Protection and Federation

Customs tariffs were not just the major source of government revenue. They were a major instrument of government policy.

The nineteenth century Victorian economy rested on wool, gold and manufacturing. The colonial government used import tariffs as a way of protecting these industries. Farming and mining equipment were brought in free, but imported manufactured goods that would compete with local industries were subject to high tariffs.

These duties applied equally to items brought from New South Wales or South Australia as they did to items imported from Europe. Customs houses were built at all the major crossing points into the colony, and customs officers patrolled the borders to prevent smuggling.

Compared to the other Australian colonies, Victoria was protectionist, with high tariffs. The debates between free trade and protectionism fuelled the political debates over Federation, and the creation of the Commonwealth of Australia in 1901 brought a welcome relief from the hated customs posts on state borders.