THE CONSUMER PAYS

Evening Post, Volume CXXVI, Issue 132, 1 December 1938, Page 8

THE CONSUMER PAYS

Expectations that the price of butter on the local market would be raised in conformity with the guaranteed price fixed for the current season have-been realised, and from today the commodity will be retailed in shops in Wellington at Is 6d to Is 6£d per pound. The new local price equals the full guarantee paid by the Government for the purchase ofbutter for export, and, under present market conditions, is in advance of the price paid for New Zealand butter by consumers in Great Britain. It is true, of course, that when the price realised on the Home markets is in advance of the guaranteed price fixed in New Zealand, the consumer here pays less than the Home consumer, but in view of the current guaranteed price and the Government's own estimate of the deficit likely to result from the year's operations' there is little chance of the New Zealand consumer enjoying any such advantage during the present season. Payment of the prices fixed by the Government in September last for export butter is estimated by the Minister of Marketing (Mr. Nash) to result in a deficit on the 1938-39 operations of £1,535,000, against which there is a credit of £600,000 in the Dairy Industry Account on the operations of the previous year. The deficit in the Dairy Industry Account at the end of the present year is thus estimated at £935,000. 'Hitherto, deficits in the Dairy Industry Account have been left as a debit in the Reserve Bank and surpluses largely distributed to the producers. Unless there is to be an alteration of this procedure, no redemption of the debt at the Reserve Bank can be made except by increased taxation, which would place an additional burden on the consumer. Leaving the debt with the Reserve Bank amounts to straight-out inflation, which, in the ultimate, must strike a serious blow at the living standards of the people. Whatever advantages may be claimed for the guaranteed price plan, it is evident that the consumer must pay. The increased local price announced today is but another instalment.