court had been debating the application for many months, and that its determination was made on conditions which were existing prior to this Government taking office. When the increase of £1 a week in the basic wage was made, it was made on conditions prevailing while the Chiefly Government was in office. The honorable member knows that the greater proportion of the evidence submitted by the industry in justification of the increase now asked for relates to the increase of £1 a week in the basic wage which was granted as the result of conditions operating in Australia during the regime of the previous Government. Therefore, it ill-behoves him, in a debate about an industry which he himself referred to as a national industry, to try to make a little cheap political capital by blaming this Government for the fact that the industry, because of increasing costs since 1949, has now to ask for 1d. per lb. increase of the price of sugar. He knows, according to his statements in the latter part of his speech, that that is a reasonable and justifiable claim. Therefore, why not let us confine ourselves to a consideration of the facts that justify this increase and remember that the whole community is now suffering from the effect of a snowball of costs and prices which is gaining momentum as a result of the policy of the Government in power from the end of the war until 1949. Only now are we beginning to feel the adverse effect of the Cheifly Government's policy. The people have spoken plainly at the last two general elections. This hill demonstrates once more the great value of the Australian sugar industry organizations, and it shows the benefit that accrues as a result of effective and democratic organization in industry. The industry has been able to present to the Government a completely unanswerable case for the proposed increase. 1124 KEJ 0 0 KEON, Standish Michael Mr. KEON The honorable member may think so. 1124 KCA 1 0 DAVIDSON, Charles William Mr. DAVIDSON Many Labour supporters, also, agree with my assertion. From years of experience, and the making of representations many times on behalf of the industry to various tribunals they have acquired a fund of information and produced incontrovertible evidence, which has enabled them to justify their claim. In presenting the bill to the House the Vice-President of the Executive Council (Mr. Eric J. Harrison) furnished details of the claim, and the honorable member for Lalor (Mr. Pollard) has dealt with the percentage increases proposed. I shall deal briefly with the probable effect of the new agreement on various sections of the community. The price of refined sugar in capital cities will rise from 5d. to 6d. per lb. The retailer will receive an increase of £2 2s. 8d. a ton, and the wholesaler an increase of 10s. id. a ton. The industry will obtain a gross increase of £11 7s. 3d. a ton. I shall now particularize the effects of the proposed Increases, In capital cities the Australian consumer will still obtain the best and cheapest refined sugar in the world. The Minister has already referred to the prices that are being paid by consumers in other countries. I shall mention only a comparable country, our sister dominion of New Zealand, where, in terms of Australian currency, sugar costs consumers slightly more than 9d. per lb. The Australian consumer has been in a very favourable position for many years. If by some unfortunate circumstance the Australian sugar industry was unable to supply the whole of Australia's requirements, we should have to import raw sugar from such countries as Cuba, and refine it in Australia. Taking into account transport and refining charges the cost of refined sugar would then be from £80 to £100 a ton, compared with £60 a ton as provided in the agreement approval for which is sought in the measure before the House. Some honorable members have referred to the probable impact on the cost of living and the basic wage of the proposed increase of the retail price of sugar. It has been reliably computed that the average increase of a weekly family budget is Sd. for each rise of Id. per lb. of this commodity. There would be a corresponding impact on the basic wage. The proposed increase of 11 per lb. would probably result in an average increase of is. a week in the cost of food for a family. The proposed increase of £2 29. 3d. a ton to retailers has been computed on the margin to be allowed to them. Representatives of the retailers urged that the previous margin of 12 per cent, should be increased to 15 per cent. The Government has seen fit to increase the margin to 13 per cent., as a result of which the retailers will receive £7 6s. 3d. a ton for refined sugar, compared with £5 4s. a ton previously. Although the retailing interests were disappointed that the full 15 per cent, margin sought was not approved I consider that the retailers are being treated very generously. What is not generally appreciated is that in addition to the increase of £2 2s. 3d. a ton the retailer can sell the bags in which he receives the refined sugar for £3 14e. 8d. a ton. The sugar industry, not the retailer, pays the Queensland Sugar Board for those