Simone Lawson
Section 51 of the Australian Constitution outlines the legislative powers granted to the Parliament of Australia by the Australian States. It covers a wide range of topics, including trade and commerce, taxation, corporations, and defence, among others. The section has been interpreted and applied in various ways over time, with legal controversies arising in cases such as Workchoices and Tasmanian dams. The High Court's approach to Section 51 has evolved, initially adopting the 'Reserved Powers' doctrine, which was later rejected in favour of a more flexible interpretation. Section 51 provides the Australian Parliament with significant authority to enact laws and shape the country's political landscape.
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Interstate trade and commerce
Section 51(i) of the Australian Constitution enables the Parliament of Australia to make laws about interstate trade and commerce. This section covers both interstate and intrastate activities that are "inseparably connected". The power of the Parliament to make laws with respect to trade and commerce extends to navigation and shipping, and to railways the property of any State.
The distinction between inter-state trade and the domestic trade of a State is considered artificial and unsuitable to modern times. However, it is a distinction adopted by the Constitution and must be observed. A legislative power with respect to any subject matter contains within itself authority over whatever is incidental to the subject matter of the power.
The early case of W & A McArthur Ltd v Queensland declared:
> "Trade and commerce" between different countries—we leave out for the present the word "intercourse"—has never been confined to the mere act of transportation of merchandise over the frontier. That the words include that act is, of course, a truism. But that they go far beyond it is a fact quite as undoubted. All the commercial arrangements of which transportation is the direct and necessary result form part of "trade and commerce."
In modern times, the most prominent heads of power for Commonwealth legislative purposes are the interstate trade and commerce power, the taxation power, the corporations power, and the external affairs power. Since a uniform federal system of income tax was introduced in 1942 under s51(ii), the Commonwealth Parliament has had a vastly larger budget.
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Taxation
Section 51 of the Australian Constitution enumerates the legislative powers granted to the Parliament of Australia by the Australian States at Federation. Each subsection or 'head of power' provides a topic under which the parliament is empowered to make laws. The 'taxation' power is one of the most prominent heads of power for Commonwealth legislative purposes.
Section 51(ii) grants the Commonwealth the broad power to impose "taxation", subject to the Constitution. This section must be considered in combination with section 90, which gives the Commonwealth the exclusive power to impose "duties of customs and of excise". Before 1942, both the states and the Commonwealth levied income taxes. However, in 1942, the Commonwealth passed the Income Tax Act 1942 and the States Grants (Income Tax Reimbursement) Act 1942, which gave them a monopoly on income taxes. Since then, the states have largely relied on section 96 grants, which allow the Commonwealth to grant money to any state on terms and conditions set by the Parliament. This has resulted in a vertical fiscal imbalance, with the Commonwealth having vastly larger budgets and revenue-raising abilities, while the states have major spending responsibilities.
Section 55 of the Constitution also contains provisions related to taxation. It requires that legislation imposing taxes deal only with imposing taxes and that any other provisions in a piece of taxation legislation are of no effect. It also stipulates that laws imposing taxation (except customs duties or excise) shall deal with 'one subject of taxation only'. This section effectively prohibits riders on money bills and omnibus bills, resulting in Australian tax law being made up of several pieces of legislation.
The interpretation of these sections by the High Court of Australia has been integral to the functioning and evolution of federalism in Australia. The court's approach to Section 51 has changed over time, initially adopting the 'Reserved Powers' doctrine, which emphasised the competence of the Australian states, but later rejecting this doctrine in favour of a more centralised Commonwealth government.
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Corporations
Section 51 of the Australian Constitution enumerates the legislative powers granted to the Parliament of Australia by the Australian States at Federation. Each subsection, or 'head of power', provides a topic under which the parliament is empowered to make laws.
Section 51(xx) of the Constitution of Australia pertains to the corporations power. The High Court in New South Wales v Commonwealth (1990) (the Incorporation Case) confirmed that the ambit of the corporations power extends only to corporations that have already been formed and, therefore, does not include the power to incorporate them. It extends only to domestic corporations of a trading or financial character and to all corporations formed outside Australia, collectively referred to as "constitutional corporations".
