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Lawson, Charles --- "Re-Invigorating the Accountability and Transparency of the Australian Government's Expenditure" [2008] MelbULawRw 28; (2008) 32(3) Melbourne University Law Review 879

[*] BSc (Hons), LLB (ANU), LLM (QUT), PhD (ANU); Senior Lecturer, Australian Centre for Intellectual Property in Agriculture, Griffith Law School, Griffith University. I acknowledge and appreciate the assistance, guidance and suggestions from Marc Mowbray d’Arbela, Louise O’Neil, the anonymous referees and the Editors, although I accept all responsibility for this work.

[1] Constitution s 86.

[2] Constitution s 88. The Commonwealth did impose uniform customs duties at 4pm on 8 October 1901: Customs Tariff Act 1902 (Cth) s 4. Notably, Western Australia levied customs duty on a reducing scale over a period of five years ‘on goods passing into that State and not originally imported from beyond the limits of the Commonwealth’: Constitution s 95.

[3] Constitution s 89.

[4] Constitution s 93.

[5] Constitution s 94.

[6] See, eg, John Quick and Robert Garran, The Annotated Constitution of the Australian Commonwealth (1901) 812; Victoria v Commonwealth [1975] HCA 52; (1975) 134 CLR 338, 384–7 (Stephen J) (‘Australian Assistance Plan Case’); Combet v Commonwealth (2005) 224 CLR 494, 535–7 (McHugh J).

[7] Various aspects of appropriations have been addressed by others: see, eg, Geoffrey Lindell, ‘The Combet Case and the Appropriation of Taxpayers’ Funds for Political Advertising — An Erosion of Fundamental Principles?’ (2007) 66 Australian Journal of Public Administration 307; Rosemary Laing, ‘Accounting and Accountability’ (2007) 22(1) Australasian Parliamentary Review 19; Charles Lawson, ‘“Special Accounts” under the Constitution: Amounts Appropriated for Designated Purposes’ [2006] UNSWLawJl 18; (2006) 29 University of New South Wales Law Journal 114; Maurice Kennedy, ‘Cheques and Balances’ (Research Paper No 16, Parliamentary Library, Parliament of Australia, 2002); Cheryl Saunders, ‘Parliamentary Appropriations’ in Cheryl Saunders et al (eds), Current Constitutional Problems in Australia (1982) 1–36; Enid Campbell, ‘Parliamentary Appropriations’ [1971] AdelLawRw 7; (1971) 4 Adelaide Law Review 145.

[8] (2005) 224 CLR 494.

[9] For reviews of this decision, see Lindell, above n 7; John Uhr, ‘Appropriations and the Legislative Process’ (2006) 17 Public Law Review 173; Lotta Ziegert, ‘Does the Public Purse Have Strings Attached? Combet and Anor v Commonwealth of Australia and Ors[2006] SydLawRw 19; (2006) 28 Sydney Law Review 387. See also Ernst Willheim, ‘Review of Australian Public Law Developments’ [2006] MelbULawRw 9; (2006) 30 Melbourne University Law Review 269, 286–7.

[10] These were the Hon Greg Combet AM, MP, Member for Charlton and Parliamentary Secretary for Defence Procurement, and the Hon Nicola Roxon MP, Member for Gellibrand and Minister for Health and Ageing.

[11] See Commonwealth, Parliamentary Debates, House of Representatives, 31 October 2005, 9 (Lindsay Tanner); Commonwealth, Parliamentary Debates, House of Representatives, 13 February 2006, 118 (Lindsay Tanner). See also Australian Labor Party, Operation Sunlight: Enhancing Budget Transparency (2006); AAP, ‘Labor Calls for Reforms to the Way Budget Presented’, Australian National News Wire, 23 October 2005.

[12] See Quick and Garran, above n 6, 811.

[13] Ibid.

[14] Ibid.

[15] Ibid.

[16] A contrary view has been expressed by Sir Owen Dixon before the Royal Commission on the Constitution of the Commonwealth of Australia: Commonwealth, Royal Commission on the Constitution of the Commonwealth of Australia, Report (1929). His Honour contemplated that the CRF was ‘a continuous fund that might be appropriated irrespective of the money going into [the CRF including loan moneys]’: see Campbell, above n 7, 149.

[17] At the time of its repeal (by the Audit (Transitional and Miscellaneous) Amendment Act 1997 (Cth) sch 1), the Audit Act 1901 (Cth) s 2 defined ‘public moneys’ as ‘revenue, loan, trust and other moneys received or held by any person for or on behalf of the Commonwealth or a prescribed authority, and includes all moneys forming part of the Consolidated Revenue Funds, the Loan Fund or the Trust Fund’.

[18] Audit Act 1901 (Cth) s 55. Having a separate Loan Fund was required by the Financial Management and Accountability Act 1997 (Cth) s 19 until the Financial Management Legislation Amendment Act 1999 (Cth) sch 1.

[19] Audit Act 1901 (Cth) s 60. The separate Trust Fund was reflected in the Financial Management and Accountability Act 1997 (Cth) ss 201 through the creation of a separate Reserved Money Fund and a Commercial Activities Fund. This was until the Financial Management Legislation Amendment Act 1999 (Cth) sch 1 abolished these sections.

[20] For an illustration of the model showing typical transfers, see Joint Committee of Public Accounts and Audit, Commonwealth Parliament, Inquiry into the Draft Financial Framework Legislation Amendment Bill, Report No 395 (2003) app J.

[21] This was done through cash accounting, and the Department of Finance and Administration also maintained a central ledger dealing with each and every payment made by the Commonwealth. For a description of these arrangements in dealing with trust accounts, see Northern Suburbs General Cemetery Reserve Trust v Commonwealth [1993] HCA 12; (1993) 176 CLR 555, 574–5 (Mason CJ, Deane, Toohey and Gaudron JJ) (‘Cemetery Reserve Case’). For an early account, see Commonwealth, Parliamentary Debates, House of Representatives, 19 June 1901, 1249 (George Turner, Treasurer).

[22] [1908] HCA 68; (1908) 7 CLR 179.

[23] Ibid 186 (Griffith CJ), 191–2 (Barton J), 200–1 (Isaacs J), 203 (Higgins J).

[24] Audit Act 1901 (Cth) s 62A(6). This was an amendment expressly directed to appropriating amounts received in Commonwealth ‘trading’: see Audit Act 1906 (Cth) s 13; Commonwealth, Parliamentary Debates, House of Representatives, 31 July 1906, 2066 (John Forrest, Treasurer).

[25] Surplus Revenue Case [1908] HCA 68; (1908) 7 CLR 179, 186 (Griffith CJ), 191–2 (Barton J), 199 (O’Connor J), 201–2 (Isaacs J), 203 (Higgins J).

[26] Surplus Revenue Act 1908 (Cth) s 4(4)(d).

[27] Surplus Revenue Act 1908 (Cth) s 5. Notably, the Audit Act 1901 (Cth) s 36 provided for all appropriations to lapse at the end of a financial year, subject to some limitations.

[28] Constitution s 94. See also Surplus Revenue Case [1908] HCA 68; (1908) 7 CLR 179, 186–7 (Griffith CJ), 191–2 (Barton J), 197 (O’Connor J), 199 (Isaacs J), 203 (Higgins J).

[29] Surplus Revenue Case [1908] HCA 68; (1908) 7 CLR 179, 191 (Griffith CJ), 196–7 (Barton J), 199 (O’Connor J), 203 (Isaacs J), 206 (Higgins J).

[30] Ibid 190–1 (Griffith CJ). See also at 194 (Barton J), 199 (O’Connor J), 200 (Isaacs J), 206 (Higgins J).

[31] Ibid 191 (Griffith CJ), 203 (Higgins J).

[32] Ibid 196 (Barton J) (‘withdrawn from the Treasury and paid to’), 199 (O’Connor J) (‘paid out’), 201 (Isaacs J) (‘pay it out’).

[33] [1993] HCA 12; (1993) 176 CLR 555.

[34] Other cases also dealt with Audit Act 1901 (Cth) trust accounts, although they do not provide significant insights into the CRF: see, eg, Luton v Lessels [2002] HCA 13; (2002) 210 CLR 333, 349–50 (Gaudron and Hayne JJ).

[35] Cemetery Reserve Case [1993] HCA 12; (1993) 176 CLR 555, 564–6 (Mason CJ, Deane, Toohey and Gaudron JJ), 585–6 (Dawson J).

[36] Training Guarantee (Administration) Act 1990 (Cth) s 3(1).

[37] Training Guarantee (Administration) Act 1990 (Cth) s 32.

[38] Training Guarantee (Administration) Act 1990 (Cth) ss 334.

[39] Cemetery Reserve Case [1993] HCA 12; (1993) 176 CLR 555, 572 (Mason CJ, Deane, Toohey and Gaudron JJ), 581–2 (Brennan J), 590–1 (Dawson J), 600 (McHugh J).

[40] Training Guarantee (Administration) Act 1990 (Cth) ss 33(a)–(b).

[41] Training Guarantee (Administration) Act 1990 (Cth) s 34(1).

[42] Audit Act 1901 (Cth) s 62A(6).

