The Dominion. TUESDAY, OCTOBER 16, 1917. SHORT-CUTS TO CHEAPER LIVING
While few expected any real benefits in the way of reductions in the cost of living from the investigations of the Parliamentary Committee appointed to inquire into and report on this vexed question as affecting- Is'cw Zealand, the findings and recommendations of the committee nevertheless have be-m looked forward to with a good deal of interest. With the report now available it must'be conceded that in whatever respects it has failed the committee has at least had the courage to bring forward a. very sweeping and rcvolutionafy proposal, affording practically unlimited scope for the dislocation of the business and finance of the country. It may be said at once that certain of the minor recommendations of the committee are of a. practical nature, and will no doubt receive. consideration with a view to giving them effect. The extension of the provisions of the Commercial Trusts Act, for instance, deserves the consideration of Ministers, as do also the "suggestions.regarding the weight of articles of food in packets and tins; the development of tho iishing industry; the enforcement by the Labour Department of the limitation of rent law when requested, and the renewal of suburban train services. These all touch on matters bearing on tho cost of living, but it is apparent; that the committee recognises that they touch only the fringe of the question. The main proposal of the committee is tho appointment of l;'ood Controller, and it also makes an important recommendation regarding the establishment of shipping services by the in conjunction with farmers and exporters. It is obvious that this shipping proposal is out of the question at the present time, and it would be waste of time to discuss it as a means for reducing the cost of living so long as the war continues and tho Imperial Government retains control of all available shipping. _ The success or failure of the committee's efforts, however, really turns on Its main recommendation : the appointment of a Food Controller with plenary powers. This is the short-cut route which tin: committee has taken to solve the problem with which it was confronted. As tile chairman of the committee in his interesting review of the committee's work admitted, the title of Food Controller hardlv lits the nfiicc which it is recommended should be created. It would be more fitting to describe one entrusted with such wide and swccoing powers as Dic-
tator of Priccs and Exterminator oi' Middlemen. The Food Controller proposed by the committeo is to be given practically unlimited powers in the matter of fixing the prices of the necessaries of lile. Ho is to have a seat
in tho Cabinet, but he is to bo superior to, and independent of. the Government in the performance of his duties. The committee would give him. power to prevent .any increase in prices as his judgment'might determine; he would have power lo fix from time to time the maximum and minimum prices to be charged for goods throughout New Zealand ; he would provide for the regulation of retail prices of local products to consumers in New Zealand by the purchase of products at ruling export prices and their sale at such lower prices as he might decide, the loss on the transaction to be made un out of the Consolidated Fund. He would ho empowered to make arrangements for the elimination of the present "unnecessary and wasteful" cost of distribution; and also for the elimination of middlemen's profits wherever possible; and he would also fix rents. His powers in these matters, the r mimittec would make absolute. It is a quite amazing proposition from various points of view,' and to some it may even appear to be a bold and practical method of reducing ths cost of living. How would it be likely to work out, however, in practical experience? Assuming that there is somewhere concealed in New Zealand a- man of such' transccndant business capacity, experience, and judgment as to warrant tho'country entrusting him with powers' which threaten the stability of the whole of our' business and national finance, what would the people gen-, orally, gain from his juggling with prices 2 It is obvious that so far as the cost of living is affected by the prices of overseas goods we are at the mercy of the overseas manufacturer, whose cost of production has soared to unexampled figures, and at. the mercy of the Shipping Controller, who fixes the high rats of freights due to war conditions. Our benevolent Food Controller could not compel tho importing merchant or retailer to sell at less than cost price, for they would then cease to import. The most ho could do would be to see that tho importer and retailer did not make excessivo profits on the landed cost of the goods. To c!o that without injury to the trade and commerce of tho country he must gather a nrngs of information concerning each <H the many different classes o£ business: and fix the prices at which they must sell their different lines of goods. Or ho might plunge and decide on an average of profit and' possibly bring ruin to many scores of businesses. But even assuming that he could gather within a reasonable time the information necessary to enable him to form, a sound judgment'; and even assuming that any ono man could carry through this tremendous undertaking without injustice to merchants and retailers, how far would his efforts in this direction §o' towards 1 reducing the cost of living? Very little indeed, for whatever may have happened in the way of exploitation in the early stages of the war by the advancing of prices on olcl stock, the reason for the increase in tho cost of imported goods to-day is almost entirely due to the increased prices of the goods abroad, the increased shipping freights, and the increased cost of labour and transport in New Zea.land. It was practically admitted by tho chairman of the Cost of Living Committee that this was the case, and it is plain that the trump card of tho committee _so far as the effect of fixing prices is concerned is the proposal relating to local products. This is a most remarkable proposal when closely analysed. It is proposed that the Food Controller, as representing the State, shall purchase local products—that, is, presumably, meat, butter, and cheese, these being recognised necessaries oi 'life—at the price they would fetch if sold for export, and then if he deems it advisable he may re-sell them to the public through retailers ; at a pricc below.that which ho paid for them. ; Tho loss thus sustained is . to be mado lip out of the Consolidated Fund. To appreciate cxactly what this means it should be explained that the Consolidated Fund is made up of tho whole of the revenues of the country from taxa tion, Customs duties, railway fares. Postal receipts—everything, in fact, that is collected from the . peoplo each year to meet the cost of administering tho affairs of the Dominion and paying interest charges on our borrowed money. Every penny that goes into the Consolidated Fund comes out of the pockets of the people in one way or another. It will be seen, therefore, that what is proposed is that the Food Controller shall buy foodstuffs at their full export value, sell them to the people below that value, and make up the loss out of the pockets of the people in a roundabout way. A farmer, for instance, sells his butter at the export price of Is. 7d. a pound. He buys it back for his own household use a.t Is. od. a .pound (assuming that is the price fixed by . tho Food Controller), and the 2d. loss sustained bv the State is taken out of the taxation which he pays into the Consolidated Fund. That is tho principle tho committee proposes the country siiouM work on in order to cut down the cost of living. It proposes that the State should sell foodstuffs to the people at a loss and make, up the loss out of the people's own pockets. But there is another feature of this astonishing scheme which deserves a little attention It is out of the Consolidated Fund that the Finance Minister has to meet the country's obligations each year, and it is necessary for him to know in advance exactly how much revenue he is likely to have to meet his known The expenditure has to come within the revenue. What sort of position would he be in under I his Food Controller scheme? The Food Controller could knock the financial arrangements °f the Government to pieces by his adjustment of food prices. It would be impossible for anyone to tell in advance what demands might be made 011 the Consolidated Fund on account of the losses sustained 011 the sale of foodstuffs below cost price, and no Finance Minister could maintain a sound finance under such circumstances. The whole finance of the p.ountry would be liable to disorganisation, and a far worse slate of things lie brought about than (hat which it is now sought 1.0 euro. The report of the Oosl of Living Committee, as previously staled, is not without some proposals of practical value, lint ils main proposition in its present form is so extravagant mid damrerous as lo be of value vdv as illustrating the 'lilfirnlties which confront those who | 0 solve I his gf'iit economic pro Mem ).v arlificial tinkering with Iti'_= laws of supply and demand.
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Dominion, Volume 11, Issue 18, 16 October 1917, Page 4
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1,599The Dominion. TUESDAY, OCTOBER 16, 1917. SHORT-CUTS TO CHEAPER LIVING Dominion, Volume 11, Issue 18, 16 October 1917, Page 4
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