LOCAL INDUSTRY

Evening Post, Volume CXIX, Issue 34, 9 February 1935, Page 10

LOCAL INDUSTRY

STATE COMPETITION

REQUESTS TO GOVERNMENT

TRADE TREATIES

Several questions affecting the members of the New -Zealand Manufacturers' Federation were placed before the Prime Minister (the Rt. Hoh; G W. Forbes), the Minister of Finance (the Rt. Hon. J. G. Coates), and the Minister of Industries and Commerce (the Hon. R. Masters), by a private deputation yesterday afternoon. The deputation submitted that primage duty on imports from the United Kingdom should now be abolished, first, because of fhe undertaking in the1 Ottawa Agreement that this would: be done as soon as financial conditions permitted; secondly, on the grounds that .a very large proportion of the duty-free goods which are subject to primage, consist of materials and components imported for use in; New Zealand industries; and, thirdly, because during the last three years the revenue obtained through primage has been:— 1932 £251,214 5933 234,731 1934 269,000 The statement added: "The amount collected on goods from U.K. is not accurately known, but it is believed to be about 60 per cent, of the total* or in the neighbourhood of £160,000 last year. The greater -part of it is in' the nature of extra taxation imposed upon one section of the community, namely, manufacturing industries." FOREIGN TRADE. On the question of most-favoured-nation agreements the federation asked the Government "to consider some of the incidental but, in certain' cases, important effects of reductions in the general tariff made as a result of trade agreements entered into with specific foreign countries. : "As nearly all the foreign countries exporting to this market enjoy: the status of 'most favoured nations,' it appears that any tariff concession granted to one 'of them must automatically apply to all," the statement .proceeded. After quoting a case- in point it concluded: . "Evidently the position is such that no reduction of duty can be made to any foreign country (under a trade agreement) without such reduction applying automatically to nearly every: other foreign-.country, including Japan. This -federation asks .the Government to confirm or correct this statement of the position, as it is felt that public opinion on the whole question of overseas trade agreements is, if our interpretation is correct, based entirely .on a misunderstanding of the position." ■•/..• ••..■•.'•■■. OTTAWA AGREEMENT. In asking the Government, iiy.th'e coming [negotiations regarding 'the trade agreement with Australia, to adopt the principle of imposing upon imports from Australia; a scale' of duties higher than that imposed on corresponding imports from the United Kingdom, the federation stated:-^ "We would point out that the' scale of duties on United Kingdom goods Has been recently adjusted to comply with Article 8. of the Ottawa Agreement; but this Dominion is under'no'obligation to place the Australian manufacturer also 'in the position of a domestic competitor.' If the Government endorses this view,; we further submit that the tariff ' oh" Australian goods should be "such -as - will - enable the' New Zealand industry.'to ■'undersell the imported article' Oin;..; this market. "This federation also adheres to the belief that New Zealand, while giving first preference to New Zealand goods, should give her second preference decidedly to Great Britain. 'It appears, however; that, as between"; Australia and Great Britain, the former, country how enjoys a distinct- advantage in this market on account of freight and exchange." ■ .-.,.:'■■■ Dealing with the activities of the Hutt Railway Workshops: the federation stated that it was much concerned about the manner in which the .workshops were entering into competition with private enterprise. It was urged that the Government should consider the whole question of policy involved —whether and to what extent the railway workshops were to be allowed to enter into' new. fields of competition and produce, either, for other Departments or for quasi-Government institutions such as the Public Trust, goods of classes which had hitherto been supplied, by ■ outside .-manufacturing concerns. • : "FAIR COMPARISON." "We would point out," the statement proceeds,' "that a fair comparison ,of tenders is extremely difficult, if not impossible. It is,understood that the railway workshops are able to .purchase the whole ,of r their - material (sheet metal, etc.), free of exchange, and also free of primage. Moreover, they are exempt from payment of the sales • tax, -which must. be chargeable by an outside tenderer. Apart from this, the outside firm is subject to heavy rates and taxes, which obviously.go into its costing, «. while the railway workshops are exempt. Even in.smaller matters —for example, the payment of fees for the inspection of machinery— the outside manufacturing firm is placed at a disadvantage, compared with the Railway Department, in its costing. There is, finally, a widespread belief that the railway workshops dp not always .charge to .these competitive jobs their full and proper proportion of general overhead, and some evidence even that labour time is not always charged entirely to the particular job. . "If the Government decides, as'; a matter of policy, that railway workshops shall be allowed to continue tendering in open.competition with independent firms, tfien we ask:— "(a) That the Government "will lay down and limit specifically the classes of goods which the railway workshops are permitted to produce for sale to outside bodies and Departments. "(b) That the Government will cause an investigation to be made by a reliable and independent costs accountant. . . ." ■ ... . .-" . ' ■