THE BUTTERFAT LEVY.

Taranaki Daily News, 9 July 1917, Page 7

THE BUTTERFAT LEVY.

DEPUTATION TO IMTOTS'I'WBK. ; (From Our Own Correspondent)'. i Wellington, July 5. Twenty-four members of the House of ' Representatives, from dairying districts 1 throughout New Zealand, waited upon the Prime Minister and the Hon. W. D. S. Mao Donald this morning to protest against the butter-fat levy. The deputation was headed bv 'Mr. G. 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. They asked also for the refund of the money that had ibeen collected from the dairymen. The present position was that the dairy farmers wers being taxed in order to provide cheap butter for the general public of New Zealand. They protested against that imposition. If a tax was necessary in order to keep dcivu the retail price of butter in Neiw Zealand, then it should be paid 'by the general taxpayer, preferably through the income tax. Mi' Jennings (Taumarunui) said that the butter levy pressed unduly on the men who had gone into the backlblocks. The dairy fanners were the hardest worked men in New Zealand and they Bhould not 'be singled out for a special tax, especially as their profits wqre never large. The dairy farmers had made the same sacrifices as other sections of the community in connection with the war. 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 precedent. The farmers in his own district were concerned chiefly in the production of cheese and they felt keenly regarding a levy designed to provir' cheap butter for townspeople. T Government should have bought the butter outright. Then if it wished to sell at a loss to Jocal consumers, the cost would have fallen on the general taxpayers. The dairy farmers had not at any stage of the war attempted to extract unduly high prices from the public. They had Bold ■ the ibutter 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 cheese in the stores owing to the lack of shipping and said that relief was urgently required by the producers. ■Mr. 'Hornsby (Wairarapa) and Mr. Pearce (Patea) spoke in similar terms. ■Mr. Pearce urged the Government to take immediate Bteps to provide increased storage accommodation for butter and cheese in view of the shipping shortage. If storage was not provided at once, the farmers would suffer a loss even more severe than the butter-fat levy.

The Hon. W. D. S. Mac Donald said 1 that it had been no pleasure to the 1 Ministers to interfere iwith the dairying ' industry. (But the increase of local prices f had created a position that the Govern- ( ment could not disregard. The retail price of butter in Wellington at the ' height of the 1916 season had been Is 8d * a pound, 4d more than in any previous J season at the same time of the year. The distributors and retailers had then 1 informed the Government that owing to ( the increase of the wholesale price by the factories, the retail price would have - to be increased to la lid a lib at once 1 with a prospect of a further rise to 2s 6d a lb. The Government had to con- '• sider the interests of the Dominion and 1 it could not allow the increases to pro- j cecd unchecked. The producers had pre- J viously been warned that if the local price went above Is 7d a lb the Govern- 1 ment would prohibit export. But the > prohibition of export seemed highly un- ' desirable owing to the importance of taking advantage of all the limited shipping space, and the Government, alter considering the whole position, had decided to fix maximum local prices and to establish an equalisation fund by a general levy on butter-fat. The factories that supplied the local manket (with butter were to receive prices on a parity with the f.o.b. prices. The scheme did not tax the dairying industry. It provided simply for the equalisation of prices. The levy had produced a 3um of about £240,000, of which aibout £60,000 had been paid out. The accounts were now (being worked out and the distribution would be completed as soon as possible. The Government had not received the actual casli from maif!' oi the factories, owing io the fact that they had not been paid for butter lying in the stores awaiting shipment. Tie Minister added that the levy represented a fraction over 4d per lb of butter and Vid per lb of cheese. The dairy farmers who had Ibeen represented by the deputation as struggling under this levy .were still receiving £'4 | 2' 10.? per -ton over pre-war prices for their butter and £'lß lis per ton over pre-war prices for their cheese. It was not true that the Government had limited prices only in the case of butter. It had taken action also with Tegard to wool, meat, rent, bacon, wheat, kerosene, bread, milk and flour. The dairy farmers were receiving big war prices for their products. The Minister added that the London price of Xew Zealand meat was 115 per cent, over the price paid to the New Zealand farmers. The dairy farmers, however, were securing a within six per cent, of the London price. The Prime Minister said tint he understood the position very well. He misht not 'be familiar with all the details of the system that had been adopted in order to keep clown the price of liutter to the local consumer, but he took his full share of repsonsibility for what had been done by the Government in his absence. He could, only say now that the Government would endeavor to solve the difficulties that had arisen. It was tiie duty of a Government in time of crisis to endeavor to keep dotwn the cost of living, and he need hardly say that the Government had no wish to injure the producers. He knew that if production was hampered 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 endeavor to get out of the difficulties that arisen. He had his 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 be carried out. The Imperial Government hiid bought New Zealand's output nt 9§d a pound, and it should not be forgotten that the representatives of the producers in London had been willing to take M. It was only whefi the Ministers 'pointed out thai) the price had inct I'scl greatly during the course of the negotiations that, the Imperial Board of Trade consented to pay an extri ha.lf- • P X y Wilkinson: "Many of the factories t had sold lQi*

Mr. Massev: Ten. to tli« middleman. They were ready to take Sd in Londo The Primo Minister added thai he was making cotastaut efforts to improve tha shipping position- Ho believed that enough gutter would be moved from the. stores before August, when tlie new season commenced, to enable the farmers to "proceed with -production unchecked. The Imperial Government was responsible for the shipment of cheese, and he believed they would make room in the stores for the r ' season's out<iut. He was making a .iccial effort to •clieve the position in the northern districts, where the season commenced early. The Government had not made any arrangement for the increase of cool storage. The matter was being considered.