HIGHER PRICES AFTER SUBSIDIES REMOVED

Northern Advocate, 8 January 1947, Page 4

HIGHER PRICES AFTER SUBSIDIES REMOVED

Following the recent announcement of an increase in the price' of tobacco and cigarettes come authoritative statements to the effect that this is only the first of a series of price jolts to the public. The increase was necessitated, according to the Government, by withdrawal of the subsidy paid to manufacturers, producers or importers to keep, down retail prices. - The subsidy system cannot be described as an efficient system of price control, as its benefits are largely illusory. L, .. TEA UP 1/- LB. . Money paid to the manufacturer by the Government has to be obtained by taxation from the pocket of the consumer. Thus the citizen should be , pleased to see a subsidy go if it did not..mean an immediate increase in indirect taxation. 'Authoritative sources state that, in ; the. drastic amendment of the system

(By C. R. MENTIPLAY.) (Special, 11.0.) SVBN'EY, This Day

imported articles will be the first aliected. Nearly £3.000,000 annually is being paid as a subsidy on imported goods, exclusive of a similar amount which helps to keep tea prices stable. The loss of the tea subsidy would mean a rise of more than 1 - per lb in the price of lea. With this forecast, and the knowledge gleaned irom the Minister of Customs (Senator Courtice) that tire Government wants to see the end of the subsidy system, the taxpayer looks askance at what is happening' to tobacco. The common view is voiced by the Leader of the Federal Opposition (Mr Menzies), who comment: “It was hoped that a lower price for the subsidised commodity would compensate the taxoayer for a higher tax. TAXPAYER SUFFERS “When the subsidy is withdrawn, up goes the price. “The taxpayer expects to have taxation lowered by way of compensation, but that is where he falls in. The tax continues at the same level and the citizen, as usual, gets it in the neck both ways.” « At the same time, official figures disclose that the Government expects to receive from customs and excise on tobacco and cigarettes £3,000.000 more than last year. The total gain to the Treasury is £23,750,000. The subsidy paid on tobacco has reached only a few hundred thousand poundd yearly and this year would have totalled £1,000,000 at the outside.. The citizen has official figures to show that at December 31, with half the financial year gone, customs and I excise revenue was already £2,746,528 ! above the estimate for the entire year. | The Press and public alike are at a toss to understand what Mr Menzies describes as “the thimble and pea aspect of Government finance.’’ COULD AFFORD CUT The Sydney Telegraph says that the increase in the tobacco price is illogical because it does not follow Mr Chifley’s stated policy of keeping down prices while relieving the taxpayer of burdens immediately this becomes possible. The paper comments that subsidies should go, but not at the price of heavier taxation. With revenue pouring into the Treasury in unprecedented quantities “Mr Chifley can certainly afford to give us a tax cut of 20 per cent. Why he delays obvlpusliy possible and popular move is hard to understand. “Is he reluctant, perhaps, to prove that Mr Menzies was right when he said that a cut was possible'? ’’ j