Victoria v The Commonwealth and Hayden

[1975] HCA 52

HIGH COURT OF AUSTRALIA

Barwick C.J., McTiernan, Gibbs, Stephen, Mason, Jacobs and Murphy JJ.

VICTORIA v. THE COMMONWEALTH AND HAYDEN

(1975) 134 CLR 338

29 October 1975

Constitutional Law (Cth)

Constitutional Law (Cth)—Appropriation of moneys from Consolidated Revenue Fund—Scope of power to appropriate—Whether limited or unlimited as to purpose—Purposes of the Commonwealth—Whether limited to specific purposes for &hich Commonwealth empowered by Constitution to make laws—Degree of specification of purpose required—Appropriation of moneys for Australian Assistance Plan—Whether valid appropriation—Whether justiciable question—The Constitution (63 &64 Vict. c. 12), ss. 81, 83—Appropriation Act (No. 1) 1974-1975 (Cth).

Decisions

October 29.
The following written judgments were delivered:-
BARWICK C.J. The State of Victoria and its Attorney-General in this action, commenced in this Court, challenge the validity of an appropriation of $5,970,000 of the Consolidated Revenue Fund of the Commonwealth of Australia by the Appropriation Act (No. 1) 1974-1975 ("the Act"), and seek to restrain the Commonwealth and the Minister for Social Services from expending any of that amount of money for the purposes of what the schedule to the Act designates as "The Australian Assistance Plan". The defendants, the Commonwealth and the Minister, by their defence have asserted the validity of the Act and of the Australian Assistance Plan upon a number of grounds, and they submit that neither the State of Victoria nor its Attorney-General have any or any sufficient standing to commence or prosecute the action. (at p343)

2. To the whole of the statement of defence, apart from joining issue on its assertions other than such as are admissions of fact, the plaintiffs demurred on the grounds that it contains no defence to the statement of claim: that its assertions do not establish that the disbursement of part of the said sum for Regional Councils for Social Development under the Australian Assistance Plan, whether in the past or in the future, was or is authorized by any or any valid law of the Commonwealth. (at p344)

3. The demurrer and joinder in demurrer do not raise in point of pleading the question of the interest of the plaintiffs to maintain the suit. But, treating the defendants as entitled, when their pleading is under demurrer, to dispute the sufficiency of the statement of claim to maintain the relief claimed, we treated the defendants in the argument on the demurrer as entitled to challenge the existence of a sufficient interest in the plaintiffs to maintain the suit. This challenge must be distinguished from another substantive argument of the defendants, namely, that the question of the validity of the appropriation was not justiciable. This question also we allowed the defendants to argue on the demurrer. (at p344)

4. The Court gave leave to the States of New South Wales and Western Australia to intervene in the argument of the demurrer, including argument on the two questions I have mentioned. (at p344)

5. The form of the Act to which assent was given on 16th November 1974 should be noted. It provides by s. 3 that "The Treasurer may issue out of the Consolidated Revenue Fund and apply for the services specified in Schedule 2, in respect of the year ending on 30th June 1975, the sum of $2,863,510,000". (at p344)

6. The Supply Act (No. 1) 1974-1975, passed earlier in the year than the Act, had authorized the expenditure of some $1,804,284,000. Section 4 of the Act therefore appropriates the total of the sums of $2,863,510,000 and $1,804,284,000, namely $4,667,794,000, for the purposes scheduled to the Act and deems the appropriation to be effective as from 1st July 1974. (at p344)

7. The drafting device of putting all the items of the appropriation in a schedule is convenient and customary: but it should not be allowed to obscure the fact that each item of the schedule is a separate item to be considered separately, if the question of the validity of the Act in respect of it is entertained. There is no question in this case of invalidity of the Act as a whole. It does itself sever and separate each item in the schedule as a distinct and separate subject of appropriation providing an express authority to the Treasurer to pay the amount of the item out of the Consolidated Revenue Fund for the nominated purpose. Thus, if the validity of the Act in respect of any item is justiciable and the plaintiffs have a standing to maintain the suit, the Court may determine and declare that there is not a valid appropriation and authority to expend the individual item, without in any wise reflecting upon or affecting the validity of the Act as an appropriation of the other items in the schedule. Indeed, no argument was addressed to us by counsel that the Act must fall as a whole if in respect of any item in the schedule the Act was not a valid appropriation of, and authority pro tanto to expend, the Consolidated Revenue Fund. (at p345)

8. Included in the services referred to in s. 3 and specified in the Second Schedule to the Act is the Department of Social Security. The amount allocated to that Department in total is $141,637,000. In Div. 530 of the schedule there appears the item:

"4. Australian Assistance Plan 01. Grants to Regional Councils for Social Development $5,620,000

02. Development and evaluation expenses 350,000 Total $5,970,000"

It is the validity of the Act in respect of this item which the plaintiffs challenge and nothing more. (at p345)

