Combet & Anor v Commonwealth of Australia & Ors
[2005] HCATrans 650
[2005] HCATrans 650
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Sydney No S359 of 2005
B e t w e e n -
GREG COMBET
First Plaintiff
NICOLA ROXON MP
Second Plaintiff
and
COMMONWEALTH OF AUSTRALIA
First Defendant
THE HONOURABLE KEVIN ANDREWS MP
Second Defendant
SENATOR THE HONOURABLE NICHOLAS MINCHIN
Third Defendant
GLEESON CJ
McHUGH J
GUMMOW J
KIRBY J
HAYNE J
CALLINAN J
HEYDON J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON TUESDAY, 30 AUGUST 2005, AT 10.16 AM
(Continued from 29/8/05)
Copyright in the High Court of Australia
__________________
GLEESON CJ: Yes, Mr Solicitor.
MR BENNETT: If the Court pleases. Your Honours, the balance of my submissions today will be divided into a number of sections. There are three major areas. The first is finishing my submissions that the expenditure is within the appropriation. The second area is the constitutional framework, particularly the particular reference to the judgment of Justice Jacobs in Victoria v The Commonwealth and to section 97 of the Constitution and that leads into submissions about relief, of the impracticality of granting relief in this type of case and then the third, much shorter area will be standing.
In relation to the first of those areas, my submissions will be divided into three subsections. The first deals with the Appropriation Act, the second deals with the portfolio budget statement and the third deals with the balance of my arguments that I started yesterday in the supplementary submissions as to why this type of expenditure falls squarely within the proposed outcome and, indeed, some of the outputs.
I start then with the Appropriation Act which is set out at page 393 of volume 2 of the special case book. The starting point is the definitions of “administered items” and “departmental items” because that becomes crucial when one examines the effect
of the Act. Your Honours will see, on page 451, a part of Schedule 1 setting out the outcomes in relation to the Department of Employment and Workplace Relations and your Honours see there are two headings, “Departmental Outputs” and “Administered Expenses”.
“administered item” is defined in section 3 at page 394 as:
an amount set out in Schedule 1 opposite an outcome . . . under the heading “administered Expenses”.
So, turning back to page 451, the relevant administered item is the amount of 90,559, $90.5 million.
KIRBY J: Where is “administered item” referred to on 451?
MR BENNETT: It is not, your Honour. If your Honour goes to the definition on page 394 ‑ ‑ ‑
KIRBY J: Yes, I have that but what does the definition refer to?
MR BENNETT: It refers to Schedule 1. Page 451 is part of Schedule 1 and it is an amount set out in that schedule opposite an outcome under the heading, “Administered Expenses”. So the three administered items ‑ ‑ ‑
KIRBY J: But where is the heading, “Administered Expenses”?
MR BENNETT: If your Honour sees at 451 at line 12, two-thirds of the way across the page. Your Honour sees the heading, “Administered Expenses”. Those words appear in the definition of “administered item”.
KIRBY J: Yes, I see that.
MR BENNETT: So the three numbers, normal numbers not italics, in that column are administered items. The administered items are then dealt with by section 8, which appears on page 397:
(1) For an administered item for an outcome of an entity, the Finance Minister may issue out of the Consolidated Revenue Fund amounts that do not exceed, in total, the lesser of:
(a) the amount specified –
and we are not concerned with the second bit, and then:
(2) An amount issued out of the Consolidated Revenue Fund for an administered item for an outcome of an entity may only be applied for expenditure for the purpose of carrying out activities for the purpose of contributing to achieving that outcome.
So the 90,559 can only be spent for the purpose of contributing to achieving the outcome of higher productivity, higher pay workplaces. It refers to the outcome specifically. Then one goes to departmental items and “departmental item” is defined in section 3. That is back on page 394.
KIRBY J: Is this departmental outputs?
MR BENNETT: No, “departmental item”, your Honour. It is the word in the statute and that is the phrase that is defined and your Honours see:
departmental item means the total amount set out in Schedule 1 in relation to an entity under the heading “Departmental Outputs”.
So one goes back to 451, sees the heading “Departmental Outputs” in the first column and the departmental item is the total amount set out in relation to the entity. That is the 1.4 billion figure at the bottom of the first column. So the departmental item is the 1.4 billion and the administered item was the three sums in the second column.
The Act says something quite different about departmental items. That appears in section 7 on page 396. What it says there is:
For a departmental item for an entity, the Finance Minister may issue out of the Consolidated Revenue Fund amounts that do not exceed, in total, the amount specified in the item.
So the amount that may be issued is the amount appearing in the item which is the total figure. Then:
An amount issued out of the Consolidated Revenue Fund for a departmental item . . . may only be applied for the departmental expenditure of the entity.
That is not defined and I will come back to that.
So what we have in the Act is a very simple situation in which the three administered items set out against each outcome are items that can only be spent in relation to that outcome, whereas the departmental item, which is the 1.4 billion, can be spent on any or all of the three outcomes. There is no requirement to comply with the breakdown. The breakdown is purely notional. Indeed, that comment appears at page 394 in a note which correctly describes the very clear construction of the sections I have just taken your Honours to. If your Honours see the note after “departmental item” at line 41 on page 394, your Honours will see:
The amounts set out opposite outcomes, under the heading “Departmental Outputs”, are “notional”. They are not part of the item, and do not in any way restrict the scope of the expenditure authorised by the item.
Now, we do not need to get into the debate about the significance or effect of notes, because it is clearly correct. It is clearly correct, because that is what section 7 says. Those figures are for information only, they are estimates.
CALLINAN J: Why should we not treat the notes as part of the Act?
MR BENNETT: I am content for your Honour to do so.
CALLINAN J: They have been enacted – the note has been enacted, has it not?
MR BENNETT: Yes. There is a provision in the Acts Interpretation Act about the effect of notes. But, your Honour, I am not concerned with that. I support the note. The note reflects – in this case one does not need to go into that issue because the note is so clearly correct. It simply sets out what section 7 says. So those are the provisions of the Act. Now, the only other provision I need to remind your Honours of is section 4, which appears on page 395.
CALLINAN J: I notice the difference in language there, Mr Solicitor, “for the purpose of carrying out those activities”.
MR BENNETT: I am sorry, your Honour?
CALLINAN J: I notice the particular language of section 4(2). It talks about purpose and talks about “purpose of contributing”.
MR BENNETT: Yes.
CALLINAN J: Which makes the task in the Court much more difficult in the sense that how are we to know that the purpose is not as expressed. Is that a subjective purpose or an objective purpose?
MR BENNETT: Your Honour, I will come to the question of exactly what purpose is implied by outcomes. Our primary submission, as set out in our submissions, is that if one could reasonably form the view that it contributes to the purpose then it can be within it.
KIRBY J: Now you are saying if one could reasonably form the view.
MR BENNETT: Yes.
KIRBY J: What has happened to your mysterious official? He has dropped out of things, has he, or she?
MR BENNETT: One assumes he is on the Clapham omnibus, your Honour, and he is a reasonable official ‑ ‑ ‑
McHUGH J: Heading in the opposite direction by the sound of things.
MR BENNETT: Yes. Your Honours, I do not want to deal with that issue at the moment. That is a separate issue, the question of – at this stage ‑ ‑ ‑
GLEESON CJ: I am sorry, just before you go any further. I understand from the definition of “administered item” and the provisions of section 8 the relevance of the outcomes to the administered item.What is the relevance of the outcome statements to a departmental item and to section 7?
MR BENNETT: Your Honour, the phrase used in section 7(2), “departmental expenditure”, picks up the outcomes. My friend says it picks up outputs and the portfolio budget statement ‑ ‑ ‑
GLEESON CJ: Where do we find it picking anything up?
MR BENNETT: We do not, your Honour. The phrase is undefined.
HAYNE J: “Expenditure” is defined.
MR BENNETT: “Expenditure” is defined but the phrase “departmental expenditure of the entity” is not defined.
GLEESON CJ: I do not have any difficulty seeing how administered items are tied into the outcomes because of the language of section 8 and, in particular, the concluding words of section 8(2). Just at the moment I do not see quite so clearly the way departmental items are tied into outcomes.
McHUGH J: It must be through the use of the term “for” - “for a departmental item . . . may only be applied for the departmental expenditure” of ‑ ‑ ‑
MR BENNETT: Yes, we accept that, your Honour. Your Honours can see that because there are some parts of the schedule where there are only departmental outputs and no administered expenses. If your Honours look, for example, on page 434, the Office of the Privacy Commissioner, where there is only one outcome, your Honours will see there is a departmental item ‑ ‑ ‑
GUMMOW J: That is true of a number of agencies in the Attorney‑General’s portfolio.
MR BENNETT: Yes, it is, your Honour. The absence of administered expenses means that the outcome is not picked up by the requirement in section 8 and we would submit it follows that it is picked up by the reference to “departmental expenditure” in section 7. The effect of section 7 is then that one looks at the outcomes but one is not bound by the breakdown, the breakdown is notional.
GLEESON CJ: The departmental item on page 451 is the figure of $1.4 billion. That is it, that is the only departmental item referred to on page 451.
MR BENNETT: Yes, your Honour, whereas there are three administered items - the 1.97 billion, the 90 million and the 560 million.
GLEESON CJ: I realise there are defined expressions, but what is the origin or the conceptual origin of this distinction between departmental, on the one hand, and administered, on the other?
MR BENNETT: Historically it goes back to different types of expenditure but it is no part of our argument to make any point of the purpose of the distinction.
GLEESON CJ: No, I understand. You could have called them X and Y but I am just wondering why they are called “departmental” and “administered”.
MR BENNETT: Your Honour, that is part of the argument that will be dealt with by my learned friend in his submissions about the ordinary annual services of government and the division between Appropriation Acts, and I would prefer to leave that for him to deal with it.
KIRBY J: What is the point that you are making now? I can see the difference between the expressions in sections 7 and 8 and the instruction in 7(2) that you have called attention to. Where does this lead?
MR BENNETT: Your Honour, where it leads is that I am simply arguing against my learned friend’s submission that the key to this Act lies in the outputs in the portfolio budget statement, although, as your Honours will see, we will be submitting that those do assist us at the end of the day.
KIRBY J: But does that mean that there is no specification so that a court can consider whether or not the appropriation is according to law, which is what the Constitution requires?
MR BENNETT: The Constitution requires, your Honour, that there be an appropriation. For that one looks at the Appropriation Act. The provisions of the Appropriation Act appropriate, as I have submitted, in terms of outcomes. There are certain aids to interpretation and I will take your Honour to those in a moment, but what is important for the purpose of what has been done under the appropriation is that it relates to outputs. In the case of administered items, a specific output; in the case of departmental items ‑ ‑ ‑
GLEESON CJ: Do you mean specific outcomes?
MR BENNETT: Outcomes I mean, I am sorry, your Honour.
GLEESON CJ: Or perhaps you mean non-specific outcome. We do not need an adjective. The noun is “outcome”.
MR BENNETT: Yes, your Honour. That is what has been done. The appropriation is in terms, we would submit, of outcomes.
GLEESON CJ: Is the number on page 451 of direct relevance to this case, $90,559,000?
MR BENNETT: No, your Honour, it is 1.4 billion, as I understand it.
GLEESON CJ: So we are concerned with section 7, not section 8, is that right?
MR BENNETT: Yes, your Honour. It becomes relevant when one gets to the question of relief. I am content for present purposes to treat the relevant outcome as outcome 2.
GLEESON CJ: So the expenditure is pursuant to a departmental item, that is to say, $1,447,552,000?
MR BENNETT: Yes, your Honour.
McHUGH J: So on your submissions under the heading “Departmental Outputs”, the terms “Outcome 1”, “Outcome 2” and “Outcome 3” are not controlling in any way?
MR BENNETT: Yes, your Honour.
HAYNE J: Is that right?
MR BENNETT: Except to the extent that one must be within one of them. The specific amount set out against the three of them, the appropriation between the three, is not of relevance under “Departmental Outputs”. It is under “Administered Expenses”.
McHUGH J: They are for guidance only, the individual amounts?
MR BENNETT: Well, “guidance” is the wrong word, your Honour. We would submit they are for information. They are an estimate. They are figures estimating….., but on their face they are not precise estimates. No one can have thought or suggested that the amount that would be spent on achieving an effective and efficient labour market would be exactly $1,235,216,000. It is clearly an estimate – it is a budget estimate.
McHUGH J: But does that mean then the department, if it chooses, can spend 1,235,000 on outcome 2 and not a cent on outcome 1?
MR BENNETT: Yes, your Honour, yes.
GUMMOW J: Provided always it is for a purpose of the Commonwealth.
MR BENNETT: Yes, your Honour, yes.
KIRBY J: I did not understand the plaintiff’s case to be focused on these different subheadings. They have addressed their argument principally to outcome 2 because they took that to be what you were justifying the appropriation under, but they did not exclude outcome 1 or outcome 3, as I read their submissions. Maybe I misunderstood it. But ultimately there has to be an appropriation made by law. That is what the Constitution says in section 83.
MR BENNETT: Yes.
KIRBY J: So that it cannot just be cast aside as some insignificant matter. Taxes are burdens on the people and hence the scheme of the Constitution and the obligation to have a degree of specificity that is required by the obligations that no payment shall be made except under the appropriation made by law.
MR BENNETT: Your Honour, all that is common ground.
GUMMOW J: This is the law.
MR BENNETT: Yes, your Honour. All I am pointing out is that the Act has defined the expenditure in terms of outcomes. A certain sum of money is limited to outcome 2 and a certain sum of money can be applied, at departmental discretion, to outcomes 1, 2 or 3. But that is the appropriation and that is what the Act does. Now, my learned friend seeks to read into the Act some words that are not there. That is why I was coming to section 4, which he construes in a manner quite differently to the way we construe it, and I am really leading up to showing why section 4 does not mean what he submits it means. Now, your Honour, section 4 is on page 395.
GUMMOW J: Can you just explain to me, Mr Solicitor, what, on the face of the Act, is the discrimen between an allocation or a characterisation as an administered item or as a departmental item?
MR BENNETT: That is a matter which my learned friend, Mr Lloyd, will deal with, your Honour.
GUMMOW J: Right. That is what the Chief Justice was asking, I think.
MR BENNETT: Yes. Now, section 4(1), your Honours see, declares:
The Portfolio Budget Statements are hereby declared to be relevant documents for the purposes of section 15AB –
and then subsection (2) is a deeming provision. What it says, in effect, is that:
If the Portfolio Budget Statements indicate that activities of a particular kind –
ie, “outputs”, to use the phrase it uses –
were intended to be treated as activities in respect of a particular outcome, then expenditure for the purpose of carrying out those activities is taken to be expenditure for the purpose of contributing to achieving the outcome.
Now, that, in my respectful submission, is a very simple deeming provision. If the portfolio budget statement says that spending money on a gardener who is watering a tree outside the department is for the purpose of achieving the higher productivity, then one does not ask any further, is it or is it not. It is a deeming. Of course, deeming does not – it simply takes effect according to its terms. That is the positive effect of the section.
