CUSTOMS TARIFF

Southland Times, Issue 19966, 4 September 1926, Page 7

CUSTOMS TARIFF

AMENDMENT PROPOSALS

A LENGTHY DEBATE

BILL PASSED IN HOUSE. (Per United Press Association.) Wellington, September 3. The Hon. V/. Downie Stewart moved the second reading of the Customs Amendment Bill in the House of Representatives to-day. He said that so far as motor cars were concerned the effect of the duties would be that cheaper cars which comprise 37 per cent, of the importations would pay less duty than under the old duties. It had been said the new duties would detrimentally affect British cars, but he had been told only that day that importers of American cars were looking for British agencies. It had also been said that the Americans would simply bring their assembly works to New Zealand and so evade the duties, but if this was done it would mean that a considerable amount of labour would have to be employed and that would do good. He had also been told that British firms would, to save freight, bring their parts to New Zealand, assemble them here and have the bodies made by New Zealand body builders which would all be for good, and so far as labour was concerned that at least would be the experience. In Australia it had been said the new duties would result in an increase of revenue to the extent of £400,000 per annum. That was pure speculation, because no one could say what the revenue would be. At all events the new duties were not being proposed for revenue purposes but for the purpose of benefiting importers and users of British motor cars as well as local body builders.

Mr D. G. Sullivan said there was no doubt that the local motor business was being hard hit by motor importations. He knew of one firm which during the past year had paid off about two-thirds of its employees, and was only now employing about 30 men, and these on short time. Importers and users of British motor cars will be favoured by the policy which would increase our technical development, and if we could encourage the building of motor cars in New Zealand we should do so. Therefore he was with the Minister in the imposition of these duties. He hoped steps would be taken to prevent the duties on timber increasing the cost of building. That was a difficult problem to solve, but he felt sure the House would assist the Minister in solving it. Sir Joseph Ward said American cars were more suitable to New Zealand’s requirements than British cars. British makers did not study colonial needs. It was no use thinking of keeping motor cars out of the country. They had come to stay, but the effect of these new duties would be to raise the price of every car imported into New Zealand. He said he thought the Minister made a mistake iu bringing down new duties without first having a thorough investigation, taking evidence from all classes engaged in the industry. There would be £1,900,000 worth of cars coming into New Zealand under contracts during the next 12 months, and he wanted to know what was going to happen to these people who made the contracts. They could not carry on business.

Mr J. R. Hamilton (Awarua), favoured any duties which- would assist Britain against America. Britain took our meat and butter and it was our duty to help Britain.

The Hon. D. Buddo said he thought the increased import on ,rubber tyres especially for motor lorries would press with undue weight upon carriers and upon farmers and other producers. Referring to the woollen industry Parliament should see that those who required cheap woollens could obtain them from local factories instead of having to use shoddy goods from overseas.

Sir John Luke said he thought all passible might be done to encourage and develop local secondary industries. This, of course, was difficult in an industry such as motor vehicle manufacture. In face of increased production in other countries he believed the capital invested in up-to-date factory facilities for a measure of massed car and body manufacture in New Zealand W’ould be a profitable investment. Such an extension of the industry would provide employment for a large number of New Zealanders in it and allied industries. Mr R. W. Smith said the tariff assistance on timber in the Bill did not help the sawmilling industry very much. New Zealand must soon undertake a more self-re-liant policy and in the matter of timber should shut out some of the foreign timber and protect local mills on which a number of small backblock towns depended. Mr H. Holland (Christchurch North), welcomed the Bill as affording a large measure of help to a growing New Zealand industry. British motor cars were just as good as, if not better than, American, and he was glad this Bill proposed to give some tariff assistance to British car builders.

