REDUCED DUTY.

Auckland Star, Volume LXV, Issue 224, 21 September 1934, Page 15

REDUCED DUTY.

FOOTWEAR INDUSTRY.

NEED OF RATIONALISATION. COMMENT BY MB, COATES. (By Telegraph.—Parliamentary Reporter.) WELLINGTON, this clay. Strong protests against the reduction in the amount of protection afforded the New Zealand boot industry were voiced in the House of Representatives last night, when an amendment was moved by Mr. F. Jones (Labour, Dunedin South) to restore the tarifl on imported boots to the original 2.5 per cent. It was defeated by 39 votes to 28. During a protracted discussion the Minister of Customs, Mr. Coates, declared there was room for much reorganir sation ill the boot industry, and he suggested that some form of rationalisation would have to be adopted. In opposing the amendment Mr. W. J. Poison (Government, Stratford) said that if the benefit the industry had received from the 25 per cent exchange had not placed it on a sound basis it was difficult to understand how an increased duty was to do that. Actually the industry had had too much protection, and the effect had been to create a number of small factories all through the country, -few of which were efficient! Another effect had been to increase the cost of both imported and locally-made footwear, and this had placed an extra burden of £1,000,000 on the consumer, a sum in excess of the industry's total wages bill. Ho was not suggesting that the industry be shorn of its protection, but lie did say that it had too much protection, when, taking exchange and other factors into consideration, it amounted to 75 per cent. Mr. E. McKeen (Labour, Wellington South) said that if the efficiency of an industry were to bo judged by the amount of assistance it received what would be said about the farming industry, which had received £1,000,000 by way of subsidies on fertilisers, and £9,000,000 from exchange? i '.'Margin of 1 Per Cent." Challenging anybody to say the boot industry was not right up to date, Mr. H. Holland (Government, Christchureh North) declared it was working on a margin of 1 per cent, and the extra 5 per cent protection was not a trivial matter. Manufacturers werj not afraid ,oi competition from Great Britain, but they were afraid of competition from Atistralia, in whose case the. exchange rate would not operate. j Mr. C. A. Wilkinson (Independent, Eginont) said the reduction was timely. boot industry had been in existence 40 years, and if it had not managed to get on a proper footing in that time, how could it ever hope to do so? Mr. H. T. Armstrong (Labour, Christchurch East) said whereas New Zealand had a protection of 20 per cent Australia had a protection of 50 per cent, with the.result that if a New Zealand factory had a surplus stock of boots it was not able to disposo of them in Australia. On the other hand, Australia was able to send lier surplus boots to New Zealand. Mr. Coates said Mr. Armstrong was not correct in his statement that there was a variation in the duty as far as trade between Australia and New Zealand \vas_conccr.nfid. ...Under the agreement with Australia there was 3u per cent protection both ways. Many representations had been made, both to the Tariff Commission and the Government, by boot manufacturers, and a "■reatdeal of investigation had been carried out since the commission rcporte.l. The whole point" was that unless the industry were prepared to carry out ths necessary reorganisation it could not expect much assistance. Indmdual factories were- efficient, but others were not, and were in need of some system of rationalisation. Wage Reduction Not Suggested. Mr D. G. Sullivan (Labour, Avon): Do you mean that there should be a further reduction in wages in this industry? ,„ Mr Coates: Not at all. Wages in these days arc not always a big factor. I must say this country is not going u> carry inefficient industries. If there n to be room for industry many of the difficulties at present existing have to be removed. There are many members who think they may be doing a good turn for industry by advocating protection, but actually they may bo doing a bad turn. It is necessary to exercise great care in such a case as this. Mr K A. Wright (Independent, Wellington Suburbs) s?aid it could not be said that the industry was inefficient. The boots produced in New Zealand were generally very good, and in many cases first class. , ~ , Mr W E Tarry (Labour, Auckland Central) said rationalisation was only a ma-nc word, and not a solution, unless there, was a reduction in the- hours of labour in order to absorb those who were displaced by the, so-called organisation. The reduction of the duty from 25 to 20 per cent was approved.