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Intentions, design, and outcomes in Australian federalism

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Best Laid Plans?

 

Intentions, design, and outcomes in Australian federalism

 

Alan Fenna

John Curtin Institute of Public Policy

Curtin University

 This paper is about the intentions behind the creation of Australia’s federal system, the way those intentions were translated into design choices, and the impact of those choices on the subsequent evolution of that system.  The representatives of the Australian colonies agreed to form a federal union in the 1890s on the basis that it would be a relatively decentralised union.  They imagined a balance between an overarching national government exercising necessary national and international functions and the individual State governments carrying out the bulk of domestic responsibilities according to their own tastes and priorities.  A century later it is clear that this is not what they got: Australian federalism is far more centralised than was ever envisaged or intended, indeed one of the most centralised of all true federations.[1]  This violates the primary rationale for federalism, which is to deliver the dual benefits of local autonomy and national unity.  However, that is not the issue dealt with in this paper.  This paper asks how it was that outcomes diverged so far from intentions in Australian federalism.  Was there something about the design choices made by the Constitutional Conventions of the 1890s that made such a divergence more likely?  This paper pursues a line of analysis proposing that "the fundamental reason for the decline of the States may be traced to the Constitution."[2]

 The constitutional challenge of federalism

Federalism presents a particular constitutional challenge.  Indeed, up to and including the time that the Americans invented federalism as a novel alternative to looser confederal union, it was widely regarded by those knowledgeable about the subject to be an impossibility, a nonsense.  Sovereignty was regarded as being by its nature indivisible.  One could have unitary government, where supremacy was exercised by one central authority, or one could have confederal government, where supremacy was retained by the constituent units of an association whose central government exercised only delegated powers.  But one could not have something in between.  No existing or previous ‘federation’ up to an including the one that the Americans had formed during the War of Independence[3] had managed to square that circle. 

 A federation we may define as a system of government where sovereignty is shared and power divided between two or more levels of government each of which has a direct relationship with the people.  Under the US Articles of Confederation whose failure led to the Philadelphia Convention being called, powers were divided, but sovereignty was retained by the States and only the State governments were constituted by the people and could act upon the people.  When the new constitution proposed a federal sharing of sovereignty, critics responded that is was a smokescreen for the creation of a centrally-dominated system of government.  Sharing sovereignty  would require too delicate a balancing act to succeed: surely the balance would inevitably tip decisively to one side.  A slight advantage enjoyed by one of the two levels of government would empower it to make further inroads into the powers of the other level, which would further strengthen it to make further inroads and so on.

Thus federalism puts an enormous premium on constitutionalism.  It presumes that somehow an effective set of rules would be set in place that could be counted on to prevent such accretions of power and protect the envisaged balance.  And thus it is no accident that with the first federal system of government came the first real national constitution.  While the US Constitution of 1789 had its forerunners in the Articles of Confederation and the constitutions of the various States, it established the benchmark of constitutionalism for the modern world.  Thus we are led to examine the way the framers of the Australian federal system set about establishing that crucial authority.

 What intentions lay behind Australian federalism?

Establishing the intentions of the framers is not difficult: we have better records of our convention debates in Australia than the Americans or Canadians have of theirs.[4]  This is not to say that establishing intentions is not without its pitfalls.  Constitutional conventions inevitably represent a congeries of views, a diversity of opinions, and thus there is a danger of attributing to constitutional framers a unity of intention that was simply not there.  The framers of the US Constitution, for instance, cannot be said to have an identifiable set of intentions because the outcome was the result of a compromise between quite radically opposed viewpoints, between two very different sets of intentions.  The ‘Virginia Plan’ proposed a highly centralised union; the ‘New Jersey Plan’ proposed a highly decentralised one; and the final result lay somewhere in the middle.  Much greater harmony of views about the type of federal system they wanted prevailed among the Australian framers, though, and it is relatively easy to identify a general (though of course not a unanimous) intention in the Australian case. 

