PETROL TAX

Evening Post, Volume CXII, Issue 85, 7 October 1931, Page 10

PETROL TAX

INCREASE OF TWOPENCE

COMPANY PROFITS

ARE THEY EXCESSIVE?

INVESTIGATION URGED

From to-day a further duty of 2d i gallon on motor spirits will become operative in New Zealand, a resolution to this effect having been" adopted in the House of Representatives last night after considerable discussion. Strong objection was raised to the tax from certain quarters on account of the large profits which, it was claimed, were being made by the oil companies. The Prime Minister stated that investigations had already been made into the profits of the companies, but they were not yet completed. Once they were, a report would be submitted to the House. He hoped the report would be available before the Customs Amendment bill was considered.

Mr. "W. J. Jordan (Labour, Manukau) asked whethor the companies were going to carry the whole or part of the increased taxation. Captain H. M. Kushworth (Country Party, Bay of Islands) asked whether the tax would be paid into the Consolidated Tund or to the Main J^ghways Board. If it went into the Consolidated Fund, would it be used to relieve the rural rates? Mr. J. S. Fletcher (Independent, Grey Lvnn) said that the companies were getting away with £2,000,000 per an--sum, ana he asked why the Government was not asking the companies to bear the tax. Before the recent exchange movements petrol could be landed in New Zealand at id per gallon, and the high price which was being paid ■went to the benefit of the oil trusts m Mr. P. Frascr (Labour, Wellington Central) asked whether a searching inquiry had been made into the price of oil and petrol, the cost of transport, the distribution charges, and the high profits made by the companies. Mr C. E. Macmillan (Government, Taaranga) asked if the House would have an opportunity of discussing the report which had been prepared by the Department of Industries and Commerce before the Customs Amendment Bill came down. . Mr. H. T. Armstrong (Labour, Christchurch East) said that unless the oil companies were- going to bo called upon. to meet the increased tax thero would bo very strenuous opposition to the proposal. The fact that tie tax was to go to the Consolidated Fund instead of for the purposes of the public highways i juld also give rise to opposition. ""Mr. W. Nash (Labour, Hutt) said there'was a strong.case to bn made out for the contention that the companies should bear extra taxation. The profits at present were enormously high.

THE INVESTiaATION.

The Prime Minister said ho had given an undertaking some little time ago that there would bo an investigation into the cost of petrol. That investigation had proceeded a considerable length but was not quite completed because it was necessary for certain figures to bo verified in the United States and other countries from which petrol was imported. Ho hoped to be able to present tho completed report to the House before the Customs Amendment Bill came down. So far as the investigation had proceeded, it had not disclosed those voi# largo profits that had been mentioned. Mr. R. Semple (Labour, Wellington East): "The companies are better able to stand it than the general public." Mr. Forbes: "I have no information as to what they will do. The companies had no idea as to what was going to be done." Mr. \V. L. Martin (Labour, Eaglan): "They have been making preparations all the same." -,;,.. Mr. Forbes: "I have no doubt the companies will do the right thing." Mr. Fraser: "But what is the right thing?"

A riSHINa EXCURSION,

Mr. Forbes: "I would say that the companies would meet the position so far as they possibly can." The Leader of the Opposition (Mr. H. E. Holland) said Mr. Forbes might have said when the Customs Bill would come down. Did that mean that he anticipated that the Bill would be held up for some time? "Does it mean that it is proposed to postpone the elections?" asked Mr. Holland, amidst laughter. Mr. Scmple: "You are fishing." A Government member: "Why bring that up?" Mr. Holland: "I thought that aspect of the matter would have been dealt ■with by the Minister of Finance in his ■tatement."

The Leader of the Opposition went on to say that a lengthy statement had been submitted to the Economic Committee by Mr. Clinkard, of the Department of Industries and Commerce, on the subject of tho petrol tax, and he suggested that that might be made available to the House. "By the way," added Mr. Holland, amidst laughter, "I take it that the Economic Committee has not concluded its sittings."

