The truth about toll roads

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The Taranaki Toll Roads - 1906-1925

Soft soils and plentiful rainfall are the worst enemies of good roads. No amount of gravel can prevent carts and wagons from sinking up to their axles during the wettest months of the year. This is not a problem for seasonal farming but it was a disaster for dairy farmers before refrigeration became common place. This is the predicament that Taranaki's dairy farmers had to face at the turn of the century. The only practical solution was to give the roads a durable waterproof surface by spraying bitumen on top of the gravel.

Bitumen is a waste product from making gas for street lighting from coking coal. Bitumen is also a waste product from oil refining. As municipal authorities established coke-gas plants they began to produce just enough bitumen to be able to tarseal short stretches of the main shopping and commercial streets each year at reasonable cost. The amount of bitumen needed to tarseal suburban streets and country roads was far greater than could ever be produced as a by-product of coke-gas production in New Zealand. Therefore the bitumen would have to be sourced from foreign oil refineries at considerable cost. To make matters worse, by the turn of the century the increased use of electric lighting was reducing demand for oil and kerosene for household lighting at the same time that increasing prosperity in the new world was increasing the demand for "civilised roads for civilised cities." These supply and demand forces continued to make bitumen expensive and it was only after the first world war that growth in demand for motor-spirits would exceed the growth in demand for bitumen sufficiently to reduce the price of bitumen by a significant amount.

It was this economic conundrum that Taranaki farmers had to face at the turn of the century. However in 1905 the farmers of Eltham county bit the bullet, followed over the next six years by all of the other counties in Taranaki. Loans would be raised to fund the tarsealing of a two metre wide strip along the centre of all minor roads with these loans to be repaid from special rates. The Taranaki dairy farmers were prepared to pay the highest rural rates in the country because most of their gravel roads could only carry laden milk wagons during the dryest eight months of the year whereas these new all-weather roads would deliver milk to the dairy factories all 365 days of the year which would increase the farmers incomes by 50% and give Taranaki a competitive advantage over the other dairying regions.

Farmers were not prepared to accept this same arrangement for main roads. On these roads a high proportion of the benefit would go to through traffic, mainly joy-riding townies, who were already a major cause of damage to the gravel road surfaces. Further, the cost of sealing these roads would be greater as the bitumen would have to be thicker and wider to cope with the greater volume of traffic. The solution was a simple one. Since 1870 the Public Works Act and Counties Act had allowed District Road Boards and County Councils to raise tolls on roads and bridges under their control. The laws exempted government vehicles and government employees travelling on government businessfrom having to pay these tolls. Initially these tolls could be imposed at the sole discretion of the local authority but from 1906 the assent of the Governor-General was required. By 1911 the Governor-General had assented to toll gates on all seven of the main roads in Taranaki.

In 1920 the Parliamentary Enquiry into Toll Gates found that over twenty counties and road boards were in the process of applying for the Governor-General's assent to erect toll-gates. The enquiry concluded that the only way the government could stop this proliferation of toll roads would be to introduce some form of national highway funding, preferably based on the principal that the user shall pay. In 1921 the Treasurer introduced a 25% excise duty on Motor Vehicle pheumatice tyres and inner tubes to fund a Main Highways Department. The Counties Conference and the Motoring Unions opposed the creation of a government department to control the Highways Scheme and succeeding in getting the legislation amended to place the scheme under the control of an independent Main Highways Board appointed by the Governor-General. Although motor-taxation had to be paid into the Consolidated Account because it was collected by government departments the Main Highways Act (1922) included a clause which automatically appropriated all of the motor-taxation directly to the Main Highways Account so that it did not form part of the government's budget. This clause has persisted through the National Roads Act (1953), Transit New Zealand Act (1989) and Transport Legislation Act (2004). Since 1989 traffic enforcement and the LTSA have also been funded from motor-taxation under this legislation and therefore have also not been at the mercy of the funding decisions of the government of the day.

As a quid-pro-quo for making the highway scheme independent of direct political interference the motoring unions accepted the introduction of registration fees to supplement the tyre tax. Because the Main Highways were to be funded from user fees Parliament decided that it would be unethical to also have toll-gates operating on these highways. Therefore, when the main roads in Taranaki were designated as Main Highways on 31 March 1925 the toll-gates were automatically abolished, thus bringing to an end the second era of toll roads.

As a further aside, it is worth noting that since motor taxation began funding the cost of tarsealing country roads in the 1950s Taranaki has paid dearly for its early adoption of tarsealed roads. Because ratepayers had already paid to get the job done Taranaki did not need the same amount of assistance from the road fund. Rather than being rewarded with lower petrol taxes Taranaki has been punished by losing more road funds per capita than every other region except Waikato and Cantebury.