It
is difficult to present Sir Harry Gibbs in a new light. As the
fifth speaker on a panel that is much more distinguished than
I, my task is a hard one. It is an honour to follow: Justice Heydon,
who is not only a judge of immense intellect but possibly Australia's
finest after dinner speaker; Justice Kirby who, even through the
virtual medium, is one of Australia's great juristic communicators;
the distinguished former Attorney-General Tom Hughes, AO, QC;
and David Jackson, QC, of whom it is said that, if High Court
appearances were rugby tests, he would be among our most capped
players.
Like
the other speakers, I knew Sir Harry Gibbs. I was privileged to
know him through my involvement in Australians for Constitutional
Monarchy and this Society. He gave great intellectual weight to
the things many felt instinctively. The man I knew was always
very shy and reserved but he could also display a fine sense of
humour.
During
the republic referendum campaign, I attended a press conference
at New South Wales Parliament House with Sir Harry and then accompanied
him to his car. On the way out he was asked by a journalist what
he thought of his former colleagues, Sir Anthony Mason and Sir
Gerard Brennan, supporting the republic model. He replied, "Even
Homer erred". The journalist gave him a puzzled look. I said
to Sir Harry, "I don't think she quite got the reference".
He replied, "I imagine she thought I meant Homer Simpson".
Sir
Harry was also always generous with his time. He was happy to
address law students and encourage young lawyers. He gave a well
attended speech on his view of the role of the Chief Justice of
the High Court at UNSW in my final year, replete with his capacity
for clever understatement. I have had, throughout my short working
life, a photo of Sir Harry Gibbs and me on my wall at work. It
is a useful talisman from which to draw inspiration. A festschrift in honour of Sir Harry
Gibbs is long overdue. I am delighted that the Society has decided
to dedicate this conference to Sir Harry's work and am honoured
to be part of it.
The
Hon R P Meagher, AO, QC once said:
"It
is one of Sir Harry's great achievements to utter simple truths
in a way that makes them seem blindingly obvious, although they
were not so before he uttered them".1
This
is true of Sir Harry's statements on federalism.
The
issue of federalism is the focus of my paper. In it I am going
to examine:
(a)
Sir Harry Gibbs' background and his view of federalism;
and
(b)
His concerns about Commonwealth legislative and financial
power.
The contribution of
Sir Harry's experience and background
Sir
Harry Gibbs grew up in Queensland. He attended school and university
there and he practiced at the Queensland Bar from 1946 to 1961.
During his time at the Bar he was regularly counsel for the Queensland
Government in the High Court. He was counsel in two cases, both
before the High Court and the Privy Council, involving s. 90 of
the Constitution which deals with the prohibition on States raising
excise duties. This issue became an interest of Sir Harry's both
on the bench and in retirement. He was counsel in the Dennis
Hotels v. Victoria2 and Whitehouse
v. Queensland3
cases which establish that a backdated licence fee is not an excise.
Sir
Harry's judgments do not espouse a broad general theory of federalism,
although they do present a consistently federal approach to the
Constitution. His judgments display what the obituarist Mark McGinness
described as an "exemplary style---simple, logical, lucid,
unambiguously expressed, without diversion, flourish or frills".4
Sir Harry respected the great federalist Chief Justice, Sir Samuel
Griffith and kept a picture of Griffith on the wall in his chambers.5
Right from the time he was welcomed to Perth at his first sitting
as Chief Justice he stressed the value of federalism. On that
occasion he said:
"It is of great
importance in a federation that federal instrumentalities do not
lose touch with the people of the States where most of the inhabitants
of the nation live and most of the activities vital to its well-being
are carried out".6
The
first speech I have been able to find by Sir Harry Gibbs on federalism
was given in 1985, late in his chief justiceship. He said of the
federation that "[a]s a matter of history, the people of
the colonies would not have united on any other basis". But
he lamented that the framers' vision had not been implemented:
".....largely
as a result of decisions of the High Court. By a process of expansive
interpretation some of the powers given to the Commonwealth by
the Constitution [have] already...been widened in a way which
no one in 1901 would have thought possible. The result has not
been entirely satisfactory".7
Gibbs'
model of federalism
Gibbs believed that
the essence of a federation is that:
".....there should
be two levels of government, each of which is limited to its own
sphere, but neither of which is subordinate to the other. There
must be a division of powers, effected by a written Constitution
which binds both levels of government, so that neither has absolute
sovereignty. Each level of government should be independent and
supreme within the area of its powers, and each should have under
its control the financial resources necessary to enable it to
perform its functions".8
Sir
Harry's model of federalism was a coordinate model where two levels
of government each have separate powers and functions. He told
this Society in 1992 that federalism "is of the essence of
the Constitution".9 I would like to describe him
as a "bright-line federalist". His vision for the appropriate
division of powers in Australia "can be summed up in one
sentence: nothing should be done by the Commonwealth that could
be done equally well by the individual States themselves".10
Gibbs'
support for federalism, both as a Justice of the High Court and
as a writer and commentator after that time, was predicated on
his view that it was the federal system that the framers of the
Constitution had established "in the true sense".11
The framers' conception was that they were creating a nation where
the States would continue to have a separate sphere of responsibility
where, to paraphrase Sir Henry Parkes, their powers would not
be crippled, their authority diminished, or their rights invaded.
