TRANSFER OF CHARGES.

New Zealand Herald, Volume LXVII, Issue 20625, 25 July 1930, Page 13

TRANSFER OF CHARGES.

PAYMENT BY HIGHWAYS FUND.

FORMER GRANTS WITHHELD.

USE OF NEW PETROL TAX. ONLY PORTION FOR ROADS. [nr TELEGRAPH. SPECIAL REPORTER.] WELLINGTON, Thursday. Proposals for the transfer to the Main Highways Fund of charges previously borne by tho ordinary Budget aro contained in the Financial Statement.. They amount to £316,000, against which the fund will receive £450,000 from tho increase in petrol taxation; tho balance is to be used for subsidiary highways in outlying districts. The Prime Minister said that in the past the highways account, in addition to tho proceeds of tho petrol tax, tyre tax and other earmarked revenues, has also received from the Consolidated Fund an annual grant of £35,000, and from the Public Works Fund £200,000 of capital per annum free of interest. About £25,000 of the petrol tax and licence fees is paid by Government departments. To assist in meeting tho shortage in tho Consolidated Fund it is proposed to mako the following adjustments in connection with the finances of tho highways account: (a) Discontinue (ho annual grant of £35.000 from the Consolidated Fund.

(li) Recover from tlin Highways Revenue Fund interest on the capital transfers from the Public Works Fund to tho Main Highways Construction Fund. Transfers to date amount to £1,226,000, and interest at 5 per cent, on this amount will bo recouped to tho Consolidated Fund during this and future financial years. The loans from which the transfers wero drawn cost on tho average about £5 3s 4d per cent. No further transfers to the Highways -Account will be made, and in future the whole of the loan capital required for main highways construction will bo raised specially for that purpose. Subsidies to Local Bodies.

(c) Transfer to tho Highways Revonue Account as from April 1 last the charge for subsidies to local authorities on rates. These subsidies are at present paid out of tho Consolidated Fund. They amounted last year to approximately £220,000. Tlicso subsidies, which were first introduced nearly half a century ago, were intended to assist backward counties and boroughs to improve the roads of tho country. Tho original intention was to pay the subsidies for a period limited to 25 years, but they have now become part and parcel of the normal finance of the local authorities. However, as the subsidies are given for loading purposes, and as the incidence for road construction and maintenance has been wholly altered by tho advent of motor traction, it is quite appropriate that these subsidies should be a charge against the taxes earmarked for reading purposes. Relief to Budget and Railways. Tlicso financial adjustments will assist the Consolidated Fund to the extent of £316,000 for this financial year. Incidentally, meeting that additional amount of the reading costs out of the petrol tax will also assist in the direction of putting road competition with tho railways on ii more equitable basis. Although tho aggregate of the annual expenditure on roading is now approximately £3,600.000, it is considered that up to the present insufficient attention has been given to the back-block roads, where more expenditure would greatly assist land settlement and be of much benefit to the settlers in outlying districts. Expenditure ori such roads would help the production of the country to a far greater extent than much of the present, expenditure. Accordingly, the Government proposes to arrange for a substantial amount out of the proceeds of the petrol tax to be expended on subsidiary highways through outlying districts each year. This expenditure will assist rather than undermine tho railway revenue.

To provide the necessary funds to enable the Highways Account to meet nil these liabilities without disturbing the present financial arrangements of the Highways Board, a resolution has been passed increasing (ho petrol tax from 4d to 7d a gallon. For thf remainder of the financial year the additional 3d a gallon will, it is estimated, bring in £450,000. Of this amount. £316.000 will be required for the liabilities taken over from the Consolidated Fund, leaving £134.000 for additional expenditure on subsidiary highways through outlying districts. In a full year about £350,000 should be available for the latter purpose.

SAVINGS ON RAILWAYS.

ESTIMATES REDUCED £360,000

CAIN OF £90,000 IN REVENUE

[BY TELEGRAPH. —SPECIAL REPORTER. ] WE LLINGTON, Thursday.

Dealing with tho financial position of the railways, tho Prime Minister said on tho basis of last year's operations tho net loss for the ensuing year was esti mated at about £1.300,000. The department has been required drastically to overhaul its estimates of expenditure, which, compared with last year's expenditure, have been reduced by £360,000 This means the curtailment or elirnina lion of nnremunerative services, and. while the cutting down of train services is regretted, it must be recognised that such action is essential if savings are to be made.

The possibilities of increasing thu revenue have also received attention and the steps being taken will, it is estimated, lead If) an increase of about £90.000, making a total immediate improvement of the position calculated to reduce the estimated shortage for the year by £450,000. In addition, a Royal Commission is engaged in reviewing all the activities of the department in order that they may advise the Government where further economics can be effected.

STATE CONTRIBUTIONS

THE UNEMPLOYMENT FUND.

NO SPECIAL PROVISION MADE

[BY TELEGRAPH. —SPECIAL REPORTER.] WELLINGTON. Thursday.

The subsidy to be paid from the Consolidated Fund to the Unemployment Fund under the provisions of the Unemployment Bill was referred to by the Minister during the course of his statement.

Mr. Forbes sain that as the proposed scheme would bo in operation only for the last three months of the financial year and as that period was tho best time of the yeai from the point of view of employment, it was considered that very lit lie, if anything, would be required from (he Consolidated Fund this year ovei and above the cost of tho present relief measures. Accoidingly, no special provision had been made iri the Budget for payments into tho Unemployment Fund. Next year, of course, the additional burden on the Consolidated Fund ■would have to be taken into account in preparing the Budget.