My learned friend, of course, seeks to construe it as if there were a further subsection which says that the outputs listed in a portfolio budget statement are the only outputs upon which money may be spent. That is the way he seeks to read this, and one simply cannot get that from section 4. Section 4(2) specifically puts the converse proposition and refrains from putting that proposition. That is all I want to say at the moment about the Appropriation Act.
May I now move to the portfolio budget statement, and the relevant statement appears at page 673. Can I just add this? If my learned friend were right, the portfolio budget statement would, in effect, be overriding the effect of section 8, which refers to outcomes rather than outputs.
Now, there are a number of things we submit about the portfolio budget statement. The first is that this may make some of the arguments my learned friend has been putting unnecessary. So far from suggesting that the type of expenditure we are concerned with here is excluded, in our submission, on its true construction, there are a number of things in this portfolio budget statement which suggests that it is included and, of course, one bears in mind in looking at that a number of things.
One bears in mind, first, that the particular need for the type of advertising would not, of course, have been anticipated at the time, so one would not expect to see a specific reference to it. The question is whether it is included in the general concepts referred to in the statement.
May I take your Honours to a number of aspects? My friend starts with page 728. That sets out the description of the resourcing in relation to outcome 2, and your Honours see it sets out the outcome:
Higher productivity, higher pay workplaces
Outcome 2 activities are directed towards encouraging –
and we place enormous weight on that word, of course –
employer and employees to adopt flexible and modern workplace relations practices. This enables workplaces to be productive and competitive and to offer employees secure jobs that are well paid.
So that makes the link which was the same link I referred to in the Prime Minister’s speech in relation to the proposed legislation between that legislation and its emphasis on agreement and individual workplace agreements and the outcomes which are sought encouraging.
That encouraging must include negating discouragement and to the extent that there are advertisements saying, “The system which is being set up is a terrible system which will operate to your disadvantage”, there is clearly a need to answer that as part of the process of encouraging people to avail themselves of the system and work within it.
KIRBY J: Yes, but the system that is being encouraged is not yet in place.
MR BENNETT: No, it is not, your Honour.
KIRBY J: The legislation even to this day is not before Parliament, has not been enacted.
MR BENNETT: No, your Honour, but if the well is poisoned in advance, one needs to remove the poison in advance.
KIRBY J: I just do not understand this argument. If the Parliament enacts a law then that is it, it is the law. So long as it is valid it must be obeyed. The poison in the well is not going to stop it being the law. So what is this encouragement directed at? It is just – unless it is, as Justice McHugh said yesterday, to direct it at Wobblies who might be getting a little worried about enacting it.
MR BENNETT: Your Honour, I am going to come back to this part of the case. I have said a number of times, and I will probably repeat a number of times, for which I apologise, that the central proposition of our submissions is that where you have a scheme of legislation which depends on the success of its objectives on people approving of that legislation, because if they have antipathy towards it it may not work, then, both in advance of the legislation and when it is enacted, it is an essential and normal part of government functioning to persuade people that the legislation is desirable in order to assist in achieving its objectives.
This is legislation which has the very objective that the department is given, the higher productivity and higher pay workplaces. I have said that a number of times, I will say it a number of times later on, but that is, in our submission, the key to the whole of this case. Everything else is commentary in a sense.
CALLINAN J: Mr Solicitor, Mr Gageler concedes that advertising per se is not proscribed anywhere.
MR BENNETT: He does.
CALLINAN J: That it may well be a proper incidental activity undertaken by the government. Of course the relief that he seeks is relief specifically in respect of the – it refers to the Prime Minister’s speech, I think, in May.
MR BENNETT: Yes.
CALLINAN J: Why is not advertising an incident, a reasonable incident of the kind just discussed, of the development of a workplace reform package which implements the government’s policy agenda?
MR BENNETT: Your Honour anticipates the next sentence of my submissions, and that is why I was starting on page 728.
CALLINAN J: I do not understand why you are dwelling upon a riposte, as it were, to Mr Gageler’s client’s advertising. I do not know whether you even need it. I am not saying you do or you do not, but I just do not understand the emphasis of your argument.
KIRBY J: Mr Gageler makes another point, which is not insignificant, and that is that where it is intended to spent very large sums of public moneys, it is usual in the PBS to make that clear, and it was not made clear in this case and that the Parliament, with limitations on the Senate as to what it could do, was not informed that this is so.
MR BENNETT: Your Honour, it could not have been. The campaign was not ‑ ‑ ‑
CALLINAN J: The constitution of the Senate has absolutely nothing to do with this case.
KIRBY J: I disagree. I think it is central.
CALLINAN J: What, every time we consider a case we have to look at the numbers in the Houses of Parliament, is that the proposition?
MR BENNETT: It is not my proposition, your Honour.
CALLINAN J: No.
KIRBY J: Appropriation Act (No 1) is specifically limited and is controlled and designed by the constitutional framework that limits the power of the Senate to amend it.
MR BENNETT: Yes, your Honour, no one disputes that. That is the aspect which Mr Lloyd will deal with, the ordinary annual services of government aspect. At the moment might I just take your Honours back to page 728 because there are a number of references on this page. The next paragraph makes the point that “Agreement making is at the centre of the workplace relations system.” That relates back, I suppose, to the word “encouraging”. Then there is a reference to “providing policy advice and legislation development services”.
Legislation development services, pace my learned friend’s submissions, clearly can include some forms of advertising. One uncontroversial type might be an advertisement saying, “We are proposing legislation to do X. Please let us know your views, members of the public. We are interested in public comment on this.” That is classic legislation development service in a democracy. That is one form of advertisement which would clearly be permitted by that. Such advertisements may frequently, as incidental to doing so, say in the course of their request for information, “We are proposing the following reforms. These are the advantages of those reforms but we’d like your views.”
McHUGH J: The advertisement at annexure A at page 45 does not invite anybody to make any submission.
MR BENNETT: No, your Honour, I am not suggesting that is this case. This is an example I am giving of something which would fall within that and incidentally fall within my learned friend’s proposed injunction.
McHUGH J: Yes, but we have to get down to some specifics. Take the advertisement, annexure A at page 45. How does it so function to achieve the matters that you have just referred to? How does it encourage employer and employees to adopt flexible and modern working places? It is a “feel good” ad. It tells the workers they are doing well and they are going to do better under a new system.
MR BENNETT: Yes, your Honour.
McHUGH J: How is it going to increase one iota of manufacturing production or more efficient production or more units per worker?
MR BENNETT: In this way, your Honour. It is addressed to people who may have read the campaign of the ACTU which says, “These reforms are not in the interests of Australian workers and fight for your rights” and so on.
KIRBY J: But that is private funds, that is private money. We are talking about the people’s money, the burden on the people as the Constitution describes it.
MR BENNETT: Yes, your Honour, I am just coming to that. In the context where that is said, the natural and probable consequence of that being said is that there will not be co‑operation between “employer and employees to adopt flexible and modern and workplace relations practices”, as said at page 728, and to work within the new system. It is a system which is designed and, on its face, expressed to depend upon the agreements which workers make voluntarily. They are going to be discouraged from working within a new system ‑ ‑ ‑
McHUGH J: Why? You make that assertion from the Bar table. If you had some evidence in support of it from industrial psychologists or other people that that is the effect of campaigns, one can understand it, but I am rather sceptical of the idea that because of this ACTU campaign that if your legislation comes in workers are going to say, “I’m not going to sign this document”, or, “I’m not going to co‑operate with my employer”. That is an assertion you make from the Bar table, but we are in a constitutional matter. You are expending public money and you need justification for it, it seems to me. You need evidence to show that what you are asserting has at least a possibility of success.
MR BENNETT: Your Honour, there are three answers to that. The first is that Clark v Ryan would make such evidence clearly inadmissible. Such a person would not be an expert in anything.
McHUGH J: There are experts in everything. I do not know how you get any assistance out of Clark v Ryan. In any event, Clark v Ryan says that you are entitled to give evidence as to what in practice happens.
MR BENNETT: Yes, your Honour, but the events are fairly unprecedented. The second answer to that proposition is that one only has to read the ACTU advertisements to see that they have a propensity to cause that very effect. Whether they will actually cause it in relation to a specific number of people of course no one can tell, even the hypothetical expert your Honour refers to. But the natural and probable consequence of that campaign when one reads through the advertisements is, we would submit, what I have described in the context of legislation which depends upon the co‑operation of the workforce and employers and one group is being told, “This system is a bad system”.
Now, if the natural and probable consequence is that people will not effectively work within it to achieve the outcomes, in my respectful submission, that is the classic case where the purpose of achieving the outcome may be achieved by rebutting such arguments, and that is what these advertisements are designed to do.
KIRBY J: With the people’s money?
MR BENNETT: Yes, your Honour. It is for the purpose of ‑ ‑ ‑
KIRBY J: Well, as far as I am concerned, if it is to use the people’s money, it has to be with a high degree of candour and specificity and transparency to the Parliament and has to be approved by the Parliament.
MR BENNETT: Your Honour, it was.
KIRBY J: Well, it was not. There was no mention whatever of this enormous campaign with all this money.
MR BENNETT: No, your Honour, the ‑ ‑ ‑
KIRBY J: And I realise this is done in all levels of government.
McHUGH J: And by all political parties.
KIRBY J: But if it is to be done, the constitutional principle, it seems to me, is arguably that it should be done with specific parliamentary approval – and that would not be a bad constitutional principle for this Court to lay down – then they have to go to Parliament, which has to raise the money.
MR BENNETT: It would have been impossible in this case. Is one to say in the Appropriation Act or in the portfolio budget statement, “If there is a campaign which denigrates this legislation and therefore has the effect of encouraging people not to co‑operate with it, money may be spent on answering that campaign for the purpose of ensuring that the legislation has its desired effect”? Your Honour, that is unrealistic. We start with the proposition that “encouraging” on page 728 includes countering discouragement. One can encourage by saying do something, one can encourage by saying do not believe the person who says do not do something.
I have referred to the words “legislation development services” and that is why I have given other examples such as the road traffic example, or war effort, and one can think of numerous examples, of cases where public co‑operation is necessary to achieve the objects of legislation. If legislation is being attacked publicly in advance of its enactment ‑ ‑ ‑
KIRBY J: In advance of its revelation.
MR BENNETT: Your Honour, what it is going to say is very clearly summarised in some detail in the Prime Minister’s statement which my friends refer to in their pleading.
KIRBY J: Not a mention there of the large campaign.
MR BENNETT: No, your Honour, of course, because the campaign was not anticipated. That arose out of a need to rebut something that had the potentiality to destroy the effect.
McHUGH J: Again, you are testing our credulity. Do you really suggest that the government did not think that there would be no opposition from the ACTU and other unions if they brought in a system which was part of their policy, given the events of 1996 and the opposition to what happened then?
KIRBY J: And the removal of State awards, State law tribunals. A lot of interest lay in these things.
MR BENNETT: But that is not the relevant test. The words that I am taking your Honours to on page 728 clearly, we submit, contemplate the sort of advertising which is necessary or desirable to assist in achieving the objectives of legislation. Here we have legislation which has the identical objectives to at least one and possibly more of those appearing in the Appropriation Act. That being so, as page 728 shows, one of the ways of contributing to the outcome is providing “legislation development services”. What could be more ‑ ‑ ‑
KIRBY J: Yes, but that is legislative development services. It is not a huge fund of the people’s money on advertising.
MR BENNETT: It is, your Honour.
KIRBY J: I mean, legislative development services conjures up to my mind – I may be simple – lots of people working in departments getting the development of legislation ready. I have been watching it for 25 or 30 years. It does not conjure up an advertising campaign with large sums of money to other organisations of the people’s money, the burden on the people.
McHUGH J: Indeed, we have read about it recently. Apparently, scores of solicitors and lawyers from private firms are all playing their part in formulating this legislation that is coming forth. That is what is meant by “providing policy advice and legislation development services”.
CALLINAN J: That is if you accept what you read in the newspapers, word for word. I do not know what the situation is. There is not the slightest evidence of that before us.
McHUGH J: We are just giving it as an illustration.
CALLINAN J: We need to focus on the facts and on the constitutional issue.
McHUGH J: We have to deal with what is meant by this term “legislative development services” and I am suggesting to you, Mr Solicitor, that what it means is invoking outside aid or systems within the department to spend money on developing the legislation.
KIRBY J: Not propagandising it in advance of its enactment.
MR BENNETT: Your Honour, in my respectful submission, there are types of legislation where advertising is an essential part and a natural and normal part, perhaps more appropriately ‑ ‑ ‑
KIRBY J: It may be that we have come to that in Australia, but if we have, as far as I am concerned, I have to be persuaded that it ought not to be with the specific approval of the representative of the people from whom the people’s money is levied.
MR BENNETT: Your Honour, let me hypothesise the example which I gave before. It is not this case, but let me hypothesise the example of an advertisement saying, “We are proposing this legislation. We think it is a good idea for reasons A, B and C. Please send your views so that we can take them into account.” Surely that would be classic “legislation development services”, except it is consulting with the public instead of consulting with the parliamentary draftsman.
KIRBY J: One does not get an impression that the public are being brought in to assist in the design of this legislation. There is not a word of that in the advertisements.
MR BENNETT: Your Honour, that is not this case. I said that.
KIRBY J: It certainly is not.
MR BENNETT: But, your Honour, I am not putting this case on that basis. I give that example to demonstrate that the words “legislation development services”, on any view of it, can include some types of advertising.
McHUGH J: Of course it could. It could include advertising for solicitors or other lawyers to formulate policy, formulate proposals, but these advertisements, or at least the document annexure A, is a long way removed from that.
MR BENNETT: Your Honour, of course it is. That is a different type of advertising which would be justified by this. It would also justify the type I have referred to, of public consultation. The point I am making is there is nothing special and unusual about advertising which puts it in any different category to any other necessary and normal ancillary expenditure. We live in a communication age and part of a democracy consists of communication of views and intentions.
McHUGH J: Mr Solicitor, I have no problem with that at all, but the question here is whether or not this particular form of advertising is authorised by the appropriations that were made.
MR BENNETT: Yes. Your Honour, my submission is ‑ ‑ ‑
McHUGH J: Part of the problem that the plaintiffs face in this case, it seems to me, is the form of relief that they seek. Obviously they cannot get an injunction restraining you from advertising, they cannot get an injunction restraining the department or the Minister from spending money in respect of industrial relations, and formulating some relief that they seek is extremely difficult.
MR BENNETT: Yes.
McHUGH J: When you reach your argument as to the form of relief, there are a couple of questions I want to put to you about potential injunction ‑ ‑ ‑
MR BENNETT: Yes, but, your Honour, what I am putting at the moment is that what I have called my central proposition, and I will not repeat it again, brings this squarely within the words “legislation development services” because part of the development of legislation is, where that legislation depends on co‑operation, encouraging people to co‑operate which may involve persuading them of the merits of the legislation or, as in the present case, dissuading them of arguments being put to them about its demerits which might encourage them not to co‑operate with it.
