PETROL TAX.

Press, Volume LXIII, Issue 19146, 1 November 1927, Page 8

PETROL TAX.

£720,000 FOR ROADS. APPORTIONMENT OF REVENUE. LAUNCHES AND STATIONARY ENGINES EXEMPT.

[THE PRESS Special .Service.! WELLINGTON, October 31. A proposal to impose a petrol tax of fourpence a gallon, the whole of the amount thus raised to be used on the Dominion's roads, was introduced in the House to-night.

The new (ax, which is expected to yield £720,000, is to come into force to-morrow. Petrol used for launches and for stationery engines as well as spirit used by dry cleaners will be exempted from the tax, which is to y be collected through the Customs, rebates being mad« in the ease of the exempted industries,

The money is to be allocated as follows: —

25 per cent, to the maintenance of the present main highways. 25 per cent, on a suggested total of 3000 miles of secondary highways. 12$ per cent, for sinking fund and interest in order to pay off the highways loans in about 15 years. 4J per cent, to the smaller boroughs. 25 por cent, for roads adjacent to the larger centres of population. 8 per cent, to the cities and larger towns on a population basis, for the payment of interest on loans or maintenance.

The Minister for Public Works,. AL; Williams, said the necessity for obtain ing additiorfal revenue for the highways was evident, because the expenditure un maintenance had been steadily increasing in direct proportion to the increase in the number of motor-vehicles. County Councils were now in the position that even if they levied the same amount of'taxation, the r ; oads Would go back. A great part of the money they contributed was going into the Main Highways Fund, to the detriment ,of their secondary roads. Again, in the larger cities and towns there was a growing desire to levy local taxation for better roads in the immediate neighbourhood.

To Help Local Bodies. Mr Williams went on -to recapitulate some of his remarks in the Public Works Statement regarding the cost of the - maintaining the highways, stressing that in the past three years tho cost; had been £sl per mile, £73, and then £lll respectively. Although it might seem that tho user was being made to pay for the roads through the extra taxation—as extra taxation it was—it had to be remembered that the improvement in the highways had been of considerable benefit to the motorists in reducing their other costs. Figures which had been taken out with respect to the Public Works Department cars showed that there had been a sarring in two years" of twenty-4ve per cent., or roughly six pounds per car, on pneumatic tyres. In regard to solid tyres the saving was much greater. The Minister said it was proposed to exemp from the tax petrol used for launches, stationary engines, and in dry cleaning. The exemption would be made by way of reclamations, and a special form for making the claims would be issued. A Bill would also be introduced later dealing with these matters. Replying to Mr T. M. AVilford (Hutt) the Minister said that petrol f° r aeroplanes was not specifically exempted, but he had no doubt that when the proper time arrived provision would be made to meet that case. Mr Williams outlined the proposed allocation of the amount produced by the tax as indicated above, and said that the needs of the backblocks settler would be met by the 25 per cent, allocation for secondary highways. At present these settlers who were in need of access to. their holdings were receiving .no assistance, but it was estimated that under the new proposals they would receive a subsidy of up to 2.5s and 30s which would be payable on roads on which at the moment nothing was being paid. Mr E. A. Ransom (Pahiatua): What reduction is being made in the present taxation by way of registration fees and tyre tax? The Minister: None. The new tax is in addition to those already levied, which are insufficient to pay the cost of maintaining the roads we have already got. I will give further details on t.he Bill, which will be brought down. The Leader of the Opposition (Mr 11. E. Holland) said he thought that this new tax was to have 1 been substituted for the tyre tax. It was far too important a.< matter to have been brought down right at the close of the session. The House should have had more time for the question. The tax imposed was a fairly stiff one,.and he thought it likely that there would! be a very considerable outcry from those most concerned, especially' as it was in addition to the tyre tax.'

In Justification of the Tax. The Prime .Minister (Mr Coates) said the scheme outlined conveyed the general idea, as it would affect the motorists, the counties, the boroughs, and the man in the city. The Government had in mind a scheme that would relieve the boroughs of less than 6000 of a population of the cost of the maintaining the roads therein. For the roads adjacent to the cities tiie amount to be expended would 1 * be £350,000, while £60,000 would be allocated to the cities. Roughly, Wellington would receive about £IO,OOO, and members could judge from that what the other cities would receive. As the number of cars had increased, so the cost of the highways had increased in almost an exact ratio. But the cars did not stick to the main highways; they used the ordinary rWls. The motorist had paid only 38 per cent, of the increase, and somebody else had had to pay more than he should have paid. The motorists and the settlers had demanded better roads, and Mr Coates uttered a word of warning that unless Parliament faced the matter, in a' comparatively few years New Zealand would be in the position of several other countries, and the farmers would be faced with such rating costs that they would be compelled! to leave iheir land. Other countries had carried the same proposal in order to obtain better roads.

