WELLINGTON NEWS

Hokitika Guardian, 15 February 1927, Page 4

WELLINGTON NEWS

THE TARIFF AM) THE FARMER,

(Special to “ Guardian.”) WELTI XGTOX. February 11. In the course of u very few months the question of the revision of the tariff will come before 'Parliament, and already we know that sectional contests are in progress, one side desiring the tariff wall tp be raised to afford protection to local industries, and another desiring to see the duties reduced and the cost of commodities lowered. A bitter fight will rage between these two factions, but the Govi rnmeiit of the day will not be influenced by the pleadings of either section. Our tariff has always been framed to provide revenue. The Customs tariff has nearly always yielded more than any other tax in New Zealand, and usually more than half the total taxation. As Tate as 1900 the tariff provided more than three-fourths of the rcvtjjiue; in 1910; two-thirds; in the years 1917-2!?, when other taxes were exceptionally heavy, the proportion fell to about one-third, but in 1920 n yielded €9,200.000. or again more than half the total taxation of. the Dominion when it was 53 per cent, of the total revenue. Dealing with the tariff the latest bulletin prepared by the Economics Committee of the Canterbury Chamber of Commerce states that " at the present time high customs taxation is undoubtedly one of the most important of several causes hindering the restoration of economic balance and prosperitv in New Zealand.” The directly productive industries of the Dominion mav be roughly divided into three groups. The first consists of the ontirclv unsheltered or primary industries in that their produce is sold in the open competition of overseas markets. The second group consists of the industries that are entirely sheltered in the local market because the produce is of such a nature that overseas competition is more or less impossible. and the third group consists of those local industries which have to meet .some overseas competition in the local market. The sheltered group No. 2 can as a general rule fix its prices to cover its costs, and can pass,on its share of taxation in higher prices. Group 3 can do this in so far as it is sheltered by Customs duties and transport costs from overseas competition. Rut our basic primary industries which out of a total production of €100,000.000 in average year, 1923-24. accounted for 55 per cent of the total, get no protection whatever. The bulletin referred to above says: ” The big export industries. securing their incomes from the sale of their produce overseas, provide tiie purchasing power which governs the market for the goods and services produced hv the rest of the country ” can • •ass nothing on in higher prices, but must somehow make their _ costs meet the prices tliev get for their produce. Their costs are determined largelv by the prices charged by the other industrial groups, and there is no doubt that a considerable part of the Customs taxation paid immediately by these groups is passed on in higher prices and higher costs to the primary industries. The bulletin contends that “However complex and interwoven our industrial and commercial relations, and however direct our dependence our whole superstructure of commercial, political and professional, as well as industrial life, rests at bottom on the wealth extracted from the soil by our priinarv products. Consequently the general welfare of all our business and industry is sooner or later determined by the prosperity or depression ol the priinarv industries. At the present time those industries are depressed, they have scarcely been really prosperous since the slump of 1921 ; and tlieiy depression is reflected in some general depression throughout the community. 'Their depression is undoubtedly due to the difficulty of making prices meet their costs, and of adjusting costs to meet their prices.” The economic condition (if the country is thus very dearie summed up and it is to tiie interests not onlv of primary producers but also of the whole community to assist in every possible way to make our primary productions pay. Sectional striving for advantages will not help, nor yet will miss-statements of the position afford assistance. The primary producers must be assisted to adjust costs to meet their prices or make their prices .meet, their costs. Raising the tariff will add to their costs, increasing wages and shortening hours ol labour also adds to their costs, and preference to unionists which .gives to the latter almost tyrannical powers, does likewise. The primary producer is the kiug-pin of our economic life ond lie must not be exploited through the tariff and the Arbitration Court.