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Tuesday, 22 November 1938


Mr MENZIES (Kooyong) (AttorneyGeneral) . - Last week the right honorable member for Yarra (Mr. Scullin) addressed the committee on the subject of the Constitution. That is my excuse for intervening in this debate. The right honorable gentleman is, of course, admirably qualified to address himself to problems of this kind, not only because he has been Prime Minister of Australia, but also because, after a relatively long political career, he is now in the almost unique position of enjoying the respect of honorable members on ' both sides of the chamber. For myself, any views to which he directs attention on the subject of the Constitution will not only be listened to by me, but will also, as in the p resent case, be capable of provoking my own mind and stirring within it certain thoughts of my own. For that reason I shall make some observations about our constitutional problems.

In the first place, may I say that it is not of much use for us to read the Constitution to-day so that we may "detect the errors in it and then inveigh against those who drafted it. I am not suggesting, of course, that the right honorable member for Yarra did this; hut it is a practice that has been resorted to by more than one person. The fact is that the Commonwealth Constitution represents a compromise. It was not brought into existence, ' as some constitutions have been, by some outside danger. It does not represent the fusing of the minds of the people of Australia by some great emotion. In reality, it represents, after years of discussion by very distinguished men, a compromise, a bargain proceeeding from reason rather than from emotion. Because of that fact, it is possible to find all over the Constitution the marks of compromise, and of hesitancy in the giving of power. I therefore remind the committee that it is useless to complain of these hesitancies or compromises, for without them we should not have a Constitution at all. They were the price we had to pay, in 1900, for some form of federal union in Australia. Under that process it was inevitable that we should find in the Constitution itself, and in the preamble and sections of the Constitution Act, all sorts of indications of a tenderness about the rights of individual colonies that would probably be thought to be quite unnecessary to-day - 38 years later. One very graphic instance of this concerns honorable members who are here to-day. Section 125 of the Constitution provides for the establishment of an Australian capital. Honorable members must recall that this section was hammered out after some years of controversy, and the expression of some extraordinarily parochial opinions. However, it was finally agreed that Australia should have a national capital and that it should be established in New South Wales, but not less than 100 miles from Sydney. If that provision were read to-day in the absence of any historical background it would strike the reader as very curious indeed; but it was merely the expression of the spirit of compromise and balancing between the rights of individual colonies which had to be resorted to, and which in fact, was resorted to by the great mcn who drafted the Constitution and engaged in the arguments at the various pre- federation conferences.

Since the framing of the Constitution we have had a great deal of experience, in the course of which we have discovered many" grievous anomalies. Some of these, no doubt, existed in 1900, but were not detected. Some have come into existence since, because of the onward march of time and the radical change of circumstances in 1938 as compared with those of what w« are pleased to term the relatively leisurely days of 1900. I wish to discuss very briefly some of these anomalies in order that I may, as it . were, sketch in against the general background provided for us by the right honorable member for Yarra, some particular and important matters in respect of which it is quite clear that greater power is required from the nation for this National Parliament. 1 shall discuss eight of these anomalies. I do not suggest that this is an exhaustive list, but it is a list that is, at least, of contemporary interest.

Take, first, trade and commerce. It was thought in 1900, either in absolute terms or as an essential to effective compromise, that trade and commerce could be divided in respect of its international, interstate ' and local aspects, and that power over the first two of these could be given to the National Parliament, while power over the remaining could be given to a second set of parliaments. So the Commonwealth was given power to make laws, subject to the great and still relatively unknown qualification of section 92, with respect to international and interstate trade and commerce, and the State parliaments retained power to deal with commerce of a domestic and local character. As the result of the experience we have had of a rapidly growing, and of a very much more complex, commerce we know to-day that trade and commerce cannot be. effectively divided in this way. No man alive is sufficiently wise to say that at this point of time, and at that point of space, interstate commerce finishes and local commerce begins. Yet, in this halting and limping fashion, the Parliament of Australia has had to endeavour to deal with what is an essentially unitary problem, by entirely unrelated means proceeding from entirely unrelated sources.


