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Wednesday, 18 November 1936


Senator A J McLACHLAN (SOUTH AUSTRALIA) (Postmaster-General) . - It appears to me that legislation of this character deserves and I think will receive, at the hands of this chamber as a branch of the Commonwealth legislature, the closest scrutiny and consideration. As one who was nurtured on constitutional law in my earlier professional years, and was closely associated with the development of the Australian Constitution, I have taken considerable interest in every movement for its alteration, and any steps which might be regarded as likely to disturb the balance of the federal system which was accepted by the people of Australia and has worked with more or less imperfection since 1901. I feel that it is one's duty as a representative of a State to be keenly interested in this matter, because all the States are vitally concerned in the preservation of this balance of powers. We should see that no principles in keeping with the federal system of cooperation are violated by any alteration of the Constitution. I have no complaint, and. in fact, Australia should have no complaint, notwithstanding sentiments I heard expressed recently on the Opposition side of this chamber, concerning the decision of the Privy Council in the James case. There is no occasion for heat or argument of a violent character concerning the proposed alteration of the Constitution. The Privy Council gave its decision, as was shown in the language of the judgment, with the greatest possible regret, because it realized that, in common with the Motherland, Australia was endeavouring by means of certain marketing legislation to do what it thought would benefit the primary producers. The Privy Council did not seek an opportunity to give this decision; the appeal to it was made at the invitation of the High Court of Australia, expressed on more than one occasion, notwithstanding the fact that, as my learned colleague, Senator Brennan, has pointed out, for a number of years the law was regarded as static. But the personnel of the court changed, -and the opinions of new members of the bench were entitled to respect; eventually such a volume of doubt arose as to the correctness of the judgment on which the various States and this Parliament had relied in passing the marketing legislation, that the High Court practically in vited an appeal to the Privy Council. That appeal has been made, and none of us can complain of the decision

It is interesting to consider that the judgment was given pursuant to canons of interpretation which have to be applied to written constitutions. The common law of England has been moulded from time to time by judicial decisions given to meet the needs and wishes of the people, but in regard to the written Constitution of the Commonwealth different canons of interpretation had to be applied. If the Constitution does not meet the needs of the people, machinery is provided in the instrument itself for its alteration. This bill is the first step in a movement for such an alteration. It is obvious from the judgment of the Privy Council that it regretted giving a decision which it realized must bring about the destruction of the orderly marketing systems established in Australia. Had the Privy Council been free to do so, I think that it would have moulded the law, as has been done with the common law of England, to suit the needs of thu people; but, owing to the canons of interpretation that had to be applied, that method was not open to the Privy Council. It merely interpreted the written words of section 92 itself.

I was impressed by the remark that fell from the lips of either Senator Hardy or Senator Abbott, that the purpose of section 92 was to terminate " border barbarisms ". I could not refrain from interjecting at the time that the framers of the Constitution could never have had in their minds the set of circumstances that has arisen since the establishment of federation. The old order has changed, yielding place to the new. Some of us look upon these new methods with a degree of horror; but what is happening in Australia is being repeated in many other countries, even in the old Mother Country itself. The framers of the Constitution never had in their minds anything of the character of the marketing legislation which the various State Parliaments have passed, and which this Parliament has implemented, in the belief, based on the decision to which my colleague has referred, that it had the power to do so. The framers of the Constitution could never have applied their minds to nonexistent circumstances. Their thoughts were directed to the " border barbarisms ", which were highly disagreeable to the whole of the community at the time when federation was established. But even one of the members of the Federal Convention considered that the limitation imposed by section 92 was dangerou'sly wide. No less distinguished a person than the former Governor-General, Sir Isaac Isaacs, pointed out, with extraordinary prescience, during the debates at the convention, that the words " absolutely free " might lead to trouble. The point was considered for a considerable time as to whether this provision should be confined to what was strictly aimed at, but so violent was the feeling against the imposition of interstate duties that it was decided to place the matter beyond doubt.


Senator Duncan-Hughes - Why was the word " absolutely " inserted before "free"?


Senator A J McLACHLAN (SOUTH AUSTRALIA) - To intensify the meaning, although I do not know that the extra word made any difference to it; the addition of the adverb " absolutely " seems to me merely to give rhetorical emphasis to the adjective. The words " absolutely free " were directed to the set of circumstances which then prevailed, and not to those obtaining to-day. But their insertion in the Constitution has given rise to the difficulties with which we are confronted and which this bill ia designed to remedy.

When the recent decision of the Privy Council was given, what became of the power over marketing which the States as colonies, previously had? So far as it relates to interstate transactions, that power has disappeared by reason of the interpretation placed on the words " absolutely free ".


Senator Herbert Hays - Federation was established for the purpose of securing interstate freetrade.


Senator A J McLACHLAN (SOUTH AUSTRALIA) - But the power of the States in regard to intrastate trade is sacred at the present time. I shall deal with that aspect later. The simple alteration of the Constitution now proposed does not connote the intention to deprive the State authorities of any of their powers. On narrowly examining the proposal honorable senators will see that the desire is merely to seek power to implement State legislation, because without it the States will not be masters in their own house in the realm of intrastate trade. I emphasize that point, because there is an idea abroad that this Parliament is reaching out to deprive the States of some of their present powers, and to endow itself with increased authority. The power sought under the bill does not rest to-day with the State Parliaments or the Commonwealth Parliament. It will be seen by an examination of the bill that its purpose is to enable the States to. pass marketing legislation. With theco-operation of this Parliament, in the true spirit of the federal union, it will be possible to give effect to the wishes of the State Parliaments.