[43] Cemetery Reserve Case [1993] HCA 12; (1993) 176 CLR 555, 572–3 (Mason CJ, Deane, Toohey and Gaudron JJ), 580–1 (Brennan J), 591 (Dawson J), 599 (McHugh J).

[44] Ibid 577–8 (Mason CJ, Deane, Toohey and Gaudron JJ), 584–5 (Brennan J), 593 (Dawson J), 603 (McHugh J).

[45] Ibid 573 (Mason CJ, Deane, Toohey and Gaudron JJ).

[46] Ibid 576–7.

[47] Training Guarantee (Administration) Act 1990 (Cth) s 34(1).

[48] Audit Act 1901 (Cth) s 62A(6).

[49] Cemetery Reserve Case [1993] HCA 12; (1993) 176 CLR 555, 577–8 (Mason CJ, Deane, Toohey and Gaudron JJ).

[50] Ibid 572.

[51] Ibid 591–2.

[52] Ibid 592.

[53] Ibid.

[54] Ibid 593.

[55] Ibid.

[56] Ibid 598–9.

[57] Ibid 599.

[58] Ibid.

[59] Ibid 602.

[60] Ibid 603.

[61] Ibid 584–5.

[62] Presumably, the payments of amounts authorised by ss 33 and 34 of the Training Guarantee (Administration) Act 1990 (Cth) to the Commonwealth are ‘notional’ payments and these amounts remain part of the CRF: see Cemetery Reserve Case [1993] HCA 12; (1993) 176 CLR 555, 583 (Brennan J).

[63] Ibid 583–4.

[64] Ibid 580–1.

[65] Audit (Transitional and Miscellaneous) Amendment Act 1997 (Cth) s 3, sch 1.

[66] ‘Public money’ was defined as ‘money in the custody or under the control of the Commonwealth’ or ‘money in the custody or under the control of any person acting for or on behalf of the Commonwealth in respect of the custody or control of the money’, including ‘money that is held on trust for, or otherwise for the benefit of, a person other than the Commonwealth’: Financial Management and Accountability Act 1997 (Cth) s 5. Notably, ‘special public money’ is a subset of ‘public money’: ss 5, 16(4).

[67] Financial Management and Accountability Act 1997 (Cth) s 18, repealed by Financial Management Legislation Amendment Act 1999 (Cth) s 17. For an illustration of the model showing typical transfers, see Joint Committee of Public Accounts and Audit, above n 20.

[68] ‘Special public money’ is defined as ‘public money that is not held on account of the Commonwealth or for the use or benefit of the Commonwealth’ according to Special Instructions issued by the Finance Minister: Financial Management and Accountability Act 1997 (Cth) s 16. The note to this section provides that ‘[m]oney held on trust for another person is an example of special public money’, although note that the place of the Commonwealth as a trustee of money may not result in that money being outside, or separate from, the CRF.

[69] Financial Management and Accountability Act 1997 (Cth) s 8. Notably, this did not include ‘advances’ made according to s 38.

[70] Financial Management and Accountability Act 1997 (Cth) s 19, repealed by Financial Management Legislation Amendment Act 1999 (Cth) s 17.

[71] Financial Management and Accountability Act 1997 (Cth) s 20, repealed by Financial Management Legislation Amendment Act 1999 (Cth) s 17.

[72] Financial Management and Accountability Act 1997 (Cth) s 21, repealed by Financial Management Legislation Amendment Act 1999 (Cth) s 17.

[73] Commonwealth, Parliamentary Debates, House of Representatives, 12 December 1996, 8345–6 (John Fahey, Minister for Finance); Commonwealth, Parliamentary Debates, Senate, 5 March 1997, 1352 (Ian Campbell, Parliamentary Secretary to the Treasurer).

[74] See Joint Committee of Public Accounts and Audit, above n 20, app J. See also Department of Finance and Administration, ‘Reserved Money Fund (RMF) and Commercial Activities Fund (CAF) — Transition to “Special Accounts”’ (Finance Circular 1999/03, 1999); Department of Finance and Administration, Guidelines for the Management of Special Accounts, Financial Management Guidance No 7 (2003) <http://www.finance.gov.au/publications/fmg-series/docs/Special-Accounts-Guidelines-Final.pdf> .

[75] See Financial Management Legislation Amendment Act 1999 (Cth) sch 1, ss 8, 17.

[76] Financial Management Legislation Amendment Act 1999 (Cth) s 5. See also Explanatory Memorandum, Financial Management Legislation Amendment Bill 1999 (Cth) 6.

[77] Financial Management and Accountability Act 1997 (Cth) ss 20(4), 21(1). The term ‘hypothecated’ also includes situations where the Commonwealth holds money as a genuine trustee for the states as part of a business operation, and so on: see Commonwealth, Proof Committee Hansard, Joint Committee of Public Accounts and Audit, 7 March 2003, PA8 (Ian McPhee, General Manager, Financial Management Group, Department of Finance and Administration).

[78] Commonwealth, Parliamentary Debates, House of Representatives, 10 February 1999, 2284 (Peter Slipper, Parliamentary Secretary to the Minister for Finance and Administration); Commonwealth, Parliamentary Debates, Senate, 22 March 1999, 2914 (Jocelyn Newman, Minister for Family and Community Services and Minister Assisting the Prime Minister for the Status of Women); Minister for Finance and Deregulation, Budget: Agency Resourcing, Budget Paper No 4 (2008) 1. See also Department of Finance and Administration, ‘Appropriations and the Consolidated Revenue Fund’ (Finance Circular No 2004/06, 2004); Australian National Audit Office, Financial Management of Special Appropriations, Audit Report No 15 2004–05 (2004) 32.

[79] Commonwealth, Parliamentary Debates, House of Representatives, 10 February 1999, 2284 (Peter Slipper, Parliamentary Secretary to the Minister for Finance and Administration); Commonwealth, Parliamentary Debates, Senate, 22 March 1999, 2914 (Jocelyn Newman, Minister for Family and Community Services and Minister Assisting the Prime Minister for the Status of Women). See also Senate Standing Committee on Finance and Public Administration, Commonwealth Parliament, Transparency and Accountability of Commonwealth Public Funding and Expenditure (2007) 12, 27–30.

[80] The long title of appropriation Bills now provides: ‘An Act to appropriate money out of the [CRF] for the ordinary annual services of the Government, and for related purposes’ (see, eg, Appropriation Act (No 1) 2007–2008 (Cth)). The earlier long title provided, for example: ‘An Act to appropriate money out of the [CRF] for the service of the year ending on 30 June 2000, and for related purposes’ (see, eg, Appropriation Act (No 1) 1999–2000 (Cth)).

[81] Australian National Audit Office, Financial Management of Special Appropriations, above n 78, 32–3 (emphasis added). See also Commonwealth, Committee Hansard, Senate Finance and Public Administration Legislation Committee (Estimates), 15 February 2005, F&PA 53 (Ian McPhee, General Manager, Financial Management Group); Department of Finance and Administration, ‘Appropriations and the Consolidated Revenue Fund’, above n 78; Joint Committee of Public Accounts and Audit, above n 20, 66–7, app J.

[82] See Explanatory Memorandum, above n 76, 1, 6.

[83] See Commonwealth, Parliamentary Debates, House of Representatives, 10 February 1999, 2284 (Peter Slipper, Parliamentary Secretary to the Minister for Finance and Administration); Commonwealth, Parliamentary Debates, Senate, 22 March 1999, 2913 (Jocelyn Newman, Minister for Family and Community Services and Minister Assisting the Prime Minister for the Status of Women); Explanatory Memorandum, above n 76.

[84] See Kennedy, above n 7, ii.

[85] See Senate Standing Committee on Finance and Public Administration, Transparency and Accountability, above n 79, 6–10. See also Explanatory Memorandum, above n 76, 1, 6.

[86] Financial Management and Accountability Act 1997 (Cth) s 63(3).

[87] See Financial Management and Accountability Act 1997 (Cth) ss 48(1), 63; Financial Management and Accountability Orders (Financial Statements for Reporting Periods Ending on or after 1 July 2007) 2007 (Cth) O 3, sch 1. Notably, a similar situation existed under the Audit Act 1901 (Cth) s 40.

[88] See, eg, the Commonwealth’s Final Budget Outcomes: Department of Finance and Administration, Final Budget Outcome 2006–07 (2007) 46.

[89] See, eg, Appropriation Act (No 1) 2005–2006 (Cth) sch 1 and Portfolio Budget Statements setting out in detail the full cost of the price of outputs forming the appropriation.

[90] Department of Finance and Administration, Consolidated Financial Statements for the Year Ended 30 June 2003 (2003) 160. See also Department of Finance and Administration, Consolidated Financial Statements for the Year Ended 30 June 2007 (2007) 159.

[91] The General Government Sector, in contrast to the Public Non‑Financial Corporations Sector and the Public Financial Corporations Sector, is the ‘[g]overnment departments and agencies that provide non‑market public services and are funded mainly through taxes’: see, eg, Department of Finance and Administration, Consolidated Financial Statements for the Year Ended 30 June 2007, above n 90, 60. See also Australian Bureau of Statistics, Australian System of Government Finance Statistics: Concepts, Sources and Methods, ABS Catalogue No 5514.0.55.001 (2005) 256; Australian Accounting Standards Board, Financial Reporting of General Government Sectors by Governments, AASB 1049 (2006) 29.

