The referendum of the 13 April 1910 approved an amendment to the Australian constitution. Technically it was a vote on the Constitution Alteration (State Debts) Act, 1909, which after being approved in the referendum received the Royal Assent on the 6th August.

At the time of the establishment of the Commonwealth of Australia, the federal government had the power to take over any pre_existing state debts. The Act altered Section 105 of the constitution to extend this power so that the commonwealth could take over the debts incurred by a state at any time. On the same day the referendum was held on the state debts amendment, a proposed surplus revenue amendment was also put to the electorate but was defeated.

Overview

Ensuring the future financial good health of the states was a matter of great importance to the writers of the constitution, and they worked hard to produce a workable Finance and Trade chapter (Chapter IV). Two important provisions of the chapter were Section 87, which required the return of surplus tariff funds to the states, and Section 105, which provided for the Commonwealth to take over State debts that existed at the time of Federation. By the end of the commonwealth's first decade it was clear that Chapter IV had serious flaws, and in 1910 attempts were made to amend Sections 87 and 105. The State Debts proposal dealt with a perceived need to expand the operation of Section 105 to allow the commonwealth to take over state debts whenever they were incurred.

The state debts amendment was carried by a 'yes' vote of approximately 55 per cent, with only New South Wales in opposition. According to a history of the Loan Council, this indicated that the nation had "decisively favoured a scheme on the basis of s. 105 to relieve the States of some of their financial burden". Although it was over a decade before the power was used, the state debts amendment was important in giving greater potential flexibility to Chapter IV of the constitution.

Changes to the text of the constitution

Deletion from Section 105 (removed text in bold):

The Parliament may take over from the States their public debts as existing at the establishment of the Commonwealth, or a proportion thereof according to the respective numbers of their people as shown by the latest statistics of the Commonwealth, and may convert, renew, or consolidate such debts, or any part thereof; and the States shall indemnify the Commonwealth in respect of the debts taken over, and thereafter the interest payable in respect of the debts shall be deducted and retained from the portions of the surplus revenue of the Commonwealth payable to the several States, or if such surplus is insufficient, or if there is no surplus, then the deficiency or the whole amount shall be paid by the several States.

Referendum results

Question: Do you approve of the proposed law for the alteration of the Constitution entitled 'Constitution Alteration (State Debts) 1909?

See also

• Politics of Australia
• History of Australia