Taxation.

The most important Act of the last session of the New Zealand Parliament is the Land and Income Assessment Act. This Act repeals the old Property Tax Act which has been in force in the Colony for many years, and imposes in its stead an Act which alters the incidence of taxation. The Property Tax was an Act which imposed a tax on the capital value of all property, whether productive or not, and irrespective of the return yielded by the property. The new Act imposes in place of the property-tax a land-tax and an income-tax to be levied on professional and other incomes not derived from landed property. The amount of the land-tax and income-tax will have to be fixed annually by an Act of Parliament. In addition to the ordinary land-tax there is a graded tax on the unimproved value of land, the grade commencing on properties over £5,000 in value. The scale of gradation is as follows:—

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Scale of Taxation.

	£	£	Penny in the £ sterling
Where the value is	5,000, and is less than	10,000	1/8
Where the value is	10,000, and is less than	20,000	2/8
Where the value is	20,000, and is less than	30,000	3/8
Where the value is	30,000, and is less than	40,000	4/8
Where the value is	40,000, and is less than	50,000	5/8
Where the value is	50,000, and is less than	70,000	6/8
Where the value is	70,000, and is less than	90,000	7/8
Where the value is	90,000, and is less than	110,000	1
Where the value is	110,000, and is less than	130,000	11/8
Where the value is	130,000, and is less than	150,000	12/8
Where the value is	150,000, and is less than	170,000	13/8
Where the value is	170,000, and is less than	190,000	14/8
Where the value is	190,000, and is less than	210,000	15/8
Where the value is	210,000, or exceeds that sum		16/8

Under the Act, and in the debates in Parliament on the Bill will be found an endeavour to discriminate between capital invested in land, and capital in the form of money which is required to develop the resources of the Colony. An attempt is made to discourage the acquisition of land in large areas and its retention in an unimproved state in the hands of speculators for a rise in value, and to encourage the flow of capital into the Colony for developing the resources of the Colony. Thus the tax on mortgage-money and money invested otherwise than in land is in no case increased, and in most cases decreased, while large areas of unimproved land are taxed more than formerly, and an effort is made to regulate the tax on investments other than land according to the returns they yield to the investor: a more equitable basis than the hard-and-fast principle of the property-tax, which taxed all property on its capital value irrespective of the return it gave. By the exemption of improvements up to a certain value, and by the levying of the graded tax on the unimproved value only, the improved value of the land is less taxed than under the property-tax. Thus the farmer who has cleared, fenced and cultivated his land pays, in proportion to value, less taxation than the speculator who acquires a block of land and allows that land to lie idle, waiting until the improvements effected by his neighbours have increased the value of his property. The object in view, to relieve from taxation the farmer who by his thrift and industry has increased the value of his land, and to demand more from the speculator who does not improve, is justified on the ground that the one man may be compared to a working bee, labouring to add to the store of honey page 428 in the State hive, and the other man to the drone doing no work, but consuming as much honey as the worker. In every case a property of less value than £500 pays no tax, and a further exemption up to the value of £3,000 is allowed on the value of all permanent improvements. It will be seen, therefore, that the small farmer is taxed very lightly indeed; in fact, he practically escapes altogether. When land is owned by permanent absentees, the State insists on their paying 20 per cent, more taxation than if they resided in the country. This may be an impolitic tax in this sense, that it produces very little revenue indeed, and is vexatious to a powerful and influential class, but the people of New Zealand, and I believe of the Colonies generally, regard with some apprehension the increasing number of landowners who leave their property in the hands of an agent, and spend their money on this side of the world instead of in the country where it is made for them. The tendency, in the case of all absentees, is to spend as little as possible on the property and get as much as possible out of it, a condition of things which is generally regarded as unsatisfactory, to say the least of it. It is important to bear in mind, however, that this absentee tax affects land only, and that the graded tax also affects land only, and both these taxes are based on the theory that the land of a country should be worked in the most productive manner, and that, if owners choose to retain land in their hands in an unimproved state, they should not object to make some compensation to the State. In this country the great bulk of taxation is raised by direct taxation on property, whereas in the Colony the bulk of the taxation is raised from Customs duties, and property contributes only a small proportion. New Zealand raises £1,625,000 from the Customs, but only £350,000 from the land-and the income-tax, and yet, remembering that no class of settlers in the Colony has been benefited by the expenditure of loan money more than has the landowner, a plausible argument might be made out that the bulk of the taxation should be contributed by that class of property. No attempt, however, has been made by the new Bill to increase the gross amount of taxation raised from property, but merely to alter the incidence. I readily admit that, in the case of individuals and companies who have become the unwilling owners of large estates by properties falling into their hands, the remedy is somewhat drastic; but the policy pursued by these individuals and companies in holding their land instead of realising has gone far to bring about the change they complain of. In 1890 there was in the hands of 255 companies and individuals 16,895,909 acres of land, and when it is considered that page 429 the area of land in the Colony is limited, it is hardly to be wondered at that the people of the Colony became alarmed and insisted upon these companies and persons contributing a larger proportion of revenue. Even, however, in the case of large properties the exemption of improvements from the operation of the graded tax, and also the entire exemption of live stock and certain personal property, has so "tempered the wind to the shorn lamb," that, except in a few cases, the increased taxation is a mere bagatelle.

The other measures passed last session are a number of legislative enactments which go to prove that the influence of the Labour Party has not led to legislation exclusively in the interest of any particular class. So far from having any apprehension regarding the awakening of the masses of the people to their political power and responsibilities, I am pleased to bear testimony to the intelligence, earnest interest, and patriotic spirit evinced by the working men of the Colony in the public questions of the day.

