The Dominion. FRIDAY, MAY 1, 1936. A “GUARANTEE” WITHOUT LIMITS

Dominion, Volume 29, Issue 183, 1 May 1936, Page 10

The Dominion. FRIDAY, MAY 1, 1936. A “GUARANTEE” WITHOUT LIMITS

In its interview with the Minister of Finance yestei day. the Dairy Conference took a commendably practical and common-sense view of the guaranteed price legislation. In effect it said. e aie divided about this. It is a tremendously big experiment, and we cannot be sure where it is leading. At the same time we appiccia e the Government’s concern for our welfare; and we admire tie Minister’s sincerity and his enthusiasm for the proposals le . outlined to us. Some of us support the principle of a guaranteed price; others of us think it would be safer to leave things as they are; and we wish the Government to note that as a conference we do not endorse its policy. Nevertheless, when this Bill becomes .aw we shall get in-behind it and do all we possibly can to make it wor well.” The Government could hardly expect a better show of cooperation; and the industry on its part, more aware than the Government can hope to be of difficult details, has, as it were, asked that its doubts be recorded in the minutes. The item which pleased the conference most appeared to be AH. Nash’s assurance that any accumulated deficit in the Dairy Industry Account would have to be met by the Government, whereas in the event of a surplus the Government “would have to decide what it was going to do about it.” As both Mr. Nash and the Prime Minister have said that moneys will not be diverted from the accdunt, the intention seems to be to put the farmer in a position of Ilea s I win; tails you lose.” Superficially, that is, and over a long period. Occasional annual deficits could be reduced or even wiped out by subsequent surpluses resulting from reduced pay-outs or market rises. The industry, however, might resent reductions in the pay-out, and almost certainly would regard a rise in overseas prices as justification for increases. Even after most careful managemen. it will be much easier to finish the season with a deficit in the fund than with a surplus. In this connection the Government is only at the beginning of its troubles. It says (through Mr. Nash) that there will be “no fancy price,” although one better than has ruled for some time. This suggests an intention of conservative administration—of estimating market proceeds over a period of years, and then striking an average on which to pay out. That is, taking a period or fiye years, an intention of paying 1/- every year when returns kotn sales are estimated to warrant annual payments of 10d., lid., V*> L I and 1/2. No such simple case would arise in practice, but the illustration serves to show the method. If the Government does this, and works from reasonably accurate estimates, it will not encounter much opposition. If the Bill were to limit the Governments power to doing this, and no more, then the Bill would not encounter much opposition. . . But there is no limit to the authority conferred, and only the vaguest suggestion of limit upon what may be done under the Bil . That suggestion comes in sub-clause 4 (c) of clause 19, which says that in fixing prices after next season regard shall be had to the general standard of living of persons engaged in the dairy industry in comparison with the general standard of living throughout New Zealand.” These words seem designed to remove the inequalities from whjch the dairy-farmer suffers at present —to put him on a level footing with the rest of the community—and to stop there. They are, however, far too indefinite to ensure that their apparent purpose will not be swamped by other factors admitted to consideration in fixing prices, and of no avail whatever to avert the general currency slide which could be precipitated by irresponsible use of tlie powers contained in this Bill. Mr. Nash impressed the Dairy Conference yesterday, as he impressed the country in his second-reading speech, by an attractive combination of conviction and restraint. When he talks, people forget the Bill, because they feel here is someone whom they can trust, someone who can be relied upon to do his honest best. But the question before Parliament and the country is not one of confidence in a single Minister, or for that matter in a particular Ministry. It is the acceptance or otherwise of a Bill which touches the living and liberty of every primary producer, authorises a vast new field of public expenditure, and sets no limit upon the possible cost. ,