EIGHT YEARS OF EXPERIMENT
"For I remember stopping by the way
To watch a potter thumping his wet clay."
In 1890 a new force came into the political field—organized labour. The growth of the cities and of factories in them, the decline of the alluvial and more easily worked gold-fields, and the occupation of the more fertile and accessible lands, all gradually tended to reproduce in the new country old-world industrial conditions. Even the sweating system could be found at work in holes and corners. There need be no surprise, therefore, that the labour problem, when engaging so much of the attention of the civilized world, demanded notice even in New Zealand. There was nothing novel there in the notion of extending the functions of the State in the hope of benefiting the community of the less fortunate classes of it. Already in 1890, the State was the largest landowner and receiver of rents, and the largest employer of labour. It owned nearly all the railways and all the telegraphs just as it now owns and manages the cheap, popular, and useful system of telephones. It entirely controlled and supported the hospitals and lunatic asylums, which it managed humanely and well. It also, by means of local boards and institutions, controlled the whole charitable aid of the country—a system of outdoor relief in some respects open to criticism. It was the largest trustee, managed the largest life insurance business, did nearly all the conveyancing, and educated more than nine-tenths of the children.
It will thus be seen that the large number of interesting experiments sanctioned by the New Zealand Parliament since 1890 involved few new departures or startling changes of principle. The constitution was democratic: it has simply been made more democratic. The functions of the State were wide; they have been made yet wider. The uncommon feature of the last eight years has been not so much the nature as the number and degree of the changes effected and the trials made by the Liberal-Labour fusion which gained power under Mr. Ballance at the close of 1890 and still retains office. The precise cause of their victory was the wave of socialistic, agrarian, and labour feeling which swept over the English-speaking world at the time, and which reached New Zealand.
The oft-repeated assertion that the Australasian maritime strike of August, 1890, was not only coincident with the forming of Labour Parties in various colonies, but was itself the chief cause thereof, is not true Colonial Labour Parties have, no doubt, been influenced by two noted strikes, themselves divided by the width of the world. I mean the English dockers' strike and our own maritime strike. But the great Thames strike may be said rather to have given a fillip to Colonial Trades Unionism, apart from politics altogether, than to have created any Party. As for the other conflict, though the utter rout of the colonial maritime strikers in 1890 undoubtedly sent Trades Unionists to the ballot-box sore and with a keen desire to redress the balance by gaining political successes, it was not the sole or the chief cause of their taking to politics. Before it took place New Zealand politicians knew the Labour organizations were coming into their field. The question was what they would do. The Opposition of 1889-90, though not without Conservative elements—the remnants of a former coalition—was mainly Radical. It had always supported Sir George Grey in his efforts to widen the franchise, efforts which in 1889 were finally crowned by the gain of one-man-one-vote. And in 1889 it choose as its head, John Ballance, perhaps the only man who could head with success a Liberal-Labour fusion. A journalist, but the son of a North Irish farmer, he knew country life on its working side. His views on the land question were not therefore mere theories, but part of his life and belief. Though not a single-taxer, he advocated State tenancy, as opposed to freehold, and his extension of village settlements had made him amongst New Zealand workmen a popular Lands Minister. Experience had made him a prudent financier, a humane temper made him a friend of the Maori. His views on constitutional reform were advanced, on liquor and education reactionary. In Labour questions apart from land settlement he took no special part. He was an excellent debater and a kindly, courteous, considerate chief. In Ballance and his followers in 1890 New Zealand Labour Organizations found a ready-made political Party from which they had much to hope. With it, therefore, they threw in their lot. The result showed the power the agrarian feeling of Unionism and of one-man-one-vote. In New Zealand, all the elections for the House of Representatives take place on one day. In 1890 the day was the 5th December. On the 6th it was clear enough that Ballance would be the Colony's next Premier. His defeated opponents made a short delay, in order to commit the huge tactical mistake of getting the Governor to make seven additions to the Upper House. Then they yielded, and on 24th January, 1891, he took office.
Within his cabinet, he had the staunchest of lieutenants in Mr. John McKenzie aforesaid, whose burly strength combined with that of Mr. Seddon, now Premier, to supply the physical fighting force lacking in their chief. Mr. Cadman, another colleague, was an administrator of exceptional assiduity. But none of these had held office before, and outside his cabinet Ballance had to consolidate a party made up largely of raw material. Amongst it was a novel and hardly calculable element, the Labour Members. At the elections, however, no attempt had been made to reserve the Labour vote for candidates belonging exclusively to Trades Unions, or who were workmen. Of some score of Members who owed their return chiefly to the Labour vote, and who had accepted the chief points of the Labour policy, six only were working mechanics. Moreover, though the six were new to Parliament, several of their closest allies had been there before, and were old members of the Ballance Party. Not only, therefore, was a distinct Labour Party not formed, but there was no attempt to form one. For the rest, any feeling of nervous curiosity with which the artisan parliamentarians were at first regarded soon wore off. They were without exception men of character, intelligence, and common-sense. They behaved as though their only ambition was to be sensible Members of Parliament. As such, they were soon classed, and lookers-on were only occasionally reminded that they held a special brief.
