PETROL TAX

Evening Post, Volume CVII, Issue 26, 31 January 1924, Page 9

PETROL TAX

AND MOTOR VEHICLES

"USERS OF ROAD TO PAY"

MINISTER OUTLINES HIS PROPOSAL. !

The Minister of Public Works, the Hon. J. G. Coates, delivered an interesting address to the members of the executive, of the New Zealand Farmers' Union yesterday afternoon. He advanced reasons in favour of the imposition of a petrol tax under the Motor Vehicles Bill rather than a double tire tax. He stated that the petrol 'tax had been adopted in America in some thirty-seven States, and urged that it was a fair tax, as under it the' user of the roads • Paid. . V ... The Minister said that recently he drew attention to the necessity of getting more revenue for the maintenance of roads, and expressed a desire to hear • any alternative scheme to the one he suggested which might be considered , practicable. He wanted to make this quite clear so far as he was personally concerned—and he thought he could •speak for the Government, too—it was noti.with any feeling of pleasure that he or any Government tackled a question which meant more taxation. There were one or two outstanding points with which the Government and those interested would have to grapple.' First of all, it was his intention, in talking about motor taxation, or the" revenue to be derived from motor vehicles; to endeavour to induce the users of our rdads to try and enthuse the public in regard to this important matter. It was one thing to sit down and say nothing, and suddenly bring a Bill before Parliament,' and expect ■Parliament to try and grapple with the question. In such circumstances, it often meant that those outside Parliament submitted their ideas, and then expected to-get a solution which was more or-less acceptable to all.' He thought that was almost impossible. We had now to face a problem which other countries • had been up against. To ua the problems were new. "TO FOCUS PUBLIC ATTENTION." Continuing, Mr. Coates said that his object in talking of the Motor Vehicles Bill was to focus public attention upon the question. It', was intended to hold a series of conferences of those interested m the question prior to the meeting of Parliament, so that^when'the House met members would have the resolutions agreed to at the conferences before them for consideration. He realised that local bodies had a very powerful influence— probably one of the most powerful influences in ttte country. The average member of "Parliament was loth to go againsfc.the deliberate wish of the local bodies in his constituency. • His object was to\focus as much attention as posBible upon questions which he thought were of vital importance to us to-day. VOTES FOR ROADS. ■t-o^m™? 1 i"* year appropriated ±.aOO,OOO for the purpose of road con-) struction in New Zealand—or, in round ' figures,'a million pounds. The amount' which local ibpdies borrowed for the purpose of road construdtion might be put down at another million. This very big sum—say, ttfey -putiit at a million and a half—of borrowed money was expended on road construction in New Zealand, and in six or seven years there would not be a sign of that expenditure, yet the expenditure had-to be met: It must be recognised that that:was not, in the interest of the country. As years went by, that economic waste continued. We hud all to pay the piper. We had to pay interest on the expenditure of money - from which w.e were getting no results at all. Would any of those present borrow money on farms, buildings, or factories, and not take care, to^see that the capital was not dissipated? When money was borrowed and expended, care was .taken to see that results were obtained, from such expenditure. If we could write it' off by still booming the capital at the end of, say, 36£ years, so much the better for- New Zealand, lnis was a matter which he thought everybody was thinking of and talking about. They knew that in many instances in the case bf local bodies that amount of money had been expended' and to-day there was not a sign of it. How could we.improve the position? Of course,' an easy way to take was to eay: "Let the Government pay the money out of the Consolidated Fund." But we must remember that the Consolidated Fund had its limitations; there were many charges upon it which. could not he avoided. ■ ■ • ' • SOME ESTIMATES. The- Minister said he thought they must look to the user of the road to contribute towards the maintenance of the road. The position at the moment was this: the Highways Act provided for a tire tax. That tire tax was used for the purpose of borrowing moneythree millions to begin with; it paid interest and sinking fund upon that money. There was £30,000 paid over from the Consolidated Fund, and £75,000 was voted from that fund towards roadmaking in New Zealand.' That had 'been the annual amount for the last n/,v™ years ' and this vear a furfher i30,000 would be paid for the purpose ofr maintenance. In threj years at least ■ £300,000 would be required for the payment 'of interest and for maintenance. hat was the lowest estimate they could put it at. Nine-tenths of our estimates were below actual/costs; that had been their experience. . "NOT A BED HERRING." The idea at the time tho Highways Bill was drafted was that we should get £150,000 from theytire-tax, and that the balance should be raised from further motor taxation. A letter had recently appeared in the Press in which' it was suggested that the Minister was trying to draw a red herring across the scent. In reply, Mr. "Coates said his object was- to do the right thing to begin with. He could assure the writer of .the letter that no red herring was being drawn across the scent. Their coats were off to carry out practical ; work, and their object was to bring about something like unanimity in the method of collecting the £150,000. The Minister then quoted from a statement made by Mr. Hurst, State Highway Engineer,, of Wisconsin, in which he said that the motor vehicle and the highway went together. .Nowadays large ; numbefs of the people were motorists; and motorists .must know that they could not expect the local irates to maintain the roads. It was all right so far as the local traffic was concerned, but not in regard to outside traffic. If they relied upon local rates maintaining highways equal to carrying the traffic' and transportation of these days, it meant relying on something which was riot practicable and which would not work out. On i.he other hand, by a contribution from the users of the roads, you could give them a track on which they could run economically. A tax of a very small amount would recoup them. BEST POSSIBLE BILL DESIRED. , The Motor Vehicles' Bill, which had not yet been finally drafted, provided for a flat tax, He knew there would

be a good deal of objection to that tax. He realised, however, that tljey must have alternatives before them for consideration before a solution of the problem was arrived at. His object was to get the best possible Motor Vehicles Bill. Therefore, it was proposed that there should' be conferences of local bodies and of- those interested, in motor vehicles. Copies of the Bill would be circulated amongst, those interested, and their suggestions would be carefully considered. The Bill would be finally sub-, mitted to a,conference of .all the parties' interested before' the meeting of Parlia- i ment. ,— ! PETROL TAX IN AMERICA. The Minister said he need not take up much timo in explaining the petrol tax or the flat tax, or any other tax; they were all pretty well known.l About 37 States in America had adopted a petrol tax in preference to any other. They had other taxes, of course. The reason they adopted the petrol tax in America was this: they thought it approached nearer to the tollgate system, which was recognised as a fair system, than any other method. Under this system the user paid according to the distance he travelled or according to the speed or weight of the vehicle. He thought the proposal would be £3 for all motor-car's. If that was accepted, they could, raise sufficient revenue to bring in the £300,000 required: Even a small petrol tax of 2d would not bring in £150,000 to begin with, but it would grow to that amount. The taxes '■in America varied from one- to ten cents, 'approximately from £d to sd. ; EXEMPTIONS. 4 One" objection to the petrol tax was that you had to grant exemptions. There was no intention to' compel anybody who did not use the highway to pay towards the construction or mainten- . ance of the highways. The petrol for stationary engines, milking-machines, fishing launches, etc., would be exempt. The tax would be paid across the counter. He understood that motor traders rather favoured a double tire tax—making the tax 50 per cent. So far as a double tire tax was concerned, it was impracticable to get the £150,000 under that system. His object was to charge the user of the road as little as possible, and see that what was collected went to the purpose for Which it was intended. The petrol tax had proved successful in America. The Minister was thanked for his address,'and after some discussion it was decided to defer consideration of the subject to the next meeting of the Dominion Executive, tihe matter in the meantime to be fully threshed out by the provincial executives.