The title of my lecture this evening is: “Public Finance in Relation to Commerce.” This covers a wide range of topics, and is capable of treatment from many points of view, for the operations of public finance are manifold, and the manifestations of commerce are various. I shall be unable to do more than select for discussion certain aspects. In the Commonwealth, and in most of the States, acute problems of public finance now confront us, but I do not intend to attempt any original analysis of the financial situation in Australia, still less to propound any startling solution. I shall rather attempt to discuss the nature and meaning of the operations of public finance and the economic effects of the system as a whole and in its various parts. These latter aspects are less exciting and controversial than the former, but they concern matters which are too often lost sight of in public discussion of the former aspects, to which discussion they are, indeed, an essential preliminary.

Public finance

The State is a form of social organization to which every man must belong, and it is usually recognised that the chief activity of the State is government, which includes both legislation and administration.

In order that the State may fulfil its purposes, in order that it may be enabled to exercise its functions, it must have money to expend, and it raises this in the form of annual revenue, or at times, by borrowing.