The Dominion TUESDAY, FEBRUARY 15, 1921. REVISING THE TARIFF

Dominion, Volume 14, Issue 121, 15 February 1921, Page 4

The Dominion TUESDAY, FEBRUARY 15, 1921. REVISING THE TARIFF

In deciding that the Customs Tariff Commission should sit in private, the Government ivas no doubt influenced by a desire to get a mass of detail evidence and representations dealt with as expeditiously as possible. There are other and somewhat larger aspects of the question, however, which suggest that it would have been wiser to ask the Commission to conduct its inquiry publicly. The existing tariff, framed nearly fourteen years ago, is out of date and full of anomalies, and if it is to bo effectively revised sweeping changes will be necessary. At present ideas regarding the general line of policy which should be pursued in carrying out these changes are by no means well defined, and widespread disagreement is likely to be occasioned if cut and dried proposals, based on evidence heard in camera, are brought down at short notice. Wage-earners, manufacturers, primary producers and wholesale and retail traders all have their special interests and viewpoints, and in such circumstances some, or all of these groups will be apt to look unkindly on almost any proposals that can be brought down. On the other hand, public sittings of the Tariff Commission might serve an incidental and very useful purpose in educating public opinion. If all sections of the community are enabled to follow the stages of an orderly survey of the facts which must govern tariff revision, something at least will bo done to avert needless friction and trouble, and facilitate the nearest approach that is> practicable to general agreement. Other considerations apart, the recommendations; of the Tariff Commission, or policy proposals in which they may be embodied, will inspire much greater confidence if they are based upon evidence taken publicly than if the present programme is adhered to. At present there . is an extreme divergence of opinion between the manufacturers who are demanding a protective tariff on the lines of that enacted last year in Australia, and those who urge in rather vague terms that all Customs taxation which bears in any way on the cost of living should be reduced to tt minimum. Looking at the matter dispassionately, however, theie does not seem to be any doubt that national interests will be served by a reasonable extension and readjustment of the Customs protection at present afforded to local secondary industries. The fear that Customs taxation under such a policy will bear with hardship on the general community would hardly have arisen but for the abnormal and temporary trade conditions of the past year. The heavy Customs revenue for 1919-20 and the still heavier receipts during the calendar year just ended were due to conditions which are now rapidly changing. Higher p’rices, of course, automatically increased the receipts from ad valorem duties, but the Customs revenue of last year was only made possible by an abnormal increase in the volume of imports from which there is already a marked decline. Even in these conditions the increase in Customs taxation as compared with the prewar figures is slight in comparison with the simultaneous increase in direct taxation. The Customs revenue of 1919-20 only exceeded that of 1913-14 by about ;10 per cent., while returns from income taxations increased over the same period more than elevenfold. So far as taxation is concerned there is certainly no need to oppose such a. revision and readjustment of the Customs tariff as would reasonably encourage, and stimulate our somewhat backward secondary industries. It is, of course, admitted that a protective tariff, at all events in its earlier operation, augments Customs revenue, but with direct taxation bearing as heavily as it is at present on business enterprise m the Dominion this is rather a recommendation than an objectionable feature. It is a familiar fact that direct taxation at present imposes such a drain on many business undertakings in this country that although they are perfectly sound anything in Mie nature of development or expansion is for the time being out of the question. Farmers, wage-earners, and others who mav be inclined to object to Customs taxation being maintained even at its present level would be wise to consider the extent to which other sources of taxation have been drained, and to consideralso that the effects of the stagnation which results from the unduly heavy direct taxation of business enterprise are not felt only My the shareho ders and other proprietors of tho businesses concerned, but arc widely distributed throughout the community. Theoretically . Customs taxation is open to objection as an unscientific method of inising i evenue, and as tending to raise prices, but in such conditions as obtain at present fairly substantial returns th rough lhe Customs offer tho Dominion a measure of financial relief which is badly needed in tho interests of all sections of the population. Ho scale of duttes that is likclv io be considered will imposthardships on the general bodv of ■consumers. On the other hand, some revenue will thus bo obtained which could hardly be obtained io any other wav, and at the same time a. useful impetus wi’l b<> given to the extension and development of local manufacturing industry, It ought, to be finite feasible in this country to reconcile a reasonable policy of protection and the raising of n fairly substantial Customs revenue with d’>c consideration for the interests of the consumer Account, of course, must bb taken of the indirect benefits of. a policy which stimulates, iudurtml enterprise and expansion. There is no doubt that tariff protection contri bides materially to nroeress on flieslinos in countries nt an earl'- stag ■ of development. As the Industries Committee of Darliamenl observed iu the report presented m 1919, it

seems clear that Australia has developed many industries by means of her tariff policy, and Canada might have been named as a still more striking example of what is to be accomplished under a wellconsidered policy of protection. Apart from broad questions of policy relating to taxation and the encouragement of industrial development, there are various aspects of tariff revision which need occasion little debate. A further measure of preference to the United Kingdom, for instance, will no doubt command general approval. It is evidently desirable that steps should be taken to secure reciprocal treatment from other Dominions or from foreign countries with which it is advisable to trade, that safeguards should be provided against “dumping,” and that provision should be made detail anomalies from time to time without throwing the whole tariff into the melting-pot. There is no doubt, however, that the Government would lighten its total task in dealing with the. tariff if it requested the Commission, of experts now net up to take evidence publicly. In courting publicity it would adopt the most hopeful method of limiting opposition to its policy proposals when they are finally elaborated.