SLIDING SCALE OF FLOUR DUTIES

Sun (Auckland), Volume 1, Issue 59, 1 June 1927, Page 13

SLIDING SCALE OF FLOUR DUTIES

STANDARD PRICE LEVEL PROTECTION FOR GROWERS Press Association. WELLINGTON, Tuesday. The following statement by the Prime Minister was made late to-night in regard to the duties on flour:— The Government has for some time had under consideration the question as to the best method which can be adopted to encourage the growing of wheat in the Dominion. In connection with this matter the interests of both the producers and consumers must be considered.

If on tbe one hand a policy is adopted under which in any year or series of years the price of -wheat to the grower in New Zealand is below that necessary to give him a reasonafcl'- return this would have the effect of restricting the area used for the’ production of wheat.

On the other hand if in any year or series ol years the price of wheat is relatively nigh this must have the effect of causing high prices of bread and other wheat products to the general consumer.

It is desired also that arrangements should be made under which the conflicting interests of those affected can be adjusted without recourse to special Government action such as embargoes, price-fixing, State importation, etc. GROWER AND CONSUMER

After considering all the circumstances and possible courses of action the Government has come to the conclusion that this object can best be attained by a system of customs duties designed on the one hand to enable the grower to obtain a reasonable price for his wheat when world prices are low and on the other to keep the cost of bread and other wheat products at as low a level as possible when world prices are high. It has, therefore, been decided to adopt a sliding scale of duties so fixed that the rate of duty on flour will increase when the price outside New Zealand falls, but will decrease when world prices increase.

It is, therefore, proposed to ask Parliament next session to alter the present duties on flour to the following bg.sis:—•

“Wheat flour, including wheatmeal and similar preparations, when the current domestic value of flour is £l3 a ton of 20001 b. advalorem the duty shall be £3 10s a ton, provided that (1) when the current domestic value exceeds £l3, the rate of duty shall be decreared by one shilling per 20001 b. advalorem for every one shilling or fraction of one shilling by which the said current domestic value exceeds £l3; (2) when the current domestic value is less than £l3, the rate of duty shall be increased by one shilling per 20001 b. for every one shilling or fraction of one shilling by which the current domestic value is less than £l3.

When these duties take effect dumping duty will not be charged on imported flour. After careful investigation the Government has decided that this scheme of duties will be more satisfactory than the original proposal for a flat rate increase in duty. PARLIAMENT TO APPROVE

In view of these proposed 1 duties on flour it will be necessary for the Government to seek Parliamentary approval of the revised scale of duties on wheat. Notice of the Government’s intention to alter the duties on flour has already been given to the Commonwealth authorities, and, if Parliament approves the above proposals, the new duties will operate in October next.

When the new scale of duties takes effect the price of local wheat will, as at present, be left to the determination of ordinary trade competition between buyers and sellers.