Evening Post. WEDNESDAY, JUNE 23, 1937. NOT TAXES BUT FEES

Evening Post, Volume CXXIII, Issue 147, 23 June 1937, Page 10

Evening Post. WEDNESDAY, JUNE 23, 1937. NOT TAXES BUT FEES

A certain 'amount of confusion arises in public consideration of motor taxation (including petrol and tyre taxes, annual licences, ■ and heavy vehicle licences) because what is in great part a charge for the use of the roads is levied in the form of a tax. Governments have contributed to this confusion by mixing taxation for general purposes with taxation for road use. Motor vehicles are subjected to Customs duties (for revenue and for Imperial preference) and petrol, which has its pleasure as well as business uses, has been seized upon in an emergency | as a means of supporting the Consolidated Fund. The considered statement made by the New Zealand Farmers' Union of its policy of userpayment for roads and rural derating should help to remove this confusion. It sets out clearly the case for transferring the cost 'of roadi maintenance from the land to the road-vehicle. ' This case, as we have often pointed out, is doubly strong: (1) because it removes from the land a charge which is clearly inequitable now that roads are national and not merely local means of access and the value of a road is often unrelated to the, land through which it passes; (2) because it adjiKts costs, and, therefore, charges, as between the competitive forms of transport, road, rail, and sea. The Farmers' Union case is, however, less than complete because it is one-sided. In one part it goes too far in implying that the farmer in the past has paid for the roads and is still paying heavily for them. It is admitted that, through county rates, a great amount of original road construction was undertaken; but there was also heavy national expenditure (falling on the. general taxpayer) through Government road and bridge votes. This fact leaves the New Zealand farmer with a case for rural derating not quite so strong as that which influenced the British Salter Conference on transport when it ruled that transport should pay the full present cost of roading because the justifiable contribution from the land had been met by the original construction. As touching present conditions also it must not be forgotten that for many.years users have been, paying heavily for the roads and their contributions have gone a long way towards rural derating. The chief flaw in the Farmers' Union' case, however, is that it does not go far enough. It treats of derating for roading purposes as wholly a rural question. It is not. The arguments for derating and user-payment which apply to the country apply with equal force to the urban areas. Borough roads carry their full share of traffic which comes from beyond their borders. Borough ratepayers are weighed down with heavy rates representing in part the cost of road construction and maintenance. If an adjustment as between land-occupier and roaduser is now made with consideration only of the rural land, owner there will be the most serious injustice. The borough land will have to find in rates the cost of borough roads, and the borough motorist will have to contribute to the cost of rural roads. This will be double taxation as bad as that of which the rural ratepayer now complains. To be equitable derating for road purposes must-be complete, not merely rural; At present there is an allocation from the -petrol tax and heavy vehicle taxation to the boroughs, but this is arbitrarily made and we have never seen a calculation to justify it by relating it to the length and. type of road formation and the volume and weight of the traffic. Any such calculation, we feel sure, would show that the boroughs are entitled to more. :

A further debatable point in the Farmers' Union statement relates to administration under a derating plan. The Farmers' Union proposes administration of funds for roading purposes by local bodies as at present. We do not see how this can possibly be justified under the existing local government system. The funds would be collected from roadusers and spent by the representatives of ratepayers—ratepayers who paid no rates for roads. This is entirely contrary to the basic principle of local government—that the' payer should control the spending. In practice, also, it would tend to work out inequitably as the roaduser's wishes would sometimes be in conflict with the land-occupier's decisions. Road-users (the motorists) have now only a semblance of representation on the authority deciding the allocation of user funds and no representation on the bodies which actually spend the money. Introduction of derating under such conditions would, we believe, be a mistake. The local bodies would be spending the funds contributed by a section of the community apart from the section which elected them. They would not be under such strong compulsion to make administration efficient as they would be if accountable to the persons supplying the funds. Derating would actually hinder local government reform by lessening the local cost incentive. For this reason we are firmly convinced that local government reform must precede any extension of road derating. If it does not the roadusers will not be assured of the best return for their funds, and they will have no remedy as they do not directly elect the spending authorities.