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High Court of Australia |
VICTORIA v. THE COMMONWEALTH AND HAYDEN [1975] HCA 52; (1975) 134 CLR 338
Constitutional Law (Cth)
High Court of Australia
Barwick C.J.(1), McTiernan(2), Gibbs(3), Stephen(4), Mason(5), Jacobs(6) and
Murphy(7) JJ.
CATCHWORDS
Constitutional Law (Cth) - Appropriation of moneys from Consolidated Revenue Fund - Scope of power to appropriate - Whether limited or unlimited as to purpose - Purposes of the Commonwealth - Whether limited to specific purposes for &which Commonwealth empowered by Constitution to make laws - Degree of specification of purpose required - Appropriation of moneys for Australian Assistance Plan - Whether valid appropriation - Whether justiciable question - The Constitution (63 & 64 Vict. c. 12), ss. 81, 83 - Appropriation Act (No. 1) 1974-1975 (Cth).
HEARING
Melbourne, 1975, May 6-8; October 17,29. 29:10:1975DECISION
October 29.
2. To the whole of the statement of defence, apart from joining issue on its
assertions other than such as are admissions of fact,
the plaintiffs demurred
on the grounds that it contains no defence to the statement of claim: that
its assertions do not establish
that the disbursement of part of the said sum
for Regional Councils for Social Development under the Australian Assistance
Plan,
whether in the past or in the future, was or is authorized by any or any
valid law of the Commonwealth. (at p344)
3. The demurrer and joinder in demurrer do not raise in point of pleading the
question of the interest of the plaintiffs to maintain
the suit. But,
treating the defendants as entitled, when their pleading is under demurrer, to
dispute the sufficiency of the statement
of claim to maintain the relief
claimed, we treated the defendants in the argument on the demurrer as entitled
to challenge the existence
of a sufficient interest in the plaintiffs to
maintain the suit. This challenge must be distinguished from another
substantive argument
of the defendants, namely, that the question of the
validity of the appropriation was not justiciable. This question also we
allowed
the defendants to argue on the demurrer. (at p344)
4. The Court gave leave to the States of New South Wales and Western
Australia to intervene in the argument of the demurrer, including
argument on
the two questions I have mentioned. (at p344)
5. The form of the Act to which assent was given on 16th November 1974 should
be noted. It provides by s. 3 that "The Treasurer
may issue out of the
Consolidated Revenue Fund and apply for the services specified in Schedule 2,
in respect of the year ending
on 30th June 1975, the sum of $2,863,510,000".
(at p344)
6. The Supply Act (No. 1) 1974-1975, passed earlier in the year than the Act,
had authorized the expenditure of some $1,804,284,000.
Section 4 of the Act
therefore appropriates the total of the sums of $2,863,510,000 and
$1,804,284,000, namely $4,667,794,000, for
the purposes scheduled to the Act
and deems the appropriation to be effective as from 1st July 1974. (at p344)
7. The drafting device of putting all the items of the appropriation in a
schedule is convenient and customary: but it should not
be allowed to obscure
the fact that each item of the schedule is a separate item to be considered
separately, if the question of
the validity of the Act in respect of it is
entertained. There is no question in this case of invalidity of the Act as a
whole.
It does itself sever and separate each item in the schedule as a
distinct and separate subject of appropriation providing an express
authority
to the Treasurer to pay the amount of the item out of the Consolidated Revenue
Fund for the nominated purpose. Thus, if
the validity of the Act in respect
of any item is justiciable and the plaintiffs have a standing to maintain the
suit, the Court
may determine and declare that there is not a valid
appropriation and authority to expend the individual item, without in any wise
reflecting upon or affecting the validity of the Act as an appropriation of
the other items in the schedule. Indeed, no argument
was addressed to us by
counsel that the Act must fall as a whole if in respect of any item in the
schedule the Act was not a valid
appropriation of, and authority pro tanto to
expend, the Consolidated Revenue Fund. (at p345)
8. Included in the services referred to in s. 3 and specified in the Second
Schedule to the Act is the Department of Social Security.
The amount allocated
to that Department in total is $141,637,000. In Div. 530 of the schedule there
appears the item:
"4. Australian Assistance PlanIt is the validity of the Act in respect of this item which the plaintiffs challenge and nothing more. (at p345)
01. Grants to Regional Councils
for Social Development $5,620,000
02. Development and evaluation
expenses 350,000
Total $5,970,000"
9. The expenditure of money for or in pursuance of the Australian Assistance
Plan (the Plan) is not authorized by any statute other
than the Act. Nor, if
it matters, so far as appears, is that expenditure governed or purported to be
authorized by any order or
regulation of the Governor in Council. The Plan
itself is not the subject of a statute. The nature of the Plan and of
Regional
Councils around which it is constructed, is to be found only in the
writings of a Committee of the Social Welfare Commission which
have been
furnished to the Court. These writings consist of a Discussion Paper dated
1973, Guidelines for Pilot Programme dated
October 1974, and a further
Discussion Paper (Discussion Paper No. 2) dated 1974. The purpose of the
appropriation in Div. 530,
No. 4 of the Second Schedule, must therefore be
gleaned from these writings. (at p345)
10. The Social Welfare Commission Act 1973, assented to on 27th November
1973, establishes a Social Welfare Commission (s. 4). Its
functions, as set
out in s.14, are:
"(a) to ascertain and report to the Minister on, the social
welfare needs of the community and to make recommendations
to the Minister in respect of those needs;
(b) to make recommendations to the Minister for furthering
the achievement of a nationally integrated social welfare
plan, including -
(i) recommendations of priorities in relation to social
welfare programmes;
(ii) recommendations for the development of social
welfare programmes on a regional basis with localized
administration;
(iii) recommendations for participation in the implementation
of social welfare programmes by representatives
of the persons or agencies to be assisted;
(iv) recommendations for the co-ordination of the
social welfare activities of organizations, including
State, local government and voluntary organizations,
involved in the provision of social welfare;
(v) recommendations for the adjustment, from time
to time, of social welfare programmes in the light of
changing community circumstances and attitudes and
the state of the economy; and
(vi) recommendations for avoiding the duplication of
social welfare programmes and for promoting the
maximum efficiency and effectiveness of the community
social welfare effort;
(c) to estimate, and report to the Minister on, the likely
cost of proposed social welfare programmes and to advise
the Minister on the relative priorities to be given to the implementation
of those programmes;
(d) to keep social welfare programmes under constant review
and to reassess and evaluate those programmes in the
light of experience;
(e) to propose to the Minister measures to give all
organizations, including State, local government and voluntary
organizations, concerned with social welfare access to
available information and technical assistance;
(f) to consider, and report to the Minister on, measures
designed to provide skilled staff for the successful implementation
of social welfare programmes; and
(g) such other functions in connexion with social welfare
programmes as the Minister approves." (at p346)
11. By s. 15 the Commission is given power to do all things that are
necessary or convenient to be done for or in connexion with
the performance of
its functions. It may conduct an inquiry, including a public inquiry, into
any matter being investigated by the
Commission and is empowered to engage and
make arrangements for others to engage in research for information on any such
matter.
It has power to appoint a committee to assist it in relation to a
matter (s. 17). (at p346)
12. This Act is not under challenge in these proceedings and therefore,
without so deciding, I shall for the purpose of these my
reasons, assume its
validity. (at p346)
13. An interim committee of the Commission, in response to a request by the
Minister "for assistance in the development of a new
project to assist the
planning and provision of welfare services in Australia", produced a
"discussion paper" which proposed the
Plan:
"1.1 The aim of the Australian Assistance Plan is to assist
in the development, at a regional level within a nationally
co-ordinated framework, of integrated patterns of welfare
services, complementary to income support programmes and
the welfare-related aspects of health, education, housing,
employment, migration and other social policies, having regard
to the following matters:
That the existing responsibilities of State and local
governments, voluntary agencies and the Australian
Government are recognized.
That assistance should be available for planning
and developmental programmes.
That the development of regional planning systems
is to be encouraged.
That every effort is made to avoid duplication and
overlapping of services.
That local residents and welfare consumer groups
are encouraged to participate in the planning and
provision of welfare services.
That continual evaluation and monitoring of all
programmes occur to ensure their flexibility, adaptability
and appropriateness in light of changing patterns
of social need.
1.2 Finance to be made available under the Australian
Assistance Plan is additional to that already being expended
by the States on welfare services, and to the grants which the
Social Welfare Commission has recommended should be
made available for social policy and programme evaluation
to the Australian Department of Social Security, the State and
Territory Departments concerned with Social Welfare and
the Australian Council of Social Service.
1.3 The primary emphasis of the Australian Assistance
Plan is in the areas of planning, programme development and
social policy evaluation, whereas the provision of complementary
casework services is seen to arise from within this
basic framework and may be under other auspices; for
example, a state Department of Social Welfare or a migrant
counselling service. The Plan envisages providing stimulus to
consumer and volunteer activity in the concept of community
development." (Discussion Paper No. 1, p. 3.) (at p347)
14. It is appropriate to emphasize that the Minister's request was for
assistance in "the development of a new project". It was
not for assistance,
advice or information in the development of any legislation related to any
specific head of Commonwealth legislative
power. (at p347)
15. It appears from this paper that "the Social Welfare Commission regards
the development of Regional Councils for Social Development
as an integral
part of regional planning" (Discussion Paper No. 1, p. 4.) Accordingly, such
Councils are to be set up, and, as will
appear, have been set up in various
States including the State of Victoria where, as at 1st July 1974, there were
eight in operation.
(at p348)
16. A region for the purposes of the Plan "is an area in which there is a
high measure of economic, social and political unity,
or which lends itself to
such unity, and thus of community interest. The region, on this definition,
may have a population of 500,000
in densely settled areas such as Sydney and
Melbourne, but for purposes of social planning sub-regions may need to be
developed,
with populations of up to 250,000. Populations will most commonly
be well below that figure in non-metropolitan areas." (Discussion
Paper No.
1, p. 4.) (at p348)
17. The functions of Regional Councils for Social Development are "to
stimulate interest and activity in the broad field of social
development.
They should give added impetus to initiatives within their regions to provide
a wider range of welfare services and
to test innovative programs for service
delivery. They will need to: relate to any regional planning bodies
concerned with physical
planning, health planning, education planning, housing
planning, etc.; continually evaluate and monitor the social needs of the
region;
consider plans for welfare service provision to meet the needs of
their regions in consultation with government and non-government
agencies;
upon request, advise and assist local government bodies and non-government
agencies in the carrying out of appropriate
welfare policies; and offer advice
to the Australian Government on the development of its own departments'
services in the region,
and on the allocation of grants and subsidies to
bodies within the region." (Guidelines For Pilot Programme, p. 5.) (at p348)
18. "Social planning" is defined for the purposes of the Plan as "the
mobilisation of resources of the community to stimulate and
manage changes for
social benefit by formulating policies and programs for the social sector of
the economy such as health, education,
social welfare, housing, recreation,
etc.". (Discussion Paper No. 2, p. 24.) It is said that "those engaged in
community social
planning must identify local problems; research and analyse
the data on these problems; assess their findings; and consider alternative
strategies for program development according to agreed priorities. The
Regional Councils must then take decisions on a program implementation
scheme
which takes into account available finances together with the need for
communication and co-ordination with other agencies".
(Discussion Paper No.
2, p. 24.) (at p349)
19. The Regional Councils are "intended to be independent, bipartisan,
community based bodies, free of political control ... The
relationship of
Regional Councils with other structures should be a co-operative and
integrative one. They will have no authority
to countermand decisions of
existing governments, although they may advise and lobby against them".
(Discussion Paper No. 2, p. 21.)
(at p349)
20. The basic staff of a Regional Council is: a director of social planning;
a project officer; secretarial assistance. (at p349)
21. Money is to be made available by the Commonwealth directly to, and for
expenditure by, Regional Councils in two forms: (a)
a specific grant of
$10,000 per annum for the employment, either by a local government authority
in the region or a local welfare
co-ordinating committee in the region, of a
community development officer whose functions would include: information
giving, assessment
of local needs, advice on implementing social welfare
programmes; recommendations on the development of new services; activities
designed to foster a sense of community involvement; participation in
committee work; training of welfare personnel; (b) block grants
to be spent in
the area by eligible bodies which may be applied to any or all of the capital
or maintenance costs of those services
outlined in Ch. 4 of Discussion Paper
No. 1. Prima facie these grants will be on the basis of $2 per capita per
local government
area but will be affected by a system of "'needs' weighting".
(See Discussion Paper No. 1, p. 6.) But "it is envisaged that Regional
Councils will have access to other funding sources and indeed are encouraged
to seek such resources". (Guidelines For Pilot Programme,
p. 5.) (at p349)
22. Each Regional Council is free to determine its own priorities for the
expenditure of the regional grant amongst local government
bodies or groups:
such expenditure is in its discretion. Eligible bodies will include: local
government bodies or groups of two
or more such bodies; local government
bodies in association with one or more community agencies, e.g. a non-profit
hospital; State
government department services in the region; welfare consumer
groups; non-government bodies of a non-profit or charitable nature,
including
trade unions, as approved by the Director-General of the Department of Social
Security. The criterion upon which the Regional
Council will allocate the
funds at its disposal is to be "the needs of the region". (at p349)
23. The services in which the grant may be employed are:
"4.1 Child development services including:
Family day care programs.
Counselling services for 'at risk' families. Day care
services not included in the Child Care Act 1972,
including before- and after-school programs, and
school holiday programs (which do not attract other
Federal grants).
Parental education programs.
Fostering programs on a permanent or temporary
basis.
4.2 Services to assist families including:
Professional counselling services
(i) Social casework or group work; family casework
services including marriage guidance;
(ii) Budget advisory services;
(iii) Home management advice;
(iv) Legal advice.
Domiciliary services
(i) Home help, housekeeper, home management
available to population generally;
(ii) Meals-on-wheels (Commonwealth assistance
available under Delivered Meals Subsidy Act);
(iii) Allied services such as friendly visiting, home
maintenance, laundry, shopping and other ancillary
services designed to assist people to remain
independent of institutional care.
4.3 Services to assist adolescents including:
Recreational/cultural facilities having a clear welfare
component (but excluding solely corrective programs):
(i) Provision of community centres as a locus for
community welfare services;
(ii) Youth clubs or 'drop-in' centres;
(iii) Activity programs aimed at providing social
therapy for special-needs groups, such as delinquent
adolescents, discharged prisoners or
those who have suffered mental illness.
Detached worker programs.
4.4 Services to assist aged persons including:
Senior citizens centres, and associated welfare
programs.
Domiciliary services listed in 4.2.
Financial assistance as in 4.6.
Accommodation as in 4.5.
4.5 Accommodation for special categories, and associated
welfare programs including:
Aged (but not of a kind to attract subsidy under Aged
Persons' Homes Act).
Transients.
Homeless families.
'At risk' youth.
Alcoholics.
Single mothers (but not babies' or children's homes).
4.6 Certain financial assistance including:
Emergency financial relief.
Crisis accommodation services and holiday grants for
low income families.
Emergency care in home.
4.7 Information services including:
Information/advice services in general community -
may involve assistance towards existing Citizen Advisory
Bureaux or sponsorship of a Bureau being
planned by community agencies.
4.8 Community Health and Welfare Centres, as a focus
for a 'total health and well-being' approach to the
delivery of services instead of services designed to
meet only particular needs, provided that this is a
proposal approved jointly by the Social Welfare Commission
and the Australian Hospitals and Health
Services Commission.
4.9 Research and evaluation projects with respect to
welfare policies." (Discussion Paper No. 1, pp. 8-9.) (at p351)
24. The Plan which has been initiated is said to be "an action-research
program in its experimental stages" intended to "cover Australia
in a network
of Regional Councils operating community-based programs" with the "dual
purpose of co-ordinating the activities being
undertaken by other
organisations and by providing a stimulus for new interests and activities".
They are to have the means "to foster
innovatory services and projects through
the capitation grant". (Discussion Paper No. 2, pp. 8-9.) Their "focus is the
integration
of welfare services and participatory social planning on a
regional basis". (Discussion Paper No. 2, p. 14.) (at p351)
25. These citations from the writings of the interim committee are not made
for the purpose of criticism of the plenitude or the
vagueness of the language
employed or of criticism of the validity of the concepts put forward in the
discussion papers and guidelines,
or to reflect on the wisdom or
practicability of the Plan. None of these aspects of the Plan and of its
documentation are of concern
to me in deciding this matter. I am concerned
only with constitutional validity. (at p351)
26. I have troubled, however, to quote sufficiently from the abundance of
words which go to make up the documents descriptive of
the Plan, to
demonstrate that the Plan is presently a going concern and to indicate the
activities which it comprises: for, as I
have said, the purposes of the
appropriation are to be found in this outline of the Plan which has no other
authority for its existence
and activities than the Act appropriating money
and authorizing the expenditure of money to service it. Though the sum
appropriated
by the Act for the Plan is considerable, it is evident from the
writings with which we have been furnished that this is only the
beginning of
a vast expenditure of money. (at p352)
27. I mentioned earlier that, as of July 1974, there were eight Regional
Councils in operation in Victoria, presumably being funded
for their
operational expenses out of the moneys appropriated by the Act for the Plan.
In fact, as of that time, there were as well
ten such Regional Councils for
New South Wales, six in Queensland, two in South Australia and three in each
of the States of Western
Australia and Tasmania and three in the Northern
Territory, making in all thirty-five Regional Councils. There were at least
six
pilot schemes within the areas of the Regional Councils receiving
capitation grants. (at p352)
28. Having thus indicated the nature of the Plan, I can at once dispose of a
submission pressed upon the Court by counsel for the
defendants. It was said
that the function of the Plan was merely investigatory and advisory: a mere
exercise of inquisition to
inform the government when contemplating an
exercise of its legislative powers under such topics as invalid and old age
pensions,
family allowances, immigration and people of the aboriginal race.
Quite plainly it is not; the Regional Councils have been set up
and the Plan
is in action. Any advisory function so far as government is concerned, would
seem to be with the Social Welfare Commission.
Any advisory function of the
Regional Councils is directed to the improvement of the Plan itself, the
development of the departmental
services in the region and the allocation of
grants and subventions to bodies in the region. (at p352)
29. According to the literature about the Plan to which I have referred,
legislation is contemplated which will implement the Plan
with such variations
as intervening experience may seem to dictate. Nowhere in the extensive
explanation of the Plan in the documents
is there the least suggestion that
the aim or purpose of setting up the Regional Council is the ascertainment of
information directed
to the exercise of the legislative power on any of the
topics to which I have referred. Notwithstanding the valiant efforts of the
Solicitor-General to convince us to the contrary, it is to my mind beyond
question that the purpose, immediate and long term, of
the Plan is to develop
Regional Councils "to stimulate interest and activity in the broad field of
social development" with the "dual
purpose of co-ordinating the activities
being undertaken by other organisations and by providing a stimulus for new
interests and
initiatives" within "a nationally co-ordinated framework of
integrated patterns of welfare services". The situation at the present
is
that there are in existence Regional Councils for Social Development with the
functions I have listed, being supported by money
out of the Consolidated
Revenue Fund on the sole authority of the item I have mentioned in the
Schedule to the Act. So far as the
money consists of grants it is to be paid
direct to the Regional Councils for disbursement by them. (at p353)
30. Section 83 of the Constitution provides that "No money shall be drawn
from the Treasury of the Commonwealth except under appropriation made by law".
That, as Sir
Owen Dixon pointed out in Attorney-General (Vict.) Ex rel. Dale
v. The Commonwealth [1945] HCA 30; (1945) 71 CLR 237, at p 271 ,
means by a valid
law of the
Commonwealth. It also means that there must be constitutional or statutory
authority for all disbursement
from the Consolidated
Revenue Fund. There is
no inherent executive power of disbursement. (at p353)
31. It is suggested by Professor Harrison Moore in The Constitution of the
Commonwealth of Australia, 2nd ed. (1910), at pp. 522-527, that several
provisions of the Constitution themselves appropriate money so that payments
for the nominated purposes may be made without the necessity of an
Appropriation Act
specifically appropriating such moneys. Sir John Latham, in
his reasons for judgment in Attorney-General (Vict.) v. The Commonwealth
[1945] HCA 30; (1945) 71 CLR 237 , takes somewhat the same view. I am not convinced that
every instance given by Professor Harrison
Moore and
by
Sir John Latham does
effect such an appropriation. But I have no need presently to decide that
matter. It suffices
to accept
the
proposition that there are in the
Constitution provisions which do satisfy s. 83 without the support of a
specific appropriation by Commonwealth statute. Thus, it cannot properly be
said as a universal proposition
that only money appropriated by such statutes
may lawfully be drawn from the Treasury. But, undoubtedly, the invariable
rule, apart
from authority given by the Constitution itself, is that money may
not lawfully be withdrawn from the Consolidated Revenue Fund except under the
authority of a valid law
of the Commonwealth. (at p353)
32. Upon these facts and circumstances, four matters arise for decision in
this case: Is there a constitutional limitation upon
the power of the
Commonwealth to appropriate and spend the Consolidated Revenue Fund? If there
is, what is the nature of that constitutional
limitation? If so, is this
Court competent - (a) to determine the existence and nature of the
constitutional limitation and (b)
to enforce it by declaration and injunction?
And, lastly, have the plaintiffs or either of them a sufficient interest to
maintain
their suit? (at p354)
33. The first step is to determine the meaning of s. 81 and to decide whether
there is a constitutional limitation upon the power of the Parliament to
appropriate, and to authorize the
expenditure of, the Consolidated Revenue
Fund; and if so, the nature of the limitation. (at p354)
34. Sections 81 and 83 are provisions of the Constitution. Clearly, in my
opinion, they were not inserted there merely to reflect British parliamentary
practice in cases resulting from conflicts
long since resolved between the
King and Parliament. Rather, they are there to reflect Australian, not
British, history and to implement
the federal distribution of power and
financial relationship upon which the colonies had resolved. If those
sections were passed
merely to indorse the outcome of the conflict of Crown
and Parliament in the long past they were an unnecessary adornment. The
British
parliamentary practices and procedures entrenched in 1900 would have
come with the establishment of the Parliament as part of the
inheritance by
the Commonwealth of the common law. There would have been an inherent power
to appropriate and an inherent obligation
to do so by statute. Further, if
inserted to emphasize the existence of such a power of appropriation, there
was no need and no
point in the insertion of the words "for the purposes of
the Commonwealth". I am unable to accept the conclusion that these words
are
either surplusage or meaningless. They have been used, in my opinion, to
effect a constitutional purpose. (at p354)
35. To comprehend the nature and meaning of s. 81, which in my opinion is the
express constitutional source of the power of the Parliament to appropriate
money for expenditure out
of the Consolidated Revenue Fund, it is necessary to
place the financial provisions of the Constitution in the setting of the
period in which federation was mooted and achieved. Such a course is well
settled in the construction of the
Constitution. (at p354)
36. Most of the colonies, pre-federation, relied upon customs and excise,
with borrowing, to maintain the expenditures of government.
