COMMONWEALTH OF AUSTRALl I ,1
SPEECH
The Rt Hon. J. G. GORTON, M. P.
ON
COMMONWEALTH AND QUEENSLAND SUGAR
AG REEMENT
( Ministerial Statement)
[ From the ' Parliamentary Debates, 25 September 1969]
Mr GORTON ( Higgins-Prime Minister)
-by leave-The negotiations between the
Commonwealth and Queensland governments
for a new sugar agreement have
been satisfactorily concluded and the basis
on which that formal agreement can now
be drafted has been arranged. The agreement
between the two governments will be
the most recent in a very long line of agreements
which go back to the 1 920s. They
assumed their present form in 1934. The
basic objectives which the sugar agreements
were designed to serve had been endorsed
by every Commonwealth government, and
no less by the present Government. These
were to regulate the marketing of sugar
in the interests of both sugar producers and
consumers. The agreement which has now been
negotiated will be substantially the same as
the one it replaces. It will run for 5 years,
during which the Commonwealth has agreed
that it will continue the present embargo
on the import of sugar and sugar products,
and the Queensland Government will control
raw sugar production and meet Australian
needs for refined sugar and sugar
products at agreed maximum prices as a
first priority. The assurance of supplies for
relatively long periods at fixed prices for
a stable commodity is of inestimable benefit
22650/ 69 to both sugar producers and domestic consumers.
Australian domestic prices have
remained constant from 1960 to 1967
despite very wide fluctuations in world
prices. The domestic sugar rebate scheme, which
has been a feature of sugar agreements for
a very long period, will be continued in the
new agreement but the rate of rebate will
be increased from $ 10 to $ 15 per ton from
1st July 1969 to bring it back towards the
position it held before the 1967 sugar price
increase of S25 per ton. This will be the
only change of any substance in the new
agreement. To finance the increased rate
it has been agreed that the funds made
available by the State, on behalf of the
raw sugar industry, to pay the domestic
rebate will be increased to $ 924,000 a year.
Although on the face of things it might
appear that this imposes an additional
burden on the raw sugar industry, this is
far from the case. The sugar industry's
interests are best served when consumption
in the domestic market-its best marketis
maximised. The increase in the domestic
rebate is designed to serve the interests of
both the fruit processing industry and the
raw sugar industry. In the case of the
former industry, this assistance takes the
form. of the provision of an additional
incentive to processors to purchase fruit for
processing at reasonable prices. In the case
of the sugar industry, the advantage of
maximising domestic consumption is
patently clear when it is realised that the
alternative to domestic usage is exports at
the vagaries of the world market price.
The maximum wholesale domestic prices
for sugar and sugar products, which are
prescribed in the existing agreement, will
remain unaltered in the new agreement.
The export sugar rebate arrangements,
which had also been a conspicuous feature
of past agreements, will continue to apply.
This rebate ensures that exporters of products
in which sugar has been used will
obtain their requirements at prices related
broadly to the Australian import parity
price or, in other words, what they would
have paid had there been no embargo on
the importation of sugar. This will continue
to ensure that the unique position granted
to the local sugar industry did not react
to the detriment of exporters and is in keeping
with the Government's policy to do
everything possible to encourage the
maximum exports of both the products
using sugar and, as a consequence, the
sugar contained in those exports. Since the
export of sugar in manufactured products
is not a charge against Australia's quota
under the International Sugar Agreement,
the maximum utilisation of sugar in
exported manufactured products is of vital
interest and great benefit to sugar producers.
Experience in operating the provisions of
the existing agreement, since the last major
review in 1962, has indicated that some
changes can make it more effective in its
operation and clearer in its expression.
During the drafting of the new agreement
the opportunity will be taken to effect these adjustments, which are largely of a technical
or drafting nature and will have no
bearing on the principles on which the
agreement is based. This, as previously
indicated, will follow the traditional lines
of previous agreements. Action is in hand
to prepare a formal new agreement and the
two governments have agreed to extend the
operation of the present agreement to give
time for this work to be completed. They
have also agreed that the new agreement
will have retrospective effect from 1st July
1969. Since it is not possible to bring the new
sugar agreement before the Parliament in
its present session, and since it was agreed
by both the Commonwealth and the State
of Queensland that it is in the interests of
both producers and consumers that it
should be brought into operation as soon
as possible, it has been agreed that it will
come into full force and effect upon its
signing in order that the benefits could commence
to flow without delay. The new
agreement would need to be brought before
the new Parliament early in its life.
I am confident that Australian sugar producers
and domestic consumers will find
the terms of the new agreement acceptable
and in their long term interests. In the
case of sugar producers, it gives them the
assurance of sole access, at remunerative
prices, to their largest single market for a
reasonable period. Domestic consumers are
assured of constant supplies at stable prices.
In conclusion, it has been agreed between
the parties that, since Commonwealth
parliamentary debate on this agreement is
not possible this session, printed copies of
the formal agreement, when signed, would
be prepared by the Commonwealth for distribution
to interested parties.
Printed for the Government of the Commonwealth by W. O. MumAY at the
Government Printing Office, Canberra