Implications for the federation Constitution, s 116 116 - - PowerPoint PPT Presentation

WILLIAMS V COMMONWEALTH

Implications for the federation

Constitution, s 116

116 Commonwealth not to legislate in respect of religion The Commonwealth shall not make any law for establishing any religion, or for imposing any religious observance, or for prohibiting the free exercise of any religion, and no religious test shall be required as a qualification for any

• ffice or public trust under the Commonwealth.

Executive Power – Commonwealth arguments

• Broad Proposition - the Commonwealth has the same

capacities as a legal person and can therefore contract and spend in relation to any subject-matter whatsoever.

• Narrow proposition - the Commonwealth has the

executive power to contract and spend in relation to subject-matters over which it has a legislative head of power, without the need actually to engage that head of power by enacting authorising legislation.

Rejection of the narrow proposition

• Heydon J, dissenting, noted that the narrow proposition

had been initially accepted by all parties and was a ‘common assumption’. In the course of argument, WA withdrew its submissions on this point and most of the

• ther States followed.
• A majority of the Court (French CJ, Gummow, Crennan

and Bell JJ) rejected the narrow proposition for reasons including federal considerations, responsible government and the need for parliamentary scrutiny of the expenditure

• f public moneys.
• Hayne and Kiefel JJ did not need to decide because they

held that no head of Commonwealth legislative power would have supported the chaplaincy program anyway.

Considerations in assessing executive power

• In considering the scope of the Commonwealth’s

executive power, the majority placed stress on both the federalism aspect and the relationship with legislative power.

• For example, Gummow and Bell JJ stated at [89] that it is

important to bear in mind the federal system and the powers of the other federal branches of government (the Parliament and the Judicature) when ascertaining the limits of the executive power of the Commonwealth. At [155] they added that in assessing the extent of executive capacity to enter into contracts one must consider the federal structure and the relationship between Ch I and Ch II of the Constitution.

Federalism considerations

• Hayne J noted at [197] that text and structure limit the

executive power of the Commonwealth and that regard must be had to the spheres of responsibility vested in the Commonwealth and the position of the Executive Governments of the States.

• Crennan J also observed at [495] that the

Commonwealth’s argument regarding executive power must be assessed in light of the distribution of powers between the Commonwealth and the States as polities and financial relations between the Commonwealth and States in addition to the relationship between the legislature and the executive.

Responsible Government

• Gummow and Bell J observed at [136] that if the

executive had power to act regarding any subject of legislative power (without legislation) this would ‘undermine the basal assumption of legislative predominance’ and ‘distort the relationship between Ch I and Ch II of the Constitution’.

• Crennan J at [508]-[511] stressed the responsibility of the

Executive to the Parliament and considered that this affected the scope of executive power.

• Kiefel J emphasised at [578]-[579] that responsible

government is the key to understanding executive power. It places the Parliament over the Executive with regard to expenditure of public money.

Executive power with no statutory authority

The majority recognised that there were some categories of executive power involving expenditure that could be exercised without statutory authority. These included:

• prerogative powers,
• the ordinary functions of government, such as the

administration of departments under s 64 of the Constitution;

• the nationhood power; and
• the execution and maintenance of the laws of the

Commonwealth.

Prerogative powers

• The prerogative powers fall within s 61 of the Constitution.
• The majority continued to rely on HV Evatt’s analysis of

the distribution of prerogative powers between the Commonwealth and the States.

• The prerogative powers do not include the capacities of

the Crown as a natural person.

• Prerogative powers may be exercised without statutory

authorisation, but this does not extend the exercise of the capacities of the Crown.

Ordinary functions of government

• Ordinary functions of government include the

administration of government departments.

• The power to exercise these functions is derived from s

64 of the Constitution which authorises the Governor- General to appoint officers to administer the departments

• f State.
• Money is appropriated under s 81 and s 54 of the

Constitution for the ‘ordinary annual services of the Government’.

• Departments may enter into contracts for their

administration (eg office supplies, leases, catering, etc).

• Ordinary functions of government include agreements

with the States under s 96 and s 51(xxxvii).

Nationhood power

• Source – s 61 and s 51(xxxix) of the Constitution.
• Mason J in AAP Case:

‘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.’

Limits on the nationhood power

• National endeavour: the enterprise or activity must be

peculiarly adapted to the government of a nation and be a truly ‘national’ endeavour ([34] (French CJ); [196] (Hayne J); [485] (Crennan J); [583] (Kiefel J)).

• Cannot otherwise be carried on: the enterprise or activity

must be one that cannot otherwise be carried on for the benefit

• f the nation by the States or others ([196] (Hayne J); [498]

(Crennan J); [583] (Kiefel J)).

• Convenience: the Commonwealth’s executive power cannot

be expanded outside its heads of power simply because it is ‘convenient’ to do so ([363] (Heydon J); [504] (Crennan J); [587] (Kiefel J)).

