MAIN HIGHWAYS FUNDS

New Zealand Herald, Volume LXIX, Issue 21325, 28 October 1932, Page 10

MAIN HIGHWAYS FUNDS

The National Expenditure Commission categorically condemned the existing system of main highways finance, recommending that it should be swept away, that the proceeds of special taxation of motor vehicles should be paid into the Consolidated Fund, and that road finance should be subject to rigid Parliamentary control. It urged this in both its interim and final reports, increasing the emphasis and amplifying its arguments in the second recommendation. The Government will not take the course advocated, for the Prime Minister gave an assurance yesterday to a deputation that the separate account of the highways fund would not be abolished. The commission based its contention on the inadvisability in principle of earmarking taxation for special purposes, and of giving any board or controlling authority proprietary rights over it. Theoretically there is a case against earmarking taxation, or interfering in any way with Parliamentary control of the yield from any source whatsoever. There are, however, special circumstances surx'ounding the question of highways funds, their origin and use. If the policy of making the user pay for the road is sound, it is only just that what he pays should be spent to that special end, a condition on which there would be no certainty if the commission's advice were followed. That principle underlies the Avhole system of motor-taxation, and is responsible for the equanimity with which it is accepted. If the highways fund were abolished, the entire

basis of the system would be removed. The public would not be any more assured of prudence and economy in the use of the money if its control were handed over to Parliament. In addition, at least part of the commission's argument is founded on mistaken premises. It blames the existence of the revenue fund for extravagant road development ; but the revenue fund is primarily intended for road maintenance. Capital for road development comes, under the Main Highways Act, from entirely different sources. The deputation said yesterday that the roads were deteriorating for lack of adequate maintenance. This opinion will be widely endorsed. The deterioration threatens the loss of capital sunk in construction ; if the revenue fund is abolished and the whole maintenance system thrown into the melting-pot the deterioration is likely to proceed further and faster, the loss of capital assets to be greater. How this would serve the cause of economy is by no means clear. Extravagances and anomalies there may be under the existing system, but to suggest its entire abolition hardly appears a constructive proposal when it, is examined.