PROTECTING LOCAL INDUSTRIES

Dominion, Volume 20, Issue 297, 14 September 1927, Page 12

PROTECTING LOCAL INDUSTRIES

TARIFF RESOLUTIONS BEFORE HOUSE

REMISSIONS APPROXIMATELY £330,000

MINISTER’S FULL EXPLANATION

Remissions approximating £330,000 are provided for in the new Tariff proposals placed before the House of Representatives last night. This figure, according to the full explanatory statement of the Minister of Customs (Hon. W. D. wart), may be increased if the effect of the extension of British preference is to divert trade from foreign countries to Britain. The Minister expressed the belief that in several cases the alterations made in the general tariff will have the dual effect of increasing Empire trade and of affording assistance to local industries against foreign competition. The formal resolutions covering the schedules were confirmed at 11 p.m.

Speaking to the motion that the Resolutions containing the new schedule' of ’ duties be read a. second time, the Minister of Customs (Hon. W. D. Stewart) said that the objects which the Government . had had in view when considering its proposals had been as follow:— (1) To reduce the cost of living and the cost of production both in the primary and secondary industries. (2) To. assist local industries (both farming and manufacturing) either by increasing the protection already afforded to a certain number of such industries or by reducing the duty on the raw materials, machinery and ~ plant used by them, . . . (3) To encourage still further trade in goods produced in the British • Empire instead of in those of foreign origin. (4) To remove the protection at present afforded to the very limited ■- number of what are regarded as un- * ■ economic industries, or to the one or two industries which have ceased to operate in the Dominion. (5) To provide further negotiating power to secure new and increased 1 markets for New Zealand products. REDUCTIONS OR. REMISSIONS OF DUTY. The reductions in duties which affected tho cost of living and the cost of production were of a twofold nature. They consisted partly of concessions which appeared in the tariff schc'’ >s and of others the nature of which ~ nd be explained later. As honourable 'members were aware,, reductions of duty were not, as a rule, made to operate immediately, but were postponed so that traders who had imported the goods affected. and paid the old duty, thereon might not have to meet unfair competition with other merchants who Lad obtained their goods at the lower rate. Time was therefore given to enable, as far as possible, stocks of goods already cleared to be disposed of. . On this occasion the date had been fixed at June 30, 1928, but with regard to items which were not affected by that consideration the reduction took effect immediately. Some of the ■ items upon which it was proposed that concessions in duty should be made were:— Cotton piecegoods so woven or marked as to indicate that they - are to be cut up. Plain tablecloths, tablenapkins, towels, quilts, sheets and similar articles. “These goods, whether in the form of piecegbods or of separate articles, now pay a duty of 20 per cent, if British," continued the Minister. “It is proposed to admit them free if of British origin, thus making the goods described, which are in use in every New Zealand home, available at the lowest cost to all classes of the community. OTHER REMISSIONS. “Other items upon which remissions of duty are to be made are table chinaware and earthenware, linoleum and similar floorcloths, mats, matting, and floor rugs of rubber or similar materials. ■ These are used in practically every household, and should, I feel, be 'admitted free if <if British make. The above articles have hitherto been very 'important revenue producing items. The manufacture of cement and asbestos building'sheets is not, I am advised, now carried on in the Dominion, and ■■it is proposed that' such sheets should be exempt when produced within the Empire. The Government also proposes to take the duty off galvanised corrugated iron of British origin. The industry as at present carried on in New. Zealand is not regarded as one suited for the conditions prevailing here. REDUCTION IN MAIZE DUTY. “Some other articles upon which reductions and remissions of duty are proposed are cash registers, adding and computing machines, accounting ami book-keeping machines, electric locomotives, spray pump outfits (other than motive power), tractors suited for wharves or pavements, screwed wrought iron pipes of whatever diameter, certain drugs and chemicals suited for use as culture media, etc., in scientific investigation and hospital work. “It is intended also to reduce the duty on British-grown maize while retaining the present rate on tho foreign article. This concession in duty should benefit the poultry and pig-raising industries. THE WHEAT QUESTION. "As members are aware, considerable attention has during tho recess been given to the question of tho production of wheat in tho Dominion. It is the policy of the Government that New Zealand should, if possible, grow sufficient wheat for its own requirements, and thus So far as this essential and staple food of the people is concerned, bo independent of outside supplies. During the last fow years this matter has been dealt with by means of embargoes on importation, price fixing, and Government control, and importations. These courses were necessary at the time they were brought into operation, but are considered unsatisfactory, and not be continued. Honourable members will recognise that tho New Zealand farmer will not grow wheat’ unless ho can be reasonably assured of a return sufficient to recoup him for his labour, cost of production, ofc. On the other hand, it is desirable that tho price of bread should, as far as statutory provision can ensure, bo kept within reasonable limits FIXING THE DUTY, "It is believed that these objects can best be achieved by means of a sliding scale of duties, decreasing when the prices- of wheat and flour rise outside New Zealand, but increasing when tho priecH of those commodities fall. Tho basis’, upon, .-.which, tho duties aru proposed to be levied depends on the current domestic values at the port of ex pert to New Zealand. When these values are ss. (Id. per bushel, and £U> per ton for wheat and flour respectively, the duty is to be at the rate of.ls. Id. per bushel, and £3 10s. per ton. These duties decrease and increase in inverse relation to the prices of wheat and flour. “I£ will thus be seen that if the current domestic, value of wheat and flour outside New Zealand increases above the figures I have mentioned by, say, tid. I gPI* husholj and ,£J per (op respectively, 1

