PETROL TAX PROPOSAL

Taranaki Daily News, 2 August 1930, Page 15 (Supplement)

PETROL TAX PROPOSAL

AN EMPHATIC PROTEST •‘INEQUITABLE AND UNJUST,’’ AUTOMOBILE ASSOCIATION'S VIEW The proposed increase in petrol taxation was discussed at a public meeting convened by the Sorith Taranaki Automobile Association at Hawera on Thurday night. Mr. W. O’Callaghan presided, over an attendance ot about 60. After a lengthy discussion the following resolution was carried by a large majority: This meeting is of opinion that the proposed taxation on petro] is inequitable and unjust and registers an emphatic protest against its imposition. An amendment, moved by Mr, N. H. Moss, Stratford,, and seconded by Mr, J. R. Corrigan, was defeated. It read: This meeting regrets the necessity for the additional petrol tax, but accepts the Government’s intimation that it is the only means of meeting the present financial'crisis. It is, however, of opinion that a definite promise of the removal of the tax should be made when the presort linane al crisis has disappeared. After stressing- the fact that the automobile associations of New Zealand were non-political in their activities. the secretary of the South Taranaki association, Mr. W. S- Walkley, stated that motorists objected to what amounted to a raid on the Highways Fund. When the'Main Highways Act had come, into force the Government had allowed local bodies the sum of £235,000 per annum as a contribution to the highways fund. Motorists were agreed that provided the Government continued to subsidise the comities they were prepared to assist, and the subsidy had been paid for six years. The.. Prime Minister now proposed to obtain *£450,000 in extra revenue from the petrol tax, and this amount was to be paid to the highways fund, but the annual grant of £35,000 from the Consolidated Fund was to be discontinued. The road fund was ■to be charged 5 per cent, interest on free grants made in the" past, and this interest was to go back to the Consoli dated Fund, the interest on £1.226.000 being £61,000. ft was also proposed to charge against the petrol tax and registration fees the sum of £220,000 which the asrpeiation considered should, as in the past, be a charge on the Consolidated Fund. This meant that out of the extra revenue of' £450.000 only £134,000 would be left over for roadin?. and that was the point, for it would be raided to save the Consolidated Fund from expenditure on unemployment relief work.

•REARING UNI-AJR SHARE.” ‘’To-day the motorist as a class i bearing- what we think to be his fai share of taxation,” continued Mi Waikicy. “Wc suggest that it is un fair to tax the motor-car as though i were a luxury. It is as essential i.i modern life as was the horse 20 year; ' ago.” In addition to the petrol tax tin motorist was heavily burdened b’ Customs duties. Under the old Custom, tariff to land a foreign motor-car, de dared at £213 value, cost £llB duty with another £6 in fees if the car wa< run a year, whereas under the nev tariff the same vehicle would cost £l4i in Customs duties. The allocation of the tax was i question that concerned everybody, fo; it had been decided to allocate 8 pe: cent, to the cities and 92 per cent. t< areas outside the cities, although a vas sum was contributed annually by dtj motor vehicle owners, who rarely, an< in many cases never, used the count) roads. No one had complained aboui th 4d tax, but the additional imposition would be felt severely. Though his ordinary contributions the motorist dkl his share towards the of unemployment and provided money for re lief works. In addition he paid taxes which might properly be regarded as r d.reet contribution towards either providing employment or relieving unemployment. In 1923 the Government’s mocor body tax had yielded £129.802, a id this had grown - to £374,936 in 1929, and yet during that period the number of body workers in New Zealand had decreased, despite the fact tl: t the tax was imposed to assist local industry. Also by the expenditure of money from the road fund the motorist provided relief work and maintained men in work who would otherwise be unemployed. There were 200,000 mot'or vehicles in New Zealand, including 31.009 motor-cycles, and 47,579 owners received an income greater than £7 a week, while 7'5,000 .received less than that amount. The latter would be the people hardest hit, and a large majority c T ' them were on the land. RATE REDUCTION UNLIKELY. In connection with the proposed tax a misconception existed in regard to the derating question quite a number of people believing that there would be a big reduction in county rales if the tax was imposed. But that was not likely. Even Mr. W. J. Polson, M.P., realised that if the tax wae imposed the farmer would find that, while his rates would not be reduced appreciably, he would be paying far more than he was ever likely to save on rate. It was clear that the town and country dwellers by increased cartage and increased fares would have to bear the burden. One dairy factory had estimated that tl cost of cream collection would be increased by 14 per cent, if the tax'was imposed. The point had been raised that the increase would result in diverting business to the railways, but when the 4d tax had been imposed no extra business had resulted. Until there was co-ordination between railway and road transport that would.continue to be the case. Mr. J. R. Corrigan: What would be a fairer tax than the petrol lax to get the revenue to balance the Budget? Mr. Walkley: That aspect han been considered, but it is really for the Government to discover where the additional revenue is to be found. It has been suggested that there is ample room for economy in the administration of the Departments ot State. When the sum of £2.500.000 is being epent on the Auckland railway station it seems evident that there ehould be a curtail- 1 ment of expenditure. I believe the | people of New Zealand would be be- ■ hind any Government that made an effort to curtail the huge administration cofit of running this Dominion. If the petrol tax wan not imposed how would it affect the landholder, asked .Mr, Corrigan. The Government was going s to spend the extra taxation money on 1 backbloeks roads, and ho did think is 1 now time the backbloeks -settlers- re- '