Senator Duncan-Hughes - If it is desired to give the States further powers, why not do it by means of an alteration of the Constitution ?


Senator A J McLACHLAN (SOUTH AUSTRALIA) - That would involve an alteration of the trade and commerce power. The alteration now proposed is designed to restore to the States powers which they previously enjoyed, and which in recent years until the Privy Council decision in the James case, were implemented by complementary Commonwealth legislation at the request of the States. No attempt is being made at an encroachment by this Parliament upon the powers of the States. During the informative speech by Senator Guthrie I heard an interjection in regard to the power proposed to be given to the States. Now, what is it? The proposal is that after section 92 the following new section 92a bo inserted : -

The provisions of the last preceding section shall not apply to laws with respect tomarketing made by, or under the authority of, the Parliament in the exercise of any powers vested in the Parliament by this Constitution.

The power thatis now sought is the power to control interstate trade and commerce. The, regulation of intra-state trade and commerce is the function of the States, and in that domain the Commonwealth may not intrude; but the control of interstate trade and commerce is, by section 51, vested in the Commonwealth. The Privy Council seems to have drawn an imaginary line. It has said, in effect, that, at a certain point, control by the State ceases, but that control is not vested in the Commonwealth. There is a sort of " no man's land " ; and it is to fill the space that has been loft vacant by legislative enactment that this alteration of the Constitution is designed. Every parliament has inherent in it the power of eminent domain, under which the property of an individual may be taken from him with or without compensation. But if that be done by the State parliaments for the purpose of preventing interstate trade, they act unconstitutionally. If the proposed alteration of the Constitution be agreed to by the electors, the parliaments of the States will have restored to them that power which they formerly had, provided that the Commonwealth Government sees fit to implement it. In other words, this bill means not that the powers of the Commonwealth willbe increased, but that the Commonwealth may come to the aid of the States. In the words of the

Attorney-General. Commonwealth marketing legislation provides the mortar to bind the State bricks, lt has been suggested that language more appropriate to the occasion could have been used in the drafting of proposed new section 92a, but I venture to predict that, in committee, we shall find that the language is not only the most appropriate, but also practically the only language that would meet the situation.


Senator Brown - Has the Minister read the views of the honorable member for .Batman (Mr. Brennan) in the House of Represen t a ti ves ?


Senator McLACHLAN (SOUTH AUSTRALIA) - Numerous suggestions as to the wording of the alteration have been considered by the Government. Honorable senators should not assume that other wording than that contained in the bill has not been considered by the Attorney-General, and by the legal authorities whom he has consulted. So important and farreaching is the proposed alteration of the Constitution that the 'best legal advice available in the Commonwealth has been sought in relation to it. We can only assume that the States wish to apply to other primary industries the same principle as that which has been applied to dairy produce and dried fruits. I cannot see any reason why the primary industries of this country should not be entitled to the same standards as those which have been set up in respect of secondary industries. It is true that, at times, the operations of the various boards of control have been criticized. I myself have criticized them, but they have learned their lesson ; they now realize that greed does not pay. On one occasion when an attempt, was made to abuse the power vested in it by one board of control, the people in the cities, by using substitutes for the commodity whose price had been raised unreasonably, taught the board a valuable lesson. Should there be abuse of the power to control the dried fruits industry, for instance, the State parliaments could step in. If, as has been suggested, the charges for dried fruits are unduly high, the remedy lies with the States, for they have means to deal with any control board which acts improperly. But the industry itself is the best judge of whether ii is being treated fairly by boards of control or marketing authorities. If those engaged in an industry do not wish such control no State parliament i3 likely to enforce it upon them. The power now sought is merely the power in respect of interstate trade and commerce; but because of the gap to which I have referred two steps must be taken - steps in harmony with the principles underlying the Constitution. The States must legislate within their respective domains in regard to intra-state trade and commerce, and the Commonwealth must legislate in the domain of interstate trade and commerce. The restoration of the power which the Commonwealth was thought to possess will enable Australian primary industries to develop in the way desired by the States and the Commonwealth. The consumers will be protected by both the State and Commonwealth Parliaments, because no parliament is likely to legislate wildly. It may be that in the future some independent body - probably the Interstate Commission - will deal with these matters; but, of course, we must first catch our hare before we can cook it.


Senator Duncan-Hughes - Does the Minister mean that an Interstate Commission will have to be set up?


Senator McLACHLAN (SOUTH AUSTRALIA) -Of what use would be an Interstate Commission to-day, in view of the complaint by Western Australia against dumping by the eastern States? If this legislation receives the support of the Parliament and of the people, it will round off the Constitution in relation to the trade and commerce power, and fill the gap to which the Attorney-General referred. It will, moreover, enable the several parliaments to give to trade and commerce, and industry generally, a completely protective policy within Australia in respect of primary production. I commend the bill to the Senate in the belief that it will give effect to a principle which is well embedded in the legislation enacted bv this Parliament, and has the support of the people of Australia.







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