Motor Unions Seek Abolition Of Tax

Press, Volume CI, Issue 29849, 15 June 1962, Page 8

Motor Unions Seek Abolition Of Tax

(X Z Press Association)

WELLINGTON, June 14.

Submissions for the entire abolition of the balance of the emergency taxation levied on petrol and motor-cars by the previous Government, under the 1958 Budget, were made today by a deputation from the joint standing committee of North Island and South Island Motor Unions.

The deputation, headed by the committee chairman, Mr E. C. Champion, waited on the Minister of Finance (Mr Lake).

A joint statement was made in 1958 by the presidents of

both motor unions which protested "at the imposition on motorists of a tax to assist the country’s economy in a financial emergency. "Organised motoring bodies have repeatedly pledged themselves to urge the removal of such taxes and to pursue this matter until these emergency taxes are entirely abolished " The present rates of emergency taxation are: Petrol: 2d a gallon. Sales tax: 13 1/3 per cent on the wholesale value Price Reduction According to a supplied statement it was submitted today that the abolition of the additional sales tax would represent a reduction of approximately £7O in the price of a vehicle retailing at present at £BOO. a reduction of approximately £IOO on a present retail price of £I2OO

and proportionately greater reductions in the prices of more expensive vehicles Actual receipts from petrol tax for the period June 26 1958. to March 31. 1961, were £l9 million and estimated sales tax receipts were £lO million The estimated receipts for the year up to March 31. 1962. were £4.5 million. Because of the increase of approximately 10 per cent in ordinary petrol tax receipts last year and the greater number of cars imported after the extension of the non-remdttance scheme in 1961, it was submitted the estimated receipts for the

year ended March 31. 1962. would probably prove to be

conservative. List Of Claims The following claims were submitted for the Government’s consideration: d) The emergency taxation was imposed to meet a financial crisis which had resulted in an over-all deficit in the public account of £22 3 million at March 31. 1958 (2) Road users as a class have contributed to the Consolidated Fund in emergency taxation alone a sum of £33 million which is £l3 million in excess of the amount of the income tax rebate. <3) In addition, the motor unions last year voluntarily accepted the temporary withholding of the expenditure of £1 million of National Roads Board funds to assist the Government to avoid a further financial crisis. (4) The motor unions are gravely concerned that

through the continuance of this emergency taxation, the funds so obtained will tend to become absorbed as permanent revenue, which, of course, is quite eontrarv to the intention specifically expressed in 1958 (5) As road users generally have provided and continue to provide approximately 95 per' cent, of the revenue received annually by the National Roads Board, it is not unreasonable to say that as a class they make a very substantial contribution towards the construction and maintenance of the reading network, vital to the econ-

omic welfare of the country ; Total receipts in the National! Roads Fund of £3O 4 million during the four-year period ended March 31. 1962 gives clear indication of the value of the road users’ contribution. (6) Petrol tax and sales tax as a cost factor at all stages of economic activity are reflected cumulatively in the cost of living. We have received evidence of this in a letter received from the Government Statistician dated July 29. 1960 He said that the direct effect a’one of those taxes accounted for one-seventh of the increase in the cost of living index in the Quarter ended September 30, 1958. Allowing, in addition. for the indirect effects of these taxes, a factor which the Government Statistician could not assess, the entire abolition of these would immediately reduce costs of production. This is a matter of vita’ importance at present.

(71 The additional sales tax has not only substantially increased the cost of new vehr'cles but this has a'so been reflected in t.he market nrice of second-hand cars. The abolition of the additional sales tax would reduce the price of all vehicles. “WidesnreM Relief"

“The abolition of these emergency taxes would be received with widespread relief by all our members in this highly motorised country.” the submissions said “We are of the opinion that the time has arrived when these emergency imposts should be lifted. “Our members are anxiously awaiting a return to strict adherence’to the principles of the National Roads Act. 1953. wherein all specified motor taxation is to be spent on road'ng. “We now express the sincere hope that this year you and your colleagues will be able to give effect to our requests." the submissions said Mr Lake agreed to consider the views of the motor unions and confer with his colleagues in the Cabinet.