PROTECTION CRITICISED

Taranaki Daily News, 1 February 1933, Page 6

PROTECTION CRITICISED

TARIFF BOARD OPPORTUNITY NEW PLYMOUTH DEALER’S VIEW, ‘BOLD MOVE WOULD GIVE BENEFIT EXPENSIVE EXAMPLES QUOTED. The statement by the Minister of Finance, the Rt. Hon. J. G. Coates, in Parliament on Friday night that a board would be set up to recommend reductions in the tariff in accordance with the agreement made at the Ottawa conference has roused much interest and speculation. New Plymouth business men appear to be of one opinion—that a bold and decisive move in this direction would bring a great deal of benefit to the country generally. A generally accepted principle in economics is that necessities of life should be admitted free and any duty that may have to be imposed should be done for revenue purposes only and then only in cases of necessity. This principle was reiterated to a News reporter by a prominent merchant yesterday and he considered that it should form the basis of the new board’s work. For a long, time thL principle had been lost sight of and naturally the cost of living, especially in the case of the necessities, had risen in an almost alarming manner. The posi-/ tion had been allowed to develop to such an extent that the task of bringing things back to a reasonable and proper level was a colossal one.- Nevertheless the problem would have to be faced sooner or later, and the sooner the bet- , ter. ■ . ■ - GROWTH OF PROTECTION. In. the merchant’s opinion, the principal cause of all the trouble was “the short-sighted and foolish policy of protection given indiscriminately to secondary industries.” Protection had been given originally to enable an infant industry to get a start but was never intended to become a permanent fixture. A big protective tariff should never be given to any industry in an essentially producirig country like New Zealand and the only protection that, should ever be given should be to an industry that was using a big proportion of the country’s primary products. A secondary industry that did not use the primary products or could not",use them in a' manner that would enable the finished products to be turned out at a competitive price was not an asset, it was probably a liability. Protection originally given to foster for a time an infant industry, the merchant remarked, had not only become permanent but in far too many cases had been increased. Other small con-' cerns had been treated similarly until to-day one did not know really where one stood. The successive Governments had been swayed far too much by sectional interests, the merchant claimed; and instead of making even the i-..' .worthwhile industries strong and self-sv'-ort-' ing they paid far too much attention to their complaints and imagined difficulties. Any attempt to import'cheap goods into the country was met-' by a' tremendous outcry from the manufacturers and their outcry had been listened to in a sympathetic manner so often that the manufacturers had come to think that the sole function of the Government was not to look after the interests of the general public but to protect them from any outside competition whatsoever.

BOARD’S OPPPORTUNITY. “Protected secondary industries,” he said, “may be luxuries that a country can stand in good, times, but at the present j—• cture we certainly cannot afford to bolster up-manufactures that are nothing more nor less than a hindrance and a burden. There is plenty of scope for the new board’s activities in this field and it will be in its power to confer a big ■ and lasting benefit upon the community.” ' - The merchant gave some of the most outstanding examples. Flour, he said, was the greatest and to protect one section, and not a big one at that, a sliding duty amounting at times to no less than 220 per cent, had been levied upon the greatest necessity of all. The boot industry, which according to the New Zealand Official Year Book, 1933, gave employment to 1459 men and 905 women, cost the country very nearly £500,000. Preserved fruits carried a duty of 25 per cent. ■ from England and 35 per cent, from Australia and all to keep some hundred odd persons employed. Soap and candle-making was almost as bad. Though practically aU the ingredients could be purchased in the country a 25 per cent, protectioh was needed over and* above the extra freight and charges that must be put on to the imported article. The public had to - pay 2d a pound more for spices to provide a snug corner for a fortunate few. That also applied in the case of ground almonds (where the half-dozen or so grinders basked under a protection of no less than £2B per ton), pickles and sauces, chinaware, plaster board (the’ Canadian lines of which were under an imposition of 3,5 per cent.),; tea (which cost 2d a pound extra if it arrived in small packages) and brushware'(an absolute necessity to the : housewife which cost 25 per cent, extra to bolster up some small factories). Even crown tops for bottles were protected to the extent of 20 per cent. The paint industry employed so few that it was not.even shown in the Year Book, but* nevertheless it had 20 per cent, to shelter behind. EFFECT ON COST Of LIVING. These, the merchant. stated, were not the only cases by any means but, were enough to let the general public see the gross unfairness of the position and the manner in which their spending pewer had been cut, as of course every increase in the cost of these articles must force up the cost of living and thus diminish the spending power of the people. .That side of the question was vital enough but the,'other, that of ihe British manufacturer, was equally important ‘ How could New Zealanders expect the Briton to continue buying their butter, cheese and meat if they assiduously set about cutting off nis avenues of trade by a wholesale. policy of protection which had the- double effect of not only curbing the British purchasing powers but also of forcing up New Zealand’s own production costs? The position in the drapery trade was not nearly so serious according to the head of one of the, big establishments. They had been very satisfied with the removal of the surtax and the primage on British goods.. The exchange, however, had complicated matters and he considered that the tariff on British manufacture should be reduced so as to bring the prices down- to the old level. The great thing from their point of view was to arrive at stability and not have continual changing. He admitted, however, that there was a general opinion that the protection on woollen goods might easily be reduced.