PRESIDENTIAL ADDRESS. 



455 



Moreover, of such subdivision into small holdings as there has been, a sub- 

 stantial share has been plainly due to another cause than the land tax. In 1892 

 the New Zealand Government began to re-purchase large estates, or parts of them, 

 and to cut them up and lease them. In this way it has bought about 1,400,000 

 acres, for about 6,000,000/. (including cost of subdivision), and withdrawn them 

 from the acreage held by the large men. 



In 1907, therefore, the Government decided to recast the graduated tax so far 

 as applicable to unimproved values of 40,000?. and over. The scale was so 

 arranged that values of 200,000/. and over were to be charged 2?. per cent, in 

 addition to the ordinary ]d. flat tax. Again, after March 1910 the graduated 

 tax was to be further raised by 25 per cent, on the classes of especially large 

 properties above 40,000?. All I know of the effect of this last change is that it 

 has not added greatly to the total amount collected by the Treasury under the 

 head of land tax. That amount is 029,000?. for the year ending with March 1911. 

 That may mean that a number of the greater estate owners have bowed to the 

 blast and cut up their properties. I understand that the Premier of New Zealand 

 states as much. But then the question arises, Of what kind has the subdivision 

 been ? We have seen that a decline of the very large estates may be coincident 

 with a growth in the number of fairly large properties. Moreover, there is such a 

 thing as subdivision which is legal but not economic. There are family and 

 other arrangements by which the law is observed, which are not fraudulent or 

 morally wrong, but by which the tax may be evaded. I refer to such expedients 

 as gifts, declarations of trust, collusive sales and leases. In a speech in the New 

 Zealand Legislative Council in 1907 Sir John Findlay, K.C., the Attorney- 

 General, credited such legal expedients with no small share in baffling the policy 

 of the land tax. We have yet to see, therefore, what the real result of the tax 

 as now imposed is, though I believe that a certain amount of genuine and economic 

 subdivision is going on. Doubtless, the effect of the land tax has been checked 

 by the long period of prosperity enjoyed by New Zealand. The large holders 

 have made much money, and the rising price of land has tempted them to hold 

 on for better and better prices. 



I have dwelt on this New Zealand tax because it is the most thorough-going 

 thing of the kind in the Colonies that has any history. Because, too, it was the 

 model taken by the Labour leaders in Australia for their more important Federal 

 land tax, and because from the experience of New Zealand we may deduce some- 

 thing which may enable us to look ahead at the prospects of the Australian 

 experiment. 



I will here insert an official table showing the incidence of the graduated 

 portion of the New Zealand land tax : — 



At the value of 40,000?. the rate is 8s. per cent., and for every additional 

 1,000?. of land value the rate is increased by |s., the increased rate in each 



