A FISCAL STUDY

Sun (Auckland), Volume III, Issue 654, 4 May 1929, Page 6

A FISCAL STUDY

FARMERS AND PROTECTION THE BATTLE OF DOCTRINAIRES Wr-rbem •tr TBS SC-V The znrreatfhy of the farmer to me " ■’ i-i. expeifisen: ecmmoiuy called Prw- " cotton is baaed a .lefty on ntisunderThe mere -tee cf the word the cockatoe to ruse hia ereac -r.'l scream. The din ia not eon- • -iurn-re to ciear rhinirng. For 2-enerationa ttote question haj 1 the ba.ttlegErcnnd cf Etoonemist.* who are merely 'iflnceraed with, absteaertions and would not know a letter of imiemnity from, a lan'i.ng- '■ - resit.- of tin-n? or on taxing inathem practical application- But -ioc - are hard to put into Acta of Parliament at any tne, ami the job sfbte to make rhe doetrtne square with the aern r*a-.ue>i of a world which Part.sans on tae issue us*ial3y -”--t off ‘.re r*.is it the ontaet by as3cuxnin« that :h» taxation or the nocCaxation of inports is a fmdaraettai principle which -:hcn..i be the basis if the fiscal policy of the State. The practica.i poixt.cran fade that the ore tty idea is of Free Traders or Proteothortista are .Teldom capable of comp.ete s.pplication, to the conditions he .a asked to hiterfere with. a h EXCCR.r:f>y mto hi-tost? The abol.tion of meat of the duties or. food and other imports into xlng--ihd itci: eighty year-s ago was an exped-ent that suited the times, although it -waua oirteriy opposed by the agrarian interests. It was foi--owed by a great of industry amt the aoram tlaoon of wea-th. The Free Trade doctrinaires of . period --riGiigad to a school of the tight which, made personal liberty a ietish. Freeiiepa of trade- freedom of con-! tract and the right of me f-nd i *4> an -nxmumty from interference amounted to an obsesaho. Cohden traced riund me capitals of Europe the hot g-0.-peh.er of the movement to a ring me nattobns of the worid tnSBther on me cnnrr.cn grocmd of the free intenmange of the cotnmodit.es i sacn produced- x£e was the sincere of a pohey that happened to . suit co utest-plooded industrial plntocracy, me Lancashire cotton-spinners, mat me worid of commerce has ever mowm Continental statesmen received him coTtrYiFiwiy, but he left them, unmoved. They saw Engand, me workshop cf the worid. ■j'rmg ah the machinery and. most if me patents for it, and with access to all sources of raw material, could hefy competition- The freedom of r-uropear. markets was a tte tain? I for the 3nt3!l mA-n but it meant hand the mdustria.--sts of Germany and France out cf * me race. 1 Continental Europe turned to the ■ teachings of Prederich List, the father lof Protection, arid spumed Ccbdenism, with, the result that Germany eventual, y oecaaid transformed from a poor | nation of farmers into one of the rich- ' eat and most high Iy - industrial used h.ia tea in Europe. Put briefly, the j taxation of imports was an expedient which in the opinion of German | statesmen suited the needs of their own country, and they were not deluded by any specious piea for pro- ’ duc.r.s a xniilenmm baaed on Free j Trade. PROTECTION FOR EVERYBODY | We have trave.led far since 1&45, and few now make pilgrimages to the tombs of Min, Adam smith, j Cob*ten and the rest of the exponents of fa ire. From, his cradle to . h:s grave the cituzen is “protected” ; and. his liberty is circumscribed by , legislation to a degree that would ! have been incocceivab 1 e to John Stuart Mill. Factory acts have mitigated much of the brutality of Industrialism in Cobden’s day. Compulsion :n the matter of health and educa- | Lion has curtailed the right of the , free-bom Briton to remain dirty and gaoratt We in New Zealand have gone further. Legislation protects the j worker in the matter of wages, hours | and working conditions and secures i partia. indemnity from loss arising •out of accidents. A legal tribunal | regulates wages according to stand - ! arris of living which are deemed reasonable and without much regard to ! the productive vaiue of the services i rendered. j The effect of all this on industrial f organisation is considerable. It may i not be due entirely to legislation; the > productiveness of the country and the , -ateiiigence and industry of the ! people are factors, but the fact rei mains that very few countries in the worid are so rich per head of popuia- ! tion. or enjoy such prosperity and such a high standard of living, as the \ in Habitants of Zealand., A PRfjBLElf Pfjß THF. Pf>T.ITTCI 4 V

