Loan to the Dairy Industry

Press, Volume XCVIII, Issue 28872, 17 April 1959, Page 8

Loan to the Dairy Industry

Realisations for butter and cheese on the overseas markets

are now expected to equal payouts to farmers for the current dairy season. This will bring a highly gratifying end to a season that opened most unpromisingly. It might have been even better had the Government given the industry some flexibility in arranging payouts to get the best returns . from the excellent prices for < cheese ruling on overseas markets. However, the unexpect- 1 edly good outcome poses ques- : tions. A few days ago a Taranaki dairy farmers’ leader ; asked a question that concerns all the taxpayers of New Zealand. In last year’s Budget, Mr Nordmeyer made provision for a loan of £5,000,000 from ' the Consolidated Fund to tide ; the dairy industry over “ a “ difficult period This seemed a strange line of reasoning, ■ especially as the Minister was at pains to make it clear that the transaction was an advance ; —not a subsidy—and that it would be repaid " as soon as • M overseas prices rose to a level " which would enable repay- “ ment to be made ”. The banking system seemed much the better channel to carry a short-term transaction of this sort, much better than a fund which draws its money almost exclusively from taxation. |

Perhaps Mr Nordmeyer had an idea that it would serve antiinflationary purposes to withdraw from the general taxpayers part at least of the money that he expected would have to be paid dairy farmers to bring their incomes up to the guaranteed price level. But it was not at all likely that the loan would have to be uplifted until the end of the dairy season, three months Sifter the end of the financial year for which Mr Nordmeyer was budgeting. The Taranaki dairy farmer presumably spoke with his tongue in his cheek when he asked whether the £ 5,000.000 “ will be rebated to the ordin- “ ary taxpayer, including the “ farmer ”. That is not the way of Ministers of Finance. The sum will add to Mr Nordmeyer’s surplus, unless there is to be some provision to carry it forward as a reserve for the industry. But this seems to be precluded by Mr Nordmeyer’s insistence in his Budget speech that dairy industry finances are to be conducted on a year-to-year basis. Mr Nordmeyer says he has discussed this subject recently with the Dairy Products Marketing Commission and the Dairy Board. He should recognise that he has an obligation to discuss the question also with the taxpayers from whom he took the I £5,000,000.