Mr Gregory - The Government of the United States of America has got on for a long while under such conditions.


Mr MENZIES - r hope that the honorable member for Swan (Mr. Gregory) is not suggesting to me, by interjection, that the United States of America offers a satisfactory example of the division: of constitutional power; for if there is one other place in the world in which the speech that 1 am now delivering could appropriately be made it is in Congress nt Washington.

The second anomaly to which I direct attention has relation to power concerning health. There has been an enormous . growth in the la3t 40 years in our sense of public responsibility, not only for public health, but also for private health. This great problem is now seen by us as presenting essentially national characteristics. The result is that people who do not read the Constitution and are not acquainted with its terms instinctively turn to the Commonwealth Government whenever any great problem relating to public health requires attention, Yet the fact is, as I now remind, not honorable members who know it, but the public, that the only power possessed by this Parliament to deal with health is the quarantine power, and a good deal of the expense that the Commonwealth has had to engage in on health matters in the past is of no constitutional validity. That is an almost humiliating reflection, not for this Parliament, because this is not a problem in which we have individual interests, but for the people of Australia, that they should not have reserved for us that national power to deal with what is essentially a national problem.

The third anomaly is one which exists in relation to the control of companies. The fabric of modern commercial life has closely woven into it the incorporation and activities of joint 'stock companies. Yet, the Commonwealth Constitution has provided, in relation to that all-pervading subject, the most curiously limited authority. It has given to this Parliament, as the decision of the High Court stands, power to deal with the conduct of trading corporations, 'but has not given to this Parliament the power to deal with the terms and conditions upon, which those corporations should come into existence. In other words, no general company law can be passed by the Commonwealth Parliament. Whether that was ever designed or not, that is the position as the decision of the court now leaves it, and, therefore, I put it forward, and confidently, as one of my serious anomalies, one which I am sure will com- mend itself as such to anybody who considers this subject.

The fourth anomaly I wish to mention is, perhaps, one of "our oldest friends, or enemies - according to the point of view - that is, the problem of the industrial power. It seems curious, looking .back on the matter at this stage, that the Constitution should have conferred upon this Parliament power to control the problems of customs and excise, power to control the whole fiscal policy of the continent, and made it an exclusive power, and yet, at the same time, should have refrained from granting to this Parliament power, the ancillary power, as I would have thought, to deal with the wages that should be paid and the conditions that should be observed in the great industries which were bound to be established and fostered under the fiscal policy of the country. The only industrial power given to this Parliament is power to deal, through the agency of arbitration and conciliation, with industrial disputes of an interstate kind. Unless some dispute can be created, and unless that dispute can ibc made of an interstate character, there is no Commonwealth jurisdiction and no Commonwealth instrumentality to deal with it. The result has been that, for rel.Y many years in the history of Australia, men in organized labour, who have no desire to become involved in disputes, have been compelled to make them in order to invoke the jurisdiction of a federal court. That anomaly is one which will, continue to exist until more effective treatment of it is made possible by giving complete industrial power to the Commonwealth of Australia.

My fifth anomaly deals with transport. I suppose that the increased fluidity of transport is one of the most outstanding phenomena of our day. Of course, with its increasing fluidity, it has assumed more and more a national character, and less and less a local one. As I had occasion to say during the discussion of the ill-fated aviation referendum, it might have been possible to talk of transport in terms of local control in the past, when transport was carried on by means of buggies, carts, drays and wagons, but to talk about local control of transport when its latest instrument may be in one State now and in another State 200 miles away in a little more than an hour, is completely absurd.


Mr Martens - It may .bc in four States in one day.


