Debate In The House On The Rise Of Costs Of Living

Wanganui Chronicle, 25 October 1950, Page 5

Debate In The House On The Rise Of Costs Of Living

Mr. Nash Wants Subsidies Restored

PARLIAMENT BLDGS., Lst taken for several classes of Estim lives today, and when the vote fo: bated, it gave Opposition speakers of living and to criticise the Gov> The former Minister of Finan should he restored. He said that was unfair. Government speakers said that subsidies had had to be paid by somebody and had acted as “chloroform” in hiding real costs. They claimed that factors outside New Zealand’s control had contributed to rises in living costs. Mr Nash suggested that subsidies be restored in order to bring prices back to about the level they were before the subsidies were lifted. He said that the removal ot the subsidy on coal had resulted in an abnormal increase in the price of gas. He quoted the case of a New Plymouth age beneficiary whose twomonthly gas bill before the removal of the subsidy was £2 Ils for 7200 cubic feet, and afterward was £4 15s 3d for 6700 cubic feet. The increase in the pension of the age beneficiary was inadequate to meet the extra price of gas. "Cruel” prices were being asked for certain types of vegetables, and in other instances peopitv outside the average income could not" afford to pay today's prices for the goods they wanted. Mr Aderman (Govt., New Plymouth) said that other factors were involved in the increased price for gas beyond the partial removal of the coal subsidy. Through the policy of the Labour Government the New Plymouth Gas Company had been left with a deficit of £6OOO. The company could not sell its tar, which was formerly used for road-sealing purposes and which was now being drained out. It had to pay extra freight charges and higher labour costs. CHANGE OF FACE. Mr McCombs (Opp., Lyttelton) said that the Minister ot Industries and Commerce, during the elections, nad said that lhe National Party would continue lhe subsidies on various commodities, but had since undergone a change of face. Egg producers were worse orf now than ix-iore, and had received little or no compensation for the removal of subsidies which bene, lited them. He said that the Labour Government had been attacked during the elections for permitting on increase in clothing prices, but the action of the present Government in reducing the clothing subsidy would cause prices to rise higher. Mr Hayman (Govt., Oarnaru) said that lhe Labour Government had used subsidies as an anaesthetic in order to disguise rising costs, higher wages and less production. He asked whether the wheal subsidy was to maintain an economic price to the New Zealand or Australian wheatgrowers?

Mr Kearins (Opp., Waimarino) said that the present subsidy on clothing was £750,000, compared with almost £1,500,000 last year, In spite of the huge increase in the price of wool. He predicted a big increase in the price of clothing. “The Government is pursuing a policy of making the rich richer and the poor poorer all the time,” he said. “It is the policy they have always stood for, and they are going to make the best of it for the next two years. That is all the time they have got. You can see it in their faces as they walk round the corridors.” Mr Gerard (Govt., Ashburton) said that so far as the New Zealand wheatgrower was concerned, the Labour Government had done nothing for him at all- What was done was to give the Australian growers an increased price, but under the farsighted policy of the Minister of Industries and Commerce and the Minister of Agriculture, the decline in wheat growing in the Dominion had beer, arrested, and would in future increase. Mr McAlpine (Govt., Selwyn): Half a million bushels more. Mr Skinner (Opp., Buller): But fewer fat lambs. MORE WHEAT AND MORE FAT LAMBS Mr Gerard said that more fat lambs would be produced this year than previously and a greater acreage of wheat than for the last 20 years. He, added that in the past. Labour mem-i bers had always indicated the pros-; perity of lhe country by referring 10 the totalisator figures. If the Opposition was in any doubt as to the prosperity of the country today, all it need do was to refer to Last weekend's totalisator returns. Mr Moohan (Opp., Petone) said Government speakers had said there, must be more work if the people were | to earn more, but were the wool-i growers working any harder for the I higher prices they would receive this' season ? The Minister of Industries and I Commerce (Mr Bowden) said it was true the price of wool on the world i markets showed a substantial increase and New Zealand growers were to receive more, but Mr Moohan apparently objected to that. i Mr Skinner: He did nothing of the, kind. Mr Bowden said the implication was that the woolgrowers were not entitled to a fortuitous increase if: they had not worked harder for it; . but who rushed to help the wool-' grower when prices were low? The effects of the, higher wool prices wore causing concern in many coun- • tries, but everyone in New Zealand would share the increased prosperity, I even if the price of woollen goods in-. evitably rose in consequence of high* prices for raw wool. Mr Bowden said there were local ■ factors contributing to the rise in gas! prices quoted by Mr Nash for New Plymouth. Tha'. rise was not typicdl, 1 and in many places the increase had been much less. Mr Mason (Opp.. Waitakere): But’ they were still substantial. Mr Bowden said that before the Nat ional Government reduced subsi-1 dies more was actually being paid to subsidies for coal than it cost to pro-* duce. Subsidies had become a severe drain on lhe public finance, and as l Mr Nash himself had said in his 1947 Budget, were causing serious anomalies in the price structure. Mr Bowden said egg marketing had ■ so improved that there was less need]