 According to Gregory Craven, the record is very clear: “only the most wilful blindness could produce any confusion over the general intentions of the founders as to the sort of federation that they intended to produce, or the position that they intended the States to occupy within it.  Put simply, they envisaged a federation in which the balance of power and responsibility would lie decidedly with the States.”[5]  These intentions were encapsulated in Henry Parkes’s motion opening the 1891 convention: “That the powers and privileges and territorial rights of the several existing colonies shall remain intact, except in respect to such surrender as may be agreed upon as necessary and incidental to the power and authority of the National Federal Government.”  Similarly expressive of the consensus view was Alfred Deakin’s complementary remark that “The federal government is to have a strictly limited power....”[6]  Western Australian delegates, beginning with Lee Steere, were at the forefront of efforts to forge a limited and decentralised union.

 There should be no surprise that such a broad consensus existed, for the circumstances, political and otherwise, in which the Commonwealth Constitution was drafted were far more conducive to harmony of views than in the United States.  The underlying reality making this the case was twofold.  First, the Australian colonies had nowhere near the degree of difference as the Americans had to manage.  The social, cultural, economic, demographic, historic and geographic differences separating the thirteen States of the US Confederation were enormous — slavery being the most vicious one, but certainly not the only one.  A lesser diversity of interests might be expected to follow from that lesser diversity of conditions. 

 Second, the Australian colonies were under no perceived imperative to unite.  It is virtually an axiom of comparative federalism that federal unions are cemented when a number of political entities with some affinities feel they are too strategically vulnerable on their own.[7]  Neither military nor economic necessity was driving the Australian colonies into closer association.  Military and economic advantages were certainly attractants, but the sense of necessity was absent.  Such benign circumstances meant that the Australians neither had to rush into union nor contemplate a massive transfer of power and responsibility to a strong central government.  Indeed, the opening Federation gambit carried with it almost a sense of whimsy.[8] 

Finally, the fact that by accident of timing the process was dominated by ‘establishment’ politicians and little influenced by the labour movement or incipient Labor parties meant a much greater sameness of mind than would otherwise have been the case.  Labor was, even from this early point, more inclined to favour a central government with real domestic responsibilities than were the prevailing elites.

 Constitutional mechanisms

As we all know, intentions are all well and good but they do not count for much unless they are given concrete form.  It was up to the framers to arrive at an institutional design that would institute and preserve the type of federation they were agreeing to.  They had to come up with a constitutional framework that would maintain that balance.  In this regard they had a considerable advantage over the Americans, who had no precedent to draw upon.  The American framers were steeped in knowledge about history’s many confederacies but the most they could derive from that knowledge was a sense of how things went wrong, not specific guidance about how to make things right.  Any mistakes they might have made were the understandable mistakes of the constitutional pioneer.  By the time the representatives of the Australian colonies first met to contemplate a similar step they had three federal constitutions and 179 years of accumulated federal experience to learn from.  Australia was by this point the fourth federal cab off the rank — after the US in 1789, Switzerland in 1848, and Canada in 1867.[9]

 Scholars of Federation are largely in agreement that the representatives of the Australian colonies looked to three main components of the system they were creating to give their ideas form and to guarantee the kind of federal balance they intended.  In the absence of evidence to the contrary we must assume that they wanted this to be a robust framework that would survive efforts to steer it in other directions.  The three components were: the division of powers; the Senate; and the High Court.[10]  Powers were to be divided in such a way as to ensure that those of the Commonwealth were, in Deakin’s words, ‘strictly limited’.  Should that not prove sufficient, the Senate would function as a ‘house of the States’ to head off any Commonwealth expansionism.  And finally, should those two not prove sufficient, the High Court would be there as guardian of last resort.  Let’s look more closely at how each of these was designed.

 The division of powers in the Commonwealth Constitution

The Australian framers were certainly aware of the precedents that lay before them and sought to draw on that experience.  The problem, though, was that their information about those precedents was rather limited: heavily swayed to the American model and misleading about that model.  They drew their understanding from one particular source, James Bryce’s The American Commonwealth, which though the leading text of its time failed to convey some of the realities of the American system.[11]  This bias affected their choices and had long term repercussions for Australian federalism.  This was very evident in the way they approached the division of powers, the logically first task of federal formation.