[92] That is, bodies under the Commonwealth Authorities and Companies Act 1997 (Cth) that are ‘financially autonomous incorporated Commonwealth bodies that can acquire legal ownership in their own right’: Commonwealth, Parliamentary Debates, House of Representatives, 12 December 1996, 8346 (John Fahey, Minister for Finance).

[93] ‘Special public monies’ are ‘public money that is not held on account of the Commonwealth or for the use or benefit of the Commonwealth’ such as ‘[m]oney held by the Commonwealth on trust for another person’. The Financial Management and Accountability Act 1997 (Cth) ss 5, 16 define ‘public money’ as ‘money in the custody or under the control of the Commonwealth’ or ‘money in the custody or under the control of any person acting for or on behalf of the Commonwealth in respect of the custody or control of the money’, including ‘money that is held on trust for, or otherwise for the benefit of, a person other than the Commonwealth’. See also Minister for Finance and Administration, Special Instruction Regarding Special Public Money 2003/01 (2003); Department of Finance and Administration, ‘Special Instruction Regarding Special Public Money’ (Finance Circular 2003/10, 2003).

[94] Despite this, there have been some recent concerns about the formal requirements of identifying an appropriation and accounting for the expenditure under the appropriation: see, eg, Australian National Audit Office, Financial Management of Special Appropriations, above n 78, 13–14. See also Senate Standing Committee on Finance and Public Administration, Transparency and Accountability, above n 79, 18–19; Senate Standing Committee for the Scrutiny of Bills, Commonwealth Parliament, Fourteenth Report of 2005: Accountability and Standing Appropriations (2005) 271–2.

[95] This now includes investments under Financial Management and Accountability Act 1997 (Cth) s 39 and amounts held by Commonwealth Authorities and Companies Act 1997 (Cth) bodies (except those holding ‘public money’ in respect of that ‘public money’: Financial Management and Accountability Regulations 1997 (Cth) reg 5 sch 1 pt 2). See also Australian National Audit Office, Financial Management of Special Appropriations, above n 78, 65–7 (there are certain bodies established by the Commonwealth Authorities and Companies Act 1997 (Cth) that are able to hold money in their own right). Notably, the amounts collected as taxation under A New Tax System (Goods and Services Tax) Act 1999 (Cth) are now considered to be part of the CRF, although they had previously been considered to be a ‘State tax’ collected by the Commonwealth: see Department of Finance and Administration, Consolidated Financial Statements for the Year Ended 30 June 2007, above n 90, 1; Minister for Finance and Deregulation, Budget: Strategy and Outlook, Budget Paper No 1 (2008) 5–26.

[96] See, eg, Commonwealth, Committee Hansard, Senate Finance and Public Administration Legislation Committee (Estimates), 14 February 2005, F&PA 173 (Brian Boyd). The only concern appears to be the over‑expenditure of an appropriation: see Senate Standing Committee on Finance and Public Administration, Transparency and Accountability, above n 79, 18–19.

[97] Constitution s 93.

[98] Constitution s 94.

[99] This reflects the difficulty of achieving an agreement during the drafting of the Constitution: see Quick and Garran, above n 6, 218–19.

[100] Surplus Revenue Act 1908 (Cth) s 3.

[101] Surplus Revenue Act 1908 (Cth) s 4(3).

[102] Surplus Revenue Act 1908 (Cth) s 4(4)(d).

[103] Surplus Revenue Act 1908 (Cth) s 5.

[104] The details of the arrangements are set out in the Surplus Revenue Case [1908] HCA 68; (1908) 7 CLR 179,

180–1.

[105] Ibid.

[106] Ibid 191 (Griffith CJ), 196–7 (Barton J), 199 (O’Connor J), 202–3 (Isaacs J), 206 (Higgins J). See also Cemetery Reserve Case [1993] HCA 12; (1993) 176 CLR 555.

[107] Surplus Revenue Case [1908] HCA 68; (1908) 7 CLR 179, 181.

[108] The plaintiff contended that the calculation of the Commonwealth’s surplus revenue required the deduction of the revenue and money actually collected from those expended or disbursed, and thus the meaning of ‘expenditure’ in the Constitution s 89 governs the meaning of ‘surplus’ in s 94: see ibid 188–9 (Griffith CJ).

[109] Surplus Revenue Case [1908] HCA 68; (1908) 7 CLR 179, 190–1 (Griffith CJ), 193–4 (Barton J), 199 (O’Connor J), 199–202 (Isaacs J), 205–6 (Higgins J).

[110] Ibid 190–1.

[111] See Cemetery Reserve Case [1993] HCA 12; (1993) 176 CLR 555, 584 (Brennan J), 592 (Dawson J), 600 (McHugh J).

[112] Ibid 584.

[113] See ibid 572–8 (Mason CJ, Deane, Toohey and Gaudron JJ), 590–4 (Dawson J), 597–603 (McHugh J).

[114] This conclusion relies on the proposition that the purpose of s 94 of the Constitution was more than just the return of surplus revenue to the states. While this proposition is open to debate, it seems likely that s 94 and other financial provisions in combination were intended to afford a measure of ‘accountability’, because the states were concerned that the new Commonwealth should be economical with the expenditure of the states’ revenues and moneys: see, eg, Quick and Garran, above n 6, 169–71.

[115] This is a profound rebalancing of the relations between the states and the Commonwealth, essentially placing financial control of the states within the ambit of the Commonwealth: see, eg, Michael Coper, Encounters with the Australian Constitution (1987) 204–42; A J Hannan, ‘Finance and Taxation’ in R Else‑Mitchell (ed), Essays on the Australian Constitution (2nd ed, 1961) 247–73. As a measure of the significance of the amounts of ‘surplus revenue’ that might be involved, the 2008 Budget Papers provided:

The Government … will invest most of the 2007–08 and 2008–09 Budget surpluses in three new funds for education, health and infrastructure for long‑term investment to build a modern nation … An underlying cash surplus of $21.7 billion (1.8 per cent of GDP) is expected in 2008–09 — the largest surplus as a proportion of GDP since 1999–00 — with further strong surpluses projected in the following three years.

Minister for Finance and Deregulation, Budget: Strategy and Outlook, above n 95, 1‑1 (emphasis added).

[116] Section 3 of the Surplus Revenue Act 1908 (Cth) provides for the effective ceasing of s 93 of the Constitution. Section 3 of the Surplus Revenue Act 1910 (Cth) also provides for the effective ceasing of s 87 of the Constitution. To comply with s 94 of the Constitution, s 5 of the States Grants Act 1927 (Cth) provides that the

Treasurer shall pay to the several States of the Commonwealth, in proportion to the number of their people, any surplus revenue in his hands at the close of the financial year commencing on the first day of July One thousand nine hundred and twenty‑seven, and at the close of each financial year thereafter.

See also Australian Assistance Plan Case [1975] HCA 52; (1975) 134 CLR 338, 358 (Barwick CJ); Australian National Audit Office, Financial Management of Special Appropriations, above n 78, 38.

[117] Joint Committee of Public Accounts and Audit, Commonwealth Parliament, Review of the Financial Management and Accountability Act 1997 and the Commonwealth Authorities and Companies Act 1997, Report No 374 (1999) 12.

[118] This change in the federation’s fiscal balance (comprising the ‘vertical fiscal imbalance’ and ‘horizontal fiscal equalisation’ — see Minister for Finance and Deregulation, Budget: Agency Resourcing, Budget Paper No 3 (2008) 3–4 — has affected some of the High Court’s deliberations: see, eg, Australian Assistance Plan Case [1975] HCA 52; (1975) 134 CLR 338, 354–8 (Barwick CJ). For an overview of these financial expenditure arrangements, and in particular the role of the Constitution s 96, see C A Saunders, ‘The Development of the Commonwealth Spending Power’ [1978] MelbULawRw 4; (1978) 11 Melbourne University Law Review 369, 389–96. Notably, the term ‘may’ in the Constitution s 94 has a ‘mandatory’ faculty: see Australian Assistance Plan Case [1975] HCA 52; (1975) 134 CLR 338, 358–9 (Barwick CJ).

[119] Minister for Finance and Deregulation, Budget: Agency Resourcing, above n 118, 3 (emphasis added). Notably, the states rely on Commonwealth financial assistance to meet between 40–80 per cent of their average funding requirement, and this is made up of all GST revenue, more than 90 different payments for specific purposes and a small amount of other general revenue assistance: at 3. None of this is now characterised as ‘surplus revenue’.

[120] See Financial Management and Accountability Act 1997 (Cth) s 39.

[121] See Australian National Audit Office, Financial Management of Special Appropriations, above n 78, 37–8.

[122] Ibid 38, citing the advice from the Department of Finance and Administration in October 2004. See also Treasury, Commonwealth Parliament, Annual Report 2006–07 (2007) 229; Treasury, Commonwealth Parliament, Annual Report 2005–06 (2006) 232; Treasury, Commonwealth Parliament, Annual Report 2004–05 (2005) 216; Treasury, Commonwealth Parliament, Annual Report 2003–04 (2004) 247–8.

