I refer to your teleprinter message, No. SY.578 of the 2nd July, 1948, regarding the adequacy of the Commonwealth’s legal powers to continue petrol rationing after 31st December 1948.

(2)  Consideration has been given to the possible heads of power under which legislation for the continuance of petrol rationing could be made. The ‘trade and commerce’ and the ‘external affairs’ powers have been considered but no support can, in my view, be derived from these powers because of the essentially internal regulation that petrol rationing involves. There remains the ‘defence’ power, and I have reached the conclusion that some reliance may be placed on this power as a basis for the continuance of petrol rationing.

(3)  In the nature of things, no advice can be given with certainty that the ‘defence’ power would be held to cover petrol rationing at some unspecified future date. Much might depend on the nature of the challenge and on the particular circumstances at the time when the challenge is decided. All that I can do at this juncture is to advise on the balance of probabilities. However, having regard to the views expressed by Latham C.J. in Dawson’s case (1946) A.L.R. at page 176, and in light of the considerations which necessitate the continuance of petrol rationing, I incline to the view that there is a reasonably good chance that legislation providing for the control of liquid fuel along the lines of that contained in the National Security (Liquid Fuel) Regulations would be upheld at present and for some further period during which conditions similar to those at present obtaining continue. Any new legislation would need to be carefully drafted to bring out the connexion with defence.

(4)  The only way in which the matter could be provided for with any certainty is by the enactment of legislation in pursuance of a reference by the States. Whether the States should be invited to refer the matter of petrol rationing is a question of policy concerning which it is scarcely within my province to advise. Possibly the chance of obtaining such a reference would, in light of recent experience in regard to price control, be slight although the position might be different if Commonwealth legislation had been declared invalid or was under serious challenge in the Courts.

[Vol. 38, p. 131]