Ha & Lim v NSW

[1997] HCATrans 70

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S45 of 1996

B e t w e e n -

NGO NGO HA

First Plaintiff

SOKHIENG LIM

Second Plaintiff

and

STATE OF NEW SOUTH WALES

First Defendant

BRUCE BUCHANAN

Second Defendant

R. G. SMITH

Third Defendant

Office of the Registry
  Sydney  No S165 of 1996

B e t w e e n -

WALTER HAMMOND & ASSOCIATES PTY LIMITED

Plaintiff

and

STATE OF NEW SOUTH WALES

First Defendant

BRUCE BUCHANAN

Second Defendant

I.P. SMITH

Third Defendant

Case Stated

BRENNAN CJ
DAWSON J
TOOHEY J
GAUDRON J
McHUGH J
GUMMOW J
KIRBY J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 12 MARCH 1997, AT 10.17 AM

(Continued from 11/3/97)

Copyright in the High Court of Australia

BRENNAN CJ:   Yes, Mr Spigelman.

MR SPIGELMAN:   Your Honours, could I go back to the Commonwealth’s submissions.  I was dealing with the four examples at pages 10 to 11 of the Commonwealth’s submissions.  I think I may have said that all four of them deal with inputs.  That is wrong.  Two of them do; two of them do not.  The first example is an input example, namely, circumstances in which tyres, which are obviously also a consumer good, are an input into the manufacture of cars.

Now, there are two ways of dealing with this.  Our first and primary submission is that in so far as the State levy, whatever it is, falls indifferently on the two areas then it is not an excise, but, alternatively, we accept that there may be, as your Honour the Chief Justice put to me, a necessity to exempt the commodity in so far as it is an input and the reason for that would be because it is taxing a step in production, perhaps a step in production of the commodity into which the tyres go.

As a matter of substance of course, it may be the case that, even on the first way we put the case, a tax of a particular raw material - one thinks perhaps of iron ore in the Hamersley Iron Case - would in its particular circumstances be on a step in production of steel because no one buys iron ore on its own.  So, in that sort of case, even though it may be on a commodity, by reason of the circumstances, in substance it is on production.

So our first answer to this example is that in one way or another attacks on an input would be exempt.  But our next answer, and our second answer to this example, turns on the phrase “thereby disadvantages local production”.  The important thing, as I think your Honour Justice Dawson has said, particularly in Capital Duplicators, any State tax has that effect, namely, a payroll tax, a land tax, disadvantages local products in so far - and it is just like any other cost.  Wage increases disadvantage local products but, dealing with taxation only, the question is whether this…