BURDEN OF TARIFF COST

Taranaki Daily News, 15 July 1933, Page 9

BURDEN OF TARIFF COST

■ IMPORTERS SUBMIT CASE SWELLING OF LANDED COSTS. RATE OF EXCHANGE TEMPORARY. . RECIPROCITY IN MARKETING, By Telegraph—Press Association. Wellington, Last Night. Placing the views of the New Zealand Importers’ Federation before the tariff commission to-day Mr.' E. Salmond said it was realised that New Zealand was almost entirely dependent on the United Kingdom market for an outlet for its primary products, and it was necessary that the local market should be open to the United Kingdom manufacturers as far as possible. “The federation is satisfied,” Mr. Salmond proceeded, “that the present duties are too high on some items, and wishes to stress the fact that it is entirely necessary when considering protection to take into account all the items which go to swell the landed cost of imported goods—freight, insurance, landing charges and Customs duties. Freight alone on a variety of imports from the United Kingdom is a very heavy item.

“In making our suggestions we leave exchange out of the calculations, realising that the present rate must be temporary in character, though it has greatly added to the difficulties of trading with the United Kingdom. The federation urges that the conversion rate should be the par rate of exchange. Under the present method invoices for goods imported from foreign countries are converted for duty purposes at the ruling rate of exchange at the date of shipment. This makes for confusion, as it is impossible for the importer accurately to calculate landed costs when placing the order, and we cannot see the advantage of the present system.” The federation considered the dumping duty should not apply to shipments from the United Kingdom. Replying to Mr. Murphy Mr. Salmond said: Many British manufacturers were undoubtedly dumping on the New Zealand market; owing to the depreciation of New Zealand’s currency they had either to do that or lose the market, and had reduced prices in order to meet the exchange. Mr. Murphy: They are absorbing some of the exchange?. Mr. Salmond: They are absorbing the whole of the exchange in some cases and selling in New Zealand at below the home consumption value. Mr. Salmond said that affiliated with the federation were the Auckland and Canterbury Importers’ Associations, Otago Importers 1 and Shippers’ Association, and the Wellington Importers’ Association—a total membership of 292 importers. In placing specific suggestions before the commission the federation concluded its general observations by the following summing-up: (1) We advocate the honouring of the Ottawa agreement as in the best interests of New Zealand; (2) we are hostile neither to local secondary industries nor to farmers, but urge that the scale of duties be conceived in the interests of the whole community; (3) we ask for considei'ation as an offset to the multiple charges which swell the landed cost of imported goods and so act automatically as a restrictive tariff; (4) we ask for definite British preference in accordance with the Ottawa Pact; (5) we advocate a specific duty as suggested by practical men with practical experience. FARMERS AND INDUSTRY UNION DEFINES ITS ATTITUDE. DENIAL OF LACK OF SYMPATHY. Wellington, Last Night. A statement issued by the executive of the New Zealand Farmers’ Union defines the union’s attitude toward the secondary industries and asserts that the impression has been deliberately given that the farmers are hostile to or desired the destruction of industries. “The farmers are of the opinion that the greatest hindrance to these industries progress is the same as that pressing hardly on the primary industries—the high level of local costs compared with oversea prices,” says the statement. The cause of this disparity is the protective tariff. We have entire sympathy with the plight of many secondary industries. The farmers are seeking a reduction of this artificial cost.” Referring to the raising of the- exchange rate and the inference that the farmers had arbitrarily caused this, the statement recalls that during 1932 exchange was arbitrarily held down to 10 per cent. In January, 1933, the exchange was arbitrarily raised by Government action to 25 per cent., which may have been above the open market rate but was certainly less than 15 per cent, more, so that if a bonus was given to the farmers it was less than 15 per cent. An increase in exchange was the alternative to an artificially deflationary policy involving cuts of-wages, salaries and other earnings. Replying to allegations that the farming community had received from the taxpayers concessions amounting to millions of pounds the statement quotes a paragraph from the union’s evidence before the tariff commission: “The union has no objection to a true revenue tariff of moderate dimensions, balanced where appropriate by countervailing excise duties. If this policy is carried out the union will be prepared to sacrifice any subsidies and protection it at present enjoys, which are purely defensive reactions to a misconceived tariff policy.