9. The expenditure of money for or in pursuance of the Australian Assistance Plan (the Plan) is not authorized by any statute other than the Act. Nor, if it matters, so far as appears, is that expenditure governed or purported to be authorized by any order or regulation of the Governor in Council. The Plan itself is not the subject of a statute. The nature of the Plan and of Regional Councils around which it is constructed, is to be found only in the writings of a Committee of the Social Welfare Commission which have been furnished to the Court. These writings consist of a Discussion Paper dated 1973, Guidelines for Pilot Programme dated October 1974, and a further Discussion Paper (Discussion Paper No. 2) dated 1974. The purpose of the appropriation in Div. 530, No. 4 of the Second Schedule, must therefore be gleaned from these writings. (at p345)

10. The Social Welfare Commission Act 1973, assented to on 27th November 1973, establishes a Social Welfare Commission (s. 4). Its functions, as set out in s.14, are:

"(a) to ascertain and report to the Minister on, the social welfare needs of the community and to make recommendations to the Minister in respect of those needs; (b) to make recommendations to the Minister for furthering the achievement of a nationally integrated social welfare plan, including - (i) recommendations of priorities in relation to social welfare programmes; (ii) recommendations for the development of social welfare programmes on a regional basis with localized administration; (iii) recommendations for participation in the implementation of social welfare programmes by representatives of the persons or agencies to be assisted; (iv) recommendations for the co-ordination of the social welfare activities of organizations, including State, local government and voluntary organizations, involved in the provision of social welfare; (v) recommendations for the adjustment, from time

to time, of social welfare programmes in the light of changing community circumstances and attitudes and the state of the economy; and (vi) recommendations for avoiding the duplication of social welfare programmes and for promoting the maximum efficiency and effectiveness of the community social welfare effort;

(c) to estimate, and report to the Minister on, the likely cost of proposed social welfare programmes and to advise the Minister on the relative priorities to be given to the implementation of those programmes; (d) to keep social welfare programmes under constant review and to reassess and evaluate those programmes in the light of experience; (e) to propose to the Minister measures to give all organizations, including State, local government and voluntary organizations, concerned with social welfare access to available information and technical assistance; (f) to consider, and report to the Minister on, measures designed to provide skilled staff for the successful implementation of social welfare programmes; and (g) such other functions in connexion with social welfare programmes as the Minister approves." (at p346)

11. By s. 15 the Commission is given power to do all things that are necessary or convenient to be done for or in connexion with the performance of its functions. It may conduct an inquiry, including a public inquiry, into any matter being investigated by the Commission and is empowered to engage and make arrangements for others to engage in research for information on any such matter. It has power to appoint a committee to assist it in relation to a matter (s. 17). (at p346)

12. This Act is not under challenge in these proceedings and therefore, without so deciding, I shall for the purpose of these my reasons, assume its validity. (at p346)

13. An interim committee of the Commission, in response to a request by the Minister "for assistance in the development of a new project to assist the planning and provision of welfare services in Australia", produced a "discussion paper" which proposed the Plan:

"1.1 The aim of the Australian Assistance Plan is to assist in the development, at a regional level within a nationally co-ordinated framework, of integrated patterns of welfare services, complementary to income support programmes and the welfare-related aspects of health, education, housing, employment, migration and other social policies, having regard to the following matters: That the existing responsibilities of State and local governments, voluntary agencies and the Australian Government are recognized. That assistance should be available for planning and developmental programmes. That the development of regional planning systems is to be encouraged. That every effort is made to avoid duplication and overlapping of services. That local residents and welfare consumer groups are encouraged to participate in the planning and provision of welfare services. That continual evaluation and monitoring of all programmes occur to ensure their flexibility, adaptability and appropriateness in light of changing patterns of social need. 1.2 Finance to be made available under the Australian Assistance Plan is additional to that already being expended by the States on welfare services, and to the grants which the Social Welfare Commission has recommended should be made available for social policy and programme evaluation to the Australian Department of Social Security, the State and Territory Departments concerned with Social Welfare and the Australian Council of Social Service. 1.3 The primary emphasis of the Australian Assistance Plan is in the areas of planning, programme development and social policy evaluation, whereas the provision of complementary casework services is seen to arise from within this basic framework and may be under other auspices; for example, a state Department of Social Welfare or a migrant counselling service. The Plan envisages providing stimulus to consumer and volunteer activity in the concept of community development." (Discussion Paper No. 1, p. 3.) (at p347)

14. It is appropriate to emphasize that the Minister's request was for assistance in "the development of a new project". It was not for assistance, advice or information in the development of any legislation related to any specific head of Commonwealth legislative power. (at p347)

15. It appears from this paper that "the Social Welfare Commission regards the development of Regional Councils for Social Development as an integral part of regional planning" (Discussion Paper No. 1, p. 4.) Accordingly, such Councils are to be set up, and, as will appear, have been set up in various States including the State of Victoria where, as at 1st July 1974, there were eight in operation. (at p348)

