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The Pamphlet Collection of Sir Robert Stout: Volume 69

Part II. The Land Tax

Part II. The Land Tax.

Let us now turn to the Land Tax; especially in relation to large land-holdings.

The Premier, as already quoted in Part I. of this article, has stated (Hansard, July 1891, p. 124):—"I have always said, and I repeat that the principal cause of this exodus of population is that there has not been land in small areas in sufficient quantity on which the people could settle. . . Many people are leaving New Zealand for other shores, because they can't get land here. Sir, unless the big estates are dealt with, I firmly believe—honestly in my heart believe—that the exodus of population must continue."

He has, therefore, inaugurated the land tax bursting up policy as a panacea for the exodus.

As, however, I hold it to be a sinister scheme, without any sound basis of reason for its inception, and in its scope and principles, dishonest, and otherwise inherently vicious, and otherwise most impolitic, and otherwise a huge mistake, I now comment fully upon its inception, scope, and principles.

But for an analysis of its details in respect of injustices, inequalities, and anomalies, I cannot do better than commend to my readers a speech made in the House by page 5 Mr. M. J. Scobie Mackenzie, on the 4th of last month (August), reported in Hansard on page 108.

Nor do I dwell upon the vicious principle of taxing improvements over £3000; because that is admitted even by the Government to be a serious blot.

Now, first, although, where land is needed for cockatoo settlement, such holdings may possibly be prejudicial to general prosperity, yet a Land Tax, levied in excess of the due proportion of taxes which should be paid by land, is dishonest; because confiscatory in its nature.

Thus Professor Fawcett in his Manual of Polit. Ec. (1883 ed., p. 573) says:—"It would therefore have been a fortunate circumstance for the nation, if the land tax in this country" (referring to England) "was greater in amount than it is at the present time." "It would now, however," (the italics are mine) "be an unjust confiscation of property to increase the land tax; such an augmentation of the tax would be paid out only from the rent of landowners, and would therefore be as indefensible as any other impost laid upon one special class." (See also, J. S. Mill's Principles of Polit. Ec., 1871 ed. page 409.)

Similarly, a tax primarily levied for other than revenue purposes, or even levied with a subsidiary purpose, other than a revenue purpose, is also considered by Professor Fawcett as inherently vicious. (See, for instance, Manual Polit. Ec., 1883 ed., pp. 513, 514, and also re Land Tax, pp. 280 et seq., and p. 573; and mark the speech of even the Legislative Councillor chosen by the Government to second the Address-in-Reply; and also note addresses by Mr. M. J. S. McKenzie, and the Hon. Mr. Rolleston.—Hansard, 1891, 2nd session, pp. 39, 243, and 562.)

Such a tax, therefore, as imposes upon large landed estates a levy of 1¾d per acre, in addition to the normal levy (see schedules A and B to the pending Land and Income Assessment Bill), for a purpose avowedly other than revenue, although revenue be one of the purposes, is distinctly confiscatory in its nature, and therefore, distinctly dishonest, and otherwise inherently vicious.

In illustration, it should be remembered that the confiscatory principle of such a tax-would not be more true, but would only be glaringly evident, if £1 per acre were substituted for the 1¾d. Indeed, the principle, or, rather, the unprincipled character of the tax, was unblushingly announced by Mr. Rees in the House (Hansard, 1891, 2nd session, p. 325). "At last the people have elected a House which represents the people, and not the class of the few—the moneyed class—and it will therefore be the duty of this House and the Parliament, of which this House forms so important a part, to see if they cannot—if they must not—take away these lands by legislation." (See also Mr. Earnshaw's address, Hansard, 1891, 2nd session, p. 448.)

Such a tax, therefore, must prove ultimately disastrous to the Colony, even on the ground of patent inherent vice alone. For dishonesty means disaster.

But I fear—worse still—not only that there is patent dishonesty, but covert also. For in turning to the Governor's Speech (Hansard, p. 2, present session) I find the following sentence:—"Moreover, the time seems to be approaching when the immense task of repurchasing parts of the large private estates which now bar settlement in some of the more fertile parts of the colony must be entered upon, and undertaken," etc.

