TAXATION BY TARIFFS

Hawera Star, Volume LIII, 15 June 1933, Page 6

TAXATION BY TARIFFS

REVENUE PURPOSES ONLY

PROTECTION POLICY OPPOSED.

VIEW OF FARMERS’ UNION

EVIDENCE BEFORE COMMISSION.

(By Telegraph—Press Association.) WELLINGTON, June 14. " The Tariff Commission to-day heard evidence submitted by the New Zealand Farmers’ Union. This takes the form of a substantial document which traverses the whole ground of fiscal policies in general and says that the policy of the union was clearly laid down in the following terms at the first Dominion conference of the union in 1902; ‘"That taxation through Customs should be for the purpose of raising revenue and not for protective purposes.” From that day to this the union; /has unswervingly adhered to this policy, which advocates the aboli-' tion of all tariff duties except those for raising revenue. The statement says: “A tariff policy to bef valid and permanent must be built up on principles, or, at ail events, must be underlain by some broad principle or policy, otherwise it cannot be permanent and is a source of danger and uncertainty to the community. The burden of protection falls on the non-protected interests of the country—the farming community, professional classes, and those employers and workers who are not employed in protected interests. In New Zealand the farmers have to take the , world parity price for goods. Tariff can be .of little advantage to them, for their prices are fixed abroad. They are not affected by what happens here as regards price, but their costs of production are materially increased by artificial loading of protective duties.”

SECONDARY INDUSTRIES

■ The statement goes on to deal with details of trade, and says, inter alia: “Our secondary industries have not shown the initiative that our fanners have done. Our manufacturers have kept their eyes fastened on small local markets only. To assist them in catering for these they have cried out for and have obtained more and more protection, rvith the result that their industries have groAvn up as hothouse plants. Our manufacturers have failed to put a single line on an export basis.”

After dealing Avith manufacturing statistics for 1927, which is taken as the last normal year, the statement says: ‘‘We are firmly convinced that less protection will ultimately prove beneficial to our manufacturers, as ;such will compel them to seek out and concentrate their energies mainly on the production of those lines of goods most suited to New Zealand conditions and Avhich, through the increased efficiency of manufacture, may he put on an export basis again “Tariff will not create new industries. Industries can be created only by labour and capital, and tariff can divert these from one channel to another hut cannot call them into being. Further, we strongly assert that the existing fiscal policy imposes upon the consuming public a burden far in excess of Avhat it should have to bear. We maintain that millions are spent needlessly every year owing to this pernicious policy. The union has no objection to true revenue tariff of. moderate dimensions, balanced where appropriate by countervailing excise duties. If this policy is carried out tile union will be prepared to sacrifice any subsidies and protection it at present enjoys,, which are purely defensive reactions to a misconceived tariff policy.” I£IGH EXCHANGE SUBSIDY.

Captain Col beck, representative oi the Farmers’ Union, was lengthily examined by Mr. Mander, secretary of the Manufacturers’ Federation. Mr. Mander asked whether some Customs duties were levied purely for revenue while others were levied for raising revenue and at the same time protecting New Zealand industries. He deceived a reply in the affirmative. -•' Mr Mander: Is the Farmers’ Union asking for a reduction of both duties? Captain Colbeek: We favour a revenue tariff.

Mr Mander: Do you agree that high exchange was a subsidy to the farmers from the community? Captain Colbeek: I am opposed to high exchange, but I believe the union supports it. Mr Mander: You agree that high exchange subsidises the exporting section of farmers?

Captain Colbeek: I don’t agree. Mr Mander; It reduces his liability?

Captain Colbeek; It does not enable him to sell at a profit. Professor Murphy, You do not think the effect of exchange is beneficial to him

Captain Colbeek: It undoubtedly prolongs his life. Replying to a further question, Captain Colbeek said his ideal was Empire free trade. Mr Mander: Did you express the opinion that many existing industries were unsuitable for the Dominion ?

Captain Colbeek said that if they were pur on an economic basis be did not think they would be unsuitable. He did not think the industries of the Dominion would go out if the tariff was removed because without the tariff they would become more efficient.

GOING TO OTHER CENTRES

-Dr. Craig said that where a producer or manufacturer proposed to present a case for the consideration of the commission through an association or organisatin it is desired that this should be done as .soon as possible. Tile commission would be at an early date proceed to other centres and it rriiprht be necessary while away from Wellington to hear evidence from other producers or manufacturers in the same line of business. It was obviously advisable that a case by an association or organisation should he heard before the time arrived for taking further evidence. The commission heard representations on behalf of the New Zealand Cannister Company. Representatives of the firm asked that there bo no alteration in the general tariff affecting the trade, but a heavier duty he imposed on goods imported in small tins. It was contended this was necessary to develop the tin-making industry in New Zealand.