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§ 372. “Or Applied towards the Payment of Interest.”

These words were added at the suggestion of Mr. Nicholas Brown, to meet Mr. Barton's objection that the clause as it then stood would make it impossible for the Commonwealth to take over the debts. (Conv. Deb., Melb., pp. 2428–31.) This addition does not in any way touch the principle of the section, that the customs and excise revenue shall be shared between the Commonwealth and the States in certain proportions; it merely provides that when the Commonwealth has taken over any of the debts, payment of interest on account of a State shall, for the purposes of the section, be equivalent to payment to the State.

This provision suggests that the ultimate absorption of the federal surplus will be effected by devoting it to payment of the interest bills of the States. Sir Samuel Griffith, in a paper presented to the Government of Queensland in 1896 (entitled “Notes on Australian Federation: its nature and probable effects”) pointed out that the interest bills of the several colonies, both individually and in the aggregate, showed a striking correspondence in amount with the customs and excise revenues; and he expressed the opinion that, though the correspondence was no doubt accidental, it was likely to have some element of permanence. This fact at once makes it clear that the States require the unexpended balance of the customs and excise revenues not so much for the purpose of current expenditure as to meet the interest on their debts. That explains why they cannot, as did the American States in 1787, surrender the customs and excise revenues wholly to the union; and it points to the probability that when the debts have been taken over by the Commonwealth, and a few years' experience of the working of the Constitution have been gained, the difficulties in the way of a final settlement of the financial problem will be far less than at present.

Uniform duties of customs.

88. Uniform duties of customs373 shall be imposed374 within two years after the establishment of the Commonwealth.

HISTORICAL NOTE.—This provision was first suggested by the Finance Committee at Adelaide, and was first drafted as part of the “exclusive power over customs' clause. Sir George Turner suggested that the uniform tariff, instead of coming into force suddenly, should be led up to by a sliding scale. The Drafting Committee afterwards placed the provision as a separate clause. (Conv. Deb., Adel., pp. 835, 838.)

At the Sydney session, 1897, a general financial debate took place under cover of this clause. (Debates, pp. 35–222.)

At the Melbourne session Mr. McMillan, while sympathizing with the intention of the clause, thought it a mistake to fetter the discretion of the Parliament. Mr. Reid replied that New South Wales wanted a definite assurance of intercolonial free-trade, and without this there would be no guarantee that the tariff would not be deadlocked. (Conv. Deb., Melb., pp. 1011–4.)

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