TARIFF COMMISSION

Otago Daily Times, Issue 21976, 10 June 1933, Page 17

TARIFF COMMISSION

IMPORTERS AND MANUFACTURERS FURTHER EVIDENCE TENDERED (Special to Daily Times.) WELLINGTON, June 9. , Giving evidence before the Tariff Commission to-day on behalf of the Manufacturers’, Mr A. E. Mander, general secretary of the New Zealand Manufacturers’ Association, said that it was sometimes suggested that a downward alteration in the tariff should be made on account of the recent raising of the rate of exchange. He submitted that this view was a mistaken one. The present rate of exchange was either temporary or permanent in character. If it were only a temporary expedient, then surely it would be a mistake to take it into account in framing a tariff which, they hoped, would remain in force for many years. If, on the other hand, the high exchange wore permanent, it meant that New Zealand had definitely adopted a new standard of values quite separate and distinct from sterling. If that were the position, then it was clear that the tariff should be based upon our own domestic needs in terms of our own new standard of values in the Dominion.

It was sometimes suggested that the increased rate of exchange had afforded New Zealand industries some additional protection. To a superficial glance, this might appear to be so; but it was not so in reality. The 125 per cent, exchange meant, of course, that the whole community was required to pay 25 per cent, on the value of exports—roughly £8,400,000 —as a subsidy to the exporters. The additional burden upon New Zealand industries would offset—and probably, very soon, more than offset —any protective benefits of high exchange. This appeared to have been the experience of industries in Australia —that there was for a short period some benefit to Commonwealth industries when exchange rose and caused an increase in the price of competing imports. But the increased cost of imported materials, together with the dffect of high exchange on the general level of domestic prices and money values, very soon balanced the benefits. The increased cost to New Zealand manufacturers, resulting from high exchange, lay first in the 25 per cent, extra cost of all imported materials. Almost every industry, including even woollen milling and tanning, was obliged to obtain a substantial portion of its materials overseas. Most of these imported materials were obtained from British countries duty free, but.all had now been increased in cost by 25 per cent. The cost of material obtained in New Zealand itself had, of course, also been affected; as there was a rough “London parity” ruling in regard to raw materials grown hen*, Imported materials, capital charges, general overhead, wages, and taxation were all measured in terms of New Zealand currency. Manufacturing costs were therefore affected by exchange to at least the same extent ns had the prices of competing imports. In other words, the raising of exchange had not had the effect of increased protection, when everything was taken into, account. It should, bo noted also that, although the rise in exchange had increased manufacturing costs generally—especially the cost of imported materials now loaded with exchange—the majority pf New Zealand industries had not increased their selling prices. _ Even where prices had been slightly raised, it had not been sufficient to cover the rise in costs. Interna! competition had been so keen as to prevent any such, development. The result was that industries had been forced almost Jo eliminate profit, and to effect economics in every possible direction, in order to keep prices down.

Another important fact seemed to have been almost entirely overlooked by those who argued that duties should be reduced because, exchange had been raised. The fact was that all duties had been reduced by one-fifth. Customs duties were assessed, not on the value of imports in terms of the currency in which those duties were to be paid, but in terms of sterling. Imports valued for duty at £IOO sterling—though actually worth £125 in New Zealand currency—paid duty on only £IOO, The duty was paid in New Zealand money, though assessed on the value of imports reckoned in English money. This v was indeed a strange state of affairs, and it would be difficult to defend it on logical grounds. It would be almost as illogical to make a 20 per cent, duty payable (in New Zealand ,pounds) on the value of imports reckoned in dollars. With imports valued for duty purposes at £IOO English money, and subject to 20 per cent, duty payable in New Zealand money, the true rate of duty had been lowered to 16 per cent. That was to say, the ratio of duty, to value was now 16 to 100 in English money; or 20 to 125 in New Zealand money. They could reckon an ad valorem duty, taking one currency for the value of the goods and another currency for the duty to bn paid. Further representations by importers for reductions in Customs duties on imported articles were made by Mr Leslie William Woolley, managing director Messrs L. W, Woolley and Co., Ltd. Mr Woolley made a plea for reduction of duty on dictaphones and equipment. He said dictaphones were made only in America and had to bear the duty imposed on American gramophones. Mr Woolley also sought a reduction in the tariff on -load-o-meters, which were made solely in America, and which were used for weighing heavy vehicles. In answer to a question by Mr Gow, Mr Woolley said a dictaphone would not record a musical performance. A gramophone was a much more elaborate instrument. In Australia dictaphones and appliances were classed as dictating equipment. There were about 1500 machines in use in New Zealand to-day, but the tariff was killing the importation. Mr Woolley said load-o-meters were used only by the controllers of public high-_ ways. Up to now they had been treated as weighing machines, but they did not purport to weigh accurately. About 26 metres had been sold in the last five years. Mr Paul Dolby Trickett, representing Messrs P. D. Trickett and Co., contended that the landing costs on glue and gelatine imported from England were excessive and detrimental to the community in that the protection afforded the local product was too high. With the high rate of exchange it was costing 100 per cent, to land English glue, and, even with the exchange rate at par, the protection to the local, manufacturer amounted to 70 per cent. Manufacturing printers considered that local glue was not suitable and was loading their costs unduly. Mr A. E. Mander asked if the New Zealand product was inferior in all cases. Mr Trickett said that bookbinders, for example, had stated that local glue was unsuitable for their purposes. Mr Mander intimated to the commission that there was to be an objection to the application and also a request for the subdivision of the item. An application for a reduction of the duty on British-made electric clocks was made by Mr James Rose Pay, representing Messrs W. Littlejohn and Co., Ltd. He said that at one time electric clocks were made only jin America, but there was now a thriving English industry from which the output was 3,500,000 clocks yearly. These clocks did not compete against any New Zealand industry. A plea for a revision of the duty on cameras was made by Mr Alexander

Beauchamp, managing director of Kodak, Ltd. Mr Beauchamp contended that the present duty was excessive, and said that if a reduction were made the sales would increase. He had no objection to the duty on photographic lines remaining, but unless the duty on cameras was lowered the sales would fall still further. Professor Murphy: Do you say that if cameras were admitted free the loss in Customs would he made up by increased sale of sundries? . Witness: I would go so far as that. Mr James Smith Macarthur, managing director of the Dental and Medical Supply Company, asked for a reclassification of dental chairs, which were at present under the heading of general furniture. He contended that chairs of British manufacture should be free of duty. Twenty per cent., plus surtax, should be imposed on a foreign article. The commission adjourned till tomorrow morning.