That, both in advance of the legislation being enacted and after it is enacted is, we would submit, within the words “legislation development services”. But let me go on on page 728. I perhaps should say this, your Honour. The way the case is going I would expect to be going until lunchtime and I apologise that yesterday I gave a shorter estimate than that. Now, it goes on at line 23:
supporting employers and employees in adopting fair and flexible workplace relations practices -
Then the key priorities. The first is – this is for outcome 2 again:
develop a workplace reform package which implements the Government’s policy –
That again indicates that part of what is proposed is matters ancillary to the proposed legislation which has, as the Prime Minister has said, the purpose of achieving the higher productivity and higher pay workplaces.
KIRBY J: Not a word here of a massive publicity campaign, paid advertisements, and yet in other parts of the PBS there are references to that. Why was it deleted? Why did you have it in elsewhere and deleted despite the size of this campaign?
MR BENNETT: Yes, can I come to the ‑ ‑ ‑
KIRBY J: Why did you keep that from Parliament, and especially from the Senate?
MR BENNETT: It is not kept from anyone, your Honour.
KIRBY J: Well, it was kept. It was not mentioned.
MR BENNETT: Well, your Honour, it is ‑ ‑ ‑
KIRBY J: Silence in an Appropriation Act (No 1) which the Senate could not amend. That is why section 83 is critical to this.
MR BENNETT: Well, your Honour, we submit it is included in all these passages I am reading to your Honour about encouraging employers and employees to adopt the practices, to have a legislation development service in relation to the particular legislation and what ‑ ‑ ‑
KIRBY J: Just silence on this campaign with millions of dollars being spent of the people’s money.
MR BENNETT: Your Honour, that is something which occurred ‑ ‑ ‑
KIRBY J: Maybe I am too sensitive, but this is an old constitutional principle. I mean, this is what battles and revolutions have been fought over, control of the people’s money, not levying money from the people except with their consent in Parliament.
MR BENNETT: And, your Honour, in my respectful submission, what this campaign is being spent on is matters which go directly to achieving the outcome which is fully disclosed to Parliament and, indeed ‑ ‑ ‑
KIRBY J: Well, it is not fully disclosed as far as I am concerned. It is not disclosed at all. Silence. If it is to be expended, it ought to be disclosed. It is a question of whether you believe in transparency and in democracy.
MR BENNETT: Well, your Honour, one is dealing with a document which makes it clear that the development of this legislation and the achievement of this legislation and the success of this legislation is the outcome which is desired. Money is then spent of necessity, millions of dollars, in rebutting something which might have prevented the legislation achieving that objective. That, your Honour, we submit, is squarely within what is disclosed to Parliament. It does not ‑ ‑ ‑
KIRBY J: It is not squarely as far as I am concerned.
MR BENNETT: I understand, your Honour.
KIRBY J: Develop legislation is one thing, spend vast sums of the people’s money on advertisements is quite another, and it is done by all levels of government, all political parties, and it has to stop except with the express authority of the people as far as I am concerned.
MR BENNETT: Your Honour, the statement that it is done by all levels of government and all political parties is what makes my point because that shows that advertising, where it is part of achieving a legislative objective, is part of general words directed to that…..in the same way as an appropriation for road safety would justify ‑ ‑ ‑
KIRBY J: But it is generally specifically mentioned, it is often specifically mentioned, and here it was not.
MR BENNETT: Your Honour says “often”. There is an expressio unius argument my learned friend puts which I will come to in relation to the one passing reference to it in a different context.
KIRBY J: It makes them accountable, you see, and it is very relevant that it is in Appropriation Act (No 1) because the Senate cannot amend that. That was not politically irrelevant at the time of Appropriation Act (No 1).
MR BENNETT: Your Honour, that aspect will be dealt with by my learned friend Mr Lloyd. Your Honours see on page 728 it goes on at line 34, “promote agreement-making choices to employers and employees”. the very word my learned friend uses in his original draft of his injunction, the word “promote”. That must involve promoting use of the legislation. That must involve saying to employers and employees, “The people who tell you that the framework we are setting up for you to work under is a bad framework are wrong for these reasons. It’s a good framework”. That is an essential part of doing what is disclosed to Parliament in line 34. It is clearly part of it.
In an information age, part of it necessarily involves advertising campaigns, use of television and so on. We are living in an age where the effectiveness of the Minister being interviewed and expressing the view at an interview is very limited compared to the coverage of advertising. That is simply a reflection of the background of the society in which these words are put to Parliament. In my submission, anyone looking at this page would say if there was a campaign the natural and probable consequence of which was suggesting to people, “Don’t work within the new system”, that promoting agreement‑making choices to them would involve negating that campaign. The words are absolutely clear, we would submit, and one does not need to be as express and as specific as your Honour Justice Kirby puts to me.
KIRBY J: That is the question. It is a question of whether you believe in transparency to Parliament, especially in the federal Parliament where the Senate has limits on what it can do to Appropriation Act (No 1).
MR BENNETT: Your Honour, it is a question of construction of what was put to Parliament.
KIRBY J: Yes, and the construction is carried out against the history of hundreds of years of constitutional principle and section 83 of our Constitution.
MR BENNETT: And the cases make it clear that Parliament can determine the level of specificity it chooses. Parliament says, “We give you this money to achieve this objective and this outcome and you decide how you spend the money to achieve it”. There are indicative documents given suggesting estimates of how it might be expended and events occur making it necessary, within the words of the parliamentary appropriation, to spend it in a slightly different way. This document does not limit in that way the methods that can be used to achieve the outcome. That would be contrary to the legislation Parliament has enacted. It has enacted, “You may spend this money to achieve this outcome”.
GUMMOW J: That is not quite right, Mr Solicitor. I think you are placing obstacles in front of yourself all the time. This is a departmental output, is it not?
MR BENNETT: Yes.
GUMMOW J: Well, we look at the note to the definition of “departmental output”.
MR BENNETT: Yes.
GUMMOW J: That tells you that these, although put in in the interests of transparency and people knowing what is expected and so on, in fact, as a matter of law, they do not restrict the scope of the expenditure authorised by the ‑ ‑ ‑
MR BENNETT: I so submit, your Honour. What I am doing at the moment is showing that even if my learned friend were right ‑ ‑ ‑
GUMMOW J: I understand that.
MR BENNETT: That is all I am doing. What your Honour puts to me is part of my argument in a different ‑ ‑ ‑
GUMMOW J: And, I then look at section 4(2) which seems to me to be linked to 8(2), namely administered items, where the phrase, “for the purpose of carrying out” is used. It is not used in section 7 and that then fits in with the definition of “departmental item” in the note so the mandatory element of the PBS finds its way into 8 but if you are in (7) and you are in the definition of “departmental item” you are in a more global situation.
MR BENNETT: I am, your Honour, subject to the qualification of what is meant by “departmental expenditure”.
GUMMOW J: Exactly, and what is involved in the concept of a department of state.
MR BENNETT: Yes.
HAYNE J: Which lies at the heart of the distinction between “departmental items” and “administered items”.
MR BENNETT: Yes, one is internal and one is external, I think, is the - but that is an aspect that will be dealt with by ‑ ‑ ‑
HAYNE J: And is to be linked back to section 15 of the Act which is the appropriation.
GUMMOW J: It is 15 that is the appropriation in the terms of 81 of the Constitution.
HAYNE J: CRF “is appropriated as necessary for the purposes of this Act” can be seen to be linked with section 81. The purposes of the Act, when you come to “departmental items” as distinct from “administered items”, the purposes of the Act relevantly are to provide the global sums of money identified in the schedule for the particular departments of state for departmental expenditure. That may, or may not, be going back to about 17th century English methods of appropriation but it seems to be the way in which this is set up.
MR BENNETT: Yes. I would so submit, your Honour.
GUMMOW J: And it is not challenged.
HAYNE J: Thus we have, à la 17th or 18th century style, an appropriation of X million for the navy, Y million for the army, Z million for the civil list. That may be satisfactory, it may be transparent, it may not be, but that seems to be the structure of what we have.
MR BENNETT: Yes, your Honour. Parliament is free to determine the degree of specificity with which it appropriates. It has chosen here to do so in a wide form. If I can just fairly quickly complete this exercise, which in a sense assumes the legal proposition against me, and complete the references in the portfolio budget statement. Your Honours see on page 730 there are – and that is obscured in the appeal book but your Honours have a document which has the numbers more clearly. It is page 48 of the little booklet.
KIRBY J: I think this is just a photocopy of the little booklet, is it not? It must be.
MR BENNETT: It is, your Honour, yes.
KIRBY J: The PBS.
MR BENNETT: Yes, because your Honour sees the same page number at the bottom, page 48. It is just that there may not have been a sufficient appropriation for the toner in the Australian Government Solicitor’s office. Now, your Honours see that under “Departmental appropriations” there is a breakdown of various numbers, but that breakdown is nothing more than an estimate. If your Honour looks in the shaded column, the column that is obscured on page 730 but clearly visible in the booklet, your Honours see the far right-hand column is headed “Budget estimate 2005-06”. We know from the Act that the individual items are in relation to - departmental appropriations are notional.
Now, again, one sees there the phrase “Workplace relations legislation development” and I have made my submission that it falls within that. On the following page the department contributes to outcome ‑ ‑ ‑
KIRBY J: Could I just ask, do you seek to justify it under output group 2.1, that is to say, under specifications other than legislative development?
MR BENNETT: Your Honour, only for the purpose of the argument on relief, that part of that argument is that the mere fact that it might not fall correctly under one part of the appropriation may not matter if it falls within another part of it. It could, we submit, fall within other parts of it, but I do not need to make that as the main submission. My learned friend seems to confine his relief now to the particular outcome, but it goes to the relevance and significance of that form of relief.
If one goes then to page 731, which is page 49 of the booklet – do your Honours prefer if for the balance of this submission I use pages in the special case book or ‑ ‑ ‑
GLEESON CJ: Please yourself.
MR BENNETT: Well, I will use the special case book. I think the toner survived most of the rest of it. Page 731 your Honour sees that the performance information for outcome 2 ‑ ‑ ‑
KIRBY J: Note the high degree of specificity even down to the “Special Employee Entitlement Scheme for Ansett Group Employees” – highly specific, transparent, admirable. Contrast that with the failure to make any reference whatever to advertisements of large sums of money.
MR BENNETT: No, your Honour, it does not set out in detail or purport to set out in detail the precise outputs which will achieve the objective. It does not purport to do that.
KIRBY J: We have even got subscriptions to the Coal Mining Industry financial arrangements. I mean, it is very particular and very specific.
HAYNE J: Amongst the administered items.
MR BENNETT: Yes. Now, we just stress on page 731 the paragraph beginning at line 22:
the development of a more flexible legislative framework within which employers and employees can develop workplace agreements –
et cetera, and we submit again that the development of a legislative framework includes demonstrating to the public and to workers and employers who are going to be using that framework its advantages so as to encourage its use to achieve the ultimate objectives. Now, I have taken your Honours to that. On page 733, the performance information for outcome 2, the first heading is “Performance indicators for administered items” and the impact is the:
Higher pay and/or conditions through higher productivity –
and the performance indicators are:
Low incidence of industrial action –
again, something which is likely to be fomented as a natural and probable consequence of the other campaign, but more importantly –
The federal workplace relations framework is used by employers and employees.
That is what one is directing funds to, seeking to achieve that it is used by them and, clearly, if they are constantly told this is dreadful, they are less likely to use it.
KIRBY J: If there is only a federal arrangement left, that is what they will have to do.
MR BENNETT: No, your Honour, it is a use in a co‑operative way rather than an adversarial way which is – and use not using – I will start again, I am sorry. This is a framework being set up which depends upon, as has been said in a number of places, co‑operation by two sides, working together to achieve certain results. People who believe that the framework is contrary to their interests are not going to work within it as effectively as people who believe that the framework is desirable. It is as simple as that. So we submit that if one does use the portfolio budget statement in the way my learned friend uses it, it supports us.
May I now say something about the expressio unius argument which my learned friend has put and which your Honour Justice Kirby has referred to. The starting point of course – and I will not take your Honours to the case, I simply remind your Honours of the reference – is the statement of this Court in Houssein v Department of Industrial Relations and Technology (1981-1982) 148 CLR 88 at 94.
KIRBY J: But that was not in the context of a high constitutional principle of specificity for the purpose of appropriations according to law. That was just a general statement in a particular statute.
MR BENNETT: It was in the context of a privative clause in relation to the ability of courts to issue prerogative writs. It was a general statement indicating that the maxim is, if I can use the colloquial expression, not as fashionable as it used to be. The phrase used I think was “a good servant but a poor master”. We would submit using it in that way in this case is simply not helpful. Parliament is unlikely to read a portfolio budget statement with an eye attuned to the old Latin maxim of expressio unius est exclusio alterius. I have found by the enormous work I have done in preparation a reference to advertising in a totally different context. Therefore, its omission here is a deliberate deletion and omission on which I can rely. That sort of legal interpretation, we would submit, has little place in construing a portfolio budget statement.
KIRBY J: That would be the result of this Court’s ruling against your arguments that the message would go out to the Federal and the State Parliament that if you want to engage in large cost advertising campaigns from the public’s purse, you have to do it with specific indication to the Parliament so that it gets approval for appropriation purposes – not a bad message, it seems to me. You have to address that as far as I am concerned.
MR BENNETT: It assumes, your Honour, that advertising is so different in character ‑ ‑ ‑
KIRBY J: It is very expensive.
MR BENNETT: It is expensive. Many things are expensive, your Honour. It assumes it is so different in character to the other expenses and other necessary outputs, if one likes, to achieving the outcome that it requires special mention.
In my respectful submission, its very normality in an information age means that it does not require special mention where it is included within clear general words which encompass a variety of possible activities and expenses.
KIRBY J: But may it be in a special class because you are using the people’s money to propagandise the people to persuade them to a particular point of view. In the past, political parties and movements have fought within their own funds, but this is using the people’s money for particular political outcomes and that is what, at least arguably, ought to be specifically approved, because that is different from the past.
MR BENNETT: Well, your Honour, that comes back to the argument that was being put yesterday, which is the third part of my submissions which I will now come to. There are two answers to that. The primary answer is this. The mere fact that one effect of particular activities may be to put the views of one political party does not disqualify the action from, if otherwise, correct, constitutional and appropriate and that is why I gave the example yesterday of the public controversy over speed limits.
KIRBY J: We are not back to speed limits.
MR BENNETT: Well, your Honour, I need to to answer your Honour’s question. The point about that analogy is that it is a case where what is being put to the public, clearly in the public interest, clearly for the purpose of achieving road safety, is the merits of one government policy over what in that case, hypothetical case, was opposition policy. There are cases where it is necessary and proper in the interests of achieving a legitimate and proper government objective.
KIRBY J: Justice Callinan says no one disputes that. Mr Solicitor, no one disputes the question is transparency. The question is whether, if it is to be done, dipping into the people’s purse, it has to be done with specificity against the background of our constitutional arrangements, particularly the limitations on the Senate in amending Appropriation Bill No. 1.
