Intergovernmental immunities

The idea

The doctrine protects the States from Commonwealth laws that impair them as governments. Its full name is the implied intergovernmental immunities doctrine. It is usually called the Melbourne Corporation principle. It is a structural implication. The Constitution presupposes a central government and a number of State governments separately organised, and the grant of the s 51 powers is made subject to this Constitution (Melbourne Corporation, Dixon J).

After Austin there is but one limitation. It asks whether a Commonwealth law impairs the constitutional status of a State or its capacity to function as a government (Austin). The older learning split the principle into two limbs, a discrimination limb and a capacities limb. Austin collapsed them into one.

Discrimination now survives only as evidence. A law that singles out a State is strong evidence of impairment, but singling out is no longer essential. A general law that binds everyone can still impair a State (Austin).

Where it comes from

Melbourne Corporation gave the doctrine its name and its footing. The Banking Act forbade a bank to conduct banking for a State without the Treasurer's consent, which struck at State control over public finances (Melbourne Corporation, Starke J). Dixon J drew the immunity as a structural implication from the conception of separately organised governments.

Queensland Electricity Commission then treated singling out as a freestanding ground of invalidity. A Commonwealth Act aimed at the Queensland electricity dispute isolated State authorities from the general law and subjected them to special procedures, which imposed a special burden (QEC, Mason J). Austin later recast the field. It reduced the two limbs to a single limitation and demoted discrimination to indicative evidence. Clarke affirmed the single principle and described the inquiry as multifactorial, protecting powers essential to the effective working of government (Clarke, French CJ).

How it is examined

Intergovernmental immunities is a final exam pillar. It appears in four of the seven papers from 2019 to 2025, always as a full question limb worth about twenty marks. The facts usually split State workers into tiers and plant dollar figures for you to use.

Since 2020 the papers concede a valid head of power, so a page on characterisation earns nothing. Note the concession in a line and move to the single principle. The marks live in two places, the capacity inquiry and the practical burden the law imposes.

Two moves are planted to catch you. The papers use old two limb language to see whether you still run discrimination as a freestanding ground. They also tier the State workforce, a new hire against an existing employee against a department head, to test the AEU limitations one class at a time.

How to argue it

Work the topic as a sequence of plain questions.

1. First, ask whether the law binds the State at all. A statute is presumed not to bind the Crown in right of a State unless it says so (Industrial Relations Act Case). Where the Act says it binds the States that presumption is answered, so note it and move on.
2. Treat the head of power as conceded and spend one sentence on it.
3. Ask whether the law impairs the constitutional status of a State or its capacity to function as a government (Austin). This is the heart of the answer and carries most of the marks.
4. Name the State function the law touches and ask whether it is essential to the effective working of government (Clarke). Control over public finances and employment at the higher levels of government are the two functions that recur (Melbourne Corporation, AEU).
5. Where the law reaches State employment, run the AEU limitations. A Commonwealth law cannot fix the number and identity of those a State employs, the term of their appointment, or the identity of those it dismisses on redundancy grounds (AEU). For officers at the higher levels of government the State alone fixes every term and condition of engagement, so a federal award cannot reach a Minister, a department head or a judge (AEU). A single breach of these limitations sinks the provision.
6. Apply the checklist to each class of worker. The State will argue that the law determines the number and identity of its employees, or fixes a term for a higher level officer, so it impairs capacity (AEU, Austin). The Commonwealth will answer that the law only sets a minimum wage and conditions floor for ordinary employees, which the AEU majority held does not impair capacity (AEU).
7. Ask whether the law singles out a State by isolating its agencies from the general law and imposing a special burden (QEC). Singling out is now evidence of impairment rather than a separate ground, so raise it as support and not as the whole case (Austin).
8. Meet the Commonwealth's best answer. Where the State's own conduct prompts the federal response, special treatment may involve no real impairment (Austin, Gleeson CJ). Raise this counter and rebut it rather than leaving it for the marker.
9. Quantify the burden from the figures on the page. In Austin surchargeable contributions fixed above 61 per cent of a judge's remuneration, and the liability they produced which forced New South Wales to legislate, together showed a major interference (Austin). Point to any State law forced in response.
10. Last, deal with severance. Where only some provisions impair the State a court reads the binding clause down rather than voiding the whole Act (Industrial Relations Act Case). In that case the termination provisions were tested one by one and s 6 was read down so the offending operation did not reach the States. Identify the single provision that impairs a protected matter, read it down to spare the States, and let the rest stand.

Conclude in the taught form. State that a Court would likely find the law valid or invalid, and name the pivotal factor and the floor the law leaves to the States.

Practice problems

One hundred exam-style problems across twelve topics. Pick a topic, read the problem, write your own answer in IRAC, then reveal the Pass and H1 exemplars and the examiner's comments. Step through in order or jump to a random one. Nothing you type is saved or sent anywhere.

The trap

The costliest error is to concede validity because the law is general. A law that binds everyone can still impair a State, and Austin struck down a facially general superannuation surcharge for its effect on State judges (Austin). Discrimination is indicative and not required, so the absence of singling out does not end the argument.

The second error is to treat the State workforce as one block. Run each class of worker through the AEU limitations. This is because a new hire, an ordinary employee and a department head are protected to different degrees, and only the ordinary employee's minimum conditions are open to federal power (AEU).

Key authorities

• Melbourne Corporation v Commonwealth — the ban on conducting banking for a State struck at State control over public finances, and Dixon J drew the immunity from separately organised governments.
• Austin v Commonwealth — there is but one limitation, whether a Commonwealth law impairs the constitutional status of a State or its capacity to function as a government.★
• Clarke — the assessment is multifactorial and turns on whether the affected power is essential to the effective working of government.★
• Re Australian Education Union — a Commonwealth law cannot fix the number and identity, term of appointment or redundancy identity of State employees, and cannot touch any term for higher level officers.★
• Queensland Electricity Commission v Commonwealth — a law that singles out a State by isolating its agencies from the general law imposes a special burden and is invalid.★
• Industrial Relations Act Case — where only some provisions impair the State the court reads the binding clause down rather than voiding the whole Act.★