16. A region for the purposes of the Plan "is an area in which there is a high measure of economic, social and political unity, or which lends itself to such unity, and thus of community interest. The region, on this definition, may have a population of 500,000 in densely settled areas such as Sydney and Melbourne, but for purposes of social planning sub-regions may need to be developed, with populations of up to 250,000. Populations will most commonly be well below that figure in non-metropolitan areas." (Discussion Paper No. 1, p. 4.) (at p348)

17. The functions of Regional Councils for Social Development are "to stimulate interest and activity in the broad field of social development. They should give added impetus to initiatives within their regions to provide a wider range of welfare services and to test innovative programs for service delivery. They will need to: relate to any regional planning bodies concerned with physical planning, health planning, education planning, housing planning, etc.; continually evaluate and monitor the social needs of the region; consider plans for welfare service provision to meet the needs of their regions in consultation with government and non-government agencies; upon request, advise and assist local government bodies and non-government agencies in the carrying out of appropriate welfare policies; and offer advice to the Australian Government on the development of its own departments' services in the region, and on the allocation of grants and subsidies to bodies within the region." (Guidelines For Pilot Programme, p. 5.) (at p348)

18. "Social planning" is defined for the purposes of the Plan as "the mobilisation of resources of the community to stimulate and manage changes for social benefit by formulating policies and programs for the social sector of the economy such as health, education, social welfare, housing, recreation, etc.". (Discussion Paper No. 2, p. 24.) It is said that "those engaged in community social planning must identify local problems; research and analyse the data on these problems; assess their findings; and consider alternative strategies for program development according to agreed priorities. The Regional Councils must then take decisions on a program implementation scheme which takes into account available finances together with the need for communication and co-ordination with other agencies". (Discussion Paper No. 2, p. 24.) (at p349)

19. The Regional Councils are "intended to be independent, bipartisan, community based bodies, free of political control ... The relationship of Regional Councils with other structures should be a co-operative and integrative one. They will have no authority to countermand decisions of existing governments, although they may advise and lobby against them". (Discussion Paper No. 2, p. 21.) (at p349)

20. The basic staff of a Regional Council is: a director of social planning; a project officer; secretarial assistance. (at p349)

21. Money is to be made available by the Commonwealth directly to, and for expenditure by, Regional Councils in two forms: (a) a specific grant of $10,000 per annum for the employment, either by a local government authority in the region or a local welfare co-ordinating committee in the region, of a community development officer whose functions would include: information giving, assessment of local needs, advice on implementing social welfare programmes; recommendations on the development of new services; activities designed to foster a sense of community involvement; participation in committee work; training of welfare personnel; (b) block grants to be spent in the area by eligible bodies which may be applied to any or all of the capital or maintenance costs of those services outlined in Ch. 4 of Discussion Paper No. 1. Prima facie these grants will be on the basis of $2 per capita per local government area but will be affected by a system of "'needs' weighting". (See Discussion Paper No. 1, p. 6.) But "it is envisaged that Regional Councils will have access to other funding sources and indeed are encouraged to seek such resources". (Guidelines For Pilot Programme, p. 5.) (at p349)

22. Each Regional Council is free to determine its own priorities for the expenditure of the regional grant amongst local government bodies or groups: such expenditure is in its discretion. Eligible bodies will include: local government bodies or groups of two or more such bodies; local government bodies in association with one or more community agencies, e.g. a non-profit hospital; State government department services in the region; welfare consumer groups; non-government bodies of a non-profit or charitable nature, including trade unions, as approved by the Director-General of the Department of Social Security. The criterion upon which the Regional Council will allocate the funds at its disposal is to be "the needs of the region". (at p349)

23. The services in which the grant may be employed are:

"4.1 Child development services including: Family day care programs. Counselling services for 'at risk' families. Day care services not included in the Child Care Act 1972, including before- and after-school programs, and school holiday programs (which do not attract other Federal grants). Parental education programs. Fostering programs on a permanent or temporary basis.

4.2 Services to assist families including: Professional counselling services (i) Social casework or group work; family casework services including marriage guidance;

(ii) Budget advisory services; (iii) Home management advice; (iv) Legal advice. Domiciliary services (i) Home help, housekeeper, home management available to population generally;

(ii) Meals-on-wheels (Commonwealth assistance available under Delivered Meals Subsidy Act);

(iii) Allied services such as friendly visiting, home maintenance, laundry, shopping and other ancillary services designed to assist people to remain independent of institutional care.

4.3 Services to assist adolescents including: Recreational/cultural facilities having a clear welfare component (but excluding solely corrective programs): (i) Provision of community centres as a locus for community welfare services;

(ii) Youth clubs or 'drop-in' centres; (iii) Activity programs aimed at providing social therapy for special-needs groups, such as delinquent adolescents, discharged prisoners or those who have suffered mental illness.

Detached worker programs.

4.4 Services to assist aged persons including: Senior citizens centres, and associated welfare

programs. Domiciliary services listed in 4.2. Financial assistance as in 4.6. Accommodation as in 4.5.

4.5 Accommodation for special categories, and associated welfare programs including: Aged (but not of a kind to attract subsidy under Aged Persons' Homes Act). Transients. Homeless families. 'At risk' youth. Alcoholics. Single mothers (but not babies' or children's homes).

