CUSTOMS BILL DEBATE

Greymouth Evening Star, 30 August 1934, Page 5

CUSTOMS BILL DEBATE

MR COATES’S REPLY. [PKB PBESB ASSOCIATION.] WELLINGTON, August 29. In the House this afternoon, Mr Coates, repling to the second reading of the debate on the Customs Bill, said that tariffs regulated imports of goods from other countries, and New Zealand gave perference to Britain and other parts of the Empire. Apart from revenue, the only need for tariff was to assist local industries. New Zealand required approximately £7,000,000 from tariffs. The Labour Party overlooked that. Much was heard of a graduated tax on all incomes, land tax, and other things, but that wdiild not make up the revenue required. Only four and a half million sterling was obtained from those sources. Referring to embargoes, Mr Coates said that Australia had had embargoes, about 80 items being affected, but they were now replaced by high tariffs. Australia imposed embargoes because she had to restrict imports quickly, because she did not have credit at the moment.

Mr Coates continued: It has been suggested that before agreements were made, tariffs should be eliminated, but apart from the revenue aspect, that would be very unwise. He did not see how New Zealand could negotiate agreements with other countries unless she offered them something better' than they had already. The Leader of the Opposition, said that no goods should be imported which could be economically made in New Zealand. That meant there would have to be either a prohibitive tariff or definite embargo. He wondered if Mr Savage realised what the effect on the general public would be. It must have an effect on prices. Mr Parry: We -would see to that. Mr Coates: Then there must be price-fixation. Each time a tariff was levied the price was raised. Continuing, he said that Mr Langstone made it clear there would be a definite embargo against these goods. If those were the methods to be adopted, and if the people knew about it, so much the better. Referring to Mi’ Lee’s suggestion about a reduction in the tea duty by 3d, Mr Coates said that would be about a farthing a lb. It could not be passed on to the public. The reduction in beer duties was made to increase the production of hops, and he also thought the excise duty too high. If anybody received the benefit of that, he thought it would be the licensee. Regulation of British imports had been mentioned by several members, but the agreements effected affected only two countries concerned. Britain had not offered one Dominion better treatment than another. Whether that would be altered in future he could not say, but Britain -was New Zealand’s best market. Cabled negotiations had been pursued, but it was not possible at present, to make public those cables. The Government- considered after close examination that the tariffs were fair and could be substantiated. They gave the manufacturers a reasonable opportunity of success if carried out in the letter and spirit of the Ottawa agreement, which was all the Government would undertake to do. Referring to Mr Downie Stewart’s remarks, Mr Coates said Mr Stewart mentioned a method in Australia which he seemed to favour. He quoted the example of woollen yarns and materials to show that if the Australian system were adopted the New Zealand woollen industry might be irreparably damaged. He considered having regard to local conditions, the methods adopted by New Zealand, were much better than those adopted by Australia. Dealing with exchange, he said the general position at present looked very much better. The exchange had improved the purchasing power in the Dominion. The statement that exchange had meant a decrease in exports was not correct.

LONDON PRESS INTIMATION. [BY CABLE—PEES 8 ASSN.—COPYBIGHT.] LONDON, August 29. The “Financial Times” editorially, expresses the opinion that the Australian and New Zealand currencies are now undervalued in the terms of the pound sterling. It says: “The recent expansion in their exports of dairy produce tends to support this view; but it is difficult to believe that Australia and New Zealand would consent to their currencies ceasing to be undervalued —even though they are accumulating heavy sterling balances —in view of the necessity of their competing on the British market, not only' against the British farmers, but against Denmark and some of the South American Republics; while they are seeking also to establish their own industries. They can justify their accumulation of sterling balances here by pointing to the contraction of their loans from the London market, and to the need for building up adequate drought reserves. The danger, however, is less, in the event of the further development of British agriculture and therefore of the curtailment of British imports from the Dominions, the latter will be tempted to depreciate their currencies as the alternative to further protective tariff measures which would conflict with the Ottawa Agreements. Our agreement with Ireland and with New Zealand had not been in force for six months when the New Zealand pound was depreciated. It was significant that Denmark immediately countered this move.”

The editorial insists that the question of Imperial currency relations must occupy the leading place in the agenda when the Ottawa Agreements are reconsidered or when the Empire Pirme Ministers meet. It says: “It is useless to fix a tariff by mutual agreement if the exchange rates are to be free to vary. It is time that this question was investigated in advance by a representative body of experts from Great Britain and the Dominions.”