OUT OF BALANCE

Evening Post, Volume CXXX, Issue 21, 24 July 1940, Page 8

OUT OF BALANCE

The fact that the Leader of the Opposition, a farmer with farmer sympathies, should find it necessary to draw attention to the subsidies on primary production indicates that there is need for investigation. Subsidies for farming are not new. There has been assistance in one form or another for many years—in free services, special railway rates, advice, instruction, arid, in a few instances, special bonuses on production. But the total sum provided in this year's Estimates for direct assistance reaches the high figure of £1,000,000. This does not include the indirect assistance provided by the Agricultural and other Departments. Why should the cost be so great now? The Government claims that it is largely accounted for by the war-increased cost of fertilisers, and that it is fairer that this increase should be borne by the whole of the public than loaded upon one section. Mr. Hamilton suggests that it is an indication that our economy has got out of balance, and that internal costs have risen to such an extent that it becomes necessary to subsidise our basic industry. Allowing that there may be some justification for placing temporary war charges on the public rather than a section of producers, there is yet much to support Mr. Hamilton's argument. Other industries are expected to meet war charges, and if all such charges were borne by the State the burden would be tremendous. An exception is made with primary production obviously because it is believed that, even on the reasonably good export prices now ruling the farmer has an insufficient margin to cover new costs. This is so because the ordinary costs of production have absorbed too large a part of farming income. In other words, the economy is out of balance. The remedy is to restore a proper balance. Subsidies may meet the need temporarily, but they are a delusion and a snare. Our economy

should be such that the basic industry of the country is able to produce profitably without subsidies. Except for a special and temporary purpose, such as assisting the establishment of a new branch of production, subsidies merely place in one pocket what is taken out of another. High internal costs make them necessary, and in turn they help to keep up costs and even send them higher. They are part of a scheme which includes also import restrictions, sterling control, short hours, and expensive industrial restrictions. High wages may give an appearance of prosperity and, well-being, but if they are offset by high prices (as they must be when costs are , high) and high taxation (which includes funds for subsidies), no one is really better off, and the position of the needy and dependent and most helpless section of the community, comprising pensioners, annuitants, and others on fixed incomes, is definitely worse.