The question of whether a corporation falls within the group of "trading or financial corporations" has been the focus of much attention and debate. A "financial corporation" is one that engages in substantial financial activities or intends to do so, but it is not necessary for such activities to be predominant or characteristic of it. However, a corporation that carries on substantial financial activities in the course of carrying on its primary business will be classified as a financial corporation.
The scope of the corporations power has expanded significantly in modern times compared to at federation. Notable cases that have expanded the understood scope of the corporations power include Workchoices and Tasmanian dams.
The Commonwealth obtained power to legislate with respect to incorporation processes by persuading the states to refer their powers over incorporation processes to the Commonwealth. The current Corporations Act 2001 (Cth) is supported by the combination of the corporations power with this referral of power.
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External affairs
The Australian Constitution, which was created in 1901, includes "external affairs" in Section 51(xxix) rather than "foreign affairs" to indicate that relations with the United Kingdom and other parts of the British Empire were intended to be included. At the time, the United Kingdom and its possessions were not considered "foreign" to Australia.
The term "external affairs" in the Australian Constitution has been interpreted by Chief Justice Latham in R v Sharkey (1949) to include relations with all countries outside Australia. This interpretation was further extended by Justice Brennan in Koowarta v Bjelke-Petersen (1982) to include relations with other "international persons", particularly the United Nations and its specialized agencies.
The scope of the external affairs power in Section 51(xxix) has been the subject of legal debate and interpretation over the years. Chief Justice Barwick in the Seas and Submerged Lands Case defined it as extending to anything "which in its nature is external to" Australia. Justice Mason offered a similar interpretation, stating that it pertains to "matters or things geographically situated outside Australia".
The external affairs power has been used in notable cases such as Polyukhovich v Commonwealth (War Crimes Act Case) (1991), where it was held that Section 51(xxix) provided sufficient power to prosecute "war crimes" committed in Europe during World War II. This decision was based on the acts being physically external to Australia.
In modern times, the external affairs power has significantly expanded in scope. It is now considered one of the most prominent "heads of power" for Commonwealth legislative purposes, alongside interstate trade and commerce, taxation, and corporations powers.
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Defence
Section 51 of the Australian Constitution outlines the legislative powers granted to the Parliament of Australia, with each subsection, or 'head of power', providing a topic for law-making. Notably, it is not a strong limit on federal involvement in Australia's political life.
The defence power, outlined in Section 51(vi), grants the Parliament of Australia the power to make laws regarding the "naval and military defence of the Commonwealth and of the several States, and the control of the forces to execute and maintain the laws of the Commonwealth". This includes the authority to establish and maintain a military force, conduct military operations, and make laws pertaining to national security and defence.
The scope of the defence power has been tested and expanded over time through various court cases, such as Australian Communist Party v Commonwealth, which helped define the scope of the defence power and its application.
The defence power also intersects with other sections of the Constitution, such as Section 51(i), which covers both interstate and intrastate trade and commerce activities. This includes the movement of goods, services, and people, which can have implications for defence and national security.
Additionally, the incidental power, Section 51(xxxix), allows the Commonwealth to act on matters 'incidental' to any power of the Constitution. This includes Section 61, which vests the Australian Government with Executive Power, further enhancing the Government's ability to act in defence matters.
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Frequently asked questions
Section 51 of the Constitution of Australia enumerates the legislative powers granted to the Parliament of Australia by the Australian States at Federation.
The key legislative powers granted by Section 51 include:
- The power to make laws for the peace, order, and good government of the Commonwealth.
- The power to make laws with respect to trade and commerce with other countries and among the States.
- The taxation power.
- The defence power.
- The power to make laws with respect to postal, telegraphic, and telephonic services.
- The power to borrow money on the public credit of the Commonwealth.
The High Court's approach to Section 51 has evolved. Initially, the court adopted the 'Reserved Powers' doctrine, which asserted that Australian States retained core competencies that could not be overruled by the Commonwealth, even with the powers enumerated in Section 51. However, this doctrine was rejected in the Engineers' Case, and the reserved powers doctrine was abandoned. The scope of Section 51's legislative powers has also been legally controversial and expanded in cases like Workchoices and Tasmanian dams, impacting the understanding of the corporations power and external affairs power respectively.