[123] There does not appear to have been such a request since 1910: see Australian National Audit Office, Financial Management of Special Appropriations, above n 78, 37; Commonwealth, Committee Hansard, Senate Finance and Public Administration Legislation Committee (Estimates), 15 February 2005, F&PA 66 (Ian Watt).

[124] See Australian National Audit Office, Financial Management of Special Appropriations, above n 78, 32–3; Department of Finance and Administration, ‘Appropriations and the Consolidated Revenue Fund’, above n 78; Kennedy, above n 7, 34–8.

[125] Notably, in addition to these appropriations there are other appropriation‑like arrangements such as the non‑lapsing of appropriations carrying amounts across years, tax expenditures and, until recently, the Goods and Services Tax: see Senate Standing Committee on Finance and Public Administration, Transparency and Accountability, above n 79, 27–36.

[126] These are appropriations by Acts other than the annual appropriations Acts and which generally continue for longer than a financial year: see Senate Standing Committee on Finance and Public Administration, Transparency and Accountability, above n 79, 15–18. Notably, this form of appropriation now accounts for approximately 80 per cent of amounts appropriated: see Senate Standing Committee for the Scrutiny of Bills, above n 94, 270.

[127] These are mechanisms in Acts or determinations used to record amounts in the CRF that are set aside for designated purposes with a Standing Appropriation up to the balance of the Special Account: Financial Management and Accountability Act 1997 (Cth) ss 201. See also Senate Standing Committee on Finance and Public Administration, Transparency and Accountability, above n 79, 19–21.

[128] These are mechanisms used to direct amounts received from non‑appropriated sources to appropriated ‘departmental items’ that are appropriated (according to ‘net appropriations’) in the annual appropriation Acts: Financial Management and Accountability Act 1997 (Cth) s 31. See also Senate Standing Committee on Finance and Public Administration, Transparency and Accountability, above n 79, 22–6; Australian National Audit Office, Management of Net Appropriation Agreements, Audit Report No 28 2005–06 (2005).

[129] This is a mechanism whereby the annual appropriation Acts authorise the Finance Minister to approve expenditure as a contingency for urgent funding ‘where the appropriated funds prove to be insufficient or a new appropriation is required’: Senate Standing Committee on Finance and Public Administration, Transparency and Accountability, above n 79, 33–5.

[130] Recoverable GST refers to the amounts of recoverable GST incurred by agencies that is added to their annual appropriation act appropriations: Financial Management and Accountability Act 1997 (Cth) s 30A. See also ibid 36–7.

[131] Notably, Auckland Harbour Board v The King [1924] AC 318, 326 (Viscount Haldane) is commonly cited as authority for the proposition that an ‘appropriation made by law’ is necessary: see, eg, Combet v Commonwealth (2005) 224 CLR 494, 597–8 (Kirby J); Cemetery Reserve Case [1993] HCA 12; (1993) 176 CLR 555, 597 (McHugh J); Brown v West (1990) 169 CLR 195, 205 (Mason CJ, Brennan, Deane, Dawson and Toohey JJ); Australian Assistance Plan Case [1975] HCA 52; (1975) 134 CLR 338, 392 (Mason J). However, this may not be so certain, as it has been stated that ‘no money can be taken out of the consolidated Fund into which the revenues of the State have been paid, excepting under a distinct authorisation from Parliament itself’ (Auckland Harbour Board v The King [1924] AC 318, 326 (Viscount Haldane)), the term ‘authorisation’ arguably including something less than a ‘law’, while what is required is probably something more than just a ‘vote or resolution of either or both Houses of the Parliament’: Combet v Commonwealth (2005) 224 CLR 494, 558 (Gummow, Hayne, Callinan and Heydon JJ).

[132] Theoretically, there may be money that was part of the CRF but was moved out of the CRF with a relevant appropriation while remaining part of the ‘Treasury of the Commonwealth’ (satisfying the requirements of s 81 of the Constitution) that the government seeks to expend that will not be captured by this provision, although an appropriation law will still be required (to satisfy the requirements of s 83 of the Constitution).

[133] Constitution s 81. The High Court has been unable to define the terms ‘in the manner’ and ‘subject to the charges and liabilities’ in s 81: see A‑G (Vic) ex rel Dale v Commonwealth [1945] HCA 30; (1945) 71 CLR 237, 253 (Latham CJ) (‘Pharmaceutical Benefits Case’).

[134] One issue of construction is where the source of power to appropriate is contained in the Constitution. Today, this is almost certainly settled as being within s 81 of the Constitution: see Australian Assistance Plan Case [1975] HCA 52; (1975) 134 CLR 338, 392 (Mason J); Australian Woollen Mills Pty Ltd v Commonwealth [1954] HCA 20; (1954) 92 CLR 424, 454 (Dixon CJ, Williams, Webb, Fullagar and Kitto JJ).

[135] See Constitution ss 48, 66, 72(iii), 834, 85(iii)–(iv), 87, 89, 934, 105105A, 122. Whether these do effect an appropriation is not settled: see, eg, Australian Assistance Plan Case [1975] HCA 52; (1975) 134 CLR 338, 353 (Barwick CJ) and accompanying footnotes. See also Brown v West (1990) 169 CLR 195, 205 (Mason CJ, Brennan, Deane, Dawson and Toohey JJ).

[136] That s 81 (and s 83) of the Constitution refers only to ‘appropriated’ (and ‘appropriation’) has caused the High Court concern as to how this ought to be construed. This concern has focused on whether within these sections there is a requirement for there to be a separate power to ‘expend’ any amounts appropriated: see Pharmaceutical Benefits Case [1945] HCA 30; (1945) 71 CLR 237, 251 (Latham CJ); Australian Assistance Plan Case [1975] HCA 52; (1975) 134 CLR 338, 392 (Mason J). See also Saunders, ‘The Development of the Commonwealth Spending Power’, above n 118, 396–407.

[137] Another related question is determining who has standing to bring such an action: see Lawson, ‘“Special Accounts” under the Constitution’, above n 7, 128–9.

[138] See Saunders, ‘The Development of the Commonwealth Spending Power’, above n 118, 375–9. Notably, at the time of the Constitutional Conventions early commentators were also uncertain about the scope and likely interpretation of these provisions: see, eg, W Harrison Moore, Constitution of the Commonwealth of Australia (2nd ed, 1910) 524–5 (limited to ‘federal purposes’); John Quick, The Legislative Powers of the Commonwealth and the States of Australia (1919) 43 (‘any purpose under the sun’); Quick and Garran, above n 6, 666 (‘the purposes in respect of which the Parliament can make laws’).

[139] Note that if the purpose is identifiable within the legislative powers of the Commonwealth, there is plainly power to appropriate (and expend): see Australian Woollen Mills Pty Ltd v Commonwealth [1954] HCA 20; (1954) 92 CLR 424, 454 (Dixon CJ, Williams, Webb, Fullagar and Kitto JJ); Davis v Commonwealth [1988] HCA 63; (1988) 166 CLR 79, 95 (Mason CJ, Deane and Gaudron JJ), 104 (Wilson and Dawson JJ), 114–15 (Brennan J). Nevertheless, the Commonwealth Parliament has regularly legislated to appropriate for schemes beyond its powers, such as arctic exploration, medical research, literary grants and pensions, public health and giving assistance to distressed Australians: see Pharmaceutical Benefits Case [1945] HCA 30; (1945) 71 CLR 237, 254 (Latham CJ).

[140] The term ‘purposes of the Commonwealth’ was addressed in passing in the Surplus Revenue Case [1908] HCA 68; (1908) 7 CLR 179, 192 (Barton J), 200 (Isaacs J). In that case, the justices accepted the purposes of the Old‑Age Pensions Appropriation Act 1908 (Cth) and the Coast Defence Appropriation Act 1908 (Cth) as being within the Constitution’s legislative powers.

[141] See Pharmaceutical Benefits Case [1945] HCA 30; (1945) 71 CLR 237, 246 (Latham CJ).

[142] Audit Act 1901 (Cth) s 62A.

[143] Pharmaceutical Benefits Case [1945] HCA 30; (1945) 71 CLR 237, 249 (Latham CJ). See further at 264 (Starke J), 280 (Williams J).

[144] Pharmaceutical Benefits Act 1944 (Cth) s 17. See ibid 249 (Latham CJ), 264 (Starke J), 267–8 (Dixon J), 279–80 (Williams J).

[145] See Pharmaceutical Benefits Case [1945] HCA 30; (1945) 71 CLR 237, 248–9 (Latham CJ), 264 (Starke J), 267 (Dixon J), 273 (McTiernan J), 276 (Williams J).

[146] Ibid 252 (Latham CJ). See further at 276 (Williams J).

[147] Ibid 252 (Latham CJ), 265 (Starke J), 269 (Dixon J), 280–1 (Williams J).

[148] Ibid 249–50 (Latham CJ), 265 (Starke J), 268 (Dixon J).

[149] Ibid 253.

[150] Ibid 254.

[151] Ibid 256. Notably, this argument was made with respect to a similarly ‘general power’ subject to one qualification in s 51 of the Constitution to make tax laws subject to being for the peace, order and good government of the Commonwealth. That too was considered to be a matter that ‘depends entirely upon the will of the Commonwealth Parliament’, and ‘entirely a political matter’: at 255–6.

