A BURDEN ON SMALL PEOPLE

Dominion, Volume 32, Issue 263, 4 August 1939, Page 8

A BURDEN ON SMALL PEOPLE

In imposing the petrol tax increase of 4d. a gallon, or 40 per cent., the Government has endeavoured to give it the guise of a special levy for defence purposes. The tax had bpen chosen, said the ActingMinister of Finance in his Budget speech, because “it reaches every section of the community, and all should share in the cost of defence.” It is perfectly clear, however, from subsequent Ministerial admissions, that the estimated revenue of £1,000,000 is not specifically earmarked for defence. It is simply a revenue-producing levy, and no one of the thousands who are obliged to contribute to it directly, or the thousands more who must support it indirectly, will be deceived by an attempt to win for it the support of patriotic sentiment. The real question concerning this heavily-increased penalty on the use of motor-vehicles is its effect on industry, trade and the public purse generally. It is true, as was stated in the Budget speech, that it reaches throughout the entire community, for there are few items in the programme of living today which are not influenced, either directly or indirectly, by the running costs of motor-vehicles. There is not an industry or business—large or small—the overhead charges of . which are immune from them. The suburban grocer, in common with the fuel dealer and the baker, is obliged to adjust his retail prices in the light of his monthly petrol bill for deliveries, just as the manufacturer or industrialist who supplies him must make due allowance for transport charges when adjusting the price-level of his wares. . The Minister of Industries and Commerce himself pointed out during the debate on the Customs resolutions that three-fifths of the total consumption of petrol is in commercial activities,, which means that the public must pay for it. To say—as was also said in the Budget speech—that the burden “has the merit of pressing much more lightly on large families,” is to make a claim conflicting with. the fact previously admitted. Large families mean large retail buying, and transport costs —petrol costs —must of necessity be added to retail prices. , ... But because a tax reaches throughout the community in direct or indirect fashion, this is not to say that it is an equitable tax. A proportion of those who operate motor-vehicles for business purposes—and included among these are a large number of small business men, such as bakers and taxi-drivers ,who deal in goods or services at more or less fixed prices—are unable immediately to pass on their increased costs. Others —including all those associated with motoring service, and again taxi-drivers—will be direct losers by the reduced public demand which is bound to follow an adjustment of their prices to a higher level. Workers who use motor transport, small business men and the householders whom they supply, individual transport operators, petrol station proprietors and garage employees are some of those on whom this 40 per cent, additional tax descends heavily. They are penalized in common with the largest transport-using firms and the host of primary producers to wliom the cost of petrol is a part of the overhead cost of their farms. The defence of the tax on the ground that “it reaches every section of the community” implies that it spreads a burden fairly and equitably. Such is very far from being the case. The smaller people, who are least well placed to do so, will lie called on to bear the greater part of the burden.