The Dominion. TUESDAY, OCTOBER 19, 1909. AUSTRALIAN POLITICS.

Dominion, Volume 3, Issue 641, 19 October 1909, Page 6

The Dominion. TUESDAY, OCTOBER 19, 1909. AUSTRALI AN POLITICS.

The .latost news respecting tho pro* posod alteration of tho financial arrange-' raonte of' Australia must make every friend of the Commonwealth' sigh lor tho day whon tho Foderation'will have finally got over its growing pains. It appears quite possible that the disagreement Hn the Ministerial ranks as to the new arrangoment decided upon by. the Premiers.'','Conference-niay'split the Cominoriwoalth Parliament into three parties again and involve still anothor change of Qovornment. Under tho 'original schomfc ombodiod in the Constitution the Federal authority i 3 financed by' its retention' of one-fourth of the 'Customs. rovanue, the remaining handed back.to. the States. .. ; This arrangement expires next year, "and in tho moantimo' thd Federal .authority,hap incurred largo new , liabilities' in tho matter, of old-age' pensions and is to' incur still heavier lia.bilitics'ufidor its defence scheme, Larger resources aro'therefore necessary. ; At tho Hob art Conference; of State Premiers it j was decided that the difficulty should bo solved by allowing, the Federal Government ..to retain 40 per. cent, of tho Customs rovonuc, subject to the provision that , the States should receive in the aggregate not less than 6| millions'a year. At tho Conference'in Melbourne in Au-. gust, however, it >vas decided that the Federal Government, retaining tho' Customs duties, should pay to the States 255. por head of the population, minor adjustments to meet present. needs' being also agreed upon. Under this arrangornent, ifit were now in force, Now South. Wales' would lose ; £1,250,000,. yictoriawould lose £140,000, and Queensland and, other States smaller amounts. The Fedoral Government proposed . last ' month to adopbtho new arrangement, and to,have itombodiod in'the Constitution as a permanent settlement of the,question, Tho merit of tho per capita proposal was.thus' stated.by; Mr. Deakin in moving for leave to bring in a Bill to enablo the .Constitu-

tiori to be altered: "It would secure efficiency in the revenuos of the Common-, wealth'and the States aliko, and also per-' mitr the States to exercise, unfettered control of their own receipts. The States would also know from year to year what they might expect to receive from the Commonwealth. Tho uncertainty both as to the States and the Commonwealth would' disappear, and they would come out of the twilight and mist into the. light of day. It ,would, remove the last fragment of hesitation from 'the path of the least timorous States in grappling with the question of immigration as it should have been grappled with I long ago. Increased population meant increased production; increased production meant increased revenue, and increased revonue meant f increased opportunities of public usefulness through the medium of the Commonwealth. It was proposed to place the agreoraent in the Constitution because. otherwise it would bo revocable at any time;" -'•'■ • ,

The opposition to the proposal, J's mainly opposition to the permanenco asked for it, but it is very difficult to find any common principle of objection in the hostility of thoso who are mainly concerned with Stato rights and thohosfcility of those who fear that the new arrangement would somehow lead to tho end of Protection. The strongest argumont against the per capita arrangemont, from tho point of viow of Federal financial stability, is based on statistics which go to show that in large States, as population increases, , the Customs revenue per head tends to fall.—New Zealand, by the way, is an eccentric and unhappy exception to this rule. Thus,'as the years passed, the balance per.head left to the Federal authority would dwindle.. Of course the Fedoral Government could I easily abandon Protection as its fiscal rule, and substitute a good rovonuo tariff. It is this prospect which lies behind tho I hostility of tho party led by tho -A ge, \yhich says quito bluntly: " Wo cannot havo this Premiers' agreement and a protective policy, at the same time." The difficulties of the Government are complicated by the objection of a great body .of.Now' South'AValoH-' opinion to'any encroachmont upon its projent share of the

Federal revenue. •■' Not many proposals have been put forward k>; which opposition has been offered: on so many con ; flicting grounds. They are all clamouring—tho State . rightsV man who wants his pound of flesh; tho Age, which calls tho proposal a State rights dodge j tho man who does not want the Constitution altered because it' can . never be altered again; the man who fears that tho proposed alteration will set on foot a genoral tendency to mako alterations at every possible opportunity. The position in Parliament is quito critical,'for there are eight Ministerialists opposed to the fixing of a perpetual per capita grant, and these will leave the; Government with a minority of two on tho broad issue of a limited as against an unlimited arrangement. Should the Government bo defeated'over- tho question, the state of parties on.all other questions will theoretically be the same as it is at present. But the basis of the Fusion w>ll bo destroyed, and all tho good work of tho past few months win, at any rate for a time,; bo undone.' In the interests of order, stability and continuity, it is to be hoped that the Government will in somo way bn able to effect a compromise with its rebels. ~