THE TOBACCO INDUSTRY.

Auckland Star, Volume LXI, Issue 286, 3 December 1930, Page 4

THE TOBACCO INDUSTRY.

EFFECT OF LEGISLATION. BENEFITS TO COMMUNITY. In the annual report of the National Tobacco Company, the effect of the new Customs tariff is adversely criticised. The new tariff, as originally drafted, increased the excise duty on New Zealand manufactured cut tobacco from 1/8 to 2/8 per lb, while reducing the import duty on foreign leaf from 2/ to 1/ per lb. Representations to the Government that the existence of growers would be threatened by having to meet American competition on such terms resulted in the excise duty being left as before, but the import duty on foreign leaf was increased to 3/ per lb. The chairman of directors, Mr. Husheer, eays:—

"The limitation clause, however, defeats the object for which the increase was meant, namely, more revenue, and it favours again the manufacturer who uses wholly or mainly foreign leaf to the extent of 1/ per lb. Another weak point concerns the duty on imported manufactured tobacco, which has not been adjusted in proportion to the duty on raw leaf. Such manufactured tobacco is allowed to enter New Zealand at the old duty of 4/2 per lb, which is 6d less than the aggregate customs and excise duty. It would thus be cheaper to import ilio ready manufactured article than , to manufacture it here on the spot. The outcome cf numerous appeals for redress has been the appointment of a Parliamentary Committee with the object of investigating the position." Of the company's operations Mr. Husheer says: "Tobacco the woi'ld over ie one of the greatest revenue producers, and so it is in this country. Though the Customs may have registered a shrinkage in the receipts, the industry has contributed handsomely to their takings. We alone have paid the Customs in excise and import duties a total of £124,490 for the last financial year, but this amount, provided our turnover remains the same, will be larger by at least £15,000 at the end of the current year, when the new tariff will have been operating for the full twelve months. These are our direct contributions to revenue, but we- are benefiting the country in many other, directions by helping to keep kindred industries going. We are spending every year more than £30,000 on tins, canisters and other packing material; £35,000 in wages and salaries, £6000 in railway freights, and we have paid over to growers last year in the vicinity of £50,000 for New Zealand grown leaf. The item of packing cases made of New Zealand timber amounts to £3000, and we are using many tons per month of wrapping paper made by New Zealand Paper Mills, while large amounts are paid out to printers supplying us with millions'of labels and wrappers. And on top of all this the Commissioner of Taxes will claim from Uβ this year £17,000 for income tax. Therefore, whatever the shrinkage irf duties on imported tobacco may amount to, the Government gets full compensation through the benefits *t derives in an indirect way.