TARIFF REVISION

Hawera Star, Volume XLVII, 14 September 1927, Page 5

TARIFF REVISION

THE GOVERNMENT’S PROPOSALS OBJECTIVES AIMED AT REDUCING COST OF LIVING TO ASSIST PRIMARY INDUSTRY

(by TELEGRAPH—PRESS ASSOCIATION.) W JELLING TON, Sept. 13. In the 1 ktu.se of Representatives tonight-, -the Hon. W. Dowiiie Stewart, Mu-nister of Customs, made the following statement upon the introduction of the resolutions amending the Customs tariff:

out, will result in an additional amount of £ISO,(XX) being remitted, making a total of £330,000. “It must be understood that this estimate of the reduction in taxation does not take into account the effect which the alterations in the preference granted on Empire goods may have upon the revenue. If the changes to which I now refer give effect) to the policy" of the Government, and thus divert to British countries any considerable portion of the trade now held by foreign nations, the result will be a further decrease in Customs duties. If. however, such a transfer does not take place, the decrease may he less. PREFERENCE TO EMPIRE GOODS. The Government has -still further developed its policy of according preference to goods of* Empire origin. During the last few years the importation of foreign goods -has increased consideiably, and it is hoped that the proposals now made will result dn transferring a substantial proportion of this trade- to those British countries which are our best customers-. It is not possible to forecast how far these alterations will achieve the objects in view. It is believed that in several cases the alterations made in the- general tariff will have the dual effect of increasing Empire trade and the equally important result of affording assistance to local industries against foreign competition. The Government finds that, in a few cases, industries are being carried on which are not suited to New Zealand conditions, and that one or two have been discontinued. In these cases it is proposed that- the protective duties at present imposed be abolished. BARGAINING TARIFFS. An important feature of the Govern-ment’-s policy in connection with the revision of the tariff must be- mentioned. Members are no doubt aware that certain countries are adopting tariffs having maximum and minimum rates with a view to obtaining advantages for their*goods in the markets of other nations. If other countries do not accord favourable tariff treatments, the maximum rates are charged on imports. On the other hand, if such favourable treatment is granted, the minimum rates are levied. In other words-, such tariffs are negotiating or bargaining tariffs. MJiile the Government- fully appreciates t.he wisdom of having a maximum and minimum tariff, and proposes to ask Parliament- for authority which will, in effect, provide for this", I think that a more fully effective means of negotiation is to possess the power to grant tariff concessions in return for a favourable Customs treatment of New Zealand- produ ts in markets abroad. It- is hoped that through the means which I have just explained, the unequal balance of trade lie tween New Zealand and certain other countries may be removed. I think that, in -such matters, the hands- of -the Government have- been strengthened by the declaration of the Imperial Conference that Great. Britain and the Dominions are autonomous communities within the British Empire, equal in status and in no way subordinate one to another in anaspect of their domestic or external affairs.

The objects wiliioh the Government has had in view in considering its proposals have been as follows : (- To- reduce rbhe cost of living and the cost of production, both in the primary and secondary industries--; (2) to assist -local industries (both- farming and manufacturing), either by increasing the protection already afforded- to a certain number of such industries or by reducing the cluty on the raw materials, machinery and plant used by them; (3) to encourage -still -further trade in goods produced in the British Empire instead of in those o.f foreign origin; (4) to remove the protection at present afforded to- the very limited number of what are regarded a$- uneconomic industries, or to the one or two industries which have ceased to operate dn the Dominion; (5) to provide further negotiating power to- secure new and increased markets for New Zealand products. The reductions in duties- which affect the cost of living and the cost of production are of a twofold nature. They consist partly Q-f concessions which -appear in the tariff schedule-s and of others- the. nature of which will be explained later. Reductions of duty are not, -as a rule, made to operate immediately, -but are postponed so that -traders who have imported the goods- affected and paid the old duty thereon may not have to meet unfair competition with other merchants who have obtained their goods at the lower rate. Time is therefore given to- enable, as fair a®- possible, stocks of goods already cleared to be disposed of. On this- occasion the date has been fixed iaiti June 30, 1929 but with -regard to items which are not affected by this consideration the reduction takes effect immediately CONCESSIONS IN DUTY.

