Red Rag

I’ve been reading the transcripts of the ACTU’s High Court challenge to the Government’s industrial relations advertisements (day 1, day 2). At times the Court gets bogged down in specific details of documents that we mere mortals can’t see, which can be confusing, but for the most part it is a very interesting case.

Justice Gummow said the advertising “[s]ounds like a healthy bout of political free speech” and his interjections generally favoured the Government. Justice Kirby responded that such free speech is “generally is not funded from the public purse”, and later noted that

[t]he question is, if you do you use public funds, is the law of the Constitution such that we should read the Appropriation Act in a fairly strict way so that Parliament has a transparent opportunity to address itself to authorising that to be done.

Indeed, the plaintiffs do not suggest that the appropriation was invalid — they argue that the expenditure on advertising went beyond its scope and was not authorised by the appropriation. It is very interesting to see the Government’s lawyer try — unsuccessfully, in my view — to explain how the advertising fits the appropriation.

On the first day, David Bennett QC again ran the “state of emergency” line he had used in the interlocutory hearing, though without using that laughable expression. The thrust of the argument is that the ACTU’s advertising campaign was fomenting industrial strife to the extent that the Government had no choice but to respond. Because it sought to minimise industrial disputes, the Government’s propaganda package would fall within the vague outcome of “higher pay, higher productivity workplaces”. Justice McHugh was particularly unimpressed, and offered another explanation for the advertising.

MR BENNETT: Now, surely, one would have thought, if one is proposing legislation which has as one of its purposes workplace co-operation by employers and employees resulting in higher productivity and higher pay workplaces, what could be more conducive to that goal than countering that type of advertisement.

McHUGH J: Yes, but how? Do you suggest that because of these advertisements the workers will now produce 16 units a week and without them they are only going to produce 15 units a week? Is that the proposition?

MR BENNETT: Your Honour, it is – - -

McHUGH J: You are talking in generalities, Mr Solicitor. At least at the moment, it seems to me that if your argument is correct, it could only have the remotest effect on productivity.

MR BENNETT: Well, your Honour, one of the matters which contributes to productivity is the work practices of various kinds of a type which are negotiated between employers and employees. Another is, I suppose, the absence of strikes and stop-work meetings and so on. There are numerous things of that type which would contribute to higher productivity. In my respectful submission, the – - -

McHUGH J: But what you seem to be arguing for, and just to take the illustration you have just given, is that these advertisements are going to deter those who would otherwise have gone on strike or held stop-work meetings from doing so.

MR BENNETT: That is one aspect.

McHUGH J: Now, is that a serious proposition? Do you think anybody who is opposed to this legislation, who is going to go on strike, is going to be persuaded by these advertisements? It just flies in the face of reality. The target of these advertisements are not those workers, surely, not the people who are prepared to take industrial action. It has to be directed at somebody else, like Members of Parliament who might be waivering in the party room or in the Parliament.

The next day, the Government changed tack slightly. It argued that the propaganda campaign fell under “legislation development services”, though again the Court was sceptical:

MR BENNETT: I have referred to the words “legislation development services” and that is why I have given other examples such as the road traffic example, or war effort, and one can think of numerous examples, of cases where public co-operation is necessary to achieve the objects of legislation. If legislation is being attacked publicly in advance of its enactment – - -

KIRBY J: In advance of its revelation.

MR BENNETT: Your Honour, what it is going to say is very clearly summarised in some detail in the Prime Minister’s statement which my friends refer to in their pleading.

KIRBY J: Not a mention there of the large campaign.

MR BENNETT: No, your Honour, of course, because the campaign was not anticipated. That arose out of a need to rebut something that had the potentiality to destroy the effect.

McHUGH J: Again, you are testing our credulity. Do you really suggest that the government did not think that there would be no opposition from the ACTU and other unions if they brought in a system which was part of their policy, given the events of 1996 and the opposition to what happened then?

KIRBY J: And the removal of State awards, State law tribunals. A lot of interest lay in these things.

MR BENNETT: But that is not the relevant test. The words that I am taking your Honours to on page 728 clearly, we submit, contemplate the sort of advertising which is necessary or desirable to assist in achieving the objectives of legislation. Here we have legislation which has the identical objectives to at least one and possibly more of those appearing in the Appropriation Act. That being so, as page 728 shows, one of the ways of contributing to the outcome is providing “legislation development services”. What could be more – - -

KIRBY J: Yes, but that is legislative development services. It is not a huge fund of the people’s money on advertising.

MR BENNETT: It is, your Honour.

KIRBY J: I mean, legislative development services conjures up to my mind – I may be simple – lots of people working in departments getting the development of legislation ready. I have been watching it for 25 or 30 years. It does not conjure up an advertising campaign with large sums of money to other organisations of the people’s money, the burden on the people.

McHUGH J: Indeed, we have read about it recently. Apparently, scores of solicitors and lawyers from private firms are all playing their part in formulating this legislation that is coming forth. That is what is meant by “providing policy advice and legislation development services”.

