Federalism in Australian Constitutional Law: A Brief History

(This was originally posted on my personal blog, so pardon the slightly personal tone, but I thought some readers here might be interested)

Facilis descensus Averno, Sed revocare gradum, superasque evadere ad auras, Hoc opus, hic labor est” – In Defence Of Federalism, Chief Justice Harry Gibbs

It is hardly a great secret that Federalism & the Australian Constitution is a great passion of mine. Indeed, I freely admit that back in the day I would read rulings of the Griffith High Court – rulings that, in my mind, were not merely legal opinions, but works of beauty sublime – in my spare time, and that I still speak about the subject whenever I get the chance (I recall a few months ago – quite literally – putting a poor American to sleep with my rants on the matter). So I’m a Con Law geek. Deal with it.

In light of this, though, it is of great sorrow to me that of the few people remaining on our side of politics in Australia who remain committed to the core Liberal-conservative principle of Federalism, there is little understanding of how we got into our present morass, and that, outside of the membership of my beloved Samuel Griffiths Society (which ought really consider renaming itself to The Society of St. Jude), few are aware of how the High Court of Australia rode roughshod over the Australian constitution, and, in the course of 80 years, ripped up the Framers intentions, and turned very limited powers into a blank cheque for the Commonwealth.

I’ve also noticed that no real summary exists of how this occurred.  As such, I thought I would prepare a very brief history of Federalism in Australia, as seen through the few landmark cases which act as signposts to the Tartarus we are now in. Hopefully some of you will find it useful. (Also if people are interested, I may follow this up with a discussion on how the Australian Constitution was based primarily on the U.S. Constitution in terms of Federalism, and, more importantly, how even following Federation there were strong links between U.S. and Australian jurisprudence, to the effect that the Australian High Court adopted U.S. rulings carte blanche, but we shall see). I note that much of this post is adapted from an Independent Research Project I wrote at Law School, which, if you wish to download, you may here.

The Golden Era

It is an undisputed fact that the Australian Founding Fathers (more commonly known as the Framers) designed a strongly Federalist constitution, with the Federal Government holding few enumerated powers, and the vast bulk of political authority reserved for the states, and that this was overwhelmingly endorsed by the Australian people at referendum. As Sir Samuel Griffith, principle author of the Australian Constitution and later Chief Justice of the High Court of Australia, stated at the Constitutional Conventions, the Australian colonies had been “accustomed for so long to self-government” that they had “become practically almost sovereign states”. As such therefore, following Federation, the separate states continued “as autonomous bodies, “surrendering only so much of their power as is necessary to the establishment of a  general government to do for them collectively what they can not do for themselves”. Federal powers were to be limited– defence, interstate commerce, lighthouses, and so forth.

For the first two decades of Australian constitutional jurisprudence, the wishes of the framers of the constitution and the Australian people were adhered to. The states were sovereign within their respective spheres, which, as independent political societies, were thus subject to no other power. Furthermore, they were given immunity from any interference from the Commonwealth Government in the exercise of its power. Indeed, noting that before federation the colonies had almost unlimited powers, the court consistently stated that in considering the respective powers of the Commonwealth  and the States it is essential to bear in mind that each is, within the ambit of its authority, a sovereign state

It was in this time that two guiding concepts had already emerged from the court’s perspective on the Constitution as a  whole: that of the reciprocal immunity of instrumentalities doctrine, under which the Commonwealth could not subject the States to Commonwealth law, nor could the States subject the Commonwealth to State law, and of  the doctrine of implied prohibitions or State “reserved powers”, based on the fact that that the Constitution’s scheme was to confer definite powers on the Commonwealth “and to reserve to the States, whose powers before the establishment of the Commonwealth were plenary, all powers not expressly conferred upon the Commonwealth”.

It should surprise no-one, however, that the forces of centralization grew more and more restless with these rulings, and thus the road to Hades began.

Packing The Court: The First Shot

The descent to centralism in Australian Constitutional Law can be traced back to 1913, with the expansion of the High Court from five to seven in a manner analogous to Roosevelt’s infamous ‘Court-packing’ scandal.

