TARIFF REVISION

Otago Daily Times, Issue 21983, 19 June 1933, Page 8

TARIFF REVISION

FURTHER EVIDENCE HEARD ONEKAKA IRON WORKS COMPETITION FROM AUSTRALIA P (Special to Daily Times.) WELLINGTON, June 17. The problems of the Onekaka Iron Company (in liquidation) were placed before the Tariff Commission to-day. Charles Gilbert White, a receiver on behalf of the debenture said that pig iron was at present admitted free into the Dominion, and he suggested that this should continue to apply to the United Kingdom, but that a duty of 20 per cent, should be placed on other Empire pig iron and a duty of 30 per cent, on all foreign supplies. The iron industry, .he said, was a key industry of the Dominion, and, in addition to tie capital- invested by the shareholders and debenture holders, the Government also had a financial interest in the company. The Government also collected a royalty on the iron extracted end on the coal used in connection with the smelting operations. The whole of the n- l 3rial nsed was obtained in the Dominion, and thus the money .expended circulated within the country. Seventy men were employed at the works and the industry provided employment indirectly to coal miners and transport workers. Before operations were started at Onekaka, the cost of imported pig iron was £l3 per ton, and with the commencement of the New Zealand industry the price was lowered to £8 per ton. With the depreciation of the Australian exchange, they were subjected to competition from the Commonwealth, which, they considered, amounted to dumping. If they obtained a New Zealand market they could cater for its requirements. They looked upon the industry as a primary industry because all the raw materials were obtained within the Dominion. Prior to the fall in the Australian exchange little iron was marketed in New Zealand from.that source, but, with the help of this factor the Australians were able to undercut the New Zealand product. The New Zealand consumer appeared to have adopted a short-sighted policy since he preferred to buy Australian iron at from 5s to 7s 6d per ton cheaper, although the aggregate saving on the total amount imported was only about £750 per annum. As a result of this small saving, 77 men , had been thrown out of work for three months, and about 30 miners, as well as ; transport workers, had also been affected. 1 The result was that over 100 men had been put but of work by the use of about 3000 tons of Australian iron. " We have maintained for some time," said Mr White, "that the operations of Australia are dumping operations. The provisions of the dumping legislation may not be construed by the Customs Department to meet the case, but we submit ■x that "if the boot had been on the other foot they would have been." The price of Australian iron at the principal ports in the Commonwealth was £5 5s per ton, but the iron had been sold at £5 17s 6d per ton iny Christchurch, notwithstanding the fact that it cost 25s per ton to ship . it to New Zealand and a further 10s lid per ton to land it in Christchurch. By the time these costs were deducted it could be seen that the Australian con-, sumer was paying a higher price than the New Zealand price, minus the landed costs. Australian iron was protected by a duty of £1 per ton, but the price was so low that the shareholders in the company were receiving no return. If tin industry in New Zealand were protected it could be placed on a profitable basis. Professor Murphy stated that the balance sheet of the Onekaka Company had shown consistent losses in spite of the fact that the company had received assistance from the Government. They felt some concern whether the iron industry in New Zealand should be proLCCtGCI " ' Mr White replied that, if they were protected from unfair competition from Australia, they would be able to place the industry on a profitable basis. Professor Murphy said they had received £BO,OOO from the taxpayers in five 'years. The company had been receiving a bounty, and it owed the Government £35,000. On a prima facie examination the chances of the Government getting one penny in the pound back was nil. . Mr White: You don't suggest that we should repay the bounty? Professor Murphy: I don't suggest that a steam hammer should be used to crack a nut. He added that' every time he looked at the balance sheet it appeared to be worse. The company had been going to the bad in the last two years at an accelerating rate. He asked whether it was likely that a duty would ~ make a difference in the future.' ' Mr White replied that since he had taken charge on behalf of the debentureholders he was convinced that the industry could be made to pay, provided it was not subject to unfair competition from Austrlia. , Professor Murphy stated that the ' Indian Tariff Commission and tin;- Australian Commission had both pointed out that it vfas not a wise practice to 1 protect a single industry, and asked the witness whether he was of the opinion that a single industry should be protected by a tariff or a bounty. Mr White replied that he did not think that a bounty was the correct way to deal with the position .when iron was being dumped into the country.' If the company had not experimented with iron pipes it would have been in a better position to-day. At one stage they had sent a shipment of iron to Australia, but while the boat was at the wharf the Australians had increased the duty by £2 per ton. He was confident that the company could supply all the requirements of the local market. • Professor Murphy said that, if the duty were raised high enough, they would be assured of a local market. Mr White said they only wanted to be safeguarded against dumping. At present they were able to work the blast furnace for only three months. If the furnace was working continuously they would be able to reduce costs. Dr Craig asked whether the company was supporting a duty on pipes. Mr White replied that they were not making any direct application, but they would support an application which was coming from another , source. Dr Craig asked whether they would again make pipes. Mr White replied that, if they could be made to pay, they would again be manufactured. The requirements of New Zealand were somewhere about 9000 tons in good times, and the plant was - capable of producing 30 tons per day. The furnace was a replica of that used in Australia. Replying to Mr Pascoe, witness said that New Zealand ore compared favourably with the. ores in other parts of the world, and it could be made to any specifications. Two or three foundries preferred Australian iron because it was cheaper. .Mr Pascoe: Are there any foundries which say that it is not suitable? Mr White said that two foundries said they got better results from Scottish iron. Representatives of the company were further examined in camera.