HIGHWAYS FUND

Manawatu Standard, Volume LI, Issue 199, 24 July 1931, Page 6

HIGHWAYS FUND

PETROL tax allocations. SHARES F O R c nACKB LOCKS AND fßv Telegraph.—Special to Standard.) (By ie g ELLING xoN, July 23. The Government’s intention to set up a select committee to investigate Alain Highways Board finance and Se Station of portion of the petrol tax is a significant move which will lead to legislation this session. the original system of financing the Mum Highways Board was by motorists contributions through the tyre and petrol taxes supplemented by annual grant, from ’ the general taxation revenue. Under this arrangement with a fourpenny petrol tax sufficient revenue was available for the requirements until 1930 when the Government increased the petrol tax to sixpence and made an important change in the policy. The Government decided that the whole burden of road finance should be moved to the shoulders of the road user. Annual subsidies from the Consolidated Fund to the local bodies in respect to general rates were required to be paid from the Highways Fund, and a definite proportion of the additional petrol tax estimated by Mr Mr Forbes- to produce £130,000 to £140,000, alocated for expenditure on backblock roads. AN EXPUtING AUTHORITY. The provision for ear-marking portion of the highways revenue for the construction and maintenance of roads which are not main highways will, according to the Finance Act, 1930, expire at the end of August. It is, therefore, necessary to reconsider the whole matter as the country s finance is still in the difficult position which warranted the change in highways finance a year ago. There appears still to be a financial necessity to restore the Consolidated Revenue of all highways liability, and to continue to allow the extra petrol tax to carry the load. It was contended by the Prime Minister last year when the Finance Act provisions were under discussion that the original arrangement for suosidies to the Highways Board from file general revenue were never intended to continue for all time. When this arrangement was made there were surpluses of a million annually and the Highways Board had a- very small sum at its disposal. ALLOCATIONS TO CITIES. During the discussion on these changes last session strong exception was taken by city members to the fact that the allocation of eight per cent, of the petrol tax receipts- to the cities and borouglis over 60u0 population was inadequate in view of the heavy expenditures in these areas and the large proportion of the petrol tax provided by their residents. They had received eight per cent, of the fourpenny tax and the same revenue was expected by allocating to them 5% per cent, of tne sixpenny tax. The result of this modification can now be proved. At the time this provision was under discussion, the Prime Minister promised that early in the 1931 session there would be an investigation of this question, and the proposed committee is in accordance with that undertaking.

PARLIAMENT LOSING CONTROL

Another important question which will be raised at the coming inquiry is that of Parliament’s control over the highways funds. Attention, has been drawn by the Comptroller and Auditor-General to the large proportion of public finance which is not subject to annual review by Parliament owing to the legislation which prescribes regular supplies of money without the necessity for annual appropriation. In the case of the Alain Highways Board Parliament takes the responsibility for imposing ■ heavy taxation on the motoring section of the community, and beyond the general directions contained in the main highways legislation has no further control over the money. The Main Highways Board handles approximately £1,500,000 in revenue collected annually in addition to loan appropriations, its gross expenditure being considerably in excess of £2,000,000 per annum. There has been considerable concern over Parliament’s lack of control except over the revenue raising, •and this is shared by the Prime Minister who, when the legislation now requiring revision was being passed, remarked: “In connection with the highways fund, I find that the claim is made that nobody shall touch this fund, but I feel that the time liascome when we will have to look into the whole question of the Highways Board and see exactly where we stand in regard to it. I think we are getting into a very unsound position when it is claimed that nobody can put a hand on the funds and the suggestion is made that no change can be made in the incidence of taxation. I consider that a very unsound position for any country to be in in connection with its taxation, and during the next session my intention is to have the whole question submitted to the Public Accounts Committee to see if the present system of highways taxation can be put on a more satisfactory basis.”

The Prime Minister, in view of the large number of issues associated with the highways finance, has preferred to send the matter to a special select committee and it will report in time for the Government to consider its recommendations when framing the financial legislation which must be passed before the session ends. The committee will comprise llim. \V ; . B Taverner, Minister of Public Works'; Hon. E.. A. Ransom, Minister of Lands ; Messrs Armstrong, Broadfoot, Campbell, Clmkard, Hamilton, Healy, MacMillan and Martin.