TARIFF INCREASES.

Timaru Herald, Volume CXXV, Issue 18626, 23 July 1930, Page 10

TARIFF INCREASES.

Foreign Goods To Pay More INCREASED PETROL DUTIES. SURTAX REPLACES PRIMAGE. By Telegraph—Press Assoeiation. WELLINGTON, July 22. When the House of Representatives met to-night at 7.30, proceedings were accorded urgency. The House resolved itself into a Committee of Ways and Means to deal with resolutions affecting the tariff. The Hon. G. W. Forbes read a lengthy statement outlining the effect of the resolutions with regard to the collection of increased revenue. Mr Forbes stated: “As members are aware, owing to the low prices obtained recently for some of our staple products i the markets of the world, and exchange restrictions which have been imposed by banking institutions, it is expected that there will, during the present financial year, be a considerable decrease in the importation of goods, and consequently in the amount of revenue obtained through the Customs Department. It is essential that a sum oi £9.145.000 should be collected from Customs and excise duties (including duty on New Zealand brewed beer, but not including the petrol tax or tyre tax). If no alterations were made in legislation now on the Statute Book, it is considered that the revenue which the Customs Department would* collect by way of Customs and excise duties during the present fi cial year, would be as under:— and excise duties (other than beer duty) £7,750,000; beer duty £600,000; total £8,350,000. This means that an amount of about £600,000 must be obtained by way of increased Customs and excise duties. Even if this extra amount is collected, the total received will be approximately £370,000 less than was collected last year from the same sources. It is proposed that this increased revenue should be obtained: (1) From an increase in the duty on foreign goods; (2) from a surtax to produce revenue in excess of the primage duty; (3) from an increase of duty on cigarettes and cigarette tobacco, both imported and locally made; (4) by taking steps to prevent inroads upon the revenue caused by the present duties on imported leaf tobacco and on locally manufactured tobacco, and cigarettes; (5) by abolishing the allowance for under-proof spirits, and (6) by increasing the duty on New Zealand brewed beer. Referring to assistance to the timber industry, Mr Forbes said: “The state of the timber industry has for some time been engaging the attention of the Government. The duties on timber were increased in 1927, but increased protection has not ha<£ the desired effect of limiting importation of timber and increasing the use of the local product. It is therefore proposed to increase the present duty on roughsawn timber in ordinary sizes from 5/to 7/6 per 100 superficial feet, and to fix the rates on timber in long lengths and large cross sectional area, and on sawn dressed timber, at 2/- less and 4/- greater respectively than this rate. The Government has also decided to grant further assistance to the clothing, manufacturing and . motor-body building industries. These industries employ a considerable number of hands. The total importations of apparel and hosiery during the last five years are as under: —1925, £2,801,167; 1926, £2,709,456; 1927, £2.458,105; 1928, £2,675,728; 1929, £2,743,724. These show the extent to which the New Zealand manufactured article is displaced by the imported product. The result of the combined surtax and increased rates of duty is to grant further protection to the clothing and ' hosiery manufacturing industries of over 6i per cent, on British made clothing, etc., and of 14* per cent, on foreign articles. With respect to the motor-building industry, it will be seen that the increases in body duty is set down at 11 per cent. It must be remembered that the body duty is payable on the whole motorcar, and according to the generally accepted view, the increased duty represents an additional 5 per cent, on the value of a body.” The Minister stated: “It has been decided to make a concession on barley, which is an important food in the raising of pigs. I am advised that barley is the best cereal to supply carbonitrates, which are necessary in diets of skim milk or whey.” Mr Forbes continued: “.’..s has been indicated, it is part of the Government's policy to increase the preference granted to goods manufactured or produced in the British Empire. During recent years there has been a decrease in the proportion of British made goods imported into the Dominion, and it is proposed to make increases in preference in 158 items of the tariff. The total number of items is 449, and the number of items upon which preference is granted is 295. There is another aspect of this matter which deserves consideration. It has frequently been urged that owing to the high tariffs which are being imposed by certain foreign countries on New Zealand products, we should go in for a policy of retaliation. The Government is greatly concerned regarding the tariff and other barriers which are being erected against our products. I do not think that as a general rule, retaliation is a satisfactory method to adopt in dealing with such matters, although I recognise that there may be instances in which retaliation is the only satisfactory way left. I think that it is far better to proceed by w r ay of negotiations. In pursuance of this policy, the Government does not regard all increased duties which have bee nimposed on foreign goods, as necessarily permanent. It is noticed that during recent years there has been a tendency on the part of some foreign countries to

provide in their tariffs for minimum and maximum rates of duty, and the Government is quite willing to enter into negotiations with any foreign countrv which treats, or is prenared to treat New Zealand goods fairly, in tariff matters.”

