HELPING NEW INDUSTRIES.

New Zealand Herald, Volume LXIV, Issue 19606, 7 April 1927, Page 10

HELPING NEW INDUSTRIES.

A question that is not nearly so simple as it appears has been raised by Sir Amos Nelson's statement that with adequate protection cotton manufacturing could be successfully established in New Zealand. In one respect his views are surprising in their moderation, for he would be content with protection for only the period required for the training of spinners and weavers. Nor is his suggestion of 30 per cent, with this limitation extravagant in comparison with the permanent duty of 20 per cent, enjoyed by similar industries. There is, however, a grave obstacle preventing the granting of such tariff assistance. Cotton manufactures are now duty-free—though there is a prohibitive duty of 4d a pound on raw cotton—and importations of piece goods alone exceed £2,000,000 annually. It would obviously be ridiculous to levy an annual tax of £6oojooo to shelter the initial stages of cotton manufacturing. That difficulty is typical of a serious deficiency in the Dominion's fiscal arrangements. The principle of tariff protection for local, industries is firmly established in the national policy, but in practice it is available for new enterprises only if they are merely extensions of existing industries. No industry novel to the country can find any shelter under it, unless the importations with which it would compete are already taxed as luxuries or simply to produce revenue. The * only authoritative pronouncement on the question is to he found in the report of the 1921 Tariff Commission, whose definition of policy, approved by the Government, included the following : To grant protection to > new industries only where it can be shown that a substantial amount of capital is invested, that the industry is fully equipped with the most modern appliances, that its output is likely to form a reasonable proportion of the total needs of the Dominion, and that the goods produced are reasonably comparable with those produced abroad. The third condition, would be an insuperable obstacle to any attempt to obtain tariff protection for the manufacture of any commodity imported in large quantities. In such cases, if the other conditions can be Satisfied, some other method of assistance must be discovered.