MEAT INDUSTRY ACCOUNT

Press, Volume LXXXVII, Issue 26512, 29 August 1951, Page 6

MEAT INDUSTRY ACCOUNT

PAYMENTS HELD TO BE ILLEGAL

ADVICE GIVEN ELECTORAL COLLEGE

(New Zealand Preu Association) WELLINGTON, -August 28.

A Crown Law Office opinion has meant that payments running into millions of pounds, made for subsidies and other purposes out of the Meat Industry Stabilisation Account, must be considered to have been illegal. Validating legislation at the next session of Parliament will be necessary to put them in order. This information was given to members of the electoral college of the New Zealand Meat Producers’ Board to-day by* its chairman (Mr G. H. Grigg), when questions were put to him by Mr W. A. loms, of Martinborough. Mr loms had earlier questioned the legality, of proposed expenditure on the purchase of an interest in the London wholesaling firm of Towers and Company. He asked why the electoral college had not been told that an advance for the establishment of the East Coast fertiliser works was not valid. Mr loms asked: "Is it a fact that you can lend to the manure works a certain amount of money without referring back to the Government, or getting new legislation?” Mr Grigg said the Government had agreed to an advance to the East Coast fertiliser works to get them established. Both the Government and the board thought at that time that this could be done, but the Crown Law Office had since said that there would have to be new legislation. The Government intended to introduce legislation at the next session of Parliament. "I think the funds cannot be touched,” said Mr Grigg. Mr loms: Well, why didn’t you tell us so?

Mr Grigg said that the advance of the money had gone ahead, but would be validated later. The Auditor-Gen-eral had approved the advance. Mr W. W. Mulholland, a member of the Meat Board, said that the Crown Law Office opinion was debatable. Other legal advice did,not agree. Other' sums in millions for subsidies had been paid out of the funds, and approved bv the Auditor-General without question of the validity of their payment.

"Position Not Yet Valid” Mr Mulholland said the stabilisation agreement provided that the money could be used, on termination of the stabilisation policy, by agreement between the Government and the body responsible, in this case the Meat Board. One of the difficulties was that stabilisation had not been formally ended, and consequently “the position had not yet become valid.” The- board considered, said Mr Mulholland, that rather than argue about it, it would be better to have a clearcut definition as to what powers and what steps were necessary for the use of those funds when the board and the Government were agreed upon their use.

Mr loms said that at an earlier meeting he had questioned the legality of the proposed purchase of the wholesaling agency of Towers and Company in London, and was told by the chairman then: “Do you think we would go into such a scheme without full legal advice?” Mr lorns said he had still doubted the legality of the board's proposals on that matter, and wanted to know new who was right about it. Mr. Grigg said: "We did have legal advice, but the Crown Law Office opinion has been given since then. Actually, all subsidies paid out of the industry stabilisation funds are illegal under that opinion.” Mr Mulholland said the board's own legal advisers did not agree with the Crown Law Office view. Mr loms said he had no wish whatever to stop the money going to the fertiliser works, but he felt quite definitely that members of the committee should be told of these things. “When we went into the matter of the Towers Agency, we got advice from our lawyers that we could carry out the scheme,” said Mr Grigg. “We put it before the electoral college, and thought we could do it.”