SOUND FINANCE

Bay of Plenty Beacon, Volume 15, Issue 58, 19 June 1950, Page 4

SOUND FINANCE

Sir, —Any Government which can implement policies which will increase the purchasing power of the individual’s money, will initiate action which would tend to the complete destruction of the menace of centralisation. I have recently stated that stabisation and tax-sub-sidies by Governments are only side tracking the issue. So I propose to show how the taking off those “tax subsidies” will react. For example, the milk producer has proved beyond doubt that increased costs of production make it imperative that they receive an increased price at the expense of the consumer, the final results are the demand for further rise in wages. Increased wages in turn increases costs in industry, which eventually wipes out the milk producers increased price! So the vicious circle, to apply the subsidy in a real constructive manner the subsidy should be only paid on milk! Paid on the genuinely desired demand of the consumer that there be no subsidisation of inefficient production. But our Government experts must do more than this, they must take steps to finance price subsidies! Not out of taxation which they promised to reduce, but by new credits. Surely the application of “new financial, credits” benefiting both producer and consumer is preferable to using new credits to extend the inflation menace. Yours etc., W. BRADSHAW. Ohope, June 15.