Withdrawal of £200,000 Grant

Nelson Evening Mail, Volume LXIII, 3 August 1929, Page 3

Withdrawal of £200,000 Grant

VIEW OF MOTORING AND LOCAL BODY INTEREST . ‘iTg . W i i,

“A BREACH OF FAITH”

THE PREMIER-EXPLAINS

The Dunedin “Star” lias just published the following correspondence:— On 21sfc June the following memorandum was despatched to the Prime Minister by Messrs W. H. Wvnyard, A. E Jull, and C. J. Talbot, three members of the 'Main Highways Board. It refers to the Premier’s letter of 22nd May in which he intimated his decision in. regard to the finance from the Public Works funds for the Main Highways Board construction account for the current year: — “We have to thank you for increasing the total amount from £400,000 to £650,000, but the statement that the whole amount will be borrowed directly for highways account and no transfer will be made from the Public Works Fund is the one which we desire to discuss with you. We would point out that such a decision will, we feel sure, be very strongly criticised by the interests which we represent on the board, and for the following reasons:— _ “We gather from the legal opinion, a copy of which has been forwarded to the board, that you have been advised that there is no legal obligation, on the part of the Government to pay to the Main Highways Board the sum of £200,000 a year. We are not so much concerned about this legal power as we are with the universally accepted position as set out in the Main Highways Act, 1922, stating:— All moneys appropriated by Parliament out of the Public Works fund for the purposes of main highways, being not less in any year than the sum of £200,000; the first such payment to be made in and for the year commencing on the first, day of April, • 1924.

“The result of your decision, in brief, would mean that the Government is departing from what the people we represent consider, to" be prima facie the statutory obligation, but in any case the moral obligation with regard to Stgte assistance to main highways, and that the Government proposes to absolve itself from all liability in respect of the construction of over 10,000 miles of the roads of the dominion, the further improvement of hundreds of miles of which is necessary for the normal development of the country. We would like to put on record in the following remarks our views upon the different points that affect the matter: — “1. The sum was expressed to be a minimum yearly payment, the clear intention of the Legislature being that such sum was the least the Public Works Department should give annually as a grant to the, board. “2. The amount was arrived at as the amount which the Public Works Fund had been finding yearly towards construction account on the main arterjal roads of 'the country at the time the Act was passed. In this connection tlie first declaration of highways comprised 5,954. miles :of increased by subsequent declarations to ; 6,608 miles in 1928. In the latter year the increased revenue of the board from the petrol tax enabled it to increase the mileage to 10,178 miles. The assumption by the board of liabilities on these extra miles of highways considerably increased the construction liabilities which the-Main Highways Board took over from the Public Works Department, and would have been a fair argument for asking that the £200,000 a year from that department should be increased. The amount of public works expenditure on Hie 3,570 miles of road taken over last year was at least £50.000.

“3. A considerable portion of the expenditure of the board in the backblock sections traversed by the various highways has in part been of a development nature, opening up metalled access to areas otherwise cut off from wheeled traffic during the winter months, and enabling these areas to be developed and settled, to which provision the Pub-

lie Works Fund would liiivc contributed substantial amounts in the ordinary way. UNEMPLOYMENT COMPLICATION “4. The unemployment question has forced upon the board a large expenditure on relief works, . which " usually 1 take the form of improvements on, Ox-., isting roads (widening, grading,,, much in advance of tile time when such works would in the ordinary course be considered by the hoard as essential, and under conditions which do not make for the most economical construction. The amount spent by th e board during the year ended 31st March last on relief works amounted to £220,000. We would point out that the relief of unemployment ■is ~ rCchgiliSed'as’ in a great measure the care-of the’ general taxpayer, by the, fact of the substantial subsidies given local authorities .towards relief works carried out by them., 1 The withdrawal of the annual grantjby the department to the bdard would be a distinct reversal of such principle! The increasing sums spent by the board in' relief of unemployment have. been adversely criticised by many contributors, and the existence .of the annual Government grant has in many carijs been the main justification that' could bo urged for them. BOARD’S COMMITMENTS V “5. The board early in . ,1928 laid down a comprehensive five years’ programme intended to take up not only the funds then in its hands, but the. annually accruing funds receivable by’ it under the existing law. Included in this programme was th e ‘- creation '£l new secondary highways (of . which 3,570 miles have since been declared); the increase of maintenance subsidy to £2 for £l, and of. bridge subsidy to £2 for £1 for the first. £IO,OOO ana higher subsidies over that* amount, a special £3 for £1 subsidy for pavements on roads adjacent to main centres or carrying heavy traffic, between such centres, and the inclusion- in the highway system of extensions of main highways in boroughs of not less than 6000 inhabitants. All these subsidies have been agreed upon, and are now -being paid, and the full programme has been laid out and provided for. We would particularly stress the large proposiis for bridge renewals, particularly in the South Island many, of them urgent renewals of existing structures running into very large amounts, for -which tentative arrangements have been made, and negotiations are in progress also to the extensive and expensive high-class pavement schemes. in which the board is providing three-fourths of the funds. “If any reductions are made in the Highways Board funds or any of the contributors fail in their contributions', then it is clear that the board’s; programme must be recast entirely?- and the subsidies reduced.,

