Opinion Number. 1782

Subject

CONTROL OF LAND PRICESCOMMONWEALTH POWER TO CONTROL LAND PRICES AFTER EXPIRY OF NATIONAL SECURITY ACT 1939: COMMONWEALTH CONTROL OF LAND PRICES DURING WARTIME: SCOPE OF DEFENCE POWER: REFERRALS OF POWER BY STATE PARLIAMENTS TO COMMONWEALTH OF THE MATTER OF CONTROL OF LAND PRICES: REFERRALS BY PARLIAMENTS OF NEW SOUTH WALES, QUEENSLAND, SOUTH AUSTRALIA AND WESTERN AUSTRALIA OF CERTAIN MATTERS RELATING TO PRICES AND PROFITEERING: WHETHER EXISTING REFERRALS BY THOSE STATES WOULD ENABLE COMMONWEALTH TO CONTROL LAND PRICES: VARIATIONS IN TERMS AND DURATION OF STATE REFERRALS

Key Legislation

CONSTITUTION s 51(vi), (xxxvii): NATIONAL SECURITY ACT 1939: NATIONAL SECURITY (ECONOMIC ORGANIZATION) REGULATIONS

Date

(1)  The Commonwealth has no general power to control land prices. During the war the Commonwealth brought into force, under the National Security (Economic Organization) Regulations, a system of control of the acquisition of land. The control was exercised in such a way as to peg the purchase price of land at the value as at 10th February, 1942.

(2)  The Regulations mentioned were made under the defence power. Recent proceedings in the High Court sought a decision that the Regulations not only are not in force at the present time but even were not justified by the defence power and consequently were never valid. The High Court has not yet given a decision in these proceedings.1

(3)  The justification for the Regulations has been that they formed part of a general plan to prevent monetary inflation. Other portions of this plan are the control of prices and the control of rents. It is impossible to say with certainty whether the High Court will hold the Regulations to be valid today in their present form. But if they are held to be so valid they could probably continue to be supported so long as other Regulations which form part of the plan to control inflation can be supported. It is impossible to specify a time limit for the operation of the Regulations. But, as the conditions of inflation arising from the excess of spending power tend to disappear, the possibility of supporting the Regulations by reference to the defence power will also disappear.

(4)  It would be legally possible for the State Parliaments to refer to the Commonwealth Parliament, under section 51(xxxvii) of the Constitution, the matter of control of land prices. The Commonwealth could then make laws with respect to that matter. The laws would operate in the States which had made the reference.

(5)  Some of the States have already referred to the Commonwealth certain matters in connexion with prices and profiteering. The following table summarises the position:

State

Matters referred

Qualifications

Duration

New South Wales

Profiteering and prices (but not including prices or rates charges by State or semi-governmental or local governing bodies for goods or services).

Repeal or amendment of Acts requires a referendum.

Until five years after Australia ceases to be engaged in hostilities.

Victoria.

As above.

Act inoperative until the same or substantially similar legislation enacted in each State. Repeal or amendment of Acts requires a referendum.

As above.

Queensland.

As above.

Repeal or amendment of Acts requires a referendum.

As above.

South Australia

The regulation and control of prices
in connexion with transactions occurring within 3 years after the cessation of hostilities, but so that no law made under this paragraph shall come into force until approved by the Governor-in-Council.

As above.

As above, but see limitation
in second column.

Western Australia

(a) No. 4 of 1943: ‘profiteering’.

(b) No. 57 of 1945: ‘prices’ (with exception as in N.S.W.).

Repeal or amendment requires absolute majority in both Houses.

(a) As above.

(b) Till 31st December, 1947.

Tasmania.

(6)  It will be seen from the foregoing table that the only States in which effective references are in force are New South Wales, Queensland, South Australia and Western Australia. In New South Wales and Queensland the matters referred are profiteering and prices. In South Australia the matter referred is the regulation and control of prices (with the approval of the State) in connexion with transactions occurring within three years after the cessation of hostilities. In Western Australia ‘profiteering’ is referred for five years after the cessation of hostilities, and ‘prices’ are also referred until 31st December, 1947. In my view the Commonwealth could, under the references made by New South Wales, Queensland, South Australia and Western Australia, control prices at which land is sold. Possibly, but with some doubt, the Western Australian reference of profiteering, after the ‘prices’ reference expires at the end of 1947, would also enable the Commonwealth to control the prices at which land is sold in that State.

(7)  Summing up, there are variations in both the terms and the duration of the references by four States. No reference at all has been made by the other two States.

The Commonwealth’s present legal power to control land prices after the expiry of the National Security Act appears therefore to be most uncertain and unsatisfactory.

[Vol. 37, p. 213]

1 Dawson v Commonwealth [1946] HCA 41, (1946) 73 CLR 157; Miller v Commonwealth [1946] HCA 42, (1946) 73 CLR 187