CUSTOMS BILL

Southland Times, Issue 21854, 3 November 1932, Page 6

CUSTOMS BILL

DEBATE IN HOUSE TARIFF CONCESSIONS EXTENSION PROPOSED LABOUR CRITICISM (From Our Parliamentary Reporter.) Wellington, November 2. Power to extend by Order in Council to Canada, South Africa, the Irish Free State, Newfoundland and India, the same tariff concessions as New Zealand accorded Great Britain under the Ottawa agreement is contained in the Customs Agreement Bill which was introduced into the House of Representatives by Governor-General’s message to-night. The measure also confirms the lowering of the duties of confectionery, apparel, hosiery and silk goods manufactured in the United Kingdom, and the changes made by the original resolutions affecting imports from Crown Colonies. It also authorizes the abolition of the surtax on imports from the United Kingdom and empowers the Governor-General by Order in Council and exempt from payment of the surtax any goods imported from Canada, South Africa, the Irish Free State, Newfoundland, and India.

The abolition of primage duty respecting goods is endorsed. Power is given the Governor-General to reduce the excise duty on New Zealand manufactured tobacco to compensate for the removal of the surtax on United Kingdom manufacturers. The Hon, J, G. Coates said that the Bill gave effect to agreements that were arrived at at Ottawa between the United Kingdom and New Zealand. Parliament had already agreed to the resolutions and these were given effect to in the measure before the House. The first operative clause of the Bill provided for lower duties on United Kingdom and colonial confectionery, apparel, hosiery, and silks. There were important provisions in the Bill relating to the powers of the GovernorGeneral in Council to reduce the duties on confectionery, apparel, hosiery and silks from Canada, South Africa, Irish Free State, Newfoundland and India to the same level as those on similar goods from the United Kingdom. These changes were proposed with the dual object of keeping the tariff as simple as possible and at the same time endeavouring to obtain concessions for New Zealand products from the dominions mentioned. Important discussions took place between the Canadian and New Zealand delegations with a view to the arrangement of a new trade agreement when the present agreement expired in May next. _ There was not sufficient time to bring the negotiations to conclusion, but it was arranged that the matter should be further gone into by correspondence. With respect to the agreement with Australia, the position was that in both countries there was a strong feeling that the time had arrived for a complete revision of the existing arrangement. Preliminary conversations had taken place between the representatives of the two dominions and it was intended if possible that there should be a further meeting as soon as practicable to go into the whole question. Discussions also took place between the New Zealand delegation and representatives of the Union of South Africa, India and the Irish Free State. It was arranged that these were to be continued by correspondence.

Tariff Simplicity. With respect to the question of tariff simplicity, the mercantile community would, he felt sure, agree that during recent years changes in customs duties due to economic conditions had rendered the tariff more and more complicated and in the interests of both importers and the department, it was desirable that further complications should not if possible continue. Important conversations had taken place between India and New Zealand. India was a potential customer for much of New Zealand’s exportable produce. The Leader of the Opposition: Won’t this give Indian products a great advantage over British or New Zealand produce? Mr Coates: No. All the Order in Council does is to give the Government power to cary out negotiations. It is vital that we should have that power. He went on to say that whatever was agreed to as between India and New Zealand would automatically require the confirmation of Parliament. Parliament would have the opportunity of saying whether it agreed to the agreements that were being contemplated or arranged. There could be no doubt that there are great possibilities for trade with India. Discussions had been carried out with the Indian Government and there was no doubt that it would readily and willingly cooperate with New Zealand in an endeavour to establish trade between the two countries. There was a good market for fruit in India as well as for by-products of the dairy industry. Trade at the present moment was very much in favour of India, although he was not one of those who thought they should be guided strictly by trade balances. In his opinion trade should be free. There were also great possibilities of trade with Canada and South Africa. Negotiations had been entered into with South Africa up to a point with a view to straightening out the existing tariff difficulties. The Australian agreement had been in existence for some time and so far as New Zealand was concerned he could not say it was satisfactory by any means. In fact, at the present time it was in anything but a satisfactory position. Tire bounty schemes which were in operation in Australia undoubtedly gave a tremendous advantage to Australian manufacturers. There were other sides to the question of trade between Australia and New Zealand which would require attention and discussions would take place between the countries with a view to making such arrangements as would be mutually satisfactory. Preference Clause. Mr Coates said that another clause in the bill provided for preference to United Kingdom and Colonies on cocoa and coffee beans, certain unground spices, printing and writing paper in large sheets, asphalt, cigars and rum. Power was also given to the Governor-General in Council to reduce the duty on English and Irish beer and stout from 3/- and 2/- a gallon. An endeavour was also being made to increase sales of New Zealand hops in England and the Irish Free State. The understanding was that if satisfactory contracts for the disposal of New Zealand hops could be made, the New Zealand Government would ask Parliament to reduce the duty on English and Irish Free State beer and stout to the extent already mentioned. Mr Coates said he was pleased to Bay that New Zealand had already been able to arrange for substantial sales of hops and Mr Hamilton, who represented New Zealand hop-growers at Ottawa, was at present in England endeavouring to arrange further sales. It was hoped that New Zealand would be able to dispose cf her surplus hops.

