Small was beautiful in 1908, gross is great today

Dr Bryce Wilkinson
Insights Newsletter
11 May, 2018

Government was vastly smaller in 1908 than now. The tax-and spend state was vastly smaller, but so was the regulatory state.

In 1907-8 central government taxation was around $780 per capita in today’s dollars, 6.3% of GDP. In the year ended March 2017 it was around $17,800 per capita, 29.6% of GDP.

The rise of the intrusive redistributive state largely explains the change. Spending on Statistics New Zealand’s measure of “collective consumption” was only 5.1% of GDP in the year ended March 2017. (Think of this as ‘core government’.)

Why pick 1908? It is the earliest year for which we have a consolidated statute book. It comprises 208 parliamentary Acts. This provides a historical perspective on today’s regulatory state.

The number of principle public acts in force in May 2019 is almost five times greater, at 1,009, according to the database on the Parliamentary Counsel Office’s website.

Happily, the diligent public servants in that Office have also made it easy to retrieve each of the 1908 Acts and compare them with today’s counterparts.

Changed social norms and a massive move to more ambitious, intrusive and prescriptive government have left their mark. To illustrate:

  • The Land and Income Assessment Act 1908 was 39 pages. The Income Tax Act 2007 is 3,351 pages.
  • There was no 505-page Social Security Act in 1908, but there was a 15-page Destitute Person’s Act.
  • The Education Act in 1908 comprised 70 pages. The Education Act 1989 is 694 pages.
  • The Monopoly Prevention Act in 1908 was 5 pages. The Commerce Act 1986 is 270 pages.
  • There was no Local Government Act in 1908, but there was a 12-page Town Boards Act. The Local Government Acts of 1974 and 2002 comprise 384 and 444 pages respectively.
  • In 1908, there was nothing like the 796-page Resource Management Act 1991.

The Destitute Person’s Act illustrates the change in social norms. It is not about state financial support. Instead, it assigns liability for the upkeep of children or a destitute person on a spouse, co-habitant or near relative. The penalty for deserting a wife or child could be up to 12 months imprisonment.

Of course, children are doing much better today, aren’t they? Big government works. The old-timers would never have believed it.

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