S-onie of the items upon which it is proposed that- concessions in duty .should he made are cotton piece-goods, so woven or marked as to indicate that they are to be cut up, plain table - cloths, table napkins, towels, quilts, sheets and similar articles. These goods, whether in the- form of piecegoods or of separate articles, now pay ■a- duty of 20 per cent., if British. It is proposed to admit them free, if ol British origin, thus -making the- goods described, which -are in use in every New Zealand home, available tit the lowest cost 't<» all classes of the community. Other items upon winch remissions of duty are- to be made are table chinaware and earthenware, linoleum and similar floorcloths, mats, matting And floor rugs of rubber or similar materials. These are used in practically every household -and should be •admitted free, if of British, make. The above articles have hitherto been very important revenue-producing items. The manufacture of cement and asbestos building sheets (is not, X am advised, now carried on in the Dominion and iti i-s proposed that- such- sheets should be exempt, when produced within the Empire. The Government also proposes to take the duty off galvanised corrugated iron of British origin. The -industry, as at present carried oil in New Zealand, is not regarded as one -suited for the conditions prevailing here. It is intended -also- to- reduce the duty on British-grown maize, while re tai.ning the present rate on the foreign article. This concession in duty should benefit the poultry -and pig-raising inti ustries. USE OF RAW MATERIALS. It is obvious that effective assistance can be given to- the manufacturing industries in the Dominion by re during the duties on sucih raw materials, machinery and plant as are of necessity* imported tor their use. Wherever possible the Government -has adopted this course and in several cases important concession have been made oil such imported goods. Some of -the industries to which further assistance is- proposed to be given by the reduction or abolition of duty on raw materials, etc., are- the textile industry, -by the- exemption of raw cotton -and the admission free q-f Britishmade cotton yarns, the stationery manufacturing industry by the abolition of the duty on foreign paper in sheets, motor-car assembling by reducing the duty on 'unassembled motor-car bodies, ap'parel manufacturing by the exemption of silk piece goods of British origin, and industries generally by the exemption of Empiremade machinery required by them when such machinery cannot be economic,aJiy made in the Dominion. Certain British-made- machinery t*> be- used for industrial purposes was admitted tree of duty, -provided -that it was of _ a class not economically made in the Dominion. At the same time certain other machines and appliances were specially mentioned as liable- to duty at various rates. The effect of this was that none of the machines or appliances so specially mentioned could be admitted as for industrial purposes, and this was the case whether the machines and appliances could or could not be manufactured in New eZn.la-nd. For example. Diesel oil engine* ore not at preset lit made in New Zealand, but owing to- the- existence of a tariff item imposing duty on oil engines having less, than 100 -brake horsepower, there was no- opinion hut- to charge "duty on isuch oil engines- ol that horse-power. . , It will there!ore be -seen that the new proposals provide- the means for i admitting free from British sources manv maciiine.s and appliances which aie required for the development o* our industries and which are not as vet, economically made in Now Zealand. CONCESSION OF £IBO,OOO. It- is estimated triat if the House adopts the proposals I have already deal with in some detail it will mean a concession of aliout £IBO,OOO per annum. after allowing for any increases in duties to further protect local industries. As will appear later, there are further proposals which, if carried

On the goods which it is proposed should lie dealt with on fill i s ba sis, th e remissions obviously will have to be postponed until 1 a- later date, corresponding with the time at which success is achieved in .securing a more favourable entry of New Zealand goods into overes-as markets.

_lt .is fully recognised that the United Kingdom is not in a position to make nnv traiff concession®, and it is u colored that anv reductions in ckijfcv made under the scheme on the goodr of any country below fib/* rates se + out in the British preferential tariff should automatical!v apply to Great Britain.

