THE FLOUR SUBSIDY.

Auckland Star, Volume LII, Issue 61, 12 March 1921, Page 6

THE FLOUR SUBSIDY.

Having fixed the price for this season's wheat crop, the Government has nowrevised the price of (lour and bread. The price of Hour is to be raised, and while the price of bread is put up one penny the subsidy paid out of the Consolidated Fund is reduced from £1 7/6 to £1 10/ a ton. That is to say while lhe householder will have to pay more for his bread, he will get relief indirectly as a taxpayer. The arrangement might have been more unfavourable to the con-

sumer and the taxpayer, for apparently the new rates to be paid to the farmer for his wheat are lower than what was promised under the agreement of some months ago. The most in-

teresting feature of the new arrangement is that it is a step in de-control, which has never worked very satisfactorily and has been open to strong objection on principle. The subsidy policy gave people something with one hand" and took it away with the other. It may have been partly justitied on the ground of emergency, but it encouraged private waste and swelled national expenditure by an easy and dangerous method. In 1010-20, the Hour subsidy amounted to £213.000, which works out at about* four shillings per head of population. The reduction of the subsidy to thirty shillings a ton is a first measure" of abolition, and perhaps by the end of the year the process will be complete. No doubt the Government finds that it cannot provide the money for a subsidy on the old scale, and before long it will "come to the same conclusion { about butter. That bread should cost a 1 penny more will annoy many people, but the rise will cause less hardship now. when other prices are falling, than it would have done six months ago. It is sound policy to let the consumer shoulder the" burden, and not attempt to deceive him by putting a portion of it on the Consolidated Kund, which is built up out of consumers' contributions. That bread will be cheaper some day is certain. Though guaranteed prices for next season's crop are substantially lower than for this year's, it may be found that they are substantially higher than the world's parity. Australia has an enormous crop this year, and there is talk of carrying over the surplus till next year by special methods. Next year's crop may be just as large, and as we pointed out yesterday, the New Zealand acreage, owing to the fall in meat prices, may show an increase. The Government may find a year hence that economic, factors have done more than their price-fixing to encourage wheatgrowing, and that, the rates they have fixed for wheat are a bad bargain for the country.