PRICE SUBSIDIES IN AUSTRALIA

Press, Volume LXXXIV, Issue 25581, 24 August 1948, Page 5

PRICE SUBSIDIES IN AUSTRALIA

MR CHIFLEY REJECTS PLEA BY STATES COMMONWEALTH TO END PAYMENTS (NJ!. Press Association—Copyright) (Rec. 11.30 p.m.) CANBERRA, Aug. 23. In spite of a warning by the State Premiers that there would be an immediate rise in the cost of living, the Prime Minister, of Australia (Mr Cnifley) rejected a plea at the Premiers’ Conference to-day for the continuation of price stabilisation subsidies. Mr Chifley told the conference that the Commonwealth Government could not agree to retain the subsidy payments on wool, cotton, cotton yarn, imported textile piece goods, interstate shipping, and potatoes. The Commonwealth would continue to subsidise butter, tea, and superphosphate. The Premier of New South Wales (Mr J. McGirr) read a statement prepared on behalf of the six State Governments in which it was declared that withdrawal of the subsidies would mean an increase in the basic wage by 53.6 d a week. The statement added that the Premiers recommended that the subsidies be continued for 12 months after the Commonwealth gave up price control in September. If the Commonwealth maintained that the subsidies must go then it would be preferable, if possible, to taper off the withdrawals so as to cushion the effect on prices. Mr Chifley replied that the Commonwealth could not properly pay public money to subsidise production which could not be policed. He added that subsidised supplies of textiles already in stock would provide the cushioning effect if the States controlled prices as effectively as they claimed they could.

The Prime Minister said that the Wool Realisation Committee had stated that Australian manufacturers had been bidding any price for special lines of wool because they knew that it was being subsidised. Instead of an estimated subsidy of between £2,000.000 and £3,000,000 for wool this year, it appeared that the Commonwealth Government might have to pay £11.000,000. Overseas buyers felt that they had a grievance, and in some cases had been inclined to “stand out.” Mr Chifley told the conference that the subsidy on, tea was being retained because the Commonwealth was the sole buyer. The butter subsidy was being continued because the Commonwealth had machinery to ensure that the consumer benefited. The Commonwealth would have continued the potato subsidy if the States had agreed to the retention of the successful wartime potato marketing scheme.