982 STATE FINANCE. THE HE functions of government are much alike throughout Australasia, and it is only to be expected, therefore, that similar items of expenditure should be found in the budgets of the various states. The chief point of difference is the extent to which local requirements are provided for out of general revenue. In most of the states provision for local improvements is a matter of which the state has long since divested itself; but in New South Wales and Western Australia the central government still charges itself with the construction of works of a purely local character, especially in the rural districts; hence the appearance, in the statements of public expenditure of those states, of items of large amount which find no parallel in the other states. Also, when comparison is made with outside countries, other points of difference are found. In Australasia, as in other young communities, it has been necessary for the state to initiate works and services which in older countries have come within the province of the local authorities or have been left to be undertaken by private enterprise. Even at the present day it is deemed advisable that the Government should retain the control of services, such as the railways, which in the United Kingdom and some other countries are not regarded as forming part of the functions of the state, and it is on account of the administration of these services that the budgets of the Australasian states reach such comparatively high figures. The revenues of the Australasian states have been subject to considerable fluctuations, due not so much to changes in the incidence of the revenue, as to variation in the amount of the imports, for it was upon taxation of imports that the states have most largely depended for revenue. The years of highest revenue ought, under normal conditions, to be coincident with the years of greatest prosperity; but some of the states have been able to efface the effect of unfavourable seasons by lavish borrowing, and the inflow of loans, as represented by taxable goods, has, at times, more than counterbalanced the shrinkage in the imports, due to failure in the wool or wheat crops, for which these imports are payment. This effect of the borrowing policy of the various states. upon their revenue was not so great in the last decade as in the previous one, but that it was considerable may be gathered from the fact that in the ten years 1891-1901 the various State Governments contrived to borrow and spend £70,000,000, obtained in London. The unsteadiness of the railway revenue, due to variations in the seasons, is another cause of disturbance to Australian finance, and one which will not be obviated until the resources of the states are so developed that wool and wheat will no longer play the important part they do at present in the railway trade of the country. In 1895 large reductions were made in the New South Wales tariff; these account for a reduction in the revenue of the state during that and the three following years, while to other influences must be added the financial crisis of 1893, which had a numbing effect upon trade throughout the states comprised in the Commonwealth. It will be observed from the table that Western Australia and New Zealand are in a different position to the more important mainland states. The financial position of Western Australia is exceptional, being due to the opening up of the goldfields, and the influx of a large amount of capital, and, as the tariff, was of a wide range, the importation necessarily involved a large customs revenue, while the trade expansion increased the earnings of the railways. The configuration of the colony of New Zealand renders it to a very great extent immune from the droughts that so much affect the mainland of Australia, and the financial crisis of 1893 had only a comparatively slight influence on its trade; the progress of trade in that colony was, therefore, fairly regular during the years when the finances of the mainland states were most disturbed. The establishment of the Commonwealth on the 1st January, 1901, necessitated the transfer of the Customs Department to the Federal Government; and, by proclamation, the Postal, Telegraph, and Defence Departments were taken over on the 1st March of the same year. The receipts of the six states are inclusive of the surplus returned by the Commonwealth, but the expenditure excludes all Federal transactions. The finances of the Commonwealth are dealt with on page 812. The revenue for each state during the past ten years is shown in the following table. For New South Wales and New Zealand the figures shown for the years 1893 to 1895 inclusive, are those for the twelve months ended on the 31st December of the previous year; while for the remainder of the period the fiscal year ended on the 30th June in the former state, and on the 31st March in New Zealand. The amounts given for Tasmania are for the year ended 31st December prior to the years shown, while for the remaining states the financial year ends on the 30th June :— £ £ £ £ £ £ £ £ 1893 10,066,463 6,953,229 3,445,943 2,525,525 575,822 787,764 24,360,746 4,669,551 29,030,297 1894 9,499,910 6,716,814 3,343,069 2,591,271 681,246 706,972 23,539,282 4,692,463 28,231,745 1895 9,350,051 6,712,152 3,413,172) 