The Waikato Times SATURDAY, MAY 16, 1936. HIGHER TARIFFS.

Waikato Times, Volume 119, Issue 19887, 16 May 1936, Page 6

The Waikato Times SATURDAY, MAY 16, 1936. HIGHER TARIFFS.

In the course of a statement regarding Government policy the Prime Minister made a brief mention to a subject that really is of great significance.’ Mr Savage bad been discussing the prevention of any undue rise in prices, and said that the Government “hoped ultimately to be able to complete trade agreements with Empire and foreign countries.” During the election campaign, of course, no stress was placed on the “hoped ultimately” aspect. It was represented that the conclusion of such agreements would present no difficulties. The significant statement, however, was that “in the meantime it might be necessary to protect local manufacturers by means of tariff increases.” That admission is of importance. It concedes that the legislation introduced by the Government will raise production costs. If it did not, then there would be no occasion to deal with the tariff. Higher internal costs are expected by the Prime Minister, and in order to protect the local manufacturer the tariff wall may be raised.

The qualification “in the meantime” refers, presumably, to the period necessary to conclude the trade agreements, but any increase in the Dominion Customs duties would be so directly contrary to the views formerly expressed by the Labour leader that it is difficult to realise that his Government may build the wall still higher. The strong opposition to high exchange rates, made by the Labour Party before it came into office, was that they would militate against trade with the Mother Country; they handicapped the best customer that New Zealand had. If that was so then, what will be the position if, without reducing exchange rates, the tariff wall is raised to a higher level? Will not that tend to make trade with Great Britain more difficult than ever? And if it should so happen that the mission of the Minister of Finance in search of a bilateral agreement with Great Britain proves fruitless then, apparently, these higher schedules would not be reduced at all.

There was a policy of twelve points which Mr Savage used to read at most of his public meetings during the election, and item No. 9 stated that a Labour Government would “provide substantial protection for secondary industries which can be economically developed in the Dominion,” but this was accompanied by a note to the effect that Labour intended to maintain Customs tariffs where necessary until industry could be protected by control of external trade. The provisos are important, but an intention to maintain tariffs could not be held to justify increases.

If increased costs to secondary industries are to be balanced by higher tariffs then the immediate result must be to add to the costs of the primary producers as a whok\ That movement will not be cancelled out by providing a guaranteed price for one section of the men on the land. In any case advances in costs, including higher wages, will make it necessary to review the guaranteed price itself, and while that price will be fixed for the year costs may continue to rise. The Prime Minister’s statement is not encouraging, and the sooner he can amplify it the better it will be for those directly concerned. They will then know where they stand.