The Dominion. FRIDAY, DECEMBER 13, 1907. THE "NEW PROTECTION."

Dominion, Volume 1, Issue 68, 13 December 1907, Page 4

The Dominion. FRIDAY, DECEMBER 13, 1907. THE "NEW PROTECTION."

Students of economics in New Zealand will be deeply interested in the cable message in this issue relating to what is known as the ' f n,gw protection-' in Australia. Under the Excise Act of 1906 the Commonwealth ; Parliament imposed certain excise duties on protected manufactures, biit provided that the Act should not apply to goods manufactured in Australia "under conditions, as to. remuneration, which are declared by the President of the Court (of Arbitration) to be fair and reasonable." Until Mr. M'Kay, the proprietor of the Sunshine Harvester .works, applied some time ago for a declaration from the Court that he 'was ; paying "fail- and reasonable' wages," and was refused a/certificate by Mr. Justice Higgins on November 8 last, not much was heard of the working of the Excise Act. ,On October 1, however, Sir William Lyne announced the revised scheme proposed by the Government with the object of securing that manufacturers' whose, manufactures ate, protected by the new tariff shall only enjoy that advantage on condition that "they pay fair rates of wages." It was proposed to impose an excise duty equal to half the tariff protection upon all goods the manufacturer of which cannot establish his right to ex'emption. To determine what 'fair and reasonable wages" might be, it was proposed to adopt the stan-, dard which : enables a manufacturer, to have his goods stamped with the " Commonwealth trade-mark " established in 1905. The application of the " trade-mark" is a matter for Ministerial authority, and only those goods can be. stamped, and thus ex* empted from excise duties, which. have been manufactured under an Arbitration Court, or ' Wages Board award, or an industrial agreement) or under conditions of wages' wliicu nave been pronounced fair and reasonable by a resolution of both Houses of Parliament, It is announced to-day that Mr. Deakin proposes to establish a Board of Trade to determine what are " fair and reasonable wages."

The theory of the Federal Government is plain enough. In effect it says that, in return for the protection of his industry, a manufacturer must treat his employees .fairly, and that the workers shall share the benefits of that protection. " The old protection," said Mr. Deakin 1 in the memorandum which he issued on Wednesday, ."contented .itself with -making good wages possible—the new protection seeks to make them actual. . .

Wherever effective protection is granted, its benefits will be limited to those manufacturers whose employees are allowed to share in them." It is obvious that manufacturers will not burden themselves with the positive penalty of the excise duty by failing to pay ' J fair and reasonable" wages, ahd will come inside an Arbitration Court award or industrial agreement. Here and there a manufacturer maybe able to. keep his works going at a profit, in spite of the excise duty, by being able to secure sufficient labour through "individual bargaining." In his judgment on the Sunshine Harvester case, Mr. Justice Higgins found great difficulty in deciding what were "fair and reasonable wages," and he concluded that the only proper standard was to be found in " the normal need of the average employee, regarded as a human being living in a civilised community. 1 ' He was not concerned with manufacturers' profits: " If the profits are nil, the fair and reasonable wages must be paid; and if the profits are 100 per cent. _ they must be paid." Eventually the judge based his table of wages on the prices of the necessaries of life. ,

The question is one of great interest to New Zealand, for it has been found that higher wages have meant higher prices, and a constant complaint of workers, to which Mr. Slater seemed to, give endorsement in the interview which we printed yesterday, has been the failure of the increased wages to meet the high prices which they have created * Enormous difficulties must beset all attempts to interfere with tho processes of fi'ee and open competition. We have seen in New Zealand that the protection of the worker hits back at the worker, and hits him harder than anybody else, since it is he who is most seriously affected by a rise in prices. The .New Zealand law is more logical than the " new protection " proposals. An employer here must pay the wages decreed or go out of business; in Australia he can gamble' on his chance of finding cheap labour, aud making a profit in spite of the excise duty. The chief defect of the Australian Excise Act is its wfint of elasticity, but the proposed Board of Trade may frame a wages tariff sufficiently' elastic to avoid the injury which must result from the thrusting into industry of a rigid and unyielding rule. The natural disadvantages of the workers' condition are like the bloodstain on tho key of Bluebeard's wifoi jyieu low. .wages are rubbed,

away in one place by an Arbitration Court award, they reappear in another place in the shape of high prices. As it probable that the workers in New Zealand will feel the rise in the cost of living still more acutely in the future, the working' out of the '' new protection" in Australia will be of the highest interest to observers in this country.