4.6 Certain financial assistance including: Emergency financial relief. Crisis accommodation services and holiday grants for low income families. Emergency care in home.

4.7 Information services including: Information/advice services in general community - may involve assistance towards existing Citizen Advisory Bureaux or sponsorship of a Bureau being planned by community agencies.

4.8 Community Health and Welfare Centres, as a focus for a 'total health and well-being' approach to the delivery of services instead of services designed to meet only particular needs, provided that this is a proposal approved jointly by the Social Welfare Commission and the Australian Hospitals and Health Services Commission.

4.9 Research and evaluation projects with respect to welfare policies." (Discussion Paper No. 1, pp. 8-9.) (at p351)

24. The Plan which has been initiated is said to be "an action-research program in its experimental stages" intended to "cover Australia in a network of Regional Councils operating community-based programs" with the "dual purpose of co-ordinating the activities being undertaken by other organisations and by providing a stimulus for new interests and activities". They are to have the means "to foster innovatory services and projects through the capitation grant". (Discussion Paper No. 2, pp. 8-9.) Their "focus is the integration of welfare services and participatory social planning on a regional basis". (Discussion Paper No. 2, p. 14.) (at p351)

25. These citations from the writings of the interim committee are not made for the purpose of criticism of the plenitude or the vagueness of the language employed or of criticism of the validity of the concepts put forward in the discussion papers and guidelines, or to reflect on the wisdom or practicability of the Plan. None of these aspects of the Plan and of its documentation are of concern to me in deciding this matter. I am concerned only with constitutional validity. (at p351)

26. I have troubled, however, to quote sufficiently from the abundance of words which go to make up the documents descriptive of the Plan, to demonstrate that the Plan is presently a going concern and to indicate the activities which it comprises: for, as I have said, the purposes of the appropriation are to be found in this outline of the Plan which has no other authority for its existence and activities than the Act appropriating money and authorizing the expenditure of money to service it. Though the sum appropriated by the Act for the Plan is considerable, it is evident from the writings with which we have been furnished that this is only the beginning of a vast expenditure of money. (at p352)

27. I mentioned earlier that, as of July 1974, there were eight Regional Councils in operation in Victoria, presumably being funded for their operational expenses out of the moneys appropriated by the Act for the Plan. In fact, as of that time, there were as well ten such Regional Councils for New South Wales, six in Queensland, two in South Australia and three in each of the States of Western Australia and Tasmania and three in the Northern Territory, making in all thirty-five Regional Councils. There were at least six pilot schemes within the areas of the Regional Councils receiving capitation grants. (at p352)

28. Having thus indicated the nature of the Plan, I can at once dispose of a submission pressed upon the Court by counsel for the defendants. It was said that the function of the Plan was merely investigatory and advisory: a mere exercise of inquisition to inform the government when contemplating an exercise of its legislative powers under such topics as invalid and old age pensions, family allowances, immigration and people of the aboriginal race. Quite plainly it is not; the Regional Councils have been set up and the Plan is in action. Any advisory function so far as government is concerned, would seem to be with the Social Welfare Commission. Any advisory function of the Regional Councils is directed to the improvement of the Plan itself, the development of the departmental services in the region and the allocation of grants and subventions to bodies in the region. (at p352)

29. According to the literature about the Plan to which I have referred, legislation is contemplated which will implement the Plan with such variations as intervening experience may seem to dictate. Nowhere in the extensive explanation of the Plan in the documents is there the least suggestion that the aim or purpose of setting up the Regional Council is the ascertainment of information directed to the exercise of the legislative power on any of the topics to which I have referred. Notwithstanding the valiant efforts of the Solicitor-General to convince us to the contrary, it is to my mind beyond question that the purpose, immediate and long term, of the Plan is to develop Regional Councils "to stimulate interest and activity in the broad field of social development" with the "dual purpose of co-ordinating the activities being undertaken by other organisations and by providing a stimulus for new interests and initiatives" within "a nationally co-ordinated framework of integrated patterns of welfare services". The situation at the present is that there are in existence Regional Councils for Social Development with the functions I have listed, being supported by money out of the Consolidated Revenue Fund on the sole authority of the item I have mentioned in the Schedule to the Act. So far as the money consists of grants it is to be paid direct to the Regional Councils for disbursement by them. (at p353)

30. Section 83 of the Constitution provides that "No money shall be drawn from the Treasury of the Commonwealth except under appropriation made by law". That, as Sir Owen Dixon pointed out in Attorney-General (Vict.) Ex rel. Dale v. The Commonwealth (1945) 71 CLR 237, at p 271 , means by a valid law of the Commonwealth. It also means that there must be constitutional or statutory authority for all disbursement from the Consolidated Revenue Fund. There is no inherent executive power of disbursement. (at p353)

