Primage Tax On Territories’
pp. 19-21 · Read in the full issue
Products
Minister Directs Attention To Preferences Granted By Australia
The following statement on the primage question has been courteously supplied to us by the Hon. T. W. White, Commonwealth Minister for Trade and Customs.
The Minister shows, conclusively, that substantial preference is given by Australia to the products of Papua and New Guinea. But the fact remains that goods from those Territories, although they virtually are part of Australia, are subject to the primage tax of 10 per cent. It is against the imposition of this tax that so many protests have been made.
MY attention has been drawn to certain statements contained in an article published in the Pacific Islands Monthly of 21st May, 1935, under the caption “Primage Anomaly,” which I feel sure cannot be read without leaving in the minds of readers, who may be unacquainted with the actual position, an entirely erroneous impression of the tariff treatment accorded to the products of Papua and New Guinea under the Australian Customs Tariff.
The article, after referring to the proclamations issued in March last, where under imports from Papua and New Guinea were accorded the same reductions in primage duty as similar imports entitled to entry under the British Preferential Tariff proceeds with the following comment: “Britain does not produce desiccated coconut, or coffee, or rubber or a score of similar things; and so such imports from New Guinea or Papua are treated still exactly as if they were the produce of foreign countries.”
In the light of this statement I feel compelled to set out in some detail the position of those three products, when imported from Papua and New Guinea, as compared with similar products imported from other countries.
Desiccated coconut is subject to duties of 2d and 3d per lb respectively under the British Preferential and General Tariffs, plus primage duty of 10 per cent, in both cases. Imports from Papua and New Guinea are admitted free of the ordinary tariff duty, but are subject to the emergency revenue tax of 10 per cent. The only countries which are legally entitled to the British Preferential rate of 2d per lb. on this commodity, viz., the United Kingdom, Canada and New Zealand, do not produce desiccated coconut.
Therefore, the real effect of the Australian tariff legislation is to accord Papua and New Guinea an exclusive preference of 3d per lb. over all other competitors.
The benefit of the preference is clearly reflected in the trade statistics. Papua and New Guinea supply the Commonwealth with 98 per cent, of the total annual imports of £95,000, and have a virtual monopoly of the Australian market.
Raw and kiln-dried coffee is subject to a revenue duty of 4d per lb., plus 10 per cent, primage under both the British Preferential and General Tariffs. Imports from Papua and New Guinea are admitted free of tariff duty, but pay the primage duty of 10 per cent. Coffee grown in the territories is therefore favoured by a preference of 4d per lb. over all other countries. In spite of this assistance, Territorial coffee is not an important factor in the import trade of the Commonwealth,
the Territorial share of the trade being less than £3,000 in a total trade of £100,000 per annum.
Crude rubber is subject to a revenue duty of 2d per lb., plus 10 per cent, pri-
mage under both the British Preferential and General Tariffs. Certain difficulties with rubber users in the Commonwealth who proposed to cease purchasing Papuan rubber if the difficulties were not rectified, necessitated the withdrawal in 1933 of the direct tariff preference accorded at that time on Papuan rubber. Concurrently with the withdrawal of the direct preference, the Commonwealth Government instituted an arrangement whereby the duty of 2d per lb. collected on imports of Papuan rubber is remitted to the Papuan Governjnent and refunded to the Territorial producers as a grant in aid.
The preferential treatment extended to Papua and New Guinea under the tariff legislation of the Commonwealth is not limited to the three products mentioned.
Under the Papua and New Guinea Tariff Preference Act of 1926 as amended by the Act of 1933 exemption from tariff duty (but not primage duty) is accorded to practically all commodities which are of any significance to the Territories.
In addition, encouragement is given to the production and importation into the Commonwealth of cocoa beans, sisal hemp, spices, sago, kapok and a number of other tropical products by the payment of a bounty of varying amounts on such products grown in the Territories and consumed in the Commonwealth.
A survey of all imports from Papua and New Guinea reveals that, with one or two very insignificant exceptions, goods of the kind produced in the Territories are admitted free of duty, except for the emergency revenue primage tax.
The proclamations issued in March extending to Papua and New Guinea the same rates of primage duty as apply to similar goods admitted under the British Preferential Tariff, do not, as your article states, confine the concession to goods of a kind produced in Great Britain. The British Preferential rates also apply to a number of tropical and other products of British colonies. The proclamations ensure that the Territories participate in all reductions in primage duty effected on such colonial products.
Unfortunately, during the numerous adjustments in the various tariff schedules, one or two minor products of the Territories became exposed to higher rates of primage duty than similar products from British colonies. The purpose of the proclamations was to remove these minor anomalies, which although of little practical significance, have been magnified to make it appear that the Territories are not receiving the sympathetic consideration which their close relationship with the Commonwealth entitles them to expect.
It is true that the recent extension to the Territories of the same rates of primage as apply to similar goods admitted under the British Preferential Tariff results in few additional immediate concessions to the Territories. It does, however, remove two minor anomalies to which in dividual traders had drawn attention, and at the same time ensures that any reductions of primage duty which may be effect ed from time to time in the future on products similar to those exported from the territories will apply simultaneously to the Territories.