MR BENNETT: Your Honour, the question of degree of specificity is not under challenge.
GUMMOW J: We cannot enter into any question of whether the Compact has been observed or not observed, it seems to me.
MR BENNETT: Well, that is another issue, your Honour, and that is one of the submissions Mr Lloyd will be making to your Honours.
KIRBY J: That has specific mention to new policies. If ever there was a new policy it is this one.
MR BENNETT: Yes. But, your Honour ‑ ‑ ‑
KIRBY J: It is a breach of the Compact, as it seems to me at the moment.
MR BENNETT: Your Honour, the Compact has been amended in that very respect and we will demonstrate to your Honours that that aspect of the old Compact was agreed to be taken out of it, in effect, by the amendments in 1999.
KIRBY J: That comes as a surprise.
MR BENNETT: Your Honour, it is an aspect Mr Lloyd is going to deal with.
GUMMOW J: Mr Lloyd’s barrow keeps getting fuller and fuller.
HAYNE J: He is enjoying it too.
KIRBY J: Poor old Mr Lloyd, he gets all the hard ones.
MR BENNETT: That aspect of the Compact has just gone, and your Honour will see the ‑ ‑ ‑
KIRBY J: You wave it away as though it is insignificant. It is at the heart of our constitutional arrangements and the powers of the Senate.
MR BENNETT: It is not, your Honour. It was a provision in the old Compact that has been overridden by an amendment to the Compact.
KIRBY J: Well, that is not clear to me.
MR BENNETT: To the extent that the Compact is – well, your Honour, that will be demonstrated in due course. At the moment I am not dealing with the Compact or the Senate aspect. What I am putting to your Honours is that the present matter is squarely within the outcome. Now, what is put against me, which I was dealing with at the moment was the proposition that because it happens to be something on which there is a difference of policy between the two parties, the two major parties, that therefore in some way one is disqualified from advocating one aspect, even if that would otherwise be justified. In my respectful submission, there is no such disqualification.
One does not answer this case by looking at one of these advertisements and saying, “This is a political issue, therefore the people’s money is being spent on a party political issue”. One asks if it is within the terms of the appropriation and, if it is, the mere fact that it may happen to coincide with the views of one party as opposed to the other does not operate as a disqualification. That is the short argument about purpose.
One can add to that that in almost every case of government policy, whether one is talking about appropriations or one is talking more generally, in one sense one could say of every government policy adopted by either party however desirable and in the public interest, “Oh, they are just doing it to get re-elected”. That is what democracy is about. It is about political parties having policies, being elected on the basis of those policies and being elected out ‑ ‑ ‑
KIRBY J: Usually using the funds of their supporters, not using the people’s money, a people who do not necessarily agree with them.
MR BENNETT: No, your Honour. I am not ‑ ‑ ‑
KIRBY J: To propagandise them and change their opinions.
MR BENNETT: I am sorry, your Honour, that is going back to the first aspect. Of course, that on its own would not be a justification, but nor is it a disqualification.
KIRBY J: That is the question.
MR BENNETT: Your Honour, it cannot be a disqualification. If Parliament appropriates money for a purpose and the achievement of that purpose happens to involve doing something which may also represent the interests of a political party that is just not a disqualification. It is within the appropriation. One does not say, “A government policy may not be pursued” because it is being pursued for the purpose of re-election or making the government popular with the people or anything else. That is what democracy does, and it cannot be a disqualification. Of course, on its own it would not be a purpose of government.
Of course, a government may not spend money directly on the purpose of its own re-election or popularity but that is not a disqualification where the money is also being spent for a proper government purpose, properly authorised by an Appropriation Act. It is simply an irrelevancy.
KIRBY J: It will always be presented as the one when, in truth, it often looks to the citizens as the other. That is with all political parties, this is not confined to the present government or the federal government. It is a creeping feature of our country. The question is whether we call a halt, this Court defending the Constitution and the arrangements and the Senate calls a halt.
McHUGH J: In fact, it is worldwide phenomenon. Only this term, the United States Supreme Court has had to deal with a challenge to government advertising but they dealt with it under the First Amendment. It was a decision given on 23 May in a case called Johanns v Livestock Marketing Association. In fact, Justice Scalia, who gave the opinion of the court, said “This is the third time in eight years we consider whether a federal program that finances generic advertising to promote an agricultural product violates the First Amendment”.
MR BENNETT: Yes. Your Honour, all that illustrates is that advertising, including advertising by governments, is a natural and normal part of innumerable other activities.
KIRBY J: That is one interpretation. The other is that some politicians of different political persuasions, with their hands on the people’s money, have thought of a good idea and have continued to use it, and let them use it but with the specific approval of the people’s representatives in Parliament.
MR BENNETT: Your Honour, I am repeating myself, but we submit they have not.
KIRBY J: I suspect we are. Of course, then you render the politicians accountable. If it is simply slipped through in this way, who is accountable?
MR BENNETT: It is not simply slipped through, your Honour.
KIRBY J: Parliament is not accountable and Parliament is our guardian of the people’s funds and taxation.
MR BENNETT: And money has been allocated to the department by a proper appropriation for the purpose of achieving higher productivity, higher pay workplaces. Parliament is given a document which says, among other things, that one of the objectives is:
The federal workplace relations framework is used by employees and employers -
That is page 733, and the government is then confronted with a situation in which people are being subjected to a private advertising campaign, the effect of which is likely to discourage that very outcome.
KIRBY J: But it is not a difficult thing to put in a supplementary Appropriation Bill to the Parliament and to seek supplementary grants. That was done with the tsunami relief, and it has the merit, depending on the later arguments, because it is not in Appropriation Bill No 1, it then can be considered by the Senate under our constitutional arrangements.
MR BENNETT: Your Honour, I do not want to spend a lot of time on the tsunami legislation. That would take another 10 minutes, but may I just summarise it this way ‑ ‑ ‑
KIRBY J: It can be done for that. Why can it not be done for this?
MR BENNETT: What was done in the tsunami legislation was slightly different.
KIRBY J: It is popular, whereas this is not.
MR BENNETT: Money was expended, your Honour, under very general provisions in an Appropriation Act by various departments on tsunami relief. Further funds were then granted to top up the amounts so that the departments would have sufficient funds for the other things they needed to spend money on. That was done in identical terms to what had been done in the prior very general provisions in the Appropriation Act. In other words, Parliament approved the fact by the second Appropriation Act that those general descriptions – and there were very general things like the defence of Australia and so on – were wide enough to cover tsunami relief.
KIRBY J: But they still went with a supplementary Bill, did they not?
MR BENNETT: It did, your Honour, but I invite your Honour to look at the supplementary Bill and to look at the outcomes in the schedules and to compare those with the corresponding schedule. I can give your Honours the references if your Honours want them handed up - because they are identical – to compare them to the outcomes in the schedules from which money had been taken and used previously. Parliament, by using the same wording, clearly accepted that it was legitimate for the departments to have done so.
It was not a matter of forgiving some breach of the Constitution by retrospective legislation. It was not that sort of thing. It was accepting that wide outcomes can justify things which very often are not specifically referred to. Parliament was clearly in no way concerned that there had not been specificity, that the earlier legislation giving general funds to the Department of Defence had not said, “If there’s a tsunami you can go and help”.
McHUGH J: Yes, but all sorts of bodies had funds diverted. It is a bit difficult to see how Comcar’s appropriation, for instance, could justify a payment for the tsunami victims, but it did, and Comcar was one of the entities for whom money was appropriated by Act No 33 of 2005.
MR BENNETT: Presumably it drove people around who were involved in organising things that were necessary for the tsunami. The point I am making is this, that the tsunami example is not an example of something being done specifically when it became necessary. It is an example the other way. It is an example which makes clear that Parliament accepts that when events occur, the general appropriations can be used so long as they cover the type of activity in their very general expressions of purpose. That was made clear by the fact that exactly the same phrases are used in the outcomes in the tsunami legislation. I will have copies of that made for your Honours and handed up to make good that proposition.
I am moving on now to section 3 on which I will be very short. This is the conclusion on my arguments in the supplementary submissions. All I want to do is just make clear the classification of the way we put the different arguments. If your Honours have the short supplementary submission, your Honours see it starts with the general proposition that there are many situations, some very different to this one, in which government advertising is legitimately directed to the achievement of a purpose of government policy and where it occurs expenditure is supported by an appropriation for the outcome to which the policy is directed. That is in addition to the general democratic purpose of keeping the community informed of proposed government action.
Now, we then make the submission I have made many times, that many of them arise because the level of public support for a policy contributes to its effectiveness. There is then the road safety example, the wartime example. There are policies involving public attitudes directly such as a policy of reducing racial or sexual discrimination and there was a United Kingdom appropriation for building a safe, just and tolerant society, for example. That would clearly support expenditure on government advertising extolling the virtues of racial tolerance.
These are, of course, very different to the present case. Government benefits is another example that is different to the present case. It has been used in some public statements by one of the plaintiffs recently, your Honours may have seen. Where a government policy such as social services confers benefits, it may be necessary to advertise in order to inform those entitled to claim those benefits that they have those rights. That could be supported under a general appropriation for the provision of those services. One would not need to include reference to advertising. It is so obviously included. But, of course, that is a case where advertising demerits of the proposal would not be necessary. The people are going to claim benefits they are entitled to whether the merits are advertised or not.
Then paragraph 5 is the one I am not going to read again but it is the central submission we make to the Court on this case, paragraph 5 on the second page of the supplementary submissions.
We then deal with the significance of a secondary purpose, and I have dealt with that. The existence of such a purpose simply does not as a matter of English detract from the proposition that an expenditure falls within the wording of a purpose and, in any event, it is a purpose that is frequently present. These submissions are all in addition. All that I have said in these two pages is really amplification of paragraph 17.1 of our submissions.
We refer to paragraph 17.2 on the last page. Paragraph 17.2 is a much shorter proposition which I will not spend a lot of time on. It is simply this, that quite apart from the primary submission, which is that the legislation is directed to achieving the outcome and that matters dealing with the legislation are therefore within it, quite apart from that the one effect, the one natural and probable consequence of the campaign against the proposed reforms is that there will be actual industrial action.
Indeed, much of the advertising specifically talks about weeks of action and stop‑work meetings and so on. I will not take your Honours to the details unless your Honours wish me to do so. There are pages of it. Your Honours can almost pick any one at random to find that, with the conclusion there every time “your rights are worth fighting for”. The word “fighting” is itself, of course, an emotive word which in this context is one the natural and probable effect of which is to foment industrial action.
The reduction of industrial action of that type is clearly within the outcome of higher productivity. If someone says there should be a general strike and the government chooses to spend money saying, “No, there should not be a general strike, that would be counterproductive and undesirable”, no one would dispute that that falls within a budget statement for an outcome on higher productivity.
McHUGH J: But why not? Why? It is not maintaining productivity; it is achieving higher productivity, which means higher than what is presently existing.
MR BENNETT: No, it means higher than what might otherwise be the case. Higher is the opposite of lower. If someone is engaging in action likely to produce lower productivity, frustration of that person’s aims is something directed to higher productivity.
KIRBY J: In the context, Solicitor, that is a very unconvincing answer to Justice McHugh. The context of higher activity, better and stronger Australia, it is all up and up. This is advertising speak, spin.
MR BENNETT: And part of up is not down, and part of up is – up involves a situation where there are pressures pushing one up and pressures pushing one down and part of achieving up involves resisting and countering and destroying the pressures that push down.
McHUGH J: Yes, but it means more than higher than zero. It means higher than the present level surely.
MR BENNETT: But, your Honour, it includes resistance to things which reduce it.
McHUGH J: Do not spend any – it is a trivial point, Mr Solicitor.
MR BENNETT: Well, your Honour, I submit that higher includes not lower and resisting the – and, of course, if one has both upward and downward pressures and one is aiming to achieve an upward movement, part of achieving the upward movement is resisting the downward pressure. The downward pressure is something which is going to work against upward movement. If one pictures some sort of hypothetical elevator with two giants, one pushing it up and one pushing it down, if one is seeking to achieve a higher level for that elevator one would do two things. One would support the giant who is pushing it up and would seek to frustrate the giant who is pushing it down.
KIRBY J: You will be back to your speed limits.
MR BENNETT: Your Honour, analogy is the soul of argument. The art of persuasion involves the use of analogy. So those are the arguments we put and we do stress the way the legislation itself is part of the achievement of the – support for the legislation itself and the successful operation of it when enacted is part of it. The argument that it is not yet in force, we would submit, has no relevance. There are many situations where, if one is talking about influencing public action or opinion, one needs to get in early. There is simply no reason why it should not be done at an early stage where the campaign which is designed to sow antipathy to the reforms also precedes the enactment of the legislation.
McHUGH J: It does seem a long shot to suggest that once the legislation comes in that people are not going to comply with its basic objects, that they are going to break the law. After all, it is a question of self-interest. J.T. Lang said, “Always back self-interest, that horse is always trying”. In this context, if workers are going to benefit from it and they see the benefits, they are going to pursue the means to achieve those benefits.
CALLINAN J: The answer is there have been quite a few actions under section 45D of the Trade Practices Act in the past which might negate that proposition, including the Mudginberry Case.
MR BENNETT: Yes, that is so, your Honour. Of course people are going to act in their own self-interest, but people are also going to make decisions about whether they co-operate on the use of a framework or regard it as something which they hate so much that they give only grudging co-operation and only to the extent of their interest. There is no doubt that this sort of legislation, on its face, is less likely to be effective if one has a workforce that passionately believes that this legislation is opposed to its interests, which is what it is being told.
KIRBY J: Well, you have a greater confidence in advertising and a lesser confidence in the Federal Parliament than I do.
GLEESON CJ: How much longer do you expect to be?
MR BENNETT: Your Honour, I am about to move onto the next section of my submissions, but certainly until lunch, your Honour. I do not think long past lunch, but it may be a small amount past lunch.
In relation to the constitutional framework, might I just remind your Honours of a few aspects of the AAP Case. It is Victoria v The Commonwealth (1975) 134 CLR 338. It concerned an appropriation for the purpose of something called the Australian Assistance Plan, which was a plan designed to facilitate co-operation between various social services at various levels of government. It is a case where the High Court divided and they divided in a number of ways. It is interesting to note that in a subsequent case, Davis v The Commonwealth (1988) 166 CLR 79 – that is the Australian Bicentennial Authority Case, one of the many bodies using the initials ABA – at page 95 there was a discussion by Chief Justice Mason and Justices Deane and Gaudron of that case. They say this about it:
Subsequently in the AAP Case McTiernan, Mason and Murphy JJ concluded that s 81 enabled the Parliament to appropriate for such purposes as it may determine. Jacobs J considered that the validity of an appropriation is not justiciable . . . The case therefore stands as an authority for the proposition that the validity of an appropriation act is not ordinarily susceptible to effective legal challenge.
KIRBY J: Yes, but that has to be within limitations because of the specific statement in section 83 of the Constitution.
