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From Co-Operative to Coercive Federalism and Back?

Published online by Cambridge University Press:  24 January 2025

Ross Cranston
Ross Cranston*
Affiliation:
(A.N.U.)
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Abstract

In this article Ross Cranston discusses the changing nature of Federalism, tracing its development and examining possible characterizations of its basis. After reviewing the elements of “co-operative” and “coercive” Federalism, the author turns to “New Federalism” and what that means in terms of the Fraser government. He concludes that disputes over financial and other intergovernmental agreements are best left to the political sphere with the High Court acting in a supplementary role because of the inherent untidiness of a Federal system of government.

Type
Research Article
Information
Federal Law Review , Volume 10 , Issue 2 , June 1979 , pp. 121 - 142
Copyright
Copyright © 1979 The Australian National University

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Footnotes

I wish to thank John Thornton for his assistance in the preparation of this article.

References

1 Mathews, “Philosophical, Political and Economic Conflicts in Australian Federalism”, Centre for Research on Federal Financial Relations (A.N.U.), Reprint Series No. 23; “The Changing Pattern of Australian Federalism”, ibid. No. 17.

2 Which recalls Wheare's well-known definition of federalism: Wheare, Federal Government (1946) 11.

3 South Australia v. Commonwealth (1942) 65 C.L.R. 373.

4 Professor Mathews is of course aware of the many qualifications.

5 E.g. D'Emden v. Pedder (1904) 1 C.L.R. 91; Federated Service Association v. New South Wales Railway Traffic Employees' Association (1906) 4 C.L.R. 488; Huddart, Parker and Co. Pty Ltd v. Moorehead (1909) 8 C.L.R. 330.

6 E.g. Wright, Shadow of Dispute (1970).

7 Leach, Interstate Relations in Australia (1965); Provost, Inter-Governmental Co-operation in Australia (Ph.D. Thesis, University of Queensland, 1955); Coupland, “The Impact of Federalism on Public Administration” in Sawer (ed.) Federalism: An Australian Jubilee Study (1952) 135; Davis, “Co-operative Federalism in Retrospect” (1952) Historical Studies 212.

8 Sawer, Modern Federalism (2nd ed. 1976) 104-107.

9 Id. 176.

10 Appendix, vol. 2, 425.

11 Richardson, Patterns of Australian Federalism (1973) 113.

12 Anderson, “The States and Relations with the Commonwealth”, in Else-Mitchell (ed.) Essays on the Australian Constitution (2nd ed. 1961) 108-111; Castles “Responsibility Sharing in a Federal System: Political and Legal Issues”, in Mathews (ed.)Fiscal Federalism: Retrospect and Prospect (1974).

13 For a recent list of such bodies: H.R. Deb. 1978, Vol. 109, 3364.

14 Deputy Commissioner of Taxation v. W.R. Moran Pty Ltd (1939) 61 C.L.R. 735; Clark King & Co. Pty Ltd v. Australian Wheat Board (1978) 21 A.L.R. 1.

15 E.g. Joint Coal Board (Coal Industry Act 1946) (Cth); Albury-Wodonga Development Corporation (Albury-Wodonga Development Act 1973) (Cth). Cf. bodies formed under State company law: Sawer, “The Whitlam Revolution in Australian Federalism-Promise, Possibilities and Performance” (1976) 10 Melbourne University Law Review 315, 325-326.

16 New South Wales v. Commonwealth (1915) 135 C.L.R. 337. That co-operative federalism is hardly an apt description for Australia receives support from a survey of the attitudes of Australian and State public servants. They ranked co-operative federalism low as a means of improving intergovernmental relations in Australia. When asked to designate where on a continuum they would place intergovernmental relations, only six per cent of the State and twenty-two per cent of the Australian public servants chose the co-operative end. The public servants were also asked to indicate the utility of intergovernmental conferences and only about one-fifth of both groups saw them as providing an opportunity for joint policy making. Most of the remainder thought that such conferences were either a useful forum for discussing problems and issues or served to make governmental officials personally acquainted with one another thus making administrative co-operation easier. Leach, Perceptions of Federalism by Canadian and Australian Public Servants: A Comparative Analysis (1976) 61, 73, 74.