Such duties of
customs were garnered at the inter-colonial border as well as at the seaboard.
Only one of the Australian colonies
as of 1900 had resorted to income tax as a
substantial source of government revenue. One of the mainsprings of the
movement in the
colonies for federation was the need to have a common external
tariff and to remove border customs and other impediments to trade
over the
colonial boundaries. This is evidenced by ss. 86, 88, 90 and 92 of the
Constitution. But, by the operation of these sections, the colonies now to be
States forming part of the Commonwealth, were deprived of what
in 1900 was a
major, if not indeed almost the exclusive, source of governmental revenue.
Consequently, as part of the federal arrangement
they had to be assured of the
replacement of these revenues by money furnished out of the revenues of the
Commonwealth. (at p355)
37. Having regard to the limited nature of the powers granted to the
Commonwealth, and to the unlikelihood, as seen in 1900, of
the Commonwealth
requiring for the exercise and enjoyment of those powers to use all the
revenues of customs and excise, of posts,
telegraphs and telephones, and other
possible sources, some constitutional provisions were necessary to ensure the
availability to
the States of the excess of those revenues over the proper
requirements of the Commonwealth. (at p355)
38. It is apparent from the history of the proposals for federation that the
plan of federation involved, and essentially involved,
the sharing or
distribution of the revenues of the Commonwealth. The then major source of
colonial revenue had to be collected by
the Commonwealth: that and other
revenues of the Commonwealth gathered from the people of the States by
non-discriminatory laws
might well be beyond the needs of the administration
by the Commonwealth of the powers allocated to it by the Constitution. The
precise manner in which the States after federation should secure their share
of the revenue so received by the Commonwealth
had been the subject of much
discussion but only of incomplete agreement. Some matters, however, were
finally resolved. It was provided
that all revenue should form one
Consolidated Revenue Fund. Section 87, though certainly only for a limited
period, specified that
part of the revenue from customs and excise which could
be applied annually
by the Commonwealth "towards its expenditures"; s. 94
provided for the payment to the States of "all surplus revenue of the
Commonwealth". Section 96 gave power to make grants to any States upon terms
determined by the Parliament. It was evidently necessary to make such an
express
provision if such grants were to be deductible from the Commonwealth
revenues in the process of determining the surplus revenue.
Quite clearly, the
making of such grants, but for the existence of s. 96, would not have been a
purpose of the Commonwealth. (at p355)
39. Just as legislative power was distributed, with specific topics assigned
to the Commonwealth and the residue falling to the
States, so, it seems to me,
the surplus of the Commonwealth revenues, the residue, after the servicing of
the exercise of Commonwealth
powers, was to come to the States, though in a
manner left to be determined by the Parliament. This distribution of the
revenue
was effected, in my opinion, by the stipulation that the Consolidated
Revenue Fund could only be appropriated and disbursed by constitutional
or
statutory authority, and that the Commonwealth could only expend the fund for
Commonwealth purposes. Thus if the revenues in
fact exceeded Commonwealth
purpose requirements, there would be surplus revenue intended to be available
for the States. The fact,
if that be the right conclusion, that the payment
of the surplus revenue was left in the control of the Parliament does not
detract,
in my opinion, from the basic concept of limiting the power of the
Commonwealth, itself a legislative power, to appropriate and spend
the
Consolidated Revenue Fund as part of the distribution of legislative power by
which the federation was effected. The failure
to agree upon a permanent
formula for distributing the revenue does not deny the essentially federal
nature of the financial provisions
of the Constitution. In my opinion, the
words of s. 81 do involve a restraint of the Commonwealth's power of
appropriation and expenditure of the Consolidated Revenue Fund and ss. 81 and
83 were part of what I may call the distribution of the available governmental
revenue of the federation as between Commonwealth and
States. (at p356)
40. The development by the States of the use of income tax as a source of
revenue between 1900 and 1942 tended to divert attention
from the surplus
revenue provisions. The working of that provision had been affected by the
Court's decision in New South Wales
v. The Commonwealth [1908] HCA 68; (1908) 7 CLR 179 :
but not to the point of rendering s. 94 ineffective. The entry of the
Commonwealth into the field of land tax and then of income tax no doubt
diluted the proportion of
the Consolidated Revenue Fund contributed by customs
and excise and posts and telegraphs. But none of these circumstances altered
the fundamentals of the Constitution in the distribution of the use of that
fund. (at p356)
41. The legislation of 1942, embodying the so-called uniform taxation scheme,
returned the country to the situation of 1900 with
the major sources of
government revenue in Australia being collected by the Commonwealth with no
binding arrangement for the quantification
of the reimbursement grants to be
paid to the States as the price of their abstention in the field of income
tax. Efforts to devise
formulae to effect the distribution of the income tax
revenue have had but partial and temporary success. However, concentration
of
attention on annual conferences of Premiers with the Treasurer of the
Commonwealth have, I think, tended to displace resort to
the legal
consequences of the basic financial federalism which the Constitution
expresses and to substitute political bargaining rather than litigation as the
mechanism for the distribution of Commonwealth revenues.
In a sense the
Premiers' Conferences have substituted consensual arrangements for legal
rights. But now in this litigation, legal
rights and constitution limitations
have been asserted and must be decided. (at p357)
42. It is as necessary now, with the uniform tax and reimbursement grant
legislation in operation, that the claim of the States
on the Consolidated
Revenue Fund through s. 94 be recognized and respected as it was when the
principles of federation were in negotiation. The purpose of the restraint on
the
Parliament's legislative power to appropriate and authorize the
expenditure of the Consolidated Revenue Fund is presently the same
as it was
in 1900, namely, the ensuring of surplus revenue so that there can be State
participation in that Fund. (at p357)
43. The Commonwealth's access to the Consolidated Revenue Fund by means of
the use of s. 96 has been aided by the decisions of the Court in Victoria v.
The Commonwealth [1926] HCA 48; (1926) 38 CLR 399 and Osborne v. The
Commonwealth [1911] HCA 19; (1911)
12
CLR 321 . But these decisions lend no colour to the proposition that an
appropriation of
the Consolidated Revenue Fund
may be
without purpose or that
the purpose of the appropriation may be to service some activity of
the
Commonwealth which it is not
authorized
by the Constitution to undertake.
Section 96, included in the Constitution to enable moneys expended in grants
to States to be debited to the Consolidated Revenue Fund as money appropriated
for a purpose
of the Commonwealth, as interpreted by this Court, has enabled
the Commonwealth to intrude in point of policy and perhaps of administration
into areas outside Commonwealth legislative competence. No doubt, in a real
sense, the basis on which grants to the claimant States
have been quantified
by the Grants Commission has further expanded the effect of the use of s. 96.
But a grant under s. 96 with its attached conditions cannot be forced upon a
State: the State must accept it with its conditions. Thus, although in point
of economic fact, a State on occasions may have little option, these
intrusions by the Commonwealth into areas of State power which
action under s.
96 enables, wear consensual aspect. Commonwealth expenditure of the
Consolidated Revenue Fund to service a purpose which it is not
constitutionally lawful for the Commonwealth to pursue, is quite a different
matter. If allowed, it not only alters what may be
called the financial
federalism of the Constitution but it permits the Commonwealth effectively to
interfere, without the consent of the State, in matters covered by the residue
of
governmental power assigned by the Constitution to the State. (at p358)
44. It is perhaps worth remarking at this point that the doctrine of the
Court established in the Amalgamated Society of Engineers
v. Adelaide
Steamship Co. Ltd. [1920] HCA 54; (1920) 28 CLR 129 has supported the exercise to the full
of Commonwealth legislative
power. But
however large and generous the
interpretation of those powers, the Constitution requires that the power of
the States with respect to the residue, not embraced in Commonwealth power as
thus construed, should not
be trespassed upon by the Commonwealth without the
concurrence of the State. Participation by the Commonwealth in policy-making
or
of administration in connexion with matters of State concern, matters
within the residue left to the States by ss. 106 and 107, must, in my opinion,
be confined to the use by the Commonwealth of s. 96 which, as I have said,
involves the consent of a State. The Commonwealth, in my opinion, activity
under s. 96 apart, cannot enter that residual area left by the Constitution to
the States, either by legislative or by executive act. (at p358)
45. In line with the limitation on Commonwealth expenditure out of the
revenues of customs and excise, with the power to make grants
to States under
s. 96 and with the provision for surplus revenue to be paid to the States, the
power of appropriation and of expenditure of the Consolidated
Revenue Fund in
my opinion is limited to appropriation and expenditure for Commonwealth
purposes. Although appropriated but unspent
money was denied the quality of
surplus revenue for the constitutional purpose (see New South Wales v. The
Commonwealth [1908] HCA
68; (1908) 7
CLR 179 ) and although the undoubted demands on the
Consolidated Revenue Fund including the amount of grants under
s. 96 may
reduce in present times the extent of surplus revenue, the right of the State
to the distribution of such surplus revenue remains.
Whilst s. 94 is
expressed in facultative rather than mandatory terms, if there is at any time
surplus revenue which the Commonwealth may not appropriate
and expend, the
practical effect must be that that surplus can only be and will be made
available to the States, though the Parliament
may determine the basis of its
distribution. Thus the absence of mandatory terms in s. 94 is really of no
practical consequence. However, the sense of the Court's decision in New South
Wales v. The Commonwealth is, in my
opinion, that if there be a surplus, the
Commonwealth is required to make it available to the States on a basis fixed
by the Parliament.
In any case, that in my opinion, is the proper
interpretation of s. 94. It must be remembered that it is a Constitution
which we have to construe. A Constitution which left in the Consolidated
Revenue Fund money which the Commonwealth could not lawfully expend, being a
surplus beyond Commonwealth
purposes, without any obligation to distribute it,
would make little sense. (at p359)
46. There was thus a clear reason in the formation of the Australian
Constitution to impose limits on the capacity of the Commonwealth to expend
the Consolidated Revenue Fund into which all revenues and moneys were
to go.
The limitation on the power of appropriation and disbursement was an
indispensable part of the financial arrangements contemplated
in the progress
towards federation which are embodied in the Constitution. It was submitted
for the defendants that we should apply to the Australian Constitution the
judicial construction placed upon the American Constitution in relation to the
power of taxation and what was considered to be a correlative power, the power
of appropriation and expenditure.
The American doctrine, developed through
periods of uncertainty, seems to be regarded as presently settled by United
States v. Butler
[1936] USSC 11; (1936) 297 US 1 (80 Law Ed 477) . The doctrine stems from
the Supreme Court's view of the extent of the power to tax, having regard
to
the text of the Constitution of the United States. But, even so, the power of
expenditure has not been held to be unlimited and beyond the reach of the
Supreme
Court. Clearly, from the reasons in United States v. Butler, the
Supreme Court considered that there may be an occasion when the
Court could
find an appropriation and expenditure beyond the power of the Congress: see
United States v. Butler (1936) 297 US, at
pp 74, 87 (80 Law Ed, at pp 492-493,
499-500) . In that case a limit on the power is suggested by the expression
that the expenditure
must be for national purposes which are not pursued to
the destruction of State power. (at p359)
47. But, however that may be, the American doctrine has no place in the
construction of the Australian Constitution. I agree with Sir John Latham
that it cannot be said of the Australian Constitution that, because the power
to tax may be unlimited, the power to spend is in consequence unlimited.
"This precise argument does not
apply to the Australian Constitution because
there is not the same collocation and association of words": Attorney-General
(Vict.) v. The Commonwealth (1945) 71 CLR,
at p 255 . I also agree with Sir
Owen Dixon's conclusion (1945) 71 CLR, at p 271 . But, and, for my part, more
importantly, nothing
comparable with the situation of the Australian colonies
in 1900 and to the constitutional provisions to which I have called attention,
was present in or in connexion with the American Constitution or its
formation. (at p360)
48. In my opinion, the words "for the purpose of the Commonwealth" were
intended to and do limit the legislative power of the Commonwealth
to
appropriate and authorize the expenditure of the Consolidated Revenue Fund.
They must be construed and applied in the light of
the circumstances and
constitutional provisions to which I have referred. It follows inevitably, in
my opinion, that they cannot
be writ out of the Constitution by deciding that
any purpose which the Parliament considers to be a Commonwealth purpose is an
authorized purpose. That is but an
example of "words meaning what I says they
mean", a notion more likely to be found in fantasy than in constitutional law.
(at p360)
49. There can be no doubt, in my opinion, that those who framed the
Constitution realized that there were purposes for which money could be spent
which were purposes of the Commonwealth and purposes which were
not. Hence
there exist words of limitation. Sections 81 and 83 in combination require
that there shall be an appropriation by law and an authority to expend the
Consolidated Revenue Fund for a
Commonwealth purpose. That means, in my
opinion, that such a purpose must be seen in the law, either expressly or
referentially
by description. It must be possible to decide that the law
containing the appropriation and authority to expend is valid within
the
constitutional limitation. (at p360)
50. That limitation may be fully satisfied by the express terms of the
appropriation, e.g. in the Second Schedule of the Act, Div.
101. Senate 1.
Salaries and Payments in Nature of Salaries; or those terms may need to be
supplemented by further material describing
the activities of the body
mentioned in the appropriation, e.g. as in the present case where the notation
"Australian Assistance
Plan" needs to be supplemented by description of the
activities embraced in the Plan. There may be Acts other than the
Appropriation
Acts, some of a long-standing nature and others of an annual
nature, which control the nature and level of the expenditure of the
appropriated sums, e.g. appropriations for the departments of State, where
public service legislation and staffing arrangements pursuant
to it, provide
the necessary statutory authority. Further, as an incident of an Act on some
topic assigned by the Constitution to the Parliament, an appropriation may be
made by a section of that Act, thus providing money to service its other
provisions. (at
p361)
51. But, however evidenced or demonstrated, the purpose of the appropriation,
i.e. the purpose on or for which the appropriated
money may be spent, must, in
my opinion, both appear and satisfy the limitation present in the words of s.
81, "for the purposes
of the Commonwealth". (at p361)
52. I should at this point call attention to the traditional form of an
Appropriation Act which includes an authority to the Treasurer
"to issue out
of the Consolidated Revenue Fund and apply" the appropriated money for the
specified services. That is the form of
the Act. It is, in my opinion, a
fundamental error to regard an Appropriation Act of the Commonwealth in the
form of the Act in
this case as doing nothing. It furnishes the authority of
the Executive to spend money upon or in connexion with some specific activity.
In the present case, the Act in relation to Div. 530, No. 4 of the Second
Schedule, is the sole authority for expenditure in connexion
with the Plan.
It is a legislative act, which to be valid, requires the support of the
Constitution. Unless the services specified in the Act constitute relevantly
Commonwealth purposes, the Act in that respect transcends the legislative
power of the Commonwealth. The grant of the authority to expend is beyond the
power of the Parliament and the withdrawal of the money
from the Consolidated
Revenue Fund is unlawful. (at p361)
53. Having regard to a remark made during the argument, I should also point
out that when the Court decides that a law of the Parliament
is invalid as
being in excess of power, the Court does not amend or repeal the Act. It
declares it not to form part of the law of
the land, usually in so far as it
would operate to the disadvantage of a litigant, whether a State or a person,
natural or juristic.
When the Court decides that the required purpose of an
appropriation is lacking, it does not amend the Appropriation Act. It
declares
that the authority to expend money out of the Consolidated Revenue
Fund upon the item in question is beyond the power of the Parliament;
that
there is no law to satisfy s. 83; that money may not lawfully be drawn from
the Treasury in pursuance of that purported authority.
(at p361)
54. What then are purposes of the Commonwealth within s. 81? The Commonwealth
is a polity of limited powers, its legislative power
principally found in the
topics granted by ss. 51 and 52: its executive power is described as extending
to the execution and maintenance
of the Constitution and of the laws of the
Commonwealth. No doubt some powers, legislative and executive, may come from
the very formation of the Commonwealth
as a polity and its emergence as an
international state. Thus it may be granted that in considering what are
Commonwealth purposes,
attention will not be confined to ss. 51 and 52. The
extent of powers which are inherent in the fact of nationhood and of
international personality has not been fully explored.
Some of them may
readily be recognized: and in furtherance of such powers money may properly be
spent. One such power, for example,
is the power to explore, whether it be of
foreign lands or seas or in areas of scientific knowledge or technology.
Again, there is
power to create departments of State, for the servicing of
which, as distinct from the activities in which the departments seek to
engage, money may be withdrawn from the Consolidated Revenue Fund. (at p362)
55. But, to anticipate a submission with which I must later deal, to say that
a matter or situation is of national interest or concern
does not, in my
opinion, attract any power to the Commonwealth. Indeed, any student of the
Constitution must be acutely aware of the many topics which are now of
considerable concern to Australia as a whole which have not been assigned
to
the Commonwealth. Perhaps the most notable instance is in relation to the
national economy itself. There is but one economy of
the country, not six: it
could not be denied that the economy of the nation is of national concern.
But no specific power over the
economy is given to the Commonwealth. Such
control as it exercises on that behalf must be effected by indirection through
taxation,
including customs and excise, banking, including the activities of
the Reserve Bank and the budget, whether it be in surplus or in
deficit. The
national nature of the subject matter, the national economy, cannot bring it
as a subject matter within Commonwealth
power. (at p362)
56. However, to whatever source it be referred, any act or activity of the
Commonwealth must fall within the confines of some power,
legislative or
executive, derived from or through the Constitution. In this connexion, I have
not included any reference to the judicial power because, in my view, such a
reference would be irrelevant
to the matter in hand. In the long run, whether
the attempt is made to refer the appropriation and expenditure to legislative
or
to executive power, it will be the capacity of the Parliament to make a law
to govern the activities for which the money is to be
spent, which will
determine whether or not the appropriation is valid. With exceptions that are
not relevant to this matter and
which need not be stated, the executive may
only do that which has been or could be the subject of valid legislation.
Consequently,
to describe a Commonwealth purpose as a purpose for or in
relation to which the Parliament may make a valid law, is both sufficient
and
accurate. In my opinion, the expression in s. 51 (xxxi.) of the Constitution
"for any purpose in respect of which the Parliament has power to make laws;"
is a reasonable synonym for the expression "the purposes
of the Commonwealth"
in s. 81. (at p363)
57. Further, the limitation which such a description places upon the power to
appropriate and expend the Consolidated Revenue Fund
is both appropriate and
necessary to carry out the financial provisions of the Constitution to which I
have referred. It accords with the limited powers given to the Commonwealth
by the Constitution. In this respect, I agree generally with what Sir Owen
Dixon wrote in Attorney-General (Vict.) v. The Commonwealth (1945) 71 CLR,
at
pp 271-272 . I am unable to agree with the conclusion expressed by Sir John
Latham (1945) 71 CLR, at p 254 or by my brother
McTiernan (1945) 71 CLR, at
pp 273-274 in that case. (at p363)
58. Is the Australian Assistance Plan, as I have outlined it by quotations
from the Social Welfare Commission's documents, a purpose
of the Commonwealth?
Is it something the Commonwealth may lawfully implement? I have no doubt it
is not. There is no granted power
which either alone, or in combination with
other powers, could support a scheme for the rearrangement of the Australian
community
into regions for deriving financial support directly from the
Commonwealth or for integration of social welfare schemes or welfare
planning
as such. Nor is there power to grant money to or through the Regional
Councils. An Act of the Parliament which sought
to authorize the carrying out
of the Plan, including its financial provisions, would, in my opinion, be
beyond the power of the Parliament.
(at p363)
59. The statement of defence suggests that the Plan is supportable by
reference to a number of powers granted by s. 51. Because,
for example, old
age pensioners or migrants might be the object of some scheme or co-ordination
by a Regional Council, it is said
that the Plan may properly be regarded as a
provision with respect to old age pensions or immigration. But such a claim
is clearly
insupportable. See, for example, Sir John Latham's discussion of
legislative subject matter in Bank of New South Wales v. The Commonwealth
[1948] HCA 7; (1948) 76 CLR 1, at pp 182-187 . A statute authorizing the Plan could not, in
my opinion, be regarded as a law with
respect to
old
age pensions or
immigration or any of the other subject matters to which reference was made in
argument. (at p363)
60. It was then suggested that, because social welfare itself and, in
particular, the co-ordination of the efforts of a large number
of diverse
agencies was a national problem, there was power in the national Parliament to
deal with it, by appropriation of funds
as well as by particular legislation.
But, as I have already pointed out, to describe a problem as national, does
not attract power.
Though some power of a special and limited kind may be
attracted to the Commonwealth by the very setting up and existence of the
Commonwealth as a polity, no power to deal with matters because they may
conveniently and best be dealt with on a national basis
is similarly derived.
However desirable the exercise by the Commonwealth of power in affairs truly
national in nature, the federal
distribution of power for which the
Constitution provides must be maintained. (at p364)
61. In my opinion, no power resides in the Commonwealth to implement and
carry out a social welfare plan such as the Australian
Assistance Plan. It
follows, in my opinion, that that Plan is not a purpose of the Commonwealth
within the meaning of the language
of s. 81. Accordingly, in my opinion,
there is no power in the Parliament to appropriate and authorize the
expenditure of money for that Plan
and its purposes. Item 4 in Div. 530 of
the Second Schedule to the Act is, in my opinion, void and in respect of the
Plan and its
purposes, the Act is ineffective to authorize the withdrawal from
the Treasury of any money for the support or implementation of
the Plan. (at
p364)
62. I need lastly to deal with the submission that the question of the
validity of the Act is not justiciable and that the plaintiff
State has no
interest to maintain its suit. I shall deal with both submissions together.
