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2004GIR Government – Business Relations

Lecture 2: Political Institutions – Constitutions and Federations

Constitutions
Commonly defined as legal framework for containing/organising government.
- ‘Set up of government’
- ‘Map Power’
- A list of who does what’ details of roles and responsibilities.

As with any piece of law, Constitutions are general not specific


- Based on principle
- Not case based
- Situational

Usually written down ‘codified’ but not always.

What purpose do constitutions serve?


- Rules and regulations set out a particular document by which society operates (Australia)
- Protect people, institutions
- Provides framework
- 8 Changes to the constitution and 44 attempts to change it.
- Mabo (Indigenous change was made in Australia)
- Territories don’t carry as much as the states

Functions of a Constitution
What are the sort of things that constitutions do?
Prohibit:
- Arbitrary punishment
- Retrospective measures
Protect:
- Individual rights
- Private Property
- Minorities from majority decisions

Define the nation, provide legitimacy


- Preamble to US constitution
- NZ Treat of Waitangi; Interpretation and Principles

Australia
- No treaty or recognition of First Australians; land declared ‘Terra Nullius’
- No recognition of prior ownership until 1990s Mabo & Wik decisions in High Court.
The Mabo Decision

Extended land rights under Native Title Act


- Narrowly defined
- Slow process

Constitutional Recognition
Political response
“The Turnbull Government has carefully considered the Referendum Council’s call to amend the
Constitution to provide for a national Indigenous representative assembly to constitute a ‘Voice to
Parliament’”.
“The Government does not believe such an addition to our national representative institutions is either
desirable or capable of winning acceptance in a referendum,” the statement read.
The government expressed it believed a constitutionally enshrined Indigenous voice to Parliament that
was only to be elected by Indigenous Australians, would be interpreted as a third chamber of Parliament
and “undermine the universal principles of unity, equality and ‘one person one vote’”.
The statement explained the inclusion of an Indigenous representative assembly would defy the
foundational principles of the Australian democracy, where all Australian citizens have “equal civic
rights” and the ability to “stand for and serve in either of the two chambers of our national Parliament -
the House of Representatives and the Senate”.
“Moreover, the Government does not believe such a radical change to our constitution’s representative
institutions has any realistic prospect of being supported by a majority of Australians in a majority of
States,”

Was it ‘too hard’?


Changes to the constitution require referenda (vote) supported by majority of voters (50%+) in majority
of states (4/6)
Only 8/44 referenda approved
- 1967 Indigenous Australians (90.77%)
- 1999 Australian Republic (45.13%)

Who decides if the constitution has been followed?


Australia: High Court
USA: Supreme Court

Constitutions can also distribute Power and Responsibility between Governments

Unitary: Power concentrated Federal: Power shared between central


and other governments

Unitary and Federal States in the World


Proto-Federal Cases:
- European Union
- UK
- China

Why Federate?
- History
- Size (Territory, population)
- Diversity (Language, religion, culture,
ethnic)
- Liberty

Australia Case 1901


- Defence (fear)
- Growing cross-border trade (self -
interest)
- National identity, independence
Functions of Government
Fundamental:
- Security (internal and external)
- Legal framework
- Financial system, currency, taxes
Additionally:
- Infrastructure, basic services
- Health and education
- Social welfare
- Environment and development

Division of Powers in Australia


Commonwealth granted power over specific areas:
- External relations (defence, immigration, treaty making, etc.)
- National economy (currency, copyright, corporations

Remaining powers left with States


But considerable area of over lap:
- Treaties
- Corporations
- Tax

In Australia, Federal Government has become more important over time. This is not necessarily the
case in other federations. E.g. Belgium.

Pros and Cons of Federations


ADVANTAGES DISADVANTAGES
- Facilitates trade, security - Promotes inefficiency through duplication,
overlap and inconsistency
- Provides policy laboratory - Encourages inter-jurisdictional bickering
- Offers better decision making from ‘local - Makes accountability more difficult
knowledge’
- Provides more representative - Entrenches conservatism, limits reform
- Preserves regional identities - Gives us too many politicians

Implications for Business


Federalism gives us:
- Multiple governments
- Differences in laws, regulations and policy
- Community and market distinctiveness

Summary
- Constitutions map power and organise government
- Federalism is one way of dividing power territorially
- In Australia, power has tended to shift to the central government
- Federalism both costs and benefits business.

What is federalism and how does it impact on business?


- Separations of powers through different layers governments
- Federal Government | State Government | Councils
- Harder to operate business across interstate because of governments
- Can become costly to impact business.

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