TOBACCO DUTIES.

Auckland Star, Volume LXI, Issue 172, 23 July 1930, Page 11

TOBACCO DUTIES.

IMPORTANT REVISION.

T<ss'Jf[ELP LOCAL INDUSTRY.

BIG GROWTH IN RECENT YEARS.

,(By Telegraph.—Parliamentary Reporter.)

WELLINGTON, Tuesday.

The great development of the tobacco and cigarette, industry in New Zealand has meant a- serious loss •in Customs revenue, which the Government proposes to make good by increased excisa duties;

The Prime Minister to-night quoted details of tobacco and cigarette production the, Dominion, showing that it had risen from 405,3061b in 1925 to 1,550,9571b laet year. "The quantity of tobacco and cigarettes manufactured in the Dominion has thus increased by over 275 per cent," he said. "The loss of revenue on these articles during 1929 was over £150,000, which represented ibout 10 per cent of the total duty collected, on tobacco during that year. Further, the duty on raw tobacco is supposed to operate eo that the local farmer may receive a protection of 2/ per lb. According to information hi my possession it appears that some years ago he ictually received less for his product than the amount of the protection, although I understand that the average price now obtained by the grower is ibout 2/2 per lb. There is evidence to jhow that in certain important lines at least the percentage of New Zealand leaf used has decreased from about 70 per :ent to about 50. Concession Not Effective. "The only inference which can be Irawn from the facts is that the concession which has been obtained by the manufacturer has not had the effect of inducing him to increase the quantity of New Zealand leaf used, which in turn das adversely affected the tobacco farmer. When it is realised that the average price at the port of export from the United States of leaf tobacco imported into New Zealand is about 2/2 per lb, it will be recognised that something must be done to place the matter m. a more satisfactory footing. In an 3ndeavour to remedy this state of affairs it is proposed to reduce the duty on' imported raw leaf tobacco by 1/ per lb and to increase the excise duties by this imount. Effect of Alterations. "The effect of these alterations will be best seen by considering $e duty on locally-manufactured cut tobacco under the old rate and the new. If a manufacturer who now uses half local and half imported leaf were to so increase the quantity of New Zealand leaf that tie used only the local product, he would pay practically the same duty as he does now. If, t>n the other hand, such a manufacturer desired to continue the use of the same percentage of imported leaf the total duty payable would be increased from 2/8 to 3/2 per lb. It is believed that this will result in the use of a greater. quantity of New Zealand leaf. "It is considered that the concession at present granted on locally-manufac-tured cigarettes and cigarette tobacco is too great, and it is proposed that about one-half of. the concession thereon should bg gsgthdwwQj*