(at p364)
63. Section 83 requires that there be a law authorizing the withdrawal of
money from the Consolidated Revenue Fund. Section 81,
in my opinion, empowers
the Parliament to make a law authorizing such withdrawal. If, as I think,
there is a limitation imposed
by s. 81 on the power of the Parliament to make
such a law, an Act which authorizes an expenditure of the Consolidated Revenue
Fund
for a purpose which is not a purpose of the Commonwealth within the
meaning of s. 81, must be beyond the competence of the Parliament.
Like any
other statute passed by the Parliament which is beyond its competence, such a
statute is void. The power of this Court
to declare that a statute which is
beyond Parliament's competence is void is beyond question. It is an essential
feature of the
Australian Constitution that the Court, in the exercise of the
judicial power of the Commonwealth, not only may declare acts of the
Parliament to be void
but, when approached by a litigant with an appropriate
interest in the statute or its operation, is under a duty to do so. (at p364)
64. As I have pointed out, the Act, in traditional form, both authorizes the
expenditure of part of the Consolidated Revenue Fund
and, to enable that
expenditure, appropriates so much of the Fund as is necessary to do so. It
cannot be said that the Act does
nothing, merely earmarking part of the
Consolidated Revenue Fund which remains as it was before appropriation. The
real operation
of the Act is to provide an authority for expenditure so as to
satisfy the terms of s. 83: and it is in the instant circumstances
being so
treated. (at p365)
65. I have indicated that the evident purpose of the limitation upon the
Commonwealth's use of the Consolidated Revenue Fund is
to effect the
distribution of the use of that Fund and to ensure, so far as the Fund will
extend, that there is a surplus of revenue.
Thus, to declare an expenditure
of the Commonwealth as unauthorized, and in breach of s. 83, is to take a step
towards the existence
and availability of surplus revenue. Likewise, an
injunction to restrain an unauthorized expenditure is in aid of surplus
revenue.
To my mind, it is manifest that a State undoubtedly has an interest
in the existence and extent of surplus revenue, whether or not
it has a right
to its distribution. Equally, it must have an interest to prevent expenditure
of the Consolidated Revenue Fund which,
if allowed, must deplete, or prevent
the existence of, surplus revenue. To say that the present suit is not a suit
to recover surplus
revenue is not, in my opinion, to deny the interest of the
State to maintain it. The suit, though not claiming a payment of money,
is
essentially concerned with the protection of the surplus revenue and of the
State's interest in the existence and extent of such
surplus revenue. (at
p365)
66. By confining the Commonwealth's expenditure of the Consolidated Revenue
Fund within the proper constitutional bounds, the State
takes a step towards
the "creation" of surplus revenue: it is endeavouring to ensure the observance
of the Constitution in a respect that vitally affects it: it is asking that
the federal distribution of the use of the Consolidated Revenue Fund be
observed:
it is claiming the invalidity of a statute as being beyond the
competence of the Parliament, a statute which if acted upon would
affect its
interest in the existence and extent of surplus revenue. (at p365)
67. I have no doubt that the State has an interest to maintain this suit. Of
course, if it were decided that the words "for the
purpose of the
Commonwealth" were meaningless no order in favour of the litigant State could
be made: but even in that case it could
not be said, in my opinion, that the
State had no litigious interest in a decision as to the meaning of the
Constitution in that respect. In any event, the meaning of the expression
must first be decided for, if the meaning is as I have suggested, quite
clearly, for reasons I have given, the State has enforceable rights. But as I
have said, in my opinion, the State has an interest
in a suit to determine the
meaning of the Constitution in the relevant respect. Nothing in the decided
cases would deny that conclusion and much that is said there supports it.
Indeed,
there is a degree of the ludicrous in the assertion that a State in a
federation has no interest to seek from the Supreme Court of
the federation an
interpretation of the federal constitution in a respect which is vital to its
interest and which if its contentions
are correct would result in an order
confirming the rights it claims. (at p366)
68. I need not decide the standing of the Attorney-General in the suit. But
it seems to me that he is an unnecessary party, the
State itself being
recognized by the Constitution as a litigant; see, for example, 75 (iv.). (at
p366)
69. In my opinion, the demurrer by the plaintiffs should be allowed and the
competence of the Court and the interests of the plaintiffs
to maintain their
suit affirmed. There should be a declaration in terms of par. A of the
statement of claim. The declaration having
been made by the Court there
should be no need for the making of an injunction. But to cover
eventualities, further consideration
of the suit should be reserved. (at
p366)
McTIERNAN J. The Appropriation Act (No. 1) 1974-1975 in Divs. 530, 532 and
533 of the Second Schedule includes appropriations for
the Department of
Social Security. (at p366)
2. One of the services which, s. 4 of the Act says is expressed in the
schedule, is "Division 530 ...
4. Australian Assistance Plan 1974-75 Appropriation Expenditure
$ $ $01. Grants to Regional
Councils for02. Development and
Social Development .. 5,620,000 1,700,000 764,030
evaluation expenses .. 350,000 130,500 108,297(at p366)
5,970,000 1,830,500 872,327"
3. The Parliament did not make any law under s. 51 of the Constitution
relating to the "Plan", "Grants to Regional Councils for Social Development"
or "Development and evaluation expenses". (at p366)
4. On the part of the plaintiffs it is contended, as I understand the
argument, that the Parliament had no constitutional power
to appropriate from
the Consolidated Revenue Fund a sum of $5,970,000 or any part of it to be
expended by the Minister for Social
Security on the grants or the expenses
mentioned under the heading Australian Assistance Plan. (at p367)
5. On the part of the defendants it is contended, as I understand the
argument, that the appropriation, in question, is for a purpose
of the
Commonwealth within the meaning of the expression "the purposes of the
Commonwealth" in s. 81 of the Constitution. (at p367)
6. The "Departments and Services" mentioned, to which the Second Schedule
refers, are "purposes of the Commonwealth". In my opinion
there is nothing in
the terms of the appropriation, in question, which takes it out of s. 81. (at
p367)
7. The legislative power of the Parliament created by s. 81 is elucidated in
the reasons of Latham C.J. in the Pharmaceutical Benefits Case [1945] HCA 30; (1945) 71 CLR
237, at pp 253-254
:
"What are purposes of the Commonwealth within the
meaning of the section? (i.e. s. 81)
I approach the consideration of this question with the
prima facie opinion that the words 'purposes of the Commonwealth'
(which plainly include purposes 'in respect of which
the Parliament has power to make laws') are not identical
in meaning with the latter words. I have already stated my
opinion that each such power includes a power to authorize
the expenditure of money. A meaning is given to the words
'to be appropriated for the purposes of the Commonwealth'
if they are read as intended to show positively that there may
be other Commonwealth purposes than those in respect of
which power to make laws is given elsewhere in the Constitution.
Otherwise the words have no legal effect whatever.
What then is the authority which can determine what purposesHe continued (1945) 71 CLR, at p 256 :
are purposes of the Commonwealth? As the appropriation
is to be made by law (s. 83), the natural answer is -
the authority which makes Commonwealth laws, that is, the
Commonwealth Parliament, not the executive authority which
administers laws when made, nor the judicial authority which
interprets and applies the laws. Thus, in my opinion, the
Commonwealth Parliament has a general, and not a limited,
power of appropriation of public moneys. It is general in the
sense that it is for the Parliament to determine whether or
not a particular purpose shall be adopted as a purpose of the
Commonwealth. I take as illustrations some past appropriations
for purposes in relation to which the Parliament has
approved the expenditure of moneys but where, when the
purposes are considered in themselves, there is no power to
legislate with respect to the matters to which the expenditure
relates. In some cases there is only an appropriation of
money for the purpose stated, in other cases there are
statutes containing detailed provisions for the establishment
of organizations for the purpose of spending the money. I
mention appropriations for Antarctic exploration, medical
research, literary grants and pensions, subscriptions to international
organizations, such as the Agricultural Institute at
Rome, public health, assistance to distressed Australians
abroad. Among statutes I mention those conveniently to be
found under the heading of Research and Science in vol. III
of the Commonwealth Acts 1901-1935 - Institute of Anatomy,
Economic Research, Forestry Bureau, Geo-physical
Survey, Science and Industry, Endowment and Research. (I
omit the Act relating to a Solar Observatory at Canberra,
because there is no doubt that, in relation to the Territories
of the Commonwealth, the Parliament has a quite general
power of appropriation for any purpose whatever.) The
application of Commonwealth moneys to these objects, so
far as it merely involves the expenditure of money, is, in my
opinion, authorized by the Constitution. Such expenditures
do not interfere with the rights of the States or of any persons,
and if the Commonwealth Parliament approves the expenditure
there is, in my opinion, full legal justification for the
expenditure."
"... in my opinion, the determination whether a particular
purpose should be regarded and adopted as a Commonwealth
purpose is a political matter. If the proposed limitation
to 'legislative purposes' in the sense stated is rejected,
no test has been suggested which would enable a court to
undertake a judicial review upon any legal basis of the multi-farious
expenditure which a Parliament may consider it
necessary or desirable to undertake.
The words 'purposes of the Commonwealth' should not, in
my opinion, be construed as meaning for the governmental
purposes of the political organism called the Commonwealth.
In the introductory provision of s. 51 (that laws are to be
made for the peace, order and good government of the Commonwealth)
the word 'Commonwealth' is used to describe
the people of the Commonwealth in the area which is the
Commonwealth in the geographical sense. The laws of the
Commonwealth operate directly upon the people of Australia,
and it is the good government of those people with which the
Constitution is concerned, not the government of the Government
itself. In s. 81 in the phrase 'the purposes of the Commonwealth'
the word 'Commonwealth' should, in my opinion,
be interpreted in the same sense. The word 'Commonwealth'
there plainly does not mean the geographical area known as
the Commonwealth. Neither, in my opinion, does it mean the
Commonwealth as a political organism. I see no reason for
limiting the words 'the purposes of the Commonwealth' to
governmental purposes in the sense of the discharge of legislative,
judicial or executive functions. The word 'Commonwealth'
in this section refers to the people who, by covering
clause 3 of the Constitution, are 'united in a Federal Commonwealth
under the name of the Commonwealth of
Australia'.
For these reasons, in my opinion, the provisions of s. 81
can fairly be read as intended to mean that it is the Commonwealth
Parliament, and not any court, which is entrusted with
the power, duty and responsibility of determining what purposes
shall be Commonwealth purposes, as well as of providing
for the expenditure of money for such purposes.
This conclusion, however, relates only to laws providing
for the expenditure of money." (at p369)
8. Moneys and revenue to be appropriated, in pursuance of s. 81, to the
purposes of the Commonwealth from the Consolidated Revenue Fund would be,
inter alia, tax and social service contributions.
By s. 51 (ii.) the
Parliament is granted power to make laws for the peace, order and good
government of the Commonwealth with respect to taxation.
(at p369)
9. In his judgment in the Pharmaceutical Benefits Case Latham C.J. said
(1945) 71 CLR, at pp 255-256 :
"The determination whether legislation with respect to any
of the subject matters mentioned in s. 51 is for the peace,
order and good government of the Commonwealth is entirely
a political matter, and not a matter for determination
by any court." (at p369)
10. The appropriation in question is not any less an appropriation for the
purpose of the Commonwealth than any other appropriation
in the Second
Schedule of the Act. (at p369)
11. The Constitution does not of course grant power to the Parliament to make
laws with respect to the subject matter of the appropriation for the Plan.
(at
p369)
12. The list of appropriations under "3. Other Services in Division 530" are
apparently included on the footing that they fall
respectively within the
scope of "the purposes of the Commonwealth". These other services are as
follows - compassionate allowances
and other payments under special
circumstances; homes for aged persons - grants to eligible organizations under
the Aged Persons
Homes Act; sheltered employment assistance - grants to
eligible organizations under the Sheltered Employment (Assistance) Act;
telephone
rental concessions to pensioners and others (for payment to the Post
Office Trust Account); annuities and other payments for holders
of the George
Cross; grant to the Australian Council for Social Service; grant to the
Australian Council for Rehabilitation of Disabled;
grant to the Australian
Council on the Ageing; handicapped children assistance - grants to eligible
organizations under the Handicapped
Children (Assistance) Act; enquiry into
Poverty - grants to universities and other organizations; hostels for aged
persons - grants
to eligible organizations under the Aged Persons Hostels Act.
(at p370)
13. As regards "Regional Councils for Social Development" these are
contemplated as merely executive bodies within the Department
of Social
Security. Their constitution does not involve the performance of functions
beyond the province of the federal executive
government. (at p370)
14. The plaintiffs having demurred to the defendants' defence must be taken
to admit by the demurrer the truth of the facts stated
in the defence. In my
opinion these facts do not show that the expenditure by the Minister for
Social Security of the money appropriated
for the Assistance Plan infringes
the constitutional powers of the States reserved by ss. 106, 107 or any other
provision of the
Commonwealth Constitution. The dispute, if any, shown upon
the face of the pleadings is, in my opinion, nonjusticiable. It is within the
field of politics
not of law. I would overrule the demurrer. (at p370)
GIBBS J. These proceedings raise for consideration four questions, viz. (1)
Whether the Appropriation Act (No. 1) 1974-1975, in
so far as it appropriates
from the Consolidated Revenue Fund the sum of $5,970,000 for the Australian
Assistance Plan, is beyond
the powers of the Parliament of the Commonwealth
and void; (2) Whether it would be beyond the powers of the Commonwealth and
the
Minister for Social Security to expend any of the moneys of the
Commonwealth for the purposes of the Australian Assistance Plan;
(3) Whether
those questions are justiciable; and (4) Whether the State of Victoria, or
the Attorney-General for that State, has
the standing to raise them. These
questions are to some extent interdependent. (at p370)
2. It is provided by s. 81 of the Constitution as follows:
"All revenues or moneys raised or received by the ExecutiveSection 83 further provides:
Government of the Commonwealth shall form one Consolidated
Revenue Fund, to be appropriated for the purposes
of the Commonwealth in the manner and subject to the
charges and liabilities imposed by this Constitution."
"No money shall be drawn from the Treasury of the
Commonwealth except under appropriation made by law." (at p371)
3. The word "law" in the latter section must refer to a valid law. Such a law
may be contained in the provisions of the Constitution itself or may be made
by the Parliament in pursuance of a power derived from the Constitution. It
is not essential in the present case to decide whether s. 81 is the only
source of the power of the Parliament to pass an Appropriation Act, or
whether, as Latham C.J. said in Attorney-General
(Vict.); Ex rel. Dale v. The
Commonwealth ("the Pharmaceutical Benefits Case") [1945] HCA 30; (1945) 71 CLR 237, at p 251
, "each
power to make
laws with respect to a particular subject matter
includes a power to make a law
providing for the expenditure of money
in
relation
to that subject matter". If the power of appropriation is conferred
only by s.
81, it can be exercised only for the
purposes specified
in that
section, that is, "for the purposes of the Commonwealth". If, on
the other
hand, the power is granted
by other provisions
of the Constitution, the words
of s. 81, unless they are to be entirely disregarded, impose a limit on its
exercise and, in effect, forbid an appropriation to be made except
for a
purpose of the Commonwealth. On either view, the question is, what is the
meaning of the words "for the purposes of the Commonwealth"
where they appear
in s. 81? (at p371)
4. This question was fully discussed in the Pharmaceutical Benefits Case
[1945] HCA 30; (1945) 71 CLR 237 . There Latham C.J.
and McTiernan J.
held that "the
purposes of the Commonwealth" within s. 81 are such purposes as the Parliament
determines, and that the Courts have no power to declare that an Appropriation
Act is invalid
on the ground that the appropriation was made for an
unauthorized purpose (1945) 71 CLR, at pp 254-256, 273-274 . However, this
view, that s. 81 does not impose any effective limitation on the purpose for
which an appropriation may be made, and that the Parliament
may appropriate
moneys for any purpose whatever, was not accepted by Rich, Starke, Dixon, and
Williams JJ., the other members of
the Court. Both Starke J. and Williams J.
were of the opinion that the words referred to the purposes of the
Commonwealth as an
organized political body (1945) 71 CLR, at pp 266, 282 .
Williams J. said that those purposes "must all be found within the four
corners of the Constitution" (1945) 71 CLR, at p 282 . Starke J. expressed
himself rather more widely. He said (1945) 71 CLR, at p 266 :
"The purposes of the Commonwealth are those of an
organised political body, with legislative, executive and
judicial functions, whatever is incidental thereto, and the
status of the Commonwealth as a Federal Government. And
where else but from the Constitution and other acts conferring
authority upon the Commonwealth can its purposes
or functions be discovered? Those purposes include matters
in respect of which it can make laws by virtue of the Constitution
or any other Act, and they also include the exercise
of executive and judicial functions vested in the Commonwealth
by the Constitution or by any other Act. Among
other purposes of the Commonwealth must also be included,
I think, matters arising from the existence of the Commonwealth
and its status as a Federal Government." (at p372)
5. Dixon J. (with whom Rich J. concurred) agreed that if the power of
expenditure "is limited to matters to which the Federal legislative
power may
be addressed, it necessarily includes whatever is incidental to the existence
of the Commonwealth as a state and to the
exercise of the functions of a
national government" (1945) 71 CLR, at p 269 . He said (1945) 71 CLR, at p
269 that he did not find
it necessary to choose between the view that the
power is so limited and the view that the Parliament is authorized to spend
money
without any limitation of purpose. But it is apparent that he did not
favour the latter view: he expressly declined (1945) 71 CLR,
at pp 270-271
to accept the suggestion that the Court should read into s. 81 the words
"general welfare" (which appear in Art. 1,
s. 8, of the Constitution of the
United States) or the conception which those words are understood to embody
and he concluded by saying that he adhered to
the opinion that "the basal
consideration would be found in the distribution of powers and functions
between the Commonwealth and
the States" (1945) 71 CLR, at pp 271-272 . The
Pharmaceutical Benefits Case [1945] HCA 30; (1945) 71 CLR 237 cannot be regarded
as a
decision that
an Act which appropriates money for a purpose other than a
Commonwealth
purpose is invalid, for the statute there
challenged went
beyond
mere appropriation, but the judgments of a majority of the members
of the
Court strongly support the view
that the power of
appropriation is effectively
limited by s. 81 of the Constitution. Support for that view may also be found
in other dicta. In New South Wales v. The Commonwealth ("the Surplus Revenue
Case") Isaacs
J. said [1908] HCA 68; (1908) 7 CLR 179, at p 200 :
"'Appropriation of money to a Commonwealth purpose'The use of the word "lawfully" in that passage indicates that Isaacs J. considered that not every determination made by Parliament of a purpose for which money should be expended would be lawful, or in other words that Parliament is not free to make an appropriation for any purpose that it selects. Barton J., who said that if the moneys drawn from the Treasury in that case were to become "surplus revenue", "they must have been either wholly unappropriated for any purpose of the Commonwealth, or appropriated for something which is not such a purpose - that is, illegally" (1908) 7 CLR, at p 193 , was evidently of the same opinion. In Australian Woollen Mills Pty. Ltd. v. The Commonwealth [1954] HCA 20; (1954) 92 CLR 424 , the Court (constituted by Dixon C.J. and Williams, Webb, Fullagar and Kitto JJ.) in a joint judgment discussed whether the expenditure of moneys in subsidies to manufacturers on wool purchased and used for local manufacture was authorized by the Constitution. Their Honours said (1954) 92 CLR, at p 454 :
means legally segregating it from the general mass of the
Consolidated Fund and dedicating it to the execution of
some purpose which either the Constitution has itself declared,
or Parliament has lawfully determined, shall be
carried out."
"Section 81 of the Constitution authorizes the appropriationThe fact that the Court regarded it as necessary to seek in specified powers of the Commonwealth a justification for the appropriation clearly shows that it was thought that the power of appropriation was a limited one. (at p373)
of the revenues and moneys of the Commonwealth for
the purposes of the Commonwealth. The payment of 'subsidies'
would appear to be a payment of 'bounties' within
the meaning of the Constitution, but s. 51(iii.) authorizes
only the making of laws with respect to bounties 'on the production
or export of goods', and the subsidies in question
were not made payable on the production or export of goods
- unless indeed we regard the subsidy . . . as a subsidy 'on'
goods manufactured, a view which, in the last analysis, would
be fatal to the plaintiff. The justification, however, for the
appropriation of moneys for paying subsidies would probably,
if challenged, be sought in the defence power, which is
conferred by s. 51(vi.)....No defence of lack of power having
been raised, the matter need not be pursued further."
6. The balance of judicial opinion is heavily in favour of the view that the
power of appropriation is not general and unlimited
but may be exercised only
for purposes which can in law properly be described as "purposes of the
Commonwealth" - purposes which
the Commonwealth can lawfully put into effect
in the exercise of the powers and functions conferred upon it by the
Constitution. Quite apart from authority I consider that view to be correct.
It would be contrary to all principles of interpretation to treat
the words
"for the purposes of the Commonwealth" in s. 81 as adding nothing to the
meaning of the section. The words do not in their ordinary sense have the
same meaning as "for any purpose
whatever" or "for such purposes as the
Commonwealth may think fit". They appear in a Constitution by which specific
powers of legislation were conferred upon the Commonwealth and the general
powers of the colonies which became
the States were, with certain exceptions,
continued. Throughout the whole of the Constitution, including the chapter in
which s. 81 appears, the expressions "the Commonwealth" and "State" are used
to refer to the respective bodies politic rather than to the people
forming a
particular community. In this context the words "the purposes of the
Commonwealth" in s. 81 naturally refer to purposes for which the Commonwealth,
as a political entity, is empowered by the Constitution to act. This
construction is supported by s. 83 - the power can only be exercised by a law
validly passed. It derives further support from s. 94, whose practical effect
has been greatly weakened by the decision in the Surplus Revenue Case (1908) 7
CLR 179 ,
but which was apparently
intended to secure payment to the States of
the surplus revenue of the Commonwealth, for if the power
of
appropriation
were unfettered
a surplus could hardly have been expected ever to arise. The
construction that I suggest is correct
is also supported by the fact
that it
was thought necessary to give the Commonwealth specific power to make laws
with respect to
bounties on the production or
export of goods (s. 51(iii.))
and to grant financial assistance to any State (s. 96), although it is true
that the object of those provisions may have been respectively to ensure that
bounties should be uniform throughout
the Commonwealth and that the
Commonwealth should have power to attach terms and conditions to grants which,
even without the enactment
of s. 96, it would have had power to make. (at
p374)
7. In the Pharmaceutical Benefits Case [1945] HCA 30; (1945) 71 CLR 237 Latham C.J. placed
considerable reliance on the fact that
there appears
in s. 51(xxxi.) the
phrase "any purpose in respect of which the Parliament has power to make laws"
and concluded that the different words of s. 81, "the purposes of the
Commonwealth", should be given a different meaning (1945) 71 CLR, at pp
252-253 . Speaking generally, it is
true that where in the same statute
different words are used it is presumed that the words were intended to convey
different meanings.
