Dairy Repayment Defended

Press, Volume CIII, Issue 30481, 1 July 1964, Page 12

Dairy Repayment Defended

(N.Z. Press Association) WELLINGTON, June 30.

The continuing satisfactory export prices for dairy products ' fully justified the Government’s decision that the £3 million loan made to the dairy industry in 1961 should be repaid to. the Consolidated Account. The • Prime Minister (Mr Holyoake) said this today when commenting on a reported statement by ' the

chairman of the Dairy Board (Sir Andrew Linton) criticising the Government's action. “It is completely wrong for Sir Andrew Linton to suggest that the Government had misled the board in recent negotiations,” he Said. Mr Holyoake said it was true the board had suggested from time to time that the £3’ million be given to the dairy industry to compensate the industry for losses it considered it had suffered from

the sale of dairy produce on the local market. However at no stage during the discussion had the Government agreed to do more than consider the board’s proposals about the return for butter sold on the local market. Mr Holyoake. said the advance of £3 million, was. made from the Consolidated Fund inMarch, 1961, when the price of butter on the London, market was 250 s a hundredweight and that the industry’s loss during the 1960-61 season exceeded £7 million. Mr Holyoake said today the

position was entirely different. Even after allowing for the increase of 5 per cent in the basic price for butter and cheese announced last week by the Dairy Products Price Authority, current prices overseas still exceeded the prices being paid to producers, with consequent further reduction in the comparatively small deficit still remaining in the Dairy Industry Reserve Account.

It was therefore entirely reasonable that the advance should be withdrawn; there was no further need for it in the Dairy Account. The repayment would not affect the amount which would be paid to farmers for butter and cheese. Mt Holyoake said the Government thought this £3 million, which was taxpayers', money, should go back into the Public Accounts to help meet the urgent need for increasing expenditure in such fields as education,-, social security and defence.