The Inter-State Commission, or Interstate Commission, is a 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, became dormant in 1920, was abolished in 1950, re-established in 1983, and absorbed into the Industry Commission in 1989.
At the first Constitutional Convention in Sydney in 1891, considerable debate occurred over the issue of freedom in interstate trade, especially over the abuses arising from differential and preferential railway rates being put into effect in New South Wales and Victoria. One delegate remarked that "'Nothing has caused more friction than the practice of imposing differential railway rates and so filching trade from a neighbouring colony... in fact I know of no other cause of strong feeling between the people of these different communities than that which has arisen from commerce." The later 1897 convention also saw concerns expressed over the effect such predatory rates were having on the river trade, prompting Richard O'Connor to declare that interstate free trade would required institutional, as well as constitutional, protection. The proposal was strongly endorsed by the Convention, and it was later described by Sir John Quick as being a "necessary adjunct to the Constitution". It was seen as being similar in nature to the US Interstate Commerce Commission and the UK Railway and Canal Commission.
History
Delay in creation (1901–1912)
While William Lyne, in his role as the first Minister for Home Affairs, had been working on a draft Bill as early as January 1901 to establish the Commission, fiscal pressures brought on by the Braddon Clause discouraged efforts to assure its passage before 1911, as its establishment was viewed to be a luxury. Lobbying efforts by the Australian shipping industry, incensed that the Commission's scope would include ocean navigation, also contributed to the delay. As a result, the initial Bill lapsed in 1902. No attempts were made during the Second Parliament of Australia, owing to the House seats split almost evenly between the Protectionist Party, the Free Trade Party and the new Labour Party. The next effort to consider the proposal occurred in the Third Parliament of Australia in 1909, when Senator Sir Robert Best introduced the corresponding bill. It failed to proceed, notably because it was also intended to be an industrial tribunal with power to decide whether certain State industrial awards constituted unfair business competition between the States, but the States declined to pass the necessary legislation under the referral power to make the Commission work. The commission's establishment occurred during the Fourth Parliament of Australia, at which time State practices concerning interstate rivalry and discrimination were becoming quite blatant. Prime Minister Andrew Fisher pushed through the appropriate implementing legislation in 1912.
First establishment (1912–1920)
In 1913, the newly elected Cook government appointed Albert Piddington as Chief Commissioner, joining George Swinburne and Sir Nicholas Lockyer. In addition to wide powers of investigation, the Inter-State Commission Act 1912 granted the Commission judicial power which was broad in scope: The High Court of Australia disagreed in 1915, ruling by 4–2 in the Wheat Case that the Constitution implicitly created a separation of powers, and therefore judicial power can only be vested in the judiciary. Furthermore, it was held that Chapter Three of the Constitution had the effect that a court must have the following features:
being vested with judicial power;
not being vested with power other than judicial power; and
its members having security of tenure, meaning that members are appointed for life.
The Commission as it then existed violated all three criteria. Hence, as it was not part of the judiciary, it could not be vested with judicial power. As a result, the s. 73 provision providing for appeals on questions of law from the 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 Commission "became a body of inquiry without any power of enforcing its decisions." The Commission, without any real purpose, lapsed in 1920 when the terms of the initial Commissioners expired and new appointments were not made. Although there was discussion in the 1930s about reviving the Commission, nothing came about, and the Act itself was formally repealed in 1950.
Second establishment (1975–1990)
The Commission was reconstituted by the Whitlam Government in 1975 with the envisaged role of inquiring into transport issues that arose due to the federal structure of the 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. Its first President was the judge Merv Everett. In 1990, the Commission was abolished with its functions transferred to a new Industry Commission, a statutory body directly responsible to the Commonwealth Government.
