AUSTRALIA / 6 9 i 



would " live upon them "; the small states began to fear that their revenues would be 

 destroyed in the interests of the big states. Tasmania and West Australia won a 

 large proportion of their income from the Customs taxation of goods from the other 

 states, and that source would disappear with inter-state Free Trade. The difficulty 

 was finally solved by a clause called the " Braddon clause " (or in party polemics 

 " the Braddon Blot"), after its author, the late Sir Edward Braddon, Premier of 

 Tasmania. 



The Braddon clause provided that the Commonwealth Government, after collect- 

 ing the Customs and Excise duties, should pay back at least f of them to the revenues 

 of the various states. The idea was ingenious. The Commonwealth Government 

 in order to get 55 for itself would have to collect 1 55 for the states, and thus the smaller 

 states could rely on no starveling policy of Customs and Excise taxation. Almost 

 everybody said that the clause was absurd without being able to suggest an alternative. 

 It was put in the Constitution with a proviso that it should last but ten years. During 

 the first three Parliaments several efforts were made to secure, by agreement with 

 the states, a less crippling arrangement. But party strife prevented resolute action 

 on the part of any Federal treasurer. On their part the states were firm to maintain 

 a system which in some cases they thought to be the only safeguard against bankruptcy, 

 while in other cases they recognised it to be a source of most abounding revenues, 

 which they had the pleasure of spending but not the odium of collecting. The Deakin- 

 Cook administration, on the eve of going to the country in 1909, made an arrange- 

 ment with the state Premiers to amend the constitution, so that in place of the pro- 

 visions of the Braddon clause the Commonwealth should pay to the states 253 per 

 head of population per annum out of the Customs and Excise collections. This amend- 

 ment was sanctioned by Parliament. To come into force, however, it required the 

 endorsement of the people at a referendum. That endorsement was refused. The 

 position, then, when Mr. Fisher took office for the second time, was that the Braddon 

 clause of the Federal Constitution was on the point of expiry and that the whole of 

 the Customs and Excise revenues would then be at the unfettered disposal of the 

 Commonwealth. He could have destroyed the financial independence of the states 

 absolutely. He took a moderate course, and by an Act of Parliament of 1910 the 

 states are allowed subsidies of 253 per head of population per annum, out of the Cus- 

 toms and Excise revenue for ten years. At the end of that time the Federal Parliament 

 can make any other disposition that it thinks fit. since there is now no Constitutional 

 provision on the subject. 



Mr. Fisher with two of his colleagues attended the Imperial Conference of 1911. 

 He was apparently impressed by the degree of confidence With which the British Gov- 

 ernment consulted the representatives of the overseas dominions. A first indication 

 of the intention of Australia to take an active ' part in the foreign policy of the Empire 

 was furnished in August 1912 by a protest against the United States policy in regard 

 to the Panama Canal. 



Australia at the end of 1912 was on the eve of her fifth General Election. The 

 Labour party intended to ask for a renewal of confidence and for such amendments 

 of the Constitution as would enable them to carry further their socialistic policy. The 

 Opposition, under Mr. Cook, Mr. Deakin announcing in December his withdrawal from 

 the leadership, raised a warning against this policy and condemned the administra- 

 tion of the Government as tinged with favouritism and inefficiency. "The Opposition 

 party was not as well organised as the Government party and it showed some signs 

 of internal dissension. Many of its friends feared that it would succeed only in weaken- 

 ing and not in defeating the Labour Government. It was impossible for it under 

 any circumstances to secure a majority in the Senate, even if it won all the 18 seats 

 to be contested, for all the 18 Senators who were not retiring at the election of 1913 

 were Labour members. A by-election in 1912 at Werriwa (N. S.W.), at which the 

 Labour party held the seat by a greatly decreased majority, seemed to foreshadow 

 this result. 