A well-informed, studious working man is a much better representative than the class of politician too general in all countries—the leather-lunged, plausible demagogue who uses the working man in order to place himself on a pedestal; and any representation which brings the landowner, the commercial man, and the worker into closer contact one with the other cannot fail to effect the elimination of imaginary grievances and the fair consideration of real grievances.

The result of bringing the masses of the people, through working-men representatives, into contact with men selected from other classes of the community is already producing good fruit in New Zealand. During the last session of Parliament a Bill to settle disputes between employers and employed, by the constitution of boards of conciliation, was introduced, but time for its consideration was not available, and a general desire is now evinced that some arrangement should be come to, to prevent the serious losses caused to all classes by "strikes" and "locks-out," whilst the passing of such Bills as the Factories Act goes to show that reasonable demands for the regulation of factories and improving the condition of the workers will always receive fair consideration. I believe that an amicable modus vivendi between the employers and employed will be arrived at in the New World before it is here, for the reasons that there is very little class hatred in the Colony, and both employers and employed are now prepared to approach the consideration of the subject with a recognition that capital and labour owe duties one to the other, and that the rights of each must be settled by justice rather than might. In this way the presence page 430 in our Parliaments of the bonâ fide working-man has been productive of great good. The better moral atmosphere and honest toil of Colonial life with a Parliament composed of the representatives of every class is, in my mind, the surest guarantee for wise and well-considered legislation, and the best security for a true recognition of the rights of property. In these days of political unrest the British capitalist should rejoice in having places like the Colonies to turn to, where he can rest assured his property will be respected. There are extreme men, no doubt, in the Colonies, just as there are extreme men here, but these men do not represent the opinions of the Colonies any more than extreme men here represent the opinions of the people of England.

The great future for New Zealand consists in the varied resources of the Colony. As an agricultural and pastoral country she stands second to none, as her yields of wool, sheep, grain, fruit, and dairy produce per acre abundantly testify. When you turn to her mines it is impossible to predict their wealth. We have already exported nearly £50,000,000 of gold, and at the present time more capital and labour are being expended in gold-mining in New Zealand than at any previous period of our history. Our coal-beds are magnificent, and practically inexhaustible. A great trade in timber is in store for us, and our splendid fisheries await development. Our manufactures have grown to an extent which seems to justify the belief that New Zealand will become the manufacturing centre of the Southern Seas.

The table on next page shows the number of the principal industries at the end of 1890, the number of hands employed, the amount of wages paid to them, the estimated value of capital invested in land, buildings, machinery, and plant, and the value of the products or manufactures in that year.

It will be seen, therefore, that the Colony does not keep all her eggs in one basket, but that every branch of industry is receiving its fair share of attention. This variety in the industries and resources of the Colony is one of the strongest evidences of her future greatness. I fear I have dwelt rather too long on this branch of my subject, but I hope I have said enough to show that the colony presents a favourable field for the investment of British capital, and I now turn to consider New Zealand as a place of residence.

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Nature of Industry.	Number of each kind.	Number of hands employed.	Amount paid in wages.	Estimated value of land, buildings, machinery, and plant.	Estimated value of produce and manufactures in 1890.
			£	£	£
Printing, &c., establishments	142	2,569	214,185	341,683	354,559
For machines, tools, and implements	43	557	45,856	76,783	148,364
Coach-building and painting	108	678	52,601	96,225	139,660
Tanning, fellmongering, and wool scouring	104	1,196	92,442	153,592	1,026,349
Ship-and boat-building	37	145	10,831	10,172	35,847
Sail and oilskin factories	32	124	6,335	16,799	31,083
Furniture factories	94	585	42,743	96,543	131,314
Chemical works	8	55	5,754	23,766	41,568
Woollen mills	8	1,175	79,040	259,955	279,175
Clothing factories	19	1,290	52,754	59,735	166,579
Hat and cap factories	16	112	6,276	26,005	21,628
Boot and Shoe factories	47	1,943	124,990	82,137	403,736
Rope-and twine-works	24	222	13,658	36,086	76,711
Flax-mills	177	3,204	116,168	146,792	234,266
Meat-preserving, freezing, and boiling-down works	43	1,568	138,459	476,151	1,464,659
Bacon-curing Establishments	33	84	6,696	14,180	83,435
Cheese and butter factories	74	269	14,928	100,453	150,957
Grain-mills	129	499	52,384	391,828	991,812
Biscuit factories	22	331	17,199	48,960	127,147
Fruit-preserving and jam-making works	15	117	4,742	10,042	27,255
Breweries	102	476	54,825	236,825	66,764
Malthouses	27	87	7,875	42,442	80,341
Aerated-water factories	112	261	17,021	73,147	91,691
Coffee-and spice-works	17	81	6,562	30,850	64,024
Soap-and candle-works	19	209	21,394	74,443	155,714
Saw-mills	243	3,266	271,814	500,272	832,959
Chaff-cutting establishments	63	205	7,330	36,300	41,455
Gas-works	27	249	31,700	730,490	178,947
Brick-tile-and pottery-works	106	494	25,190	119,780	56,830
Iron and brass foundries	68	1,727	152,687	262,042	390,943
Spouting-and ridging-works	12	100	7,981	29,670	33,140
Gold-and quartz-mining	135	1,971	183,582	241,715	278,893
Hydraulic gold-mining and gold-dredging	74	495	32,904	154,270	73,713
Collieries	95	1,655	173,538	155,671	279,777
Other industries	295	1,881	117,415	671,172	860,851
Totals	2,570	29,880	2,209,859	5,826,976	9,422,146