That presumption is in my opinion not a very weighty one,
particularly in the case of a statute such as the Constitution, and it
certainly does not justify a construction of s. 81 which would have the result
that the material words of that section should be given no effect or read in a
sense quite different
from their natural meaning. Of course, the purposes of
the Commonwealth may be executive or judicial as well as legislative, and
an
appropriation may validly be made for a purpose for which no law has in fact
been enacted, but as Latham C.J. pointed out laws
may be made with respect to
executive and judicial purposes, so that "legislative purposes could be held
to include the other purposes
mentioned" (1945) 71 CLR, at p 252 . It
therefore seems correct to say that "purposes of the Commonwealth" are
purposes for which
the Commonwealth has power to make laws - purposes which
however are not limited to those mentioned in ss. 51 and 52 but which, as was
pointed out by Starke J. (1945) 71 CLR, at p 266 and Dixon J. (1945) 71 CLR,
at p 269 in the Pharmaceutical Benefits
Case, may include matters incidental
to the existence of the Commonwealth as a state and to the exercise of its
powers as a national
government. (at p375)
8. It may be objected that this construction will lead to practical
difficulties, having regard to the nature of an Appropriation
Act, and in
particular to the fact that it may not be practicable for the Parliament to
set out in such an Act in full detail the
particulars of the purposes for
which an appropriation is to be made. However, the suggested difficulties may
at least be minimized
by the fact that the power of appropriation has to be
construed liberally rather than narrowly and that, as Dixon J. said in the
Pharmaceutical Benefits Case "in discharging our duty of passing upon the
validity of an enactment, we should make every reasonable
intendment in its
favour" (1945) 71 CLR, at p 267 . In my opinion, it is not necessary that an
Appropriation Act should set out
such particulars as would establish that
every purpose referred to is a Commonwealth purpose; if a purpose referred to
could be a
purpose of the Commonwealth - that is, if it does not appear on the
face of the Act that the purpose is one with which the Commonwealth
could not
possibly be concerned - it should in my opinion be assumed, in the absence of
proof to the contrary, that the appropriation
is valid. (at p375)
9. It is true that it follows from what I have said that the Commonwealth has
no power to make any grant for a purpose which is
not a Commonwealth purpose -
except a grant to a State, since under s. 96 financial assistance may be
granted to a State for any
purpose, or for no specified purpose. (at p375)
10. In the present case the question that then arises is whether the purposes
of the Australian Assistance Plan are "purposes of
the Commonwealth" within
the meaning I have suggested. The Plan is not the subject of any legislation
other than the Appropriation
Act itself. That Act deals with it only briefly
in the following words of Item 4 of Div. 530 of the Second Schedule:
"Australian Assistance Plan - $However, the Commonwealth, by its defence, admitted that "the purpose of the Plan is and was at all material times to assist, in the manner set out in the Discussion Paper and a Document issued by the Government of the Commonwealth in October 1973 entitled 'Guidelines for Pilot Programme - Australian Assistance Plan' (here called 'the Guidelines'), in the development, within a nationally co-ordinated framework, of integrated patterns of welfare services, having regard to and recognizing the existing responsibilities for welfare services of the Commonwealth, the Government of the Commonwealth, the States, the Governments of the States, Municipalities, Municipal Governments and voluntary agencies". Some of the contents of the Discussion Paper and the Guidelines are set out in the judgment of the Chief Justice and I need not restate them. It is enough to say that the Plan provides that there should be set up throughout the Commonwealth Regional Councils for Social Development. These Councils, whose constitution is imprecisely defined, will employ staff and will be entitled to receive substantial grants. The Councils have a very wide discretion as to how the moneys available to them may be spent. Chapter 4 of the Discussion Paper contains a schedule of personal welfare services which may attract grants under the Australian Assistance Plan; the schedule includes, inter alia, child development services, including day care services; professional counselling services to assist families, including budget advisory services, home management advice and legal advice, domiciliary services, including home help; services to assist adolescents, including youth clubs; senior citizens centres; accommodation for aged, transients, homeless families, "at risk" youth, alcoholics and single mothers; and financial assistance, including emergency financial relief, crisis accommodation services and holiday grants for low income families and emergency care in the home. However, the Councils are not limited to these welfare services and it seems right to say that under the Plan the Councils are free to spend the public moneys granted to them for whatever purposes related to social welfare they may think desirable. In fact Councils of this kind have been established in the State of Victoria. (at p377)
01. Grants to Regional Councils for
Social Development 5,620,000
02. Development and evaluation
expenses 350,000
5,970,000"
11. A letter of 1st July 1973, under cover of which the Discussion Paper was
presented to the Minister, refers to "the development
of a new project to
assist the planning and provision of welfare services in Australia". On
behalf of the Commonwealth, it was submitted
that the aim of the Plan was to
obtain information to enable the Government to consider what legislation it
might introduce to provide
the welfare services most beneficial to the
community. It was said that the Parliament might itself legislate to provide
welfare
services under pars (vi.), (xxi.), (xxii.), (xxiii.), (xxiiiA.),
(xxvi.), (xxvii.), and (xxxix.) of s. 51 and under s. 122 and also
under the
power which arises from its position as a national Parliament, and that it
might provide grants to the States for welfare
services under s. 96, and that
the purpose of the Plan was to inform the Executive as to which of these
powers should be exercised,
in an endeavour to ensure that the welfare
services provided by the Government of the Commonwealth combine harmoniously
with those
provided by others, and that the States should be encouraged by
means of grants to provide necessary services that the Commonwealth
cannot
provide. It is true that the Plan is of a flexible, experimental and
evolutionary kind, and that it is apparently intended
that it should be
modified whenever experience shows that to be desirable. However, with all
respect to the learned Solicitor-General
for the Commonwealth, it is quite
unreal to suggest that the Plan has no wider purpose than to obtain
information for the purpose
of enabling the Parliament to legislate on matters
within its powers. The framers of the Plan obviously intended that the
Regional
Councils should provide the public with a wide variety of welfare
services on quite a large scale. It is clear from repeated references
in the
documents that it was intended that the Councils should decide what projects
for social welfare should be put into effect
and should in fact give effect to
them. In other words, it was intended that the Councils should provide social
welfare services
as well as plan for them. Some indication of the scale of the
services to be provided is given by the amount appropriated for the
purposes
of the Plan for one year. Moreover, it is quite apparent that under the Plan,
the Councils may use their moneys in providing
services although the
Parliament would have no power to legislate for the provision of such
services. Some of the paragraphs of
s. 51, to which reference has been made,
would appear to have little or no relevance to the present question, but under
other paragraphs
it is possible that the Parliament might legislate to provide
some of the services mentioned, at least for particular classes of
persons.
No doubt under s. 122 the Parliament could legislate to provide social welfare
services for the inhabitants of the Territories,
but the Plan is not limited
to or primarily concerned with the Territories. The legislative power that is
said to be incidental
to the exercise by the Commonwealth of the functions of
a national government does not enable the Parliament to legislate with respect
to anything that it regards as of national interest and concern; the growth of
the Commonwealth to nationhood did not have the effect
of destroying the
distribution of powers carefully effected by the Constitution. Indeed, the
Pharmaceutical Benefits Case [1945] HCA 30; (1945) 71 CLR 237 decided that the existence of
the Commonwealth and
its status as a
national government did not provide the
Parliament
with power to enact the social welfare legislation which was
challenged
in that
case. However widely the powers of the Commonwealth
to
legislate with regard to social welfare may be thought to extend,
this Plan
goes far beyond them - indeed, under the Plan, the
Councils would be free to
devote the whole of the funds available in
providing
services which could not
possibly be the subject of
valid Commonwealth legislation. The Plan cannot be
justified as an
inquiry for
the purpose of determining what grants should be
made to the States; it is not limited to a mere inquiry, and in any
case under
the
Plan the moneys are not paid to the States but
to the Regional Councils
set up by the Plan itself. (at p378)
12. It should be unnecessary to say that the decision of this matter does not
in any way depend on the merits or demerits of the
Plan - the whole question
is whether the purposes of the Plan are "purposes of the Commonwealth". For
the reasons I have given,
in my opinion they are not. It is not possible to
sever the Plan into valid and invalid purposes, so as to save part of it. The
Appropriation Act, in so far as it makes an appropriation for the purposes of
the Plan, is invalid. (at p378)
13. It follows from what I have said that the expenditure of the moneys of
the Commonwealth for the purposes of the Plan would be
unlawful. According to
s. 61 of the Constitution, the executive power of the Commonwealth "extends to
the execution and maintenance of this Constitution, and of the laws of the
Commonwealth". Those words limit the power of the Executive and, in my
opinion, make it clear that the Executive
cannot act in respect of a matter
which falls entirely outside the legislative competence of the Commonwealth.
A view consonant with
that which I have expressed has previously received
acceptance in this Court: see The Commonwealth v. Colonial Combing, Spinning
and Weaving Co. Ltd. [1922] HCA 62; (1922) 31 CLR 421, at pp 431-432, 437-441 ; The
Commonwealth v. The Australian Commonwealth
Shipping Board (1926)
39 CLR 1, at
p 10 . The Constitution effects a distribution between the Commonwealth and
the States of all power, not merely of legislative power. We are in no way
concerned
in the present case to consider the scope of the prerogative or the
circumstances in which the Executive may act without statutory
sanction. Once
it is concluded that the Plan is one in respect of which legislation could not
validly be passed, it follows that
public moneys of the Commonwealth may not
lawfully be expended for the purposes of the Plan. (at p379)
14. There is no doubt in my mind that the questions that I have been
discussing are justiciable. It has long been established that
this Court has
the power and the duty to decide whether legislation, whether passed by the
Parliament of the Commonwealth or by the
legislature of a State, is in
accordance with the provisions of the Constitution which is, to use the words
of Marshall C.J. in Marbury v. Madison [1803] USSC 16; (1803) 1 Cranch 137, at p 177 [1803] USSC 16; (2 Law Ed
60, at p 73) , "the fundamental
and paramount law of the nation". As Fullagar
J. said in Australian Communist Party v.
The Commonwealth [1951] HCA 5; (1951) 83
CLR 1, at
p 262
, the principle of Marbury v. Madison [1803] USSC 16; (1803) 1 Cranch 137 (2 Law Ed 60)
is accepted in our system as axiomatic.
The duty of the
Courts in giving
effect to that principle
was thus explained in Reg. v. Kirby; Ex parte
Boilermakers' Society of
Australia (1956)
94 CLR 254, at pp 267-268 :
"In a federal form of government a part is necessarilyNo reason exists for placing appropriation laws in a special position of constitutional inviolability. In Marbury v. Madison, Marshall C.J. said (1803) 1 Cranch, at p 179 (2 Law Ed at p. 74) :
assigned to the judicature which places it in a position unknown
in a unitary system or under a flexible constitution
where Parliament is supreme. A federal constitution must be
rigid. The government it establishes must be one of defined
powers; within those powers it must be paramount, but it
must be incompetent to go beyond them. The conception of
independent governments existing in the one area and exercising
powers in different fields of action carefully defined
by law could not be carried into practical effect unless the
ultimate responsibility of deciding upon the limits of the
respective powers of the government were placed in the
federal judicature."
"In some cases, then, the constitution must be looked intoIt is our duty to give effect to ss. 81 and 83 as much as to any other provision of the Constitution. The same principle requires us to pronounce on the validity of executive action when it is challenged. Indeed, some might think that the justification for the review by the courts of the constitutional validity of executive acts is even stronger than in the case of legislation. The duty of the courts to determine whether acts of the executive go beyond constitutional power has been clearly recognized in two notable cases in the United States. In Youngstown Sheet and Tube Co. v. Sawyer [1952] USSC 74; (1952) 343 US 579 (96 Law Ed 1153) , the Supreme Court struck down an executive order issued by the President professedly for the purpose of securing a continuing supply of steel during the Korean War. More recently, in United States v. Nixon [1974] USSC 159; (1974) 418 US 683 (41 Law Ed 2d 1039) , the Supreme Court unanimously overrode a claim by the President to executive privilege and in so doing reaffirmed (1974) 418 US, at p 703 (41 Law Ed 2d, at p 1061) the statement in Marbury v. Madison (1803) 1 Cranch, at p 177 (2 Law Ed, at p 73) that "it is, emphatically, the province and duty of the judicial department, to say what the law is". No different view has been taken in Australia. In Attorney-General (Vict.); Ex rel. Victorian Chamber of Manufactures v. The Commonwealth, Starke J. (who dissented in the result) said: "In the last resort it is for the Courts to determine whether the legislative and executive acts of the Commonwealth are within the powers conferred by the Constitution" [1935] HCA 31; (1935) 52 CLR 533, at p 566 . Similarly, in Attorney-General (Cth) v. The Queen and the Boilermakers' Society of Australia, Viscount Simonds said that "in a federal system the absolute independence of the judiciary is the bulwark of the constitution against encroachment whether by the legislature or by the executive" (1957) AC 288 at p 315; (1957) 95 CLR 529, at p 540 . (at p380)
by the judges. And if they can open it at all, what part of it
are they forbidden to read or to obey?"
15. The final question is whether the State of Victoria or its
Attorney-General had the necessary standing to institute these proceedings.
It
was said on behalf of the Commonwealth that an Appropriation Act is a mere
authority to release money from the Treasury and that
the State and its
citizens are not concerned with the expenditure of the funds of the
Commonwealth. It was pointed out that the
Act imposes no duties upon, and
creates no rights in, the citizens of the State and does not conflict with any
legislation of the
State or affect the exercise by the State of any of its
powers. Finally, it was said that the principles upon which this Court has
acted in determining whether a State or its Attorney-General has sufficient
standing to institute legal proceedings are too narrow
to permit the
plaintiffs to sue in the present case. (at p381)
16. In my opinion it is involved in the very nature of the Constitution that
either the Commonwealth or a State should have standing to institute legal
proceedings when the other has exceeded its constitutional
authority. It
seems to me that the Constitution, in defining the powers of the respective
bodies politic, assumes that a remedy will be available to one of those bodies
if another
trespasses beyond the boundaries within which the Constitution has
confined it. It is true that in the Pharmaceutical Benefits Case Dixon C.J.
said (1945) 71 CLR at pp. 272-273 :
"The settled doctrine of this Court was accurately expressedThat statement of principle was sufficient for the purposes of that case but in my opinion it was not intended to be, and cannot be regarded as, exhaustive. For example, it would not cover circumstances such as those of Tasmania v. Victoria [1935] HCA 4; (1935) 52 CLR 157 ; similar legislation of the Commonwealth would in my opinion be open to challenge by Tasmania although it did not extend to or operate within that State. The statements made in earlier cases as to the circumstances in which the Attorney-General of a State has standing to challenge legislation of the Commonwealth on the ground that it is beyond power have, of course, been made in relation to the particular facts of those cases. The special position of an Appropriation Act has nowhere been considered except in the Pharmaceutical Benefits Case (1945) 71 CLR 237 and, since the majority of the Court in that case considered that the statute there under consideration was more than a mere Appropriation Act, the decision that the Attorney-General was entitled to maintain the action does not directly govern the present case, although it is certainly not adverse to the contention that the State and its Attorney-General have standing in the present case. If it were necessary to show that the State or its inhabitants are injured by a statute or by executive action in order to establish that the State has sufficient standing to challenge the legislation or executive act, in my opinion it should be held that the State of Victoria is injured by an invalid appropriation of Commonwealth funds. Such an unlawful appropriation deprives the State of the opportunity, however slight it may be, to share in surplus revenue under s. 94. Moreover, if the provisions of the Australian Assistance Plan had been enacted in statutory form by the Parliament, and if the Regional Councils had carried on their activities in Victoria under the assumed powers of such a statute, there could have been little doubt that the State of Victoria or its Attorney-General would have had standing to restrain what might be regarded as a usurpation of the State's administrative authority - cf. Attorney-General (N.S.W.) v. Brewery Employes' Union of New South Wales [1908] HCA 94; (1908) 6 CLR 469, at p 557 . If that is so it is impossible to accept that similar unconstitutional action could not be restrained if committed without any statutory sanction. It is only a short step to hold that unlawful expenditure for the purpose of promoting such unconstitutional activities should similarly be restrained. (at p382)
by Gavan Duffy C.J., Evatt and McTiernan JJ. in
Attorney-General (Vict.) v. The Commonwealth
[1935] HCA 31; (1935) 52 CLR 533, at p 556 ,
when they said: 'In our opinion, it must now be taken as
established that the Attorney-General of a State of the Commonwealth
has a sufficient title to invoke the provision of the
Constitution for the purpose of challenging the validity of
Commonwealth legislation which extends to, and operates
within, the State whose interests he represents'."
17. Reference was made to the decision of the Supreme Court of the United
States in Massachusetts v. Mellon [1923] USSC 152; (1923) 262 US 447 (67
Law Ed 1078) , where
it was held that a State had no standing to challenge the validity of an Act
of the Congress
of the United States
which appropriated moneys for purposes
said to be purely State purposes. It was said that the State could not
sue on
its own behalf,
because the Court was not called upon to adjudicate any rights
of person or property, or rights or dominion
over physical domain,
or
quasi-sovereign rights actually invaded or threatened (1923) 262 US, at pp
484-485 (67 Law Ed, at p 1084)
. A further claim by
the State, that it might
sue as the representative of its citizens, was rejected in the following words
(1923)
262 US, at pp 485-486
(67 Law Ed, at pp 1084) :
"It cannot be conceded that a State, as parens patriae,In more recent cases, challenges by the States to congressional legislation, some of which did not appear to invade the rights of the States, have been entertained by the Supreme Court (South Carolina v. Katzenbach [1966] USSC 46; (1966) 383 US 301 (15 Law Ed 2d 769) ; Oregon v. Mitchell [1970] USSC 207; (1970) 400 US 112 (27 Law Ed 2d 272) ). It is not for me to consider whether what the Supreme Court did in those cases affects the authority of what it said in Massachusetts v. Mellon [1923] USSC 152; (1923) 262 US 447 (67 Law Ed 1078) . However, whatever may be the position in the United States, where there is a complete separation of the executive from the legislative power, I would, in Australia, think it somewhat visionary to suppose that the citizens of a State could confidently rely upon the Commonwealth to protect them against unconstitutional action for which the Commonwealth itself was responsible. However that may be, in my opinion Massachusetts v. Mellon states the law in a way which has not been accepted in Australia, and is inconsistent with decisions of this Court, as Starke J. pointed out in the Pharmaceutical Benefits Case (1945) 71 CLR, at p 266 . (at p383)
may institute judicial proceedings to protect citizens of the
United States from the operation of the statutes thereof.
While the State, under some circumstances, may sue in that
capacity for the protection of its citizens ... it is no part of
its duty or power to enforce their rights in respect of their
relations with the federal government. In that field it is the
United States, and not the State, which represents them as
parens patriae, when such representation becomes appropriate;
and to the former, and not to the latter, they must
look for such protective measures as flow from that status."
18. There is in my opinion no authority that binds us to hold that either the
State of Victoria or its Attorney-General has no standing
in the present case.
In my opinion each has a locus standi, although I would incline to the view
that the State itself is the more
appropriate plaintiff. I do not find it
necessary to bring this case within the statements made in earlier decision,
although, as
I have indicated, that is possible. Those earlier statements,
which were sometimes made under the influence of principles of private
law
that are not entirely applicable to constitutional cases, were not intended to
lay down rules that would govern every case.
I would base my conclusion on
the fact that the Constitution, by defining the limits inter se of the
constitutional powers of the Commonwealth and those of any State or States,
must be taken
to have given to the Commonwealth and to each State a right to
the observance of the constitutional limits and a standing to obtain
such
remedy as is necessary to secure their observance. (at p383)
19. For these reasons I consider that the proceedings were appropriately
brought and that the plaintiffs' demurrer to the defence
of the Commonwealth
and the Minister should be allowed. (at p383)
STEPHEN J. In these proceedings the State of Victoria and its
Attorney-General seek a declaration that the Appropriation Act (No.
1)
1974-1975 is ultra vires the Parliament of the Commonwealth insofar as it
appropriates by one subdivision of the appropriations
for the Commonwealth
Department of Social Security almost $6 million for a purpose described as
"Australian Assistance Plan". An
injunction is also sought restraining
expenditure for the purposes of that Plan. The Commonwealth and the Minister
of that Department
are defendants. (at p384)
2. The defendants have denied that either plaintiff has standing to commence
or prosecute this action. It is appropriate to determine
this question of
standing, if not the closely allied question of justiciability, before
considering, if at all, the merits of the
plaintiffs' attack upon validity.
(at p384)
3. It is necessary to examine with some care precisely what it is which is
here said to be ultra vires. By its legislation what
Parliament has done is
to authorize the Treasurer to issue out of the Consolidated Revenue Fund - s.