Subsidiary Roads. New Zealand had provided more mileage of maintained roads per car than the State of California, and 50 per cent, of the cost of the roads had hern foisted on' to the ratepayers. For the backblocks roads it was proposed to allocate a sum of about £200,000 a year, the amount to be spent on the mauitenanee and improvement of subsidiary roads, which 'would! be selected hv the local highways advisory board. Where it was now costing local authorities a huge sum annually for the upkeen of the 3000 additional miles of roads that would benefit under this scheme, there would be a contribution of roughly £1 10s «for-every £1 spent by the local body. It was not pro-

posed to interfere with any small schemes of local road improvements, but he thought the provisions of tho Bill to be brought down would make many of those schemes quite unnecessary. Iri regard to tho width of roads in the boroughs, the idea was to give the same width of the roads that ran through the counties. It might bo deemed necessary that the Highwavs Hoard should make the same contribution as was made under the Highways Act. Users to Pay. The time had come in connexion with the whole problem when they had to lace tho position they were getting into, and finally decide what should be clone. Some would say this was extra taxation. Ho would say that reamit meant a more equitable contribution by the user of the road. In regard to tho road ho used they were asking him to carry, not all, but a fairer proportion of the charges. It was the fairest tax they could imagine. They had considered the question of taking off the direct tax of £2 a year, and ouo pound registration, but had they done that they would have had to increase the petrol tax. It would be found that this scheme was economically sound, and that it met something they had to face, so it was time tire policy was properly initiated. When the Bill came down they would have prepared figures that would state the position accurately. At present the local taxation was falling.on tho shoulders of tho farmer to an undue extent. He was not proposing to go on with tho Bill now; it would come on before the end of the week.

Exemptions. An lion, member: What about tho effect on contracts? Mr Coates: They will' have to be met. He added that he hoped the sellers would not add the fourpence to-morrow morning to the stocks they had in hand, and make a huge profit out of it. They would be very unwise to do that. The duty would only take effect from midnight to-night. An lion, member: What about petrol used by farmers in connexion with their machinery'?

Mr Coates: There will be exemption for from 30,000 to 40,000 milking [ machines. They will be able to claim a rebate or exemption. In regard to tractors, I am not sure. Launches will have the right to claim a rebate. As to existing contracts, I do not see how ue can get over that. People had better buy their petrol as soon as they cp'i before the rise takes place. Mr T. M. Wilford (Hutt) said a petrol tax meant a preference for British cars. The fairest way of getting good roads -was by means of a petrol tax, but this method of introducing such a tax was very unfair. He claimed that under this Bill the 'man with a cheap second-hand car would be paying at thesame rate as the man with a big limousine. Going Too Fast? Mr V. H Potter (Roskill) said he agreed that this country was trying to go too fast in providing concrete, bitumen, and tar-sealed roads. The Government's proposals were far in advance of the needs of the times. This was not the time for an addition of 20 per cent, to the price of petrol, while retaining the present motor taxes.

Burden on Cities. Mr Sullivan (Avon) said that no doubt the bulk of the taxation would come out of the cities. The Prime Minister and the Minister for Public Works had dropped a bombshell on the community, and their ears would be tingling if they could only hear the comments of those engaged in the motor industry. Mr Sidey (Dunedin South) said it had never been contemplated that there would be both a tyre and a petrol tax, and as the Government had now declared in favour of the latter, as being more just, they should at once repeal the tyre tax. Sir John Luke (Wellington North) put in a plea for further exemptions in favour of city firms whose lorries never ■went outs'4&-j the cities'

Mr McKeen (Wellington South) thought the proposals would detrimentally affect local bodies, and should be delayed until local bodies could have an opportunity of considering them. The Hon. Mr Buddo (Kaiapoi) declared that we were going too fast in the desire for fine roads. He feared that this taxation would drive nearly every lorry off the roads. The Hon. Mr McLeod said that there was one fact related to the Government's proposals which had to be faced. Our country roads were falling into an extremely bad state. Repairs and the cost of maintenance had increased by £IOO,OOO during the past year, towards, which the cities had contributed nothing* The position was becoming so acute that country ratepayers were on the verge of being driven out. It was not so much a question of laying down new roads, as it was of-, maintaining existing roads up to the present standard. Messrs Bitchener, Waite, Rhodes, arid Jones (Marsden) supported the proposals to levy a petrol tax. Mr Savage (Auckland West) said this was an increase in taxation on people who could not bear it, and it had been put on by a Government pledged to reduce taxation. [The debate was not concluded when this edition went to press.] •