THE BUTTER TAX.

Taranaki Daily News, 22 May 1919, Page 5

THE BUTTER TAX.

HON. GUTHRIE'S VIEWS. Wellington, Last Night. By Telegraph.—Press Association. The deputation of butter men who waited on the Minister last evening put before the Hon. Guthrie to-night their grievances respecting the equalisation schemes.

The Minister, replying, said tie Government thought it was doing a wise thing in making the contract with the Imperial Government and stabilising prices for our principal products for two years. There was at that time a lack of shipping, and if the produce had not been sold it might have happened that the Imperial Government would have sent to the nearer countries for supplies. The contract was made with the full consent of the representatives of the butter producers of the country. When the contract had been made the question of supplying the local market arose, seeing that the price for local consumption was not as high as that for export. He had been pleased to find that theproducers were willing to adopt the expedient of an equalisation fund. He could express no opinion as to what the Government would do about the request that the sellers to the local market should be conpensated from the Consolidated Fund. It was a matter that would have to be decided by Cabinet. In Cabinet he would express his own opinion. He expressed the opinipn that if any levy had to be made on any section, of the dairy industry it should have been spread over all sections.

AN UNJUST CHARGE. DAIRYMEN'S PROTEST. Mr. A. Morton, of Mangorei, acted as spokesman at the big and representative deputation to Ministers at Wellington on Tuesday, regarding tiic butterfat tax. He said that all the exportable butter of the Dominion for a period of two yeaio Jiad been sold to the Imperial Governmftiit at 1810 per cwt, or Is 7%d per lb, and at the time that that arrangement was made the local wholesale price of butter at the factory's door was fixed at Is 5d a lb. This left a difference of 2%d between the export price and the local wholesale price, and equalisation fund had been established to secure that the suppliers of the local market should receive the same price for their butter as the exporters. The purpose of that, they presumed, was that the local price of butter should not go to too high a range. He wished to point out, however, that in making their recommendations two or three years ago, the Board of Trade stated that, so far as the local market was concerned, there had not been at any time any exploitation by those connected with the dairying industry. They had simply endeavored to get what they believed to be a fair market price for their butter. The fixed price, he contended, inflicted an injustice on those supplying the local markets, many of them backblocks farmers, the poorest in the Dominion, living upon very poor land, separating their own iream, carrying it, often on horseback, long distances to the butter factories, and having no returns except from their butterfat. The deputation to Mr. Massey two years ago had pointed out that i>. very large number of the dairy farmers received very small remuneration indeed for their toil, and it seemed very unjust that these people, who were the backbone of the country, should have to find cheap butter for the whole of the rest of the community. If they had only to find cheap butter for the poorer classes there would not be so much reason for complaint But they were finding it for all alike, for the Acting-Prime Minister himself, and for the highest salaried men in the Dominion. Under imch conditions, he urged, the loss in supplying the local market with cheap butter for all should be borne not by one section, but by the whole community. The cost of production, he pointed out, had tremendously increased during the war period. The cost of labor had gone up at least 50 per cent.; the cost of manures had gone up in some cases 100 per cent.; and grass seed 200 to 300 per cent. The dairy farmers had also had to bear the increased cost of living so far as their families were concerned, and were doubly penalised, as at the same time they were not allowed a free market for their produce, but had to supply cheap butter for the rest of the community. The previous deputation had been told that there was no legal authority to levy the equalisation charge on the Consolidated Revenue. But the position aeemed to have altered, inasmuch as the Board of Traie had now made the suggestion that the flourmillers should be compensated out of the Consolidated Eevenuo for any loss due to their having to pay a fixed price to the wheat growers and sell their, flour at a fixed price. If that was right for the flourmillers, it should be right also for the dairyfarmers. The farmers had trouble enough anyhow tp make both ends meet, and the Consolidated Revenue, he maintained, should bear the whole of the cost.

ACTING-PREMIER'S REPLY. Sir James Allen, in reply, said he realised that the dairy farmer was to a large extent the backbone of the country, and everything the country and Government could do for him ought to be done. The deputation asked that the equalisation charge should be borne by the Consolidated Fund, and not by the industry itself; but if ho recollected aright the proposal that the charge should be put upon the industry came from themselves. Mr. Morton: It was forced upon us. The Prime Minister had repeatedly stated that he would never allow tho price of butter in New Zealand to go beyond Is 5d a lb wholesale, and Is 8d to the consumer; so that the position was forced upon us. Sir James Allen said that on the lint occasion there was a good deal of protest; but on the second occasion, he understood, they all agreed to it but three factories, and they came into line later. The equalisation charge on the Consolidated Fund would have to be submitted to Cabinet for consideration. Nor did he wish to give them his personal opinion, though he had clearly made up his mind; because that might lead them to think that he would influence Cabinet in tho direction. He admitted that there might be some logic behind the objection that the wealthy were being benefited to some extent, but it was being done so that the poor might benefit too. Mr. Macdonald said the whole business had been carried on between the Imperial' Supply Department and the Dominion. Butter Committee. It was at the request of the committee that it was done; and, in order to facilitate the negotiations with the Imperial Government for the sale of the 1918-1919 and 1919-1920 seasons' butter, Mr. Massey was informed in July last that the Butter Committee undertook to see that the loeal market was adequately supplied at Is 5d a pound jn bulk »t the faotwjr doer. That Tu u

absolute agreement between the Domini* ion Butter Committee and the Imperial Supplies Department; but now they aakx , ed that the equalisation charge, estimated* at 6s Od a cwt., should be paid out at • the Consolidated Fund. But, so that to* dairy farmers of New Zealand should not think that they had been hardly detib with, he would point out that butter wa» •the only commodity that, after supplying the local markets, was sold at fba highest price obtainable in the Britbh Empire. Voices: We don't get it Mr. Morton: It is sold at 256s wholesale in London, and we get 181s. Mr. Macdonald: Of course, you don't get it at the price they sell it per ousce to the very poor. The price you refer to is f.0.b., without freight, commission, , handling charges, etc. Wool, mutton, beef, lamb, scheelite and flax all had ft restricted market. As to the flour miller, lie had to pay Sd a bushel more than the year before, and the year before it had. been worked down to bedrock, bo that some said they only made Is a ton on flour. But now bags, freight and everything had gone up, and the price had been fixed with mathematical calculation . to put them on the same basis as last year. He recognised that the dairy farmers and other producers had played tin game, and done their best to help the Government. He held that it Was unfortunate that the first equalisation scheme had been done away with. That was why the butter people were so hard hit to-day. (Hear, heair.) To do the fair thing the charge should have been levied on all butterfat, glaxo, dried mUk, cheese, etc, (Hear, hear.) A voice: And wool and meat, Mr. Macdonald: Yes, and wool and meat. (Hear, hear.) Mr. Morton said that when the meeting of delegates passed the resolution re- . f erred to in regard to the local price of butter, they did so knowing that the Prime Minister had repeatedly stated that the price of butter locally must not be allowed to go beyond Is 8d a poind retail. He held that the local price of butter was a matter for the Board of Trade, not for. the Imperial Supplies Department. The latter was only dealing with the equalisation fund because they handled the money. Mr. Macdonald replied that the question of fixing the price of butter had not come before the Board of Trade for the past two years. It was done by the Imperial Supplies Department. Mr. Morton: It was done to give Mr. Massey a free hand, knowing that the prices here were fixed, to negotiate in regard to the price from the Imperial Government.—N.Z. Times,