CALLINAN J: That is if you accept what you read in the newspapers, word for word. I do not know what the situation is. There is not the slightest evidence of that before us.

McHUGH J: We are just giving it as an illustration.

CALLINAN J: We need to focus on the facts and on the constitutional issue.

McHUGH J: We have to deal with what is meant by this term “legislative development services” and I am suggesting to you, Mr Solicitor, that what it means is invoking outside aid or systems within the department to spend money on developing the legislation.

KIRBY J: Not propagandising it in advance of its enactment.

MR BENNETT: Your Honour, in my respectful submission, there are types of legislation where advertising is an essential part and a natural and normal part, perhaps more appropriately – - -

KIRBY J: It may be that we have come to that in Australia, but if we have, as far as I am concerned, I have to be persuaded that it ought not to be with the specific approval of the representative of the people from whom the people’s money is levied.

[...]

MR BENNETT: [T]he words “legislation development services”, on any view of it, can include some types of advertising.

McHUGH J: Of course it could. It could include advertising for solicitors or other lawyers to formulate policy, formulate proposals, but these advertisements, or at least the document annexure A, is a long way removed from that.

MR BENNETT: Your Honour, of course it is. That is a different type of advertising which would be justified by this. It would also justify the type I have referred to, of public consultation. The point I am making is there is nothing special and unusual about advertising which puts it in any different category to any other necessary and normal ancillary expenditure. We live in a communication age and part of a democracy consists of communication of views and intentions.

McHUGH J: Mr Solicitor, I have no problem with that at all, but the question here is whether or not this particular form of advertising is authorised by the appropriations that were made.

So it seems that at least some judges have doubts about whether the appropriation covers the advertising campaign. The Government appears to be clutching at straws to explain where the Parliament authorised a massive advertising campaign in support of undrafted legislation.

However, the ACTU is likely to face problems when it comes to relief. Even if the Court agrees that the spending so far has been unauthorised, it is difficult to see how they can restrain further spending. As Justice McHugh (who, as we have seen, is sympathetic to the plaintiffs) put it:

Part of the problem that the plaintiffs face in this case, it seems to me, is the form of relief that they seek. Obviously they cannot get an injunction restraining you from advertising, they cannot get an injunction restraining the department or the Minister from spending money in respect of industrial relations, and formulating some relief that they seek is extremely difficult.

However, McHugh J went on to consider whether a narrow injunction could be given against a specific form of advertising:

Assuming the Court was against you on your substantive argument, why could not a declaration be framed in these terms, that an injunction restraining the third defendant from issuing any drawing right under section 27 of the Financial Management and Accountability Act purporting to authorise the payment of moneys for the purpose of an advertisement in the form, or to the effect, of annexure A, which is set out at page 45? That is a specific injunction.

MR BENNETT: Well, in the form or to the effect, it would be so limited it would have the – - -

KIRBY J: Yes, but your view is one that completely emasculates the power of this Court to uphold important constitutional principles. I mean, in the end, remedies will adapt and be found for that purpose, and you seem to create a miasma of difficulty which it is the business of courts to cure if there is a constitutional or statutory offence.

MR BENNETT: The problem is this, your Honour, that the way my learned friend puts it in his original – - -

McHUGH J: He wants an injunction preventing expenditure of any money on any advertisement promoting the reform package. There are extreme difficulties about that.

MR BENNETT: Your Honour, that would prohibit, for example, an advertisement which said we are proposing the following reform package. We think it is desirable for reasons A, B and C, but we seek the public’s views before we make the final decision. Such an advertisement which would be classic legislation development on any view of it would be forbidden by my learned friend’s injunction.

McHUGH J: That is why I put the very specific injunction to you. Now, it may not get the defendants very far in the real world because those who frame these advertisements might easily get around it, and maybe there is not much utility in it, but I would like to hear your submission on it anyway.

MR BENNETT: Your Honour, there would be no utility on something as narrow as that.

McHUGH J: Stop another advertisement in the form of annexure A.

KIRBY J: And it would make people pause before they put forward advertisements of this kind and consider its consequences for appropriation policy and the content of PBS and the role of the Senate.

That’s about the long and the short of it. There’s a reasonably good chance that the High Court will agree with Labor and the ACTU that the existing appropriation does not cover the advertising campaign, but even so there is not much chance of an injunction prohibiting future advertising.

However, that is not necessary for Labor’s purposes. If the High Court says the advertising was unauthorised, the Government will be forced to put a new appropriation through the Parliament. That will give a boost to Labor’s proposals about transparency in Government advertising approval, and an opportunity to debate industrial relations in the Parliament before the legislation is finalised. That would be a significant tactical advantage.

The High Court has reserved its decision, but it must deliver its judgment before 1 October, when Justice McHugh retires, so we will know the result within a few weeks.