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Wednesday, 28 May 1930


Senator DALY (South Australia) (Vice-President of the Executive Council) .- I move-

That the bill be now read a second time.

I regret that this bill is apparently destined to share a. similar fate to that which has been promised the two constitutional measures that have already been discussed in this chamber.


Senator Sampson - How does the Minister know that.


Senator DALY - I realize that I have a following in the vicinity of twelve short of a majority in this chamber, and as fourteen of those who spoke on the Constitution Alteration Power of Amendment Bill said that it would be in the best interests of the country if the three constitutional measures were defeated, my pessimism is justified. I sincerely trust that my forecast on this occasion will be incorrect, and that, at any rate, in that spirit of compromise for which this chamber is noted, one of the three proposals may meet with the approval of the majority of honorable senators. In introducing this measure, I desire to direct attention to the fact that the powers of the Commonwealth in respect of trade and commerce are conferred in a manner entirely different from any other grant of power. The grant is extraordinarily composite in its nature. It is a general power over interstate and foreign commerce, including navigation, and there are various specific unlimited powers in relation to such matters as banking, insurance, weights and measures, bills of exchange, copyrights, patents and trade marks, certain corporations and bankruptcy. There is also an auxiliary power in regard to customs and bounties. As the Senate has adopted the policy of expedition in dealing with these constitutional proposals, I do not purpose wearying honorable senators with a dessertation concerning the present powers of the Parliament. I refer them to a very fine digest of its existing powers contained in the report of the Constitution Commission, which was referred to in the course of the other debates. In pages 141 to 159 they will find a complete summary of the position which confronts the Commonwealth Parliament from the point of view of the powers which it possesses and the powers which this Government believes should he conferred on it. If honorable senators will read and study that summary they will be forced to the conclusion that the grant of power was badly conceived and bears all the appearance of a muddle.

Our constitutional difficulties are accentuated by a further provision which deprives the States of full control over powers which remain with them under section 92, which enacts that trade, commerce and intercourse between the States shall be absolutely free. Admittedly that would be a wise provision if the Commonwealth had sole power. In existing circumstances it is mischievous.

This Government is accused of attempting to violate the Constitution, because it is endeavouring to provide the remedy. It is charged with attempting to take from the people certain rights which they already possess. Again I remind honorable senators that the Government has no desire to take anything away from the people. Unfortunately in regard to trade and commerce, the people have no power to legislate. Their right or so-called right is simply the right to delegate to this Parliament the power to legislate. Until they exercise that power of delegation, the so-called right remains dormant, so that actually all that they have is the right to prohibit this Parliament from legislating. If it does not legislate, the mischievous state of affairs to which I have alluded continues, and the people are powerless. If, during the regime of the Bruce-Page Administration, the Labour party had been able to give effect to one plank in its platform - the initiative, referendum and recall - one could have understood the contention that these grants of power, which the Government is seeking would, if approved by the people, be equivalent to taking from them some rights which they at present possessed. But this bill exposes the fallacy of that contention. As I have explained, the Commonwealth is endowed with certain powers and the States with the residue, and because the State power is inoperative, the people are impotent. They could return a State Government to power, but it would be powerless to legislate in regard to trade and commerce. This Parliament also is unable to do anything. It will be seen, therefore that the Government does not propose to take from the people the right to regulate trade and commerce. All that it asks is that they shall extend to the

Parliament the right to legislate, in regard to trade and commerce, along the only lines possible.

I remind honorable senators that those who charge this Government with attempting to violate the Constitution represent a political party which presumably has always been the champion of State rights, and would at all times urge the people to rebel against any attempt to violate the Constitution. I ask them to bear in mind the cases which I mentioned when moving the second reading of the proposal to ask the people to give this Parliament power to amend the Constitution, and to remember that no protest was made against the Wheat Acquisition Act or against any other actions which led up to the litigation to which I alluded. There was no objection in regard to those matters, because every one realized that it was desirable to obtain from the people the right to legislate to remedy the chaotic state of affairs which obtained. Has the voice of any honorable senator been raised against the violation of the spirit of section 92 by States which have exercised the power of eminent domain in order to prevent the operation of that section? I do not imply that such action has been taken in any wanton spirit, but I wish to show that the division of powers is fundamentally wrong.