may the light :* that the imposition of protective duties in the interests of local industry materially increases the production cost of butter-tS-h meat and wool, which have to be -=old m tee world'’s markets in oompe- ; tition with the products of other ! countries. The truth is that if the : limit;k,l.l were removed to-morrow, apart from the widespread unemployment | suud loss of capital that wouid ft .low | the closing down of scores of industrial establishments. farm costs 1 would remain much at their present level. To realise this, it is merely necessary to study the finance of New Zealand farming, and analyse a TO BURDEN OF ttTERExT The majority of the occupied hoid*tg3 m NTew Zes .and consists of oneman farms: that is to say farms on which the bulk of the work is done : by the farmer and his family, with j s. little extra labour at certain seasons. Tne capital investment necessary to provide a man with a farm which will i yield him a reasonable living ranges : from the price of a small i. sheep run, to £.5.Q<iG for a mixed ; farm, and £3.WO for a dairy farm, stock and improvements, included. In j each, case, after paying interest on 1 capital and getting a rent-free home I and half his food supply off the place, i the farmer will not have more than I three or four pounds a week, to spend | on goods which might be affected by protective duties. 1 Now, let us look at these duties | which make farming dear. In the first ' place, nearly half the imports that ; come into the country are duty-free, ' and the farmer is benefited more than anyone else by the free list. The entire Customs revenue amounts to about a year. About 27 , per cent, of it is collected off alcohol ! and tobacco, 13 per cent, off motor- : car 3 and tyres, and 15 per cent, off ; luxury art-cles that have no need to [ enter into anyone's expenditure. The i remainder, amounting to something • under three millions, comprises duties on clothing, textiles, machinery, prei pared foods, biscuits, confectioners' j proprietary articles, and a host of | things necessary and unnecessary to i the average household. There are about 54*0,0*50 bread- • winners in the country, and they share i this three millions among them. It works out at a off fie over E 5 a head. : It la not much, to worry about and if the farmer is sufficiently fond of his ! glass to drink a bottle of whisky a ; month, or if he smokes 4oz of tobacco a week he contributes more to the j revenue under that heading than any ; sacrifice he makes in the interests of j local industry. ■ The truth is that the chief item in the cost of farm production is inter- ; est. N*ot one farmer in 100 baa, a 1 clear title to his place, and the , farmer's equity in the majority df ! cases is than s<> per cent, of the l cost. | A reduction of 1 per cent, in the I rate of interest on mortgages would I furnish most farmers several times as I much relief as they would obtain : from any remission of duty on imports. i Mortgage interest and, the price of I farm products are the chief factors I in. determining the price of land. The j cost of living as affected by pro tec - ! trre duties hardly enters into the matter at all. a reduction of 2d a lb lin butter-fat over a couple of sea- ‘ aor.s would leave little inducement to ‘ thousands of .North Island farmers to 1 remain on their farms. A corresponding rise would see half of them buying new motor-cars. Maintenance of the present price and a reduction in the rate of interest would tempt hundreds of men to give more for a place than they wouid if the money was going to cost 6 per cent. In short, it is possible to protect industry, to protect the worker, to protect women and children; but it is beyond the wit of man to protect the farmer from himself or from the risks of his business which, contrary to popular opinion, is one of the most speculative in the community. The transfer of three of taxation from customs duties to la.n<fl or income tax would do the farmer no good, and the dislocation it would produce would be ruinous to the country.