4 - this large amount for the
service described in Div. 530/4.01 and 4.02 of
the Second Schedule of the Act, the Australian Assistance Plan. In doing so
it has,
in purported compliance with s. 83 of the Constitution, "made by law"
an appropriation of funds. (at p384)
4. Appropriation Acts represent one aspect of the legislature's control over
the executive arm of government in matters financial,
that concerned with the
expenditure of government revenue as distinct from the raising of that
revenue. The exercise of this control
has long been regarded as a fundamental
principle of parliamentary democracy on which is said to be grounded "the
whole law of finance,
and consequently the whole British constitution" -
Redlich, Procedure of the House of Commons (1908), vol. 3, p. 114; however the
present importance of appropriation by Parliament, when the Crown and the
executive have come to represent the same forces as control
a majority in the
lower house, may be rather different from what it formerly was and may now lie
principally in the opportunity which
it affords for criticism by the
Opposition and for scrutiny by the public. (at p384)
5. What is presently complained of is not any circumvention by the executive
of the legislature's control of expenditure but rather
the allegedly ultra
vires character of the authorization which has been given in the course of
exercising that control; ultra vires
because, so it is said, the purpose
assigned in the Second Schedule of the Act to the impugned appropriation is
not within federal
competence. Thus the process of parliamentary control of
expenditure, a process characteristic of parliamentary democracy in general,
is said to have given rise to a peculiarly federal problem, the need to
restrict within its proper limits the actions of one entity
of the federation,
the federal government. The character of the legislation itself, an
appropriation of sums out of consolidated
revenue for the service of a
particular year, is not, of course, challenged as being beyond federal
legislative power but it is said
that if the particular object of an item of
appropriation is beyond power, however the ambit of that power is to be
determined, then
to appropriate money to it is likewise beyond power. (at
p385)
6. Because the plaintiffs attack the Appropriation Act on grounds of ultra
vires a misleading colour may tend to be given to these
proceedings; they tend
to be assimilated to proceedings, familiar in this Court, in which it is said
that by the enactment of particular
legislation the legislative powers of the
Commonwealth have been exceeded. In fact rather different issues are raised;
the real
substance of the plaintiffs' complaint must be, not that the
Commonwealth has exceeded its legislative competence but rather that,
by the
manner in which it is proposing to spend its revenues, it is exceeding its
spending powers, which are not necessarily restricted
to its heads of
legislative power. (at p385)
7. It is important to notice why it is that in these circumstances the
plaintiffs, in prosecuting their attack upon what they claim
to be a
threatened ultra vires spending of money by the Commonwealth, focus their
attack upon an exercise of the legislative power
to appropriate, which does
not in itself immediately result in any expenditure at all but merely
dedicates money to a particular
purpose and for a limited time, the financial
year in question. (at p385)
8. In the long history of the struggle by the Commons with Plantagenet, Tudor
and Stuart kings for control of the financial affairs
of the Kingdom it was in
the form of Acts of Parliament that there evolved a mechanism for the control
both of the raising of funds
and of their expenditure, only achieved in full
after the Revolution of 1688. But it was a quite special form of Act of
Parliament
which was developed for this purpose, one in which the three
entities, the Commons, the Lords and the Crown, did not play their accustomed
roles; instead the role of the Commons was quite predominant. In 1661 the
Commons reiterated its objection to the initiation of
money bills by the
Lords, a complaint initially expressed early in the 15th century; in 1665 the
principle of appropriation of supply
for specific purposes was re-established
by the Commons after its initial emergence in the 14th century and its
subsequent demise;
in 1671 the Commons resolved that money bills should not be
amended by the Lords and in 1678 it resolved that it alone might originate
such bills. All this occurred between Rebellion and Revolution; after the
Revolution the Lords were left only with a power to withhold
assent to money
bills. Even that power was effectively deprived of meaning by the Parliament
Act of 1911, under which a money bill
not passed by the Lords might be
presented for Royal Assent and become an Act of Parliament without the assent
of the Lords. (at
p386)
9. The adoption of an Act of Parliament, rather than, for instance, a
resolution of the Commons, as the mode of Commons control
lies perhaps in the
gradual development of that control and in the use of a familiar procedure to
achieve a new end. Section 83 of the Constitution, by its reference to
"appropriation made by law", adopts this practice of appropriation by Act of
Parliament. (at p386)
10. When an item in an Appropriation Act is attacked as ultra vires it is not
in any real sense the Commonwealth Parliament's legislative
power that is
attacked but rather the taking of the first step in the expenditure of moneys
on a particular purpose. As was said
by Isaacs and Rich JJ. in The
Commonwealth v. Colonial Ammunition Co. Ltd. [1924] HCA 5; (1924) 34 CLR 198, at p 224 when
speaking
of the parliamentary
appropriation of moneys:
"The object of Parliament in such a case is financial, notThis peculiar character of Appropriation Acts was, until 1963, made the more apparent by the then standing orders governing parliamentary procedure on money bills. Under that procedure, borrowed from what is still the British practice, the passage of an Appropriation Bill in the lower house was a mere formality, all significant proceedings being conducted in committee of the whole (Jay & Mathews, Government Accounting in Australia (1968), pp. 10-11). Lord Palmerston described an Appropriation Bill passed under that procedure as no more than "a form that is required by the Constitution, and not a Bill to give rise to any discussion" (Todd, Parliamentary Government in England (1867), vol. 1, p. 529). (at p386)
regulative. In doing that, it is not concerned with general
legislation, and is acting wholly alio intuitu ..."
11. It is, then, with this special type of Act of Parliament that the present
proceedings are concerned. It is an Act which, while
a necessary precondition
to lawful disbursement of money by the Treasury, is not in any way directed to
the citizens of the Commonwealth;
it does not speak in the language of
regulation, it neither confers rights or privileges nor imposes duties or
obligations. It only
permits of moneys held in the Treasury being paid out,
upon the Governor-General's warrant, to departments of the Government. Its
importance is essentially confined to the polity in question, here the federal
polity; the control which, by its means, is exercised
by the legislature over
proposed government expenditure is of significance within the framework of
that polity but has no direct
effect upon the powers or interests of the other
component parts of the federation, the States. (at p387)
12. How then can the present plaintiffs, the State of Victoria and its
Attorney-General, have any standing to complain of this legislative
authorization of proposed federal expenditure? The answer is, in my view,
that they cannot. The State itself has no concern with
the mode of
expenditure of federal revenue unless it be associated with some claim to
surplus revenue of the Commonwealth under s. 94 of the Constitution, but the
present proceedings are no more appropriate to raise any such claim than were
those in Attorney-General (Vict.); Ex rel.
Dale v. The Commonwealth ("the
Pharmaceutical Benefits Case") [1945] HCA 30; (1945) 71 CLR 237 ; I would adopt what Latham
C.J.
there said (1945)
71 CLR, at p 247 . The plaintiffs did not seek to
support
standing by reference to surplus revenue, no doubt both
because of the
Commonwealth's use of trust funds, sanctioned in New South
Wales v. The
Commonwealth (1908) 7 CLR
179 and exemplified, in refined
form, in s. 7 of the
present Appropriation Act and because, in any event, the very large deficit
budgeted for effectively eliminates it from consideration.
(at p387)
13. The citizens of the Commonwealth, as federal taxpayers, certainly have,
in the colloquial sense, a very real interest in how
moneys collected from
them are disbursed; not so much because they contributed a part of that money
but rather because its very expenditure
is likely to increase their future tax
liability. In some jurisdictions this has been held to accord to individual
taxpayers sufficient
standing to sue; thus in Flast v. Cohen [1968] USSC 133; (1968) 392 US 83
(20 Law Ed 2d 947) the Supreme Court recognized the standing of an individual
taxpayer. Consistently with Frotheringham
v. Mellon [1923] USSC 152; (1923) 262 US 447 (67 Law
Ed 1078) , it denied standing where challenged spending
was merely said to go
beyond the general taxing
and spending power of Congress conferred by s. 8(1)
of Art. 1 of the Constitution but recognized it where the impugned spending
was alleged to exceed specific constitutional limitations upon that power.
This is
not, however, an action by a taxpayer; the question of a taxpayer's
standing to sue when ultra vires spending is alleged has, to
date, only been
adverted to by this Court in passing reference: Pye v. Renshaw (1951) 84 CLR
58, at p 83 ; Fishwick
v. Cleland [1960] HCA 55; (1960)
106 CLR 186, at p 199 ; Logan Downs
Pty. Ltd. v. Federal Commissioner of Taxation
[1965] HCA 16; (1965) 112 CLR 177, at pp
186-187 . A full consideration
of the question must await the appropriate
case. (at p388)
14. What then of the standing of the Victorian Attorney-General, as distinct
from that State itself? If he be regarded as protecting
"on behalf of the
Crown those rights and functions with which the King, guided solely by his
State representatives and advisers,
is invested in respect of the State" (the
Union Label Case (per Isaacs J.) [1908] HCA 94; (1908) 6 CLR 469, at p 558 ) he can be
in no
better case
than the State itself, which, as I have already said, has no
relevant interest
in the spending of federal moneys.
But if he may
also be
regarded as entitled to sue as parens patriae, on behalf of his Victorian
public and in respect of some injury
to their public
rights, can he thereby,
and independently of any rights of his State, derive
sufficient standing? I
think not. (at
p388)
15. In expressing this view I need not go so far as did Higgins J. in his
dissenting judgment in the Union Label Case (1908) 6 CLR,
at p 597 . His
Honour would have confined an Attorney-General to his particular public, in
this case the public of Victoria, so
that federal legislative or executive
action affecting the public of Australia as a whole would be the concern of
the federal Attorney-General
and not of any State Attorney-General. A view
identical to that of Higgins J. was adopted by the United States Supreme Court
in
Massachusetts v. Mellon (1923) 262 US, at pp 485-486 (67 Law Ed, at p 1084)
a case which was heard at the same time as Frotheringham
v. Mellon [1923] USSC 152; (1923) 262
US 447 (67 Law Ed 1078) and which appears still to be the prevailing view in
that Court (Ohio v. Wyandotte
Chemicals
Corporation [1971] USSC 51; (1971) 401 US 493, at p
512 (28 Law Ed 2d 256, at p 270) and American Jurisprudence (2d) vol. 72, p.
486,
par. 91). (at p388)
16. It is instead enough to rely upon what has been described by Dixon J. in
the Pharmaceutical Benefits Case as "the settled doctrine
of this Court"
(1945) 71 CLR, at p 272 . That doctrine was expressed by Gavan Duffy C.J.,
Evatt and McTiernan JJ. in Attorney-General
(Vict.) v. The Commonwealth when
they said [1935] HCA 31; (1935) 52 CLR 533, at p 556 :
"In our opinion, it must now be taken as established thatThis doctrine was also expressly approved of by the Chief Justice in the Pharmaceutical Benefits Case (1945) 71 CLR, at pp 247-248 ; he then also spoke of a State Attorney-General's right to seek a declaration of invalidity as arising where federal legislation involved an invasion of a purely State field of legislative power and therefore interfered with the public rights of citizens of the State. (at p389)
the Attorney-General of a State of the Commonwealth has
a sufficient title to invoke the provision of the Constitution
for the purpose of challenging the validity of Commonwealth
legislation which extends to, and operates within, the State
whose interests he represents ...".
17. The doctrine, while it is expressed in terms recognizing, rather than
restricting, locus standi, contains a significant limitation;
it describes
those laws which may be so challenged by a State Attorney-General as laws
which extend to and operate within his State.
In the Union Label Case Isaacs
J. had made use of a similar concept when he spoke of a law the provisions of
which were "constantly
operating in New South Wales, and assuming to govern
the conduct of residents of that State ..." (1908) 6 CLR, at p 558 . Griffith
C.J. in that case had relied for a State Attorney-General's standing upon the
injurious effect which the claimed exercise of some
public function would have
upon the public of his State (1908) 6 CLR, at p 499 . O'Connor J. likewise
relied upon injurious effect
and the hampering of State citizens' freedom to
trade (1908) 6 CLR, at p 553 . (at p389)
18. In the Pharmaceutical Benefits Case both Latham C.J. (1945) 71 CLR, at p
248 and McTiernan J. (1945) 71 CLR, at p 276 expressly
reserved the question
of locus standi in the case of a federal Appropriation Act: however the
former, in doing so, drew attention
to the views of the Supreme Court in
Massachusetts v. Mellon [1923] USSC 152; (1923) 262 US 447 (67 Law Ed 1078) , in which the
standing of a State
Attorney-General was, in like circumstances, denied, and
to
the observation of Sir Harrison Moore that appropriations of public money
took nothing out of the pockets of the people and were
rather burdens on the
Crown or the revenue. These reservations were there
appropriate enough since
the Pharmaceutical Benefits Case
[1945] HCA 30; (1945) 71 CLR 237 was concerned with
legislation which
went considerably
beyond the bare appropriation of moneys
and did not call
for any decision as to standing of a State Attorney-General
where a simple
federal Appropriation Act was in question. It was in those
circumstances that Dixon J. referred to the Attorney-General's
traditional
duty to protect public rights and to a State Attorney-General
accordingly
having standing to sue for a declaration wherever
his public
"is or may be
affected" by an ultra vires act on the part
of Commonwealth or State (1945) 71
CLR, at p 272 . He thus
rejected the
Commonwealth's submission to the
contrary which relied upon
the fact that "but little" exertion of coercive
power was
involved and
that there was neither prejudice to rights or
immunities enjoyed
as of common right nor invasion of a field already
occupied
by existing
State legislation. The other judgments in the case in no
way cast
doubt upon the doctrine to which I have referred.
Rich J. (1945)
71 CLR, at p
264 relied for his conclusion that the Attorney-General
and standing upon his
reasons in two earlier
decisions of the
Court in which he had upheld standing
upon the basis, in the first,
of legislative interference with a freedom to
trade conferred
upon an Attorney-General's public by the Constitution
(Tasmania v. Victoria [1935] HCA 4; (1935) 52 CLR 157, at p 171 ) and in the second upon the
basis of allegedly ultra vires Commonwealth
trading
activities competitive
with the activities of citizens of a State (Attorney-General (Vict.) v. The
Commonwealth (1935) 52
CLR, at
p 561 ). It was upon
these two cases and the
Union Label Case (1908) 6 CLR 469 that Starke J. also relied
in holding
competent
the Attorney-General's action (1945) 71 CLR, at p 266 . Williams J.
described the
action as one concerned with
alleged infringement
of the public
right of Victorian citizens not to be subjected to ultra vires federal
legislation (1945) 71 CLR,
at p 277 and referred
to the question for the
Court as being whether or not the public in each of the
States was entitled to
the
benefits and subject to
the obligations imposed by the legislation (1945)
71 CLR, at p 278 . (at p390)
19. In the light of the foregoing I conclude that where the federal
legislation which is impugned is no more than an Appropriation
Act, whose
provisions not only do not extend to and operate within any State and do not
affect, still less interfere with, public
rights but have no ordinary law
making function at all, not purporting to govern the conduct of the citizens
of any State or of the
Commonwealth and having no injurious effect upon their
trading activities or other rights, the Attorney-General of a State has no
standing to sue. There is here nothing which can operate so as to "hamper the
freedom of citizens of the State" (per O'Connor J.,
in the Union Label Case
(1908) 6 CLR, at p 553 ) because what is complained of is not truly an
instance of law making but rather
an example of the exercise of fiscal control
over the executive by the legislature. (at p390)
20. To express this conclusion is to acknowledge that, whatever might be the
outcome of appropriate proceedings brought by an individual
federal taxpayer
or by the Commonwealth Attorney-General, the allegedly ultra vires expenditure
by the Commonwealth of its own funds
which this Appropriation Act is said to
authorize may not be attacked in a declaratory action instituted by the
Attorney-General
of another political entity, the State of Victoria. So
expressed, the proposition accords well enough with concepts of
inter-governmental
relationships within a federation and does, I think, no
violence to, but rather conforms with, the previous work of this Court,
referred
to by Dixon J. in the Pharmaceutical Benefits Case (1945) 71 CLR, at
p 272 , of applying to our federal system a doctrine developed
in the English
unitary system. (at p391)
21. The question of justiciability is necessarily closely associated with
that of standing and in a number of the precedent cases
in this Court,
including the Pharmaceutical Benefits Case [1945] HCA 30; (1945) 71 CLR 237 , justiciability
was argued and was dealt
with in the
reasons of members of the Court. In the
present case we
heard no argument on justiciability; this fact, coupled with
the circumstances
that if proceedings impugning an Appropriation Act
were to
be brought by a federal taxpayer quite different considerations
might
arise,
leads me to conclude that no general proposition
as to the justiciability of
allegedly ultra vires spending by the Commonwealth
should be stated. To deny
standing to the plaintiffs
is sufficient to dispose of these proceedings. (at
p391)
MASON J. The first question for decision is whether the power of the
Commonwealth Parliament to appropriate by statute moneys standings
to the
credit of Consolidated Revenue is unlimited and extends to any purpose which
the Parliament may select as a purpose of the
Commonwealth (the view taken by
Latham C.J. and McTiernan J. in the Pharmaceutical Benefits Case [1945] HCA 30; (1945) 71 CLR
237
) or whether it
is more narrowly confined to purposes conforming to the
powers and functions entrusted to the
Commonwealth as a national
government
under the Constitution (the view which, subject to some variations, was taken
by the other members of the Court in the same case). (at p391)
2. The precise source of the Commonwealth's power to appropriate has been the
subject of much discussion - see the Report of the
Royal Commission on the
Constitution (1929), pp. 137-139. It has been thought by some that s. 81 of
the Constitution is not the source of the appropriation power and that the
section assumes the existence of a legislative power to appropriate elsewhere
conferred by the Constitution, as, for example, by s. 51 (xxxix.) or by the
specific grants of legislative power to be found in the Constitution,
including in particular ss. 51, 52 and 122. The consequence, according to the
proponents of this view, is that the power of appropriation is limited to
"what can be done by
the enactment of a valid law" (Pharmaceutical Benefits
Case (1945) 71 CLR, at p 271 ). Others have considered that s. 81 is the
source of the power or that it defines the extent and scope of an implied
power to appropriate by its use of the words "for
the purposes of the
Commonwealth" (Pharmaceutical Benefits Case (1945) 71 CLR, at pp 252-254, 265,
273, 281-282 ). (at p392)
3. The weight of opinion in the Pharmaceutical Benefits Case [1945] HCA 30; (1945) 71 CLR
237 was that s. 81 defined the scope and extent of the power, a view confirmed
by the observation of the Court in Australian Woollen Mills Pty. Ltd.
v. The
Commonwealth [1954] HCA 20; (1954) 92 CLR 424, at p 454 , where Dixon C.J., Williams, Webb,
Fullagar and Kitto JJ. said that
the section
"authorizes the appropriation
of
the revenues and moneys of the Commonwealth for the purposes of the
Commonwealth".
See also Attorney-General
(Vict.) v. The Commonwealth
[1935] HCA 31; (1935)
52 CLR 533, at pp 567-568 ; the Second Uniform Tax Case
[1957] HCA 54; (1957) 99 CLR 575, at
p 655 . (at p392)
4. In ascertaining the meaning of "for the purposes of the Commonwealth",
which is the critical expression in s. 81, it is necessary to keep in mind the
function and purpose of an Appropriation Act. Section 83 in providing that "No
money should
be drawn from the Treasury of the Commonwealth except under
appropriation made by law", gives expression to the established principle
of
English constitutional law enunciated by Viscount Haldane in Auckland Harbour
Board v. The King (1924) AC 318, at p 326 : "no
money can be taken out of the
consolidated Fund into which the revenues of the State have been paid,
excepting under a distinct authorization
from Parliament itself". An
Appropriation Act has a twofold purpose. It has a negative as well as a
positive effect. Not only does
it authorize the Crown to withdraw moneys from
the Treasury, it "restrict(s) the expenditure to the particular purpose", as
Isaacs
and Rich JJ. observed in The Commonwealth v. Colonial Ammunition Co.
Ltd. [1924] HCA 5; (1924) 34 CLR 198, at p 224 . (at p392)
5. Their Honours, after noting that an Appropriation Act is "financial, not
regulative", continued (1924) 34 CLR, at pp 224-225
: "It ... neither betters
nor worsens transactions in which the Executive engages within its
constitutional domain, except so far
as the declared willingness of Parliament
that public moneys should be applied and that specified funds should be
appropriated for
such a purpose is a necessary legal condition of the
transaction." An Appropriation Act therefore is something of a rara avis in
the world of statutes; its effect is limited in the senses already explained;
apart from this effect it does not create rights, nor
does it impose duties.
(at p393)
6. The case for confining the expression "for the purposes of the
Commonwealth" to activities which fall within the exercise of
powers
legislative, executive and judicial, committed to the Commonwealth under the
Constitution has its attractions, based largely as it is, on important
considerations stemming from the distribution of powers and the consequential
division of functions between the Commonwealth and the States. The existence
of an unlimited power of appropriation would, it was
said, be quite
inappropriate to, and inconsistent with, the distribution of powers so
carefully contrived by the Constitution. A limited power of appropriation
would play a powerful part in keeping the Commonwealth within the bounds
assigned to it by that
instrument. (at p393)
7. Likewise, the existence of s. 94 of the Constitution, which provides for
the distribution to the States of the surplus revenue of the Commonwealth, was
urged as an additional reason
for restricting Commonwealth appropriations to
purposes falling within the area of responsibility assigned to the
Commonwealth under
the Constitution. The application of the section was
curtailed when this Court decided in New South Wales v. The Commonwealth
[1908] HCA 68; (1908)
7 CLR 179 that
it gives the States no interest in moneys appropriated
but not expended. So construed the section allows
the Parliament
to give
priority to appropriations for Commonwealth purposes, even by means of
permanent or standing appropriations
to trust accounts
into
which moneys are
paid from Consolidated Revenue pursuant to the authority conferred by the
appropriation.
As the section merely
assumes, without stipulating, that there
will be a surplus, the entitlement which it gives to the States to
participate
in the distribution
of surplus revenue leaves them very much at the mercy of
the Commonwealth. (at p393)
8. In this situation the more limited is the Commonwealth's power of
appropriation the greater is the prospect that the States have
of securing by
a distribution of surplus revenue a financial provision which is more
commensurate with their needs. Conversely,
if the power of appropriation is
unlimited, the smaller will be the amount of a surplus available for
distribution to the States.
This observation is subject to the important
qualification that even if the power of appropriation be unrestricted, its
exercise
is necessarily influenced by the limited scope of the Commonwealth's
legislative, executive and judicial powers, a matter to be discussed
later.
