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Wednesday, 11 November 1936

Senator BRENNAN (Victoria) (Assistant Minister) . - I move -

That the bill be now read a second time.

This bill is described as a bill for an act to alter the Constitution with respect to marketing. In otter words, it is a proposal for an alteration of the Constitute!, and as such, 1 conceive, it must be of high importance. Any proposal to alter tuts Constitution needs to be approached with the gravest consideration and calmness and, above all, as free as possible from party bitterness. Notwithstanding its importance, I shall not have a great deal to say in commending it to- honorable senators, for the reason that although, in one way, it is a legal question, it is none the less a popular question ; that is to say, it is a matter in which the ordinary citizen takes special interest and with which he makes himself, to a large extent at least, acquainted, i think I am correct in saying that there is not in this chamber a solitary honorable senator who does not know how it has come about that this proposal has been put before this Parliament and is to be put in due course before the people. The people in general know, at least, in broad outline, the effects of the decision given by the Privy Council in the case of James v. The Commonwealth. I think that they also know the extent to which the control of certain commodities has become part of our economic policy. In particular, the dried fruits industry has been controlled for many years. The production of dried fruits - currants, sultanas and. lexias- has made enormous strides in Australia since the war, chiefly on account of the entry of many returned soldiers into the industry. Only a very email proportion of the total output of these fruits could be consumed in Australia, and it became evident in 1924 that, if steps were not taken to take the surplus fruit off the Australian market, the resulting unlimited competition would be ruinous to the growers and detrimental to the progress and stability of the dried fruits industry. Tn that year the governments of the producing States principally concerned, namely, South Australia and. Victoria, and later the Government of New South Wales, took appropriate action to pass legislation to regulate the marketing of the dried fruits in the States. In the same year the Commonwealth passed the Dried Fruits Export Control Act in order to control the export of dried fruits. That is a subject within the legislative power of the Commonwealth. Under Hie State acts a board could determine where, and in what quantities, the output of dried fruits produced in any particular year was to be marketed, in pursuance of this power determinations were made from time to time fixing the proportion of the output which might be marketed in Australia. That legislation has, however, had a very chequered career. In the first place, State legislation as to quotas was successfully challenged before the High Court in the case of James v. the State of South Australia, as being contrary to section 92 of the Commonwealth Constitution, which guaranteed interstate freetrade. Another provision in legislation relating to the compulsory acquisition of dried fruits had been unsuccessfully challenged before the High Court. This did not survive a further challenge when the question of ils validity was litigated before the Privy Council in the case of James v.' Cowan. Prior to that decision of the Privy Council a State was enabled to acquire dried fruit, and, by acquiring it, to become the owner and to sell where it desired. It was thus 'possible for a State, by exercising its power of compulsory acquisition, to operate a system for the control of the marketing of dried fruits. Such a system would, however, be very inconvenient in practice from the view-point of the States. An appeal was, therefore, made to" the Commonwealth Parliament to legislate in such a way as to place the whole system on a better basis. The Commonwealth was asked by the States to co-operate with them in passing joint legislation which might deal effectively with the subject of marketing. It did so, and for some years this co-operation was quite successful. What power had the Commonwealth to assist the States in the marketing of their produce by any legislation that it could pass? It had none, as section 92 had been construed up to that date. As honorable senators arc aware, that section provides that on and after a certain date trade, commerce and intercourse between the States shall be absolutely free. Those words seem very definite. They came up for consideration before the High Court on many occasions from 1909. lu the judgment which was given in tho Wheat case in 1915, the High Court held that neither the Commonwealth nor the States could interfere with freetrade between the States. Still section til had not taken from the States their power of eminent domain - that is their right to acquire and to hoA the whole of the property of any individual or group of individuals within their .own boundaries. Then cam, the Foggitt Jones case in 1916, relating to steps taken by New South Wales in respect of stock and meat. The High Court did not depart from its decision that no individual or organization - Federal, State or Executive - could interfere with the freedom of trade between the States. I think that it was held in that case that what was done violated section 92. Then came the case of Duncan v. the State of Queensland, in which the court reversed that decision, but in 1920 the High Court, in the McArthur case, reversed the decision given in the Duncan case.

Senator Brown - A good thing for the lawyers.