bags. The wholesaler's margin will be increased from 2 per cent. to 21 per cent., that is from 16s. 7d. to £1 6s. 8d. a ton, and, in common with the retailer, the wholesaler will therefore receive a greater percentage than is enjoyed by the sugar industry itself. The sugar industry has amply demonstrated to the Government the necessity to ensure stability in the industry which will not receive the full benefit of the proposed increase of Id. per lb. An appreciable proportion of that amount will be absorbed by increases of costs since the last price rise in 1949. With the consent of the House, I incorporate in Hansard the following table: — I point out that 6d. per lb. is equivalent to £60 13s. 4d. a ton, the proposed new retail price of 1A grade refined sugar, not the wholesale price mentioned in the agreement. There will be available for the raw sugar millers and growers only 3.537d. per lb., or £33 0s. Gd. a ton, after the various costs have been met The table shows clearly what the Colonial Sugar Refining Company Limited gets other organizations that handle sugar will receive for their services. 1125 KZP 0 0 WHEELER, Roy Crawford Mr. WHEELER Does the honorable member intend to show what the Colonial Sugar Refining Company Limited gets out of it? 1125 KCA 1 0 DAVIDSON, Charles William Mr. DAVIDSON Yes. I shall now refer to the payment of £216,000 annually by the sugar industry to the fruit industry. The sugar industry organization asked that this payment should be 'waived. It may not be generally known that, pursuant to the agreement at present in existence, the sugar industry has been subsidizing the southern fruit industry. When the export price of sugar soared above the Australian price the statutory amount required under the agreement between the Australian and Queensland Governments was greater than the annual payment from the fund from which that subsidy has been paid. The sum standing to the credit of the Fruit Industry Sugar Concession Committee has steadily increased and is now approximately £1,100,000. As far as both industries are concerned, that is practically dead money, because for some considerable time there will be no use to which it can be put. The money that has already been paid into the fund by the industry is more than sufficient to meet the drain on the fund. It will be recalled that in 1949, when the sugar industry approached the Chifley Government for an increase of the price of sugar, a part of the industry's case was that this statutory payment should be waived. It was pointed out that there was no need for the industry to make further payments to the Fruit Industry Sugar Concession Committee because the fund that had been established would last for a number of years. It was argued that a continuation of the payments would serve no useful purpose and would only deprive the industry of a proportion of the return to which it was entitled. I congratulate this Government upon the fact that, having had placed before it precisely the same arguments as those that were placed before the Chifley Government, it has adopted the realistic and sensible course of agreement to the suspension of the annual payment until the fund has been reduced to £500,000. At least £600,000 will have to be expended from the fund before the industry can be asked to make further payments to it. I believe that it will take five years to do that. The importance of this feature of the agreement is that the sugar industry will have available to it each year an additional £216,000 of its own money, which will enable it to function in the present difficult circumstances, but there will be no cessation of the domestic rebates that are paid to manufacturers who use sugar in making various products. 1125 JTF 0 0 BURKE, Thomas Patrick Mr. TOM BURKE Would the fund be sufficiently large if a sharp fall of prices occurred? 1125 KCA 1 0 DAVIDSON, Charles William Mr. DAVIDSON If there were a sharp fall of prices, which is not envisaged by anyone connected with the sugar industry, the fund would be sufficiently large to enable necessary payments to be made for two or three years. The industry has agreed that, when the fund has fallen to £500,000, it will be prepared to consider, in the light of circumstances then prevailing, what further payments should be made. Speaking from memory, I think that last year approximately £137,000 was disbursed from the fund to pay the domestic rebate. No payments are being made in respect of the export rebate, and they will not be made until the world parity price for sugar has fallen below the Australian price. There is an amazing lack of knowledge in the community about the sugar industry. It is not to the advantage either of the industry or of the nation that some people should still talk about a sugar bounty. There is no such thing as a sugar bounty, and there never has been. Many honorable members are not aware that the sugar industry has never received from the Commonwealth anything in the nature of a handout from Consolidated Revenue. I shall deal with the point raised by the honorable member for Lalor regarding the relationship of the Colonial Sugar Refining Company Limited with the