THE BUTTER TAX.

Taranaki Daily News, 20 November 1916, Page 7

THE BUTTER TAX.

DISCUSSED BY TARANAKI FARMERS' UNION*. At the montlily meeting to tlie executive in Hawcra on Thursday a lengthy letter was read from the Acting-Premier in reply to the executive's letter on the matter of the new arrangements with regard to butter-fat. He trusted the executive would reconsidei; its resolution in vie.v of the urgent need, as it presented itself to the Government, to prevent where possible increases in the cost of living. The proposal was not to tax in the ordinary sense of the word; the Government received no benefit from it. but it was simply an adjustment of the profits of the industry, and it was wrong to think that the dairy producers had been singled out. and he quoted the commandeering of meat, restrictions placed on the export of wool aifd hides, and restrictions placed on the price of wheat and flour. He would remind them that but for the protection afforded by the army and navy it might have been impossible to have sent any exports away, but the producers was now in the fortunate position of being able to secure a high price for his produce, and lie (the Minister) must say that it seemed to him fair that the fanner should acquisce in the arrangements made, wliieh were a necessity of the peculiar circumstances that had arisen owing to the war. Mr. Maxwell was of opinion that not only should they not climb down, but they should still further protest. With due deference to Mr. Allen, he was a trifle illogical; he said the imposition is not a tax in tho ordinary way, and then goes on to quote instances of the commandeering of meat, cheese, etc. The daily people were always agreeable to the commandeering of cheese if it meant, thereby, the securing to the men in the trenches a supply of necessary commodities, but this latest tax was a, case of robbing Peter to pay Paul something that Paul was not entitled to. Fariperj, were agreeable to the commandeering of cheese, meat, wool, etc., on certain terms, and to assist the great cause, liut to select a small class of the community and tax them to benefit another section of the community was entirely wrong. Continuing, Mr. Maxwell remarked; The tax on butter-fat is such a gross injustice that I consider it the duty of dairy farmers and the Farmers' Union on their behalf to continue their efforts to obtain just treatment. For even should we not be successful ;n inducing the Board of Trade and the Government to remove the imposition, at least we sbiuld endeavor to acquaint the general public as to the true position. It is hardly conceivable that the Board of Trade and Government could have been guilty of such a gross act of injustice One can only suppose that they acted mostly from ignorance, and that in their eagerness to meet the demands of a iertain .class they failed to give any attention to the rights of the other side; but oven then it seems 'incomprehensible that they could have been so blind as to have acted as they did. It must bo obvious to all who choose to give the slightest, consideration, and who have even a slight knowledge of the matter, thai (a) the tax is utterly wrong in principle, being purely a class tax, and (b) that it is grossly unjust in that it imposes an extortionate levy on a very small section of the community—probably not more than one-fiftieth of the whole, and that far the hardest worked for the benefit of the remainder, or, I should say, so that each individual of the remainder may be saved a trifling amount (c) that it is absolutely inequit able in that it is a levy, not on the profit, but on the gross amount of hia products. irrespective of wftether any profit may be or what amount of profit, and of whether he had already sold the whole for a low or high price or not sold, and, further, that the war levy made after many sales have been at prices under the price that was considered so high as to supposedly warrant action being taken by the Board of Trade. As far as I have been abb to ascertain, sales haVe taken place at prices ranging from to lOld. I am satisfied that BJd, at which one or more large sales were effected, would not net tho producer a price equal to pre-war prices, and whilst IOJd may reasonably bo considered an excessive price, I do not suppose, considering all things, the price that equals cheese at would have warranted State interference. This la.?t I consider a very important point, and one which, as far as I know, was not usi-rt in the first conference or at the test case before the Court.

