PREFERENCE ON RAILWAYS.

New Zealand Herald, Volume LXV, Issue 19860, 2 February 1928, Page 10

PREFERENCE ON RAILWAYS.

Answering a resolution pas tied by the New Zealand Farmers' Union, the Prime Minister regrets that the preferential railway freight x'ates on articles of New Zealand manufacture cannot be removed immediately because of the complications a drasticrevision would cause in industry and business. This plea is one which must be considered, though it does not help in any way to prove that the grant of specially favoured treatment in the first instance was sound. Mr. Coates himself exposes its fundamental weakness by saying that while the preferential rates were established to help industries in their early developmental stages, it has been very difficult to get the parties to recognise the temporary character of the assistance. This is characteristic. Special privileges are more easily granted than withdrawn, especially by a department of State. The railways are not in a position to be generously helpful to industry, for they need help themselves, facing as they do intensified competition from other transport agencies. If they were to meet the

wishes of the Farmers' Union by reducing freights on imported goods to the level enjoyed by the New Zealand article, they would lose money. If, with the same object, they raised the preferential rate to secure uniformity, they would lose traffic. It is an unfortunate impasse. Apart from what the Farmers' Union has said, the Railway Department would be wise if it gradually rid itself of this subsidy to local industry, which it cannot afford to pay. It should immediately determine that no more can be granted, and stand by that decision inflexibly. The Government, which is the ultimate arbiter, should agree with the Farmers' Union that railway subsidies for industry are undesirable. It should also recognise, without any such prompting, that export subsidies for industry are equally vicious in principle, and decline in future to be a party to either.