Is Australian Federation Broken?

12 09 2007

I’m currently writing a research essay for a constitutional law subject that requires me to have an opinion and I was hoping that babbling about it would help me get my own thoughts straight.

The recent High Court decision in NSW v Commonwealth (the decision upholding the Workchoices legislation) was a ruling that many would have seen as a long time coming based on the previous authorities. But the true extent of the expansion of the Corporations power under 51(xx) of the Australian Constitution needed to be spelled out. Effectively the majority decision gives the Commonwealth very wide power to use the Corporations power to legislate indirectly on Industrial Relations. This was never envisaged by the framers of the Constitution, but that in itself is not sufficient to make the decision wrong.

Kirby in dissenting, stated that the High Court needed to ‘rediscover the essential character of the Constitution’ and I think that I tend to agree. Being quite left leaning in my views I generally tend to favour ‘big’ government that intervenes in the economy to effect social outcomes. But having watched the Howard government over the last decade I think I have moved closer to a ‘small l’ liberal position where I see the Australian federal compact as an effective way of limiting the power of the Commonwealth government.

The Australian Constitution in contrast to the Canadian Constitution (which establishes a federal system similar to our own), read literally sets up a very decentralised federal system of government. The moves towards centralising power in the Commonwealth have largely come from evolving interpretations in the High Court rather than Constitutional amendment. It is notoriously difficult to amend the Australian Constitution by referendum so maybe this approach by the court has been a necessary one. After all the Constitution should be seen as a living document that evolves and adapts to suit modern circumstances. The world we inhabit now has changed markedly from the one in which the Constitution was drawn up, and much change occurred during and in the aftermath of the two world wars.

It would seem apparent that the Australian system of government would be a poorer one without its federal nature. It encourages innovation admittedly often through bitter disagreement but generally, I would argue, produces better outcomes. It is not in our interests that we allow the Commonwealth Government to reduce the states to mere service providers.

Kirby’s reasoning in the Workchoices decision, in invalidating the legislation was not based upon the heretical ‘Reserved State Powers’ Doctrine. This doctrine exemplified in the 1920s decision in Huddart Parker v Moorehead stated that there were implied limitations on the powers given to the Commonwealth based on the assumption that certain powers and responsibilities were ‘reserved’ to the states. This decision was overruled in the Engineers case and the High Court has never gone back. Thus it will get you nowhere to argue in front of the High Court that power over Industrial Relations is reserved to the States.

It is apparent also from the authorities on what activities of constitutional corporations (foreign and trading or financial corporations) are covered by the Corporations power, that a very broad range of activities are covered. This includes activities incidental and in preparation to trading and on the broadest view, covers any activity done by constitutional corporation. Kirby in Workchoices could not then argue that matters related to employment did not fall within the Corporations power as it would appear that battle has been lost long ago. What Kirby did argue is that 51(xx) should be read subject to 51(xxxv) of the Constitution. This provision relates the the Commonwealth’s power over industrial disputes that extend beyond the limits of one state and provides for a Conciliation and Arbitration commission to deal with such disputes. Any Commonwealth legislation regarding industrial relations has long been based on this power.

Kirby’s argument was essentially that the Commonwealth could not defeat qualifications to this power by using another power, 51(xx), to indirectly legislate for that subject matter. To do so would render the industrial disputes power in the constitution a nullity. I accept this view and it is difficult to understand how the High Court adopted an interpretation that effectively destroys a particular section in our constitution. With any luck, if the Howard government is voted out at the coming election the balance in the High Court may start to shift closer to Kirby’s view point, though it may be a bit late for Kirby. Unfortunately, he may have to spend his remaining years on the bench, in dissent.

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