Highway Fund Raid

Sun (Auckland), Volume III, Issue 743, 16 August 1929, Page 8

Highway Fund Raid

Motorists Allege Breach of Faith FOR the first time in New Zealand political history, money which has been raised through taxation over a section of the community for a specific purpose, has been declared by the Government to be public funds and available for whatever use the Government might consider desirable. The Minister of Finance has suddenly stopped the annual grant of £200,000 from the Public Works Fund to the Main Highways Board —a precedent established in the Main Highways Act—and has incurred the violent displeasure of motorists and local bodies throughout the Dominion.

In liis endeavours to balance the State Budget and extinguish last year’s deficit of £577,000, Sir Joseph Ward, as Minister of Finance, has attacked the Main Highways funds by omitting from the estimates £200,000, which was the established amount payable annually by the Public Works Department as the Government's minimum contribution toward tbe cost of roads under the board's jurisdiction, hitherto maintained by the State. This decision followed a legal opinion from the Crown Law Office, which decided that there was no legal •obligation upon the Government under the Main Highways Act, 1924, which, in Section 16, reads: “The Construction Fund shall include all monies appropriated by Parliament out of the Public Works Fund for the purposes of main highways, being not less in any one year than the sum of £200,000, the first such payment to be made from April 1. 1924.” Consternation was caused in motoring organisations throughout the country when Sir Joseph Ward conveyed his decision to Mr. M. H. Wynj'ard, of Auckland, motorists’ repi esentative on the Main Highways Board, and since then several meetings of the Auckland Automooile Association, as well as motor unions in both Islands, have discussed the position. Indignation was expressed in the South, and the political honesty of the Minister of Finance impugned. Auckland motorists regard it frankly as a “steal” in the political sense. The correspondence which passed between Mr. Wynyard and Sir Joseph Ward indicates how seriously the removal of £200,000 from the highways fund will affect the fixed developmental programme of the board over a period of years, apart altogether from the ethics of the decision, characterised as a “breach of faith.” Sir Joseph Ward, in his letter to Mr. Wynyard, says, inter alia, that “ail the money expended out of the Main Highways Account is either loan money borrowed by the State or tbe proceds of taxation, and while tbe Highways Board, as representative of the parties particularly interested in the state of the roads, is vested with authority to determine how and when the funds made available for arterial roads are to be expended, it must not be overlooked that all such funds are roonies. . . . The resources of the Main Highways Board are more than ample to meet current requirements, and accordingly this fund must

assist to make good the shortage in other directions.” The complete position of the Highways Account was set out in a long letter to Sir Joseph Ward from Messrs. Wynyard, A. E. Jull and C. J. Talbot, all members of the board, in which they explained that the board had committed itself with local bodies for a five-years’ programme, using not only the funds now in hand but the money accruing annually for some years hence. Included in this was the creation of a new secondary highway, of which 3,570 miles have since been declared, and substantial assistance to local bodies in the way of subsidies on bridges and specified road works. All the subsidies have been agreed upon and are now being paid, and the full programme cannot be suspended without serious readjustment and embarrassment to the inter-island arrangements upon roads’ expenditure. The letter further states that the amount of £200,000 was arrived at as the amount which the Public Works Fund had been finding yearly toward the Construction Account on main arterial roads at the time the Act was passed. It was clearly meant to be a minimum payment, and even with the reduced revenue secured by the board from tbe Public Works Department this year (£550,000, or £150,000 less than asked for),-the board's income would be seriously restricted, falling to about £250,000 at the end of this year, and disappearing entirely at the end of next year. As a subtle reminder to Sir Joseph of his position in the Government, the letter suggests to him some of the political effects of his action. Local bodies and motorists will regard it as a breach of faith, he is reminded, and as an endeavour to make them carry, without any assistance from the State, a large share of the relief of unemployment in the country. It will be regarded also as a reduction in the assistance which they have been led to expect, and which the board is prepared to give them if its funds are left intact. Motorists, it is plain, are indignant, and are marshalling their forces for an onslaught against the abolition cf this grant. For, as Mr. G. W. Hutchison, secretary of the Auckland Automobile Association, says, “As electors, the people of the Dominion must regard with the deepest concern the possibility that honourable obligations entered into by Governments can be biushed aside, and funds alienated for Government purposes for which they were not raised.”