A KINDLY CRITIC

Evening Post, Volume CVIII, Issue 136, 5 December 1929, Page 10

A KINDLY CRITIC

COST OF FORMALITIES

DOMINION'S TOURIST TRAFFIC

TABIFF QUESTIONS

Sir Lennon IJaws, Australian Representative of Imperial Chemical Industries, Ltd., of which Lord Melchett is the head, has now completed a brief but informative- visit to the Dominion. Besides being the Australian head of a vast Imperial industrial undertaking, Sir Lennon is a particularly keen observer of industrial, economic, and financial affairs, and as a former president of the Association of Australian Chambers of Commerce, he instinctively looks at them from the sharp, clear angle of business.

When asked by "The Post" to-day for such impressions of the Dominion as ho had formed during his visit, Sir Lennon remarked: "Well, I need not say anything of tho great beauty of New Zealand scenery, that I think is pretty well known throughout the world; but I do see great possibilities of development of an extensive tourist trade. The first thing that strikes one coming to New Zealand, however, is the amount of formality required by the authorities in order to enter New Zealand. Before one can buy a ticket for New Zealand one has to make a declaration; before one can land one- has to make another declaration; and before one can buy a ticket to leave New Zealand one has to make still another declaration. Then there is the medical inspection on arriving from Sydney or Melbourne at Auckland or Wellington. This surely in the case of passengers from Australia is entirely unnecessary and a tax on the time and patience of passengers. One is called an hour before one is required to be medically dealt with, and in my own ease I just passed before the doctor and he said 'all right,' and that was the inspection so far as I was concerned. When my secretary went up for examination the doctor was not there. The ship's doctor, who would be well known to the authorities, is in a much better position than the port medical officer, taking a merely cursory glance, to report upon the health of the passengers and crew. "All these restrictions add to the cost of things and their utility is extremely doubtful. Goods held up in bond, port delays, and general restrictions of rapid transport are all costly, and so many of them are as unnecessary as they are vexatious. In particular they may seem small but in the aggregate more money is required to do the same volume of business. "Then ships do not 'turn round' as expeditiously as th«y should do, and this is largely due to restrictions of one sort or another in the ports. GREAT ADVANTAGES. "New Zealand has great advantages over Australia in that it is practically on a basis of world's prices, and this means that the trade is on a sound foundation, and therefore less liable to extreme changes "than is Australia, where attempts have been made to establish internal price-levels, independently of world's price-levels. New Zealand, like Australia, is a debtor country, and therefore has to provide a surplus of exports over imports to meet demands abroad for interest and other payments. But Australia, within recent years, has been providing this surplus by borrowing money abroad, a pro" cess that cannot be indefinitely continued, and may be described as a Mantellini form of finance which in the end has disastrous results. A greater proportion of New Zealand production is exported than is the case with Australia, and therefore even more than Australia, is New Zealand dependent for her continued prosperity upon tho ability to export profitably at world's prices. It is highly important for New Zealand that her internal price-level should be closely related to world's prices, in other words, for Now Zealand to cut the coat according to her cloth. In this connection it seems to me that a high rate of company taxation is an undesirablefeature of New Zealand Government finance. WHY COMPANIES ARE TAXED. "Taxation of companies is no doubt attractive to Governments, because a company has no vote. A tax on companies' profits is much more definitely a charge on production than is taxation on personal incomes; moreover, the modern tendency is for companies, rather than individuals, to provide the larger blocks of capital required for new enterprises, and therefore, if companies are heavily taxed it means that tho money available for developmental purposes is being restricted. "Without applying the observation to New Zealand, where conditions may bo different, I do not think that development of latent resources can be done so economically and so efficiently by the State as by private enterprise. As regards social benefits, which some people claim are better provided by the Governments than by private benefactions, I think that it is political rather than social benefits which have the prior .claim in the mind of the politician. "New Zealand has the advantage of Australia in that her seasons arc much more regular. I have been, told, for example, that it is possible to estimate within 10 per cent, the production of dairy produce. Australian seasons fluctuate considerably, although there are signs that these fluctuations are being modified by water conservation and better management. "I have noted in touring New Zealand indications of tidiness (from the outside, at any rate) of tho farm houses and buildings, and this gives one the impression that the New Zealand farmers are careful about the proper housing of their stock and implements, and this is a sure sign of efficiency. Of course, the New Zealand countryside is so picturesque that it provides an admirable setting for farm buildings. , INTER-DOMINION TRADE. "New Zealand taxes Australian wheat and Australia taxes New Zealand butter. This spoils any opportunities for complementary trade to tho mutual advantage of the Dominion and the Commonwealth. The idea of free trade within the Empire is admirablo in sentiment, and has many strong arguments in its favour, but there are many difficulties in the way of its accomplishment. But it seems to me that there are no great difficulties in the way of free trade between Australia and New Zealand. Both have a high standard of living, and many common interests. If the economic relations between tho two countries can be strengthened it will be an important step in the direction of closer cconI omic connections between the big units jof tho British Empire."