17 Senate Select Committee on Off-Shore Petroleum Resources (1971), 192-193, 232-233.

18 John Cooke & Co. Pty Ltd v. Commonwealth (1922) 31 C.L.R. 394, 416; Magennis v. Commonwealth (1949) 80 C.L.R. 382, 409; South Australia v. Commonwealth (1962) 108 C.L.R. 130, 140.

19 New South Wales v. Commonwealth (No. 1) (1932) 46 C.L.R. 155; The Garnishee Cases Nos. 2 and 3 are at (1932) 46 C.L.R. 235, 246. See Sawer, Australian Federal Politics and Law 1929-1949 (1963) 65-66Google Scholar.

20 Lang, Why I Fight (1934) 213-214; Wynes, Legislative, Executive and Judicial Powers in Australia (5th ed. 1976) 361. Cf. Clark, “Was Lang Right?” in Radi and Spearritt (eds.) Jack Lang (1977) 144-148, 158-159.

21 Australian Railways Union v. Victorian Railways Commissioners (1930) 44 C.L.R. 319.

22 (1962) 108 C.L.R. 130.

23 Magennis v. Commonwealth (1949) 80 C.L.R. 382.

24 Liicke, “Intention to Create Legal Relations” (1970) 3 Adelaide Law Review 419, 424-428.

25 Moore, “The Federations and Suits between Governments” (1935) 17 Journal of Comparative Legislation and International Law (3rd series) 163, 182.

26 Renard, “Australian Inter-State Common Law” (1970) 4 F.L. Rev. 87, 105-109 seems to be the only discussion of the matter.

27 John Cooke & Co. Pty Ltd v. Commonwealth (1922) 31 C.L.R. 394, 418.

28 Magennis v. Commonwealth (1949) 80 C.L.R. 382 involved a scheme in which the Australian government made section 96 contributions-but unlike most specific purpose grants the States were expected to make substantial contributions: War Service Land Settlement Agreements Act 1945 (Cth). Note that the Courts are reluctant to find a binding contract in government offers of financial assistance to citizens:Australian Woollen Mills Pty Ltd v. Commonwealth (1954) 92 C.L.R. 424; (1956) 93 C.L.R. 546; Milne v. A-G for Tasmania (1956) 95 C.L.R. 460, 546; Administrator of The Territory of Papua and New Guinea v. Leahy (1961) 105 C.L.R. 6. Cf. The Crown v, Clarke (1927) 40 C.L.R. 227.

29 E.g. Housing Agreement Act 1973 (Cth), Schedule §3.

30 A clause along these lines was present in the Agreement considered in South Australia v. Commonwealth (1962) 108 C.L.R. 130: Railway Standardization (South Australia) Agreement Act 1949 (Cth), Schedule §2(3).

31 Mathews, “The Changing Pattern of Australian Federalism”, op. cit. 31.

32 South Australia v. Commonwealth (1942) 65 C.L.R. 373, 429.

33 Sawer, “Seventy Five Years of Australian Federalism” (1977) 36 Australian Journal of Public Administration 1, 6.

34 Dickenson's Arcade Pty Ltd v. Tasmania (1974) 130 C.L.R. 177; Victoria v. Commonwealth (1971) 122 C.L.R. 353.

35 Strickland v. Rocla Concrete Pipes Ltd (1971) 124 C.L.R. 468; R. v. Australian Industrial Court: Ex parte C.L.M. Holdings Pty Ltd (1977) 136 C.L.R. 235.

36 Murphyores Incorporated Pty Ltd v. Commonwealth (1976) 136 C.L.R. 1; Herald and Weekly Times Ltd v. Commonwealth (1966) 115 C.L.R. 418; Fairfax v. Commissioner of Taxation (1965) 114 C.L.R. 1.

37 Jay points out that the term “specific purpose grant” is preferable to “conditional grant” for conditions may be attached to general purpose grants. “General purpose grants are not subject to spending conditions but may be conditional on the recipient governments conforming to specified revenue-raising policies.” Jay, ''The Shift to Specific Purpose Grants: From Revenue Sharing to Cost Sharing”, in Mathews (ed.) Responsibility Sharing in a Federal System (1975) 41.

38 Lane, An Introduction to the Australian Constitution (2nd ed. 1977) 35-36. Cf. “It is on the letter of Section 96 that the spirit of federation has tottered “ West Australian, 3 August 1973 (leader).