Mr MENZIES - That is so. I do not believe, and I do not suppose honorable members believe, that the problem of transport and all of its allied problems can be dealt- with effectively unless they can be dealt with as a whole, yet, curiously, our position as a Commonwealth is that, while we can deal with interstate transport in so far as it is carried by sea to a considerable degree, and by the consent of the States and on reference by them we can deal with aviation, our powers to deal with rail and road transport are so shadowy, once they have been subjected to the operation of section 92 of the Constitution, that they are hardly worth discussing. So that, whereas, in respect of the first, we have only relatively limited powers, in respect of the second we have partial and heavily conditioned powers, we have completely shadowy powers in respect of each of the other two.

The sixth anomaly is one which came into my mind when I was thinking of some points raised by my friend, the honorable member for Kalgoorlie (Mr. Green). It relates to the question of the fishing industry of Australia. "What is the position in regard to that industry? The fishing industry is dealt with in the Constitution, and the Commonwealth Parliament is given power to make laws with respect to fisheries and the control of fisheries in Australian waters beyond territorial limits; but inside territorial limits, the problem remains one for the State to which the territorial waters are adjacent.


Mr Green - And the States want the Commonwealth trawler to go into State waters.


Mr MENZIES - The honorable member can picture to himself the extraordinary circumstances which would arise. Here is a trawler sailing along with a stainless conscience four miles out from land ; but inadvertently the drift of current brings it within two and a half miles of the shore. It is then completely outside its jurisdiction. Here ' is a boundary line, which is literally written in water, between the power of the Commonwealth and the power of the States, and the result is that there is a meaningless division of authority. Wherever you have division of a single power energy is dissipated and great industries are handicapped in their establishment and development.

The seventh anomaly I wish to mention is one that we have had cause to think about once more in the last few weeks, namely, the anomaly that the Commonwealth has no power to deal with agriculture. The problem of agriculture is one of those that, by implication, has been reserved for the control of the States. The State parliaments alone Li Australia can determine in the last resort agricultural policy; the State governments alone in Australia can determine whether they are going to attack the problem of marginal production and whether they are to attempt to secure a more accurate balance of their agricultural development. Yet every time tin problem in relation to agriculture arises, the aid of the Commonwealth is invoked. Why is this so? It is because the Commonwealth is the only Parliament that has power to impose indirect taxes. One of the recognized means of establishing a home-consumption price or a bounty in relation to wheat, as we shall shortly sec, is by the imposition of an indirect ta..<, an excise, a -flour tax, or a sales tax of some kind, and the distribution of the proceeds of that tax in a certain way.


Sir Frederick Stewart - Tasmania does riot object to being left out then.


Mr MENZIES - I do not want to become involved in that ' argument at present. I am addressing myself now to what suggests itself as an absurdity, th.it is, that on this problem, which is essentially a unitary problem, of what you are to do about agriculture and how yon can plan the development of agriculture or control its development, the answer is that the only government -which has power to come in in a real financial way is also the only government that has no direct power to deal with agriculture at all.

My eighth anomaly is the one which presents itself in relation to unemployment insurance. Unemployment insurance, which is a matter on which we have had a little discussion, is a subject on which the Government secured a most valuable report, and on which this Government initiated a conference with the States. It is a subject which I have thought about a great deal myself, and the more I think about it, the moil astonishing it seems to me to be that there should bo a topic embraced in a phrase consisting of two words, " Unemployment insurance," in which unemployment is primarily a State problem, and insurance is primarily a Commonwealth problem. What happens when the Commonwealth Parliament comes along to a consideration of that problem ? We all know that it is important socially and industrially, and we know that it is essentially a unitary problem and is not the sort of problem that can be broken up and dealt with by sectional authorities. Yet wc all know that the position is that the problem of unemployment, dealt with over a period of years by the States, has resulted in very proper and desirable State laws, of which I offer no criticism, providing for the collection of unemployment relief tax and for various other schemes and methods of relief: but when the Commonwealth says " We should like to attack this problem because we wish to exercise the insurance power in relation to it ", it is at once confronted with the difficulty that if it superimposes an insurance scheme on State laws, it brings about duplication of effort and cost. Consequently if it is to bo fair to all parties in industry anything done must form part of a real whole, and must fit properly into the general schemes that are being carried out by the States-. That, at once, as in the case of the other matters mentioned, brings lft to the point that, instead of being able to say "What is the problem? What is the solution? " and " This is what we are going to do about it ", we are forced to deal with a problem of that magnitude by means of consultations and conferences and to extort modern bargains in 1.038 because of old bargains made in 1900. So the attack on this great social problem is made conditional upon the possibility of arriving at unanimity at a conference between seven governments all of whom for this purpose are treated as having equal rights. I do not think that many honorable members of this House will quarrel with the eight examples I have given; I feel that they will all, at this very moment, be thinking of other, and possibly more important, examples. I am anxious to illustrate in a plain fashion, I hope, the anomalies that do exist, and the handicaps that arise from their existence.

