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Reserved State powers doctrine rejected
Pre-Engineers case, the HCA applied the reserved State powers doctrine, which states that as a matter of implication power over matters not mentioned in the Constitution was reserved to the States.?
Everything not given to the Cth was State power and Cth laws found to have impinged on reserved powers were invalid. This resulted in narrow constructions of Cth power in order to reserve everything else to the States.
R v Barger (1908 HCA): approval of reserve State powers doctrine
? Cth passed law supposedly "in respect of taxation" (a Cth power) to impose an excise tariff on manufacturers of agricultural machinery if they did not comply with Cth policies regarding wages paid to employees, such that it was preferable to pay the wages than the tax. o the law was clearly introduced for an ulterior motive of protecting the workers.
? Barger (a manufacturer) brought an action challenging the tax.
? DECISION: majority held the law was a law designed to regulate the conditions of labour, not a law with respect to taxation. They held that the tax power should not be interpreted to enable the Cth to enter into a subject matter intended to be reserved to the States. Amalgamated Society of Engineers v Adelaide Steamship Co (1920 HCA) (the 'Engineers' Case'): reserved State powers rejected
? Engineers' trade union claimed for an award against 844 employers including three WA government employers. The question was whether a Cth law enacted under CC s 51(35) could authorised the making of an award binding State government employers the same way it could bind the other employers.
? ISSUE: does Cth Parliament have the power to make laws binding on State employers under s 51(35)?
? DECISION: Parliament can make such laws. Knox CJ, Isaacs, Rich and Starke JJ held that the doctrine of 'implied prohibition' (reserved State powers) could no longer be permitted to sustain a contention. Instead, the Cth heads of power are to be interpreted in accordance with the natural meaning of the words, and no limitations not found in the words should be read in.
Characterisation Laws must be capable of being characterised as falling within a Cth head of power (under s 51 (concurrent), s 52 (exclusive powers) and some powers like in ss 81 and 96). 1) Consider scope of Cth powers (interpret Constitution) 2) Determine character of Cth law: is it with respect to a head of power?
Scope of power: Presumption in favour of broad interpretation There is a presumption in favour of broad interpretation of Cth powers consistent with the natural meaning of words and subject to their context and purpose (Jumbunna Coal Mine).?If capable of a broad interpretation on the natural meaning, that is the interpretation that should be given. If the context/purpose suggest a narrow interpretation should be given it will be, but it is rare for the courts to think it should. Rationale: Cth powers are plenary (s 51 and 52 confer powers to make laws for the POAGG of the Cth). Also, since a Constitution is intended to last possibly for centuries, the powers should be interpreted broadly to deal with unforeseeable developments .
Express incidental power The CC s 51(39) grants express power to make legislation "with respect to... matters incidental to the execution of any power vested by this Constitution in the Parliament...' This conferral of legislative incidental may be superfluous (see implied incidental power below). This section is most relevant in allowing Cparl to exercise power incidental to the powers of other arms of government. Implied incidental power Every express power the Cth is accompanied by power over matters ancillary or incidental to the subject matter (see, eg, Grannall v Marrickville Margarine Pty Ltd). They are not expressly or strictly within the power named, but are implied on the basis that such power is necessary to properly regulate a subject matter and to make the regulation truly effective. Purposive and non-purposive powers Non-purposive powers are those that do not have a specific purpose, describing instead an activity, type of person, recognised category of legislation or an object. Most powers are of this nature. Purposive powers lay down a specific purpose to be pursued (eg defence). Implied incidental power is purposive.
Characterisation of non-purposive powers Fairfax v FCT (1965 HCA)
? Cth laws deprived superannuation funds of income tax exemptions unless the fund included 'public securities' (Cth securities, State bonds and stocks, securities in public utilities).
? The trustees of a super fund for John Fairfax and Son Ltd challenged the laws on the basis they were not laws with respect to taxation under s 51(2) but in fact laws with respect to investment activities.
? DECISION: the court held that the test of characterisation for the non-purposive tax power is the direct legal operation test. The only direct legal duty imposed by the laws was the duty to pay income tax (no actual requirement to invest in public securities). Accordingly it was a law with respect to taxation.
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