Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Thursday, 1 July 1937

Senator ALLAN MACDONALD (WESTERN AUSTRALIA) . - I hasten to assure Senator Leckie that there arc many people in Western Australia who will appreciate the passing of this measure. 1 myself am pleased that representatives of the States and the Commonwealth have been able to reach agreement, as a result of which this measure has been made possible. In common with South Australia and Queensland, Western Australia will benefit greatly from the extension of the Federal Aid Roads

Agreement for a further ten years. Senators from Western Australia appreciate the fact that the industrial States of Victoria and New South Wales have agreed that the money shall be distributed on a basis which takes into consideration area as well as population. Money made available to the States under the agreement has not always been wisely expended. In 1927, just prior to the first election after the Federal Aid Roads Agreement became operative, it was a common sight to see hordes of itinerant workers moving from one portion of the State to another but, however, carrying no tools for the construction of roads. One cartoonist depicted them with fountain pens over their shoulders and electoral enrolment cards in their hands. The main purpose of the Government of (he day in moving them from place to place was to ensure that they would he in certain electorates 31 clear days before the closing date for nominations. Senator Johnston may call that a faildistribution of the funds by State governments, but I have another name for it. That election campaign was not singular in that respect, for the same tiling has happened during other election campaigns. In my opinion, it is a wrongprinciple for a taxing authority to hand over its revenues to be expended by another authority. Unfortunately, the direct disbursement of thi.3 money by the Commonwealth in the several States would mean the creation of a huge Commonwealth organization in addition to existing State organizations. The time is not yet ripe for the taxing authority also the spending authority. However, I hope that the State governments will not again try to manipulate these funds as some of them have done in the past.

We hear a great deal about the heavy burden placed on motorists by the Commonwealth, but very little of the taxes levied on them by the States. Every criticism relating to the taxation of the motor industry is an attack on the Commonwealth, not on the States. On every petrol bowser, from one end of Australia to the other, the disc which notifies the price of petrol announces that it includes 7^d. Commonwealth petrol tax. Such propaganda has the effect of making the ordinary individual who has the misfortune to own a motor car believe that the Commonwealth Government is the bugbear.

Senator Sampson - The Commonwealth gets the odium and the States the kudos.

Senator Leckie - The ordinary motorist, who uses his car principally at week-ends, pays into the coffers of the Commonwealth little more than half of the amount that he pays to the State government as registration fees. Although much is said of the heavy burden placed on motorists by Commonwealth taxation, little or nothing is said about the fees payable by them to the States.

Senator BROWN - As it happens, there are many words said about them.

Senator ALLANMacDONALD.Not in comparison with the volume of words which is hurled at the Commonwealth Government in connexion with the imposition of the petrol tax. Having been a motorist for many years, I am aware that the odium which is incurred by the Commonwealth Government on this account is out of all proportion to the rate of the levy. I say that who am not a believer in the imposition of a high petrol tax.

Senator Sir GEORGE Pearce - What is the registration fee for the average motor car?

Senator ALLANMacDONALD.In Western Australia the registration fee for an ordinary motor car ranges between £9 and £10 per annum. The average motorist who uses only six or eight gallons of petrol a week would not pay in the course of a year, any more by way of petrol tax than the annual registration charge, but emphatic objection is seldom raised against the latter imposition which is levied by the State governments. Senator Johnston heaped lavish praises upon the States for their wonderful administration of Federal Aid Roads funds; in the meantime they wear a satisfied smirk, because they obtain the money and avoid the odium of collecting it by taxation. Nevertheless their high fees are amongst the factors which give rise to the agitation by motorists against excessive taxes.

Senator Brown - The average motorist would pay in petrol tax anything from £15 to £50 a year.

Senator ALLANMacDONALD.In order to do so, such a person would have to drive his car 24 hours of the clay. I have travelled long mileages in Western Australia but I have never paid so much as £50 per annum in petrol tax. Some attention should be drawn to the high rate of tax -which is imposed by the State authorities on motorists in order that, by way of welcome change, the Commonwealth Government may be given a little kudos for the expenditure of money on roads. Up to date, however, it has received nothing but knocks, and it will continue to get them while' the present system under which the taxing authority hands over the funds to theStates, is maintained. If that system continues we cannot hope to cure the existing anomalies without the creation of a costly federal spending authority in each of the States, and the population of Australia would not warrant the expense of that. I hope that the State authorities will spend the proceeds from the petrol tax in the most advantageous direction. If it be possible to reduce this tax in the near future, the States should also be requested to make a reduction of the charges which they levy upon the motoring community. It is my earnest desire that in the next budget the motorists will be granted some relief from the heavy burden of taxation ; because everybody seems to delight in taking a pot-shot at them. A reduction of the petrol tax should be made at the first appropriate opportunity, but I suggest that the Commonwealth Government should make such a reduction conditional upon an equal reduction of registration fees being made by the State authorities. If the States cannot be in that way prevailed upon to give the motorists relief, this already excessivelytaxed section will never obtain relief. The States should also be compelled to share some of the odium caused by the imposition of the petrol tax; all the criticism in this respect should not be borne by the Commonwealth Government.

