IV
THE LAND POLICY OF NEW ZEALAND
Differences of conditions between Australia and New Zealand—The Public Works policy—Taxation on land—The Land Act of 1892—The Land for Settlements Acts—The Government Advances to Settlers Acts—The encouragement of settlement—The co-operative construction of Public Works—The unemployed—Continuity of policy.
The Constitution of 1852, under which New Zealand obtained responsible government, differed from those granted to the Australian Provinces in the creation of Provincial as well as Central Authorities. Owing to the mountainous character of many parts of both islands, and in the absence of railways and other facilities for internal transit, communication had been carried on principally by sea, and settlement, instead of radiating from one point, as in New South Wales, Victoria, and South Australia, had been diffused at Auckland, Wellington, Christchurch, Dunedin, and other places of secondary importance. Under these circumstances, while it was deemed advisable to create a Central Government at Auckland, which was transferred to Wellington in 1865, six elective Provincial Councils were established, which, though their legislative and executive powers were confined within specified limits, promoted the continuance of the separate development of the several portions of the Colony. In 1876 the Provincial Legislatures, which had in the meanwhile been increased by a division of territories to ten, were abolished by the Central Government, principally because they impeded the execution of the national policy of the construction of public works. The effects of the system, however, are still seen, especially in the demands made in the House of Representatives that the different districts shall share in the benefits of any proposed expenditure of public funds.
Another feature which served to differentiate New Zealand from Australia was the existence of a warlike native race in the North Island, which opposed the colonisation of the early settlers. From the outset, ignorance of each other's language and habits of thought led to misunderstandings in regard to the disposal of land, which was complicated by the communal tenure of the Maoris. The appreciation of this difficulty led to the insertion in the Treaty of 1840, in which the chiefs purported to cede the sovereignty of New Zealand, of a provision which reserved to the Crown the right of pre-emption over all native lands. But the dissatisfaction was not allayed; the natives, conscious of the steady advances of the settlers and urged to sell by agents of the Crown, feared that they would gradually be dispossessed of their territory. A conflict which arose in regard to some land, and led to fatal results, increased the state of tension, which culminated, after a struggle in the extreme north, in the prolonged conflicts of 1860 to 1870. After the pacification the reciprocal relations began to improve, and are now excellent. The Maoris are universally respected, have four members in the House of Representatives, and two in the Legislative Council, and are represented in the Executive Council by a Minister, who is himself a half-caste. Numerous attempts have also been made to settle the land question, notably by the resumption of the right of pre-emption, which had been waived for a time, and by the constitution, by an Act of 1893, of a Validation Court for the purpose of considering and finally settling the titles to lands obtained by Europeans from the natives. In view of their pre-emptive right, the Government have been bound, in justice to the Maoris, to make provision for the purchase of such lands as may be offered to them, though they have not herein initiated a new policy. From the establishment of Imperial sovereignty to 1870, successive Governments acquired six million acres in the North Island, the whole of the Middle Island, with the exception of reserves for the original owners who were few in number, and Stewart Island. From that date until 1895, another six million acres had been acquired at an outlay of a million and a half pounds, and subsequent purchases, from a large area still under negotiation, amount to about 550,000 acres. New Zealand has thus disbursed, and is still disbursing, large sums of money in the purchase of native lands, while Australia and Tasmania recognised no right of possession on the part of the few degraded aboriginals; and New Zealand alone is burdened with the payment of interest upon loans raised to cover the charges of prolonged military campaigns.