Commonwealth powers were to be restricted and defined in s. 51
of the Constitution "for example, in relation to banking,
insurance, fisheries and industrial conciliation and arbitration.
The [framers] restricted the application of the provisions regarding
trial by jury, and freedom of religion, to Commonwealth laws.
They prohibited the Commonwealth from taxing State property".12
The federal government was to be "given power only over specific
matters in respect of which uniform legislation was desirable
and that the residue of power was left to the States".13
The framers, as Gibbs understood it, "proceeded on the assumption
that State functions would include, as Griffith said, 'almost
all matters which have a direct bearing on the social and material
welfare of the people' ".14
Gibbs' federalist interpretation
of the Constitution
Gibbs'
view of the importance of the federal balance influenced his approach
to the interpretation of the Constitution. As he said in Koowarta
v. Bjelke Peterson,
"in determining the meaning and scope of a power conferred
by s. 51 it is necessary to have regard to the federal nature
of the Constitution".15 This was not a revolutionary
concept. Nor was it the reserved powers doctrine which Gibbs,
consistent with the Engineers Case,16 rejected.
It was a view of the Constitution that was, to some extent, shared
by judges of the Latham Court who, in 1947, in Melbourne Corporation
v. The Commonwealth17 drew
implications from federalism to prevent the Commonwealth legislating
to impose special burdens or disabilities on State governments.
What
underlay Sir Harry's federalism jurisprudence was best expressed
in Queensland Electricity Commission v. The Commonwealth,18 a case
considering the application of Melbourne Corporation doctrine. Gibbs held
that:
"It
is now clear in principle, and established by authority, that
the powers granted by s. 51 of the Constitution are subject to
certain limitations derived from the federal nature of the Constitution.
The purpose of the Constitution was to establish a Federation.
'The foundation of the Constitution is the conception of a central
government and a number of State governments separately organized.
The Constitution predicates their continued existence as independent
entities': Melbourne Corporation v. The Commonwealth. The fundamental purpose
of the Constitution, and its 'very frame' (Melbourne Corporation
v. The Commonwealth),
reveal an intention that the power of the Commonwealth to affect
the States by its legislation must be subject to some limitation".19
This
meant that provisions of the Constitution need to be read, not
in isolation, but in the context of the whole document. Gibbs'
hope was that in defining the limits of Commonwealth power:
".....the
Courts would have resolved any ambiguity by interpreting the provisions
in a way that would maintain the federal distribution of power
which the Constitution so obviously appears to guarantee. In other
words, on principle one would have expected the Courts to hold
that no single power of the Commonwealth should be given so wide
an effect that the careful definition of other powers would be
meaningless and that the States would be rendered subordinate
to the Commonwealth in areas of power left to them by the Constitution....
The Court has rightly laid emphasis on the need to give a broad
interpretation to constitutional provisions, but has ignored the
necessary qualification that the Constitution as a whole may indicate
that to give a narrower meaning to particular provisions would
better preserve the federal balance that the Constitution intends
to maintain".20
In
relation to the limitations of the Melbourne Corporation doctrine and its extension
Gibbs noted that:
"There
is not much value in a principle that protects the existence of
the States and at the same time places no limit on the extent
to which the Commonwealth can deprive the States of their functions".21
In relation to the
external affairs power, for instance, Gibbs' notions of the federal
balance required "that
some limits be imposed on the power to implement international
obligations conferred by par (xxix)".22 This is
particularly so as the external affairs power "differs from
other powers conferred by s. 51 in its capacity for almost unlimited
expansion".23 In explaining the limits of Commonwealth
power, imposed by the federal balance, Gibbs sought in aid
a decision of Latham CJ, Rich, Dixon, McTiernan, Williams and
Webb JJ, on the defence power, where the Court held:
"Nearly all the
limitations imposed upon Commonwealth power by the carefully framed
Constitution would disappear and a unitary system of government,
under which general powers of law-making would belong to the Commonwealth
Parliament, would be brought into existence notwithstanding the
deliberate acceptance by the people of a Federal system of government
upon the basis of the division of powers set forth in the Constitution.
We proceed to state reasons why the Court should not ascribe an
operation so far-reaching and, indeed, revolutionary".24
Gibbs
held that in deciding whether legislation purportedly enacted
under the external affairs power is valid it will be "necessary
to have regard to the fact that the Constitution is a federal
and not a unitary one".25
Similarly
the federal nature of the Constitution placed limits on how Sir
Harry viewed the scope of the corporations power. In Actors
and Announcers Equity Association v. Fontana Films,26 he said:
"[H]aving regard
to the federal nature of the Constitution, it is difficult to
suppose that the [corporations power was] intended to extend to
the enactment of a complete code of laws, on all subjects, applicable
to the persons named in those paragraphs ... extraordinary consequences
would result if the Parliament had power to make any kind of law
on any subject affecting such corporations".27
And:
".....The
method which the courts have followed in the past, of approaching
the solution of the difficult problems presented by such a provision
as s. 51(xx) gradually and with caution, proceeding no further
at any time than the needs of the particular case require, is
the most likely, in the end, to achieve the proper reconciliation
between the apparent width of s. 51(xx) and the maintenance of
the federal balance which the Constitution requires".28
It
is important to note however that Gibbs' view of federalism did
not mean he was fast and loose with the provisions of the Constitution.
