The Southland Times. PUBLISHED EVERY MORNING, Luceo Non Uro. THURSDAY, SEPTEMBER 11, 1924. CUSTOMS AND PRODUCTION.

Southland Times, Issue 19346, 11 September 1924, Page 6

The Southland Times. PUBLISHED EVERY MORNING, Luceo Non Uro. THURSDAY, SEPTEMBER 11, 1924. CUSTOMS AND PRODUCTION.

There are some delighting touches in the letter from “Suum Cuique” we publish this morning under his heading “Land Taxation and Smoke Screens,” but none is more diverting than his title, because his attempts to justify it depend entirely on the assumption that the table of percentages we published to combat his previous statement that the bulk of ,the revenue was obtained through the Customs, was misleading, although in the next few lines he admits that it proved his own error. What our correspondent does not say, is that the change in the incidence of taxation was due largely to the imposition of heavier rates of taxation on land and on incomes. He has failed to realise that whereas this table deals with the proportions of taxation, his case is much worse if the proportion of Customs revenue to the total revenue is taken—his original point. He seeks refuge in the valueless contention that Customs and Excise yielding £7,000,000 out of £19,000,000, supply more than any other single item. Here, of course, he is making a comparison with the returns from taxation, not with the total revenue. It seems that to escape the charge imposed by the Customs tariff, and thus to lower the cost of production to the farmer, our correspondent would do away with this £7,000,000 received from the Customs; but has he considered how this sum would then be raised? Eliminating the two big trading departments, the cost of the national administration is roughly £19,000,000, and if we take from the revenue side £7,000,000 now received from the tariff, there must follow increased taxation in other directions, which means that practically the whole of the burden will be restored in some other form. The Customs revenue per capita in 1912 was £3 4/3, and from 1919 onwards it has beer'

This shows a rise of about £2 5/- a head over the average of the pre-war period, but at the same time the value of our exports has shown an increase of over £lB per capita. When the Customs revenue is used by our correspondent in this way he should examine the incidence of it, because he will be interested td find that “Alcoholic Drinks and Tobacco” account for more than a third of the total duty collected, while “Clothing and Textiles” supply about one-fourth of the total duty received through the Customs. It is not necessary to go into every detail of our correspondent’s letter, but there are a few sweeping generalities that attract attention. For instance, he forgets that some secondary industries are essential for the well-being of the primary industries, when he cheerfully declares that secondary production is dependent on primary production, and thus falls short of a fair statement of the full position. That there are farmers who arc in an insecure financial position goes without saying, but before anyone could accept the dictum that farming does not pay, it would be necessary to go more deeply into the subject than time, space and opportunity permits. As our exports are almost entirely the products of fanning, the trade figures suggest that fanning does pay, as do the steady rise in land values, but it must be admitted that before any definite conclusion can be arrived at there are many factors to be taken into account, such as the quality of the farmer, his technique, and his condition when he entered the industry. Our correspondent has only one means of reducing the cost of production in the dairy industry: to reduce'the cost of clothing, etc., by the elimination of the Customs tariff. In other words, taking a family of four as the average, he would turn the industry from a losing position to one of profit by cutting out payments amounting to £2l a year, which would be collected at once in some other form of taxation, and the profits on these payments. The wheat farmer, of course, would be delighted by the removal of his protection; but that would not trouble “Suum Cuique,” who evidently is interested in dairying. Confidence in our correspondent’s facile generalities is weakened when he declares that the removal of the tariff would lead to a rise in exports by secondary industries —he must be confusing conditions in New Zealand with those of a great manufacturing country like Britain—and when he infers that increased production would not help the producer. He mentions the production of 1501 b of butterfat, and gives us 1/6 as a price. Using these as a basis, let us assume that production is increased by 10 per cent., he can then get an equal return with a fall in the price to 1/4J. But, if production is reduced 10 per cent, he must obtain for his blitter-fat 1/8 per lb, and this second achievement is the more difficult because he cannot force the market up. The case for those who urge increased production through more businesslike handling of herds is really not so hopeless as our correspondent thinks, and today, a growing number of dairy farmers, great and small, are moving in this direction, convinced that they must eliminate the wasteful cow, and reduce the cost of production in that way. Of Denmark, we

need say nothing because “Suum Cuique’s” information is so indefinite, but we must congratulate him on his temerity in using in his title the word “screen,” which suggests at once the employment of the term “sieve” in a general description of his argu- 1 ments. His letter is interesting and forcefully put, but it lacks solid basis, and too often our correspondent succumbs to the weakness of making sweeping assertions that are striking rather than sound.

1919-20 £ s. . .. 3 18 d. 9 1920-21 . .. 6 13 5 1921-22 . .. 4 12 8 1922-23 ...46 y 1923-24 ...55 2‘ *Approximation.