CUSTOMS INCREASES.

Auckland Star, Volume LXII, Issue 262, 5 November 1931, Page 3

CUSTOMS INCREASES.

PROBABLE YIELD, £1,300,000.

MINISTER DISCUSSES PROBLEMS. MANUFACTURERS SAFEGUARDED. I _ (By Telegraph.—Parliamentary Reporter.) WELLINGTON, this day. According to the Minister of Finance, the Hon. W. Downie Stewart, who moved the second reading of the Customs Amendment Bill in the House to-night, the additional duties, including excise, which it confirms, should bring an increased revenue of £1,300,000. It is estimated, when presenting the Supplementary. Budget, that the total Customs revenue for the year would be £6,750,000, but the revenue collected during the seven months of the present financial year was £3,171,429, or about £422,000 below the estimate for that time.

"It is impossible to read the future," added Mr. Stewart, "but taking into consideration the possibility of a continued increase in the prices of our primary products, there is some reason for believeing that relatively higher returns may be expected for the ensuing months of the year. The principal items included in the bill from which increased revenue is anticipated, and the additional amounts cxpected from those items during the portions of the year in which they will be in operation are:— Tea £92,000, sugar £210,000, tobacco £240,000, apparel and hosiery £86,000, silks and artificial silk £42,500, chinaware £30,000, floor coverings £18,500, motor spirit £180,000, other items £71,000, primage £180,000, total £1,150,000. The amount expected from the increased excise duty on beer is £150,000, making a grand total of £1,300,000."

Primage Duty. Referring to the clause imposing a primage duty of 3 per cent ad valorem on all goods imported from British and foreign countries which are otherwise free of duty, except on certain goods, the Minister said requests had been made for the exemption of other lines of goods from the primage duty, but owing to great pressure of work he had not yet had an opportunity of fully considering them. Power was contained in the bill to exempt by Order-in-Council, and he proposed as soon as possible to go fully into the requests. Australian Exchange. i Clauses in the bill enable a higher duty to be charged on Australian goods, in. view of the exchange premium. The Minister said the primary object was to protect New Zealand manufacturers, and the Government would later receive some revenue through income tax. That was the reason why it was decided that when an importer of goods was not the retailer or manufacturer he would be allowed to retain the exchange premiums, provided he came to an arrangement with the Department that prices would not be reduced on account of exchange benefits, and that he would sell to wholesalers and retailers only. "I am well aware that some members think this policy gave an advantage to certain importers over others," said Mr. Stewart, "but a little consideration will show that the main object in view was the safeguarding of New Zealand industries. There was a choice of two evils in dealing with the matter, and I think that the lesser evil chosen. When the dumping duty is claimed it is charged on the amount of exchange premium in excess of 5 per cent. It is recognised that in the country in which the currency is depreciating or depreciated, internal prices sooner or later adjust themselves to altered conditions." Imports generally have fallen about 42| per cent. It was interesting to note, said Mr. Stewart, that importations of the principal lines of goods of the class or kind made in New Zealand had decreased about 41$ per cent, which showed that the measures which had been taken had achieved the result aimed at. However, as certain chambers of Commerce and mercantile organisations doubted whether the present legislation warranted the action which had been taken, the Government had not had time to consider the course it would adopt after the clause became law, but it was intended that the whole' mat-Mr should be reviewed as soon as possible. I ■> Labour Objections. The opinion was expressed by Mr. M. J. Savage (Labour, Auckland West) that if the principle of the primage duty were carried far enough it would be futile talking any more about preferential trade within the Empire, because it destroyed the idea of British preference. No member would openly fight to destroy that preference, but a vote for the primage duty was a vote against the principle of British preference. The primage affected commodities for which the comparatively poor had to pay, and that raised the general question' of unscientific methods of taxatio'n for revenue purposes. From 1922 onwards there had been a growing tendency to reduce direct forms of taxation and to increase indirect forms, without taking into consideration the protection of local industries or otherwise. It was simply a matter of raising revenue. If, as some held, it was the comparatively rich who paid the bulk of the Customs taxes, it was logical to argue that money should be-collected straight out from them by the Commissioner of Taxes. |f Mr. Stewart: We are taking it both ■^ays.

Mr. Savage: Yes, but we are reducing the direct taxation paid by the comparatively rich, and increasing the indirect taxation paid by the comparatively poor.

"You would not have ahy revenue taxes?" asked Mr. Stewart.

Mr. Savage: Frankly, not from the Customs, excepting to the extent that would foe necessary to give protection to deserving local industries atid effect the principle of British Empire preference. Mr. Stewart: What about luxuries and whisky? Mr. Savage: I would pass that over to my colleague, the member for Lyttelton. (Laughter.) I don't think you can control the consumption of any form of liquor by taxes of that description. He considered that Customs taxation designed to protect New Zealand industry or to give effect to British pieference was. justifiable, 'but it was difficult, if not impossible, to defend it for straight-out revenue purposes when the direct form of collecting revenue through income tax was available.