Land pays no Income Tax, and landowners who have less than L500 worth of bare land value pay no Land Tax.  This complete exemption of the very small land owners forms an almost insuperable barrier to the progress of singletaxers.  On all land over L500 value 1d. in the L is paid.  The mortgaged farmer deducts the amount of his mortgage from the value of his farm and pays only on the remainder.  The money-lender pays 1d. in the L on the mortgage, which for this purpose is treated as land.  An additional graduated tax begins on holdings worth, L5,000.  At that stage it is an eighth of a penny.  By progressive steps it rises until, on estates assessed at L210,000, it is 2d.  Thus under the graduated and simple Land Tax together, the holders of the largest areas pay 3d. in the L, whilst the peasant farmers whose acres are worth less than L500 pay nothing.  The owner who pays graduated tax pays upon the whole land value of his estate with no deduction for mortgage.  The Graduated Tax brings in about L80,000 a year; the 1d.  Land Tax about L200,000; the Income Tax about L70,000.  The assessment and collection cause no difficulty.  South Australia had a Land Tax before New Zealand; New South Wales has imposed one since.  Both differ from New Zealand’s.

Income earners pay on nothing up to L300 a year.  Between L300 and L1,300 the tax is 6d. all round; over L1,300 it rises to a shilling.  Joint-stock companies pay a shilling on all income.

Another law authorizes local governing bodies to levy their rates on bare land values.  Three times the Bill passed the Lower House, only to be rejected in the Upper.  It became law in 1896.  The adoption of the principle permitted by it is hedged about by various restrictions but some fourteen local bodies have voted in favour thereof.

The unexampled and, till 1895, continuous fall of prices in the European markets made it hard for colonial producers to make both ends meet.  The cultivator found his land depreciated because, though he grew more than before, he got less for it.  As the volume of produce swelled, so the return for it sank as by some fatal compensation.  To pay the old rates of interest is for the mortgaged farmer, therefore, an impossibility.  Various schemes for using the credit of the State to reduce current rates of interest have been before the public in more than one colony.  The scheme of the New Zealand Government is contained in the Advances to Settlers Act, 1894.  Under it a State Board may lend Government money on leasehold and freehold security, but not on urban or suburban land, unless occupied for farming or market-gardening.  The loan may amount to three-fifths of the value of the security when freehold, and one-half when leasehold.  The rate of interest charged is 5 per cent., but the borrower pays at the rate of 6 per cent. in half-yearly instalments, the extra 1 per cent. being by way of gradual repayment of the principal.  Mortgagees must in this way repay the principal in 73 half-yearly instalments, provided they care to remain indebted so long.  If able to wipe off their debts sooner, they can do so.  The Act came into force in October, 1894.  Machinery for carrying it out was quickly set up; applications for loans came in freely, and about a million has been lent, though the State Board, in its anxiety to avoid bad security, has shown a proper spirit of caution.