PETROL TAX

Rotorua Morning Post, Volume 2, Issue 336, 24 September 1932, Page 2

PETROL TAX

VlEWS DIFFER 1/ARMERS' UNION SEEKS OPINIONS OF M.P'S. LEADING VIEWPOINTS. Som'2 time ago tlie executive of the New Zealand Farmers' Union circulated members of Parliament asking whetber they were in favour of petrol taxation being used for general purposes by the Treasury. Out of the ! 80 members, 30 have replied, and the views expressed sbow considerable diversity of opinion. Twelve have replied definitely in the negative; nine replied that in the exigencies of the moment the Government was compelled to use the money ' for other purposes, failing which additional taxation would have been unavoidahle; six declared themselves ! against the principle of earmarking : any taxation for special purposes; one Minister felt bound hy the decision of the Government; another said he would only reply to such questions at a public meeting when they could be fully explained; and one Minister declined to express an opinion.

Dire Niecessity. "As a general principle," said the Prime Minister, the Rt. Ilon. G. W. Forbes, "the Government does not favour the earmarking of taxation for j special purposes, as such a practice, i apart from other considerations, is j contrary to the principles of sound | public finance, in that expenditure on ! particular activities should be decided ! in relation to the general budgetary i requirements at the time. I am, of course, aware of the circumstances I which led to the earmarking of petrol ; taxation for road purposes, but in : view of the difficult economic conditions at present prevailing, there har. been no alternative but to restrict expenditure on roads equally with expenditure in other directions." "On general grounds I agree that the principle which your executive seeks to have recognised is a sound one in normal times," replied the Hon. J. A. Young, Minister of Health, "hui in times of dire national adversity necessity demands that, in certain circumstances, steps shall be taken and things done which under normal conditions would not be dreamed of. The present is such a time, hence the ac_ tion which the Government has de'emed it essential to talce in the present instance." Eight of the twelve Labour membgrs expressed themselves against the petrol tax funds being taken for any other purpose than that for which , they were raised. Three Reform memj bers and one of the Country Party I were of the same opinion. j Mr. H. E. Holland, Leader of the | Labour Party, wrote: "I am strongly ■ of the opinion that the funds derived i from the petrol tax should be used I for roading purposes as provided by the law, more especially since the raid i on moneys which properly belonged to i the Main Highways Fund was for the I purpose of saving persons with large j incomes from additional taxation." Objection to Extra Tax. ! I The Hon. A. D. McLeod, Wairarapa, replied. "I agree that petrol taxation 1 should be preserved for roading or j local tax relief purposes. The troublt- ! last session was that the Treasury j and the Minister of Finance propose, I to pass an additional twop'ence on ; petrol for Consolidated Fund purposes. To this our president (Mr. W. J. PolI son, M.P.), backed hy other rural representatives in Parliament, strongly objected. The final outcome was that we agreed to the Treasury having roughly twopenca from the road fund for this year, in preference to raisI ing the total tax to tenpence. Mr. Polson is well seized of all the facts, and with him I feel it was the only course to adopt under the circumstances." "The proceeds of the petrol taxal tion should he used for the construction and maintenance of the highways and byways of the Dominion to the end that rating of farm lands for roading purposes should be abolished," said Captain H. M. Rushworth, Country Party. With the excep'tions stated, most of the other replies were to the effect that the Government was compelled by circumstances to take the stepa it did, or that they were not in favour of the eai'marking of any taxaiion for special purposes.