PRIMAGE DUTY.

Auckland Star, Volume LX, Issue 257, 30 October 1929, Page 12

PRIMAGE DUTY.

LEGISLATION PASSED.

MODIFICATION ANNOUNCED.

FOODS AND FERTILISERS.

EXTRA IMPOST CEASES MARCH 31

(By Telegraph.—Press Association.)

WELLINGTON, this day.

The House of Representatives passed tlie Customs Amendment Bill, which doubles the primage duty, early this morning. Amendments moved by the Reform party were defeated. When the bill was introduced Hon. G. W. Forbes, Acting-Leader of the House said that members would recognise that the end of the session was approaching, and lie thought they would ■wish to get through the business as soon as practicable. The Government had 110 desire to force the business through, but it wanted to get on with it.

The Leader of the Opposition, the Rt. Hon. J. G. Coates, said that the Reform party did not care if the session continued till Christmas if the interests pi thecountry were at stake. The Hon. W. D. Stewart (Dunedin West) and Mr. D. Jones (Mid-Canter-bury), suggested, after the bill had been read a first time, that further stages should be deferred till 7.30 p.m. to enable the Opposition to consider the position in consequence of any statement made on behalf of the Government.

Prime Minister's Concessions,

Mr. Forbes agreed to this course, and ho made the following statement on behalf of the Prime Minister:—

"In his speech in the Financial Statement debate the Prime Minister, referring to the proposal in the Budget to impose on all imported goods an additional primage duty of one per cent, stated that he hoped the proposed increase of duty would be of a temporal"} nature and that when the financial position permitted £he former rate of primage duty would be restored. After careful consideration, the Prime Minister desires to state —and in this decision the Cabinet has concurred—that in regard to foodstuffs and other groceries which are enumerated in schedules to the and also in respect of fertilisers, the extra primage duty will terminate at the end of the present financial year. •

"With respect to other goods, power is being taken in the bill to terminate the extra duty il and when the financial position justifies such a step. The Prime Minister hopes that these concessions •will be appreciated by the House and the people generally, and particularly by the farming community, in so far as the concession relates to fertilisers."

Mr. A. M. Samuel (Thames) contended that the statement did not disclose any concession, but a further imposition, in that the increase was to be lifted only from certain goods at the end of the present financial yetfr. ' \ , Mr. Coates, Mr. J. A. Young, and Mr. Jones urged that the Government should make a statement as to the half-year's financial, position, so that the bill could be discussed in that light. „ Customs Comptroller's Statement. The Hon. W. B. Taverner read a communication from the Comptroller of Customs, Mr. G. Craig, dealing with the estimated Customs revenue for the year. Mr, Craig stated It would be recognised that owing to the many varying factors which had to be taken into account it was. practically impossible to do this with any. degree of certainty. "The chief items : of revenue are spirits, tobacco, cigars and cigarettes and motor vehicles," stated Mr. Craig. "The revenue so far received on spirits- during the present financial year has been greater than that collected during the corresponding period of the year 1928-29. This was: expected, owing to lower clearances during the latter year on account of the abnormal quantities entered for home consumption prior to the introduction of the .tariff of 1927. As a matter of fact collected on spirits during the period mentioned is less than that received during 1926 (the last normal year). This bears out the view- tnat the consumption of spirits is gradually decreasing. There has been a slight decrease in the duty collected on tobacco, cigars and cigarettes. This is due to the increased''local manufacture of tobacco at a lower rate of duly rather than to decreased consumption.

"With respect to motor vehicle's, considerably more vehicles were imported during the first six months of the present year than in the corresponding period of 1928. It seems evident, and inquiries ■which have been made verify the opinion, that importations during the remainder oT the year will be considerably Jess than during the same period of last financial year. With respect to. other goods, it is remarkable that increased importations consisted largely of free iteni3, such as manures and raw materials.

"Importers < and banking and other financial authorities who have been consulted are not optimistic as to the likelihood of increased importations during the • remainder of the year. This is attributed, inter alia, to probable lower prices this year for some of^our'primary products, tha't is, wool and .meat, the increase in the bank rate in England and slackness in trade in New. Zealand, due to a variety of caUses."

"In view of.; the; above it seems t'o me that, looking at the matter in-the-light of the information a, present available, the Customs revenue likely-to be c9llected during the financial year .1929-30 should be estimated at £8,450,000. This, estimate is based on the assumption that the increased primage duty of 2 per cent ad valorem will be levied during: the remainder of the year."

