Fiji Sugar Export Tax Voted Out

by Indian and European MFC’s

From Our Own Correspondent

SSUVA, March 22.

OME surprises but few real sensations marked the March session of the Legislative Council of Fiji.

There was a sharp division of opinion, and a curious alignment of non-official forces, over the proposed continuation of the export tax on sugar.

A section of the non-official members (Sir Hugh Ragg, and Messrs. F. G. Aichi bald and S. H. Wilson) joined the Indian members in opposing the tax; while an other section (Mr. A. A. Ragg) joined tne Fijian members in supporting it. I his renewed the report (widely circulated, but never proved) that the European non officials originally made an “unholy bar gain” with the Indians, to the effect that if the Indians would oppose the proposed copra tax, the Europeans would oppose the sugar tax, which the Indians hate.

The Europeans maintained that they are fighting for a vital principle—namely, the non-taxation of primary products.

The proposed copra tax was abandoned when the industry was affected by the recent hurricane; but the Government proceeded with its plan to continue the export tax on sugar.

The tax, of 10/- a ton, of which tho processor (the CSR Company) paid 5 and the canegrower 4/4i, has been m operation for two years and returns about £65,000 a year.

The Government rejected the theory that primary products should not be taxed and maintained that the levy, besides be ing light, was fully justified by the returns being received by the sugar industry.

The Financial Secretary (Mr. R. M Taylor) sharply criticised the attitude of Sir Hugh Ragg, who had suggested the reimposition of the Port and Customs Service Tax as a means of raising re venue. The Controller of Customs (Mr.

A. R. Smith) pointed out that Sir Hugh had strongly supported the removal uf that tax at the end of 1947. and Mr.

Taylor said that in the debate, Sir Hugh had provided “probably the best example of public conversion since the days of St Paul.”

The Governor (Sir Brian Freeston) left the voting on the tax to the unofficial members, who defeated the proposal for retention by nine votes to five.

This resulted in the removal of the tax, but the Governor made it clear that if the Colony’s finances in July indicated that the tax be needed, he reserved the right to move for its reintroduction.

Arguments Against Tax

AS Sir Hugh Ragg bore the brunt of the Government attack (made in sup- P 0 1? the P r °P°sal), and we had no report of the arguments used by the non pmcial members in opposing the tax, we s * r . to give us a summary of the position as he had seen it. and he has kindly supplied the following;— Fiji economy is based almost entirely on primary production—therefore it is unsound in principle to place an export tax on primary products. The primary producer provides the wherewithal for all other classes—merchants, bankers, hotel keepers, butchers, bakers, etc. If it was the Government’s policy to tax sugar and copra (as had been proposed) the next ogical step would be an export tax on old and bananas, and that would spell isastcr.

In presenting its 1949 budget, the Government departed from its orthodox method of presentation by including, as expen ‘ diture which normally should have gone l an a PP endlx the budget. The ef this was that an anticipated surplus of over £250,000 was converted in f O a deficit of some £2o,ooo—thus creating on aDDarent "justification for the onpor P ?js U ailv such capital exSLdUu??

Si' been nrovided forient of P ?nrrdns ftas Deen P rovlclecl lor out of surplus

balances, or Colonial Development grant, or loans, if and when necessary. These three headings have invariably appeared as appendices to the normal budget.

Taxation should be general and should

not be applied to particular interests.

There are over 8,000 Indians producing cane to-day, in comparison with only 400 Fijians: which means that the sugar tax would be a sectional tax —which is bad in principle. If the Government really needed these additional funds out of re venue, it should impose a general import and service tax, and thus spread the burden over the whole community.

Sir Hugh said that he started the sugar tax in March, 1948, but he had changed his outlook because further consideration based on experience had clearly shown the unwisdom of sectional taxation. It had been stated privately—but not pub licly—that the tax in the main was to be an impost on the Indian community (the cane growers) and in his opinion the time had arrived when any such policy as that must be resisted. There was no future for Fiji unless the Colony sank all sectional differences and pooled all its resources.