Tariff Policy

Sun (Auckland), Volume II, Issue 342, 1 May 1928, Page 12

Tariff Policy

FREE TRADE NOT POSSIBLE PROTECTION AND REVENUE (Special to THE SUNJ CAMBRIDGE, Monday. “To advocate duties so high that they excluded all competition, is to mistake the idea of protection, and it would be just as easy to put on an embargo at once,” declared the Minister of Finance, the Hon. W. Downie Stewart, while speaking at Cambridge this evening. He sought to justify the customs tariff revisions effected by the Government in 1921 and again last year. He considered the competition of imported goods increased the efficiency of local factories, and pointed out that if the protective duties were abolished, some millions of pounds in revenue would have to be secured from increased land tax or income tax. The Minister’s remarks upon tariff questions were inspired largely by the strenuous complaints which were voiced last year by farmers in the Auckland and Waikato districts, and by manufacturers throughout the Dominion, the latter having complained that they were being butchered for a farmers’ holiday. Mr. Stewart declined to acknowledge that to abandon—even gradually —the existing system of moderate protection would produce a good result; on the contrary, he said, it would cause chaos in primary and secondary industries. Even a fre f e trade Parliament would be met with insuperable difficulties in effecting such a policy. Many people fostered the belief that a protective system of duties did not protect if importations took place, but the authorities in New Zealand had always accepted the philosophy that the object of protective duties was not to exempt the manufacturer from competition, but merely to compensate him for the disadvantage he suffered in respect to high wages and a restricted market. Farmer critics proposed to keep alive the revenue duties on what were popularly—but he thought questionably—described as luxuries, such as whisky, wines, beer and tobacco, which yielded 40 per cent, of the revenue from customs, but even that part of the tariff which was designed to protect local industries produced almost half the total revenue. Few people realised that nearly half of the imports into New Zealand came in free, except for primage duty. It was the constant duty of the Government to reduce the cost of living and the cost of production, both in primary and secondary industries. Concessions to the farming and building industries were quoted by the Minister, who added that all dairying machinery was admitted free, except a few items made in New Zealand. All this had produced an effect upon agricultural implements beneficial to the farmer. In Mr. Stewart’s opinion the general effect of the tariff is greatly exaggerated, at any rate in the case of a moderate tariff such as we have in New Zealand. The essential question is not the existence of the tariff bLit the efficiency of production.