MOTOR USE AND TAXES

Evening Post, Volume CXVIII, Issue 92, 16 October 1934, Page 8

MOTOR USE AND TAXES

Speaking as president of the Automobile Association (Wellington), Sir Alexander Roberts said' last night that nearly two-thirds of the taxation paid by motorists was being diverted from the roads, and neglect of the roads in consequence entailed extra wear and tear on motor vehicles costing the motorists at least £1,000,000 a year. This is serious from the motorist's viewpoint, but there is another aspect from which it should be considered. In order "to distribute transport business economically between road, rail, and sea, it is essential -that the charges for different forms of transport should accurately reflect the costs. It was bad when the railway was required to pay for its track, but the motor could run on a highway largely provided and maintained with funds .from the general taxpayer and ratepayer.* There is more than a suspicion, however, that the present arrangement of costs has made the balance unequal on the other side. The Automobile Association's calculation includes £1,125,000, the estimated yield of that part of the petrol tax which is paid direct to the Consolidated Fund, and £500,000 transferred from the Main Highways Fund. The Minister of Finance has excused the latter item by pointing out that it is almost covered by grants to the Highways Construction Fund. But, as we pointed out in comment onjhe Budget, this transaction merely obscures the true financial position. The Budget is made to appear healthier (though it is really not so) by taking £500,000 for revenue, and making compensation from loan funds.

The general revenue petrol tax comes under a different heading. It was imposed because this was a simple way of collecting taxation, and part of the excuse for it was that some motor use was more a luxury than a necessity. Nevertheless it tends to throw the cost of motor transport out of proportion. The Government must consider how far it can levy a general revenue tax and a user-pay-ment charge at the same time. Slated simply the position is this: the railways must pay interest on capital expenditure and maintenance. Railway charges are fixed to return these costs. It is fair that motor transport should pay similar costs and that motor charges to the public should be calculated in the same way. If this is done business will go where, in the national interests,

it is best that it should go. But if motor transport pays £1 for roads, £2 for general revenue, and £1 wear and tear on vehicles because the ro.ads are not properly maintained, the effect must be to force off the roads business which can be most economically handled by motor transport. The loss to motorists is probably not so great as these sample figures suggest, for part of the money seized by the Government (including ihe general revenue petrol tax) is made good

I))' rates both in town and country. Nevertheless it is clear that the present system dors not help to reveal [he true cosl of motor transport. It is lime that a fair and accurate system of user taxation was brought into operation. The longer an adjustment is deferred the greater must be the national loss. A million a year extra for motor wear and tear is deplorable waste; but this is not all. Road foundations are being damaged and surfaces are deteriorating. If this neglect continues maintenance must become progressively heavier and reconstruction costing perhaps some millions will have ,to be undertaken.