By way of background, following the defeat of two constitutional referendums to increase Commonwealth powers in 1911 and 1913, Attorney-General Billy Hughes, under Prime Minister Andrew Fisher, took the opportunity to try to ‘stack’ the court. This was first attempted with the appointment of Albert Piddington, whereby, as a condition of his appointment, Piddington assured Hughes he was “In sympathy with supremacy of Commonwealth powers”. When this was discovered, Piddington resigned from the bench not having tried a single case.

With this tactic having failed it, the government simply increased the size of the court and appointed centralists Rich and Starke to the bench. Combined with the already-known centralist Justices Isaacs and Higgins (who, it must be noted, were members of the Constitutional Conventions where they argued strongly in favour of greater Commonwealth Powers, yet were consistently defeated), the tide was beginning to turn. By 1920, both Griffith and Barton had left the bench, and, with the appointment of Knox as Chief Justice by Billy Hughes, the scene for a constitutional showdown was set.

The Engineers Case: The First Blow

There can be no way of describing the Engineers case other than to say it drove a stake into the heart of Federalism in Australia. It radically revolutionised not only politics, but also law. The effect of the case constitutionally was threefold: it abolished the immunity of instrumentalities doctrine, it abolished the doctrine of reserved state powers, and, more insidiously, changed the method of constitutional interpretation from a form of originalism, to one of literalism, where the historical context of the document was no longer viewed as relevant. No longer were the states sovereign. No longer could they be expected to exercise reserve powers. Rather, power swung decisively – and, many would say, irreversibly – to the commonwealth.

Whilst the legal reasoning of Engineers could charitably be described as creative, it became settled law, and all students of politics and lovers of decentralised power should study and learn this odious case.

Shortly after Engineers, in R. v. Licensing Court of Brisbane; ex parte Daniell, a further blow against federalism was struck, with the Court holding that the Commonwealth law evinced a legislative intention to ‘cover the whole field’ of the subject matter, the state law would in be rendered inoperative, overturning the previous approach that a federal Act made a state law inoperative to the extent that it was impossible for the citizen to obey both. As a result, the door was opened for the broad-brush invalidation of State law even where the Commonwealth law is silent, and enabling the Commonwealth to indirectly prevent the states from legislating

The Uniform Income Tax Cases: The End Of Fiscal Sovereignty

The second major blow to Federalism in Australia came in the guise of the Uniform Income Tax Cases, which involved four Commonwealth statutes which together were designed to drive the States out of the income tax field by means of a combination of inducements, penalties and coercion: in essence the Commonwealth said “abolish the income tax, or financially we’ll destroy you”. In a decision representing a complete triumph of form over substance, the core feature of the First Uniform Tax Case was the decision to treat the States’ ouster from the field as voluntary (in sharp contrast to every legal principle applicable).

The effect of the First Uniform Tax case cannot be underestimated. It has been seen as marking a ‘turning point in Australian constitutionalism’ and in federal financial relations, with Prime Minister Sir Robert Gordon Menzies stating it marked ‘the end of the Federal Era’ in Australia, and Justice Dawson calling it the ‘most important single step in the increase in the effective powers of the Commonwealth at the expense of the powers of the state”. There can be no doubt that this case not only heralded a great deterioration in the States’ financial independence since it deprived them of their independent source of income tax,  but effectively enshrined Australia’s gross vertical fiscal imbalance.

As a result of this case, the States no longer had control of their own finances, and had to depend on the graces of the Commonwealth Government. The era of vertical fiscal imbalance had begun.