31. It is suggested by Professor Harrison Moore in The Constitution of the Commonwealth of Australia, 2nd ed. (1910), at pp. 522-527, that several provisions of the Constitution themselves appropriate money so that payments for the nominated purposes may be made without the necessity of an Appropriation Act specifically appropriating such moneys. Sir John Latham, in his reasons for judgment in Attorney-General (Vict.) v. The Commonwealth (1945) 71 CLR 237 , takes somewhat the same view. I am not convinced that every instance given by Professor Harrison Moore and by Sir John Latham does effect such an appropriation. But I have no need presently to decide that matter. It suffices to accept the proposition that there are in the Constitution provisions which do satisfy s. 83 without the support of a specific appropriation by Commonwealth statute. Thus, it cannot properly be said as a universal proposition that only money appropriated by such statutes may lawfully be drawn from the Treasury. But, undoubtedly, the invariable rule, apart from authority given by the Constitution itself, is that money may not lawfully be withdrawn from the Consolidated Revenue Fund except under the authority of a valid law of the Commonwealth. (at p353)

32. Upon these facts and circumstances, four matters arise for decision in this case: Is there a constitutional limitation upon the power of the Commonwealth to appropriate and spend the Consolidated Revenue Fund? If there is, what is the nature of that constitutional limitation? If so, is this Court competent - (a) to determine the existence and nature of the constitutional limitation and (b) to enforce it by declaration and injunction? And, lastly, have the plaintiffs or either of them a sufficient interest to maintain their suit? (at p354)

33. The first step is to determine the meaning of s. 81 and to decide whether there is a constitutional limitation upon the power of the Parliament to appropriate, and to authorize the expenditure of, the Consolidated Revenue Fund; and if so, the nature of the limitation. (at p354)

34. Sections 81 and 83 are provisions of the Constitution. Clearly, in my opinion, they were not inserted there merely to reflect British parliamentary practice in cases resulting from conflicts long since resolved between the King and Parliament. Rather, they are there to reflect Australian, not British, history and to implement the federal distribution of power and financial relationship upon which the colonies had resolved. If those sections were passed merely to indorse the outcome of the conflict of Crown and Parliament in the long past they were an unnecessary adornment. The British parliamentary practices and procedures entrenched in 1900 would have come with the establishment of the Parliament as part of the inheritance by the Commonwealth of the common law. There would have been an inherent power to appropriate and an inherent obligation to do so by statute. Further, if inserted to emphasize the existence of such a power of appropriation, there was no need and no point in the insertion of the words "for the purposes of the Commonwealth". I am unable to accept the conclusion that these words are either surplusage or meaningless. They have been used, in my opinion, to effect a constitutional purpose. (at p354)

35. To comprehend the nature and meaning of s. 81, which in my opinion is the express constitutional source of the power of the Parliament to appropriate money for expenditure out of the Consolidated Revenue Fund, it is necessary to place the financial provisions of the Constitution in the setting of the period in which federation was mooted and achieved. Such a course is well settled in the construction of the Constitution. (at p354)

36. Most of the colonies, pre-federation, relied upon customs and excise, with borrowing, to maintain the expenditures of government. Such duties of customs were garnered at the inter-colonial border as well as at the seaboard. Only one of the Australian colonies as of 1900 had resorted to income tax as a substantial source of government revenue. One of the mainsprings of the movement in the colonies for federation was the need to have a common external tariff and to remove border customs and other impediments to trade over the colonial boundaries. This is evidenced by ss. 86, 88, 90 and 92 of the Constitution. But, by the operation of these sections, the colonies now to be States forming part of the Commonwealth, were deprived of what in 1900 was a major, if not indeed almost the exclusive, source of governmental revenue. Consequently, as part of the federal arrangement they had to be assured of the replacement of these revenues by money furnished out of the revenues of the Commonwealth. (at p355)

37. Having regard to the limited nature of the powers granted to the Commonwealth, and to the unlikelihood, as seen in 1900, of the Commonwealth requiring for the exercise and enjoyment of those powers to use all the revenues of customs and excise, of posts, telegraphs and telephones, and other possible sources, some constitutional provisions were necessary to ensure the availability to the States of the excess of those revenues over the proper requirements of the Commonwealth. (at p355)

38. It is apparent from the history of the proposals for federation that the plan of federation involved, and essentially involved, the sharing or distribution of the revenues of the Commonwealth. The then major source of colonial revenue had to be collected by the Commonwealth: that and other revenues of the Commonwealth gathered from the people of the States by non-discriminatory laws might well be beyond the needs of the administration by the Commonwealth of the powers allocated to it by the Constitution. The precise manner in which the States after federation should secure their share of the revenue so received by the Commonwealth had been the subject of much discussion but only of incomplete agreement. Some matters, however, were finally resolved. It was provided that all revenue should form one Consolidated Revenue Fund. Section 87, though certainly only for a limited period, specified that part of the revenue from customs and excise which could be applied annually by the Commonwealth "towards its expenditures"; s. 94 provided for the payment to the States of "all surplus revenue of the Commonwealth". Section 96 gave power to make grants to any States upon terms determined by the Parliament. It was evidently necessary to make such an express provision if such grants were to be deductible from the Commonwealth revenues in the process of determining the surplus revenue. Quite clearly, the making of such grants, but for the existence of s. 96, would not have been a purpose of the Commonwealth. (at p355)

