PRICE SUBSIDIES GOING OUT IN AUSTRALIA

Grey River Argus, 24 August 1948, Page 4

PRICE SUBSIDIES GOING OUT IN AUSTRALIA

Prime Minister Shows How They Are Exploited (Rec. 11.5). CANBERRA, August 23. The Federal Prime Minister, Rt. Hon. J. B. Chifley, rejected a plea at the Australian Premiers’ conference to-day for a continuance of price stabilisation subsidies by the Federal Government. He did so in spite of a warning by State Premiers that there would be an immediate rise in the cost of living. Mr Chifley told the conference that the Commonwealth Government could not agree to retain the subsidy payments on wool, cotton, cotton yarn, imported textile, piece-goods, interstate shipping, and potatoes. The Commonwealth, he said, would continue to subsidise butter, tea, and superphosphates. The Premier of New South Wales. Hon. John McGirr, read a statement which had been prepared on behalf of the six State Governments, in which it was declared that the withdrawal of the subsidies would mean an increase in the basic wage by 53 point six pence weekly. The statement added that the State Premiers recommended that Federal subsidies be continued for twelve months after the Commonwealth vacated the price control field in September. If the Commonwealth maintained that the subsidies must go, then it would be preferable, if possible, to taper off the withdrawals so as to cushion the effect on prices. Mr Chifley replied that the Commonwealth could not properly pay public money to subsidise production which could not be policed. He added that the subsidised supplies of textiles Which already are in stock would provide the cushioning effect if the States controlled their prices as effectively as they claimed they could do. The Prime Minister said that a Wool Realisation Committee had stated that the Australian wool manufacturers had been bidding up to any price for special lines of wool, because they knew that it was being subsidised. Instead of an estimated subsidy of between two million and three million pounds for wool this year, said Mr Chifley, it appeared that the Commonwealth Government might have to pay eleven million pounds. The overseas wool buyers felt that they had a grievance, and in some cases they had been inclined to “stand out’”.

Mi- Chifley told the conference that the subsidy on tea was being retained because the Commonwealth was the sole buyer of the tea. The butter subsidy was being continued because the Commonwealth had the machinery to ensure that the consumer benefited. The Commonwealth would have continued the potato subsidy if the States had agreed to the retention of the successful war-time potato marketing scheme.