The Guardian And Evening Star, with which is incorporated the West Coast Times. MONDAY, OCTOBER 17, 1927. THE TARIFF?

Hokitika Guardian, 17 October 1927, Page 2

The Guardian And Evening Star, with which is incorporated the West Coast Times. MONDAY, OCTOBER 17, 1927. THE TARIFF?

The Lower House disposed of the revision of the tariff early on Saturday morning, a fact which would be a relief to the Government. It is always an arduous task, and once disposed of, a Finance Ministter is not anxious to take the job again. Mr Downio Stewart will be a much relieved man now that the main work is done with, though no doubt there will be many questions and queries to answer still. Parliament certainly gave extended consideration to the tariff on this occasion, and it had an amount of consideration in detail not usually given. At the same time, the Government had an assured majority behind it on every point upon which the Minister wished to make a stand. Still, many concessions and alterations were made as the proceedings continued in deference to represntations made from various quarers. The tariff was not reviewed from strictly a protectionist or a free trade point of view. Certainly not the latter. But the element of protection came into the discussion at every turn where local industry was concerned in the main, or Empire industry in a secondary sense; always with the reservation that the foreign article was not a matter of necessity either as a food or an implement, to say nothing of a means to afford pleasure—as cinema films for instance. There was the distinct inclination to be protectionist where local industries and manufactories were concerned. In this respect the proposals were adopted plainly with he object of encouraging industry and development, rather than as a means to afford extra, revenue for the country. It was interesting as an illuminating coincidence while the New Zealand Parliament was dealing with the tariff, that the Australian Tariff Board’s annual report should be presented to the Federal Parliament. That report conveyed two main points on the trend of the tariff in Australia; first, the warning that high tariffs have not invariably suceeded in bolstering up protected industries in Australia; secondly, that he tariff is being used to some extent as an expedient for forcing up wages, for the producers in protected industries, being shielded from foreign compettiion, are able to pass on their high cost of production. No doubt this lesson was assimilated in New Zealand for it cannot he said that the protective character of the tariff is strikingly high. As regards the effects of the protective tariff upon the growth of local industries, it is doubtless true that protection does not always ensure the healthy and prosperous development of the industries concerned. As the Australian report appears to indicate, this is often due to misguided attempts at encouraging the wrong type of industry. No doubt many instances of failure of this kind can be quoted in all countries. But free traders who cite such instances against protection Upper to forget that all legislation, and especially all legislation of an economic character, must be to some extent ex-' perimental, and that there is no reason why failures should not * be acknowledged and remedied in the fiscal or industrial sphere just as in any • other , sphere of administrative activity. The

argument that would sweep away protection because some tariffs have sometimes failed to achieve their purpose would sweep away other laws. But there is more to be said lor the specific cause of failure advanced by the report in regard to the level of wages. There can be no doubt that, ns wages are paid out of the wealth produced, by the joint activity of labour and capital, the rate of wages must always be limited by the productive capacity of the industry concerned. Beyond a certain level a rise in wages of necessity represents a burden under which the employees and the capitalist will sruggle in vain. For the time they must pass on at least a portion oi their load to the general public in the form of high prices, and, as we have said, the exclusion of foreign competition enables them to solve their problem in this way for a time. But if the share of the product allotted to labour is enlarged beyond a certain point, then no raising of protective tariffs will enable the producer to compete with rivals served by workers who accept a lower rate of wages elsewhere, and so in the long run the increased cost of production will drive the industry affected out of the market. This brief analysis shows that the Australian Tariff Boaul’s report is not an attack on protection as a principle or a policy, but only a criticism of the abuses to which it is under some circumstances liable. The question of New Zealand establishing a Tariff Board, was raised during the recent discussion in Parliament. Probably such a Board will ho created in time, for it suggests the better means for tariff revision on the whole. Where protection of free trade is not the designed political policy, such a Board would deal with all aspects on a purely impartial basis, considering the relative value of the trade or industry to the community in its widest sense. For instance, a Board dealing with such an item as dredging machinery could investigate the practical application of the industry and consider its maintenance, not in a theoretical sense ns covering the Dominion as a whole, but restricted to local necessities and possibilities. Through such a channel an ideal tariff should l.e.compiled eventually avoiding the necessity for Parliament dealing with the subject when party prejudices are often inclined to mar the best of intentions.