Mr E. A. Ransom said he thought encouragement should be given to those secondary industries using raw material of our own production. He mentioned the Onekaka Ironworks as an industry specially deserving of support. So far as motor body building was concerned the materials used were mostly already manufactured so that the building was really more correctly describable as “assembling.” A tax on tyres was not the best method of collecting revenue which could be much more equitably met by imposing a tax on motor spirit. Mr H. G. Dickie said he would like to be able to think the increased tariff on foreign cars would result in increased imports from Britain, but he was afraid the result would really be more importations from Canada where the factories were practically financed by United States capital. He hoped, however, that the amended duties would result in English makers producing a car suitable for colonial needs. The Hon. A. D. McLeod, Minister of Industries, said tariff revision must be considered carefully from the viewpoint of all sections of the people. In the old days of horse traction most of the things used in connection therewith were locally produced. In increasing tariff duties every care must be taken to see that the interests of the primary, producers were fully protected. Replying to interjections the Minister said the farmers of New Zealand never limited wheat production in order to get a higher price. He believed that next season 10,000,000 bushels would be grown in the Dominion and the price here would be at world parity. We could increase our local consumption of our own products and still the price would be fixed in London. The farmer had no say in the fixing of wages and these were prejudicially affecting him. Too large a proportion of New Zealand’s population was in the urban areas, a condition of affairs that was not for the good of the country. Mr McLeod added that a farmer nearly always found that tariff changes sent the prices up against him. The time had come and the opportunity was here for the encouragement of the British car maker. We were buying far too many from a country that took practically nothing from us. There were enough second-hand cars in the country to fill all the needs for the next 12 months if we could only try to live within our means. Mr H. E. Holland suggested that the whole situation might be reviewed before next session so that while protecting the local industries people at the same time would be protected 'against exploitation through a monopoly of prices. We should lift the duties altogether on such articles as cannot be produced in New Zealand., Mr Holland considered it wrong that the prices of New Zealand products, such as bytter and cheese, to the consumers in New Zealand should be governed by London parity. Since New Zealand could not make

motor cars why not let the British car in free of duty if it was desired to give tariff assistance to British manufacturers.

Mr Holland also agreed with Mr Smith that the Bill gave little help to the timber industry. Whatever safeguard was given to the timber user must ultimately be accompanied by State sawmills.

The Hon. W. D. Stewart, Minister of Customs, replying referring to the point raised by Sir Joseph Ward, said goods were coming into the country as British goods that were not really of British manufacture, but only partly made in Britain, thus qualifying to come within scope of British preference by reason of 25 per cent, of the material or work being British. It was then decided to try making the percentage 75, but this was found inimical to Britain so New Zealand decided to try 50 per cent. This was not in the case of American motor cars by makers assembling cars in Canada. New Zealand could not take any steps that would hit at Canada because the latter had been very fair in her treatment of New Zealand products. The Minister said British cars suitable for New Zealand needs will be on the market here in a month or two. They were already on sale in Australia. The Canadian Ford was the car used more than any other by the farmer and on this duty was to be eased which should enable its sale at a cheaper rate. About 27 per cent, of the cars imported into the Dominion were Fords. American manufacturers were over-stating the value of the chassis, making it appear that the bodies could be built for only a few pounds. The duty on British cars was 20 per cent, on the cheaper makes and on similar foreign vehicles 50 per cent. This, while helping local bodymakers, would also assist British makprs The Minister said the ultimate result of the increased duties would be the establishment of assembling works in New Zealand which would give employment to New Zealand skilled and other workers. He said he thought it unwise to indulge in frequent tariff amendments as in Australia it was producing chaos in business through almost daily operations of the Tariff Board. In New Zealand we had had no general tariff revision since 1921 and an overhaul was now due. The addition to duty on American cedar and other timber was only made after consultation with the Forestry Department.

Touching on the Onakaka Ironworks, the product of which was used in other industries, he said that to make a special protective provision for the Onakaka iron would react detrimentally on various other industries such as agricultural implement manufacture which was subject to fierce competition from overseas. The Bill was read the second time, put through the Committee without amendment, read the third time and passed.