MR BENNETT: Yes. Your Honour, I am not suggesting that this action is ‑ ‑ ‑
KIRBY J: What is the point of referring us to a general statement of that kind? It really does not help.
MR BENNETT: The purpose, your Honour, is simply to put in context the decision, a number of aspects of which are directly relevant to this type of case. That case of course concerned the validity of an appropriation. This case does not concern the validity of the appropriation. The validity is accepted by the plaintiffs.
KIRBY J: On the contrary, they rely on the Appropriation Act.
MR BENNETT: Yes, they do. They do not suggest that the breadth of the appropriation in some way is beyond the power of Parliament.
GUMMOW J: The appropriation in Davis was for the purposes of the Bicentennial Authority. That is how it came before the Court.
MR BENNETT: Yes. The judgment of Justice Jacobs discussed a number of aspects. His Honour’s judgment starts on page 402, where he sets out the item in the second schedule of the Appropriation Act (No 1). It is interesting; that was very much a new policy but very clearly in Appropriation Act (No 1). That does not seem to have been regarded as an issue. It had grants to regional councils for social development, development and evaluation expenses and so on. It was suggested that that was invalid.
The main argument, which was rejected, was that it would have been possible under that appropriation to spend money on matters not within section 52. The argument was rejected for two reasons, the first being that there was not necessarily a confining to section 52 in relation to purposes, the second being that the mere fact that an appropriation could result in money being expended for purposes within and purposes without did not disqualify it. There was also discussion of the implied nationhood power, although I do not think that phrase was used in the case.
It is interesting to note also that at page 407 Justice Jacobs refers to the fact at point 7 of the page – if your Honours see the word “material” in the left‑hand margin at point 7, halfway through the paragraph beginning, “There was still nothing”, his Honour says:
It became clear that the Australian Assistance Plan was in course of evolution but in the course of this evolution the Social Welfare Commission . . . had embarked upon the trial programmes . . . 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.
So there was nothing surprising about the fact that part of what money was being spent on was something which was not yet evolved.
At page 410, his Honour, at the end of the long paragraph on that page at point 5, rejects the proposition that an appropriation under which money may be spent in part for Commonwealth purposes and in part not, is invalid and he rejects that, and the reasons he rejects it appears in the paragraph beginning at point 6 of the page, point 7 perhaps, where his Honour says:
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.
The problem, of course, in relation to relief was the impossibility of formulating it in a context where one did not know what head of Commonwealth power would be used and that appears at page 411. At the top of the page he says:
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 . . . The Crown may then within the law governing appropriation of its money expend those moneys . . .
There must be an appropriation -
and it goes through sections 81 and 83. Then he says at point 5:
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.
Of course, that is in a context to a challenge to the appropriation. He goes on to say:
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.
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 . . . 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.
Just stopping there, that sentence, of course, is confined to constitutional validity but the importance of it is that it applies to this sort of problem. If there were to be an injunction against particular expenditure, one would need to work out in the injunction all the appropriations which might justify the expenditure, all the heads in the Appropriation Act under which it might be justified and if my learned friend were right in saying it has to be within outputs in the portfolio budget statement, then one would have to identify every output and go through the whole of the portfolio budget statement ‑ ‑ ‑
McHUGH J: But why, Mr Solicitor? Assuming the Court was against you on your substantive argument, why could not a declaration be framed in these terms, that an injunction restraining the third defendant from issuing any drawing right under section 27 of the Financial Management and Accountability Act purporting to authorise the payment of moneys for the purpose of an advertisement in the form, or to the effect, of annexure A, which is set out at page 45? That is a specific injunction.
MR BENNETT: Well, in the form or to the effect, it would be so limited it would have the ‑ ‑ ‑
KIRBY J: Yes, but your view is one that completely emasculates the power of this Court to uphold important constitutional principles. I mean, in the end, remedies will adapt and be found for that purpose, and you seem to create a miasma of difficulty which it is the business of courts to cure if there is a constitutional or statutory offence.
MR BENNETT: The problem is this, your Honour, that the way my learned friend puts it in his original ‑ ‑ ‑
McHUGH J: He wants an injunction preventing expenditure of any money on any advertisement promoting the reform package. There are extreme difficulties about that.
MR BENNETT: Your Honour, that would prohibit, for example, an advertisement which said we are proposing the following reform package. We think it is desirable for reasons A, B and C, but we seek the public’s views before we make the final decision. Such an advertisement which would be classic legislation development on any view of it would be forbidden by my learned friend’s injunction.
McHUGH J: That is why I put the very specific injunction to you. Now, it may not get the defendants very far in the real world because those who frame these advertisements might easily get around it, and maybe there is not much utility in it, but I would like to hear your submission on it anyway.
MR BENNETT: Your Honour, there would be no utility on something as narrow as that.
McHUGH J: Stop another advertisement in the form of annexure A.
KIRBY J: And it would make people pause before they put forward advertisements of this kind and consider its consequences for appropriation policy and the content of PBS and the role of the Senate.
MR BENNETT: Yes, but it would prohibit a lot of things which on – well, one would have to then ask, in the real world, what is it that is being sought to be prohibited, and that is almost impossible for my learned friend to define.
KIRBY J: Yes, but that means that if he comes along and shows that annexure A is offensive to the statute and to the constitutional framework, and giving colour to the statute, then your answer is there is just nothing you up there can do about it. That is not a view of the judicial power of the Commonwealth that I accept or of the duty of this Court.
MR BENNETT: Would your Honour just pardon me one moment? Your Honour, I say this subject to correction, but my understanding is that there is not the slightest suggestion anywhere that there is a subsisting threat to publish an advertisement in that particular form. That is a past advertisement.
KIRBY J: That would be a matter for the future for any breach of it. I mean, it is not only in that form, it is to the effect.
MR BENNETT: Your Honour, to the effect of a document covering a whole page is almost meaningless, and the Court does not, in my respectful submission, pronounce injunctions which are ineffective. What my friend really seeks ‑ ‑ ‑
GUMMOW J: It would be an entertaining contempt application.
MR BENNETT: Yes. But it is an illustration of why, where one has an outcome in fairly broad general terms, that there are difficulties formulating an injunction in relation to matters that fall within it. There are, of course, as has been pointed out, other ways of dealing with the matter if it is in fact not within the outcome.
McHUGH J: If the Court has jurisdiction and makes such an injunction, but for reasons of utility would not make it, why could it make a declaration? I mean, the Court has no power in this field to be making declarations except as an ancillary order.
MR BENNETT: Precisely.
McHUGH J: Or in substitution for an order that it could have made.
MR BENNETT: Yes, that all demonstrates the inappropriateness of these proceedings as the means of vindicating the claim that my learned friend asserts. We say, of course, he has no claim.
HAYNE J: Looking backwards to past events then requires consideration of what intersection there is between granting relief that essentially looks backwards with section 26 of the Financial Management and Accountability Act, the offence‑creating provision, and section 15(3), the civil relief provision that might be engaged and whether the Court should grant relief which seems to carry with it conclusions concerning criminal and civil liability.
MR BENNETT: Yes, your Honour, and particularly in a context where there are parliamentary procedures and procedures involving the Auditor‑General and his legislation.
HAYNE J: Everybody refers ‑ ‑ ‑
KIRBY J: There happen to be three branches of government in this country. To say that there are parliamentary procedures and to say that there are executive government procedures is not an answer to an appeal to the judicial branch.
MR BENNETT: Well, your Honour, it may be, certainly in a discretionary sense and possibly further. If one looks at section 97 of the Constitution, your Honours see that in Chapter IV, in the chapter which contains the various provisions about the consolidated revenue fund and how it is to be administered and the problem of surpluses and how they are to be distributed and so on, in that context it provides:
Until the Parliament otherwise provides –
so it is making provision for the future provision for –
audits of such receipt and expenditure . . . in the same manner –
which existed in the various colonies and then after that in the method provided by Parliament.
KIRBY J: But that is no answer to an appeal to Chapter III. That is just supplementary. It is important, it is significant, but it is down the track and this is here and now.
MR BENNETT: It is a demonstration, your Honour, as is I suppose illustrated by the analysis we are going to go into when my learned friend, Mr Lloyd, addresses your Honour. It is an illustration of the difficulty of the degree of interference with the legislative branch, and to a lesser degree – and the Executive branch to some extent – where one is dealing with these financial matters. The structure of appropriation is intended, we would submit, to be one primarily dealt with within Chapter IV. That does not mean that in an extreme case one could not perhaps use Chapter III – certainly at the discretionary level, where one is dealing with the sort of issue one is dealing with here – but the primary method for dealing with it is the procedures in section 97, plus of course ‑ ‑ ‑
KIRBY J: Section 97 itself is spent.
MR BENNETT: No, your Honour. It is until – well, 97 in conjunction with 51(xxxvi).
GUMMOW J: It is alive and well. It supports the Financial Management and Accountability Act and the Auditor-General Act.
MR BENNETT: Yes. Precisely, your Honour.
GUMMOW J: No other head of power.
MR BENNETT: Precisely.
KIRBY J: But 97 is spent.
MR BENNETT: No, your Honour.
KIRBY J: The Parliament has now otherwise provided, and therefore the governing law is – it is not, “if the Parliament” it is “until”. So it is a point in time. A point in time is reached where the Parliament otherwise provides. Once it does, 97 is spent.
MR BENNETT: Your Honour, the operative part is spent, but the part – insofar as it is incorporated by reference in 51(xxxvi), it is not spent. Section 51(xxxvi) incorporates by reference the words of section 97, and to that extent it is not spent. All that is spent is the operation of the section by its own force on its own.
KIRBY J: I would not want to do anything that degrades the important role of the Auditor-General, and so for the moment I will accept that, but that simply leaves Chapter IV to do its work and Chapter II, insofar as it has picked up 97. But that is not an answer to an invocation now for a relief from this Court to prevent the ongoing expenditure, nor is a criminal prosecution down the track. I do not know if that prosecution would be decided by the Director of Public Prosecutions or whether it would be decided in some other way, but that is within the Executive branch. We have an appeal to the judicial branch, which is the defender of the Constitution and of statutes that conform to the Constitution.
MR BENNETT: Yes, your Honour. When one is looking at the discretionary considerations in relation to orders in this area, one must look at section 97 and what flows from that and the policy behind that. One must also look ‑ ‑ ‑
KIRBY J: No one is now disputing that. So what?
MR BENNETT: If I could just add this. One must also look at the procedures involved in Senate estimates hearings, which are described in some of the material, which demonstrate that there are procedures within the legislature.
KIRBY J: They do their job; we do our job.
MR BENNETT: Yes, your Honour. There are procedures within the legislature for keeping the government accountable in relation to appropriations.
KIRBY J: But sometimes in real life the legislature is under the control of the Executive Government. The judiciary is not. The judiciary defends the people and the people’s purse.
MR BENNETT: Yes, your Honour, and the judiciary does so in accordance with a number of principles and some of those involve exercises of discretion and some of those in turn involve looking at the appropriate methods by which particular types of dispute may be resolved. In my respectful submission, the availability of methods under legislation passed pursuant to section 97 and in the legislature itself and the Senate estimates procedures and so on make very cogent reasons why the Court should not intervene in this type of dispute. We do not suggest that it is non-justiciable in the way that validity of appropriations may be non-justiciable, but it is a matter, we would submit, in relation to which the Court would be highly reluctant to intervene.
I have given examples in relation to the way a general injunction would be almost impossible to frame. What would be said, for example, of an advertisement which said in effect, “Co‑operate and work within the proposed reforms so as to achieve higher productivity and higher pay workplaces”? Suppose one had an advertisement which on its true construction meant that. That would certainly fall within my learned friend’s original formulation of what he seeks to prohibit but it would not fall within his amended thing but it is an example of the problem. One cannot define in any precise way whether a particular advertisement would fall within or without with the degree of particularity required for an injunction. The degree of specificity is that determined by Parliament and defined in the relevant outcome.
So for those reasons, your Honours, it is our submission that the expenditures of the type complained of here fall squarely within the outcome and are squarely anticipated by various passages in the portfolio budget statements. The need to specify advertising depends upon the assumption that advertising is something so different, so special and out of the normal run of government activities that it cannot be included in general words which authorise expenditure for the achievement of particular outcomes. That is something which in 2005 cannot, we would submit, be maintained.
I have put the submissions about the irrelevance of the suggestion that because the aim being pursued by this campaign may also achieve another objective, or conduced towards that objective, is in some way disqualifying and, in my respectful submission, for the reasons I have given, it clearly is not.
Now, the final matter is standing, which I can deal with very briefly. The law in this area, we submit, is most clearly laid down in the Australian Conservation Case. I will not take your Honours to it, but the familiar passage of course is the passage that states that a belief or emotional or other attachment to a principle is insufficient to give one locus standi and the Australian Conservation Foundation, a body whose raison d’etre was the various conservation activities, did not have locus standi to seek to prevent matters which were inimical to those views.
We submit the interests here are very much in that category. One has an interest – and I am prepared for this purpose to accept the equation of Mr Combet with the ACTU. I do not take any point arising out of that. It is an unincorporated association. But, in my respectful submission, that is nothing more than the interest of a body which opposes particular reforms and has a particular view as to whether or not they should be introduced and how people should respond.
McHUGH J: I know that the Constitution does not mention Prime Minister, does not mention Leader of the Opposition, but it does seem a little strange, does it not, that the States always have standing to challenge federal legislation but the Leader of the Opposition would not have?
MR BENNETT: No, your Honour.
KIRBY J: That is a court made rule. It is not in the Constitution.
MR BENNETT: That is so, your Honour.
KIRBY J: It is a rule which was devised in another place, in another time for a different Constitution and not to uphold notions of constitutional rights which exist in our system of government.
MR BENNETT: It is a rule applied by this Court under this Constitution under its ‑ ‑ ‑
KIRBY J: This particular question has not been determined. The closest that the Court came to it was in the case of Brown v West where you make a fair point that Mr Brown had a more personal and direct interest in the postal allowance, but that was not really the issue he was bringing. He was bringing to the Court the question of conformity with statutory and constitutional law. He was not just after his allowance or did not want it.
MR BENNETT: No, your Honour, he was not, but that is what gave him locus standi.
KIRBY J: You suggest here that if the second plaintiff had made an application to the Attorney‑General she would have received a fiat from him to bring these proceedings? Pull the other leg.
MR BENNETT: Your Honour, that is not a question I can answer.
KIRBY J: In McBain the history of the grant of fiats by the federal Attorney‑General was referred to. The last one was 12 or 15 years ago. They are rare birds.
MR BENNETT: Your Honour, the States of course ‑ ‑ ‑
KIRBY J: It should not depend on that for constitutional rights as a matter of principle and for statutory rights that take colour from the Constitution.
MR BENNETT: Well, your Honour, the phrase used in the Australian Conservation Foundation Case which has been accepted again and again is that ‑ ‑ ‑
KIRBY J: That was not itself a constitutional case.
MR BENNETT: No, your Honour, it was not.
McHUGH J: It does not sit well with Onus v Alcoa either, does it?