Koowarta & Tasmanian Dams: The Final Nail

The ‘third wave’ of centralism within Australian constitutional thought, politely  categorised as ‘cosmopolitanism or globalism’ (although more accurately categorised as “total bollocks”), began with Koowarta v Bjelke-Peterson, where it was held that the Racial Discrimination Act was a valid exercise of the ‘external affairs’ power. Enacted to give effect to the United Nations Convention on the Elimination of All Forms of Racial Discrimination, the Act was a significant departure from previous External Affairs jurisprudence, as its effects applied entirely within Australia, and did not involve either foreigners or foreign powers (which you would think would, you know, kinda be needed for “external affairs”). In any event, in his case, the majority ruled that the mere existence of a treaty obligation was sufficient to render the matter an ‘external affair’, regardless of the particular subject in question.

Not a year after the decision in Koowarta was handed down, the use of the external affairs power to allow the Federal Government to regulate purely internal matters was confirmed in Commonwealth v Tasmania (The Tasmanian Dams Case). As a result, if the Commonwealth Executive signs a treaty on any subject – any whatsoever – then it can legislate on that matter, irrespective of whether the subject in question is a Commonwealth or State power. After this case, there remained no limit to the matters that may be dealt with by treaty by the Executive. Essentially, if the Executive wished to do something, all they had to do was sign a treaty on it, making a mockery of the intentions of the Constitution.  After this case, the Federal Government had the power to legislate in such a way to render virtually all State powers ineffective if it so chooses. Constitutional Federalism was dead, and only political federalism remained.

The WorkChoices Case: Dancing On The Grave

The salt in the wound for Constitutionalists came in the Workchoices cases, which gave the Commonwealth power over industrial relations through their power to regulate the trading activities of corporations. As such, it allowed the Commonwealth to govern completely all aspects of the relationship between employers and employees.

In order to fully appreciate the constitutional impact of WorkChoices, a few historic notes must be made, and this requires brief consideration of where the regulation of Australia’s IR began, the “conciliation and arbitration power” given to the Commonwealth. This was, in fact, a section which received considerable attention in the Convention Debates, with future Prime Minister George Reid remarking that “no part of the Bill has received more careful consideration than this particular clause” , and there was extended argument during the debates about whether the Commonwealth parliament should have the power, or indeed any similar power. Ultimately, the proposal succeeded very narrowly because a number of opponents were persuaded that the power was very confined and would be used only in limited circumstances, leaving “no doubt that the architects of the Constitution assumed that the States would be responsible for the regulation of IR, the intention was that the Commonwealth should only be permitted to make laws supporting the resolution of a small number of interstate industrial disputes”. Without going into it in great detail, it is clear that the drafters of the Constitution chose to define Commonwealth legislative power in the area of Industrial Relations by reference to two limitations: firstly, a restricted class of disputes was chosen – industrial disputes extending beyond the limits of any one state, reflecting a concern for what would now be called the federal balance. Secondly, the ends and means of the legislation were limited: conciliation and arbitration were to be the means, and the prevention and settlement of such disputes were to be the ends.

It is also critical to note that in the first half of the last century, there were a total of six failed referenda attempting to amend the arbitration power to give more power to the Commonwealth – the first as early as 1911, the last in 1946. The fierce opposition to these proposals, as articulated through parliamentary debate by John Quick, the preeminent authority on Australia’s constitution, was grounded on the premise that if passed they would“ make the beginning of the end of the Commonwealth of Australia as a union of States. They will mark the beginning of the destruction and the degradation of the Australian States as political units and partners in a scheme for the government of the Australian people…there can be no doubt that if they are enacted upon the Constitution they will deal a staggering blow to the State Legislatures and Governments”. So allow me stress this once again – there were SIX failed referendums to give the Commonwealth power over industrial relations. And then, in WorkChoices, they were given them by judicial fiat. And there is nothing – legally – the commonwealth can’t do.

So. There you have it. A (brief) history of Federalism in Australia, and how the High Court overturned the wishes of the Constitutional Framers, ratified in referenda by the Australian people, by judicial fiat.

Any questions? 🙂

21 thoughts on “Federalism in Australian Constitutional Law: A Brief History

  1. “Any questions?”
    Yes, are you going to tell us what “Facilis descensus Averno, Sed revocare gradum, superasque evadere ad auras, Hoc opus, hic labor est”” means?