’ the dulv will be reduced to <d. per bushel, ami £2 10s. per ton ou wheat and flour. On the other- hand, if the current domestic- values of the commodities decrease by the same amounts, the duty will be similarly increased. The Government believes that the result of these duties will be to stabilise, within certain more or less definite limits, the prices of wheat, . .flour, and bread in the Dominion. CONDITIONS OF INDUSTRIES. ' "In determining the industries which should receive tariff assistance the Government has very carefully considered the report of the Tariff Commission. That report has been prepared with the greatest care, after hearing evidence from all sections of the community. The Government’s general policy is that assistance should, where thought necessarv be granted to industries winch are* suited to New Zealand conditions, which are carried on in an economical manner, and which are considered to bo in the interests of the Dominion as a whole. The view of the Government is that the Dominion cannot develop along progressive lines if it has to depend upon the primary industries alone. Honourable members will recognise that f farmin" and manufacturing industries are, up to a point, interdependent. Assistance has therefore been grantted to certain of such industries where the conditions I have just referred to have been fulfilled. “It is recognised that at the present time some industries are not in a satisfactory financial condition, but it is thought that this is probably due rather to the financial stringency from which we are now happily emerging than to the operation of the tariff. VALUE OF COMPETITION. “There is no need for me to say that several applications were received tor high tariff protection. . Lhe Government is, however, of opinion that a high tariff policy is not in the best interests of the Dominion. It believes that industries are more likely to be conducted on satisfactory lines if a certain measure of competition is allowed to take place. If the protection granted to an industry is such that reasonable competition does not exist there, is, 1 believe, a tendency for such an industry not to avail itself of the best manufactoring methods or*to keep its plant up to modern requirements. ( “It is pleasing to record the fact that a considerable number of well-equipped ' and -well-managed industries in New. Zealand are being successfully and pro-fitably-conducted under the present tariff. THE ALTERNATIVES. “There are, however, certain industries in New Zealand with efficient plants and conducted on sound lines which appear to be suffering either from a decreased production or a production not sufficient to allow the plant to be operated economically. In these instances Parliament must face the question either of abolishing the protection and probably forcing the industries out ot existence or of granting increased assistance. In those cases where the - continuance of such manufacturing concerns is considered to be in the public interest, the Government has proposed certain increases in. duties, but only sufficient to enable the industries to prosper if efficiently carried on. LOCAL INDUSTRIES ASSISTED. “In deciding upon the industries which should receive further assistance, the Government has taken into consideration 'the possibility ot the further utilisation of materials produced m the Dominion. It is unnecessary. to .state, that many of our manufacturing industries now use considerable quantities ot raw materials of local origin. Among the items upon which increased duties are proposed to assist local industries are the following —Linseed oil, paints and varnishes (which use a considerable quantity of such oill, woollen floor rugs, glass bottles and jars, plaster pulp sheets, cabinets for wireless sets, timber, electric insulators, oil engines, hydro-extractors, brass pipe fittings, metal window frames, and gelatine and glue. “In tho manufacture of many of these articles, local materials are used. The Government also proposes to abolish the embargo on the importation ot egg pulp and to substitute rates of duty sufficient to afford protection, to the poultry industry. It is considered that prohibition of importation, though it may be necessitated by abnormal conditions, is not a satisfactory means of affording continued assistance to indusHELPING THE TIMBER INDUSTRY. "Members will no doubt be interested to learn tho Government’s proposals with respect to the duty on timber. Largo quantities of timber arc now being imported into New . Zealand, and the Government is of opinion that the present position requires a revision of tlie Customs duties. The rates at present charged have, in general, been in force for many years. This ot itself is, of course, not a reason why duties should be increased. It should bo remembered, however, that during the past twenty years the value ot timber (as ot most other commodities) lias increased considerably, while tho duty has remained at practically the same level, viz., 2s. and 4s. per one hundred super feet for rough sawn and dressed timber respectively. "The Government desires to encourage the utilisation of its own indigenous timbers, and it believes that if the duties proposed are accepted by the House, it will assist in bringing about this result. “It must not, however, be thought that the Government is of opinion that the present position of tho timber industry is duel entirely io importations. This is a factor, but only one of the factors in bringing this about. Decreased demand for timber generally, decieascd exports, relatively high production of timber in recent years, and other causes have all had their influence in producing flic present slate of lhe industry. 'The Government proposes that llio dulv on rough sawn and dressed timber .should generally he. nt I ho rates, of ss. and 7s. Cd. per one hundred super I'eet. A lower rate of 3s. per one hundred super feet I s provided for baulk'

