The Press Friday, April 23, 1926. Protection for Secondary Industries.

Press, Volume LXII, Issue 18673, 23 April 1926, Page 8

The Press Friday, April 23, 1926. Protection for Secondary Industries.

Although it is only four years since the tariff was revised in order to give greater protection to the secondary industries of the Dominion, a demand is being made for a further substantial addition to the duties. The local Industrial Association has passed a long resolution asking the Government to increase by 10 per cent, the duty on all manufactured articles, and to treat the request as "a matter of "urgency." It is very unlikely, we should say, that the Government will grant this request without careful investigation and without stronger reasons than are set out in the Association's resolution. It is perfectly true that the rate of wages in New Zealand is higher than the rate in Britain, and much higher than the rate in almost any European country, and this is a handicap upon local industries which must be admitted and allowed for. It is very largely reduced, however, by the fact that the foreign articles must bear the cost of transportation over many thousands of miles of sea, and "the average person finds difficulty in believing that the additional protection o£ tariff dutias does not completely neutralise the handicap of higher labour costs. The Industrial Association declares that "the shibboleth "—as it rather oddly calls it —"that 'the Customs tariff "' combined with the freight charges "' from oversea countries should be "' sufficient protection' is exploded." It may not be sufficient protection for some industries, but that it should be is by no means an "exploded" idea. The duty of the Association is to explode it, by means of figures. One great difficulty in the way of securing very ready public acquiescence in still higher tariff protection is a fact which the Association omitted to mention in its resolution—namely, that not the least troublesome competition the industries have to. face comes from America and Australia, where the wages are on the whole higher than in New Zealand. Despite their higher labour costs, Australian and American manufacturers are able to produce their goods at a price which enables them to bear the cost of transport and the substantial import duties. Nor must it bo forgotten that the New Zealand manufacturer, being on the spot, must know—or fit any rate ought to know—the nature of his market and the needs of his customers better than manufacturers working thousands of miles away. All this suggests that a good deal of such trouble as some local manufacturers encounter is the result of defective technique. Everyone, it hardly requires to be said, would be glad to see our secondary industries flourishing through their own skill and merit, and in course of tinle, no doubt, they will. But it is a mistake to suppose that the way of salvation is through ever-increasing tariffs. Those New Zealand industries have been most successful which used the protection afforded by the tariff to establish themselves strongJy and learn the most effective methods of production —to make good goods, of the kind wanted by the public, and to keep their goods always before the people who have money to spend. Sound technique will do far more for any industry than mete tariff protection.