DEBATE ON REPORT.

New Zealand Herald, Volume LIV, Issue 16671, 16 October 1917, Page 4

DEBATE ON REPORT.

CRITICISM OF SCHEME.

OBJECTIONS TO STATE AJD. ; [by telegraph.— correspondent.] .. ■, . WELLINGTON, Monday. Speaking in support of the report of the Cost of Living Committee, Mr. C. E. . Statham said the remedial measures tried J in other countries had sometimes failed, and in other cases met with only partial success. The committee had not been ■unanimous in all its findings, and its report would, no doubt, meet with a good deal of criticism. The appointment of a food controller was one of the chief recommendations of the committee. (Hear, Iheav.) He should be a man of Cabinet rank, and his powers should extend to all necessaries of life, and Parliament could not this session pass lerislation that would satisfactorily deal with the situation, but the Food Committee would be able to meet the difficulties as they arose, and cope with any situation that might be 1 created. The Board of Trade might act as an advisory body to the food controller, together with such other experts as he might gather round him. The problem was at present being dealt with by too many different people acting independently. Some members of the committee were of opinion that legislation should be passed to compel all' local authorities to enter into trading when it was considered that such action would be beneficial to the community. Mr. J. Payne (Grey Lynn) said many local bodies simply wanted the power. Suburban Train Services.

Mr. Statham laid stress upon the need for restoring the suburban train services, and proceeded to comment on other parts of the committee's report. The goods which would come under the supervision of the food controller were: — (1) Imported manufactured goods. (2) Goods manufactured in New Zealand from raw products, brought from abroad. (3) New Zealand staple products and articles manufactured from them. There was no power to keep down the prices of overseas goods, continued Mr. Statham (i who said he had no doubt that peopl»,.'with large stocks in hand when the war broke out made undue profits, but he doubted if such stocks were held in many cases now. The food controller would have the power to" keep down undue profits made by people in transforming imported raw products into manufactured articles. ' As regards New Zealand staple products, any attempt to arbitrarily reduce present prices to pre-war rates would mean ruin to manv small farmers. This phase of the problem should have been grapoled with at the beginning of the war. Now it was too late, as the producers had to pay more for their necessaries. To insist that the producer should contribute something towards an equalisation fund, so that the rich man could get his goods cheaper, was not considered fair. It would in some cases mean that small producers would have to make sacrifices for the benefit of people more wealthv than themselves. It had been suggested that the loss should be made good out of the Consolidated Fund. This would make the wealthier classes pay for the loss, but the Consolidated Fund was not inexhaustible, and it would be necessary to consider how 'it could be supplemented. Personally, he favoured, a small export tax on New Zealand products. He did not, however, know that this would be generally acceptable. Wasteful Distribution. I

The question -of, distribution also had had the,attention of. the committee, and . it was considered that the present waste- , ful method helped materially to keep up the cost of living/ It was felt that food controller could regulate this to advantage. The question of the cost of living of the back-blocks settlers had also come before the committee. This? and; middle, j men's profits and similar matters could be i dealt with by the food controller, who must be a bold business man. who was prepared to trrapple immediately and 1 courageously with problems. ... Mr. T. K. Sidey (Dnaedin South) moved as an amendment that . the "report be referred back to the.committee for further consideration of paragraph * (b) of clause 10. which recommends that the food controller should haVe power to provide for the regulation of retail,prices of local.products to consumers in New Zealand at lower prices .than the ruling export prices, the loss to be met out of the Consolidated Fund. Mr. Sidey said the committee had been able unanimously to come to an agreement on every clause except the one in question. On this clause the committee was practically evenly, divided. He asked I the House to. give the committee an opportunity of considering the clause again with a view to making such modifications as., would ' enable the committee to come to a practically unanimous conclusion. No matter to what extent prices might rise in this country, the only relief to local consumers under the clause was the extent to which the Consolidated Fund could go. . He contended, moreover, that the proposal was an impracticable one, and not in accordance with the evidence of any witness examined by the committee. : The evidence of the Board of Trade was in favour of an equalisation fund. As regards meat and dairy produce, Mr. Sidey said he did not think that the Government had always been sufficiently sympathetic with the efforts of the Board of Trade to keep down prices.

