VITAL PRINCIPLE OF GUARANTEED PRICE.

Horowhenua Chronicle, 13 July 1938, Page 3

VITAL PRINCIPLE OF GUARANTEED PRICE.

TARMEES’ UNION PRESIDENT’S CRITICISM

(jay Telegraph—Press Association., WELLINGTON, Last Night. “One of the most important matters concerning the farmers of this country to-day," said Mr. W. Mulholland in his presidential address to the annual conference of the New Zealand Tamers’ Union, “is the Government’s guaranteed price plan. What is the guaranteed price? I have to confess that after its various Uiclan:srphcsc3 I find it difficult to say. “In my address last year I described the Government’s scheme of marketing under the Primary Products Marketing Act as a long-range stabilisation plan. The means used for attaining the objective, I pointed out, was a compulsory pool operated by the Minister for Marketing which had no definite balancing date. Por the successful operation of the scheme it was of vital importance that the Equalisation Fund, which resulted from the balance from overseas in seasons when prices were good, should remain intact in the Dairy Industry Account until required to make up a deficiency in low price periods. I pointed out that for the six seasons prior to June 30, 103(3, it would have required £22,000,000 to have paid out a price on exported butter and cheese equal to the guaranteed price for 1936-37. I also stated that 'while control of the scheme remained in the 'hands of the Minister, political pressure would make it impossible to build up an adequate reserve fund, if indeed it were possible to build up any at all. A guaranteed price would never achieve its object unless the control were restored to the industry where it rightly belonged. ’

“I could hardly have anticipated that the correctness of this statement would have been so fully demonstrated in so short a time as has been the case. The Minister for Marketing at the conference of the National Dairy Association at New Plymouth on June 22 last, announced the disbursement of the Equalisation Fund before it had existed | for one season. He stated that there: an anticipated surplus of a little I the result of this year’s transand that lie was going to pay whole of that away in an payment of id per lb. PutterMinister also said: ‘lt has that the guaranteed price has been abandoned. It is Ihe principle remains that industry Account stands on The Government does not to touch the account in any Bfay. The adjustment of the price for Rhe current season does not break the

principle. ' “It is not an abandonment of the principle of the guaranteed price only if it is expected that the price over a series of years will be sufficiently much above the Is or Is 4d and one-third pence per lb. butterfat for making butter or cheese respectively, which is now being paid to enable the equalisation to be established while paying that price. There is no evidence in the Minister's statement that this has ever been given a moment's thought. The disbursement of the credit balance in the Dairy Industry Account is a complete abandonment of the most vital principle in the guaranteed price plan —the establishment of an Equalisation Fund. “Mi. Nash has said on many occasions that the retention in the account of the surplus from good years was a vital part of the scheme. It is only necessary for me to quote Dr. Sutch’s statement in his book, ‘Recent Economic Changes in New Zealand.’.. He says: ‘From explanations given by the Minister of Marketing (Mr. Walter Nash) it has been made clear that the Dairy Industry Account is to act as an Equalisation Fund whereby surpluses from realisation in good years balance deficits incurred in low-priced periods. ’

“The authoritativeness of this statement is vouched for not only by Dr. Sulch’s position as Mr,Nash’s economic adviser, but also by an introduction written by Mr. Nash himself. This vital principle has now been abandoned to political necessities. “Fixation of the price for 1937-33 indicated the abandonment of the principle—so definitely promised in Mr. Nash’s pre-election pamphlet —of paying a price divorced from the market value of the produce. '■i'lio 1937-38 price was fixed on the market prospects. That it was so the payment of the bonus confirms. The first year the guaranteed price was anchored to the market by means of the 8-10-year average of market prices.

"I had thought that the promise ot the Prime Minister and of the Minister for Marketing to have a price fixed by means of a tribunal —very grudgingly given it is true—might have been a reinstatement of the principle of an artificial price unrelated to the market but related to farmers’ costs, but the opportunity to abandon that proposal was very readily seized, and it has disappeared from the picture. With these vital principles abandoned, what is left? Of the guaranteed price plan of the Labour Party there now remains nothing but the State ownership and control of the marketing of dairy produce, and that seems to be the only principle which the Government will not abandon. Have the other promises and principles with which the scheme was decorated been only sugar-coating

to induce us to swallow something

which, if openly avowed, would have been exceedingly noxious to the farmers of New Zealand ”

Imported lines of goods were being given preference by buyers to locallymanufactured products. Mr. Coates said he had heard the Prim* Minister (Mr, Savage) say time after time would not interfere with the private ownership of property, but by rising costs it was possible to do this. Marketing Policy Defended,

The Minister of Finance (Hon. W. Nash) said the Forbes Government had supported peace and the League of Nations and the Opposition was criticising the present Government for adhering to the principles set up by that Government.