I remember that, on the first occasion on which I had the honour to address this House, I said something which I should like to repeat. It was to the effect that, because of the limitations placed on the power of this Parliament, we always have to go through two processes in dealing with a problem. The first is the process of discovering what ought to be done about the matter as we see it. On that the parties in the House can afford to disagree. Frequently, though both parties have a similar objective, they favour different methods. However, the first problem is: "What ought we to do?" Then we invariably have to turn to a second problem. We have to say to ourselves. " Now that we have made up our minds what we ought to do, can we do it? Let us bring the lawyers in, lest we find ourselves in the High Court, or other appropriate tribunals. Let us determine whether we have the power to do what we believe ought to be done." That, of course, is an inescapable result of all federal systems. I realize that, hut it is a result from which we could readily escape in Australia if the people were prepared to look at these problems on their merits, and to recognize that the only thing that matters is how we can best attack them.

That brings me to the concluding phase of my speech: This Government is convinced that the people of Australia must move towards greater national powers, and it proposes that the Parliament shall, in the early part of next year, be given, as suggested by the right honorable member for Yarra (Mr. Scullin), a substantial opportunity to discuss both the objectives at which we ought to aim, and the means we ought to adopt to achieve them.

In the meantime, however, it may be of some assistance to honorable members, and to others, if I propound a question to myself, and endeavour to answer it.

The question is : Why has there been, in the past, such reluctance on the part of the Australian people to amend the Constitution? Unless we can understand the reason for past failures to amend the Constitution, it may be idle to expect that, at some time in the future, with no change of method on our part, success will be achieved where there was only failure before. Certain reasons present themselves to me.

In the first place - and I say this as one who has had experience of these problems both in a State parliament and government and in the Common wealth Parliament and Government - there is a common fallacy that the States arc sovereign bodies, and that any proposal to increase the power of the Commonwealth is, therefore, almost a sacrilegious attack on State sovereignty. Let me be frank, and say that I have, no doubt, in tha course of my life, used the expression " sovereign States ". I think many of us have, but I say quite deliberately to-day that, on an examination of the matter, I can imagine no greater fallacy than this theory of sovereign States. Sovereignty in this country belongs to the people of Australia.. As we pointed out just before the recent referendum, even that sovereignty is not, perhaps, technically complete, because there are one or two silent places still in the Constitution. But, speaking broadly, sovereignty belongs to the people, because this is a democratic community which carries out its desires through various agencies. Wherever there is popular federal government and there are two governing agencies, no one of them exercises sovereignty, but sovereignty is divided between them. Therefore, it is not to the point to say that here Ave have sovereign States, and that it is almost treason to attack a sovereign. The truth is, here is a sovereign people; they desire to' govern themselves, in their various affairs and relationships, through the instrumentality of parliaments. They have decided that they will have State and Commonwealth parliaments. The problem of power is whether it shall be exercised with this hand or with that. How absurd it would be for me, as an individual, to say that I was exercising my authority through the sovereign right hand, or through the sovereign left hand. I use them both, and each is necessary to me. Therefore, we must get away from the somewhat rhetorical atmosphere in which there ib talk of sovereignty, and realize that thu problem of the distribution of power is a direct, common-sense problem of which authority Ave are to entrust with a particular task.