So that, apparently, a bursting-up tax is imposed with the covert intention also of forcing owners to sell to the Government at such low prices as could not otherwise be hoped for; the Government buying, I presume, by means of new State loans obtained for the purpose. Indeed, as I hereinafter point out, who else is there that could be found to buy?

Moreover, the tax is otherwise vicious; for it not only aims to effect its purpose in a sinister manner, but, forsooth, punishes a man for being more industrious and thrifty than his fellow colonists.

I go further, however, and hold that even if such a tax were not dishonest, or otherwise inherently vicious, it must be most impolitic for us, in our present condition of urgent need for yeomen; as a land tax, of whatever nature it is, Must tend to deter the immigration we especially require, and dishearten the small farming class that we ought above all others to foster: to say nothing of the proposed graduation being looked upon as most unjust and oppressive by the capitalist class—a class which Labour is most foolishly, but most evidently, resolved to oppress and harass at all costs.

Indeed, to encourage yeoman settlement, I would long, long ago have offered, and would still offer, good land, free of all cost and of All rates and taxes up to a certain acreage, to induce immigration and the settlement of small farmers; subject only to certain residential and cultivation conditions, and to restrictions against mortgaging.

Assuming, however, for the sake of my argument that the proposed tax is not dishonest, or otherwise inherently vicious, or otherwise impolitic, I am convinced that, page 6 as a lever to burst up big estates, it is not only a sinister but an absurdly clumsy expedient and that even were such a bursting up policy advisable, the simple, straightforward, and far more effective plan would be directly prohibitive legislation: providing, in respect of present holdings, that, after a specified future date, the State might confiscate upon giving compensation, duly assessed by some such machinery as is now available under the Public Works Acts (See, for instance, the 1882 Act, Part II). Moreover, such a course might not, under special circumstances, and conditions, be open to the charges of dishonesty and other vice, and of the other impolicy that I have just indicated.

But all this assumes premises to exist which are not proved to exist. For it has Not been proved (1) that big estates have any connection herewith industrial misery, or general prosperity; and, therefore, it has Not been proved that the bursting up—even if effected in a simple straightforward manner—would prevent, or cure, any such misery here, or would promote hero general prosperity.

Nor (2) has it been shown that there is a lack of good land now available here for general settlement; both which premises it is, of course, necessary to prove before you can urge that big estates here are causing, or perpetuating, misery, or preventing, or retarding, prosperity.

Indeed, in respect of the first premiss I have already pointed out in "The New Evangel," No. VIII., Part 2 ("The New Zealand Herald," 22nd August, 1890), that there is strong evidence that big estates have not the effect contended for; as testified, strange to tell, even in the socialistic publication, "The Labour Movement in America," by E. and E. M. Aveling (Swan, Sonnenshein, Lowry, and Co., 1888): where it is stated (p. 16) that "the condition of the working classes is no better in America than in England. . . . The country (i.e., America) in which at the same time there is the largest area of land as yet unclaimed, or uncultivated," etc. (See p.p. 15 and 185.)

Ergo, it cannot be contended that the existence of such areas available for small settlements, prevent industrial misery, or promote general prosperity, in The United States.

Indeed, not only has no connection been proved between big estates here and industrial misery, or general prosperity, but even Sir George Grey so lately as 1882, notwithstanding the confiscatory policy now advocated, testified to the protection and sympathy, that owners who have honestly acquired such estates are entitled to—and to the valuable use to the State of such properties.

It will be seen that his words go much further, in favour of such estates, than for the purpose of my present argument, there is any need for me to go in this article.

