The Dominion. THURSDAY, MAY 12, 1910. CLASS LEGISLATION.

Dominion, Volume 3, Issue 815, 12 May 1910, Page 4

The Dominion. THURSDAY, MAY 12, 1910. CLASS LEGISLATION.

The late Mr. Seddon claimed for New Zealand that sha was "God's Own Country," and in so far as her natural resources, climate, scenery, and fertility arc concerned, there are probably few; who will be inclined to cavil at tho description, or question its accuracy. But with regard k) the system of experimental legislation, and the general policy of placating the democratic vote at the expense of the capitalist, and (.•specially the landowner, which in recent years would seem to have become almost an obsession o.n the ipart of the Government, one may be pardoned for doubting whether the result is equally perfect! In taking a retrospective view of the growth of clasp legislation in New Zealand, it is interesting to observe what has been done in other agricultural countries in the same direction, and compare the' results, judged by their respective success in attracting, and especially retaining, immigrants. It is well understood that the foundation of all national progress is a stable population, and the obtaining of it has been the main objective in the policy not only of New Zealand, but of Australia, Canada, and tho Argentine—all agricultural countries, whose rapid rise and growth was one of the chief wonders of the nineteenth century. Is New Zealand holding her own, and progressing at the same proportional ; ratc as her rivals? The Dominion has long been renowned for its experimental legislation, and, though some of it has been copied into the Statutebooks of other countries, it will take a riiueh longer time than has hitherto elapsed to prove its value by experience. We were amongst the first to adopt a graduated income tax, and, of countries taxing income, we still have the largest untaxed individual amount in allowing £300 free. We were likewise first with a graduated land tax, and indeed, amongst agricultural countries, we still, in this, remain alone. AVe were the pioneers of the "absentee" tax, as to which there is a good deal to be said on both sides. Can it be wondered at, then, that Canada and the Argcntino, both infinitely nearer to Europe, and the markets of the world, and neither subjecting their moneyed nationals to this species of class' taxation, should bo able to attract immigrants in thousands, whilst we are little more than stageant? It is certain that the Dominion is 'not holding her own in the matter of tho accretion of cither population or capital, and the emigration .to Australia and South America of some of our best colonists, who have realised on holdings hero to reinvest elsewhere,- is only one of tho ominous signs, • which should give warning to our public men. ■ . . ,

If-it bb admitted that the solu u tion of ,tho population question is of paramount importance to a new and; only partially-developed country, it must be conceded that as a backing to such population, and essential to its attainment of prosperity, tho question of capital is an ■equal, if not a more far-reaching, factor requiring sympathetic consideration. For, in the nature of things, the creation of such stapleindustries as dairying, meat-freez-ing, mining, and wool production are entirely dependent in the first instance cin private capital, .and their development would be seriously imperilled, if not hopelessly brought to an end," if, for any reason, either local or oversea capitalists are made uneasy by the results of class taxation, or -by legislation tending to place anything in the nature of an unfair burden on their invested funds. It would be evident that any long continuation of such a course of action would make the investor fight shy of New Zealand, and take his capital elsewhere. One might add, in the case of the local investor, that in deciding to withdraw his capital , from a country which afforded to it insufficient protection, ho would more than probably take himself off with it, in which case wo should lose both the settler and the capital—the two things we admittedly most require! One of tho great difficulties attendant on any system of graduated taxation lies' in the fact that what may in tho earlier stages of a tax be fairly legitimate too often partakes of a penal character before it reaches the ultimate class. In a measure it might bo conceded that taxes should be imposed upon different classes of people just in proportion to their ability to meet them — but even to go this far is \>pen to objection inasmuch as the real object of all taxation is the obtaining of revenue, and it might just as easily be urged that the finding of money should be done by people in proportion not to how much they have, but to how much of the- proceeds of the tax is going to be spent for their benefit. Judged by the last-named test it is certain that the general incidence of taxation would require, in New Zealand, to undergo a very complete and radical alteration. It is not only the heavy graduated taxes on incomes and land which hit a man tho harder just in proportion to what his work or thrift have enabled him to accumulate, but the ever-increasing taxes at death on estates bordering between the moderate and the very large, which penalise his heirs. Capital, as has been remarked, is absolutely necessary to tho prosperity of a new country, but it has to earn a fair return for its possessor, and there are limitations to the ability to squeeze from it more than other countries impose, for capital is essentially migratory, and invariably follows the line" leading to lands affording it the safest and most profitable occupation. The avowed policy of the Government during the last decade has been tho breaking up of large estates, or the forcing of their owners to subdivide, them as the result of penal taxation. The experience of Canada, Australia, and the Argentine has all tended to show that,'in the, early stages of the settlement of unimproved lands, it is only tho granting of large areas that has made their occupation either profitable ov possible.. All the countries mentioned are still offering good lands on tempting terms to settlors willing to improve, and are doing, in a much more extensive manner than Now Zealand, all they can to attract both capital and population, [t is well known that, tho Duiiiiniim is not gaining,, as she should bo, by an excess of arrivals over departures. It is not only, that other

countries, Canada, Queensland, West Australia, and the Argentine in particular, arc offering more scope to the investment both of funds and brains, but there has been no attempt here to produce .that state of restful security essential to confidence within our gates. The fact is that, whilst it is economically necessary that the possessor of wealth should be made, as comfortable as possible, and induced by favourable conditions to turn over his money in the development of the country, it has become the practice in New Zealand to think and speak of the well-to-do as if they were an encumbrance. Tllis is a state of things to which it should only be necessary to draw attention to find a remedy, and there is little doubt that the moderate man, who thinks, quite realises the value of capital legitimately employed,' and deprecates the continuous demand to increase the burden beyond what it is reasonable that it should carry. The loss of private capital on any extensive scale would necessarily have a serious effect on our budding industries as well as on the general development of the country. And as an incidental reminder that we are not the only country offering inducements to the investment of British capita], one has only to recall that our countrymen oversea have sunk no less ,than five hundred million pounds sterling in enterprises in the Argentine Republic, and countless millions in Australia and Canada. It is the height of folly to direct elsewhere the eyes of possible investors, but up to the present this aspect of things does not appear to have impressed our legislators; or else_ they, for'the sake of the popularity of the moment, have deliberately shut their eyes to the risks they force the Dominion to face.