TAXATION ON MOTORISTS

Greymouth Evening Star, 1 April 1935, Page 3

TAXATION ON MOTORISTS

MINISTER’S REPLY

[PER PRESS ASSOCIATION.]

AVELLINGTON, 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 .Finance, who said: “In their statement, the motorists point out that in 1923, the Government collected from motor vehicles 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 2d per gallon off ,the petrol tax and states last year, ,the declared value of motor imports (including petrol) was £3,756,516, but that tho landed cost of these imports was £8,387,449, the increase being composed of duty, sales tax, and exchange. The Minister draws attention to the fact that the total burden of taxation is not peculiar to motorists, but applies to all taxpayers, and that the adverse exchange rate applies to the whole of imports into New Zealand, amounting to £25,719,266, of which only £3,656,516 was in respect of motor vehicles, etc, “It is stated that £5,336,537 was collected by the Government from motorists,” continued the Minister. “Analysis, however, of the figures supplied revealed several inaccuracies. Customs duty on motor vehicles, parts, tyres and lubricating oils was overstated by £lOO,OOO, refunds at 6d a gallon on 5.578,000 gallons to nonmotorist users, was not allowed for £139,450, the 4Ad a gallon paid by non-motorist users was not allowed for £104.587. The 25 per cent, exchange was not collected by the Government, but was common to all imports. The general taxpayer also paid on Government imports and remittances for debt services £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, total £1,523,166. 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 follow: —

The major portion of transport was used for business purposes and it should be remembered that incidence of taxation did not rest where it fell, but was passed ou to the general public in the form of increased charges. It should also be borne in mind that car mileage was 25 to 40 miles a gallon, wheras with heavy trucks and omnibuses the mileage was from 5 to 12 miles a gallon. It is 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, 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 consiuered as household necessaries and which were formerly free, have been subjected to taxation; sugar, tea and sales taxes were instances. Owing to the pressing needs of the main highways account, have been made by the Highways Board for restoration of the amount of the petrol tax, at present diverted from the Main Highways Fund to the Consolidated Fund. If this concession was io be made, any reduction in the ear,marked petrol tax (6d) would have the effect of nullifying the benefit to the Highways Account, while the reduction of Customs duty on petrol ,(4id) would directly affect the Consolidated Fund, and would tend to restrict any proposals for relief of the Highways Fund. AVith regard to ( the reduction in the rate of the unemployment tax this was not restricted to any particular section of the taxpayers, but was general, and motorists participated in benefits to the .same extent as the other taxpayers. The demands on the Highways funds are ever increasing and if any concession is granted it should be by way of reduction in the petrol tax retained in tho 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 tlie year 1935-36 is formulated. Demands for reduction in taxation are being received from all sections of the community, and if any relief is to be granted, it is considered that firstly it should take the form which would benefit the greatest number of taxpayers.”

Cars Light Heavy trucks trucks p.c. p.c. p.c. Farming Industry 30 33 37 Business Purposes 31 58 11 Private and family use 19 TH fl