Thus the Hansard reports (1882, p. 175) record Sir George Grey to have said: "None will deny that all the best of the Crown lands here have been picked out in enormous blocks; thus those lands are held to a large extent in fee simple by very great and large proprietors, indeed. The means by which they acquired those lands I will not go into. Some of them acquired them in a way which we ought to admit was perfectly right and perfectly justifiable; they deserve every protection and every sympathy from us. Again, in the same debate (p. 175): "I believe that capitalists are to a certain extent like great lakes in mountain districts, which supply water to streams in time of drought, and are the reservoirs for which the whole of the country, at periods when otherwise it would be a barren waste, is fertilised. I believe that, if you do not allow money to take its true course, and flow into those channels in which it can be used, you will inflict a great injury on the country, and, what is more, you will not succeed in your effort. The money will find its own level. Pass what laws you will, some means will be found of evading, and I think it is unwise to attempt to legislate on such a subject in the direction I understand it is proposed to do."

But the evidence respecting the second premiss is even more startling, and also supplies an additional doubt whether the cry to burst up big estates is not solely, and essentially, a dishonest outburst of malice against landowners and capitalists—because they are so; or distinct evidence of an intention to plunder them by what is, practically, confiscation.

For, notwithstanding the Premier's statements quoted by me at the commencement of this article (Hansard, July, 1891, second section, p. 124), I am officially informed that there are 1,734,715 acres of Crown lands now available for general settlement even in this provincial district alone; representing, at the present average rate of absorption in acreage, over 21 years' supply: and, of this (1,734,715 acres), 425,000 acres are 1st-class lands, amounting to over forty years' supply—calculating the present yearly average of absorption of 1st-class land in this provincial district to be, as I am officially informed it is, about 10,000 acres. Of course, these lands being in the hands of the Crown, are directly under the Premier's control, and Are therefore available to be sold in small areas to suit purchasers.

page 7

Indeed, the Premier's Financial Statement, mirabile dictu, admits (Hansard 1891, 2nd sess., p. 64) that "the low-lying pastoral and agricultural land fit for settlement amounts to about 2,850,000 acres;" i.e., land still in the hands of the Crown here, and therefore available to be sold in small areas to suit purchasers.

Nor must it be overlooked that these figures do not include fresh supplies periodically accruing from new purchases, or leases available to be made by the Government from the Maoris: and which are contemplated. [See, for instance, the Governor's speech, Hansard, 1891, second session, p. 2, and Financial Statement, p. 65]

So that, in a most startling and notorious measure, it is not land that is needed for the population, but population that is needed for the land; and, therefore, to say, as the Premier is reported to have said (see, for instance, Hansard, July, 1891, 2nd session, pp, 124 and 64) that "the principal cause of this exodus of population is that there has not been land in small areas in sufficient quantities on which the people could settle" . . . "and that "Many people are leaving New Zealand . . . because they can't get land here," . . and that "unless the big estates are dealt with I firmly believe—honestly in my heart believe—that the exodus of population must continue,"—is, in my opinion, foolish and misleading, and therefore, in my opinion, idle, dishonest talk. (See also speech by the Hon. Mr. Reeves, Hansard, p. 192, 1891, second session).

Moreover, it is well known that thousands of private owners, large and small, would be only too glad to sell land, in areas to suit purchasers; aye, and in many instances at such a price as, including buildings and other improvements, would be less than its original cost price from the Crown.

Thus, first of all, the premises do not exist; i.e., there is no honest ground for, or honest reason in, any bursting up policy; and second, even if the premises were proved to exist, the cure, like the cry, is (a) sinister and dishonest, and otherwise in-herently vicious, and (b) otherwise most impolitic, and must, therefore, eventuate disastrously for the Colony.

Indeed, it is well known to impartial investigators of truth, that the cry comes not from persons who, in good faith, are needing, or seeking, land for settlement; but from agitators, or fanatics, moved by the love of popularity, or gain, or by idiosyncracies, or from those who are inspired with hatred against, or dishonest intentions towards, property owners, because they are property owners: i.e., the cry proceeds from persons who crowd the cities, and who would not go upon the best of land if it were given to them for nothing, subject to residential and cultivation conditions.