The second answer I suggest to the question is this: In the past, Ave have, I think, underrated the real difficulty of explaining constitutional changes to the people. We have, on far too many occasions, had relatively hurried campaigns. It is not a criticism of the people of Australia to say that, after most of these campaigns, most of the people have had to go to the poll with no clear idea of what the issues were. The people of Australia are of an intelligence second to no other people in the world, but they are entitled - indeed, they are bound - to be given ample opportunity to understand the changes suggested. Therefore, if we believe that in certain respects, or in all respects, additional powers should be given to the Commonwealth Parliament, Ave should make up our minds that there is a price to be paid, namely, a sustained attempt by us to make everybody in Australia, as far as possible, understand what the issue is.' We must have longer periods of preparation; other.wise. Ave shall find that the people; as always, will say, when in doubt, "I vote No." That is not an unhealthy attitude -of mind; it is a perfectly reasonable and natural state of mind.

The third answer is that, far too frequently in the past, Constitution alteration proposals have been regarded as party political mat ters to be determined, not by one's opinion regarding the Constitution, but by one's opinion of persons sitting, for the time being, on the Government benches. There was a striking illustration of that, I thought - though I do not desire to revive the ashes of dying fires - in the aviation vote which was taken not long ago. I cannot believe that a huge majority of the people of New South -Wales really believed that aviation ought to be controlled by the States, and not by the Commonwealth. I was told, as were all honorable members, of many interesting and intriguing reasons for that vote, but I am quite sure that one of them was a purely factitious party opposition to proposals put forward by a Government of another colour. As the right honorable member for Yarra said the other clay, if we are to deal with these problems of national power, we must shut our eyes and minds completely to all idea of which party is putting them forward, or of what such and such a party will do if such and such powers are granted. From my point of view, there is only one question : Should the people of Australia take power through our Commonwealth Parliament to carry out certain functions? If they do, the people will have their own rights, in their own way, to decide which party sh.ill sit on the Government benches. That is a matter which they will determine every three years, or perhaps more frequently, but the result of constitutional changes will endure for generations, and will affect Parliament for generations. We must forget party if we would deal with these organic questions.

The fourth answer is this: I have detected many times, as have other honorable members, an instinct in the average voter in Australia to feel that, in this welter of governing authorities, his primary loyalty is to his State. We have all encountered this. I have met men in the States who, in addressing themselves to a problem of constitutional change, have not said, " Is this the kind of power better exercised by a local governing authority, or a national one?" - which is the real question - but instead have said, "Why should we in the States give any more power to the Commonwealth," with the finger pointing in a rather condemnatory fashion in tho general direction of Canberra. If that instinct is analysed, it will be seen to be an instinct of primary loyalty to the States, and, in effect, it treats the Commonwealth as an outside body, if not a foreign body. And so, year after year, and referendum after referendum, we hear well-meaning people, otherwise intelligent, saying that the real question is, " Why should the States give more power to the Commonwealth?" whereas the real question is, " Should we, the people, who are superior both to Commonwealth and States authorities, entrust this power to this parliament or to that?" If that were properly understood, a great deal of the difficulty that attaches to this feeling among the people would disappear. Nothing is so calculated, I believe, to thwart a real attack on great problems as the necessity for determining, with the assistance of lawyers, not only what the remedy is, hut also ' which is the right doctor to apply the remedy, the Commonwealth doctor or the State doctor. Our most vital problems and most imminent dangers affect us- as a nation, and I believe, as, I think, other honorable members believe, that only a national spirit, a new and vigorous national spirit, can meet them with success.







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