timber exceeding _‘jlt. iu length and 150 square inches in minimum cross sectional area.

RAW MATERIALS DUTY. “It is, I think, obvious that effective assistance can be given to manufacturing industries in the Dominion by reducing the duties on such raw materials, machinery and plant as are of necessity imported for their use. Wherever possible the Government has adopted this course aud members will see, if they will refer to tho schedules, that in several cases important concessions have been made on such imported goods. “Some of the industries to which further assistance is proposed to be given by reduction or abolition of duty on raw materials, etc., are as under: Textile industry.—-By the exemption of raw cotton and tho admission free of British made cotton yarns. Stationery manufacturing industry.— By the abolition of ths duty on foreign paper in sheets. Motor car assembling.—By reducing tho duty on unassembled motor-ear bodies. Apparel manufacturing —By the ex- , emption of silk piecegoods of Brit- , ish origin. Industries generally.—By tho. exemption of Empire-made machinery, required by them when such machinery cannot ho economically made in the Dominion. TEXTILE PIECEGOODS. "With respect to these matters I might mention that heretofore raw cotton and cotton yarns have been liable to a duty which practically precluded tho manufacture of textile piecegoods other than those made wholly of wool. While the Government is of opinion that it is very desirable that the manufacture of all-wool materials, for which the name of New Zealand is so justly famed, should be encouraged by tlie community, it fools that, it is somewhat anomalous that the tariff should place difficulties in the way of the local manufactnro of union textile materials, i. 0., mixtures of woollen and 'cotton Into puch materials are largely imported amt compete with our all-wool fabrics. It seems to me that if it is advisable that the tariff should retard the manufacture in the Dominion of union textiles, the importation of these labrics should be restricted. Such a course does not commend itself to the Government, and it is therefore proposed that the duty on raw cotton and that on British-made cotton yarns should be abolished so that those woollen mills which desire to manufacture union materials may do so without tariff restrictions on their raw materials. STATIONERY MANUFACTURING. "So far as stationery manufacturing is concerned, it is considered that our manufacturers are placed in an unsatisfactory position owing to the fact that if they used paper of foreign origin they have had to pay a duty of 20 per cent, thereon. A manufacturer in Great Britain can obtain his foreign paper free of duty, manufacture it into stationery and other articles, send it to the Dominion, have it, as a general rule, admitted under tho British preferential tariff, and sell it in competition with the New Zealand-made goods.. It is therefore proposed to remove’ the duty at present charged on foreign paper of the classes chiefly used in the manufacture of stationery. ASSEMBLING OF MOTOR-CARS. “The Government proposes also to grant tariff assistance to the assembling of motor-cars in New Zealand. This is an industry which, in the course of time, must, j believe, become an important ono for this Dominion owing to the number of employees who will probably be engaged and the plant and machinery required to undertake the work. There is, too, the further advantage of reduced freight on a motor vehicle imported in an unassembled condition as compared with ths complete ear.

