PRICE SUBSIDIES

Wairarapa Times-Age, 22 July 1943, Page 4

PRICE SUBSIDIES

EXPECTED TO ACCELERATE INFLATION UNLESS THEY ARE DRAWN FROM TAXATION. DISCUSSION IN AUSTRALIA. (By Telegraph—Press Association—Copyright) (Received This Day, 11.40 a.m.) SYDNEY, This Day. Subsidies to be paid by the Australian Government on tea and potatoes, plus the loss of revenue in sales tax, are estimated to cost between £7,000,000 and £8,000,000 this year, it has been disclosed by the Federal Prime Minister (Mr. Curtin), who declared that the subsidies were'in keeping with the Government’s firm intention to reduce the prices level to that operating before April 12. Some economists point out that unless these subsidies are financed from taxation, prices will rise again. Unless a more stringent control of consumer spending and consumer goods is instituted, the new subsidies will only slow down the inflationary upsurge, says the Sydney “Daily Telegraph,” describing the plan as “patent electioneering trickery.” The paper says the Commonwealth Treasury’s that 38.8 per cent, of last year’s war expenditure was financed from credit shows that the seeds of inflation sown by the Curtin Government are germinating. Before the war, in 1938-39, after the Government had collected taxes and floated loans, there remained £50,000,000 for the public to spend. After collecting this year’s taxes and floating loans, the Curtin Government left the public £552.000,000 to spend — with 60 per cent, less goods to spend it on and no avenue, outside Government loans, for investment. Advocating compulsory loans to reduce the public spending power and curb the present inflationary tendency, the “Telegraph” adds: “Our currency is-being slowly but surely debauched.”