THE PETROL TAX

Evening Post, Volume CXII, Issue 59, 7 September 1926, Page 10

THE PETROL TAX

ARGUMENTS IN FAVOUR

DEPUTATION TO MINISTER

A NON-COMMITTAL BEPLY.

A deputation of master carriers, wholesale and retail motor traders representative of the Dominion waited on the Hon. K. S. Williams, Minister of Public Works, to-day, and urged the adoption, of a petrol tax in lieu of the existing methods of motor taxation. Mr. B. L. Hammond, who acted as spokesman, said: "The Government has adopted a roading policy involving a proposal to make motorists pay a fair contribution towards the development of good roads. The interests represented by this deputation are naturally anxious ,to see good roads constructed and maintained, and aro not in the least averse to contributing a fair quota towards the cost. They are concerned, however, with the method of exacting that quota, and the actual amount they are required to pay. "Admitting the primary object of the tax to be that of securing the necessary revenue to construct and maintain good roads, the principle of application should necessarily be that of requiring all users of the roads in question to pay in true proportion to the use they make of them. All motorvehicles are required to be registered, and all owners are required to pay registration fees under the Motor-Ve-hicles Act. As this method exacts taxation from all owners and the registration fees are based on a sliding scale according to the class of vehicle owned, we have no fault to find with this method of taxation—although we do think that the fees should be nominal and sufficient merely to cover cost of administration only."

THE PRESENT TEES,

"The deputation desired to protest against the present heavy traffic fees on the grounds that the principle of indirect taxation is wrong; one section only of the community is being unduly penalised, and other sections equally responsible are being correspondingly relieved of taxation, which they should rightly be called upon to bear; and the fees levied are in any case excessive. "In taxing the owners of heavy vehicles only the Government has done an injustice to one small section of the community, and by so doing has relieved a very much larger section of what is rightly an obligatipn on its part to share the cost of road maintenance. The very fact that the heavy, traffic fees have been so designed as to ensure a certain revenue per annum justifies the master carriers' claim that if. that revenue were obtained by taxation evenly distributed over those who should rightly pay, then their contribution would be very much less than at present. To-day,, under the Heavy Traffic Begulations, a taxation of £215,000 per annum is being exacted from owners of 14,028 vehicles, whilst the owners of 84,000 lighter motorvehicles are not required to contribute one penny piece under this heading, and very little, under any other form of taxation.

THE TAX OK TIRES.

In operation the tire tax is more equitable than the heavy traffic fees, inasmuch as the tax payable does to some extent at least bear some relationship to the use made of the raods, but whilst this is so it is nevertheless wrong in principle and unfair in many cases. To show how unfairly it operates we will cite a particular case. Auckland city has adopted concrete roads. The construction of those roads has and is being paid for out of loan moneys in respect of which the ratepayers as a whole are responsible for interest and capital. The motorist has contributed next to nothing towards those roads, but has had them provided for him by the general ratepayers. On these roads the life of a set of tires has been ascertained to be 30,000 miles. Now contrast the position of the Auckland motorist with that of ,a Wellington motorist. Good roads have not been provided for the Wellington motorist, and what progress is being made in that direction is being. chiefly financed by the taxation derived from motorists. The life of the tires used by the Wellington motorist has been ascertained to be 8000 miles, so that for every 30,000 miles travelled the Auckland motorist requires one set of tires and the Wellington motorist four sets. In other words, the Wellington motorist pays an amount of tire tax four times greater than that paid by the Auckland motorist, whilst the Wellington motorist has not the advantage of good roads and the Auckland motorist has. Furthermore, on a vehicle out of commission the tires deteriorate, even though, no use. is made of them. If a man is unfortunate enough to have a new set of tires rendered useless through any cause whatever, he not only suffers the. loss of the tires but is required to pay immediately a further tax for his misfortune on reshoeing his vehicle. The deputation asks the Government to abolish the heavy traffic regulations, insofar as they relate to petrol driven vehicles, and also to abolish the j- tire tax, and in substitution of the same to inaugurate a petrol tax. At present roughly £215,000 per annum is received by way of heavy traffic fees, and a further £186,000 per annum by way of tire tax —in all from those two sources £400,000. During 1925 the importations of motor spirit amounted to 33,125,217 gallons, and on this a tax j of 3d per gallon would realise £414,065, less a small sum allowable by way of rebates. This deputation therefore asks the Government to legislate with a view to imposing a petrol tax not exceeding 3d per gallon in substitution of heavy traffic fees and tire tax. There are no objections to be logically made against the principle of a petrol tax. No one can dispute the fact that by means of a petrol tax motorists can be required to pay a share of the cost of road construction and maintenance bearing a true relationship to the actual use made of the roads.

