TARIFF POLICY

Hawke's Bay Tribune, Volume XXII, Issue 258, 14 October 1932, Page 6

TARIFF POLICY

EFFECT ON INDUSTRIES NOT SACRIFICED AT OTTAWA. SOUND ENTERPRISES. Wellington, Oct. 13. After giving the details of the changes m customs duties to which New Zealand agreed at Ottawa, the Rt. Hon. J. G. Coates, in his statement to-night, went on to say: “The issue has to some extent been clouded through the alarmist propaganda of interested parties, who have tried to discredit Ottawa by alleging the betrayal of our secondary industries. 1 have said enough to show the House and the country how fantastic is the statement that, by the Ottawa agreement, our locall industries have been sacrificed. There is nothing in the agreement or in our obligations under it that will prejudice the establishment or the growth of sound industrial enterprises in New Zealand

“We are, however, bound by the let ter and by the spirit of the agreement to see that reasonable opportunities for trade are extended to the British manufacturer. Already the general fall in prices has injured trade and has materially added to the burden of protective duties. If we are to revive trade, it mu«t be on a reciprocal basis We cannot expect Great Britain to embark upon a new trade policy designed to help the Dominions without our facilitating her trade. The agreement definitely commits New Zealand to a thorough overhaul of her protective tariff duties. This should be undertaken not merely for the purpose of giving effect to the Ottawa agreement, but is, I firmly believe, in the interests of our own people. Already the distance that separates New Zealand from the outside world gives substantial protection to local industry Fur ther artificial protection, which is so easy to establish, so difficult to surb or remove, is apt to be a costly business for our country. If we are to export, we must import; we cannot have one-way trade. COSTS OF PRODUCTION. “There is another side to this question. Unnecessary protection is a disadvantage to the manufacturer himself. It is essential in this strenuous industrial age tht every industry established in the country should bring its costs down to the lowest possible level by employing the most up to date plant and adopting the most improved methods of production. If the tariff is so high as not to ensure low costs of production both manufacturers and employees suffer through loss of trade due to inefficiency. My view is that New Zealand would be in a far better industrial and economic position if the protection granted 1 by the tariff were limited to those classes of goods the manufacture of which is natural to the country either through the local production of raw materials or otherwise. “I do not wish to appear to be prejudging the results of the inquiry which is to be held but from the information which has been supplied to me. in some cases even by manufacturers themselves, it is difficult to resist the conclusion that there are industries in New Zealand upon which the protection is too high and that in the case of others the removal of the substantial tariff assistance at present granted would be an advantage to the whole community. -It must be remembered that New Zealand’s prosperity depends to a great extent upon the export, of its primary products and it is essential, if we are to compete with other nations in the world’s markets, that the farmer’s costs should be brought down. J cannot therefore too strongly impress upon the House and the country the importance of this question. GAIN BY REDUCTIONS. “We are apt in judging the results of the conference to weigh the concessions granted by the United Kingdom against the concessions granted by New Zealand But it must be remembered that the so-called ‘concessions’ which we made in reducing tariffs are not ot advantage to United Kingdom exporters alone. They are a gain to ourselves. The contrary view rests upon the fallacy of assuming that tariff duties are paid by exporters. They are. in fact, as is well recognised, paid rather by purchasers and consumers. Their reduction is therefore a necessary step towards lower costs of production and lower costs of living.”