$358. "Transfer of Property of State."

OBJECT OF SECTION.-The general principle embodied in this section is that the lands, buildings, and other public property used by the transferred departments shall be taken over by the Commonwealth, and paid for at their fair value; but the necessary provision for this is complicated by two circumstances.

In the first place, property used by a transferred department is not always exclusively so used; the department may occupy part of a building the rest of which is occupied by a department not transferred, or it may make use of property which belongs wholly to another department. For example, telegraph lines in many cases run along the railway lines, and many post and telegraph offices are situated upon railway premises. In the second place, all the property used in connection with the collection of customs on the inland borders will not be required by the Commonwealth after intercolonial freetrade is established, and therefore only needs to be transferred for a limited time.

The section is therefore framed so that property used exclusively by a transferred department shall be vested at once in the Commonwealth, either permanently or temporarily as the case may be; whilst property used, but not exclusively, by a transferred department may be acquired by the Commonwealth at its option.

§ 359. "All Property of the State, of any Kind."

Property of the State" means the public property of the State, and includes real as well as personal property-lands, buildings, public works, vessels, materials, and so forth. In earlier drafts these particular words were inserted; but they were afterwards discarded in favour of the general word " 'property." A similar expression is used in the B.N.A. Act, secs. 108 and 117, where the property" of a province is referred to. See also sec. 51-xxxi. (the acquisition of property for public purposes), and sec. 54-i., giving the Federal Parliament exclusive power over all places acquired by the Commonwealth for public purposes.

§ 360. "Used Exclusively in Connection with the

Department."

The chief difficulty under this sub-section is likely to arise in ascertaining exactly what property comes within this description. No mode of ascertaining this is prescribed, and it is therefore a question of interpretation upon the facts. In most cases there will probably be little doubt; and, in those cases where doubt does arise, the question (which is one of proprietary rights only-see note below) will be capable of settlement by agreement between the governments of the Commonwealth and the State, under the authority of the respective Parliaments.

§ 361. "Vested in the Commonwealth.”

The effect of this expression is to vest the property in the Commonwealth when the department is transferred-i.e., from the time of transfer-without the need of any legal assurance (see Conv. Deb., Adel, p. 871); and the result of the vesting would seem to be that the Commonwealth acquires the property to exactly the same extent as if it had been acquired under the next sub-section, or under sec. 51, subs. xxxi. The difference is in the mode of vesting, not in the nature of the interest acquired. Compare the phrase used in sec. 125, which provides that the seat of Government shall be within territory "which shall have been granted to or acquired by the Commonwealth and shall be vested in and belong to the Commonwealth." The substantial difference between the two expressions is that under this section the property is vested, and under sec. 125 the territory only. The effect of this section, considered by itself, seems to be to transfer only the proprietary rights of the State, and not its territorial rights; but sec. 52 supplements this by giving the Federal Parliament "exclusive power to make laws" with respect to places acquired by the Commonwealth for public

purposes.

§ 362.

"The Commonwealth may Acquire any Property . not Exclusively Used.”

The Commonwealth has a general power (sec. 51-xxxi.) to make laws for the acquisition of property on just terms from any State for any purpose in respect of which the Parliament has power to make laws. Legislation under that section would-assuming legislation to be necessary-apply to acquisitions for the purpose of this section; except as to the ascertainment of value and the mode of compensation, for which special provision is here made. If the Commonwealth and the State are agreed as to the property to be transferred, it appears that this section of itself is sufficient authority for the transfer, without any federal legislation; but if there is any dispute, legislation will be necessary to prescribe the mode of acquisition.

§ 363.

"The Commonwealth shall Compensate the State." The following returns of the value of the property of the chief departments proposed to be transferred are taken from Papers on Federation circulated by the Government of Victoria, 1897, p. 296 :—

ESTIMATED PRESENT VALUES OF PROPERTY OF CHIEF DEPARTMENTS PROPOSED TO BE TRANSFERRED TO A FEDERAL GOVERNMENT. (a) Distinguishing Departments.

NOTE.-The above figures must be regarded only as a rough approximation, in the absence of definite information on the subject, which has been applied for but not yet received.

b. Dreinguishing Colonica, and shouring also. Cost of Maintenance and Interest.

Capital Value of—

Farmature. and Fittin

§ 364. "The Mode of Compensation.”

These words were inserted at the Melbourne Convention (see Debates, pp. 1001-7) To carry out, with a somewhat wider scope, a suggestion of the Legislative Assembly of South Australia that payment might be made by taking over an equivalent part of the public debt of the State. The amount of compensation is arrived at under subs. ii., and subs. iii. then provides that the mode of compensation may be determined by Parliament. It seems that it will be open to the Parliament under this section to provide that compensation may be made in cash, or in instalments, or by an annual rental, or by issuing debentures, or by taking over an equivalent part of the public debt, or in any other way which will give to the State the value agreed upon or ascertained.

$365.

"The Current Obligations of the State in Respect of the Department."

The transfer of the property used in connection with the departments having been provided for, it was necessary also to provide for the transfer of claims against the departments. This provision is intended to meet the case of current contracts with the department, by requiring that the obligations under them should be taken over by the Commonwealth. The word "current" was inserted by the Drafting Committee to meet a criticism that the words might be construed to extend to loan moneys spent in connection with the department. See Conv. Deb., Adel., pp. 920-2; Melb., p. 1902.) It is quite clear that the words refer only to the "current" obligations incurred in the course of departmental business, and have no reference whatever to capital invested by the State in departmental works, or the obligations which the State may have incurred in raising such capital-obligations which cannot be said to be incurred in connection with the department on which the money is afterwards spent.