[152] Pharmaceutical Benefits Case [1945] HCA 30; (1945) 71 CLR 237, 256.

[153] Ibid 256–7.

[154] Ibid 258–63.

[155] Ibid 273.

[156] Ibid 274.

[157] Ibid 274–5.

[158] Ibid 275.

[159] Ibid 266, citing Harrison Moore, above n 138, 523–7 (Moore was of the opinion that the power was limited to ‘federal purposes’).

[160] Pharmaceutical Benefits Case [1945] HCA 30; (1945) 71 CLR 237, 271–2 (Dixon J), 264 (Rich J).

[161] Ibid 267.

[162] Ibid 268–9.

[163] Ibid 270.

[164] Ibid. Significantly, Dixon J accepted (at 269) that:

Even upon the footing that 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 [the implied nationhood power] …

[165] Ibid 282.

[166] [1975] HCA 52; (1975) 134 CLR 338.

[167] Appropriation Act (No 1) 1974–75 (Cth) s 3, sch 2 div 530 no 4. See Australian Assistance Plan Case [1975] HCA 52; (1975) 134 CLR 338, 344–5 (Barwick CJ), 366 (McTiernan J), 376 (Gibbs J), 398 (Mason J), 402 (Jacobs J), 416 (Murphy J).

[168] The Committee of the Social Welfare Commission was an entity established under the Social Welfare Commission Act 1973 (Cth): see Australian Assistance Plan Case [1975] HCA 52; (1975) 134 CLR 338, 345–6 (Barwick CJ), 407 (Jacobs J).

[169] Australian Assistance Plan Case [1975] HCA 52; (1975) 134 CLR 338, 346–52 (Barwick CJ), 376–8 (Gibbs J), 400 (Mason J), 403–5 (Jacobs J).

[170] Ibid 352–3 (Barwick CJ), 407 (Jacobs J).

[171] Ibid 345, 351–3 (Barwick CJ), 376 (Gibbs J), 399–401 (Mason J).

[172] Ibid 345, 353–4 (Barwick CJ), 366–7 (McTiernan J), 375–6 (Gibbs J), 391 (Mason J), 410 (Jacobs J), 417 (Murphy J).

[173] Ibid 355–6.

[174] Ibid 357.

[175] Ibid 358.

[176] Ibid 357–8.

[177] Ibid 360–1.

[178] Ibid 363.

[179] Ibid 364.

[180] Ibid 373–4.

[181] Ibid 378.

[182] Ibid 375.

[183] Ibid 396.

[184] Ibid 393.

[185] Ibid 396.

[186] Ibid 400.

[187] Ibid 402.

[188] Ibid 369, citing Pharmaceutical Benefits Case [1945] HCA 30; (1945) 71 CLR 237, 256 (Latham CJ). Perhaps McTiernan J’s citing of Latham CJ’s reasoning should be viewed with caution. In his reasoning, Latham CJ was careful to distinguish between the legislative power of the Commonwealth to make appropriation laws and its powers to make other laws about subject matter outside the Constitution by relying on that subject matter being incidental to the appropriation power: see Pharmaceutical Benefits Case [1945] HCA 30; (1945) 71 CLR 237, 263 (Latham CJ).

[189] Australian Assistance Plan Case [1975] HCA 52; (1975) 134 CLR 338, 369–70 (McTiernan J).

[190] Ibid 411.

[191] Ibid.

[192] Ibid 412.

[193] Ibid.

[194] Ibid 413–14.

[195] Ibid. In respect of the implied nationhood power, see Pharmaceutical Benefits Case [1945] HCA 30; (1945) 71 CLR 237, 269 (Dixon J).

[196] Australian Assistance Plan Case [1975] HCA 52; (1975) 134 CLR 338, 417.

[197] Ibid 417–18.

[198] Ibid 421.

[199] Ibid 370 (McTiernan J).

[200] Ibid 384 (Stephen J) (citations omitted).

[201] Ibid 363 (Barwick CJ), 375 (Gibbs J); Pharmaceutical Benefits Case [1945] HCA 30; (1945) 71 CLR 237, 266 (Starke J), 267 (Dixon J), 282 (Williams J). See also Australian Woollen Mills Pty Ltd v Commonwealth [1954] HCA 20; (1954) 92 CLR 424, 454 (Dixon CJ, Williams, Webb, Fullagar and Kitto JJ). Notably in Davis v Commonwealth [1988] HCA 63; (1988) 166 CLR 79, 96, Mason CJ, Deane and Gaudron JJ referred to the Australian Assistance Plan Case as standing for ‘the proposition that the validity of an appropriation act is not ordinarily susceptible to effective legal challenge’. For further commentary about the constraints on the process of appropriation, see Lawson, ‘“Special Accounts” under the Constitution’, above n 7, 127–9.

[202] Australian Assistance Plan Case [1975] HCA 52; (1975) 134 CLR 338, 368–9 (McTiernan J), 396 (Mason J), 410–11 (Jacobs J), 417 (Murphy J); Pharmaceutical Benefits Case [1945] HCA 30; (1945) 71 CLR 237, 254–6 (Latham CJ), 273–4 (McTiernan J). See also Davis v Commonwealth [1988] HCA 63; (1988) 166 CLR 79, 95–6 (Mason CJ, Deane and Gaudron JJ); Australian Constitutional Commission, Final Report of the Constitutional Commission (1988) vol 2, 831–4.

[203] Pharmaceutical Benefits Case [1945] HCA 30; (1945) 71 CLR 237, 266 (Starke J), 269 (Dixon J); Australian Assistance Plan Case [1975] HCA 52; (1975) 134 CLR 338, 361–2 (Barwick CJ), 412 (Jacobs J). Notably, Mason J in the Australian Assistance Plan Case suggests that a narrow interpretation has potentially significant consequences (at 394):

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.

[204] Relevantly, these reforms introduced accrual budgeting and outcomes and output appropriations: see Department of Finance and Administration, Specifying Outcomes and Outputs: The Commonwealth’s Accrual‑Based Outcomes and Outputs Framework (1999).

[205] Combet v Commonwealth (2005) 224 CLR 494, 526 (Gleeson CJ), 540 (McHugh J), 562 (Gummow, Hayne, Callinan and Heydon JJ).

[206] Ibid 521 (Gleeson CJ), 533–5 (McHugh J), 558–9 (Gummow, Hayne, Callinan and Heydon JJ), 581–5 (Kirby J).

[207] Ibid 568 (Gummow, Hayne, Callinan and Heydon JJ).

[208] Ibid 553–4 (McHugh J), 614–15 (Kirby J).

[209] Ibid 568–9 (Gummow, Hayne, Callinan and Heydon JJ).

[210] Ibid 568.

[211] Ibid 577 (citations omitted) (emphasis in original).

[212] Ibid 522, citing Pharmaceutical Benefits Case [1945] HCA 30; (1945) 71 CLR 237, 254 (Latham CJ). Notably, this was also the view favoured by Mason J in Australian Assistance Plan Case [1975] HCA 52; (1975) 134 CLR 338, 396.

[213] See Australian Assistance Plan Case [1975] HCA 52; (1975) 134 CLR 338, 368–9 (McTiernan J), 384 (Stephen J), 396 (Mason J), 410–11 (Jacobs J), 417 (Murphy J); Pharmaceutical Benefits Case [1945] HCA 30; (1945) 71 CLR 237, 254–6 (Latham CJ), 273–4 (McTiernan J). See also Surplus Revenue Case [1908] HCA 68; (1908) 7 CLR 179, 200 (Isaacs J).

[214] Australian Constitutional Commission, above n 202, 831, 834.

[215] See Combet v Commonwealth (2005) 224 CLR 494, 522 (Gleeson CJ); Brown v West (1990) 169 CLR 195, 209 (Mason CJ, Brennan, Deane, Dawson and Toohey JJ); Australian Assistance Plan Case [1975] HCA 52; (1975) 134 CLR 338, 360 (Barwick CJ), 369 (McTiernan J), 375–6 (Gibbs J), 394 (Mason J), 404 (Jacobs J), 421 (Murphy J).

[216] Pharmaceutical Benefits Case [1945] HCA 30; (1945) 71 CLR 237, 253 (Latham CJ). See also Surplus Revenue Case [1908] HCA 68; (1908) 7 CLR 179, 200 (Isaacs J); Commonwealth v Colonial Ammunition Co Ltd [1924] HCA 5; (1924) 34 CLR 198, 224 (Isaacs and Rich JJ); Cemetery Reserve Case [1993] HCA 12; (1993) 176 CLR 555, 600 (McHugh J).

[217] See, eg, Pharmaceutical Benefits Case [1945] HCA 30; (1945) 71 CLR 237, 267 (Dixon J). See also Australian Assistance Plan Case [1975] HCA 52; (1975) 134 CLR 338, 375 (Gibbs J).

