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Thursday, 24 June 1937


Senator E B JOHNSTON (Western Australia) . - I intend to support the bill; but I protest strongly against the action of the Government in rushing the measure through before honorable senators have had an opportunity to compare its provisions with the Act of 1912. The Leader of the Senate (Senator Pearce) moved the second reading of this important bill only yesterday, and within 24 hours we are asked to express our considered opinion on it. Does the Leader of the Senate realize that for fifteen out of seventeen years he has been a member of governments which have refused to re-constitute the Inter-State Commission? Now the Senate is asked to deal withthe bill without having had time to consider it. The debate on this measure, which is bristling with legal intricacies and technicalities, should be adjourned until next week. On numerous occasions when I have asked whether the Government intended to. re-constitute the Inter-State Commission, I have met with rebuffs. At last a bill providing for a commission has been introduced, and an adjournment of the debate has been refused.


Senator Collings - Perhaps the Minister will agree to adjourn the debate at this stage.


Senator E B JOHNSTON - If he will I shall ask leave to continue.


Senator Sir George Pearce - The honorable senator has had ample time to study the bill, and doubtless his speech on it has been prepared.


Senator E B JOHNSTON - I am anxious to compare the measure with previous legislation on the subject, and, having been fully occupied this morning, have had insufficient time to do so. As I am not in the fortunate position of Ministers and leaders of parties who have secretarial assistance, it is difficult to deliver a fully considered speech at such short notice. The Minister's attitude to the Senate generally is unjust, but, ashe has the support of the majority, I suppose it is useless to complain.

Ever since I have been a member of the Senate I have consistently urged that the Inter-State Commission be re-constituted, but my repeated requestshave met with direct refusals. I congratulate the Government upon its changed attitude, and I am pleased to find that effect is being given to the promise made in the Prime Minister's (Mr. Lyons) policy speech prior to the last general election. The intention of the framers of the Constitution is clear. Section 101 reads -

There shall he an Inter-State Commission . . .

Despite that mandatory provision there has not been an Inter-State Commission for seventeen years, and, consequently, the weaker States have been denied the protection they are entitled to expect under the Constitution. The section continues - with such powers of adjudication and administration as the Parliament deems necessary for the execution and maintenance, within the Commonwealth, of the provisions of this Constitution relating to trade and commerce, and of all laws made thereunder.


Senator Collings - That is an answer to the honorable senator.


Senator E B JOHNSTON - Yes, but what has been done during the last seventeen years when various governments, including a Labour government, have been in office? Despite that mandatory provision, for 30 years out of 37 years the States have been without the assistance of such a body. I am glad that the position is being remedied, even belatedly, because, since 1920, the weaker States have been illegally deprived of the assistance of a tribunal which may be regarded as the oil necessary to lubricate the federal machinery.


Senator Collings - Has not the Commonwealth Grants Commission been working in the interests of the weaker States?


Senator E B JOHNSTON - I do not think much of that commission or of its personnel. I trust that the personnel of the Inter-State Commission will differ from the body mentioned by the honorable senator.

SenatorFoll. - Have its grants to Western Australia been inadequate?


Senator E B JOHNSTON - Yes, entirely, and I objected to the biased attitude adopted by its chairman before it commenced its work. It is rather interesting to note the attitude previously adopted by the Government on this subject. On the 15th September, 1932, Han sard, Vol. 135, page 498, I asked the Leader of the Senate the following question : -

Is it the intention of the Government to appoint an Inter-State Commission in order that the State of Western Australia may receive the protection provided by sections 101 and 102 of the Federal Constitution; if not, why not?

He replied-


Senator Sir George Pearce - On behalf of the Prime Minister.


Senator E B JOHNSTON - The Minister replied-


Senator Sir George Pearce - The honorable senator asked the question of the Minister representing the Prime Minister.


Senator E B JOHNSTON - I intend to read the reply.


Senator Sir George Pearce - I want those who read this little story to know that I answered on behalf of the Prime Minister.


