Ruqayyah Snyder
The Australian Constitution outlines the powers of the Parliament of Australia, including its ability to make laws for the peace, order, and good government of the Commonwealth. The Constitution grants Parliament the power to legislate on matters such as trade, taxation, defence, and foreign affairs, among others. However, it is unclear whether the Constitution explicitly limits the power of the government. While it provides a framework for governance, the extent to which it restricts governmental authority is open to interpretation and has likely evolved over time.
| Characteristics | Values |
|---|---|
| Trade and commerce | With other countries and among the states |
| Taxation | Non-discriminatory between states or parts of states |
| Bounties on the production or export of goods | Uniform throughout the Commonwealth |
| Borrowing money | On the public credit of the Commonwealth |
| Postal, telegraphic, and telephonic services | N/A |
| Military defence | Of the Commonwealth and of the several States |
| Lighthouses, lightships, beacons, and buoys | N/A |
| Astronomical and meteorological observations | N/A |
| Banking | Non-state banking; state banking extending beyond state limits |
| Conciliation and arbitration | For the prevention and settlement of industrial disputes extending beyond the limits of any one state |
| Foreign corporations | Trading or financial corporations formed within the Commonwealth limits |
| Divorce and matrimonial causes | Parental rights, custody, and guardianship of infants |
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What You'll Learn
Trade and commerce
Section 51(i) of the Australian Constitution enables the Parliament of Australia to make laws about trade and commerce with other countries and among the states. The meaning of trade and commerce is clarified in Section 98 of the Constitution, which provides that 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 Constitution draws a distinction between inter-state trade and the domestic trade of a state. This distinction must be maintained as it makes impossible any operation of the incidental power that would obliterate the distinction. However, the distinction between interstate and intrastate activity is not absolute. If control of intra-state trade is necessary to make effectual the exercise of Commonwealth power, that control may be exercised by the Commonwealth itself.
The early case of W & A McArthur Ltd v Queensland declared that "trade and commerce" between different countries have never been confined to the mere act of transportation of merchandise over the frontier. All the commercial arrangements of which transportation is the direct and necessary result form part of "trade and commerce".
Section 92 of the Constitution states that trade, commerce, and intercourse among the states, whether by means of internal carriage or ocean navigation, shall be absolutely free. This provision has been the cornerstone of significant Australian constitutional jurisprudence, which has also been quite complex.
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Taxation
The Australian Constitution does limit the power of the government in terms of taxation. Sections 51(ii), 90, 53, 55, and 96 of the Constitution of Australia outline the limitations and provide the basis for the country's taxation system.
Section 51(ii) grants the Commonwealth the broad power to impose taxation, but it is subject to the Constitution's enumerated powers. This section must be read in conjunction with Section 90, which aims to achieve uniform trade relations with other countries and free trade between states. The interpretation and application of these sections by the High Court of Australia have been crucial in shaping federalism in the country.
The limitations on state taxing powers have resulted in a vertical fiscal imbalance, where the Commonwealth has revenue-raising abilities, while the states have significant spending responsibilities, such as funding schools and hospitals. This has led to a situation where the Commonwealth collects taxes and then distributes the funds to the states, often with conditions attached.
Section 53 specifically addresses the role of the Senate in taxation legislation. It prevents the Senate from introducing or amending bills related to taxation, revenues, or appropriation. However, the Senate can request amendments or omissions from such bills, which the House of Representatives can choose to address or ignore. This section ensures that taxation legislation focuses solely on imposing taxes and prevents riders on money bills or omnibus bills, as seen in other countries.
Additionally, Section 55 requires that legislation imposing taxes should only deal with taxation matters. This section aims to prevent the inclusion of other provisions in taxation laws. The non-discrimination limitation in Section 99 further reinforces this by prohibiting the Commonwealth from discriminating between states in laws related to trade, commerce, or revenue.
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Borrowing money
The Australian Constitution does limit the power of the government when it comes to borrowing money. Section 51 of the Commonwealth of Australia Constitution Act outlines the legislative powers of the Parliament, which include the power to borrow money on the public credit of the Commonwealth. This power is exclusive to the Commonwealth, and any borrowing undertaken by the government is subject to limits and regulations by the Loan Council, except in cases of defence purposes or temporary borrowing.