It was also suggested Conv. Deb., Melb.. pp. 1905-6 that contracts of service entered into by the department with its officers might be held to be included; but seeing that these are expressly dealt with in the preceding section, this construction would be superfluous as well as forced.

86. On the establishment of the Commonwealth, the collection and control of duties of customs and of excise366, and the control of the payment of bounties, shall the Executive Government of the Commonwealth.

pass to

HISTORICAL NOTE.-In the Commonwealth Bill of 1891, this provision, in substantially the same words (except that "the payment of bounties," not "the control of the payment of bounties," passed to the Commonwealth) stood as a paragraph of Clause 4, Chap. IV. (Exclusive power over customs, &c.) There were also provisions (clauses 7, 9) that until the uniform tariff, bounties payable in the several States should be paid by the officers of the Commonwealth, and charged against the States.

At the Adelaide session, 1897, the provision, following the draft of 1891, still stood part of the “exclusive power" clause. The debate, which turned entirely on bounties, is summarized in Historical Note to sec. 90, Conv. Deb., Adel., pp. 835, 838-66.

At the Melbourne session the paragraph was struck out, and re-inserted as a new clause. An amendment by Sir George Turner, excepting State bounties consented to by the Federal Parliament, is noted under sec. 91, Conv. Deb., Melb., pp. 964-5, 990, 2343-65.

$366.

"The Collection and Control of Duties of Customs and of Excise."

COLLECTION.-By sec. 69 the departments of customs and excise become transferred to the Commonwealth on its establishment, and by this section the collection of the duties also passes at once to the Executive Government of the Commonwealth. That is to say, the duties continue to be collected by the same departments as before, but on behalf of the Commonwealth instead of the several States.

Until the imposition of the federal tariff (sec. 89) customs and excise duties will continue to be collected in the several States, according to their respective tariffs — which do not 66 cease to have effect" until then (sec. 90). During this period, customs duties will of course be collected on intercolonial trade as well as on imports from abroad. As long as the medley of tariffs remains, it would obviously be impracticable to allow the free passage of goods across the borders, and therefore intercolonial freetrade is postponed until the uniform tariff is in force (sec. 92).

Meanwhile, though the duties themselves are collected and controlled by the Commonwealth, the tariff of each State remains alterable by the Parliament of the State. The power to impose duties of customs and excise does not become exclusive with the Commonwealth until the first federal tariff is imposed (sec. 90); and until it becomes exclusive, the concurrent power of the State Parliament continues (sec. 107).

CONTROL.-By "control" of the duties is meant the disposal of them after collection. That "control" is of course subject to the provisions of the Constitution. The duties collected, instead of being paid into the Treasuries of the respective States, are paid into the Consolidated Revenue Fund of the Commonwealth (sec. 81) to be dealt with as the Constitution provides.

$367. "The Control of the Payment of Bounties."

The Bill of 1891 provided (chap. IV., secs. 4, 7, 9; that "the payment of bounties " should pass to the Commonwealth; that until the imposition of uniform duties the bounties payable in each State should be “ paid by the officers of the Commonwealth; and that the amount so paid on behalf of any State should be deducted from its share of the surplus. In the Adelaide draft of 1897 these provisions were all omitted, and nothing but "the control of the payment of bounties" passed to the Commonwealth.

What passes to the Executive Government of the Commonwealth by these words is not a liability, but a right of control. "Control" means regulation, government, direction; it is a matter of authority, not of obligation. To interpret the somewhat vague words of this provision, it is necessary to refer to the other sections of the Constitution dealing with bounties.

Sec. 51-iii. empowers the Federal Parliament to make laws with respect to "bounties on the production or export of goods, but so that such bounties shall be uniform throughout the Commonwealth."

Sec. 90 provides that on the imposition of uniform duties, the power of the Commonwealth to grant bounties shall become exclusive; that thereupon all laws of the States offering bounties shall cease to have effect; but that "any grant of or agreement for any such bounty" shall be good if made before 30th June, 1898. It follows from that section, read together with sec. 107, that until the imposition of uniform duties the States may make laws offering bounties; but that when the uniform tariff begins the laws so made must cease to have effect and the bounties so offered (unless granted or contracted for before the date named) must cease also.

Sec. 90 declares that nothing in the Constitution prohibits a State from granting any bounty for mining for metals, or from granting, with the consent of both Houses of the Federal Parliament, any bounty whatever.

The Constitution therefore refers to two kinds of bounties-Federal bounties and State bounties. With regard to Federal bounties, the words of this section raise no difficulty; whenever such bounties have been authorized by the Parliament the Federal Executive will control their payment as it controls every other part of the federal administration.

With regard to State bounties, it is hard to see what control the Federal Executive can exercise over payments, beyond seeing that the requirements of the Constitution are complied with. State bounties may come under four heads: (1) Before the uniform tariff each State may, as before, grant what bounties it pleases. (2) After the uniform tariff, there may be (a) State bounties to the extent of grants made, or binding agreements entered into, before 30th June, 1898; (b) State bounties on mining for metals; (c) any State bounties granted with the consent of both Houses of the Federal Parliament. As to grants and agreements made before 30th June, 1898, see Notes, § 383, infra. With respect to State bounties on mining for metals, or given with the consent of the Federal Parliament, the powers reserved to the States leave little room for federal control. Such bounties are arrangements between a State and its producers; they are granted by the State, and payable by the State, and involve no obligation on the part of the Commonwealth.

87. During a period of ten years after the establishment of the Commonwealth and thereafter until the Parliament otherwise provides, of the net revenues of the Commonwealth from duties of customs and of excise not more than one-fourth shall be applied annually by the Commonwealth towards its expenditures.

The balance shall, in accordance with this Constitution, be paid to the several States, or applied towards the payment of interest372 on debts of the several States taken over by the Commonwealth.