Senator E B JOHNSTON - The Minister does not suggest that he would give, on behalf of the Prime Minister, a reply with which he was not in entire agreement.


Senator Sir George Pearce - I know why the honorable senator is putting it in that way.


Senator E B JOHNSTON - I am reading the reply as it appears in Hansard, and I know that the Minister will correct me if I use words which are not in the official report, which is clear and convincing. I have not the slightest desire to misrepresent the right honorable gentleman. The reply by Senator Pearce reads -

In view of the decision of the High Court in the case of New South Wales v. Commonwealth (20, C.L.E. 54), that part5 of the Inter-State Commission Act1912 relating to the judicial powers of the commission is ultra, vires, the Government does not considerthat the appointment of commissioners to exercise the remaining powers of the commission under that act would be justified in view of the financial position of the Commonwealth. In any case, however, the non-appointment of the commission docs not deprive the State of Western Australia of any protection.

I am hopeful that Western Australia will receive protection and assistance from the reconstituted commission.


Senator Collings - Does the honorable senator suggest that this Parliament has not given Western Australia " a fair spin " ?


Senator E B JOHNSTON - Yes, and I am prepared to debate that subject with the honorable senator on any public platform. I am glad that the indefensible attitude adopted by the Government has been abandoned, and that one of our vital disabilities is being removed in some degree by the introduction of this measure; but I do not know to what extent, because in the brief time at my disposal I have not had an opportunity to ascertain whether the bill is all that I think it should.be.


Senator Arkins - The honorable senator has been sleeping on it for seventeen years


Senator E B JOHNSTON - Not on this measure. I have been at it ever since its introduction seventeen hours ago.


Senator Sir George Pearce - Has not the honorable senator previously given any consideration to the type of commission he favours?


Senator E B JOHNSTON - Of course I have.


Senator Sir George Pearce - Then can he not see whether this bill is in accordance with his views?


Senator E B JOHNSTON - I cannot cover the matter as comprehensively as I desire in a few hours. I have not had an opportunity to study the powers to be conferred upon the commission or the scope of its work, and in that way determine whether it differs in any material respects from the previous commission. The Royal Commission on the Constitution recommended not only that the InterState Commission should be reconstituted, but also that it should have the right, by an amendment of sections 71 and 72 of the Constitution, to exercise the judicial powers which the act of 1912 purported to confer upon it. I regret that no steps were taken to adopt this recommendation, which, incidentally, urged that the retiring age for judges should be fixed at 72 years. On page 250 the report proceeded -

The same permanent body should, we think, inquire into and report upon such transactions as the agreement between the governments of the Commonwealth and the State of Queensland relating to the purchase and disposal of the sugar crop and the embargo on imported raw sugar, and inquire into and report on proposed bounties, and the effect of the Navigation Act on the various States.

The advantage of the establishment of such a body for these purposes would, we think, be twofold. There would be a tribunal in existence equipped with a knowledge of Australian conditions and of the working of the federation, and the claims of necessitous States would no longer afford an opening to the benevolence or the opportunism of political parties. Au analogy may be found in the position of the Public Works Committee in the Commonwealth, and in some of the States. Public works costing more than a prescribed amount will not in normal circumstances be sanctioned by Parliament unless favorably reported on by the Public Works Committee, and in our opinion it would be to the advantage of the federation if it were provided by law that grants under section 00 were not to be made unless first recommended by such a body as the Inter-State Commission.

In making these recommendations wo have not overlooked the fact that some of the duties originally assigned to the Inter-State Commission have been curried out by other bodies, and that very important duties are now carried out by the Development and Migration Commission. As has been pointed out elsewhere in this report, the value of an Inter-State Commission has been acknowledged by the royal commission which inquired into the finances of Western Australia and by that "which inquired into the finances of South Australia. We do not think that the reasons for the opinions expressed by these royal commissions have been diminished by the proposed appointment of an economic adviser by the Commonwealth.

