Senior counsel Mordy Bromberg said the most surprising aspect of the decision was the wide view the Court gave of the corporations power under the Australian Constitution. He saw first hand the effect of the decision, having represented Victoria in the case.

“I think its significance transcends well beyond industrial relations,” he told Lawyers Weekly last week. “And I think it’s a watershed in terms of the interpretation of the constitution on the question of the balance of power between the states and the federal parliament.

“There was no attempt by the majority to try and confine the wide interpretation to this particular case, or to relations between corporations and their employees more generally,” he said.

“Instead, the court [said] quite clearly, that it sees the corporations power as a wide power applicable to a very wide range of circumstances.”

Prime Minister John Howard was quick to downplay the significance of the decision last week, stating that “it has underlined commonwealth power in relation to a number of economic issues, but it does not mean that our power in relation to things like health and education is any different”.

“I disagree whole heartedly,” Bromberg said. “As long as there is a corporation in the field … the corporations power extends to that field — it might be health, it might transport, it might be water — the identification of the field is irrelevant.”

Yet Douglas Graham, solicitor-general for Victoria between 1992 and 2002, appearing in some of the most important High Court constitutional law cases, including Victoria v The Commonwealth in 1996, believes the most recent decision is unsurprising.

“I don’t see the decision as representing a significant departure from the course of High Court authority in relation to the corporations power,” he said. “I think that’s been exaggerated in the course of the last few days.”

Nor does Graham “see any reason why the decision would enable the commonwealth to legislate in relation to hospitals or in relation to education, beyond what it does at the moment, mainly using its controlling financial powers”.

Yet according to Bromberg, the position of the states has been weakened, and he believes Justice Callanan’s description of future states as “debating societies” is an entirely likely outcome.

Andrew Lynch, senior lecturer at the University of New South Wales faculty of law, said that “given the pervasive position of corporations, this power now presents the Commonwealth with almost limitless potential to implement policies on a national level, and … erode further the autonomy of the states”.

“If you’re going to have states, then you shouldn’t have them in the current position that they’re in,” he said. “You should have some sensible allocation of powers and responsibilities between the states and the commonwealth. This seems to me the worst of both worlds.”