Evening Post. THURSDAY, JUNE 23, 1938. PRINCIPLES STILL VAGUE

Evening Post, Volume CXXV, Issue 146, 23 June 1938, Page 8

Evening Post. THURSDAY, JUNE 23, 1938. PRINCIPLES STILL VAGUE

The obscurity concerning what happens to deficits has not been dispelled by Mr. Nash's statement in New Plymouth as to what happens to this year's dairy surplus. Mr. Nash denied that the additional payment which the Government is making to the dairy industry of approximately a halfpenny a pound of butter-fat means the abandonment of the guaranteed price principle. He will not deny that the Government is leaving the country in doubt as to whether this distribution-from-surplus implies that in future the farmers'will retain the surpluses and the public purse will retain the deficits, or whether the Government, departing from the precedent it created in 1936-37, will debit deficits against surpluses in the Dairy Account, and thus establish that deficits as well as surpluses are "the property of the industry." The issue of principle involved in whether the industry or the country is to carry the deficits is vital to both industry and country. Can the guaranteed price principle be correctly described as a principle so long as this issue of principle is deliberately clouded? What genuine principle attaches to a policy that awards the first deficit to the State, and the first surplus to the'industry, and then, for political ends, emulates the Sphinx? Mr. Nash is reported' as saying in New Plymouth:

There is not the slightest sacrifice of the principle of the guaranteed price. We are paying out a little more this year than th* sum originally fixed to meet the legitimate criticism with regard to the difficulty of obtaining farm labour at the price offering.

The difficulty of obtaining farm labour at the payment fixed for the dairying industry is one of the costs of the industry. The argument that, to meet this cost, a further payment must be made, in addition to the price guaranteed, means that the guaranteed price for 1937-38 did not reflect all the dairying costs accruing in 1937-38. To that extent, therefore, the former claim of the Government that the guaranteed price reflected all dairying costs obviously fails. During the progress of the season the Government has found that certainly labour costs—possibly ! other costs—are not reflected in the guaranteed price as fixed. "Very well," says Mr. Nash, in effect, "we will meet this 'legitimate criticism' by this. additional pay-out." But what would have happened if there had been—as last year-r-no surplus in the Dairy Account? What would have happened if there had been these admittedly uncovered costs, plus a deficit? Would Mr. Nash have come to the farmers' rescue with ah additional pay-out that would haye made the deficit (the State's deficit, not the farmer's) larger? Or would the "legitimate criticism about labour costs have ceased to be "legitimate" had there been a deficit and no General Election pending? The Judge-presided three-men tribunal that is to fix the guaranteed price in future was heard of again in New Plymouth. Farmers seem to be divided as to whether they wanl it, but, like John Brown's soul; it is marching on. Like the deficil column in the Dairy Account, it pre sents some-dark spots. For instance when an interjector asked whethei the Government would accept th< price fixed by the tribunal, Mr. Nasi is reported as replying: "I expect i [the Government] will." This re mark falls something short of ai assurance that a price issuing fron the price-fixing tribunal is a fixei

price. We have pointed out on an- , other occasion that a Government which debits the first deficit to the country, which distributes the first surplus to the dairying industry, and which refuses to disclose its future . policy concerning one of the vital principles underlying the so-called principle of the guaranteed price, ' has no moral authority to delegate to an independent tribunal the fixing of a figure involving taxpayerliabilities that are both unknown and unjustifiable and which are kept under a political smoke-screen. For that weakness there can be no remedy except to hand the marketing and price-fixing enterprise over to the farmers themselves, without terr minating the interest—friendly and b possibly financial—of the State, but :> on terms which confer on the dairy J farmers full authority and responsibility. But so long as indefinite a taxpayer-liabilities are inherent in t the vagueness of principle of the Government's policy, the Governt ment cannot surrender price-fixing e to an independent third party. Perhaps a sense of this danger g causes Mr. Nash to merely "expect" a that the Government will accept the J - tribunal's price. Is the Government, then, to retain a power of veto over b, a price which Government experts, ° as apart from the tribunal experts, i- may deem dangerously high? If that were so, political pressure would not •d be avoided; it would be concern--3[ trated,,with tribunal-authority behind > r it. In the circumstances, an indem pendent tribunal would be a bad r! move, and a tribunal not fully inden- pendent would be no better. So long ** as the taxpayer-liability and the industry's liabilities remain- vague, be there can be no cure of an illogical to situation by delegating price-fixing, ie with or without reservations. Mr. Nash's denial that the Government or has abandoned the principle of the ,y guaranteed price does not meet the case which the Government has to answer. The principle of the guaranteed price is incomplete in <i - vital matter of principle, which, as one Minister has said, was present in the t °' pre-election "announced policy.' >ke Yet to the question which its pro na longed silence invites the Governmenl is still unable to answer yea or nay