High sales tax is taking its toll

Press, 20 July 1977, Page 5

High sales tax is taking its toll

by

LES BLOXHAM

New Zealand’s retail photographic industry is facing its worst crisis since World War 11.

In Christchurch already this year, three shops and two wholesalers have gone out of business and others have been forced to cut back on staff and stock. One of the country’s largest monochrome film-pro-cessing plants will also close at the end of the month.

Some retailers are being forced to carry non-photo-graphic lines such as toys and novelties while others are discounting their goods and offering free film to attract custom.

Members of the industry blame Mr Rowling’s Budget of 1975 for its current depressed state. In those final months of the Labour Government’s reign, the existing tax of 30 per cent on cameras and other taxable items was increased to 50 per cent.

That w’as bad enough, but Mr Rowling’s net extended much further to enmesh all photographic equipment and accessories ' which, until then, had been exempt of

tax. The Budget in effect increased the tax on those items from nil to 50 per cent overnight.

The situation was compounded by both the devaluation of the New Zealand dollar last year and general inflationary trends to such a degree that the price of everything photographic has virtually doubled since 1975.

Faced with increasing consumer resistance and steadily diminishing returns, the industry is battening down for even harder times ahead. For no-one is sufficiently optimistic to believe that Mr Muldoon will, with a simple stroke of his pen, remedy the situation in tomorrow’s Budget.

Mr K. H. Lawrie, Christchurch branch manager of one of New Zealand’s biggest wholesalers, H. E. Perry, Ltd, said the situation was as grim now as it wds

during World War IL He believes more small businesses will be forced to close. “The Government must accept the fact that photography is no longer a fun thing,” he said. “Many people — both amateur and professional — are being hurt.”

Mr Lawrie said another disturbing aspect of the tax was the effect it was having on film sales in tourist centres. “A Queenstown retailer told me that overseas tourists simply turn around and walk out of his shop empty handed when they learn the high price of film here,” he said.

Mr Lawrie said that the word had been widely

spread overseas and most tourists were now arriving well stocked with film. Another New Zealandwide wholesaler, Mr lan R. Little, of Christchurch, considers that New Zealanders would be in for “ a real eyeopener” if they went overseas and found how much cheaper film was there. In Canada and Australia it was about half the New Zealand price, he said. “The application of the 50 per cent tax on almost everthing we stock has been a re‘al killer,” said Mr Little. “I think we are in a good position to gauge the state of the industry and right now the' credit situation is bad. Some retailers are facing a hard struggle,” he said.

Mr E. A. Hope, Christchurch manager of International Cameras, Ltd, confirmed that there had been a

general slowing up across all sections of the retail trade. “A year ago retailers were barely recovering from the blow of the increased tax on cameras in the 1975 Budget’” he said.

“The tax structure is wrong,” said Mr Hope. “While we would hope for some . relief in this year’s Budget, I doubt that we will get it because the Government still classes photography as a luxury.

“But it is not a luxury. It should be regarded as a necessity — a means by which families can keep a personal and lasting record of their lives,” he said.

Similar sentiments were expressed by Mr M. J. Mail, manager of Camera House. “We are discounting like crazy and we’re not making much profit,” he said. Mr Mail said that the industry had made representa-

tions to the Minister of Customs (Mr Wilkinson) for some relief from the tax. “We told him we considered that photography had been singled out for harsh treatment while other activities, such as ski-ing and boating, were getting off relatively lightly. “The Government listened carefully, and then reacted by increasing the tax on outboard motors and sports gear and leaving ours at the same high level,” he said.

Mr Graham Logan, another Christchurch retailer, was forthright in his assessment of the market: “It is (expletive deleted) awful, the bottom has fallen right out. “Three retailers and two wholesalers have closed here in Christchurch in recent months and I know of others who want to quit,” he said.