PROBLEM FOR AUSTRALIA

Chronicle (Levin), 8 June 1948, Page 5

PROBLEM FOR AUSTRALIA

(N.Z.P.A.-

— . Reuter,

Prices May Rise: Will Taxes Fail ? ,

Copyright)

Received Monday, 9 p.m. . SYDNEY, Juue 7, Since iirsfc indications scarcely more than a week ago", of the overwheiming defeat of the Chifley Government 's biu for pemianent control of prices, rejits and charges, Anstralia has been roclced by successive developments' which must eli'eet 'great changes in living conditions througliout the Coimnonwealth. In what has been deseribed by Opposition meiubers as " a fit of qjique ' the Government almost imniediately announced the abandonment of wartime rent controls within two months and price .controls within three. The State Goyernments have recovered from their shocked surprise and are now niaking ett'orts to implement legislation and prepare the necessary machinery before the deadline is reached. It now devolves upon them to safeguard their citizens from sharp rises in prices which would inevitabiy follow the complete abandonment of controls. The seeond development /from Canberra came not entirely as a surprise, During fhe canipaign Mr. Chifley said, in connection with subsidies: "He who pays the piper calls the tune. " In aecordance with this dictum he announced within a few days of the referendum vote, tliat consumer subsidies of more tirau £3.0^000,000 would be abaudoned. The States are now Jaced with the additional obstacle of reestablishing control over retail prices which must soar when they are releas- 1 ed from three-quarters of the Common-j wealth total subsidy payments. Opposition eritics lraye openly accused the Federal .Government of placing; an unnecessary burden on the State Governments with the idea of profiting by any chaos that may result. "The complex problems of price control are being dumped on the doorsteps of the States by the Federal regime by exhibiting au unwonted and eyen exaggerated deference to public opinion," says the Sydney Herald. "If any chaos should result the electors will know how to apportion the blame. ' 7 But electors who expressed their irnpatience with Federal controls in peaeo time, see one bright spot ahead. Firstly, the abandonment of subsidies will leave the Federal Governnient with £30,000,000 in hand. Secondly, Mr. Chiflev has anuounced that revenue for this unancial year will exeeed expenditure by a sinular amount. These facts, coupJed with Government alarm at a loss of popularitv shown in the referendum, have given' rise to hopes' that July will see heavy remissions of direct taxation. Guarded Government state•nents refer to Mr. Chifley as "favouring the bulk of taxation remissions to the lower ineome groups." The general opinion is that there wi]l be tax--'tjon remissions totalling up to £50,000,000 of which the lower wage brackets will reap'the most beneflt.