 The alternatives

Two quite different options were on offer: one used by the Americans since 1789, the other used by the Canadians since 1867.  It might be assumed that the Australians would be drawn by logic, affinity and prejudice to prefer the Canadian approach.  After all, Canada was the only other British Dominion to have implemented federalism and the only other parliamentary system to have adopted federalism.  American federalism was in many ways an integral component of a more alien arrangement of fragmenting power, revolving around the presidential separation of legislative and executive powers that the Australians flatly rejected.[12] 

 The Canadians had chosen to divide powers by making three lists: a list of national powers; a list of provincial powers; and a list of shared or concurrent powers.  This represented a considerable sophistication of the pioneering American approach which was to employ only a single list.  The US Constitution enumerates those domains in which Congress is permitted to legislate and originally included no reference whatsoever to the powers of the States.  Implicitly — but only implicitly — the States were to retain all their existing powers with the very minor exception of a handful of areas where they where their powers had been withdrawn. It was only with the passage of the Tenth Amendment two years after the US Constitution was adopted that the States were accorded explicit recognition of their residual powers.[13]  The crucial assumption here was that explicit enumeration of powers indicated a grant of specific powers only while the un-stated powers of the States were by contrast open and unlimited.  All this reflected the reality that any American union would have to be decentralised union if it was to be accepted.

Choosing the single list

But it was the American, not the Canadian, approach that the Australian framers chose.  Why?  The answer is that the Australian framers desired the same sort of decentralised union that the Americans had intended.  The highly-centralist intentions of the Canadian constitutional architects by contrast they entirely rejected.  “The point was repeatedly made…that the American federal arrangement was both ‘true’ and ‘proper’ while the Canadian system was neither.”[14]  So we find that the federal division of powers in the Commonwealth Constitution essentially follows the approach laid down by the US Constitution.  It is the single list approach: section 51 enumerates the specific, defined, areas in which the Commonwealth is permitted to legislate, while section 107 guarantees the States the full sweep of their existing powers — save those areas where authority has been specifically withdrawn.[15]  Not a single State power is mentioned (although it could be said that some are by direct implication[16]).  In reference to the American system, James Bryce had declared that “It would have been superfluous to confer any powers on the States, because they retain all powers not actually taken away from them.”[17]  Leading Australian framers were fully persuaded by this logic and rejected the proposition that State powers should be identified.  Griffith argued that to attempt to do so would be “‘unscientific’ and impossible. Cockburn thought it would limit the powers of the States, which should be left undefined to ensure their generality.”[18]  Notwithstanding his assertion, Griffith went on to assemble quite a plausible list of State government powers.

It is important to note that in both the US and Australian cases, the enumerated powers are not assigned to the national government, they are merely allowed to the national government.  These are not, in other words, powers that have been taken away from the States, but ones where either or both levels of government may legislate.   Of course such an arrangement of concurrent powers requires one of the two partners to be a little more equal than the other if deadlocks are not to result.  Accordingly, and again following the US example, the Australian framers inserted section 109, stipulating that in cases of disagreement “the Parliament shall prevail”.[19]

 Concurrent and exclusive State powers?

Thus, by implication, the Constitution creates two distinct types of State powers.  The first type encompasses those powers the States share with the Commonwealth, the concurrent powers.  The second type encompasses all those areas where no grant of power was made to the Commonwealth.  These might be termed the exclusive powers of the States.  However, they are exclusive only by implication, for the Constitution does not expressly make them so.

 Misinterpretations, misdirections

In so slavishly following the American model the Australian framers were making two rather elementary mistakes.  First, they were confusing intentions on the one hand and real effects on the other.  Secondly, they were falsely assuming that because the Canadian Constitution, the British North America Act 1867, had strongly centralist intentions behind it and strongly centralist components within it that the Canadian approach to the division of powers was part of that perfidious project.  The fact is that the centralist components of the Canadian constitution lay elsewhere in the document[20] and the fact is that the American design had already given very clear indication of how feeble it would be at containing Congress. 

 This latter point is very interesting and very significant.  The revelatory moment came in 1819, when the US Supreme Court brought down its judgement in the case of McCulloch v. Maryland.  The State of Maryland was contesting the right of the US government to charter a bank on the fairly persuasive grounds that nowhere in the enumerated powers is there any mention whatsoever of Congress possessing such a power.  But this lack of explicit authority is no obstacle ruled Chief Justice John Marshall, for the Constitution allows Congress to legislate in regard to matters “necessary and proper” to the execution of the enumerated powers.  In other words, the list may not be anywhere near as limiting as was presumed.  The significance of McCulloch seemed to escape the Australian framers and as we shall see, the consequences were evident within only a couple of decades.

