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The Inter-State Commission, or Interstate Commission, is a defunct constitutional body under Australian law. The envisaged chief functions of the Inter-State Commission were to administer and adjudicate matters relating to interstate trade. The Commission was established in 1912, abolished in 1950; re-established in 1983, and absorbed into the Industry Commission in 1989.
Section 101 of the Constitution of Australia provides that "[t]here shall be an Inter-State Commission", which would have such powers "as Parliament deems necessary" to administer and adjudicate all matters relating to the Constitutional provisions on interstate trade, and laws made under these provisions.
Section 103 provides that members of the Commission are to be appointed by the Governor-General in Council, for seven years, and whose remuneration must not be diminished during the seven-year tenure.
History of the Inter-State Commission
The Inter-State Commission was established in 1912, by the Labor Government under Andrew Fisher. In 1913, Attorney-General Billy Hughes had appointed A.B. Piddington to the High Court, one of the first Labor appointees. However, Piddington resigned without taking up the position, partly due to to criticism that his declared centralist views regarding the balance of power between the Commonwealth and the states may have been a condition for his appointment. Later that year the newly-elected Cook government invited Piddington to become Chief Commissioner of the Inter-State Commission, joining George Swinburne and (Sir) Nicholas Lockyer.
Loss of Judicial Power
The government at the time believed that the Inter-State Commission had powers to "administer and adjudicate" as to "the execution and maintenance ... of the provisions of the Constitution relating to trade and commerce". Most crucially, it was believed that this would include jurisdiction over Section 92, which provides for freedom of interstate trade.
This dream was shattered soon after, in 1915, with the Wheat Case. This case involved the interpretation of Section 92 of the Constitution. As that provision dealt with interstate trade, it was first heard by the Inter-State Commission. However, on appeal to the High Court, it was held that the vesting of judicial power in the Inter-State Commission was invalid.
This was because the Constitution implicitly created separation of powers. Thus, judicial power can only be vested in the judiciary. Furthermore, Chapter Three of the Constitution provided that a court must have the following features: 1) being vested with judicial power; 2) not being vested with power other than judicial power; 3) having security of tenure, meaning that members are appointed for life (this has since been changed to mandatory retirement at age 70). The Inter-State Commission as it then existed violated all three criteria. Hence, as it was not a part of the judiciary (not a "Chapter Three Court"), it could not be vested with judicial power.
This ruling created continuing controversy, because although the Constitution clearly provides for an Inter-State Commission to "administer and adjudicate", the provision appears to be irreconcilable with the concept of separation of powers. As a result, the part of Section 73 providing for appeals on questions of law from the Inter-State Commission to the High Court has been 'dead letter law' for most of the Court's history.
Having lost its judicial power in 1915, the Inter-State Commission's power was restricted to administrative and executive matters. However, as this was a function already served by relevant government departments, the Commission, without any real purpose, lapsed in 1920 when the terms of the initial Commissioners expired and new appointments were not made.
The Commission was reconstituted by the Whitlam Government in 1975 with the envisaged role to enquire into transport issues that arose due to the federal structure of Australian government. Issues on the agenda included Victorian shipping to the Riverina; Bass Strait ferries; and disruptions to Fremantle shipping to the Eastern States in 1975. In this second incarnation, the Commission did not have any judicial power, but did have powers of arbitration and adjudication, and of investigation and reporting.
The Commission did not become active due to the dismissal of the Whitlam Government. In 1984, following the re-election of Labor Party under Bob Hawke, the Commission received its appointments and was charged with investigating all matters relating to interstate transport.
In 1989, the Commission was abolished with its functions transferred to a new Industry Commission, a statutory body directly responsible to the Commonwealth Government.
Despite the Commission's apparent importance in the scheme of government envisaged by the framers of the Australian Constitution, it is largely unknown to most Australians today. The Inter-State Commission is mentioned often[by whom?] in two contexts: as a lesson from the past, and as a suggestion for change.
It has been said[by whom?] that the Commission sits oddly outside of the three branches of government. It was intended as an institution of federal-state co-operation, but was to be controlled exclusively by the Commonwealth Government. As a result, it has not played any significant role, and certainly has not fulfilled the expectations of the framers of the Constitution. This is often cited[by whom?] as a lesson as to the importance of federal-state cooperation, and of preserving the balance of power between state and federal governments.
A few arguments have also been made[by whom?], using the story of the Inter-State Commission, to support certain causes. These include advocates for the abolition of State governments, or some other type of radical change to the Australian system of government. It is also sometimes cited[by whom?] as an example of the inadequacy of the present Australian Constitution, and the importance of either a republic or a bill of rights.