Submissions By Associated Chambers Of Commerce

Press, Volume XCIII, Issue 27989, 8 June 1956, Page 12

Submissions By Associated Chambers Of Commerce

TARIFF INQUIRY

(New Zealand Press Association)

WELLINGTON, June 7.

Protection for a particular industry was justified only if it was in the interest of the whole community, including the consumers, said Mr A. O. Heany, secretary of the Associated Chambers of Commerce, in submissions to the Board of Trade today on the tariff review.

He said that many arguments for tariff protection were advanced on considerations other than the ability of New Zealand industries to compete against overseas manufacturers. It was not incompatible in any tariff policy to encourage both international trade and deserving New Zealand industries.

New Zealand must buy abroad to obtain cheaper goods, but on the other hand would have to provide employment for an estimated population ot 3.000,000 by 1978. It was most unlikely that this could be achieved wholly by primary industries and those related to them.

The tariff should therefore encourage the growth of economic secondary industries without blocking the channels of trade or surrendering national advantages greater than those gained by an unduly protective policy. The Associated Chambers of Commerce supported tariff protection for recently-established industries whose inability to compete with imports should be only temporary, said Mr Heany. Tariff assistance should be selective, not general, because the labour supply was already severely strained and artificial development in protected industries could face established and economic industries with more acute labour shortages and rising costs.

As tariff protection was an investment by the community, tariffs should be reviewed periodically, and the measure of tariff assistance scaled down progressively over a reasonable period. Otherwise the situation was tantamount to consumer subsidies for shareholders in protected industries. That periodic review should, indeed, extend also to past concessions in the field of tariff policy. In all cases it needed to be kept in mind that (a) the existence of a New Zealand in-

dustry might have kept the prices of competing imports down, notably where overseas competition was restricted or in abeyance; and (b) the excessive cost of locally-produced commodities to the final buyer might be the result of wasteful and duplicated trading services rather than the result of higher manufacturing or importing costs due to the tariff.

At the same time, the Associated Chambers would prefer higher tariffs to import control, said Mr Heany. The time that had passed between the present and the previous review of the customs tariff—23 years—was too long. The Board of Trade, he added, was the logical body to undertake such periodic reviews.

Reciprocal reduction of tariffs under G.A.T.T. was a promising means towards the expansion of overseas markets, Mr Heany said. New Zealand's commitments under the agreement gave her no scope for an extension of the margins of preference allowed in existing tariffs. It was a question whether the Dominion had, on balance, gained anything from Empire preference. There were New Zealanders who had complained that the only effect 01 the preferential tariff in a certain case had been that a “ring” of British exporters had charged their New Zealand customers 20 per cent, more than their South African customers. The Associated Chambers were not in favour of any major move to increase tariff rates merely to secure more revenue for the State, said Mr Heany. If New Zealand-made goods were the raw materials for other important industries, it was essential that they should be available at the lowest possible cost, and that tariff protection, where required in such cases, should be kept at a minimum. Mr Heany said that the Associated Chambers were not satisfied that the present provisions for dealing With dumping were adequate and efficient in preserving to affected New Zealand industries the protection contemplated by the legislation. “We suggest that the board review the New Zealand, legislation and practice in the matter with a view to strengthening them,” he said.