sugar industry. It is important from the point of view, not of that company but of the sugar industry, that false conceptions of the position of the company in the industry should be removed. In view of further representations that may have to be made, it is a danger to the industry that some people in responsible places should believe that the Colonial Sugar Refining Company Limited is making exorbitant profits from the sugar industry, and that a large percentage of any increase of the price of sugar goes into the coffers of the company. Some honorable members read in various newspapers that the company is making large profit and, knowing nothing of the company's ramifications, they promptly assume that the whole of those profits have come from the sugar industry. The company has many ramifications. It owns four raw sugar mills in Queensland and three in New South Wales, from which it makes normal milling profits. It operates live sugar mills in Fiji, where it produces annually approximately 150,000 tons of sugar. It has five sugar refineries in Australia. It refines all the refined sugar that is used in New Zealand, which is approximately 100,000 tons a year. It operates a distillery in Sydney and another in Melbourne. It owns factories in Sydney that are engaged in the manufacture of building materials, such as canite, hardboard, gyp rock wallboard, asphalt floor tiles and asbestos products. It has a plaster mill in Sydney and another in Melbourne. It operates gypsum mines in New South Wales and Victoria. It has large interests, directly and through subsidiary companies, in chemical manufacture. It is well known that during the last war it played, especially in relation to chemical investigation, a magnificent part in developing the war effort of this country. Those are some of the activities in which the company is engaged and from which, if it is efficient, it must make profits. Last, and I should say least in importance, the company acts as agent for the Queensland Government in the handling, refining and distribution of sugar in Australia. Let honorable members who are apt to criticize the company remember that any, criticism directed at its profits is also, in effect, a criticism of the Queensland Government, which, in order to discharge its obligations under this agreement, appoints a sugar board to do its work. That board appoints the company to act as its refining and distributing agent. All the operations of the company in connexion with the sugar industry in this country are, as has already been pointed out by the honorable member for Lalor, subject to the directions of the sugar board in Queensland and, therefore, of the Queensland Government. The company's accounts are subject to audit by the Queensland Auditor-General. A dissection of the return to the sugar industry for the 1950 season, which is the last season for which definite figures are available, shows that for management, marketing, interest on advances for the purchase of raw sugar, and margin of profit on refining, the company was paid £1. 6s. Gd. a ton, which, in terms of the fraction of id. for which the honorable member for Lalor asked, represents .15d. per lb. of refined sugar. It is anticipated that, although the price of sugar has been increased, the amount payable to the company this year for the services it renders will be the same as it received previously. For instance, in respect of remuneration to refiners for administration, taxes and profit, the company received 15a. Gd. a ton for 1950-51. In this financial year, it will again receive 15s. Gd., despite the increased price of sugar. The company is also remunerated in respect of refining costs which cover wages, coal, packages and other materials, insurance and delivery of refined sugar, allowance for depreciation of plant, and processing loss. In 1950-51, those costs amounted to £10 Is. 2d..a toll. That was the actual cost as determined by a survey of the company's accounts, which must be submitted to the sugar board before a payment can be made. All that the company receives is remuneration for actual costs. The sum that I cited previously is that from which the company can make- a profit and honorable members who approach the matter fairly will realize that the company cannot make exorbitant profits from the industry on the basis of that slender margin. I am not concerned about what profits the company may make from its other operations. Anyone who approaches this matter from a socialistic standpoint and desires to attack the company will not be justified in doing so on the return that it derives directly from the industry. I shall conclude by referring to the recurrent shortages of refilled sugar in the southern States. 