 Bicameral sureties

Should the division of powers of itself provide insufficient protection for the States, it was envisaged that a second line of defence would be provided by the Senate.  The Commonwealth Parliament was to be strongly bicameral: with legislation requiring passage in identical form through two chambers of essentially equal powers. Most importantly as far as federalism is concerned, the upper house was to be a ‘House of the States’ giving the States in some way a veto over the actions of the Commonwealth government.  Western Australia’s delegates, in particular, were adamant about this point, seeing a strong upper house as essential to the protection of States’ rights.  It is an important and recognised element of federal systems that there be not only a division between two levels of government, but that the national government itself be structured to accommodate representation on a federal basis.  The Australian framers had some alternatives to choose from.

 Alternatives

The Canadians had elected not to have an elected upper house and instead created an appointed Senate.  In a democratic age this was not going to have legitimacy, and not having legitimacy it was not going to have efficacy.  The Americans had been functioning for a century with a rather different arrangement.  The US Senate was composed of delegates elected by the State Legislatures.  In principle this very much embodied the principle of a federal upper house giving the States a say in national policy making.  In practice, however, the system had been failing for some time and indeed was shortly to be replaced by popular election.[21]

 Opting for direct election

Thus with the appointee model a non-starter and the delegate model in disarray, Australia’s highly democratic culture meant that there was only one choice: popular election.  It would be a States’ house, though, by virtue of equal representation for each State regardless of the great population discrepancies and by virtue of the filling of individual vacancies by State government fiat.  In this, as in the division of powers, the Australian framers would predictably fail in their objective of building a second layer of protection into the federal system.

 The umpire of Australian federalism

There was to be, though, a third layer of protection for the States.  Should the division of powers and the Senate prove inadequate, there stood above them all the High Court, guardian of the constitution and umpire of Australian federalism.  Section 71 of the Constitution declares that “The judicial power of the Commonwealth shall be vested in a Federal Supreme Court, to be called the High Court of Australia….”  Furthermore, section 74 indicates — though interestingly enough, only by implication and not by explicit statement — that the High Court would exercise the key function of providing authoritative rulings on constitutional disputes between the two levels of government.[22]

 Alternatives

Here the Australian framers had two very different choices on offer before them.  One was the US model of a supreme constitutional court existing as one branch of the national government, regulated and appointed by the national government.  The other was the Canadian model of a supreme constitutional court established and functioning overseas, under the authority of the Imperial government.  The final arbiter in Canadian constitutional disputes was the Judicial Committee of the Privy Council (JCPC) in London, the ‘supreme court’ of the British Empire. 

 For better or for worse: an Australian supreme court

As a fellow British Dominion, Australia might have been expected to follow the Canadian example and likewise continue to rely on the mother country.  Such was not to be.  The Australians had no desire to abandon that element of the sovereignty they were gaining and resisted pressures to subordinate themselves to the Imperial judicial structure.  They succeeded in having the British accept a clause that effectively made Australia’s High Court the final court of appeal in jurisdictional disputes.[23]  Australia succeeded in establishing something much closer to the American model, a supreme constitutional court functioning under the authority of its own national government.  This may well have represented a victory for Australian sovereignty, but as we shall see it was not necessarily one for Australian federalism. 

Financial failure

One cannot conclude a survey of the ways in which the framers sought to construct a lasting federal framework without also noting perhaps their biggest blunder of all: the financial arrangements. It scarcely needs to be said that who has the money is at least as important as who has the officially assigned powers and responsibilities.  To be fair to the framers, designing a division of taxation powers that maintains a division of revenue between the two levels of government proportional to the division of responsibilities has been one of the greatest challenges faced by federal systems.  Having acknowledged that, though, it must be said that the Australian framers settled for arrangements that were manifestly inadequate, even at the time.

 The approach

The approach the framers took to revenue powers had three elements.  First, they decided to grant a plenary, or all-inclusive, taxation power to the Commonwealth under section 51.  Second, they added a separate clause — section 90 — prohibiting the States from levying certain specific types of taxes.  Third, by implication they left the States with the power to levy all other types of tax except those specifically prohibited.  In taking this approach the framers were simply following the American template. 