39. Just as legislative power was distributed, with specific topics assigned to the Commonwealth and the residue falling to the States, so, it seems to me, the surplus of the Commonwealth revenues, the residue, after the servicing of the exercise of Commonwealth powers, was to come to the States, though in a manner left to be determined by the Parliament. This distribution of the revenue was effected, in my opinion, by the stipulation that the Consolidated Revenue Fund could only be appropriated and disbursed by constitutional or statutory authority, and that the Commonwealth could only expend the fund for Commonwealth purposes. Thus if the revenues in fact exceeded Commonwealth purpose requirements, there would be surplus revenue intended to be available for the States. The fact, if that be the right conclusion, that the payment of the surplus revenue was left in the control of the Parliament does not detract, in my opinion, from the basic concept of limiting the power of the Commonwealth, itself a legislative power, to appropriate and spend the Consolidated Revenue Fund as part of the distribution of legislative power by which the federation was effected. The failure to agree upon a permanent formula for distributing the revenue does not deny the essentially federal nature of the financial provisions of the Constitution. In my opinion, the words of s. 81 do involve a restraint of the Commonwealth's power of appropriation and expenditure of the Consolidated Revenue Fund and ss. 81 and 83 were part of what I may call the distribution of the available governmental revenue of the federation as between Commonwealth and States. (at p356)

40. The development by the States of the use of income tax as a source of revenue between 1900 and 1942 tended to divert attention from the surplus revenue provisions. The working of that provision had been affected by the Court's decision in New South Wales v. The Commonwealth (1908) 7 CLR 179 : but not to the point of rendering s. 94 ineffective. The entry of the Commonwealth into the field of land tax and then of income tax no doubt diluted the proportion of the Consolidated Revenue Fund contributed by customs and excise and posts and telegraphs. But none of these circumstances altered the fundamentals of the Constitution in the distribution of the use of that fund. (at p356)

41. The legislation of 1942, embodying the so-called uniform taxation scheme, returned the country to the situation of 1900 with the major sources of government revenue in Australia being collected by the Commonwealth with no binding arrangement for the quantification of the reimbursement grants to be paid to the States as the price of their abstention in the field of income tax. Efforts to devise formulae to effect the distribution of the income tax revenue have had but partial and temporary success. However, concentration of attention on annual conferences of Premiers with the Treasurer of the Commonwealth have, I think, tended to displace resort to the legal consequences of the basic financial federalism which the Constitution expresses and to substitute political bargaining rather than litigation as the mechanism for the distribution of Commonwealth revenues. In a sense the Premiers' Conferences have substituted consensual arrangements for legal rights. But now in this litigation, legal rights and constitution limitations have been asserted and must be decided. (at p357)

42. It is as necessary now, with the uniform tax and reimbursement grant legislation in operation, that the claim of the States on the Consolidated Revenue Fund through s. 94 be recognized and respected as it was when the principles of federation were in negotiation. The purpose of the restraint on the Parliament's legislative power to appropriate and authorize the expenditure of the Consolidated Revenue Fund is presently the same as it was in 1900, namely, the ensuring of surplus revenue so that there can be State participation in that Fund. (at p357)

43. The Commonwealth's access to the Consolidated Revenue Fund by means of the use of s. 96 has been aided by the decisions of the Court in Victoria v. The Commonwealth (1926) 38 CLR 399 and Osborne v. The Commonwealth (1911) 12 CLR 321 . But these decisions lend no colour to the proposition that an appropriation of the Consolidated Revenue Fund may be without purpose or that the purpose of the appropriation may be to service some activity of the Commonwealth which it is not authorized by the Constitution to undertake. Section 96, included in the Constitution to enable moneys expended in grants to States to be debited to the Consolidated Revenue Fund as money appropriated for a purpose of the Commonwealth, as interpreted by this Court, has enabled the Commonwealth to intrude in point of policy and perhaps of administration into areas outside Commonwealth legislative competence. No doubt, in a real sense, the basis on which grants to the claimant States have been quantified by the Grants Commission has further expanded the effect of the use of s. 96. But a grant under s. 96 with its attached conditions cannot be forced upon a State: the State must accept it with its conditions. Thus, although in point of economic fact, a State on occasions may have little option, these intrusions by the Commonwealth into areas of State power which action under s. 96 enables, wear consensual aspect. Commonwealth expenditure of the Consolidated Revenue Fund to service a purpose which it is not constitutionally lawful for the Commonwealth to pursue, is quite a different matter. If allowed, it not only alters what may be called the financial federalism of the Constitution but it permits the Commonwealth effectively to interfere, without the consent of the State, in matters covered by the residue of governmental power assigned by the Constitution to the State. (at p358)

