WORLD IN FLUX.

Auckland Star, Volume LXV, Issue 162, 11 July 1934, Page 9

WORLD IN FLUX.

TOWARD NEW ORDER. EFFECT ON NEW ZEALAND. MAIN ASPECTS OF POLICY. (By Telegraph.—Parliamentary Reporter.) WELLINGTON, this day. Dealing with tariff and world conditions when introducing the Customs resolutions, Mr. Coates said that a significant paragraph in the early part of the report of the Tariff Commission read:—"The recommendations in the present report are based on the assumption that the present world depression, and the trading restrictions arising peculiarly out of it, will pass, and that World economic life and international trade, will be restored in substantially the same form, and governed by sub■tantially the same principles, as prevailed before the depression. "I quote this," said the Minister, "not fo call it in question or to provoke a debate on it, though it is a paragraph which could provide ample material for useful discussion, but to illustrate the fact that there are factors of pressing importance which must be taken into account when we are considering these matters, and factors which by the nature of things could not have been within the contemplation of the Tariff Commission when it was sitting. "It is impossible to consider the tariff without having regard to world conditions and the alterations which have taken place during recent years in the commercial and economic policies of the United Kingdom and the other principal trading nations of the world. The most striking characteristic is the development of a policy of nationalism, based on the idea or more self-sufficiency. With this object in view, one nation after another has adopted devices by which trade is regulated to a much greater extent than obtained before the period of world depression.

'•'The world is in a state of flux. Changes of perhaps far-reaching nature are taking place before our eyes. Every day the probability of restoring the old pre-war world grows more remote. It is an inescapable fact that we are moving on towards a new order. As to precisely what that order will be, none of us can honcstlv pretend to be dogmatic. We can onlv do our best to keep ourselves informed of the trends and to keep in step with developments. The Future. "For the purposes of the Tariff Commission's report, it was. of course, impossible that they should foretell the future course of events. They could not. any more than any of us can, safely assume' that this or that change will be permanent. Instead, they di(T the useful and houe&t thing, as I nave

'shown in the quotation from their report, of making perfectly clear and explicit to themselves and to others the assumption on ; which the report is based, and it is the simple assumption that international trade will return to substantially its former condition. "It is well that this assumption should be made clear. And it is important to say that its corollary is that, to the extent that it does not prove to be warranted, we may, and indeed must in some instances, review some specific recommendations. Again, in saying this, I make it clear that, except to the extent that can be clearly shown to be warranted, we will adhere to the recommendations of the Commission. "New Zealand, although a country with a relatively small population, has a very large external trade, upon which it is vitally dependent to discharge its external obligations and to carry on its national life. The tariff, therefore, must be considered not only from the point of view of encouraging production for local consumption, but also of developing markets abroad for our exportable surplus. Another and very important matter which must be born,© in mind when our tariff is under review is the revenue required to carry on the government of the country. Policy of Government. "The main aspects of our fiscal policy can therefore be dealt with under four heads:—The development of local industry; the maintenance and extension of markets for our products; the encouragement of intra-Empire trade; the obtaining of revenue. "In at least two Important respects the present revision of the tariff is undertaken under conditions different from those which existed when previous alterations have taken place, viz.: (a) The Ottawa Agreement of 1932; (b) the world-wide depression in trade and industry through which practically all nations are now passing; and (c) the necessity of obtaining new markets for our exports and maintaining existing markets. These factors are necessarily taken into consideration when reviewing the whole problem. "The policy of the Government with reference to the tariff may be stated as under: —

"Development of local industry: (1) To accord protection only to those industries regarded as suitable to New Zealand; (2) to grant protection only to tho extent necessary to enable local industries to function efficiently; (3) to give effect to the Ottawa Agreement so far as it relates to the New Zealand tariff; (4) to give employment to pur people; (5) to keep down costs of living and costs of production; (6) to admit raw materials for primary and (secondary industries at as low a rate as possible. i "To use the tariff for the purpose of maintaining and extending markets abroad for' our products. "To encourage iritra-Empire trade. "To obtain revenue." The Schedules of new duties are published on Page 12 and Tariff I comment appears on Page 10, overleaf, i