OTHER PAPERS’ OPINIONS.

Matamata Record, Volume XIII, Issue 1140, 21 July 1930, Page 4

OTHER PAPERS’ OPINIONS.

DE-RATING.

The discussion over de-rating and the petrol tax at the Morrinsville Farmers’ Union meeting was interesting, but being confined to generalities of an ideal did not render it very valuable. To discuss an economic question with its wide reaching ramifications without the fullest data or consideration of the bearing on other interests is only apt to create false impressions and to lead to fallacious assumptions. That the users of roads should contribute to their cost is practically universally admitted. Experience has proved that the petrol tax is the most equitable and easiest method of securing this payment. It must be admitted that the burden of rates on the farming community for maintenance and construction of roads is becoming excessively high in many districts, especially those in which supplies of good metal are scarce. Reduction of rates is only practicable through an increased contribution from those using the roads, and there is justice behind the claim that this should be raised. This brings forward the suggestion that country lands should be de-rated for roading purposes, and the cost raised by an increase in the petrol tax. On the face of it, such \ appears a very simple solution, but a little examination will reveal very many pitfalls.

If the basis is that those who use the roads should pay for them, then logically why should de-rating be confined to country lands? Surely the small towns are just as much entitled to be relieved of rate liability for roads as the country districts? Many of them have been Under a disadvantage in the past that no subsidy was received from the j Highways Board for construction of tar-sealed roads. It is also a certainty that the cities will lay a claim to similar treatment. It is here that data '.ia needed to determine the jus-

tification of a claim or the proportion of it. For the year ending 1928

the rural section grouping counties and road districts paid £2,078,730 in

rates and’ the urban section of boroughs and town boards £2,952,231.

Approximately the rural communi-

ity raised £2 in rates, to £3 of the urban centres. In the year referred to rates supplied about 75 per cent of the revenue of counties and 35 per cent of boroughs. The further dissection of rates as to whether general or special, information as to the amount of subsidies or grants to the construction of roads is essential before balanced consideration can be given to this aspect. The determination of the price of benzine is governed by many things, and it cannot be assumed that advance to one shilling as suggested is going to give total relief to the rural community. It may be accepted as reasonably certain that the higher the increase the more persistent and more likely of success will become the claims of the urban section to their share. For the year ending 1929 the petrol tax produced £730,414. But it must not be taken as a fact that a shilling tax will produce three times the amount. To hope that the addition of eightpence in taxation will not affect the price and that the oil companies will bear it is to be altogether too optimistic, and to express a belief in the philanthropy of big commercial concerns unwarranted by experience. Increased prices will diminish use, and lessen the revenue.

It was urged that the high petrol tax would relieve the roads of transport by forcing the greater use of the railways. But that may provide an indirect cost. The adjustment of railway and motor traffic can only be on the basis of which provides the most economic ana best means of transport. Any artificial aid to either will create a delusive condition reacting to the detriment of the community. In co-ordinatiop of the transport methods a reasonable charge for the use of the road must be made against motor traffic, but if excessive it simply adds to the indirect cost.

Farmers are very prone to remind the rest of the population that everything comes back on to the land. There is always the danger that an increase of indirect taxation will Seriously diminish the gain through a reduction of the direct process. - For this, it, is t always advisable "to examine all proposals from every angle, so as to obtain the proper perspective. To accept that the increase of the petrol tax must bring about a total gain is to take a -false view of the subject. Subtraction of indirect loss from direct gain is needed to provide a basis for calculated judgment. There are many other points which can be mentioned. But the conclusion is reached that de-rating is not nearly as simple a process as may appear at first sight; on the other hand the more carefully it is examined and studied the more complicated and intricate it becomes. A greater question at the present moment than de-rating is what are the Government’s intentions in regard to the petrol tax? Indications point to’ an increase, which will go to the revenue of the Government, not to the roads. It seems almost a certainty that the Government grant of £200,000 to the Highways Board will not be forthcoming this year. Will the Government take the amount raised by the present petrol tax for revenue purposes? This is a matter which alike affects the farmer and the user of roads, as a contributor to the fund. It would be better if for the moment the parties concerned concentrated on this, leaving other subjects on which there is not such unanimity of opin-

ion to wait until this matter is settled.—Morrinsville Star.