PRICE OF BUTTER

Dominion, Volume 10, Issue 2941, 29 November 1916, Page 8

PRICE OF BUTTER

THAT OBNOXIOUS LEVY

REQUEST FOR ITS WITHDRAWAL

BY COUNTRY.M.P.'S

GOVERNMENT'S DEFINITE REFUSAL

'""'A demand that tho levy recently imhsed upon butter-fat going into dairy .wtories should be withdrawn was riado with much emphasis by a deputation of members of Parliament rcpre- ' Senting country districts which waited . irpon Ministers yesterday. The Ministers who received tkd deputation were: the Hon. J. Allen (Acting-Prime Minfeter), tho Hon. W. D. S. Mao Donald (Minister of Commerce), Dr. M'Nab, the Hon. G. W. Russell, and the Hon.SL M. Myers. Tho members of Parliament constituting the deputation were: Messrs. G. J. Andorson (Mataura), C. A. Wilkinson (Egmout), G. Hunter tfWaipawa), J. M. Dickson (Chalmers), • 31. F. Bollard (Raglan), J. A. Young |(Waikato), W. H. Field (Otaki), H. J. E. Okey (Taranaki), G. R. Sykes (MasIterton); and J. T. M. Hornsby (Wairatapa). Tho members of the deputation ,were not encouraged to hope that the Ifrorermnent would review its former decision on the question. The V/rong Way. ' ! Mr. Anderson said that the deputaition had como to lay before Ministers Jthe views of their constituents in tho (country regarding the butter-fat tax. He knew that it "was argued that it [was not a tax but a license fee, but fthat,.of course, was a mere quibble. He 'and tho other members present agreed that it was quite right that the GovSernment should endeavour to reduce tho cost of living. In doing this the Government were likely to injure sometone, but tho Government should see {that tho resultant loss should not bo '. Sput upon any individual industry, but upon the taxpayers as a whole, more Especially upon the wealthier taxpayers. He wished to have this point emphasised—that the deputation had not come to criticise the_ policy of the Gov- • eminent in attempting to reduce th© • -'cost of living. They did say, however, that the Government was acting unjustly in putting a burden on one of the hardest-worked 'sections of the (community. The butter-fat tax was hbout Is. per 1001b., and this would work out at about £1 per cow per Season. Mr.. Okey: A cow tax. ■ I Mr. Andorson said that the tax operated with special hardship against cheese-producing districts. At the heginning of tho season the South Island output was offorod to the Government . Ifor Bd. per lb. Later the whole New iZealand output could have been bought •ifor BJd. The purchase was not made, ibut instead this inequitable tax' was ■imposed. He believed the Govern.■'tnent could have kept down the price of butter to the consumer by ;nuying butter early in the season. " They were advised that butter was ...sure to rise, and that they ought to ..buy, but they did not buy. In this .they showed some lack of foresight, - but he did not blame Ministers, • because he knew that every one of them - had had a heavy load on his shoulders. Had they ; bought butter long ago they could have/,kept it in cold store, ito put on tho market when the price threat- ■ cned to rise above Is. 7d. per lb. later in the season they, would have .:.,liad to buy at the higher market rates, .-hut they could have sold still at is. - 7d., putting the loss on the general -•taxpayer, as was done in the case of ■tho wheat purchased. -"would the Farmers Have Agreed? Mr. Russell: Do you think the but- . ■ .tor factories would have submitted to sale in advanoe at the beginning of the season at the then ruling prices? ( , Mr, Anderson; I believe they would ■have at the beginning of the 'season ... In this' way the Govern- ; ment could have kept down the price of butter. You don't ask the other coal mines in New Zealand to make up your loss on tho State coal mines. ~•■■; Mr. Mac Donald: There has been ... none. , Mr. Anderson: That is a matter of -"opinion. ■ ; . Mr. Mac Donald: It is a matter of fact. '_.„.. ; Mr. Anderson went on.to argue that .the Government could have by some scheme of purchase kept the local price . of butter down to Is. 7d. per lb., and .the loss could havo been tome by the general taxpayer. Now they were ; levying this tax upon the poor man, and giving butter to the wealthy man . at the same rate as to the working .man. They were taxing the hardest- ,.- .worked portion of the farming com- ,.- munity not to benefit only the man . ; :who could not pay for his butter, but to benefit far more tho big hotels frequented by wealthy people, -the teashops, and so on. Some small farmers in his district had bought cows at •very high.prices, without any idea of ;this tax, and they were now in a bad 'way. •' , Mr. Mac Donald (smiling): Do you want us to believe that? : Mr. Anderson: I do. Untimely Interference. 1 Mr. C. A. Wilkinson said that'his' district was vitally interested. The ■ other_ day -at a meeting of ■ (.dairying representatives was held, at ■ which the farmers, made strong protest against the Government's proposal. Indeed, they had stated that they would keep in mind the charge made upon them until next polling day. The Government, he urged, should havo purchased the butter and cheese output. ' Previous opportunities to buy cheese had been lost, but now, after all contracts had been made, the Govern- ' ment interfered. Ho maintained that the tax would not greatly benefit the working men, who did not use much •butter. ~ Mr. Mac Donald: If they didn't buy 1' ,3'our butter you wouldn't havo a mariket for it] ( ;. Mr. V/flkinson said the reduction in •prico would benefit rather the big ~'hotels and tearooms, who would not :give_ their customers any relief. Ho admitted that tho Government might properly buy butter as a matter of policy to keep the price to the consumer down. Mr. G. Hunter also opposed the heavy tax being put on the hardest working - industry in the country. It might be said that tho dairy farmer was'doing very well, hut ho was doing well because of the labour of himself and his family. They worked seven days a week and sixteen hours a day. He did not that the settlers were unwilling ._ to hear a share 'of the burden of the .war, but they did object to being singled out for a special charge for the ■ benefit of other sections of tho com- : munity. One factory in his district had paid in one month £247 in levy—surely a very big charge for ono month from a , small community. Amonnsfc those struggling settlers being called upon to pay the tax were, soldier settlers who had just gone on their land. II call Parliament Together. : Mr. H. J. H. Okey entered his protest against tho charge, which, he said, was an inequitable tax. A share milker <tf his acquaintance was required to pay •&. a day under this tax, and this man would not earn in a year much more than labourers' .wages. If this tax had