ceived their share of the good things, for ever since the petrol had been imposed the amount received had been expended on main roads. He had attended the meeting thinking that he might hear of a better way to place the taxation, but if there was a'better way than by petrol taxation he had yet to hear of it. It was absolutely essential that the Budget should be ; made to balance annually. As a farmer he paid 15s an acre in county rates, and that capitalised on a 5 per cent, basis meant that the local authority received a niortgage of £l5 an acre. He doubted very much whether organised, motorists were able to express a comprehensive opinion of any real value to the Government, said Mr, Walkley. but one of the things he felt was needed was a more or less dinpassionate investigation of the whole of New Zealand’s finances by a body of men competent to undertake the work. Motorists, he felt sure, d'd not oppose the spending of money on backbloeks road-, for they were just as important now as railways were yearn ago. For that reason the taxation should be a charge not on one section of the community but upon the whole country. In complimentin'"' Mr. Walkly on the way in which the subject had been handled Mr. Corrigan stated that it behoved every citizen to take a keen interest in Dominion affairs, financial and otherwise, and to endeavour to help solve the problems facing the Government of the country. All knew that if the source of supply of capital was stopped somebody would suffer. .Money had to be found, and for that reason, he still failed to see why the petrol tax should not produce part of that sum. Local authorities had collected rates from backbloeks lands for the past 50 or GO years and had used then on main--roads, said one motorist. He failed to see why motorists should now be called upon to pay for the improvement or those roads. ! ... Without suggesting an alternativescheme he could not see how- the meet-z--ing could disagree with the proposed taxation, said Mr. N. 11. lyioss. F<jr.. many years motorists had : used ' tlje.roads without any taxation at all, anjd, ns soon as the Highways Board had beefo. constituted there had been ,an extraordinary demand for first class roadi,,. with the resulting big expenditure in p few years. “We cannot carry on a * large expenditure without a large iri-

come,” he continued. “Would it not b!e possible for motorists to say to the Government. 'Wc are prepared to accept the main highways as they are today if the money saved is expended on backbloekts roads?’ Some of the critics of the tax have not given consideration to that position. To be fair we must recognise that if taxation is not put on petrol we must pay it either by way of income tax or by increased Customs duties. Wo should accept this tax in a time of national emergency provided that the former position is. reverted to when the country recovers its financial stability.”

“We are chasing the cat up the wrong tree in my opinion,” said a motorist. “Petrol in America is 10 cents, equivalent to 5d a gallon, and we pay 2s for it. Could the Government not make the oil companies come to the rescue arid pay the tax themselves?”