Nor did it detract from his strict, technical approach to reading
its provisions. Nevertheless, it did infuse his thinking about
the outer limits of Commonwealth power.
Concerns
about Commonwealth legislative power
Sir
Harry Gibbs' view of coordinate federalism suggests that each
level of government was to be independent of the other. This view
of the federation influenced his thinking about the limits of
Commonwealth power.
External affairs
As
I have mentioned, one of Sir Harry's key concerns was the potential
interpretation that could be given to s. 51 (xxix) of the Constitution---the
external affairs power, which provides:
"The
Parliament shall, subject to this Constitution, have power to
make laws for the peace, order and good government of the Commonwealth
with respect to ..... external affairs".
Sir
Harry acknowledged that the external affairs power would give
rise to "difficult decisions"29 and would
create "grave difficulties of interpretation". He agreed
with Sir Harrison Moore who described it as a "somewhat dark"30
power. The cases on the external affairs power raised the question
of what constitutes "external affairs". Sir Harry's
view was that the expression was a confined one. It related to:
"the external relations of the Commonwealth",31
"some matter indisputably international in character",32
"relations with other countries or persons or things outside
Australia",33 or "matters concerning other
countries".34 However "a matter does not
become an external affair simply because Australia has entered
into an agreement with other nations with regard to it".35
He
contrasted laws made pursuant to the external affairs power with
laws which related to the "internal organization of the nation"
and therefore "could not be regarded as a law with respect
to external affairs".36
Sir
Harry's view did not mean that the external affairs power has
a narrow scope. For example, he conceded that the power could
properly be used "in some circumstances, at least",37
to pass a law to carry into effect an international agreement
to which Australia is a party. It is not limited to matters geographically
external to Australia. For instance, Sir Harry thought that diplomatic
privileges, the pursuit of fugitives from another country, and
laws making it an offence to excite disaffection with a friendly
nation or aerial navigation are all matters which fall within
the ambit of the external affairs power.38
Sir
Harry rejected a view that the external affairs power would support
the Commonwealth Parliament enacting laws to execute any treaty
to which the Commonwealth is a party, regardless of whether the
subject matter of the treaty was purely domestic and involved
matters which did not relate to relations with other countries.
He was particularly concerned that such a view would give the
Commonwealth Executive the ability to "determine the scope
of Commonwealth power".39 This would potentially
give the Commonwealth the power to:
".....control
education, to regulate the use of land, to fix the conditions
of trading and employment, to censor the press, or to determine
the basis of criminal responsibility ...the Commonwealth would
be able to acquire unlimited legislative power. The distribution
of powers made by the Constitution could in time be completely
obliterated; there would be no field of power which the Commonwealth
could not invade, and the federal balance achieved by the Constitution
could be entirely destroyed".40
In retirement Sir Harry
continued to worry about the scope of the external affairs power.
In a provocative statement to this Society he suggested that "[i]t
is hardly an exaggeration to say that it would not make any practical
difference if the word 'anything' were substituted for 'external
affairs' in this provision".41 Gibbs called for an
amendment to the external affairs power to limit its scope along
the lines he was suggesting in his judgments.42 With
the Commonwealth in possession of an unlimited treaty making power,
Gibbs became worried about the amount of scrutiny treaties
were receiving. He was pleased to see Parliament beginning to
subject treaties to more effective probing.43 He was
also alarmed about the central role that the Racial Discrimination
Act 1975,
which had been enacted pursuant to the external affairs power,
played in Mabo,44
where it was used to strike down Queensland land law.45
Sir Harry was in the
minority in almost all the cases concerning the federal balance.
The minority view of the external affairs power has not prevailed.
Gibbs thought that the combined effect of the external affairs
power and s. 109 of the Constitution could annihilate State legislative
power.46 He concurred with a comment of David Jackson,
QC, who in 1984 observed that "in the future the issue between
State and Commonwealth Governments is more likely to be whether
the Commonwealth power should be exercised, rather than whether
it exists. In other words the resolution of the issue is likely
to be by political, rather than by legal, means".47
Gibbs'
fellow judges in the minority in cases concerning the federal
balance were, variously, Sir Daryl Dawson, Sir Keith Aickin and
Sir Ronald Wilson. It is appropriate also to pay tribute to Sir
Ronald, who passed away last year shortly after Sir Harry. Whatever
view one takes of Sir Ronald's role as President of the Human
Rights Commission, as a High Court Justice, he should be remembered,
like Sir Harry, as a great federalist.48
Corporations power
A discussion of Sir Harry Gibbs and federalism
could not be held at this time without some further mention of
the corporations power. Section 51(xx) provides that:
"The Parliament
shall, subject to this Constitution, have power to make laws for
the peace, order and good government of the Commonwealth with
respect to ..... Foreign corporations, and trading or financial
corporations formed within the limits of the Commonwealth".