ever been submitted to Parliament, it would never have been passed. No tax on such mon, struggling to make ends meet, would ever bo agreed to by Parliament. Mr. J. A. Young said he would always support tho Government in efforts to rcduco the cost of living, but on this occasion ho did not approve of the methods adopted by tho Govern, ment. 'Tho charge should be on the consolidated revenue, and not only on a poor section 'of the community. It was not right that the hard-working dairy farmer should be taxed to get cheap butter for tho man who could afford to pay 10s. a pound for butter. Mr. Mac Donald: Don't you think that man is paying anything for jthe war now? Mr. Sykes: He is, but ho.could pay more. . Mr. Young declared that the dairying industry was not able to boar tho burden of the heavy charge. If it was to continue for long, he would urge that the Government should call a short session of Parliament to deal with the matter. The Purchase Idea. Mr. W. H. Field endorsed the protest made by other members. He declared that the so-called levy was in actual fact a tax, and as such inequitable. The cost of supplying cheap butter to the people ought to be borne by the general, revenue, and not by a specially selected, hard-working section of the community. Ho believed that the tax would principally benefit people who we're well able to pay for their butter. He hoped the Government would next session' make up to the settlers the loss imposed upon them. The Government might have purchased the butter early in the 1 season at less than current rates. .' Mr. Mac Donald: You are surely illogical. . Mr. Field: Why?. ' , Mr. Mac Donald: You say that the Government ought to.have collared all tho butter at the beginning of the season at about Is. 2d., and now you complain when the farmers are getting Is. 5d.! ■ Mr. R. F. Bollard said he would like to disabuse people of the idea that farmers, and especially dairy farmers, wero making fortunes rapidly. This was not so. He protested against the tax. Farmers did not object to pay their share, but-they did object to be singled out for sDocial taxation. Mr. J. M. Dickson. Mr. J. T. M. Hornsby, and Mr. G. R. Sykes all protested against the unfairness of the levy on the small farmer for the benefit of the whole community. The Problem For the Covornment. The Hon. J. Allen said that he would deal only with one or two broad principles, leaving Mr. Mac Donald to reply in detail. First, he wished to say that every Minister in the Government was just as anxious as were the members of the deputation to help the small farmers.' This the Government had had in mind always when considering this butter question. He was glad that the deputation agreed that it was the duty of the Government to see that the cost of living, fjs far as possible, should not be increased.' But what were the Government faced with when this butter question cropped up? They were faced with' an immediate increase in the cost of butter to Is. lOd. per lb., and a prospective increase to 2s. per lb. within a short time. . The increase _to Is.- lOd. would have taken niece immediately, and it was withheld only on the definite promise that the Government would deal with the situation. Parliament was not assembled, and the deputation knew well enough that no Government could impose taxation on the people without the will of Parliament. Mr. Young: 'Are you prepared to submit the proposition to Parliament? Mr. Allen: No, I am not. I say most definitely that I am not. . . . You suggest that the burden should be home by the general taxpayer?. Voices: Yes. Mr. Allen: Now, gentlemen, havo you considered this question from every pointof view? Yon have been looking at it from the point of view of a loss. _ May I nut'it to you that it is a gain by allowing to the nroducers an unrestricted'market? Supnosing we had bought all the butter at 15...2 d. What would havo been the nosition of the dairy farmer in New Zealand? Mr. Mac Donald: They would have called us robbers. Mr. Allen: Instead of having Is. 2d. per pound the dairy farmer will now get Is. 4Jd-—I think it is. I don't think you can consider your proposal a practical one. even from the point of view of the dairy farmer himself. Apart from nil other considerations, where is the Government going to get the. money to buy all this butter? ' ' ' Mr. Okoy: You would get the money back every month.' Mr. Allen said that it.would never have worked out at all like that. Tho Government had not the money nor tho machinery to carry' out a purchase scheme, and even tho dairy farmer himself would not have benefited. The advantage to the producer of the present scheme was that it secured to him an unrestricted market. Mr. Wilkinson: Oh, no, not for cheese. s Mr. Allen: We have not commandeered cheese. Tho Imperial Government has taken the cheese at the other end. 'Mr. Wilkinson: With your co-opera-tion. Mr._ Allen: No. Wo'have nothing to do with nothing to do with it. Mr. Allen suggested that when an industry was left an unrestricted market to get large profits, was it not fair to charge upon the industry whatever difference there might be between the limit' price of Is. 7d. per lb. for butter for local sale and the price that could be made in the unrestricted market? Was not this a fair thing to do? Voices: No. Not at all. Mr. Allen: Thon, gentlemen, Ido not agree with you. He argued that any proposal to put the burden on the general taxpayer would not have been fair. An Unpleasant Duty. The Hon. W. D. S. Mac Donald said ho did not think that tho Government were any more desirous than members of Parliament cr anybody else to imposo this levy. But about tho beginning of October a deputation waited upon him to state that the 1 prico of butter for local use would have to be raised to Is. 10d. The Government had only two or three days in which to decide whether they could agreo to having the prico raised to Is. 10d., and perhaps 2s. later. And there were no middleman's profits. The cost between tho factory and tho distributor did not exceed Id. per lb., and tho retailer was allowed a profit' of 2d. per lb., which all were agreed was not excessive. When the Government was faced with the position, ho asked that tho raising of tho price locally be deferred until he had met representatives of the dairy associations and factories throughout the Dominion. That conference met, and for eleven hours the delegates put their case before him very forcefully. But they did not and would not mako any suggestion for meeting the Government in any possible way. They wanted the absolute maximum for their produce, and after long consideration of the matter would make no concession at all.' The Threat of Prohibited Export. Previously they had been in consultation with Mr. Massey, and he agreed that so long as they kept the prico of huttcr_ down to Is. 7d. for local consumption he would not interfero with tho trade; but if tho price was raised above Is. 7d., export would be proTho method of export under permission of the Minister of Customs

