All subjects are linked to crocodiles. Just ask the NT News (via Flickr)
High Court challenge jeopardises $900 bonus – Sydney Morning Herald (19 March) –
THE High Court has agreed to hear a challenge to the legality of the Federal Government’s proposed $900 tax bonus to 8.7 million taxpayers. The case has been brought by a law lecturer and former National Party office holder, Bryan Pape, a champion of states’ rights. The High Court will hear the case on March 30 and 31.
At least some of Pape’s constitutional arguments are outlined in a paper he gave to the Samuel Griffith Society in 2005 entitled “The Use and Abuse of the Commonwealth Finance Power“. The arguments revolve around Constitution section 96 (financial assistance grants to the States) and section 81 (appropriations), as well as questions of whether citizens have standing to challenge such Commonwealth decisions and whether such a challenge is justiciable.
I doubt that Pape’s current argument has anything to do with section 96 grants, because the $900 bonus payments are characterised as refunds to individuals of tax they have paid rather than as grants to the states. My best guess is that Pape will argue that the payments can’t genuinely be characterised as refunds of tax (and hence supported by the Commonwealth’s taxation power in Constitution section 51(ii)), in that the flat $900 “refund” bears no quantifiable relationship to the amount of tax originally paid. Thus it isn’t really a refund of tax but a gift, and the Commonwealth possesses no independent constitutional head of power permitting it to make gifts to citizens. It’s an interesting argument because the Commonwealth can only enact an appropriation under s81 for the “purposes of the Commonwealth”. However the argument could only succeed if the High Court is prepared to overrule previous authority (e.g. the AAP Case) holding on various different grounds that Commonwealth appropriations are not ordinarily susceptible to successful challenge.
Update – George Williams reaches similar conclusions in the SMH, only more succinctly.
For any readers interested in a bit more detail on this fairly technical area, here’s an extract from my constitutional law study guide:
- Some Justices (notably Jacobs J in Victoria v Commonwealth and Hayden (AAP Case) (1975) 134 CLR 338) have regarded matters relating to appropriation as non-justiciable i.e. they are for Parliament and not the Courts to decide.
- Stephen J in the AAP Case held that the State of Victoria lacked standing to bring an action impugning a mere appropriation (because the appropriation itself could not in any way hamper the freedom of citizens of the State). Stephen J’s position is fairly similar in effect to treating the question as non-justiciable.
- Mason J in the AAP Case adopted a wide view of the appropriation itself, but held that any legislation establishing machinery for administering and spending the money so appropriated was limited to subjects where the Commonwealth had express legislative power. Thus, although the Commonwealth could appropriate funds for whatever purposes it liked, it could only spend the funds for purposes where it lacked express legislative power if it could do so in the absence of enabling legislation.
The net result of the AAP Case was that 3 Justices (McTiernan, Murphy and Jacobs JJ) held that the Australian Assistance Scheme was valid, 3 Justices (Barwick CJ, Gibbs and Mason JJ) held that it was invalid, and Stephen J held that the plaintiff Victoria had no standing. Accordingly the Plan survived.
In Davis v Commonwealth (1988) 166 CLR 79 (mostly about the “implied nationhood” power), Mason CJ, Deane and Gaudron JJ summarised the results of the AAP Case (and therefore the current law on sections 81 and 83 appropriations) as follows:
“The case therefore stands as an authority for the proposition that the validity of an appropriation act is not ordinarily susceptible to effective legal challenge. It is unnecessary to consider whether there are extraordinary circumstances in which an appropriation of money by the Parliament may be susceptible to such challenge. It suffices to say that, if there be such cases, the present is not one of them.”
Incidentally, Justice Jacobs in the AAP Case, as well as deciding the matter was non-justiciable, also opined that the Australian Assistance Plan could be supported under the Commonwealth’s social welfare powers (Constitution section 51(xxiii) and (xxiiA)) in any event, and hence a “purpose of the Commonwealth” under section 81. That might conceivably be an argument available to the Commonwealth in relation to the $900 bonus payment, although I wouldn’t like to be arguing that it’s a tax refund or in the alternative a social welfare pension payment!!