Sir George Grey’s Machiavellian Constitutional and Fiscal Reforms in Aotearoa New Zealand, 1845–1876

Abstract

This paper examines the evolution of the New Zealand tax system from 1845 to 1876. The key to this period is the New Zealand Constitution Act 1852 (UK), which was devised by the Governor, Sir George Grey, and which divided the Colony into six provinces. There were hardly any roads, so allowing isolated settler communities a degree of autonomy made obvious sense. Grey’s more sinister aim, however, was to retain control of the purse-strings and thus dictate policy generally. In this he was markedly successful: the Act gave the Governor tight control over the Colony’s two main sources of revenue (land sales and customs duties) and also over the military (which he used to confiscate Māori land). The provinces were free to build and operate roads, wharves, railways, schools, hospitals and so on — but they had to either persuade the Governor to supply funding or pay for them themselves.

Twenty years later the difficulties of communication had been largely solved and the Colonial Government, spectacularly insolvent prior to Grey’s arrival, was financially secure. The provinces had served their purpose and in 1876 they were abolished. Since then, New Zealand has had one of the most centralised systems of government and taxation in the world, and the Māori people are still suffering from the catastrophic loss of their land.

Keywords: Tax, New Zealand, 19th Century, George Grey, Māori, Colony, New Zealand Constitution Act 1846, New Zealand Constitution Act 1852, Customs, Duties

JEL Classification: H1, H2, H7, K34, N47