MR BENNETT: It does, your Honour. Onus involved a quasi‑proprietary right under Aboriginal law. Onus involved something which under Aboriginal law was analogous to a property right and perhaps a trust.
McHUGH J: But for the purpose of white man’s law it was nothing more than an intellectual or emotional interest.
MR BENNETT: No, your Honour. The ratio of Onus, we would submit, is that it was not an intellectual or emotional interest. It was an interest under a system of laws which has for some purposes a degree of recognition – I will not go into that at the moment – and it was a recognition of the quasi‑proprietary and perhaps quasi‑trust nature of the interests of the duties and rights of the custodians under Aboriginal law which gave them locus standi.
It was not in that sense a mere emotional or intellectual interest, which is what is present here. There are views, no doubt strongly held by both plaintiffs and the organisations to which each belongs, as to a political question which in a sense lies behind the ‑ ‑ ‑
KIRBY J: But they are not just personal views. They are views about the way the Constitution and the statute law of this country operate by responsible players, certainly in respect to the second plaintiff, in the Parliament. Members of Parliament are expressly referred to in the Constitution.
MR BENNETT: Yes.
KIRBY J: Your view is that only governments and government‑fiatted people can bring proceedings. Well, that is a view of the Constitution which is a bit outdated. People have rights under our Constitution.
MR BENNETT: In my submission, your Honour, a Member of Parliament does not by virtue of being a Member of Parliament alone thereby obtain locus standi in relation to constitutional litigation. There is no case suggesting that a person does. As I say, Brown’s Case involved someone who on the Croome principles, apart from anything else, had a very clear locus standi. It does not matter that he was using it for a different purpose.
KIRBY J: As a Member of Parliament.
MR BENNETT: It does not matter that Mr Brown came to this Court not because he was worried about the amount of his allowance but because he wished to vindicate a principle. Many people come to this Court to vindicate principles, but they need locus standi to get them here and the locus standi does not depend on their desire to vindicate the principle or their belief in the principle.
We would submit that there is no special status which a Member of Parliament has, nor a member of the shadow Cabinet, or even the Shadow Attorney-General. The functions which devolve upon that person are general functions but the existence of functions of that type cannot itself confer locus standi any more than the constitution of the Australian Conservation Association could give it locus standi in relation to those matters. Your Honour, that is the short answer in relation to both of them.
The Bateman’s Bay Case does not assist. That was a case of commercial interest which is very different.
The discretionary reasons we have given why the Court should hesitate to intervene in this type of case are supported by the difficulties in relation to standing. They indicate rather clearly the true nature of the underlying issues in the case and the difficulties the Court would have in determining them. So for those reasons we submit that neither plaintiff has locus standi.
GLEESON CJ: Yes, Mr Lloyd.
MR LLOYD: If it please the Court. My submission to be primarily directed towards a submission made by the plaintiffs and by the respondent to the effect that an inference arises from the fact that the appropriation in issue is in Appropriation Act (No 1), an act which deals with the ordinary annual services of government, that the expenditures sought to be paid by my clients are not permitted or authorised by that Act. The argument goes along the lines that in 1965 a Compact was entered into which limits the kind of material that may be included in such an Act and that an inference should be drawn that such material is not in an Act at least unless there are specific indications to the contrary.
In particular, I suppose, it is suggested that the expenditure on the advertising in issue is either itself a new policy or possibly done in support of a new policy. The defendants’ case is that no such inference arises from the Compact. While it may arise in some cases and did in Brown v West, this is a different case. When one appreciates the history of the Compact and also its nature, it is apparent that the kind of inference drawn by the plaintiffs and Western Australia in this case does not lie.
The Court has been taken to the terms of the Compact yesterday. It may be seen at the Court book at 1500 but I do not need to take the Court to it now. It is perhaps convenient – and I may address another issue raised by the Court – to take the Court along a timeline to see how it fits in. There has been provided to the Court a copy of an Appropriation Act (No 1) 1986‑1987. Reference is made to it simply to show the formula or the structure of that Act at that time. An example might be seen – perhaps it is convenient to use the employment context, which is on page 41 of that Act. At that time it will be seen that an appropriation was made under Division 287, under a subdivision, “Salaries and Payments in the nature of Salary” and “Administrative Expenses” as a second subheading. So that was an appropriation in effect to a department to be used for those purposes. In 1987-1988 ‑ ‑ ‑
GUMMOW J: Wait a minute. Where was the appropriation in this Act? Which section was the appropriation?
MR LLOYD: The appropriation was effected by section 4.
GUMMOW J: Yes. We are looking at schedule what?
MR LLOYD: Schedule 3 I believe. It appears that some pages have been left out. The abstract is on page 7. The particular page I was looking at was page 41.
CALLINAN J: What page number is that of the document itself?
MR LLOYD: This is on page 7 of a hand-up of the 1986-1987 Appropriation Act (No 1).
CALLINAN J: I did not catch the number of the page.
MR LLOYD: Page 7 is the beginning of Schedule 3. Page 41 is the relevant page for the Department of Employment and Industrial Relations. There may be seen, as I have indicated, a division there between “Salaries and Payments” and “Administrative Expenses” at the top of the page and then “Other Services”. In due course I will make the submission that the “Salaries and Payments” and “Administrative Expenses” essentially became what are now called “departmental expenditure” and the other ‑ ‑ ‑
GUMMOW J: With this difference though, I think, that under the present scheme what one is locked into is this notion of departmental expenditure which is not further defined.
MR LLOYD: That is right.
GUMMOW J: One has the note to which reference has been made in the definition of “departmental item” which means that if one goes to the workplace relations provision in Schedule 1, outcomes 1, 2 and 3 insofar as they go to departmental outputs are not controlling.
MR LLOYD: That is right.
GUMMOW J: Yet they do seem to have been controlling in 1986‑1987. Is that right? There is this elaborate transparency but it is in fact not mandatory when you have a departmental classification.
MR LLOYD: In 1986‑1987 there was a capacity to spend as between salaries and administrative expenses in a similar lump sum appropriation, and I was coming to say ‑ ‑ ‑
GUMMOW J: Where do we see that?
MR LLOYD: Just from the appropriation as in terms of “Salaries and Payments in the nature of Salary”.
GUMMOW J: Sorry, could you say that again?
MR LLOYD: On page 41 the appropriation of 212 million is just for “Salaries and Payments in the nature of Salary” and for “Administrative Expenses” 70 million, and beyond that it is to be done for the purposes of the Employment and Industrial Relations Department.
No doubt it is meant to cover the salaries and administrative expenses used, amongst other things, to facilitate the other services provided further down on the page as well as, I would submit, normal development of government policy and legislation and everything else that the department did. There was then a change in the 86-87 Appropriation Act.
KIRBY J: But back in 1986 and 1987 advertising, and certainly advertising of the kind in annexure A, was non-existent.
MR LLOYD: Well, in my submission – I will come back to this, but in my submission, it would have fallen within administrative expenses.
KIRBY J: Well, if it existed ‑ ‑ ‑
GUMMOW J: Is that administrative expenses the same notion as departmental expenditure under what is now 17?
MR LLOYD: Except that departmental expenditure also includes salaries. So salaries and administrative expenses are merged. That, however, happened in 1987 and 1988, not in the 1999 reform, which is what I was coming to. In Appropriation Act (No. 1) 1987-1988 Schedule 3 there, the relevant one for the Department of Employment Education and Training is on page 42 in this version. The Court will see that there are two subdivisions. One is just called “Running Costs” and then everything else is done under “Other Services”. Now, I provide that primarily to give context to the next piece of correspondence which is a piece of ‑ ‑ ‑
KIRBY J: Professor Lindell’s article, which we have been referred to, rather suggests that this phenomenon of advertising really began in about 1993.
MR LLOYD: I am not in a position to comment on the history of that, your Honour.
KIRBY J: I am referring to the document behind tab 6 of the plaintiff’s material.
MR LLOYD: I am not in a position to contradict Professor Lindell but I do not think there is any ‑ ‑ ‑
KIRBY J: If it is correct it does not make much sense or is not much help to refer to what happened in 1986. We have a new phenomenon here and the questions ought to be dealt with.
MR LLOYD: Perhaps if I say two things about that. I suspect Professor Lindell was talking about larger style advertising as opposed to any advertising whatsoever and, secondly, the main reason I bring to it is to put in context the piece of correspondence which is at page 1501 of the court book which deals with the Compact. This is a letter which is sent from the Minister for Finance to the President of the Senate. In the second paragraph it says:
The purpose of this letter is two-fold: firstly to inform you of further developments to the running costs system which the Government has agreed; and secondly to seek your agreement to minor items of equipment and fitout which are part of the normal on-going activities of departments, in future being funded from Bill 1.
RUNNING COSTS
The running costs system as introduced in the 1987‑88 financial year involved a package of measures which provided greater flexibility to departments -
If I stop there, in context, “greater flexibility to departments” means less bound by specific appropriations, that money is to be used for specific different purposes. By putting it together into one running cost appropriation it is to be used more flexibly by the Executive and agencies:
in the management of their staffing and other administrative resources combined with greater responsibility to use those resources efficiently.
GUMMOW J: This was the birth of the efficiency dividend, was it not?
MR LLOYD: I think that is so, your Honour.
GUMMOW J: Which did not quite mean what it seemed to say.
MR LLOYD: I suspect there will be some heads of departments who would disagree. I note in particular the first dot point:
• the consolidation of salaries, administrative expenses and operational expenses appropriations into single running costs appropriation -
Over the page, on page 2, there is a reference at about line 10, a paragraph:
Firstly, it is intended to extend the coverage and to improve the consistency of the Running Costs appropriations by including more expenses of a running costs nature.
Now, that no doubt is a relatively unpleasant jargon, but still used between two people involved in the appropriations field.
KIRBY J: Yes, but is advertising what one would normally take as running costs?
MR LLOYD: It is certainly something which I think unambiguously, as I will come to show you, came to suddenly be understood to fall within running costs.
KIRBY J: Maybe that is an understanding that has to be stopped in its tracks.
MR LLOYD: I understand what your Honour says about this. In my submission ‑ ‑ ‑
KIRBY J: There is advertising for jobs in the department, there is advertising perhaps of services that are new and that citizens have an entitlement, but advertising for propaganda for something which is not yet on the statute books and is still being conceived is a horse of a different colour, as far as I am concerned.
MR LLOYD: Your Honour, there would no doubt be much advertising which was just ‑ ‑ ‑
KIRBY J: It is not only a horse now; it is a whole herd of them.
MR LLOYD: I would submit there would be much advertising that just is intended for the purposes of providing the public with information. That would certainly come within the concept of “running costs”. At that time it would be running costs because it was not under any other category and advertising would have been done. As I say, I will make good the proposition.
GLEESON CJ: All right, then we will adjourn until 2.15.
AT 12.49 PM LUNCHEON ADJOURNMENT
UPON RESUMING AT 2.17 PM:
GLEESON CJ: Yes, Mr Lloyd.
MR LLOYD: I was at page 1503 of the special case book. I just note that in this correspondence ‑ ‑ ‑
KIRBY J: Mr Lloyd, could you just speak up a little bit. I am missing every second word.
MR LLOYD: Sorry, your Honour. On page 1503, this is in correspondence in 1988, after the introduction of the running costs system, there were changes made to the Compact which are not presently relevant but they just indicate the nature of the changes – indicate how the process for changing the Compact - on page 1503 of the Minister’s letter, the second paragraph under the heading “FUNDING OF MINOR ITEMS OF EQUIPMENT AND FITOUT” the Minister was asking that expenditure, in effect, on computers and the like, should be able to be done in Appropriation Act (No 1) and not in Appropriation Act (No 2) and concurrence was sought in that respect. That concurrence was given in a letter beginning on page 1507, and in particular I note the passage on the top of page 1508 in which the President of the Senate indicates that those changes are consistent with the spirit of the Compact.
KIRBY J: I may have missed something, but when we were shown yesterday by Mr Gageler the correspondence of Senator Reid, I thought we saw something that that expenditure on new programs or new policies had survived the change.
MR LLOYD: I will come to that. This was not a change in relation to the new policy element. That is exactly what I am about to come to now.
KIRBY J: So that remains in the Compact, the obligation to seek specific appropriation approval for new policies?
MR LLOYD: In my submission, in a very limited manner, but there is still some operation for it. As the Court will have seen by the current Acts, there was a change from the so‑called running costs system in 1999 and 2000 to a system based on two different but at least chronologically related concepts of accrual accounting and the so‑called outcome and output framework.
In preparation for that development there was further correspondence in relation to the Compact and that appears at page 1212 of the special case book. The covering letter of the then Minister for Finance and Administration is writing about changes to the Appropriation Bills and consequently to the 1965 Compact. Then the changes are discussed in an enclosed document which is reproduced in the book at pages 1213 through to 1217. I think Mr Gageler has taken the Court’s attention to the passage on page 1213 from about lines 17 to 35.
KIRBY J: Again you are dropping your voice, I am afraid. If you want me to hear you, you are going to have to – this is a very big room and it has to be heard.
MR LLOYD: I am sorry, your Honour. I draw the Court’s attention to the passage on page 1213 from lines 17 to 35. It notes there and summarises there the changes to be made. I will detail in a moment what those changes are, but for immediate significance is the understanding that the Minister had of the Compact which is summarised on page 1215 at the bottom of that page from line 38. That says:
Bill 1 represents the instrument for appropriations that are not amendable by the Senate and covers expenditure for the ‘ordinary annual services’ of Government. This includes:
·Running Costs, including minor capital, eg, computers and fit‑out of buildings –
something added in 1988 –
and new policy of a running cost nature ‑ ‑ ‑
KIRBY J: New program costs.
MR LLOYD: That is, the Minister was indicating that the existing understanding of the Compact included the proposition that new policy of a running cost nature was already something that could be put in Bill No 1. Then over the page on 1216 there is changes proposed in relation to the accrual budgeting system. The relevant and significant change, although it does not apply immediately to the present case, but it gives some guidance as to the ambit of the Compact, is that noted at line 21:
new administered expenses that fall within an existing outcome included in Bill 1.
Perhaps I should stop myself there.
KIRBY J: But that has to be read with the – well, the passage that new policies not previously authorised by special legislation, which would seem to be the Prime Minister’s ex post policy in this case, are to be dealt with in Bill No 2 which is subject to the Senate’s scrutiny and amendments.
MR LLOYD: Well, your Honour, in my submission, what this is saying is that even at the time of writing of this it was, at least in the Minister of Finance’s view, accepted that new policy of a running cost nature. Now, of a running cost nature means new policy expenditure on new policy involving salaries or operating expenses of the kind I took the Court to earlier. That expenditure is already at that point in time something that could be done in Appropriation Act (No. 1).
KIRBY J: I will not repeat it but that passage has to be read with the passage at pages 1215, line 50 over to 1216, line 6 which includes in Bill No 2 new policies not previously authorised by specific, special legislation which is this case.
