TOPICS OF THE TIMES

Southland Times, Issue 20524, 28 June 1928, Page 6

TOPICS OF THE TIMES

The latest market report from London issued by the Dairy Control Board contains some information of special interest to dairymen. It shows that New Zealand butter in the middle and latter weeks of June was commanding a higher price than the Danish. New Zealand salted butter was quoted at from 174/- to 178/-, while the Danish butter was listed at from 168/- to 176/-. In the two weeks ended June 22 New Zealand topped the market.

Discussing Mr Winston Churchill’s petrol tax troubles recently The Economist touched on some matters of particular interest to New Zealand at the present moment. At the first clamour of opposition the Chancellor of the Exchequer has dropped the proposed tax of 4d per gallon on kerosene without proposing an alternative (said the Economist). This decision not only upsets the balance of the Budget, but strikes at the successful application of the petrol tax. The original petrol tax was scrapped in 1920 because it was found difficult to administer and easy to evade. .< Petrol is not a substance capable of clear definition. The Government chemist once stated that it was “not a pure substance, but an ungodly mixture.” When crude oil, which is black or blackish-green in colour, is distilled, the light fractions vaporize off, leaving a black residual oil. There is a clear commercial distinction between the “white” products of the condensed vapours and the “black” residues. But there is no clear distinction between the various “white” products themselves. In the distillation process the first condensations of the vapours is called commercially “petrol,” and the later condensations (at a higher temperature) are called commercially white spirit or kerosene. But no chemist can say positively at what particular temperature in the still the petrol vapours end and the kerosene vapours begin. Yet under Mr Churchill’s amendment to the Budget a taxable distinction is being made between petrol and kerosene according to the percentage distilled off at certain temperatures. The question is whether this distinction cannot be evaded in actual commercial practice. Whatever Mr Churchill may say about the habits of motorists, it is scientifically possible for a white oil which falls within his definition of kerosene to be doctored with various chemical substances and then used successfully as a fuel in the engine of a motor-car. By this means the “petrol” tax could be avoided. There is, for example, a petrol “dope” called lead-tetra-ethyl, which takes the “knock” or “pinking” out of even an inferior petrol. What can prevent the use of this lead compound for mixing with a “kerosene” (as defined by Mr Churchill) as a tax-dodging motor fuel? Again, kerosene is already used as a fuel in the engines of tractors, fishing vessels, and stationary power units. What can prevent the development of a motor-car using Churchill-kerosene with the aid of a vaporizer? The answer which Mr Churchill may give is that a tax of 4d, is not worth evading. But the price of petrol in the world markets might rise while that of kerosene might remain low. This might make it worth while to attempt to evade the petrol tax. It would not be possible to stop evasion by declaring that the tax would be imposed upon any fuel which the motorist puts into his tank, because petrol is used for other power purposes than motor transport and is also employed in the manufacture of paints, varnishes, polishes and rubber goods and in the dyeing and cleaning trades, all of which uses are intended to fall within the scope of the tax. Mr Churchill has admitted that the tax would be better and more scientific if it were levied on the whole family of “white” oils as against “black” oils, and it seems doubtful whether his attempt to make a taxable distinction between the grades of white oils will meet with any better success than the petrol tax of 1909, which was scrapped as unworkable in 1920.