The Secretary, Department of Markets, has forwarded to me for advice the
following memorandum:

• Condition (b) of an owner’s licence issued under regulation 4 of the Dried Fruits (Interstate Trade) Regulations (S.R. 1928 No. 91) reads as follows:

That the licensee shall market outside the Commonwealth such percentage of the output of dried fruits produced in any particular year as the Minister, on the recommendation of the prescribed authority, from time to time determines.

2. In the case of Victoria and South Australia the export percentages determined in respect of dried fruits (currants, sultanas and lexias) for the purposes of interstate trade are the same as those which growers are compelled to observe under the respective State Dried Fruits Acts if they desire to trade within the State.
3. In New South Wales, however, the export percentages fixed under the New South Wales Dried Fruits Act in respect of currants and sultanas have in view of the small production been considerably lower than those which have been determined under the Dried Fruits Acts of Victoria and South Australia. As a result of this, the Prescribed Authority in New South Wales (Dried Fruits Board) has been reluctant to agree to the higher export percentages for interstate trade as recommended by the Prescribed Authorities in the States of Victoria and South Australia and some difficulty has been experienced on each occasion in arriving at a uniform recommendation to enable export percentages to be determined under the Commonwealth Act and Regulations.
4. Recently an agreement was arrived at between representative bodies of the Dried Fruits Industry, and it was decided that the export percentages to be determined for New South Wales under the Dried Fruits Act of that State and the Commonwealth Dried Fruits Act in respect of currants and sultanas be on the following basis:

1931	65%
1932	75%
1933	80%

and uniformity thereafter. Lexias are to be uniform with Victoria and South Australia each year.

5. It is desired that, during the next three years, the export percentages as set out in the previous paragraph shall operate in the case of New South Wales for the purposes of interstate trade, provided the export percentages recommended by the prescribed authorities in Victoria and South Australia during any of those years are not less than the percentages to be applied to New South Wales fruit.
6. It is understood that, if different export percentages are directly determined by the Minister in respect of the various States, preference will be given to one State over another State and the validity of the regulations might be open to question, having regard to the provisions of section 99 of the Constitution.
7. It is thought that the difficulty might perhaps be overcome by determining the export percentages on a State production basis by proclaiming, for example, that in all States where the total production of currants or sultanas exceeds, say, 5,000 tons, the export percentages recommended by the prescribed authorities in Victoria and South Australia be adopted, whereas in any State producing less than that total the percentage set out in paragraph 4 above could be fixed by regulation. (Victoria and South Australia each produce over 5,000 tons of currants and lexias, and New South Wales and Western Australia produce less than that total).
8. The dried fruits industry is anxious to know whether the agreement referred to in paragraph 4 could be given effect to under the Dried Fruits (Interstate Trade) Regulations, and as a meeting of all sections of the industry is to be held in about two weeks’ time, it would be appreciated if you would kindly furnish me as early as possible with your opinion on the points raised above.

I think that, if a licencee in any State who is granted an owner’s licence to trade interstate in dried fruits in accordance with Form B in the Schedule to the above Regulations is required to market outside the Commonwealth a percentage of the output of dried fruits which is greater than or less than the percentage determined with respect to another State, such requirement would amount to the giving of a preference to one State over another State, and would consequently be invalid as being obnoxious to section 99 of the Constitution (see James v. Commonwealth and others, 41 C.L.R. p. 442).

The question is raised as to whether the difficulty could be got over by basing the quota on the production of a State rather than by determining the quota arbitrarily for each State. Take, for instance, a system of quota such as the following:

It may be contended that in such a system there is not necessarily a preference, seeing that any State which produces the same quantity, or a quantity within the same group, has the same quota. The method proposed, however, has the effect of applying different quotas to producers in different States. In other words, a producer in one State may, by reason of the production in that State, be required to export a certain percentage, whereas, if he were resident in another State, he might, by reason of the production in that other State, be required to export a different percentage. This method would in my opinion amount to the giving of a preference to one State over another State, contrary to section 99 of the Constitution.

In my opinion therefore the percentage of dried fruits to be marketed outside the Commonwealth, as determined by the Minister, for the purposes of Regulation 4 of the above Regulations, must be a uniform percentage throughout all the States of the Commonwealth.

[Vol. 24, p. 880]