TOBACCO INDUSTRY

Evening Post, Volume CX, Issue 38, 13 August 1930, Page 4

TOBACCO INDUSTRY

INQUIRY BY, COMMITTEE

OLD BATES MEANWHILE

Discussing the now alteration in the Itety oil tobacco leaf, the Prime Minister said there had been a great deal of misunderstanding with, respect to thejjprevious-proposals- made by-the; Government. It was alleged, for example,, that the effect.pf .the alteration previously made, was to encourage the manufacture in New Zealand of tobacco made wholly from imported leaf. To view the ..matter properly it must not be overlooked that before such manufactured tobacco could be delivered from fche. control .of .-the .Customs..two duties must be paid—the import, duty on the imported leaf and the excise duty on the tobacco manufactured in the Dpminion. For example, under the law "in force before the 22nd July the import duty, on the leaf was 2s per lb, and the excise duty on manufactured cut tobacco was Is 8d per lb, a total of Sa 8d per lb. Under the resolutions of 22nd July the import duty was Is per lb, and the excise duty 2s 8d per lb, a total of 3s 8d per lb; It would be seen, therefore, that so far as tobacco made wholly from imported leaf was concerned, no difference whatever was niade in. the position, and there was 3i6"foundation for the allegation that jthe proposals would'result only in tho iiso of imported leaf. Since the alteration was made, however, the Government had decided to set up a Parliamentary Committee to inquire into and areport upon the Dominion tobacco growing: and manufacturing industries in all "their phases. ""In the meantime," said Mr. Forbes, wit is proposed to revert to the excise rates in .force before the resolutions came down. One of the objects of the alteration was to stop the drain which the old system was making upon tho revenues of the country, arid for this pnrpose it is proposed to increase the duty on leaf tobacco to 3s per lb. This cannot prejudice the local tobacco growers. A clause ha 3 been inserted in tho Customs Bill to authorise the alteration of these duties if such action is 'considered necessary after the report of the Committee is received. \ liObALXiY GROWN TOBACCO. 1 "Two further points arise out of the changes now proposed. The first is that the aggregate of the import duty on the leaf and the excise duty on tobacco made .in New Zealand wholly from imported leaf is in general greater than *he duty payable on the manufactured article importod into New Zealand. The local .manufacturers have always received a protection on tobacco made in •JJew .Zealand from imported leaf, and it iB-*noi proposed to interfere with this aspect of the matter. Take, as an example, the case of manufactured cut tobacco. Under tho resolutions now .before the House, if some special proivision were not made, ; the total of the Smport and excise duties would be 4s JBd, whereas the Customs duty payable ion. imported manufactured cut. tobacco is 4a 2d. There has for many years past been a protection of 6d per lb on itobacco made locally from imported lent. This is being retained. Provision has therefore been made In. tho resolutions.that the aggregate Customs and Excise duties on such locally manufactured tobacco shall not exceed the figures set out in the resolutions. In the case of manufac- { tured cut tobacco the total' of the I duties; payable is 3s Bd. This was f the amount both before and after j the introduction of the first resoluj tidns. : i; : IMPORTED - LEAF. ' "The other point previously referred ia is that a considerable quantity of amported leaf tobacco has been cleared nt the rate of Is per lb. It would give Tin unfair advantage in such cases if d,!ie tobacco made from such leaf could Trie entered for excise duty at the rate mow proposed. A proviso has therefore jhecn added'by which any tobacco made it'rom leaf which has been entered at 3s per }h shall in effect be liable to excise duty at tho rate in force whon tho shilling rate applied to tho loaf, Ji ~ CIGARS AND SNUIT. T ''Mention should be made of the rate hi exciso duty on cigars and snuff.

There is only one manufacturer of these goods'-in, New' Zealand, and after hearing his, representations, it is considered that if;thi'e rat;e set out in, the-;.first resolu|i'ons'is.niaintained iti.will prejudice Elm in Ihis business.' The -total duty payable, by him on his leaf tobaegflj^-Ljtinderstand that only imported leaf'haV sojfitr been used—and on the ■manufactured' cigars has for some yearr past been-, one half of the duty payable on imported cigars, and it is now proposed that the total duty payable . by, Miai should bo 7s 6fl per lb, that ij}, 'one. half pf the import rate of 15s per lb. Provislpii was made previously by which the output at this reduced rate cpuld be limited, and similar provision will be made "in the Customs Bill which ■wiir.bei introduced."