2,497,648 1,125,941 696,795 23,795,759 4.447,899 28,243,658 1896 9,091,368 6,458,652 3,641,583 2,585,230 1,858,695 761,971 24,397,529 4,556,015-28,953,544 1897 9,109,253 6,630,217 3,613,150 2,698,759 2,842,751 797,976 25,692,106 4,798,708 30,490,814 1898 9,304,884 6,898,240 3,768,152 2,633,727 2,754,747 845,019 26,204,769 5,079,230/31,283,999 1899 9,573,415 7,378,842 4,174,086 2,731,208 2,478,811 908,223 27,244,585 5,258,228 32,502,813 1900 9,973,736 7,450,676 4,588,207 2,853,329 2,875,396 943,970 28,685,314 5,699,618 34,384,932 1901 10,612,422 7,722,397 4,096,290 2,886,854 2,964,121 1,054,980 29,337,064 5,906,916 35,243,980 1902 11,007,356 7,006,333 3,535,062 2,477,432 3,354,123 826,163 28,206,469 6,152,839 34,359,308 The revenue per inhabitant for each state during the past ten years was as follows: : The following statements show that the expenditure of the six Commonwealth states has increased from £25,983,968 in 1893, to £29,240,334 for the year 1901-2, while the amount per inhabitant has decreased from £7 19s. 11d. to £7 12s. 7d. The expenditure of Australasia has increased, during the same period, from £30,308,958 to £35,155,249, while the amount per inhabitant has decreased from £7 16s. 1d. to £7 12s. Od. The expenditure for each state during the past ten years is set forth in the following table : New South Australia, Queens. including land. Western Tas- Common- New AustralZealand. asia. Northern £ £ £ £ £ 629,372 919,802 25,983,968 4,324,990 30,308,958 656,357 836,417 24,985,835 4,455,116 29,440,951 936,729 789,806 23,786,695 4,266,712 28,053,407 £ £ £ £ 1893 10,103,272 7,989,757 3,557,620 2,784,145 1894 10,082,198 7,310,246 3,351,536 2,749,081 1895 9,329,353 6,760,439 3,308,434 2,661,934 1896 9,698,891 6,540,182 3,567,947 2,640,688 1,823,863 748,946 25,020,517 4,370,481 29,390,998 1897 9,316,620 6,568,932 3,604,264 2,779,110 2,839,453 750,244 25,858,623 4,509,981 30,368,604 1898 9,299,411 6,928,850 3,747,428 2,750,959 3,256,912 785,026 26,768,586 4,602,372 31,370,958 1899 9,562,739 7,001,663 4,024,170 2,777,614 2,539,358 830,168 26,735,712 4,858,511 31,594,223 1900 10,086,186 7,280,689 4,540,418 2,936,619 2,615,675 871,454 28,331,041 5,140,128 33,471,169 1901 10,729,741 7,683,079 4,624,479 3,007,034 3,051,331 923,731 30,019,395 5,479,703 35,499,098 1902 11,020,105 7,407,781 3,967,001 2,823,578 3,151,427 870,442 29,240,334 5,914,915 35,155,249 The expenditure per inhabitant for each state for the last ten years is as follows: : Below will be found a statement showing the total revenue and expenditure of each state for the financial year 1901-2, with the amounts per head of population. It must be pointed out that from the revenue and expenditure of New South Wales, Victoria, South Australia, Tasmania, and New Zealand, as given in the table, refunds are excluded; while for Queensland and Western Australia there is nothing in the published statements to show whether the amounts are gross or net : As will be seen from the table, the revenue of the states included in the Commonwealth for the financial year 1901-2 was £28,206,469, or £7 7s. 2d. per head of population, and the expendi ture £29,240,334, or £7 12s. 7d. per head, showing a total deficiency on the twelve months' transactions of £1,033,865. The revenue of the whole of Australasia was £34,359,308, or £7 Ss. 7d. per head of population, and the expenditure £35,155,249, or £7 12s. per head, showing a deficiency of £795,941. The only states which had a surplus were Western Australia and New Zealand. SOURCES OF Revenue. The revenue of the states is mainly derived from taxation and public services. During the year 1901-2 the customs and excise duties, and postal and telegraph revenue of the states forming the Commonwealth were collected by the Federal Government, and the balance, after deducting expenses of the transferred and new services, was returned to the states. These balances amounted to £7,438,094, and other forms of taxation, £2,654,873; while the railways and tramways returned a revenue of £11,806,022, making altogether a sum of £21,898,989 derived from these sources, or 77.6 per cent. of the total receipts. For New Zealand, customs and excise duties yielded £2,291,349 and other taxation, £821,730; railways returned £1,869,489, and posts and telegraphs, £488,573; the receipts from the sources mentioned being £5,471,141, or 88.9 per cent. of the total. It will thus be seen that for the whole of Australasia the collections under the headings mentioned amounted to £27,370,130, or 79.7 per cent. of the gross revenue. division of the revenue of each state is appended : -- A 2,654,873 11,806,022 * 20,399 3,355,774 7,438,094 2,931,307 28,206,469 821,730 1,869,489 488,573 249,619 432,079 6,152,839 Australasia 2,291,349 3,476,603 13,675,511 508,972 3,805,393 7,438,094 3,663,386 34,359,308 .... *Two months only. Below will be found a statement of the revenue in 1901-2 on the basis of population. The average for the states included in the Commonwealth was £7 7s. 2d., and for the whole of Australasia was £7 8s. 7d. per head, the amount ranging from £4 15s. 2d. in Tasmania to £17 4s. 2d. in Western Australia. The high revenue in the latter state is attributable to the influx of foreign capital consequent on the discovery of the gold-fields. While oversea goods entering the state are |