 The problem

This created a succession of problems, including an immediate problem that the framers recognised but failed to solve.  The immediate problem was that the revenue base they closed off to the States was “duties of custom or of excise” — which happened to be the major source of government revenues in the nineteenth century.  This was a tax particularly relied upon in Western Australia. 

 Given that the States were intended to retain, and indeed did retain, the bulk of spending responsibilities, this would immediately create the problem subsequently to be labelled ‘vertical fiscal imbalance’.  The problem that would emerge only later was that even in the other revenue raising areas where the two levels of government ostensibly shared access, the approach taken to dividing powers provided the levers for assertion of Commonwealth superiority.  As Cheryl Saunders has noted, “All the predictions of the various delegates about the untoward effects of a system which compels revenue redistribution but fails to provide any constitutional guidance for how it should take place have come to pass.”[24] 

 A third problem was that the s 90 prohibition on State customs and excise duties came to be interpreted by the High Court in a much broader — and to the States more damaging — way than could ever have been intended.[25]  It is virtually an essential cornerstone of any federation that the constituent units not be allowed to place obstacles in the way of trade amongst themselves.  Thus it was entirely understandable that the farmers included a ban on State customs tariffs.  But for some reason they decided to include the additional words “and of excise”.  But what does excise mean?  There has never an unequivocal answer to that question, and thus the framers left open the opportunity for the High Court to interpret the term in the way they liked, and that turned out to be as meaning sales tax.  As a consequence, the Australian States have not been able to shore up their tenuous financial position with local sales taxes as their Canadian and American counterparts have been able to do.

 The solution

The framers acknowledged the problem and acknowledged that they did not have a solution for it.  But this did not stop them from forging ahead.  Their one concession was to insert section 96: one of the few home-grown elements of the Constitution, one that had no precedent in either the US or Canadian constitutions.  Section 96 is the ‘spending power’ clause.  It authorises the Commonwealth to “grant financial assistance to any State on such terms and conditions as the Parliament thinks fit.” 

 Section 96 was a last-minute addition, included by the colonial premiers in 1899 and thus not something that was the result of the combined wisdom of the constitutional conventions — nor something about which we have proper records.  The reasoning behind its insertion seems to have been that the financial superiority of the Commonwealth meant that the power to give some of that money back to the States had to be guaranteed.[26]  But how much constitutional licence does one need to give money away?  And was it necessary to give such an unequivocal authority?  This constitutional innovation, it soon became clear would not only fail to address the underlying problem, it would actively exacerbate it.

The choices in practice

We have seen how intentions translated into design; it remains now see how suited to the task those design choices actually were.  It cannot be claimed that the evolution of a political system is determined by its constitutional framework, but equally it cannot be doubted that the constitutional framework will influence that evolution.

Interpreting the division of powers

How should the High Court interpret a division of powers based on the single list approach?  The key question for judicial interpretation is how narrowly or expansively individual grants of power should be interpreted.  We recall that the intention behind the approach taken by the Americans and the Australians was to create a limiting list, with those matters lying outside remaining the exclusive jurisdiction of the State governments.  However, in neither the American nor the Australian cases did the framers actually spell out those intentions in the document they wrote.  The framers evidently assumed that the way in which the Constitution they were drafting should be interpreted or applied was somehow self-evident.  Nowhere in its text does the Constitution include a clause on how it is to be interpreted.

 For the first two decades after Federation, the Australian Constitution was interpreted in what we might describe as a ‘sympathetic’ manner, one that took into account the intentions lying behind it and the implicit message it contained.  But ultimately how sustainable is such a course of interpretation?  Who can provide an authoritative rendering of the unwritten constitution?  And was it not up to the framers to create a document that adequately captured their intentions?  And thus it is not surprising that the High Court eventually brought down a judgement declaring that indeed the Constitution is only what it says it is and must be interpreted literally, not as shaped by suppositions about its implicit meanings.  The Engineers decision of 1920 effected a far-reaching shift in the way the division of powers would be interpreted.[27]  It was a shift that was not kind to the single list approach since that approach is based on implicit rather than explicit guarantees.  Just as the McCulloch decision had done in the case of the US Constitution, so the Engineers case opened the way for an expansive interpretation of the individual powers allowed to the Commonwealth government. 

