EXPENDITURE ON ROADS

Otago Daily Times, Issue 20252, 10 November 1927, Page 10

EXPENDITURE ON ROADS

ANNUAL LIABILITY, £1,823,000 TAX ON MOTORISTS. STATEMENT BY PRIME MINISTER (From Oun Parliamentary Reporter.) WELLINGTON, November 9. That New Zealand’s/'annual liability in respect of its roads amounts to £I,B^O,GOO, and that of this total motorists will contribute £930,000 in direct taxation, leaving £895,000 still to bo found by the local bodies, were points made by the Prime Minister in the House of Representatives to-night in the course of an analysis of reading finance when speaking on the second reading of the Motor Spirits Bill. “The money that will be derived from tbo petrol tax will not be used for the repayment of the capital cost of the roads/’ said Mr Coates. It be used primarily for tho puropso of maintaining tho roans.” It was all very well for men like Sir Joseph Ward to talk of the capital sum represented by tho petrol tax, continued the Prime Minister, but they surely could not advocate borrowing £1,000,000 a year for roads as a scheme likely to oencfit tho country, and then in the next minute belabour the Government for borrowing. “Wo have seen roads which have boon built with money provided »by longterm loans, and wo have seen that capital torn to pieces in five years, while in 10 years nothing could be seen of tho money, invested in them. Somebody has got to pay. Some day the chickens must corns home to roost. The Government has seen th© danger, and it has laid down tho policy that the repayment of the capital put into roads must b© made within the life of the road and that the users of the road must help. ■ “ The situation which had been revealed in an examination of the Dominion’s road and their finance was enough to make anyone pause and ask if we were going on the right lines. The capital expenditure on the 9400 miles of roads affected by the present Bill, comprising 6000 miles on main highways and OWU miles on secondary highways, was estimated by the Government engineers to be £15,000,000. This money had been borrowed for the purpose and for it the taxpayers were responsible. The duty of repaving it was on them, but taxation could not be steadied up if .the Dominion continued to follow that principle Mr Coates said he considered it was a fair thing to say that when money was borrowed for tho specific purpose of providing roads to carry motor traffic that traffic should carry its proper proportion of tho responsibility. The inteiest on the £15,000,000 invested on the 9400 miles of main and secondary highways was £7s °'”'" and tho maintenance costs wore a littio over £1,090.000. In addition a-ha.t per cent, had to be provided for the repayment of the borrowed money, bringing the Dominion's total annual liability m respect to 'these roads up to £1,825,000. . . . “ What money are we receiving rnect this annual liability? asked the Prmie Minister “From the registration tees and license fees wo, get £300,000 a year. The tyre tax does not come into con sidcration in this respect, for that revenue is ear-marked for the payment of interest and sinking fund on the £3,000,000 of loan money raised for the 6000 miles of main highways. Tho petrol tax will yield £630,000, making the total from tho motorists £930,000. This leaves a deficiency of £985,000, which has to be provided by the local bodies tO (> meet the balance of the annual liability. Mr Coates said that apart from the roads affected by the Bill there were approximately 31,000 miles to their cost to the country being about £20,000,000.. It was impossible t ° B i y e exact figures in respect of these loads, which had been constructed for development purposes. When they examined the position in regard t° aH the roads and the demands for good highways it n. s time to look into the supposed magic well and see whether the money wa» really there to pay for them. It was certainly not there. Railway companies made a practice of ascertaining the whole of'their operating maintenance and other costs and then adjusting their tariff accordingly, and if that was reasonable in the case of Hie railways then it was logical that the same principle should be applied to the roads.- The user should paj. , , The Prime Minister said that the petrol tax was fair in that the consumption of petrol was affected by the weight and speed of the vehicles, factors which counted in road usage. To suggest that all forms of motor taxation for load pm noses should be abandoned in favour of a larger income tax was neither fan; nor practicable. It was not posable by a petrol tax, however, to say 'veights should be allowed on certain roads, that could be fixed only by reference to the standard of the road. It was quite reasonable if the road could carry only a certain maximum load .0 decree what size loads should be allowed upon it. .It had long been said that if the roads improved the value of a settler’s land then he should mv' more in rates, but there was a limit to‘that! We could not expect to go on passing on the burden to tlicratcpaycrs In this connection New Zealand had before it the experience of America and Spain, where the burden of local rates were such that thousands i*# 5 acres of good land had to he idle because of the inability of the settlers to meet the accumulated rates. Secondary industries could either pass on their increased costs or clc..c up, but this was not possible with property. Within JO or 40 miles of Wellington there were cases of settlers who, if they were asked to pay their back rates, would bo compelled to give up their holdings. From 1907 to 1916 the average rates—general and hospital—had almost doubled, and between 1916 and 1920 they had ahnosv doubled rrii firrurcs were: —-190/, t4io,uuu, 1916, £909,000; and 1927, £L900,000. “ When we look at these totals, added Mr Coates, “ we can realise what has happened and we are safe in saying that we cannot optimistically look » very much of an increase in the prices for our products, and therefore we can no longer ask the land to pay more in anticipation of increased land values. We are gradually coming back to stabilised to a point raised py Mr T. M. Wilford (Hutt), the Prime Ministei intimated that a bonding system had been ■n-nnged for. From another quarter that day had come the suggestion that the tax should be 2d on petrol, and that the balance should be made. up on the tyic tax. “It is no use splitting hairs, the Prime Minister. I think the tax is a fair one. No one is going to deny that it is a big one. The interpretation placed on the position by .Mr Savage is an incorrect one. The principle is that the user should pay.” There would, added Mr Coates, be exemptions for everybody other than those who used the roads, namely, those using trucks, launches, maC!lln |lr F° - N. Bartram (Grey Lynn): What about the man with the three-ton truck who is earning £5 per week. . The Prime Minister; Is that seriously talked about? What is the difference between his position and that of the company which rims 20 trucks? It has to pay exactly the same. Mr G. W. Forbes (Hurunui): Are you goiiif' to charge electrically driven vehicles? Tim Prime Minister: No, they come under the heavy traffic provisions. When the motorist makes up his mind he will pav (ho tax provided he can get results. (‘■'Hoar, hear.”)—l admit it is a swingeing’’ tax, but is it not best to tackle the situation and not bother about the political aspectSo far wo have had no reasons which cause us to come to any conclusion other than that (ho (ax is well received. Mr Wilford: Why obtain so much in one year? Tho Prime Minister: Every penny piece wo have bore is necessary, to maintain the present standard of the highways. I Dealing with tho allocation the Prime Minister mentioned that 24 per cent, would I bo devoted to the maintenance of highI ways, 25 per cent, was earmarked for i secondary roads, 12i per cent, (or £90,000) I for sinking fund and interest, 4 per cent. (or £30,000) for assistance to small boroughs, i and 25 per cent, (or £185,000) for assistance to counties on tho outskirts of large i centres of population. Probably in the cities the city councils and motor associations would form some sort, of board to select the roads on which the money would be spent. Mr Coates said he had been informed by the engineer of tho Main Highways Board that as far as Eastbourne wag concerned tho Highways Board would deal with tho

road there and it would bo one of the firjf. to be put into the secondary highways No doubt Mr Wilford would now bo able to make himsolf swoot with the obetors there by conveying that information to them.—(Loud laughter.)