[218] Australian Assistance Plan Case [1975] HCA 52; (1975) 134 CLR 338, 360 (Barwick CJ). See also at 375 (Gibbs J), 394 (Mason J), 404 (Jacobs J), 422 (Murphy J); Combet v Commonwealth (2005) 224 CLR 494, 522 (Gleeson CJ), 554 (McHugh J), 577 (Gummow, Hayne, Callinan and Heydon JJ), 597 (Kirby J); Pharmaceutical Benefits Case [1945] HCA 30; (1945) 71 CLR 237, 253 (Latham CJ); Surplus Revenue Case [1908] HCA 68; (1908) 7 CLR 179, 192 (Barton J), 200 (Isaacs J).

[219] Brown v West (1990) 169 CLR 195, 208 (Mason CJ, Brennan, Deane, Dawson and Toohey JJ). See also Combet v Commonwealth (2005) 224 CLR 494, 522 (Gleeson CJ), 553–4 (McHugh J), 577 (Gummow, Hayne, Callinan and Heydon JJ), 614–15 (Kirby J); Cemetery Reserve Case [1993] HCA 12; (1993) 176 CLR 555, 576–7 (Mason CJ, Deane, Toohey and Gaudron JJ), 582 (Brennan J), 593 (Dawson J), 600 (McHugh J); Australian Assistance Plan Case [1975] HCA 52; (1975) 134 CLR 338, 404 (Jacobs J).

[220] Cemetery Reserve Case [1993] HCA 12; (1993) 176 CLR 555, 600 (McHugh J), citing in contrast Fisher v The Queen [1901] VicLawRp 38; (1901) 26 VLR 781, 800 (Madden CJ).

[221] Brown v West (1990) 169 CLR 195, 212 (Mason CJ, Brennan, Deane, Dawson and Toohey JJ).

[222] Ibid 199.

[223] Ibid 199–200.

[224] Ibid.

[225] The supply Acts were Acts appropriating the CRF for use in the financial year pending the passing of appropriation Acts, whereupon the aforementioned Acts ceased to have effect. The Supply Act (No 1) 1989–90 (Cth) provisions were repeated in the Appropriation Act (No 1) 1989–90 (Cth) whereupon the Supply Act (No 1) 1989–90 (Cth) then ceased to have effect: see New South Wales v Bardolph (1934) 52 CLR 455, 479 (Evatt J); Brown v West (1990) 169 CLR 195, 206–7, 209–210 (Mason CJ, Brennan, Deane, Dawson and Toohey JJ). From 1994, with the change to a financial year, the supply Acts ceased to be necessary: see Commonwealth, The Commonwealth Budget: Process and Presentation, Parliamentary Library Research Paper No 6 (2003).

[226] Brown v West (1990) 169 CLR 195, 200 (Mason CJ, Brennan, Deane, Dawson and Toohey JJ).

[227] Ibid 200, 209–11.

[228] Ibid 209.

[229] Ibid 201–5.

[230] Ibid 205–12.

[231] Ibid 201–5, 212.

[232] This conclusion was reached after considering ss 53 and 54 of the Constitution, highlighting the distinction between appropriations for the ‘ordinary annual services of the Government’ and other appropriations, and the Parliamentary practice of separating out the classes of appropriations according to different supply Acts: ibid 205–7, 211.

[233] Brown v West (1990) 169 CLR 195, 205–7, 211–12 (Mason CJ, Brennan, Deane, Dawson and Toohey JJ).

[234] Ibid 212.

[235] Ibid 208.

[236] Combet v Commonwealth (2005) 224 CLR 494, 526 (Gleeson CJ), 540 (McHugh J), 562 (Gummow, Hayne, Callinan and Heydon JJ).

[237] For an overview of these developments, see Department of Finance and Administration, Specifying Outcomes and Outputs, above n 204.

[238] Combet v Commonwealth (2005) 224 CLR 494, 523.

[239] Ibid 526 (Gleeson CJ), 531, 540 (McHugh J), 560, 562 (Gummow, Hayne, Callinan and Heydon JJ), 579–80 (Kirby J).

[240] Ibid 531 (Gleeson CJ), 531 (McHugh J), 579 (Gummow, Hayne, Callinan and Heydon JJ).

[241] Ibid 568 (Gummow, Hayne, Callinan and Heydon JJ).

[242] Ibid 566.

[243] Ibid 568.

[244] Ibid 529–30 (Gleeson CJ):

Provided such statements are not so general, or abstract, as to be without meaning, they represent Parliament’s lawful choice as to the manner in which it identifies the purpose of an appropriation. … If Parliament formulates the purposes of appropriation in broad, general terms, then those terms must be applied with the breadth and generality they bear.

See also at 577 (Gummow, Hayne, Callinan and Heydon JJ) (citations omitted):

It is for the Parliament to identify the degree of specificity with which the purpose of an appropriation is identified. … [T]he manner of exercising that guardianship, within the relevant constitutional limits, is to be determined by the Parliament.

[245] Ibid 577 (Gummow, Hayne, Callinan and Heydon JJ).

[246] Ibid 523.

[247] Ibid 521–2, citing Re Patterson; Ex parte Taylor (2001) 207 CLR 391, 401–3 (Gleeson CJ).

[248] These forms of appropriation were present in ss 10 (net appropriations) and 12 (Advance to the Finance Minister) of the Appropriation Act (No 1) 2005–2006 (Cth).

[249] Appropriation Act (No 1) 2008–2009 (Cth) s 14(1); Appropriation Act (No 2) 2008–2009 (Cth) s 15(1). See also Explanatory Memorandum, Appropriation Bill (No 1) 2008–2009 (Cth) 15–16; Senate Standing Committee on Finance and Public Administration, Transparency and Accountability, above n 79, 33–5; Australian Government, Issues from the Advance to the Finance Minister as a Final Charge: For the Year Ended 30 June 2006 (2006) and the same titles from previous years; Senate Standing Committee on Finance and Government Operations, Commonwealth Parliament, Advance to the Minister for Finance (1979).

[250] See Appropriation Act (No 1) 2008–2009 (Cth) s 14(4); Appropriation Act (No 2) 2008–2009 (Cth) s 15(4). Notably, the Senate does consider these appropriations, however, it is unable to express dissatisfaction as rejecting them does not remove their authorisation: Harry Evans, Odgers’ Australian Senate Practice (11th ed, 2004) 273.

[251] Combet v Commonwealth (2005) 224 CLR 494, 577 (Gummow, Hayne, Callinan and Heydon JJ).

[252] Brown v West (1990) 169 CLR 195, 200 (Mason CJ, Brennan, Deane, Dawson and Toohey JJ).

[253] Ibid 211.

[254] Supply Act (No 2) 1989–90 (Cth) s 3 sch 2 div 868.

[255] See Appropriation Act (No 1) 2008–2009 (Cth) s 13; Financial Management and Accountability Act 1997 (Cth) s 31. See also Explanatory Memorandum, Appropriation Bill (No 1) 2008–2009 (Cth), 14–5; Senate Standing Committee on Finance and Public Administration, Transparency and Accountability, above n 79, 22–7; Australian National Audit Office, Management of Net Appropriation Agreements, above n 128.

[256] See Appropriation Act (No 1) 2008–2009 (Cth) s 14(2).

[257] See Legislative Instruments Act 2003 (Cth) s 44(2) item 38; Appropriation Act (No 1)

2008–2009 (Cth) s 14(4).

[258] This also assumes that the proposed appropriation law has, in the same session, been recommended by a message of the Governor‑General to the Parliament: Constitution s 56.

[259] See, eg, Appropriation Act (No 1) 2008–2009 (Cth), which dealt with the ‘ordinary annual services of the Government’, and Appropriation Act (No 2) 2008–2009 (Cth), which dealt with expenditure other than the ‘ordinary annual services of the Government’. Notably, additional appropriation Acts also maintain the distinction by subsequent numbering (see, eg, Appropriation Act (No 3) 2008–2009 (Cth); Appropriation Act (No 4) 2008–2009 (Cth)): Evans, above n 250, 271–2.

[260] Constitution s 53. Notably, the Senate sends a request to the House of Representatives asking the House to amend such a Bill: see Evans, above n 250, 270.

[261] Constitution s 54.

[262] See, eg, Senate Standing Committee on Finance and Public Administration, Transparency and Accountability, above n 79, 37–42; Evans, above n 250, 282–4.

[263] Appropriations and Staffing Committee, Commonwealth Parliament, Annual Report 2006–07 (2007) 1–2, app 1; Appropriations and Staffing Committee, Commonwealth Parliament, Annual Report 2005–06 (2006) 2, app 1. See also Senate Standing Committee on Finance and Public Administration, Transparency and Accountability, above n 79, 37–42.

[264] See Commonwealth, Parliamentary Debates, Senate, 22 April 1999, 4198 (motion adopting Senate Appropriations to which the Staffing Committee agreed). See also Appropriations and Staffing Committee, Senate, Thirtieth Report (1999) 3; Minister for Finance and Deregulation, Budget: Agency Resourcing, above n 78, 1; Appropriations and Staffing Committee, Annual Report 2006–07, above n 263; Appropriations and Staffing Committee, Annual Report 2005–06, above n 263. Notably, there remains some dispute about the division of content between the appropriation Acts: see, eg, Evans, above n 250, 272 (and 2008 supplement); Senate Standing Committee on Finance and Public Administration, Transparency and Accountability, above n 79, 37–42; Senate Standing Committee on Finance and Public Administration, Commonwealth Parliament, Annual Reports (No 2 of 2007) (2007) 7–8.

