REDUCED FOOD PRICES

Press, Volume LXXXVII, Issue 26512, 29 August 1951, Page 3

REDUCED FOOD PRICES

DECISION GAZETTED SALES TAX LOWERED ON WINE MADE IN N.Z. (New Zealand Press Association) WELLINGTON, August 28. A special Gazette issued authorises reductions in prices of petrol, tea, butter, bread, and flour. From Monday next, the retail prices will be reduced as follows:—butter, by 4d per lb; bread, by Id a 21b loaf; flour, by id per lb; motor spirit, by 2d a gallon; and by 3d per lb. Commenting on the reductions, the Associate Minister of Finance (Mr C. M. Bowden) said that the Prime Minister (Mr Holland) had announced a reduction of Is 6d in the price of a 251 b bag, but for sales of lesser quantities, such as parcels of 11b or 21b, the rate of subsidy had now been increased to £5 5s a short ton, so as to permit the retail price reduction to be Jd per lb. Grocers would, therefore, be entitled to claim a refund from the Marketing Department on loose stocks held on, the morning of September 3 at the rate of ijd per lb, whereas merchants, bakers, ana pastrycooks would claim at the rate of £6 a ton, and biscuit manufacturers at the rate of £6 5s a ton. The method of application for stocks of tea, butter, and flour was set out in press advertisements to-day. The Bowden said it had also been decided to encourage the New Zealand wine industry by reducing the rate of sales tax on wines made in New Zealand from 40 per cent, to 20 per cent. The Minister said that when the general sales tax rate was increased in 1942 from 10 per cent, to 20 per cent., an additional sales tax of 20 per cent, was imposed on all wine made in New Zealand, making the rate 40 per cent. At the same time, increased import or excise duties were imposed on beer, spirits, imported wines, tobacco, and cigarettes, and the additional sales tax on New Zealand wipe yas in the nature of an excise duty, and the method of collection by way of sales tax was to simplify administration. The Government felt that the stage had been reached when the additional 20 per cent, imposed as a war measure could be removed, and the special Gazette contained notification of the reduction accordingly, applying to wines made in New Zealand only, with application from September 3. Mr Bowden said that opportunity was also taken to include an Order-in-Council suspending the regulations under which a third of the proceeds of sales of wool were frozen, with effect from August 15 last, in accordance with the Prime Minister's announcement a few days ago.