The High Court Brings Things Together

Over the last couple of years, the High Court has reconfirmed the interpretation of some of the constitutional provisions underpinning the Australian federal structure.

The Workchoices case reconfirmed the principle that the various paragraphs of section 51 of the Constitution (which sets out many of the powers of the Australian Parliament) should be read widely:

The general principles to be applied in determining whether a law is with respect to a head of legislative power are well settled. It is necessary, always, to construe the constitutional text and to do that 'with all the generality which the words used admit'…..

The Court noted the observations of Sir Owen Dixon in the Melbourne Corporation case when he observed that the net effect of this means:

The position of the federal government is necessarily stronger than that of the States. The Comonwealth is a government to which enumerated powers have been affirmatively granted. The grant carries all that is proper for its full effectuation. Then supremacy is given to the legislative powers of the Commonwealth.

However, the Court has equally confirmed that it cannot spend money for any purpose considered politically desirable – an expenditure must be supported by a constitutional provision.

Following Pape v. Commissioner of Taxation, the 2009 High Court case of ICM Agriculture v.the Commonwealth noted:

It is now settled that the provisions…. of s 81 of the Constitution for establishment of the Consolidated Revenue Fund and in s 83 for Parliamentary appropriation, do not confer a substantive spending power and that the power to expend appropriated moneys must be found elsewhere in the Constitution or the laws of the Commonwealth.

This could put at peril a number of spending programmes in the health, education and housing areas – subject areas where Commonwealth participation cannot be immediately identified in the Constitution.

However, given that the Commonwealth collects the vast majority of taxes they have the power of the purse, with section 96 providing the workaround that permits the Commonwealth to set the agenda in areas not expressly dealt with in the Constitution.

Without going as far as Chief Justice Latham, who said in the First Uniform Tax case that the Commonwealth ‘may properly induce a State to exercise its powers ... by offering a money grant', ICM Agriculture confirmed that the Commonwealth has power to grant financial assistance to any State for any purpose on such terms and conditions as the Parliament thinks fit, provided it didn’t contravene perceived constitutional guarantees relating to religion and on the acquisition of property except on just terms.

These reaffirmations of constitutional doctrine are interesting, given the upcoming publication of the Henry Report, as will be discussed in the next article.