(at p394)
9. However, the support which these considerations give to the plaintiffs'
case are, I think, outweighed by other factors which
point to an opposite
conclusion. (at p394)
10. The annual appropriations are a central feature of the financial
arrangements made for the government of the country. It is
not lightly to be
supposed that the framers of the Constitution intended to circumscribe the
process of parliamentary appropriation by the constraints of constitutional
power and thereby to expose
the items in an Appropriation Act to judicial
scrutiny and declarations of invalidity. Consequences more detrimental and
prejudicial
to the process of Parliament would be difficult to conceive. Any
item in the Act would be subject to a declaration of invalidity
after the Act
is passed, even after the moneys in question are withdrawn from Consolidated
Revenue and perhaps even after the moneys
are expended, for an appropriation,
if it be unlawful and subject to a declaration of invalidity, does not cease
to have that character
because acts have taken place on the faith of it. (at
p394)
11. The adverse consequences of a narrow view of s. 81 do not stop at this
point. It has been the practice, born of practical necessity,
in this country
and in the United Kingdom, to give but a short description of the particular
items dealt with in an Appropriation
Act. No other course is feasible because
in many respects the items of expenditure have not been thought through and
elaborated
in detail. How is the short description of an item contained in
the schedule to the Act to serve as the fulcrum of constitutionality?
If it
fails to throw sufficient illumination on the area of doubt, is the Court to
have regard to supplementary material, as it
has been invited to do in this
case, and if so, to what material will it have recourse? These questions,
which to my mind admit
of no satisfactory solution, illustrate the problems
inherent in the narrow construction offered by the plaintiffs and the hazards
attending the processes of Parliament if that construction is accepted. (at
p394)
12. Another consequence of the plaintiffs' view of s. 81 is that it would
deprive the Commonwealth of the power to make grants
for purposes thought to
be deserving of financial support by government, yet standing outside the area
of Commonwealth power and
not involving any exercise of the Commonwealth's
executive power. Over the years there have been many instances of
appropriations
made by the Parliament to persons and bodies and for purposes
which appear to have little, if any, connexion with the functions and
powers
of the Commonwealth under the Constitution. On the plaintiffs' argument these
appropriations are invalid. The consequence would be that public money has
been illegally withdrawn
from the Treasury and paid away. And for the future
the Commonwealth, subject to the authority which s. 122 provides, could make
such grants only through the agency of the States under s. 96. (at p395)
13. Although some have discovered in s. 96 of the Constitution a power to
make grants to the States which would not otherwise exist, the section should
in my view be seen as a provision which
puts beyond question the power of
Parliament to attach conditions to grants made to the States, as to which
doubts would certainly
have existed had explicit provision not been made. But
it could scarcely be doubted that in the absence of s. 96 the Parliament would
have enjoyed the power to make unconditional grants to the States. So much at
least would be implied from the
relationship subsisting between the
Commonwealth and the States as constituent elements in the federation and the
possession by the
Commonwealth of its taxation and other financial powers.
The presence of s. 96 is therefore not a reason for confining s. 81 as the
plaintiffs would suggest. (at p395)
14. The far-reaching interpretation given to the appropriation power of
Congress by the Supreme Court of the United States supplies
no reason for
reaching a contrary view. It has been held that "the power of Congress to
authorize expenditure of public moneys for
public purposes is not limited by
the direct grants of legislative power found in the Constitution" (United
States v. Butler [1936] USSC 11; (1935) 297 US 1, at p 66 [1936] USSC 11; (80 Law Ed 477, at p 488) ;
Helvering v. Davis [1937] USSC 118; (1937) 301 US 619 (81 Law Ed 1307)
). However, Art. 1, s.
8, cl. 1 of the United States Constitution associates the appropriation power
with the power to tax. It empowers Congress to tax and to appropriate "to
provide for the general
welfare of the United States". The words of Art. 1, s.
8, cl. 1 were held to overcome the federal considerations which had been
advanced by Madison to support the contrary opinion. It has
been said that
the Supreme Court has not conceded to Congress a power to appropriate without
any limitation. Alexander Hamilton
and Story J., whose view was accepted by
the Supreme Court, considered that the power extended only to matters of
national, not local,
welfare (see United States v. Butler (1935) 297 US, at p
67 (80 Law Ed, at p 489) ). Cardozo J. though that an appropriation might
be
judicially reviewable when "it was a display of arbitrary power, not an
exercise of judgment" (Helvering v. Davis (1937) 301 US,
at p 640 (81 Law Ed,
at p 1315) ). (at p396)
15. Whether these qualifications amount to a significant limitation on the
power of Congress is not altogether clear. When an appropriation
is to be
characterized as a matter of local, rather than national, welfare or as a
display of arbitrary power, rather than an exercise
of judgment, is by no
means easy to ascertain. Apt though these qualifications may be to the
appropriation power of Congress there
is no basis for their introduction into
our Constitution which is differently expressed. And in the ultimate resort
the point remains that even if these qualifications were thought to be
appropriate to the power conferred by s. 81 they fall far short of the
limitations which the plaintiffs seek to introduce. (at p396)
16. It follows, then, that I would give to the words "for the purposes of the
Commonwealth" in s. 81 the meaning ascribed to them by Latham C.J. in the
Pharmaceutical Benefits Case (1945) 71 CLR, at p 256 , that is, for such
purposes
as Parliament may determine. (at p396)
17. But this is not to say that the Commonwealth has an unlimited executive
power or that a statutory appropriation provides lawful
authority for the
engagement by the Commonwealth in particular activities. An appropriation, as
I have explained, has a limited
effect. It may provide the necessary
parliamentary sanction for the withdrawal of money from Consolidated Revenue
and the payment
or subscription of money to a particular recipient or for a
particular purpose but it does not supply legal authority for the
Commonwealth's
engagement in the activities in connexion with which the moneys
are to be spent. Whether the Commonwealth can engage in any specific
activities depends upon the extent of the Commonwealth's legislative,
executive and judicial powers. (at p396)
18. Here, no legislation having been enacted to give effect to the Australian
Assistance Plan, we must look to the executive power.
In the words of s. 61,
the executive power of the Commonwealth "extends to the execution and
maintenance of this Constitution, and of the laws of the Commonwealth".
Although the ambit of the power is not otherwise defined by Ch. II it is
evident that in scope
it is not unlimited and that its content does not reach
beyond the area of responsibilities allocated to the Commonwealth by the
Constitution, responsibilities which are ascertainable from the distribution
of powers, more particularly the distribution of legislative powers,
effected
by the Constitution itself and the character and status of the Commonwealth as
a national government. The provisions of s. 61 taken in conjunction with the
federal character of the Constitution and the distribution of powers between
the Commonwealth and the States make any other conclusion unacceptable.
Moreover, it is a
view of the executive power which is confirmed by the past
decisions of this Court (see The Commonwealth v. Colonial Combing, Spinning
and Weaving Co. Ltd. ("the Wooltops Case") [1922] HCA 62; (1922) 31 CLR 421, at p 432 ; The
Commonwealth v. Australian Commonwealth
Shipping Board
[1926] HCA 39; (1926) 39 CLR 1, at p
10 ). (at p397)
19. However, in ascertaining the potential scope of the power there are
several important considerations which need to be kept steadily
in mind.
First, the incidental power contained in s. 51 (xxxix.) taken in conjunction
with other powers, notably s. 61 itself, adds a further dimension to what may
be achieved by the Commonwealth in the exercise of other specific powers. So
in Burns
v. Ransley [1949] HCA 45; (1949) 79 CLR 101 and The King v. Sharkey [1949] HCA 46; (1949) 79 CLR
121 , ss. 24A, 24B and 24D of
the Crimes Act 1914-1946 (Cth)
were held to be
supported by the combination of ss. 51
(xxxix.) and 61. Secondly, the
Commonwealth
enjoys, apart from its specific
and enumerated powers, certain
implied powers which
stem from its existence and its character as
a polity
(Australian Communist Party
v. The Commonwealth (1951) 83 CLR 1, at pp 187-188
). So far it has not been
suggested that the implied powers extend beyond the
area of internal security and protection
of the State against disaffection and
subversion. But in my opinion there is to be deduced
from the existence and
character of the
Commonwealth as a national government
and from the presence
of ss. 51 (xxxix.) and 61 a capacity
to engage in enterprises and activities
peculiarly adapted to the government
of a nation and which cannot otherwise be
carried on
for the benefit of the nation. (at p397)
20. It is in the exercise of this capacity that the Commonwealth has
established the Commonwealth Scientific and Industrial Research
Organization
to undertake scientific research on behalf of the nation. The Science and
Research Act 1951, as amended, is an exercise
of the power conferred by s. 51
(xxxix.) and s. 61 or perhaps of implied power. So also the Commonwealth may
expend money on inquiries,
investigation and advocacy in relation to matters
affecting public health, notwithstanding the absence of a specific legislative
power other than quarantine - see the Pharmaceutical Benefits Case (1945) 71
CLR, at p 257 . No doubt there are other enterprises
and activities
appropriate to a national government which may be undertaken by the
Commonwealth on behalf of the nation. The functions
appropriate and adapted to
a national government will vary from time to time. As time unfolds, as
circumstances and conditions alter,
it will transpire that particular
enterprises and activities will be undertaken if they are to be undertaken at
all, by the national
government. (at p398)
21. However, the executive power to engage in activities appropriate to a
national government, arising as it does from an implication
drawn from the
Constitution and having no counterpart, apart from the incidental power, in
the expressed heads of legislative power, is limited in scope. It
would be
inconsistent with the broad division of responsibilities between the
Commonwealth and the States achieved by the distribution
of legislative powers
to concede to this aspect of the executive power a wide operation effecting a
radical transformation in what
has hitherto been thought to be the
Commonwealth's area of responsibility under the Constitution, thereby enabling
the Commonwealth to carry out within Australia programmes standing outside the
acknowledged heads of legislative
power merely because these programmes can be
conveniently formulated and administered by the national government. (at
p398)
22. In this respect s. 96 has a dual significance. On the one hand it
indicates that the executive power, like the appropriation power, extends to
the investigation
and formulation of policies to be expressed in conditions to
be attached to grants made to the States. On the other hand its presence
confirms what is otherwise deducible from the Constitution, that is, that the
executive power is not unlimited and that there is a very large area of
activity which lies outside the executive
power of the Commonwealth but which
may become the subject of conditions attached to grants under s. 96. (at
p398)
23. The appropriation in question is contained in the appropriations for the
Department of Social Security in the Second Schedule
to the Appropriation Act
(No. 1) 1974-1975. It is under "Division 530. - ADMINISTRATIVE" and is
expressed as follows:
"4. - Australian Assistance Plan - $Section 3 of the Act provides:
01. Grants to Regional Councils for
Social Development 5,620,000
02. Development and evaluation
expenses 350,000
5,970,000"
"The Treasurer may issue out of the Consolidated Revenue
Fund and apply for the services specified in Schedule 2, in
respect of the year ending on 30 June 1975, the sum of
$2,863,510,000." (at p399)
24. According to the Commonwealth's defence the purpose of the Australian
Assistance Plan which was announced by the Minister for
Social Security on or
about 30th August 1973
"is and was at all material times to assist, in the mannerThis statement of the purpose of the Assistance Plan is taken from par. 1.1 of Discussion Paper No. 1 which endeavours to express more comprehensively, if not more coherently, the aim of the Plan. (at p399)
set out in the Discussion Paper and a Document issued by
the Government of the Commonwealth in October 1973
entitled 'Guidelines for Pilot Programme - Australian Assistance
Plan'...in the development, within a nationally co-ordinated
framework, of integrated patterns of welfare services,
having regard to and recognising the existing responsibilities
for welfare services of the Commonwealth, the Government
of the Commonwealth, the States, the Governments
of the States, Municipalities, Municipal Governments and
voluntary agencies."
25. It would be an unrewarding exercise to recapitulate the principal
elements in the Plan as they emerge from the documents. It
is sufficient to
say that it is not confined, as the defence might suggest, to the
co-ordination on a national basis of welfare services
otherwise provided and
to be provided. It makes provision for the establishment and financing of
Regional Councils for social development
throughout Australia. The pilot
programme records that in the first full year twenty-nine bodies received
administrative grants
only and a further six Councils received capitation
grants for expenditure on social welfare services covering a wide range of
social
welfare activities including such activities as family day care
programmes, parent education programmes, family counselling services,
home
help and housekeeper services, provision of community and other centres. The
function of the Regional Councils is to stimulate
interest in activity in the
broad field of social development. (at p399)
26. The pilot programme provides for four types of grant to Regional
Councils. They are: (1) Initiating grants for the formulation
of Councils
which are to be made available in regions other than the thirty-five already
funded. (2) Administrative grants of up
to $40,000 per annum to the
thirty-five Councils already established for staff salaries and administrative
costs. (3) Capitation
grants not exceeding an amount calculated on the basis
of $2 per head of population in the region to be paid to the six full pilot
regions. The actual amount of the grant is determined after consideration of
projects for expenditure within the schedule of welfare
services referred to
in Ch. 4 of Discussion Paper No. 1 submitted by the council. (4) Grants for
community development officers
to be employed by a local authority, welfare
organization in the region or even by the Council itself. (at p400)
27. The elements of the Plan have not yet been enshrined in legislation. At
this time it exists as an administrative scheme only.
However, the pilot
programme contemplates that enabling legislation will be introduced into the
Parliament. Plainly enough the legislation
contemplated is not an exercise of
the power conferred by s. 96. Nowhere in the documents is it suggested that
the scheme is to
be administered by or through the States. Likewise, despite
the Solicitor-General's vigorous asseverations to the contrary, it seems
clear
that the programme is not an experimental programme conducted with a view to
determining or formulating a policy according
to which s. 96 grants might be
made to the States. (at p400)
28. The documents indicate that the elements of the scheme are to be a direct
responsibility of the Commonwealth, acting not through
the States and their
agencies, but independently of them. They also show that, although the pilot
programme is experimental in the
sense that alterations to the programme will
be made in the light of experience gained, the Plan as such has been put
forward and
adopted as a continuing social welfare scheme. So it is that the
establishment of regional councils has not been undertaken as an
experiment
but as a deliberate step in a social welfare scheme which calls for the
setting up of regional councils throughout Australia,
operating not under the
aegis of the States, but independently of and perhaps in competition with them
and their institutions. (at
p400)
29. In the light of what I have already said as to the extent of the
appropriation power, the Appropriation Act, in so far as it
relates to item
530.4, the item in question, is a valid exercise of that power conferred by s.
81. However, in my view the activities
which call for the expenditure of this
money, the elements which comprise the scheme known as the Australian
Assistance Plan, stand
largely, if not wholly, outside the boundaries of the
executive power of the Commonwealth. I acknowledge that some part of the
moneys
appropriated could find their way into the hands of citizens in the
form of pensions within the meaning of s. 51 (xxiii.) and (xxiiiA.),
but this
is consequential upon the establishment and operation of the regional councils
which, as I understand it, is central to
the creation of the bureaucratic
organization envisaged by the Australian Assistance Plan. The carrying into
execution of that Plan
is in my view outside the realm of the executive power
of the Commonwealth and should be restrained by injunction subject to the
question of the plaintiffs' locus standi. (at p401)
30. The fact that the item of appropriation under consideration appears in
the list of appropriations for the Department of Social
Security has no
relevance to the question whether the implementation of the Australian
Assistance Plan falls within the executive
power of the Commonwealth. That
the money in question is given to the department does not bring the
establishment or the activities
of the Regional Councils within the ambit of
constitutional power. (at p401)
31. The question as I see it is whether the plaintiffs have standing to
challenge activities of the Commonwealth standing outside
the area of its
executive power, involving as they do the expenditure of money which has been
appropriated for that purpose. As
we are not concerned with a challenge by a
State or its Attorney-General to the validity of a Commonwealth law operating
in the State
it is idle to appeal to the principle established by
Attorney-General (N.S.W.) v. Brewery Employes Union of New South Wales [1908]
HCA 94; (1908)
6 CLR 469 , and expressed by Gavan Duffy C.J., Evatt and McTiernan JJ. in
Attorney-General (Vict.) v. The Commonwealth
in
these words
[1935] HCA 31; (1935) 52 CLR 533,
at p 556 :
"... the Attorney-General of a State of the Commonwealth
has a sufficient title to invoke the provision of the
Constitution for the purpose of challenging the validity of
Commonwealth legislation which extends to, and operates
within, the State whose interests he represents." (at p401)
32. It is equally irrelevant to appeal to the principle said to be enunciated
by the Supreme Court of the United States in Massachusetts
v. Mellon [1923] USSC 152; (1923)
262 US 447 (67 Law Ed 1078) , that a State lacks standing to challenge the
validity of an appropriation of funds
by Congress.
(at p401)
33. The real interest of the States, so it seems to me, is that they are
constituent elements in the federation and that the federation
is one in which
there is a division of powers and a consequential allocation of
responsibilities between the Commonwealth and the
States. As such they have
an interest in the observance of the Constitution and in ensuring that the
Commonwealth keeps within the bounds assigned to it by the Constitution.
Ultra vires acts on the part of the Commonwealth, that is, acts exceeding
constitutional power, whether legislative or executive,
are in truth
intrusions into the area of responsibility left to the States by the
Constitution and are in this sense prejudicial to the interest of the States
under the Constitution and as constituent elements of the federation. To this
interest may be joined the prospective interest which they have in the
distribution
of surplus revenue under s. 94; it is an interest which entitles
them to seek relief from this Court. (at p402)
34. If the situation were otherwise it is not easy to see how relief could be
obtained against the commission of ultra vires acts
of this kind by the
Commonwealth. The activity in question creates no cause of action in the
individual citizen and the individual
taxpayer has no interest at all in funds
standing to the credit of Consolidated Revenue. His interest in challenging
the validity
of what is proposed to be done is less direct than that of the
States. (at p402)
35. The final comment which should be made is that if the traditional
procedure had been followed and legislation had been enacted
to give effect to
the Australian Assistance Plan, the States would in my opinion have had
standing to challenge it according to the
principle stated in Attorney-General
(N.S.W.) v. Brewery Employes Union of New South Wales [1908] HCA 94; (1908) 6 CLR 469 as a
law operating in
the States and in this respect I would draw no distinction
between a State and its Attorney-General.
Yet it is
suggested that because
the Plan lacks the customary statutory clothes, the States lack standing to
challenge its want
of constitutional
authority. It is
an argument which
should be rejected. (at p402)
36. In the result I would refuse the declaration sought but I would grant an
injunction restraining the defendants from carrying
into effect the Australian
Assistance Plan and from expending the moneys appropriated for the purpose of
carrying the Plan into effect.
(at p402)
JACOBS J. The Appropriation Act (No. 1) 1974-1975 in Div. 530 of the Second
Schedule, more particularly in par. 4 of that division,
contains the
following
"4. - Australian Assistance Plan - $
01. Grants to Regional Councils for
Social Development 5,620,000
02. Development and evaluation
expenses 350,000
5,970,000" (at p402)
2. The State of Victoria objects to these appropriations in so far as they
purport to authorize the expenditure of some part of
the sum so appropriated
within the State of Victoria. It has commenced proceedings in this Court
against the Commonwealth of Australia
and the Minister for Social Security
claiming a declaration that the said Appropriation Act in so far as it
provides that the said
sum of $5,970,000 is appropriated from the Consolidated
Revenue Fund for the Australian Assistance Plan is beyond the powers of the
Parliament of the Commonwealth and is void and of no effect and an injunction
restraining the defendants and each of them from expending
any of the moneys
of the Commonwealth in pursuance of or for the purposes of the Australian
Assistance Plan. (at p403)
3. The statement of claim alleges that on or about 30th August 1973 the
Minister for Social Security purported to establish the
"Australian Assistance
Plan" and that pursuant to the said Plan the Minister since September 1973 has
purported to establish Regional
Councils for Social Development and in
particular has established such Councils within the State of Victoria. It is
claimed that
he plans and intends that each of the said Regional Councils
should employ a social planner, a secretary and other staff to be known
as a
"Secretariat for Social Planning". The statement of claim then alleges that
save that the said Regional Councils are to plan
and provide social welfare
services within the community and are to establish the said Secretariats for
Social Planning the purposes
of the Plan are not defined. It is then alleged
that the establishment of the said Plan and the establishment of the said
Regional
Councils and the said Secretariats is unauthorized and in particular
(without limiting the generality of the foregoing) is not authorized
by any
Act or Resolution of the Parliament of the Commonwealth and further is not
authorized by any proclamation or order by the
Governor-General whether under
any Act of the Parliament of the Commonwealth or otherwise howsoever and
further is not authorized
by any regulation, rule or by-law whether under any
Act of the Parliament of the Commonwealth or otherwise howsoever. (at p403)
4. Paragraph 7 of the statement of claim then alleges the appropriation in
the Appropriation Act to which I have referred and in
par. 8 claims that in so
far as that Act provides that the sum of $5,970,000 is appropriated and is
deemed to have been appropriated
from the Consolidated Revenue Fund of the
Commonwealth as from 1st July 1974 for the said Plan in respect of the
financial year 1974-1975
the said Act is beyond the powers of the Parliament
of the Commonwealth and is void and of no effect. Paragraph 9 alleges that
pursuant
to the said Plan the Minister has purported to authorize and has
directed the payment of and has caused to be paid part of the said
sum of
$5,970,000 to Regional Councils for Social Development within the State of
Victoria for the purposes of such Councils using
such moneys to plan and to
provide social welfare services within the community and for the further
purpose of such Councils using
such moneys to establish and pay for the said
Secretariats for Social Planning. The next paragraph alleges that the
Minister threatens
and intends to continue so to do. It is then claimed that
the expenditure of moneys of the Commonwealth in pursuance of the said
Plan is
contrary to law and is beyond the power of the Commonwealth. (at p404)
5. It is understandable that on the basis of those allegations the
submissions of the Solicitor-General for Victoria should have
been directed
primarily to the claim that an appropriation is bad unless the purposes
thereof flow from and are governed by legislation
of the Commonwealth
independent of and separate from the actual appropriation of moneys, and to
the claim that no purpose is stated
for the appropriation of the said sum of
$5,970,000. (at p404)
6. It does not appear to me that there is any substance in either of these
submissions. It cannot be said that the appropriation
is one without purpose
because the purpose, good or bad, is distinctly stated. It is a purpose of
paying moneys to Regional Councils
for Social Development, the establishment
of which is alleged in the statement of claim itself. It also appears from
the terms of
the appropriation that the money may be paid to the Regional
Councils for the purposes of the Australian Assistance Plan, and, again,
the
establishment of that Plan is alleged in the statement of claim. The moneys so
appropriated may within the terms of the appropriation
be so expended. No
greater particularity is required for the purposes of an appropriation.
