A Blank Cheque For Labor

by Jack Waterford - Canberra Times

Yesterday's High Court decision on the reach of the Commonwealth's corporations power is a great fillip for the Howard Government and its new industrial relations regime. It is also a significant defeat for organised labour.

But whether it is a defeat for political Labor is entirely up to it. From defeats like this could come tremendous victories - if only Kim Beazley and his troops had the vision, the imagination and the energy. There's now a new rule book and it favours Labor far more than it does John Howard.

Under the new rules, there are virtually no constitutional limits on the ability of the Federal Government to regulate economic matters, including matters of environmental, health, education or welfare significance. Even apparent constitutional limitations seem to disappear. In effect, a law saying "a corporation shall" or "a corporation shall not" is likely to be a valid exercise of Commonwealth power.

Such power suits Labor, which prefers to exercise the power of government, more so than conservative parties, that in theory at least, want to restrict the role of government in the workings of society, markets and the economy. Even a Labor Party that has learnt respect for markets, and lost faith in both nationalisation and heavy economic regulation, could forge a new agenda of sensitive new political and economic regulation as a "more caring", inclusive and less Darwinian player than the other side. Gough Whitlam would have jumped at the opportunity. He, after all, had a reason for seeking power and wanting to exercise it. Now the constitution is neither an excuse nor a limitation.

The big danger, indeed, is that Labor will see the decision narrowly. It might say: if the High Court has recognised that John Howard has the power to completely remake industrial relations, then so has it recognised a power in a future Labor government to unmake it. It can thus confidently promise to go back, perhaps even to skew the old laws even further on the side of union rights.

Labor thinks this can win it an election. It might be right but it could well be wrong. The changes have in fact taken root fairly easily, without any of the disastrous social effects predicted by Labor. That's been helped by skill shortages and a continuing economic boom. With no election due for a year, by then the changes will seem pretty much the status quo. And many workers like the changes, or some of them.

Labor would be far better advised to look forward, not back, even if it is committed by its union constituencies to restoring some old rights.

Nothing now prevents direct legislation on the stuff of old award conditions - maternity pay, child-care, training requirements, minimum rates, even overtime. Or, for that matter, putting into the general law a host of rights favoured by union officials - without quite the appearance of restricting the labour market.

Such a tactic might not have Labor as exposed to the claims of re-regulation and reduced labour market flexibility. Able to be sold, even to those who strongly favour open markets, as safety-netting, protection of the relatively powerless, and evening-up an otherwise unfair bargaining process.

Likewise, a new agenda of economic regulation does not have to imply the clumsy market interventions of the 1960s and 1970s. Or, if it does, the same reasons.

It now has, for example, new methods of mandating environmental, pollution and resource restraint rules - ones that are likely to be of far more certain effect than those which have depended on the constitution's external affairs power, or power over international trade.

The Commonwealth now has clearer power to intervene in the affairs of universities, rather than with the blunt instrument of control over the purse.

And hospitals, even state ones. And pharmaceutical companies. Possibly even doctors, despite what was previously considered a constitutional barrier. Or to reinstate something like the Australian Assistance Plan.

It could, in the public interest of course, decide that it wanted to regulate newspapers, something it has always thought itself unable to do.

Newspapers are run by companies. If the Government wants, say, a privacy law, it merely has to pass legislation saying that "no corporation shall publish anything except according to this code". It could create a court or tribunal to enforce that law, on which it could, if it wanted, reverse the onus of proof.

It could decide that the proper enforcement of the law required that journalists be licensed, and that only persons of good character, approved by it, could be employed as journalists.

The only limits would be of common sense and politics, not the law. Government would, of course, insist that it was acting in the public interest, and create a completely impartial committee - perhaps like the present ABC board - to protect the public interest.

One could imagine other areas into which the Commonwealth could move.

Some of the reaction has focused on the new capacity of the Commonwealth to take powers from the states. Yes, it gets some more power, since the majority of the court is indifferent to changes in old balances, so long as no one actually abolishes the states.

But the Commonwealth has been accruing power from the states since 1901 and that trend will continue with or without yesterday's decision. We are now more a single nation than a set of states and territories.

The Commonwealth has taken a role in education since 1940; its role and its aspirations increase each year, to open state dismay. Likewise in health. But now the Commonwealth has fresh power to do directly what previously it could do only by stealth, or by its control of the money.

But it is not only state and territory governments that can lose power. So can individuals. So, for that matter, can corporations.

The inexorable trend of government, even after the conversion to market economics, has been towards expanded government power over all aspects of our lives. Without a Bill of Rights - a constitutional description of parts of our lives that government cannot enter, or a limitation, by the people, on what any branch of government can do - the High Court decision expands the scope for further interference with the individual.

John Howard will retort - rightly, in one sense - that his legislation, as opposed to the decision, does no such thing. His legislation passes power to the individual, not to government. Much of his economic legislation increases, rather than restricts, personal choice.

Yes, but the constitutional underpinnings of such legislation depend on the Government being accorded the power to decide what choices people can make and what they cannot. When you give politicians such power, you also give them the power to change their minds and pull the string back. It's now a matter of political, not constitutional, judgment.

Of course, a party that wanted to further restrict freedom would be taking political risks. It would be accused of being oppressive. Of being radical. Of breaching fundamental understandings about the division of power in the federal system. It might be accused of undermining the system.

The party most likely to take advantage is Labor. The irony is that it will have been John Howard, and a supposedly conservative High Court, that gave them the means to do so.

But then again, some might think the real irony is that Labor shows little idea of what it might want to do with the blank cheque it has just been given.

Who knows what Beazley yearns for, or dreams of?

While Labor is so clueless, of course, there's not much prospect of it being able to cash the cheque anyway.

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