1. CHANGING THE CONSTITUTION
Other Methods besides Referenda

2. Constitutional Change
There are FIVE ways the Constitution can be altered
Referenda
Interpretation by the High Court
Cooperation between Commonwealth and states - Referral of powers / Unchallenged legislation
Use of financial powers
Constitutional conventions and commissions

3. High Court Interpretation
This has proven to be the most important method of changing the Constitution because of the difficulty of passing a referendum
Interpretation does not alter the wording of the Constitution but rather the way in which it is read

4. High Court Interpretation
All courts can only act on cases brought before them thus the High Court cannot decide on the meaning of the Constitution unless two parties are in dispute about how the Constitution is to be read and bring the case before the Court.

5. High Court Interpretation
High Court decisions in Constitutional cases often affect the balance of power between the States and the Commonwealth by…
Protecting the States from Commonwealth power
Extending Commonwealth financial power
Extending other powers (such as the External Affairs power or the Corporations power)

6. High Court Interpretation
Some Constitutional cases alter the Constitution in ways that do not affect the balance of power.
Finding “implied rights” that are not written in the Constitution but which seem to be suggested is one example
Much more detail on the impact of the High Court on the federal balance of power is the subject of the next part of the course and your Research Essay

7. Federal / State Cooperation
s 51 (xxxvii) says…
“Matters referred to the Parliament of the Commonwealth by the Parliament or Parliaments of any State or States, but so that the law shall extend only to States by whose Parliaments the matter is referred, or which afterwards adopt the law”
This allows States to hand on residual powers to the Commonwealth
SA & Tasmania referred their powers over State Railways in 1977
Victoria referred its power over Industrial Relations in 1997

8. Federal / State Cooperation
Referral of Powers is difficult because the States are reluctant to surrender Sovereignty
The Commonwealth persuaded the States to refer their Income Taxing powers in WW2 and then refused to hand them back. This lead to two High Court cases which the States lost

9. Federal / State Cooperation
Referral of Powers allows the States to enact identical legislation to produce uniform national (as opposed to Commonwealth) laws – examples…
Off-shore oil and gas industry regulations
Air safety regulations
Uniform national gun laws

10. Federal / State Cooperation
UNCHALLENGED LEGISLATION
The Commonwealth may pass laws that are outside its Constitutional powers (it cannot refer to a “head of power” in the Constitution). Usually someone will challenge this in the High Court and the Court will strike down such laws because the Commonwealth has acted ultra vires (beyond its power)

11. Federal / State Cooperation
In some cases, however, the States may not challenge the legislation. In this case the law stands – even though its not within the Commonwealth’s power to pass such a law.
Why would this happen??

12. Federal / State Cooperation
Sometimes an action of the Commonwealth is a “manifestly good idea” of which everyone can see the good sense. In these cases the States may prefer to just let the Commonwealth act – even if it is ultra vires – and not challenge it in the High Court (no-one else can challenge because no-one else is a “party to the case”)
Legislation to create the CSIRO
Snowy River Authority
SA railways (before the power was referred)
Cross-vesting (allowing state courts to hear federal matters & vice versa) Family Court matters (except WA)
Radio & TV regulation
Australian Companies Code
Overall impact of unchallenged legislation on the Constitution is small

13. Constitutional Conventions and Commissions
These are “meetings” formed to study and recommend changes to the Constitution
The 1890’s debates about federation are examples of Constitutional Conventions
The most recent example was the Convention on becoming a Republic. This convention drafted the question that was then passed by parliament and put to the people as the Republic Referendum

14. Constitutional Conventions and Commissions
Various governments have formed conventions and commission over the years.
Whitlam formed the Australian Constitutional Convention in It meet 4 times and was dissolved in 1985
It was replaced in 1985 by the Constitutional Commission – which lasted until 1988
The Constitutional Centenary Foundation was set up in 1995
The 1998 Republic Convention was established to examine the issue of Australia becoming a republic

15. Constitutional Conventions and Commissions
This has been a most unsuccessful and limited form of changing the Constitution. PM Menzies once remarked, after sitting on the Joint Committee on Constitutional Review in 1959, that Constitutional change required “the labour of Hercules” (i.e. it was almost impossible)

16. Financial Powers
In all federations there is a Vertical Fiscal Imbalance (VFI) – but Australia has the world’s highest VFI
Thus the Commonwealth is in a very favourable position – money is power
ss 86 & 90 gives the Commonwealth exclusive power to collect customs & excise (this actually means a lot tax)
s 87 The Braddon Clause (after Premier Braddon of Tasmania) aimed to ensure the distribution of the Commonwealth surplus to the states. This was spent after 10 years and the Commonwealth legislated to stop the surplus distribution as soon as it could

17. Financial Powers
Since then the Commonwealth Grants Commission has decided on the distribution of the surplus – at the Commonwealth’s discretion
This has been used to carry out Horizontal Fiscal Equalisation (to ensure uniform living standards across Australia)
The Commonwealth has influence over the States’ borrowing through the Loans Council (est. by referenda in 1928)

18. Financial Powers
In WW2 the Commonwealth acquired Income Taxing powers from the States and refused to return them – this was upheld by the High Court in two cases
Various High Court cases (eg Tobacco Case) have defined “excise” broadly to include any tax on goods up to but not including consumption – thus all these “sales taxes” can only be collected by the Commonwealth
Other state taxes, such as franchise fees, have been defined by the High Court as “excise” (Hammond Case 1997)

19. Financial Powers
s 96 allows the Commonwealth to grant money to the states “as the [Commonwealth] parliament thinks fit”
Thus the Commonwealth has complete discretion in how it grants money to the states
These “tied grants” have been used to influence state decisions in areas of residual power where the Commonwealth is prevented from direct action by the Constitution – eg education, housing, roads & health. Tied grants enable the Commonwealth to specify what the States must do with the funds, and in many instances, involve matching arrangements requiring States to contribute. This has greatly reduced the freedom States have in how they spend funds within their budgets.

20. Financial Powers
Impact of the GST The Commonwealth raises revenue through the GST which all goes to the States. These GST revenues have been assigned to the States by the Commonwealth in place of the Commonwealth's general purpose grants. This gives the States access to a more reliable and a more generous source of funds. It does not diminish the Commonwealth's use of tied grants to influence policy in areas of State responsibility

21. Other Methods Other possibilities exist for changing the Constitution
New States – would require existing states to surrender territory – highly unlikely
New States – Northern Territory – no need for an existing state to surrender territory. A referendum on statehood was rejected by Territorians

22. Other Methods
Repeal of the Commonwealth of Australia Constitution Act 1900 (clause 9 of which is the Australian Constitution) by the Westminster Parliament. This is possible but fanciful – especially since the passing of the Australia Acts in 1986 by both the Australian and Westminster Parliaments, which effectively removed any remnant legislative and judicial links to Britain

23. Review
The Australian Constitution can be changed in the following ways – in order of importance…
Interpretation by the High Court (the most important)
Use of financial powers (very important & related to the above)
Referenda (formal but less important)
Cooperation between Commonwealth and states - Referral of powers / Unchallenged legislation (relatively little significance)
Constitutional conventions and commissions (very little significance)
New States (never occurred & unlikely but possible - NT)
Repeal by Westminster (fanciful)