HIGHER PRICES

Auckland Star, Volume LXXIII, Issue 123, 27 May 1942, Page 6

HIGHER PRICES

TAX ON GROCERIES

OPERATING THE INCREASE

Inconsistencies in the operation of the sales tax increase from 10 per cent to 20 per cent have come much under the notice of grocers and drapers in revising their price schedules this month. It has been found that while many non-essential items of apparel are unaffected by the increase, all but a few groceries are now subject to the doubled tax.

The exempted grocery lines are those previously not taxable, including salt, tapioca, sago, rice, cornflour, coffee, candles, butter and cheese, haricot beans, pearl barley, bacon and hams, honey, syrup, flour, kerosene, invalid foods, peas, milk and milk powder, all breakfast foods, sugar and a score of other items. Except for this group the prices in retail shops have now been revised to cover the extra 10 per cent added to the sales tax, and the rise is reaching consumers. For the average family the addition to the cost of living may amount to half a crown a week. "It is a very sweeping change," said a leading representative of the grocery trade in Auckland to-day. Footwear and Clothing In contrast with the increase on groceries, all items of footwear are unaffected by the increase in the sales tax, and there is a similar general exemption applying to apparel and clothing. In the footwear group, in addition to boots and shoes, are slippers, goloshes, gumboots, sandals and tennis shoes and laces. Some doubts exist as to the position of insoles and rubber soles under the change. A comprehensive schedule relating to the position of apparel and clothing has been issued during the past few days by the Auckland Provincial Drapers and Allied Retailers' Association for the information of its members, but generally this group, like footwear, is not affected. A doubtful class, however, is that of handkerchiefs. In some instances, it was learned to-day, shops had applied the increased tax in fixing new prices, but in other shops there had been no change, the view taken by those who held the latter opinion being that handkerchiefs were as much items of apparel as collars and ties, and wore certainly more essential than bridge coats, fancy dresses, swim suits and numerous other items not subject to the increase in tax. Computing the Increase Suggestions were made to-day that some grocers and other retailers were charging an extra Id on lines formerly priced at 5d and 6d. In such cases the increase would be well over the added sales tax of 10 per cent.

Commenting on this the head of a large city grocery establishment said tnat it such cases existed they constituted profiteering, for most grocers were believed to be operating the new prices in conformity with a schedule which had been circulated. For instance, goods valued at Id to 3d bore no adcied price, but goods priced at 3£d to Sd were id dearer. The scale continued as follows: —81d to 1/3, Id up; l/3i to 1/9, lad up; l/9a to 2/3, 2u up; 2/3 i to 2/0, 2id up, and so on proportionately. Actually the retailer's ratio of profit, he said, was smaller because of the added cost as a result of the increased sales tax. As an example, an article formerly costing a grocer 'Jd was sold by nim for 1/. Now that ii cost him Uid he could not cnarge more than 1/oa, so that the ratio of profit was less.