THE TARIFF

Evening Post, Volume CXVIII, Issue 52, 30 August 1934, Page 14

THE TARIFF

REPLY TO LABOUR

MR. COATES'S SPEECH

QUOTAS AND EMBAEGOES

A defenco of the Government's tariff proposals as set out in the Customs Amendment Bjll and a criticism, of the policy of the Labour Party on trade questions wore two features of the speech of the Minister of Customs (the Bt. Hon. J. G. Coates) in the House of Bepresentatives yesterday, when replying to the discussion on the second reading of the Bill. He made it plain that the fact that a country liad a tariff did not prevent that country from negotiating for trade agreements. Mr. Coates said that there were all sorts of schemes in the minds of members as to the best system to adopt for the* purpose of regulating trade. In the first place, there was the tariff system which was a method of regulating importations' of certain goods from other countries. A tariff had two objects— the production of revenue and the assistance of local industries. Mr. E. McKeen (Labour, Wellington South): The local industries should come first. The Minister of Customs said that it had been argued that they should not have a tariff on any goods ' imported into New Zealand which could not be made in New Zealand, but the fact of the matter was that the Government was dependent on'tariffs to the extent of £7,000,000. Everyone had definitely overlooked the fact that the country must have revenue. Unfortunately, it was not for the Labour Party to say where the money was to come from, but it was certain that the proposals which had emanated from the Opposition would not make up anything like the amount that was required. To him the Labour Party's view appeared to be a little out of perspective. The Leader of the Opposition (Mr. M. J. Savage): Where does the,revenuecome from now? ' Mr. Coates: I know you are going to say from the people; that won't get you anywhere. A Labour member: You get'it from the people without them knowing you are doing it. : . Mrs. E. B. McCoinbs (Labour, Lyttelton): The present system makes the people pa/ twice. THEY LIKE IT. Mr. Coates: Of course it does,' and the people seem to like it. The Minister added that if a man who bought a motor-ear had to pay £50 in direct taxation on it. he would object very strongly, but ho willingly . paid the taxation indirectly and thought it was fine. ' The Minister went on.to say that the Labour Party talked about the necessity for a new system of dealing with tariffs. Was it. to be the quota or the embargo 1 If it was proposed .that there should be quotas or quantitative regulations it would still be necessary to have tariffs. The Labour Party also suggested trade agreements, and proposed to do away with tariffs before they entered into negotiations to arrive at those agreements. In his opinion, apart altogether ■ from the revenue aspect, that would be very unwise. He could not see how any country _ could proceed to any point in negotiations with another country unless it was offering that country something better than it already had.' At any rate, did the tariff in any way interfere with negotiations for agreements with other countries? Mr. Savage: Could not we import goods under licence 3 Mr. Coates: Is not that quantitative regulation? : . ' ■ • Mr. Savage: Imports are at present regulated by our inability to buy goods. Wo may as well have organised regulation as unorganised regulation. Mr. Coates said that members should not think that it was possible to make agreements in six or twelve months. Mr. Savage: Should we not begin? Mr. Coates: Does the Leader of the Opposition suggest that we have not been in close touch, with other countries in an endeavour to mako some agreements? The Government has been in touch with seven countries on the very lines suggested by Mr. Savage. Mr. Savage: Wo have seen no results. ■ • • . THAT "OFFER" TO BRITAIN. Mr. Coates: I am just wondering what results are yet to bo seen.' Mr. McKeen: Are you making them an offer like you made to Great Britain? Mr. Coates: I know of nothing more deliberately 'unfair than that. No such offer was ever made by this Government. ■ ■ '■ . Mr. -E. J. Howard (Labour, Christ-. church South): This, is the first time the Government has ever said that. M,r. Coates: I think you arc entirely mistaken. No such-offer was. ever macle, and if members will read the.British Hansard they will find'that Mr. J. H. Thomas confirmed that statement. It is true, that some trado interests tried to make out that an offer was made. Every member of the House knows what the position is, and if it is, repeated it is just pure politics. I have given the member for Wellington South an answer,; but I know he will go on-re-peating his statements; if he, wants deliberately to misrepresent me, let him carry on; good' luck to him. In any event, I am not very intcrestedin what ho says. Mr. Coates said there was nothing to prevent agreements being made with other1 countries, and when they were made they had to come before Parliament for ratification. Mr. W. E. Parry (Labour, Auckland Central): You commit us before the House has ah opportunity of saying anything about it. PRICE FIXATION. Mr. Coates: The House always has an opportunity of rejecting the legislation. The Minister pointed out that whether the Labour Party proceeded by a definite embargo or by prohibitive" tariffs the effect was the same: it meant an increase in prices. Mr. Parry: We will sec to that. Mr. Coates: That is a matter of fixing prices. • Mr. McKeen: You do it now. Mr. Coates: There is ample room in our trading conditions for competition. Every time you put a Customs tariff on goods you raise prices. The Minister • said that it had been revealed by the member for Waimarino (Mr. F.- Langstone) that there was to be a definite embargo against goods that could be produced in New Zealand. Now they had it that there was to be price fixation as well. It was always handy to know those things, and it enabled peoplo to know exactly whero they were. REGULATION OF IMPORTS. Befcrring to the question of the regulation of imports into'the United Kingdom, Mr. Coates said that up to the present the negotiations between New Zealand and the United Kingdom had been carried on under confidential seal. Any agreement arrived at would affect only two countries, and the other countries would have to look after themselves in the meantime.. The United Kingdom was not offering New Zea-

