THE New Zealand Herald AND DAILY SOUTHERN CROSS. FRIDAY, OCTOBER 15, 1926. THE CUSTOMS TARIFF.

New Zealand Herald, Volume LXIII, Issue 19459, 15 October 1926, Page 10

THE New Zealand Herald AND DAILY SOUTHERN CROSS. FRIDAY, OCTOBER 15, 1926. THE CUSTOMS TARIFF.

The customs tariff, according to official announcement made long ago, is due for general revision next year. The work is one which needs doing, and doing thoroughly. If for no other reason, the swelling total of taxation gathered in this manner has now reached dimensions such that some amount of relief is urgently necessary. Last financial year the sum of £8,383,877 was received into the Consolidated Fund from this source. This is exclusive of £228,712 collected in duties on motor-tyres and paid directly into the Main Highways Account. The defence, .when the amount is called excessive, is usually that it ifr contingent on the bulk of imports, and that if the community chooses to indulge in luxuries which are taxed on entry into the country, there is no legitimate cause for complaint about the aggregate result of . the import. This would be a complete answer if nothing but luxury articles paid duty. Even a casual survey of the tariff schedule shows that many necessaries of daily life, especially household utilities, pay a tax which can be defended neither as a levy on luxury nor as a protection for local industry. The high level of general indirect taxation and the anomalous manner in which many articles are made liable for duty both support the demand for careful revision. It will have to be undertaken with two principles in mind, the imposition of duty on articles which can most equitably be so taxed, and the use -i! £ 1-1— i «• .

of frankly protective duties so that they will safeguard industries worth fostering without at the same time increasing unduly the price which consumers will ultimately have to pay for the products. Discussing next year's task, the Minister most concerned, Mr. Downie Stewart, has expressed his views about how it should be undertaken. He said he favoured a tariff board of similar personnel to that which acted in 1921. with the addition of a representative from the Department of Industries and Commerce. It was a departmental board except that the chairman of the Board of Trade was associated with the men from the Customs Department who served on it. Mr. Downie Stewart proposes to follow this precedent fully. In one respect the procedure fbllowed in 1921 might well be altered. The commission was charged, in its warrant of appointment, not to disclose the contents or purport of its report. This was only natural, for the Government was the proper agency of any publicity for it, but the commission also held its

meetings in camera. The evidence was never made public. Things are done differently in Britain. When any industry asks for protection against foreign competition under the Safeguarding of Industries Act, the Board of Trade sets up a committee to investigate and report. Its meetings are open, so accounts of the evidence given are published by the newspapers in the ordinary way. There was some suggestion in 1921 that this was not possible with the Tariff Commission, that manufacturers and other business men would not give evidence if it was t!o be made public. If fear of publicity is stronger than the desire for a protective duty for any industry, then the need for protection cannot be very great. At the present time, when there is considerable feeling over the whole question of protective duties, when on the one side the secondary industries are asking for and the primary producers for reductions in the tariff, it would

be a salutary system if the whole subject were investigated openly, all men being allowed to know the evidence for or against any change. There is no sound ground for continuance of secrecy in this country when the heads of great manufacturing concerns in IBritain can openly discuss the state of their business and its increase or decrease in face of foreign competition. The exact personnel of the board matters less than the conditions under which it

conducts its inquiry. On the general principles of giving r>r withholding protection, Mr. Downie Stewart was sound when he suggested the need to determine whether an industry was worth protecting, the test being whether it ivas capable of expansion without putting a burden on the consumer. Mi*. McLeod, a farmer addressing iarmers, but also Minister of Industries and Commerce, was equally in touch with the realities when he mentioned the same subject at Papaiura. He expressed willingness to

tielp any secondary industry able to produce and employ many hands without levying extra tribute on the general public. Opposing the sort >f protection which merely assured profits to secondary industry at the direct expense of the primary producer, he was entirely right. At the same time, the farmer must recognise he is not wholly without interest in the fostering of industry. If it expands, employs much labour, and distributes large sums in wage 3, it is increasing the purchasing power of a market the farmer cannot afford to despise, the local market. The primary producer should consider that possibility carefully before he

hastily condemns the maintenance, or even the extension, of the protective! principle in the tariff. To sum up, there are many questions of importance to he settled in the revision of the tariff. First there is that of relief to the taxpayer where duties are levied on articles of common necessity neither manufactured nor likely to be manufactured in the Dominion. Then there is the general desirability of fostering local industry wherever the production of

inarnifactttr&d goods promises to be a payable proposition. Finally there is a balancing of interests, an assessment of the dual claims of the primary producer demanding the cheapest article possible, and of infant industry which, by reaching a healthy maturity if reasonably fostered, may ultimately benefit the whole country, including the primary producer. Joined with these must be the further objective, requiring no advocacy here, of maintaining, where possible strengthening, British preference, for the furtherance of Empire trade and the assistance of British industry. The task marked down for next year is no light one. I ===============