Minister’s Reply as to Guaranteed Price.

Franklin Times, Volume XXVI, Issue 119, 12 October 1936, Page 5

Minister’s Reply as to Guaranteed Price.

A TRUE AVERAGE.

TAKEN OVER 10 YEARS.

INCREASED COSTS ALLOWED FOR. Stating it had been estimated that on the basis of last season’s production, the Government, in fixing the guaranteed price at a payout of 1/1 per lb. butterfat would be paying £562,500 above the amount necessary if the 10-years’ average alone had been taken, the Minister of Marketing, the Hon. W. Nash, has replied to a resolution carried by the Farmers’ Union. The letter was read at the Franklin sub-provincial 1 executive meeting at Pukekohe on Friday. On the ground that it did not improve the standard of living of the primary producers,. the ‘ executive expressed disapproval of the guaranteed price for dairy produce.

True Average Price.

The Hon. Nash stated that the Prime Minister’s promise concerning the guaranteed price was that it would be based on the amount received over the last eight to 10 years. - An authoritative committee had been appointed by the Government in order ,to work out w r hat the true average was, respectively, for these periods. It was found that the eight-years’ average gave the lowest return, and tire 10 years, the highest. In choosing the 10-years’ average the Government had given a generous interpretation <. f the Prime Minister’s promise, but, in addition, there was added to this 10years’ average an amount to meet increased costs. The Government had quite definitely allowed the £562,500 stated for increased costs. The average arrived at was not a weighted average, nor an average of averages, but a true average. The Minister said >he could not, therefore, understand the suggestion that the Government had not fixed the guaranteed price in accordance with election promises, unless it was meant that the fixed price was greater than that promised by the Prime Minister.

The Sales Tax. Insofar as the sales tax was concerned, continued the Minister, the majority of the goods which the farmer needed to carry on his farming w r ere exempt from the sales tax or customs duties, and these taxes were a far greater burden on the non-far-mers. However, the Government intended to reorganise the taxation system, so that its incidence would *be more equitable and more in accordance with ability to pay.' The organisation and administrative machinery necessary to do this could not be worked out in a few months, at the same time maintaining the revenue necessary for carrying out the Government’s aim. Transition by the necessity of the case must be a more or less gradual process. It was decided to reply to the Minister stating that in the opinion of the executive there was no need for any committee as the averages were held to refer to the averages received by farmers. As the sales tax and customs taxes did not stay where they were put but entered into all costs making up the cost of living, and leading to the necessity for higher wages and other higher payments, the executive would certainly dispute the Minister’s contention that these taxes were a greater burden on others than farmers.