under the Public Debts Sinking Funds Act of 1868, or by the trustees of any local authority whose revenues are exempt from taxation; and all mortgages held by or on behalf of any charitable institution.

Still another exemption is provided for, namely, all land owned and mortgages held by or on behalf of any religious body, the proceeds of which land and mortgages are devoted to the support of aged or infirm ministers, or of widows or orphan children of ministers. It is also declared that native land occupied by any other person than the Maori owner shall be subject to one-half of the ordinary land tax in respect of the Maori landowner's interest therein, while being exempt from the graduated tax, and that all mortgages held by or in trust for Maoris shall be liable to the payment of ordinary land tax. Mortgages held by banking companies are reached by the income tax; and land owned and mortgages held by any registered building society are exempted from taxation, the profits derived by members being subject to income tax. In the event of land being undervalued, the Commissioner may give notice to the owner, within twelve months of the signing of the assessment roll, that he must increase the value of the land to the sum placed upon it by the taxation authorities. If the owner is not willing to increase the value to the sum notified by the Commissioner, he may appeal to the Resident Magistrate to assess the value; but should he neither adopt this course nor consent to the Commissioner's valuation within thirty days, the Commissioner may recommend that the Government shall purchase the land at the returned value plus 10 per cent. On the other hand, if the owner is not satisfied with the value at which the land has been assessed, whether by the Board of Review or not, he may call upon the Commissioner to reduce the valuation to a certain sum or to purchase the land at this price.

The income tax is payable upon income derived from employment and from business, including investments other than those in mortgages of land, upon which ordinary land tax is levied. An exemption of £300 is allowed to every person domiciled in the colony, this concession being withheld from absentees; but no exemption is allowed to a public company. The rate of tax is 6d. in the £ on the first taxable £1,000, and 1s. on every additional £, except in the case of public companies, which pay 1s. per £ on the whole sum. The income of public companies

is declared to be the amount of dividends earned, sums carried to reserve fund, and any other profits made or income derived by such companies. To this provision exception is made in the case of banking companies, insurance companies, shipping companies, and loan, building, and investment companies. It is provided that every banking company shall be assessed for income tax at the rate of 7s. 6d. per £100 of the average of the total liabilities and assets for the four quarters of the preceding year. The shareholders of ioan, building, and investment companies are personally taxed upon the amount of income derived from such societies. The regulations declare that a person or company engaged in business as the owner or charterer of shipping shall be

assessed upon the income derived from such business carried on in New Zealand and with places beyond the colony; and that when the head office of a person or company engaged in such business is outside the colony the agent shall be liable to the payment of income tax of 5 per cent. of the receipts from the carriage of passengers, goods, and live stock shipped at New Zealand ports. It is also provided by these regulations that the income of every insurance company shall be taken as the income derived from business carried on in the colony, and from investments within the colony other than those in land and in mortgages of land. The exemptions to the income tax comprise the revenues of any county council, borough council, town board, road board, harbour board, public university, public school, education board, school commissioners, licensing committee, and every other local authority receiving revenue of any kind for the purposes of or in relation to local self-government; the income of friendly societies and building societies, and of all public bodies and societies not carrying on business for purposes of gain to be divided amongst the shareholders or members; and income derived by the owner or occupier from any land on which land tax is payable, and from mortgages of such land. The income of any savings bank constituted under the Savings Bank Act of 1858, and the income of any public charitable institution. are also exempted. Also, when a person occupies for purposes of business or employment land on which he pays land tax, he is allowed to deduct from his income a sum equal to 5 per cent. on the amount on which he is liable to pay land tax. It is imperative that a person who does not reside permanently in the colony, and who offers or exposes goods for sale or disposition by sample or otherwise, shall take out an annual license, the fee for which is fixed by regulation at £50.

