TARIFF INTRICACIES

Evening Post, Volume CX, Issue 132, 2 December 1930, Page 10

TARIFF INTRICACIES

A protest placed before the Auckland Manufacturers' Association concerning tariff anomalies raises pressing questions of policy. The protesting firm declared that it had been forced out of business because it had to pay 52i| per cent. duty.on its raw material, while the same raw material was admitted, to England duty-free, and the English finished product was allowed to enter New Zealand after paying 27 per cent. duty. The position is not' quite so simple as might appear from this statement. We are not furnished with the full facts in the Auckland case quoted, but it will usually be found that, when a high" duty is imposed on raw material, that "raw material" is some other manufacturer's finished product, and the duty is protection for that stage of manufacture. Another point that arises is this: British manufactured goods, to enter under the preferential tariff, must have a 50 per cent. British content of value in labour or material. This means that with aSO per cent, duty on foreign raw material and a 25 per cent, duty on the finished British product, the New Zealand manufacturer pays the sanie dutyas his British competitor, or possibly a little less. If the foreign raw material represents ,more than half the cost of the British product, that product cannot be admitted as British. If, however, there were a movement to place the British article on a less favourable basis several difficulties might be encountered. It might be argued that a higher duty on finished articles would be too heavy an impost on the local consumer, or a lower duty on "raw material" would destroy the business of a local manufacturer of that "raw material," or a greater British value content (say 75 per cent.) would exclude some British lines which must obtain their "raw material" from foreign countries. Such difficulties as these cannot be solved by a. Minister or even by a Customs Department, which must give its chief attention to collecting duties. They demand, as we have so often emphasised, the attention of a competent fact-finding body. It is not sufficient to set up a commission to hear evidence every ten years. Such a body must investigate every subject from the beginning. A permanent fact-finding body would accumulate information and would be 'able to cqnsider demands with a knowledge of the history of an ' industry. It would not be necessary to give such.a body power to alter the tariff. It would be sufficient if it could furnish recommendations, supported by fact, for the consideration of the Legislature and the public.