Provided that purposes are stated it
is a matter for the Parliament how minute
and particular shall be the expression of purposes in any particular case. (at
p404)
7. Nor is it correct that Parliament may only appropriate moneys in respect
of a purpose which is already the subject of legislation
of the Australian
Parliament. The Constitution does not say so and there is no place for such
an implication. The argument overlooks the wide area in which moneys may be
expended
by the Executive Government, that is to say, by the Queen exercising
her prerogative through the Governor-General on the advice of
the Executive
Council. When moneys are voted to the Queen by Parliament for the purposes
declared by the Parliament, it falls within
the prerogative to determine
whether or not those moneys will be expended for that purpose and how, within
the expression of the
purpose to which the moneys have been appropriated, the
expenditure will be made. Legislation is only needed when Parliament chooses
to replace or affect the prerogative powers by legislation which either
extends or limits or simply reproduces in the form of executive
or other
authority the powers previously comprehended within the prerogative. The
exercise of the prerogative of expending moneys
voted by Parliament does not
depend on the existence of legislation on the subject by the Australian
Parliament other than the appropriation
itself. This exercise of the
prerogative is in no different case from other exercises of the prerogative
which fall within the powers
of the Executive Government of the Commonwealth
under s. 61 of the Constitution. If legislation were a prerequisite it would
follow that the Queen would never be able to exercise the prerogative through
the Governor-General
acting on the advice of the Executive Council; she would
always exercise executive power by authority of the Parliament. This cannot
be suggested. It would, if correct, result in an inability of Australia to
declare war, make treaties, appoint officers of State
and members of the
public service of the Commonwealth and do all the multitude of things which
still fall within the prerogative,
unless there was a general or special
sanction of an Act of Parliament. (at p405)
8. The Constitution envisages the exercise of the prerogative through the
Governor-General in those matters appertaining to the Government of the
Commonwealth
in its provision by s. 61 that the executive power of the
Commonwealth extends to the execution and maintenance of the Constitution.
Except so far as the Constitution makes particular provision in respect of
matters otherwise within the prerogative, the prerogative remains unaffected.
It was always
intended that, subject to the Constitution and its expression of
the subject matters of Commonwealth power, to a large extent the prerogative
would be exercised on all matters
of Australian concern by the Crown on the
advice of Australian Ministers rather than on the advice of United Kingdom
Ministers. The
extent of its exercise on such advice has throughout the years
of federation been a growing extent. The area of its exercise on
the advice
of Australian Ministers is limited by the terms of the Constitution.
Primarily its exercise is limited to those areas which are expressly made the
subject matters of Commonwealth legislative power.
But it cannot be strictly
limited to those subject matters. The prerogative is now exercisable by the
Queen through the Governor-General
acting on the advice of the Executive
Council on all matters which are the concern of Australia as a nation. Within
the words "maintenance
of this Constitution" appearing in s. 61 lies the idea
of Australia as a nation within itself and in its relationship with the
external world, a nation governed by a system
of law in which the powers of
government are divided between a government representative of all the people
of Australia and a number
of governments each representative of the people of
the various States. (at p406)
9. It does not follow that any subject matter of the exercise of the
prerogative which is properly exercisable through the Governor-General
on the
advice of the Executive Council cannot be the subject of legislation of the
Parliament which may deny or limit or replace
the prerogative by legislative
provision. The same is true of any executive power expressly conferred by the
Constitution, though of course the exercise of either executive or legislative
power is subject to the provisions of the Constitution. The power to
legislate in respect of matters falling within the prerogative arises under s.
51 (xxxix.) in so far as it does not arise under any other particular head of
power. Alternatively the course of power is the inherent
sovereignty of the
Australian Parliament in all subject matters which lie within the province of
the Government of the Commonwealth
of Australia. The Parliament is sovereign
over the Executive and whatever is within the competence of the Executive
under s. 61, including or as well as the exercise of the prerogative within
the area of the prerogative attached to the Government of Australia,
may be
the subject of legislation of the Australian Parliament. However, although
the Parliament may legislate in respect of any
subject matter which is within
the prerogative so far as it is exercisable through the Governor-General on
the advice of the Executive
Council, it does not follow that legislation is
necessary before a prerogative power is exercised. (at p406)
10. It would therefore appear to me that the statement of claim alleges no
fact or matter which would entitle the plaintiffs to
the relief which they
seek. For all that appears therein the Minister might be setting up Regional
Councils for Social Development
with the Secretariat described in the
statement of claim, and might have established the Australian Assistance Plan,
for purposes
fully related to subject matters of Commonwealth power within s.
51. It would appear, however, that the defendants preferred not to see the
action go off upon this limited ground because in their defence
they identify
and describe the purposes of the Australian Assistance Plan so far as it had
been formulated at the time. The defence
alleged that the purpose of the Plan
was to assist, in the manner set out in two documents - the Discussion Paper
No. 1 and "Australian
Assistance Plan - Guidelines for Pilot Programme" - in
the development within a nationally co-ordinated framework of integrated
patterns
of welfare services, having regard to and recognizing the existing
responsibilities for welfare services of the Commonwealth, the
Government of
the Commonwealth, the States, the Government of the States, municipalities,
municipal governments and voluntary agencies.
They claimed that throughout
Australia there was a very large diversity of welfare services, a need to
co-ordinate such services,
a need for further welfare services and in
particular for the personal welfare services referred to in Ch. 4 of the said
Discussion
Paper No. 1, and a need to ensure that existing welfare services,
including those provided by the Commonwealth of Australia, were
rendered as
effectively as possible. It was also claimed that there was a need to ensure
that the Commonwealth of Australia was
fully informed of needs for welfare
services in the various regions of Australia and a need to secure the
participation of local
residents and groups in the planning and provision of
welfare services. It was claimed that these matters were of national
importance
and concern to the federal Executive Government, the Parliament and
the nation as a whole. (at p407)
11. There was still nothing so far in the pleadings to indicate that the
appropriation would involve expenditure upon or in respect
of any subject
matter outside the powers of the Australian Parliament; but the plaintiffs
demurred to the whole of the defence and
in so doing incorporated in the
demurrer the Discussion Paper and the Guidelines which had been referred to in
the defence. So by
a somewhat tortuous but nevertheless useful path the
necessary material came before the Court. It became clear that the Australian
Assistance Plan was in course of evolution but in the course of this evolution
the Social Welfare Commission, a commission established
by the Social Welfare
Commission Act 1973, had embarked upon the trial programmes by the
establishment of Regional Councils and the
provision of funds to those
Councils. It may therefore be taken that the Australian Assistance Plan as at
present evolved is that
which appears from the Discussion Paper and the
Guidelines. (at p407)
12. The stated aim of the Australian Assistance Plan is to assist in the
development, at a regional level within a nationally co-ordinated
framework,
of integrated patterns of welfare services, complementary to income support
programmes and the welfare-related aspects
of health, education, housing,
employment, migration and other social policies having regard to the following
matters:
"That the existing responsibilities of State and localThe Discussion Paper states that the primary emphasis of the Australian Assistance Plan is in the areas of planning, programme development and social policy evaluation, whereas the provision of complementary casework services is seen to arise from within this basic framework and may be under other auspices, for example, a State Department of Social Welfare or a migrant counselling service. The functions of Regional Councils for Social Development are expressed as follows:
governments, voluntary agencies and the Australian Government
are recognised.
That assistance should be available for planning and developmental
programs.
That the development of regional planning systems is to
be encouraged.
That every effort is made to avoid duplication and overlapping
of services.
That local residents and welfare consumer groups are encouraged
to participate in the planning and provision of welfare
services.
That continual evaluation and monitoring of all programs
occur to ensure their flexibility, adaptability and appropriateness
in light of changing patterns of social need."
"To relate to any regional planning bodies concerned with
physical planning, health planning, education planning, housing
planning, etc.
To continually evaluate and monitor the social needs of the
region, and to report on these to the State and the Australian
governments.
To devise plans for welfare service provision to meet the
needs of the region, in consultation with, and having regard
to the autonomy of Australian, State, local government and
non-government agencies.
To advise and assist local government bodies and non-government
agencies in the carrying out of appropriate welfare
policies as requested.
In particular, to advise the Australian Government on the
development of its own departments' services in the region,
and on the allocation of grants and subsidies to bodies within
the region." (at p408)
13. The Discussion Paper envisages that the Regional Council for Social
Development should have a staff consisting of a Director
of Social Planning, a
Project Officer and secretarial assistance. Under the heading "Resources"
appears the matter which as the hearing
developed became the matter upon which
the plaintiffs and the interveners particularly relied. The paragraph is as
follows:
"Under the Australian Assistance Plan money would be
available from the Australian Government to be spent in
the region, at the discretion of the Regional Council for
Social Development. Two specific forms of funding are envisaged:
(a) A specific grant of up to $10,000 per annum for individual
local government areas which would be paid
either to the local government authority or to a local
welfare co-ordinating committee to employ a Community
Development Officer.
Responsibilities of this staff person (who would require
secretarial support) envisaged within the grant,
would include: information giving; assessment of local
needs; advice on implementing social welfare programs;
recommendations on the development of new services;
activities designed to foster a sense of community involvement;
participation in committee work; training of
welfare personnel.
This grant would not automatically be available to
all local government areas throughout Australia, but to
those areas seen as having a special need, or where the
region comprises more than one local government area.
(b) Block grants to be spent in the area by eligible bodies
(as defined below) which may be applied to any or all
of the capital or maintenance costs of those services
outlined in Chapter 4. It is suggested that grants will be
available on a basis of $2 per capita per local government
area, but that a system of 'needs' weighting should
operate. Such a system could be similar to that developed
by the United Kingdom Government for educationally
disadvantaged areas." (at p409)
14. Chapter 4 of the Discussion Paper is the schedule of personal welfare
services which may attract grants under the Australian
Assistance Plan. The
main headings of the schedule are child developmental services, services to
assist families, services to assist
adolescents, services to assist aged
persons, accommodation for special categories and associated welfare
programmes, financial assistance
of limited kinds, information services,
community health and welfare centres and research and evaluation projects.
Very many of these
services do not fall within any particular subject matter
of Commonwealth power in respect of the community generally although most,
if
not all, of them would fall within a subject matter of Commonwealth power
related to certain classes in the community, for example,
migrants, people of
any race for whom it is deemed necessary to make special laws, members of the
Commonwealth Public Service and
members or former members of the Defence
Forces. (at p409)
15. With this material before the Court, the argument proceeded to a further
stage. Part of the expenditure by the Government pursuant
to the
appropriation would under the Australian Assistance Plan in this pilot phase,
as it has been called, be by way of capitation
grants to the Regional
Councils. These Councils could spend the grants so made on any or all of the
capital or maintenance costs
of the services outlined in Ch. 4 of the
Discussion Paper and many of those services would in the case of persons who
did not otherwise
fall within a class comprehended in a subject matter of
Commonwealth power be outside any particular head of Commonwealth power.
Part
of the expenditure might, and probably would, thus be on matters which, viewed
in isolation, did not fall directly within a
subject of general Commonwealth
power. In this situation, it is submitted, the whole appropriation is bad and
an injunction may
be granted by the Court restraining expenditure generally.
The basis of the submission is an analogy between the appropriation and
the
expenditure pursuant thereto and the principles which govern the construction
of legislation of the Australian Parliament which
imposes duties and
obligations. Such legislation is not valid if it may in its execution
transcend the limits of power or if part
thereof is within power and an
inseverable part is beyond power. It is submitted that, just as legislation
will be invalid if it
may inseverably operate on a matter or in a matter
beyond power as well as on matters or in matters within power, so an
appropriation
will be wholly beyond power if some part thereof, not severable
in the appropriation from the remainder, may be expended in respect
of matters
which do not fall within the power of the Commonwealth to legislate generally.
This is a very far-reaching submission
and would invalidate a very large
number of items in any Appropriation Act. (at p410)
16. But it is in my opinion a submission which cannot be sustained. It does
not give weight to the nature of the relief which may
be granted by the Court.
The submission must depend on the invalidity of the actual appropriation of
moneys. It can have no weight
if it is the threatened expenditure alone which
can be impugned. In my opinion the appropriation by the Commonwealth
Parliament
of moneys of the Commonwealth to the purposes stated in the
Appropriation Act cannot by itself be the subject of legal challenge.
The
appropriation is a matter internal to the Government of the Commonwealth. It
may not make valid anything which cannot be validated.
That depends on the
breadth of the Commonwealth power of appropriation and expenditure expressed
in s. 81 and on the meaning of
the words therein "for the purposes of the
Commonwealth". However, even when those words are given a limited meaning it
does not
follow that the Appropriation Act or any part thereof can be declared
invalid. The appropriation is no more than an earmarking of
the money, which
remains the property of the Commonwealth. All it does is to disclose that the
Parliament assents to the expenditure
of the moneys appropriated for the
purposes stated in the appropriation. The Crown may then within the law
governing appropriation
of its money expend those moneys. It is given "the
authority and the opportunity" so to do (The Commonwealth v. Colonial
Ammunition
Co. Ltd. [1924] HCA 5; (1924) 34 CLR 198, at p 222 ). (at p411)
17. There must be an appropriation by Parliament. Section 81 requires that
revenue or moneys be appropriated in the manner imposed
by the Constitution
and under s. 83 the appropriation must be made by law. This is the expression
in our Constitution of the requirement established in English constitutional
law that the revenues raised by authority of Parliament must be voted to
the
Crown by Parliament. Section 83 is not in itself a limitation on the power of
the Parliament to appropriate moneys and should not be read as meaning "by a
law on
a subject matter in respect of which the power is otherwise conferred
on the Parliament to legislate". The section does not say
that and there is
no need for such an implication. The limitation, if any, is to be found in
the words "purposes of the Commonwealth"
in s. 81. (at p411)
18. Although the appropriation made on the message from the Governor-General
is clearly evidence of an intention to expend the moneys
for the purposes
stated in the appropriation, relief can only be given in respect of so much of
the expenditure pursuant to the appropriation
as lies outside the purposes for
which an appropriation can be made. The appropriation cannot make lawful that
which is unlawful
but it does nothing which can attract to its operation the
principles which have been developed in respect of Commonwealth legislation
creating rights, obligations and duties. It is for a plaintiff to identify
any expenditure which is impugned and to frame a prayer
for relief in terms
which will enjoin that expenditure and that only. (at p411)
19. There is no analogy between the validity of legislation and the validity
of expenditure. In the former case it is the intention
of the Parliament
which is the subject of scrutiny and if the Parliament discloses an intention
that its legislation shall apply
or be capable of applying inseverably to
matters and things within power and to matters and things outside power then
the whole legislation
is inseverably invalid. On the other hand, if the
Executive Government expends or proposes to expend money the only relevant act
or intention is that of expending or proposing to expend particular sums. No
question of any "overall" intention can arise. There
is in law no "scheme" of
expenditure as there can be a scheme of legislation. It follows that any
relief granted by the court against
an illegitimate expenditure would need
carefully and precisely and exhaustively to delineate those expenditures in
respect of which
relief is granted. The practical impossibility of so doing
may well prevent the granting of relief by way of quia timet injunction
or
even by way of declaration. The complex interrelation between the heads of
power within the competence of the Commonwealth would
make it very difficult
to frame relief except in general and therefore impermissible terms. Clearly
much of the proposed expenditure
of $5,970,000 would fall within Commonwealth
power in respect of social welfare generally or in respect of the social
welfare of
particular groups or classes of persons. No form of relief
appropriate only to so much of the sum of $5,970,000 as may be claimed
to be
proposed expenditure beyond Commonwealth power has been, or apparently could
be, formulated. No argument was presented to
the Court which would require
such a formulation. (at p412)
20. For these reasons alone the plaintiffs have made out no case for relief
even on the assumption that some part of the proposed
expenditure may be
beyond Commonwealth power. That assumption, however, does not appear to me to
be correct. Moneys may be appropriated
and therefore expended pursuant to
that appropriation "for the purposes of the Commonwealth". It appears to me
that the view of
the majority of the Court in Attorney-General (Vict.) v. The
Commonwealth [1945] HCA 30; (1945) 71 CLR 237 was that the power of
appropriation
was
limited by the nature and purposes of the Government of the Commonwealth
but
that, on the other hand, the purposes
of the Commonwealth
may not only fall
within a subject matter of general or particular
power prescribed in the
Constitution but may also be other purposes which now adhere fully to
Australia as a nation externally and internally sovereign: cf. per Starke
J.
(1945) 71 CLR, at p 266 . The growth of national identity results in a
corresponding growth in the area of activities which have
an Australian rather
than a local flavour. Thus, the complexity and values of a modern national
society result in a need for co-ordination
and integration of ways and means
of planning for that complexity and reflecting those values. Inquiries on a
national scale are
necessary and likewise planning on a national scale must be
carried out. Moreover, the complexity of society, with its various
interrelated
needs, requires co-ordination of services designed to meet those
needs. Research and exploration likewise have a national, rather
than a
local, flavour. (at p413)
21. In two ways the Australian Assistance Plan is in substance within the
powers of the Commonwealth. First, it is an expenditure
of money in the
exercise by the Commonwealth of its executive power to formulate and
co-ordinate plans and purposes which require
national rather than local
planning and of its legislative power to appropriate its funds accordingly.
Secondly, in so far as the
proposed expenditure does not fall directly within
a specific power of the Commonwealth it is an expenditure of money which is
incidental
to the execution by the Commonwealth of its wide powers respecting
social welfare. A considerable part of the proposed expenditure
falls or may
fall directly within Commonwealth power either in respect of specific subject
matter or in respect of particular classes
of persons but in so far as some
expenditure may be outside Commonwealth powers in respect of specific subject
matters or in respect
of particular classes of persons it seems to me that the
expenditure falls within the incidental power in s. 51 (xxxix.). The purposes
of the Commonwealth certainly include all the purposes comprehended within the
subject matters of s. 51 in respect of which the Commonwealth may legislate,
including the subject matter comprised in s. 51 (xxxix.). The purposes of the
Commonwealth include purposes comprehended within the Commonwealth power in
respect of matters incidental
to the execution of the legislative power to
appropriate and the executive power to expend moneys for the purposes of the
Commonwealth.
Moneys may therefore be appropriated and expended for that
purpose as well as for purposes wholly comprehended within the other subject
matters of Commonwealth power. Appropriation and expenditure of moneys for
the purposes of the Commonwealth may therefore be made
for purposes
comprehended within the power of the Commonwealth in respect of matters
incidental to the execution of the legislative
power to appropriate and the
executive power to expend moneys for purposes comprehended within other
subject matters of power. In
every case it is necessary to determine whether
the expenditure, if it is not for the purposes of the Commonwealth in what may
compendiously
in the light of this analysis be described as a primary sense,
is nevertheless incidental to the execution of the power to expend
moneys for
the purposes of the Commonwealth in that primary sense. Matters incidental to
the execution of an executive power are
not limited to matters either
adjectival or ancillary to the execution of that power. That is to say the
"incidental" subject matter
of s. 51 (xxxix.) may be a matter of substance and
not merely a matter in aid of or procedural to the relevant substantive power
itself.
The latter power is contained within the grant of the substantive
power itself because it is incidental to, an incident of, the subject
matter
of power. But a distinction must be drawn between what is incidental or
incident to the subject matter of a power and what
is a matter incidental to
the execution of a power. Compare Le Mesurier v. Connor [1929] HCA 41; (1929) 42 CLR 481, at
p 497 .
The distinction
reflects a recognized difference in the meanings of
the word "incidental". The word
may be used to describe a side
occurrence
which,
though not essential to the main action, may be expected to arise in
connexion with
the main action. It may also
be used to describe
a side
occurrence with stress on its independence of the main action. The
distinction
is so made in Fowler's
Modern English Usage
(1954 reprint), p.
264, where it is also observed that a tendency has arisen to use the
adjective
"incident"
to describe the former
and "incidental" to describe the latter.
Thus the Oxford Dictionary defines the adjective
"incident" first
as "liable
or apt to befall
or occur to; likely to happen; hence, naturally appertaining
or attaching". On the
other hand, it defines
"incidental" first as
"occurring
or liable to occur in fortuitous or subordinate conjunction with something
else of which it forms
no essential part".
This, it seems to me, is the
distinction between the implied incidental power and the
express power in s.
51 (xxxix.). Whatever is incident (in the above sense) to the subject matter
of power comes within the ambit of the main power. It
is incident to that
power in that it naturally appertains and attaches to that power. However,
what is incidental to the execution
of a main power includes every matter
which occurs or is liable to occur in subordinate conjunction with the
execution of that power,
even though it forms no essential part of the main
power itself. It is subordinate but just as importantly it is in conjunction.
Thus a subject matter incidental to the execution of a power may have a wider
ambit than the power implied in respect of the incidents
of a subject matter
of power. It is itself a subject of legislative power (per Dixon J. in
British Medical Association v. The Commonwealth
[1949] HCA 44; (1949) 79 CLR 201, at p 274 )
and that is so even though it only exists in subordinate conjunction with the
execution
of a main
power.
Whether or not a particular expenditure or
proposed expenditure which does not fall within any particular subject
matter
of power
nevertheless falls within this incidental power will depend on the
facts and circumstances surrounding that proposed
expenditure.
Often it will
be a matter of degree. Cf. Burton v. Honan [1952] HCA 30; (1952) 86 CLR 169, at p 179 . (at
p414)
22. Subject matters of social welfare which fall outside those matters the
subject of express power in other placita of s. 51 are not incidental to those
matters of express power. If they were, then the Commonwealth would have
plenary power to legislate
upon them. But it will be a matter incidental to
the execution of a power to appropriate and expend moneys of the Commonwealth
upon
those subject matters to appropriate and expend moneys upon other
subjects of social welfare in subordinate conjunction with expenditure
upon
those subject matters. (at p415)
23. The proposed 1974-1975 expenditure of the Commonwealth, classified in the
1974-1975 Budget papers as expenditures upon welfare,
health and social
security, but not including education, are the largest expenditures by
classification which it makes. The total
for the relevant year is
$4,673,000,000 out of a total budgeted expenditure of $16,274,000,000. See
Hansard, House of Representatives,
First Session - First Period, p. 1295. The
Executive Government has taken the view that these expenditures are
unco-ordinated among
themselves and are unco-ordinated with social welfare
expenditures made independently by and in the various States. It has also
determined that it is desirable to involve people at community level in the
devising and planning of welfare services. The claim
that planning for
co-ordination and rationalization of welfare services and expenditure thereon
is beyond power has hardly been pressed.