44. It is perhaps worth remarking at this point that the doctrine of the Court established in the Amalgamated Society of Engineers v. Adelaide Steamship Co. Ltd. (1920) 28 CLR 129 has supported the exercise to the full of Commonwealth legislative power. But however large and generous the interpretation of those powers, the Constitution requires that the power of the States with respect to the residue, not embraced in Commonwealth power as thus construed, should not be trespassed upon by the Commonwealth without the concurrence of the State. Participation by the Commonwealth in policy-making or of administration in connexion with matters of State concern, matters within the residue left to the States by ss. 106 and 107, must, in my opinion, be confined to the use by the Commonwealth of s. 96 which, as I have said, involves the consent of a State. The Commonwealth, in my opinion, activity under s. 96 apart, cannot enter that residual area left by the Constitution to the States, either by legislative or by executive act. (at p358)

45. In line with the limitation on Commonwealth expenditure out of the revenues of customs and excise, with the power to make grants to States under s. 96 and with the provision for surplus revenue to be paid to the States, the power of appropriation and of expenditure of the Consolidated Revenue Fund in my opinion is limited to appropriation and expenditure for Commonwealth purposes. Although appropriated but unspent money was denied the quality of surplus revenue for the constitutional purpose (see New South Wales v. The Commonwealth (1908) 7 CLR 179 ) and although the undoubted demands on the Consolidated Revenue Fund including the amount of grants under s. 96 may reduce in present times the extent of surplus revenue, the right of the State to the distribution of such surplus revenue remains. Whilst s. 94 is expressed in facultative rather than mandatory terms, if there is at any time surplus revenue which the Commonwealth may not appropriate and expend, the practical effect must be that that surplus can only be and will be made available to the States, though the Parliament may determine the basis of its distribution. Thus the absence of mandatory terms in s. 94 is really of no practical consequence. However, the sense of the Court's decision in New South Wales v. The Commonwealth is, in my opinion, that if there be a surplus, the Commonwealth is required to make it available to the States on a basis fixed by the Parliament. In any case, that in my opinion, is the proper interpretation of s. 94. It must be remembered that it is a Constitution which we have to construe. A Constitution which left in the Consolidated Revenue Fund money which the Commonwealth could not lawfully expend, being a surplus beyond Commonwealth purposes, without any obligation to distribute it, would make little sense. (at p359)

46. There was thus a clear reason in the formation of the Australian Constitution to impose limits on the capacity of the Commonwealth to expend the Consolidated Revenue Fund into which all revenues and moneys were to go. The limitation on the power of appropriation and disbursement was an indispensable part of the financial arrangements contemplated in the progress towards federation which are embodied in the Constitution. It was submitted for the defendants that we should apply to the Australian Constitution the judicial construction placed upon the American Constitution in relation to the power of taxation and what was considered to be a correlative power, the power of appropriation and expenditure. The American doctrine, developed through periods of uncertainty, seems to be regarded as presently settled by United States v. Butler (1936) 297 US 1 (80 Law Ed 477) . The doctrine stems from the Supreme Court's view of the extent of the power to tax, having regard to the text of the Constitution of the United States. But, even so, the power of expenditure has not been held to be unlimited and beyond the reach of the Supreme Court. Clearly, from the reasons in United States v. Butler, the Supreme Court considered that there may be an occasion when the Court could find an appropriation and expenditure beyond the power of the Congress: see United States v. Butler (1936) 297 US, at pp 74, 87 (80 Law Ed, at pp 492-493, 499-500) . In that case a limit on the power is suggested by the expression that the expenditure must be for national purposes which are not pursued to the destruction of State power. (at p359)

47. But, however that may be, the American doctrine has no place in the construction of the Australian Constitution. I agree with Sir John Latham that it cannot be said of the Australian Constitution that, because the power to tax may be unlimited, the power to spend is in consequence unlimited. "This precise argument does not apply to the Australian Constitution because there is not the same collocation and association of words": Attorney-General (Vict.) v. The Commonwealth (1945) 71 CLR, at p 255 . I also agree with Sir Owen Dixon's conclusion (1945) 71 CLR, at p 271 . But, and, for my part, more importantly, nothing comparable with the situation of the Australian colonies in 1900 and to the constitutional provisions to which I have called attention, was present in or in connexion with the American Constitution or its formation. (at p360)

48. In my opinion, the words "for the purpose of the Commonwealth" were intended to and do limit the legislative power of the Commonwealth to appropriate and authorize the expenditure of the Consolidated Revenue Fund. They must be construed and applied in the light of the circumstances and constitutional provisions to which I have referred. It follows inevitably, in my opinion, that they cannot be writ out of the Constitution by deciding that any purpose which the Parliament considers to be a Commonwealth purpose is an authorized purpose. That is but an example of "words meaning what I says they mean", a notion more likely to be found in fantasy than in constitutional law. (at p360)

