TWO-THIRDS FOR GENERAL PURPOSES

Evening Post, Volume CXXIV, Issue 58, 6 September 1937, Page 8

TWO-THIRDS FOR GENERAL PURPOSES

A striking fact quoted by the motorists' deputation to the Minister of Finance was that in 1935 65 per cent, (almost two-thirds) of taxation contributions by motorists were used for general purposes. In 1931 the percentage was 33. In a general reply to the deputation the Minister said: "The only reason we tax is because we feel that the money we obtain from the people who pay it will be better spent by the Government." This is not an answer to! the fact submitted by the deputation. Motor taxation is not imposed solely as a means of taking money from those who have it so that th» State may use it for other purposes. -It is intended further as a direct charge for the use of the roads, to be paid by road-users, so that transport may be economically divided between road, rail, and sea. For this purpose it is highly desirable that the taxes falling on the road-user should be neither much more nor much less than actual road costs. If they are much less than costs the consequence will be that road transport will appear cheaper than it really is, and business will be diverted to the roads that should 'go to the railway or shipping. If on the other hand the charge is much more than is justified by costs, the development of road transport will be hindered. An economical means of transport will be made artificially expensive. The diversion of 65 per cent, of motor taxation certainly loads road transport unduly. There > are, of course, receipts to set against this. The general body of citizens contribute through rates and taxes to roadwork. But allowing for this the. proportionof 65 per cent, for general purposes and 35 per cent, for roads is such that the purpose of the taxation as a means of inducing economic distribution of transport is largely, lost. It may be admitted that there is an argument for manding 'a contribution for general revenue from private car owners on the ground that motoring (judged by Customs standards) is sufficiently a luxury to warrant such a contribution. Also it is well known that part of the taxation on vehicles has a British preferential or protective purpose, and part is a reasonable contribution to the cost of registration, inspection, traffic control, and other services made necessary by the increase in motor, traffic. But when all this is allowed for, motor transport as a business (and a highly important business for the trade and industry of the Dominion)" is gravely handicapped by the excessive charges it has to bear.! The worst feature of the case is the apparent intention of the, Government to retain taxes imposed in an emergency even though the retention is against justice and real public economy. This is; not the only instance of such retention. Other examples are to be found in the land and income and sales taxes. The argument that decides the case is evidently that the Government wants the" money. Mr. Nash said: "We have a certain amount of money to find to meet commitments entered into." The size of these commitments which is forcing excessive and inequitable taxation may yet cause, great injury to industry.