FREEZING RATES

Gisborne Herald, Volume LXVIII, Issue 20636, 16 August 1941, Page 8

FREEZING RATES

REDUCTION NEEDED EXCESS PROFITS ALLEGED CRITICISM IN HOUSE (Parliamentary Reporter.) WELLINGTON, this day. When the House of Representatives was considering the meat marketing account estimates, yesterday, the Hon. A. Hamilton (Nat., Wallace) referred to the results of the audit of accounts of export freezing works, which disclosed that an abnormal profit bad been made in one year. He urged that steps should be taken to safeguard the producers in future. The acting-Prime Minister, the Hon. W. Nash, said that he too thought the charges made were too high in view of the profits disclosed as a result of tlie audit. Taking that into account, lie was of tlie opinion there should be a reduction in charges for succeeding periods. As for the past season, it looked next to impossible for any reimbursement of charges to be made, as the profits, in most cases, had been distributed to the shareholders. Tlie matter was discussed with tlie Meat Board, and it was decided they would take charge of the negotiations with the, freezing companies, who decided they could not make any alteration. The Government also took the matter in hand, but he did consider there was a case for re-examination of freezing company charges to determine whether the work they did was in accord with the price they charged. Mr. Hamilton: They have a monopoly. There is no competition. Abnormal Profits Mr. Nash went on to explain that abnormal profits were made in a year when charges were the same as in a year of normal profits. Mr. Hamilton: By-products affect the results. The acting-Prime Minister agreed that not only the income from freezing charges but the sale of by-products had to be taken into account. If, in the year subsequent to one in which they made abnormal profits, the prices of their by-products crashed, one might have to pay them more. The Government was trying to arrange with the Meat Board and the companies for another examination. Mr. Nash suggested that another side of the question was that tlie meat producers had also had a good run and, so far as the companies were concerned, not only was abnormal income tax levied, but there was the excess profits tax to consider. "J don’t mind that,” concluded tlie Minister. Lack of Incentive The Leader of the Opposition, Mr. S. G. Holland: And leave them without the incentive to make money to pay the tax? Mr. Nash: The big incentive is to do work which will help keep the profit normal and get a little bit more for running the country. The Minister of Agriculture, the Hon. J. G. Barclay, referred to the difficulty of making retrospective payments to producers whose meat was sold and had possibly passed through two or three hands. It was impossible at the beginning of tlie season to know what the by-products would letch, although they loomed so large in the freezing companies’ income. The Rt. Hon. G. W. Forbes (Nat., Hurunui): I see the difficulty, because only at the end of the season do they know their profits from by-products. Mr. Barclay: They brought nearly £1,000,000 last year.