In the cases that examined
the limit of the power, Gibbs found that the trading activities
of trading corporations could be regulated.49 He held
that legislation could apply to a trading corporation "only
in relation to such of its activities as are properly regarded
as trading activities".50 If its activities are
"preparatory to the trade [and] do not form part of it",51
then they are not trading activities:
"The authorities in which s. 51 (xx) has
been considered are opposed to the view that a law comes within
the power simply because it happens to apply to corporations of
the kind described in that paragraph...in the case of trading
and financial corporations, laws which relate to their trading
and financial activities will be within the power. This does not
mean that a law under s. 51 (xx) may apply only to the foreign
activities of a foreign corporation, for ex hypothesi the law
will be one for the peace, order and good government of the Commonwealth.
It means that the fact that the corporation is a foreign corporation
should be significant in the way in which the law relates to it".52
Gibbs'
view of the corporations power has not, at this stage, commanded
majority support. His view was cited in aid in the recent challenge
to the Work Choices
legislation particularly as counsel tried to explain Sir Harry's
view. If trading activities of trading corporations could be regulated,
and financial activities of financial corporations could be regulated,
but he did not mean that only the foreign activities of a foreign
corporation could be regulated, what did he mean by the observation
that "the fact that the corporation is a foreign corporation
should be significant in the way in which the law relates to it"?53
It
is difficult to speculate on the result of that challenge before
the present High Court. It is also unwise to guess how Sir Harry
might have determined the matter. Sir Harry's speeches in retirement
seemed to express different views. At Samuel Griffith Society
conferences, in 1992 and 1993, Sir Harry initially expressed concern
at the potential of the corporations power, given the state of
the authorities.54 However, by 2001 he seemed, at least
on one reading, to be expressing a somewhat different view. Sir
Harry hoped that politicians of all major parties would put aside
political differences and work "out anew which powers should
be given to the Commonwealth and which to the States". In
this context he observed that "some issues should be easy
to decide---for example, to increase the power of the Commonwealth
with regard to corporations".55 At any rate it
is idle to hypothesise what Sir Harry might write were he a Justice
of the High Court hearing the Work Choices challenge.
Concerns about Commonwealth
financial power
The second essential
characteristic of a federation as Gibbs saw it was for each component
part to have financial independence. The interpretation given
to three of the financial provisions of the Constitution have
made the achievement of this goal difficult.
Section 90 excise duties
Gibbs,
using the words of Dr Johnson, described the taxes mentioned in
s. 90 of the Constitution as "hateful".56
His view of s. 90 was reflected in his statement that:
"It is essential
to the nature of a true federation that the States should have
under their independent control financial resources sufficient
to perform their functions. The way in which s. 90 has been interpreted
is one of the factors which have contributed to the instability
of federation in Australia".57
Section
90 prevents the States from raising excise duties. An excise duty
has a vague meaning, but by 1983 it meant:
".....a
tax directly related to goods imposed at some step in their production
or distribution before they reach the hands of the consumer. This
means that the person on whom the tax is imposed is charged by
reason of and by reference to the fact that he has taken such
a step in relation to the goods e.g., as manufacturer, producer,
processor or seller".58
What
was controversial is how this manifested itself. That is, in considering
impugned legislation, the Court divided between those who thought
that the practical effect of the tax was central to the law's
validity (i.e., if it produced the same result as an excise duty
it was an excise duty) and those who favoured the legal effect
(i.e., did the legislation provide for an excise duty?). Sir Harry
favoured the legal effect test. He explained his view in Hematite
Petroleum v. Victoria:
"[Section]
90 makes exclusive to the Commonwealth a particular sort of tax.
The question whether a State law infringes s. 90 can be answered
only by determining whether it imposes that sort of tax. One must
first define 'excise', and then ask whether the tax imposed by
the State statute comes within that definition. It is irrelevant
that the State statute brings about the same practical result
as a duty of excise, for s. 90 does not forbid the States to achieve
any particular economic result; it forbids them to enact a particular
form of taxation".59
This
led Sir Harry to support schemes whereby the States could charge
licence fees to a business, based on the previous year's turnover,
without being an excise duty, as such charges would not constitute
taxes on goods. However he was not always in the majority and,
partly because of the shifting composition of the Court during
his 17 years on the bench, inconsistent decisions resulted.
