WELLINGTON NEWS

Hokitika Guardian, 8 October 1930, Page 7

WELLINGTON NEWS

UNEAIPLOYMENT RELIEF.

(Special Correspondent).

AVELLINGTON, October 6

A Air F. AV. Hartley, writing from Auckland, to a. AAtollimgton paper makes a very absurd proposal to help relieve unemployment in the Dominion. He estimates the weekly consumption of butter in the Dominion at a million to a million and a half pounds, and says: “AVe are unable to dictate to the London market as to the price, but we certainly can do that to our own. Let tlxe permanent price of butter by say 2s and cheese Is lOd per lib retail. ■ This would have the tendency to stabilise the market and the equally important point, land values, and also to assure to the farmer that little extra spending power which is so vitally necesasry to we people in town. The extra 4d or 5d per lb on butter or cheese he suggests take the place of the 30s poll tax to relieve unemployment.! It is truly remarkable how some people with very hazy knowledge of economics will rush into print to air absurd proposals. To arbitrarily to raise the price of butter and cheese is to at- once raise the cost of living, and the poorest in the community will be obliged to go without these estimable commodities entirely or greatly reduce the consumption, so that the million or million and a half pounds of butter now consumed weekly will contract and the surplus would have to be exported to a market that cannot be controlled, so that what is made on the swings will be lost in the roundabout.

Then -again it must be remembered that such a vicious tax it would be and would remain for all time and perhaps increase. That is the history of all protection. There will grow up in connection with the scheme powerful vested interests which will be veryhard to shift. Many leading business men are persistently urging that there should be less Government interference in' business, and there are others who recklessly urge increased Government control. Neither the poll tax of 30s nor the suggested butter tax will cure unemployment. That can only be done by reducing costs by increased efficiencies and economics. There is far to much inflation in the Dominion.

The value of services as expressed in wages and salaries are inflated, land values are inflated and the retail price's of local productions are in most cases, inflated. When the balloon is pricked and the hot air released we may get clear of unemployment. Surely. it must be obvious that with butter at 123 s we cannot afford the costs that were regarded as reasonable when butter was selling in London at 180 s per cwt-, as was the case for some time last year. The dairy industry, like the meat industry, was initiated by private enterprise, and all the Government assistance that was needed was to enforce uniform grading. There was no call for boards which were initiatc4 by politicians for the purpose of buying votes. Farmers themselves' now realise that these boards are costly oxcresences on the industries they are supposed to control.

In Victoria, under recent legislation which is on similar lines to that enforced in Queensland where it is known a s “equalisation,” all factories are payed on an equal footing for marketing, while retaining the identity of the butter sold, The system admits premiums realised on sales overseas to be retained by the sellers. A high price is fixed for home consumption irrespective of the overseas market and ruling export parity. The proceeds of sales in the home markets are apportioned among the factories so that all receive returns upon a similar basis irrespective of the proportion of home market sales that they may have obtained. This is effected by employing a formula which is based on the prices current for choicest and first grade butter in the London market three months after the date of .shipment from Australia. The export parity price is taken in relation to the ratio of local sales to exports, and a weighted average price is obtained. The “equaliser” is applied to all the returns sent in by all the factories. If a factory has exported more than its quota it is granted a bonus, and if a factory has exceeded its quota of local sales a reclamation is made. This system means robbing Peter to pay Paul, and the people of Victoria are being taxed to provide Londoners with cheap Australian butter.