TARIFF JUGGLING AND BUTTER

Evening Post, Volume CXI, Issue 1, 2 January 1931, Page 8

TARIFF JUGGLING AND BUTTER

Although it is Australia, not New Zealand, who pays an export bounty (Paterson plan) on butter, the Canadian duty on butter has lately been higher on the New Zealand than on the Australian product; and an Ottawa cablegram published on Tuesday suggests that opposition will- be raised if the treaty negotiations with Australia take the form of continuing a lower duty on Australian. "Several members" of the Canadian Government itself "are believed to hold that there should be no difference in import duty as between Australia and New Zealand." If, after all the Canadian protest against the "dumping" effect of the Paterson plan, New Zealand butter is to bear the heavier import duty, such a thing would be not only an inequity but an iniquity. Recently the export bounty payable under the Paterson plan has been reduced by the Australian Butter Stabilisation Committee from 4Jd to 3^d per Ib, but the principle remains the same. Purely domestic reasons have dictated the reduction. Some time ago it was calculated that with.a levy on all Australian-produced butter of Ifd per Ib, and with, a bonus of 4id per 1b on the exported portion of if, the revenue of the levy would be overstrained (having regard to operating costs) if the exported portion totalled much in excess of 45,000 tons. But for this season an export from Australia of 58,000 tons of butter is expected; and the Australian Butter Stabilisation Committee has reduced the bonus simply because a l£d levy could not pay1 a 4;} d bonus on so great an export. As the proportion of export to home consumption rises, the difficulty of financing an export bonus, out of a levy, automatically increases. The Australian consumer of butter has to pay more in order that the oversea consumer of Australian butter may pay less; and as the Australian consumers ' grow fewer (forced out by Australian price) their burden grows heavier. The published statement that "a factor which has been operating against the Committee in the last year has been the decline in the consumption of butter in Australia" speaks for itself. The bonus, it will be noted, is now twice the amount of the levy.