Mr Forbes said: “In accordance with the tariff agreement between Australia and New Zealand, none of the increased duties will apply to Commonwealth products, except by agreement with the Australian Government or after six months’ notice. It will be observed also, that it is necessary to retain the primage duty on Australian goods, but that wheat and wheat flour have been exempted. I should perhaps mention that quite recently the Hon. P. A. de la Perrelle had preliminary conversations with Mr Fenton, Australian Minister for Trade and Customs, while he was at Auckland, and I believe that as a result of the discussion, more satisfactory trade arrangements will short.y exist between the two Dominions.” Mr Coates asked whether it was intended to treat the increased petrol tax as ordinary revenue, or was it to be paid into the Highways Fund.

Mr H. E. Holland said it seemed the Government was adopting the principle of getting revenue by indirect taxation. He considered necessaries that could not be produced in the Dominion should be admitted duty free, while goods which could be produced in the Dominion should be subjected to a protective rather than to a revenue-raising tax. With regard to the petrol tax, he asked how industries, particularly the carrying industry, were to be affected. Mr A. Harris said the Government’s only objective seemed to be to extract more and more from the already overburdened taxpayer. Mr H. T. Armstrong asked how much revenue it was hoped to obtain from this source. The imposition of the increased petrol tax would drive out a number of men in business in a small way. Furthermore, the tax did not give protection to any industry in this country. Mr C. A. Wilkinson expressed regret that the duty on wheat had not been removed.

Mr W. D. Stewart said he did not think New Zealand industries should be protected by an embargo. They should be afforded some protection, but they should not be placed behind a brick wall.

Mr C. H. Chapman urged that there should be provision that a percentage of motor-cars imported should be with bodies, which could be manufactured locally. Replying to various questions, Mr Forbes stated that the extra petrol tax would be paid into the Highways Fund. It would be disclosed in the Budget what would be done with the looney. The petrol tax was now the same as in Australia. He did not believe in giving any industry a monopoly as it would always be better as a result of a certain amount of competition. It was expected that the increased taxation, excluding the petrol tax, would amount to £IOO,OOO. Mt Forbes stated that cinematograph films would be dealt with in the Budget. Replying to Mr Stewart, he stated that the reason for anticipating the Budget was to combat abnormal Customs clearances. The reason for increasing the duty on cigars was to place them on the same footing as cigarettes. The system of a stipulated number of locally-built motor bodies had not worked successfully in Australia.

Several members expressed the opinion that tne resolutions would provide a disagreeable surprise for the country.

Mr A. E. Ansell said the Prime Minister had shrouded in mystery the ultimate destination of the proceeds of the petrol tax. Working people in suburbs would suffer as a result of the increase, because it was almost certain that ’bus fares would be increased. It would appear that the Government was endeavouring to bolster ,up the railways at the expense of motor transport. If the Prime Minister imagined he was going to stem the progress of motor transport, he would be a modern King Canute. The Government must seek co-operation with motor transport.

Mr H. M. Rushworth protested against the increased duties, which he described as a blow to industry. The additional taxation would be passed on to the priniary producer, and in consequence exporters would be placed at a further d Mr G. H. Mason advocated additional protection for the New Zealand wine industry. There was only 6/- duty on wines, compared with 36/- on other intoxicants. Mr G. C. Black urged that all packet tobaccos and cigarettes claimed to be locally grown should bear some mark indicating the actual percentage of local product in the contents. The duty on New Zealand tobacco should not be increased. Mr W. Nash (Hutt) said he estimated that the actual tax. on petrol would be Bid per gallon. because a sub-clause of the fifth resolution provided for a stipulated addition in lieu of the primage duty. This would mean a duty increased by over 100 per cent. Mr W. H. Field expressed the view that some means should be devised whereby it would be possible to import petrol more cheaply. At present the price was too high, and with the increased tariff it would become almost prohibitive. Mr R. Semple submitted that the petrol tax would aggravate the problem of unemployment, as it would put many struggling carriers out of business. Mr H. E. Holland appealed to the Prime Minister to take tne House into his confidence with regard to what he intended to do with the proceeds of the increased petrol tax. He added that it seemed to be the impression that the Government was entitled to 1 j have its resolutions passed, but when i s details came before the House for j subsequent consideration the Labour | Party would take action where it conI sidered it necessary. Mr Forbes said the petrol tax proceeds, when paid into the Highways Fund, would be used for the country's requirements and road-making, particularly back-block roads. Details I of the proposals would be contained I in the Budget. The petrol tax would not amount to Bid, but would be 7 7-20 d., when the surtax was added, and the primage duty deducted. Mr Coates agreed that the v Government was entitled to the passage of the resolutions, but he presumed that no member was bound to support the prosposals merely by his voting for the resolutions. Mr W. E. Barnard said there were many things in the proposals which many members would consider gravely. The Government was likely to find it necessary to accept several important! amendments. Mr J. S. Fletcher asked why it had been necessary to um,uUpdie tne Budget, when it was due in two days’ j time. A policy statement should have accompanied proposals such as those before the House. Mr W. E. Parry agreed with this view, and likened the Government's attitude to the well-known parallel of a mother and child. The Government was asking the country to open its mouth, shut its eyes, and see what the Government would give it. Mr Bitcnener auvouatta greater protection for the British motor industry. Mr W. J. Poison said he believed the Government could have obtained additional revenue by taxation on luxuries.’

