REDUCTION OF SUBSIDIES

Otago Daily Times, Issue 27387, 12 May 1950, Page 6

REDUCTION OF SUBSIDIES

Sir, —When one reckons out what the increased costs are going to be it is found to be only a matter of shillings, yet to hear the frightful racket going on one would think starvation stares us in the face. Those who are out purely • and simply to make matters awkward for the Government will give their imaginations full play with figures, but the average person will not be stampeded by such blatant and obviously inspired propaganda.” This country is going to be placed on a sound economic basis, and this cannot be done in five minutes. We read of absurd wage claims and so on. The truth is that too many of us have been greedy and thoughtless' too long. Money has flown into our pockets. We have had subsidised food on the cheap that other workers have been taxed to provide the money for. Now we moan at the idea of pa.vin'g the proper price ourselves. Buj there certainly is need for assistance to those workers op the lower income scale. If there is any suggestion of Increases in family allowances a means test must be used. Already millions of pounds are being paid out to those who certainly do not need it. We cannot pile waste on w r aste. The National Government has a mandate to govern fairly and squarely and, excepting those with an axe to grind and the moaners, the people of New Zealand will give it ample time to fulfil its promises.—l am, etc., Interested. Sir,—l was greatly amused to read of the Hillside Workshops workers demanding the resignation of the Government. Really, this is the tail trying to wag the dog. The Government is to be commended on trying to puncture the inflation balloon and put some guts into the £. The consuming public in New Zealand have been very lucky all these years in regard to food prices. For instance, in Australia, milk is UJd a quart and a 41b loaf is Is 6d; butter is 2s 8d a lb and meat and fish a good deal dearer .than here. Subsidies are right enough in war time, but it is high time they were taken off, especially in these days of high employment and good wages. There is plenty of loose cash floating around, judging by totalisator returns and full public houses. Wages should be linked with cost of living, as in ' Australia, with its basic wage. Wages are climbing to a fantastic level, so is it any wonder the cost of living should rise also? New Zealand was riding for a fall with the chief Government industry manipulation of the printing press, so it was high time the doctor was called in to prescribe, The present Government could easily have swum with the tide, but thank heaven they have the intestinal fortitude to risk temporary unpopularity for the welfare of the country, not for one class, according to Labour standards, but for all classes. Now that controls are being lifted, competition will keep prices down, Instead of ceiling prices under control. The Internal Marketing Division, with' its cumbersome overhead, spelt goodbye to cheap fruit, vegetables and fish to the public.—l am. etc., A. A. Jones. ' Balclutha. Sir,—lt Is amusing to read “ Battleaxe’s ” call to the unions to follow “ majority rule,” while at the same time complaining at the’ present Government’s action. This Government was put in office by • people of New Zealand by a large majority. In recent years when the cost of living crept up and up the Socialists took it like lambs. Now. when a Prime Minister makes things so clear a child can understand, they get ud like lions. They can argue what they like, but if they use common sense and compare costs the last four years of the Labour Government’s term they will see that the prices were rising! but they shut their eyes to it. The only ones I feel sorry for, and I hope the Prime Minister wakens up to it, are the old-age beneficiaries.' They had to stand the rising costs for years, and because of the election they got a rise. , The young people have had the cream of the last few years. Let them do something for production. Give the Government time before the lions roar so loud.— I am. etc.. Fair Play.

Sir,—lt apparently never occurs to anyone to ask what is the cause of the inflation about which Mr Holland is so concerned. Any goods or services sold above cost cause inflation, which means that rent, interest and profits, which come under the above category, are the chief causes thereof, and these can be maintained successfully only in an inflationary economy. AH of these- being fundamental features of our economic system,'it is surely obvious that to continue satisfactorily that system must maintain a certain measure of inflation. To attempt a cure for inflation by removing subsidies, which are - in no way associated with the cause, Is totally illogical and oan only make confusion worse confounded. Mr Holland, in his capacity of economic doctor, is attempting to cure blood pressure with a dose of poison, and will emulate that doctor in the story who signed his name on the death certificate under “ cause of daath. ’ —I am, etc., Ivan E. Sutherland.

Sir,—l believe the - removal of subsidies is very sound, because not only does this make the consumer pay for what he uses, but it is a move in the right direction to bring things back to normal. The increased price on essential household commodities will hit the wageearner hard, so naturally he will look for an increase in wages. However, I do not agree with the suggestion that there should be a general increase in wages, as this wiU certainly not improve the situation. . The answer is to earn more by producing more, and so the position will be improved, privately and nationally: but to receive higher wages for the same amount of work is really only taking another step up the inflationary spiral.—l am, etc., H - '

Sir,—l think that, perhaps Mr Holland himself did not make it plain enough where New Zealand has been heading for the past 10 years. Everyone knows that new money has been pumped into circulation and people have seen the value of their £ notes gradually diminishing. That result was certain. If the introduction of new money was persisted in for long enough, the position would undoubtedly nave arisen eventually when the pound note suddenly ‘skated. No one knows exactly where that point arises. Money suddenly “ skated in Germany after the First World War. Also in Austria after the last world war and in China in more recent times. Where this happens, all the trade of a country is disorganised and the blow falls much harder on working people than on anyone else. - .... If a countrv reaches the stage where a tram ride costs £IOO and butter £2OOO per lb today and £3OOO tomorrow, it takes little imagination to see the complete disorganisation entailed. Despite what has already happened to the New Zealand £, those who do not want to believe will say that this could not happen in New Zealand. 'The British people in Singapore also said, “ It cannot happen here." before the Japanese walked in. Money is onlv the means of exchange in trade, but like most things, it is subject to inexorable laws.—l am. etc.. Merchant. Sir,—Mr Holland was certainly giving us what we expected when he announced the names of the Cabinet Ministers, everyone a case-hardened Tory.. There is one thing certain, they are going to defeat their own objective, and then some. They seem to look only from one angle. One has only to mention one industry—and there are many. I refer to sawmilling, timber merchants, joinery factories and builders. They will be hard hit right from the green tree in the bush. It wiil make prices so high that no one will accept a tender. Tenders for State houses will be too high for the Government to accept, and what about the ones that have been signed up for? It will mean that there will be thousands of unemployed.—l am, etc., Full Employment.