Backdated
licence fees relating to tobacco60 and petrol61
were upheld as not being excises. However an annual levy on the
owners of livestock was held to be an excise,62 as
was a levy calculated on the number of animals slaughtered at
an abattoir in a previous year63 or the processing
of fish.64 Gibbs was critical of the uncertainty and
lack of precision about whether a particular tax is an excise.65
When the backdated licence fees were finally invalidated, in 1997,
in Ha v. New South Wales,66
he warned that the result of the decision was that "the imbalance
between revenue and expenditure of both the Commonwealth and the
States has become even more extreme and the financial dependence
of the States on the Commonwealth has become even greater".67
Sir
Harry Gibbs applied a purposive approach to s. 90. It was, in
his view, an essential part of the pact of federation to abolish
"customs barriers erected by the Australian colonies. The
inclusion of excises and bounties in the areas forbidden to the
States was obviously intended to make effective the Commonwealth's
control of its tariff policy".68 Sir Harry rejected
a view that the section was designed in order to give the Commonwealth
"a real control of the taxation of commodities",69
or that it "enabled it to control the national economy as
an economic union".70
Sir Harry also believed
that the presence of s. 109 of the Constitution, which enshrined
the supremacy of Commonwealth laws, also provides a reason to
take a narrow view of the prohibition on excise duties. The presence
of s. 109 in the Constitution means that "a State excise
duty which counteracted the effect of a Commonwealth tariff"
would be invalid.71
A wide interpretation
of the meaning of excise duties would, in Sir Harry's view, force
the States to "impose some forms of taxation which, although
constitutionally permissible, are less economically desirable
than taxes now categorized as duties of excise".72
It would also continue to cripple the States financially as they
had been "virtually prevented" from imposing income
tax.
Sir Harry Gibbs' views of excise duties are not the accepted
law, and in retirement he campaigned for an amendment to the Constitution
to allow the States to raise excise duties.
It is interesting to consider the backgrounds of those
Justices who, like Sir Harry, took a narrower view of excise duties.
Every Justice who had been a State Solicitor-General prior to
their appointment has adopted a narrow view of excise duties,
and every Justice from a State other than New South Wales and
Victoria (with the exception of Sir Gerard Brennan) also adopted
a narrow view. It is also interesting to observe that there have
been no cases on s. 90 since Ha
in 1997, despite the fact that in that decision the Court was
split 4:3 and only two justices, Gummow and Kirby JJ (of the majority),
remain on the Court from that time. Perhaps the effect of the
Goods and Services Tax has meant that the States have been less
likely to attempt creative taxation measures.
The
other interesting observation about cases involving s. 90 is that
in 1974 in Dickenson's Arcade Pty Ltd v. Tasmania73 the Court held that a tax on
consumption was not an excise duty. This means that from 1974
the States would have had the power to raise their own consumption
tax. Sir Harry said, while supporting the legality of a consumption
tax raised by the States, that:
".....
the exclusion of a consumption tax from the conception of an excise
seems to be an anomaly in principle, because a tax on consumption
would appear to have the same effect in passing into the price
of the commodity, and reducing demand for it, as a tax on production,
distribution or sale".74
It
is interesting that despite the many complaints about vertical
fiscal imbalance, no State took up this option.
Appropriations power
The
second area of financial power where there was a potential for
the Commonwealth to reach into areas of State action was, in Gibbs'
view, the appropriations power. Section 81 of the Constitution
relevantly provides:
"All revenues
or moneys raised or received by the Executive Government of the
Commonwealth shall form one Consolidated Revenue Fund, to be appropriated
for the purposes of the Commonwealth in the manner and subject
to the charges and liabilities imposed by this Constitution".
Gibbs
understood the potential reach of this power. In the Australian
Assistance Plan Case,75
the Court was asked to consider what appropriating money "for
the purposes of the Commonwealth" meant. Gibbs, in classic
federalist style, observed:
"It would be contrary
to all principles of interpretation to treat the words 'for the
purposes of the Commonwealth' in s. 81 as adding nothing to the
meaning of the section. The words do not in their ordinary sense
have the same meaning as 'for any purpose whatever' or 'for such
purposes as the Commonwealth may think fit'. They appear in a
Constitution by which specific powers of legislation were conferred
upon the Commonwealth and the general powers of the colonies which
became the States were, with certain exceptions, continued. Throughout
the whole of the Constitution, including the Chapter in which
s. 81 appears, the expressions 'the Commonwealth' and 'State'
are used to refer to the respective bodies politic rather than
to the people forming a particular community. In this context
the words 'the purposes of the Commonwealth' in s. 81 naturally
refer to purposes for which the Commonwealth, as a political entity,
is empowered by the Constitution to act.76
"It therefore
seems correct to say that 'purposes of the Commonwealth' are purposes
for which the Commonwealth has power to make laws---purposes which
however are not limited to those mentioned in ss. 51 and 52 but
which ... may include matters incidental to the existence of the
Commonwealth as a state and to the exercise of its powers as a
national government".77
Gibbs
was in dissent in this case, but it provides another example of
his application of federalist principles.
Section
96: grants power
The
third provision of the Constitution whose interpretation created
problems of vertical fiscal imbalance was s. 96. Section 96 allows
the Commonwealth to make grants to the States on such terms and
conditions as the Commonwealth Parliament thinks fit. The power
was originally designed to last for the first ten years of federation
"and thereafter until the Parliament otherwise provides".
