TAX ON BREAD

Taranaki Daily News, 14 June 1929, Page 15

TAX ON BREAD

VIEWS OF MR. POLSON GOVERNMENT MOVE LIKELY. THE NECESSITY FOR A CHANGE. Special importance is to be attached to the opinions on “the bread tax,” of Mr. W. J. Polson, M.P. for Stratford, by reason of hit' being president of the New Zealand Farmers’ Union—a nonpolitical organisation, which includes the grain-growers of South Canterbury and the “bread tax” objectors of the rest of the Dominion, among its members. Mr. Polson has already expressed his opinion on Customs tariffs, objecting to the heavy burden which they impose on the primary producer, thereby increasing production costs. His views on. protective duties afforded to a section of the farmers are therefore of great importance at the present moment. “If you are asking me to justify flour selling at £l7 in New Zealand, when its price is £lO 15s in Australia, I cannot do it,” said Mr. Polson, when interviewed on the subject of wheat duties by a Wanganui Chronicle reporter recently. “But if I am asked to justify the southern grower obtaining a reasonable price for his wheat, in order that this country shall continue to produce wheat, that is another question.” “You have been discussing the question of costs on various public occasions, Mr. Polson, and pointing out the handicap of high costs. I count this tax on wheat and flour as one of the causes of increased cost?” “Quite obviously it is,” replied Mr. Polson. “A duty which may rise to £5 or £6 a ton, as flour and wheat cheapen, almost must increase the cost of the bread. It is, in fact, a bread tax.” "Then why not abolish it?” asked the reporter. “A large number of northern farmers, practically all of them, definitely anti-tax in their viewpoint, have just been on a tour through the wheat country of the south. Ask them what should be done with that land. I think most of them will tell you it is more suitable for growing wheat than anything else. It will produce wheat, and may be made to produce better wheat, with a higher protein yield at a still less cost. That aspect of the question has not been sufficiently investigated. Recent research, I am told, reveals that * the old low-grade hard-straw Tuscan, which the miller paid the lowest price for, has a better protein yield than high-priced varieties, such as Hunter s and Pearl. "But let us assume that it could .be • profitably employed growing something else. Is New Zealand prepared to adopt such a policy and say, ‘We will import all the flour and offals we require and grow no more wheat?’ That would be a grave reversal of national policy, and in my opinion would require very careful consideration indeed. It is hardly necessary to recapitulate what might happen in a period of foreign Shortage.”

WHEAT GROWING COSTS. “Cannot wheat be grown at a less price than 5s 6d a bushel?” “Carefully compiled figures convinced Mr. Coates that it could not. The firms financing the wheat growers declared at that time that 60 per cent, of them could not meet their liabilities if pushed and- that unless protection to ensure 6s a bushel was given to the industry,. 50 per cent, of them would have to give up growing wheat. The statement showed that the cost ran from £7 10s an acre on light land to flO 10s On heavy land. The average cost was set down at £8 10s per acre and the average field for yield for ten yeais at 32 bushels —

'Wheat growing is a risky business, with numerous blights and diseases and subject to weather conditions. Such a profit does not work out on that class of land much over 3 per cent.” “What about the cost of distribution?” DISTRIBUTION COSTS. “I have said that scientific investigation may show us how to grow wheat. I am satisfied it will need no scientific jnvestigaton to show us how to distribute it cheaper. It costs the Australian miller at least £1 per ton less to mill his product, because his _ system is more efficient. One combination runs all the New Zealand mills; many of them don’t work full time and some of them in the past have not worked at all. One smah mill in the south, with a capacity of 10 sacks an hour, in 1927 was turning out 80 tons per week and underselling Distributors, Ltd., by from 5s to lOs per ton, and showing a good profit. Again, I have seen flour quoted at £l6 per ton in Auckland and £l7 10s in Timaru, where it is grown. .Undoubtedly our mills are not efficient. There are too many of them for the job. But it is not possible to blame any one process of distribution. I gave figures some time ago to show that flour which the farmer sold at £ll per ton cost the consumer £32 to £35 as bread. Bread made from Australian flour sells in the counties of England at from to 4d the 2-lb loaf. Our bread is too high and the reason is that high costs are affecting other sections of the community as well as the farmer. If the Press would concentrate on this great problem of higher costs they would be helping more than by particularising upon the price of flour.” NATIONAL STOCKTAKING URGED. “What remedy do you propose?” “Remedy! There is no remedy, except a national stocktaking and the use of hard work and national common sense. It is proposed to reduce the tariff. If it could be done it would be’an immediate relief, but how .is it to be done? Sir Joseph Ward is fore; shadowing more taxation, not a reduction. The only way to reduce taxation is to reduce expenditure by economising. There must be no. wasteful public expenditure of any kind —every shilling must be looked at twice. A nationwide reduction in costs of production to enable us to maintain high and in- ’ creasing export figures for our primary products in the face of the falling prices of wool and meat particularly, although butter and cheese are still reasonably good, is the only remedy. “Australia is in a precisely similar position, as may be gleaned from Mr.

Bruce’s momentous speech at Canberra, a few days ago. He pointed out that the situation, due to increased costs of production, called for the closest investigation of the cruses of the present difficulties. That is equally true in New Zealand.” “The Government.does propose to consider the wheat question?” “Yes; Mr. Forbes has indicated that a committee of all the parties in the House is to be set up to deal with it. Quite rightly the Minister pointed out thht those opposed to the present duties were not opposed to assistance being given to the wheat growing industry to enable it to be undertaken on a reasonably remunerative basis. Their objection was to the method by which it is given. But I am not sure that a political organisation, which includes tin deal with this question. The Farmers’ Union, with the wheat growers within its ranks, is asking for a scientific and practical investigation by a qualified and quite impartial board, and is prepared to s + and by the decision of such a tribunal, established with statutory authority. S- di a body would first ascertain what are the essential industries to this Dominion, what measure of protection they are entitled to, if any; whether that protection shall be temporary, or permanent; and whether it shall be by way of Customs duty, or bounty. It would be a better plan. “The whole question is,” said Mr. Polson, in conclusion, “that circumstances have been too strong for the (farmers. Some of them—wheat growlers, maize growers, potato growers, to!mato growers, and others —have been forced to ask for protection; and now that demand is being made use of as a weapon to bludgeon the whole body of farmers who can pass nothing on, having to accept world paid prices for their products, while paying through the nose for everything they use by means of the Customs tariff. Protective tariffs, I am afraid, are sometimes made use of to bolster up inefficiency in our secondary industries. We need secondary industries, but they must be efficient ones. To establish them we must first have a sound and successful base of primary industries.” v

32 bushels at 6s ...... . £9 12 0 . £8 10 0 Average profit at 6s .. . £1 2 0