“The Government also proposes to exempt British silk pieeegoods with tho threefold object of reducing tho dutyon an article which is now in common use, of assisting local clothing manti-

fact iirers, and of granting increased preference to British count l ies. ELECTRIC DEVELOPMENTS. “It is proposed also to render some assistance to the electric development of the country by an alteration in the duly on oils which will, 1 believe, practically exempt all transformer oils and by the exemption of dressed or shaped hardwood poles specially suited for power transmission lines. REMISSIONS OF DU7IES ON MACHINERY. “Brom 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 used for industrial purposes was admitted free of duty, provided that it was of a class not economically made in tho Dominion. At tho same time certain other machines and appliances were specially mentioned as liable “to duty at various rates. Tho effect of this was that none of the machines or appliances so specially mentioned could be admitted as for industrial purposes, and this was the case whether the machine and appliances could or could not be manufactured in New Zealand. “Bor example, Diesel oil engines arc not at present^made in New Zealand, but owing to tlie 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, ami which are not as yet economically made in New Zealand. ESTIMATE OF DUTY REMITTED. “It is estimated that if the House adopts the proposals I have already dealt with in some detail, it will mean a concession of about £lBO,OOO per annum, after allowing for any increases in duties to further protect local industries. As will appear later, there are further proposals which, if carried out, will result in an additional amount of £150,000 being remitted, making a total of £330,000. 1 "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 .1 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, tho decrease may be less. DUMPING DUTY ON PIG IRON. "Before leaving this part of my subject I should like to say a few words respecting the manufacture of pig .iron in tho Dominion. As is well known, a company has been carrying on. this industry at Ouakaka for a number of years. It is found, however, that tho success of the undertaking has been prejudiced Io a considerable extent by tho importation of Indian pig iron. Tho Government has been making inquiries and satisfactory evidence has now been received (o 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 and the 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, as a rule, be an amount exceeding £1 per ton, and in some cases even reaching .£2, if the iron is invoiced in future, at prices which have been shown in recent months. “Importers will be required to ensure that llio correct particulars as io current domestic values, actual selling prices, etc., are shown upon their invoices and that the goods are properly entered. It is considered reasonable, however, that merchants should receive notice of the imposition of this duty and accordingly the action indicated above

will be taken with respect to all such shipments imported after December 31 next. If, however, *an endeavour is made to defeat tho objects of tho dumping provisions of tho Customs Act by the importation of pig iron in what are ro"arded as largo quantities, the Government reserves 1 tho right to immediately imnose the dutv. It is believed that this action will, with the assistance already given to the industry, enable it to be successfully carried on. BRITISH PREFERENCE. "The Government has still further developed its policy of . according preferenco to goods of Empire origin. Durin" the last few years the importation of°foieign 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. As I have already indicated, it is not possible to forecast how far these alterations will achieve the objects in view. “In this connection honourable mem- . bers may be interested to learn that it is proposed to increase the duty on foreign-made kinematograph films to 3d. per foot. It is believed that in several cases

the alterations made in the general tariff will have the dual effect of increasing Empire trade and the equally important result of affording assistance to local industries against foreign competition. J