That this special class tax l is an immensely dangerous political expedient will not be denied, but how dangerous may not have been realised by many. But, at this time of high costs ann where large increases in rates of wagon have been conceded all round, that or all others the .dairy farmer, who is notoriously the hardest worked and worst paid member of the community, should have been selected as the victim is, to say the least of it, astounding. To ta:; war profits for the purpose of carrying 011 the war or for the benefit of the whole community, I think all admit is fair, but a class tax and that tax so that others may get their butter a little cheaper is another thing altogether. And to tax, not war profits, but the entire product, arid to have selected the hardest worked section of the community, wlio is not making war profits for the very reason that many others are making these profits out of the things that are essential to the dairying business, and because war advances have been granted to labor. This brings me to my contention that the dairy farmer on the average is not making any war profit, t estimate that, at least so far as applies to factories that have sold their output, the increased prices of cheese returns to the faetoies not mop?, on the average, than 25,t0 30 per cent, increase as- compared with pre-war prices; that is, after allowing for the increased costof manufacture. It is true that the actual prices at -which factories, have sold, are in the gross about 40 per cent, higher than pre-war prices, but the cost of manufacture. labor, material (rennet, for instance, 600 to 700 per cent.) has so risen that the pay-out on butter-fat will only be 25 to 30 per cent, higher. Now, whilst I estimate the pay-out by the factories will be 25 per cent, to 30 per. cent greater tlian pre-war rates, I contend that the expenses of the producer—the small dairy farmer—have so increased that this 25 to 30 per cent, will be far more than absorbed and that, therefore, instead of getting any war. profits from which to pfiy the 3d levy, hi- net profit will be consideraly less. The following list of some of the essentials to the- dairy farm, with increased prices, will give a fair idea of the increased cost of production of butterfat: Keep, 45 per cent; labor, 45; manures, 75 to 100; seeds, 50 to 100; iron, 110; wire netting, etc., 100 to 300; staples and nails, 100 to 125; buckets, etc., up to 100; chains, etc., 75; oils, 50; paints, 50 to 100—an average of just

under 100 per cent, increase. Of course, we all know that tlie effect of these increased costs will vary on every farm, chiefiy as to (1) the proportionate animal charge per acre by war of rent or interest to the amount of manure used, and (2) proportion of hired labor. Bet it it not individual cases, but a fair average that has to be considered, and on the average the cost of labor, manure and seed when so high as they are now are proportionately so great to the capital charge that the average is—just 70 per cent. —on those will, I am sine, fir moi'O tl.an alsorb the 25 to :>il per cent. I am satisfied that as time goes on, where proper accounts are yept, r.iy content,ion will be proved correct. At the last meeting of the Executive I stated that 1 could show that on many small dairy farms those of (he family employed at the farm work did not earn an average of 3d per hour- for the time worked. Somehow I was, I believe, wrongly reported as having said 9d per hour.

It is unquestionable that the small dairy farmer, on the average, is the hardest worked and poorest paid menv ber of the community. Many, very many, work 15 and 10 hours a day for the .whole 305 days in the year, and though they by the combined work of as many members of the family as can work, and by the long hours and every day in the week the year round, they manage to lift a seemingly large cheque in the gross, but it is undoubtedly the dearest earned money in the country, and these are the people who have been selected by that very wise body of men the Board of Trade, assisted by the Government, to be heavily taxed out of their 3d an hour so that those earning Is 3d to 2s 6d or more per hour can get their butter at about (id per week less I wonder if even you fellow-farmers are all aware how heavily the special tax will fall. As an instance I will take a case I know ol' a dairy farmer struggling under a load of mortgages to get about £IOOO per year, but after paying all his costs of production, interest, labor, manure, etc., etc., lie has not more than £l5O clear, and how will he stand? Tin? special ta\ of |d on butter-fat will take over £4O out of his poor £l5O. Surely such cases should convince the authorities of the gross injustice of their action.

Tho chairman remarked that lie was not aware yet whether they were going 011 with their appeal, and in the meantime'he did not see that they could do any good by discussing.'the matter further. However, they could decline to withdraw from the position they had taken up, and he would move as follows:—''ln reply to your letter asking this executive to withdraw their opposition re butter-fat regulation tax, we would respectfully repeat that >we must still continue to protest against this special class tax l and also to oppose any inteference with the economic laws, and we would draw your attention to the Prime Minister's and.Sir .T. G. Ward's speeches reported in Hansard, on the subject in June last." This was seconded by Mr. Mackie and carried unanimously—Star.