NEW IMPOST ON PETROL

Taranaki Daily News, 13 February 1933, Page 6

NEW IMPOST ON PETROL

NOW HIGHEST IN WOBLD —■- *lll MOTORISTS’ SYMPATHY ALIENATED. “FOUR HUNDRED PER CENT. TAX.” PROTEST TO FINANCE MINISTER. What the imposition by the Government of a further 3d. a gallon petrol tax means to the motorist has been outlined in a letter to the Minister of Finance, the Hon. J. G. Coates, from Messrs. W. A. O’Callaghan and F. W. Johnston, presidents respectively of the North and the South Island Motor Unions. The writers of the letter maintain that the ad valorem tax on petrol is now in the vicinity of 400 per cent., which is more .than double the ad valorem tax on any other commodity essential or otherwise, and make# the petrol tax in New Zealand easily the highest in the world. “We cannot understand why motorist# should be singled out for taxation, confiscatory in its extent and grossly inequitable in its application,” state? the letter. “The ad valorem percentage of taxation is staggering. The Gulf ; price of petrol to-day is 4.45 cents per. Imperial gallon, which converted at 3.38 equals 3.15 d. per gallon. The position is, therefore:— - ’ Gulf price ——345 d,. Old tax Bd. Primage ........ ,4d. New tax 3d. Primage «15d. 15% extra exchange, which is a direct tax on petrol (based on c.i l. cost, N.Z.) .......... 9d. Total taxation 12.45 d. “Petrol, therefore, is now subject to the amazing impost of 400 per cent, ad valorem; Compare this with any other item on the Customs schedule and you will see the extraordinary onslaught that has been made on the motor vehicle owners’ pocket. It passes our comprehension that whereas ; such commodities as whisky (180 p.c.), confectionery (61 p.c.), cigars (120 p.c.), tobacco (170 p.c.) Are subject to the ad valorem duties mentioned, petrol should be singled out for such extortionate taxation. GROWTH OF TAXATION. “Another matter which has hot escaped our notice, but it seems must have been entirely overlooked by the Government, is that motor taxation has been increased between 1924 and 1932 by 600 per cent, and now that you have added a further, 3d per gallon to petrol, the increase for next year may safely be said to be not less than 820 per cent. We cannot think of one, argument which .could even in the least degree warrant such wholesale and oppressive taxation upon one class of the community. ‘Tetrol consumption has dropped. during the last two years, and we feel that the law of diminishing returns will operate at an accelerated rate, due to this further taxation. For example, 2d. tax was put on in 1930,"* and the following year sales dropped, by 6,000,000 gallons, as against the normal increase the previous year of 6,000,000. In. 1931 still another 2d. was added and sales dropped by a further 5,000,000 gallons. “We have' already said that we object to the oppressive and unjust nature of the new taxation, and we suggest it should be dropped and the following avenues explored:— ■ (a) The Government obviously has determined bn the imposition of a sales tax and we think you should be reminded that in Australia the actual return from the sales tax exceeded the estimate by £2,400,000, and, therefore, • it is reasonable to suppose that * similar result will be attained in New Zea- ' land; "(b) We suggest that instead of bleeding the taxpayer white to meet next year’s. Government commitments in London, the Government could relieve the taxpayer by borrowing a proportion of its requirements in London, thereby spreading the burden of repayment and at the same time avoiding the present, additional cost of settlement due to the. 25 per cent, rate of exchange. ROADING SCHEME SUGGESTED. (c) That to relieve the • unemployment situation a comprehensivelyplanned roading scheme be put into operation, and, say, £1,000,000 at the Unemployment Board’s money transferred to the Main Highways Board and used for the purpose. - This would resuit in work of permanent value being done and in useful- employment being provided for a large number-of men. In planning the road work - the Highways Board must have in mind the undertaking of works likely to absorb the maximum number of men.. Further, this - will enable advantage to be taken of the county organisations in the country and of the • Highway# Board’s staff, which is specially trained for the work. (d) That the possibility of reducing the national interest burden by a conversion scheme be examined. (e) A tax on local body trading and power boards should be considered, because apart from equities such a tax would be spread equitably. The tax would require to be on the capital invested because otherwise- it would be evaded by reductions in charges . for the services. This would yield

£500,000. “Another matter that must not be: lost sight of is that this new tax places * heavy burden upon all commercial transport in the country. It will react against farmers, market gardeners, carriers, passenger vehicle owners and users, and all road goods and produce services, and will inevitably result in a large accretion to the ranks of the unemployed. . “We feel that we are entitled to observe that in the past we have done everything in our power to assist you, and our helpful' attitude has been acknowledged by the Government. .. year and the year before we accepted 5 ydur financial proposals, and with great difficulty prevailed upon our members through our organisations to do ’likewise. To-day, however, we cannot pursue the same policy, because advantage has been taken of our previous helpful attitude, and the present tax is so inequitable that our duty to our members demands that we now take an entirely .different stand. If we failed to oppose your new taxation no argument that could be advanced would justify our action to our members, and not only are we not justified in attempting to pacify our members and get them to accept the additional burden, but know any such attemp. would be hopeless. Petrol is an essential business commodity, and. it seems to us Incomprehensible that the Government should persist with a manifestly unfair imposition, which must alienate and antagonise not only our 55,000 mem bers, but all persons engaged ;in road transport in this country.”