Oped for Friday or Monday 20 May 2005 . Ports
By CRISPIN HULL
Deputy Prime Minister John Anderson’s brief reference to Australia’s ports at an industry lunch this/last week (week ending 21 May) was like a stick stirring up an ants’ nest.
The states are ropable.
Anderson said, “We also need to have a single, Australian Government regulator with transparent processes and tight deadlines, because of the ports’ critical importance to our national future.
“The Australian Government has always had the power to make laws for our export ports, under the trade and commerce power in the constitution. We have not needed to use it until now, but I believe that we now have to take action in the national interest.”
The trouble for Anderson and the Federal Government in general is that many of the ports are owned by state governments and all of them are substantially regulated by state legislation.
The states are not likely to give up ownership and power over ports and the income from them very easily.
The states have been taken aback by Anderson announcing publicly that the Federal Government is to take action without first telling them and telling them what sort of action.
The Federal Government has not spelt out the detail of its proposals. Even so it is a remarkable grab for power and it comes at a time of unique political circumstance – a Federal Coalition Government with control of the Senate and every state and territory controlled by Labor.
It means the Government has the power to gets its legislation through exactly as it wants and it can force it on the states without treading on the toes of its own side.
That said, you can understand Anderson’s frustration. The states so often make a hash of the things they administer. But if the Commonwealth asserts power over the ports, it must surely end the myth that the Liberal and National Parties are the parties of states’ rights.
Since at least 1972 they have stood for states rights against the onslaught of centralism which it equated with socialism and meddling state control. They riled against Labor’s use of constitutional inventiveness like the expansion of the foreign-affairs power to enable the central government to get its way in fields such as the environment, discrimination law and unfair dismissal.
Now the Coalition parties federally are using whatever constitutional power they can to pursue their ideological agenda: industrial relations and education. Much the same as Labor, really.
So how will they go with the ports?
The Federal Government says it is concerned about efficiency. Presumably, it is concerned about fees and charges; investment in infrastructure; rules and regulations governing the operation of the ports; and industrial awards applying to them. The last is a separate issue.
The Constitution provides that the Commonwealth Parliament has power to make laws with respect to “trade and commerce with other countries, and among the states”.
It has not been a widely used power because another section of the Constitution provides that trade and commerce among the states shall be “absolutely free”. This has left little room for regulating interstate trade.
The extent of the foreign trade power has been tested and found to be quite broad. For example, a Commonwealth law prohibiting the export of certain minerals has been upheld, even though the intent of the legislation was to end sand mining on Fraser Island as an environmental measure (because there was no local market for the minerals).
A Commonwealth law regulating the standards of meat processing has also been upheld, even though only part of the meat-processing works’ produce was for export.
The states will have a difficult time trying to argue that much of the traffic going through the ports is not connected to foreign trade so the Commonwealth cannot take over the ports.
The High Court has held, for example, that the Commonwealth can regulate a purely NSW airline because its operation affected the safety of interstate and international aviation.
It may well be that if a port is the route of any foreign trade, it will be enough for the Commonwealth to assert power over it even if the vast majority of traffic is local.
Legislation giving the Australian Competition and Consumer Commission power to administer federal legislation and regulations over the operation of ports could most likely be drafted in a way to withstand challenge.
However, that is not the full story. For an efficient waterfront you need new infrastructure and competitive fees. With airports that was done by privatisation. That was easy because the Commonwealth owned the airports and could sell them. It does not own the ports. It cannot easily march on to someone else’s land and start constructing new infrastructure. And it cannot easily tell the states and companies who own the ports how much to charge for use of their land, buildings and materials.
To do so might offend the constitutional prohibition against the Commonwealth acquiring property without giving just compensation.
It is easy enough for the Commonwealth to step in when it is providing something without compulsion: new TAFE colleges or a Year 12 exam. But when you are taking something away – profits from ports, water, electricity and the like, it is a different matter. You are bound to get a legal challenge or at least uncooperative conduct.
In that environment the Commonwealth might be better off not wielding the constitutional stick, but doing what is has done to get greater efficiency in other state utilities – using the fiscal carrot. If the states meet certain port benchmarks, they will get efficiency payments.
The Commonwealth may have the power – constitutionally and in the Senate, but that alone will not make the ports more efficient.
crispin.hull@netspeed.com.au
Ends