Senator Sir GEORGEPEARCE (Western Australia - Minister for External Affairs) [11.5] - in reply. - In referring to the probable increase of the use of oil fuel in road vehicles,

Senator Hardyraised a matter of considerable interest. This subject has given some concern to the Commonwealth Government in connexion with this matter, and I have obtained some information which should be of interest to honorable senators. An endeavour has been made to estimate the growth of the use of oil fuel in road vehicles, and the Government has been able to secure information relating to the position in all States, with the exception of Queensland. The following table indicates the increased use of oil fuel during the last 2£ years: -

Senator Leckie - Do those figures relate to motor vehicles on roads?

Senator Sir GEORGE PEARCE - Yes.

Senator Leckie - How was the distinction made between fuel used by motor vehicles on roads and that used in industrial plants?

Senator Sir GEORGE PEARCE - As the result of its investigations the Government was able to separate the two classes.

Information in respect of the number of road vehicles using oil fuel has also been secured. The details are shown in the following table: -

Senator Hardy - The motor manufacturing companies are producing this year a light diesel truck for use on roads.

Senator Sir GEORGEPEARCE.That is so. On an average, 22 gallons of oil fuel will replace 50 gallons of petrol. On this basis, if, for the first six months ended the 31st December last, 977,000 gallons of imported petrol dutiable at 7d. a gallon had been used instead of the 429,848 gallons of oil fuel the revenue would have benefited to the amount of £28,500. The most recent development was the announcement yesterday of the advent of a British 2-2½-ton and 3-4- ton truck with a diesel engine which will be sold in Australia for less than £500; that is less than half of the cost of a similar vehicle hitherto. The company which is marketing the truck claims that on an annual running distance of 30,000 miles the saving of fuel costs with a diesel truck will be approximately £110. The Department of Trade and Customs has had the matter of the displacement of petrol by crude oil, owing to the increasing use of diesel engines for road transport, constantly before it for some years, and the subject will continue to receive consideration.

In view of what are sometimes extravagant statements made in regard to the. amount of revenue derived by the Commonwealth from petrol duties, I desire to place on record the following comparison of the amounts collected annually from this source since 1926, with the amounts actually paid to the States during those years: -


The balance, which is the amount of petrol tax retained for the general revenue purposes of the Commonwealth, is shown as follows-


Petrol duties are levied for two purposes : First as a general revenue tax for Commonwealth purposes, and secondly to provide moneys for roads and other transport purposes of the States. In imposing this tax the Commonwealth is not singular. The Government of the United Kingdom and the Government of New Zealand impose a tax on petrol for general revenue purposes, and I am informed that the tax in New Zealand is about10d. a gallon. Although I have not specific information in regard to the petrol tax in the United Kingdom, I can assure honorable senators that it is heavy.

Senator A J McLACHLAN (SOUTH AUSTRALIA) - It is 8d. a gallon.

Senator Sir GEORGE PEARCE - In New Zealand, the petrol tax is nearly 50 per cent, greater than the Commonwealth tax.

Senator Brown - What is the tax in the United States of America?

Senator Sir GEORGE PEARCE - I endeavoured to obtain that information this morning, but was unable to do so. I am gratified that Senator Johnston is pleased that the Commonwealth Government is carrying on the principle of distributing this grant on the basis of threefifths population and two-fifths area. I am well aware that the honorable senator stated that the credit for this arrangement rests solely with Mr. S. M. Bruce. While I do not desire to take away any of the credit from that gentleman, who was the head of the Government which introduced the arrangement, I avail myself of this opportunity to inform the Senate that 1 happen to be the Minister who first brought this matter under the notice of the Bruce-Page Government.

An Honorable Senator. - Hear, hear !

Senator Sir GEORGE PEARCE - I urged the adoption of this arrangement for a considerable time before I was able to convince my colleagues of its merits. I am gratified to discover that, for once at any rate, I have done something of which Senator Johnston approves.

Question resolved in the affirmative.

Bill read a second time and passed through its remaining stages without amendment or debate.

Suggest corrections