BUTTER FOR AUSTRALIA.

New Zealand Herald, Volume LXIII, Issue 19513, 17 December 1926, Page 12

BUTTER FOR AUSTRALIA.

The prospect of New Zealand butter being imported to meet the deficiency in domestic production caused by drought conditions in dairying districts of New South Wales and Queensland has aroused a vigorous agitation for prohibitive customs duties. Judged by its reflection in. the cabled reports, the clamour is entirely out of proportion to the facts of the situation. There appears to be some uncertainty regarding the actual extent of the deficiency, and whether other States, particularly Victoria, have a sufficient surplus to supply those affected by the drought. The consequent risks are being taken by the. Australian. merchants, who are making contracts for the purchase of New Zealand butter. Actually the opportunity for this- trade, which is obviously welcome to New Zealand dairy factories, was prepared by the Australian industry's adoption of what is known as the Paterson stabilisation scheme,, by which the domestic price of butter is artificially raised above the London parity by a system of levies, out of which a bounty is paid on all exported butter. The effect is to nullify the protective duty, and immediately abnormal conditions inflate the price sufficiently to balance the handicap of transport costs the way is open for the entry of New Zealand butter. If the- Australian consumers are willing to pay a tax of threepence a pound to provide an export bounty, they may be persuaded to raise the duty to even sixpence a pound. New Zealand would, however, be fully justified in protesting against such a denial of the occasional, opportunities for business in this commodity. The Dominion is a valuable customer for Australia, the commerce between them being far from balanced. Last year, for instance. New Zealand sold to Australia goods valued at £2,500,000, but her purchases' were entered at £5,250,000, or more than double. The Largest items in the imports from Australia are primary products—-wheat £BOO.OOO ; timber, £700,000.; coal, £680,000; fruit,, £343,000 are typical examples. Australia's Trade Commissioner has been telling the Americans that they cannot expect to continue exporting to Australia unless they are prepared to take a larger quantity of goods in return. If there is any force in • his argument, it applies equally, from New Zealand's viewpoint, to the commerce between the Dominion and the Commonwealth. While the latter enjoys so substantial an advantage, it is a little ungenerous for Australians to oppose the importation of a few thousand boxes of butter.