Abolition Of Extra Tax On Motoring Urged

Press, Volume XCIX, Issue 29270, 30 July 1960, Page 12

Abolition Of Extra Tax On Motoring Urged

A request that the Prime Minister give his urgent consideration to the immediate abolition of additional petrol tax and sales tax on motor vehicles was made by Mr T. E. V. Turpin, of Otago, at a meeting of the South Island Motor Union in Christehurcb yesterday. Mr Turpin was replying to a letter from the Government Statistician (Mr J. T. C. Baker) to the union’s executive committee about the 'cumulative effect on the retail price structure of the additional petrol tax and sales tax on motor vehicles. In his letter Mr Baker said: “Such additional taxation can affect the retail price structure in two ways: directly by increasing the price of petrol and motor vehicles to consumers and indirectly by its effect -bn the cost structures qf all goods and services. • “These indirect effects are not readily measureable. Not all of the price movements that occurred in the goods and services purchased by consumers in the period immediately following the Budget of 1958 and the period subsequent to the petrol tax reductions of late 1959 can be at-

tributed to alterations in taxation on petrol and motor vehicles." said Mr Baker. "It would be an exceedingly difficult task to establish the proportion of price changes that did in fact result from these taxation changes. On the other hand, the direct effects on the retail selling prices of petrol and motorvehicles are more readily distinguished. "The net effect of price changes in these two items immediately following the Budget of 1958. and the two reductions of taxation on petrol effective in November and December, 1959, was to increase the consumers’ price index by 4.3 points, or 0.5 per cent, approximately,” said Mr Baker. Cost Of Living "Mr Baker’s reply is interesting in that, for the first time, we have irrefutable evidence that the cost of living has been substantially increased by the imposition of additional petrol tax and sales tax on vehicles." said Mr Turpin. “Unfortunately, at the present time, the direct increases only in the cost of living are measureable. However, the direct cost alone is staggerftig. “These additional taxes were directly responsible for oneseventh of the total increase in the cost of living during the quarter ended September 30. 1958. i.e„ the quarter immediately following the imposition of these taxes," he said. “It is apparent that all items included in the consumer price index are also indirectly affected and it would be fair to say that these taxes must constitute a reasonable proportion of the remaining six-sevenths of the overall increase. This being so. surely some attempt must be made to assess the indirect cost. “In the light of the information so obtained it is obvious that the present Government has imposed these taxes with little thought being given to these factors.” As indirect taxation was a matter of some consequence to motorists and non-motorists alike Mr Turpin moved that “The attention of the Prime Minister be drawn to these figures with the request that urgent consideration be given to the immediate abolition of these fiscal taxes.”