Senator BRENNAN - The good lawyer is he who has the last word. The McArthur case relates to the sending of goods from New South Wales to Queensland. Queensland had a price-fixing law, and it was contended that by virtue of having such a law, it could fix the price3 to be charged on goods, even though those goods came from New South Wales. A curious feature of the case was that neither of the parties sought to obtain from the High Court a declaration that section 92 did not bind the Commonwealth. Both argued the case on the assumption that it did bind both the Commonwealth and the States, but the High Court, in a long and learned judgment, upset the whole trend of decisions from 1915 to 1920. The decision in the McArthur case did not run counter to any opinion held in Australia as to what was right, ft was accepted by the people and by all of the States that section 92 did not bind the Commonwealth. In consequence of that interpretation various acts dealing with dried fruits and other com modities were passed and sue>cessfully operated. They could not have been operated if the High Court had not held ' that section 92 did not bind the Commonwealth. A litigious gentleman from South Australia, Mr. James, was not content to let the matter rest there: I am not in the least criticizing Mr. James; he is entitled to say : " That is my view of the law, and 1 am prepared to back it up by my own hard cash, and to test the matter before the Privy Council." He did so, and the Privy Council has said that the High Court in McArthur's case was wrong when it said that section 92 did not bind the Commonwealth. The following passage, which, I think, might be of some assistance to honorable senators, appeared in the judgment of the Privy Council in the James case: -

Tho result is that in their Lordships' judgment the Commonwealth should be held to have failed in its attempt by the method adopted under the act in question to control prices and establish a marketing system, even though the Commonwealth Government ara satisfied that such a policy is in the best interests of the Australian people. Such a result cannot fail to cause regrets. But those inconveniences are liable to flow from ┬╗ written constitution. Their Lordships cannot arrive at any conclusion save that they could not "'vo effect to the respondents' contention consistently with any construction of the Constitution which is in accord with sound principles of interpretation. To give that effect woul'd amout to rewriting, not to construing, the Constitution. That is not .their Lordships' function. The Constitution, including section 92, embodied the will of the people of Australia, and can only be altered by the will of the people of Australia expressed according to the provisions of section 128.

The correctness of the judgment is not questioned either in Parliament or by lawyers. Indeed, there was a strong body of legal opinion which thought that if the issue were decided by the Privy Council, that tribunal would overrule the judgment delivered by the High Court in Mc Arthur's case. It seemed impossible to get away from the plain word┬╗ of section 92. Regardless of the inconvenience that might be created by the divergent interpretations, the duty of their lordships was, as they said, to construe the words of section 92; if they did otherwise they would be making a law, and not construing it. If the people of Australia want the law altered they can alter it. It ia no reflection upon the Privy Council and its prerogative to construe the Constitution as it exists if the Commonwealth, as represented by its government, thinks it right that the condition of affairs which, in fact, existed from 1920 to 1936 should be restored. When a section of the Constitution has been construed by the Privy Council and the legislature has been told what it means, it is the right of the legislature to try to rectify the condition of affairs brought about by the judgment.

Senator J V MACDONALD (QUEENSLAND) - Why appeal to the Privy Council in another country at all?

Senator Hardy - If the Commonwealth is given the power proposed to be sought, does the Minister think that marketing schemes can again be upset, let us say, by a challenge of the power of a State compulsorily to acquire property!

Senator BRENNAN - In whatever I have to say on that point, I am expressing merely my own individual opinion. Under a constitution which distributes powers between the States on the on 3 hand and the "Commonwealth on tha other, we- cannot, of course, be absolutely sure of the validity of any proposal put forward. For proof of that we have only to survey the history of the Commonwealth since 1903, when the High Court was established, and to consider the extraordinary conflict of opinion that has arisen throughout the years since that date. I do not know whether a State, by exorcising its power of eminent domain, as was held right in the Wheat case, could upset any scheme of marketing; but I can imagine an individual like Mr. James desiring to upset such a scheme, and saying: " I do not want to be in this pool ; I want to conduct my own business in my own way within the provisions of the Australian -Constitution, and I am going to do so." My colleague also recalls to me the fact that, in the earlier James ease, when the effect of expropriation had to be construed, the Privy Council held that expropriation was invalid and should not be resorted to. I have "heard a number of lawyers say that. I may say that I do not agree with the assumption, or conclusion, that, in the earlier J amrs case the Privy Council laid down the rule that a State cannot expropriate or acquire property within its own boundaries. It is a question of fact, and 1 think the most that can be said lor it is that if the intention is to defeat the provisions of the Constitution relating to freedom of interstate trade it cannot be done, because it is a legal principle that what you cannot do directly you cannot do indirectly. The powers of the States as laid down in the Wheat case, are still left open to them. Senator J..V. MacDonald asked why there should be an appeal to the Privy Council. Something might be said about that, but I am not sure that it is distinctly relevant to the question before the Chair. The fact is that Mr. James went to the Privy Council by virtue of the authority given to him by the Constitution. Whether or not the right of -appeal to the Privy Council is good or bad, is a question that would involve " long argument, in which 1 would have a good deal to say in support of the view that, in respect of political questions which may take on a party aspect and engender a good deal oi' heat, and in respect of which the only argument is that of numbers, it may be very much better that a completely outside legal body such as the Privy Council should construe the Constitution.

