MONEY FROM SMOKE

Evening Post, Volume CXV, Issue 39, 16 February 1933, Page 12

MONEY FROM SMOKE

SEARCH FOR REVENUE

N. 2. TOBACCO GROWERS

CIGARETTE DUTY

Further consideration of the duty recently imposed on tobacco was promised by the Prime Minister (the Rt. Hon. G. W. Forbes) and the Minister, of Finance (the Rt. Hon. J. G. Coates) today when replying to a deputation of tobacco growers from the Nelson Province which asked that the duty on imported cigarettes should be increased in proportion to the increase placed on the New Zealand product. Mr. Coates assured the deputation that the Government was anxious to do nothing that would jeopardise the New Zealand industry, and said that in reaching its decision it had taken all factors into consideration. His belief was that the New Zealand grower would be no worse off relatively, but he was prepared to go into the question again before the Customs Bill passed the House. The Government was trying to get as much revenue as it could from the sale of tobacco and cigarettes. The deputation was introduced by Mr. K. J. Holyoake, M.P. for Motueka, who said that 700 growers in the Nelson Province, were represented. He stated that when a similar duty was imposed on Australian-grown tobacco the result had been disastrous to the industry there. He referred'to the cheap price for which manufacturers in New Zealand were able to obtain American leaf. What the deputation wanted was that such an increase in duty: should be placed on cigarettes and imported manufactured leaf as would place the New Zealand grower in exactly the same position as before. Mr. H. Atmore, M.P. for Nelson, referred to the.importance of the tobaccogrowing industry in New Zealand;. It had been definitely proved in-the Nelson Province that tobacco could be profitably grown, and it was an established fact that the industry was a big factor in relieving the unemployment problem.

TO KEEP INDUSTRY GOING.

Mr. Spencer Smith, chairman of the Motueka Tobacco Growers' Executive, said they were not asking the Government to.forgo one single penny of the duty it was imposing, but their proposition would actually mean extra revenue for the Government. At the same time it would afford New Zealand growers the same -protection as they had enjoyed hitherto. If the tobacco industry was to be kept going it was essential that a duty should be imposed on the imported article. There was no reason why New Zealand should not grow all the tobacco it required. Information he had received showed him that it was possible for the New Zealand manufacturer to import tobacco from America at 10 cents a lb, plus freight and Customs duty. That waa the result of the cheap'labour conditions ruling in America. The American leaf also came in already stemmed, whereas the New Zealand leaf had to be stemmed after it left the grower. They were not asking the Government to put a sales tax on cigarettes, butj they were asking that an extra 8d a i lb should be added to the duties on the imported article. They earnestly hoped that the Government would seriously consider maintaining the present protection. He quoted figures showing the enormous growth that had taken place in the industry. In 1926 there were only 126 growers, but today there were 700. The value of the tobacco grown in that time had increased from £36,000 per annum to £180,000 per annum. It could bo. said definitely that £85,000 per annum was spent' in wages alone. Mr. B. Rowling quoted figures showing the large proportion of the cost of growing tobacco which was'absorbed in wages.

NEED FOR, REVENUE.

_ Mr. Coates said that.the whole question had been very carefully considered by the Government, and there was no desire to do' anything that would injure the tobacco industry in New Zealand. If lit was possible to increase the percentage of New Zealand-grown tobacco used in tho making of cigarettes by means of tariffs and so on it would-be to the advantage of. the grower. It had to be remembered that the great need of the Government at the present time was "revenue. Mr. H. Manoy: You. will get .more out of our proposition. Mr. Coates: That may appear so, but there is such a thing as diminishing returns. In the interests of the growers themselves we have to see that we don't get beyond the point where the consumer is able to buy the article he wants. I believe you can make any country amoke the tobacco which it grows; that was the evidence given at Ottawa. There is no need to demand a pure. Virginian leaf. We have been considering this matter from every point of view, and I must say that we\ cannot see that the tobacco-growing industry is jeopardised in any way. At the same time we are trying to get as much revenue as we can from the sale of tobacco and cigarettes. I shall be glad, however, to discuss the point again with Dr. Craig and with the manufacturers. After all one must depend on the good faith of the manufacturers to use New Zealand tobacco. lam assured that we are leaving the tobacco industry in exactly the same relative position, but we will discuss the matter again before the Customs Bill passes the House. _ Mr. Forbes also assured the deputation that its representations would be carefully considered by the Government.