In the very statement that trade and commerce among the States shall be free, it is implicit that commercial horizons extend beyond State boundaries, and that commerce is not of a domestic nature controllable in a domestic manner. The general power given to the Commonwealth has been used in late years in connexion with the organization of certain rural industries. As with the State in organizing a local industry, so with the Commonwealth in organizing a national industry - a lack of necessary power is immediately evident. In these national marketing schemes resort has to be had to a clumsy expedient. Bodies representative of the particular industry submit their scheme to the Commonwealth Parliament and their respective State Parliaments to take the necessary legislative steps. It might be necessary for four separate Parliaments to pass acts to put a single scheme into operation. Briefly we employ four machines to do the work of one. The customs' power is not merely a means of raising revenue.

We are using that power and the bounty power to establish manufactures in Australia in order that our wealth may increase and unemployment decrease. Having established an industry in Australia by means of our tariff, and perhaps fostered it by a bounty, are we to be left without further powers in regard to it? Do we not hear to-day complaints as to profiteering under the shelter of the tariff wall recently created? To destroy the wall is a counsel of desperation. It is merely to retreat to the evils we have striven to shut out. It is inequitable, for both the scrupulous and the unscrupulous are penalized. We are compelled to rely on public opinion to do what we should have power to do. I invite those honorable senators who allege that the Government has raised the tariff wall and done nothing to protect the consumer, to pay due regard to the limited powers at the disposal of the Government. If they appreciate its difficulties, they should be prepared to support it in asking for this grant of power to pass the necessary legislation to protect trade and commerce in all its ramifications.

The Prime Minister (Mr. Scullin) has threatened to make public the names of traders who exploit the people, hoping that the people will defend themselves. Was ever a National Parliament so naked and defenceless as to be compelled to say to the people: "We cannot help you ; look to yourself for protection." We desire that this Parliament shall have the right to give ample protection to trade and commerce and not to be hampered, as at present, by constitutional limitations. In view of the fact that dual jurisdiction does not arise -


Senator Sir HAL COLEBATCH (WESTERN AUSTRALIA) -batch. - It will arise in regard to intra-state commerce.


Senator DALY - No. During the debate on the other constitutional bills, I wondered at times whether I was sitting in a National Parliament and listening to debates on national proposals. Honorable senators opposite should give the Government credit for acting in the best interests of the nation. It matters not whether we are representatives of the Nationalist or Labour interests; the objective of both parties is the betterment of Australia. We differ only as regards the means to that end.


Senator Ogden - That being so, the Minister should not object to criticism.


Senator DALY - I do not object to criticism. On the contrary, I invite it. The point I was leading up to was this: While it is possible, even under this power, to have dual jurisdiction, the National Parliament, vested with full power over trade and commerce, would analyse the position in the light of public opinion, and in giving effect to its policy with regard to trade and commerce, it would leave to the States the powers necessary for the efficient working of the State machinery. This proposal will not create conflicting jurisdictions as between the Commonwealth and the States. It is designed to give to the Commonwealth Parliament the right to legislate in relation to trade and commerce on lines which will enable such power to play its part in the national life of this community. Whatever the Senate may think of the other two proposals it should, in view of the opinions expressed by honorable senators from time to time, be unanimous that the Commonwealth should be given the legislative powers asked for in this instance.

Senator Sir GEORGEPEARCE (Western Australia) [9.1]. - I do not ask for the adjournment of the debate because I appreciate the desire of the Government to push on with business, and I do not know that we need further time to consider this measure. I want, however, to take exception to some statements appearing in the press about the progress that has been made in the Senate on these constitution alteration proposals. I notice that the Prime Minister is reported to have said that these measures were introduced in the Senate many weeks ago, the suggestion being that there has been undue delay in dealing with them here. The facts are that the messages from the House of Representatives transmitting the bills were received on the 10th April, just six weeks ago, and the Leader of the Government in this chamber (Senator Daly) did not move the second reading of two of them until the 30th April, just four weeks ago. Surely it cannot be said that this is an undue length of time. Neither can it be said that the Senate has shown a disposition to block the passage of the bills or delay them.