39 Crommelin and Evans, “Explorations and Adventures with Commonwealth Powers” in Evans (ed.) Labor and the Constitution 1972-1975 (1977) 24. It was some thirty per cent in 1970-1971 when the Liberal Country Party was still in office.

40 Davis, “A Vital Constitutional Compromise” (1948) 1 University of Western Australia Law Review 21.

41 Victoria v. Commonwealth (1926) 38 C.L.R. 399; Deputy Federal Commissioner of Taxation (N.S.W.) v. W.R. Moran Pty Ltd (1939) 61 C.L.R. 735, affirmed (1940) 63 C.L.R. 338; South Australia v. Commonwealth (1942) 65 C.L.R. 373; Victoria v. Commonwealth (1957) 99 C.L.R. 575.

42 Victoria v. Commonweatlh (1957) 99 C.L.R. 575, 605.

43 Id. at 606.

44 Pye v. Renshaw (1951) 84 C.L.R. 58.

45 Mathews, “The Changing Pattern of Australian Federalism” op. cit. 43-46.Cf. Wiltshire, “New Federalism-The State Pefspectives” (1977) 12 Politics 76, 78, 80-81.

46 E.g. Growth Centres (Financial Assistance) Act 1973 (Cth); Land Commission (Financial Assistance) Act 1973 (Cth); Mental Health and Related Services Assistance Act 1973 (Cth).

47 Spann, “Comment” (1969) 28 Public Administration 117.

48 E.g. Financial Review, 25 September 1968 (Dep. Premier, Qld); id. 20 August 1969 (Prem. S.A.).

49 Sun Herald, 3 April 1977.

50 May, “Intergovernmental Finance” (1969) 28 Public Administration 38, 45.

51 Maxwell, Specific Purpose Grants in the United States: Recent Developments (1975) 86. If the States had firm priorities, however, even non-matching grants of a capital nature might distort because of the need to fund running costs. Note also that specific purpose grants might favour some States over others which have already provided a service.

52 Rockefeller, The Future of Federalism (1962) 44; Elazar, American Federalism: A View from the States (1966) 58-59.

53 Proceedings of Australian Constitutional Convention, 3-7 September 1973 142.

54 E.g. Marginal Dairy Farms Agreements Act 1970 (Cth); Education Research Act 1970 (Cth), s. 4; Queensland Beef Cattle Roads Agreement Act 1962 (Cth).

55 This is usually spelt out: e.g. “Subject to compliance by the State with the provisions of the agreement, the Commonwealth will provide financial assistance ... “: Brigalow Lands Agreement Act 1962 (Cth), Schedule §(1). “The Treasurer may withhold the making of any advances under this agreement if he is satisfied that the State is not carrying out the work in accordance with this agreement: Railway Agreement (Queensland) Act 1961 (Cth), Schedule §5(2).

56 E.g. “The state must make full use for irrigation of the water stored”: Blowering Water Storage Works Agreement Act 1963 (Cth), Schedule §18; State to have consultants conduct a general investigation of Northern division of railways and to take all reasonable steps to implement it: Railway Agreement (Queensland) Act 1961 (Cth), Schedule §16.

57 E.g. Coal Loading Works Agreement (Queensland) Act 1962 (Cth), Schedule §2. But cf. Railway Agreement (New South Wales and South Australia) Act 1968 (Cth), Schedule §8 (Works must generally be by public tender unless the Australian Minister approves otherwise).

58 E.g. Gladstone Power Station Agreement Act 1970 (Cth), Schedule §3.

59 E.g. Railway Agreement (Tasmania) Act 1971 (Cth), Schedule §16(2).

60 Commonwealth and State Housing Agreement Act 19S6 (Cth), Schedule §1S. Cf. Housing Agreement Act 1973 (Cth), Schedule §19.

61 Road Grants Act 1974 (Cth), s. 6.

62 South Australia v. Commonwealth (1942) 6S C.L.R. 373, 416-417. See also Rich J. at 436; McTiernan J. at 45S-4S6; Williams J. at 464.

63 Anderson, “Reference of Powers by the States to the Commonwealth” (19S1) 2 University of Western Australia Law Review 1, 3.

64 Saunders, “The Development of the Commonwealth Spending Power” (1978) 11 Melbourne University Law Review 369, 387-389.

