Why the Land Tax was First Put on.

What did we see? We saw this Colony had expended not one million, not two millions, not ten millions, but nearly double that in improving the lands of this Colony. We saw that the lands of this Colony had increased in value; and this increase in value had not been caused by the landowners, but by the State. It had been caused by the increase of population and by their industry. We said: Is it fair that ail these railways should be made, that all these bridges should be built, that all page 5 these roads should be constructed, and that all the interest for these vast sums of money should come from the Consolidated Revenue—from those who are perhaps landless—and that the landowner should escape free of taxation— (Cheers.) We said, This is not fair, and it is our duty to put on a land tax. And how did we put it on? We said it was our duty, if we could do so by a tax, to encourage thrift; and hence we provided that for every acre a man tilled, for every improvement, for every house, for every fence he put up, no tax should be charged. We encouraged him to improve his land by exempting all improvements from taxation. We taxed the bare land on its value, exempting all improvements, so that he might be encouraged to improve his land and make it most productive for the benefit of the State.— (Cheers.) I ask whether that was not fairer than putting on a property tax? I ask you to note, in regard to the property tax, this distinction. We find that as the Colony advanced land went up and up in price, while money or personal property gradually cheapened. I remember that when I came to the Colony first in the gold-digging days, interest on mortgages was often 15 per cent., and in very few cases was it 12 ½ per cent.; but as the millions began to flow in freely, and the Public Works scheme progressed, and after people began to save, money went down in price. People could only get 10, 8, 7, perhaps only 6 per cent, for their money. So you will see that while the land all the while was mounting in value, personal property was practically decreasing in value. I ask, therefore, was there anything wrong in determining that the land, when it was gradually increasing in value, should pay a small proportion—a very small proportion—of the burdens imposed on the people, in order to make it more valuable? That is the theory of a land tax as opposed to the theory of a property tax. I will say one word more about taxation. I say that a land tax is defensible on another ground; I say that it is defensible, even if the State did not make a single railway, road, or bridge. I will tell you why.