§ 388. “With the Consent of Both Houses… Expressed by Resolution.”

This provision amounts to an absolute power given to the two Houses of the Federal Parliament to dispense, to any extent which they may desire, with the prohibition imposed by the preceding section. The intention is that whilst State bounties in general are prohibited, there should be full opportunity given for the allowance of bounties which are purely developmental in aim and not unfederal in effect. It being impossible to frame any definition which would secure this desirable object, the matter was entrusted absolutely to the discretion of the Federal Houses of Parliament.

As to the nature of the consent, it is conceived that it may be absolute or conditional, particular or general, for a fixed or an indefinite period; and that the resolution may be either antecedent or subsequent to the grant by the State. Perhaps the most important questions likely to arise are (1) whether the consent once given is revocable, and (2) if so, what will constitute revocation.

(1.) That any consent given under this section is revocable there can hardly be any doubt. The consent of Parliament in such a case is not the consent of a contracting party, but a license given by a governing body. If instead of the consent of “both Houses of the Parliament expressed by resolution,” the consent of the Parliament itself had been required, the consent would have been by legislative Act, revocable at any moment at the will of the Parliament. A Parliament cannot bind succeeding Parliaments, and cannot even bind itself; and it is impossible to suppose that it was intended to empower the two Houses by joint resolution to do what the Queen and both Houses together would be unable to do. It is submitted, therefore, that the consent of both Houses must be a continuing consent, revocable at any moment. Consideration of the object of the general prohibition against bounties, and of this exception, leads to the same conclusion; because it is obvious that a bounty which does not, when granted, interfere with equality of trade may afterwards, under altered conditions of trade, involve serious inequality.

(2.) Then comes the question—what constitutes revocation? If the consent is revocable, it can clearly be revoked in the way in which it was made—by resolution of both Houses. But would the rescission of the resolution by either House, without the other, constitute revocation? The answer seems to depend on the further question whether the “consent of both Houses” is to be regarded as a joint or a several consent —as one consent or two. If the consent of each House were regarded independently, it would seem that the consent of both Houses could not be said to continue when the consent of one was withdrawn; whereas if the consent of both Houses were regarded as one common consent, the concurrence of both would be needed to withdraw that consent. Looking at the language of the section (which speaks of “both Houses,” not of “each House;” compare sec. 128), and also at the character of the Parliament as a legislative body, and the semi-legislative character of the consent required, it seems clear that a joint revocation would be necessary. If the intention of the Convention be considered, this view is borne out. The proposal to require the consent of “both Houses” was a compromise to meet the views of those who feared that the consent “of the Parliament” would involve undue delay. The joint resolutions seem to have been regarded as a slightly more expeditious substitute for an Act of Parliament, and not to differ in effect. (Conv. Deb., Melb., p. 2352.)

It was indeed suggested (id. pp. 2357–8) that a consent once given would become “part and parcel of the Constitution,” and would be interminable unless so expressed by the resolutions themselves; but it is submitted that this view—which was not based on the distinction between resolutions and Act of Parliament—cannot be supported.

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Trade within the Commonwealth to be free.

92. On the imposition of uniform duties of customs, trade, commerce, and intercourse among the States, whether by means of internal carriage or ocean navigation, shall be absolutely free389.

But notwithstanding anything in this Constitution, goods imported before the imposition of uniform duties of customs390 into any State, or into any Colony which, whilst the goods remain therein, becomes a State, shall, on thence passing into another State391 within two years after the imposition of such duties, be liable to any duty chargeable on the importation of such goods into the Commonwealth, less any duty paid in respect of the goods on their importation.

CANADA.—All articles of the growth, produce, or manufacture of any one of the Provinces shall, from and after the Union, be admitted free into each of the other Provinces.— B.N.A. Act, 1867, sec. 121.

Where customs duties are, at the Union, leviable on any goods, wares, or merchandises in any two Provinces, those goods, wares, and merchandises may, from and after the Union, be imported from one of those Provinces into the other of them, on proof of payment of the customs duty leviable thereon in the Province of exportation, and on payment of such further amount (if any) of customs duty as is leviable thereon in the Province of importation.—Id. sec. 123.

HISTORICAL NOTE.—At the Sydney Convention, 1891, the first paragraph of the clause was drafted and passed substantially in its present form—except that it referred to trade “throughout the Commonwealth,” not merely “among the States.” There was also a clause enabling the Parliament to annul any law having the effect of derogating from inter-state free trade.

The difficulty as to the possible evasion of the federal tariff by “loading up” just before its imposition, in a colony where goods were duty-free, was raised by Colonel Smith, who proposed to retain the intercolonial duties for twelve months after the imposition of the Federal Tariff. The amendment was, however, withdrawn. (Conv. Deb., 1891, pp. 790–802.)

At the Adelaide session, 1897, the 1891 draft was followed almost verbatim. In place of the power to annul laws made in derogation of free-trade, there was appended to the preference clause a provision that such laws should be wholly void. Sir George Turner feared that “absolutely free” might have a wider interpretation than was meant; and Mr. Isaacs suggested that the clause was unnecessary, and dangerously wide. All that was needed was a prohibition of inter-state duties—which was elsewhere provided for. He also suggested “among the States” as better than the wide phrase “throughout the Commonwealth.” (Conv. Deb., Adel., pp. 875–7.)

For an amendment by Mr. Deakin, to enable a State to prohibit importation of articles the sale of which within the State is prohibited, see Hist. Note to sec. 113.

At the Melbourne session, a suggestion of the Legislative Assembly of Western Australia to omit “throughout the Commonwealth,” and substitute “between the States,” was agreed to.

The second paragraph was added in accordance with the Report of the Finance Committee. Mr. McMillan feared it would be unworkable; but Mr. Holder replied that it would probably not need to be enforced, as the mere fact of its existence would prevent the mischief. The provision was amended by inserting “colony or” before

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“State,” so as to make it applicable to goods imported before the establishment of the Commonwealth. Sir Philip Fysh proposed words to make it clear that these duties are to be credited to the State of destination; but the amendment was deemed unnecessary, and withdrawn. Sir George Turner suggested that where the duty paid in the colony was higher than the Commonwealth duty, the State should give a drawback; but the matter was left over for consideration. An amendment by Mr. Henry, to limit the clause to one year, was negatived by 32 to 9. The provision that laws derogating from free-trade should be void disappeared from the Bill, that result being sufficiently secured by this clause. (Conv. Deb., Melb., pp. 1014–36.) Drafting amendments were made before the first report and after the fourth report.