65 In the Second Uniform Tax Case (1957) 99 C.L.R. 575, the High Court raised no objection to what is a fairly typical clause in agreements for specific purpose grants that the States would repay moneys on breach of condition. But the matter was not really considered: see at 622, 642-648. On execution: Howard, Australian Constitutional Law (2nd ed. 1972) 72-74Google Scholar.

66 Campbell, 'The Commonwealth Grants Power” (1969) 3 F.L. Rev. 221, 240; Myers, “The Grants Power. Key to Commonwealth-State Financial Relations” (1970) 4 Melbourne University Law Review 549, 558. Contra Sawer, Australian Federalism in the Courts (1967) 147. See also Judiciary Act 1903 (Cth), s. 65.

67 Tomlinson, and Mashaw, “The Enforcement of Federal Standards in Grant-In-Aid Programs” (1972) 58 Virginia Law Review 600CrossRefGoogle Scholar.

68 E.g. Townsend v. Swank (1971) 404 U.S. 282; Lewis v. Martin (1970) 397

69 E.g. Citizens to Preserve Overton Park v. Volpe (1971) 401 U.S. 402.

70 A typical clause in an Agreement for a s. 96 grant is:

(1)The accounts, books, vouchers, plans, documents and other records of the State relating to cost of planting shall be subject to audit by the Auditor-General of the State.

(2) Until all amounts to be paid by the Commonwealth under this agreement are paid, and supporting evidence to the satisfaction of the Treasurer is furnished by the State in relation to all amounts making up cost of planting, a report on the audits and on the financial statements in respect of each financial year shall be furnished by the Auditor-General of the State to the Treasurer as soon as possible after the completion of the financial year, indicating inter alia–

(a) whether the financial statements are based on proper accounts and records and are in agreement with those accounts and records; and

(b) whether the expenditure of moneys was for the purpose of meeting cost of planting,

and including reference to such other matters arising out of the audits and financial statements as the Auditor-General of the State considers should be reported to the Treasurer.

Softwood Forestry Agreement Act 1972 (Cth), Schedule §13. In the U.S. federal “inspectors” visit State offices to check compliance: Elazar, op. cit. 149.

71 MacMahon, Administering Federalism in a Democracy (1972) 94-95. In other jurisdictions central governments are authorised to discharge functions themselves at the expense of the offending authority: Royal Commission on the Constitution Cmnd. 5460, 263. Clearly there is no possibility of this in Australia.

72 E.g. Courier-Mail (Brisbane) 23 February 1973 (leader).

73 H.R. Deb. 1978, Vol. 20, 3219. See also Commonwealth-State Scheme for Co-operative Companies and Securities Regulation, Formal Agreement.

74 States (Personal Income Tax Sharing) Act 1976 (Cth).

75 See Mathews, Australian Federalism (1978).

76 Proposals for Change in the Administration and Delivery of Programs and Services First Report, 1977.

77 Id. §§238-240, 248.

78 Law News, vol. 13(2), May 1978, 3.

79 Commonwealth Legal Aid Commission Act 1977 (Cth), ss. 6(a), (d).

80 Ss. 6(b), (f).

81 Legal Aid Commission Act 1976-1977 (W.A.), ss.15(1), 51A. One of seven members of the State commission is nominated by the Australian government, s. 7.

82 Commonwealth of Australia, Report of the Royal Commission on the Constitution (1929) 186.

83 Australian Government Administration. Report of the Royal Commission (1977) (Chrm: H.C. Coombs) §7.4.3 [hereafter Royal Commission].

84 Id. §7.4.2.

85 Id. §§7.4.3, 7.4.4, 7.4.7, 7.4.9.

86 E.g. National Security (Manpower) Regulations S.R. 1942 No. 34 §12 and National Security (War Damage to Property) Regulations S.R. 1942 No. 79 §56. Legislative powers were invested in State Premiers e.g. National Security (General) Regulations S.R. 1939 No. 87 Part III as amended by S.R. 1941 No. 289 S.R. 1942 No. 974. See Senex, “Imperium in Imperio? Powers of State Premiers under National Security Regulations” (1944) 18 A.L.J. 34Google Scholar. See generally Bailey, “The War Emergency Legislation of the Commonwealth” (1942) 4 Public Administration 11, 24-27Google Scholar; Mauldon, “Commonwealth-State Relations in Administration” (1949) 8 Public Administration 138, 140Google Scholar; Walker, The Australian Economy in War and Reconstruction (1947) 91-92Google Scholar; Parliament of New South Wales, The State and the War Effort Parliamentary Paper, Session 1942-1943, 1277.

