Highways £200,000 Advance to be Paid

Sun (Auckland), Volume III, Issue 756, 31 August 1929, Page 8

Highways £200,000 Advance to be Paid

TO BEAR INTEREST NO OTHER GRANT (THE. '.S Parliamentary Reporter) PARLIAMENT BLDGS., Fri. The contention that the Government's reorganisation of the Highways funds was justified was made in the House of Representatives this afternoon by the Prime Minister, Sir Joseph Ward, who claimed that the Government had been misrepresented in regard to these proposals. ‘ There has been a great deal of misunderstanding and misrepresentation regarding the Government’s proposals in thi« matter, and I will endeavour to clear up the position,” said the Prime Minister. “It has been stated that the Budget proposals will deprive the Main Highways fund of £235,000, but how such an impression can be held in view of previous explanations I have given it is difficult to understand. “In the first place I wish to emphasise that the sections of the Main Highways Act that deal with these moneys mean that the amounts so provided for require to be annually voted by X J arliament and obviously are subject to annual revision and are not, as appears to be imagined, a permanent charge. These sections of the 1922 Act merely express the policy for the time being. Since that date considerable changes in highway taxation have occurred, which undoubtedly affect the original position. In 1922 the Highways fund had little revenue from taxation, but is now in receipt of about £1,250,000 in revenue and is thus a revenue account and should, in view of changes that have taken place, come within the category of all public accounts in receipt of revenue —that is it should pay interest on the loan capital it requires. “The total loan allocation for Highways constructions this year was £ 550,000 and if the Act as it has been operating for the la/st few years was still followed, £200,000 of this would be free of interest to the Highways fund by transfer from thq Public Works fund, the Consolidated Fund being left to bear the interest.” “The change proposed merely requires that the Highways Fund shall pay interest on its full loan capital, and the statement that £200,000 is being withheld is quite incorrect. THE £35,000 GRANT “Regarding the £35,000 which has been annually granted from the Consolidated Fund, in view of the changed and the improved revenue position of the Highways Fund, it is considered that the Government, at a time when it is faced with increasing taxation to balance its Budget, should discontinue this grant, the disadvantage of which in no way restricts the Highways Board’s present finances. “The Highways Account does not need this £35,000 at present, so the Government would not be justified in making a gram while there is a general shortage in the Consolidated Fund. “In the South Island suggestions have been made that as a result of these adjustments, subsidies and grants for various local body works have been refused or curtailed. I can assure the House that these suggestions are quite incorrect, as the matters referred to are wholly questions of policy as between the Highways Board and the local authorities concerned, and' they are not affected by these adjustments.” In regard to the £200,000 transfer, the Prime Minister said the board was expected to repay the country the interest it had paid. That was only a fair thing. A Member: Will the £200,000 be paid this year? The Prune Minister: Yes, it will be paid. The Leader of the Opposition, Mr. ,T. G. Coates: And the £35,000. The Prime Minister: The £35.000 will have to be in the same position. We cannot take the liberties that were taken last year. We have all to recognise that we are in a different position from what we were last year. Wc have, in the first place, a shortage of revenue. We are £1,500,000 short of what we were last year. We have to make that up. We are depending upon sources of revenue that may or may not come up to the estimate that we are expecting to reach.