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Tuesday, 18 October 1983
Page: 1844


Mr LIONEL BOWEN (Minister for Trade)(5.29) —I move:

That the Bill be now read a second time.

This Bill, which has been developed over a decade, commencing with the Sydney meeting of the Australian Constitutional Convention in 1973, is being put before the Parliament with a view to enabling the people of Australia to express their views on a proposal to facilitate flexible interchanges of power between the Commonwealth and the States. The objective which we are trying to accomplish through this proposed constitutional amendment is to establish machinery whereby legislative powers can be vested by the Commonwealth in the states in areas previously outside their jurisdiction and to facilitate also the reference of powers by the States to the Commonwealth.

The Constitution at present makes provision in section 51 (37) for references of legislative power by the States to the Commonwealth Parliament. This provision has been used relatively little, largely because of the doubts that have been held by the States as to whether a reference once given could be revoked and whether a reference could be limited in time to a term of years and made subject to conditions. Examples of how the existing reference power has been used are the references by the governments of Queensland and Tasmania which have enabled Trans Australia Airlines to provide air services within those States over the last 30 years.

The constitutional amendment proposal before the House contains two principal reforms. First, it corrects the present one-sided situation in which the States may refer powers to the Commonwealth but the Commonwealth is unable to refer any of its exclusive powers to the States. The Bill authorises references, which for technical reasons are described in the Bill as designations, of powers by the Commonwealth Parliament to the States. These references may be made only on the basis that they are available to all States and not just to particular States.


Mr Hodgman —Would you like to refer the external affairs power back to Tasmania?


Mr LIONEL BOWEN —Tasmania keeps creating legal history. If this proposal is adopted it will mean that the Commonwealth is in a position where it can confer on the States the power, for example, to impose duties of excise, and to legislate in respect of matters involving Commonwealth places-both heads of power which are at present exclusively in the Commonwealth domain.

The Bill will overcome any doubts which the States have held as to the basis on which references may be made by them to the Commonwealth. The Bill makes it clear that a reference given by the States will be revocable, that it may be given subject to conditions, including conditions regulating the type of laws that can be passed under it, and that such references may be made for a limited period of time. Designations of matters by the Commonwealth Parliament will be subject to the same provisions as those relating to references by the States in relation to revocation, the power to impose conditions and like matters.

The history of this proposal deserves recounting briefly. The original interchange of powers proposal arose from formal submissions made to the Sydney meeting of the Australian Constitutional Convention in 1973 by the then coalition Government of New South Wales and the then Liberal Government of Victoria. The New South Wales submission was in these terms:

At present uncertainties exist as to the manner in which placitum (37) of s. 51 -the 'reference power'-operates.

The limited use made of the power in the past is no doubt attributable in large measure to such uncertainties.

It is considered that, by constitutional amendment, these uncertainties should be removed by providing, for example, that references of legislative power by States to the Commonwealth may be made for limited terms and that repeal of a reference Act has constitutional efficacy, and also that the Commonwealth Parliament might refer to the States any legislative power of the Commonwealth.

The Victorian submission was along similar lines although it focused on removing the uncertainties as to the scope of the reference power in section 51 (37). At the 1973 Convention the heads of the Commonwealth and all of the State delegations except that of Queensland met and agreed on the principle of references of power either way and the removal of existing doubts about the operations of the reference power of the States under section 51 (37). The then Prime Minister, Mr Whitlam, announced to the Convention the intention of the Commonwealth Government that in any interchange of powers, whether from the Commonwealth to the States or vice versa, the same provisions should apply as to duration, revocability and the power to apply terms and conditions. The Prime Minister's announcement was followed by statements from the leaders of all State delegations welcoming the proposal.

The Convention referred the matter to Standing Committee B which endorsed a Bill prepared early in 1974 by the Commonwealth, subject to a reservation that was later met by the Federal Government, by incorporating in the Bill a requirement that a designation by the Commonwealth must be made in favour of all States, as the present Bill does. The 1974 Bill, after passing through the House of Representatives, was deferred by the Senate until after it had been considered by all State governments and the Australian Constitutional Convention . The Bill lapsed before these requirements could be met.

