OPPOSITION TO THE PETROL TAX

Star (Christchurch), Issue 19134, 29 July 1930, Page 4

OPPOSITION TO THE PETROL TAX

alternatives are .VERY UNPLEASANT. (Special to the “Stair’) WELLINGTON, July 28. ; ‘ A time ot national necessity ~ ha* forced the Government to undertake an unpleasant task there wac a big: deficit to be avoid* ed,” said the Prime Minister, (Hon G. W. Forbes) when defending the '* Government's proposals in regard to the petrol tax. The Prime Minister recognises that there is strong hostility to the increase in the petrol tax. However, in an interview with the - correspondent of the “Star/’ when * some points of criticism were submitted to him, Mr Forbes showed that an unpleasant financial necessity « forced this plan on the Government, but that there is an alternative which, unfortunately, would be equally unsatisfactory, not to the Government, but to local authorities and the Main Highways Board. Of course no Government likes to have indignation meetings held to discuss its proposals,” remarked the Prime Minister, when his attention was called to the plans of city motorists. “ A national necessity has forced the policy to which.they propose to object, and J am hopeful that those who view the whole situation in a broad sense will ultimately realise that however they may object to the increased petrol tax it is the least unpleasant method of meeting a difficult situation. First and foremost the Consolidated Fund, in other words the taxpayer, had to be relieved this 3*ear of as many burdens as possible, and among the burdens lifted have been the grants made from revenue for road construction and road maintenance. No Breach of Faith. ' The statement has been made that this action, dictated by no other reason than relief of the taxpayers, constitutes a breach of faith. There is no desire on the part of the Government to cease these payments if it is possible to make them, but it is just as well to recognise that they can r.o longer be made, and that as it is entirely a matter of road costs, the opinion of the Government is that road users should, as far as possible, bear that burden. However, what is proposed in the Budget does not completely relieve the Consolidated Fund from this liability, because the revenue contributed by the general taxpayer is carrying a very big burden in respect of interest on road construction loans. Details of the Dominion's public works expenditure to March 31 last show that considerably over £15,000.000 has been expended on roading, and ihat the taxpayer is finding interest on that large debt. Thus a very substantial contribution is still being made fay the taxpayer for the provision of facilities for road transport. The Government is also expending from general revenue a good deal of money in relief works on roads. This again is a big burden, which neither road users nor local bodies are asked to carry. Under these circumstances it is considered reasonable that the Government should ask the road user to carry a larger proportion of the financial burden or roads, and in raising the petrol tax by threepence there will be some additional revenue also available for the direct benefit of secondary highways. Alternative to Petrol Tax. “ The Government had two alternatives,” continued the Prime Ministei. “ It was obliged to cease payments to the Main Highways Account, and it had to decide either to make good the deficiency by a further petrol tax or to curtail the finances of the Main Highways Board and local bodies. The subsidy to local bodies on rates expended for roading purposes was, su far as I know, properly spent in that direction. There is evidently considerable objection to relief being given through the extra petrol tax, and if this agitation is successful it means only that the burden of curtailed finance is thrown on the Highways Board and local authority. Having ample proof of the necessity of relieving the Consolidated Fund, the Government considered that this could be achieved with the least amount cf hardship by imposing a burden on those who get the benefit. “ I would like to make this personal appeal to the motorist/' concluded Mr Forbes. *”1 give my assurance that this is a time of national necessity which has forced the Government to xmdertake an unpleasant task. There was a big deficit to be avoided. An easy way would have been run into a financial morass and extricate the country by borrowing to meet a deficit in current revenue, but those who put first in their minds the Dominion's high financial reputation would deplore the adoption of such a course and admit, however reluctantly, that tinder the circumstances the Government has done the right thing.”