He regretted that the Government had decided on the proposals before the House.

Mr E. J. Howard said he would like to know how much money there was in the Highways Account. He could not see how additional revenue was necessary. The Highways Board had not spent the money already at its disposal. He feared the petrol tax would kill the goose that laid the golden egg, and he foresaw of the displacement of petrol engine by Diesel engines burning oil fuel. He mentioned that there was a six-wheel vehicle in use in Britain that would convey a heavy load at a much lower cost than a petrol engine. There would be very much smaller revenue derived from such oilburning vehicles. Mr C. A. Wilkinson asserted that the Government, perceiving it could not fulfil its pledges to the country, should have resigned rather than submit such proposals for increased taxation. Mr Poison, speaking for Independent members, stated that they would not oppose the resolutions, but they would be guided by what appeared in the Budget in hotly opposing the Customs Bill.

The resolutions were then adopted by the Committee, and the House rose at 11.58 p.m. till 2.30 to-morrow. DETAILS OF INCREASES. MOTORISTS MAINLY AFFECTED. By Telegraph—Press Association WELLINGTON, July 22. Following are some of the chief alterations in the Customs tariff whi. i become effective to-morrow, subject to Section 143 of the Customs Act, 1913, made by resolutions submitted to Parliament this evening. Increases are made on the following: Cigarettes, from 26/6 to 33/9 per 1000; and from 10/6 to 13/9 per pound. Cigars, from 12/- to 15/- per pound. Rough sawn timber, duty increased by 2/6 per 100 superficial feet. Sawn dressed timber, increased to 14/6. v Fresh small fruits, increased from Id to 2d pound. Motor spirits increased from 4d to 7d per gallon. The foregoing goods are liable at the same rate if of British or foreign origin. The rates on the following goods are increased:— Hosiery, British rate increased by 21 per cent; foreign by 5 per cent. Motor vehicles, foreign increased by 5 per cent, and body duty, British and foreign, increased by 11 per cent. The allowance for underproof spirits is abolished. Increases have been made in the rates on the following goods if of foreign origin:— Onions, from 30/- to £4 ton. Jams, from 4d to 5d per pound. Watches, from 20 per cent to 45 per cent. Lubricating oil from 8d to 1/- per gallon. Electric lamp bulbs, duty is increased by one-fourth. The rate on the following foreign goods inter alia) is increased by 5 per cent ad valorem: — Confectionery. Phonographs and Preserved fruits. records. Provisions. Musical instruSoap. ments. Chemi Is. Photo goods. Drugs. Toilet requisites. Apparel made to Stationery. order. Paperhangings. Drapery. Firearms. Haberdashery. Cartridges. Laces. Hardware. Ribbons. Metal manufacWoollens. tures. Millinery. Cash registers. Hats. Typewriters. Boots other than Electrical machin- \ children’s. ery and appliLeather manufac- ances. tures. Pumps. Tyres for motor Weighing mavehicles. chines. Glass bottles andlndustrial ma jars. chinery and ap Glassware. pliances. Chinaware. Artificers’ tools. Clocks. Motor cycles. Fancy goods. Lubricating Toys. greases. Jewellery. Basketware. Plate. Furniture. Plateware. Woodenware. Cinematographs. Brushware.

Primage abolished except for Australian goods, and a surtax on the i duty payable on dutiable goods is substituted at the rate of one-twentieth of the duty in the case of tobacco, cigarettes, spirits, timber and petrol; and nine-fortieths of the duty on all other goods except wheat and flour, which are exempt from both primage except when for the manufacture of beer. The increases in duty do not in the meantime apply to Australia. Leaf tobacco is reduced by 1/- per pound for British and foreign. The following are increases in excise duties. Cut and plug tobacco increased by 1/- per pound. Cigarettes made by machinery increased to 11/- per pound. New Zealand beer minimum duty increased from llid to 1/- per gallon.