Sir Joseph Ward's Criticism. Sir Joseph Ward said it would be easy ? r em 3er3 to P' ace tfl e responsibility on the Government for not carrying out those proposals of the committee which might not be given effect to. He was desirous of grappling with the cost of living problem, _ but there were some things it was quite impossible to do. He was amazed at the proposal of the committee regard-1 ing the Consolidated Fund. It was impossible to put it into practice. A member interjected that the Prime Minister had voted for it in committea Mr. Massey:Yes, but I said it would not work out. and that I would not support it in Cabinet. Sir Joseph Ward said that no one could say what the loss would be that would have to be made up from the Consolidated Fund. It might run into three or four millions. The very class of people they were intending to benefit would themselves have to provide the money to make up the loss. The appointment of a food controller with penary powers to over-ride the rest of the Cabinet would not work. They might as well give him the supreme power of an autocrat and dissolve Parliament. No responsible Government could accept such a proposal. The position in New Zealand was not the same as in Britain. New Zealand exported two-thirds I of its food supplies, while Britain imported two-thirds of its food. The reasons that led to the appointment of a food controller m .Britain did not exist in this Dominion, Hie difficulty in New Zealand was a unique one. Those people who spoke about what ; the Government should have done at tho beginning of the war did not seem to realise that no one could .have foreseen the snipping problem that had since arisen.

Export Tax Opposed. As regards the proposed export tax would it be fair, he asked, to place both a high income tax and an export *"* on the same people? Personally he did not believe in an export tax on the products of the soil. The only reason the profits tax was repealed was because it was insufficient with the other taxes to pay its way in connection with the war, and increases 'in the land and income taxes were substituted. Referring to the recommendations refarding the control of shipping transport, V Joseph Ward said there was no more chance of doing what was suggested until some time after the war was over than there was of jumping over the moon. It was impossible to expect the importers to do without a profit and make losses for the purpose of helping the general community in reducing the cost of living.' All they could do was to assess what should be a reasonable profit. Mr. W. A. Veitch (Wanganui) said the powers of the food controller were carefully considered by the committee. It was not proposed to give Kim 6uch extreme powers as was suggested by the Minister