Inquiries had been made as to the effect, of the reduction of duty on imported beer and stout, and it was found that on the prices at which the imported and New Zealand made commodities were sold, the reduction would not prejudice the local industry. The Governor-General was given power to extend concessions to Canada, South Africa, the Irish Free State, Newfoundland and India, the object being to keep the tariff as simple as possible and promote trade with other dominions. Another clause dealt with Orders in Council. Tobacco Duties. Dealing with the question of tobacco duties, Mr Coates said that the protection granted to New Zealand tobacco and cigarette manufacturers had been considerably reduced in recent years and the removal of the surtax on United Kingdom tobacco and cigarettes meant further reduction in protection and in certain lines practically abolished it. A clause in the Bill gave the Gover-nor-General in Council power to reduce the excise duty to an extent not exceeding the surtax remitted. The actual rates had not been inserted in the Bill since it was first necessary to ascertain the facts relating to competing tobaccos from the United Kingdom which were exempt from the surtax. The Leader of the Opposition: Why not take the excise off altogether? Mr Coates: How much we would like to do that. He then formally moved the second reading of the Bill. Mr M. J. Savage (L, Auckland West) criticized the reduction of the tariff against Indian manufactures which, he said, represented the product of surplus British capital invested in India. The problem that faced us was that our manufacturers were being asked to compete against the produce of British capital invested in countries where there were poor labour conditions and low rates of wages. One did not need to be an economist to see where we would land. It would simply mean that our people would be forced down to the low standard of living that existed in countries where these goods were manufactured. He declared that whether it was a question of trading with a country inside the Empire or outside the Empire, we could not afford to neglect the standards of our own people. Continuing, Mr Savage said that instead of allowing British manufacturers to compete with New Zealand the Government should endeavour to induce British financiers to finance industries in the Dominion. It had been said that New Zealand was going to lose a certain amount of revenue, and if that were so the taxpayers would not benefit by the arrangement. It appeared that either the British manufacturer or importer would get the benefit and the people of New Zealand would be no better off. “It looks to' me as if tariffs never have protected because goods have always come in and will continue to come in,” he said.

Trade With India. Referring to trade with India, he said that the Bill evidently proposed to give the Government power to place the British manufacturer on the same footing as the teeming millions of India with their low standard of living. It would lead to British money being invested in India for the purpose of manufacturing articles there with cheap labour and the workers in Britain would either have to starve or migrate to some other part of the world. He did not see much hope of selling an increased amount of New Zealand produce in India for many years to come, and instead of trying to find a market there it would be better, to try and raise the standard of living in New Zealand. If New Zealand were to allow Indian pig iron to come in it would be impossible to develop mountains of iron ore here, but the time must come when a progressive Government would want to do so. The Bill would take away protection from a number of important industries. The proposals were serious because the whole of the Customs was involved and the powers under Orders-in-Council proposed would carry the Government to any length. Mr Coates had said that Parliament would have to endorse any agreements made, but they all knew what that meant. Parliament was being asked to endorse agreements already made and would do so, and if Mr Coates were to go to Japan tomorrow to make an agreement there his action would be endorsed when he returned. Mr Savage said he wanted to make it quite clear that the attitude adopted by the Labour Party towards the resolutions would be continued as far as the Bill was concerned. The Opposition was in favour of fostering industries in the country and believed that goods that could not be produced in New Zealand should come in duty free. For instance, motor car chassis could not be made in New Zealand and if they were allowed to come in free a tremendous amount of work would be provided for body builders in the Dominion. The tariff on such things could only be for the purpose of raising money which should be raised by more direct means because the method at present in use was simply strangling local industry. Mr Sullivan Concerned. “This Bill gives me the gravest concern,” Mr D. G. Sullivan (L., Avon) said. He supported Mr Savage in the attitude he had taken up, and said there could be no doubt but that the Bill would make the position of local manufacturers harder. Mr Coates: Have they said so? Mr Sullivan: Yes, they have said so to me. Mr Coates: They have not made representations to me. Mr Sullivan said the Bill would seriously affect the clothing industry in the South Island and would lead to a reduction in the standard of living or the dismissal of employees. Mr C. A. Wilkinson (Ind., Egmont) said that during the past four years New Zealand had exported nearly twice the value of goods to Britain than had been imported from there. During the last year two and a half times more had been exported than imported. It appeared to him that the tariff walls against Britain were too' high and would have to be adjusted. On the other hand New Zealand had imported six times as much from Canada as she had sent there, and the trade with Australia was two to one in favour of the Commonwealth. These things should be adjusted immediately. Continuing, he referred to wheat duties. The Bill was a move in the right direction, but in his opinion it did not go far enough, consequently he moved as amendment: “That the second reading of the Bill be postponed until the next sitting day in order that the Government may further consider the direful effect of the duty on wheat and flour and its effect as a tax on bread, etc.”

Mr H. W. Rushworth (C.P., Bay of Islands) seconded the amendment. Mr J. McCombs (L., Lyttelton) referred to the fact that the price of wheat had been reduced from 6/8 to 4/4 and said the amendment was ridiculous and would be rejected almost unanimously by the House. The reductions proposed in the Bill would prove a tremendous tax on local manufacturers, Mr McCombs continued. New Zealand had agreed to reduce the British preferential tariff, while Canada and Australia had refused any reduction. Thousands of workers in New Zealand would be adversely affected, while workers in Australia and Canada were to receive further protection by increased tariffs against foreign manufacturers. Amendment Rejected. The debate was continued by members representing all the parties in the

House, the majority of them confining their remarks almost entirely to a discussion on the wheat duties. The division on Mr Wilkinson’s amendment was reached at 12.30 and the amendment was rejected by 55 votes to 2, only the mover and Mr H. M. Rushworth voting for it. Mr Coates then replied and said that high tariffs were no guarantee of high standards. The United States had high tariffs, but reliable authorities claimed that there would probably be from 25 to 30 millions unemployed there during the winter just starting. New Zealand could trade with India without the standard of living being lowered. Great Britain had traded with India for hundreds of years without her standard of living being affected. The preferences gained by New Zealand from Britain were considerable and it would be some time before the full benefit of Ottawa was felt. The second reading was passed at ,1.10 a.m. and the House then rose.