proved burdensome at tho busy period when tho season opened, and although it did keep, tho prico of butter down to Is. 7d. for some time, tho dairy companies complained about tho threat of prohibition, saying that it was harassing. Tho factories supplying tho local market at length said that unless they could increase tho price their suppliers would leave them. In the end tho Government adopted the system now in operation as being tho best possible to secure the uninterrupted flow of the trade in the. usual channels. From Another Viewpoint. Mr.'. Mac Donald said that the protest of the dairy farmers seemed to him scarcely fitting when we were engaged in the grimmest tragedy in human History. • "All the land in this country," he said, "all the land held in areas of an aero and upwards, is held by somo 70,000 people. Are the other million people going to allow these 70,000 people to export all tho produce, until food is procurable in tho country only at famine prices?" Members of tho deputation expressed dissent from this manner of putting the proposition. Mr. Mac Donald: You all say you are willing to help the Government to reduce the cost of living. But as soon as tho Government puts its fingers on a particular method of reducing the cost of living which affects the farmer, you all crv out that it is unfair. ... What is the position of the butter industry to-day? The position is that after deducting tho levy of 3d. per pound there is still_ an increase of sd. on •ore-war prices. We are told we are taking away something —that men have entered tho industry expecting these prices. When did tliey enter the industry expecting these ■prices? These prices are not fair market rates; they are,emergency rates forced upon the neople owing to this war. We are told that no other country treats the. small fanner ns New Zealand is doing. But has not Australia done the samp thing in regard to meat, butter, and cheese? I have hero a list of the pre-war prices for butter-fat, and of the wices ruling this year. Mr. Mac Donald gave these prices as under:—