[265] The Senate has, in the past, exercised this authority: see Evans, above n 250, 271 (and 2008 supplement).

[266] Constitution s 53. See also Evans, above n 250, 299–307.

[267] See Commonwealth, Parliamentary Debates, Senate, 19 March 2008, 1344–8 (Andrew Murray); Commonwealth, Parliamentary Debates, Senate, 20 March 2008, 1410 (John Faulkner, Special Minister of State).

[268] Notably under Constitution ss 534, the intra‑mural activities of the Parliament are not justiciable: see Osborne v Commonwealth [1911] HCA 19; (1911) 12 CLR 321, 336 (Griffith CJ), 351–2 (Barton J), 355–6 (O’Connor J); Buchanan v Commonwealth [1913] HCA 29; (1913) 16 CLR 315, 329 (Barton ACJ); Cormack v Cope (1974) 131 CLR 432, 454 (Barwick J); Victoria v Commonwealth [1975] HCA 39; (1975) 134 CLR 81, 184 (Mason J); Australian Assistance Plan Case [1975] HCA 52; (1975) 134 CLR 338, 421–2 (Murphy J); Air Caledonie International v Commonwealth [1988] HCA 61; (1988) 165 CLR 462, 471 (Mason CJ, Wilson, Brennan, Deane, Dawson, Toohey and Gaudron JJ); Western Australia v Commonwealth [1995] HCA 47; (1994) 183 CLR 373, 482 (Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ); Cemetery Reserve Case [1993] HCA 12; (1993) 176 CLR 555, 578 (Mason CJ, Deane, Toohey and Gaudron JJ), 585 (Brennan J), 594 (Dawson J); Permanent Trustee Australia Ltd v Commissioner of State Revenue (2004) 220 CLR 388, 409–10 (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ). See also Combet v Commonwealth (2005) 224 CLR 494, 535–8 (McHugh J), 572–5 (Gummow, Hayne, Callinan and Heydon JJ), 598–604 (Kirby J); Brown v West (1990) 169 CLR 195, 211 (Mason CJ, Brennan, Deane, Dawson and Toohey JJ).

[269] Brown v West (1990) 169 CLR 195, 200 (Mason CJ, Brennan, Deane, Dawson and Toohey JJ).

[270] Ibid 209–11.

[271] Ibid 211. See also Cemetery Reserve Case [1993] HCA 12; (1993) 176 CLR 555, 578–9 (Mason CJ, Deane, Toohey and Gaudron JJ), 585 (Brennan J), 594 (Dawson J), 603 (McHugh J).

[272] Combet v Commonwealth (2005) 224 CLR 494, 521 (Gleeson CJ), 531–2 (McHugh J), 559 (Gummow, Hayne, Callinan and Heydon JJ), 579–80 (Kirby J). However, it is important to note that the major argument was about the construction of the Appropriation Act (No 1) 2005–2006 (Cth).

[273] Combet v Commonwealth (2005) 224 CLR 494, 531 (Gleeson CJ), 575–6 (Gummow, Hayne, Callinan and Heydon JJ). Notably, Gleeson CJ stated that ‘departmental expenditure’, being expenditure for the ‘ordinary annual services of the Government’, does not include ‘expenditure which is so clearly unrelated to the business of the Department that it could not rationally be regarded as expenditure for the purpose of that business’: at 529.

[274] Ibid 575–6 (Gummow, Hayne, Callinan and Heydon JJ).

[275] See Brown v West (1990) 169 CLR 195, 206–8 (Mason CJ, Brennan, Deane, Dawson and Toohey JJ). See also Cemetery Reserve Case [1993] HCA 12; (1993) 176 CLR 555, 578–9 (Mason CJ, Deane, Toohey and Gaudron JJ), 579 (Brennan J), 594 (Dawson J), 603 (McHugh J).

[276] Combet v Commonwealth (2005) 224 CLR 494, 577 (Gummow, Hayne, Callinan and Heydon JJ).

[277] Commonwealth, Parliamentary Debates, House of Representatives, 31 October 2005, 9 (Lindsay Tanner); Commonwealth, Parliamentary Debates, House of Representatives, 13 February 2006, 118 (Lindsay Tanner). See also Senate Standing Committee on Finance and Public Administration, Transparency and Accountability, above n 79, 37–42.

[278] See Quick and Garran, above n 6, 219. See also Australian Assistance Plan Case [1975] HCA 52; (1975) 134 CLR 338, 354–9 (Barwick CJ): ‘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’: at 359.

[279] This is by no means a unique observation or conclusion as there is a long record of commentary detailing the increasing scope of the Commonwealth Parliament’s authority with the imprimatur of the High Court: for one of many examples, see Harry Gibbs, ‘Decline of Federalism?’ [1994] UQLawJl 1; (1994) 18 University of Queensland Law Journal 1.

[280] See also Senate Finance and Public Administration References Committee, Commonwealth Parliament, Government Advertising and Accountability (2005) 45, citing the submission of the Clerk of the Senate.

[281] For a similarly expressed sentiment in respect of Special Accounts, see Lawson, ‘“Special Accounts” under the Constitution’, above n 7, 146.

[282] These include Appropriations and Staffing Committee, Annual Report 2006–07, above n 263; Senate Standing Committee on Finance and Public Administration, Transparency and Accountability, above n 79; Australian National Audit Office, Application of the Outcomes and Outputs Framework, Audit Report No 23 2006–07 (2007); Appropriations and Staffing Committee, 2005–06 Annual Report, above n 263; Joint Committee of Public Accounts and Audit, Commonwealth Parliament, Review of the Accrual Budget Documentation, Report No 388 (2001); Finance and Public Administration Legislation Committee, Commonwealth Parliament, The Format of the Portfolio Budget Statements: Third Report (2000) and the earlier reports in this series.

[283] See Commonwealth, Parliamentary Debates, House of Representatives, 12 February 2008, 1.

[284] Lindsay Tanner, ‘Enhancing Budget Reporting’ (Press Release, 15 April 2006). See also Australian Labor Party, above n 11; Senate Standing Committee on Finance and Public Administration, Transparency and Accountability, above n 79, 46–50.

[285] Senate Standing Committee on Finance and Public Administration, above n 79, 50–2; Australian National Audit Office, Application of the Outcomes and Outputs Framework, above n 282,

90–1.

[286] Senate Standing Committee on Finance and Public Administration, Transparency and Accountability, above n 79, 18–19.

[287] Ibid 19.

[288] Ibid 22.

[289] Ibid 27.

[290] Ibid 29.

[291] Ibid 41–2.

[292] This also appears to be the preference of most commentators: see, eg, Lindell, above n 7; Senate Finance and Public Administration References Committee, above n 280, 45, citing the submission of the Clerk of the Senate.

[293] Appropriations and Staffing Committee, Annual Report 2005–06, above n 263, app 1.

[294] For an illustration of the relationship between these frameworks in practice, see Charles Lawson, ‘Managerialist Influences on Granting Patents in Australia’ (2008) 15 Australian Journal of Administrative Law 70, 74–87.

[295] See, eg, Senate Standing Committee on Finance and Public Administration, Transparency and Accountability, above n 79, 9–10; Appropriations and Staffing Committee, Annual Report

2005–06, above n 263, app 1; Department of Finance and Administration, The Outcomes and Outputs Framework Guidance Document (2000) 3–5.

[296] See, eg, Evans, above n 250, 289; Joint Committee of Public Accounts and Audit, Inquiry into the Draft Financial Framework Legislation Amendment Bill, above n 20, 26. See also Lindell, above n 7, 313–21; Tyrone M Carlin and James Guthrie, ‘Accrual Output Based Budgeting Systems in Australia: The Rhetoric—Reality Gap’ (2003) 5 Public Management Review 145,

154–8; Kennedy, above n 7, 34–8.

[297] See Saunders, ‘Parliamentary Appropriations’, above n 7, 13. See also Australian Assistance Plan Case [1975] HCA 52; (1975) 134 CLR 338, 384 (Stephen J).

[298] Joint Committee of Public Accounts and Audit, Review of the Accrual Budget Documentation, above n 282, 8.

[299] Ibid; Joint Committee of Public Accounts and Audit, Review of the Financial Management and Accountability Act 1997 and the Commonwealth Authorities and Companies Act 1997, above n 117; Finance and Public Administration Legislation Committee, The Format of the Portfolio Budget Statements: Third Report, above n 282 and the earlier reports in this series; Commonwealth, Report 341: Financial Reporting for the Commonwealth Towards Greater Transparency and Accountability: Joint Standing Committee on Public Accounts, Parl Paper No 300 (1995); Joint Committee of Public Accounts and Audit, Commonwealth Parliament, Accrual Accounting: A Cultural Change (1995).

[300] See Financial Management and Accountability Act 1997 (Cth) ss 16 (instructions for ‘special public money’), 63 (orders, except certain determinations), 65 (regulations); Legislative Instruments Act 2003 (Cth) s 42. Notably, ss 63 (certain determinations according to orders) and 64 (guidelines) are exempted: Legislative Instruments Act 2003 (Cth) s 44(2) items 20–1.

