FOREIGN GOODS PENALISED

Sun (Auckland), Volume IV, Issue 1031, 23 July 1930, Page 8

FOREIGN GOODS PENALISED

The Prime Minister explained that the object of some of th» Increases in duties was to help New Zealand industries. Under the new scheme the primage duty is to be abolished except on Australian groods and a surtax on certain goods Substituted. Altogether it is anticipated that £BOO,OOO in extra revenue*will be collected. The taxation of film's will be dealt with in the Budget. Under Section 143 of the Customs Act, 1913, goods already imported which*, have not been entered for a warehouse will be allowed to be entered at the old rate or the new rate, whichever is most favourable to the importer. The oblects of the alterations, said Mr. Forbes, were: (1) To provide for the collection of increased revenue. (2) To abolish the primage duty and to substitute a surtax on dutiable goods. (3) To grant a further measure of protection to timber and to certain farming and manufacturing industries. (4) To take power by means of increased duties on foreign goods, to grant further preference on British Empire goods and at the same time to place ourselves in a position to negotiate with countries which are willing to treat New Zealand products fairly in the matter of tariffs. (5) To abolish the duty on barley used for stock food. (6) To obtain increased revenue from petrol for the main highwavs. account. “As the members are aware,” said Mr. Forbes, “owing to the low prices obtained recently for some of our staple products in the markets of the world, and the exchange restrictions which have been imposed by banking institutions, it is expected that will, during the present financial year, be a considerable decrease in the importation of goods, and consequently in the amount of revenue obtained through the Customs Department. It is essential that the sum of £9,145,000 should be collected from the Customs and excise duties (including the duty on New Zealand-brewed beer, but not including the petrol tax or tyre tax). If no alterations were made in the legislation now on the Statute Book it is considered that the revenue which the Customs Department would collect by way of Customs and excise duties during the present financial year would be:—Customs and excise duties (other than beer duty). £7,750,000; beer duty, £600,000; total. £8,350,000. ‘*This means that an amount of about £BOO,OOO must be obtained by way of increased Customs and excise duties. Even if this extra amount is collected the total received will be approximately £370,000 less than that collected last year from the same sources. MEANS TO BE USED “It is proposed that this Increased revenue should be obtained: an increase in the duty on foreign goods; (2) from a surtax to produce revenue in excess of the primage duty; (3) from an increase of the duty on cigarettes and cigarette tobacco, both imported and locally made; (4) by taking steps to prevent inroads upon the revenue caused by the present duties on imported leaf tobacco and on locally manufactured tobacco and cigarettes; (5) by abolishing the allowance for under-proof spirits; and (6) by increasing the duty on New Zealand-brewed bear.” Referring to assistance to the timber industry, Mr. Forbes said; “The state of the timber industry has for some time been engaging the attention of the Government. The duties on timber were increased in 1927, but the increased protection has not had the desired effect of limiting the importations of timber and increasing the use of the local product. It is therefore proposed to increase the present duty on rough, sawn timber in ordinary sizes, from 5s to 7s 6d a 100 superficial feet, and to fix the rates on timber in long lengths and large cross-sectional areas, and on sawn dressed timber at 2s less and 4s greater, respectively, than this rate. “It has been decided to make a concession on barley, which is an important food in the raising of pigs. I am advised that barley is the best cereal to supply carbo-hydrates, which are necessary to protein in the diets of skim milk or whey. BRITISH PREFERENCE The Minister continued:—“As has been indicated, it is part of the Government’s policy to increase the preference granted to goods manufactured in the Gritish Empire. During recent years there has been a de- , crease in the proportion of Britishmade goods imported into the Dominion and it is proposed to make increases in the preference on 158 items of the tariff. The total number of items is 449 and the number of items upon which preference is granted is 295. There is another aspect of this matter which deserves consideration. It has frequently been urged that owing to the high tariffs which are being imposed by certain foreign countries on New Zealand products we should go in for a policy of retaliation. The Government is greatly concerned regarding the tariff and other barriers which are being erected against our products. I do not think that as a general rule retaliation is a satisfactory method to adopt in dealing with such matters, although I recognise that there may be instances in which retaliation is the only satisfactory way left. I think that it is far better to proceed by way of negotiation. In pursuance of this policy the Government does not regard all the increased duties which have been imposed on foreign goods as necessarily permanent. It is noticed that during the recent years there has been a tendency on the part of some foreign countries to provide in their tariffs for minimum and maximum rates of duty and the Government is quite willing to enter into negotiations with any foreign country which treats or is prepared to treat New Zealand goods fairly in matters.”

