PREFERENTIAL TARIFFS.

New Zealand Herald, Volume LXVIII, Issue 20929, 20 July 1931, Page 8

PREFERENTIAL TARIFFS.

Protests have been made against the recent exposition by the Prime Minister of New Zealand's tariff policy. He stated that the preferential tariff was instituted primarily for the benefit of Great Britain and not with the idea of doing business with the other Dominions; and, further, that the present Government had established the principle that as far as possible New Zealand should buy from those to whom her produce was sold. The first part of this statement has been properly challenged as an inaccurate statement of fact; the second is open to criticism on the ground that it is not a function of the Government to determine fiscal policy, and to carry it into effect by Orders-in-C'ouncil without reference to Parliament. Until comparatively recently, the policy of New Zealand was to grant preferential treatment to the produce and manufactures of every part of the Empire without discrimination. That was the principle of the first preferential tariff in 1901) and it has been confirmed in all subsequent tariff legislation. There is a striking illustration of its application in the fact that until the end of 1921, the benefit of the preferential tariff was given to Australia, though exports to the Commonwealth were there subject to the general tariff, Australian preference being limited exclusively to Britain. There was

no modification of this policy up to the time Mr. Forbes left for London last year. It was reaffirmed by him in the statement he made on August 12, one of his declarations then being that "this Dominion has invariably been to the forefront in the preference which its customs tariff allows to the products of other members of the Commonwealth." Between that date and the opening of the Imperial Conference, Mr. Forbes revised the national policy. In a formal statement to the conference, he correctly said that in 1903 "preference to Empire goods became a permanent part of New Zealand's tariff policy." Without the slightest explanation of the qualification, this statement was followed by the following pronouncement: — The policy adopted is to grant preference to goods produced or manufactured in the United Kingdom or in any oilier part of the Empire which treats New Zealand products fairly in tariff matters. That policy has never been "adopted" by the Parliament of New Zealand. The Customs Act provides that the preferential rates of duty shall apply to "all goods being the produce or manufacture of some part of the British Dominions" and there is no sanction for the Prime Minister's presumption in adding the reservation regarding "fair treatment." Its mischievous effects have already been demonstrated by its application to Canada—that part of the Empire which also has always adhered to a policy of Imperial preference, and especially has also given to New Zealand the benefit of any concessions granted to other parts of the Empire. A "case may be made for modifying the national policy in the manner suggested by Mr. Forbes, but the decision should be made by Parliament after deliberate consideration, and not merely established by apathetic acceptance of a condition created by the Prime Minister as a retort to action which he regarded as a gratuitous affront. There will be opportunity in this week's debate on the Imperial Conference for a restatement of Parliament's opinion, and it is to be hoped the discussion will produce a clear definition of policy.