CRITICISED.

Auckland Star, Volume LXX, Issue 33, 9 February 1939, Page 13

CRITICISED.

CONTROL OF IMPORTS. REASONS FOR OBJECTIONS. CONFERENCE VIEWS. (By Telegraph.—Own Correspondent.) WELLINGTON", this flay. A further statement on the Import Control Herniations, I!KiS, lias been issued by the Importers' National Committee. It reads:—■ On behalf of the national conference of importers vvliicli appointed us. we have jriven a reasoned reply to iiie | speech Of the Minister of Customs and Finance in which lie presented the ease for the Government on the import control regulations. Our next duty is to explain to the cmiMimiiig public the objections of the conference to the import selection scheme, and the reasons for those objections. These are as under: — (1). The New Zealand Government i* the only Government in the British Kmpire to banish freedom of exchange. Th.it. in itself, is deplorable, and is pllbliclv branded as sikTi liy responsible British opinion outside New Zealand. (•2). Tin! extreme steps taken by the Government were more than were necee-r-ary to ensure tlie conservation of sufli-i-ient funds in London to meet national debt commitments. Importers fully appreciate the fact that, in order for the country tn be able to provide sufficient funds in London to service the national debt, imports will have to be less., but there is a vn«t difference between (a) importer.* left tree, as individuals or individual concerns, to make the best thev cull of fewer funds for imports, and (l>) the Government stepping into the field and sayinjr, by arbitrary decree, how the N'ew Zealand market is to lie served, by importations, and to what extent, find from what countries, and by what firms. Not a Fighting Chance. Tn past periods of national financial stress, when importers, left free to exercise their skill, resource, and knowledge of the market, nevertheless failed to survive—finished, perhaps, in the bankruptev court —they did not blame the Government of the day, or seek compensation from the State. Under those conditions they had a fighting chance; but to-day, under the present control scheme, there is no chance whatever for an importer who is told by the Government that he must go out of business because the State says eo. If the Government assumes, the function of cutting the ground from under the feet of individual importing concerns, then it must shoulder the responsibilities that go hand in hand with the exercise of such extreme powers of interference. (3). Sudden and extensive unemployment, for both importers and their employee.*, will result from the operation of the import selection scheme. The complacent contention by the Government that employees in importing concerns who lose their livelihood will find re-employment in secondary industries cannot be proved to any satisfactory degree. (4). It is wrong and unjust for one section of the community to be penalised for what should be the concern of all. Since the country, in the financial difficulty that has arisen, must bring in fewer imports, then (if reputation by the Government is to be conceded), why does not the Government state by what percentage imports jnnet be reduced, and let that percentage reduction apply to all importers, irrespective of the classes of goods imported ? This would have obviated all the complicated selective policy of the Government —a policy which is discriminatory in its elTect as between importer and importer—and would have reduced the matter to a simple solution. Increased Expense.. The heavy cost that will fall on the taxpayer* because of the tremendous administrative task that has been thrown on the Customs Department is as nothing compared with the expen-e that ha* devolved on the thousands of importing firms in the country, which expense must inevitably be passed on to the public, wherever possible, in hipher prices for goods and services. (."») The import selection policy ie a temporary expedient whirh will serve to smother up the effects of the unsound financial policy the Government has been I pursuing, but this will be only for a Itime. Although the country has now i run through nearly all its money, the ■ Government decline;- to adjust its policy ! accordingly. l»y reducing public and pri'vate exiiMvaaiinee: on the contrary, the !;Minister of Finance state-* that the Government intends to maintain "the standard of living"—which could bo Ix'tter j described as an attempt to maintain an I artificially high standard of costs which I ics eating into the real standard of living. I (6) One of the objec-ts of the CJovern- ! ment scheme ie to ensure that there ie a i surplus of exports over imports euffiI cient to provide all the funds that are

needed in London for debt purposes. But restriction of imports can produce an export surplus only if exports, themselves are maintained. How doee the Government plan to maintain exports? The Minister of Finance voiced the broad generality that "primary and secondary production must be extended as far as is humanly practicable.' , but he said no word as to how primary production— which alone will build up our London funds- is to be even maintained, leave alone extended. We repeat that restriction of imports will not in itself ensure an excess of exports, and that the proper sphere of activity for the Government is in removing every obstacle—chiefly of its own creation—that stands in the way of increased primary production. "Hurried Afterthought." (7). The scheme of import selection to protect local industries, which the Government has grafted, as a hurried afterthought, on to the control of exchange for national debt service purposes, is ill-conceived, unscientific and uneconomic. It is the result of no proper survey and plan as to the capacity or incapacity of New' Zealand,,industry to fill the pap left by Government bans and restrictions v on imported lines. There are established factories in New Zealand which have already proved incapable of meeting the demand which, by the compulsion of Government methods, has turned in their direction. In the time-lag that will operate until i secondary industry is able to step into the breach, the public may expect to go short. (H). It remains to be seen how much overseas capital is likely to be attracted to New Zealand for secondary industries in view of (1), the restricted market; (2), the crushing rates of taxation that exist; (3), the fact that a great amount of capital left New Zealand because reasonable returns were not allowed it; (4), the high cost of labour; (5), the lack of sufficient trained labour; and (6), the bureaucratic control of commerce and industry th.it is being increasingly applied by the Government as a matter of policy. The business of importers is now being run by the Government and Government officials. Manufacturers will, in due course, find themselves in the same i boat. (!>). The cost of living, spread over innumerable items, is going to rise. Even if new secondary industries were to spring up in New Zealand and were to produce to capacity the whole year round, they could never hope to reproduce for either price or quality, many lines now imported. Lines beyond number which are now imported are made possible in New Zealand, either as to price or quality, or both, only because of mass production, which, in turn, is made possible only by the fact that great numbers of people, in many lands, are being catered for. Government Importations. (10). No information has been given as to the extent —if any —by which the Government intends to reduce its own excessive importations, which have played a leading part in the decline of London funds. (11). If the Government intends to maintain not only expenditure on its own excessive importations for unproductive public works and other purposes, but also internal expenditure on State services, then the public may expect the imposition of further taxes to i,lake up for the loss of revenue from Customs, income tax and other sources which will be adversely affected by the import selection scheme. (12). The regulations are a breach of the spirit —if not of the letter —of the Ottawa Agreement, and of trade agreements not only with the United Kingdom, but also with Australia, Canada, Germany, Belgium, Sweden and other countries. We are fearful of reprisals on the part of those countries that are being adversely affected by the operation of these arbitrary regulations. It would bl calamitous to New Zealand to have her export markets —which are the Dominion's life-blood —restricted by the affected countries as a retaliatory measure. The points given above explain to the consuming public the reasons why the Import Control Regulations, 1938, were considered by the recent national conference of importers to be impracticable, unnecessary and unjust.