WOOL DILEMMA

Otago Daily Times, Issue 27572, 14 December 1950, Page 8

WOOL DILEMMA

Sir, —There is a good deal of resentment among farmers and some misapprehension on the part of townspeople over the Government’s action in freezing part of the wool returns. It has been suggested that the course proposed by Mr Nash would be better; namely, to pay the farmers the whole of their wool returns, and use the surplus Income tax collected for paying off overseas debt. It is very doubtful whether Mr Nash would follow this course if he were an power. Something more in line with his dealings in meat and dairy produce would occur, and the woolgrowers would never see the surplus. The wool freeze is primarily intended to check inflation, and it will benefit most woolgrowers by spreading their extra income over a period of years. It is essential, however, that the c’ommittee which is to consider exemptions should have the widest discretionary power inorder that those who particularly require the money should get it. It is doubtful whether the committee appointed—consisting as it does of Meat Board, Wool Board and Federated Farmers executive members—can do more than lay down general principles for exemption. If every application for exemption is to be considered on its merits, it is probable that provincial or even district committees will be necessary. It is fallacious to imagine that most sheen farmers will come within the highest income tax scale. They will naturally try to avoid this penalty by spending more on farm improvement. The chief avenues of expenditure will be repayment of mortgages and debts, building construction and renovation, motor vehicles, farm implements, fencing material, household appliances, and more labour at higher wages in competition with manufacturers and others. More goods from overseas will be available, but not sufficient because the terms of trade are still against us. Consequently a certain amount of inflation will ensue unless part of the wool payment is taken out of circulation. Mr Holland’s scheme is undoubtedly the fairest to all sections of the people.—l am, etc.. Yeoman.