AUSTRALIAN FLOUR TAX

Timaru Herald, Volume CXXXVII, Issue 19682, 27 December 1933, Page 2

AUSTRALIAN FLOUR TAX

BONUS TO WHEATGROWERS. After much discussion and agitation, and many proposals and counterproposals, the Federal Cabinet has reached a decision regarding the assistance to be given to the wheatgrowing industry. A sales tax of £4 ss. a ton on flour Is to be imposed. This, it is estimated, will yield £1,600,000 during the present financial year. An additional £1,400,000 is to be provided from revenue, making the total assistance to wheatgrowers £3,000,000. This should enable a grant of 4s. an acre to be made to the growers. The proposal to borrow money from the Commonwealth Bank for the relief of wheatgrowers has been abandoned. The proposed sales tax will, it is estimated, result in an increase of Id. per 21b. loaf of bread. Had a sales tax been imposed of an amount sufficient to provide the whole of the £3,000,000 in the current financial year there would have been an Increase of lid. per 21b. loaf. Some form of increased taxation will be necessary to enable the amount required from revenue to be provided. It is anticipated, however, that the whole amount to be spent can be provided from revenue before 30th June. The sales tax will be imposed only until 30th June. Legislative provision will be made so that growers who are considered to be in prosperous circumstances shall receive no share of the Government’s bounty. It is understood that Customs duties on certain goods will be adjusted to provide some of the additional revenue required. Raising Revenue. It is understood that it is the intention of the Government that the tax shall operate for one year only, and that, when Parliament reassembles again after the recess legislation shall be introduced with the object of stabilising the price of wheat for home consumption. At this juncture the details of the policy which will be adopted are obscure, for the relative powers of the Commonwealth and the States to regulate the marketing of primary products are ill-defined. It is intended that the matter shall be discussed at the constitutional conference in Hobart in February, and the Government’s policy will depend upon the result of that conference. Labour Opposes Tax. “The Labour Party will strongly resist the proposed sales tax on flour,” said the leader of the Federal Labour Party (Mr. Scullin). “It is outrageous that a Government that has recently remitted £7,500,000 in taxation should turn round and impose a tax on the people’s bread. The Government boasts of having reduced the sales tax by one per cent, on numerous commodities, including luxuries, and then imposes 50 per cent, sales tax on the people's basic food. This action will recoil on the Government. The Labour Party believes in helping the wheatgrowers, but not by taxing the people.”