The Prime Minister said that the iiiformation which had boen submitted to the Committee had been of a confidential nature. It was not a Parliamentary Committee. Mr. W. E. Parry (Labour, Auckland Central): "It was set up by the House." Mr. Forbes: "The information supplied to the Committee would not in the ordinary course of events be supplied to the House." Mr. Holland: "We were not told it was confidential. The Minister has used it to-night." Mr. Parry: "What was th© Committee? A hot-cross ban, or what was it?" (Laughter.) Mr. Forbes added that the Customs Bill would probably-cume down next week. There would be no delay in the ■work of th© House. Mr. J. O'Brien (Labour, Westland): "The Bill will bo down before Christmas'?" Mr. Martin: "We will be here for three months." Mr. M. J. Savage (Labour, Auckland West) said that the Prime Minister had told the House that the report made by tho Industries and Commerce Department was confidential. Mr. Forbes: "Until it is completed." Mr. Savage said that some of tho facts given in the report had been used by tho Minister of Finance in his statement to the House. The Prime Minister's excuse, therefore, that the report was confidential was not convincing.

HUGE, FEOFITS.

Mr. F. Langstone (Labour, Wairnarino) said that, if petrol cost a little over 5d per gallon to land and about 3d per gallon to distribute, the companies were making huge profits. The people were being exploited by the oil companies, and ho hoped that the companies would be called upon to fcear the whole of the increased tax. Mr. 11. M. Campbell (Government, Hawk'es Bay) believed that the companies were making high profits, and

he hoped that tho investigation being made by the Government would be a searching one. Mr. Semple made a plea for the thousands of men who were making a living out of running motor-lorries. If they were to carry the extra taxation they would be taxed out of business. Mr. W. J. Poison (Independent, Stratford) said that the destination of the petrol tax was of paramount importance to the primary producers. If the tax was not going towards the relief of rates, tho trifling relief which wjuld be given in other directions would not be enough. He hoped that there would be no interference with exemptions to farmers. Mr. Fraser said that the abolition of the land tax would be relief for the largo farmer, and under the petrol tax the small farmer would be hit. He asked whether any provision was being made for the exemption of commercial vehicles. Mr. Macmillan: "He can pass it on." Mr. Fraser: "Yes, on to the bulk of tho people. It is the pcoplo who always pay in the long run." Mr. Fraser said that he hoped there would bo no delay in bringing down the Bill embodying the resolutions. So far no Bill containing the resolutions passed several weeks ago had made its appearThe Minister of Native Affairs (the Hon. Sir Apirana Ngata): "There were exceptional circumstances." Mr. Fraser: "Yes, and an exceptional Government. I would like to know also whether the Government is prepared to faco the electors." Mr. E. A. Wright (Government, Wellington Suburbs) expressed the hope that the people carrying out an investigation into petrol prices would probe the whole position most thoroughly. Evidence taken in Australia had shown that at least one company was making enormous profits. It had been said that it was impossible to pin the oil companies down, but he would remind members that a special tax had prevented picture film companies from passing tho cost on. If a vote of the House were taken, he thought that a majority of tho members would bo in favour of making the companies pay. Mr. J. O'Brien (Labour, Westland) hoped that tho backblock districts which had to pay more«thau tho town districts for their petrol would receive some concession.

Mr. Macmillan said that there were larger sums paid to commercial traveller" selling benzine than was paid to all the members of Parliament.

Mr. W. Nash said that on the basis of figures supplied in Australia the companies were making a net profit of 6d per gallon. If that was so there was a need for a thorough investigation.

Mr. A. E. Ansell (Government, Chalmers) said that he was very disappointed with the indication given by tho Prime Minister that the investiga-

tion being made in New Zealand did not disclose large profits. In Australia an investigation showed that much of the profit was being covered up. He urged that a report should bo submitted to the House before the Bill crane down. The resolutions were agreed to without further discussion.