IMPOSITION OF PETROL TAX.

Manawatu Herald, Volume XLVIII, Issue 3711, 1 November 1927, Page 3

IMPOSITION OF PETROL TAX.

FOUR PENCE A GALLON AS FROM TO-DAY. Wellington, Last Night. The imposition of petrol tax to become effective from to-day was announced by the Minister of Public Works in the House of Representatives this evening, when resolutions amending the present tariff and imposing a tax of 4d per gallon on motor spirits, both British and foreign, were introduced. The new tax is expected to jdeld £720,000. Petrol used for launches and for stationary engines, as well as spirit used. by. dry cleaners, will be exempted from the tax, which is to be collected through the Customs, rebates being made in the case of the exempted industries. The money is to be allocated as follows: — 24 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 aboutl fifteen years. 4 per cent, to the smaller boroughs. 25 per 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 new tax is in addition to those already levied, which are insufficient to pay the cost of maintaining the roads. REASON FOR TAX. The Minister of Public Works (Hon. K. S. Williams) said the necessity for obtaining additional revenue for the highways was evident because the expenditure on maintenance had been steadily increasing in direct proportion to the ipcrease in the number of motor vehicles. County councils were now in the position that even if they levied the same amount of taxation, the roads 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, The decision to levy a petrol tax had therefore been brought about by the desire to help the local bodies and to meet the wishes of those who wanted better roads adjacent to their cities or towns. FOR ROADING PURPOSES.

“The whole of the money that will be raised by means of the tax will be appropriated for roading purposes, and will form no part of the Customs contribution to the Consolidated Fund,” the Minister continued. The Leader of the Opposition (Ms. Holland), said the tax proposed 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 tire tax. STATEMENT BY PREMIER. The Prime Minister (Right Hon. J. G. Coates) said the scheme outlined conveyed the general idea, as it would affect the motorists, counties, boroughs, and the man in the city. The Government had in mind a scheme that would relieve the boroughs of less than 6000 population of the cost of maintaining the roads therein. For the roads adjacent to the cities the amount to be expended would be £350,000; £60,000 would be allocated to the cities. The time had come in connection with the whole problem when they had to face the position they were getting into, and finally decide what should be done. Some would say that the proposed tax was extra taxation.

He would say that it really meant a more equitable contribution by the user of the road in regard to the road he used. They were asking him to carry, not all, but a fairer proportion of the charges for the roads. It was the fairest tax they could imagine. They had considered the question of taking off the direct tax of £2 a year and £1 registration, but had they done that they would have had to increase the petrol tax. It would be found that the scheme was economically sound, and that it met something ithey had to face. He added that he hoped the sellers would not add the fourpence this morning to the stocks they had in hand, and make a huge profit out of it. They would-be very unwise that. RISE; IN FARES PREDICTED. Mr. T. M. Wfilford (Hutt) claimed that under the Bill the n\an with a cheap second-hand car would be paying at the same rate as the man with a big limousine. After that night all fares would be adjusted—taxi fares, service car fares, and lorry charges would all go up. There would be a general rise in all fares, excepting on the railways, and perhaps the idea was to divert traffic back to the railways. There was to be no remission of present taxation, but an addition. The tax was too high. The imposition of the petrol tax came as a bomb-shell to owners of motor driven vehicles throughout this district, and many and varied were comments expressed. A flaxmiller said: “The outlook for the industry is bad enough as it is without imposing a further tax on production by increasing cost of transport.” “What guarantee have we that

the Mannwatu County will expend the extra taxation on its roads?” That highway from Foxton to the Kairanga is about the worst in the Wellington province, and the Highways Board should see to it that this road is put in order as it costs motorists enough for repairs as it is.” “Let men skilled in road making administer the fund instead of County Councillors,” was another remark. The various local vendors of petrol had a busy morning in quitting stocks in hand at the old prices.