Premier Tom Playford in 1949 laments South Australia/other states' revenue and powers lost to commonwealth
Cooperative Building Society of South Australia manager A.R. Burnell handing a £1,000 cheque towants the cost of World War II to premier Tom Playford in 1940.
Image courtesy State Library of South Australia
South Australian premier Thomas Playford (1938-65) dramatically drew attention in 1949 to the Australian states’ loss of power to the commonwealth.
Addressing the 15th summer school of the Australian Institute of Political Science at Albury, Playford declared that the shift in the balance of the Australian constitution had “gone beyond anything contemplated by those who created the federation” in 1901– when the commonwealth government was expected to be a relatively small operation.
Playford said this had changed “to such an extent that the states, though still as a matter of law sovereign bodies within their appointed sphere, have, in fact, become completely subservient to the commonwealth. The organisation which the states created is now devouring them. Australia is ceasing to be a federation of independent groups of people, and is being changed into a unitary State”.
Playford said federal politicians of all parties, supported by the high court, had shared in exploiting the central parliament’s powers, and seizing extra ones, to a degree no one had foreseen, so that they were “destroying our federation”. Playford was especially annoyed that prominent right-of-centre members of the federal House of Representatives, including opposition leader Arthur Fadden, Eric Harrison and Frederick Stewart, plus four opposition senators, had helped John Curtin Labor government’s legislation which gave the commonwealth government a monopoly of collecting income tax. Curtin’s federal ministry during World War II, raised the top marginal rate of income tax to 19 shillings in the pound or 95%, making it politically impossible for states to continue raising their own income taxes.
Playford complained that Curtin, with his treasurer and successor Ben Chifley, contributed to the states’ getting much less total taxation revenue from taxation but also reduced the states’ capacity to decide their own spending. States’ independence had been reduced by federal loans, grants and subsidies to the states for specific purposes under federal conditions. The commonwealth influenced policy in all the states with conditions on grants under its Federal Aid Roads Act 1926.
One instance especially annoyed South Australia. Although the constitution left mining exclusively to states, the commonwealth used export controls and foreign investment rules to exert a major influence on developing South Australia’s mineral resources, especially uranium. The commonwealth also imposed unwelcome conditions on a loan to South Australia for forestry purposes.
Using its power to legislate on conciliation and arbitration, the commonwealth had set up a court to override state laws and fix standard wages and hours.
