PETROL TAX PROPOSALS

Evening Star, Issue 18533, 16 January 1924, Page 5

PETROL TAX PROPOSALS

HOT THE OFFICIAL POLICY. MINISTER JUSTIFIES HIS VIEW. tPsB Unitsd Pares Association.] AUCKLAND, January 15. “I am not speaking for the Government when I advocate a tax on petrol. That is purely my personal opinion. As a matter of fact, the Motor Vehicles Bill proposes no such thing. Instead,' it provides lor a fiat tax on motor cars.” Such was the reply of the Minister of Public Works (the Hon. J. G. Coates) when asked to discuss the criticism by the Otago Motor Club and the Canterbury Automobile Association of his suggestion, made on several occasions during his North Auckland tour, that a petrol tax would be the most equitable manner in which to make Dio user pay for road maintenance.

Asked what particular advantages he thought would accrue from a petrol tax, the Minister said: “In tho first place, it would be a direct tax as I would impose it. You always get tho greatest net return from direct taxation. Income tax is a case in point. It costs loss to collect than indirect taxation. The tyre tax is a case in point. Tho trader takes his profit on the cost of the tyre to him, plus duty. Thus, while tho Government is getting £150,000 out of the tyre tax, the motorist is paying another £30,000 to £60,000 a year in tho extra profit the trader takes, based on the cost, plus duty. The precise figures I have not beside me, but they can be obtained. However, the point is clear—tho motorist is paying 20 to 40 per cent, more than ever reaches the main highways fund. That is why it is economically unsound to raise tho tyre tax, say, from 25 to 50 per cent, to obtain maintenance funds. The flat tax is not an ideal method of making the user pay for tho roads. Take the case of the North Auckland farmer whose car is immobilised during the winter months, as against that of tho fanners in Taranaki on bitumenised roads throughout the year. That brings us to the petrol tax. Personally, I think it is the most equitable way of making the user pay. My opinion is supported by the experience of one of the most progressive States in America —California—v/hich has dropped all other taxes on motors and adopted the petrol tax.” Asked how he would get over the expensive method of indirect taxation, (Mr Coates replied: “ The consumer pays for his petrol as he buys it. It is an additional charge like the amusement tax. The trader will have put on his profit before the tax is added. If the petrol is to be used for launches or milking machines or nonvehicular purposes, then a certificate of exemption must be produced by the purchaser. Evasions should be easily pro- ; vided against. “I believe that opposition to the petrol tax comes chiefly from tho motor trade. Lhider the system I have outlined the trader would not get his share of the tax, and the net return to the Highways Maintenance Fund would be high, much higher than if tho tyre tax wore doubled and the trader still took his profit on the cost plus a doubled tax. The user of the roads, I believe, is prepared to pay for their construction and maintenance. He must be careful that ho is not tugged at the heels of the trader. “The Main Highways Act gives us £150,000 with which to pay interest on loans for capital expenditure on roads. We want another £150.000 annually for maintenance, so that our capital chall not all bo dissipated. In a few years the petrol tax as I have suggested would be the cheapest and most equitable way of making the user pay; but these are rav own individual opinions, not the official policy as enunciated in the Motor Vehicles Bill.*’