Senator Collings - With no knowledge of Australian conditions or atmosphere.

Senator BRENNAN - If the Privy Council were entitled to say : " We think Australia would be a lot better off if it did this, that, or the other thing", there might be something in what the honorable gentleman says. But the duty of that body is to construe the written words of the Constitution, and it suffers no disadvantage whatever by reason of the fact that it is composed of English, and not Australian, lawyers. The Government believes that the people expect? it to take the steps necessary to restore the position that obtained prior to thu decision of the Privy Council. Consequently, after very mature consideration of the matter by the Government and the Attorney-General - and, in reply to Senator Hardy, I may say that the Attorney-General did not fail to bring in outside advice, but obtained the best authority and support he could - it was decided that the beat way to re-establish the position chat had been disestablished by the Privy Council's decision was to ask the people to insert in the Constitution this new provision - 92a. The provisions of tha last preceding section shall not apply to laws with respect ti) marketing made by, or under the authority of, the Parliament in the exercise of any powers vested in the Parliament by this Constitution.

In order to bring about a change in the Constitution, the proposed alteration must first be passed by an absolute majority in both branches of the legislature. That is the reason why the Leader of the Senate has given notice of a motion for a call of the Senate a few weeks hence. The next stage is that in not less than two months, but not more than six months, after the passage of the proposed law, it must bc submitted to the people and agreed to by a majority of the electors in a majority of the- States. There must be an affirmative majority in four of the States and an affirmative majority of the total votes polled in Australia. Even though the proposal might be agreed to by an overwhelming majority in the more populous States of New South Wales, Victoria and Queensland, the Constitution could not be amended if the proposal were rejected in the three smaller States. One reason that actuated, the Government in its decision to frame the proposed alteration in the way it has was the suggestion that if the question to be submitted to the people were so framed that it would be difficult to understand, or could possibly be discussed with great bitterness, the most unpopular feature of the proposal would be taken as the main proposal, and those electors who regarded it so would vote against it. Therefore the Government thought that it had no opportunity in the short period available for an educational campaign, to induce the people to accept any proposal except one of a very simple character. The history of all the various proposals for alterations of the Constitution in Australia lends the strongest support to that view. The people have shown themselves to be extremely cautious about granting extended powers to the Commonwealth Parliament. The proposal was submitted in its present form because it is extremely easy for the people to grasp its meaning. I cast no reflection upon the democracy of this or any other country when 1 say that measures proposing alterations of a constitution which aLow the subjects upon which the Parliaments of the Commonwealth and the States should respectively legislate are usually above the heads of a very large section of the electors. The proposal which the Government now submits to the Senate has noi that great disadvantage. The Government merely desires to say- to the people "From 1920 to 1936 you lived under certain conditions and we had certain acts of Parliament which were df assistance in the marketing of many important primary products. The decision of the Privy Council has shown that to an extent we were living in a fools' paradise. We cannot continue under those conditions, and all we ask of you now is not to buy a pig in a poke, but simply to say ' We want to revert to the position as it was from 1920 to 1936 ' ".

With great respect, I do not think that much is to be gained by a general discussion of this bill, because it may be taken for granted that practically every individual Senator was in favour of the conditions that prevailed up to the time of the Privy Council's decision in the early part of this year. If, however, any honorable senator, including the leader of the Country party, can point to' something which suggests that we may not bo able to do, by the words we have used, the things Ave think we can do, that will be a relevant and helpful criticism.

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