1127 KEJ 0 0 KEON, Standish Michael Mr. KEON There is a shortage now. 1127 KCA 1 0 DAVIDSON, Charles William Mr. DAVIDSON That in so; but the point I make is that such shortages are not attributable in any way to lack of production of raw sugar. For instance, as a result of the coal strike that occurred in 1949, and other difficulties that that strike caused, refineries in Australia were 100,000 tons short of their capacity. In 1950-51, due to similar industrial troubles, involving lack of adequate labour, adequate supplies of high-quality coal and power black-outs, those refineries were 70,000 tons short on their capacity. Thus, in those two years, if the Colonial Sugar Refining Company Limited had been able to obtain adequate supplies of fuel and had not been affected by interruptions of transport, it would have produced an additional 170,000 tons of refined sugar. In addition, there is an increasing demand for refined sugar by manufacturers. That factor has an important bearing upon the availability of adequate supplies to meet the demands of consumers in the southern States, but, unfortunately, its importance is not generally realized. I conclude by paying a tribute to the Government in this matter. It is entitled one a good deal of praise from the industry itself for having introduced this bill. I take this opportunity to voice that praise and to thank the Government not only for granting the requests that were made on behalf of the industry—which is now experiencing a bad season and which made out an irresistible case—but also for having treated this measure as one of urgency. It has given priority to the consideration of the one measure over other business this morning in order that it may become law to-day. 1128 12.20 JRF Fawkner 0 0 BOURKE, William Meskill Mr. W. BOURKE I approach this matter from a standpoint slightly different from that from which the honorable member for Dawson (Mr. Davidson) has approached it. I do not share that honorable member's solicitude for the Colonial Sugar Refining Company Limited, which he went to great pains to defend. I approach the problem from the viewpoint of the consumers of sugar. This measure, the purpose of which is to give effect to the new agreement that has been made between the Queensland Government and the Australian Government, will increase the price of sugar to the consumer from 5d. per lb. to 6d. per lb. That is an increase of 1d. per lb., or 30 per cent. it is a substantial increase and in order to justify it the House will require a more adequate explanation than has so far been placed before it, The Vice-President of the Executive Council (Mr. Eric J. Harrison), who is in charge of the bill, made a statement, which, if it were correct, would influence members of the Opposition to support the measure without any qualification and without raising any query whatever. The Minister said— The major portion of the increased proceeds which will result from the use in price will, of course. accrue to the sugar-growers and millers, who have had to meet greatly increased costs over the last few years. The Minister did not even mention the Colonial Sugar Refining Company Limited in his second-reading speech. I make it perfectly clear to the people who grow sugar cane and to the millers that I have the greatest respect and admiration for them. They represent a type in the community of which we need more in this country. They are small proprietors who own their own blocks, and that is the kind of ownership we need in Australia. They are efficient and they work hard. In addition, there is no doubt that their costs have greatly increased. The honorable member for Lalor (Mr. Pollard) was in agreement with the honorable member for Dawson that the costs of raw, material; and wages in the industry had considerably increased. 1128 KEJ 0 0 KEON, Standish Michael Mr. KEON And so has the price for export Sugar. 1128 JRF 0 0 BOURKE, William Meskill Mr. W. BOURKE That is the point that I am about to make. It is rather interesting that no supporter of the Government who has spoken on this matter has pointed Out that the sugar crop is divided into two sections First, sugar that is reserved for consumption locally: and, secondly, the exportable surplus. A considerable surplus has been exported in recent years, and the price that is received for that sugar is in excess of that which is received for sugar on the home market. Why have not supporters of the Government explained to the public the degree to which the higher price that is received for the exportable surplus absorbs the additional costs which the industry undoubtedly now has to meet? Official statistics show that in the 1948 season 499,821 tons were consumed in Australia and 443,072 tons were exported at the higher price that I have mentioned, whilst the corresponding figures were much the same in 1949, when 497,302 tons were consumed in Australia and 439,635 tons were exported. I should like to know whether the Minister is going to give the facts about the increased profit that the industry receives from the sale of the exportable surplus and the degree to which the higher price received for that sugar absorbs the increased costs with which the industry has to contend. I do not pretend that I have any association with the industry, but I am very interested in the welfare of the summers of sugar. My understanding of the problem is that the Colonial Sugar Refining Company Limited will receive a much bigger cut of the new price of 6,1/2d. per Lb. that the housewife will have to pay that supporters of the Government are prepared to admit that it