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The Commonwealth and WAConstitutionThe Carve UpCommonwealth Power and the States

Commonwealth power and the States

CF Is there a trend towards centralised government?

SHARMAN: I suppose. I think again these terms are very tricky. I'd say 30 or 40 years ago the assumption would have been that computers were enormous centralising agencies. But now of course with the desktop computer … [it's] ... anarchic, in many ways it's dispersing power. There are a group of people, economists as well as political scientists, who argue that the growth of globalisation is reducing the power of central governments because they're losing their power … their ability to regulate things ... And State governments and regions are much more autonomous units, they are harder units because they correspond with economic realities whereas national governments don't really correspond with much economic reality at all. The argument is that Perth has got more and is going to have more in common with Singapore and Kuala Lumpur than it does with Sydney and Sydney is going to have more to do with Los Angeles and whatever than it does with Perth.

Campbell Sharman, March 2000 [Battye Library, OH3009]

Pro-Republican pamphlet, 1999In the 100 years since Federation there have been 43 constitutional amendments put to the Australian electorate. Of these only eight have succeeded, with just three of the proposals increasing Commonwealth power in relation to the States. Five proposals put to referendum won a majority of votes but failed to win a majority of States, while the remainder of referenda failed by substantial majorities.

Clearly the Commonwealth Constitution is very difficult to alter, yet the powers of the Commonwealth have increased over the years. This has been due in part to the evolution of Australian political institutions and to the interpretations given to the Constitution by the High Court which have often favoured the Commonwealth.

Two world wars required the federal government to assume considerable powers as part of its defence role, which it did not relinquish in peace time. For example, the First World War saw an increase in Commonwealth control over the economy, commerce, trade, taxes and social services. These changes remained in place in peacetime to enable the Australian government to pay war debt and to care for returned soldiers.

Similarly in 1942 the Commonwealth assumed many new powers, including taking complete control of income taxation from the States - a move backed by the High Court. The Commonwealth Grants Commission which had been set up in 1933 to formalise payments of general revenue to the States after many years of ad hoc payments, became the vehicle through which finances were transferred back to the States.

The Commonwealth has steadily increased its area of influence in Australian polticial life. In the first half of the century the formation of State branches of national unions enabled the Commonwealth to get around the constitutional restriction that it could not legislate for "conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of one State". After the Second World War the growth of a global economy also made Commonwealth control over economic policy more important, while the federal government increasingly entered into international treaties and conventions.

Some decisions of the High Court have frustrated Commonwealth Governments - for example, it has refused the Commonwealth the power to ban the Communist Party, to nationalise banks, and to ban political advertising. However, there are a number of key decisions which have affected Commonwealth/State relations, including.

  • The 1920 Engineers Case which allowed federal industrial law to apply to State instrumentalities.
  • The 1942 First Uniform Tax Case which forced States to relinquish income tax as a source of revenue.
  • The 1982 Koowarta Case which overruled the Queensland Government's refusal to allow an Aboriginal community to lease a pastoral property on the grounds that it breached international conventions on human rights.
  • The 1983 Tasmanian Dam Case which prevented construction of the Franklin River Dam on the grounds that it was a world heritage listed area.
  • The 1992 Mabo Case in which common law native title rights were recognised for the first time.
Without question the role of the Commonwealth has grown considerably since Federation. The extent of its power - its dominance of financial power in particular - have led to calls for reform of taxation as a way of returning financial independence to the States. Other contentious areas of Commonwealth/State relations include the use of international conventions to override State legislation, the need to deal with the issue of native title, and the proposal for Australia to become a republic.

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