DUTIES AND PRICES.

Lyttelton Times, Volume CXVIII, Issue 18571, 25 November 1920, Page 6

DUTIES AND PRICES.

The volume recently issued by the Government. Statistician reviewing the movement pf prices between the years 1891 and 1919 nan given our morning contemporary a text for a little disquisition ,on the relation between import duties and prices, a matter which, it observes, "is generally either overlooked or misrepresented." Our contemporary then proceeds to deal with, the nature of the " misrepresentation" to which it refers. " "We have heard," it says, "some critics of the Government speaking as if a high tariff on the necessaries of life were a factor in the upward movement of prices, and clamouring for the abolition of Customs duties. As a matter of fact the amount ?f relief that would he afforded by a wholesale sweeping away of Customs duties would be exceedingly small, since

the tendency of tariff legislation for many years before, the war was in the direction of allowing free entry to most articles in common use." The unwary reader might come to the conclusion that the Government Statistician was the authority for the views expressed, but this is not the case. The whole tenour of the Government Statistician'b remarks on the subjeot, together with the graphs which indicate the coincident movement of food tariffs and pricee, is to showthat reductions duty have been followed by reductions in price. " Import duties," says the official publication, "raise the cost of living within a country and, conversely, their reduotion tends to lower the cost or living." As one of the " critics of the Government" whom our contemporary setß out to correct we should like to say that we find ourselves in entire agreement with the Statistician's statement of the position, and we are puzzled to know why our contemporary should have associated with such a sjiatement views which are either irrelevant or absolutely divergent thereto. The Statistician's references are entirely to imported foodstuffs, and in this connection he says:" The slight amendments to the duties on foods which have been brought into force since the commencement of the war can have had so small an influence upon food prices generally that their effect would bo wholly obscured in the violent price movement which has taken place since 1914. Further than this, although it has been possible to prove the existence of a casual relation between duties and prices, the precise extent to which prices have been influenced by the imposition or removal of duties is a matter impossible of determination.". We give this quotation out of a desire to be 'honest with our contemporary, since itgives more support than the quotations which our contemporary saw fit to use to a contention that the removal of food duties would have a very small effect. But a consideration of food duties does not exhaust the question, though it must bo remembered that the tea duty of 3d per lb means 4d per lb before it roaches the consumer, and represents a tax of about £130,000 per annum which is levied alike on rich and poor regardless of their ability to . pay. Whether New Zealand has a "high tariff" on tho "necessaries of life" or not, it must be remembered that there is a tariff on clothing and footwear, on wheat and;flour, and on tobacco and beer, to go no further in the list of "articles in common use," and that this Dominion is at present being taxed through the medium of the Customs ■■ House at the rate of nearly £9,000,000 per annum, more than half as much again as the whole burden of taxation, direct and indirect, in 1914. If our •contemporary can sie no connection between this crushing impost and the cost of living, and is labouring undor an impression that the Government Statistician has proved, or attempted to prove that its abolition wonld have no effect on prices, then it must be singularly short-sighted.