will receive. Worse than that - and I should like those honorable members to elucidate the point - there seems to be a complete conspiracy of silence so far as the operations of this wealthy monopolistic organization are concerned. One cannot obtain any information at all about this company. I have thoroughly searched all the records that are available but I have been unable to ascertain what amount the company gets out of the fixed price for sugar. This conspiracy of silence about the operations of the sugar combine is not only maintained in the Parliament but also seems to prevail in all publications that are issued in the name of the industry. I should like honorable members opposite who are concerned with the industry to tell me whether I am incorrect in this analysis, which shows that the Colonial Sugar Refining Company Limited is very well protected as far as profits from sugar are concerned. In the case for an increased price of sugar which the sugar industry submitted to the Queensland Government and also to the Australian Government earlier this year, the increase for which it applied was only 1d. per Lb. The Government now seems to think that it should grant an increase of 1,1/2d. per Lb. To support its case the industry stated that costs of production had risen by 9 10s. a ton. Of that amount, it said that the actual cost of producing raw sugar, which is really the cost to the cane growers and the sugar-millers, amounted to 5 10s. a ton and that 4 a ton represented marketing costs. What are those marketing costs? Are they not the charges which the colonial Sugar Refining Company Limited deducts from the sale price of sugar after it has been sent to Sydney and other places for distribution? I suggest that 4 of the 9 10s a ton goes to the Colonial Sugar Refining Company Limited and I challenge honorable members opposite to prove that it is not correct. In view of the defence of the company presented by the honorable member for Dawson, it is pertinent to look into the operations of that company. I do not believe in widespread State monopolies but I do not see any difference between them and a monopoly such as the Colonial Sugar Refining Company Limited, which controls a complete industry,. I should like honorable members opposite to point out to me the difference between a State enterprise which monopolizes the production of an industry and a private company which does the same thing. The Colonial Sugar Refining Company Limited, which the honorable member for Dawson was at such pains to defend, has now graduated to the position of the second largest industrial concern in this country. The Broken Hill Prosperity Company Limited, with all its subsidiary companies lumped together, is only slightly bigger. The way in which the capital of the Colonial Sugar Refining Company Limited has been built up is astounding. I think that nothing like it has happened anywhere in the world. That capital has been accumulated from the production of sugar, at one time by the use of slave labour, and it represents money paid by the consumers of sugar in this country. An examination of the accounts of the company shows that the paid up capital, prior to a call made within the last few months, was 2,425,000. That is the money which the shareholders had put in. Bonus script or watered capital, which really amounts to tax free dividends, handed back to the 13,175,000, in addition to the dividends normally paid. That brings the capital up to 15,600,000. However, that does not tell the whole story. In addition to that, this poor company which honorable members opposite are so eager to defend returned to the shareholders as a gift, capital to the value of 3,800,000. I do not think that a corporation in the history of any country could place such an amazing story before the people. Government supporters interjecting 1130 10000 0 0 SPEAKER, Mr. Mr. SPEAKER Order! If the House will not come to order I shall have to take action. There are too many interjections. 1130 JRF 0 0 BOURKE, William Meskill Mr. W. BOURKE The honorable member for Dawson, I suggest, gave the House the impression that although the Colonial Sugar Refining Company Limited has something to do with sugar and has a small interest in its production, it also has many other interests. I suggest that to give the impression that the company regards sugar as of minor interest is entirely wrong. It is also wrong to suggest that the huge profits made by the company are made from other ventures. The profit made by the company last year is worthy of mention. On the capital of £11,700,000 to which I have referred, it was £1,231,571, which was not a had effort when one considers how the capital has been watered. In addition to that, the company set aside reserves of £2,024,958. I suggest that that also was not a bad effort. As is indicated by the company's balance-sheet, its total reserves as at last year amounted to £9,666,880. Because of its gigantic operations, I consider that this company is becoming a menace to the well-being of Australia, whether its profits are made from sugar or from other sources. Do we want the productive resources and capacity of this country to be controlled by wealthy monopolies which put their surplus funds into other industries and thus gain a stranglehold on the country? 