TARIFF POLICY

Dominion, Volume 21, Issue 10, 6 October 1927, Page 8

TARIFF POLICY

HIGH OR MODERATE PROTECTION INDUSTRY AND OUTPUT THE PRIME CONSIDERATION Some sidelights on tariff policy were given to the House of Representatives by the Minister of Customs (Hon. W. D. Stewart) yesterday when moving the second reading of the Customs Amendment Bill. The Minister said that revision of the tariff was fraught with such farreaching consequences that no Parliament could attempt to undertake it without a great sense of responsibility. The tariff policy of New Zealand had been one of moderate protection. 'Hie idea in the earlier tariffs that came under review was that of revenue, but it was always the case that some amount of shelter was given to struggling industries. The tariff of .1888 was the first definitely protective tariff as distinct from the earlier tariffs, which were mainly revenue raising, or affording a certain amount of protection. In 1888 the duties were increased on apparel and ready-made clothing. In 1895 the duties were increased on boots and shoes, Hid certain classes of machinery, hosiery, and other classes of goods. The present tariff, which was now being repealed, commenced in November, 1921, and by it protection was given to a number of articles produced in New Zealand, but the great mistake was the removal of the duties previously imposed on British machinery which came into New Zealand for industrial or manufacturing purposes, and which could not be made here. Tbe value of that machinery in 1926 amounted to £350,000. Industry and Productivity. , The time was definitely approaching, said the Minister, when the question would arise as to whether the Dominion should follow the model of high tariff in Australia or continue its policy of moderate protection. Members would have noticed, from the numerous deputations received by the .Government, that the manufacturers were looking across the Tasman Sea with longing eyes at the high duties imposed in Australia. But in the opinion of the Minister the question of whether the Dominion should adopt a high or low tariff was of secondary importance to the question, raised by him some months ago, of the system on which our industries were organised, the wages method that should be adopted, and generally how far the industries showed that the remuneration bore some real relation to the productivity of the unit. Reports showed that Australia was coming to realise that this was an outstanding question that had to be considered. Woollen Industry. Referring to the woollen industry, the Minister said that the companies asserted that they were working halftime, and must have more protection. In the manufacture of blankets the mills had the control of the home market, the raw material at their doors, and no competition from abroad, and yet they could not export. Did not that indicate that there was something wrong with the management, or organisation, rather than with the tariff? That idea seemed to be growing up, also, in Australia, if the operations of their Tariff Board was any indication of the position there, because, in a report published only last year, the point was stressed that, in tbe opinion of the Tariff Board, they were getting into a sort of vicious circle, and that before they could accept the statement of the manufacturers that they would not increase prices as justification for increasing the duties, they would have to suggest, not only that the employers would not increase prices, but also so organise the union workers that they would not apply for more wages. Before consideration was given the question of modelling our policy along the lines of Australia’s it would have to be determined whether there was anything in the danger signal raised by the Aus-

tralian Tariff Board. He was inclined to think that tbe test as to whether high protection was working successfully was whether an industry, by means of a high tariff, had secured its home market, had established itself in’ a sound position, and could, when the occasion arose, go outside its shelter and compete in the world’s markets. If confined to its home markets, in times of depression there must be unemployment in the industry, unless it were in a strong financial position. He believed that in a case like the boot industry in New Zealand a number of factories would be faced with more unemployment. Referring to circulars that had been issued to members, the Minister stated that a great deal of the material was so fallacious that he did not think it worth while replying to it. He quoted figures to show that in many cases Canada’s duties were lower than the Dominion’s.