THE OTAGO DAILY TIMES THURSDAY, MAY 27, 1948. RATIONING AND SUBSIDIES

Otago Daily Times, Issue 26782, 27 May 1948, Page 4

THE OTAGO DAILY TIMES THURSDAY, MAY 27, 1948. RATIONING AND SUBSIDIES

For a long time the need to continue the rationing of tea and sugar has been determined in the mind of the Government not so much by problems of- availability of supplies as of payments. While the Government was collecting huge sums from the taxpayers to maintain the prices of these commodities at false levels the official interest was obviously best served by restricting the consumption of both tea and sugar as much as possible, even a reduction in fat excise revenues being of less embarrassment than the soaring costs of subsidies. But the progress of inflation in this country has caused the discarding of many of the Labour Government’s cherished theories of stabilisation, and Mr Nash, in his last budget speech, was compelled to confess that the maintenance of subsidies on the existing scale would require taxation to the tune of nearly £20,000,000 for the current year. In reluctant tones, therefore, he announced that subsidies would be reduced or cancelled on a number of items, including meat, fresh fruit, tea, and sugar. In respect to tea and sugar the savings were estimated to be £500,000 and £945,000' respectively, but these represent only the savings to the Government that have been brought about, by advancing the retail price of tea by approximately Is Id a pound and sugar by 2£d a pound. From the stabilisation vote of £13,459,000 this year the Government will still payin subsidies yet another £500,000 on tea, and on sugar an unspecified amount calculated on the basis of nearly £4 10s on every ton supplied for domestic consumption. When he announced recently that the rationing of tea would'cease at the end of this month, the Minister of Supply, Mr Nordmeyer, said he hoped it would not be long before the sale of sugar would similarly be made free. The import figures for both commodities indicate, however, that despite the undoubted difficulties of shipping, New Zealand has been well served by the exporting countries of both products, and that during and after the war the quantities imported each year seldom revealed any. substantial deviation from the norm. For the first 10 months of 1947 more than 64,000 tons of .sugar were imported, the figures for some previous years being 86,500 in 1946, 95,600-in 1942 and 84,000 in 1938. In the first 10 months of 1947, 5600 tons of tea were imported, a figure that might be compared with 4839 tons in 1946, 5886 tons in 1941, and 4989 in 1938. The information contained in a recent article in our news columns suggested that the only obstacle to the immediate cessation of sugar rationing was the present lack of reserve stocks in the South Island, a circumstance that will be overcome only by an improvement in the coastal shipping position and when South Island wholesalers are encouraged to build up stocks. In order that the inconveniences of rationing might be done away with as soon as possible wholesalers would doubtless be quite willing to make the large outlay required to accumulate substantial reserves of sugar, even though the margin allowed them by the Government on this item is so slender that their money would be as profitably invested if left in the bank; but the question of shipping is one to which the Government must find the answer —and is expected to find it quickly.