[301] See Financial Management and Accountability Act 1997 (Cth) s 63; Financial Management and Accountability Orders 2008 (Cth).

[302] See Financial Management and Accountability Act 1997 (Cth) s 63; Financial Management and Accountability Orders (Financial Statements for Reporting Periods Ending on or after 1 July 2007) (Cth).

[303] See Financial Management and Accountability Act 1997 (Cth) s 64. Relevant examples include: Department of Finance and Administration, Guidelines for Issuing and Managing Indemnities, Guarantees, Warranties and Letters of Comfort, Financial Management Guidance No 6 (2003); Department of Finance and Administration, Guidelines for the Management of Special Accounts, above n 74; Department of Finance and Administration, The Role of the CFO Guidance for Commonwealth Agencies, Financial Management Guidance No 11 (2003).

[304] See Financial Management and Accountability Act 1997 (Cth) s 27.

[305] See Commonwealth Authorities and Companies Act 1997 (Cth) s 48; Commonwealth Authorities and Companies Orders (Financial Statements for Reporting Periods Ending on or after 1 July 2007) (Cth).

[306] See Commonwealth Authorities and Companies Act 1997 (Cth) s 48; Commonwealth Authorities and Companies (Report of Operations) Orders 2005 (Cth).

[307] See, eg, Senate Standing Committee on Finance and Public Administration, Transparency and Accountability, above n 79, 63–7, which appears to endorse only the existing arrangements such as encouraging further scrutiny by Senate committees, further assistance from the Auditor‑General, further assistance to Senators by Senate committee staff, reasserting the approval process for appropriations, and so on.

[308] Public Accounts and Audit Committee Act 1951 (Cth) s 8; Auditor‑General Act 1997 (Cth) s 10.

[309] Auditor‑General Act 1997 (Cth) s 8(1). See also Commonwealth, Parliamentary Debates, Senate, 5 March 1997, 1350 (Ian Campbell, Parliamentary Secretary to the Treasurer); Commonwealth, Parliamentary Debates, House of Representatives, 12 December 1996, 8342 (John Fahey, Minister for Finance). However, there are some significant restrictions that may be imposed on the Auditor‑General by the Australian government (Attorney‑General): see Legal and Constitutional Legislation Committee, Senate, Auditor‑General Bill 1996: Clauses 35 and 37 (1997) 3–11.

[310] Auditor‑General Act 1997 (Cth) s 10; Public Accounts and Audit Committee Act 1951 (Cth) s 8(1)(m).

[311] Auditor‑General Act 1997 (Cth) ss 11–13 (‘audits’), 15–17 (‘performance audits’), 18 (‘general performance audits’).

[312] Auditor‑General Act 1997 (Cth) s 24.

[313] Public Service Act 1999 (Cth) ss 63(1)–(2). See also Department of the Prime Minister and Cabinet, Requirements for Annual Reports for Departments, Executive Agencies and FMA Act Bodies (2007); Australian National Audit Office and Department of Finance and Administration, Better Practice Guide: Better Practice in Annual Performance Reporting (2004); Australian National Audit Office, Annual Performance Reporting, Audit Report No 11 2003–04 (2003); Australian National Audit Office, Performance Information in Portfolio Budget Statements: Better Practice Guide (2002).

[314] Charter of Budget Honesty Act 1998 (Cth) s 14(1).

[315] Charter of Budget Honesty Act 1998 (Cth) s 10.

[316] Charter of Budget Honesty Act 1998 (Cth) s 18.

[317] Currently, financial statements are presented in various formats with moves towards unifying the financial statistics with the accounting standards: see, eg, Treasurer and Minister for Finance and Administration, Budget Strategy and Outlook 2008–09, Budget Paper No 1 2008–09 (2008) 3.22–3.24; Australian Accounting Standards Board, Financial Reporting of General Government Sectors by Governments, above n 91. Notably, important distinctions between the different approaches to financial statements and financial statistics may be lost if this unification process occurs. This is especially so where the economic stocks (such as the liabilities) are defined according to the accounting standards.

[318] However, a potential tension between the Joint Committee of Public Accounts and Audit and the Auditor‑General needs to be resolved. Under current arrangements, the Joint Committee of Public Accounts and Audit can ‘determine the audit priorities of the Parliament and … advise the Auditor‑General of those priorities’: Public Accounts and Audit Committee Act 1951 (Cth) s 8(1)(m). On the other hand, for the Auditor‑General ‘[t]here are no implied functions, powers, rights, immunities or obligations arising from the Auditor‑General being an independent officer of the Parliament’: Auditor‑General Act 1997 (Cth) s 8(2). Significantly, the Joint Committee of Public Accounts and Audit cannot ‘direct the activities of the Auditor‑General’: Public Accounts and Audit Committee Act 1951 (Cth) s 8(1A). See also Commonwealth, Parliamentary Debates, House of Representatives, 12 December 1996, 8349 (John Fahey, Minister for Finance); Commonwealth, Parliamentary Debates, Senate, 5 March 1997, 1355 (Ian Campbell, Parliamentary Secretary to the Treasurer). As a matter of practice, the Auditor‑General determines the work program in consultation with the Joint Committee of Public Accounts and Audit: see Australian National Audit Office, Annual Report 2006–2007 (2007) 26; Joint Committee of Public Accounts and Audit, Commonwealth Parliament, Annual Report 2005–2006 (2006) 3. The Auditor‑General ‘may’ further undertake audits requested by the Joint Committee of Public Accounts and Audit (the Committee acting on requests from other parts of Parliament): Australian National Audit Office, Annual Report 2006–2007 (2007) 26. According to these arrangements, the Auditor‑General is potentially not completely independent of the executive, and the rhetoric of the Auditor‑General being an independent officer of the Parliament (such as ‘functional independence’: Joint Committee of Public Accounts and Audit, Commonwealth Parliament, Review of the Auditor‑General Act 1997 (2001) 2) needs to be considered within the context of the potential powers exercisable over the Auditor‑General: see Legal and Constitutional Legislation Committee, above n 309, 13–24. This contrasts with the evolution of an independent auditor function from which the Australian institution was originally fashioned: see A J V Durell, The Principles and Practice of the System of Control over Parliamentary Grants (1917) 157–8.

[319] See Commonwealth, The Senate: Standing Orders and Other Orders of the Senate O 26(1). For an overview of the process, see Evans, above n 250, 307–8, 364–9. Notably, the Supplementary Budget Estimates are confined to answering questions on notice from the May–June Senate Estimates hearings: at 308.

[320] Department of the Prime Minister and Cabinet, above n 313, 2.

[321] The Financial Management and Accountability Act 1997 (Cth) imposes auditing arrangements conducted by the Auditor‑General according to the Auditor‑General Act 1997 (Cth) s 10 and the audit priorities of the Parliament determined by the Joint Committee of Public Accounts and Audit under the Public Accounts and Audit Committee Act 1951 (Cth) s 8(1)(m): Financial Management and Accountability Act 1997 (Cth) ss 567; Public Service Act 1999 (Cth) ss 63(1), 70(1). Notably, the form of the Annual Reports is approved by the Joint Committee of Public Accounts and Audit: see Public Service Act 1999 (Cth) ss 63(2), 70(2); Department of the Prime Minister and Cabinet, above n 313, 1. Similarly, audits are conducted by the Auditor‑General that are included in the annual report: Commonwealth Authorities and Companies Act 1997 (Cth) ss 89, sch 1.

[322] Australian National Audit Office, Annual Performance Reporting, above n 313, 21; Australian National Audit Office and Department of Finance and Administration, Better Practice Guide, above n 313.

[323] See Australian National Audit Office, Guide on Annual Performance Reporting, above n 313,

5–6. See also Department of the Prime Minister and Cabinet, above n 313, 3–4.

[324] Commonwealth, The Senate: Standing Orders and Other Orders of the Senate O 25(20). See also Evans, above n 250, 386–7.

[325] Commonwealth, House of Representatives: Standing and Sessional Orders O 215(c). See also Ian Harris (ed), House of Representatives Practice (5th ed, 2005) 624.

[326] Where the Senate and House of Representatives committees have reported, their reports are very brief: see, for recent examples, Senate Standing Committee on Economics, Commonwealth Parliament, Annual Reports (No 1 of 2007) (2007); Senate Standing Committee on Economics, Commonwealth Parliament, Annual Reports (No 1 of 2006) (2006). For example, the House of Representatives Standing Committee on Industry and Resources has not assessed any recent Annual Reports: see Lawson, ‘Managerialist Influences on Granting Patents in Australia’, above n 294, 86–7.

[327] See Commonwealth, The Senate: Standing Orders and Other Orders of the Senate O 25(20)(e); Commonwealth, House of Representatives: Standing and Sessional Orders O 215(c).

[328] This will include the performance measures in employment arrangements applying to specific public servants who exercise authority over the management of budget funded programs and those performance measures might presently be restricted documents: see Freedom of Information Act 1982 (Cth) ss 41(1) (documents affecting personal privacy), 43(1)(c) (documents relating to business affairs etc).

[329] For an illustration of the intended operation of these overlapping framework arrangements, see Lawson, ‘Managerialist Influences on Granting Patents in Australia’, above n 294, 74–87.