THE TARIFF.

Press, Volume LXIII, Issue 19105, 14 September 1927, Page 10

THE TARIFF.

(CONTINUED.)

Farther Remissions of Duties on Machinery.

From a perusal of items 350 and 351 of the resolutions, it will be seen that considerable alterations are proposed. Under the tariff hitherto in force certain British-made machinery to "be nsecl for industrial purposes was admitted free of duty, provided that it was of a class not economically made in the Dominion. At the same time certain other machines and appliances were specially mentioned as liable to duty at various rates. The effect of this was that none of the machines or appliances so specially mentioned could be admitted for industrial purposes, and this was the case whether the machines and appliances -could or could not be manufactured in New Zealand. For example, Diesel oil-engines are not at present made in New Zealand, but owing to the existence of a tariff item imposing duty on oil-engines having less than 100 brake horse-power, there was no option but to charge duty on such oil-engines of that horse-power. It will, therefore, be seen that the new proposals provide the means for admitting free from British sources many machines and appliances ; which are required for the development of our industries, and which are not as yet economically made in New Zealand. Estimate of Duty Remitted. "It is estimated tjiat if the House adopts the proposals I have already dealt with in some detail, it will.-mean a concession of about £IBO,OOO per annum, after allowing for any increases in duties to further protect local industries. As will appear later, there are further proposals if carried out, will result in an additional amount or £150,000 being remitted, making a total 0f.£330,000. It must be.understood that this estimate of reduction in taxation does not take into account the effect which alterations in the preference granted on Empire goods may have, upon the revenue. If the changes to which I now refer give effect to the policy of the Government, and thus divert to British countries any considerable portion of the trade now held by foreign nations, the'result will be a 'further decrease in Customs duties. If, however, such transfer does not take place, the decrease may be less.

Iron Industry. "A company lias been carrying, on this industry at Onakaka for a number of years. It is found, however, that £TTe success _of the undertaking has been prejudiced to a considerable extent by the importation of Indian pig-iron. The Government has been making enquiries, and satisfactory evidence has now been received to show that this iron is sold to New Zealand purchasers under conditions which amount to dumping. It is therefore proposed to charge a dumping duty on shipments of such pig-iron, where its imposition is warranted* equal to the difference between the current domestic value, as defined by the Customs Acts, actual selling price as set out in Section 11 of the Customs Amendment Act, 1921. So far as the information in my possession enables me to form a conclusion, the dumping duty will, asa rule, be an amount exceeding SI per ton, and in some cases even reaching £2. If the iron is invoiced in future at price.s which have been shown in recent months, importers will be required to ensure that the correct particulars as to current domestic ■ actual s©lling prices, etc., are shown upon their invoices, and that the goods aro properly entered. It is considered reasonable, however, that. merchants should receive notice of the imposition this duty, and accordingly the action indicated above will be taken with respect to all such shipments imported after December 31st next. If, however, an endeavour is made to defeat the objects of the dumping provisions of the Customs. Act by the importation of pig-iron in what are regarded as large quantities, the Government reserves the right to immediately impose the duty. _lt is believed that this action will, with the asistance already given to the industry, enable it to be successfully carried on.

British Preference. "The Government .has still further developed its policy of according preference to goods of Empire origin. During the last few years the importation of foreign goods has increased'considerably, and it is hoped that the proposals now made will result in transferring a substantial proportion of this trade to those British countries which are our best customers. It is not possible to forecast how-far these alterations will achieve the objects in view. It is proposed to increase the duty on foreign-made cinematograph films to «Jd per foot. It is believed that in several cases the alterations made in the general traiff will have the dual effect ot increasing Empire trade, and the equally important result of affording assistance to local industries against foreign competition. Protection Withdrawn. "The Government finds that in a few cases industries are being carried on which are not suited to New Zealand conditions, and that one or two have been discontinued. In these cases it ia proposed that the protective duties at present imposed he abolished. Increasing Markets Abroad. "An important part of the Government's policy in connexion with the revision of the tariff still remains to be mentioned. Honourable members are no doubt aware that certain countries are adopting tariffs having maximum and minimum rates, with a view to obtaining advantages . for their goods in the markets -ot other nations. If other countries do not accord favourable tariff treatment the maximum rates are charged on imports; on the other hand, if such favourable treatment is granted, the minimum rates are lot' d. In other words, such tariffs are negotiating or bargaining tariffs. While the Government fully appreciates the_ wisdom of having a maximum and minimum tariff, and proposes to ask Parliament for authority which will in effect provide for this, I think that a more fully effective means of negotiation is to possess power to grant tariff concessions in return for favourable Customs treatment of New Zealand products m markets abroad. It is, in my opinion, necessary that every endeavour should be made to find new and increased markets for our products, especially our primary products,- and if the Govern* ment, while granting concessions m duty on articles used by the community," can in making those concessions increase the markets for New Zealand goods, a benefit will have been conferred. It is hoped that through the means which I have just .explained the unequal balance of trade between New Zealand and certain ♦ other countries may be removed. "I think that in such matters the hands of the Government have been strengthened by the recent declaration i ' the Imperial Conference that 'Great Britain and the Dominions are autonomous communities within the British Empire, equal in status, and in no way subordinate one to another in any aspect of their domestic or external affairs ' On the goods which it is proposed should be dealt with on this

