The Evening Star WEDNESDAY, SEPTEMBER 14, 1927. THE NEW TARIFF.

Evening Star, Issue 19661, 14 September 1927, Page 6

The Evening Star WEDNESDAY, SEPTEMBER 14, 1927. THE NEW TARIFF.

Tub hirilT controversy which is always smouldering iu most countries has for some time past been Jauued to a moderate blaze iu New Zealand. A stage iu our development has ere this been reached when manufacture has been asserting its rights to consideration as well as primary production. Some measure of protection has already been granted to secondary industries, but in this ease the appetite grows by what it fecds.on, and, from the towns there has been a call for a higher and wider protective policy. This brought forth a counter-agitation from the farmer, who urged with reason and lorcc that he was still the backbone of the country, but that be was threatened with paralysis because Protection put up Ids costs of production, and by reason of his having to sell in the world’s open markets he could not pass on this rise to the consumer of his products. Therefore he demanded a Frcetrado tariff or an approach to it in the form of reduced duties on any of.his requirements. It is obvious that Mr Downio Ftcwart could not produce a tariff that would please ono section without grievously offending the other. Ho appears to have sought to mollify botli parties, and the old fable tells us that the man who tried to please everybody ended by pleasing nobody. Probably in this case the Minister has given far less offence to the fanner than to the manufacturer. The farmer has the negative satisfaction of seeing the demand for a higher scale of protective duties definitely declined, as well as some slight positive satisfaction in seeing remissions of duties on .some linos of goods of which ho is a purchaser. The manufacturer, on the other hand, has with few exceptions had all his hopes dashed. Those few exceptions will iu his view fall very far short of justifying the Minister’s statement that 11 the view of the Government is that the dominion cannot develop alon- progressive lines if it has to depend upon primary industries alone.” The natural rejoinder from the secondary industries is the query: “Why, then, does not the Government assist us, knowing as it docs from the evidence given before the Tariff 1 Commission how things are with many of ns?” Mr Uownic Stewart lias anticipated this in his statement. He declares that the plight of industries in difficulties is duo either to mismanagement or outrof-dateness on the part of some, and in the case of more of them to “ the financial stringency from which we are now 1 happily emerging.” Ho then goes on to make what is the equivalent of a, definite pronouncement that Now Zealand Ls not going to follow Australia’s example in seeking to build up industries under a protective tariff so high as to bo almost prohibitive. It is unquestionable that Australia has fostered manufacture, almost forced it, but present symptoms have given rise to grave doubts as to whether in doing so Australia is not undermining her own economic foundation. Evidently Mr Stewart shares those doubts. He is no believer in. hothouse industries. If a form of manufacture cannot face ont-of-door conditions it is not worth cultivating, but be will see that it gets reasonable shelter and attention under those conditions. His enunciation of policy is that “ the Government is of the opinion that a high protective tariff policy is not iu the best interests of the dominion. It believes that industries are more likely to be conducted on satisfactory lines if a certain measure of competition is allowed to take place.” * But that is no reason for dealing a death blow to one particular industry which was struggling on valiantly without any hothouse shelter. One great blot on the new Customs tariff is the jvay in which the motor car body-build-

in" industry lias been treated. Motor cars can now be imported with unassembled bodies at a lower rate of duty than before. This means that bodies will" come into the country either on'the car or unassembled, and that tho bodybuilding industry in Now Zealand will disappear. It had great possibilities, but the now tariff eliminates them at a blow. What will probably happen is that a concern or concerns run with American capital, already established in Wellington, t will greatly enlarge activities, probably in a number of shops throughout New Zealand. The employment of a certain amount of unskilled labor ou routine work will be to the dominion as a whole quite negligible compensation for the disbanding of the stall's of highly-skilled tradesmen employed in tho New Zealand bodybuilding industry, and the idling or scrapping of the plants and tho loss of capital. The New Zealand body-build-ing industry under severe competition had been marking time and keeping staffs together, under the hope that the new tariff would bold out an inducement to launch out and develop an enterprise which promised to be of material benefit from more aspects than directly concerned the industry itself. Now anxiety is replaced by despair, and in business circles some scathing comments arc being passed to-day on wlnil influence lias caused tho Government to make such a decision. As' against this flagrant instance the complaints of supporters of other local industries over failure to secure increased protection arc less convincing, The woollen mills, for cxaipplc, express disappointment, but their raw material for the pure woollen article is procurable locally, and if they wish to compete with the imported article in which cotton is mixed with wool the raw cotton is now u> I be admitted free instead of being dul l- ! able. In quite a number of other in- | stances the Government is helping local j industry by free admission of the ran j material used, and by cheapening llmj landed cost of the machinery employed | instead of by raising the duty on the competitive imported finished article. There were some new duties, such as tho sliding scale duties on wheat ami flour, to encourage wheat-growing in New Zealand, and yet protect the consumer, which had previously been foiesbadowed by the Government. But notable absentees arc increased duties on spirits and tobacco and a petrol dot}. No announcement was made in connection with either, but that tho Government at least once considered the former is suggested by the recent heavy clearances Irom bond, (hough nianv merchants later realised that they had been precipitate, and had merely enabled tho Government to anticipate a revenue which it did not propose to enhance from this source. As to the petrol tax, there is still some uncertainty, some of those interested believing that it may be introduced later as a constituent part of main higlinajo amending legislation. An increased duty on timber has materialised. There is justification for it. The stagnation of many districts, notably tho West Coast, where there is abundance of virgin forest from which, timber ciuinut be got economically because of tho competition of imported timber, warrants some protection, and one reason for the protection hitherto existent not sufficing is that it was ou a fixed basis, and noli an ad valorem duty, while the price of timber has immensely advanced since the duty was fixed very many years ago. It is perhaps opportune to remind tho New Zealand Saw-millers’ Federation of its guarantee that higher duties would not lead to a rise in prices of New Zealand timber, since the increased output of the mills would enable them to make profits at the same price which they have been making losses on because of working far below capacity. The taxpayer will bo principally concerned to aco that the cost of living (and particularly the cost of home-building) is nut increased by tho tariff changes, fa bis monetary relations with the Government be is collectively left very much as be was prior to a. week ago. What additional revenue io required of him by direct taxation through the income tax is roughly balanced by the concessions made him under the new Customs tariff. The Government may have dealt fairly enough with taxpayers in the mass, but it is less likely that the gains and losses of individual taxpayers will balance as fairly. Finally, there are two wholesome disappearances from the new tariff’: there arc to be no more embargoes on importation and no more suspended duties coming into operation by Order in Council. Both were interferences with trade no longer necessitated by conditions which have changed since the time of their imposition.