HIGHWAYS FINANCE

Wanganui Chronicle, Volume 79, Issue 197, 23 August 1935, Page 9

HIGHWAYS FINANCE

COMMENT BY MOTOR UNION HOW TAXATION HAS BEEN USED. Comment on the administration of main highways finance, is contained in the annual report of tho North Island (N.Z.) Motor Union, which is to be laid before the annual meeting in New Plymouth to-day.

“When the Main Highways Act was passed in 1922, it provided that the tyre tax and all moneys received from the licensing, of motor vehicles should be credited to the Main Highways Board’s revenue account,” the report states. “Recognising that the State also had a responsibility in connection with main roads, the same Act provided that the State would contribute annually to the board not less than £235,000. Later, a petrol tax of 4d per gallon was imposed, and as everyone knows, this tax has been increased at regular intervals until, with primage added, it now equals JOJd a gallon. “Unfortunately, aud, it can safelv be said, unjustifiably, the major por tion of these specia* taxes has latterly been diverted from the roads to the {National Exchequer, and thereby, as we have said again ami again, when a lax levied from a special class of taxpayers for a special purpose is diverted to other ehanpels, the taxpayer is, to the extent of the diversion, being doubly taxed. Equally deplorable is the indisputable fact that our roads are deteriorating. Added to these things, loading authorities are placed in an unenviable position because tho uncertainty of finance puts any planned loading scheme beyond possibility. The following figures indicate the amount of tyre tax, petrol tax and annual licence fees collected during the year ended March 31, 1935, and how these moneys were disbursed:— Revenue— Tyre Tax £91,693 Licence Fees 391,660 Petrol Tax • .. 2,582,336 Total £3,065,689 TTow Disposed of— Primage on Petrol Tax retained by tho Consolidated Fund 130,803 4d per gallon Petrol Tax retained by the Consolidated Fund 1,046,903 £1,177,706 Diverted frftm the Main Highways Fund to the Consoli-

dated Fund 321,754 12% Special Rebate on County Rates 178,246 £1,677,706 Interest on past free grants . 61,300 Subsidy on Local Body Rates .181,105 £1,920,111 Balance of Revenue available for tho purposes of the Main Highways Board .. £1,145,578 1 “Charging of Interest to the High ways Revenue Account. The annual sum charged the Highways Board by way of intercut is steadily growing, as we apprehended it would. ’! he raids have left, the board’s const ruction ac count short of money, the Government made good tho shortage by handing back to the board the money it had just taken away, but as a loan at interest with a redemption fund clause attached. Then, of course, the unjustifiable charging of interest on past free grants goes on, and the net result of this policy is that whereas the revenue account of Hie board was charged under £lOO,OOO for interest ami sinking fund during the year ended March, 1930, if, can safely- be stated that the current years’ charges will bo over £250,000, and I lay the strongest possible emphasis on this considered statement that if the presen*, policy continues unchecked the Main Highways Board will, in six years’ tint?, I«e paying £500,000 to the State as interest ami “sinking fund” on its pillaged funds. The effect of Hi,. Government first taking the highways money into the Consolidated Fund is that the revenue is thereby swelled. When the same moneys are then handed back to the Main Highways Board as a Jean the budgetary position is not adversely af fected, but the finances of the Main Highways Board are cumulatively prejudicially affected by this budgetary nianipulal ion.-’ ’