National Development and the Constitution

Prior to Federation , the states of Australia operated as independent economies, virtually as separate countries. The Constitution was written to preserve that independence. It was never intended that the new Commonwealth Government would be granted powers to manage a national economy. At that time, a national economy did not exist.

Now, 100 years later, Australia is vulnerable because the Australian Government does not have sufficient powers to defend the national economy, or to plan and build for national development. This is the most serious problem facing the nation. The only major national infrastructure project in our history was the Snowy Mountains Scheme, started 50 years ago and authorised under the defence powers of the Commonwealth. There is now much to be done. The Australian Government has vital national responsibilities. The Commonwealth should have the powers to plan and build for national development.

An Historical Background

This is an interesting, exciting and challenging time to be a citizen of Australia. There is a strong mood of nationalism in the air. We are all concerned about global economic changes, and the impact on our nation. It is much like the mood in Australia immediately after the second world war, when we were faced with the tasks of re-building after the lost time of war.

Nationalism in Australia is a dynamic ideology, capturing our imagination. It is a vision of a future Australia as a sovereign state and with a united people. The current debate on a Republic encourages us to think about our national future.

Australia has never been a nation-state. Australia is more a loose federation of independent State Governments, working uneasily with a Federal Government having limited powers. Whitlam referred to the relationship between the various state governments and the federal government as one of ‘systematic entrenched procrastination’.

Over 100 years ago, prior to Federation, the States operated as virtually independent nations. The State Governments then collected their own revenue and controlled their own expenditures. They had their own postage systems and postage stamps, they collected customs duties at state borders. They even had their own defence forces.

It was the possible threat of a Russian invasion of Australia in the 1890’s that prompted the moves for the states of Australia to join together in a federation. The new Commonwealth government was given powers for defence, customs, overseas trade, and posts and telegraph.

After federation in 1900, the States continued to control their own revenues and expenditure. It was never intended that the new Commonwealth Government would have powers to manage the national economy, because a national economy did not exist.

Now, 100 years later, the Australian Government simply does not have the powers to manage the Australian economy in the interests of all Australians. This limitation of the constitutional authority of the Commonwealth government is now the most serious problem facing the nation.

It was only during World War II, when the nation was facing the threat of invasion from the Japanese, that the State governments finally relinquished their control over income taxes to adopt a system of uniform national taxation to be managed by the Australian Government.

Nevertheless, the States continued to assert their own sovereignty.

After the end of the second world war, the United Nations was established. The NSW Government sent a delegation to the United Nations to plead the case for NSW to be a member of the United Nations. They argued that the States of Australia were the sovereign economic units. The Australian Government had only limited powers. Fortunately, wiser counsels prevailed, and the federal government became the representative for Australia.