Shepheard-Walwyn

Home

A History of Land-Value Taxation in New Zealand

Further Reading:

Ricardo’s Law
by Fred Harrison (ed.)

New Zealand holds a rather special status in that it was notably the first country to introduce a system of land-value taxation for raising revenue.

This essay, by Ian Hopton, traces the fortunes of Land-Value Taxation (LVT) in New Zealand from its beginnings in 1849, some 30 years before Henry George published Progress and Poverty, to its final abandonment in the 1980s. LVT was introduced under the governorship of Sir George Grey, who had an understanding of Ricardo’s Law of Rent. LVT was adopted initially at local level, with the consent of settlers, who were able to exercise their choice through a popular poll. They recognised that under this system they were not penalised for making improvements to their property. The poll sustained the tax for more than 130 years until it was removed in 1988 by government decree.

In the 1870s the government, no longer able to rely on customs and excise duties and the sale of land, turned to property taxes, for which the land-value tax was proposed by the Liberals but opposed by the National party. The ensuing struggle for a national land-value tax lasted from 1878 to 1896, but it was not until 1912 that a full LVT was achieved – at the height of the worldwide Georgist movement. But perhaps this was also the high point of the LVT story in New Zealand for, although initially successful, by 1922 the national land tax yielded only ten percent of the budget. Thereafter it was constantly degraded through deliberate government policies, which reduced the yield over the years to negligible levels before being rescinded in 1991.
On the other hand the local rating system based on land values flourished, being sustained through the democratic choice of the taxpayers. It was an undoubted success. Support for this system increased so that by 1982 land value rating had been adopted by the majority of municipalities.

How was all this lost within a few short years afterwards? The essay goes on to explain the political machinations.

As with the national tax it was also the government that brought the local tax to an end, basically for ideological reasons. The leading figure in the train of events was the new Minister of Finance, Roger Douglas, an erstwhile socialist who became an advocate of the neo-liberal policies of the Reagan-Thatcher era, currently in vogue. Douglas came to power in 1984 when New Zealand was undergoing a severe economic crisis and his extreme solutions created many casualties, including LVT which was dealt a body blow in 1988 when the right of taxpayers to determine their rating system by poll was withdrawn. Thus, in New Zealand, within a few years in the 1980s, 95 years of national LVT and 133 years of local LVT was lost or severely diminished.

The essay is an attempt to find out why that happened. You can read the full essay here. Also further general information on LVT can be found on the website: Land Value Tax Guide.

Another Honour for Polly Higgins

Further Reading: Eradicating Ecocide by Polly Higgins Earth is our Business by Polly Higgins In recognition of her work to create a new body of Earth Law, international environmental lawyer and activist, Polly Higgins, has been appointed to the Arne Naess Chair for...

read more

Economic Justice

Further Reading: The Science of Economics by Raymond Makewell Progress and Poverty by Henry George Re-Solving the Economic Puzzle by Walter Rybeck Progress and Poverty by Brian Hodgkinson A reviewer  of The Science of Economics in Network Review, the Journal of the...

read more

Review in International Journal of Environmental Studies

Further Reading: The Traumatised Society by Fred Harrison A New Model of the Economy by Brian Hodgkinson Eradicating Ecocide by Polly Higgins ‘This analysis [The Traumatised Society] integrates many data and many explanations to attack private land ownership as the...

read more

Can LVT Save Us?

Further Reading: Progress and Poverty by Henry George The Traumatised Society by Fred Harrison Public Revenue Without Taxation by Ronald Burgess The Land Value Tax (LVT) is a “radical” form of taxation first proposed by Henry George in his 1879 Progress and Poverty...

read more

“You can become wealthy by creating wealth or by appropriating the wealth created by other people. When the appropriation of the wealth is illegal it is called theft or fraud. When it is legal economists call it rent-seeking”

John Kay, Financial Times 27th Dec 2009

“If a free society cannot help the many who are poor, they cannot save the few who are rich.”

John F Kennedy, Inaugural Speech, Jan 1961

“If science is defined by its ability to forecast the future, the failure of much of the economics profession to see the crisis coming should be a cause for great concern”

Joseph Stiglitz

“Today we live in a world that is divided. A world in which we have made great progress and advances in science and technology. But it is also a world where millions of children die because they have no access to medicines… It is a world of great promise and hope. It is also a world of despair, disease and hunger”

Nelson Mandela

LATEST BOOK

Rent Unmasked

Rent UnmaskedRent Unmasked explores the new economic paradigm that policy-makers need to solve global problems in the post-2008 era. With conventional economic theories discredited, the new model must equip governments with tools to re-stabilise societies in a dangerous world. Rent Unmasked explains why one paradigm only qualifies to serve this purpose: the dynamic model that reinstates time and space in economic theorising.

ISBN 9780856835117 | Price: £19.95