The Minister for Commerce and Agriculture:

I refer to your letter of 9th January, 1945, addressed to the Attorney-General, forwarding copies of papers received by you from the Egg Producers Council and requesting that the Attorney-General should advise on certain questions formulated by the Council concerning the power of the Commonwealth to implement a scheme for the marketing of eggs on an Australia-wide basis in the post-war period.

The Attorney-General was not able to prepare a reply before leaving Australia. The following general observations in answer to the questions raised by the Council may be of assistance. It must be remembered, however, that neither the Attorney-General nor myself can give any authoritative ruling on these questions, which can be finally answered only by the courts.

The questions asked, and my observations upon them, are as follows:

1. Question.

Is it within the power of the Commonwealth Government to establish by legislation, a post war Australian Controlling Board or Authority in respect of egg marketing, with power to control the marketing and distribution of Australian eggs both within Australia and overseas and to make financial arrangements therefore, closely similar to the powers at present held by the Controller of Egg Supplies under National Security (Egg Industry) Regulations, including power of general direction over the operations of Statutory State Egg Marketing Boards?

(Note: Under the said Regulations, existing State Egg Marketing Boards have been appointed as agents of the Controller of Egg Supplies and operate under his direction.)

Answer.

The power of the Commonwealth Parliament to legislate under the defence power will not, of course, come to an end at the cessation of hostilities. It is generally agreed that the defence power would enable the Parliament, to some extent, to pass laws designed to facilitate the return of Australian economic affairs to peace-time conditions. In the absence of any adequate consideration of the matter by the High Court, legal opinions differ considerably as to the duration and extent of this power. Even on a fairly wide view of the defence power, however, that power would not be a sufficient basis for the establishment of a permanent scheme of control on a Commonwealth-wide basis, such as appears to be contemplated by the Council.

The Commonwealth’s power to legislate with respect to trade and commerce is limited to trade and commerce with other countries and among the States. It appears clear that this power would not be sufficient to enable the Commonwealth to pass legislation of the kind suggested by the Council. It was for this reason that the Government included in the powers proposed to be conferred on the Commonwealth at the recent Referendum power over the ‘organised marketing of commodities.’ I gather from the subsequent questions that the Council is well aware of this difficulty, and contemplates the supplementing of the present powers of the Commonwealth by the reference of matters by the States to the Commonwealth under placitum (xxxvii) of section 51 of the Constitution. Under that placitum the States could refer to the Commonwealth Parliament power over the organised marketing of commodities, or of certain commodities, and any other powers which might be necessary in connexion with such a scheme as the Council contemplates, e.g. some power over prices.

Any powers so referred to the Commonwealth could, however, be exercised only subject to section 92 of the Constitution, providing for freedom of interstate trade. It is the view of the Attorney-General, however, that that section would not prevent legislation, properly framed, for the organised marketing of commodities. The Attorney-General has stated briefly his reasons for this view on pages 16 to 18 of the booklet entitled ‘Notes on the Fourteen Powers and the Three Safeguards’ issued by him shortly before the Referendum.

2. Question.

Will the Attorney-General kindly advise, in general terms, to what extent complementary action (by legislation or otherwise) would be necessary on the part of the respective State Governments:

1. In States where Statutory Egg Marketing Boards are established, and
2. In States where such Boards are not established?

(Note: Statutory Egg Marketing Boards are established in the States of Queensland, New South Wales, Victoria and South Australia. In the last-mentioned State, the existing Board is established for the duration of the war and six months thereafter, similarly to the life of the Wartime Egg Control Scheme under National Security Regulations, but hopes are entertained that the South Australian Government will legislate to extend the Board’s life in the post war period.)

Answer.

I am not clear what is the complementary action by the States which is referred to. If adequate powers were referred to the Commonwealth by the States, the whole scheme could be covered by Commonwealth legislation. The existing State Boards could be continued in operation, and their functions defined, by the Commonwealth legislation.

3. Question.

In view of the result of the recent referendum, would the Commonwealth Government be in a position (after examination and approval of a scheme) to approach the respective State Governments on the subject, or would it be necessary for the State Governments first to approach the Commonwealth Government and offer to transfer to the Commonwealth such powers as might be necessary to enable Commonwealth legislation to be effective, undertaking also to pass the necessary complementary State legislation?

Answer.

There is no legal reason why the Commonwealth should not approach the States with a request that they refer any particular legislative power to the Commonwealth under section 51(xxxvii) of the Constitution.

4. Question.

In the event of a minority of the States being unwilling to hand over the necessary powers to the Commonwealth, and the scheme being considered practicable without active participation by such States, could the Commonwealth implement the scheme in respect of the majority of States willing to hand over the necessary powers?

Answer.

Section 51(xxxvii) of the Constitution clearly contemplates the possibility of reference to powers by some States and not by others, and provides for the application of laws made by virtue of the reference to those States only which have made the reference, or which afterwards adopt those laws. It is possible that some difficulty might arise out of section 99 of the Constitution which provides that the Commonwealth shall not, by any law or regulation of trade, commerce, or revenue, give preference to one State or any part thereof over another State or any part thereof. So far as I am aware, the application of this section in relation to powers referred to the Commonwealth by the States has never been judicially considered. I may also mention that, if any taxation were involved in the scheme, the taxation would be subject to the constitutional prohibition of discrimination between States or parts of States.

5. Question.

In the event of there being any insuperable legal bar to the proposals in the form under consideration, can the Attorney-General indicate in general outline, any alternative method by which the objective of establishing a producer controlled Commonwealth body with power of direction in the various States can be achieved?

Answer.

I am not in a position to suggest, at this juncture, any alternative scheme.

In conclusion, I desire to say that the experience over the past 40 years of attempts to obtain transfers of powers from the States does not afford much encouragement in any attempt to seek a transfer of powers to deal with the present matter.

[Vol. 36, p. 419]