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§ 165. “Bounties.”

The trade and commerce sub-section would probably have been sufficient to confer on the Federal Parliament power to grant bonuses, bounties, and subsidies on the production or the export of goods; that is to say, on the growth or manufacture of goods to be consumed within the Commonwealth, as well as on the growth or manufacture of goods to be exported from the Commonwealth. This sub-section has been inserted for


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the purpose of placing the bounty-granting power of the Parliament beyond doubt, and also for the purpose of associating with and grouping around the power several restrictions and directions. It may facilitate the study of this power to present a survey of the constitutional provisions relating to it.

First comes the requirement (sub-sec. 3) that such bounties shall be uniform throughout the Commonwealth. If they are not uniform the law on which they are founded is null and void. The rule as to uniformity means not merely that the bounty must be general throughout the Commonwealth, but also that there must be a uniform or equal bounty on each class of goods which is the object of the bounty. (Sturges v. Crowninshield, 4 Wheat. 122.) The Supreme Court of the United States has interpreted the word “uniform,” in similar association, to mean the same amount upon the same article wherever found. (Head Money Cases, 112 U.S. 580; Burgess, Political Sc. ii. 151.)

The next question to consider is, at what stage in the history of the Commonwealth does this bounty-regulating power come into operation? Sec. 86 provides that on the establishment of the Commonwealth the control of the payment of bounties shall pass to the Executive Government of the Commonwealth. Does this mean the control of the payment of bounties authorized by the Federal Parliament, or does it mean the control of the payment of bounties authorized under grants or agreements lawfully made by the governments of the States before 30th June, 1898?

This leads to the consideration of sec. 90. By the first paragraph of that section, the power of the Parliament to grant bounties on the production or export of goods becomes exclusive on the imposition of uniform duties of customs and excise. The preparation and adoption of such uniform duties will necessarily occupy a considerable time; by sec. 88 they must be imposed within two years of the establishment of the Commonwealth. By the second paragraph of sec. 90, it is enacted that, after the imposition of uniform duties, the bounty laws of the States shall cease to have effect. This is followed by a proviso—which requires careful examination—that certain grants or agreements made by States for bounties shall be preserved.

At the Adelaide sitting of the Convention, when the section relating to the cessation of State bounties, as drafted by the constitutional committee, was under discussion, attention was drawn to the fact that no provision was made for the protection of existing bounty arrangements. The State bounty laws, and contracts made thereunder, were to be absolutely swept away as soon as uniform duties were imposed. It was contended that where a colony had, prior to federation, entered into arrangements with the promoters of certain industries to grant bonuses and bounties for the assistance and development of those industries, such arrangements ought to be protected and preserved, even after the establishment of the Commonwealth; otherwise the sudden withdrawal of State aid from those who had invested capital, in the expectation of the continuance of that aid for a certain time, would be an unjust breach of faith on the part of the government, and would be ruinous to those who had entered upon productive enterprises on the strength of a public agreement. In illustration of the argument, it was mentioned that the government of South Australia had made contracts with stock-breeders in the Northern Territory, to pay them bonuses on the export of cattle. Those contracts had several years to run, and if federation were accomplished and uniform duties imposed before the expiration of the term, the government of South Australia would, under the clause as it then stood, be prevented from completing its contract. Victoria was under similar obligations, which her representatives were anxious should remain in full force and unimpaired by the Constitution.

An effort was made to show that the repeal of State laws offering bounties on the production or export of goods would not ipso facto invalidate any agreement made under such laws before their repeal. Legal authorities were cited, showing that where an enactment would prejudicially affect vested rights, or the legal character of past Acts,


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the presumption against a retrospective operation is strongest. Every statute which takes away or impairs vested rights acquired under existing laws, or creates a new obligation, or imposes a new duty, or attaches a new disability in respect of transactions or considerations already past, must be presumed, out of respect to the legislature, to be intended not to have a retrospective operation. Thus the provision of the Statute of Frauds, that no action should be brought to charge any person on any agreement made in consideration of marriage, unless the agreement were in writing, was held not to apply to an agreement which had been made before the Act was passed. The Mortmain Act, in the same way, was held not to apply to a devise made before it was enacted. So it was held that the Act 8 and 9 Vic. c. 109, which made all wagers void, and enacted that no action should be brought for a wager, applied only to wagers made after the Act was passed. (Maxwell, Interpretation of Statutes, 3rd ed. 299.)

This assurance, however, did not satisfy the representatives of the colonies interested. Eventually an addendum was made to the proposition, which, after various modifications at subsequent stages, at last assumed the phraseology in which it is presented in clause 90 of the Constitution, viz., any grant of or agreement for any bounty lawfully made by or under the authority of the Government of any State shall be taken to be good if made before the thirtieth day of June, one thousand eight hundred and ninety-eight, and not otherwise.

Another branch of the bounty question is dealt with by sec. 91, in which a limited measure of bounty-granting power is reserved to the States. In the course of the general debate at Adelaide, it was said that there were a number of local industries, peculiar and special to particular States, and with which the Commonwealth Parliament would have no concern. Thus the Victorian Parliament had been in the habit of granting prospecting votes for the encouragement of gold mining. New South Wales might see the advisability of granting a similar assistance for the production of iron. It was urged as extremely desirable that the greatest possible facility, consistent with equality and freedom of inter-state trade, should be reserved to the States, in order to enable them to promote any policy for the development of their natural resources. It was first suggested by Mr. Trenwith, that the right to vote grants in aid of gold and other metal-mining should not be exclusively vested in the Federal Parliament, but that the States should have a concurrent power, and that as regards other local industries, not capable of full specification, and in which the Commonwealth as a whole was not concerned, bounties might be given by the States with the consent of the Federal Parliament. This would secure the object aimed at without detracting from the supreme control and supervision of the highest legislative authority. A section allowing the States to subsidize mining for gold, silver, or other metals, was readily agreed to. (Sec. 91.) It was only after a prolonged debate in Melbourne, and in response to the earnest appeal of the Premier of Victoria, supported by his colleagues, that an addition to the mining section, enabling a State, with the consent of both Houses of the Federal Parliament, to grant aids to or bounties on the production or export of goods was made. (Sec. 91.)

For further discussion of State and Federal powers with regard to bounties, see notes to secs. 86, 90, and 91.

51. (iv.) Borrowing money166 on the public credit of the Commonwealth:

HISTORICAL NOTE.—The Constitution of the United States empowers Congress “to borrow money on the credit of the United States.” (Art. I. sec. vii. sub-s. 2.) The British North America Act, sec. 91, sub-s. (4), gives the Dominion Parliament power as to “The borrowing of money on the public credit,” whilst sec. 92, sub-s. (3), gives each Provincial Legislature power as to “The borrowing of money on the sole credit of the Province.” In the Commonwealth Bill of 1891 the sub-clause appeared in its present form. In Committee, the only debate was on the suggestion that there should be power


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to borrow in order to pay off the debts of the States. (Conv. Deb. Syd., 1891, pp. 679–83.) In the Convention of 1897–8 the sub-clause was adopted and agreed to without debate.

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