TARIFF INQUIRY

Ashburton Guardian, Volume 53, Issue 204, 10 June 1933, Page 3

TARIFF INQUIRY

REDUCTIONS IN DUTIES URGED.

MANUFACTURERS’ EVIDENCE.

(Special to the “ Guardian.”)

WELLINGTON, June 9,

Further representations by importers for reductions in the Customs duties on imported articles were made before the Tariff Commission to-day. Leslie William Woolley, managing director of L. W. Woolley and Company, Ltd, made a plea for a' reduction of the duty on dictaphones and equipment. He said dictaphones were made only in America and had to bear the duty imposed on American gramophones. He also sought, a reduction in the tariff on load-o-meters, which were made solely in America and which were used for weighing heavy vehicles.

In answer to a question by Mr Gow, witness said a dictaphone would not record a musical performance; a gramophone was a much more elaborate instrument. In Australia dictaphones and appliances were classed as dictating euqipment. There' were about 1500 machines in use in New Zealand to-day, but the tariff was killing their importation. Load-o-meters were used only by the controllers of public highways. Up to now they had been treated as weighing machines, but they'did not purport to weigh accurately. About 26 meters had been sold in the last five years.

Clue and Gelatine. Paul Dolby Trickett, representing P. B. Trickett and Co., contended that the landing costs of glue and gelatine imported from England were excessive and detrimental to the community, in that the protection afforded the local product was too high- With the high rate of exchange it was casting 100 per cent to land English glue, and even ■yvith the exchange rate at par the protection to thje local manufacturer amounted to 70 per cent. Manufacturing printers considered that local glue was not suitable and was loading their costs unduly. Mr A. E. Manders, representing the New Zealand Manufacturers’ .Federation, asked if the New Zealand product was inferior in all cases. Witness ,said that bookbinders, for example, had stated that local glue was not suitably for their purposes. Mr Mander intimated to the Commission that there was to be an objection to the application, and also a request for the subdivision of the item.

Clocks and Kodaks. An application for a reduction of the duty on British-made electric clocks was made by James Rose Pay, representing W. Littlejohn and Co., Ltd. At one time electric clocks were made only in America, but there was now a thriving English industry, from which the output was 3,500,000 clocks a year. These clocks did not compete with any New Zealand industry. A plea for the revision of the duty on cameras was made by Alexander Beauchamp, managing director of Kodak, Ltd. Witness contended that the present duty was excessive and said that if a reduction was made sales would increase. He had no objection to the duty on' photographic lines remaining, but unless the duty on cameras was lowered sales would fall further.

Professor Mufpliy: Do you say if cameras are admitted free the loss in Customs will be made up by the increased sales of sundries?

Witness: I would go so far as that,

James Smith McArthur, managing director of the Dental and Medical Supply Co., asked for the reclassification of dental cliatrs at present under the heading of general furniture. He contended that chairs of British manufacture should he free. A duty of 20 per cent, plus surtax should ho imposed on the foreign article.

Effects of Exchange. 4‘lt is sometimes suggested that a downward alteration in the tariff should he made on account of the recent raising of the rate of exchange; I submit that this view is a mistaken onef” said Mr A. E. Mantler (general secretary of the New Zealand Manufacturers’ Federation), in continuing his evidence. “The present rate of exchange is either temporary or permanent in character. If it is only a temporary expedient, then surely it would he a mistake to take it into account in framing a tariff which, we hope, will remain in force for many years. If, on the other hand, the high exchange is permanent, it means that New Zealand has definitely adopted a new standard of values quite separate and distinct from sterling. If that is the position, then it is clear that the tariff should be based upon our own domestic needs in terms of our own new standard of values 'in the

Dominion. “It is sometimes suggested that the increased rate of exchange has afforded New Zealand industries some additional protection. To a superficial glance, this may appear to be so ; hut ' it is not so in reality. The 125 per cent, exchange lheans, of course, that the whole community is required to pay 25 per cent, on" the value of .the exports —roughly £8,400,000 —as a subsidy to the exporters. The additional burden unon New Zealand industries will offset, and probably, very soon, more than offset, any protective benefits of high exchange. “This appears to have been the experience of industries in Australia, that there for a short period some benefit to Commonwealth industries ' when exchange rose and caused an increase in the price of competing imports. But the increased cost of imported materials, together with the effect of high exchange on the general level of domestic prices and-money-values, very soon balanced the benefits.

Added Cost of Imports. “The increased cost to New Zealand manufacturers, resulting from high exchange, lies first in the 25 per cent, extra, cost of all imported materials. Almost every industry, including oven woollen milling and tanning, is obliged to obtain a substantial portion of its materals ovfy. - seas. This is true, of course, of every industrial country, including Great Britain. Most of these

imported materials are obtained* from British countries duty-free, but all have now been increased in cost by 25 per cent. The cost of material obtained in Nqw Zealand itself has, of course, also been affected; as there is a rough 'London parity’ ruling in regard to raw materials grown here. “Imported materials, capital charges, general overhead, wages, and taxation are all measured in terms of New Zealand currency. Manufacturing costs are therefore affected by exchange to at least the same extent as have the prices of competing imports. In other words, the raising of exchange has not had the effect of increased protection, when everything is taken into account.

“It should' he noted also that, although the rise in exchange has increased manufacturing costs generally, especially the cost of imported materials now loaded with exchange, the majority of New Zealand industries have not increased their selling prices. Even where nrices have been slightly raised, it has not been sufficient to cover the rise in costs. Internal competition -has been so keen as to prevent any juicli development. Tlie result is that industries have been forced almost to eliminate profit, and to effect economies in every possible direction, in order to keep prices down.

Duties Actually Decline. “Another important fact seems to have been almost entirely overlooked by those who argue that duties should be reduced because exchange has been raised. The fact is that all duties have been reduced by one-fifth. “Customs ‘ duties are assessed, not on the value of imports •in terms of the currency in which those duties are to be paid,' but in terms of sterling. Imports valued for duty at £IOO sterling, though actually worth £125 iu New Zealand .currency, pay duty on only £IOO. The duty is paid in New Zealand money, though assessed on the value of imports reckoned in English money. This is indeed a strange state of affairs; and it would be difficult to defend it on logical grounds. It.would be almost as illogical to. make a 20 per cent, duty payable (in New Zealand pounds) on the value of imports reckoned in dollars. “With imports valued for duty purposes at £IOO English money, and' subject to 20 per cent, duty payable in New Zealand money, the true rate of duty has been lowered to 16 per cent. That is, the ratio of duty to value is now 16 to 100 in English money; or 20 to 125 in New Zealand money. We cannot reckon an ad valorem duty taking one currency for the value of the goods and another currency for the duty to be paid.” The commission adjourned till tomorrow morning.