Protection

Press, Volume LXXXIX, Issue 27072, 22 June 1953, Page 8

Protection

In a letter in the correspondence I column on Friday morning Mr J. G. Power commented that two recent I leading articles on tariffs and on , import control leave no doubt where “ The Press ” stands on the question of local industry. There should, indeed, be no doubt, because “The Press” has frequently and . consistently made its position known over the years. Yet Mr Power mis- ‘ takes or misrepresents it when he ( describes it as advocacy of free trade; he would have been correct i in describing it as advocacy of freer

trade—much freer trade. Free trade, however desirable in theory, is not a practicable economic policy in the modem world; but that is no reason why each country—and most of all the countries which live by their overseas trade, as New Zealand does—should not try to obtain as many of the advantages of free trade as possible. That, indeed, is the basis of the agreed policy of the Commonwealth countries; and they have agreed upon it for the benefit of no-one but themselves. It is a fallacy to suggest, as Mr Power does in the first of the three questions he has put to “The Press”, that a high standard of living is ensured by closely protecting domestic secondary industries against overseas competition. The highest standard of living possible to any country is ensured only by the hard work of its citizens in using, intelligently and economically, the resources at their command. It is neither intelligent nor economical to devote scarce capital and labour to the production of things that can be bought much more/ cheaply from other countries. It is true that a balance must be struck between what is desirable and what is practicable. It might not be possible for the farming industries in New Zealand and the manufacturing industries based upon the processing of local materials to absorb all the labour “that would be disposed of in the “ event of import and exchange con-

“ trol being abolished ”, which is Mr Power’s variant of the charge that “ The Press ” would like to see New Zealand become a wholly agricultural or “peasant” economy. The answer to this suggestion is that neither “The Press” nor any other responsible person has ever advocated that all controls should be thrown overboard at once. But the nature of the economy can be shaped—and is being shaped—advantageously by their progressive reduction, so that domestic industries are gradually and increasingly subjected to the only worthwhile test of their value to the country, which is their ability to meet reasonable overseas competition as they stand or to fit themselves to meet such competition. No country can for long maintain a high standard of living. unless its economy is efficient; and New Zealand’s high standard of living has been secured and maintained largely through the efficiency of its farming and ancillary industries. “ The Press ” has on many occasions expressed its confidence that the majority of New Zealand’s secondary industries could meet successfully the challenge of overseas competition. Many of them have done, so with advantage to those engaged in the industry and to the country as a whole. There are some which cannot do so; and their usefulness to the country must be closely examined before they are given the blanket protection of continued import control, which has in practice amounted usually to import prohibition. As has been" made clear on other occasions, “ The Press ” has no quarrel with the general principle of the Government’s policy of replacing import licensing with import duties as a means of protecting industries which for special reasons need and deserve protection, although it should not need to be emphasised that New Zealand cannot afford to become a high-tariff country. The approval of this policy is also subject to the qualificatioh that the “ soundest ” manufacturing industries are those which need the least protection. The objection of “ The Press ” was to a specific application of this policy which has the effect of heaping additional charges upon the cost of houses which the Government is straining every nerve to cheapen.