MAIN HIGHWAYS.

Auckland Star, Volume LXI, Issue 174, 25 July 1930, Page 7

MAIN HIGHWAYS.

READJUSTING FINANCES.

RATES SUBSIDY ABOLISHED.

ATTENTION TO BACKBLOCKS.

CONSOLIDATED FUND ASSISTED.

(By Telegraph.—Parliamentary Reporter.)

WELLINGTON, Thursday.

The Financial Statement brought down in the House of Representatives to-night by the Prime Minister (the Hon. G. W. Forbes) reviews to. some extent the Main Highways account and the operations of the board. The Finance Minister points out that in addition to the proceeds of the petrol tax, tyre tax, and other ear-marked revenue, .the Highways Account has received an annual grant of £35,000 from the Consolidated Fund, and from the Public Works Fund it has received £200,000 of capital peV annum, free of interest. He proposes to discontinue the £35,000 grant from the Consolidated Fund, and to recover from the Highways Revenue Fund interest on the capital transfers from . the Public Works Fund to the Main Highways Construction Fund.

The Prime Minister states that the transfers to date amount to £1,226,000, and interest at 5 per cent on this amount will be recouped to the Consolidated Fund during this and future financial years. The loans from which the transfers were drawn cost on the average £5 3/4 per cent. No further transfers to the Highway Account are to be made, and in future the whole of the loan capital required for main highways construction will be raised specially for that purpose. Local Body Subsidies. Another proposal is to transfer to the Highways Revenue Account, as from April 1 last, the charge for subsidies to local authorities on rates. These subsidies amounted to approximately £220,000 last year, and came out of the Consolidated Fund. Mr. Forbes explains that these subsidies were introduced nearly 50 years ago, and were intended to assist backward counties and boroughs to improve roads. It was not intended that the period should extend further than 25 years, but the subsidies had become part and parcel of the normal finance of local bodies. The "financial adjustments" outlined are estimated to assist the Consolidated Fund to the extent of. £316,000 for this financial year. Mr. Forbes adds: "Incidentally, meeting that additional amount of the roading costs out of petrol tax will also assist in the direction of putting road competition with the railways on a more equitable basis." Roafl Expenditure. The Prime Minister concludes his statement on - the main highways in the following terms: "Although the aggregate of the annual expenditure on roading is now approximately £3,600,000, it is considered that up to the present insufficient attention has been given to backblock roads, where more expenditure- would greatly assist land settlement, i.nd be of much benefit to the settlers in outlying districts, who, be it said to their credit, are carrying on under gi'eat difficulties. Expenditure on such roads would help the production of the country to a far greater extent than much of the present expenditure. Accordingly; the Government proposes to arrange for a substantial amount out of the proceeds of the petrol tax to be expended on subsidiary highways through outlying districts each year. Tim expenditure will assist rather, than undermining the railway revenue.

"To provide the necessary funds to enable the Highways Account to meet all these liabilities without disturbing the present financial arrangements of the Highways Board, a resolution has been passed increasing the petrol tax from 4cl to 7d a gallon. For the remainder of the financial year the additional 3d a gallon will, it is estimated, bringing £450,000. Of this amount £316,000 will bo required for the liabilities taken over from the Consolidated Fund, leaving £134,000 for additional expenditure on subsidiary highways through outlying districts. In a full year about £350,000 should be available for the latter purpose.