McCulloch protectionism 

“It is not easy to discover the specific grounds upon which the
three prominent men in the Cabinet of 1865 suddenly turned their backs upon the economic principles which they had, until then, so vigorously upheld. No financial exigency at the Treasury demanded increased taxation, and indeed, had it done so, it would have been a very roundabout way of reaching revenue to impose duties intended to stop or largely reduce importation. Mr. Verdon, in making his budget statement, was compelled to admit that the revenue was satisfactory, and in order to make some sort of excuse for spreading the grip of the Custom-house officer over the whole area of commercial imports, he had to reduce by one-half the duty on “tea, sugar and opium, and to surrender the substantial revenue derived from one of the most equitable forms of taxation ever imposed, the export duty on gold. In view of the widespread antagonism to the Chinese, it seems strange that a drug almost exclusively used by them should be selected for a reduced duty, but the explanation offered was that, in consequence of the lower duty ruling in South Austraha, it was being largely imported to Adelaide and smuggled across the Murray to the goldfields. It is difficult to escape the conviction, which was certainly widely spread at the time, that, so far at least as Mr. McCulloch is concerned, the retention of place and power was the main influence that led him to accept the verdict of the majority, and to trim his politics to suit them. And, however unpalatable the adoption of such views may have been at the outset to the Attorney-General, when they had once involved him in the “dispute with the Council, every consideration gave way before the one dominant desire for victory. It was sufficient for the Chief Secretary that a majority of the members had been elected pledged to Protection, and that nearly a score were pledged to follow the ardent Graham Berry to any extremity to ensure its recognition by the State. The miners, too, were naturally eager to add half a crown an ounce to the value of their products, without inquiring what proportion of the saved export duty they would disburse in the enhanced cost of their food, stores and appliances. It is true the export duty had been paid by a comparatively few, but in all cases they were the successful ones, and this was really the only charge imposed for the privilege of helping themselves to so valuable a product and protecting them in

“the search for it. On the other hand, the import duties were spread over the widest area, and touched alike the lucky finder of fortune-giving nuggets and the solitary fossiker, between whom and starvation there was often only the forbearance of the storekeeper.
The incidence of the tariff appears in the retrospect to have been arranged on a scale verging on the ridiculous. Nearly everything that came into the colony in the shape of eatables was charged at the rate of one penny per pound weight. Millinery and articles made up of silk paid duty at the rate of 5s. per cubic foot on the outside measurement of the package containing them. Apparel and slops, boots and shoes, hosiery, gloves and other personal effects were 4s. per cubic foot of enclosure. And nearly everything else that could be listed was uniformly rated at 10 per cent. ad valorem. The fixed duties on the external measure“ment of packing cases acted most inequitably, taxing a gentleman’s dress suit, worth £10 10s., at the same figure as a digger’s moleskins and jumper, worth perhaps £1 10s. Under this system the rich man paid less than 5 per cent, on his apparel, and the labouring man from 20 per cent, to 50 per cent.
But such considerations were not allowed to have any influence. Confident in a subservient majority, the Ministry implied that the duty of the House was to comply with the mandate of the country by passing the tariff, not to discuss it, so by the 19th of January the resolutions for imposing the duties were agreed to, and their collection at the Customs was forthwith commenced. Such a course, in anticipation of the early passing of a Tariff Bill by Parliament, was strictly in accordance with British precedent, as a necessary protection of the revenue, the theory being that in the “event of the duties failing to become legally collectable the interim payments would be refunded. But when months passed by and no Customs Bill was introduced, the importers began to turn restive, and Mr. O’Shanassy made an inquiry in their interest. To his surprise Mr. McCuUoch replied that, in consequence of an agitation which had been raised by a certain class in the city against the tariff, the Government, with a view to avoid jeopardising a measure which, after long debate, had been passed by a large majority in the Assembly, had decided to include it in the Ap-
propriation Bill; and he urged members to hui’ry through the Estimates in order that the Bill might be promptly sent to the Council, throwing upon that Chamber ” the responsibility of rejecting the “Appropriation Bill if they were so disposed “. Mr. O’Shanassy entered an earnest protest against such a violation of procedure, upon the mere assumption that the Council would deal adversely with the tariff, if sent up separately. He denounced the proposal as unconstitutional, and, though a few members had the courage to support him, the bulk of the Ministerialists were quite satisfied with the assurance of Messrs. Higinbotham and Michie that everything was in perfect legal order, and gleefully entered upon the struggle.


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