A federation can only be stable if there is a way of releasing the tension that inevitably arises among the constituent parts and between them and the central authority.
In Australia the tensions have been frequent and fierce. Indeed, Western Australia voted to secede in the 1930s. The tensions have been made worse by the friction between the left and right of politics. As one or other side held power in the centre it flexed central power to implement its philosophy across Australian life irrespective of notional constitutional deliniation of power.
The Australian Constitution provides two way of releasing the tension: a referendum process to change the balance struck in the Constitution between the Commonwealth and the states, and the High Court which arbitrates when disputes arise between the Commonwealth and the state.
The former method is all but defunct. Over the years, the people have routinely rejected attempts by the Commonwealth to increase its power at the expense of the states. So the Commonwealth has increased its power in other ways, typically though legislation that stretches the very limits of the words of the constitution.
The constitutional history of the Australian federation has been a story of ever increasing Commonwealth power at the expense of the states, climaxing the present position in which the Commonwealth can legislate virtually for whatever its wants. It is no longer a question of constitutional power, but political will and the now constant pressure to muster a Senate majority either through deals with minor parties or the Opposition.
In the beginning, the states had all the power. The Founding Fathers began with the proposition that the Commonwealth’s powers should be listed. They should be defined. That way, they thought, they would be limited. The list was created in Section 51. It says the Commonwealth Parliament shall have power to make laws with respect to a list of 39 things. After defining the Commonwealth’s power, the states would have everything else. On its face, that seemed as if the states would have the greater power. Evolving legal reality was different. As we shall see.
The first High Court was appointed in 1903. It consisted of three judges who had worked closely on federation and the drafting of the Constitution. They invented two pro-state doctrines that were not written into the Constitution – the doctrine of implied prohibitions and the doctrine of implied immunity of state instrumentalities. The gist of these doctrines was that the Commonwealth’s power had to be tightly restricted and could not interfere in state areas. Commonwealth income tax could not be enforced against state public servants, for example. It was almost as if the Commonwealth were to get only the new powers that arose out of the act of federation: defence, external affairs, coinage, foreign trade and so on and very little else.
The court was expanded and the first three judges retired. This left the way open for the Engineers’ case in 1920. It was a fundamental change. The court ruled that there were no states’ rights. The Commonwealth’s powers as listed in Section 51 had to be given their full weight. The court said Commonwealth industrial-relations law applied to state workers.
In the next 80 years the Commonwealth slowly got more power through High Court interpretations. And there was little to stop it.
In the Engineers’ case the court held that no court had the right to limit power described by words of Constitution just because of a fear that the power might be abused. That was matter for voters. Fine in principle, but, from a states’ point of view, it had two flaws. It only takes one Parliament and Government to pass a law to push out the edge of Commonwealth power. Even if the voters throw out that Government, the law stays on the books. Of more import, the exercise of power sets a precedent. New Governments then pick it up, whatever their complexion. Also, voters have a very limited role in changing the constitutional framework that strikes the balance between the Commonwealth and the states. Only the Commonwealth Parliament can initiate referendums to change the Constitution. Neither the states nor the citizens can initiate a referendum. This is why there has rarely if ever been a referendum that would reduce the power of the federal legislature or executive.
And as only the Commonwealth politicians can initiate, they invariably ask the wrong questions or the right question in the wrong way and they get rejected by the people.
So it has been through the court and clever drafting of legislation that the balance of power over the years has moved the centre. Four heads of power have been used very effectively by the Commonwealth: tax, spending, foreign affairs and corporations. First were tax and spending. During World War II, the Commonwealth took over income tax. The High Court bought the argument that the power to make laws with respect to taxation meant that the Commonwealth could tax everyone 100 per cent of income and rebate a sliding percentage back. Once that happened there was no room for a state income tax. Moreover, the Commonwealth could take over the state income-tax bureaucracies. The result was that the Commonwealth got the lion’s share of overall revenue. Then the Commonwealth handed money back to the states with conditions attached, particularly for things not specified in Section 51 as Commonwealth powers. It meant that the Commonwealth could stipulate detailed conditions upon grants of money to the states on matters it would otherwise have no constitutional head of power. In particular, it could dictate matters of health and education in such detail as to drive a national policy in areas the founding fathers would have thought were matter of purely state jurisdiction.
Next came foreign affairs. As the world became more complex, the Commonwealth signed treaties on many matters, including those not mentioned in the list of Commonwealth powers in Section 51. It signed treaties on air traffic, environment, world heritage, human rights, employment conditions and so on. There was no aviation industry in 1901 and it was certainly not listed as a head of Commonwealth power in Section 51. But the Commonwealth controls it. The Commonwealth stopped the construction of a dam in Tasmania because it had signed a treaty on world heritage. It has legislated about racial discrimination and unfair dismissal on the basis of its agreement to a foreign treaty.
Next came the corporations power.
It is now accepted by the High Court that the Commonwealth’s power to make laws with respect to corporations can take the form “”a corporation shall/shall not do X, Y, Z”, where X, Y and Z are matters not listed in the Constitution as Commonwealth powers. For example, “”a corporation shall do certain things to protect privacy”. Given corporate transactions embrace such a large portion of Australian life, it gives the Commonwealth very wide legislative powers, quite unintended by the Founding Fathers.
The balance has shifted so much – for good or ill – that at present the Commonwealth can achieve whatever political objective it wants. It can isolate the result it wants and draft the law accordingly to fit the wide interpretation of Commonwealth heads of power. And the objective need have nothing to do with heads of power listed in Section 51.
So after 100 years of federation the brawls over the balance between the Commonwealth and the states are no longer primarily fought out in the High Court. Rather the balance is struck politically according to the philosophy of the government in power and the practicality of obtaining a majority in the Senate.
Meanwhile the High Court is busying itself in another major role: striking the right balance between individuals and the executive and legislative power that affects them. Sometimes this is a matter of common law, as in the Mabo case and various tort cases. Other times constitutional law is invoked as in the matters of freedom of speech and the rights of illegal migrants and others to due process of law.
At the conventions in the 1890s the primary concern of the Founding Fathers appeared to be getting the balance between the states and Commonwealth right. As the Australian nation strengthened, the concern that the Commonwealth was taking too much power has waned. In its place has been a concern that the exercise of legislative and executive power by both states and the Commonwealth is eroding individual rights. Small wonder, then, the court that the Founding Fathers created is looking more closely at that. And more people are wondering if the words of the Constitution itself should not be made more explicit in guaranteeing those rights.