HIGHWAYS FINANCE

Evening Star, Issue 20942, 5 November 1931, Page 3

HIGHWAYS FINANCE

♦ ALLOCATION OF MOTOR AND PETROL TAX SHOULD ALL BE EARMARKED FDR ROADS PETROL PRICE MAXIMUM RECOMMENDED OR TAX ON FOREIGN CORPORATIONS Uxitis PxEta Association.] WELLINGTON, November I. Important recommendations are contained in the report of the Select Committee set up to inquire into highways finance in general, and into the allocation of the proceeds of the petrol taxin particular. The report was tabled in the House of Hepresentatives to-day. The conWittcc recommends that the separate fund now called the Highways Fund should bo maintained, but that it should in future bo designated the Hoads and Bridges Fund, and that all the proceeds from motor and petrol taxation should bo paid into this fund, and also that the whole of the funds be earmarked for reading purposes. This would call for an amendment to the existing legislation. In addition this fund should be called upon to contribute substantially to the construction and maintenance of roads other than highways. “ The committee recommends that a system of automatic allocation should be instituted,” says the report, “ and sums in the fund mentioned should he automatically allocated to the road districts, similar to the principles adopted in the allocation of public works expenditure of a developmental nature, but utilising factors more suitable to the particular requirements of the ordinary main roads and by-ways.” In the opinion of the committee, based on the evidence heard, there is a definite indication that petrol is a present-day necessity, and the consumers m New Zealand are being charged too highly for the commodity by those who have control of thb supply and distribution. As the committee cannot recommend the Government to undertake the conduct of this essential industry, it recommends that the following protective measures be adopted by legislative enactment:—• (a) That the maximum selling price to importers in bulk at terminal points bo fixed at twopence per gallon, plus the import duty, above world parity price. (b) That the maximum selling price ex. bulk tanks in New Zealand be the maximum buying price plus twopence per gallon. (c) That any financial person requiring lots of 200 gallons or more should have the right to buy at these prices. As an alternative the committee suggests that a foreign corporation tax of at least threepence per gallon should bo levied on foreign corporations operating in New Zealand. The evidence which the committee received shows that the initial invoices and charges for freight, etc., have been manipulated, with the result that ‘lie national revenue has not received the income tax it would otherwise have received. In the opinion of the committee the suggested foreign corporation tax may produce the desired result. The committee is in favour of relief being given in the direction of derating farm lands for reading purposes. With reference to boroughs of under 6,000 inhabitants (in particular those which had completed most of their paving without assistance from the Main Highways Board), it is suggested that legislation bo introduced to allow these boroughs the option of applying to be grouped with the cities and boroughs of over 6,000 inhabitants for the purpose of receiving a contribution from the 8 per cent, petrol tax allocation for direct distribution among the cities and boroughs of over 6,000 inhabitants, the Main Highways Board to have full jurisdiction in considering and granting application. With the exception of Newmarket (Auckland) all boroughs of under 6,000 inhabitants have their arterial routes declared main highways, and they receive a subsidy from the board toward the cost of construction and maintenance.,

Where the. application .of any borough under the proposal is approved by tho board, the board should have power to revoke tho declaration of main highways under which such ■boroughs receive a contribution for construction and maintenance.

Having given careful consideration to this important subject, the committee earnestly recommends the Government to give effect to the decisions arrived at.

When the report was tabled in the House, Mr W. Lee Martin (llaglan) said ■ that investigations into the importation of oil and petrol had shown that petrol could be landed in the dominion at Is OJd per gallon, and the cost of distribution was not more than threepence per gallon. There was no doubt the oil companies had been reajiing excessive profits. Mr J S. Fletcher (Grey Lynn) said ib was alleged that tho oil companies’ accounts had been manipulated, and if that were so. the companies had not been paying full income tax. Mr C K. 'Macmillan (Tauranga) said if effect were given tr the recommendations of tbo committee, and the petrol duty were raised to lOd a gallon, there would be a return to tho Highways Fund of £2,833.000 a year or £133,000 more than tlio duty of 6d provided. A substantial drop in tho price to the consumer would enable a greater amount of petrol to be used. Mr Stewart (Minister ot balance) said tho question of price fixation was one of the most difficult a Government could face.