I refer to your letter requesting the Attorney-General’s comments on the following resolution of the Federal Executive of the Australian Labor Party:

Nationalisation of Industry.

Item 33. S.A. Executive—That Convention request the Federal Government to nationalize the coal mines and transport, including shipping and airways.

Messrs. Bardolph and O’Flaherty moved—That item 33 be submitted to the Prime Minister for his report as to its practicability.

Messrs. Stewart and Kennelly moved amendment—That this item be left in the hands of the Executive Officers to confer with the Prime Minister.

Amendment lost. Motion carried.

I have discussed this resolution with the Attorney-General but only in general terms.

It is ordinarily recognized that the present constitutional powers of the Commonwealth are insufficient to permit of the nationalization of the coal mining and transport industries. However, the Commonwealth is not wholly unable under the present Constitution to take over particular coal mines or, in effect, to run certain transport services.

Thus, the Commonwealth could, in my view, acquire and operate particular coal mines in order to maintain a supply of coal for its own needs, for instance, to supply to the Navy, to the Commonwealth Railways, to Commonwealth Territories, to munitions establishments and the like.

I think it clear that, under the ‘defence’ power, the Commonwealth could not engage in the general business of coal mining in time of peace and could not acquire all mines or ‘nationalize’ the industry. In any event, it would be necessary for it to acquire on just terms any property which it was obliged to acquire for the purpose of operating any mines used for its own needs.

So far as coal is concerned, I do not need to do more than mention the recently established arrangements between the Commonwealth and New South Wales setting up a Joint Coal Board with wide powers not only to control the coal mining industry but to acquire coal and coal mines. But, as you are yourself well aware, the vital powers under this arrangement are conferred not by the Commonwealth but by the State.

The Commonwealth has power to engage in overseas and interstate transport but, as was held in the Airlines case,¹ cannot exclude others from the field of interstate transport. Acting under this power, the Commonwealth has set up an authority to engage in interstate transport by air and also proposes to set up an authority to engage in overseas and interstate shipping. It does not appear to be constitutionally practicable for the Commonwealth to go beyond this in regard to transport.

[Vol. 37, p. 578]

¹ Australian National Airways Pty Ltd v Commonwealth (No. 1) [1945] HCA 41; (1945) 71 CLR 29.