There are about 110,000 land owners in New Zealand and of these 17,500 pay tax, the remainder being exempted from one cause or another. The land tax yielded £313,000 for the year ended 31st March, 1902, of which £234,000 came from ordinary land tax and £79,000 from graduated tax, the latter amount including £6,000 collected from absentees. The total value of land subject to taxation is about £30,175,000 out of a total unimproved value of £61,466,000. The following is a statement of the tax levied during the past five years:

1

The income tax returns have shown great expansion during the last two years; indeed, the yield shows substantial increases in almost every year since the first imposition of the tax. The revenue obtained during each of the last ten years was as follows:

The number of taxpayers for 1902 was 6,556, including 620 absentees and 538 companies. The total incomes assessed for taxation amounted to £6,105,464, but the taxable amount was reduced to £4,486,064 by exemptions. The incomes of companies are assessed at £1,989,734, and of absentees £153,218.

REVENUE FROM DIRECT TAXATION.

The following table shows the amount of revenue received from the various sources of direct taxation during the year 1901-2::

*Includes £7,073 from Totalisator Tax. + From Companies' Tax.

LAND REVENUE.

The practice of treating as ordinary revenue money derived from the sale and occupation of Crown lands obtains in all the states, and the money so raised forms one of the largest items of their income. The propriety of so doing is open to grave doubt, but the argument used in

its justification is that the sums so obtained have enabled the Government either to construct works, which both enhance the value of the remaining public lands and facilitate settlement, or to endow municipalities, and thus enable them to carry out local works. The revenue from land sales is declining year by year, both absolutely and as compared with population. In New South Wales and South Australia the fallingoff has been most noticeable; in the former state the revenue from this source is now some £1,214,000 less than was the case in 1881, while in South Australia the revenue from land sales is only slightly over £41,000.

Adopting the division of land revenue into receipts from sales and receipts from occupation, the following table shows the income for 1881

Australasia

4,691,672 1,005,441 5,697,113 1 14 2 0 7 42 16

Compared with 1881, the land revenue for 1901-2 shows a large decline, amounting to £1,790,399 for the states included in the Commonwealth, and to £2,091,720 for the whole of Australasia. The falling-off' is found entirely in the amount of revenue from sales, that derived from rents having largely increased. However, general remarks applicable to all the states can scarcely be made. New South Wales obtained £2,483,338 from land sales in 1881, out of a total of £4,691,672 for all the states, or more than one-half; while from occupation its revenue was £337,651 out of £1,005,441, or little more than one-third. In 1901-2 the revenue of the state from sales amounted to £1,269,559-still a large amount, but £1,213,779 short of the receipts of 1881. In regard to occupation, a different condition of things is disclosed. The receipts in New South Wales during 1901-2 totalled £732,015, or an increase of £394,364 as compared with 1881, and amounting to 48.8 per cent. of the total of the states comprising the

Commonwealth, or to 43.6 per cent. of the total for Australasia. The following are the figures for 1901-2:

Australasia

1,926,254 1,679,139 3,605,393 0 8 407 30 15 7

In all the states, New South Wales and Victoria excepted, a general sinking fund is established to assist in the redemption of public loans on maturity, and in New South Wales and Victoria special sinking funds have been inaugurated in connection with portions of the local funded stocks. The desirability of establishing a general sinking fund is on all sides admitted, and a portion of the proceeds of land sales could with advantage be set apart from the general revenue and devoted to this purpose. Victoria deals with a portion of the proceeds from the sale of Crown lands apart from the general revenue, and at the close of the financial year 1890-1 a sum of £578,740 derived from that source had been placed to the credit of the Railway Construction Account; while since that year various sums amounting to £678,532 have been appropriated on account of the Land Sales by Auction Fund" for expenditure on public works, and a total of £298,686 has been received from sales, &c., leaving a debit balance of £379,846 on the 30th June, 1901.

HEADS OF EXPENDITURE.

The amount disbursed by the Government of New South Wales is far larger than that expended by any other state of the group; in the last financial year it exceeded the expenditure of Victoria by £3,612,324, was nearly twice as great as that of New Zealand, and was over one million more than the united expenditure of Queensland, South Australia, and Western Australia. This is chiefly owing to the absence of a complete system of local government in New South Wales and the system of centralisation already referred to. Below will be found a