Greymouth Evening Star. SATURDAY, SEPTEMBER 27, 1947. The Rise In Prices

Greymouth Evening Star, 27 September 1947, Page 6

Greymouth Evening Star. SATURDAY, SEPTEMBER 27, 1947. The Rise In Prices

AMIDST the murmurings.. against the substantial rises in the price of meat, sugar and tea, announced this week, a fact that is likely to be overlooked is that the consumer has for a number of years been paying indirectly a large proportion of the increases which he has now to meet directly in his weekly household expenditure. He has been paying in the form of taxation, from which the Government has derived the revenue for subsidy payments to keep down the over-the-counter prices of every-day commodities. Tn this way price increases have been hidden from the consumer. The Government, however, has now found that the mounting cost of subsidy payments has reached such proportions as to become an intolerable burden on its finances, and so has decided partially to end the subterfuge. A question which will naturally occur to the average consumer is: If the Government is no longer to pay subsidies on the lavish scale which has for some time been its policy, why does it not grant him proportionate relief from taxation so as to enable him to be in a better position to meet the rise in over-the-counter prices? If the Government is not to pay the subsidies, then surely, it should follow that the money collected for this purpose in the past is no longer needed by it and therefore it should require less from the consumers by way of taxation. The only answer to that question is that Mr Nash requires the money for other purposes. He seems to be a rather difficult man to satisfy. Indeed, he has been with truth called the hungriest tax-gatherer New Zealand has known. He is maintaining taxation this year at a rate very near the peak wartime level. The trouble is that the Socialist structure —that top-heavy structure which the taxpayer finds increasingly difficult to balance on his broad shoulders — is for ever being added to. It is a rather expensiye structure. Its maintenance expenses alone have already reached a colossal annual, sum, and in addition a great deal of material, human and otherwise, is going into its building that could be used beneficially elsewhere, particularly in the field of production. The Wages Rise

Recently the Arbitration Court granted a 10s rise in standard wages. The workers who benefited —and not all were affected by the. Court’s order—will by now have found the rise about cancelled out by the increased prices for commodities that have already been, permitted. But many more increases are likely. According to an estimate given recently in the House of Repr<esentatives, these are expected to include: An approximate retail price increase of 4d a dozen for eggs to cancel out the floor subsidy and a further 3d a dozen to compensate for the removal of the wheat and flour subsidy; a 2qd to 3d increase for bacon and ham, an increase of 4d per lb for cheese; and higher prices for cigarettes and tobacco. The list could no doubt have been continued. Apparently the Government wisely from its own point of view, is making the process a gradual one, in the hope, it would seem, that the public memory will continue to be short.

The Government has only itself to blame if the repercussions of the blow it has allowed to fall on the people are not to its liking. It was for years consistently argued against it that, while there was a case for a modified system of subsidies in war-time to meet emergency conditions, the rapid and large-scale extension of that system which it had adopted as part of the basis of its policy would lead to dangerous economic disequilibrium. It did not heed the warnings. It should by now, however, have learnt that it is possible to hide harsh economic facts from the. people for some of the time, but not all the time. What the people are now beginning to feel in greater measure is the policy of inflation which the Government has deliberately adopted. Wages have never been higher—but costs also have never been higher. There seems to be little reason to doubt a recent assertion in the House of Representatives that the real value of takre-home pay—that is, the amount of consumer goods it will buy if they are available —is lower than it was 10 years ag.’O. There is little reason to doubt, too, that rock-bottom in the value of the pound n ote has not yet been reached.