NEW SCHEME OF SURTAXES PETROL DUTY OF SEVENPENCE HIGHER RATE IMPOSED ON CIGARETTES THE SUN'S Parliamentary Reporter PARLIAMENT BLDGS., Tuesday. EMBODYING substantial increases in the general Customs taxation, with a 75 per cent, increase in the petrol tax, a series of Customs resolutions which will come into effect immediately was introduced in the House this evening by the Prime Minister, the Hon. G. W. Forbes, who is also Minister of Customs. Urgency was asked for the passing of the resolutions which make the new duties operative and the Bill making them law will be brought down next week, according to a statement by Mr. Forbes. The House was surprised by the manoeuvre and objections came from the Reform, Labour and Independent benches protesting against taxation on such a ruthless scale for revenue-gathering purposes. Long and bitter discussion seemed inevitable, but actually the House rose, after adopting the resolutions, some minutes before midnight.

Mr. Forbes added: ‘ln accordance with the tariff agreement between Australia and New Zealand none of the increased duties will apply to Commonwealth products except by agreement with the Australian Government or after six months’ notice. It will be observed also that it is necessary to retain the primage duty on Australian goods, but that wheat and wheat-flour have been exempted. I should perhaps mention that quite recently the Hon. F. A. de la Perrelle had preliminary conversations with Mr. Fenton, the Australian Minister for Trade and Customs, while he was at Auckland, and I believe that as a result of the discussion more satisfactory trade arrangements will shortly exist between the two countries.” The Leader of the ODDOsition. the Right Hon. J. G. Coates, asked if the increase in the petrol tax was to be paid back to the highways fund or treated as revenue. He asked what was the increase in round figures in the duty on motor-cars. PETROL TAX AND CARRIERS The Leader of the Labour Party, Mr. H. E. Holland, said the general principle appeared to be one of getting revenue by indirect taxation. It was a sound principle that those goods which were not produced in the Dominion should come in duty free. Mr. Holland hoped that before the resolutions were passed it would be possible to get clearer information regarding the changes. The heavy increase in the petrol tax appeared significant. It was an increase of 75 per cent., and he did not know whether the Government had considered the effect on the carriers of New Zealand. If goods could not be produced in New Zealand, to what extent would the surtax affect them? There seemed a fairly substantial increase in the taxes on British goods, and it was apparent that the object of the Government was to gain revenue by indirect taxation. Mr. A. Harris (Reform —Waitemata) said that by imposing further duties of £BOO,OOO, the Government would go down in history as the most ruthless tax gatherer of all time. In New Zealand last year £1,000,000 extra taxation had been imposed, and another Bill proposed more taxation. Where was it going to end? Then on top of that there was a surtax of nine-forti-eths of the duty payable or a 224 per cent, increase. All this Vas in place of the two per cent, primage. Mr. Harris asked why there was not an extra duty on foreign films. The foreign film duty could be raised easily from a penny to threepence a foot. Mr. H. T. Armstrong (Labour — Christchurch East) wanted to know how much revenue was expected. It seemed that Mr. Forbes was copying Australia in a mild manner, but in Australia, it was explained, taxation was not for revenue purposes, for a loss was expected. The Government’s tariff would neither bring in revenue nor protect New Zealand industries, Mr. Armstrong thought, but would merely place a burden on those least able to pay. The increase in the duty on timber, he said, would not prevent the importation of timber. Why not take a lead from America and forbid the importation of certain classes of timber, preventing at the same time monopoly prices. Mr. Armstrong asked what industry the extra petrol tax would protect. It would drive many people out of business, and the fourpenny tax had had a serious enough effect. This would be disastrous. “A SHOCK FOR THE COUNTRY” Mr. C. A. Wilkinson (Independent— Egmont) held that the extra Customs taxation would be a shock to the country and the House. He held that the taxation would be higher than £BOO,OOO, and would be an intolerable burden to those least able to pass it on. The petrol tax would be a great handicap to very many people engaged in the motor transport business all over the country. Mr. Wilkinson said he proposed to move the abolition of all taxation on wheat and flour imported. Mr. W. Downie Stewart (Reform — Dunedin West) failed to understand the Prime Minister’s reasons for bringing down the schedule before the Budget. There was no need for that procedure. Mr. Stewart desired more definite information as to the effect of the increases on the main classes of goods. He thought it would not bo of benefit to New Zealand industries to place an embargo on goods, although he favoured the industries being assisted. Mr. C. H. Chapman (Labour—Wellington North) was of the opinion that the increase in the petrol tax would be regarded with consternation by the country. Mr. W. J. Poison (Independent— Stratford) said he had heard the speech of the Prime Minister with consternation. Mr. W. E. Parry (Labour—Auckland Central): Do you want an aspro? Mr. Poison: Many members will be needing aspros. Mr. Poison said he had given the Government general support, but this increase would send up the cost of living, and perpetuate the worst mistakes Australia had made. Who could justify an increased tax on foods, and not put a tax on films? Mr. Poison was amazed at the attitude of the Government in penalising the New Zealand tobacco industry instead of supporting it. “We have seen a decrease in taxation,” he said, as the bell rang, “on such things as onions.” (Laughter.) Mr. H. W. Dickie (Reform —Patea) said that, with a 74 per cent, increase, the revenue from petrol would go up £600,000 alone. He wanted to know how the figure of £BOO,OOO was arrived at. “BAD OLD METHODS” Mr. M. J. Savage (Labour—Auckland West) thought the proposals were return to the bad old methods of raising revenue. He urged that British goods not made in New Zealand could be admitted free. British motor-