Mr. Taverner mentioned that the estimate of £8,450,000 exceeded the original estimate in the Budget by £50,000. He pointed out that the revenue would have been £250,000 down had the primage increase not been effective. "Perfectly Justifiable Tax." When the House met at 7.30 Mr. Taverner, in moving the second reading of the bill, said the tax that the bill was' desigped to impose was perfectly justifiable. The i'rime Minister . had stated in the Budget that it was i not anticipated that sufficient revenue would be obtained from land taxation... to balance the Budget, and that an increase in the primage duty would be the manner in which the additional burden would be leas.t felt. It. was expected that it would produce £300,000. The Government had to find some means of increasing revenue in as widely a diffused manner as possible. Other avenues had been explored, but it had been found that the simplest and easiest way as far as the burden on the taxpayer was concerned, was the method that had been embodied in the bill. r. '' " V': 1 , ,

Reform Leader's Views. Mr. Coates said the Opposition had to be thanked for the concessions that had been included in the bill. Had it not been for the efforts of the Reform party a.casual bill would have been introduced, leaving it to the sweet will of the Government to choose its own time to remove the increase by means of Order-in-Council. He expressed appreciation, however, of the extent to which the Government had gone to meet the demands of the Opposition. He criticised the Government for not having placed at the disposal 62 members a statement covering the whole financial position for the half-year, and said he considered it had failed in its duty in not placing before the country such a statement, to prove the necessity for increased primage duty.

Mr. Coates asserted that all Government Departments were inclined to be conservative in their estimates, and that it only required the present rate of increase in Customs revenue to continue for the' estimate to be exceeded by £300,000. He said he believed that if the Government did require additional revenue it had adopted the wrong process, and lie would, therefore, move as an amendment, "That on the assumption that increased revenue is required from Customs taxation, in the opinion of this House such increased revenue should be obtained from taxation of luxury items, particularly of foreign origin, and not of articles affecting the costs of living and production."

Mr. A. Harris (Waitemata) expressed the view that a general increase in primage duty would continue until a change of Government eased the burden on the working people. He did not consider that additional taxation was necessary, but if it were lie suggested that the Government would be wise to substitute increased duty on foreign motor cars and foreign films. Such an increase would be as easy to impose and as easy to lift, "A Motion of No-Confidence." Mr. Forbes said the Government could not accept the amendment, which it must take as a motion of 110-confidence. 111 regard to the criticism of the Government's failure to furnish the half-year's financial position, he stated that the Treasury had been approached, but had .advised that the statement could not be released until.the auditing had been completed.

Mr. H. R. Rusliworth (Bay of Islands) said that indirect taxation was the most extravagant form tiiat could be imposed. It cost the country £3 to-day for the Government to collect fl in that way. He suggested that all avenues of increased revenue had not been explored, and he referred in particular to income tax and license fees for the sale of liquor. He contended that the primary producer to-day was bearing the cumuJative effect of the increased burden. Other sections of the community could pass the advance on, but the exporting primary producer, who had to compete in world markets, could not. . Labour Party Supports Bill. Mr. H. E. Holland said the Labour party had always been opposed to Customs taxation for revenue-raising purposes. The amendment only substituted another form of Customs taxation. The Labour party asked the question over and over again, whether the Reform party was sincere in its attitude. It had. never been prepared to remove the original 1 per' cent primage. The Labour party had made its representations to the-Government, and its request had been partly met. It had desired the removal of the primage duty from all necessaries of life, and substantial concessions had been granted. Its attitude in relation to Customs was sound. It believed that where goods could be produced in this country there should be sufficient protection, through a Customs duty, to prevent killing the local industry. Mr. Rush worth had stated that anyone who voted against the amendment was not a friend of the working farmer, but he asked was anyone who placed the Reform party back on the .Treasury benches the friend of the working'farmer? The most charitable view he could take of Mr. Rushworth's statement was that he had not realised that the result would be the return of Reform.

Mr. Rush worth: Why not you? Mr. Holland: Because I have not moved this amendment.

(Mr. Holland's remarks are further reported iii another column.)

Mr. Jones declared the House was witnessing the spectacle of the United party joined by Labour in increasing the burden on the farmers and the working people of New Zealand and leaving the wealthy people alone.

The debate was continued by Messrs. Young," H. Holland, Ansell, Samuel, Hall, Kyle, Waite and Nash.

The Division List

A division was taken on the amendment at 12.40 a.m., and it was rejected by-43 votes to 23. The division list is as follows — Against the Amendment (43). Armstrong McDonald Atmore McDougall Black McKeen Bodkin ' Makit'anara Broadfoot Mason Charaman Munns Clinkard Munro Cob be Murdoch De La Perrelle O'Brien Donald Parry Fletcher Poison ' Forbes . - **''< Ransom Eraser Savage Hawke \ Sempie Healy Smith Hogan Staihvorthy Holland, H. E. Sullivan . Howard Taverner Jenkins Veitch Jordan Wilford Lye Wilkinson ; McCombs '• , : For , the Amendment (23). Ansell •• Lysnar Campbell Macmillan Coates Massey Dickie Nash yield Rushworth Hall Samuel Hamilton Sykes Harris \va'ite H, Holland Williams Jones Wright Kyle • Linklater Mr. Taverner then replied, and on a division the bill was read the second time by 43 votes to 22. The House went into committee on the bill. A division was taken on the clause increasing the primage duty, and •it was retained by 41 votes to 23. Mr. Rushworth moved an amendment to clause 3, granting concessions with respect to. foodstuffs, groceries and fertilisers, to the effect that the increased primage duty should not apply to any goods after March 31. Thn was ruled out of order as a direct negative.

The House then completed the committee .stage without further opposition, and the bill was read a third_ time and passed.-The House'rose at 2.5 a.m.