I refer to your memorandum 540/44 of 23rd July, 1946, asking for advice on the question whether the Commonwealth has power to legislate for the continuance of the controls established under the National Security (Landlord and Tenant) Regulations and, if not, whether there are some alternative means—such as a reference of powers from the States—whereby such power could be obtained.

(2)  The controls in question are, broadly speaking, provisions for the limitation of rents and provisions restricting the eviction of tenants. The control of rents is part of the general scheme for the prevention of the inflation which might otherwise arise as a result of war-time conditions. The eviction provisions appear to be partly incidental to the control of rents, and partly designed to ensure the full use of housing facilities which are, as a result of the war, inadequate.

(3)  These provisions were within the scope of the defence power of the Commonwealth during the war, when the maintenance of stability on the home front was obviously necessary for the efficient prosecution of the war. (Silk Bros. Pty. Ltd. v. State Electricity Commission of Victoria, 67 C.L.R. 1).

(4)  Fundamentally, it was their quality as means of preventing monetary inflation that justified the provisions for the limitation of rents as an exercise of the defence power. Rents enter so greatly into the cost of living that without control of rents it would be manifestly impossible to control wages, and therefore the price of commodities. Limitation of rents therefore has been basic to the economic structure during the war. The provisions restricting the eviction of tenants are largely incidental in character. In part no doubt they could be justified as a means of preventing social dislocation, arising from the considerable movements of population that have occurred during the war. Basically, however, these provisions find their justification in the fact that without them it would in practice be impossible to maintain rent control itself.

(5)  If the forgoing analysis is correct, it follows that the landlord and tenant controls can probably be supported, during the immediate post-war period, so long as general price control can likewise be supported. The policy in relation to rents and evictions may therefore depend on the policy to be adopted in relation to general price control.

(6)  It will be understood that no fixed time limits can be predicted in such matters as these. There is, in my opinion, little doubt that measures of price control (and therefore measures of landlord and tenant control also) could validly be enacted by the Commonwealth, by virtue of the defence power, even after the National Security Act expires. As the community approaches nearer the condition, however, in which the inflationary tendencies arising from the excess of spending power over goods are replaced by something approaching equilibrium, the possibility of supporting these controls by reference to the defence power will disappear. In this regard, it should be kept in mind that the attitude of the courts in considering the post-war extent of the defence power will not be altogether unaffected by the knowledge that the States have ample power to deal with such matters as rents and tenancies, and that in peace time they normally occupy the legislative field in those matters.

(7)  With regard to the question of alternative means of control by the Commonwealth, it would be legally possible for the State Parliaments to refer to the Commonwealth Parliament, under section 51(xxxvii) of the Constitution, the matters of rent control and tenancy control, and the Commonwealth Parliament could then make laws on those matters with operation in the States which had given the reference. Past experience has, however, showed the difficulty of obtaining action, especially uniform action, by the states under that provision of the Constitution. It would also be possible for state laws relating to rents and tenancies to confer, or provide for conferring, on Commonwealth authorities administrative powers under those laws, but I am not sure that such a course would be of any assistance in the present connexion.