chassis could be admitted free. The only reason for the tariff on them was to raise revenue. The Government would have to answer questions, however. The Reformers said “Hear, hear,” but they were in exactly the same position in 1927, and did not give answers. Mr. Savage wondered when there would be a Government which would admit free British goods not made in New Zealand. He complained of the extra cost to the workers. Some Government members, he had a shrewd suspicion, had criticised Reform when it proposed similar tariffs. The whole method was unscientific. Mr. Forbes, in his first reply, said the extra petrol duty would be paid into the highways fund, and what would be done with it would be disclosed in the Budget. The amount of the duty put on was the same as in Australia. Mr. Parry: Not a very good example. Mr. Forbes stated, regarding the taxation of motor bodies, that he did not believe in giving any industry in New Zealand a monopoly. Mr. Forbes said the amount of the petrol-tax was not included in the £BOO,OOO increase. He said the sur-tax was estimated to produce about the same as the primage duty The Customs Bill would be brought down next week and the proposals as to films would be found* in the Budget. Regarding the wheat and flour duties, Mr. Forbes said a primary industry was entitled to protection. The sole reason for his anticipation of the Budget was to prevent abnormal clearances from bond. Merchants, except in some few cases, had paid attention to his warning. Mr. Forbes said the full debate would take place when the Bill was brought down. The resolutions were for the purpose of imposing the taxation immediately. GLASS MANUFACTURERS Mr. W. J. Jordan (Labour —Manulcau) said Mr. Forbes had stated that the House should endeavour to find work for the people of New Zealand. Little attention was paid to glassware, yet in his district there was a factory which could employ 120 that was shut for four months of the year because, though there was a tax on glassware, by an understanding the shipping freights were reduced and the goods came in as readily as before the duty was imposed. The factory used New Zealand materials for bottles except for the soda ash, and the managers gave Mr. Jordan their assurance that the price of their commodities would not be raised. Therefore he asked the Prime Minister to give consideration to that point before bringing the Bill down. Mr. F. Langstone (Labour-Waima-rino) urged a tax on profits instead of the present unscientific method. Nothing but consternation would reign through the country when the people realised the impositions of the proposals. Mr. A. E. Ansell (Reform —Chalmers) said the cheap money of the Government had proved a dear delusion. Regarding the petrol-tax increase, he said the Government had failed to realise the benefits of motor transport, and was penalising the people by driving them from the suburbs into the city. “The Prime Minister may as well join our old friend King Canute,” he said, “because he is trying to stem the tide of motor transport. If the Government is going to declare war on motor transport, I feel sure it is going to hear from the country about it in the near future.” “A BLOW TO INDUSTRY” Mr. H. M. Rushworth (Country— Bay of Islands) protested against the increased duties, which he described as a blow to industry. The additional taxation, he said, would be passed on to the primary producers and in consequence exporters would be placed at a further disadvantage. Mr. H. G. R. Mason (Labour —Auckland Suburbs) advocated additional protection for the New Zealand wine