Senator Daly - Hear, hear !


Senator Sir GEORGE PEARCE - The speeches that have been delivered have been to the point, and there has been nothing in the nature of a stone-wall. I can understand, however, that it seems a long time to the Prime Minister. His position reminds me of the man who remarked to his wife that they had been married for a long time, and when she replied," Why it is only a few years ", said, " Well, it seems a long time ". I can understand that four weeks of the life the Prime Minister has been living recently may seem a long time.


Senator Daly - It seems an age.

Senator Sir GEORGEPEARCE.In the circumstances, I do not propose to attach too much importance to what the Prime Minister said.

This bill is of great importance. Its effect, if carried, would be as far-reaching as that of the bill to take full legislative power to alter the Constitution. If we were to pass it and the people agreed to it, this Parliament would be clothed with power, not to alter the Constitution as it pleased, but to effect something which would have the same result. Unification would be an accomplished fact. The. report of the Royal Commission on the Constitution contains the following : -

Trade and commerce with other countries and among the States.- Wo do not recommend that an unlimited power with respect to trade and commerce should he conferred on the Commonwealth Parliament.

It continues -

The terms " trade and commerce " have a very wide connotation, and if the power to legislate with respect to trade and commerce were transferred to the Commonwealth Parliament, we think that it would be difficult to say what powers were left to a State, or what acts of a State Parliament might not be overridden by federal laws. We do not think that the same reasons against limiting the federal power to trade and commerce with other countries and among the States exist in Australia, as might be urged with regard to the Constitution of the United States of America. In Australia, where the States are relatively few and large, where the population is concentrated in a few cities and each capital is on or adjacent to the coast, it is much easier for the States to control commercial activities and to deal with any abuses that may arise, than it would be if the States were small and approximately equalin size. In our opinion a wise course was followed in the 1891 draft and in the Constitution itself when, instead of a complete power to legislate with respect to trade and commerce being conferred, certain elements of that power were mentioned separately and such powers were conferred on the Commonwealth Parliament as it was thought could conveniently be exercised by a central legislature.

The point is put so well there that I do not propose to elaborate it. The term, " trade and commerce " is exceedingly wide. It covers a multitude of subjects - not merely the carriage of goods and passengers, but also the buying, exchange and selling of goods, and legislation governing those activities. It covers fully 75 per cent. of the activities of the States. If this bill were approved by Parliament and accepted by the people, the Commonwealth could strip the States of all their powers in regard to trade and commerce. It would have unlimited power over an enormous field.

Senator Dalyhas mentioned one case in which he claims this power is needed. He says that the Commonwealth has no power to protect consumers from the profiteering that has already taken place under the high tariff and tariff embargoes imposed by the present Government, although the Prime Minister and the Acting Minister for Trade and Customs have been trying to make the people believe that the Government has the necessary power, but cannot exercise it. The only effective way of preventing the profiteer from taking advantage of a high tariff is to deprive him of the duties under the shelter of which he is profiteering; but, of course, objection may be raised to that because its effect is to punish the innocent as well as the guilty. The power the Prime Minister wants is that which every State Parliament has to-day : the power to fix prices.


Senator Daly - Would the honorable senator object to the Commonwealth having that power?


Senator Sir GEORGE PEARCE - I object to it because it is an entirely domestic matter for the States and not the Commonwealth to handle.


Senator O'Halloran - That means six tribunals and six sets of prices.

Senator Sir GEORGEPEARCE.That may be so, but it is entirely a matter for the people of the respective States to determine for themselves. Many people who have had a little experience of price-fixing have come to the conclusion that it is far better to leave it alone.


Senator O'Halloran - Why did not the Government of which the right honorable senator was a member leave it alone during the war?


