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§ 376. “The Commonwealth shall credit to each State.”

These words impose upon the Federal Treasury the duty of keeping an account of the revenues collected in each State by the Commonwealth. The clause, as framed at Adelaide, provided that the necessary particulars should be “shown, in the books of the Treasury of the Commonwealth, in respect of each State;” and in the simpler language of the section as it stands the same direction is clearly implied.

The actual moneys are of course to be paid into the Consolidated Revenue Fund of the Commonwealth (sec. 81). The process of crediting and debiting prescribed by this section is a mere matter of book-keeping entries, upon which the appropriations and payments to the State are ultimately to be based.

TO EACH STATE.—One thing to be noticed about this section is that it does not appear to contemplate the existence of any federal territory not forming part of a State, but which may form part of the Commonwealth; or, at least, that it does not appear to deal with any revenue or expenditure except such as is collected or incurred in a State. In subs. i. and subs. ii. (a) the word “therein” seems clearly to exclude any revenue collected, or expenditure incurred, elsewhere than in a State. In sub-s. ii. (b), where “the other expenditure of the Commonwealth” is mentioned without limitation, it is not clear whether the proportion which each State has to bear is the proportion of the number of its people to the number of the people of the Commonwealth, or the proportion of the number of its people to the number of the people of all the States, exclusive of any federal territories.

It therefore becomes a question how far the section applies to revenue collected and expenditure incurred—(1) in the federal territory selected for the seat of Government; (2) in any other territory which may be acquired by the Commonwealth. As regards the latter territories, the question is of no immediate interest, and could probably be arranged for in the terms and conditions of admission of such territories. But with regard to the seat of government, the question will arise as soon as the territory is acquired by the Commonwealth.

It is submitted that revenue collected, or expenditure incurred, in the federal territory is not collected or incurred in a State, although as a matter of location it is provided in sec. 125 that the seat of government, or the territory—it is not clear which —shall be “in” the State of New South Wales. The question is not of great practical importance, because the only substantial “revenue” collected in the federal territory at first will be from the post and telegraph department, and the bulk, if not the whole, of the federal expenditure in the territory will be included in the “other expenditure” of the Commonwealth which is to be borne in proportion to population. (See § 379, infra.)




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