I refer to your memorandum dated 5th January, 1944, seeking advice as to what action would be constitutionally possible to control the movement of foodstuffs from one State to another. From subsequent correspondence it appears that the question has arisen in the following circumstances:

1. the depletion of the Queensland stocks of tomatoes and other commodities through movement into New South to take advantage of higher prices in Sydney;
2. the depletion of Tasmanian stocks of tomatoes through movement into Victoria under advantageous arrangements with agents;
3. the movement of flour from the mainland into Tasmania, with the result that there is less milling done in Tasmania, with consequent shortage of bran and pollard there; and
4. the shortage of some foodstuffs (e.g. oranges) in Queensland through absence of sufficient movement into Queensland from New South Wales.

In all these cases, the substance of the matter is that the unregulated flow of trade, under war conditions of price-fixing and transport control, produces or would produce shortages in some parts of Australia and surplus stocks of foodstuffs in others. The fact that the areas of shortage and of surplus can be spoken of in terms of States is purely accidental, and indeed it may be strictly inaccurate so to speak of them. What is required is to maintain adequate supplies in all areas. To prevent shortages it may be necessary to regulate the movement of foodstuffs out of or into an area of shortage.

The question arises in each case whether section 92 or section 99 of the Constitution would invalidate an attempt to regulate by means of permits these movements.

If it appears on the face of a law that in substance it is directed towards maintaining adequate supplies of essential commodities in an area threatened with a shortage, there is good authority for saying that the law is valid, even though in order to achieve its object it regulates or even prohibits the movement of goods from one state to another. Putting the same thing in another way, it may perhaps be said that a Commonwealth law can validly deal with an area threatened with a shortage, even though that area happens to be a State: see Milk Board (NSW) v. Metropolitan Cream Pty Ltd (1939) 62 C.L.R. 116; The King v. Martin, ex parte Wawn (1939) 62 C.L.R. 457.

To constitute an infringement of section 99, it must be shown, first, that some tangible commercial advantage is given to the inhabitants of one area over those of another and, secondly, that the area is selected by reference merely to its character as a State and not to its economic or other characteristics as a part of Australian national territory: see Elliott v. the Commonwealth (1936) 54 C.L.R. 657, especially per Evatt J.

Wherever possible the aim should be to regulate commodity movements in Australia in terms of areas chosen because of their economic characteristics, and without regard to State boundaries. The particular areas in which a commodity is produced, or in which shortages or surpluses of particular commodities exist, will quite commonly be found either to overlap in more than one State or to occupy only a portion of any one State. The particular circumstances of Tasmania, as an island, may often make it difficult to do anything else than treat the State as an economic unit. But the same is not by any means always true on the mainland.

If, for any reason, it does become necessary to exercise control of commodity movements in terms of State boundaries, an order should, for reasons already given, be so expressed as to make it clear that the State boundary is not selected merely as such, but is selected as the basis of regulation because of the economic characteristics that prevail in the State, and in order to achieve some purpose other than mere regulation of commercial dealings.

An order so framed will not only obviate difficulties under section 92, but will probably meet any difficulties arising under section 99 as well.

An order along the lines of the drafts which have been prepared in relation to the movement of flour from the mainland into Tasmania and in relation to the movement of tomatoes from Tasmania to the mainland would meet precisely the views expressed above. Even if, under such an order, a State were to be taken as the area by reference to which control is exercised, it would not be chosen merely ‘as such’.

I do not think it can be said that the validity of an order in this form is absolutely certain. The High Court considered, but did not find it necessary to determine, the relation between section 92 and the defence power when the matter was raised by Counsel in Andrews v. Howell (1941) 65 C.L.R. 255. Williams J. has not so far had to express any view on the matter, and both Starke J. and Dixon J. have expressed dissatisfaction with the interpretation given to section 92 in the Milk Board case, from the judgment in which Starke J. had expressly dissented. So long as the present interpretation is maintained, however, the conclusions stated above can be regarded as well-founded.

The method of control by permit would deal with the matters mentioned in subparagraphs (a), (b) and (c) of the first paragraph of this memorandum. I have not discussed the alternative methods mentioned in your memorandum as this particular method seems to be much the easiest to administer, and much the most satisfactory, so long as its validity is reasonably secure.

With reference to the matter mentioned in paragraph (d) it would seem that, in order to force foodstuffs from New South Wales into Queensland, it would require some mechanism other than the prohibition of carriage out of New South Wales without a permit. I cannot see any legal objection to any order requiring food to be sent from one area to another, provided the principle mentioned above is observed, that is, that the areas concerned are as chosen economic units and not States as such.

[Vol. 36, p. 40]