International Economic Relations

From the middle of the nineteenth century onwards the international economic relations of the colonies and then the Commonwealth of Australia were dominated by two themes: imperial preference and industry protection. Following the gold rush of the 1850s governments in the colony of Victoria adopted policies to protect local manufacturing from imports. The tariffs imposed also had the advantage of generating revenue for the government. When the colonies came together at Federation in 1901 the protectionist forces, concentrated in Victoria, won a famous victory over free traderswith employment and revenue effects of tariffs both being cited as significant benefits of the policy. High tariffs became increasingly entrenched when they were associated with the New Protection in the first decade of the twentieth century (see Protectionism); they provided compensation to manufacturers for relatively high wages and the White Australia Policy.