MR LLOYD: I accept that, your Honour, but the question arises, what is “new policies not previously authorised by special legislation” as compared with new policy of a running cost nature and when one looks at the practice, as far back as the AAP Case, bearing in mind the AAP Case was a new spending proposal in relation to the Commonwealth Government doing new things and it was in Appropriation Act (No 1) at that time in 1975, it, in my submission, has been unambiguously the case that where new policy involves expenditure only in the relation of running costs, it is not something that requires a special appropriation. If I might test that proposition ‑ ‑ ‑
KIRBY J: The question is, is it running costs or is it costs for “new policies not previously authorised by special legislation?” Where you have the two categories – you have two boxes and you have to put it into one or the other and if there is an exclusion then that would seem to be the one that is most appropriate.
MR LLOYD: Then perhaps I will take your Honour to what the Minister for Finance might be taken to have understood running costs to be in writing that letter which was governed by the running costs handbook which appears in the special case book beginning on page 1172 and I draw the Court’s attention, in particular, to page 1177 which provides a definition of running costs to be used in relation to these matters and I note that it includes:
salaries and related employment costs, superannuation, administrative items, property operating expenses and the purchase of goods and services from the private sector including consultancy services, research, advertising and public relations services.
Now, that proposition is entirely consistent with the government’s then guidelines, which appear ‑ ‑ ‑
GLEESON CJ: What page was that?
MR LLOYD: Page 1177.
GLEESON CJ: Thank you.
MR LLOYD: That proposition is also entirely consistent with the “Guidelines for Australian Government Information Activities”, which appears at page 1351. I draw the Court’s attention in particular to 1352 and paragraph 2.3, which is at about line 46. It says:
Information activities are to be regarded as an integral part of the management of departmental programs and of the development of new programs.
So as early as 1995 it was common practice in the people dealing with appropriations that development of new policy involved advertising and, in my submission, from a much earlier point in time, that development of new policy is something that could be done and paid for out of the Appropriation Act (No 1), which of course includes the salaries of public servants who will develop new policy.
In my submission, the Compact could not and, in my submission, has never been construed as meaning that any new policy whatsoever needs a special appropriation. If that were true, if there were a change of government and a new government came in, they could not direct their public servants to develop any new policies until they had appropriated money for it. It has never been understood in that way. In the same way, in my submission, if an existing government develops a new policy, or wants to develop a new policy, it can be done. Returning to the document at page ‑ ‑ ‑
KIRBY J: The development of new policy by a new incoming government is part of the ordinary expenses of government whereas with a government in office and a Compact which refers to new policies then that by inference is excluded from the ordinary running costs of government.
MR LLOYD: Your Honour, the Parliament did not appear to take that view in passing the AAP appropriation but even more specifically in the very precise appropriation that this Court looks at my friend, Mr Gageler, took the Court yesterday to the question of welfare to work. That is a new policy of this government in that appropriation. It is in Appropriation Act (No 1). It makes, as my friend indicated, express provision for advertising, also in Appropriation Act (No 1). In my submission, the Compact cannot be construed as saying that kind of thing must be in Appropriation Act (No 2) – it is not – and as such the Court should not draw an inference narrowing the ambit of appropriation in a way that is inconsistent with what is clearly existing practice.
The only thing else I wanted to say about the letter at 1216 is that the change that it did propose to make was that not only could new policies of a running costs nature, which was the pre‑existing position, could be done in an Appropriation Act (No 1) but in addition new administered expenses could be done if they fell within an existing outcome. So if there is an existing outcome, for example, higher productivity and higher pay workplaces, then any new administered expenditure in relation to that outcome could be put into Appropriation Act (No 1). That also has the advantage again, if there is a change of government, that the new government can decide they have better ways of improving productivity and improving pay and they can do it their way and spend the money as they see fit. The contrary view would, in my submission, be unworkable and the Court should be slow to draw inferences of the kind that the plaintiffs and the interveners suggest.
I should also indicate that the Minister’s approach and understanding of the Compact was expressly approved by the President of the Senate in a letter on page 1220. I note that the Thirtieth Report of the relevant Senate committee which my friend, Mr Gageler, took the Court to yesterday summarises what that committee saw as being the relevant changes and it gave emphasis to the changes in that letter and not emphasis to the understanding which was accepted that a new policy of a running costs nature is included. Now, I should say my friends have also placed in the special case bundle ‑ ‑ ‑
KIRBY J: Has there been any instance since that exchange of letters with Senator Reid where the president of the Senate has expressed what he or she understood the Compact now to be? Has there been any, as it were, statement?
MR LLOYD: As far as I am aware, there is not any comprehensive restatement of the understanding of the Compact. It is comprised in correspondence and in a sense is a living, breathing understanding between the government and the Senate.
KIRBY J: It is slightly embarrassing. First of all, this is a somewhat peripheral matter because it is for the Court to say what the law requires and the Compact between the Houses is relevant but it is not determinative, it cannot be determinative. But it is somewhat embarrassing for the Court to be told by one party to this dispute that the Compact remains as it was and for you to come along and say no, the Compact is now modified and for us to have to try to work out, if it is relevant, what the Compact between the Houses of Parliament is.
MR LLOYD: My friends use it to want to say that the Court should draw an inference as to the construction of an Appropriation Act. If your Honour is unsure as to what the Compact is or says, which may be a quite reasonable position to be, because maybe it is not crystal clear, that that all goes to show that the inference just does not lie.
KIRBY J: But if we look at the books on the Parliament, they appear to express it as if the Compact remains as it was.
MR LLOYD: They express the terms of the Senate resolution in 1977 and they refer to the Thirtieth Report. What they do not do, and I am not critical of the authors – maybe they did not have the correspondence – but what the authors of the book say does not represent the Compact. What the correspondence says represents the understanding, arrangements of the relevant parties.
KIRBY J: But one would think a Compact is not made between the president of the Senate and a Minister in private correspondence, both of whom are, after all, senior members of the government party normally, but would be a matter on which the Senate has its own resolution and it is a public statement of the Senate.
MR LLOYD: My recollection is that the correspondence from Margaret Reid indicated that the committee had agreed to the proposed adjustment, so it appears that ‑ ‑ ‑
HAYNE J: And that the committee would report to the Senate accordingly – see page 1220, last line. I assume that was done.
MR LLOYD: I also wanted to deal with some material which I fear my friend will come to in reply, so I do it in an anticipatory way.
KIRBY J: That document at 1220, by the way, appears to be an affirmation by Senator Reid of her belief that these so-called adjustments “are in accordance with the spirit of the 1965 Compact”, so that is an affirmation of the 1965 Compact.
MR LLOYD: That is so but also, when one appreciates the content of what is said, one has to read the Compact accordingly, in my submission.
GUMMOW J: We are not construing a contract.
MR LLOYD: I accept that. My submission is simply that to the extent – is that the Compact will not assist your Honours in construing the Appropriation Act. I do not put it any higher than that. My friends say you can draw an inference, like the Court did in Brown v West. I will come to Brown v West in a moment but, in my submission, this Compact in this context is not of the same assistance. I just wanted to say in passing there is some correspondence between pages 1523 and 1543 which is of more recent ilk which shows some level of apparent disagreement as to the application of the Compact in one particular instance in which it would seem that the clerk of the Senate takes a different approach to the government.
My friend’s submissions refer to a passage at page 1543 as indicating that my client’s departments agreed with the Senate – might have given the impression that my client’s departments agreed with the Senate’s approach, but in fact what the recommendation was was of a much more narrow kind and they agreed to liaise with the Department of Finance – or to consult the Department of Finance in relation to liaising with the Senate on those issues. So that is a matter as between the government and the Senate that perhaps there is not presently agreement. To the extent that my friend relies upon it to say the Compact is still relevant, we do not dispute that it still has ongoing significance and the limiting what is appropriate in an Appropriation Act (No 1), but this kind of spending is, in my submission, clearly inside of Appropriation Act (No 1).
GUMMOW J: How does the Senate find its successors, in any legal sense, apart from political sense or constitutional sense? It cannot, I am sure.
MR LLOYD: I do not suggest that it does, your Honour. It is not part of my case that it does. I probably should now deal with the question of Brown v West. My friend took the Court to Brown v West, and Brown v West is a case in which there was a new policy issue. The Court did draw an inference from practice, as it understood from the Compact, to suggest that the new policy in that case was not one which would have been authorised in an Appropriation Act (No 1). In my submission, there are two reasons to distinguish that case. The first is that the Court was unaware of the developments in relation to new policy of a running cost nature. So now that the Court is aware that that is the position, that inference just does not lie.
Secondly, and perhaps even more importantly, is that was a case in which there was an express standing appropriation in relation to the postal allowance by a legislative mechanism which could and had determined a maximum allowance. In those circumstances, where the government only by force of appropriation purported to increase that allowance, it would be easy to indicate that that would be a new policy because it was not supported by a specific legislation – in fact, it was contrary to specific legislation – and it was beyond the power. So, in my submission, Brown v West does not stand in the way of any of the submissions I have previously made.
I should deal last with the point made in the plaintiff’s submissions in reply. They contend that even if the Court accepts the defendant’s analysis in relation to the new policies of a running costs nature, they contend that the present expenditures in relation to the development of the Workplace Relations Policy would not fall within Appropriation Act (No 1) because of the substantial nature. The quantity of the expenditure takes it outside the concept of what might have been authorised by the appropriation.
In my submission, that is fallacious and not correct. Parliament authorises expenditure for particular purposes. One of those purposes clearly was advertising in relation to the development of the new policy. It may be readily accepted that at the time that the estimates were done the government did not anticipate, and therefore the Senate would not have anticipated, that the amount of spending on that subject matter would be as much as it has been. In my submission, the quantity of spending does not change the nature of the spending.
The consequences are not that the government is entitled or has spent money on matters it was not authorised to spend moneys on; rather, it has spent more money on matters that it was authorised to spend money on than it had estimated. The estimate is not binding. If it ends up spending so much more money that it cannot absorb it in the current appropriation for the departmental expenditure, it has various options available to it. One is to use the advance of the Minister, another is to return to the Parliament and seek more money for that appropriation. That will, of course, be a process which will result in parliamentary scrutiny of the expenditure in the normal way.
So, in my submission, contrary to some concerns expressed by the Court, the process adopted in this case by the government is not a secret process. There is no sleight of hand involved. It is a public expenditure and it will be accounted for one way or another and there is full parliamentary scrutiny in the normal course.
Perhaps I should also say, just before leaving the question of the inferences to be drawn in relation to the present matter, that another reason why the inference drawn from the Compact is not available is that the budget statements expressly indicate that money is to be spent on the development of new policy on the government’s agenda. It is one of the express things mentioned and so, in my submission, if that is entitled to be in Appropriation Act (No 1), and there has been no submission that that should not be in Appropriation Act (No 1), advertising done in support of or to advance or to facilitate or to protect that outcome and to advance towards the implementation of a legislative scheme designed to lead to higher productivity and higher pay is included expressly, so that no negative inference could be available.
The only other thing I was wanting to say is that I understand my friend either has or will shortly provide the Court with a note in relation to the role of the Auditor-General in relation to PBSs. I understand that my instructors do not agree with everything that is said therein and, with the leave of the Court, we would provide a note within the next day or so in relation to the significance of PBSs to the role of the Auditor‑General.
My learned friend reminds me that your Honour the Chief Justice had asked earlier about the differences between departmental items and administered items. It is a jargon, perhaps ideally not used, in a context of an Act used in a limited area not affecting people’s right, which is perhaps not surprising. It is discussed and the distinction is discussed in the budget paper in which the Bill was introduced at page 365 of the case book, the thrust of it being ‑ ‑ ‑
GUMMOW J: Just a minute ‑ 365, yes.
MR LLOYD: The thrust of it being that departmental expenses are those over which the agency ‑ ‑ ‑
GUMMOW J: Where do we see that?
MR LLOYD: This is at line 24 of page 365 of the case book. The amounts appropriate are either:
administered or departmental. Departmental expenses are expenses over which an agency has control.
Then it notes salaries, accruing employment entitlements and operational expenses and further discussion of departmental expenses being a single amount for each agency.
GUMMOW J: The split is notional.
MR LLOYD: Indeed. And then at line 40 there is discussion of administered expenses. Administered expenses are, in effect, programs that an agency does on behalf of the government to pay money to third parties, and that is the main distinction between departmental and administered.
HAYNE J: That is to be read also with page xii of the portfolio budget statement for Employment and Workplace Relations portfolio where at page xii there is a discussion in other words of the distinction.
MR LLOYD: Yes, that is so, your Honour. May it please the Court, they are the submissions of the defence.
GLEESON CJ: Yes, Mr Gageler.
MR GAGELER: And your Honours might also note that at page 221 to 222 of the same portfolio budget statement there is a glossary that contains, in effect, definitions of those terms.
Your Honours, I propose to say something relatively briefly about the Compact. I then want to deal specifically with the critical question of the construction of the Appropriation Act. I then want to deal with relief and there are a few bits and pieces to tidy up after that.
Your Honours, the error in our learned friends’ submissions concerning the Compact is to equate new policy of a running cost nature with any new policy to be paid for out of running costs, that is, in our respectful submission, to misunderstand, fundamentally, the Compact which was properly understood by the Court in Brown v West.
The Court, in Brown v West 169 CLR 209 was confronted with an attempt to use an appropriation for running costs to fund the new policy of the postage stamp allowance and it held, at page 211, that the funding of a new policy of that kind consistently with the Compact would be expected – and it is only an indication of legislative intention – to be found in Appropriation Bill No 2. They did not misunderstand the Compact, they gave effect to it.
KIRBY J: What is your answer to Mr Lloyd’s point concerning new incoming governments, that when they come in everything is new policy?
MR GAGELER: Your Honour, the development of new policy is undoubtedly part of the ordinary annual services of government. That is what public servants do. That is something fundamentally different from the implementation or the promotion of new policy which is the expenditure on new policy that is the subject matter of paragraph (e) of the Compact determined in 1965 and as reaffirmed in 1977. Your Honours, whatever the government thought it was doing in 1999, what it told the Senate it was doing in 1999 at page 1216 was leaving the Compact largely unchanged ‑ that is paragraph 9 ‑ and what the Senate thought it was doing in agreeing to the changes at page 1517, line 27 at (ii) was accepting a change that meant no more than:
all appropriation items for continuing activities for which appropriations have been made in the past be regarded as part of ordinary annual services –
Now, that is what the Senate understood in its published Thirtieth Report and it is in exactly those terms that the Compact continues to be described in the current version – the 1999 changes to the Compact continues to be described in Odgers, volume 3, page 1454, and in Barlin, to which I have already taken your Honours, at page 415.
KIRBY J: Do we have those in the plaintiffs’ materials?
MR GAGELER: Barlin is the House of Representatives Practice, the current edition, I took your Honours through most of that in‑chief. Your Honours have Odgers, yes, volume 3, the particular reference at page 1454.
Of course, the Compact is referred to in Budget Paper No 4 at volume 2, page 363 as the basis upon which the division was made between items in Appropriation Bill (No 1) 2005-2006 with which we are concerned and Appropriation Bill (No 2) 2005-2006. Your Honours, that is as much as I want to say about the Compact.
