PLUNDERED BY STATE

Bay of Plenty Beacon, Volume 10, Issue 31, 30 September 1946, Page 6

PLUNDERED BY STATE

PETROL TAX DIVERTED MR W. SULLIVAN’S CONTENTION “I say without hesitation that the worst part of our State highways one travels over from here to the Bay of Plenty is that area between Rotorua .and Opotiki and Gisborne. In some places the road is impassable almost. That is due very largely to the fact that the Main Highways Board has not had sufficient revenue to maintain the surface of those roads,” declared Mr W. Sullivan (National, Bay of Plenty) discussing the incidence of motor taxation when the Finance Bill was before the House of Representatives. “We have reached a stage when we really should have a look at the whole question with a view to bettering the position—with a view to giving service to the people who are paying the tax.” The Gallon Tax “The motor unions are asking that the 4d a gallon war tax should be removed,” continued Mr Sullivan. “They would also like to see removed the 4cl a gallon tax imposed during the depression period for the Consolidated Fund. On the other hand, the county councils would prefer that the whole of the tax should remain, and that all the money should be made available for road development and expenditure, including the £ for £ subsidy for county roads that has been asked for by the counties during the last few years. If the argument that the users should pay for the roads is valid, then we must agree that the people who pay should get the benefit, and therefore, we are in honour bound to use the money in the way I have indicated.” Steadily Growing Burden

The original tax—4d a gallon on petrol—was introduced in 1927. In 1930, another 2d was added. In 1931 and 1933 a further 4d a gallon was imposed for Consolidated Fund revenue, and that had been paid into the Consolidated Fund ever since. In 1939, the Government decided that it would seek further revenue from the motorists and imposed a further tax of 4d. The motorists. had no objection to paying that tax during the war, but now that the war was over they felt that serious consideration should be given to granting some relief. “After all, the Government is receiving the substantial amount of 14|d on every gallon of petrol used,” he remarked. “There was also ci ‘bomb proof tax imposed for the protection of oil storage tanks equivalent of 7-10ths of one penny per gallon, and that tax is still in operation. On every 10 gallons of petrol used, we pay 12s 3d in taxation. Should Be Investigated I do not advocate that we should, at this stage, determine to take off any of that taxation. Rather, do I want to see the whole position investigated to decide what is the right thing to do with the revenue derived from tyre and petrol taxation and registration fees so that it will not be diverted into other funds' as has been done over the last few years. The road users and the local bodies generally, are not getting a fair deal.” Highways Board Impoverished Mr Sullivan said that the fact that the Minister had made provision in the Bill to give some relief showed that the finances of the Main Highways Board were-in a pretty bad way. The arrears of interest which the Minister proposed writing off amounted to £1,936,000. In addition, he had written off the 1930 loan amounting to £1,226,000. In 1944-45, the total revenue derived from petrol, registration and tyre tax was £4,127,646. Of that amount, the Main Highways Board received only £1,863,193. The Consolidated Fund got £2,166,589, and boroughs with a population of 6000 and over, £97.864. For 1945-46 the total revenue from petrol, registration and tyre tax amounted to £4,999,132. The Main Highways Board got only £2,724,480, and the Consolidated Fund got £2,724,480. The amount that went to boroughs was £115,930. “So there again is a picture where revenue we are collecting for a special purpose is not being used for that purpose, but is being transferred to the Consolidated Fund for general purposes” he added. “If we go into the figures relating to the revenue derived since the petrol tax was imposed in 1927, we will find that the total revenue was over £66,000,000. Of that sum, the Main Highways Board received approximately £35,000,000. It is high time that we had a look at the whole of the circumstances and tried to bring about the relief I have referred to. We should use the money for the purpose for which it was raised.” Highest in Empire Mr Sullivan pointed out that this tax was higher in New Zealand

than in another part of the British Empire. In the United Kingdom, the petrol tax was, he understood, 9d a gallon; and in Australia 117/10d. Here, it was 14-7/10d. “I ask the Government to review the whole incidence of taxation and the expenditure of the revenue so that we can get the best advantage from it, and at the same time develop our State and main highways. In addition, we will be able to give some assistance to local authorities to construct and maintain county roads, particularly in out-back areas. There are portions of the back country where road construction is costly, and access is badly needed. Unless the Government is prepared to assist local authorities, we will not get the settlement and development in those areas, and that is what we all want to see.”