 Getting around the division of powers: tied grants

As we noted, fiscal relations between the Commonwealth and the States were out of balance from the moment of Federation.  By the early 1920s the Commonwealth was beginning to use its superior resources to make policy in areas outside its jurisdiction.  Offering substantial amounts of money to the States with conditions attached allowed the Commonwealth to dictate terms in those areas of ‘exclusive’ State responsibility by means of an offer the States could ill afford to refuse.  These intrusive grants may have started small, but it has been a slippery slope indeed.  For the last thirty years, conditional grants (officially referred to as ‘Specific Purpose Payments’) have made up almost half of all the moneys received in transfer payments by the States and cover an enormous range of programs in almost all areas of State responsibility, including health, education, environment, transportation and social services.

 Power begets power

But intrusion into areas of State jurisdiction has not been the only way in which s 96 has undermined Australian federalism.  The Commonwealth has also used the spending power to further tighten its monopoly on revenue raising and increase its financial dominance.  Up until the Second World War, the States and the Commonwealth enjoyed joint access to the personal and corporate income tax, exercising their concurrent powers in this domain.  In 1942, the Commonwealth introduced its ‘uniform tax’ legislation requiring the States to withdraw altogether from the income tax field.  What made it possible for the Commonwealth to compel the States to abandon a shared jurisdiction was s 96.  For every shilling any State continued to raise in defiance of the Commonwealth, a shilling would be withheld in Commonwealth grants.[28]  Since that date, the States have been deprived of a crucial source of independent revenue.  Far from helping to correct the financial imbalance as the framers envisaged, s 96 ensured that Commonwealth financial dominance would be a large and permanent feature of the Australian federal system.

The Senate and the High Court

What about the second and third levels of security?  As it was bound to do, the Senate failed more abjectly than any other component of the system to play its role in preserving the federal balance.  An elected chamber is a party chamber and a party chamber is one where party discipline, not State of Origin, determines how members vote.  The Senate has never functioned as a States’ house.

And, what about that last line of defence, the High Court?  Judgement here cannot be quite so straightforward; however, certain observations can be made.  In the Canadian case, the JCPC used its complete independence from the Canadian government to enforce, quite deliberately, an aggressively federalist rather than centralist reading of the division of powers.  From the late nineteenth century through until 1948 when right of appeal was terminated by the Canadian government, the JCPC worked to make Canada a true federation rather than the false federation a number of its framers had intended.  This culminated in their Lordships’ controversial declaration that the laws passed in the 1930s to introduce national solutions to the Great Depression exceeded the authority Parliament and were unconstitutional.  By contrast, the US Supreme Court failed in its attempt to maintain the federal balance.  Efforts to curb Congress culminated in Roosevelt’s threat to stack the Court with new appointments if it did not reverse its stand on his New Deal legislation in the 1930s.  The Court promptly backed down and has since left the decision about the extent of Congress’s powers to Congress itself.

 Australia has experienced no such fiery confrontation between the political and judicial branches.  However, exactly like the US Supreme Court, the Australian High Court is not a ‘federal’ court in its composition or accountability; it is a ‘national’ court.  It operates under Commonwealth legislation and appointment is a prime ministerial prerogative (at least in the American system the president’s nominees for the bench must be approved by the Senate).[29]  The States have no say.  It is difficult to imagine the JCPC or a truly federal supreme court[30] bringing down the Engineers decision, the Uniform Tax decision, the broad interpretations of s 90, of the external affairs judgements of the 1980s. 

 Last resort

High Court decisions are final well, not quite.  The last resort for correcting constitutional error is the voice of the people.  Section 128 of the Commonwealth Constitution lays down an amending procedure that makes the people the final arbiters.  In the view of some commentators, the framers looked to s 128 to provide that very last line of defence for the States against Commonwealth encroachment.[31] Should the division of powers, the Senate and the High Court fail them, then there is remains the opportunity to set things to rights through a constitutional amendment. 

 Here again, the framers made some curious decisions, given their desire to preserve a truly federal character in the union.  Section 128 does have an important federal element to it.  Proposals to amend the Constitution are required be meet a ‘double majority’ requirement.  They must be approved by a majority of voters overall and they must be approved by a majority of voters in a majority of States.  But who is licensed to put those amendments to the people?  Here a federal component is noticeably absent, for it is the Commonwealth government alone that controls the initiation of amendments.  Indeed, effectively it is the prime minister.  Section 128 includes no provision for either the people or the States to initiate such a constitutional corrective.[32]  Unsurprisingly, proposed amendments have almost entirely been concerned with increasing the power of the national government.  Most have been rejected. 

