I refer to your memorandum dated 3rd July, 1946, in which you asked for advice as to whether it is within the powers of the Commonwealth to enter into the manufacture of prefabricated houses. It is regretted that pressure of work arising from the present sittings of Parliament has prevented earlier consideration being given to your memorandum. For the like reason, I do not propose to furnish a formal opinion but shall state my views shortly in this memorandum.

In ordinary times the Commonwealth would not have power to engage in the manufacture of houses. In ordinary times the Commonwealth would not have power to regulate the rights of landlord and tenant. In view, however, of the shortage of houses brought about by the war and the necessity to provide for the housing of returned servicemen, the Commonwealth has, by such Regulations as the National Security (Landlord and Tenant) Regulations, regulated the rights of landlords and tenants. If, and probably so long as, the Commonwealth can validly regulate the rights of landlords and tenants the Commonwealth can, in my view, equally validly engage in the manufacture of homes.

I think, therefore, your Department may assume that for the present it has power to manufacture prefabricated houses. But this power is not of indefinite duration and will, subject to the qualifications mentioned in the next paragraph, come to an end when the disorganization of housing conditions brought about by the war has ceased.

If it is necessary for defence purposes to maintain a factory for the production of aircraft, and if this necessitates the retention of a skilled staff engaged on work of a kind similar to that involved in the production of aircraft, such as the manufacture of large aluminium or other metal structures, then I think the Commonwealth could validly maintain such a factory, manufacture such structures therein and dispose of them as it thought fit.

I may add that the Commonwealth cannot acquire a power which it otherwise would not possess merely by agreement with a State Government. Nothing but a reference by a State Parliament under section 51(xxxvii) of the Constitution could produce such a result.

[Vol. 37, p. 189]