land any better treatment than she was offering other parts of the Empire. They had 'to admit that the United Kingdom was New Zealand's main market. It was hoped that when tho negotiations were completed it would be possible to release the contents of the cablegrams which had passed between the two countries. That, of course, was dependent upon the attitude of Great Britain. New Zealand was quite prepared to release them. Mr. D. G. Sullivan (Labour, Avon): You are making sacrifices that other people have not made. Does New Zealand get anything for that? Mr. Coates: What sacrifices are we making? Do you really say that tho tariff proposals before the House are sacrifices? Labour members: There is no question about that. Mr. Coates: Well, I am wondering. I am quite clear that they are not sacrifices at all. Now Zealand has observed the spirit and the letter of the Ottawa Agreement. ■ . Mr. Parry: If there are.no sacrifices, how can there be a concession to Britain? . Mr. Coates: Quite easily. . New Zealand, he said, had met all the conditions that had been asked for in the, Ottawa Agreement. OTHER SPEECHES. Three speakers took part.in tho debate on the second reading of tho. Customs Acts Amendment Bill before Mr. Coates rose to reply. T1 \ Mr H. Atmore (Independent, Nelson) said that there was general satisfaction at the restoration of the duty on imported jams. There was dissatisfaction over the tobacco duties, however. If the Government was desirous of really assisting industry, the duty should have been raised to 3s. An advantage had been given to the manufacturer, though, tho matter was really a growers " questiou. He expressed the opinion that the manufacturers were getting quite a good thing out of it. Dealing with porcelain duties, he said that Britain could not compete with Japan till there was an alteration in the monetary system. If the Lancashire workers charged nothinff for their labour, their manufacturers could not compete with-Japan-ese articles shipped from Japan .and landed in Lancashire. Japanese trade had increased while British trade had decreased, and he expressed the opinion that the reason for the position was the monetary system. Trade today was not so much a matter of a business between two countries as a matter between the manufacturer's of a country and tho producers of the raw material in the same country. If tho monetary system were reformed thero would be no need to fear the changes at present taking place in the world. , Mr. A. E. Ansel! (Government, Chaimcrs) said they could not look forward to a return of the conditions which had prevailed for many year? past. Great Britain was paying more attention to her agriculture, and although that policy was to be commended, it would materially affect New Zealand. In some quarters it had been proposed that the revision of the tariff should be delayed until after the effect of the quota had bern felt. It was absolutely necessary t'.at the Dominion should safeguard and develop hnr secondary industries. • They could not have ■ a prosperous farming community without prosperous manufacturing industries. Efficient industries had been built in New Zealand with moderate protection and much credit for this was due to the Hon. W. Downio Stewart, who had the portfolio of Customs for several years. The protection given by the exchange rate was not as high as generally believed because many industries had "to buy their raw material at world parity. It was gratifying to note that the Government had restored the duty on electric, cooking appliances Mr. W. A. Veiteh' (Independent, Wanganui) said, that the principle of tho Ottawa Agreement hat", been to clear out the channels of trade, but now the Mother Country was asking New Zealand that the channels should be blocked. The raising of the exchange rate by New Zealand and the' imposition of a quota had broken the letter and tho spirit of tho Ottawa Agreement. New Zealand owed a great deal to Great Britain, but at the same' time the country had to be kept solvent. Ho considered that action should be deferred till New Zealand knew whero she was in relation to quotas and inflationary measures in the Old Country. New Zealand production had been concentrated on primary production,. and secondary industries in general had suffered severe restrictions. Production must now bo brought back to a balanced condition. If secondary industries were given a chanco they would p-rogrcss rapidly. ,

Tho Bill was read a second time.