HIGHWAYS FUND TAXATION

Press, Volume LXXXII, Issue 24985, 20 September 1946, Page 6

HIGHWAYS FUND TAXATION

Undertaking By Minister REVIEW NEXT YEAR •(P.A.) WELLINGTON, Sept 19. The whole highways fund was in, a very precarious position, and it was time it was reviewed and investigated so that a decision could be reached as to the right and proper method of disposing of revenue derived from petrol and tyre taxation, said Mr W. Sullivan (Opposition, Bay of Plenty) in the House of Representatives to-day. Nothing should be done to rqb the Main Highways Board -of‘ the means of maintaining highways at a high standard,: and'local bodies should also receive some assistance in maintaining country roads. a Mr S. W. Smith (Opposition, Bay of Islands) said there was no justification in maintaining the war tax on petrol unless the revenue would be used for roadmaking and maintenance and improvement. Mr G. H. Mackley (Opposition, Masterton) also pressed for an investigation into the incidence of this class of taxation, revenue from which was in excess of the reasonable expenditure of the Matin Highways Board. Mr H. Johnstone (Opposition, Raglan) said the petrol tax was 14.7 d, of which the greater part went into the Consolidated Fund, leaving only 6d available to- the Highways Board for expenditure. This, coupled with the curtailed imports of petrol and the tact that there was a great deal of leeway to be made up in road maintenance and construction work, meant that taxation revenue available for roading purposes was quite inadequate. The cost of maintenance and construction work had skyrocketed. For instance, the copt of bitumenising roads had trebled. The loan indebtedness of the Main Highways Board was £ said the Minister of Finance (the Rt. Hon. W. Nash). Referring to a clause m the Finance Bill writing off the liability of the Main Highways Account to the Consolidated Fund, he said the bill wrote off £1,226,000, and that saved the highways fund £49,000 a year by way of interest. Interest Written Off The Minister said that, in addition, the Government had.decided to write off not only arrears of interest amounting to £1,416,297 to March 31 last, but also® 1946-47 Interest; which amounted approximately to £520,000, which the Highways Board was due to pay on Government loans. Mr W. Sullivan (Opposition, Bay of Plenty): But you have taken half their funds. The Minister said that the writing off of this interest would be of tremendous advantage to the Main Highways Fund. There had not been one penny diverted from sources that the House had decided. It was misleading and incorrect to say that petrol taxation was exclusively for the roads. Mr K. J. Holyoake (Opposition, Fahiatua): It was originally. Mr W. J. Polson (Opposition, Stratford): The original proposal was that the taxation was for the maintenance of roads. , Mr Nash said that that was not so, and motorists would not argue that they should be exempt from taxation. It was entirely wrong to say that one penny of the funds had been diverted. Mr W. Sullivan: The fourpence for war purposes now goes into the Consolidated Fund. Mr Nash said that the taxation was never levied for road purposes. Would the Opposition say that revenue to run the roads should come from motorists? The Leader of the Opposition (Mr S. G. Holland): You go on and make your own speech. Mr W. Sullivan; The Minister knows very well that the whole question ought to be reviewed. Mr .Nash: I will agree to review it next year. The Minister said that motorists should pay their fair share of taxation, as well as everyone else, and they would not argue otherwise. The Government had a debt of £28,000,000 outside the Main Highways Account for money spent on roads Highways taxation would not meet half the cost of the roads and bridges. \ Mr W. S. Goosman (Opposition, Waikato); It would tie better spent on the rdads. Mr Nash said it would.not be sufficient to make the roads if it were. Special taxation for a particular purpose was a bad form of taxation. The Government had never given any indication that it would remit any of it. Mr W. Sullivan: You never remit anything. The Minister said that on £28,000,000 of Government money the Government was spending £1,127,000 in interest. It was true that roads had deteriorated, but the Government had spent money on them that no highways account could meet.