Conclusion

The evolution of federal systems is influenced by a number of factors, among the most important being the underlying socio-economic realities.  The fact is that Australia is a far more regionally homogeneous federation than either Canada or the United States and thus has predictably moved in a strongly centralising direction.  What this paper has sought to highlight, though, is that this centralisation was facilitated by design choices at federation.  If the framers of Australia’s Constitution sought to construct a balanced federal system, where the national government exercised jurisdiction only in specific national domains — and everything indicates that was the case — then they went about it in rather the wrong way.  Almost all the choices they made were poor ones: the choice of the single list approach to the division of powers; the choice of an elected Senate; the design of the High Court; the financial arrangements; and the choice of amending procedures.  It is not surprising that Australia’s federal system has become as centralised as it is.

 Footnotes


 

[1] Relative levels of centralisation and decentralisation are not easy to measure, and judgements will vary according to which measures are employed.  Two of the main indices are degree of financial independence of the sub-national units, and range of autonomous policy domains.  The Australian States have notably less financial independence than either the Canadian provinces or the US States, both of which have power to levy retail sales taxes and personal and corporate income taxes.  Switzerland is an even more balanced or decentralised federation.  On the other hand, the Federal Republic of Germany is considerably more centralised than the Commonwealth of Australia by most criteria.  However, it is a fundamentally different type of federation.  The German approach is not one of dividing powers, but of dividing functions between a national responsibility for establishing framework policies and a Länder (viz., States) responsibility for implementation.  The unusual degree of centralisation that creates is counter-acted by the unusual degree of input the Länder have into national decision making through the Bundesrat, the parliamentary upper house made up entirely of instructed delegates of the Länder executive governments.

[2] Gregory Craven, “The States: decline, fall or what?”, in G. Craven, ed., Australian Federalism: toward the second century. Carlton: Melbourne University Press, 1992, p.58.

 [3] The failed first constitution of the United States was the Articles of Confederation and Perpetual Union, finally ratified by the thirteen States in 1781, largely moribund by 1785, and replaced by the current US Constitution in 1789.

 

 

[4] The Philadelphia Convention of 1787 which drafted the current US Constitution kept no minutes whatsoever.  For an understanding of their deliberations we are entirely reliant on the notes and recollections of individual participants, and in particular of one leading participant, James Madison.  Madison’s Notes of Debates in the Federal Convention of 1787 are the only comprehensive source on those proceedings.

[5] “The States: decline, fall or what?”, p.50.  Similarly, another commentator writes that “The protection of states’ rights was foremost in the minds of the majority of delegates to the conventions and that majority won most of the crucial divisions in the committees against liberal nationalists.” James Warden, “Federalism and the Design of the Australian Constitution”, Australian Journal of Political Science 27:Special Issue (1992), p.144.

 [6] Quoted in Michael Crommelin, “The Federal Model”, in G. Craven, Australian Federation: towards the second century, pp. 34 & 38. 

 

 

[7] "In every successfully formed federation it must be the case that a significant external or internal threat or a significant opportunity for aggression is present, where the threat can be forestalled and the aggression carried out only with a bigger government. This is what brings union at all and is the main feature, the prospective gain, in both giving and accepting the bargain." William H. Riker, “Federalism”, in Fred I. Greenstein and Nelson Polsby, eds, Handbook of Political Science, Vol 5: Government Institutions and Processes. Reading MA: Addison-Wesley, 1975, p.116

 [8] Among the various accounts and analyses of these dynamics see: W. G. McMinn, Nationalism and Federalism in Australia. Oxford: Oxford University Press, 1995; John Hirst, The Sentimental Nation: the making of the Australian Commonwealth. Oxford: Oxford University, 2000.

 [9] Switzerland is easily the most venerable of federal systems, having functioned continuously as such with one minor hiatus since the treaty between the original three Cantons in 1293; however, it was only with the 1848 Constitution that Switzerland became a truly federal rather than a loosely confederal union.

 [10] Craven, “The States: decline, fall or what?”; Crommelin “The Federal Form”.