Senator Sir GEORGE PEARCE - I was just about to tell the Senate of the experience we had of price-fixing during the war. Under the War Precautions Act the Commonwealth Parliament had unlimited power - as much power as it would have if this alteration of the Constitution were made. When it was alleged that there was profiteering in the sale of meat, the Government set out to fix the retail price of meat. Our experience reminded us of one of Gilbert and Sullivan's operas. When we fixed the retail price we found that it did not " do the job." We, therefore, went beyond the retailer to the wholesale man, but when we got to him we found that it did not " do the job " - that there was some one else behind him. And so we went on chasing these various people until we had a whole network of war precautions regulations, only to find that as fast as we extended the net in one direction, the fish were slipping through in some other direction. Finally, in despair, we abandoned the whole thing. The price-fixing of meat broke down under its own weight. I thank Senator O'Halloran for refreshing my memory of that striking example of the futility of Parliament endeavouring in this way to interfere with the natural laws of supply and demand, which have a nasty knack of slipping through any legal nets that may be spread. The experience the present Government has already encountered in its endeavour to interfere with some of these natural laws will make it very much wiser before twelve months are over. Many of the States have endeavoured to fix prices ; but can any honorable senator point to any State attempt in that respect that has been successful? Fair rents courts have been set up to fix rents, with the unfortunate result that in the cities where the rents are fixed by law the tenants pay higher rents than are paid in the cities where fair rents courts have noi been set up.


Senator Dunn - That is not so in New South Wales.

Senator Sir GEORGEPEARCE.New South Wales is the horrible example I have in mind, because rents in Sydney are the highest in the Commonwealth.

The proposal before us is a most peculiar one. It seems as if the Government at first determined to "go the whole hog" and that later the hearts of Ministers failed them, and a proviso was inserted The proposal is to alter the Constitution to give the Commonwealth full power over trade and commerce, with this proviso -

Provided that -the alteration of this paragraph . . . shall not be construed to empower the Parliaments to make laws with 'respect to the control or management of railways, the property of a State, or the rates or fares on such railways.

In Victoria, there are railways and tramways the property of the State, and tramways the property of private companies. By this proviso the Commonwealth Parliament would have power in respect of any private railways in Victoria or tramways, the property of the State or the property of a private company, but no power in respect to railways, the property of the State. It would have power to regulate motor traffic. Can we imagine this Parliament taking power to solve the problem of the 'buses? This Parliament - which Senator Daly is so fond of reminding us is a National Parliament - is to amend the Constitution so that we can tell the people of the States how to run their motor 'buses. Many State Premiers have become prematurely grey over the problem of motor 'buses; but we are to show them how to solve it !

The previous bill sought power for the Federal Government to fix wages, salaries, hours and conditions of labour. This Government has no compunction in regard to that. It will cheerfully determine salaries, wages, and the hours to be worked on the State railways; but the fixing of fares and freights, from which the States derive the revenue with which to pay those wages and salaries, is magnanimously left to the States. An embarrassing power, indeed, in the circumstances ! Frequently, in times of depression, the States find it necessary to increase fares and freights, so that, under" this provision, the privilege of doing the unpleasant things will be left to the State governments, while the Federal Parliament will have a monopoly of the things that are pleasant. This Parliament is to be a sort of Father Christmas, distributing gifts in the form of higher rates of pay and shorter hours to the State railway employees, and leaving to the unfortunate States the task of finding the necessary funds. The Federal Government also seeks power to take control of intra-state navigation. There may be something to be said for that; but is the Commonwealth to control navigation on the river Murray, or the sending of barges down the river Darling and internal navigation generally? The States evidently are thought to be incompetent to control that sort of thing, so this Government must take it over !


Senator Hoare - What about the Swan River?

Senator Sir GEORGEPEARCE.The Swan River is at least a navigable water-way, whereas some of the alleged rivers of the eastern States are incapable of floating anything.

Why could not the Government have brought forward a proposal to enable the passing of a uniform company law for Australia? It could have asked for a limited power to enable that to be done. That would be something useful - something that would commend itself to the people of Australia - a project that would be approved by a tremendous majority.


Senator Daly - And I suppose that it would put about 50,000 more people into employment !


Senator Sir GEORGE PEARCE - I dare say that it would put some people out of employment. When companies are registered under six separate company laws the procedure must make for a lot more employment, but employment that is useless and uneconomical. A uniform company law would be of some service to the Commonwealth. Then there is the control of aviation. To-day the Federal Parliament can control interstate aviation ; but the power of regulation generally in regard to aviation remains with the States. I believe that four out of the six States agreed to vest full control with this Parliament. Several practical schemes such as these might have been properly considered by the Government. Instead we are asked to approve of a comprehensive power such as this, which will emasculate the States and destroy their powers. If granted this power the Federal Parliament could practically strip the States of their -authority.

