AT WHOSE EXPENSE?

Evening Post, Volume CXXVII, Issue 110, 12 May 1939, Page 8

AT WHOSE EXPENSE?

With the personal aspects of the Prime Minister's reply to Mr. Mulholland on the subject of a guaranteed price for meat and wool, we have no intention of, dealing. The Dominion president, of the Farmers' Union can, and no doubt will, answer for himself the charge of political activity. It does appear regrettable, however, that such a charge should be brought into the discussion when Mr. Mulholland dealt solely with facts and economic arguments. It does not help in forwarding the Prime Minister's own professed desire to secure the cooperation of all classes in dealing with the country's difficulties. Moreover, there is ample scope for nonpolitical discussion of the guaranteed price scheme. Mr. Savage's own statement provides a starting point. He declines to say what a guaranteed price would be, but adds:

I have gone so far as to say that any guaranteed price would have to take into account the farmers' outlay and other conditions. If he did not get a guaranteed price that would meet all that and give him a decent standard of living, then the guaranteed price would break down.

This must mean that the guaranteed price should take into account the costs of production and allow the farmer a decent standard of living over and above such costs. But if world market prices do not leave the margin for this what is to happen? Mr. Savage denies any belief in the Government's ability to control overseas prices. Therefore his provision for a payable price must be made by some other means. By what means is such provision to be made? This is the point that is yet unsettled in the third year of dairy produce marketing. In the first season there was a loss which remained for some time as a debit in the Reserve Bank account, but has now been paid, from the Consolidated Fund (by the taxpayer). For the second season the market returned more than the guarantee. Part of the surplus was distributed to producers as a bonus, on the ground that it was warranted by increased costs. The remainder of the surplus has been reckoned in calculating this season's probable deficit, so it is apparently to be used to offset the loss. What is to be done with the balance of the loss has not been disclosed. A, greater loss was avoided only by whittling down the price recommended by an expert committee as necessary to give dairy farmers just what the Prime Minister says should be allowed wool" growers —provision for costs and a decent standard of living. In the light of these transactions, what would be the procedure in determining the guaranteed price for wool? Would an average of market returns be made, with losses cancelled by surpluses or surpluses held against possible losses? Or would there be an assurance of a price to cover costs and allow a decent standard of living, apart from what the market returned? If the latter, how- would deficits be covered—by Reserve Bank credit or the taxpayer? To none of these questions does the procedure in dairy marketing supply a definite answer, and the Prime Minister's statement also leaves the issues undetermined. Wool growers—and taxpayers also— want more information before they can consider the scheme.