However, the Commonwealth Parliament has never chosen to limit
its options under this power. In broad terms, s. 96 allows the
Commonwealth, by making tied grants to the States, to enact legislation
in areas in which it does not have express power to do so. Section
96 was the constitutional centrepiece of the Whitlam Government's
policy programme.78 Some s. 96 grants are made free
of conditions but many are not. Sir Harry regarded the effect
of grants made under s. 96 "as the most important cause of
the distortion of the financial relations between the Commonwealth
and the States",79 and the source of a "Commonwealth
bureaucracy which duplicates that of the States".80
In
Sir Harry's view the most significant financial impact s. 96 has
had on the States has been through the 1942 uniform taxation scheme
which has effectively centralised income taxation. Under that
scheme the Commonwealth imposed income tax rates about as high
as the same sum previously collected by the Commonwealth and States
combined. The tax rates have remained high enough to make it politically
difficult for the States to raise their own income tax. This has
led to a vertical fiscal imbalance where the Commonwealth raises
more taxation than it needs and the States do not raise enough.
Sir Harry suggested that the consequence of this imbalance was
to place:
".....
a strain on the federal system; it puts the financial relationship
between the States and the Commonwealth out of balance. The result
is a reduction of accountability, because the Commonwealth raises
money although it is not responsible for the way in which it is
spent while the States spend money although they are not accountable
for the manner in which it is raised".81
As
a judge, Sir Harry Gibbs only considered the extent of s. 96 grants
on one occasion, in the DOGS Case.82 No party asked the Court to overrule
previous authority on s. 96 so there is no substantial consideration
of the provision. Gibbs therefore held, one suspects reluctantly,
that "if money is granted by the Commonwealth to a State,
there is a grant of financial assistance to the State within s.
96 notwithstanding that the condition of the grant requires the
State to pay all the moneys away".83 He did add
however that:
"The
State cannot be compelled to accept the moneys, and the fact that
it does accept them may be regarded as an acknowledgement of the
fact that the moneys granted are of assistance to the State".84
States
have been more willing to reject Commonwealth grants of recent
times. But this has had consequences of both a political and economic
nature. Nowhere is this better illustrated than in Victoria, where
the Commonwealth government offered to pay $90 million towards
refurbishment of the Melbourne Cricket Ground on the condition
that federal workplace inspectors would be allowed on the site.
By the Victorian government refusing the federal government's
assistance for ideological reasons, the MCG redevelopment cost
the Victorian taxpayers more than it otherwise would have.
Sir
Harry also called for consideration of possible amendments to
s. 96, but he was not really satisfied with either of the suggestions
he made on this topic. The first suggestion was "to amend
the Constitution in a way that would forbid the Commonwealth to
make grants except for defined purposes". But he acknowledged
that "such a course presents great practical difficulties...
it is not easy to suggest a formula that would include purposes
for which grants should be made and exclude those for which they
should not".85 His second proposal was in effect
to revive and refine the "Braddon clause" to provide
that "a specified proportion of the total revenues of the
Commonwealth should be distributed to the States and to specify
the proportions in which the States should share in the amount
distributed".86 An unsuccessful amendment of this
kind was attempted in 1910.
Other issues
Over
the years Sir Harry expressed a number of other concerns about
the state of federalism both in his judgments and in speeches.
He found the Whitlam Government's attempts to introduce legislation
providing for Senators for the Territories to be invalid. This
was because of his conception of the Senate as an institution
designed to protect the interests and integrity of the States
and the potential for the Commonwealth to undermine this by potentially
placing:
".....no limit
to the number of Senators who may be chosen for each Territory.
By legislation allowing a sufficiently large representation to
the Territories, the House that is intended to be the organ of
the States could be brought entirely under the control of Senators
elected by residents of the Territories".87
Gibbs
was again in the minority in this case. When, almost two years
later, and as the result of the change of only one member of the
Court, the Justices were asked to reconsider the issue,88
Gibbs felt bound by the precedent of the earlier authority. In
a phrase that beautifully encapsulates Sir Harry's approach to
the judicial function he said, "I have had much difficulty
in deciding what course my duty requires".89 His
duty indicated that he should follow the precedent although he
thought it wrong. In retirement, Sir Harry maintained his support
for the Senate, and was concerned about plans to weaken the Senate's
power "to operate as an effective check on the combined power
of the Executive and the House of Representatives".90
Even
in relation to Court accommodation he was a federalist. As a High
Court Justice he was the principal opponent of Sir Garfield Barwick's
idea that all the Justices would be permanently based in Canberra.91
No doubt this was in part because he was concerned that judges
would lose touch with people in other parts of Australia. He was
a strong supporter of the idea that the Court should continue
to travel to the State capitals despite its permanent home in
Canberra.92
Ironically,
despite being promised appointment to the mooted federal superior
court in the 1960s, Sir Harry did not support the place of the
Federal Court in the justice system. He said in 1981 that "it
is difficult to discover any valid reason for bringing it into
existence".93 His concerns related to the effect
that the growth of the Federal Court may have on the position
of the State Supreme Courts. He felt that rather than passing
the original jurisdiction of the High Court to a new court, it
could have been passed to the State Supreme Courts. His concerns
have turned out to be justified, as the Federal Court's jurisdiction
has continued to grow. Recently plans have been announced to allow
the Federal Court to hear a limited class of criminal trials involving
hard core cartel conduct under the Trade Practices Act. Cases
involving Commonwealth crimes have traditionally been heard by
State Supreme Courts.94
In
retirement Sir Harry Gibbs became increasingly distressed by the
state of federalism. He became the founding President of this
Society, which has been dedicated to "promote discussion
of constitutional matters through the articulation of a clear
position in support of decentralisation of power through the renewal
of our federal structure".95
In
particular Sir Harry was worried that towards the end of the 20th
Century plans were being made to rewrite the Constitution with,
as he put it: "the ultimate aim ... to destroy federalism
... encouraged in the pursuit of that objective by the fact that
federalism in Australia has already been weakened by the actions
of Governments and the decisions of the Courts".96
He
was therefore opposed to plans which he saw as weakening the federation,
in particular, a mooted separate Aboriginal state. He warned that,
based on overseas experience, a separate state might lead to division
and potentially "the ultimate dissolution of the federation"97
due to ethnic tensions which Australia has managed to avoid.