I shall not debate the matter further. I understand, from statements that have been made, that we shall be given a further opportunity to say something on the subject at a later date, shortly before this measure will be placed before the people. I conclude by pointing out that this proposal, like the Power of Amendment Bill, is merely another step towards giving effect to the platform of honorable senators opposite, in compliance with a " mandate " of which we hear so much. It is a step towards that socialization of industry of which we have read so much in the reports of the Labour Congress now sitting in Canberra. We are informed that the nationalization of industry is not sufficient. The railways are nationalized, but that is not enough. There must be socialization. I should like Senator Dunn to be good enough to illustrate the difference between nationalization and socialization of industry so that we shall know exactly what the Government is aiming at.


Senator Daly - What has that got to do with this bill?


Senator Sir GEORGE PEARCE - It could be given effect to if this bill were carried. The Federal Government would then have full power over trade and commerce, and could " socialize " the shipping industry and many other industries. According to the Labour conference now sitting in Canberra the only way to cure unemployment is to socialize industry. Nationalization will not effect that cure ; socialization will. What is the difference? I understand that nationalization of industry means ownership by the State, while socialization of industry means not ownership by the State or by the people, but ownership by those who work in the particular industry concerned. That is the ideal for which Senator Rae strives. If this bill were given effect it would be possible to socialize motor traffic, and 'bus services - transport of every description in the air, on the land, and on the water. That is why the Labour Government seeks this sweeping amendment of the Constitution.


Senator Dooley - Why does not the right honorable senator advocate the handing over of the Post Office to private enterprise ?


Senator Sir GEORGE PEARCE - I am not advocating handing over anything ; I am dealing with the proposals of the Government. To-night I am the critic; the honorable senator is the creator. It is for him to rise presently, unless his leader says he shall not, and tell us what his Government proposes to do under these powers. Whilst the VicePresident of the Executive Council gave us a very learned disquisition upon the legal effect of the measure he did not give us any indication of how the Government was going to give effect to its platform, or carry out the "mandate" that it received at the last general election. With his characteristic caution the honorable senator has not seen fit to lift the curtain to let us see what lies beyond. So I am hoping that Senator Dunn and Senator Dooley will tell us what is to be the next step. Senator Dunn has assured us that the people are "waiting with their mouths open " to get a chance to carry these bills by tremendous majorities when the referendums are taken. It would be extremely interesting to be told what the Government will then do to abolish unemployment. Is socialization of industry to be the remedy? Russia has socialization of industry. There is no private enterprise there at all, yet millions of its people are unemployed and starving.


Senator Ogden - The Government would begin by taking over the Tasmanian ships.


Senator Sir GEORGE PEARCE - I have my doubts on that point. The PostmasterGeneral happens tobe a Tasmanian, and he has had some experience of State-owned ships. I venture to say that when it comes to the nationalization of shipping the honorable gentleman will have something to say on the subject. Again, with the Treasurer facing his next budget I cannot see any immediate move towards the nationalization of the industry. In any case, it is not the nationalization, but the socialization of industry that is talked of.


Senator Ogden - I want to know the difference.

Senator Sir GEORGEPEARCE.The difference is that with the socialization of the industry the men who manned the ships would own them. That perhaps would make things easy for the Treasurer, because he would not have to find the money. I assume that it would be found by the Seamens Union. Of course, the property may be expropriated. That is another word in the lexicon of honorable senators opposite. It is difficult to say what might be done in the way of expropriation or compensation.

Apparently these bills are not going to the people for some little time. I am very sceptical as to the people waiting anxiously for them. If I am able to read aright public opinion in the State that I represent not one of these bills has a chance of obtaining anything like a majority there. Tremendous majorities will be registered against them, and I hope that the example of the western State will be followed by this Senate when voting on thesecond reading, and by the eastern States when the referendum is submitted to them.







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