During the wars, settlement was necessarily checked in the North Island, but proceeded in the Middle Island without intermission. At their conclusion, in 1870, Mr. (now Sir Julius) Vogel, the Colonial Treasurer, placed before Parliament a comprehensive scheme of public works, which aimed at the general improvement of means of communication, a matter of particular importance in the North Island as being likely to hasten its final pacification. "The leading features of the policy were: to raise a loan of ten millions, and to spend it over a course of years in systematic immigration, in the construction of a main trunk railway throughout the length of each island, in the employment of immigrants on the railway work, and in their ultimate settlement within large blocks of land reserved near the lines of railway, in the construction of main roads, in the purchase of native lands in the North Island, in the supply of water-power on the goldfields, and in the extension of the telegraph. The plan, with some modifications, was authorised by the Legislature. These modifications mostly related to the amount to be borrowed and to its expenditure; but there was one alteration which crippled the whole policy. The reservation of large tracts of Crown land through which the railways were intended to be made, with a view to the use of that land for settlement thereon, and as the means of recouping to the Colony a great part of the railway expenditure, was withdrawn by the Government from fear of losing the whole scheme. That fear was not unfounded, inasmuch as provincial opposition to the reservation in question, combined with the opposition of those who disliked the whole scheme, would have seriously endangered its existence."[[1]] The provincial opposition was due to the fact that, though the disposal of the Crown lands and the appropriation of the Land Fund were vested by the Constitution Act in the Central Legislature, each province had in practice been allowed to frame the regulations for the alienation of land within its district, and had received the proceeds of sale for its own use. But the omission of the proposed reservation "has necessitated the frequent recurrence of borrowing large sums in order to continue work which had been begun and was useless while it was unfinished, instead of making, as would have been the case under a proper system of land reservation, the work itself to a great extent, if not altogether, self-supporting and self-extending; and that deplorable omission has also frustrated the anticipated conduct of progressive colonisation concurrently with the progress of the railways. The result of not insisting on this fundamental condition has been what should have been foreseen and obviated. The Provincial Governments sold land in the vicinity of the intended railways, and expended the proceeds for provincial purposes; and, as a rule, speculative capitalists absorbed the land and the profits which should have been devoted to colonisation and to the railway fund."[[2]] As the proposed railways would pass through private as well as Crown lands, Sir Julius Vogel also sought the power to levy a special rate, in certain circumstances, upon the persons in the vicinity of the railways who would be benefited by their construction. He believed that he would thereby prevent "indiscriminate scrambling for railways," but was equally unable to induce Parliament to accept his views. The aggregation of large estates was promoted by the low price, 10s. or even 5s. an acre, at which the land was for many years sold. 262 freeholders, including companies, owned in 1891, 7,840,000 acres of land in estates of 10,000 acres and upwards. The Province has, since its foundation, sold or finally disposed of more than 21 million acres, and has at present nearly three million acres open for selection. The remaining lands, exclusive of those in the hands of the Maoris, amount to 16-½ million acres, but comprise large tracts of barren mountainous country in the Middle Island, and of valueless pumice sand in the North Island. In most directions, according to the Premier, settlement is already in advance of the roading operations.
The policy initiated by Sir Julius Vogel in 1870 was carried on by successive Ministers until 1888, during which time more than 27 millions were borrowed and devoted, for the most part, to the construction of railways and other public undertakings. Subsequently, Sir Harry Atkinson and his successor, Mr. John Ballance, realised the danger of constant reliance upon loans, and greatly reduced the expenditure, which had become extravagant in the abundance of borrowed money. Mr. Ballance also reformed the system of direct taxation and gave an impetus to legislation dealing with the settlement of the land and the protection of workmen in industrial pursuits.
The existing property tax, at the rate of one penny in the £ on all property, subject to an exemption of £500, was replaced by a graduated tax on incomes and land values, the principle of graduation having already been recognised in the case of succession duty. The former impost was naturally upheld by large owners of property and by all classes of professional men who had escaped taxation upon their incomes; while it was distasteful to shopkeepers, who might be taxed on unsaleable merchandise, and to cultivators of the soil, who found that their taxes rose in proportion to the improvements which they effected upon their estates. The Government had little difficulty in passing their measure, which, subject to slight modifications, is in force at the present time. Incomes below £300 are not taxed; between £300 and £1,300 they pay 6d. in the £, above £1,300 a shilling; but the sum of £300 is deducted from the total income in the assessment of the tax. For instance, an income of £2,000 pays £60, at the rate of £25 upon £1,000, and £35 upon £700. The ordinary land-tax is a penny in the £ on all freehold properties of which the unimproved value exceeds £500; between £500 and £1,500 exemption is allowed on £500; between £1,500 and £2,500 the exemption decreases by £1 for every £2 of increased value, being extinguished at the latter amount. Should the value exceed £5,000, a graduated land-tax is also levied, which rises progressively from half a farthing, until it reaches twopence upon estates of the unimproved value of £210,000 and upwards. All improvements are excluded from the assessment of the taxable amount: they are defined to include "houses and buildings, fencing, planting, draining of land, clearing from timber, scrub or fern, laying down in grass or pasture, and any other improvement whatsoever, the benefit of which is unexhausted at the time of valuation." Under this provision rural owners have every encouragement to improve their properties, as the more they do so, the smaller becomes the proportion of the total value of their estates on which they are liable for taxation. Owners are allowed, for the purposes of the ordinary, but not of the graduated land-tax, to deduct from the unimproved value of their land the amount of registered mortgages secured upon it; and mortgagees pay one penny in the £ upon the sum total of their mortgages, but are not subject to the graduated tax. A return, published under the assessment of 1891, shows, however, that rural owners are obtaining less benefit from the exemption of improvements than the owners of urban lands. The figures are as follows:—
Actual Value, Value
including of Unimproved
improvements. improvements. value.
Counties ... 85,818,167 27,922,735 57,880,233
Boroughs ... 36,406,862 18,442,562 17,907,662
Total ... £122,225,029 £46,365,297 £75,787,895