19/10/2011 - 10:37

Charles Court was our greatest federalist

19/10/2011 - 10:37

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Sir Charles Court fought many battles with Canberra as he set WA on its development path.

I HAVE a feeling the people of Western Australia don’t like sharing Sir Charles Court with other Australians. 

But one of the points I wish to emphasise is that Sir Charles belongs to all Australians and that he will become increasingly important to all of us in the years ahead. 

Sir Charles was Australia’s great federalist, perhaps the greatest federalist since federation. 

For some time now, the Canberra disease has infected both sides of politics. 

The main symptom of this disease is the deeply entrenched belief that because Canberra captured the rivers of gold flowing from the war-time transfer of all income tax to the Commonwealth, it also possesses the superior wisdom and foresight which justifies Canberra deciding, in great detail and in areas of public policy in which the Commonwealth has no explicit authority at all, how this money is to be spent.

The mining super profits tax proposal was a declaration of superior wisdom, and greater power, by Canberra on WA and Queensland. 

When first proposed it was described as an ‘exquisite model’ tax.  It took only hours after its release for commentators to note it was fundamentally flawed. 

In this context then, it is appropriate to congratulate Premier Colin Barnett on his recent visit to China. On the surface, this visit was a commercial exercise but, more fundamentally, it had an important constitutional significance. 

It reminded the decision makers and opinion formers of Canberra that the minerals in WA belong to the Crown in the right of the states and that whoever is entrusted with executive authority in WA has a trustee role as state landlord with respect to those mineral lease tenements issued to mining companies, whether they be the basis of existing operations, or whether they remain to be discovered. 

These minerals do not belong to Canberra or to the people of other states, they belong to the people of WA.

Australians generally know very little about the detail of their constitution, although they know enough to vote, with big majorities, against constitutional changes desired by Canberra that have been put to them in referendum after referendum.

We have suffered for decades now, from a generation of political leaders in Canberra, on both sides of politics, who regret even giving lip service to the constitution. 

Sir Charles was a political leader who understood that federalism was at the heart of the constitution and he did everything he could to protect the federalist ideal. 

The fundamental point about our constitution is that it provides legitimacy for the existence, not only of the Commonwealth, but also for the states, which, before federation, were self-governing colonies of the British crown. 

Part of the political agreement which generated the public support for the 10 referendums, which finally supported the Commonwealth of Australia Constitution Act, signed by Queen Victoria in 1900, was the guarantee that each state, no matter how small, was to have the same number of senators as the largest state. In addition, the High Court was to act as the guarantor of the Constitution.

Tragically, things have not worked out as the founding fathers intended. But the fundamental virtues of federalism remain. The first is that political power which is diffused rather than concentrated, as in a working federation, guarantees that political folly, which we find in increasing abundance today, does far less damage and is more quickly rectified, than when political power is concentrated at the centre.

The second is that, in a working federation, policy experimentation can take place which, in a competitive environment where states are always watching over their shoulders at what their rival states are doing, leads to more rapid progress than where competition does not exist.

Which brings me to the story of Sir Charles’ contretemps with John Gorton, then newly installed prime minister.  Gorton had his own plans for the development of the Pilbara and they had been formed without any reference to the WA government.

The new prime minister had no qualms about overriding the authority of the states if he could, and as Ronda Jamieson (author of Charles Court’s biography) describes so well, he organised a trip throughout the north-west of the state. Using a light plane he would go from place to place to consider various development options.

Sir Charles got wind of this scheme and was able to obtain a detailed prime ministerial itinerary. 

So, everywhere the Prime Minister’s plane touched down, there was the WA minister for the north-west, welcoming him to another part of the state where there was a prospect of new investment, for which foreign capital was essential. 

Gorton was a centralist who forgot that state premiers were influential political leaders in their own right. One consequence of this was that Gorton’s period in office was brief. 

You will all be aware the Grants Commission is back in the news and Premier Barnett is to be commended and supported in his attempts to get the commission wound up. The commission was established by prime minister Joe Lyons in the 1930s as a response to the overwhelming vote for secession, which WA had passed in a referendum in 1933. 

Sir Charles took great pride in the fact that WA was, at his instigation, taken off the commission’s mendicants list. He knew that being a mendicant was advertising to the world that you were not prepared to stand on your own feet and make your own way in the world.

Today, WA is the richest state in the Commonwealth; not just in terms of per capita incomes and not just in terms of current investment and the royalties, which will ultimately go to the people of WA, as the owners of the minerals which are being exploited. 

The taxes that the resources companies pay to the Commonwealth benefit, we hope, all the people of Australia. 

But we must not forget that a major beneficiary of this investment and development in WA are the people to whom we sell these mineral resources, not just in our neighbourhood, but globally. 

No one understood this better than Sir Charles.

As a consequence of his outstanding army career during World War II, he developed a deep understanding of what we now call geo-strategy. 

He knew that the world was an uncertain place. He knew that the owners of great resources had great responsibilities to exploit those resources for the benefit of people from other countries who needed them and were happy to pay the market price for them. 

During his ministerial career he laid the foundations for the development of WA as a great mining state.  

Two events in which he was the key player illustrate how he did it and of which I had personal knowledge.

The first is the establishment of the alumina industry in the Darling Ranges. Western Mining Corporation (WMC) had decided to diversify from gold into other minerals and the company decided in 1956 to try to develop the bauxite deposits of the Darling Ranges.  

It was a high-risk venture and Geoffrey Blainey tells the story in his book entitled White Gold. Today alumina exports from WA generate about $3.5 billion and there is the strong likelihood of further expansion.

Sir Charles came into office in March 1959 and devoted his energy and skill into getting the enabling legislation for the mining leases and the alumina refinery through the WA parliament. 

The legislation was strongly contested on the grounds that WA got little out of the project. But that political success established Sir Charles’ reputation as a political leader who could get things done and who was very enthusiastic about the prospect of turning the state into one of the world’s great mining provinces.

The second followed WMC’s discovery of nickel at Kambalda in January 1966. 

The first export of nickel concentrates took place 18 months later. That early cash flow meant the company did not need any foreign partners.

Ore shipments started on March 16, 1966, from Geraldton, in the 28,000-tonne Margaret Maru, named after my mother. 

For Kambalda, we dealt with two WA government departments without any need for overseas involvement in the project.  But when I told this story, contrasting that development with Olympic Dam, Sir Charles always corrected me and said: “No Hugh, you dealt with one – me.”

Olympic Dam was discovered in 1975, (nine years after Kambalda). Before long, WMC was negotiating with 54 government departments, many of them Commonwealth, and it took 13 years after discovery before we received the first export cheque. 

The contrast with Kambalda is a striking one.  The primary reason for this extraordinary change was the intrusion of Canberra into the mining industry. This story illustrates why federalism is a very good thing and centralism is a bad thing.

The most important political issue facing Australia, I believe, is one that rarely gets mentioned. 

The question we have to answer is do we continue on the slide to centralism or do we reverse course and rediscover the great benefits which a deeply entrenched federalism can provide?

When I observe the agenda of the council of Business Council of Australia, it is noteworthy that not one of the issues cited on that agenda could be resolved without addressing the necessary repair of the federation.

Sir Charles’ contribution to WA is widely recognised. His upholding of the constitution, particularly the federalist foundation on which it is built, is not so widely recognised and my wish is that this aspect of his political life should receive wider acclaim. 

• This is an edited extract of Hugh Morgan’s speech at the Charles Court Centenary Dinner late last month. Mr Morgan was chief executive of WMC.


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