Like many countries, Australia a century ago developed a class-based political system: the ALP for the workers, and what ultimately became the Liberal Party for the middle classes.

Although they have weakened in recent decades, the class lines of the division remain strong, and nowhere are they more in evidence than on industrial relations.

Hence the odd phenomenon yesterday of a very conservative bench handing down one of the High Court’s most radical decisions.

Four Howard-government appointees — Chief Justice Gleeson, and Justices Hayne, Heydon and Crennan — together with Keating appointee Gummow voted to dismiss the states’ challenge to the government’s IR legislation.

They held that the fact that the Commonwealth’s power over industrial relations is specifically limited to disputes extending beyond one state (section 51(xxxv)) does not prevent Canberra nullifying that limitation by relying on a different head of power, in this case the corporations power (section 51(xx)).

The decision was not unexpected, and is entirely consistent with other recent decisions, notably the Concrete Pipes Case of 1971.

Nonetheless, by kicking away one more limitation on Commonwealth power, it reduces even further the sphere of powers reserved to the states.

It is blindingly obvious that this is not how our constitution was intended to work. As Justice Kirby points out in his dissenting judgement, the long history of legislation and litigation on industrial relations is rendered virtually meaningless by the decision: in his words, we should “pause before nonchalantly consigning those efforts to judicial oblivion.”

Yet among the court’s supposed conservatives, only fellow-dissenter Ian Callinan heeded this argument. It’s hard to imagine that any issue other than industrial relations would have led a conservative government and a conservative court to so drastically re-write the rules.

The Prime Minister insisted yesterday that the decision was not “some kind of carte blanche for some massive expansion of commonwealth power”. But even if that is his intention — if, for him, the chance to destroy union power really is sui generis — what chance that his successors will be so restrained?

Conservative commentators have generally followed the government’s line (see, for example, the editorial in today’s Australian). An honourable exception is Paddy McGuinness, who points out how class interests have trumped economic and constitutional principle:

But do not be deceived into thinking that this is a triumph for market forces and for competitive capitalism, or even for economic freedom.

It simply substitutes another elaborate system of regulation of economic matters, which in essence is just as statist as that it replaces.

Peter Fray

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