TOBACCO DUTIES

Evening Post, Volume CX, Issue 41, 16 August 1930, Page 6

TOBACCO DUTIES

EFFECT ON PRODUCTION

THE GROWERS UNEASY

(From Our Own Correspondent.)

NELSON, 15th August.

Three. representatives of the Federation of Tobacco Growers (Auckland), Dr. W. H. Horton and Messrs. 0. P. Lock and Gen. A. Green, have been on a visit to Nelson in connection with the tobacco duties question. The body they represent speaks for the whole of tobacco growing interests in Auckland. The total capital of-the companies at present in the. Federation of Tobacco Growing Companies is approximately £CSO,OOO. In view of the tariff pro-, posals now before Parliament, they claim that a close watch is needed on the present legislation. Any mistake at this juncture would seriously jeopardise a young and promising industry, in which it is claimed that over £2,000,000 has already been invested in the Dominion. It is essential that the incidence of any adjustment necessary for revenue purposes should be so arranged as to give increased inducement for the manufacture of New Zea-land-grown tobacco leaf, and this, it is claimed, is not provided for under the legislation of 22nd July or of 12th August, which was ostensibly intended to assist the New Zealand grower. TOBACCO DUTIES. They state the question that arises is, has any provision been made to give effect to the recommendations of the Tobacco Committee, should such recommendations when made be contrary to the provision of the tariff. If no such provision has been made, or if, as they think is the ease, the provision made in clause 26 is inadequate, what will be the value of the committee taking evidence regarding the tobacco industry,' and the actions necessary for its preservation and development?

Speaking to a reporter this morning, Dr. Horton said: "We consider that the objectives of the Government should be: (1) Protection of local industries; (2) conservation of revenue; (3) in giving effect to .1 and 2 the Govern-, ment should always see that the New Zealand consumer is not compelled to use inferior products. :

"With reference to (I) decrease of duty on raw material, despite tho arguments of the Comptroller, of Customs which -frill be dealt with later, must obviously result in an increase of the amount of imported leaf used, and a consequent shrinkage in the amount of New Zealand grown leaf employed.

"(2) The conservation of revenue, other things being equal, will not be achieved by a reduction in duty, but it is conceivable that an increase of duty might result in a shrinkage of revenue if importation, decreased. The shrinkage in revenue could be met by a scientifically adjusted system of . excise duties.

"(3) "We have it on the authority of the tobacco instructors and experts of the Department of Horticulture that leaf can be grown, and has been grown in New Zealand which- is equal in all essential requirements to anything that is grown in the world.

"The provisions:as at first outlined, spelt the absolute destruction of the tobacco-growing industry of this Dominion, and these.provisions were introduced by a Government who,, we be'Heve, are actuated by a genuine desire to foster such industry.- -■-■~

"The recommendation as to the reduction, of duty, etc., was made by the Comptroller of Customs, and so far, although he evidently is.of opinion that: those provisions will benefit the local grower, still no one I have discussed it with can see this possible- effect,, and admit that they cannot see it, all except one, and he says lie understands the working, but admits that he cannot exactly explain it. ; PARLIAMENTARY COMMITTEE. '^When strong objection was raised to these proposals the Hon. the Prime Minister set up a Parliamentary Committeo to.consider the whole question of tho tobacco industry. That Committee has met once, elected its chairman, and adjourned, pending the.receipt of reports from the Departments of Industries and Commerce, Agriculture and Customs. We understand that the Committee cannot meet again until tho middle of next week. Meantime, without any recommendation based on evidence having been received from this Committee, the following things have occurred since 22nd July:—

"1. Huge withdrawals of imported leaf have been made from bond. ,The tobacco withdrawn pays one shilling per 1b duty.

"2. After such -withdrawals, regulations have been issued fixing the duty on imported leaf, fixing the exciso duties, and providing also that when the aggregate of such import duty and excise are in excess of the duty on the imported manufactured article, adjustments shall -be made to balance this excess, but that such adjustments shall be made on the excise only. -

"3. The import duty on the imported manufactured article was fixed before the adjustment was discussed.

•'4. No increase in duty on imported manufactured ■ leaf was made, nor can be made, and the door was definitely and permanently closed on any further adjustment of the tariff in the direction of benefiting local . growers, except as provided in.clause 26, where the provision made is in our opinion inadequate. . ■

"The position now is that 'the import duty on the article which is completely manufactured, overseas and arrives hero ready for market has been definitely fixed. This duty is less than the aggregate of • the import duty on raw material, plus the excise duty on locally manufactured tobacco. Thus, whatever adjustments are made to bring this aggregate into line with the duty, on the manufactured article, imported from overseas, it would be done by a reduction of the aggregate to the detriment of the locally-grown leaf. This detriment wil be sustained not at the cost of an increase of revenue, but will be accompanied by a loss of revenue." ■ ■ .