CASE FOR PROTECTION

Sun (Auckland), Volume IV, Issue 1043, 6 August 1930, Page 11

CASE FOR PROTECTION

DEVELOPMENT OF INDUSTRY STRESSED BY MR. G. FINN ADDRESS AT HAMILTON “Protection is the only policy which fills the requirements of modern development, hence its acceptance, wholly or in part, by every country in the world. Trade was adopted in England for the purpose of protection and it is now being abandoned for the same reason. Free Trade is merely a camouflage and an ideal impossible of attainment, for Free Trade has never existed.” The above remarks were made by Mr. George Finn, president of the New Zealand Manufacturers’ Association, when he addressed the Hamilton Chamber of Commerce last evening on “The Case for Protection in New Zealand.” He stated that protection was the accepted policy of almost every country in the world and this was overwhelming evidence in its favour. Protection had steadily gained ground and today was stronger and more lusty than ever. NOT FOR MASSES Mr. Finn explained that at the time Free Trade was introduced into England the franchise was in the hands of a small section of the people. The outlook of those with whom the decision lay was not for the good of the masses, but the maintenance of trade for the benefit of the few, therefore Free Trade suited their purpose and the conditions existing at that time. The position was entirely different in the United States, which today afforded the best example of a protective policy. There the policy was to build up a Constitution for the benefit of the whole of the people. Mr. Finn said that Protection was a democratic principle in that it reserved to the people the advantages of their own markets. He quoted the instances of our woollen manufacturers and boot manufacturers competing with overseas buyers at the Dominion wool and hide sales. Local industries were therefore a direct advantage to the farmers. Foodstuffs and articles of clothing, more than any other commodities, should be produced locally. NOT EXPEDIENT TODAY Free Trade allowed things to take their own course. This might have been possible at one time, but it was j not expedient today when competition ; was so keen. The idea of Protection was to enable local industries to be- ; come established so as to supply the ' home market and provide work for the people. All new countries had developed along these lines. The report of the British Economic Mission in . 1929 to the Australian Government did j not condemn Protection, but took ex- 1 ception to the methods of regulating | wages and other conditions which tended to increase the costs of production. The same might be said of New Zealand.

Mr. Finn said that those who condemned Protection were to be found chiefly among that section of the community which benefited most from it. All the manufacturer asked for was honest criticism and fair treatment. The man on the land got that. Protection was necessary to * both the farmer and the man in the city, and it should be dealt with on its merits and not made a stalking-horse to further the propaganda of any particular section of the people. The thing to be determined was the extent to which Protection should rule in any industry. The economical cost of production was an important feature, but not the only one. This world was made up of a number of countries having different standards, different laws and each with a different outlook. Mr. Finn quoted the example of maize being produced by black labour in South Africa for Is a bushel. Dairy farmers here might consider that the New Zealand grower should produce it at the same price, but cheapness was not the only factor to be considered. New Zealand was particularly free from diseases affecting animals and the importation of grain might bring such diseases from affected areas. The day had arrived when we must adapt ourselves to our environment and rely more on our own resources. SELF-PRESERVATION Self-preservation was the first law of nature and the principle of protection was practised in every home, every town and every country. It survived and flourished because it was a sound principle and capable of standing alone on its merits. This could never be said of Free Trade. The manufacturers of New’ Zealand had no desire to be magnates or millionaires, but they desired to maintain, if possible, the- Dominion’s present standard of living and to build up industries which would provide employment for the people- and enable the country to prosper. Protection made the necessary provision for a steadily increasing population. If it were possible, by adopting Free Trade, to raise the standard of living in other countries it might be worth considering, but this was impossible. Competition in a Free Trade market would always result in an advantage to the nation content with the lowest standard of living

When Free Trade was introduced into England, railways were in their infancy, steamships were hardly out of the cradle and refrigeration was unknown. How was it possible for the people to have any conception of w’h i>* Free Trade meant to them? EXAMPLE QUOTED Mr. C. E. Mills Palmer, vice-presi dent of the Auckland Manufacturer.Association, also addressed the chain ber. Protection, he said, by securing the home market to the local industry, encouraged capital and competition It was admitted that in a country with a high standard of living no amount o' Protection could enable an industry to compete successfully on equal term* with those whose long hours and lowwages gave them a marked advantage in labour costs. Where living conditions were more or less on a parity, Protection would not only enable the local industry to produce at the same price, but as a general rule would eventually reduce the price of its own country below that at which it would be imported if no duty were levied. This was only a matter of history and could be proved over and over again. Mr. Mills Palmer quoted a typical example of the difference between a protective and a revenue tariff. He took the confectionery industry as an example of one on which a tax was to be imposed. INCREASE IN PRICE

“Suppose a duty of 5s a lb is imposed on raw cocoa beans,” he said. ‘‘The immediate result was that local chocolates increased in price, thus giving colour to the claims of the Free Traders that any additional duty was passed on to the consumer. If that duty had been levied on refined sugar there would have been no revenue for the Government, no benefit to the confectionery manufacturers and no increase in the price of sugar. If that 5s a lb had been transferred to £ 300,000 worth of confectionery annually imported into New Zealand, the immediate effect would be to reduce importatiens by. say, £IOO.OOO worth. The market for the local product would be extended by a like amount, greater production would reduce local prices, while the country’s revenue would remain much the same.” Mr. Mills Palmer said that New Zealand’s present tariff, unfortunately, was a clumsy, haphazard affair —an unscientific compromise between the two methods of protective and revenuegetting taxation. This succeeded in assuring revenue to the State only at the expense of harassed and cramped industry, plus increased cost to the consumer.