Poverty Bay Herald. PUBLISHED EVERY EVENING GISBORNE, FRIDAY, APRIL, 21. 1939. THE GUARANTEED PRICE

Poverty Bay Herald, Volume LXVI, Issue 19918, 21 April 1939, Page 4

Poverty Bay Herald. PUBLISHED EVERY EVENING GISBORNE, FRIDAY, APRIL, 21. 1939. THE GUARANTEED PRICE

There will bo n good deal of sympathy with the Minister of Finance at the predicament in which he finds himself in regard to the guaranteed price scheme. Having used this grandiose plan for catching the votes of the dairy farmers, it is now found lo be an embarrassment to the Government, and Mr. Nash, in effect, asks the farmer to jettison it and to disregard the legislation which he himself caused to be enacted. The basis of the guaranteed price plan is that the farmer should be asured of a reasonable return for his labour. The

reasonable return was defined last year by an independent tribunal, but the Minister refused to accept its recommendation and imposed a "cut" of more than 5 per cent in the dairy farmers' wages as fixed by the equivalent of an arbitration court. Now the Minister suggests that the farmers should forgo their rights under the legislation and refrain from asking for an increase in payments to compensate them for the increasing costs which the policy of the Government has compelled them to pay. So it is that after three years of experience of guaranteed prices, Mr. Nash is constrained to ask the farmers to accept a price, not sufficient to compensate them for their labour but in accordance with the ability of the industry and the country to pay.

To be fair to Mr. Nash, it must be pointed out that he has ilso appealed to the Federation of Labour to refrain from seeking further increases in wages, and there will be ready acceptance of his statement that "it was difficult to put. that proposition to the people whom he had been helping for years to ask for more." In this, as in other matters, Mr. Nash has shown commendable courage, but he would earn still higher encomiums wore he bold enough to admit thai these problems are the direct result of the Government's policy and that no real remedy can be effected until it retraces its steps. The Minister insists that it is necessary to secure an element of stability within the Dominion and to keep the cost spiral from growing. It is not unfair to recall that he was warned years ago that his policy would result in instability and spiralling costs, and experience has proved that his critics were right, and his own optimism illfounded. Tacitly admitting this position, Mr. Nash now seeks to secure stability and to check rising costs by cutting the real wages of one section of the community, the dairy farmers, without at the same time protecting them against . further rising costs which, to some extent, are represented in the wages of other sections. His proposal is clearly too one-sided to be acceptable. What would be the response if Mr. Nash told the Federation of Labour that he could not prevent the cost of Jiving from rising but it must not. nevertheless, ask for increases in wages'.' Yet that is precisely the proposition he has submitted to the dairy farmers, whose returns, owing to the Minister's own arbitrary action, are already in arrcar of their costs as determined by an independent tribunal. Even while asking the farmers to accept a stabilised income Mr. Nash has indicated that they must be prepared for still higher costs. There is a demand, for instance, for higher freight rates, which arises to some extent from Mr. Nash's own policy of import control with reduced inward cargoes. Since the present guaranteed price was fixed —at a figure substantially lower than that unanimously recommended by the Government's own tribunal —the farmer has had to submit to an increase of railway freights and other cosls. while Mi-. Nash himself has imposed increases in taxation and lias indicated that further heavy imposts must be expected during the current year. To talk of stability in these circumstances is sheer mockery and exposes the whole so-called guaranteed price plan as the farce tiiat it has always been, because the former last year received little more than 5 per cent above market rates and since the scheme was introduced lias had his costs increased by 30 per cent. Mi'. Nash is plainly concerned, and with good reason, at the cost of this scheme to the consolidated fund. Previously it was insisted that any deficit in life dairy industry account would not be a charge on the taxpayers— Mr. Hultquist went so far as to inform local farmers that if the sum got ton large it could be rubbed out — but now the Minister admits that the taxpayer has to foot the bill and ap-

peals to the farmers not to ask for more from the consolidated fund. In

oilier words, he wants to stabilise general costs at tho expense of the dairy farmer "as the Government would not have too much money this year." Mr. Nash is. at lasl forced to realise that the real problem facing the Dominion is one of costs, yet only yesterday the Prime Minister was telling a deputation of sheepfarmers not to ask for a commission which w'.ould only recommend a reduction of costs Even Mr. Savage apparently realises that an impartial judicial commission could only come to one conclusion, but because that conclusion does not conform to his own impractical philosophy he spurns an inquiry. his obvious that this sort of thing cannot go in indefinitely. The Government, as Mr. Lee has pointed out, persists in dealing with effects instead of attacking the causes, and until if reverses its policy and seeks a basis of real stability for the Dominion as a whole, and not merely for the dairy farmers, it will make no progress towards a solution of its many problems.