MOTOR TAXATION

Evening Post, Volume CXXXVI, Issue 121, 18 November 1943, Page 4

MOTOR TAXATION

REASONS FOR CRITICISM

MOTOR UNION CIRCULAR

To give members of Parliament a factual background, the North Island and South Island Motor Unions have I issued a circular dealing with the in- , cidence of motor taxation. t In the early stages of the Mam High- ; ways Board's operations the Public ' Works Fund made a grant to the board . of £200.000 a year in recognition of , the relief to the Public Works Fund ' given by the operations of the board, states the circular. A total of £1,266,000 was granted to the board m this way, but not only was the grant stopped" but when the Government became pressed for money it charged the board interest on these "free" grants. The position is now made worse in that by an obscure section, section 5 > of the Finance Act, 1943 (No. 2), these < amounts became a debt due by the i board to the Consolidated Fund. 1 Since the introduction of the petrol |: tax in 1927. and with subsequent in-' 1 creases, the motorists had paid ; £42,000,000 under that heading. Of i this amount £20,500,000, or less than ' one-half, had reached the Mam i Highways Account. The remainder, ; £21500.000, had gone to the Consolidated Fund and the War Expenses Ac- ' count. While the Consolidated Fund had the benefit of that amount of , motorists' money, the Main Highways Board had to borrow £13,000,000 to : meet construction costs on main highways and the interest and sinking fund < payable by the board amounted to ( more than' £500.000 a year. I In 1932 the Minister of Finance of the day approached the motor unions and appealed for their non-criticism of an additional tax of fourpence a gallon on petrol to assist the Government through a time of difficulty, the promise being made that as soon as the national finances improved this additional tax would be removed. It was not removed, and a deputation to the present Minister of Finance failed to secure it's removal. I Since war broke out a further fourpence special war tax had been put on petrol, so that motor-vehicle owners were not only paying all the general taxes paid by others, but also were paying an added war tax of fourpence on every gallon of petrol they used. WAR DAMAGE INSURANCE. The motor unions protested against the high rate charged on motor vehicles for war damage insurance, being of opinion that there were fewer hazards with a motor vehicle on account of its mobility than with fixed property. They also protested against the fund raised from war damage insurance being held for diversion to other purposes if no war damage occurs. The unions' representations'were not favourably received. Though petrol tax was originally intended as a roading tax, only sixpence of the present tax of Is 2.7 d was allocated to the Main Highways Board, and of the excess, 4.7 d went into the Consolidated Fund, and 4d into War Expenses Account. The motor unions continued to press for rectification of this palpably unfair incidence of taxation. "In post-war development and rehabilitation," the circular adds, "the motor vehicle will play an important part not only in providing employment for thousands of men returned from a motorised and mechanised war, but in making practicable a scheme of decentralisation, in making it possible for people to live outside the cities or industrial areas, and in assisting those who take up land to keep quick contact with their buying or selling markets. Discouragement of motor vehicle ownership through unjust taxation and high operating costs, or through harsh regulation, will militate against the fullest employment by the people of a means of transport conducive to ■ health, happiness, and independence, just as it will militate against post- : war development and rehabilitation."