Limits on the nationhood power

• Section 96: Section 96 of the Constitution must not be

rendered otiose – so there must be large areas of activity which are outside the executive power of the Commonwealth which can only be entered by way of a s 96 grant ([243] and [247] (Hayne J); [501] and [503] (Crennan J); [592] (Kiefel J)).

• No Competition: The Commonwealth’s exercise of

executive or legislative power must involve no real competition with the States ([31] (French CJ); [144] (Gummow and Bell JJ); [256] (Hayne J); [505] (Crennan J); [588] (Kiefel J)).

Other limitations on executive power

Executive power cannot be used to:

• impose taxation ([135] (Gummow and Bell JJ); [398]

(Heydon J));

• create a new offence or impose coercive measures ([135]

(Gummow and Bell JJ); [521] (Crennan J));

• dispense with the operation of any law ([135] (Gummow

and Bell JJ); [399] (Heydon J));

• alter rights and liabilities under states laws ([399] (Heydon

J));

• curtail the capacity of the States to function as

governments ([400] (Heydon J)).

Power of the States to contract and spend

• Limitations on Commonwealth executive power, to the

extent that they are derived from the fact that the Commonwealth has limited legislative powers or from federal considerations, will not apply to the States.

• Limitations on executive power derived from the system of

responsible government and the need for parliamentary scrutiny of executive action, particularly where the expenditure of public money is involved, may extend to the States.

NSW v Bardolph

French CJ summarised the findings in Bardolph at [74] as follows:

Rich J characterised the making of the contract for advertising services as ‘an

• rdinary incident of this particular function of Government’. Starke J made
• bservations to similar effect. Dixon J, with whom Gavan Duffy CJ agreed,

made a similar point, saying that:

No statutory power to make a contract in the ordinary course of administering a

recognized part of the government of the State appears to me to be necessary in

• rder that, if made by the appropriate servant of the Crown, it should become the

contract of the Crown, and, subject to the provision of funds to answer it, binding upon the Crown. (emphasis added)

The words emphasised in the judgment of Dixon J reflect a characterisation

• f the contract in issue in Bardolph upon which all members of the Court
• agreed. That characterisation suggests that the State executive power

considered in Bardolph was analogous to the powers of Commonwealth Minister, derived from s 64 of the Constitution, in relation to the administration

• f governmental departments. The case is not authority for the existence of a

general contractual power derived from s 61 capable of exercise without statutory authority.

State power to contract and spend

• Gummow and Bell JJ contended at [151] that the power of a

government to contract is different from that of an individual, because the government proposes to spend public money, in contrast to an individual who spends his or her own money. They said that where ‘public moneys are involved questions of contractual capacity are to be regarded “through different spectacles”.’

• Hence, the expenditure by a State of public money under a

contract must also be seen through those new spectacles. Issues that come into play in such a debate will include, according to Gummow and Bell JJ at [152], the extent to which government action may fetter future executive action in a matter of public interest and the extent to which it will regulate activity in the community, which cannot be done in a coercive

• r penal way, as only the legislature has such power.

Financial Framework Legislation Amendment Act (No 3) 2012 (Cth)

The Act inserts s 32B in the Financial Management and Accountability Act 1997 (Cth). 32B Supplementary powers to make commitments to spend public money (1) If: (a) apart from this subsection, the Commonwealth does not have power to make, vary or administer: (i) an arrangement under which public money is, or may become, payable by the Commonwealth; or (ii) a grant of financial assistance to a State or Territory; or (iii) a grant of financial assistance to a person other than a State or Territory; and (b) the arrangement or grant, as the case may be: (i) is specified in the regulations; or (ii) is included in a class of arrangements or grants, as the case may be, specified in the regulations; or (iii) is for the purposes of a program specified in the regulations; the Commonwealth has power to make, vary or administer the arrangement or grant, as the case may be, subject to compliance with this Act, the regulations, Finance Minister's Orders, Special Instructions and any other law. (2) A power conferred on the Commonwealth by subsection (1) may be exercised on behalf of the Commonwealth by a Minister or a Chief Executive.

Constitutional validity of the Act

• The Financial Management and Accountability Act 1997

is generally supported by s 97 and s 64 of the Constitution.

• There is no obvious head of power to support the

amendments to it, including s 32B.

• At best, the Commonwealth will have to rely on a web of

heads of power to the extent that they cover the subject- matter of programs specified in the regulations.

• The most s 32B can do is prop up the validity of

expenditure on executive programs where there is an existing head of power to support them. It cannot help where there is no head of power.

Conclusion

• Williams is a serious loss for the Commonwealth.
• The Commonwealth cannot simply spend on whatever it

wants.

• It needs a head of power to support expenditure, and in

some cases it will also need statutory authorisation.

• The nationhood power has also been limited in its scope.
• If federalism limits Commonwealth executive power – why

not Commonwealth legislative power?

• The significance of s 96 of the Constitution has been

raised.

• State executive power may be limited, but the States can

more easily legislate themselves out of this problem as they have plenary legislative power.