Where it is claimed that the
Commonwealth has transgressed the limits of power is in including within the
funds made available at
community level amounts by way of the so-called
"capitation grants" which may be expended on aspects of social welfare other
than
aspects within the limits of express powers conferred in s. 51. It has
not been established that payment of these "capitation grants" is not
incidental to the execution of the power to appropriate
and expend moneys for
the purposes comprehended within the Commonwealth powers contained in s.
51(xxiii.) and (xxiiia.) as well as the powers possessed by the Commonwealth
in respect of particular groups and classes of persons in the community
for
whose social welfare the Commonwealth may generally provide. In my opinion no
cause of action is disclosed by the pleadings
and I would dismiss the action.
(at p415)
MURPHY J. This case concerns the scope and use of the national spending
power. (at p415)
2. For the financial year ending 30th June 1975, the total budget outlays
were estimated at $16,274 million (1974-1975 Budget Paper
No. 1, at p. 3). (at
p415)
3. The State of Victoria and its Attorney-General claim that the
Appropriation Act (No. 1) 1974-1975, so far as it assigns a sum
of almost
$6,000,000 of the Consolidated Revenue Fund for purposes described as "the
Australian Assistance Plan", is invalid. They
seek to restrain the second
defendant, who was the Minister for Social Security at the time, from
expending any of the sum for that
purpose. (at p416)
4. The Appropriation Act (No. 1) 1974-1975 is a general appropriation Act for
the ordinary annual services of the Government as
contemplated by s. 54 of the
Constitution. There are other general annual appropriation Acts, as well as
special and permanent appropriation Acts. (at p416)
5. Section 3 of the Act provides:
"The Treasurer may issue out of the Consolidated RevenueThis authorization is in addition to the sums authorized by s. 3 of the Supply Act (No. 1) 1974-1975, bringing the total of sums authorized to be issued out of the Consolidated Revenue Fund to $4,667,794,000. (at p416)
Fund and apply for the services specified in Schedule 2, in
respect of the year ending on 30th June 1975, the sum of
$2,863,510,000."
6. That sum was appropriated and deemed to have been appropriated from 1st
July 1974 for the services expressed in the Second Schedule
in respect of the
financial year commencing on that date (s. 4). (at p416)
7. The Second Schedule of the Act contains the challenged item in the form:
"Department of Social Security ... Division 530 ...
4. - Australian Assistance Plan - 1974-75 1973-74
Appropriation
Expenditure
$ $ $(at p416)
01. Grants to Regional
Councils for Social
Development 5,620,000 1,700,000 764,030
02. Development and
evaluation expenses 350,000 130,500 108,297
5,970,000 1,830,500 872,327"
8. I will not trace the history of the pleadings or the details of the
Australian Assistance Plan which have been set out in other
judgments. (at
p416)
9. Briefly, the plaintiffs contend that in regard to the particular
appropriation: (1) the Act was not an appropriation for purposes
of the
Commonwealth within s. 81 of the Constitution; (2) it was not sufficiently
specific to amount to an appropriation; (3) it went beyond appropriation; (4)
even if the appropriation
were valid, the expenditure of the amounts was not
lawful without separate validating legislation. (at p417)
10. The defendants opposed these contentions, and also contended that neither
the plaintiff State nor its Attorney-General had standing
to pursue the matter
before this Court. (at p417)
11. If the plaintiffs' contentions were accepted, it would mean that the
Parliament's use of its appropriations power has been unconstitutional
since
federation (see the evidence of Solicitor-General Garran in the Report of the
Royal Commission on the Constitution (1929), at pp. 69-70). (at p417)
12. I will deal with the contentions under the headings of The Purposes of
the Commonwealth; Specification of the Appropriation;
Is the Act Confined to
Appropriation? Necessity for Separate Legislation; and Standing. (at p417)
The Purposes of the Commonwealth.
13. I agree with the opinion expressed by Latham C.J. in the Pharmaceutical
Benefits Case (Attorney-General (Vict.); Ex rel. Dale
v. The Commonwealth
[1945] HCA 30; (1945) 71 CLR 237, at pp 254-256 ), that Parliament is the authority to
determine what purposes
are the purposes
of the Commonwealth.
(at p417)
14. The plaintiffs contend that the "purposes of the Commonwealth" in s. 81
are restricted to those purposes for which the Commonwealth
is empowered to
make laws under other sections of the Constitution, e.g., ss. 51, 52 and 122.
(at p417)
15. A number of considerations lead me to reject this contention. (at p417)
16. Firstly, nothing in the Constitution warrants the limitation on the
appropriation power of the Parliament which the plaintiffs contend exists. (at
p417)
17. Secondly, when such a limitation was intended, it was expressed as in s.
51(xxxi.) which provides:
"The acquisition of property on just terms from any StateOn familiar rules of interpretation, the expression of the limitation in one part of the instrument is a good reason for rejecting its implication in another part. (at p417)
or person for any purpose in respect of which the Parliament
has power to make laws."
18. Thirdly, it would be quite impossible to conduct the finances of the
country if the appropriation power was so limited. This
view was put
powerfully, persuasively and, in my opinion, irrefutably, by Solicitor-General
Garran to the Royal Commission on the
Constitution in 1929 (see the Report of
the Royal Commission on the Constitution, p. 71). He stated: "in
interpreting a Constitutional document, that is one of the weightiest
arguments which can be used to show
that it was not the intention." (See also
his views recorded in the Report of the Royal Commission on Child Endowment
and Family
Allowances, (1929), p. 10, par. 5.) (at p418)
19. "Purposes of the Commonwealth" as determined by the Parliament over the
years in the Appropriation Acts include a wide variety
of purposes to be
furthered by many programmes and activities. Some of these have been
conducted by the Executive Government (under
s. 61), some by statutory
corporations established by Parliament (under s. 51 including (xxxix.)), some
by States, some by other bodies and persons. The expenditure on many of these
has been authorized by general
Appropriation Acts, others by special or
permanent Appropriation Acts. (at p418)
20. From the material supplied to the Court and an examination of the
Appropriation Acts, it appears that there were many current
programmes (that
is, in 1974-1975), some of which had been in operation for many years and
which are not clearly referable to any
head of legislative power in the
Constitution other than s. 81. (at p418)
21. These include substantial appropriations in the Departments of Education,
Tourism and Recreation, Science, Health, Housing and
Construction,
Agriculture, Special Minister of State, Prime Minister, Media, Urban and
Regional Development, Environment and Conservation,
Labor and Immigration, and
Social Security. (at p418)
22. To ascertain whether these appropriations are referable to one of the
enumerated powers (other than s. 81) would involve exhaustive inquiry into the
boundaries of the enumerated powers. (at p418)
23. The appropriation for those purposes not within the scope of the
enumerated powers would, on the plaintiff's contention, be
unconstitutional.
Hundreds of items of appropriation since federation and many hundreds of
millions of dollars would have been unlawfully
appropriated and spent. (at
p418)
24. The chilling effect that such an interpretation would have on
governmental and parliamentary initiatives is obvious. It is
not a formula
for operating a Constitution. It is one for stultifying government. If the
surplus revenue issue is re-opened, the States would be encouraged to
challenge items
of appropriation in order to enhance the possibility of
surplus revenue. (at p418)
25. This would lead to constant conflict, unless Australian Governments and
Parliaments retreated to the conservative position of
avoiding any
appropriation which was at all doubtful. They would suffer from the absence
of advisory judicial jurisdiction. (at
p419)
26. The observations of Solicitor-General Garran (Report of the Royal
Commission on the Constitution (1929), loc. cit.) on the impossibility of
financing government would be borne out. (at p419)
27. It follows that Parliament may determine that the purposes of the
Commonwealth include promotion of scientific research (in
the social as well
as the physical sciences), cultural activities, sport, education and health.
(at p419)
28. It may determine that the purposes include the general management of the
economy or any aspects of it such as levels of employment
or the value of the
currency. To that end it may appropriate for expenditure where it wishes, and
is not restricted to spending
in confined areas such as those covered by the
legislative powers with respect to banking, insurance, or inter-State trade
and commerce.
(at p419)
29. It may determine (as it has) that expenditure in areas of social welfare
is one of the purposes of the Commonwealth and appropriate
for that purpose.
(at p419)
30. The purpose of the appropriation to the Department of Social Security for
the Australian Assistance Plan includes support of
voluntary agencies
(Regional Councils for Social Development) to inquire and report and expend
moneys for social welfare. Parliament
has determined that this is a purpose
of the Commonwealth. (at p419)
31. The appropriation is within the powers of the Parliament and the spending
is authorized by the Appropriation Act and the consequential
executive powers
(s. 61). There is no need to justify it by referring to any one or more of
the enumerated legislative powers of
the Parliament. If it were necessary, I
think that support can be found in a number of such powers. (at p419)
32. It is clear that the Australian Government is and will be involved in the
expenditure of vast sums of money in various forms
of social welfare. (at
p419)
33. Legislative power has been exercised to provide invalid and old-age
pensions (under s. 51(xxiii.)), maternity allowances, widows'
pensions, child
endowment, unemployment, pharmaceutical, sickness and hospital benefits,
medical and dental services, benefits to
students and family allowances (under
s. 51(xxiiiA.)). Legislative power has also been exercised to provide social
welfare for Aborigines
and other peoples (under s. 51(xxvi.)). There are
other responsibilities (actual and potential) for social welfare of persons
such
as members and ex-members of the defence forces and the public service
and migrants under other legislative powers. (at p419)
34. Experience has been that there is a bewildering, inefficient and costly
proliferation of social welfare services provided by
the Australian Government
and by State and local government and private agencies and persons. (at p420)
35. In my view, it would be incidental to the execution of the powers vested
by the Constitution in Parliament and in the Australian Government for
legislation to be passed authorizing the inquiry and report envisaged by the
Australian
Assistance Plan (see Lockwood v. The Commonwealth [1954] HCA 31; (1954) 90 CLR 177
). The inquiry and report could be made by an
officer of the
Australian
Government or by a private person engaged
by it. It could equally be done by
the system of regional councils.
If Parliament
wished, it could authorize the
establishment
of a system of regional councils in order to assist it in the
discharge
of its responsibilities
in social welfare, including the
expenditure
of any moneys appropriated by Parliament (see Jumbunna Coal
Mine N.L. v.
Victorian Coal
Miners' Association (1908)
6 CLR 309 , and s. 14 of the Social
Welfare Commission Act
1973, the validity of which is undisputed).
(at p420)
36. In the United States of America, Congress has adopted a similar course in
using the power under Art. 1, s. 8 of the Constitution "to ... provide for the
... general Welfare of the United States" uninhibited by the restricted scope
of its other powers. The famous
controversy between Hamilton (who favoured
the wide view) and Madison (who favoured the narrow view) over Congressional
power, has
been resolved in favour of Hamilton's view by the Supreme Court.
In United States v. Butler it was said [1936] USSC 11; (1936) 297 US 1, at p 66
[1936] USSC 11; (80 Law Ed
477, at p 488) : "... the power of Congress to authorize expenditure of
public moneys for public purposes is not limited
by the direct grants of
legislative power found in the Constitution." (at p420)
37. This decision was referred to in Helvering v. Davis [1937] USSC 118; (1936) 301 US 619 (81
Law Ed 1307) , which upheld the validity of federal
laws providing for old age
pensions (see also Cleveland
v. United States [1945] USSC 2; (1945) 323 US 329 (89 Law Ed
274) and "The Constitution of the United States of America, Analysis and
Interpretation", Senate Document No. 92-82, p. 136). (at p420)
38. In Helvering's Case, the Court concluded that Congress had validly
attempted to deal with a problem which was truly "national
in area and
dimensions" (1936) 301 US, at p 644 (81 Law Ed, at p 1316) . The criterion
suggested was stated thus (1936) 301 US,
at pp 640-641 (81 Law Ed, at p 1315)
:
"The line must still be drawn between one welfare and
another, between particular and general. Where this shall be
placed cannot be known through a formula in advance of the
event. There is a middle ground or certainly a penumbra in
which discretion is at large. The discretion, however, is not
confided to the courts. The discretion belongs to Congress,
unless the choice is clearly wrong, a display of arbitrary
power, not an exercise of judgment ... Nor is the concept of
the general welfare static. Needs that were narrow or parochial
a century ago may be interwoven in our day with the well-being
of the Nation. What is critical or urgent changes with the
times."
39. In our Constitution, there is no requirement of generality as distinct
from particularity in "the purposes of the Commonwealth". The phrase is
equivalent
to the national purposes. As Latham C.J. said in the
Pharmaceutical Benefits Case (1945) 71 CLR, at p 256 :
"I see no reason for limiting the words 'the purposes of the
Commonwealth' to governmental purposes in the sense of the
discharge of legislative, judicial or executive functions. The
word 'Commonwealth' in this section refers to the people who,
by covering cl. 3 of the Constitution, are 'united in a Federal
Commonwealth under the name of the Commonwealth of
Australia'." (at p421)
40. In my opinion, the only constitutional limitations upon the scope of the
spending power are those arising from constitutional
prohibitions such as
those in ss. 92, 116 and 117. Section 81 would not authorize spending in
contravention of any such prohibitions. (at p421)
Specification of the Purpose of the Appropriation.
41. Section 81 of the Constitution provides that all revenue or moneys shall
form one Consolidated Revenue Fund and are to be appropriated for the purposes
of the Commonwealth
"in the manner" imposed by the Constitution. No money is
to be drawn from the Treasury except under appropriation by law (s. 83). (at
p421)
42. Provisions regarding "the manner" of imposition are in ss. 53, 54, 55 and
56. (at p421)
43. The appropriation is not to be made by a law imposing taxation (s. 55).
(at p421)
44. Sections 53, 54 and 56 provide that the form of the proposed law must be
such that it can be seen that the appropriation proposed by the law has been
recommended
by the message of the Governor-General to the House of
Representatives, and that if the appropriation is for the ordinary annual
services of the Government, it deals only with such appropriation. The
provisions are outside the concern of this Court, which is
with laws, not
proposed laws (Osborne v. The Commonwealth [1911] HCA 19; (1911) 12 CLR 321, at p 336 ). (at
p422)
45. The subject of specification has been discussed by Professor Campbell in
"Parliamentary Appropriations", Adelaide Law Review,
vol. 4 (1971-1972), at
pp. 154-155. She refers to State v. Moore (1896) 69 NW 373, at p 376 where
the Supreme Court of Nebraska
stated:
"Having in view the origin and history of appropriations,The Supreme Court of Arizona made a similar statement in Crane v. Frohmiller (1935) 45 P (2d) 955, at p 959 :
as well as the general lexicographic meaning of the word, to
'appropriate' is to set apart from the public revenue a certain
sum of money for a specified object, in such manner that the
executive officers of the Government are authorized to use that
money, and no more, for that object and for no other."
"... in order to constitute a valid appropriation by theIn the Pharmaceutical Benefits Case it was the view of Latham C.J. that a statute would not operate as an appropriation Act unless it defined the purpose for which the money might be spent. He said (1945) 71 CLR, at p 253 :
Legislature, it must, if the appropriation is to be paid from the
general fund, fix at least a maximum amount beyond which
such appropriation may not go, although, if the payment is to
be made only from a special fund which is itself limited in
amount, no limit need be stated in the act authorizing the
expenditure and specifying for what purpose the money is to
be expended."
"... there cannot be appropriations in blank, appropriations
for no designated purpose, merely authorizing expenditure
with no reference to purpose. An Act which merely provided
that a minister or some other person could spend a sum
of money, no purpose of the expenditure being stated, would
not be a valid Appropriation Act." (at p422)
47. In my view, the Constitution does not require any particular degree of
specification of the purpose. With purposes such as defence, intelligence
gathering or
the advance account to the Treasurer it would be highly
inconvenient if it did. (at p422)
48. The purpose of any appropriation may be indicated generally. "One-line"
appropriations are valid. (at p422)
49. Whether a proposed law for appropriation in such form would be acceptable
to the Houses of Parliament is another question. Scrutiny
of the estimates and
comparison of past expenditure with past appropriations is deeply embedded in
parliamentary practice. How that
is done is to be resolved by Parliament
itself. The Constitution does not restrict Parliament in handling its
financial business to observe any precise specification of the purpose. (at
p423)
50. In "The Constitution of the United States, Analysis and Interpretation",
op. cit., at pp. 376-377, it is said that in the United States, the Supreme
Court:
"... has also recognized that Congress has a wide discretion[1937] USSC 97; (1937) 301 US 308, at p 322 [1937] USSC 97; (81 Law Ed 1122, at p 1132) )." (at p423)
with regard to the extent to which it shall prescribe
details of expenditures for which it appropriates funds and
has approved the frequent practice of making general appropriations
of large amounts to be allotted and expended as
directed by designated government agencies. Citing as an
example that Act of June 17, 1902 where all moneys received
from the sale and disposal of public lands in a large number
of States and territories were set aside as a special fund to be
expended under the direction of the Secretary of the Interior
upon such projects as he determined to be practicable and
advisable for the reclamation of arid and semi-arid lands
within those States and territories, the Court declared: 'The
constitutionality of this delegation of authority has never been
seriously questioned'. (Cincinnati Soap Co. v. United States
51. If specification is required, item 530 is sufficiently specific. The
degree of specification conforms entirely to legislative
practice in regard to
appropriations in Australia and elsewhere. (at p423)
Is the Act confined to Appropriation?
52. The Act is simply a general Appropriation Act. It is clearly intended as
a law which appropriates revenue or moneys for the
ordinary annual services of
the Government (Constitution s. 54). (at p423)
53. Section 54 directs that a proposed law for appropriating shall deal only
with that appropriation. The item gave legislative
recognition to the
Australian Assistance Plan and to its scheme of Regional Councils for Social
Development. It appropriated the
sums mentioned, for expenditure for the
purposes mentioned. The Act does not go beyond appropriation as did the
Pharmaceutical Benefits
Act 1944 that dealt with matters (other than
appropriation), which were held to be outside the legislative powers of the
Parliament.
In this Act there is no attempt to exercise coercive or "police
power" even of an incidental nature. (at p423)
Is Separate Legislation Necessary to Validate Expenditure of Appropriated
Moneys?
54. Again the contention of the plaintiffs, if correct, means that almost
seventy-five years of Federal parliamentary practice has
been incorrect. Over
the years hundreds of appropriations have been made and expended on a variety
of purposes without separate
legislation additional to the appropriation.
Separate legislation is not necessary. In some cases it may be desirable and
the Parliament
has enacted such legislation. For example, "the purposes of
the Commonwealth" as determined by Parliament include those for which
the
Commonwealth Scientific and Industrial Research Organization was established
under the Science and Industry Research Act 1949-1973.
Section 25 of that Act
provides:
"... There are payable to the Organisation suchApart from any other sources of constitutional support, that Act is valid as an exercise of the incidental power s. 51 (xxxix.) in relation to appropriation "for the purposes of the Commonwealth". (at p424)
moneys as are appropriated by the Parliament for the
purposes of expenditure by the Organisation under this
Act. ..."
55. The Australian Institute of Marine Science Act 1972-1973 has similar
provisions and is valid on the same basis. (at p424)
56. So also with the numerous programmes, activities and involvement of the
Commonwealth directly or through agencies or by assistance
to private persons
or bodies. (at p424)
57. The incidental power, s. 51(xxxix.), in my opinion, enables legislation to effectuate the expenditure of the moneys, the appropriation of which has been determined by Parliament to be "for the purposes of the Commonwealth" and for which there is no other source of power in the Parliament. Such legislation may be directed to ensuring that the moneys appropriated are spent for the purpose of the appropriation. Such legislation may provide for the expenditure by the Executive Government, or by a corporation or other agency established by the Parliament, or by some other body or person. But such legislation, (not being authorized by a plenary head of legislative power) may not be plenary. Ordinarily it may not impose obligations on persons generally or be coercive (except in a very limited area, for example, to deter misappropriation).
Standing of the Plaintiffs.
58. It is unnecessary in the conclusions which I have reached to decide upon
the objection to the plaintiffs' standing to proceed.
I am inclined to agree
with what has been said by Stephen J. in his reasons in this case that the
State of Victoria and its Attorney-General
have no standing. (at p424)
59. If it were claimed that the appropriation or the expenditure were in
breach of any constitutional prohibition, then the position
might be
different. (at p425)
60. The tendency to exaggerate the standing of an Attorney-General to
challenge legislation or administrative action has been to
the detriment of
private litigants (see S.M. Thio, Locus Standi and Judicial Review (1971), p.
9). The necessity in many cases of
a proceeding by an Attorney-General at the
relation of others is not appropriate to the operation of our judicial system,
especially
as the Attorneys-General of Australia and of the States are
Ministers of State. (at p425)
61. If the Attorney-General of a State is not parens patriae in respect of
federal legislation (see Massachusetts v. Mellon (1923)
262 US, at p 486 (67
Law Ed, at p 1078) ; Florida v. Mellon [1927] USSC 7; (1927) 273 US 12, at p 18 [1927] USSC 7; (71 Law Ed
511, at p 515) ) it is inappropriate
except in special circumstances for the
Attorney-General of Australia to act in
this role in view of his function in
defending federal
legislation. In my opinion, in the adaptation of procedures
to modern circumstances,
the requirements of standing in individual and
representative actions need to be liberalised. (at p425)
62. Whether the State would have sufficient standing to challenge an Act
which is, in truth, an appropriation Act and nothing more,
is a matter which
was reserved in the Pharmaceutical Benefits Case by Latham C.J. (1945) 71 CLR,
at p 248 and by McTiernan J. (1945)
71 CLR, at p 276 . I prefer to reserve
the question for a case where it is necessary for me to reach a concluded
view. (at p425)
63. The disputed appropriation is valid. There is no basis for an injunction
to restrain expenditure pursuant to the appropriation.
(at p425)
64. The plaintiffs' demurrer should be overruled and the action dismissed
with costs. (at p425)
ORDER
Plaintiffs' demurrer overruled.Action dismissed with costs.
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