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Customs Union and Fiscal Union in Australia at Federation

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  • Peter Lloyd

Abstract

type="main" xml:id="ecor12167-abs-0001"> A central feature of the constitutional changes imposed at the time of Federation in 1901 was the ‘fiscal union’ of the six States. This union involved the abolition of tariffs on trade between the States, the harmonisation of the tariff rates and of the excise duty rates of the former six colonies, and the establishment of the financial arrangements to distribute the surplus net customs and excise revenues among the States. This paper examines these four elements of the fiscal union. It provides, for the first time, a measure of the change in the level of tariff duties imposed on imports from outside the Commonwealth and in excise duties. The harmonisation of the customs duty rates increased the average rate of customs duty on dutiable imports from outside the Commonwealth by about 34 per cent, while the harmonisation of the excise duty rates maintained the rates at about the mid-point of these rates in the colonies. The four elements of fiscal union interacted and together they laid the foundations of assistance policy, commodity taxation and Commonwealth–State financial relations for the future Commonwealth of Australia.

Suggested Citation

  • Peter Lloyd, 2015. "Customs Union and Fiscal Union in Australia at Federation," The Economic Record, The Economic Society of Australia, vol. 91(293), pages 155-171, June.
    • Handle: RePEc:bla:ecorec:v:91:y:2015:i:293:p:155-171
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    File URL: http://hdl.handle.net/10.1111/ecor.2015.91.issue-293
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    Cited by:

    1. Brian D. Varian & Luke H. Grayson, 2024. "Economic Aspects of Australian Federation: Trade Restrictiveness and Welfare Effects in the Colonies and the Commonwealth, 1900–3," The Economic Record, The Economic Society of Australia, vol. 100(328), pages 74-100, March.
    2. P. J. Lloyd, 2016. "The First 100 Years of Tariffs in Australia: the Colonies," Department of Economics - Working Papers Series 2018, The University of Melbourne.
    3. William Coleman, 2018. "Was Federation Uniting or Dividing? The Impact of the Customs Union of 1901 on Australian Trade Relationships," Economic Papers, The Economic Society of Australia, vol. 37(3), pages 230-247, September.
    4. Brian D. Varian, 2024. "Market integration and a lower-productivity economy: the case of Australian federation and Queensland’s manufacturing sector, 1897–1906," CEH Discussion Papers 06, Centre for Economic History, Research School of Economics, Australian National University.
    5. Peter Lloyd, 2017. "The Evolution of Tariff Protection and Wage Protection in the Late Colonies and Early Federation," Economic Papers, The Economic Society of Australia, vol. 36(4), pages 459-476, December.
    6. P.J. Lloyd, 2015. "The First 100 Years of Tariffs in Australia: The Colonies," CEH Discussion Papers 043, Centre for Economic History, Research School of Economics, Australian National University.
    7. Luke H. Grayson & Brian D. Varian, 2023. "Economic Aspects of Australian Federation: Trade Restrictiveness and Welfare Effects in the Colonies and the Commonwealth, 1901-3," CEH Discussion Papers 01, Centre for Economic History, Research School of Economics, Australian National University.
    8. Peter Lloyd, 2017. "The First 100 Years of Tariffs in Australia: the Colonies," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 57(3), pages 316-344, November.

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