1 for Finance.'His plenary powers referred mainly :to - administration. < TME!S would be decided by Cabinet. Care should be taken to prevent ridicule being thrown upon the proposal to appoint' Mood controller, as this.was a very important part of'the committee's report. The committee had given sympathetic attention to tne Labour point of view. No hostility had been shown to the Labour propoxate, several of which : had been adopted. In war time it was the duty of Parliament and the Government to see fair play between the consumers and the producers, ibe proposal to sell in New Zealand at pre-war prices and to make up the differ ences between those prices and London prices out 0/ the Consolidated Fund would, said Mr. Vietch, create a position ■ thai would not be tolerated. The only practical way of solving, the problem would be to make the whole of the industry concerned contribute to a fund to compensate those who sold at reduced prices in Aew Zealand. State competition would be nc use. State and municipal monopoly waf the only effectual method of dealing with the problem. Mr. Veitch advocated the establishment of c&aring stations for mils in the principal, centres. This proposal, be said, was respected -by the committee. Mr. Massey: Because yon proposed tc make it compulsory. Prime Minister's Defence. The Prime Minister said members 0! the committee would admit that he bad never attempted to interfere with the proceedings. He had never heard yet of any exploitation or monopoly that the committee had discovered. If there were people who had broken the law by forming combines for putting up prices it order to make unreasonable profits he would see that they were punished. He was dead against anything in the form of monopoly, whether it was by the in dividual, State, or municipality. It was dangerous. Members of Cabinet were as anxious, if not more so than members, to reduce the cost of living. Unfortunately the Government was not able tc do so by a stroke of the pen. In nearlj every case, history recorded the failure of the fixing of maximum prices, the issuit very often being the opposite of wrttt was intended. Take the goods that were brought from overseas—rice, raisins, cur rants, tea, cocoa, coffee, and clothing, anc other articles. Could this country contra! their prices? The country had no con trol over them at all, and they had gon< up much in price. During the last fev months New Zealand was in the.positioi of. either taking, them or leavin; them. She was almost in thi same ; position in regard to wheat and he felt certain that the presen shortage of wheat was due to the abus< the wheatgrowers suffered. Wheatgrower, preferred to grow something more profit able. Under normal circumstances thi producers of meat, mutton and lamb wouli be entitled to a fair price in the world') markets, but these were not normal times They had taken a far less price from thi Imperial Government than they woul< have received if they had placed it ii the world's markets. They had lost fron Bight to ten millions sterling thereby. Hi did not say that they could have dom this had it not been for the protection 0 the Imperial Government. He -admittec they received a pood return for their pro [luce, but the prices received by the pro Jucers maintained the financial position 0 ihe Dominion. He contended-that no mai in the community worked so hard as thi small dairy farmer. What remuneratioi lid these people receive? Statistic/ showed that at the end of the year thej inly made from £120 to £150. He wa.lot there to represent the wool king. "Cash Over the Counter." u - _ Members would find thafc.nineteen-twen-tieths of the woqlgrowers were small men He did not believe a single member 0: the House would force the small dairj farmers to contribute to the equalisatioi fund. It would °: be a most" unfaii thing. .'To.'take . the money'to maki up .losses , from the Consolidated Fune might be right as an abstract bu ( it would not work.out in practice. ; ;y. I: they, wanted to reduce the cost of livinj they ' must pay cash, over 'the cdunter : foi their goods. a time, like this it - wai the proper thing to do. Persons had tok him of.the money, they had saved By pay ing cash for their meat at ..the butchers shop instead to! the butcher delivering : i and on credit. He was doing all he conk to reduce the price of ■ meat. .'" Next montl the Government expected to let. the publii have meat from the freezing chambers the export price. I Unfortunately, owinj to the, lack of shipping, the meat had, ij some cases, remained in store for months, and, consequently, storage charge were added to the price. That made a! the difference between cheap 'meat" an< dear meat. Special.-. arrangements, wouli have to be made, meaning, possibly,' legis lation, whereby the meat. would be ; ob tained from the. stores free of storagi charges. He had,not objection to the tap pointment of a food controller, Ibiit'then ; was no magic in! tht name of- food con trailer. Even with i* food controller th< cost >of living had gone up to "'. England America had One, but the cost'of-livini had,< gone ;up ; there. .' If ;> despite the bes brains 'in England and America the cos of living went up, owing to the war period , they could hardly expect it to be : kep down in New Zealand. , New Zealand ane ! Australia were running neckband-neck ii regard to prices. ' '■.. C ,-'? i ; ?, \ ; , , s General Support, y;.. I Mr. . Massey said he 'agreed : with thi 1 proposals.'-regarding rents. It * was un fortunate that t the ; suburban train .«r vices had had to ■be reduced, >• He sup ported generally the proposals of the committee,, and he agreed- with; thi amendment of Mr. Sidey. He considered ii would be. better to refer 1 the report back to the committee for further con fiideration. . ■ M t Mr. J. T. M. Hornsby (Wairarapa] opposed referring the report back to the committee, though he had opposed altogether the equalisation fund proposed, He considered that Mr. McDonald, a member of the Board of Trade,' would make an excellent food controller. i'■ The producers were 1 not securing an undue profit, but there existed in this country a meat ring. The Minister for Finance must rest assured that the committee's idea' was that the food controller should go to him in connection with matters of finance. Mr._ J. McCombs (Lyttelton) said the committee had not gone down to fundamental principles. It bad seen sectional parts of the problem and proposed sectional remedies, but had not grappled with the problem as a whole. The Government had lacked the will to deal effectively with the cost of living. j Mr. C. A. Wilkinson (Egmont) said the debate had shown that there was no royal road to the reduction of the cost of living. He favoured the amendment referring the report' back to the committee for further consideration. The report preshadowed a great extension of State activity in trade enterprises. There was an entire absence of definite evidence of exploitation in the statements of witnesses who appeared before the committee. The debate had not concluded when the telegraph office closed.