    Re the Workchoices case.
    Section 51(xxxv) of the constitution declares the commonwealth has power for “conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond limits of any one state.”
    In law school I was taught a Latin phrase used to aid interpretation of laws which goes Expressio unius est exclusio alterus : The express mention of one thing is the exclusion of the other.
    Thus applied to section 51(35), if the constitution expressly declares that the cmlth has arbitration powers for disputes extending beyond state borders the obvious implication is that the cmlth does NOT have powers for disputes that don’t extend those state borders.

    How those High Court judges could rule as they did when it was so explicitly spelt out for them in black and white did rather surprise me.

    Quite a good article Tim.

    Personally I don’t particularly blame the politicians or the barristers who appeared before the High Court with their ambit self serving political claims. The gutter rat can’t change its nature. But those certain highly paid judges who have accepted the prestigious role and taken the oath to be gatekeepers of our constitution and thus our democracy commit sins I believe equal to that of treason when they rule as they do. May they be banished to that place I first heard about on reading this article: Tartarus.

  2. “…this was overwhelmingly endorsed by the Australian people at referendum.”
    I thought it only just passed in WA.

  3. @Philip Ah yes, sorry, I had been meaning to explain that joke and never got around to it. Chief Justice Gibbs prefaced a paper he wrote on the decline of Federalism and how hard it will be to get out of our present morass with that quote which essentially says “Easy is the descent to Haydes, but to retrace one’s footsteps, and ascend again to the upper air – that is the labour, that is the toil”.
    (The reason I used Tartarus also was because I think we’re in a situation now that is even far worse than Haydes, and, quite frankly, I am quite pessimistic about even being able to find a way out…)

  4. @Tinos – a fair point, however, considering the WA voters wished even more independence and autonomy for their state, I hardly think that nullifies my argument- if anything, it strengthens it! 🙂

  5. Here is another point- should we be bound, hand and precedent, to what the founders thought? They would have been old white men who hated foreigners and anybody different, so I hope you also go along with their wishes there! How many homoes and queers have you prosecuted, and told them that the Founding Fathers would have wished it?
    If we’re going to complain about dissidents, we should first clean out our own act.
    Or should we admit that the Founding Fathers weren’t seers, and the Constitution needs updating now and then?

  6. Letting the commonwealth make court appointments does seem to me to be leaving the fox in charge of the hen house. It would have made more sence to require any candidate for a vacancy to be nominated by a state government (one candidate only per state) and the final selection to be made by lot. That would elliminate their capacity to stack the bench.

  7. Short of excluding a federal government from tax powers (as is the case in EU federalism) I think the drift towards centralism is somewhat natural (in the sence that death is natural). Given the original motivations and intentions I think it is reasonable to conclude that federation has been a failure. The main surprise is the unified sense of national identity that makes such claims contraversial.

    If we accept, as I think we ultimately must, that the states no longer have the power to withstand the power of the national government then I think the value of state governments is severely limited. It would be interesting to do a CBA on whether we should keep them at all. I don’t think romantic notions of a proper federalism stack up on the benefit side of any such equation.

  8. We also don’t have house of review reviewing of exectivie actions.

    Unlike the US, judical appointments etc are not subject to upper house consent or approval.

    They bloodywell should be.

  9. Nuke,
    Yes we should be bound.
    The constitution in its original form was not meant to be for all time. It can always be changed by the people before it becomes anachronistic.

    TerjeP, Bad judges are often bad because they are biased, but sometimes they are just plain dumb. It might be a bit of a risk to give the applicant from small gene pools like Tassie or SA the chance to become a HCA judge. In Japan the people have the right to recall a supreme court judge just as in some USA states. (There was a famous recall of the Californian Chief Justice, Rose Bird, back in the eighties) I would think it is more important for the people to have a removal provision than to go to too much trouble as to how they are appointed. Some cunning politicians in black robes will always get through the cracks.

