MOTOR TAXATION

Evening Star, Issue 21993, 1 April 1935, Page 15

MOTOR TAXATION

MINISTER ANSWERS NORTH ISLAND UNION FIGURES DISPUTED fPfiR U KIT BO FUli AMOeUTIOK.] WELLINGTON, March 30. 'A reply to the memorandum on motor taxation issued by the North Island Motor Union on March 18 was made to-day by the Minister of Defence (Mr Coates). In their statement the motorists point out that in 1923 the Government collected from motor vehicle owners £795,062, and that “ last year’s burden reached the colossal sum of £5,336,537.” The union asks the Government for immediate relief to the extent of at least two pence a gallon of the petrol tax. The memorandum states that last year the declared value of motor imports (including petrol) was £3,756,516, but that the landed cost of these imports was £8,387,449, the increase being composed of duty, sales tax, and exchange. In his reply the Minister draws attention to the fact that the burden of taxation is not peculiar to motorists, but applies to all taxpayers, and that the adverse exchange rate applies to the whole of the imports into New Zealand amounting to £25,719,266 sterling, of which only £3,656,516 was in respect to motor vehicles, etc. “It is stated that £5,336,537 was collected by the Government from the motorist,” continued the Minister. An analysis, however, of , the figures supplied revealed several inaccuracies. Cutonis duty on motor vehicles, parts, tyres, and lubricating oils was overstated by £IOO,OOO. Refunds at sixpence a gallon on 5,578,000 gallons to non-motorist users was not allowed for, totalling £139,450, 4}d a gallon paid by non-motorist users not allowed for totalling £104,587, and the 25 per cent, exchange was not collected by . the Government, but was common to all imports. The general taxpayer also paid that on Government imports and remittances for debt services, the total amounting to £939,129. The following are not the responsibility of the Government: —Heavy traffic fees which are collected by certain local authorities and distributed by arrangement, £180,000; drivers’ licenses, which are collected and retained by local authorities issuing the license, £60,000.

“The total amount of Government collections from motorists amounted to £3,813.371. The 1934 report of the Commissioner of Transport showed that motor vehicles were owned approximately as follows; — Per cent Farming industry— Cars 30 Light trucks 33 Heavy trucks 37 Business purposes— Cars 31 Light trucks f>B Heavy trucks j, II Private and family use—' Cars ... ... ... 76 Light trucks 19 Heavy trucks 5 “ The major portion of the transport was used for business purposes, and it should be remembered that the incidence of taxation did not rest where it fell, but was passed on to the general public in the form of increased charges. It should also be borne in mind that the car mileage was twentyfive to forty miles a gallon, whereas with heavy trucks and omnibuses the mileage was from five to twelve miles a gallon. It was doubtful whether a reduction in the tax would be reflected in reduced charges to the general public. “ With regard to the comparison with 1923,” added the Minister, “ the figures are not comparable, as it has been found necessary, in order to supplement the shrinking revenue, to tap entirely new sources and increase the existing taxation in order to balance the Budget or bring the deficit within controllable dimensions. Many items in general use, which are considered as household necessaries and which were formerly free, have been subjected to taxation. The sugar and tea sales tax were instances. Owing to the pressing needs of the main highways account representations have been made by the Highways Board for the restoration of the amount of petrol tax at present diverted from the Main Highways Fund to the Consolidated Fund. If this concession were to be made any reduction in the earmarked petrol tax (6d) would have the effect of nullifying the benefit to the highways account, while the reduction of Customs duty on petrol (4sd) would directly affect the Consolidated Fund and would tend to restrict any proposals for the relief of the Highways Fund. “ With regard to a reduction in the rate of the unemployment tax, this was not restricted to any particular section of the taxpayers, but was general, and the motorists participated in the benefits to the same extent as other taxpayers. The demand on the highways funds arc ever increasing, and if any concession is granted it should be by way of a reduction in the petrol tax retained in the Consolidated Fund. The question of tax reduction is one affecting the budgetary policy, and cannot be decided until the financial position at the end of the year is known and the Budget for the year 1935-36 is formulated. Demands for a reduction of taxation are being, received from all sections of the community, and if any relief is to Iks granted it is considered that, first, it should take a form which would benefit the greatest number of taxpayers.