industry. He said there was only 6s duty on wines, compared with 36s on other intoxicants. Mr. G. C. Black (Government — Motueka) urged that all packets of tobacco and cigarettes claimed to be locally-grown should bear some mark indicating the actual percentage of local product in the contents. The duty on New Zealand tobaoco, he said, should not be increased. Mr. W. Nash (Labour —Hutt) said he estimated that the actual tax on petrol would be Bid a gallon, because a sub-clause of the fifth resolution provided for a stipulated addition in lieu of primage duty. This would mean that the duty would be increased by over 100 per cent. Mr. W. H. Field (Reform—Otaki) expressed the view that some means should be devised whereby it would be possible to import petrol more cheaply. At present, he said, the price was too high. With the increased tariff it would become almost prohibitive. Mr. R. Semple (La.bour—Wellington East) submitted that the petrol-tax would aggravate the problem of unemployment, and said it would put many struggling carriers out of business. Mr. H. E. Holland appealed to the Prime Minister to take the House into his confidence with regard to what he intended to do with the jtroceeds of the increased petrol-tax. He said it seemed to be an impression that the Government was entitled to have its resolutions passed, but when the details came before the House for subsequent consideration, the Labour Party would take action where it considered it necessary. Mr. Forbes said the petrol tax proceeds, when paid into the Highways Fund, would be used for the counties’ requirements and road making, particularly backrblocks roads. Details of the proposals would be contained in the Budget. The petrol tax would not amount to B£d but would be seven and seven-twentieths pence when the surtax was added and the primage duty deducted. HINT OF OPPOSITION Mr. Coates said he agreed that the Government was entitled to the passage of the resolutions, but he presumed that no member was bound to support the proposals merely by voting for the resolutions. Mr. W. E. Barnard (Labour — Napier) said there were many things in the proposals which many members would consider gravely. The Government was likely to find it necessary to accept several important amendments. Mr. J. S. Fletcher (Grey Lynn) asked why it had been necessary to anticipate the Budget when it was due in two days’ time. He said the policy statement should have "accompanied 'proposals such as those before the House. Mr. W. E. Parry (Labour —Auckland Central) agreed with this view. He said the Government was asking t.ho country to “open its mouth and shut its eyes and see what the Government would give it.” Mr. W. J. Folson (Independent— Stratf<prd) said he believed the Government could have obtained the additional revenue by taxation on luxuries. Mr. E. J. Howard (Labour —Christchurch South) said he would like to know how much money there was in the highways account. He could not see how the additional revenue was necessary. The Highways Board had not spent the money already at its disposal. He feared the petrol tax would kill the goose that laid the golden egg. Mr. Wilkinson said the Government, perceiving that it could not fulfil its pledges to the country, should have resigned rather than submit such proposals. Mr. Poison, speaking for the Independent members, said they would not (

oppose the resolutions, but they would be guided by what appeared in the Budget in hotly opposing the Customs Bill. The resolutions were then adopted by the committee and the House rose* at 11.58 p.m. till 2.30 p.m. tomorrow. A