The Australian Office of Financial Management, a part of the Treasury Portfolio, is responsible for managing government debt and borrowing on behalf of the government. The net government debt is calculated as gross government debt minus its financial assets, often expressed as a percentage of Gross Domestic Product (GDP) or debt-to-GDP ratio. Australia's net government debt as a percentage of GDP in the 2016-17 budget was estimated at 18.9% ($326.0 billion), significantly lower than most developed countries.
Historically, the Australian government's borrowing practices have evolved. Before 1979, the government relied on individual cash loans and the TAP system, where the government set a fixed yield and the private market financed the debt. If the market demand fell short, the Reserve Bank of Australia would step in to lend at a concessional rate, ensuring unlimited financing. This changed in 2007 when the Rudd government introduced a debt ceiling of $75 billion, which was gradually increased over the years until it was repealed by the Abbott government in 2013.
In summary, while the Australian Constitution grants the Parliament the power to borrow money, this power is subject to limitations and regulations. The government's borrowing activities have implications for the national economy, and the Australian Office of Financial Management plays a crucial role in managing government debt and ensuring compliance with the Loan Council's limits.
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Divorce and matrimonial causes
The Australian Constitution, which emerged from the Federal Conventions of the 1890s, gave the Commonwealth Government the power to make uniform marriage laws for the country. However, this power was not exercised until much later, and divorce laws remained under state authority.
Under the state-based fault-based system, a spouse had to establish one of 14 grounds for divorce, including adultery, desertion, cruelty, habitual drunkenness, imprisonment, and insanity. This system was expensive and humiliating for spouses, requiring the collection of evidence, witness statements, and other forms of proof.
In 1955, Liberal backbencher Percy Joske, a lawyer and expert in divorce cases, introduced the Matrimonial Causes Act, which allowed married women to initiate divorce proceedings in their state or territory of residence. This Act was later replaced by the more comprehensive Matrimonial Causes Act of 1959, which came into operation in 1961. The 1959 Act established a uniform basis for divorce law throughout Australia, recognising a specified period of separation as sufficient grounds for ending a marriage.
The Family Law Act of 1975 replaced the fault-based system with a "no-fault" divorce system, where the sole ground for divorce was the irretrievable breakdown of the relationship. This Act reduced the minimum separation period from five years to twelve months. It also established that either party to a marriage could apply for divorce, and that a decree of nullity could be made if a marriage was void.
Today, Australian family law is principally found in the federal Family Law Act 1975 and the Federal Circuit and Family Court of Australia (Family Law) Rules 2021. The Federal Circuit and Family Court of Australia have jurisdiction to deal with divorce under Part VI of the Family Law Act 1975. To apply for divorce in Australia, an individual must satisfy the Court that they and their spouse have lived separately and apart for at least 12 months, and there is no reasonable likelihood of resuming married life.
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Foreign corporations
The Australian Constitution defines 'constitutional corporations' as 'foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth'. Foreign corporations are those established beyond the limits of the Commonwealth but still operating in Australia. They are incorporated under foreign law but are legally recognised and authorised to operate in Australia.
A foreign corporation does not need to be formed within the Commonwealth or be a trading or financial corporation to be classified as a constitutional corporation. They can include publicly listed companies in Australia, as well as private companies, incorporated joint ventures, and corporate trustees.
The High Court has confirmed that the ambit of the corporations' power extends to all corporations formed outside Australia, which are collectively referred to as 'constitutional corporations'. This power is not about creating or dissolving corporations but regulating their conduct in transactions with the public.
Whether an entity is a trading and/or financial corporation is determined by the 'activities test', which considers whether the entity is engaged in trading and/or financial activities and whether these activities are substantial and not merely peripheral. If the income an entity receives from trading or financial activities is substantial, it may be considered a constitutional corporation, even if this income is a small proportion of the entity's overall income.
The term 'body corporate' covers any artificial legal entity with a separate legal personality. These entities have perpetual succession and the power to, for example, limit the personal liability of directors and shareholders for company debts.
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Frequently asked questions
The Australian Constitution grants Parliament the power to make laws for the peace, order, and good government of the Commonwealth in areas such as trade, commerce, taxation, borrowing money, postal services, military defence, banking, divorce, and more.
No, the Parliament's law-making powers are limited to specific areas outlined in the Constitution, known as heads of power.
In such cases, the Parliament can refer the matter to the Commonwealth, and the law will only extend to the States that adopt it.
Yes, the Constitution can be amended, but it typically requires a national referendum and a majority of Australians must agree to the changes.
Yes, the Constitution outlines the powers of the States and the Commonwealth, ensuring a balance between federal and state powers.
