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§ 374. “Shall be Imposed.”

This section is an unequivocal and unqualified direction to the Government and Parliament of the Commonwealth to impose customs duties within the time fixed. Such a direction in a constitutional instrument has almost the weight of a mandate, and obedience to it may be anticipated with perfect confidence. It is necessary, however, to observe that in strict legal effect the words must be interpreted as directory only, not mandatory. The section does not contemplate non-compliance, and does not attempt to prescribe any consequences of non-compliance. It would have been easy to enact that at the expiration of the two years, if no federal tariff had been imposed, the provincial duties of customs and excise should come to an end. That would have had the effect of leaving the Commonwealth wholly without revenue from those sources in the event of non-compliance; but the Convention did not elect to frame any such provision. It cannot be doubted that under the Constitution, if a tariff bill should not become law at the expiration of the two years, the provincial duties would continue in force until it did become law. Nor can it be doubted that such a law, though passed after the two years had elapsed, would be as valid as if passed before; otherwise it would have to be held that the default of the first Parliament should cripple the taxing powers of the Commonwealth for all time. The true interpretation of the section is that a solemn constitutional obligation has been laid upon the Parliament; but that no attempt has been made to threaten pains and penalties in the improbable event of that obligation not being fulfilled.

The framing of the first uniform tariff for a group of communities whose present tariffs are so widely divergent is certainly as difficult and responsible a task as could be entrusted to any legislative body. It is a matter which intimately concerns, not only the people of the Commonwealth as a whole, but the people of each State; seeing that it affects the revenue necessities of each State, and also the industries and vested interests that have grown up in each State in reliance upon the continuance of its present fiscal policy. Unless opposing parties and interests recognize the necessity for compromise, it is likely, not only that there will be a prolonged contest in each House, but that there may also be a disagreement between the two Houses. The constitutional provisions for deciding such a disagreement, together with the political urgency of the question, may be trusted to bring about a settlement; and to that end this provision may be expected to contribute. The command of the people, by whom and for whom the Commonwealth is established, that within two years all differences must be reconciled and a tariff agreed to, ought to be a powerful moral aid to the forces making for compromise and settlement.




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Payment to States before uniform duties.

89. Until the imposition of uniform duties of customs375—

  • (i.) The Commonwealth shall credit to each State376 the revenues collected therein by the Commonwealth377.
  • (ii.) The Commonwealth shall debit to each State—
    • (a) The expenditure therein of the Commonwealth incurred solely for the maintenance or continuance, as at the time of transfer378, of any department transferred from the State to the Commonwealth;
    • (b) The proportion of the State, according to the number of its people379, in the other expenditure of the Commonwealth.
  • (iii.) The Commonwealth shall pay to each State month by month380 the balance (if any) in favour of the State.

HISTORICAL NOTE.—For the history of this clause in the Commonwealth Bill of 1891, see pp. 133, 139, supra. (Conv. Deb., Syd., 1891, pp. 802, 833.) The clause as adopted provided for the apportionment of surplus revenue both before and after the imposition of uniform duties, and was as follows:—

“9. The Revenue of the Commonwealth shall be applied in the first instance in the payment of the expenditure of the Commonwealth, which shall be charged to the several States in proportion to the numbers of their people, and the surplus shall, until uniform duties of Customs have been imposed, be returned to the several States or parts of the Commonwealth in proportion to the amount of Revenue raised therein respectively, subject to the following provisions:—

  • (1.) As to duties of Customs or Excise, provision shall be made for ascertaining, as nearly as may be, the amount of duties collected in each State or part of the Commonwealth in respect of dutiable goods which are afterwards exported to another State or part of the Commonwealth, and the amount of the duties so ascertained shall be taken to have been collected in the State or part to which the goods have been so exported, and shall be added to the duties actually collected in that State or part, and deducted from the duties collected in the State or part of the Commonwealth from which the goods were exported:
  • (2.) As to the proceeds of direct taxes, the amount contributed or raised in respect of income earned in any State or part of the Commonwealth, or arising from property situated in any State or part of the Commonwealth, and the amount contributed or raised in respect of property situated in any State or part of the Commonwealth, shall be taken to have been raised in that State or part:
  • (3.) The amount of any bounties paid to any of the people of a State or part of the Commonwealth shall be deducted from the amount of the surplus to be returned to that State or part.

After uniform duties of Customs have been imposed, the surplus shall be returned to the several States or parts of the Commonwealth in the same manner and proportions until the Parliament otherwise prescribes.

Such returns shall be made monthly, or at such shorter intervals as may be convenient.”




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Adelaide Session, 1897 (Debates, pp. 877–908; 1051–3).—For the history of the clause in Adelaide, see pp. 169, 176, supra. It was passed in the following form:—

“90. Until uniform duties of Customs have been imposed, there shall be shown, in the books of the Treasury of the Commonwealth, in respect of each State:—

  • (i.) The revenues collected from duties of customs and excise and from the performance of the service and the exercise of the powers transferred from the States to the Commonwealth by this Constitution.
  • (ii.) The expenditure of the Commonwealth in the collection of duties of customs and excise, and in the performance of the services and the exercise of the powers transferred from the State to the Commonwealth by this Constitution:
  • (iii.) The monthly balance (if any) in favour of the State.

From the balance so found in favour of each State there shall be deducted its share of the expenditure of the Commonwealth in the exercise of the original powers given to it by this Constitution, and this share shall be in the numerical proportion of the people of the State to those of the Commonwealth as shown by the latest statistics of the Commonwealth. After such deduction the surplus shown to be due to the State shall be paid to the State month by month.”

Melbourne Session, 1898 (Debates, pp. 775, &c.; 1036–9, 1906–11, 2375–8). In accordance with the recommendations of the Finance Committee, the clause was recast, the only difference in substance being a declaration that any expenditure “originated by the requirements of the Commonwealth, in respect of services and powers transferred, and not incurred solely for the maintenance or continuance in any State of the services as existing at the time of the transfer, shall be taken to be incurred by reason of the original powers given to the Commonwealth by this Constitution.” This somewhat extended the scope of per capita division of the expenditure; and Mr. O'Connor (pp. 1906–11) to meet what he thought was the wish of the Finance Committee, proposed that the per capita basis should be further extended to the expenditure of all the non-revenue producing departments—i.e., defence, light-houses, light-ships, beacons and buoys, and quarantine. The amendment was, however, opposed by Mr. Holder, Sir Geo. Turner, and Mr. Henry, who objected to expenditure being charged per capita unless revenue were credited in the same way. At the suggestion of the Drafting Committee, the clause was simplified by defining the two classes of expenditure as they now stand in the section. It was further verbally amended after the 4th Report.

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