Deputation To Minister Seeks Petrol Tax Cut

Press, Volume XCVIII, Issue 28920, 13 June 1959, Page 15

Deputation To Minister Seeks Petrol Tax Cut

(New Zealand Press Association)

WELLINGTON, June 12.

Representatives of the North and South Island Motor Unions today waited on the Minister of Finance (Mr Nordmeyer) and asked him to abolish the extra Is per gallon tax on petrol and the increased sales tax on motor vehicles imposed in last year’s Budget.

A spokesman for the deputation said later that the Minister had indicated there would certainly be no abolition of the petrol tax and he could not say for certain at this stage that there would be any reduction.

However, the deputation was assured that as soon as the national economy allowed reductions would be made, said the spokesman.

The deputation claimed that, with collective membership of more than 300,000 its organisations represented not only motorists as such, but a substantial cross-section of the whole community. It summarised its submissions on petrol tax as follows: (1) ‘‘We deplore the fact that the Government found it necessary to impose additional petrol tax for revenue purposes. (2) “Petrol is the raw material of every form of economic activity and enters into all stages of production, with a cumulative effect on the cost of services and retail prices alike. (3) ‘‘Comparative figures for vehicle registrations to population show that in 1926 there was one vehicle to, every 10 persons; in 1959 there is one vehicle to every three persons(4) “Petrol tax, like all other indirect taxes, falls most heavily on those less able to affdrd it, for example, the motorist in the lower income group who requires a large car for use pf his family. (5) ‘‘Under the present legislation private motorists are the only ones who bear the full burden of the petrol tax. The provisions for rebates and the approval given commercial operators to increase their charges have brought a wide

section out of the tax-paying

group. (6) “Table 6 of the 1958 Budget discloses that in the four-year period ended March 31, 1958, total receipts in the National Roads Fund exceeded £7B million.

Government Contribution The deputation said that of this, only £4 million has been contributed by the Government, leaving the amount from road users at £74 million.

‘‘Net petrol tax for this period alone exceeds £53 million and on estimates provided by the Transport Department, the private motorist has- contributed approximately half this sum. In the nine months ended’March 31, 1959, the additional Is per gallon t . has realised’ approximately £9 million (less rebates). ‘‘Every person who uses five gallons of petrol a week throughout the year is paying £l3 per annum in extra ta£.” said the submissions.

On the additional sales tax on motor vehicles, the deputation made the following submissions:— (1) “Due to the method of assessment of sales tax, the increase of 20 per cent, results in a tax of much greater proportions in relation to the current domestic value of vehicles than

would appear at first sight, being from 28 per cent, to 41 per cent, depending on whether c.k.d. or assembled, and the country of origin. (2) “The increased sales tax has removed the purchase of a new vehicle beyond the resources of the majority of private motorists. The cost of the most popular English family car is now £BO9 compared with £706 prior to the Budget. (3) “The continued use of vehicles beyond their economic lives is both costly and dangerous. (4) “The additional tax greatly increases replacement costs to commercial users and this has already resulted in increased fares and charges. “Strongly Disapproved”

“At the time of the Budget we strongly disapproved the imposition of the taxes on one section of the community, irrespective of their ability to pay, when they were to bear their full sha/e of the effect of the increases in taxation as ordinary citizens. “The considered opinion of the Motor Unions is that having regard to the improvement in the national finance, the Government give serious and urgent consideration to the abolition of the additional petrol tax and the additional sales tax on vehicles.”