Similarly,
as the republic debate gained a head of steam Gibbs became worried
that not enough attention had been paid to the role of the States
in a republic: in particular whether, in order to alter the Constitution
pursuant to s. 128 to make Australia a republic, the referendum
would need to pass in all States because, in effect, one was being
asked to dissolve the "indissoluble federal Commonwealth
under the Crown". His other concern related to the position
of State Governors, and the need to consider amendments to the
State Constitutions as well as the Commonwealth Constitution concurrently.98
As we know, the republic referendum was soundly defeated, but
those who seek its revival have not focused enough on these particular
questions.
Conclusion
As
a Justice of the High Court Sir Harry Gibbs did his duty. He interpreted
the Constitution with particular regard to its federal character.
As his time on the bench drew to a close, and in retirement, as
the case law increasingly went against the meaning he believed
the Constitution to have, he became ever more concerned with the
state of federalism.
The
further the interpretation of the Constitution moves from his
vision, the harder it may be to return it to a jurisprudence that
has regard to its federal character. I believe that the focus
of federalism in the future will be less on legal federalism and
more on political federalism. On the state of current authorities
the question in the future seems to be not, does the Commonwealth
have the power, but should it exercise it? The challenge of political
federalism will be to resolve the tension between Commonwealth
governments of both political colours wishing to pursue a broader
agenda, and the need for the State governments to make themselves
more efficient and dynamic to keep the Commonwealth at bay. If
the proper balance can be achieved then we will well and truly
serve the distinguished memory of Sir Harry Gibbs.
1.
Roderick Meagher, Address Launching "Upholding
the Australian Constitution", Volume 1, in Upholding the Australian Constitution, Proceedings of The
Samuel Griffith Society, Volume 3 (1993), 150.
2.
(1960) 104 CLR 529.
3.
(1960) 104 CLR 609.
4.
Mark McGinness, Conservative stickler followed precedent, The Sydney Morning
Herald, 2 July, 2005.
5.
Joan Priest, Sir Harry Gibbs: Without Fear or Favour
(1995), 57.
6.
Transcript of Proceedings, Welcome to the Chief Justice,
Sir Harry Gibbs and Mr Justice Brennan at Perth (High
Court of Australia, 21 September, 1981).
7.
Sir Harry Gibbs, Some thoughts on the Australian Constitution, Speech delivered
at the All Nations Club, 21 November, 1985, 7.
8.
Sir Harry Gibbs, The Threat to Federalism, in Upholding the
Australian Constitution,
Proceedings of The Samuel Griffith Society, Volume 2 (1993), 183-184.
9.
Sir Harry Gibbs, Rewriting the Constitution, in Upholding the
Australian Constitution,
Proceedings of The Samuel Griffith Society, Volume 1 (1992), x.
10.
Ibid, xiv.
11.
Sir Harry Gibbs, The Decline of Federalism?, 18 (1) University
of Queensland Law Journal,
1.
12.
Sir Harry Gibbs, The Constitution 100 Years On in Upholding the
Australian Constitution,
Proceedings of The Samuel Griffith Society, Volume 13 (2001),
xvi.
13.
Sir Harry Gibbs, Federalism in Australia, in Alan Gregory (ed),
The Menzies Lectures 1978-1998 (1998), 261.
14.
Sir Harry Gibbs, The Decline of Federalism?, loc. cit., 1.
15.
(1982) 153 CLR 168 at 199.
16.
Amalgamated
Society of Engineers v. Adelaide Steamship Co Ltd
(1920) 28 CLR 129.
17.
(1947) 74 CLR 31.
18.
(1985) 159 CLR 192.
19.
Ibid., at 205 (citations
omitted).
20.
Sir Harry Gibbs, The Threat to Federalism, op. cit., 186.
21.
Ibid..
22.
(1983) 158 CLR 1 at 99.
23.
Ibid., at 100.
24.
R v. Foster
(1949) 79 CLR 43 at 83.
25.
(1982) 153 CLR 168 at 192.
26.
(1982) 150 CLR 169.
