CUSTOMS TARIFF

Hawera Star, Volume XLVII, 1 May 1928, Page 9

CUSTOMS TARIFF

* VALUE OF RECIPROCITY. PROTECTIVE DUTIES. REVIEW BY MINISTER. [BY TELEGRAPH—PBESS ASSOCIATION ] CAMBRIDGE, April 30. The Hon. W- Downie Stewart, Minister of Finance, devoted a considerable portion of liis speech here tonight to matters connected with the Customs tariff. The revision of the tariff last year had aroused widespread criticism, he said. Some of the manufacturers who wanted high protection complained that they were being butchered to make a farmers’ holiday. On the other hand, in some districts, farmers protested against any increased protection. Indeed, in. the Auckland province, the Farmers’ Union hot only declared against any increase in dunes hut urged the gradual abolition if all protective duties. In liis view, to abandon, even gradually, New Zealand’s system of moderate protection, which has long been an established policy, would produce serious and even chaotic results for a long time, in both primary and secondary industries. Fruitgrowers, poultry men, maize and grain growers, dairymen, pig raisers and many others had demanded and obtained protection, and the duties were substantial in relation ■co the values of the goods. Even if a ee trade Parliament were returned the Minister of Customs would. find almost insuperable practical difficulties in gradually reverting to a free trade policy. PART O'F NATIONAL LIFE,

Nearly all Dominion tariffs began in the early days as purely revenue tariffs, but even under a .low revenue tariff industries sprang up in a most unexpected manner. Once these industries sprang up and developed and employed a large number of hands and a large amount of capital, their existence became part of the national life. If Customs protective duties were abolished, some millions of pounds in revenue would have to be made up. out of increased land or income tax. Many people took up the view that a protective system of duties did not protect if importations* took place, but in New Zealand they had always taken the view' that the objective of protective duties was not to exempt the manufacturer from competition, but merely to compensate him for the disadvantages he'was'under as to high. wages, a restricted market, and so on. To advocate duties so high that they excluded all competition was to mistake protection for prohibition, said Mr. Stewart. There was another aspect of the Customs tariff, that had proved most valuable, both to farmers and manufacturers, and that was the. power it gave them to* negotiate with other countries. ’ BENEFITS OF RECIPROCITY. This the .Minister illustrated by reference to the treaty made with Australia in 1922, by which many of -New Zealand’s chief exports, including butter, cheese and bacon, entered Australia under a (reciprocal tariff at rates lower than the British preferential The .speaker quoted figures to show how beneficial these, reduced rates were to New Zealand. For instance, the average total annual export from New Zealand to Australia for four years befoi-e the treaty was only £55,332, whereas in 1926 it was £479,330 and in 1927 £984,516. These figures demonstrated the advantages that could be secured from the proper use of tariffs in negotiating better export trade for both primary and secondary industries. . . , As another illustration the Minister quoted trad© relations between New Zealand and Canada. Australia had a treaty with Canada, getting substantial reductions on various farm produce entering Canada, and the speaker said he had only to ask the Canadian Government for a similar concession to New Zealand and it was Reverting tQ I the Australian reciprocal tariff, the Minister quoted figures showing how it had affected the balance of trade. For the calendar year 1921, the (adverse balance of trade to New Zealand was £392,000, while for the financial year 1928, it was only approximately £250,000. As they were aware, Australia recently increased the duty on New Zealand butter and cheese bv 6d a pound. On liis recent visit to New Zealand, , the Hon. H. E. Pratten, federal Minister of Customs, bad discussed this matter with the speaker, but no agreement had been arrived at. In the meantime, few people realised that nearly half the imports came into New Zealand free except for the primary duty.

LOWERING THE COST OF LIVING. Air Stewart said it had been the Government’s constant endeavour to- reduce the cost o-f living and the cost of production in both primary and secondary industries. As an instance,-he said they had in 1921 taken off the duty on children’s boots and other necessities, later on reduced the tax on tea. and tobacco, and in 1927 took off the duty on many articles of ‘household use, such as china-ware, linoleum, floor cloths, mats, rugs, certain drugs and medicines, and silk piece goods. In order to assist' local industry wherever possible the Government had reduced or abolished the duty on raw materials used in industry and much machinery of British origin and admitted free. Where this machinery could ie made in New Zealand, exemption did not apply. In 1927 revision of the duty had been taken off corrugated iron, asbestos and cement sheets, while dairying machinery was free. Except vor a few items made in the. Dominion, there were no agricultural implements on which the duty still existed. In his opinion the general effect of the- tariff was greatly exaggerated. The essential question waLS nob the existence- ol the tariff, but the efficiency of production. Ho believed the New: Zealand tariff was properly designed to meetthe stage of economic development the eountry"had reached.