Charter would stifle economic freedom - The Centre for Independent Studies
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Charter would stifle economic freedom

Australia is in the final stages of a debate that might lead to the introduction of a federal charter of rights. A consultative committee will report at the end of August to the Attorney-General as to how human rights might be better protected in Australia, and may in fact recommend the implementation of an Australian charter of rights.

Those who support a charter argue that the time has come, as Australia is one of the only common law countries without any kind of charter (or bill) of rights. However, a charter can also have less favourable effects on individual rights and freedoms.

In this time of financial crisis, it is interesting to reflect on the consequences of the US Bill of Rights during the Depression. Following the worldwide crash in financial markets, US president Franklin D.Roosevelt announced the New Deal in 1933 to remake capitalism. Reforms included plans to regulate large parts of the economy and take state ownership of failing companies.

While popular among the public, Roosevelt’s program of reform was frustrated by the Bill of Rights as interpreted by the Supreme Court. At the time, a majority of judges held views that might today be described as ‘radical neoliberalism’. A judicially implied right to ‘freedom of contract’ was used by the court to strike down laws regulating everything from a maximum working week to child labour throughout the 1920s and 30s.

Those Americans who viewed judicial activism under a Bill of Rights as a safeguard to economic liberty soon learned that it had an expiry date. As the composition of the bench changed, so did the prevailing judicial philosophy. The US Constitution has since become the basis for the unprecedented control of the national economy in President Barack Obama’s ‘new new deal’. This is a common experience internationally, as human rights laws have become a basis to require, rather than restrain, government activity.

As Australia contemplates the implementation of our own bill or charter of rights, it is instructive to consider the experience of countries that have undertaken similar reforms. If recommended by the federal committee, such a charter is expected to take a similar form to that in force in Victoria, the Australian Capital Territory, and Britain, in that it would require any court when interpreting a law to adopt an interpretation that makes that law ‘compatible’ with a list of specified human rights.

In Britain, human rights are routinely used as a basis for making claims on government expenditure. In his new book, The Assault on Liberty, Dominic Raab observes that applicants under the UK Human Rights Act ‘are now just as likely to press the government for some new category of social support as to seek the limit of its powers’.

Even the best intentioned human rights law invites attempts to test government decisions against the rights of affected individuals. Broadly specified rights can be quite easily equated with obligations upon government. For example, consider a government body that makes decisions as to the subsidy of medications. An affected patient might challenge an adverse decision on the basis that it has affected his or her right to life. Such a case has the unhappy consequence that the merits of government policy must be judged by a court against the circumstances of the individual rather than taking account of the most efficient allocation of those resources across other categories of need. The downside is of course that it’s bad luck to everyone else waiting for government assistance.

Many Australians have urged for the implementation of a bill of rights like that in force in South Africa, which has gone even further than Britain and specifically included economic and social rights such as shelter or education in its Constitution. Providing for these needs is, of course, a central obligation of any government, but their inclusion in a bill of rights gives courts the power to indirectly control governmental spending. Courts limited to considering the evidence presented in the individual case are ill-equipped to make such broad policy decisions.

Australia is facing the dual challenges of the growing welfare needs of an ageing population and the biggest global financial crisis since the great depression. Implementing a bill or charter of rights would limit the federal government’s flexibility in allocating public resources by placing more expenditure decisions in the hands of the courts.

Ben Jellis is a Melbourne lawyer. This article is based on a recent essay in Policy Magazine, published by CIS.