basis, the remissions obviously will have to be postponed until a later date, corresponding with the time &t which success is achieved in securing more favourable entry of New Zealand goods into overseas markets. It is fully recognised that the United Kingdom is not in a position to make any tariff concessions, and it is proposed that any reductions in duty made under this scheme' on the goods of any country, below the rates set out in the British preferential tariff, should automatically apply to Great Britain. "A matter which has giron the Goveminent some concern in this connexion is the existence of certain commercial treaties with foreign countries, to which New Zealand is a party. One of the terms of these treaties generally is that this Dominion would to such countries most favoured nation treatment. Any concessions, therefore, made on the goods of any foreign countries would have had to be automatically extended to the products of the countries with which treaties existed. The Government proposes, during the recess, to go fully into thtf question of the wisdom or otherwise of retaining these treaties, and where it is considered in the best interests of the Dominion that they should be abrogated the necessary steps will, wherever possible, be taken to achieve this end. Some of these treaties were entered into many years ago, before our positipn in the Empire was as fully developed as it is to-day. In fact, in some cases they were made before the foundation of New Zealand. For example, this Dominion is a party to a treaty with Denmark, made in the seventeenth century,'• and to several made with foreign countries over a hundred years' ago. Total Approximate Remissions of Duty.

"If these proposals for negotiating commercial agreements with other countries are brought into effect, it will mean concessions in duty approximating £150,000 per annum, making total remissions of duty amounting in the aggregate to £330,000, effected by this revision of tariff. As already stated, this amount of remission may •be still further increased if the effect of the extension of British preference is .to divert trade from foreign countries to Britain. On the other hand, it-may be somewhat reduced, if such transfer of trade does not take place. It will, of course, be understood tlrat any such commercial agreements with other countries cannot take effect until they are ratified by Parliament. ' General. el l may state that the first resolution abolishes the old tariff and substitutes the new' rates. On this occasion it has been decided to allow the provisions of Section 143 of the Customs Act, 1913, to operate. This means that if goods (not being warehoused goods) are imported into 'New Zealand before the coming into force of the resolutions, but not entered for home consumption until after that' time, the importer is entitled to enter the goods either at the old or the new rates, whichever is most favourable to him. AH warehoused goods entered for home consumption after to-day will be subject to the new rates.

"As honourable members are aware, it is the usual practice to v resolutions introducing a new tariff without a discussion of the details. The resolutions must, in due course, be followed by an amending Bill, and opportunity is then afforded to the House of fully discussing the -items of the tariff. The Bill will not be brought down until a reasonable time has been given to Parliament and the public of considering the Government 'a proposals. . Form of Tariff. "It will be noticed that in the new tariff only two columns, the British preferential and general tariff columns, are provided, for it is proposed to dispense with the intermediate tariff which appeared in the 1921 Act. This-middle tariff was adopted for the purpose of being able to negotiate with other countries, but in viei f the proposals which I have, already outlined, it iB not considered that any good purpose will be served by retaining it. It is also proposed not to continue the system of suspended duties, i.e., inserted in the schedule which may be brought into force. by Order-in-Council. It is thought that- owing to the fact that tracing conditions so frequently change rates proposed, say, this year, might be quite unsuited to future conditions. It will also be noticed that the number of items in the tslfiff has • been reduced from 644 in the 1921 tariff to 446 in the proposed schedule. This has been done by regrouping and consolidating some of the items, and it is' believed that this will make for clearer definition, and a more intelligible understanding of the tariff by the general community. "It is proposed to lay- on the table of the. House at an early date the report of the Tariff Commission in order that honourable members may have time to study it before the Tariff Bill comes down.

A Brief Debate. At tie conclusion of the Minister's statement Mr Savage (Auckland) said he. would like, to learn what the (*oveminent really had in mind. Was tn© tariff to be revenue producing, or was it for the laudable purpose of encouraging industries £. He criticised the incidence of the timber duties, arguing that some safeguard was desirable fqr the people against higher prices being charged by New Zealand sawmillers. Mr Forbes (Hurunui) said farmers and manufacturers _ had lately teen passing resolutions in favour of reduotion .of duties other than those on British goods. Any tariff intended to be protective of industries tended to create a monopoly within the country, and there should be an efficient Board of Trade to see that the people were not subjected to higher prices for protected goods. ■ Sir Joseph Ward (Invercargill) said he hoped the Minister would furnish a more convenient statement of the proposals. So far as he could see, there was no reduction in preference to British goods. The preference was only given by increasing the tariff on foreign goods. What was needed was a reduction in the British preferential duties, otherwise the consumer could not expect any benefit in the prices he has to pay for goods. So far as Be couM see the relief granted in the tariff was not going to benefit the man whose income tax nad lately been jincrea&ed. He urged that the imposition of a high tariff wall would mean, an increase in the cost of articles to the consumer. Mr H. E. Holland (Leader of the Opposition) hoped that when the Bill was introduced, it would do something to conserve the interests of the people of New Zealand—those engaged in the production of goods peculiar to New Zealand. Safeguards like that applied in the case of wheat should be provided in timber and other industries. He stressed. the need for ( complete Empire reciprocity. If we granted preference in trade/ we should get a similar "concession in. the financial market.

Mr Harris (Waitftmata) thought it unwise to. exclude foreign trade by unduly raising . preference to British goods. He deprecated the remission on raw cotton, as being likely to damage the local woollen industry by opening the way to a mixture of cotton with wool.

Mr "YVilford (Hutt) said he was disappointed at the small amount of benefit motor body building concerns received under the proposals. The resolutions'were" agreed to, aj}d the House rose at 11 p.m. j ' "