What is the Amount of Ground Rent?

It is not possible to say what is the exact amount of the ground-rent now obtained or enjoyed in this Colony; but, thanks to the Land Tax Act of 1891, we know the assessed capital value of all the land that has been sold by the State. Now, these two figures always bear some ratio to each other, and therefore we can, within certain limits, deduce one from the other. The selling value of the privilege to holding land rent free is equal to so many years' purchase of the annual ground-rent. The number of years' purchase will be determined, from time to time, by the rate of interest then obtaining in this class of investment. If we say 5 per. cent., it will probably be pretty near the mark at the present time.

The capital value given by the 1891 assessment is £75,787,895.^*

The ground-rent at 5 per. cent, on this sum would, therefore; amount to £3,789,395, to be received annually by the state.

The progressive growth of this fund, beyond the sum required to pay interest on the debentures, affords the margin upon which the success of the new method is founded. Its future growth can only be estimated, but we may form a good idea of what it has been in the past by referring to official figures. The entire sum which the three holders have paid to the State for lands now valued (as above) at £75.787,895^*, is £13,372,984,^† so that in little more than half a century the growth of selling value, page 7 and consequently of annual value, has been something like 470 per cent. Whatever increase may accrue in the future will form a surplus revenue, from year to year, beyond the interest charged on the debentures. This ever-increasing sum would be applied as Parliament might determine.