CUSTOMS LAW

Dominion, Volume 7, Issue 2138, 2 May 1914, Page 6

CUSTOMS LAW

USEFUL REFORM ASSAILED

ABSURD ALLEGATIONS

ANTI-REFORM BLANK CHARGE

THE FACTS STATED.

Some "startling". allegations wero published in the local Anti-Reform Jioivspapor yesterday in reference.to tho ■operation of tho . Customs Amendment Act of last session, which camo itno force on April 1 ; 1914. In tho courso of .a long article it was alleged that this legislation was laid bofore Parliament by tho Hon. F. M. B. Fisher (Minister of .Customs) as merely a consolidating measure, when in fact it made largo remissions of tariff duties, amounting to something like £300,000 per ,annum. This, loss of revenue, it was alleged, would follow upon a removal of, the duty upon "packages, cartons, and cases;" and upon the 2J per cont. discount allowed for cash to tho importer by tho ■exporter at Home. The article was fortified with a number of short extracts ■ "from "Hansard," intended to show that Mr. Fisher assured tho Houso of Representatives that the Customs Bill. was merely a consolidating measure. / The Hon. F. M. B. Fisher is' absent irom Wellington at tho pcrsent time, •but the response to inquiries addressed to those who are fully informed as to tho scope and operation . [of the now Customs law mado it perfect- - jJy clear that tho alleged facts contained '.in tho article in question aro 'mostly fiction, and reference •to "Hansard" makes it equally clear that the Customs remissions made Hast session wero discussed, and were •approved by parties on both sides of tho i'House. For instance, in tho article referred to tho fact is ignored or suppress- • ltd that upon tho Select Committee . of [tho House of Representatives which dealt with tho Bill wore tho following |Mr. J, ( Bollard, tho Hon..Mr. Buddo, Mr. Coates, Mr. No'sworthy, Mr. Statliam, Mr. Veitcli, the Right Hon. Sir Cl. G. Ward, Mr. Wilkinson, Mr. :'iWitty. Tlio reasons for tho abolition ■ of duty on casing and upon cash discounts wore fully discussed before this ■committee, and they were satisfied to favourably recommend tlio Bill to the House. Tho'Right Hon. Sir J. G. Ward somehow got tho idea that additional taxation of 2} per cent, to ad valorem •.values was contemplated. He nccording■ly spoke as follows (p. 1000 Hansard ' debatos, vol. 167)• The Remissions Discussed. "The Right Eon. Sir J. G. Ward (Leader of the Opposition): Bill went through the committee to which it was referred without any division of opinion upon, it from-be-ginning ,to cud, anil upon tho whole it is a consolidating Bill. The Minister of Custom? gave tho committee his assurance that tlwra was iio alteration of any kind in .'any items of tlio-Customs tariff. There is one clauso only to. which . I wish to allude, and that is' jt.ho ' 1 clauso which proposes to do away with tho per cent, discount which all iin-. porters in this country liavo provided for under the tariff as it stands at the moment. I do r,.iit know, what aro the exact reasons for tlio proposal to do away with it. I understand that from the Departmental or administrative point of view there is something to be said in favour of doing w. I merely wish to take tlio opportunity of saying that, though agreeing to tlie ■ Bill as a whole, I do not want to be ■ , committed from the mere fact of not bobating tho whole proposal this session. It should bo understood that I am (? not) in favour of what is indirectly an increase in connection with the Customs duties, to tlio extent oven of'the abolition qf the / right to the deduction of the per i cent. .."Tlie Hon. Mr. Massey: It is a slight decrease, not an increase. "Tho Right Hon. Sir J. G. Ward: Pardon inc, I understand tho 2} per cont is usually deducted, as far as the merchants aro concerned. "Tile Hon. Mr.-Massey: But tho Customs propose to allow tlio -deduction. In the past they have not alwavs done so. "The Right Hon. Sir J. G. Ward • In that caso I misunderstood the position. That makes it quite clear. . "The Hon. Mr. Massey: That is a reduction of taxation. "Tho Rigjit Hon. Sir J. G. Ward :• It would lie, from that point of view. I thought it was the other way. . , "Tho Hon. Mr. Massey : It is done.to meet the wishes of the commercial people. "The Right Hon. Sir J. C. Ward : Tho nouit being now quite clear to me. .1 shall be only too glad to facilitate the passage of what is'an importnnt'consolidating Bill. 1 ' It is therefore quite clear that both n.des of the House knew perfectly well what they wore about with regard to Hie remission of cash discounts. Allegations Upset. .As. regards cases, example is offered of a case for a motor-car ISl't. x 14ft. Gin., value estimated at "255. or 305., or even as high as 505.." but it is carefully overlooked that oiily the body of the motor-car is sulrcet to ,duty;'and that such body constitutes only about oiie-lilth of llie value of tlio whole. Tho mistaken and mischievous information is also supplied that cartons, cardhoard boxes, etc., being internal containers. in which the goods aro ordinarily sold for wholesale are not to ho included in the value for duty. This is Jiot correct. Such internal containers are subject to duty. . . A Long-standing Grievance. It has long been recognised that tho Imposition of duty upon casing was a hardship. Casing is not "goods," and it was surely an anomaly that material 'for. consignment to the backyard or for disposal as firewood should bo subject to taxation, csoe-jially as no duty is charged on casing for free goods. Thero ■ was a further advantage in remitting the duty on casing and cash discounts, viz.. that Nov,- Zealand is now exactly in lino with tho Commonwealth of Australia in the basis adopted for ad valorem valuation, so that all forms of declarations and commercial customs relating to methods of invoicing can bo made tlio same for both countries. 'Hi is is a great advantago to tho exporters in Great Britain 1 and on the Continent, and saves confusion and mistakes as to. what is required for the purpose of verification at this end. Discounts nnd Duty. Those who have an expert acquaintance with tho merits of tho matter contend that it is unfair to assume that the merchant will necessarily take advantage of tlio remission of 2J per cent. It is io ho expected that lie will "cost" his goods as usual, and sell them accordingly, and it should ho further remembered that tho 2\ per cent, discount is . only one of tho many factors in determining tho price at which goods .will be sold. As is well known to everyono havi'/g a superficial acquaintance with commercial practice discounts and prices varv according to the cost of tho raw material, e.g., hardware discounts, discounts' on platcd-ware and silver-ware, and discounts on woollens vary nccord- , ina to the prico of pig-iron, blooms and billets, silver, and wool resncctively,