“The precarious position that .would arise is illustrated by the fact that ,we estimate that with the amount 'available from the Public Works Fund cut down to the limit that you have fixed (£550,000), which is £150,000 less than the board asked for, the, credit balance, if the board’s programme is maintained, of the board’s revenue fund, will fall to' some £250,000 at. the end of. this-year, and will entirely disappear at. the end of next year. This is without considering any unforeseen damage such as the heavy expenditure recently ■ rendered necessary by the disaster which has overtaken . the northern., part: of 1 the South Island. :

“6. Tiie evident intention of the Aci was that the £200,000 a year grant should be a minimum. Since then the obligations and contributions' --of the board and the local’ bodies have "increased very considerably, caused large;, ly by the increasing. number, 'of motors .in’ the country, but althougli the State lias from Customs revenue On such crease in cars la:'.very large addition to its revenuevit's vaetUal, payment to the board lias- remained stationary. The position, to ’ our mind, warrants in various aspects rather, an increase in the contribution ‘ from , the Public Works Fund than its extinction. “7.. The principle of ffie. State’s partnership in the liabilities for main: highways is recognised in practically every country, and was certainly, recognised in the New Zealand ’Main HignwSys' Act, not. only by the contribution paid by statute, but also by the inclusion of one-half of its members as representatives of the State, and so long as that Act continues unrepealed ■ it must be taken to be the intention of Parliament.

“The withdrawal of the £200,000 a: year grant will also disorganise the accounts of the Alain Highways Board as between the two islands, and will involve some very considerable readjustments on account of the various factors entering into the matter of the accounts in future between the North and South.

POLITICAL EFFECTS “May we be permitted to refer to the political effects, which will, in our opinion, result from the suggested withdrawal of the £200,000 a year grant;: 1. That local authorities and the motorists (who were consulted prior to the Act coming into force, and who have been' satisfied ’ ‘with, the intentions indicated in the said Act, aud as heretofore carried put) will look upon the withdrawal of the annual grant as a breach of faith on the part of the Government. 2. The local authorities and 'the motorists will consider that it is. ;in endeavour to make them carry,- without assistance from the State, a" very, large part of the relief of unemployment in tlie country, andi'in works, often of a non-essential , 3. The motorists will "consider-: that an unreasonable share of"Wliat liiay lie termed development work is placed-, on their shoulders without any assist-' ance from the State, whose is the bbr ligation to subsidise W’bi'k of a developmental nature. , 4. The local bodies will consider the impoverishing of the board’s funds by the loss of the £200,000 a. year, as a reduction of the assistance which they • have been led to expect, and are now: l receiving," arid which' tllei hbard Tsf i prepared to continue lb give tliferir if | its funds are leit intact. “We, therefore, earnestly beg you to reconsider the decision to make the whole of the moneys from the Public Works fund this year chargeable to loan •account, but to make at least £200,000 the annual grant to the board provided for by section 16 (b) of the Main Highways Act. In doing so,- we would point out that the only difference to the State would be the amount (some

£II,OOO a'yeaif) which would be the interest on the £200,000 as the whole funds payable to the board on construction account will, in any case, be provided by State loan. “In the meantime, we have kept the .iiifonnatibu cantained in your memoran;dUin ‘f<i:.thfe. board oi 22nd May last, as euiifidriitittl. "Should you, however, not sec ypuytyfay to reconsider the point, wo would feel constrained to Jet our conistieaents know of :the position, as otherwise wo should be.placed in a most invidious position in that, knowing the fact tliat.vijjmh' interests may be prejti diced, jyeV'Werc debarred from communicating tKc position to them or consuming iligtri : : upon it.”