Anything like a detailed history of the struggles which followed would be out of place here. Nor is it possible yet to sum up the results of changes, none of which are eight years old. A mere enumeration of them would take some space: a succinct description would require a fairly thick pamphlet. Some were carried after hot debate; some after very little. Some were resolutely contested in the popular chamber, and were assented to rather easily in the Upper House; others went through the Lower House without much difficulty, but failed again and again to run the gauntlet of the nominated chamber. The voting of some was on strict party lines: in other instances leading Opposition Members like Captain Russell frankly accepted the principle of measures. Some were closely canvassed in the newspapers and country; others were hardly examined outside Parliament. But, roughly speaking, the chief experiments of the last eight years not already dealt with many be divided into three sections. These relate to (1) Finance; (2) Constitutional Reform; (3) Labour. One of the first and—to a New Zealander's eyes—boldest strokes delivered was against the Property Tax. This, the chief direct tax of the Colony, was an annual impost of 1d. in the £ on the capital value of every citizen's possessions, less his debts and an exemption of £500. Its friends claimed for this tax that it was no respecter of persons, but was simple, even-handed, and efficient. The last it certainly was, bringing as it did into the Treasury annually about as many thousands as there are days in the year. But inasmuch as different kinds of property are by no means equally profitable, and therefore the ability of owners to pay is by no means equal, the simplicity of the Property Tax was not by many thought equity. The shopkeeper, taxed on unsaleable stock, the manufacturer paying on plant and buildings as much in good years as in bad, bethought them that under an Income Tax they would at any rate escape in bad seasons when their income might be less or nothing. The comfortable professional man or well-paid business manager paid nothing on their substantial and regular incomes. The working-farmer settling in the desert felt that for every pound's worth of improvements made by muscle and money he would have to account to the tax-collector at the next assessment. Nevertheless the Conservative politicians rallied round the doomed tax. It was a good machine for raising indispensable revenue. Moreover, it did not select any class of property-owners or any description of property for special burdens. This suited the landowners, who dreaded a Land Tax, for might not a Land Tax contain the germ of that nightmare of the larger colonial landowner—the Single Tax? It suited also the wealthy, who feared graduated taxation, and the lawyers, doctors, agents, and managing directors, whose incomes it did not touch. So when in the autumn the rumour went round that the Ballance Ministry meant to abolish the Property Tax and bring forward Bills embodying a Progressive Land Tax, and Progressive Income Tax, the proposal was thought to represent the audacity of impudence or desperation. When the rumour proved true, it was predicted that the farmers throughout the length and breath of the country would rise in wrath and terror, scared by the very name of Land Tax. Nevertheless Parliament passed the Bills, with the addition of a light Absentee Tax. The smaller farmers, at any rate, took the appeals of the Property Taxers with apathy, suspecting that under a tax on bare land values they would pay less than under a Property Tax which fell on land, improvements, and live stock as well. Since 1891, therefore, progression or graduation has been in New Zealand a cardinal principle of direct taxation.
Land pays no Income Tax, and landowners who have less than £500 worth of bare land value pay no Land Tax. This complete exemption of the very small land owners forms an almost insuperable barrier to the progress of singletaxers. On all land over £500 value 1d. in the £ is paid. The mortgaged farmer deducts the amount of his mortgage from the value of his farm and pays only on the remainder. The money-lender pays 1d. in the £ on the mortgage, which for this purpose is treated as land. An additional graduated tax begins on holdings worth, £5,000. At that stage it is an eighth of a penny. By progressive steps it rises until, on estates assessed at £210,000, it is 2d. Thus under the graduated and simple Land Tax together, the holders of the largest areas pay 3d. in the £, whilst the peasant farmers whose acres are worth less than £500 pay nothing. The owner who pays graduated tax pays upon the whole land value of his estate with no deduction for mortgage. The Graduated Tax brings in about £80,000 a year; the 1d. Land Tax about £200,000; the Income Tax about £70,000. The assessment and collection cause no difficulty. South Australia had a Land Tax before New Zealand; New South Wales has imposed one since. Both differ from New Zealand's.