RAIDING THE REVENUE.

Auckland Star, Volume L, Issue 222, 18 September 1919, Page 4

RAIDING THE REVENUE.

The Prime Minister has not yet stated exactly what he proposes to take the place of the butter equalisation scheme, but it looks as if he is going to raid the Consolidated Fund. At any rate, he says producers are going to get the full export price for butter sold locally, but he is not prepared to put up the price to the consumer. If the consumer is not to pay the difference directly, it must be obtained from something or somebody else, and we fear Mr. Massey has his eye on the Consolidated Fund. If export prices are maintained this would mean that in order -to maintain the cheaper price here and prevent the producer being penalised, between £150,000 and £175,000 would have to be paid out of the Consolidated Fund to t!hc producer. This simple process may be ■attractive to some people, especially to those who are feeling the pinch of the high- price of butter, but surely it does not require much thought to see that if the Government does this, it will only be moving in a vicious circle. What is the Consolidated Fund? Merely what the people pay to the Government in taxation or for services rendered. When you take £150,000 out of that fund you take it out of the people's purses. To keep down the price of butter hy making up the difference between local and export prices out of the State's revenue is like presenting a man with a live-pound note that you have just taken from his pocket. It is true that the poor man may feel a temporary satisfaction in that his butter bill is kept down, but if lie reflects he will 6urely sec that as a taxpayer he must pay his share of that £150,000. The principle is utterly wrong, and we really feel alarmed lest its application be extended. It has been applied to flourmilling; the State has fixed the price of (lour and subsidises the mills heavily so that they can manufacture at that price. But the subsidy comes out of the pockets of the taxpaying bread-eaters, so howmuch better off are they? It the principle of dipping into the Treasury to keep prices down is applied to butter there will assuredly he an attempt to apply it to other things. Coal would be an (obvious temptation. There is talk of putting part of the cost of housing schemes on the Fund. And in time we might find the Government doing the same in respect to boots, clothes and food of all kinds, when the country would present an interesting resemblance to a dog chasing its own tail. In seeking a substitute for the butter equalisation scheme the Government should pontine itself to two proposals. It should cither return to freedom of trade, and trust to increased production to bring local prices down, or it should place the burden of the difference between local and export prices on the whole of the export trade, instead of, as at present, on one section of it.