 [11] James Bryce, The American Commonwealth, 3rd edition. London: Macmillan, 1893.  “Many representatives quoted from Bryce both in the conventions and in the colonial parliamentary debates and…he was never criticised….” Warden, “Federalism and the Design of the Australian Constitution”, p.147.

 

 

[12] With the notable exception of Tasmanian delegate Andrew Inglis Clark, a leading admirer of the American political system.

 [13] “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

 [14] Warden, “Federalism and the Design of the Australian Constitution”, p.146.

[15] “Every power of the Parliament of a Colony which has become or becomes a State, shall, unless it is by this Constitution exclusively vested in the Parliament of the Commonwealth or withdrawn from the Parliament of the State, continue as at the establishment of the Commonwealth….”

 

[16] In s 51(xxxv) the Commonwealth is given a power to legislate in the domain of industrial relations but with the proviso that this power is limited to “disputes extending beyond the limits of any one State”.  By implication we might assume then that the States are granted an exclusive power over industrial relations within their own respective territory.

 [17] Bryce, The American Commonwealth, p.313.

 [18] James Crawford, “The Legislative Power of the Commonwealth”, in G. Craven, Convention Debates, p.125.

 [19] See the US Constitution’s ‘supremacy clause’, Article VI: “This Constitution, and the Laws of the United States which shall be made in Pursuance thereof…shall be the supreme Law of the Land….”

 [20] They were primarily in the way the Provincial Lieutenant Governors were created as appointees of the Governor General, answerable to the Governor General, with the Prime Minister thus in a position to disallow Provincial legislation and the national parliament in some sense enjoying an ‘imperial’ position vis-à-vis the provinces.

 [21] Which occurred with the ratification of the Seventeenth Amendment in 1913.

 [22] For a very interesting discussion of the Constitution’s rather coy approach to the role of the High Court in exercising the power of overriding governments, see James Thomson, “Constitutional Authority for Judicial Review: a contribution from the framers of the Australian Constitution”, in Gregory Craven, ed., The Convention Debates 1891−1898: commentaries, indices and guide. Sydney: Law Books, 1986.

 

 

[23] Section 74 declares that: “No appeal shall be permitted to the Queen in Council from a decision of the High Court upon any question…as to the limits inter se of the Constitutional powers of the Commonwealth and those of any State or States….”

 [24] Cheryl Saunders, “The Hardest Nut to Crack: the financial settlement in the Commonwealth Constitution”, in Gregory Craven, ed., The Convention Debates 1891−1898: commentaries, indices and guide. Sydney: Law Books, 1986, p.172.

 [25] See, for instance, Michael Coper, “The Economic Framework of the Australian Federation: a question of balance”, in Gregory Craven, Australian Federation: towards the second century. Carlton: Melbourne University Press, 1992.

[26] See Saunders, “The Hardest Nut to Crack”, p. 171.

 

 

[27] The Amalgamated Society of Engineers Claimant; and The Adelaide Steamship Company Limited and Others (1920) 28 CLR 129.  Quoting from an earlier British judgement, the Court declared that the “golden rule” of constitutional interpretation was same as that of interpreting ordinary laws: one should “exclude consideration of everything excepting [sic] the state of the law as it was when the statute was passed, and the light to be got [sic] by reading it as a whole….the only safe course is to read the language of the statute in what seems to be its natural sense.”

 [28] As laid down in the States Grants (Income Tax Reimbursement) Act of 1942.  The unprecedentedly coercive use of the spending power was contested in the High Court, but upheld in the ‘Uniform Tax’ decision, The State of South Australia and Another v. The Commonwealth and Another (1942) 65 CLR 373.

 [29] Section 72 of the Commonwealth Constitution says that justices of the High Court “Shall be appointed by the Governor-General in Council.” This means the Governor-General acting on the advice of the Federal Executive Council, a constitutional fiction that is really the Cabinet.

 [30] Is there an example of a truly federal supreme court?  The closest might be the supreme court of the European Union, the Court of Justice of the European Communities as it is officially called.  Each member state supplies one judge for what is now a full bench of 25.

 [31] Such as Warden, “Federalism and the Design of the Australian Constitution”, p.144.

 [32] On this see Jeffrey Goldsworthy, “A Role for the States in Initiating Referendums”, in Upholding the Australian Constitution, vol 8. East Melbourne: Samuel Griffith Society, 1997.