The next instance of national expenditure in the promotion of enterprise comes under a different category: the State has, since 1878, devoted to the encouragement of the gold-mining industry the sum of £800,000, which was not intended to give a direct return upon the outlay so much as to maintain the pre-eminence of Victoria among the gold-producing Provinces of Australasia. Of this amount £455,000 was expended in boring, the remainder in subsidies to mining companies and prospecting parties. But, as in the case of railways and works of water supply, the Government were confronted by the extreme difficulty of providing safeguards against the misapplication of the funds. Direct control by the Minister of Mines was proved neither to yield good results nor to be satisfactory to the Minister, as he was subjected to continual pressure from Members of Parliament. Prospecting Boards were, accordingly, appointed in the seven mining districts into which the Province is divided, each Board consisting of five members, the surveyor of the district, a member of the Mine-owners' Association, a member of the Miners' Association, a member of the local mining board, and a representative of the municipalities. These men were authorised to allocate all votes, and, according to a statement of the present Minister, as they represented different interests in the mining and different localities, they took a parochial view of their duties and developed "a kind of unconscious log-rolling" { 148} which caused the grants, in many cases, to be devoted to entirely unprofitable objects. The expenditure of the £800,000 is believed to have been of the greatest value to several mining companies, but has produced a direct return of only £11,526, an amount which would have been smaller had not the Minister threatened dividend-paying companies with the forfeiture of their leases unless they repaid their loans to the State.
The Government have also attempted to increase the export of such articles as butter, wine, cheese, and frozen meat, for which a large market is believed to be obtainable in Great Britain. Their policy has been to foster these industries by means of bonuses to producers, subsidies to owners of factories, and the free use of cold storage at refrigerating works, and to enforce a certain standard of quality as a necessary condition of their assistance. As the industry progresses the bonus is reduced and finally withdrawn, and charges are made for cold storage which are sufficient to reimburse the State for its outlay. Such a course has already been pursued in the most successful case, that of butter, in which the value of the amount annually exported has risen from £51,000 in 1889-90 to £876,000 in 1895-6. In this manner the State is not permanently engaged, but initiates its expenditure at the highest point and gradually releases itself from the obligation.