The Press WEDNESDAY, OCTOBER 27, 1965. Money For Roads

Press, Volume CIV, Issue 30892, 27 October 1965, Page 16

The Press WEDNESDAY, OCTOBER 27, 1965. Money For Roads

The budget revision approved by the National Roads Board last week should strengthen the case for an overhaul of the financial provisions of the National Roads Act As it now stands, the act permits the Minister of Finance to direct the payment of any sum appropriated by Parliament to the fund. Previously £1 million was the minimum contribution from the Consolidated Fund in any one year. The new legislation is retrospective and confirms the action already taken by the Government for this financial year, for which a nominal sum of £5OOO was provided in the annual Estimates of Expenditure. As long as Governments continue to allot some funds from this source the board’s affairs may be debated in the House during the consideration of the Estimates.

Last October, when the Prime Minister called for voluntary action to reduce inflationary pressures in many sectors of the economy, the Minister of Works (Mr Allen) persuaded the board, apparently without difficulty, to budget for a surplus of £2 million at the end of the construction season. Earlier, the board had planned for a surplus of £600,000. The board’s revenue from motor registration and heavy traffic fees, from motor spirits tax, customs duties on tyres, and from the Consolidated Fund contribution of £1 million exceeded the estimate of £2B million by more than £3 million. Helped by a balance of £BOO,OOO from the previous year, the board's accounts closed with a credit of £3 million. This year’s revenue, including the nominal Consolidated Fund contribution, is expected to be nearly £35 million. To ease the strain on the country’s economic resources, the board has budgeted this year for a surplus of £2 million.

Roading cannot be excluded from the programme of economic restraint; but it cannot be curtailed heavily or for long. Roading improvements must remain high on the list of works priorities; the need is roughly represented by the rapid increase in revenue from road users. It is to be hoped that the accumulated surpluses will eventually permit the board to expand its major works programmes. The Government will not be precluded from making additional contributions from the Consolidated Fund when the economic climate favours an attempt to catch up on deferred works.

The financing of the National Roads Fund is still far from satisfactory to motorists, who provide most of the board’s revenue. A contribution from the Consolidated Fund of £5OOO is almost contemptuous when it is considered that the board this year has to find an additional £60.000 to reconstruct a county road giving access to the new prison at Paremoremo and is spending a far greater sum on roading connected with the Tongariro power scheme. This illustrates the disadvantages of earmarking specific tax revenues for a specific purpose. The policy may make taxation more tolerable: and for roading it provides a rough-and-ready rule for matching expenditure to demand. But if the policy is to be consistent the Government should match its contribution to its own special requirements for road works. Now that the policy is producing revenue which cannot immediately be spent, the need for a review of the financing of the National Roads Fund is clear and imperative.