EXCHANGE RATE

Evening Post, Volume CXX, Issue 105, 30 October 1935, Page 12

EXCHANGE RATE

AND AUSTRALIAN TRADE

AN UNFAIR ADVANTAGE

(By Telegraph.) (Special to the "Evening Post.")

NAKER, This Day.

Adverse comment on the pegged ex-) change rate in relation to the Do-1 minion's trade with Australia was made today by Mr. A. H. Allen, of Dunedin, in his presidential address to the annual conference in Napier of the Associated Chambers of Commerce. "For the last two years and threequarters," he said, "our pound has been pegged at a discount of approximately 20 per cent, in relation to sterling. . This step was taken to assist our primary producers, but it is questionable if we could not then have maintained our £ at its true value and have rendered an equal service to the man on the land by some internal taxation, equal in total to the cost of purchasing London exchange. This would have enabled us to meet all our external debts without loss, whereas devaluing our currency has cost Government and local^bodies a huge sum of money, and has increased the cost of importing commodities from all countries,/ excepting Australia, by 25 per cent, on manufacturers' invoices, and all charges to ship's slings New Zealand ports. This obviously adds considerably, not only to the cost of living, but also to the cost of production, so that the benefit the farmers obtain on the one hand is immediately diminished on the other. "My purpose in introducing this vexed question is to again draw attention to the unfair advantage it gives to Australia over Great Britain. Many commodities hitherto imported from British 'manufacturers are now being supplied by Australir. as a result of British invoices and shipping expenses being loaded with 25 per cent, bank exchange, whereas imports from Australia escape this impost entirely. Australia now finds New Zealand a valuable outlet for the surplus production of many of her new industries, to which we would not object if it were not at the expense of our best customer. Great Britain. Though our imports from Australia may not as yet show any marked increase, they will rapidly do so unless his unintentional advantage is rectified. "It is surely an anomaly that whereas in our exports to Great Britain Australia is our greatest and keenest competitor, we should enable her by this advantage to rob Great Britain of her former market in New Zealand for many manufactured articles. "I feel that our Government should take immediate steps to ensure a balanced trade with Australia, and if necessary to impose on Australian invoices for goods now displacing similar articles of British origin a duty surtax, equal to bank exchange, Australia on London, and then, on invoice values plus surtax, to add relative Customs duty. , This would place both countries on a more equitable footing."