  10. As a Minarchist, I naturally want the Con restructured so that local governments are mentioned and empowered; indeed, they should end up with more power than State or Federal levels. Also, I believe in time-share governing- all who choose to be citizens should get a share in being the government of their county. For eleven months of the year, citizens would engage in community service, and then they would have one month to make laws and govern.
    So I am not enamoured of our present Con, or voting system, though i agree that we should stick to it until we change it completely.

  11. Philip – whilst they probably would I was not insisting that Tasmania nominates a Tasmanian.

  12. @Nuke – If we want to change the constitution – get away from those “old white men who hated foreigners” (as you (incorrectly) put it) then it’s quite simple: hold a referendum. Surely that would be a better system than to have a few unelected judges (funnily enough, also all white men)change it for them.

    Or do you hate the Australian people so much that you don’t wan them to decide what is best for them?

  13. @Terje – Agreed re court appointments by the states,but I think it a bit late now…

    @. My concern there would be you’d see what happens in the US, with an over-politicisation of the judiciary. Which, of course, happens in Aust, but at least it’s more covert! 🙂

  14. Tim, I have no objection to changing constitutions by referendae. Naturally, I would hope for each question to be simple and easily understood, and hard for a judge to misinterpret.
    As for the intelligence of the average Australian, I think that whatever it is, the Government should raise us all above it, so we are all above average- in everything!

  15. Thank you for presenting a brief but detailed historical overview of how Constitutional Federalism was usurped by the Executive and the Judiciary.

    As you rightly point out; Federalism as implied in the original constitution is now all but dead in Australia… restoring the constitution to what it should or was meant to be is near impossible given the current powers of federal government.

    If we understand this to be true does it not make more sense then for Australia to become a Republic and draft a new Constitution and a Bill of Rights (something we have never had)?

  16. Hi, good post. thanks.
    What i wanted to ask was how the states can make legislation like the native vegetation act, which is in direct conflict with all our constitutional and common law rights, and should be theoretically stuck of by section 109 of the constitution?
    And have you seen the site “people of the commonwealth” or “flora”, and do you think they are correct?
    Thanks again.

  17. I have an argument which goes by the following, I believe the High Court should have struck those laws down:

    Given leasehold land is convetible to freehold, this represents an option value (a chose in action), then I think Peter Spencer got dudded and he was due for just compensation, even if the NSW Native Vegetation Act does not “directly” benefit the Commonwealth. The NVAs were passed under a quid pro quo for more Federal grant assistance, as it would allow the Cth to abide by carbon mitigation treaties without levying a tax or passing the regs themselves. Also, the right to fell the valuable Mountain Ash (forestry rights or the property rights could be sold forward at a time decayed discount) also represents an option value, which the NVA took away.

    This is why:

    The High Court has said that property extends to rights and uses of the land {Justice Starke said the term includes: “every species of valuable right and interest including real and personal property, incorporeal hereditaments such as rents and services, rights-of-way, rights of profit or use in land of another, and choses in action. Justice McTiernan confirmed the term property extends to tangible and intangible property}.*

    A prohibition which has a benefit accruing to the Commonwealth is an acquisition.** An acquisition by the States for the Commonwealth***, by agreement or not****, is treated as an acquisition made by the Commonwealth and must be made on just terms, “as a protection from a serious gap in our constitutional safeguards”.*****

    I also beleive the land and choses in action were acquired in a constructive trust for the Commonwealth, which would mean that an argument can be made in the alternative, only relying on *, **, and ***.

    * Minister of State for the Army v Dalziel (1944)
    ** Commonwealth v Tasmania (Tasmanian Dam Case) (1983)158 CLR 1
    *** PJ Magennis Pty Ltd v Commonwealth (1949) 80 CLR 382
    **** Jenkins v Commonwealth (1947) 74 CLR 400 at 406 per Williams J.
    *****Trade Practices Commission v Tooth adn Co. Ltd (1979) 142 CLR 397 at 452 per Aickin J.

  18. אני מתרשם! הבלוג אינפורמטיבי באמת כאן ידידי. רק רציתי להגיב & לומר לשמור על איכות העבודה.

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