CUSTOMS REVENUE.

New Zealand Herald, Volume LXVIII, Issue 20889, 3 June 1931, Page 8

CUSTOMS REVENUE.

The decisive reason given by (he Prime Minister for the immediate application of the maximum rates of duty to imports from Canada is that the Government requires additional revenue to balance the Budget. That expectation seems inconsistent with the principal object of the retaliatory action, which would be futile if it did not virtually close the New Zealand market against Canadian goods. But in respect of customs revenue, the Government is doubly safeguarded. If any imports continue from Canada, they will be charged the highest rates of duty; if orders are diverted to other countries, previously unable to coinpete with Canada under the handicap of tlie tariff surtax, the Government will again get the maximum rates. The only weakness is that, the cost of supplies from either source may be prohibitive. Mornover, there 'S an increasing tendency toward rigid curtailment of imports, and as values are gradually falling, the prospects of customs revenue are being seriously undermined. The receipts from ordinary customs duties in 1929-30 were £8,897,000: last year they were £7,700,000 and all tiie Budget plans for this year have been based upon a forecast of £6,530,000, or about 17 per cent, less than last year's receipts. The returns for the first two months of the financial year cast doubts upon that estimate. The actual collections at. Auckland, Wellington and Christchurch in April and May amounted to only £602,000, as against £959,000 in the corresponding months last year, although a higher tariff is now in operation. Last month's receipts alone were only slightly above half those of May last year, and there is no reason to suppose that the minimum has been reached, fn the nine months ended March 3 ( 1, imp'iits into Australia were reduced

by 52 per cent., a remarkable illustration of the extent to which importation can be controlled in a period of necessity. There has been a substantial restriction of imports into New Zealand, but the reduction in the nine months has been only 27 per cent. That process must be continued if the whole volume of commercial and financial transactions is to be balanced with the aid of only rigidly restricted borrowing in London. Taking all the circumstances into consideration, it appears that the Government cannot count with any certainty upon £6,500,000 from customs duties, and since the opportunities for taxation in other directions are severely limited, its efforts to balance the Budget must be directed to a search for further large economies.