The six colonies formed a federation in 1901 because it was advantageous in many ways as it overcame many of the problems they faced when uniting.
One problem that the colonies faced was taxes on imports and exports between each other. The colonies also debated over free trades and new markets. The colonies had to find other ways to do free trade or avoid taxes. It was thought if they joined together they would over come the problem and they would be more profitable.
Transportation was a dilemma that the colonies faced. Transporting from one colony to the other became a dear cost. As each colony had different sized rail gauges and you had to change train. Also you were taxed at each colonies border. This became costly for the people and it would be to their advantage to form a federation as the gauges would be All the same and there would only be one tax, not several.
The continual need for loans for the colonies would become a financial problem in the future and forming a federation would help. The colonies needed loans from Britain to build such things as railways and roads. If the colonies joined they would have more money to invest in large projects. This would be a huge advantage for all of them.
The problem that faced the six colonies was who to let in and who to not. There were many criminals coming into Australia and this resulted into crime and a bad reputation. What Australia wanted was good tradesman who would help the economy. But this could only be achieved with controlling who comes in and this would involve forming a federation. It would be beneficial to have a good reputation and economy.
Probably the most contributing factor to the colonies forming a federation was the crisis of defence of the continent. The problem with defending became a concern when Germany had begun to colonise Papua New Guinea, France to colonise the New Hebrides (Vanuatu) and the Russian Navy was patrolling the Pacific Ocean.