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4. The operation of import licensing depends upon the authority conferred by legislation upon the Minister and the Department of Customs. Each year—and usually towards the end of the year —there has been prepared and released to the public a Schedule containing a list of items covering all classes of goods and disclosing the decision of the Minister as to the basis upon which applications for import licences will be received and dealt with for the ensuing " licensing period." This period (being the period of validity of a licence) has varied slightly, but has recently run from Ist January in one year until the 28th February of the following year—fourteen months. From the 1951 period, however, the periods are to be the calendar years to facilitate correlation between licences issued and available overseas funds. According to the circumstances, items in the Schedule may be (a) virtually excluded from importation —D " items ; (b) allowed to be imported only after close examination of each individual application—" C" or " control " items ; or (c) allowed to be imported on a " basic allocation " dependent upon the previous " import history " of the applicant. Group (6) involves the exercise of discretion in individual cases. Group (c) can be dealt with promptly as a matter of course with benefits in speed of administration and facility and foreknowledge for the trader. For the 1949 licensing period approximately 123,000 applications and appeals were made, of which about 44,000 were applications for basic allocations. Of the remaining 79,000 applications and appeals, 43,000 were granted and 36,000 declined—three-quarters of these cases being considered in departmental Head Offices in Wellington. About 12,000 cases were referred to the Department of Industries and Commerce for consideration. 5. The compilation of the Schedule and its various classes, groups of items, and types of " allocation " (if any), as above described, is a work undertaken by the Department of Customs in conjunction with other Departments, and particularly the Department of Industries and Commerce. The factors taken into account by the Departments include such matters as past imports, probable demand and overseas supply, local availability —actual or potential—and Government policy in relation to protection of industry or special and specific limitation of consumption of certain types of goods. For the 1951 Schedule the Government requested the Import Advisory Committee to consider the views of the Departments and trade organizations and recommend a Schedule. This was done, and the Committee's recommendations were adopted. 6. In an endeavour to assess what may result from the policy embodied in any Licensing Schedule, the Departments compile what is known as a budget of estimated expenditure under licences to be issued under each item or sub-item. In actual practice, it has been found that licences —particularly for the more important items of expenditure—frequently exceed the budget estimate. This is mainly due to (a) the continued rise in prices, (b) increased availability from overseas, (c) the insistent pressure of local demand, and (d) unforeseen development of shortages in local production. 7. The release of the Schedule each year necessarily has embodied a virtual promise by Government to issue licences, and by implication the necessary overseas exchange, and so to permit over a long period ahead the importation of specified goods to a specified value. It also has implied —on the grounds of equity —that persons or firms who have been late in applying would, so far as practicable, have equal claims with those who in similar circumstances applied early. 8. It can "therefore be said that this system of control has not been closely related to current overseas income. Owing to the availability of licences over a period of fourteen months, the system has not been able to ensure that the level of imports has been kept in close harmony with overseas income. The system has markedly restricted buying abroad only to the extent that classes of imports have been deliberately selected for limitation —usually those classes where substantial savings in overseas funds have been possible with minimum disruption to the economy.

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