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 is proposed that the protective duties at present imposed be abolished. INCREASING MARKETS ABROAD. “An important part of the Government's policy in connection with the revision of the tariff still remains to bo mentioned. Members arc, 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 of other nations. If other countries do not accord favourable tariff treatment tho maximum rates are charged on imports. On the other hand, if such favourable treatment is granted the minimum rates are -levied. 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, 1 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 in markets abroad It is, in my opinion, necessary that every endeavour should bo made to find new and - increased markets for our products, especially our primary products, and if the Government, while granting concessions in duty on articles used by the community, can, in making those’ concessions, increase the markets for New Zealand goods, a.double 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 (he Government have been strengthened by. the recent declaration of 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 bo ! postponed until a later date corresponding with the time at 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 (he British preferential tariff should automatically apply to Great Britain. COMMERCIAL TREATIES. “A matter which has given the Government some concern in this connection is tho 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 accord to such countries most favoured nation treatment. Any concessions, therefore, made on the goods of any foreign countries would have had to bo automatically extended to tho products eff the countries with .which treaties existed. “The Government proposes, during the recess, to qo fully into the 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 taten to achieve this end. “Some of these treaties were entered into many years ago before our position in the Empire was as felly developed as it is to-day—in fact, iu seme cases they were made before the foundation of Now Sealand. For example, this Dominion is a party to a treaty with Denmark made in tho seventeenth, century, and to several made with foreign countries over a hundred years ago. TOTAL APPROXIMATE REMISSIONS. "If these proposals fcr negotiating commercial agreements with other countries are brought into effect, it will mean concessions iu 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 Bi*.iin. On tlie other hand, it may be somewhat reduced if such transfer of trade docs not take place. “It will, of course, bo understood that '. any such commercial agreements with other countries cannot, take effect until they are ratified by Parliament. DETAILS OF RESOLUTIONS. “Dealing more particularly with the individual resolutions I may state that tho first resolution abolishes the old tariff and substitutes the new rates. On this occasion it has been decided to allow the provisions of section 113 of tho 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, which" ever is most favourable to him. All warehoused goods entered for home consumption after to-day will bo subject to the new rates. “The second resolution provides for

the admission of goods under the British preferential tariff or tho general tariff according to whether they do or do not comply with the conditions governing the granting of preference “The third resolution keeps alive, except where specially affected by the new rates, the various decisions which have been made classifying goods under di“ following old tariff items:— Articles and materials, specified by the Minister, aud on such conditions as he may prescribe, suited for, and to be. used solely in, the fabrication or repair of goods within New Zealand. Apparatus, appliances, articles, and materials, for educational purposes, as may bo approved by the Minister, and under conditions prescribed by him.

“The fourth resolution is necessary to bring the exemptions from primage duty into line with the new tariff items. Certain minor alterations have been made in the list of exempted goods. “Tho fifth and sixth resolutions are intended to keep alive the tariff arrangements which have been made with the Commonwealth of Australia and the Inion of South Africa until any amendments are made after duo notice to or agreement with those countries. “Tho last resolution is intended to keep the present tariff in force in the Cook Islands until the Customs amending Act is finally passed in law and the question of bringing the new duties and exemptions into operation in those Islands has received consideration. "As members are aware, it is the usual practice to pass resolutions introducing a new tariff without a discussion ot the details. The resolutions must in duo 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’s proposals. FORM OF TARIFF. “It will be noticed that in ttie 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 lhe 1921 Act. This middle tariff was adopted for the purpose of being able to negotiate with other countries, but in view of the proposals which I have already outlined it is.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., duties at rates inserted in the schedule which may be brought into force by Order-in-Council. It is thought that owing to the fact that trading conditions so frequently change, rates proposed (say) this year might be quite unstated to future conditions. “It will also be noticed that the number of items in the tariff have been reduced from 644 in the 1921 tariff to 4-16 in tho 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 un(lerstanding of tho tariff by the general community. REPORT OF TARIFF COMMISSION. . “It is proposed,” eaid tho Minister, in conclusion, “to lay on the table of the u . £ j a an , ea lly date tho report of the larift Commission in order that honour, able members may have time to study it before the Tariff Bill comes down.” MEMBERS’ VIEWS 11 J ' Sava 9 e (Auckland'West) said „ i t ) , tan J ailearnin K’ bel °w £3OO a y-ear wn'J t ! ler< j for ® exempt from income itas to be taxed for revenue purposes 'rough customs duties, then he might I „ , as , we ‘* P a £ ln <’°nie tax. Regarding with he " as ver -'' Pissed 'A lh ,, 1 h ® Ministers remarks; but there should be safeguards against the operations and machinations of any foreign timber combine.

