PETROL TAX

Timaru Herald, Volume CXXXVII, Issue 19626, 21 October 1933, Page 14

PETROL TAX

“HIGHEST ON RECORD” Drawing attention to the fact that the petrol tax in New Zealand is the highest on record, the executive of the Wellington Automobile Club in its ahnual report advocates the vesting of the control and maintenance of the arterial system in the Main Highways Board.

On February 9, 1933, stated the report, the Government introduced a Customs resolution imposing an additional tax of 3d per gallon, and with this additional rate the tax, excluding primage, stood at lid per gallon. This happened at a time when the motoring organisations, through the North and South Island (N.Z.) Motor Unions, were contemplating approaching the Government with a view to obtaining a reduction in the tax. Immediate representations were made to the Government, and when the Customs Bill was Introduced the Minister of Finance announced that the increase would be 2d instead of 3d. The tax to-day was lOd per gallon, which represented a duty of 400 per cent, ad valorem.

The most serious aspect of the matter was that this additional tax was credited direct to the Consolidated Fund and did not find its way on to the roads, thus breaking down the principle of the “user tax.” The extra tax could only be regarded as what the Salter Commission in England defined as a "sumptuary tax”—imposed on the assumption that possession of a motor-car was a presumptive indication of ability to pay. By the diversion of this additional tax of 2d to the Consolidated Fund there was now twofifths (or 4d per gallon) of the petrol tax being paid into the Consolidated Fund, and at a time when the national roading system was being starved to a degree which must later have serious consequences. For the past two or three years “so-called economies” had been effected in road maintenances by cutting down expenditure, and the result was now becoming evident In all parts of the country. Unless this restricted policy was checked, resurfacing costs, and In many instances reconstruction costs, would run into huge figures in order to bring the road surfaces back to their previous state. The reductions were serious enough to endanger the large capitalised investment in highway construction. The matter was one of national vital concern, and it was impossible to over-emphasise the hazards to the public interest in the inevitable collapse, if the policy continues, of some sections of the national highways.

An important recommendation by the executive, that the arterial highways should be taken over, controlled, and maintained by the Main Highways Board, was brought before the North Island (N.Z.) Motor Union. At the present time the standard of maintenance of the roading system varied considerably according to the system and methods adopted by the county councils. The executive felt that a much more uniform and satisfactory state would be brought about by vesting the control and maintainenance of the arterial system in the Main Highways Board. The scheme had the approval of the North Island (N.Z.) Motor Union, and the details were receiving consideration at the present time. The executive further recommended the North Island (N.Z.) Motor Union to approach the Government with a request for the provision of sufficient funds to enable a comprehensive programme of surfacing of main highways to be inaugurated and thus arrest the serious deterioration on the gravelsurfaced roads.

The executive had as far as possible endeavoured to counteract the agitation by the Farmers' Union for complete derating of farm lands. The demands made by the Farmers’ Union were entirely unreasonable. Any relief granted to the farmer in the way of derating would within a very short period be capitalised and the farmer would receive no benefit. The New Zealand Counties’ Association realised that the proper measure of relief was by the direction of motor revenue into the Main Highways Account, and the expenditure of the amount on the roading system.