TWO-AND-THREE BUTTER

Evening Post, Volume C, Issue 91, 14 October 1920, Page 6

TWO-AND-THREE BUTTER

The Butter Committee recommends that butter for New Zealand consumption be taker by the Government from the general supply of butter ay 2s 6d per lb f.o.b. ("this being the amount of the Imperial Government's offer") and be sold retail at 2s 3d cash, 2s 5d booked. The "fixed" retail price for the "old" make of butter is Is 9d; the present unfixed price for new season's butter in the free market is, we understand, 2s lOd, a. difference in price of thirteenpence. In the ordinary course it might have been expected that, if it is right to fix the price of "old" butter, then the

" new " butter should not havo come upon the market except at a lixed price. But, instead of that^the extraordinary situation aiises that thorn is a fixed market for one- butter and a frei* market for tho other; and though the Chairman uf the Butter Committee states that there arc still in cold store sonic 19,000 boxes of th« " old " butter, very few wnsumors can buy- it—the, grocer, as «• special Uvawt, may cell you one pound—

and those people not privileged to buy the fixed butter at Is 9d have to buy the " new" butter at about thirteenpence dearer. Instead of being ready with a policy for the "new" butter, the Government appointed a Committee (the Butter Committee) to try to find a policy. So far as we can see, nothing has been contributed to the policy question by the Committee—nothing useful, that was not known before—but the hunt for a policy has provided an interregnum during which the public has been mostly unable to secure "old" butter— the 19,000 cases notwithstanding—and has had a taste of butter at 2s lOd. Which experience has perhaps helped to create a chastened mood in which, by process of comparison or contrast, two-and-threepenny butter will seem almost like a privilege. There are important tactical advantages in asking your customer to step down from 2s lCld to 2s 3d, instead of to step up to 2s 3d from Is 9d.

Into the tactical situation thus created —with its rumours of industrial war should the New Zealand consumer be asked to pay on the basis on which the British consnmer of necessity , pays—is now introduced the Butter Committee's two-and-threepenny proposal, which leaves the butter supplier full market value, and falls back upon the established but unheroic policy of taking the difference out of State revenue. Will the consumer, after his experience of an increase of thirteenpence, be more in a humour to accept an increase of sixpence? Will the philosophy of the lesser evil prevail, and will the strike-advo-cates find, to use the words of a recent correspondent, that the fixing of a price which is an increase on the old, but a reduction on the new, has " cut the ground from under their feet"? As an attempt to "dish" the Reds, the butter manoeuvre, which is still incomplete, is interesting. In the interests of industrial peace, we hope that the result will do acceptable to the public, but we cannot enthuse over it nor over the methods that have led up to it. The Committee's report/leaves the matter on the same economic basis r,-, before—the subsidy basis; and has merely suggested a price that should result in the preisent butter subsidy (over £300,000 a year) being nearly or quite doubled. But the Committee has left it open to the Government to raise the money, or part of it, in other ways than by merely lifting it out of the Consolidated Fund, which is built up out of general revenue and taxation, including Customs duties that fall heavily on the masses. Perhaps the subsidy could' be raised out of luxury taxation. or out of taxes 1 not so easily passe* 3 on to the weak from the strong as Customs duties are passed on. To meet the subsidy, there are possible sources of sup : ply in death duties, imposts on land transactions (cannot land-traffickers pay higher transfer duties?), totalisator taxation, and the new higher grades of land tax.

If the subsidy can be raised from wealth or from luxuries (e.g., the remarkable luxury taxes in America) these sources should certainly be tapped before the Consolidated Fund. In this connection, Mr. Massey's anticipation that he •will be able to raise the whole subsidy out of." taxation that cannot be passed on, and that will not be fult by the great body of the public," is hopeful. The opening sentence of tlie Butter Committee's recorrimendation, justifying "full market prices" for butter on the ground that "no restriction has been placed on the price of wool and other products of the Dominion," entirely ignores the case of timber, the price of which is below export value, and is based upon cost of production, without compensation for the margin between New Zealand price and export price. Concerning production and prices we will have more to say later.