REDUCTION OF SUBSIDIES

Otago Daily Times, Issue 27390, 16 May 1950, Page 6

REDUCTION OF SUBSIDIES

Sir. —“ I Wish ” and others of your correspondents laud Mr Holland for his courageous action in raising prices. “ Courageous" seems a strange word to apply to an action which injures people who cannot retaliate. Mr Holland did not even have to put up a token fight to prove his courage, as he made sure he did not even have to face Parliamentary opposition to his action. He just dictatorially raised prices. But perhaps your correspondents mean he was very .courageous ’* in breaking the “ solemn pledges ” he gave six months ago. that he would not lower the standard of living of pensioners and workers. He has certainly broken all records for the speed with which he has broken his election pledges, so perhaps he is entitled to the laudation of “ I Wish ” and others.—l am, etc., I See.

Sir.—l agree with the Government’s decision to remove subsidies on condition that they reduce taxation. I am always wary of a rise in wages, as when this happens the manufacturers, etc., increase the price of their goods in proportion to the increase in wages, plus a wee bit more for good measure, leaving the wage-earner with the equivalent of a decrease in wages. What I would like to see done is the wages remain as they are now, and the manufacturers’ profits reduced. There is not the slightest doubt that the public are exploited to the full; the all-time net increases in the profits of most big concerns are proof of this. As for “ I Wish," his or her comments on the workers are not worth commenting on. I worked for a “ Lord Haw Taw ” not long ago, and “ I Wish ’’ is apparently of the same clan.—l am, etc.. Not a Spiv.

Sir,—Mr Sutherland has raised an interesting point with regard to inflation and one which strengthens my desire to get those who use the word to define its meaning. Quite a few people have said to me, "Mr Holland has done a good thing in stemming inflation." When 1 ask them to tell me what inflation really is, and how it is caused, they are unable to answer, showing that with them it is iust a parrot cry. If I have grasped correctly the meaning of Mr Sutherland’s letter, inflation is a normal factor in general price fixing. If this be so, then the only remedy is to issue money in excess of that which is distributed as wages and salaries. Perhaps Mr Sutherland would further enlighten me on this point.—l am, etc., Wilfred.

Sir,—The Increase In prices announced by Mr Holland was a severe blow to many National supporters who never expected nor suspected their Government of such a reversal in their avowed policy. Personally, I am only a worker who never reached a higher grade than Standard VI, so when our Prime Minister said during his election campaign that he would reduce the cost of living, I believed him. Has he done so? Some will say that this will be done when a proper balance between money and goods has been established, but in this evasive answer lies a serious proposition, and no one' can tell when this international problem will be solved. I believe our Prime Minister to be a gentleman who embraces the fundamental principles of Christianity, and who realises that to keep the respect and trust of the large majority of citizens whom he represents, he must speak “ simple truths ” and not make involved statements. By not keeping strictly to that one feature of the National policy, as enunciated in the party manifesto, i.e., to reduce the cost of living, and to, in fact, increase the price of foodstuffs, he has broken faith with the people and increased the cost of living. Fears have been instilled in many of the lowersalaried groups which I hope our party leader will prove to be unfounded in his next announcement. —I am, etc., H.M.S.

Sir, —In reply to " Observer’s ” sneers at the expense of those who are protesting at the removal of the subsidies, I would point out that in the last analysis the abolished subsidies were paid for by the wage and salary earners, the pensioners, superannuitants and others living on fixed incomes, because, unlike the business and professional sections, they are unable to pass their taxes on to the consumers in prices and fees. Nevertheless, it is the wealthy companies ‘and individuals who. in the first instance, pay most of the income tax from which the subsidies were chiefly' derived, and it is they who will reap the benefit by the saving of £12,000.000 on subsides. Those wealthy taxpayers stand to gain in three ways: They will continue to pass on the cost of the abolished subsidies in their prices as before; they will make a fresh increase in prices equivalent at least to the abolished subsidies: and they expect a large remission of income taxation as a solatium by the new Government. . ~ . , On the other hand, the rest of the people can expect no remission of. taxa.tion from the lifting of the subsidies, and must, it appears, go on paying the above-mentioned price increases in perpetuity without redress because of the unwise action of the present Governm Another point that “ Observer ” has failed to consider is that modern democracy, faced with the challenge of Socialism, has been compelled to develop the welfare State. A policy of subsidising essential commodities for the benefit, chiefly, of the lower-paid bread-winners as a safety valve to keep unrest in check is one aspect of the welfare State. Probably the new Government will find this out to its cost. —I am. etc.. Householder.

Sir.— lf any body of workers received a good hearing from the late Labour Government it was the Hillside Workshop employees. That this coddling did them no good is obvious from the nonsensical resolution they have passed. To them can now be added the Dunedin Tramways Union. To both these bands of humorists may I humbly point out that the National Government has a mandate from the .people of New Zealand to govern the country for three years? The question of subsidies is only one thing in the framework of putting New Zealand s economy on a sound and sensible footing. Quite apart from the ridiculous " nerve ” of calling on the Government to resign, it may be pointed out that the time when unions ” run ” the country is definitely past. And while silly nonsense, such as claiming another £4 a week, is necessary and a mere 10s a week more in child allowance, may appeal to some unthinking people, it irihy safely be said that the passing of such resolutions will not help the subsidy problem, although they may provide some humorous aspects to a serious job.—l am. etc., Worker.