In this connexion we would also draw attention to the provisions of the Industrial Peace Act. relating to the appointment of an industrial council, and to the evidence in favour of the appointment of an industrial council or parliament given by Mr. Kneebone and Mr. Sutcliffe, and to' the suggestion by Professor Cumbrae Stewart that a committee be appointed for the purpose of bringing about uniformity in State laws. Certain of the functions of the industrial council which might be of great value to the Commonwealth might well be carried out by the Inter-State Commission, and the same body might perform a valuable duty in bringing about uniformity in the laws of the State, particularly in the commercial laws.

In view of the recommendations and the views expressed by the royal commission which inquired into the finances of Western Australia under federation in 1926, it is perfectly clear that the proposed Inter-State Commission should be required, at the request of any State, to inquire into the effect of any federal law or regulation on the primary industries, finances and trade and commerce of any State. We in Western Australia believe, and we have ample evidence to prove it - I might, in this connexion, refer to the report of the Australian economists who were appointed by the Bruce-Page Government to report on the economic aspects of the tariff - that that State, more than any other, suffers from the burdens of the tariff. In my opinion, the Inter-State Commission will be futile if it does not have undoubted power to inquire into the effects of the tariff, the Navigation Act and other federal laws and restrictions and regulations on the finances, primary industries, and trade and commerce of Western Australia.

SenatorFoll. - There is nothing to stop it from conducting such an inquiry.


Senator E B JOHNSTON - That is not clear. Under this bill the commission may have power to do so, if so requested by the Commonwealth Parliament. I think that it should be mandatory for it to do so at the request of a State.


Senator Sir George Pearce - A State may base its claim upon any ground.


Senator E B JOHNSTON - In any case, I propose to move, in committee, an amendment, which, if carried, will bring this bill more into conformity with the act under which the previous commission was set up, and which will require the commission to inquire into and report on the effect and operation of any tariff acts, or any other law or regulation of the Commonwealth, on the primary industries, revenues, manufactures and trade or commerce of any State.


Senator Brennan - Would the honor- a ble senator abolish the Tariff Board ?


Senator E B JOHNSTON - That is not my present contention. The Tariff Board takes an Australian point of view in recommending duties. It seems to me that the previous I nter-State Commission was required to inquire into the effect of the tariff on any individual State. I fear that unless my amendment be accepted, the work of the commission will be abortive, and that body will prove an expensive and unnecessary luxury. This power was given to the previous commission specifically in the following words : -

16.   The commission shall be charged with the duty of investigating from time to time all matters which in the opinion of the commission ought in the public interest to be investigated affecting -

(d)   the effect and operation of any tariff act or other legislation of the Com monwealth in regard to revenue.. Australian manufactures, and industry and trade generally;

The amendment I propose to move is of similar purport, except that I naturally put in the first place the effect of the tariff on Australian primary industries. The deplorable burdens placed on primary industries by legislation, particularly the tariff, are too well known, and have been recorded by too many Australian commissions to need any elaborating. Even withthe amendment I shall propose, the powers of the proposed commission will be reduced in comparison with those of its predecessor. The report of the Royal Commission on the Constitution, in referring to the legislation under which the original Inter-State Commission was established, said -

Part III. of the act relates to investigations by the Inter-State Commission, and is divided into two sections- 16 and 17. By section 16 thecommission is charged with the duty of investigating all matters which in its opinion require investigation in the public interests affecting (a) the production of and trade in commodities ; (b) the encouragement, improvement, and extension of Australian industries and manufactures; (c) markets outside Australia, and the opening up of external trade generally ;

Now follows the paragraph which I wish to see repeated in the present legislation - (d) the effect and operation of any tariff act or other legislation of the Commonwealth in regard to revenue, Australian manufactures, and industry and trade generally; (e) prices of commodities; (f) profits of trade and manufacture; (g) wages and social and industrial conditions;(h) labour, employment and unemployment; (i) bounties paid by foreign countries to encourage shipping or export trade; (j) population; (k) immigration; and (l) other matters referred to the commission by either House of the Parliament, by resolution, for investigation.