87 Quarantine Act 1908 (Cth), s. 11. State officials have also been designated as customs officers under Customs Act 1901 (Cth), s. 4. See Royal Commission Appendix, vol. 2, 433-443.

88 Gardner, “Commonwealth-State Administrative Relations” in Spann, (ed.) Public Administration in Australia (1959) 252Google Scholar. Other examples where State officials have administered Australian law are: Fisheries Act 1952 (Cth), s. 6(1); Continental Shelf (Living Natural Resources) Act 1968 (Cth), ss. 6, 10; Matrimonial Causes Act 1959-1966 (Cth), s. 78(1) (mentioned without adverse comment in Horne v. Horne (1963) S.R. (N.S.W.) 121, 127). Note the reciprocal situation where a State appoints Australian officials to administer State laws: e.g. Meat Inspection Arrangements Act 1964 (Cth), s. 5(1); Queensland Meat Inspection Agreement Act 1932 (Cth).

89 Articles 256, 258.

90 [1952] 4 D.L.R. 146. See also Coughlin v. Ontario Highway Transport Board (1968) 68 D.L.R. (2d) 384; R. v. Smith (1972) 21 D.L.R. 222. Contra Attorney-General of Nova Scotia v. Attorney-General of Canada [1950] 4 D.L.R. 309, which held legislative delegation to be invalid. See Hogg, Constitutional Law of Canada (1977) 226-227Google Scholar. A limitation in Canada may be that such delegation should not amount to an abandonment by the Canadian government of its responsibilities: see the remarks of Tweedy J. in the Prince Edward Island Supreme Court in PEI Potato Marketing Board v. Willis [1952] 2 D.L.R. 726; Ritchie J.'s dissent in Coughlin v. Ontario Highway Transport Board (1968) 68 D.L.R. (2d) 384; and Lederman, “Some Forms and Limitations of Co-operative Federalism” (1967) 45 Canadian Bar Review 409, 424.

91 Kentucky v. Denison (1860) 24 How. 66, 107-110; Prigg v. Pennsylvania (1842) 16 Pet. 539, 615-616, see Willoughby, The Constitutional Law of the United States (2nd ed. 1929) vol. 1, 121Google Scholar.

92 (2nd ed. 1910), 438. See also Warner, An Introduction to Some Problems of Australian Federation (1933) 36Google Scholar.

93 (1928) 41 C.L.R. 442, 459-460, 463.

94 Le Mesurier v. Connor (1929) 42 C.L.R. 481; Bond v. Geo. A. Bond and Co. Ltd (1930) 44 C.L.R. 11. Of course this in no way validates the section: see Grace Bros Pty Ltd v. The Commonwealth (1946) 72 C.L.R. 269, 289; Attorney-General v. The Queen ex parte The Boilermaker's Society (1956) 94 C.L.R. 254.

95 South Australia v. The Commonwealth (1942) 65 C.L.R. 373, 430.

96 Queen Victoria Memorial Hospital v. Thornton (1953) 87 C.L.R. 144. Cf. earlier remarks in Ex parte Coorey (1945) 45 S.R. (N.S.W.) 287, 317, 318.

97 Id. 152.

98 Commonwealth Parliamentary Debates 2 December 1953, 183.

99 Re-establishment and Employment Act 1953 (Cth), s. 3.

1 (1955) 92 C.L.R. 353.

2 At 364-365. Cf. The Commonwealth and the Central Wool Committee v. Colonial Combing, Spinning and Weaving Co. Ltd (1922) 31 C.L.R. 421, 440 per Isaacs J.

3 Richardson, “The Executive Power of the Commonwealth” in L. Zines (ed.) Commentaries on the Australian Constitution (1977) 81, 85, 86Google Scholar.

4 Senate Select Committee on Off-Shore Petroleum Resources, Off-Shore Petroleum Resources (1971) 167-168.

5 E.g. s. 57(4). Cf. s. 18(1).