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Thursday, 3 March 1932


The CHAIRMAN (Mr Bell (DARWIN, TASMANIA) - The right honorable member's time has expired, but as no other honorable member has risen he may, in accordance with the Standing Orders, take his second period of time.


Mr SCULLIN - Although I have made only brief extracts from the comments of Sir Edward Mitchell on these important points, I have quoted sufficient to show that extreme care is necessary. Sir Edward observes that he cannot contemplate an executive acting in absolute defiance and disobedience of the High Court. In these circumstances, I think that the Government would be ill-advised to adopt this procedure against a sovereign State. It should arm itself with the authority of the court, obtained by the taking of legal proceedings in the ordinary way. It is not justified in asking Parliament to take judicial action. Parliament should confine itself to legislative action, and leave judicial action to the appropriate authority. It may be said that this would involve delay, because documents and witnesses may have to be obtained from various places. My answer is that if the Government desires Parliament to act, it should make the burden of proof not less, but greater .than in the case of a High Court action, for the reason that there are not in Parliament the trained legal minds that are to be found on the High Court bench. It is not sufficient merely to call upon this Parliament to declare by resolution that the liability of the State is so much. A decision of the High Court should be obtained on the subject. When mention is made of delay, it should be remembered that we have already devoted two weeks to the discussion of this bill, and another week will certainly elapse before the measure can be finally dealt with by Parliament. Surely it would be possible for the High Court, in an important case, to move a little more rapidly than usual. The Minister representing the AttorneyGeneral in this chamber said in his speech, a day or two ago, that proceedings which involved the consideration of the constitutionality of this measure need not occupy very long; yet I have known of many long-drawn-out cases on constitutional points. But I do not confine my argument on the time aspect to the possible duration of the High Court proceedings on the constitutional aspect. When the court is called upon to deal with any action taken pursuant to this legislation, that is when an application is made for a declaration, every point will be called into question that would be involved if writs had been issued in the ordinary way. Every document necessary to prove the indebtedness of a State, and every other element in an ordinary legal action will come under consideration. I make one exception, to which I shall refer presently. In addition to that, the constitutionality of the legislation under which the action is being taken will be certainly questioned. There will thus he litigation on some points that would not have arisen if action had been taken under the existing power. I know that the Government will reply to this argument by saying that I have omitted to refer to clause 5 which purports to provide a short cut by declaring certain documents to be prima facie evidence. This bill seeks to enact that a certificate of the Auditor-General shall be prima facie evidence; but that is one of the hurdles that will have to be jumped very early in the piece. That provision is, in my opinion, unconstitutional. I do not for a moment believe that the High Court will accept as prima facie evidence a certificate of the Auditor-General. I know that provision is made in our customs, immigration and taxation legislation for certain affirmations to be received as proof of debt; but there is a vital distinction between those measures and this one. Surely it will not be argued that the constitutional power granted under section 105a is unlimited ; on the other hand, our powers in respect of immigration, taxation and customs and excise are unlimited, except that we may not, in our taxation law, discriminate between States or parts of States, or put two taxing measures in one law. Our power under section 105a is strictly limited to the carrying out of the financial agreement. There is nothing in that agreement which gives this Parliament power to declare certain documents prima facie evidence, and I do not believe that any judge of the High Court would agree that we have such power. There is, therefore, no royal road open to us. We shall ultimately have to proceed in the ordinary legal way.For all these reasons I submit that this procedure is wrong. There is no authority for the taking of such action. We shall meet the constitutional hurdle at the very inception of action under this measure. The biggest bar in the history of Australia will be briefed to test the validity of these provisions. In these circumstances, what becomes of the quick action ? It is a most dangerous thing to ask this Parliament to exercise judicial power. It will use such power if it declares how much a particular State owes to the Commonwealth.

I submit also thatwe shall be going very much further than we have a right to go in seeking to attach the revenues of the State. It would be inviting civil war to do this.


Mr BRUCE (FLINDERS, VICTORIA) - That is under clause 6.


Mr SCULLIN - But provision is also made in clause 5 to attach the revenues of the State.


Mr Hughes - After judicial process.


Mr SCULLIN - Yes; but a judicial process that will take much longer than the ordinary judicial process. It will not be the attaching of revenues or the issuing of a garnishee order after the taking of ordinary judicial action, but after the passing of a resolution by Parliament. I believe that the adoption of these extraordinary and unusual methods will arouse keen resentment. This will not be the taking of calm judicial action in the High Court, but the taking of action in an atmosphere of political suspicion. The Government should be content to take whatever steps are necessary in ordinary judicial procedure, and it should not seek to take this extraordinary action. We must read clause 5 in conjunction with clause 6. I know that the Government has indicated that it intends to submit several amendments, but these do not remove fundamental objections. Clause 5 creates the machinery, the basis of the whole thing.


Mr Maxwell - What is the connexion between clause 5 and clause 6?


Mr SCULLIN - Clause 5 lays down the procedure as also, in fact, does clause 6 ; it is an alternative in case of urgency. Setting aside clause 6 for the moment, I submit that the methods that are employed in clause 5 will not effect a saving of time. Why then, shouldwe adopt that legislation, particularly as a method is already provided in ordinary judicial procedure? The Government proposes to adopt the method of making a document prima facie evidence. That will be challenged immediately on the objection that the Federal Government, as a party to the Financial Agreement, is assuming a right of enforcement,which is not granted to the other six parties to the compact. The proposal is fundamentally unsound. It is wrong for the Commonwealth Government to sign a document entering into an agreementwith the State Governments, and then to introduce legislation enabling it, in the event of a State Government defaulting, to adopt methodswhich are denied to the State Governments. If the Commonwealth defaulted, the Stateswould have to approach the High Court for a judgment, and for any other legal restraint that was necessary, and would have to prove their case. The Commonwealth Government should be compelled to take similar action. Then the people of Australiawould be satisfied that everythingwas lifted high above the taint of political interest's and vindictiveness. Matterswould be raised to the calm, judicial atmosphere of the High Court, and the Commonwealth Parliament would be saved from the questionable procedure of enacting legislation to enforce the fulfilment of the conditions of an agreement knowing full well that the remaining parties to the compact were powerless to pass similar legislation to enforce its conditions against the Commonwealth.

Sitting suspended from 6.19 to8 p.m.







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