list Night (PA). —’Urgency was lates in the House* of Representa>r Economic Stabilisation was deli opportunity to refer to the costs ’eminent for rises in those costs, ice (Mr. Nash) said that subsidies their removal was as cruel as it for transferring eggs to Wellington and Auckland. Mr Bowden said the whole question of the cost of transferring eggs from cne area to another was being discussed at the present time, and it was ridiculous to say the whole poultry industry was suffering from the removal of the subsidy. OVERSEAS INCREASES The Minister said many increases in clothing prices were due to overseas increases beyond the Government’s control. The price of pelt? and hides to New Zealand tanners was still being subsidised by the producers themselves. Apart from overseas cost factors in many classes of goods, New Zealand was today paying the penalty lor the mistakes of the Labour Government. Opposition voices: What rot! Mr Bowden said he hoped the committee which had been investigating the gas industry would report to him in a few days. Mr Skinner said the Minister had claimed eggs were now plentiful, but it was easy to fiiake things plentiful by allowing them to become too dear for many people. Mr Anderton (Opp., Auckland Central) claimed that some households were paying another 35s a week for necessities since subsidies were removed. Wage increases had not compensated for that.

The Minister of Agriculture (Mi Holyoake) said not an ounce of unsubsidised wool had yet been bought by New Zealand mills. Mr Anderton said that apart from higher wool prices the removal of the subsidy would mean an extra 4s 6d for a girl’s cardigan and an extra Is 6d for a pair of men’s hose. Mr Kearins said wage and salary earners were being pushed “completely down the drain” by the Government’s policy. The increases in prices which had already taken place were nothing like those which would come in the next nine months. The Government knew that and felt concern, but was incapable of doing anything. Probably its attempted solution would be to appreciate the exchange rate eventually by 25 per cent.

Mr Sheat (Govt., Patea): Bunkum! Mr Sheat said that while Australia was enjoying a high income from her main exports, wool and wheat., New Zealand's main exports, meat and dairy produce, had been held down to fairly low prices through the “rotten arrangement” made by the last Government. It was, therefore, too silly for argument to suggest the present Government would appreciate the exchange, thereby decreasing cfui export income still further. N.Z. SELLING PRODUCE MORE CHEAPLY Mr Sheat said New Zealand was selling her produce today more cheaply than any other country. As for .wheat, we did not deserve a cheap loaf in New Zealand because the Labour Government nearly killed wheatgrowing by importing high-priced wheat while refusing local growers an adequate price. Now the same people, who nearly killed wheat production in the Dominion, were squealing about the price of bread. Mr Moohan said household economies had been disrupted by the Government’s betrayal of its pre-election pledges. The burden had been thrown on the poorer sections of the community. Was the only remedy to be an uncontrolled spiral of wages, social security benefits and prices? Mr Maher (Govt., Otaki) asked if the raising of freights, due to the slow turn-round of ships, had not contributed to higher living costs. Mr Bowden said a subsidy on fertilisers and lime had been continued because of their 4 importance for pro-

duction. and because the railways had been unable to handle all supplies for . farmers, and had had to call upon J road transport, to assist in the task. J Mr Nash said that the Government J had given a pledge to the people to .[bring down the cost of living. Mr Johnstone (Govt., Raglan): And Jso it will. Mr Nash: There have been major increases in prices, greater than in any corresponding period in the country’s history. The taking off of subsidies is as cruel as it is unfair and . unnecessary. The benefits go to those , people who do not need them. I Mr Chapman (Opp., Wellington ’Central) said that the lifting of subsidies had a “most damnable” effect 'on those with low incomes. j Mr Sutherland (acting-Chairman ,of Committees): I think the honourable gentleman has a better choice of ' language than that. 1 Mr Chapman: My language is suitable >o the occasion. On Mr Sutherland’s insistence he amended his expression and said the 'Government’s action was regrettable lin the extreme. “Everyone knows what I mean,” added Mr Chapman. MINISTER WANTS STATEMENTS CHECKED Mr Chapman said the he knew of , many cases where age beneficiaries [had to be assisted through charitable .organisations to buy coal supplies. I The Minister of Health (Mr Watts): ; Whaf organisations? I Mr Chapman: The Red Cross. Mr Watts: I will have a look at 'that. , After Mr Chapman said that he per- ( sonally had assisted some people, and being pressed by Mr Watts to say , how many cases had been assisted by I the Red Cross, Mr Chapman said that ; he knew of six. j Mr Watls: Have you got five pounds of coal in the last six months? | Mr Nash: This is a cross-examina-tion. ! Mr Watts: I will see that this is cheeked up. 1 Mr Anderton said that the interim wage order increase of the Arbitration Court was insufficient, for a man jto maintain his wife and four chll- . dren when the cost of living for a | family of that size had increased >y

up to 35s a week. All the essential commodities were costing more. Mr Kidd (Govt., Waiipate) said the present Opposition members should be the last to stand up in the House and talk about the cost of living and shortages. He know of a young couple who came to Wellington after their marriage and were unable to buy either wood or coal when Labour was the Government. “They had to break up their sideboard for firewood,” he said. Opposition members, in a mixed chorus of sceptical laughter and protest, cried: “Oh, no!” and “TaN w another!” Miss Howard (Opp.. Sydenham) said conditions were rapidly returning to those of before 1935. Things such an bacon and eggs were becoming luxuries for the workers, who could no longer afford them. We were returning to the old division between workers on a low standard of living and lhe rest of the community on a much higher standard. The vote was passed.