H.— 4ÔA.

of 10|d. per gallon on petrol, only 6d. was imposed for roading purposes, the remaining 4fd. being definitely allocated for general purposes in the legislation authorizing the levy. The following figures are supplied to us by the Treasury : — Taxes collected on Petrol for Year ending 31st March, 1934. £ Per Cent. Tax for highways, 6d. per gallon .. .. .. 1,291,879 54-47 Tax for general purposes, 4id. .. .. .. .. 1.079,963 45-53 £2,371,842 100-00 The legitimate charges against this taxation during the same year were :—

The Treasury state that it will be seen from these figures — " That instead of only 25 per cent, being applied to roading purposes, over 75 per cent, is so applied, and, although over 45 per cent, of the tax was levied for general purposes, only 24 per cent, was thus expended, or, in other words, that out of £1,079,963 levied for general purposes, £506,546 was absorbed by roading charges, although not specificially earmarked for that purpose. It must also be borne in mind that a considerable quantity of petrol on which Customs duty was levied was consumed by aeroplanes, tractors, engines, &c. For 1930 the estimated quantity was 5,400,000 gallons, or approximately a tenth of the total imported." 16. The foregoing statements, taken from two different points of view, and representing such widely divergent interests as the Motor Trade and the Treasury, agree in this important aspect : that in relation to the upkeep of the roads over which they travel, motor-vehicles are not overtaxed as regards petrol. 17. Looking at the matter from another aspect, the cost per vehicle-mile of road upkeep : we were supplied by the Motor Unions with certain figures derived from a recent traffic tally in Inglewood County, which indicated the cost might be 0-034 d. per vehicle-mile. These figures were submitted by us to the Chairman of the Main Highways Board, who has pointed out to us that, the result is wrong and should actually be on the figures 0-283 d. per vehicle-mile. He also points out that for various reasons maintenance in this county is below the average, and informs us that the cost of maintenance of all highways last year (this excludes, of course, local roads, and urban roads and streets) was 0-46 d. per vehicle-mile. It is believed that actually insufficient maintenance was carried out last year, so the actual average cost of maintenance of highways may be a little in excess of this figure. 18. Returning now to the benefit to the motor-user arising from petrol-tax as compared with the actual cost of the tax to him : we find that, excluding motor-cycles, the average run of all motorvehicles is seventeen miles per gallon of petrol. The average cost to the motor-vehicle, therefore, of the 6d.-per-gallon petrol-tax imposed for road purposes is 2s. lid. for each 100 miles run. If the whole tax of lOid. per gallon is taken into account, the cost to the motorist is less than ss. 2d. per 100 miles. These figures serve to show at what trifling cost to the motorist good road surfaces have been obtained, and there is little doubt, when comparing the wear and tear on a car of 100 miles of running now with what it was before the establishment of the Highways Fund, the cost of the whole tax to the motorist is saved several times over in his freedom from broken springs and the many other accidents which used to befall him only a few years ago. 19. We think it is established that the petrol-tax is not excessive, relatively to road maintenance. We do not agree that this is the sole criterion by which the rate must be measured, but we have dealt with it exhaustively because it is the test which has been suggested to us by large classes of road-users. We must also inquire if the tax is too high in the abstract, so as to cause diminishing returns. We do not think it is. There is no evidence of reduction of motor-transport on account of the tax, on the contrary commercial road transport, at any rate, is increasing ; and the steady yield of the tax is a clear indication that it has not been found unduly oppressive, when the diminishing returns from other taxes are considered. Taking its effect on the ordinary private car the resulting tax is approximately |d. per mile, assuming an average for such cars of twenty miles per gallon, and if such a car runs 6,000 miles a year the annual cost is £12. While we express the opinion that the tax is not excessive it must be remembered that all taxation is heavy at present, and we realize the motor-vehicle must bear its

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Nature of Charge. Amount. Percentage of Rate per £1. £ £ s. d. Costs of collection .. .. .. .. 20,283 0-86 0 0 2 Allocation to boroughs .. .. .. .. 101,728 4-29 0 0 10 Allocation to Main Highways Account .. .. 669,868 28-24 0 5 8 Amortization (| per cent, on roading debt) .. .. 131,623 5-55 0 1 1 Net interest on roading debt .. .. .. 861,345 36-31 0 7 4 Maintenance of roads (paid from Consolidated Fund) .. 13,578 0-57 0 0 1 Total road charges on petrol-taxation .. .. 1,798,425 75-82 0 15 2 Applied to general purposes .. .. ■■ 573,417 24-18 j 0 4 10 £2,371,842 100-00 £10 0