NEW PRICE FOR WHEAT

Ashburton Guardian, Volume 70, Issue 129, 16 March 1950, Page 4

NEW PRICE FOR WHEAT

EFFECT ON ECONOMIC STRUCTURE FURTHER COMMENT BY MR WALSH (P.A.) INVERCARGILL, Mar. 15. “It is gratifying to know that the Government is giving careful consideration to the views I expressed recently upon the effects of the new wheat price upon our economic structure,” said Mr F. P. Walsh to-day at Invercargill in reply to the Minister of Industries and Commerce (Mr C. M. Bowden). “The new price raises a question which must he given deep thought by everyone who is concerned to see our economy survive.” Mr Walsh said that the Minister of Industries and Commerce had given the Government’s views in a sober and reasoned statement, and he did not wish to enter into a public argument with him. “Let me say I can still see no error in my calculations,” Mr Walsh said. “I used the Minister’s own words, ‘9s 9d a bushel f.0.r., equivalent on .an average to 10s 2d f.o.b.’ ' This surely means that grower is ( no longer required to pay the cost of railage, estimated by the Minister at an average of 5d a bushel. But its price at 8s 9d this year allows him 43d a bushel for this cost. If it is not to meet rail costs this should be reduced to 8s 4Jd f.o.r. Giving him 9s 9d f.0.r., is 133 d per bushel as a gift above his cost of production plus a reasonable return; if the f.o.b. price is at 10s 2d instead of last year’s f.o.b. at 8s 9d this gift is Is sd. This arithmetic still seems simple to me, and the double rail payment for 1950-51 is still there at 9s 9d f.o.r. or 10s 2d f.0.b.” “However,” continued Mr Walsh, “the big problem to be considered is the effect on our economy by the gift of Is 5d a bushel to wheat-growers. The Minister has asked whether I would sooner pay 8s 9d f.o.b. and see production remain stationary, or give 10s 2d f.o.b. and try to reduce the quantity of Australian wheat imported. My answer is that the Minister is under an obligation to consider our economy, and its effect on the whole of the country, and not a sectional interest. By paying over and above the cost of production, plus a reasonable profit, to wheatgrowers they are placed' in an advantageous. position over producers of other grains, daii'y and meat producers, salary and wage earners, social security beneficiaries—in fact over all other sections of the community. Incentive Payments “My experience as a member of the Stabilisation Commission has taught me the danger of granting incentive payments (to primary producers or othei’s), without a proviso guaranteeing increased production. Where workers have been given bonuses it has always been on the basis of increased production, but the Government’s present intention is a straight gift of Is 5d a bushel without any guarantee of increased production. “I have always claimed that the essence of our 1942 stabilisation bargain was that the workers would not hold the community to ransom for the higher wages that could undoubtedly obtain, farmers would not press for the prices other meat and dairy producers overseas were getting, and commercial men would not profiteer on the scarcity value of goods for sale. That is why I am so perturbed at the Government’s action.

“If one section is freed of its stabilisation bargain, other sections cannot in natural justice be kept tied to the bargain,” continued Mr Walsh. “As a member of the Stabilisation Commission I have always claimed thHt the granting of incentive payments without a guarantee of increased production must upset our economic balance and lead to just demands by othersjor equal consideration. It was on this basis that all parties agreed to the 1942 stabilisation bargain. Refusing to Face Facts

“It is escapism on the Government’s part to say that they .‘will emphatically reject any claim that changes in wheat prices constituted a precedent.’ They are merely refusing to face the facts. Stabilisation was not a policy imposed by the Government in 1942. It was a policy hammered out and agreed to by all sections of our community. “Once a bargain is broken all sections are automatically freed and the Government cannot *>.eep them shackled. The bargain has been broken. Not only this, but the breaking of the stabilisation bargain has received the Government’s blessing.. “In natural justice other sections will consider that they are entitled to similar consideration. Their hands are now untied and the essence of my warning is that this will have a tremendous effect throughout our whole economy. The Government would be wrong in justice, or even in law, to refuse new claims by the other partners to the bargain.

“It is therefore with an eye to the immediate future that I repeat my appeal to the Government to give the fullest consideration to all the factors involved and decide whether the risky course they have now embarked upon will not bring about rapid and irreparable damage to our whole economy, as I am personally satisfied it must,” concluded Mr Walsh.