The Press MONDAY, AUGUST 25, 1947. Milking the Motorist

Press, Volume LXXXIII, Issue 25271, 25 August 1947, Page 6

The Press MONDAY, AUGUST 25, 1947. Milking the Motorist

Of all the interests and sections which have good reason for dissatisfaction with the Budget perhaps the most disappointed will be the motorists. For two years now they have looked forward to relief from the tax of 4d a gallon on petrol, which in August, 1939, was added to an already burdensome tax rate as “a “ special contribution toward the “ additional heavy costs of defence ”, as the Financial Statement put it. Motorists’ organisations have pointed out that the petrol tax in New Zealand is, with one or two unimportant exceptions, the highest in the world—l4.7d a gallon compared with lOld in Australia and B£a in SouthAfrica, to quote typical examples from other British countries. They have pointed out that other countries have reduced their war-time taxation on petrol, South Africa by 3d a gallon and Australia by Id a gallon, to use the same illustrations. Australian motorists, moreover, have been promised a further reduction.

Mr Nash made much of the “re- “ lief ” given the Main Highways Account last year by the writing-off of arrears of interest and loan liability totalling £3,226,000. In announcing the Government’s decision to close the Main Highways Account, with its debit of £12,159,000, Mr Nash said this would mean further “ relief ” in interest of more than £486,000 a year. Motorists cannot be accused of ingratitude if they show no enthusiasm over these “ concessions ”. The Main Highways Account, as originally established, was to be nourished from motorists’ taxation; but though the rate of tax has risen steeply over the last 14 or 15 years the proportion going to the credit of the Main Highways Account has steadily diminished. It matters little whether the original legislation envisaged, as the motorists contend and the Government denies, that all motor taxation should be earmarked for highway development and maintenance. There should at least have been no diversion of motor revenue from the Main Highways Account to the Consolidated Fund until the requirements of highway financing had been met.

This is recognised, although obliquely, in the Financial Statement. The intention, said Mr Nash, was that full interest on the indebtedness of the ’Main Highways Account should be payable again as from April 1 this year. The Government, however, had further reviewed highways policy and decided that “ to maintain this national asset “ in a proper state additional relief 7 will be necessary ”. The national asset was built up largely from funds provided by the motorists. As the money they provided was used for general taxation purposes as well as the specific purpose, it was no fault of theirs that the account fell so deeply into debt. The extinguishing of the account is a tacit admission of this. Nevertheless the Government guards itself carefully against any future commitment. All motor taxation will henceforth go into the Consolidated Fund and votes for the Main Highways Board will come from the general revenues. It is not surprising that Mr Nash found “ reasonable ” the stipulation of the board that the annual votes “ should not be less than the amount “ that would have been available “ under the present system ”. The amount available to the board from petrol tax under the present system is 6d out of Is 2d on every gallon. The Government seems to have disposed finally of the motorists’ argument that motor taxation is a specific tax for highway work and it has perpetuated, in principle, at least, the very arrangement they have long regarded as unjust and inequitable.