THE BUTTER LEVY

Dominion, Volume 10, Issue 3129, 6 July 1917, Page 6

THE BUTTER LEVY

DEPUTATION TO MR, MASSEY Twenty-four members of the House of Kepresentatives Iroiu dairying districts throughout New Zealand waited upon the Prime Minister and the lion. W. i). S. MaciJonald yesterday morning to protest against tne butter-fat levy. The deputacion was headed by Mr. (_i. J. Anderson (Mataura), who said that the members had come to ask for the removal of a tax that they regarded as unfair and oppressive. Tncy asked also for the refund of the money that had been collected. The present position was that the dairy farmers were being taxed in order to provide cheap butter for tho general public of New Zealand. They protested against that imposition. If a tax was necessary in order to keep down the retail price of butter, then it should be paid by the general taxpayer, preferably through the income tax. "We are not pleading lor high prices," added Mr. Anderson. "No power on earth can prevent the price of butter from coming down now. The accumulated stocks in storage aim the shortage of shipping make it certain that the local price will fall." Mr. Jennings (Taumarunuij said that tho butter levy pressed unduly on the men who had gone into the backblocks. The dairy-farmers were the hardest worked men in New Zealand, and they should not be singled out for a special tax, especially as their profits were never larg-L Mr. Wilkinson (Egmont) protested that the tax had not been imposed by Parliament. He believed that it was unconstitutional, and that it had created a very dangerous prscedeiic. The farmers m his own district were concerned chiefly in the production of cheese, and they reit keenly regarding a levy designed to provide cheap butter for townspeople. The Government should havo Lougnt tho butter outright, then if it wished to sell at a loss to local consumers the, cost would have fallen on tho general taxpayers. The dairy farmers iiad not at any stago of the war akimpced to extract unduly high prices.from the public. They had sold tho butter below the London prices after making allowance for the cost of carriage. Mr. "Wilkinson proceeded to refer 'to the grave position created by the accumulation' of butter and checso in the stores owing to-the lack of shipping, and said that relief was urgently required by tho producers.

Mr. Kornsby (Wairarapa) and Mr. Pcarce (Patea) spoko in similar levins. Mr. Pearce urged the Government to take immediate steps to provide Increased storage accommodation for 1/itter and cheese in view of the shipping shortage. . Tlio Hon. W. D. S. Mac Donald said that it had been no pleasure to the -Ministers to interfere with the dairying industry. 'But the. increase of local prices had created a position that the Government could hot disregard. Tbo retail price of butter in Wellington at tho height of the 191 G. season had been Is. Bd. a pound, Id. more than in any previous season at the same time of tho year. Tho distributors and retailers had tlien informed tho Government that owing to the increaso of tho wholesale price by tho factories, the retail price would have to bo increased to Is. lid. a lb. at once, with a prospect of a further rise to 2s (id. a lb. -The Government had to consider the interests of.the Dominion, and it could not allow the increases to proceed unchecked. The produceis Jiad previously been warned that if the local prico wont above Is. 7(1. a pound tho Government would prohibit export. But the prohibition of export seemed highly undesirable owing to tho importance of taking advantage of all the limited shipping space, and the Government; after considering tha whole position, had deqided to fix maximum local prices and to establish an equalisation fuud by a general levy on butter-fat. The factories- that supplied the local market with butter were to receive prices on parity with the f.o.b. prices. The scheme did not tax the dairying industry, since it took no money out of the industry. It provided simply for the equalisation of prices. The levy had produced u sum of about .£210,000, .of which about .£60,0(10 had been paid out. The accounts were now. being worked out, and the distribution would bs completed as soon as possible. The Government had not received the actual cash from ninny of the factories, owing to the fact that they had not been paid for butter lying in the stores awaiting shipment. The minister added that the levy represented a fraction over id. per lb. of butter ami'id. per lb. of cheese. the dairy farmers who had been represented by the deputation as struggling under tins levy were still receiving £ii 10s. per ton over pre-war prices for their butter, and *ElB lis. per ton over pre-war prices for their cheese. It was not true that the Government had limited prices only in tbo case of butter. It had taken action also with regard to wooi, meal, rent bacon, wheat, kerosene, bread, mil,: and flour. The dairy farmers were receiving big-war prices for their products. The Minister added that the London price of New Zealand meat was 115 per cent, over the price paid to the jSew Zealand farmers. The dairy farmer* liowever, were securing a price within b per cent, of the London price. The Prime Minister said that he understood the position very well. He might not be familiar with all tho detaifs of the system that had been adopted in order to keep down tbo price ot butter to the local consumer, but he took his full share of responsibility for what had been done by the Government in his absence: He could only say now that the Government would endeavour to solve the difficulties that had arisen. It was tho dutv of a Government in time of crisis to endeavour to keep down the cost of living, and he need hardly say that the Government had no wish to injure tho producers. He knew that if production was hninpened in any way the whole of the Dominion would suffer. The position of the butter industry would be considered by Cabinet within a few days and the Ministers would endeavour to get out of the difficulties that bad arisen, lfo had h'is own ideas on the subject, but he must consult his colleagues. Referring to cheese prices; Mr. Massey said that he was in correspondence with the Imperial authorities on the subject. New Zealand had made a bargain, and he believed it would bo carried out. The Imperial Government had bought New Zealand's output at 9!d. a pound, and it should not be forgotten that the representatives of the producers in London had been willing to take !)d. It was only when the Ministers pointed out that the price had increased greatly during the course of the negotiations that the Imperial Board of Trade consented to Mr Wilkinson: Many of the factories had sold at lOd. Mr. Massey: "Yes, to the middlemen. They" were ready to take M. in London." The' Prime Minister added that he was making constant efforts to improve the shipping position. lie believed that enough butter would be moved from the stores before August, when the ne>v season commenced, to enable the farmers to proceed with production unchecked. Tlii! Imperial Government was responsible for the Shipment of cheese, and lie believed they would make room in the stores for tile new season's ( output. He was making a special effort to relieve tho position in tho northern districts, where the season commenced early. The Government had not made any arrangement for tho increase of cool storage. The matter was being ,-