It is perfectly clear, therefore, that the commission to be constituted under the bill which we a.re now considering is not to have anything like the measure of power and wide range of inquiry that were specified for the previous commission.

Sitting suspended from 6.15 to 8p.m.


Senator E B JOHNSTON - The list of subjects in respect of which the new Inter-State Commission is authorized to make investigations indicates that it will have much less work to do. Its judicial duties have also been taken away. It seems to me, from a cursory examination of the bill, that everything in connexion . with the commission has been cut clown except the salaries which the Government, with characteristic federal liberality, fixed at the rates paid to the first commissioners - £2,500 a year for the chairman and £2,000 a year for etch member. Part IV. of the bill contains provisions empowering the commission to prevent any State railway authority from fixing unfair and discriminating freight rates, to the disadvantage of other States. It is absurd to confine the authority of the commission to the investigation of freights charged on State railways, anil to exclude any examination of rates imposed by the Commonwealth Railways Commissioner on the transcontinental railway, which carries the interstate traffic between South Australia and Western Australia.


Senator Sir George Pearce - I assure the honorable senator that the Commonwealth railways are included.


Senator E B JOHNSTON - I doubt this, but the time available for consideration of the bill has been limited. I direct the attention of the right honorable gentleman to clause 21, which reads -

1.   It shall not he lawful for any State or for any State railway authority, to give or make upon any railway the property of the State, in respect of Inter-State commerce, or so as to affect such commerce, any preference or discrimination which the commission adjudges undue and unreasonable, or unjust to any State.


Senator Sir George Pearce - The Commonwealth railways would not come in under that clause.


Senator E B JOHNSTON - That is my contention, and I have not yet been able to discover in the bill a provision which would include the transcontinental line. The freights on that railway should be under the commission's review. Australia is served by systems of railway from Cairns to Fremantle, and the freight rates on all of them, except the Commonwealth railways, will be subject to investigation by the Inter-State Commission, with a view to preventing unfair discrimination. This being so, the bill, I believe, inflicts another glaring injustice on the people of Western Australia, because the preferen tial rates charged on the transcontinental railway discriminate unfairly against the primary and secondary industries of that State. The Commonwealth Railways Commissioner is a. law unto himself. On the transcontinental railway he is carrying primary and secondary products from eastern States at rates which pay little more than axle grease. It is difficult, sometimes, to ascertain how low are some of the rates as they are fixed under secret' agreements. I object to the exclusion of the freights and charges on the transcontinental railway from the list of subjects which may be investigated by the proposed commission. The primary and secondary producers in Western Australia should not be penalized in this way. I have a high regard for Commonwealth railway officials, and pay a tribute to them for their courtesy and attention, but I think that, in order to divert traffic to their lines, they would not be averse to imposing preferential rates on many classes of goods. I have given notice of an amendment to ensure some measure of (protection to our primary and secondary industries from the unfair freight rates that are charged on the transcontinental railway, and I shall depend oh the good sense and fairmindedness of the Senate to support me. I hope that the Minister will accept the amendment, the effect of which will be to bring the transcontinental line under the control of the Inter-State Commission as regards freight rates and other charges.

I welcome the measure and congratulate the Minister upon its introduction. I trust that the bill will be passed with the amendments indicated by me. I also hope that no political appointments will be made to the commission, and particularly the political appointments which have been predicted in the press. Sincethat body will have an important work to do, its members should have the highest qualifications; that is essential. We should be able to obtain from our universities the services of prominent economists or highly trained constitutional lawyers. Perhaps, also, the Government will be able to select a suitable appointee from our efficient Public Service. Great care should be exercised in making the appointments, because the welfare of the smaller States and the smooth working of the federal machine will depend on the efficient functioning of the new body. The Commonwealth Public Service Act stipulates that a public servant must retire when he reaches the age of 65 years. That is generally regarded as a wise provision, and I hope that it will be applied to members of the new Inter-State Commission.







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