An Opposition interjection: The circumstances are somewhat different to- : day. Mr. Nash: Yes, of course the Govern- , ment of that day is in Opposition now. i (Laughter.) Mr. Coates had challenged the Government to mention a single measure brought down by the previous Government which interfered with the freedom of the individual. Had the past Government brought in a law barring the building of picture theatres? The Government had been chided for not restor ing returned soldiers' pensions. Who had cut the returned soldiers' pensions in the first place, he asked. When the question of restoring the returned men's pensions was considered the Government had told them they had something which they considered more urgent at the time: That was giving pensions to soldiers’ widows who had not had pensions before. .Soldiers’ economic pensions would be restored, added Mr. Nash. The Minister defended Mr. Jordan’s attitude at Geneva and went on to defend the guaranteed price system for butterfat, stating that there was no-one connected with marketing, not even Use Government’s opponents, who did not admit that the Government’s policy of marketing in Loudon had given stability in the butter market in the Old Country that had never been there before. He added that as a result of the Government’s oversea marketing there had been a saving effected on butter alone of £165,000. The figure in connection with cheese amounted, he thought, . to somewhere in the vicinity of £85,000. [He refuted Mr. Coates’ suggestion that oversea goods were being purchased in preference to New ■ Zealand manufactured products, stating that on March 31, 1937, 17,000 more people were engaged in factories in the Dominion than hitherto.

The Minister of Labour (Hon. 11. T. Armstrong): There are 35,000 more this year.

How Labour’s Policy is Formulated. In conclusion, Mr. Nash outlined the method which was observed in the formation of Labour’s political policies. He stated that at the annual conference of the Labour Party, every member had a right to write remits for the consideration of the conference. When these remits were passed they were written into the policy of the party by the Prime Minister and the President of the Party. Then the electors at election time were asked to vote for Labour candidates who were pledged to support that policy. When Labour members were elected to Parliament they were expected to assist in writing that election policy into the laws of the land without outside interference of any kind. He stated that the Labour Government would go to the country on its record for its two and a-half years ut office, and it asked the Opposition to go to the country on its record of office. Socialism Versus Individualism. The Under-Secretary for Housing (Mr. j. A. Lee) said the issue at the next election would be between Socialism and rugged individualism. The country had experienced “rugged individualism” during the depression years. New Zealand’s whole political tradition was ,one of innovation and experiment and it had resulted from the refusal of the mass of the people t,o allow the mass to suffer because some orthodox economist considered they should. He went on to point out many measures introduced by the previous Governments which really amounted t,o Socialism.

Taxation Increases Bir Alfred Ransom asked what the Labour Government had ever done to establish the credit of the country which the Prime Minister said it was intended to use. It had not contributed one farthing to the country’s credit which had been built up by the wise administration of past Governments’ Ministers, said Sir Alfred, and were continually stating that there had not been any- increases in any individual taxes but that the higher taxation received by the Government was due to the increased prosperity of the people. This was not correct. Income taxation had been increased and the graduated land tax had been introduced. The wageearner and the small business man paid the bulk of the country’s taxation unde; the present Government. Minister Denies Land Seiztire.

The Minister of Lands (Hon. F. Langstone) refuted the suggestion that taxation was higher to-day than under the past Government. There was a whispering campaign going round the country, he"said, that Labour was going to take away the freehold to land, but there was not a single measure on the Statute Books which enabled any Government to take land without payment of compensation for it. Since he had been Minister of Lands, he said, ho had given 172-1 titles. Did that seem as if the Government were going to take away land titles? he asked. He went on to criticise the land policies of past Go\ - ernments and outlined the huge amounts which had to be written off properties which had been purchased at unecono-

inic prices. He instanced the case of 304 estates which had been purchased for £.1,700,000. Two millions of this amount hud been written off years ago and lie was afraid to think how imii'n more would he written off when the Mortgage Adjustment Commissions had completed their work. The House adjourned at 10.25 on. Mm motion of the Prime Minister who staled that to-morrow afternoon would be devoted to the answering of questions asked during the session and in (he eve ning the Address-in-Reply debate would continue.