IMAGINARY OBJECTIONS.

The only objection that can be raised is the practicability of operation. Many of the objections raised in the past are purely imaginary. A great number of cases for exemption have been quoted, but actually the cases calling for actual exemption are limited indeed, whilst |it is even arguable as to whether any exemptions whatever should be provided for. ,It might be considered that the Government and ilocal body supplies should not be taxable, but in principle that is entirely wrong. To relieve them of taxation raised for the specific purpose of meeting a certain definite expenditure would be to relievo the country as a whole of an obligation and to require the taxable section to make up the deficiency. In other words, double taxation would be thus placed upon one section of tho community. Thon again tho old bogy of the farmers' petrol engines for milking . and shearing will probably be raised, but why should any exception be made in the case of the farmers? Tho tax will be a general one for the purpose of maintaining good roads, and the farmer makes considerable use of the roads — more particularly for the cartage of cream and produce generally. Good roads develop farming districts, and development leads to enhanced land values, hence the farmer has everything to gain from a sound loading policy, , and should be required to boar what

at worst would be but a very small share. Furthermore, as the use of electricity develops, the petrol engines will gradually disappear. There is a growing sentiment in favour of a petrol tax as being the fairest method of imposing motor taxation. In fact, it is the only method which will ensure that every user of the roads pays in due proportion to the use he*makes of the roads. A petrol tax is operative in forty-three States of America, and also in South.Australia. What is practicable there is practicable here. The New Zeaalnd Counties Association at a recent conference declared itself in favour of a petrol tax, and the Eight Hon. the Prime Minister has also expressed his approval of a petrol tax.

" TINKERING WITH THE TAX."

From a Press report of remarks made by the president of the Wellington Automobile Association it is evident that some opposition will be shown to a petrol tax, but I would ask the Government to make a special note of the fact that the president' urged opposition on the sole ground that a povertystricken Government might tinker with the tax. It was not suggested that a petrol tax was not an equitable one. When associations pretended to show that a petrol tax was not equitable in operation their opinions were entitled to respect, but little consideration should be given to arguments such as a fear that a needy Minister of Finance might tinker with it. Furthermore, if that argument were logical then a tire tax was open to the same objection, yet the president supported a tire tax. The very fact of the Wellington Automobile Asoeiation being against a petrol tax provided the greatest justification for the master carriers' request. The master carriers were now carrying "the baby" for all motorists, and the owners of pleasure cars were naturally averse to anything which would have the effect of requiring them to pay more than at present—even though it were fair for them to do so. The deputation was of the opinion that the whole question of motor taxation and transport generally should 4>e inquired into by a Special Commission appointed for that purpose with a view to having the matter considered from all points of view. One sore point with the master carriers concerning transport was the manner in which local bodies were classifying roads. The standards adopted in classification varied in every district, and uniformity was essential. A Commission could do much to remove the dissatisfaction now existing in that connection.

THE GOVERNMENT'S INTENTIONS.

The deputation urged the Government to reconsider, the whole question of motor taxation with a view to devising a system correct in principle, equitable in operation, and mutually acceptable to all fair-minded motorists. Mr. Hammond said that since it had been decided to make representations on the matter of a petrol tax a rumour had been circulated to the effect that the Government contemplated increasing the existing heavy traffic fees, and the deputation would like to know whether such rumour had any foundation in fact. The Minister, in reply, said that so far as, the question of increasing the existing heavy traffic fees was concerned he was not aware of any intention on the part of the Government to do so. He had not heard of such a move. Mr. Hammond: "Thank you. That allays quite a lot of anxiety on the part of master carriers." The Minister said that he considered that the whole question of motor taxation required careful and thorough consideration, because there were varied interests and conditions differed so much. He was not in a position to reply to the deputation beyond saying that he would consider the representations made and discuss the matter with his colleagues.