In the Beginning: Taxation in Early Colonial New Zealand

For the first five years of the colonial period, from 1840 to 1845, the New Zealand government was insolvent, spiraling deeper and deeper into debt and failing to pay salaries and other bills. It conscientiously adopted the revenue-raising methods proposed by London (mainly land sales and customs duties) plus several others (notably liquor licensing, a tax on auctions, and borough council rates), but the revenues raised never came close to covering spending. In desperation, it resorted to borrowing, printing money and experimenting with an income tax – an extraordinarily innovative move in 1844. Unsurprisingly, none of these measures proved satisfactory. London blamed the Colony’s governors, but the real problem was that its economy was simply too small to sustain a government even remotely resembling the British colonial norm.