Opinion Number. 1641

Subject

UNEMPLOYMENT INSURANCE POWER OF THE COMMONWEALTH TO LEGISLATE WITH RESPECT TO A SCHEME OF UNEMPLOYMENT INSURANCE: INSURANCE POWER: COMPULSORY CONTRIBUTIONS: TAXATION POWER: DISCRIMINATION BETWEEN STATES: PROVISION OF BENEFITS IN REMOTE AREAS

Key Legislation

CONSTITUTION s 51(ii)

Date
Client
The Secretary, Department at the Treasury

In reply to your memorandum of 15th March, 1939, forwarding for advice on the legal questions involved in a copy of a letter received from the Victorian Board of Directors of the Australian Natives’ Association concerning the question as to the validity under the Constitution of an Unemployment Insurance Scheme:

  1. initiated by the Federal Parliament by its own power;
  2. as complementary to States’ legislation.

I desire to inform you that the powers of the Commonwealth to legislate with respect to a scheme of Unemployment Insurance are, in my view, similar to those which the Parliament possesses with respect to National Health Insurance.

It may be that the insurance power alone would be insufficient to extend to the imposition of compulsory contributions and that, as in the case of National Health Insurance, it would be necessary to rely in addition on the taxation power. This being the case, it would not be possible to provide for a scheme of Unemployment Insurance applicable to some States only, as that would involve discrimination between States contrary to the provisions of section 51(ii.) of the Constitution. It would however be possible in an Unemployment Insurance Scheme, just as in the National Health Scheme, to provide for the limitation of benefits where persons are resident in areas so remote that the effective administration in those areas of benefits under the Act is impracticable.

[Vol. 32, p. 78]