Air. G. W. Forbes (Hurunui) said where protection was given to an industry, there should be an ultimate reduction in tho cost of an article to the public. In that connection he favoured a tariff board, which would see that that was done as far as possible.

Sir Joseph Ward (Invercargill) said as far as he could judge the preferential tariff held out no hope of any reduction in the cost of living. The sliding scale of duties on wheat was a very ingenious arrangement, but he was doubtful if it wotjld bo effective in keeping out wheat. lie quoted a number of items from the schedule in support of his contention that certain increases tended to make the tariff prohibitive and would certainly not reduce the cost of living. He was in favour of a revenue tariff.

The Leader of the Opposition (Mr. H. E. Holland) said a revenue tariff could not be wholly effective as a means of protection ite was wholly in favour in conserving the interests of those engaged in industries natural and useful to the country. He believed the timber millowners who gave promises that if they were protected, they would not increase prices, were sincere. Everyone would stand for protection for such industries as sawmilling and the Onakaka Iron Works. Articles that could not be produced in Nejv Zealand should be entirely free. In view of the great margin of preference given to British goods, there should be some guarantee that the price of British articles would not be raised accordingly. Mr. A. Harris (Waitemata) said that apparently a considerable extra preference was to be given to British goods, a policy that met with general aproval. But the fact must also be faced that

they were going to unduly raise the duty against the foreigner, thereby putting all their eggs in one basket, and adding to the cost of certain articles. People should not have to pay a 20 per cent, increase for British goods. Mr. ff. M. Will ord (Hutt) said to test the value of the Minister’s statement that he was cheapening the cost of living, all a man had to do was to cut l\is wife’s monthly allowance down by the amount of his increased income tax, and he would soon learn whether the contention of the Minister would hold water, lie regretted to see that the motorbody building industry had not been given more help. Air. W. J. Girling (Wairau) congratulated the Minister on having put towels and other cotton piece goods and linoleums and certain floor coverings on the free list. He could not, however, understand tho increases made in respect of carpets and other floor coverings, unless it was that they were to bo regarded as luxuries. lie complimented the Minister also on the additional protection afforded to certain industries, such as tlib woollen industry. The Government had assisted in bringing down the cost of living as far as they possibly could. Mr. W. E. Parry (Auckland Centra*) said if the farmer was not prepared to carry a certain amount of the burden in building up the country’s industries then he, in common with the rest of the people, would feel the pinch later on. In many cases the manipulation of freights by shipping companies stultified the law of tho country m regard to the tariff. Mr. W. A. Veitch (Wanganui) hoped the protection under the new tariff would be applied to wrought iron pipes of all sizes, with a view to assisting the Wanganui pipe works, and not be limited to pipes of six inches ami over. Mr. E. J. Howard (Christchurch South) said that those secondary industries that had expected gome great surprise would be very much surprised when they learned the small effect of the proposals for their benefit. The Government had worked another joke off on the people of New Zealand.

MINISTER’S REPLY The Alinister of Customs said that no joke had been worked. It had been said that preference was a farce, because Britain was investing money in foreign countries. He equid not see how it was possible for Britain to invest all her surplus money in New Zealand or the other Dominions. Britain was fighting hard to get back her world markets, and in addition she afforded us a large measure of naval protection. The question of preference was one that must be looked at in a very broad way. It had been suggested that one effect of the preference increases was that foreign manufacturers might come inside the tariff wall, and start manufacturing in New Zealand. He thought it more proliable that the British manufacturer would come and start works in the Dominion if such competition threatened. One of ’the difficulties in regard to increasing trade between New Zealand aud Australia was the similarity of goods manufactured. Australian chaff was allowed in free after consultation with the Agricultural Department, and it could only be altered in conjunction with the revision of the Australian treaty. The concessions respecting the assembling of motor-cars and bodies in the Dominion represented a very heavy loss of revenue, probably £40,000, mid were designed to help the local industry as much as possible. Answering lhe question as to whether a tariff should be regarded as a legitimate source of revenue, the Alinister affirmed that H was necessary to draw a certain amount of revenue through the Customs. The proposals afforded a reasonable protection to many industries. The resolutions were read a second time and confirmed. The House rose at 11.5 p.m.