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Wednesday, 25 June 1930

An Instructive Discussion at the National Convention.

At the National General Convention, last month, Mrs. E. F. Canning moved and carried a motion that " The cost of wheat should regulate the price of bread." The discussion brought out many details that proved very informative and interesting to a large audience.

Mrs. Canning prefaced her remarks by saying that, in her opinion, the price of bread was out of all proportion to the cost of wheat and that bread should be cheaper to the consumer." The price of flour to-day," she said, " is £11 10s. a ton. The price of mill offal - i.e., bran and pollard - is £7 10s. a ton. A ton of flour makes approximately 1,400 loaves of bread. Hence, a loaf at6d. equals a return of £35 a ton to the baker. At Bondi, Newtown, Redfern and other industrial areas, bread is being sold at 41/2d. a loaf, or two loaves for Sid., while the householders in other areas pay 6d. a loaf.

TheCase for the Bakers.

Among the delegates to the convention was

Mr. FrederickReed, of Croydon, a master baker of long experience and high standing in the trade. He explained the position from a different viewpoint, taking his hearers back ten years, when the Profiteering Prevention Court fixed the price of bread at63/4d. per 2-lb. loaf for cash. The price of flour then was from £19 7s. Cd. to £21 2s. 6d. a ton - an average of £20 5s. a ton. Since then, he declared, the price of bread has been fixed to accord with the decision of that court.

The variations have been influenced by changes in the price of flour, wages, altered working hours, payment for holidays, workmen's compensation, child endowment, and costs incidental to increased prices of goods used other than flour. For instance, whereas in 1921 bakers' wages were £5 3s. 6d. a week of 441/2 hours and carters' £4 17s. for 54 hours, they now are respectively paid £6 8s. 6d. for 44 hours and a week's holiday on full pay and £5 8s. 6d. for 48 hours and a fortnight's holiday each year.

In 1926 the Lang Government passed the Day Baking Act, and this again inordinately increased the price of bread.

Mr. Reedfurther stated that from 1921 to 1930 the price of flour had been reduced by £8 15s. a ton. In the same period the reduction of1d. a loaf was relatively equal to £5 10s., but the increase in wages and alterations in conditions involving expense were equivalent to another £3 5s. 6d. a ton of flour. There was, therefore, a comparative loss to the baker, even though only a small one; but as carters' wages have since been reduced by 2s. 6d. a week a drop of 10s. in the price of flour will enable bakers to charge a farthing a loaf less, and they admit that now they have a slight advantage.

Referring to the companies quoted by Mrs. Canning, Mr. Reed said he had positive information that one of these did not average more than 61/2 per cent, in dividends, while another bread-making firm, it was well known, lost £7,000 during the year ended, 30th June last.

In conclusion, Mr. Reed said that the actual manufacturing cost of bread was 3.04d. per 2-lb. loaf, plus 1.88 per loaf for delivery, .33 per cent, for rent of bakehouse or interest in lieu thereof, making a total of 5Jd. per loaf. And he added : " Surely 5}d. cannot be regarded as exorbitant, particularly when it is known that a discount has to be allowed to institutions, colleges, &c." " Bread can," he declared, "be purchased in Sydney at less than cost."

These figures will bear examination, and I hope that those honorable senators who propose to use the argument to which I have referred will rebut them, if they can. I have said that in my judgment this scheme should be examined as if we were an economic committee. I propose to make another and final quotation. It is from one of a series of articles published by Professor Copland in the Melbourne Argus of the 28th, 29th, 30th and 31st May last. Dealing with the subject of wheat marketing, he said -

What, then, should be the measure of relief afforded to wheat-farmers at the present time? The first and simplest method is to allow the exchange rate to rise to its " natural " level. Every increase in exchange would give an additional bounty to exporters, and wheat producers would thus be relieved of some of the disparity between costs and prices. Secondly, the Government might announce that it was prepared to grant assistance without disturbing the prevailing marketing methods. This could be done in the following way: - Let the pools and merchants proceed with the marketing of wheat in the usual manner. If on the completion of the sale of the wheat the pools showed a return to the farmers of 3s. 9d. a bushel the bounty payable to all growers, whether members of pools or not, would be 3d. a bushel. The Government might give such assistance to a maximum of Gd. a bushel, and any favorable movement in prices or freights would reduce the bounty required. Such a proposal has many advantages. It maintains the present marketing methods without favour to pools or merchants and without disturbance of prevailing financial arrangements; it avoids the necessity of making a doubtful experiment in compulsory pooling; it reduces both the inequalities among the States and the indirect economic effects to a minimum; it eliminates the need for an artificial Australian price; it is a temporary measure, because it involves taxation; and it keeps down the financial assistance to the minimum required in the circumstances. Alternatively it is open to the Government to offer a straight-out bounty of not more than 6d. a bushel.

I have not by any means exhausted all that may be said regarding the bill. I have expressed my individual views; other members of the Opposition must speak for themselves. If the motion for the second reading of the bill is put to the Senate I shall vote against it, but I wish to have an opportunity of testing the opinion of honorable senators on the desirability of a bounty as against a guaranteed price for wheat and a compulsory pool. In order to do that, I move -

That all the words after the word "That" be left out with a view to insert in lieu thereof the following words : - " in the opinion of the Senate, in order to give definite encouragement to the growing of wheat, and to avoid the disadvantages and difficulties of a compulsory pool, the bill should be withdrawn, and a bill be introduced providing for the payment of a bounty up to an 'amount not exceeding 6d. per bushel on all wheat of the 1930-1931 crop of f.a.q standard, delivered at prescribed points of delivery within the Commonwealth.

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