1130 10000 0 0 SPEAKER, Mr. Mr. SPEAKER Order! I think that the honorable member had better return to the discussion of the affairs of the company in relation to sugar. 1130 JRF 0 0 BOURKE, William Meskill Mr. W. BOURKE In deference to your ruling, Mr. Speaker, I shall now leave that company to the tender mercies of honorable members opposite, who will no doubt attempt to explain away its huge profits and its issues of bonus shares. Reverting to the factors mentioned in this Parliament as justifying an increase of the price of sugar, it is perhaps significant that when the sugar industry first made representations to the Queensland Government and the Australian Government it asked for an increase of only id. per lb. At the time when the application for that increase was wade, which was in February of this year, the representatives of the industry stated that costs hind risen. I direct the attention of honorable members to the fact that at that time the costs for the balance of the year to the 30th June were estimated. Motion (by Mr. GULLETT) put— That the question be now put. The House divided. 52 35 Majority ... ... 17 AYES NOES PAIRS Question so resolved in the affirmative. Original question resolved in the affirmative. Bill read a second time. In committee: The bill. 1131 12.40 KIE Darwin 1 0 LUCK, Aubrey William George Mr. LUCK I protest against the method of distributing sugar in certain parts of Taomania. For many years, it has been the practice of the Colonial Sugar Refining Company Limited to deliver sugar from Melbourne to ports on the north-west coast of Tasmania, and supplies from Sydney to Hobart and Launceston. Fremantle and Launceston are the only ports in Australia that are classed as capital cities apart from the recognized capital cities. I urge that the ports of Devonport and Burnie also be included in that category. It should be realized that there are many ports in Tasmania that serve large adjoining districts and these, too, could be used for the discharge of sugar from the mainland. Supplies of sugar from Melbourne to the ports of the north-west coast of Tasmania were substantially reduced recently. A reduction of supplies in Melbourne by 25 per cent. means a similar reduction of supplies for the ports on the north-west coast, and it has not been possible to obtain sugar from Sydney for them. The practice of supplying them from Melbourne has evidently been followed for many years by the Colonial Sugar Refining Company Limited, but I consider that it should be varied, because it is unfair that the north-west of Tasmania should experience a shortage of sugar when stocks have been available in Sydney, and, what is more important, hipping has been available to transport it to Tasmania. Recently, one of the mining towns on the west coast of Tasmania was in a desperate position. The stocks of white and brown sugar, and even the black stuff that may be regarded as raw sugar, were exhausted. The people in that community also had no dried milk, and were not able to obtain fresh milk. I hope that the Government will investigate that problem of distribution. I had intended to move an amendment with the object of having Devonport and Burnie classed as capital city ports, but if I can obtain an assurance from the Vice-President of the Executive Council (Mr. Erie J. Harrison), who is in charge of the bill, that those ports, and possibly others in Tasmania, will be supplied with sugar from Melbourne and Sydney, I shall not proceed with it. 1131 10000 0 0 CHAIRMAN, The The CHAIRMAN Does the honorable member propose to move the amendment that he has mentioned? 1131 KIE 1 0 LUCK, Aubrey William George Mr. LUCK I have not moved the amendment, because I expect to obtain the assurance for which I have asked. 1131 12.44 KNX Wentworth Vice-President of the Executive Council and Minister for Defence Production 1 0 HARRISON,Eric John Mr. ERIC J. HARRISON The honorable member for Darwin (Mr. Luck) has asked for an assurance that additional shipments of sugar will be sent to the Tasmanian ports of Devonport and Burnie. The honorable member, who is very diligent in looking after the interest of the people of the north-west coast of Tasmania, has spoken to me at some length about this matter. I am well aware of the problem that confronts him and those who live in that area. It is true that in the agreement certain provincial cities in Australia have been placed on the same basis as have the capital cities as regards both distribution and price. Launceston and Fremantle fall into that category. Whether Burnie and Devonport can also be included in that category is a matter for determination by the Queensland Government and the Queensland Sugar Board. 