Can I come to the construction of Appropriation Act No 1 and attempt to state the preferable construction as succinctly as I can. Dealing first with departmental items, a departmental item as defined in section 3 is not simply an amount, it is a total amount for departmental outputs. The departmental expenditure that is referred to in section 7(2) is not simply expenditure of the whole or some part of the amount of the departmental item. In our respectful submission, it is the expenditure of the whole or some part of the departmental item on departmental outputs.
What are the departmental outputs? If your Honours go to page 76 relevantly, the departmental outputs are the outputs that are grouped by reference to outcome in the column “Departmental outputs” and are signified by a dollar amount. Precisely what those departmental outputs are is obscure on the face of the legislation. Section 4(1) tells us through section 15AB(2)(g) and 15AB(1) that one looks to the portfolio budget statements to fix or to ascertain the meaning of the outputs that are being referred to.
The note to the definition of “departmental item” says no more than this. It says that the grouping of outputs by reference to outcomes does not limit the amount that can be spent on a particular output. The whole or any part of the total being the departmental item can be spent on all or any departmental outputs. It does not mean that one can expand the total pot of funds and it does not mean that one can expand the outputs or change the outputs to which that pot of funds relates. It means that one can move the total pot around between the identified outputs.
Now, in respect of administered items, in our respectful submission, the Act works in almost precisely the same way with one modification; that is that there are separate pots of money defined by reference to administered expenses falling within a particular administered outcome.
What those administered expenses are that fall within a particular outcome one finds by going through section 4 to the PBS in exactly the same way.
GUMMOW J: If you are wrong about that, what follows? This is critical for you, is it not, this construction?
MR GAGELER: Yes. I am sorry, your Honour?
GUMMOW J: This is critical for you, adoption of this construction?
MR GAGELER: Well, it is important, yes. What follows about being right or what follows about being wrong?
GUMMOW J: What follows if you are wrong?
MR GAGELER: I have two other somewhat less technical arguments, your Honour.
GUMMOW J: Well, it is no good to denounce it for being technical. That is what politicians say when they find the Constitution prevents something.
KIRBY J: We all have to get used to this new jargon.
MR GAGELER: Yes. Your Honour, I try not to contemplate being wrong. It seems to be the ‑ ‑ ‑
GUMMOW J: Just contemplate being subtle, that is all.
MR GAGELER: Yes, the apparent structure of the Act, and not only the structure that one discerns, or we say on a strict and technical reading of the Act, it is also the way in which the PBS is explained in the PBS itself in the introduction in page ix. I have taken your Honours to that. It is apparent in the whole structure of the PBS in the way it matches up precisely to the appropriation schedules. It is consistent with, indeed it is the explanation given in Budget Paper No 4, volume 2, page 364 and it is the explanation that was given to the Senate in 1999 in the same letter that your Honours have been taken to many times, volume 3 at page 1214.
KIRBY J: It is said that you have fallen into a logical fallacy of jumping from the use of the PBS as something useful and informative to something that is compulsory and exclusive.
MR GAGELER: Your Honour, there is no logical fallacy in taking the language of section 4(1) which our learned friends ignore – the Solicitor‑General made no submissions about that critical provision.
GUMMOW J: Yes, he did.
MR GAGELER: Maybe in writing. I do not know if he made – he jumped to section 4(2).
GUMMOW J: He made it this morning.
MR GAGELER: Maybe I missed it. He did make extensive submissions but it is critical, in my submission, to note exactly what section 4(1) does and exactly what section 15AB of the Acts Interpretation Act does. Those provisions are all about fixing or ascertaining the meaning of something that is obscure, and that is precisely the position here.
So far as section 4(2) is concerned, whatever it does, in our respectful submission, it does not limit or qualify the operation of subsection (1) and the better view is that it spells out the effect of section 4(1). So that if and only if an activity, that is an outcome or an expense, is identified in the PBS as within an outcome, then that activity comes within that outcome as referred to in the schedule, the word “activity” covering outcome or expense. It does not mean, in our respectful submission, that one reads up but does not read down. I do not want to overstate it, but that would make a mockery of the scrutiny process that the PBS documents are designed to assist.
KIRBY J: In favour of that interpretation is that it gives effect to the grand constitutional design. Against it is that it imposes a degree of rigidity on the multifarious and growing activities of government in the contemporary world and it puts limitations that make it difficult to cope with new developments.
MR GAGELER: It does not impose rigidity, it imposes transparency and it allows for scrutiny which is precisely what the Constitution has always mandated and precisely what contemporary parliamentary practice emphasises. That is our response to that, your Honours.
In relation to relief, can I take your Honours to the case book, volume 1, page 5, and it is necessary to have regard to the reasonably precise factual context in which this matter comes to the Court. Paragraph 10 of the special case says:
The First Defendant has since 9 July 2005 engaged and proposes to continue to engage in advertising -
this is an agreed fact -
the purpose of which is to provide information about and promote the Reforms -
and that is the sole purpose, as identified, in the agreed statement.
To that end, the First Defendant:
(a) has since 9 July 2005 published in newspapers circulating in each State and Territory advertisements -
Your Honours have been taken to the form of that advertisement, page 45 – we have given your Honours, I think, a cleaner copy -
(b) has since 23 July 2005 broadcast on commercial radio advertisements -
Your Honours have the transcript of those radio advertisements at volume 2, pages 910 to 911. They can be described as nothing more than promotional.
You have in paragraph 12 an existing intention. You have in paragraph 13 a statement that drawing rights have been issued, and your Honours have been provided with a document which, although it postdates the special case and was provided to us yesterday, we are informed is the drawing right that has been issued under section 27. What it purports to do, as your Honours will see through the schedules, is to authorise payments:
To meet expenses incurred by the Commonwealth under contracts and arrangements for or in relation to advertising regarding workplace relations reform.
And it purports to permit the debiting of ‑ this is Schedule 2, column 2 – the particular appropriation identified as “the departmental item for the Department of Employment and Workplace Relations.”
GUMMOW J: That assumes the construction of the sections that you dispute, does it not?
MR GAGELER: Yes, of course, and so ‑ ‑ ‑
GUMMOW J: By fixing simply upon the departmental item?
MR GAGELER: Yes, exactly, your Honour, and your Honours will note that paragraph 14 over the page says that:
The Defendants propose that one or more persons in the Department of Employment and Workplace Relations will draw moneys from the Treasury of the Commonwealth in accordance with those drawing rights –
That has not yet occurred and that is apparent from the correspondence, volume 3, page 1431, line 40. We were told and we understand it to continue to be the case that:
No payments have yet been made for the purposes of the advertising campaign.
McHUGH J: Where is the copy referred to in 11(a) and the transcripts in 11(b)?
MR GAGELER: Your Honour, 11(a) is page 45 and 11(b) is 910 to 911. So what we have, your Honours, is specific advertisements. We have a specific and immediate intention to pay for those advertisements out of the disputed appropriation and we have a drawing right that has been issued for that purpose.
Now, in those circumstances we have, in our respectful submission, by any normal test, a sufficiently imminent threat of unlawful, or at least invalid, conduct to allow for the making of declaratory and injunctive relief. We have, your Honours, under the rubric of further or other orders which we seek at page 44 provided to your Honours an alternative form of relief which is limited to relatively narrow declaratory relief. If we need to stop a $100 million advertising campaign in increments, then so be it. But we have, in our respectful submission, a sufficiently imminent ‑ ‑ ‑
KIRBY J: Where do you get that $100 million from?
MR GAGELER: We do not know exactly how much it is, but $20 million has been mentioned in a number of places, $100 million in another. There has been no precise statement by the defendants as to what the entirety of the advertising campaign would be.
KIRBY J: Where did you get it from? Is it in the record somewhere?
MR GAGELER: It is in the record. Your Honours will see one reference at page 1585 to $100 million. There are some other references. If your Honour wants them, I can provide them. So that is what we have to say about the form of relief.
HEYDON J: You get the evidence out of a newspaper. Page 1585 is a cutting from The Australian.
MR GAGELER: We get our information on what the government proposes to do out of newspapers, yes, your Honour, and I do not apologise for that. That is what we are told. That is, if you like, the transparency with which we are operating.
CALLINAN J: I am sorry, it cannot have any probative value at all, Mr Gageler. So far as I am concerned, an unsworn assertion by a journalist.
MR GAGELER: Your Honour, let me go back a couple of steps. I do not know how much the advertising campaign will be.
CALLINAN J: I understand that and I know that it is not critical to your argument, but that any weight or value can be attributed to this at all I cannot accept. I am just advising you of that.
MR GAGELER: I am not asking your Honours to make a finding about how much is to be spent. We only know about the advertising campaign from two sources: public sources and what the government tells us.
CALLINAN J: We could take judicial notice of the fact that this is going to be relatively costly from the form of the advertisements.
MR GAGELER: And your Honour might note that the figures we have at the moment – I think they come to something a little less than $5 million – was for the newspaper advertisements and certain other preparatory steps.
CALLINAN J: Which is sufficient for your purposes.
MR GAGELER: Which is sufficient for my purposes but it does not appear to include commercial radio and it is an agreed fact that consideration has been given to commercial television broadcasting, so ‑ ‑ ‑
McHUGH J: There is a letter, is there not, from the defendants’ solicitors dated 8 and 15 August at 1435, paragraph 6 which says 3.8 million has been spent up to date?
MR GAGELER: Yes. We understand it to be – if your Honour is looking at our submissions, you need to add an extra million. It is 4.8.
KIRBY J: Do not worry about a couple of million here.
MR GAGELER: Yes, 4.84, but the million or so is not the point. It is only what is being spent to date.
KIRBY J: Just toss in a few million.
MR GAGELER: Yes. It appears not to include radio that has already occurred and it certainly does not include the television that is the subject of consideration. Your Honours, can I ‑ ‑ ‑
GUMMOW J: What were these alternative or backup arguments you had on the statutory construction point, Mr Gageler?
MR GAGELER: The two other arguments, your Honours, are in our written submissions and I went through them in-chief. They are the Compact itself which was enough for Brown v West to be decided the way it was and simply the nature of the expenditure quite apart from the Compact being of such a nature that one would expect it to be highlighted in the material that was placed before the Senate, that is, it is not of its nature something that one would expect to be encompassed within general descriptions, your Honour. That is made in our written submissions and I went through it in-chief. I am told, your Honours, we were mistaken. The amount does include radio to date, but nothing turns on that.
Your Honours, can I deal with justiciability and the reliance our friends place on the AAP Case. As we read Justice Jacobs in the AAP Case, he was not talking about justiciability in any traditional sense. He was at page 411 proceeding on the same assumption as that fully articulated by Justice Gibbs in passages to which I have already taken your Honours and he was accepting that if there was a proposal unlawfully to spend money then it ought in the normal case be the subject of injunctive relief. That is exactly what he appears to be saying at page 411.
What he was concerned about in that particular case was the ability to frame the appropriate relief in circumstances where there was extreme vagueness about the nature of the expenditure that might be undertaken and that vagueness he refers to in a passage introductory to the passage that I have taken your Honours to already at page 410 at about point 3.
Your Honours, I am conscious of the time but can I deal very quickly with a number of other matters. A question was raised about section 97 of the Constitution and whether that might show an alternative constraint that was contemplated by the framers on public spending which did not require curial intervention. We have given your Honours Quick & Garran on section 97 which refers to the relevant colonial Audit Acts. We have also given your Honours the Audit Act (NSW) 1898 ‑ ‑ ‑
GUMMOW J: I have looked at that.
MR GAGELER: Your Honour has looked at it and your Honour would have seen paragraphs 15, 16 and 17 and section 17, in particular, required the Auditor-General to countersign any instrument for the withdrawal of funds.
GUMMOW J: I realise that.
MR GAGELER: So the role of the Auditor-General was not something that came in later. He was there at the point of withdrawing the money and what he had to seek to ascertain was that the sums that were sought to be withdrawn by the Treasurer were then legally available. That is the language of section 17. He was, in our respectful submission, doing nothing more and charged with nothing more than administering the law.
HAYNE J: That is to be compared with section 11 of the Auditor‑General Act coupled with section 57 of the Financial Management and Accountability Act ‑ ‑ ‑
MR GAGELER: Yes.
HAYNE J: Coupled in turn with the Finance Minister’s orders that are published pursuant to or made pursuant to that last Act?
MR GAGELER: Yes, they are additional mechanisms of scrutiny that serve only to reinforce the basic need for that scrutiny, your Honour.
GUMMOW J: We have not seen the Governor-General’s messages yet.
MR GAGELER: I have given your Honours the Governor-General’s message, yes, formal document. We have given your Honours also the note that is apparently disputed about the role of the Auditor-General. Related to that we have given your Honours the Finance Minister’s orders which is a piece of delegated legislation made under section 63 of the Financial Management and Accountability Act, and the version we have given your Honours is current as at – being last amended as at 10 February 2005, so in existence as at the time of these Acts being passed.
What it concerns relevantly, if your Honours go to page 54, your Honour has asked about the reporting. What it shows, and I will not go through the detail, is that in table B at the bottom of page 54 and table C, the top of page 55, there is reporting at the end of the financial period for each outcome, with the outputs within that outcome being specified. Your Honours might note page 56, there is a reference to how tables B and C of the policy are set up and 2D.1.8, about the middle of the page, says:
In the context of service cost disclosures, AAS 29 –
that is, Accounting Standard 29 –
uses the term “activities”. In the Australian Government framework this will generally equate to the term “outputs”.
That may give your Honours some insight into the meaning of the word “activities”, or at least the scope of the word “activities” as used in section 4(2) of the Appropriation Act, and we have provided your Honours with that Accounting Standard.
Your Honours, in terms of the chronology some questions were asked yesterday. Can I deal with that extremely quickly? Your Honours have in our written submissions at paragraph 19 a short chronology. Can I add to that very briefly. 10 May we have the budget introduced, 26 May the launching of the Industrial Relations Reform Package, then 20 June the Appropriation Act (No 1) passed the House of Representatives, 23 June
Appropriation Act (No 1) passed the Senate. On the same day, that is 23 June, we have the first public reference to the proposed advertising campaign - that is page 1585. Your Honours might note the publication of an opinion poll then on 5 July, which is referred to at pages 1588 to 1589, and then we have the government advertising commencing on 9 July. Your Honours, those are our submissions in reply.
GLEESON CJ: Thank you, Mr Gageler.
MR BENNETT: Your Honour, may I just say on behalf of all counsel at the Bar table how privileged we all feel to have been present at what may well be the last time Justice McHugh sits on the Full Court of this Court.
McHUGH J: Thank you.
GLEESON CJ: Thank you, Mr Solicitor. We will reserve our decision in this matter and we will adjourn for a short time to reconstitute.
AT 3.18 PM THE MATTER WAS ADJOURNED
Key Legal Topics
Areas of Law
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Administrative Law
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Constitutional Law
Legal Concepts
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Judicial Review
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Standing
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Procedural Fairness
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Natural Justice
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