IntroductionIsolation 1929DiscontentDominion LeagueFederal LeagueSecession
Campaign-Federal LeagueCampaign-SecessionLondonFailureForgettingA Federated State ?

WA and Canberra

Grants CommissionIn spite of the general prosperity of the 1920s many Western Australians felt their State hard done since Federation in 1901. People were quick to complain of the disabilities they believed they had suffered. There were many instances in which Western Australians had good reason to feel disadvantaged. During nearly thirty years of Federation interstate free trade had allowed the dumping of goods manufactured in eastern Australia at the expense of Western Australian industries, Commonwealth protection of Queensland sugar had raised local prices, federal arbitration had increased wage rates, and the Navigation Acts had raised shipping freights.

In the late 1920s Labor Premier Philip Collier took part in negotiations between all State leaders which resulted in increased financial powers for the Federal Government. These changes were necessary to help the Commonwealth meet its increased responsibilities for war loans, pensions, rehabilitation and soldier-resettlement following the First World War. Western Australians approved this new Financial Agreement in the 1928 federal referendum, allowing the Commonwealth to take over the management of public debts and to regulate future debt through a Loan Council.

Since 1921 the Commonwealth Government had collected the State's taxes in addition to its own. These were reimbursed to the State in addition to a per capita payment and other special grants from the federal treasury for the State's roads and soldier settlement. The new Financial Agreement changed Commonwealth-State relations significantly with the Federal Government allocating the amount each State would receive annually. As a small "claimant" State with only 6 per cent of the Australian population, Western Australia could receive more funding than under the old per capita payments, but a good deal of the State's financial independence was surrendered.

The Loan Council restricted the ability of States like Western Australia to raise capital in overseas markets like London. British capital had helped finance the gold boom of the late 1890s as well as major development and infrastructure projects such as the construction of railways and the Group Settlement Scheme, undertaken between the wars. Western Australia would remain a claimant State dependent on Canberra for the next forty years.

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