The Evening Star WEDNESDAY, SEPTEMBER 3, 1924. PROTECTING THE C.S.R.

Evening Star, Issue 18729, 3 September 1924, Page 6

The Evening Star WEDNESDAY, SEPTEMBER 3, 1924. PROTECTING THE C.S.R.

When the continuance of war taxation on such an item as tobacco was objected to as unwarranted and unfair the Ministerial excuse for giving no relief was that it was inadvisable to open up the question of Customs tariff revision. But it has been done in the case of sugar. When the whole tariff was revised in 1921 a duty of |d per lb was the duty fixed for all sugar, except that of British origin. Last year there was tariff revision on quite a number of articles, sugar among them. It was decided to place on all sugar during this current month a duty of 5-16 d per lb, and thereafter it was to be on the free list, whatever its country of origin. Now Parliament has decided, not by a big majority, but by more than the proverbial three party votes, that there shall be a duty of per lb on foreign sugar. One reason why the Government will reopen the question of the duty on sugar and not on tobacco is that from the latter heavy revenue is derived, while none is expected from sugar. Tire purpose of the sugar duty is to prevent importation that would compete with the monopoly, in which during the control period the Government was itself associated.

The principle over which the House divided was whether local industry, as represented ,by a single concern, should be maintained at a slight cost to the consumer. That extra cost, so we are informed, on the basis of New; Zealand’s present consumption, amounts to perhaps £170,000 per annum. The Colonial Sugar Eefining Company ’employs at its Chelsea refining works some 300 employees, whose wages sheets amount to £75,000 per annum. The company declared that, in the event of sugar entering duty free, it could not compete and would close down its works. There was at first a distinct disposition to regard this as mere bluff, but there are reasons to believe, that the company was in earnest. There followed negotiations as to the minimum price the company would accept as an inducement to stay in business. On the basis of present income taxation the company came down from a 5-16 d per lb protection to 9-32 d per lb. Then, on the understanding of reduced income taxation, the company further came down to -jd per lb. As stated, this means that New Zealand’s annual sugar bill will be £I7O,OCX) higher than would have been the case if sugar had been placed on the free list, as Parliament last year decided it should be as from October 1, 1924.

A good many people will ask why the consumers of New Zealand should contribute £170,000 a year (Mr Sullivan states the amount at £140,000) to keep in operation a concern paying only £75,000 a year in wages. As a mere matter of figures, would it not be better to pay the Chelsea employees full wages for no work in return, and save the difference of anywhere between £65,000 and £95,000? Undoubtedly it would. There are, however, some points to be urged In mitigation of this remarkable bargain which the people’s representatives have

concluded on their behalf. The article provided by the company has always been of uniform excellence, and in general its distribution has been well managed. Ij this good service disappeared and reliance wore placed on foreign supplies there might be variations in quality and irregularity of shipments, leading to fluctuations of price consequent on occasional shortages. This is the only consolation consumers can extract from an arrangement by which the Government has committed them, to pay a fair sum per annum for the privilege of remaining in the hands of -a monopoly.