At each of the following four Convention meetings held in Melbourne in 1975, Hobart in 1976, Perth in 1978 and more recently in Adelaide, the proposal as embodied in a Bill drafted in September 1975 was endorsed either in detail or in principle, on the last two of these occasions unanimously. In 1976 the then Premier of Victoria, Mr Hamer, said in relation to the motion before the Convention approving the 1975 Bill that it was the Convention's greatest single chance of achieving a really important change in the Constitution which will at one stroke give it a flexibility and responsiveness it does not yet have, and an ability to deal with situations as they arise, without any of the partners- Federal or State-surrendering any of the powers or discretions they now have. Since 1978 the proposal has been closely considered by the Standing Committee of Attorneys-General, by the Committees of Solicitors-General and Parliamentary Counsel prior to its most recent endorsement by the Australian Constitutional Convention meeting in Adelaide. Despite this long history, the people of Australia have not yet had the opportunity of voting on the matter at a referendum. Given the advantages of the proposal, the time and effort that have been expended in refining the original idea and the Adelaide Convention's unanimous endorsement a few months ago of a resolution, in terms which are faithfully reflected in this Bill, it is appropriate that the referendum question be now submitted to the electorate. The resolution was as follows:

That this Convention approves a constitutional amendment to enable an interchange of powers between the Commonwealth and the States in the form of the Constitution Alteration (Interchange of Powers) Bill 1975, provided that the matters which can be designated under section 108A are confined to:

(a) matters which are already within Commonwealth power; and

(b) the empowering of State parliaments to vest in Federal courts (other that the High Court) jurisdiction, both original and appellate, in matters arising under State law.

In all the circumstances I believe it can be said that this is truly a consensus proposal. All of the principles developed over the years in relation to the proposal-principles which have been supported on all sides-are fully implemented in this Bill.

Criticism of the 1975 Bill

The principal criticism made in respect of the 1975 Bill, which has been reiterated for some years by the former Attorney-General of Western Australia, Mr Medcalf, related to a clause which would have meant that the power of the Commonwealth Parliament to designate a matter was not limited by other provisions of the Constitution such as section 51 (11) and section 99 which prohibit the Commonwealth from discriminating between States. The Government has been sympathetic to the objection, and at Adelaide supported the amendment to the form of the Bill put forward by an Opposition member of the New South Wales delegation to the Convention to the effect that subject to one exception the Commonwealth's power to designate matters should be restricted to matters in respect of which it clearly has exclusive power under the Constitution. The exception is in relation to the power of the Commonwealth to empower State parliaments, should they so wish, to vest some matters of State jurisdiction in Federal courts. As I said at the Adelaide Convention this notion of an ability in State parliaments to vest matters of State jurisdiction in Federal courts can be one solution to the problem of divided jurisdiction, which has been the subject of such discussion recently, in the context of the proposed integrated court system.

The only reason for making specific provision for the vesting of State jurisdiction in Federal courts is that there is at present some constitutional uncertainty as to whether the Commonwealth Parliament can empower State parliaments to vest State jurisdiction in Federal courts. To put the matter beyond doubt appropriate language has been used in the Bill to ensure that such a power can be conferred should the States be willing to exercise it in particular cases.

This is a highly constructive measure. It creates a framework which has considerable potential to facilitate greater co-operation between the Commonwealth and the States in the interests of the public. The interchange of powers provided for by the Bill involves voluntary action by the Commonwealth and the States which could assist the States to raise additional revenue and to have firmly based powers in relation to Commonwealth places such as airports and post offices.

By clarifying and facilitating references of State legislative powers to the Commonwealth the chances of obtaining uniform defamation laws and comprehensive family law powers at Commonwealth level should be increased. The reference of a matter by a State to the Commonwealth or vice versa would not, of itself, prevent the parliament which had referred the power from passing legislation concerning that matteer. This aspect, together with the power of the referring parliament to impose conditions upon its reference of power and to revoke the power at any time, makes the proposal a very flexible one. This should improve the efficiency of government at both Federal and State levels. I commend the Bill to the House.

Debate (on motion by Mr Spender) adjourned.