The last thing the Murray-Darling basin needs is to be the centre of a year-long High Court dispute. The litigation will cause more uncertainty and further delays in fixing the problem. On the other hand, the failure of the Commonwealth and Victoria to agree means that the Court may be the only place their differences can be resolved.
Even when the legal issues have been determined, the final policy for the basin may end up being what the Prime Minister has described as a "three-legged horse" and the Victorian Premier "a dog's breakfast". This is because the federal plan will now be shaped not just by the environment and the needs of those who depend on the system, but by the often arcane limitations of the Australian Constitution.
The Constitution does not grant express power to the Commonwealth over rivers or systems like the Murray-Darling. This is one reason why the Howard Government has spent months trying to entice the States to cede their powers in return for a $10 billion investment.
Without the support of Victoria, the Commonwealth must be creative in using its other powers to impose its policy. Federal Environment Minister Malcolm Turnbull has suggested he will rely upon the corporations, external affairs and interstate trade and commerce powers. These are an awkward fit with the federal plan and will require changes and compromises.
The corporations power was given an expansive reading last year by the High Court in the WorkChoices case. It would allow the Commonwealth to regulate irrigators and other river users, but only where they operate through a corporation. Indeed, some might decide not to use the corporate form to avoid federal regulation.
The external affairs power can be used to implement international treaties ratified by the Australian government. However, the High Court has said that laws must conform to the terms of the treaty. Hence, the power will support the Commonwealth plan only to the extent the federal government can find a treaty that matches its policy.
It is likely to rely upon two treaties, the Convention on Biological Diversity and the Convention on Wetlands of International Importance especially as Waterfowl Habitat. Both will be useful to the Commonwealth, but neither extends as far might be hoped. The 1983 High Court decision that upheld the Hawke government law that saved the Franklin River in Tasmania is of limited assistance. It dealt with the World Heritage Convention, a treaty that does not apply over the Murray-Darling area.
The final power is that over interstate trade and commerce. It suffers from being interpreted narrowly by the High Court. Where a matter falls within just one state the power is likely to fall short.
In any legal attack Victoria will rely on section 100 of the Constitution. It says "The Commonwealth shall not, by any law or regulation of trade or commerce, abridge the right of a State or of the residents therein to the reasonable use of the waters of rivers for conservation or irrigation". This applies only to the trade and commerce power, and even then it just protects "reasonable" use of the waters. The section is unlikely to provide the winning case that Victoria seeks.
Each of the Commonwealth's powers will be useful in supporting parts of the federal takeover of the river system. However, the coverage will be incomplete. The government will need to give up aspects of its plan to have the best chance of winning in the High Court. This will involve trading off policy and flexibility for a law that is more closely aligned with constitutional power. While a cautious approach will make a federal victory likely, there will be no certainty until the Court has decided.
The Commonwealth has already signalled it will drop parts of the plan. While it will push for control over the overall amount of water diverted to irrigation, it might not seek power over seasonal river levels or specific river operations. In doing so, the federal government will have to give up the idea of a holistic plan to manage the basin.
The underlying problem is Australia's dysfunctional federal system of government. Our 1901 Constitution fails to set out clear responsibility for the Murray-Darling and other waterways. While the management of a river system that crosses state borders should be a matter for the federal government, the Constitution fails to say this.
The result is a political log-jam. Prime Minister John Howard has said that "This is a national problem, it's an Australian problem," while Premier Steve Bracks has been elected to govern for Victorians and so has asserted the interests of his farmers. What we all lose in this conflict is the capacity for decisive action and the ability to achieve the best policies. Indeed, the one thing that the Commonwealth and Victoria do agree on is that we are headed for a second best solution.
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