1 assure the honorable member that the Government will make representations to the Queensland Government and to the board with a view to making arrangements to ensure that the requirements of Burnie and Devonport shall be met. 1131 12.46 KYC Lalor 0 0 POLLARD, Reginald Thomas Mr. POLLARD I Point out, for the benefit of the honorable member for Darwin (Mr. Luck), that the promise that was just made by the Vice-President of the Executive Council (Mr. Eric J. Harrison) means absolutely nothing. Irrespective of what representations the Minister may make to the Queensland Government or to the board, under the terms of the agreement the Queensland Government is obliged to deliver sugar to Sydney, Melbourne, Brisbane, Adelaide, Perth, Fremantle, Hobart and Launceston respectively, and there its obligation ceases. From that point onwards, it becomes the responsibility of the sugar wholesalers in Tasmania to ensure that sufficient supplies of sugar shall be delivered to Devonport, Burnie, and other centres in Tasmania. How then can the Minister allow the honorable member for Darwin to believe that his representations can result in additional supplies of sugar being made available compulsorily to Burnie and Devonport, or, in fact, any centre in Tasmania other than Hobart and Launceston The Minister has indulged in a lot of humbug and the honorable member should persist with his original intention of moving the amendment in order to test the sincerity of the Minister. If the Government believes that appropriate quantities of sugar should be delivered to Burnie and Devonport it should include both centre in the agreement or, alternatively, it should withdraw the bill pending further consultations with the Queensland Government. 1132 12.48 KNX Wentworth Vice-President of the Executive Council and Minister for Defence Production 1 0 HARRISON,Eric John Mr. ERIC J. HARRISON The observations of the honorable member for Lalor (Mr. Pollard) would be all right if they were correct and truthful, but they are neither correct nor truthful. At present sugar is being delivered from Melbourne to Burnie and Devonport by the Colonial Sugar Refining Company Limited. 1132 KYC 0 0 POLLARD, Reginald Thomas Mr. POLLARD If that is so, why should not those centres be included in the agreement? 1132 KNX 1 0 HARRISON,Eric John Mr. ERIC J. HARRISON There is no need to include them, as I have given the honorable member for Darwin an assurance that representations will made with a view to the delivery of additional quantities of sugar to Burnie and Devonport from Sydney. Honorable members interjecting 1132 10000 0 0 CHAIRMAN, The The CHAIRMAN Order! Honorable members must remain silent while the Minister is addressing the committee. 1132 KNX 1 0 HARRISON,Eric John Mr. ERIC J. HARRISON When I make a promise of the kind that I have made to the honorable member for Darwin, honorable members generally know that I shall honour it. I am well aware of the circumstances that exist on the north-west of Tasmania. In an attempt to gain party political capital Opposition members are trying to rob the honorable gentleman of the benefits that will accrue to him as the result of the representations that he has made on behalf of his constituents; but they will not succeed in doing so. Motion (by Mr. GULLETT) put— That the question be now put. The committee divided. 51 32 Majority ... ... 19 AYES NOES PAIRS Question so resolved in the affirmative. Bill agreed to. Bill reported without amendment; report adoptded. Bill - by leave - read a third time. 1133 adjournment COMMONWEALTH EMPLOYEES' COMPENSATION Motion (by Mr. ERIC J. HARRISON) proposed - that the house do now adjourn. 1133 12.57 JSW Wills 0 0 BRYSON, William George Mr. BRYSON I again raise an important matter that I brought to the attention of the Government two weeks ago. I then urged it to prepare legislation to amend the Commonwealth Employees' Compensation Act in order to increase the weekly rate of compensation payable under the act to a level that would be commensurate with present living costs. Because of rapid increases of prices, the rate of compensation paid under the act has fallen about £3 a week behind the cost of living. I expected serious consideration to be given to my representations, and had hoped that I should receive a reply from the Government within a fortnight at the very longest. But I have received no acknowledgment of the suggestion even though the Vice-President of the Executive Council (Mr. Eric J. Harrison) announced yesterday a list of bills that the Government proposed to introduce before the end of the current sittings. Therefore, I again ask the Government to give urgent consideration to this matter. The standard rate of compensation should be increased from the present level of £4 a week to about £7 a week. Persons who are receiving compensation because of accidents that they sustained in the service of the Commonwealth are being treated very unjustly. The necessary amending legislation could be introduced next week. I am sure that it would have the approval of every member of this Parliament and would be passed without waste of time. I hope that the Government will produce such a measure at the first opportunity. Question resolved in the affirmative. 1133 papers The following papers were presented: - Public Service Act—Appointments—Department—Commerce and Agriculture—M. E. Crawford, H, l, D. McConnell. Trade and Customs—B. Ho.-ben, G. V. Roberts, J. W. Weaver. House adjourned at 12.59