The Press TUESDAY, FEBRUARY 18, 1964. Subsidised Bread—Still ?

Press, Volume CIII, Issue 30368, 18 February 1964, Page 12

The Press TUESDAY, FEBRUARY 18, 1964. Subsidised Bread—Still ?

The arguments in favour of I removal of subsidies, says the report of the Committee of Inquiry into the Wheat, Flour and Bread Industries, “ appear few and simple “ and overwhelming ”. The “ most desirable course ”, in the committee’s view, is the complete elimination of subsidies on flour and; bread. This course, which has for years been urged by most of the country’s economists, is clearly the right one for the Government to adopt now. If the Government cannot accept an unequivocal recommendation from a competent committee of inquiry, when will it ever have the political courage to grasp this nettle of subsidies? It is true that Government and National Party statements during the election campaign showed an aversion to removing subsidies; and we do not suggest that election promises should be dishonoured. The retention of subsidies, however, was not in the National Party’s election policy as submitted to the electors. Should a statement made anywhere else, particularly to a minority group, be considered an “ election pro- “ mise ”? The committee considers three alternatives to the complete elimination of bread and flour subsi-

dies; only the proposal to remove all subsidy except on price-controlled bread appears to offer any improvement on the present situation. This would at least restore some competition in the milling industry and pave the way for the ultimate removal of all subsidy. It would, however, represent little saving to the taxpayers in subsidy in the meantime. The committee’s report is sound in its consideration of subsidies, meticulous in its examination of the costs of the present system, and shrewd in many of its observations on the milling and baking industries. On one basic issue, however, it is disappointing: the place of the wheatgrowing industry in the economy. Self-sufficiency in wheat production might well be achieved without loss of overseas income from other farm production; and production of more wheat (alone) might be the best safeguard against stock diseases. In short, increased wheat production might be both economically and technically desirable. But the report does not present the conclusive case under this heading that might have been expected from such a thorough examination of the industry generally.