The Daily News THURSDAY, JULY 24, 1930. THE FISCAL SCREW.

Taranaki Daily News, 24 July 1930, Page 10

The Daily News THURSDAY, JULY 24, 1930. THE FISCAL SCREW.

It may certainly "be assumed that whatever opinions may exist concerning the new tariff proposals submitted to the House of Representatives on Tuesday by the Minister of Finance, the Hon. G. W. Forbes, few, if any, envy him the discharge of what must be an unpleasant duty. At the same time there are doubtless many who will neither see eye to eye with him in attempting to raise the best part of a million sterling by increasing tariff and excise levies nor in his choice of the commodities on which higher imposts are proposed. Although the House, according to precedent, formally adopted the resolutions necessary to make those proposals active at once, it . by no means implies that the Bill to give effect to the changes will receive a similar assent. On the contrary, judged by the adverse criticisms aimed at the proposed tariff changes, there is a strong indication of opposition to the method of obtaining an increase of revenue by indirect taxation. That the Minister is treading upon very thin ice is evident, and his reasoning in favour of the step, he has taken is far from convincing. . It will be gathered from the lengthy statement made by Mr. Forbes that owing to the low prices obtained recently for some of the staple products of the Dominion, as well as to the banking restrictions in the matter of exchange rates, there will be a considerable decrease in the importation of goods, to the detriment of the Customs revenue to an estimated extent of £BOO,OOO. Obviously to utilise the fiscal screw in order to raise an amount of this kind is not only unjustifiable, but savours of a woeful lack of in taking the line of least resistance and the adoption of an opportunism that is altogether reprehensible. Moreover, this pinpricking method has been chosen at a time when the producers not only are suffering from the loss of an appreciable part of the anticipated returns from their capital, enterprise and strenuous labour, but are also not in a position to bear the additional cost of living consequent upon the increased duties proposed by the Minister. There are several ways of viewing this new tariff, but none of justifying it. That the heads of the Customs Department have been asked to frame . proposals for bringing up the Customs revenue to the amount required by the Minister fol* Budget purposes seems probable; hence the machine-made and apparently haphazard new duties, a study of which is by no means pleasant reading. To saddle the banking institutions with part of th? responsibility for a decrease in the Customs revenue does not reflect to the Minister’s credit, for they followed the fundamental principle of exercising pressure in order to maintain the value of exports at a reasonable level above that of imports. Instead of being blamed the bankers should' be praised for their action in favour of upholding the financial welfare of the country. The question of high tariffs is now exciting much controversy throughout the world, and there is soundness in the remark made by the Hon. W. D. Stewart—no mean authority on finance—to the effect that while New Zealand industries should be afforded some protection, they should not be placed behind a brick wall. Mr. Forbes does not believe, he states, in giving any industry a monopoly, as it would always be the better for a certain amount of competition. Is that why the present Government is preventing competition in timber by adding to existing duties on imported material? Is that why the growing industry of growing should be handicapped by excise increases? With regard to motor spirit, the duty on which it is proposed to. increase from four pence to .something over seven pence, the Minister was pCrsisently mysterious as to the ultimate destination of the impost beyond the amount handed to the Highways Board. Is there any ground for the contention of Mr. A. E. Ansell that the Government is endeavouring to stem the progress of motor transport in order to bolster up the railways? Of course it is well known that every impost is passed on to the consumer. While it is true there are some articles of luxury that can and should bear fitting tariff charges, yet (here are many commodities in the new proposals that do not come into such a category—chemicals, drugs, artificers’ tools, and other articles, some of which are essential to the welfare of industry.' Apparently the. Minister has been unwisely advised. If not, then he may be fishing for ideas and using his new schedule merely as a framework from which some of the articles can be

removed, others added and a compromise made. The principle of obtaining revenue by indirect taxation has long since been condemned. It may be that Mr. Forbes is acting on the maxim that ‘‘Necessity knows no law,” but Parliament must decide, what is the least objectionable method of increasing the country’s revenue.