The Tariff—Its Costs and Effects

The opposite policies of the two most populous colonies, New South Wales and Victoria, made an interesting experiment, from which illuminating deductions might have been expected. But the were different, particularly in the fact that New South Wales was very rich in coal and Victoria very poor. In fact, neither colony in 1900 had beyond dispute a marked advantage in manufacturing industry, and fiscal opponents put different interpretations on the facts. The statistics of the two colonies were not sufficiently full or uniform to permit a confident answer being given now. We cannot, therefore, very well go behind the contemporary judgment of T. A. Coghlan, of New South Wales, the ablest statistician of his time, that Victoria was then considerably ahead of New South Wales in the manufactures which came into competition with imported goods. Taking hands employed as a criterion and reckoning two women equivalent to one man, Coghlan's results imply that Victoria was absolutely 12 per cent ahead of New South Wales, and in proportion to population, 30 per cent.' 1 Coghlan, A Statistical Account of Australia and New Zealand, 1902-1903. The policy of the new Commonwealth was of necessity a compromise. The need for customs revenue was dominant, but moderate protection to existing industries was to accompany the revenue tariff. The of the time, moreover, required a higher revenue tariff. In order to put the states in the same net revenue position after Federation, with interstate free trade, an average duty of 18 per cent was required on all imports outside of alcohol and tobacco, which were heavily taxed as a beginning. Obviously a revenue tariff on this scale must of necessity have a considerable protective effect; and the more so, as one quarter of the imports of merchandise were admitted free. This initial compromise Tariff of 1903 has been followed by a series of revisions, all in the direction of higher protection. The Tariff of 1908 was deliberately protective, and introduced preference to the United Kingdom. That of 1914, brought in by a Labour Government, increased both protection and preference. The Tariff of 1921 took particular account of the effects of the war, both in imposing higher duties where changed conditions had made the old duties ineffective, and in giving protection to new industries born of the War.2

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• Early Analytical Agricultural Economics in Australia

  Open Access•Roger G Mauldon•Australian Economic History Review•2021

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