CONSIDERATION OF TREATIES. A matter which has given the Government some concern in this connection i,s the existence of certain commercial treaties with foreign countries to which New Zealand is a party. One of the terms of these treaties generally is that this Dominion would accord to such countries “most favoured nation” treatment, and any concession therefore made on the goods of any foreign countries won d have had -to bt automatically extended to the product* of the- countries with which the treaties existed

The Government proposes, during the recess, to go fully into the question oi the- wisdom or otherwise of retaining these treaties, and, where it is considered in the best -interests of the Dominion that they should be abrogated, the- necessary stiep.s will, wherever possible, be taken to achieve this end. Some of these treaties' were entered into many years ago before our position. in the Empire w-a« as fully developed as it is to-day. In fact, in some cases, they were made before the foundation of New Zealand. For example, this- Dominion is a party to a treaty with Denmark made in tin? seventh century and to 'several made with foreign countries over -a hundred years ago.

If these proposals for negotiating commercial agreements with other countries are brought .into effect, i f will mean concession® in duty approximately to .£15,000 per annum. RESOLUTIONS DISCUSSED BY HOUSE.

When the House resumed at 7.30, the Minister of Customs moved that rhe House go- into committee of ways and means to consider the resolutions amending the Customs Tariff. At the conclusion of the Minister’s statement, Air. AI. J. Savage said it was impossible t<> discuss the- resolutions in detail, -but he would like t< learn what the Government really had in mind. Was the tariff to be revenueproducing. or was it for the laudable purpose of encouraging Industries ? He ■feared l tlnat. t-liie British preferential tariffs would be only a paper prevision. since trade would go to the countries by which money was lent. If the tariff was meant to assist industry and so- develop employment, then it was worth supporting. Mr. Savage commented o-n the small amount of business- done between New Zealand

and Australia. He criticised the in*cadence of timber duties, arguing that some- 'safeguard was desirable for the .pco-plo against higher prices being charged by New Zealand sawmille-rs. - Air. G. \V. Forbes said that farmers and manufacturers- Laid lately been passing resolutions in favour of a- reduction of duties other than those on British goods. Any tariff intended to be protective of industries tended to _-.iea.te -a- monopoly within the country, and there should -lie an efficient board of trade to see that the people were not subjected to higher prices l'on- protected goods. Sir Joseph Ward hoped the Minister would furnish a more convenient statement of the proposals. So far as be could see there was no reduction i'll preference to British goods. The preference was only given -by increasing the tariff o-n foreign goods. What was needed was a reduction in the British preferential duties, otherwise the consumer -could not expect any benefit in the -prices lie ‘had to pay for goods. So far as lie could see, the relief granted in the tariff was not going toj benefit the man whose income tax had lately been increased, lie urged that the imposition of a high :aniff wall would mean an increase in tlie cost of articles to- the consumer. Mr. H. E. Holland hoped that when the Bill wa® introduced it would do something to conserve the -interests- ol the people- of New Zealand and those engaged an production of goods peculiar to New Zealand. Safeguards like that applied -to the 'increase of wheat -should; be provided in the- timber and other industries. He stressed the need for complete Empire reciprocity. If we -granted preference in trade we should get- similar concesvions in the financial market.

Air. Harris thought 'it unwise to exfiudo foreign trade by linduly raising die preference to British goods. He deprecated the remission on raw cotton a-s likely -to damage the local woolen industry by opening the way to- a mixture of cotton, with the ivo-01.

Mr. T. M. Wilford said the Alinister claimed that the proposals were made for -a reduction of the cost of living ind, at present, members could not gainsay that. He was, however, disappointed at the ■small amount of benefit motor body building concerns received under the proposals. New Zealand could produce- motor bodies as good as any to be found anywhere, mkl the encouragement of 'local builders would increase the available em"doyment. All parts of the Empire should ilo their utmost to- spend their money, as far as possible among thenisel ve-s-. Air. Wilford said there lately had been a tendency in New Zealand to build up associations corresponding to what, t-he Americans call -trusts, and these tended to limit production. Air. W. J. Girl-in g commended the encouragement given to the woollen l nanuroo t lines o" New Zealand. The discussion was carried on by Messrs. W. E. Parry, AV. A. Veitch. and- E. J. Howard,* and after the Minister had briefly replied the ire-so-lution s were agreed 1 to.

(Copies of the tariff resolutions are obtainable from tlie Collector of Customs. Pa-tea. at 2s 6d a copy).