and so in respect of all other goods. Tho final cost, taking all factors into consideration, fixes tho prices at which tlio goods will bo eventually sold. Among these factors the power of competition to forco wholesalers to, pass oil remissions to tlio consumer must not be forgotten. Blunders Refuted. Tlio amount remitted has been inflated through ignorance. All ad valorem goods are not sold plus casiug. A large proportion of such goods are Quoted and sold in tho ordinary courso oE business, "casing included," or .it so much "per case." It is only where casing is, as an ordinary trade practice, charged "extra" that tho valuo of casing is to bo • deducted. 'When the assessment and remission by the "Times" is subjected to this amount of reduction and to a further reduction on the wrongly framed proposition that' cartons, cardboard boxes, internal packages, and tanks aro to bo admitted free, the amount will bo reduced to a sum. far below that allotted. A Systsm Improved. It is misleading to assess the.remission on account of discount upon tlio total value of ad valorem goods. There is good reason to believo that a great proportion of such goods aro sold for export at 30, 60, and 90 days' sight at tlio same prices ns those for which they aro sold for cash in tho Home market, and it was partly on account of the constant delay and squabbling over the proper discount, and necessity for depositing duty with tho Customs for many months until particulars could be verified, and to tlio general wear and tear of an'unworkable system of assessment, that it- was finally decided to allow all genuino discounts, both trado and cash. In respect to a great proportion of goods coming «to New Zealand, it is well known that it is impossiblo to arrive at any satisfactory conclusion concerning the proportion of the final discount whiph should properly be regarded as cash. The Position Epitomised. Experts who aro fully acquainted with the position state that tha assessment of remission by tho "Times" may be reduced by two-thirds, and some of those consulted remarked that it seemed a great pity that beneficial legislation calculated to remove galling anomalies, and to facilitate both tho .work of importers and that of tho Department should be subjected to such unreasonable, carping criticism or exploited for the purpose of injuring tlie prestige .of the Ministry, especially when, as is made clear from the "Hansard" 'extract quoted above, the House as a wliole know that the reduction was being made.