HIGHWAYS FUNDS.

New Zealand Herald, Volume LXVI, Issue 20366, 21 September 1929, Page 12

HIGHWAYS FUNDS.

OBSCURE INTENTIONS.

PRIME MINISTER'S VIEWS.

A NEW- INTERPRETATION.

The representative deputation of motoring, local body and commercial interests which waited on the Prime Minister, Sir Joseph Ward, in Wellington on Thursday, to appeal against interference with the funds of the Main Highways Board was left guessing. The deputation sought light on the proposed cessation of the annual grant of £35,000 and the threatened conversion of the free grants of £200,000 into in-terest-bearing loans. After the discust sion some members of the deputation left with the impression that there had been a chameleon change ' somewhqre, Sir Joseph Ward's explanation being difficult to reconcile with his statements in Hansard.

Tho Prime Minister took exception to some of the remarks made by the deputation, and said that there had been misrepresentation. He asserted that he had never made any statement which justified the assumption that the £200,000 would not go to the Highways Board this year. It had been suggested that .the board should pay, interest amounting to £II,OOO a year on this sum, but that would not bo definitely determined for a few days. Ho assured the deputation that it was not proposed to charge interest on grants which had been made in the past. Statements in the House.

The deputation had gone prepared to argue on Hansard and the Prime Minister's explanation was in conflict with some of the points to which most exception was taken.

On August 22, Sir Joseph stated in tho House that the references in the Main Highways Act to the £35,000 grant and the £200,000 transfer were no more than an expression of policy when the Act was passed. After referring to the income from, special motor taxes ho said: "It is not now necessary to make an annual grant of £35,000 out' of the general revenue of the Consolidated Fund." A further statement was: ,4 In regard to loan money provided for construction purposes, it is not proposed iri the meantime to make any further transfers from the Public Works Fund," and "It is intended to provide for the recovery of interest paid in the future on amounts transferred in the past from the Public Works Fund." An indication of the Prime Minister's original intention regarding interost payments was given in the following statement: "I think there can be no doubt that the Government is justified in saving tho Consolidated Fund in this way, instead of increasing general taxation to obtain £85,000 more revenue." The sum of £85,000 mentioned by Sir Joseph was obviously compounded from the £35,000 grant with £50,000 as interest on previous contributions.

" Resources More Than Ample.".

On August 123 tho Hon. A. £t worthy said: - It is not, however, pr> posed to recover interest for b£ck years on such transfers.' 'ln effect, it simply means that for this and succeeding years some £50,000 additional interest will be recovered from the Main Highways Account."

Sir Joseph made a significant statement in a letter sent to three members of the Main Highways Board on July 16. Ho stated: " The resources of the Main Highways Revenue Fund are more than ample to meet current requirements, and accordingly this fund must assist to make good the shortage in other directions. I therefore regret that I am unable to amend my decision to provide the whole of tho new capital for Main Highways Construction Fund by direct allocation instead of partly through the Public Works Fund." Again, on August 27, Sir Joseph wrote to the secretary of the North Island Motor Union as follows With reference to your telegrams of August 23, the position regarding highways finance has changed considerably since the Act was passed in 1922, taxation earmarked for highways now providing ample revenue, so that it is unnecessary to continue the additional grant of £35,000 or provide £200,000 free capital out of the Public Works Fund, which additional assistance is not justified in view of the general financial position to which all Government accounts must be subject. All capital considered necessary for highways construction will bo provided, but by direct borrowing for highways account The Government policy in respect of all such matters cannot be regarded as fixed regardless of changing circumstances, and no breach of faith can arise in dealing with public funds in the best interests of the Dominion as a whole."