The Guardian 6 December, 2006
Dark clouds and silver linings
Paul Matters
In a 5-2 judgement, the High Court, in New South Wales v Commonwealth of Australia;
Western Australia v Commonwealth of Australia dismissed the states' arguments that the
Work Choices legislation was constitutionally invalid.
The use of the corporations power, under the Constitution, together with other heads of power such
as the Territories power and powers referred by Victoria, the federal industrial relations system will
expand to cover about 85 per cent of Australian workers. This is because large and medium sized
businesses in Australia are almost all incorporated, which would bring them under the corporations
power. It is believed that about 49 per cent of small businesses employing workers are currently
incorporated.
The States' argument was that the constitutional corporations powers 51(xx) were restricted to a
power to regulate the dealings of constitutional corporations with people external to it and not
workers. They also argued that s 51(xx) should be read down, in regard to par (xxxv) the power to
make laws with respect to "conciliation and arbitration for the prevention and settlement of
industrial disputes extending beyond the limits of any one State".
Underpinning these arguments was the traditional constitutional doctrine that the corporations
power should be restricted because of its effect of diminishing the authority of the
States.
The decision confirms two important issues:
1. Capitalist law and decision-making, particularly in regard to the essential legal relations of
contract law — particularly employment law, property law and credit law — reflect the developments,
needs and imperatives of the economic base of society. The majority of the High Court has made a
decision to bend the law to the priorities of the economic base, as a virtually universal system of
industrial relations will be created under the oppressive WorkChoices regime.
2. The majority decision reflects the developments of Australian capitalism in terms of its
restructuring in the era of globalising imperialism. Constitutional law has played an important
function in both reflecting and advancing the growth of monopolisation, finance capital and
rationalisation in Australian capitalism.
The federal system, with States holding wide powers in the economy was the consequence of the
huge size of the Australian territory, small dispersed populations, the rudimentary communications
technology and a relatively small capital base of corporations. In 1910 the Victorian Railways
assets were nearly six times larger than the biggest private corporation. The nature of the physical
dispersion of the centres of the mining, agriculture and smelting industries further strengthened the
States' organisational structures. Early constitutional law reflected this natural and social
fragmentation.
The rapid and huge expansion of scale, associated with globalisation, neo-liberal strategies such
as the internationalisation of finance and privatisations, merger waves resulting in monopolisation,
particularly in the 1970s and 1980s, have all conspired to greatly weaken the old federal structure
of shared powers between the States and central government.
The majority decision of the High Court has placed a judicial seal on the triumph of neo-liberal
centralism, repression and an industrial relations system of hyper exploitation.
Unable to hide his glee Howard sniggered, "This removes the one potential cloud over the
legislation and it means that Australia at long last, in 2006, has a national system of industrial
relations laws".
He is wrong. The storm clouds that will envelop this oppressive, ruthless and harsh system are
already gathering. These clouds of the struggle of the Australian people will carry with them the
silver linings of the demands and program of real economic, social and political justice, which no
capitalist court can deliver.