Export Levy On Wool Urged To Check Inflation

Wanganui Chronicle, 1 September 1950, Page 5

Export Levy On Wool Urged To Check Inflation

CANBERRA, Aug. 31 (Recd. 10.10 pm).—The Vice-Chancellor of the Australian National University, Sir Douglas Copland, Today urged the imposition of an export tax on wool as a means of checking inflation caused by the skyrocketing wool prices. “It is a perfectly good solution if the country has the courage to adopt It,” he said. “It might be fixed, under present circumstances, as high as 33 1-3 per cent, and if wool prices rise higher might have to be increased. If prices fall the tax can be reduced. Two-thirds could be placed to the credit of the woolgrowers themselves. They would avoid paying high income tax on the amount taken by export tax, and they would have a cushion on which to rest should lean years return. The other third could be partly used to subsidise the domestic price of wool and so keep down the price of clothing and be partly held for expenditure over many years in ways

designed to promo'te the long-term interests of the wool industry. “The proposal would have a great advantage for the -community as a whole. It would cut off at the source the generating force causing inflation and further adjustments to costs and incomes, impart greater stability to economy immediately and have a most important direct effect on the cost of living by limiting the rise in meat prices which would otherwise be inevitable.

“There are two weakhesses to appreciation of the Australian pound—it would affect primary producers and the development of secondary industry without compensating advantages. In the case of wool appreciation would not be enough to combat all the undesirable repercussions of high prices. We must regard a solution through appreciation as a mirage. It has a fatal attraction fqr the less discerning and will disappoint even the most fervent followers in the long run/