27.
Ibid., at 181-182.
28.
Ibid., at 182.
29.
New South Wales v. The Commonwealth (The Seas and Submerged
Lands Case) (1975) 135 CLR 337
at 389.
30.
Koowarta v. Bjelke-Petersen
(1982) 153 CLR 168 at 188.
31.
(1975) 135 CLR 337 at 389.
32.
Ibid., at 390.
33.
(1983) 158 CLR 1 at 99.
34.
(1982) 153 CLR 168 at 188.
35.
Ibid., at 201-202.
36.
(1975) 135 CLR 337 at 390.
37.
(1982) 153 CLR 168 at 189.
38.
Ibid., at 190-191.
39.
Ibid., at 198.
40.
Ibid..
41.
Sir Harry Gibbs, Address launching "Upholding the
Australian Constitution", Volume 1, in Upholding the Australian Constitution, Proceedings of The
Samuel Griffith Society, Volume 3 (1993), 137.
42.
Sir Harry Gibbs, Concluding Remarks, in Upholding the
Australian Constitution,
Proceedings of The Samuel Griffith Society, Volume 7 (1996), 250.
43.
Sir Harry Gibbs, Australia Day Message, 26 January,
1996, in Upholding the
Australian Constitution,
Proceedings of The Samuel Griffith Society, Volume 16 (2004),
264.
44.
Mabo v. Queensland (1992)
157 CLR 1.
45.
Sir Harry Gibbs, The Decline of Federalism?, loc. cit., 5.
46.
Ibid..
47.
Ibid..
48.
Interestingly, in an interview Sir Ronald undertook in
1997 in the light of Bringing Them Home,
he
was asked whether he would have taken a different approach to
adjudication if he were to return to the High Court today. He
responded:
"I
don't think that I would, but because my dominant feeling on the
bench is that I have sworn to 'do justice according to law'. And
it's that 'according to law' that makes it so damned difficult...
the two decisions that I would not wish to confront again was
the Koowarta decision and secondly Mabo #1. I wrestled for ages
with Mabo #1
and I still can't read section 10 of the Racial Discrimination
Act in such a way as to
find that it applies and so I dissented. Mind you, I wasn't alone.
It was 4:3. So two other minds of some eminence reasoned along
same lines, but I was longing to find with the majority. So you've
posed a conundrum and frankly my only defence is that I gave it
my best shot in these two cases but was compelled by my legal
reasoning the way I did. It was a great honour to serve on the
High Court but I can't say it was the highlight of my professional
career. It was damned hard work". (From Julian Morrow, "Interview
with a Commissioner", Blackacre (1997) 27, 29).
49.
Strickland v. Rocla Concrete Pipes Ltd (1971) 124 CLR 468 at 525.
50.
(1983) 158 CLR 1 at 117.
51.
Ibid., at 118.
52.
(1982) 150 CLR 169 at 182-183.
53.
For instance in oral argument by NSW, South Australia and
Queensland and distinguished by the Commonwealth.
54.
See for example Sir Harry Gibbs, Rewriting the
Constitution, loc. cit., xviii, and Sir Harry
Gibbs, The Threat to Federalism,
loc. cit.,187.
55.
Sir Harry Gibbs, The Constitution 100 Years On, loc. cit., xix-xx.
56.
Sir Harry Gibbs, A Hateful Tax, in Upholding the Australian Constitution, Proceedings of The
Samuel Griffith Society, Volume 5 (1995), 123.
57.
Ibid., at 126.
58.
Hematite Petroleum Pty Ltd v. Victoria (1983) 151 CLR 599, 615 per Gibbs CJ.
59.
Ibid., at 618.
60.
(1974) 130 CLR 177.
61.
H C Sleigh Ltd v. South Australia (1977) 136 CLR 475.
62.
Logan Downs Pty Ltd v. Queensland (1977) 137 CLR 59.
63.
Gosford Meats Pty Ltd
v. New South Wales
(1985) 155 CLR 368.
64.
MG Kailis Pty Ltd v. Western Australia (1974) 130 CLR 245.
65.
Sir Harry Gibbs, Vertical Fiscal Imbalance and the Allocation
of Tax Powers: Constitutional Reform,
in DJ Collins (ed), Vertical Fiscal Imbalance and the Allocation
of Taxing Powers
(1993), 336.
66.
(1997) 189 CLR 465.
67.
Sir Harry Gibbs, Federalism in Australia, loc. cit., 271.
68.
Sir Harry Gibbs, A Hateful Tax, loc. cit., 127-128.
69.
Sir Harry Gibbs, Vertical Fiscal Imbalance and the Allocation
of Tax Powers: Constitutional Reform,
loc. cit.,
334.
70.
Ibid., 335.
71.
(1983) 151 CLR 599 at 617.
72.
Ibid..
73.
(1974) 130 CLR 177.
74.
Sir Harry Gibbs, Vertical Fiscal Imbalance and the Allocation
of Tax Powers: Constitutional Reform,
loc. cit.,
336.
75.
Victoria v. The Commonwealth and Hayden (1975) 134 CLR 338.