THE DAIRY FARMERS’ CASE.

Waipawa Mail, Volume XXXVII, Issue 7914, 4 August 1917, Page 4 (Supplement)

THE DAIRY FARMERS’ CASE.

The dairy farmers may be said to have a case of their own, and their special grievance is the butter-fat tax. They regard this tax as an obnoxious imposition which, even as a class tax, does not fall equitably, for the reason that those whom it hits the hardest aro those who aro struggling to establish themselves. It has been asserted that the tax takes in some cases .to in one-quarter to 0110-half of the small wages coined under the hardest of conditions. It has been further urged that it is a tax on the gross output, quite irrespective of whether there is a profit or loss, and ‘that in operation it is entirely opposed to the principle of taxation in accordance with ability to pay. There is a prevalent idea that the war has brought the average dairy farmer undreamed-of wealth, comparatively speaking, and that the butter-fat tax merely skims a little of the cream of his big profits. The farmers’ version is that it is not a war profits tax, because it is only those farmers who have had the good fortune to become well-established who are making any war profits at all. In view of what ho now has to pay for his milk, butter and cheese, the townsman may regard this statement with scepticism. The farmer, however, is aide to cite some rather startling figures in proof of his claim. Seme weeks ago a large and influential deputation waited upon the Minist. r for Agriculture to urge the removal of the butter-fat tax, and on that occasion the principal speaker, Mr K Maxwell, cited a number of actual instances which, he said, had been Carefully investigated and checked by himself and others, in most cases the accounts having been checked off with the merchant’s, auctioneer’s, and factory figures:

Case No. I.—A man whose accounts I have made up for taxation purposes, and whose net return (without inter-

est on his own capital of over £2,000 at 5 per cent.) was £l3B This amount represents the total wages of the man, his wife and two daughters. Just the magnificent su mof 3d per hour for the actual hour engaged on the lann work. Taking the man at full time and the women at half-time, each is certainly not an over-estimate. The money was earned cn a remote, lodgh, partlycleared place under all the hardships ami drawbacks usually attached to such a life in such a place. Strictly, the total w ages earned were £3B, not £l3B, because the man need only have lent his capital on the best security to have got £IOO fo- it. Now tius £3B would represent 2d. per hour wages to the man on'y, with nothing whatever for his wife and two daughters. Now how does the butter-fat tax affect such a case? As applied to last year’s returns, from which the above figures are giv« 11. the following is the position • 2d. i>er lb. on butter-fat he supplied comes to £35 25., and the li per cent, commission on value of cheese produced £lO. approximately. That menu 3it would take the entire wages earned and £7 over, or £45 out of the ■ toss a*,come of £l3B. or very slightly under one-third of the totai of the hardestearned money under the hardiest conditions.

Case Xo. 2. —Tlio farm is a elen:’°d bush farm some distance back, and re-nlts and conditions arc ‘■•nnewnab better than Xo .1. The members .f tiie family engaged on the farm v/uvk are the man, lii.s wife, and iad. The income, including interest cn about C 1 • p >oo of his capital invested H ‘he farm at 5 per cent. (£75), was £177, or just about £IOO for wages for the three people for 305 days—ore at full time and two at half-time—or less than 3d. per hour if interest on capital is counted, or slightly over 4.sd. pe- hour if interest on capital is not charge a. On theso returns tho butter-fat tax would come to £2B 25., and the l.i per cent, commission to approximately ri, or a total of £36 2s.—more than onethird of the total wages or over o'vefifth (4s. ill the £) of the total income.) Caso Xo. 3.—A mail receiving just over £6OO for his milk, who has sharemilkers on half shares, but who also spends all his time looking after and working in connection with the farm. Hi» half-share from all sources is £350, out of which he lias to pay over £2O in rates, £4 insurance. £6O interest on loans, 5 percent, on his own £ISOO (£75), and innumerable charges, such as manures, seeds, amounting to over C*D —a total of over £24o—leaving linn £llO for wages for tho year —less than an ordinary labourer’s wages—but out of which his half share of the butter-fat tax would be £l6 10s. ar.d for the 11 per cent, commission approximately £4 55., or a total of £2O 15s. out of his £llO wages—just under one-fifth (4s. in the £). Even these better results are only obtained after years of the hardest work building up bis home. Case No. 4.—A farm of just over 100 acres, tho man and his wife milking. Income £l4O, less interest on capital invested, £IOOO at 5 jk-t cent. (£SO) ; net, COO wages for the man and bis wife at time and a-half, or very slightly over 3d. per hour. His butter-fat tax on above would be about £l6 10s.. and the l.\ per cent, commission £4 55., or a total of £2O 15s. out of £OO wages—about Is. 7d. in the £. Case Xo. 5.—A farm of about 120 acres, man and two daughters engaged on farm. Net income £4O, without interest on cost of stock and plant. 'Faking the man at full time and the daughters at quarter-time each, this does not represent 2d. per hour, and yet out of this pittance tho butter-fat tax jyould conic to about £l3, and tho l.» per cent, commission to approximately £3 15s.—a total of £l6 15s. Case No. 6. —A mixed farm on which 45 cows are milked. East year’s gross income with all the high prices was £7iX), but after paying intoiost, rent, rates, wages, in>uran{*e, loss on stock, and file hundred-nnd-one other things incidental to running a dairy farm, his not income for himself and wife was £250 (what a huge amount to pay a dairy fanner and his wife for 365 days’ work from daylight to dark, and often longer, after years at a mere pittance!) His position tilts year is: He pays roughly £2O butter-fat tax, over £8 n> l.\ per cent, commission, and loses £ll through broken contracts —a total of £4B. Til addition to the above detailed Instances, Mr. Maxwell quoted tie*' amounts that had to be paid under the buttor-lat tax bv twelve struggling small dairy farmers who live up a bush road and have to carry on their farming operations under tin hardest conditions, amongst logs and stumps. The amounts, he says, are those which were actually deducted from their cheques for one month only (December) The amounts arc taken from the factory j ]

books: £5 Us. 5d., £5, £5 ss. 7d , £B'lßs. lod., £1 19s. 6d., £1 17s. Id ! £1 19s. Bd.. £4 9s. 5cL, £1 6s. 5d., £2 135., 19s. Gd., and £1 19s. "These twelve,” comments Mr Maxwell, “arc all poor or comparatively poor, hardworking, struggling bush farmers on leasehold land—not private lands. The land is cleared bush, or partly cleared bush land, and though they have been years at work they do not even now liavo net incomes that would return them on the average 3d. per hour wages for nil tho hours worked. And yet they liavo out of tins pittance of a wage to pay such sums as given above, in ono month, so that people living m comfort in the towns and earning anytiling from four to ten times as much or more, taking tho wage-earners only may buy their butter at 2d. per pound less.”