HIGHWAYS FINANCE

Wanganui Chronicle, Volume 74, Issue 148, 25 June 1931, Page 5

HIGHWAYS FINANCE

EAR-MARKED REVENUE CHANGE IN SYSTEM OPPOSED USE OF SPECIAL TAXATION AUCKLAND, Juno 23. The opinion that both motorists and local bodies would bo opposed to any substantial alteration of the original principles of tho Main Highways Act, 1922, was expressed by Mr M. H. Wynward, motorists’ representative on the Alain Highways Board, yesterday, in connection with the announcement that it was likely the Government would seek to make some alteration in the present system, as earmarked revenues were at present considered to be more than sufficient to cover the maintenance expenditure on highways. Mr Wynward said there was a suggestion of an intention to jettison the present principle of earmarking even the 4d a gallon petrol tax for highway purposes, and to pay it Into the general revenue of the country, out of which an annual allocation would be made for highway funds, both maintenance and construction. In almost every country in the world highways finance was found by special taxation earmarked for the purpose, and there was ample precedent for tho provisions of the Main Highways Act, under which the board’s revenue was provided and ad ministered. Other recent taxation had been allocated for special purposes, such as the unemployed levy, and administered by a special board. Lower Revenue Indicated The indications were that the board’s revenue from the different sources was decreasing, Air Wynward added. For the five months ended Alay 31 this year the importation of petrol decreased by about 4,500,000 gallons, compared with the same period last year. Tho number of motor vehicles registered at the end of last year was about 236,000, and, although all figures were not in, it seemed certain that tho number would be considerably less this year, at all events, during the winter months. The board anticipated having finance sufficient to spend about £700,000 on construction this year.

Prior to the increase of 2d a gallon duty on petrol last year, the 4d a gallon previously imposed, less 8 per cent, for the cities and boroughs with over 6000 inhabitants, went to tho Highways Board, and, together with the amounts receivable from registration and license fees of motor vehicles, duty on tyres and the sum of £35,000 a year free grant from the Consolidated Fund, constituted the revenue fund of the board. It was agreed that one-quarter of the annual receipts from the petrol tax of 4d a gallon would be utilised for construction work on improved pavements on roads radiating from the centres of population, on a subsidy basis of £3 for £l. The balance of tho revenue account, after providing for the necessary maintenance on main highways, interest on borrowed money, loans for machinery and plant to local bodies, and administration costs and a sufficient balance for safe trading, was available for transfer from the revenue fund to the construction fund. Effect of Changes Last Year The construction account consisted of money borrowed by the Government, limited to a total of £3,000,000, under the principal Act, and which it was understood would amount to £300,000 a year, plus £200,000 free grant from the Public Works Department, and moneys transferred from the revenue fund. From these sources the board in its construction fund spent for tho year ended March .31. 1930, £1,071,416, continued Air Wynward. Last year its expenditure was about £850,000. This was owing to tho fact that as a result of accumulations in the revenue fund £750,000 was transferred to the construction fund in 1929-30, and £300,000 last year. The amendment of last year, while imposing a further 2d a gallon duty on petrol, directed that it should be applied by the board toward payment of the interest on the previous free grants of £200,000 a year, amounting altogether to £1,226,000, made to the board since its inception. This amounted to about £63,200 a year, and, in addition, it was charged with the amount of about £226,000 a year previously payable out of the Consolidated Fund for subsidies on rates to local bodies, any further balance t.o be utilised for maintenance on roads other than highways. With the exception, therefore, of the £35,000 previously granted as annual free grant for maintenance, tho actual moneys received by the board during the last financial year were not affected, said Mr Wynward, and the whole of the extra taxation practically went to the relief of the Consolidated Fund.