Economics Powers A

Trade and commerce Power

Scope

• The reach of s 51 (“Trade and commerce with other countries and among the States” is wide

  • The words are also found in s 92 that speaks of “trade, commerce and intercourse” which are also broadly construed

• In W & A McArthur v Queensland, Knox CJ, Isaacs and Starke JJ iterated that what falls within the ambit of the expression in s 51 depends on the varying phases of ‘trade, commerce and intercourse’ itself

  • They also explained that it not only includes transportation but also “commercial arrangements of which transportation is the direct and necessary result from part of ‘trade and commerce’” including “mutual communings, the negotiations…the bargain, the transport and the delivery”

• The section enables the CTH to regulate and participate in T&C with other countries and among the states

• Australian National Airways Pty Ltd v Commonwealth (ANA Case) (1945) 71 CLR 29

  • Facts: The Australian National Airlines Act (ANAA) established the Australian National Airlines Commission (now Qantas) which was authorized to operate interstate airline services.

  • Held: that the operation of the service was valid – the CTH had power to legislate WRT interstate trade and commerce which allowed it to established its own government instrumentality to engage in such trade and commerce

    • Australian Coastal Shipping Commission v O’Reilly (1962) 107 CLR 46

      • Facts: The court took a similar view as in the ANA Case but in that case sections of the Act attempted to confer a monopoly on the airline – these sections where held to be invalid

  • Dixon J based his argument for this inclusiveness on the fact that the powers granted by the Constitution are wide enough for flexible application (“it is a constitution we are interpreting”) and laws authorizing the conduct of a transport service for inter-state trade (as a monopoly or not) definitely fall within it

• The CB writers point out three distinctive inhibiting factors constraining the interpretation of s 51(i)

1. The section omits trade and commerce within a State and hence judges have construed the section as not allowing the CTH to encroach too far on an area of power not granted to it. The dichotomy is given considerable importance despite the interdependence between inter/intrastate trade (Gibbs CJ in A-G (WA) v ANAC)

2. Despite the close verbal parallels with the Commerce Clause of the USC the Australian equivalent is far less widely used than the American counterpart

   1. One reason is that the grants of power to the AU Parliament are much more numerous (39 as opposed to 18) – these powers are more explicit, e.g. “banking” in 51(xiii); such areas were implicitly included in the USC Commerce Clause. These have allowed development to be spread amongst powers in Australia

   2. The commingling doctrine accepted in America (the idea that inter/intrastate trade is so commercially interdependent that the congressional power must necessarily extend to it) has not been accepted in Australia

3. The need to harmonize s 51(i) and s 92 – s 92 inherently limits s 51 as it places area of State trade and commerce beyond CTH power (it must be “absolutely free”) – accordingly any expansive interpretation of the words will impose a large parallel interpretation. In the ANA Case s 92 precluded the CTH from giving the ANAC a monopoly due to s 92.

• This idea that the CTH can’t encroach on intrastate trade has overtones of the ‘Reserved Powers’ doctrine (and was once used under a principle that such limitations can be extended to other powers – this however has been discredited)

  • But this is clearly different – s 51(i) says nothing of Reserved Powers, it simply does not grant the power to enact laws with respect to intrastate T&C

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