INFLATION OF COSTS

Press, Volume LXXII, Issue 21858, 11 August 1936, Page 10

INFLATION OF COSTS

DIFFICULTIES FOR FARMERS | MR W. W. MULHOLLAND i CRITICAL \ STRESS ASSOCUtTIOK TELEGRAM.) MASTERTON, August 10. 1 Addressing a gathering of farmers I this afternoon, the Dominion presiI dent of the New Zealand Farmers’ | Union, Mr W. W. Mulholland, i strongly criticised the policy of in[flating wage and other costs withi out at the same time inflating the | prices of agricultural products so i as to bring them into reasonable rei lationship with costs. Mr Mulholland [ urged that it was imperative to-day !as it had never been before for I fanners to get together in their own ! interests and those of the commun- , ity generally, and to urge the Govi ernment to complete the policy on ■ which it went to the country. Mr ■ Mulholland said the Government 'had gone to the country on a policy jof artificial inflation as opposed to ; the policy by which the preceding j Government reduced costs and ; brought these into reasonable relaI tionship with the prices of agricul- ! tui al products. The present GovI ernment, however, had got the i wrong foot first. If it had first in- ; flated prices, inflation of wage and | other costs would have followed : natura ly. It had inflated costs withi out inflating prices and so had rej established, though on a higher price i level, the conditions of 1931—the disparity between prices and costs ; which had led to the slump. There I was no question of going back on the ' nolicy of the last six months.

! Farmers, if they were to escape i being ground down by those secj tions of the community compulsorily : organised, must unite in doing everything they could to induce the Govi eminent to complete its policy by initiating prices and bringing them in- ' to conformity with costs.

Mr Mulholland condemned the - heavy increase in company taxation, i It was indirect taxation which would ;be passed on to consumers and, therefore, was totally at variance ! with the professed policy of the i Labour party. He contended that in 1 its reintroduction of the graduated | land tax the Government had taken !no account of the position of the sheep farmer who necessarily used a much larger area of land than did the dairy farmer. Particularly in the South Island considerable areas of grazing land could not be worked under the taxation now imposed.