More About Purchase. "I. want to know," Mr. Mac Donald continued, "when the farmers—these small backblock farmers you are talking about—began to reckon on these high'prices? .. . Some'of my friends have said, 'Why didn't the Government step in and buy butter earlier?' I venture to say that if butter had been bought at Is. 2d., and afterwards the-price had risen to Is. Bd., there would have been a very much bigger deputation of farmers here to-day. Mr. Okey: ■ They sold cheese to the I Government at 7Jd., and never said a word about it when the price rose. i Mr. Mac Donald: I was at the conference at which the purchase of cheese at 7jd. was agreed upon. The men went away jubilant, very well satisfied that the price was a good one. But since this butter business began, what letters I havo had —ono with this passage marked in red ink, .'You seized our cheeso at £150,000 less than its true value.'" It was much better, Mr. Mac Donald continued, to make the levy than to purchase. The Government had charged tho levy on cheese factories, but had not attempted to regulate the prico of chgese. It had been said that the Government missed an opportunity of buying' half the cheese output at Bd. The New Zealand Government did not want the cheese, and the Imperial Government would not take it 'at that price. That ended the business, j How other Industries Fare. Mr. Hornsby: Why is New Zealand singled out amongst all the dependencies of the Empire!' Mr.' Mac Donald: Australia, all the States of Australia are in it, too. Mr. Hornsby: Canada is not. < Mr. Mac Donald: I don't know about Canada. He went on to point out that the dairy farmer was not tho only man in the community under disability. Tho export of wheat, flour, and bides was restricted. Meat had been'sold to tho Imperial Government considerably below its market value. . Something had been said about wool. Tho lnperial Government made an offer forour clip, which tho growers, after consideration, did not think satisfactory, and the Imperial Government made another oft'ei— the 6amo offer as had been made to Australia —which had been accepted. Sugar was £21 a ton instead of £39. Scheelite was worth, in the free market, twice the prico the men working to get it up in tho mountains were obtaining for it. The price of wheat in New Zealand was at one time _ fixed at 4s. 9d., when the London prico at the same date was ss. lOd. (after deducting freights), and at ss. 3d. when the London prico was Bs. ld_. . Butter was by no means the only thing interfered with. t The Government had even restricted emigration. _ (Laughter.) Mr; Okey: Quite right. Mr. Mac Donald: Yes, I know it is quite right. ■ Everything is quite right except butter. ' Then we havo brought in conscription, commandeering the manhood of this country, and no matter whether a man is getting £1 a day or £5 a day he has to go out to Trentham and' cot ss! When all these things are being done it seems to me you haven't much to complain of about butter. As Affecting Cheese. Mr. Okey asked whether the Government would reconsider tho matter as affecting cheese, in view of that product being now commandeered. Mr. Mac Donald said that _it was not known yet what the Imperial Government was doing, and whatever it was the New Zealand Government could not control it. As to tho reconsideration of the matter, the Government would have to be guided by circumstances aa tliev arose. Tho Hon. G. W. Russell said that tho prices quoted by Mr. Mac Donald were an unanswerable reply to all that the deputation had said. "The Indigent Farmer." The Hon. A. M. Myers reminded the deputation that farmers wero not badly cared for in New Zealand. "Farmers as a class in New Zealand," ho said, "have, always been well looked after. Tho Government purchases land for you, lends you money at cheap rates of interest, imports selected stock for you, sends round specialists to improve your knowledge and direct you in your affairs. Indeed, I onco thought there should he a Eoyal Commission appointed to investigate tho indigent condition of tho farmers,_but I am not now going to suggest this to the Act-ing-Primo Minister.'' He pointed out that the general incidence of taxation wa3 not hitting tho small farmer by any means. The deputation dispersed after (wo hours of talk, at about 1.30 p.m.

1914. 1916. January 11.25 13.5 February 10.98 14.91 March 10.71 15.42 April '.. 10.18 1S.52 May 10.28 15.92 June 10.59 16.12 July 11.2 16.2 •August — 16.39 September — 17.61 *War broke out earlv in August, 1914. ,-