Politics Shapes the Economy

1. Politics Shapes the Economy Investing In The Economy Close relationship between politics and the economy during the 19th century. A major concern of Pakeha politics was to facilitate economic growth and development for the settler population. One of the main ways was through investment in public works, immigration schemes and most importantly, providing land for settlers. Schoolhistory.co.nz

2. Gubernatorial System of Government Under Hobson and Fitzroy • Needed to acquire land to sell to settlers. • Both proved unsuccessful at this because: • Britain expected NZ to be self-supporting using the profit from selling land to promote economic development. • However, Maori rarely offered large areas of land for sale. • Created a cyclical effect: shortage of land resulted in a shortage of funds and high land prices.

3. In response to this Fitzroy suspended the Crown’s right of pre-emption and imposes a high tax on lands sales as a way of obtaining funds. Largely unsuccessful and is one of the reasons why settlers wanted to replace the Gubernatorial system with settler self-government and a Constitution. Gubernatorial System of Government Under Hobson and Fitzroy cont’d

4. Late 1845- Governor Grey succeeded in acquiring land for settlers • British Colonial Office abandoned policy of self-supporting colonies and provided funds to purchase land. • Grey acquired Maori land through the “wasteland” principle. i.e. He assumed, without payment, ownership of any land not occupied or cultivated by Maori. • Through this method and purchases he acquired 30 million acres of the South Island and 3 million acres of the North Island. Thus providing the basis of the Pakeha economy. • There are 66.5 million acres in NZ.

5. The Provincial Councils 1852-1876 • Initially 6 provinces-Auckland, Taranaki, Wellington, Nelson, Canterbury and Otago. Hawkes Bay, Marlborough, Westland and Southland added after 1858. • Became a powerful part of new Govt. • Assumed responsibility for regional colonisation and development. • Funded by a share of revenue from land sales within a province and a part share of the nations custom revenues. • They could initially arrange loans in Britain.

6. Provinces established in the New Zealand Constitution Act of 1852

7. Economic development under the Provincial Councils • Regional variation a striking feature. • Responsible for (1) land distribution, (2) publicworks, (3) immigration and services (4) education and (5) hospitals within their province • Some provinces were far more successful than others. Canterbury Provincial Council Building

8. Land Distribution • Vital to facilitate land sales to Pakeha as this provided a large part of a provinces income and future economic growth through development of the land. • Some provinces had slow land sales, therefore, slower economic growth and a strong dependence on central govt for funds. Eg Taranaki.

9. In contrast, most of the land in the Sth Island had already been purchased by Grey and was well on its way to being developed and providing a solid economic base for the provinces to grow i.e. wool, grain and gold. Most Nth Island provinces were forced to offer assistance such as deferred payment, liberal credit and, in Auckland, free land grants to particularly desirable settlers like SCHOOL TEACHERS!!!!!!!

10. Public Works • Public works schemes organised by individual provinces for the most part. • For example, roads, harbours and tunnels etc. • However, as a consequence of the variations in economic development between provinces, the level, standard and extent of public works varied greatly between provinces. i.e. there was no national roading plan to link different regions so transport was a big problem for goods etc within regions.

11. Immigration • New settlers were regarded as vital by provinces for economic growth. • Provincial councils actively recruited immigrants mainly from Australia and Great Britain. • Used paid immigration agents as well as offering assisted or free passages to desirable immigrants. • Often targeted certain groups of immigrants depending on needs of a province, e.g. in the 1850s and 1860s Canterbury and Otago targeted single women to redress a gender imbalance, domestic servant shortage and to marry and have children. Chinese miners were also targeted to work the gold fields.

12. Education • Was the responsibility of individual provincial councils. • However, most provided little in the way of funding so the standard of education was low along with the attendance rates.

13. The Role of Central Government in Fostering Economic Development • Within 2 decades of its creation, central government’s role changed from occupying a position secondary to that of the provincial councils to being the major mechanism driving the nation’s economic development. • Race Relations has been traditionally seen by many historians as being the major concern of central government until the late 1860s.

14. However, the passing of the NZ Settlements Act of 1863 and the Native Land Act of 1865 can also be viewed as an economic initiatives of central govt. Directly or indirectly these 2 Acts ensured that the major economic resource in 19th century NZ could be more readily transferred from Maori to Pakeha control irrespective of which province settlers resided in.

15. By the late 1860s….. • underlying economic problems combined with recession and the NZ Wars challenged even Canterbury and Otago’s ability to manage economic development on a regional basis. • As a result, in 1868, central government was forced to terminate the provinces’ power to raise loans which opened the way for greater central government involvement in the economy.

16. Abolition of the Provinces • In 1870, Julius Vogel launched a programme of large scale borrowing to fund national public works and immigration schemes thereby ensuring that the central government became the major player in the economic development of the nation. • Political change was enacted in 1876 when the provincial tier of government was abolished resulting in the central government becoming responsible for economic development nationally.

17. References • Northcott, D., & Sheryll Ofner (1995), In Pursuit of Prosperity. Economic and political change in nineteenth century New Zealand: A textbook and workbook, Auckland: White Ribbon Schoolhistory.co.nz