But the whole Land Tax scheme is other-wise a huge mistake. For our urgent needs, as I have over and over again pointed out, and in this article have already indicated, are Financial Invigoration (involving restoration of confidence) and increased suitable Population. We are dying of inanition; and therefore need immediate. tonics. Consequently, supposing the Land Tax scheme were the grandest tax project devisable by human ingenuity—instead of being a miserable clap-trap delusion—surely its most ardent advocates would not dare to assert that its effects will be sufficiently speedy to supply us with either of our urgent needs immediately, or, indeed, for a long, long time hence.

Thus, it can't be conceived that large landholders, however much they might like to do so, can sell, or could sell (except, possibly to the Government at forced sale prices), and thereby break up their estates, forthwith; and that, even if they could, the lands—plus those now available for settlement—could be settled for many many years thereafter: and even then a considerable period must afterwards elapse before settlement could affect materially the general prosperity of the colony.

For (1) the population to settle such lands is not here; and (2) the Colony's insane policy has been for a long time past, and still is, to discourage immigration, as shown by the Premier's recent remark—"My policy is New Zealand for the New Zealanders" (New Zealand Herald, August 20 1891); and (3), even if immigration itself were encouraged, how could we reasonably expect immigrants in view of the legislative antics in vogue; and (4) even if there were people able and willing to buy, a considerable period must afterward elapse, as I have just pointed out, before settlement could affect materially the general prosperity of the Colony.

Indeed, the Premier's reply to the question (see Hansard, July 10, 1891, p. 124):—"Where are the people to come from to settle those large estates if they are cut up?" seems to me to be, not only ludicrous, but alone damnatory of his cause; as shewing that no immediate settlement can be hoped for. For his reply is reported in Hansard (July 10th, 1891, p. 124) to have been:—"Sir, they are to come from the small estates; they are to come in the sons of the yeomen of this country."

page 8

So that before the settlement takes place, and before the relief comes for our immediately urgent needs, to save us from dying of inanition, we have to wait for the Premier's yeomen to breed and rear sons, for the purposes of our salvation.

Thus, even apart from the admitted tax-upon-improvements blot, and apart from injustices, inequalities, and anomalies in detail, and apart from its having no sound basis of reason for its inception, the whole land tax scheme is, in its scope and principles, so bristling with absurdities, and so profoundly dishonest, and otherwise so inherently vicious, and otherwise so impolitic, that if a veteran philosopher like Sir George did not support it, I could not understand how it could even be arguable for us.

Nor is there even any need of such a tax on revenue grounds.

For, as I have exhaustively shown (see, for instance, "The New Evangel" in "The New Zealand Herald" of 19th November, 1888), if even a very small proportion of the immense retrenchment available were made, the amount estimated to be obtained from the proposed land tax would not be needed; and, if any such amount were needed, a very different tax should, in our present condition, be imposed, as I have fully pointed out in one of my articles upon taxation (see "The New Zealand Herald," July 8, 1889): and, in this connection, I was delighted to read in Hansard of 12th June last, the following remarks by Mr. E. M. Smith, the member for New Plymouth:—"When I hear or read of members of Parliament and statesmen dangling this question of tea and sugar before the eyes of the working men of this Colony, I think it is highly amusing. During one of the elections this increase of duty on tea and sugar was proposed, and when I stated I was in favour of an increase in the duty upon tea and sugar, I thought that the working men would not vote for me; but anyhow, I was able to convince them—being a working man myself—by means of apt illustrations, of the fallacy of the tea and sugar business."

But I fear to weary; and therefore must postpone my summary of the situation for the concluding section of this article.

Meantime, it may possibly be a comfort for us to remember that truth must eventually prevail—that Providence decrees our future to be in our own hands—that everything has happened, and will happen, in natural sequence—that, as the present Holy Father's motto says, nothing is to be feared unless it be from God—and that (as I wrote on 13th September, 1888) in matters political, as in matters religious, although the road to Paradise is as hard as the road to Hell is easy, yet that rough and muddy as it may be, it is passable.

Erst wägen, dann wagen.