THE New Zealand Herald AND DAILY SOUTHERN CROSS WEDNESDAY, JULY 23, 1930. TARIFF FOR REVENUE.

New Zealand Herald, Volume LXVII, Issue 20623, 23 July 1930, Page 12

THE New Zealand Herald AND DAILY SOUTHERN CROSS WEDNESDAY, JULY 23, 1930. TARIFF FOR REVENUE.

Explaining the. tariff changes introduced by resolution last evening the Prime Minister detailed the objects the Government had in view. First among them was that of obtaining new revenue. For the moment it is not necessary to go beyond that one, though allowance must be made presently for the results to follow abolition of the primage duty, and the manner in which British preference gains an increase over a wide range of commodities. From the revenue aspect there can be no question that the Government is thrusting its hands very deeply into the pockets of the people, not some of the people, but all of the people. To gain an inkling of this, it is only necessary to realise that a very large proportion of imported foreign goods, whether free of duty now or taxed, are also to pay a further ad valorem duty of 5 per cent. In short, a primage duty of 5 per cent, is being imposed on these goods of foreign origin. Then, in substitution for the former primage all duties collected are to be loaded with a surtax, amounting to 5 per cent, of the amount collected on certain items now made subject to increases in the schedule, and 22!, pei' cent, of that collected on all other dutiable articles. It: sounds complicated, but it works simply—and drastically. To take the second classification, every £i collected under the schedule is to be automatically increased to £l Is 6d. The Prime Minister says he must collect £9,113.000 in customs, excise and beer duty. With the anticipated fall iu imports, he estimates that the old rates, including the primage duly, would produce a revenue of £8,350.000. Therefore, he is seeking to raise another £BOO,OOO, in round figures. If the amended tariff yields this extra amount, it will still be £370.000 short of the amount collected last year. True, but that £9.500,000 customs and excise revenue was £1.000,000 greater than the yield of 1928-20. Resides, it has yet to be proved that the new exaction will not exceed £BOO,OOO. The basis of collection has been altered so drastically that comparisons are difficult, but it will be very surprising.it the return is not substantially greater. The raid will probably produce more spoil than the chief raider suggests.

The actual increase in rates is easy to grasp. The petrol tax goes up from fourpenec to sevenpence. An addition to this duty was expected. The Prime Minister says the money is for main highways, a fund that in most people's opinion does not need this degree of reinforcement. The lowest rate of beer duly charged is raised by one halfpenny a gallon, the old ratio between it and the higher rates being preserved. All tobaccos are to be more heavily charged, the excise rate on domestic manufactured being lifted as well as ihe import duty. To take the excise alone, (lie high rates of 102!. reduced in 102~>, have now been more than restored: they have been substantially exceeded. The Prime Minister claims that the charges have been arranged to encourage the use of New Zealand leaf, hut it is difficult to see from the schedule that the benefit will be as he suggests. Timber duties arc to go up. and in this instance protection is crtainly the. motive of the added duty. A higher duty on spirits is secured b.v charging ease liquor on the liquid instead of the proof gallon. This, it is explained, is an increase of some moment, and, it may he, will encourage the importation of spirits in bulk. The duty on foreign onions, that is the Calitornian and Japanese which arrive in times of scarcity, is to go from .'II Ids a ton to .El. Ready-to-wear apparel, hosiery and furs are also to bear an increased rate, this being claimed as an encouragement to Xew Zealand manufacture. On the same grounds the motor-body duty, both preferential and general, is increased for most, classifications. Barley for stock food is made free. There are many other changes, but these are the main features in the new schedule to catch the eye on a first reading. So far the increases have been considered only as meaning more customs revenue. It is now reasonable to consider other features. The new rates generally bring an increase of British preference, in some instances small, elsewhere quite appreciable. The added 5 per cent, ad valorem on foreign imports is an automatic addition to that preference. Less directly, but none the less certainly, the sweeping away of the primage and the substitution of a percentage addition to duties collected means a measure of relief and a further margin of preference. Primage was collected on all goods, whether dutiable or free. As it disappears, all items on the free list become actually and entirely free. Here is the relief. Of those on which no duty is charged, the vast majority are British. Therefore the percentage increase on duties collected adds to the British preference. Since the free foreign items are rarely if ever competitive with British imports.

this is a general feature of the new system. Wheat and wheat products, it may he added parenthetically, are to hear no primage, though ihis charge is retained for Australian imports generally, and are simply to he charged the sliding-scale duties. Allowing all these things for the new duties and the new system introduced into the tariff, it still leaves tho impression of a levy, and a universal levy, on the people of the Dominion: The Prime Minister suggests an increase of £BOO,OOO on the bulk of imports expected, presumably for the remainder of this financial year. These estimates are invariably underestimates, and so it may be expected with this one. The Government; which imposed the primage duty now takes it, off ami proposes to collect, on its own calculation, £300,000 more than the country would have paid had no change been made. The Government which increased taxation last year has announced its first increase for this year. The Government which, forecasting a heavy deficit, struck the note of economy, procoeds to a balance by new taxation before any substantial evidence of effective economy has appeared. The Prime Minister began his explanation of the new tariff by saying it was to increase revenue, and a tariff for revenue it certainly is.