49. There can be no doubt, in my opinion, that those who framed the Constitution realized that there were purposes for which money could be spent which were purposes of the Commonwealth and purposes which were not. Hence there exist words of limitation. Sections 81 and 83 in combination require that there shall be an appropriation by law and an authority to expend the Consolidated Revenue Fund for a Commonwealth purpose. That means, in my opinion, that such a purpose must be seen in the law, either expressly or referentially by description. It must be possible to decide that the law containing the appropriation and authority to expend is valid within the constitutional limitation. (at p360)

50. That limitation may be fully satisfied by the express terms of the appropriation, e.g. in the Second Schedule of the Act, Div. 101. Senate 1. Salaries and Payments in Nature of Salaries; or those terms may need to be supplemented by further material describing the activities of the body mentioned in the appropriation, e.g. as in the present case where the notation "Australian Assistance Plan" needs to be supplemented by description of the activities embraced in the Plan. There may be Acts other than the Appropriation Acts, some of a long-standing nature and others of an annual nature, which control the nature and level of the expenditure of the appropriated sums, e.g. appropriations for the departments of State, where public service legislation and staffing arrangements pursuant to it, provide the necessary statutory authority. Further, as an incident of an Act on some topic assigned by the Constitution to the Parliament, an appropriation may be made by a section of that Act, thus providing money to service its other provisions. (at p361)

51. But, however evidenced or demonstrated, the purpose of the appropriation, i.e. the purpose on or for which the appropriated money may be spent, must, in my opinion, both appear and satisfy the limitation present in the words of s. 81, "for the purposes of the Commonwealth". (at p361)

52. I should at this point call attention to the traditional form of an Appropriation Act which includes an authority to the Treasurer "to issue out of the Consolidated Revenue Fund and apply" the appropriated money for the specified services. That is the form of the Act. It is, in my opinion, a fundamental error to regard an Appropriation Act of the Commonwealth in the form of the Act in this case as doing nothing. It furnishes the authority of the Executive to spend money upon or in connexion with some specific activity. In the present case, the Act in relation to Div. 530, No. 4 of the Second Schedule, is the sole authority for expenditure in connexion with the Plan. It is a legislative act, which to be valid, requires the support of the Constitution. Unless the services specified in the Act constitute relevantly Commonwealth purposes, the Act in that respect transcends the legislative power of the Commonwealth. The grant of the authority to expend is beyond the power of the Parliament and the withdrawal of the money from the Consolidated Revenue Fund is unlawful. (at p361)

53. Having regard to a remark made during the argument, I should also point out that when the Court decides that a law of the Parliament is invalid as being in excess of power, the Court does not amend or repeal the Act. It declares it not to form part of the law of the land, usually in so far as it would operate to the disadvantage of a litigant, whether a State or a person, natural or juristic. When the Court decides that the required purpose of an appropriation is lacking, it does not amend the Appropriation Act. It declares that the authority to expend money out of the Consolidated Revenue Fund upon the item in question is beyond the power of the Parliament; that there is no law to satisfy s. 83; that money may not lawfully be drawn from the Treasury in pursuance of that purported authority. (at p361)

54. What then are purposes of the Commonwealth within s. 81? The Commonwealth is a polity of limited powers, its legislative power principally found in the topics granted by ss. 51 and 52: its executive power is described as extending to the execution and maintenance of the Constitution and of the laws of the Commonwealth. No doubt some powers, legislative and executive, may come from the very formation of the Commonwealth as a polity and its emergence as an international state. Thus it may be granted that in considering what are Commonwealth purposes, attention will not be confined to ss. 51 and 52. The extent of powers which are inherent in the fact of nationhood and of international personality has not been fully explored. Some of them may readily be recognized: and in furtherance of such powers money may properly be spent. One such power, for example, is the power to explore, whether it be of foreign lands or seas or in areas of scientific knowledge or technology. Again, there is power to create departments of State, for the servicing of which, as distinct from the activities in which the departments seek to engage, money may be withdrawn from the Consolidated Revenue Fund. (at p362)

55. But, to anticipate a submission with which I must later deal, to say that a matter or situation is of national interest or concern does not, in my opinion, attract any power to the Commonwealth. Indeed, any student of the Constitution must be acutely aware of the many topics which are now of considerable concern to Australia as a whole which have not been assigned to the Commonwealth. Perhaps the most notable instance is in relation to the national economy itself. There is but one economy of the country, not six: it could not be denied that the economy of the nation is of national concern. But no specific power over the economy is given to the Commonwealth. Such control as it exercises on that behalf must be effected by indirection through taxation, including customs and excise, banking, including the activities of the Reserve Bank and the budget, whether it be in surplus or in deficit. The national nature of the subject matter, the national economy, cannot bring it as a subject matter within Commonwealth power. (at p362)

56. However, to whatever source it be referred, any act or activity of the Commonwealth must fall within the confines of some power, legislative or executive, derived from or through the Constitution. In this connexion, I have not included any reference to the judicial power because, in my view, such a reference would be irrelevant to the matter in hand. In the long run, whether the attempt is made to refer the appropriation and expenditure to legislative or to executive power, it will be the capacity of the Parliament to make a law to govern the activities for which the money is to be spent, which will determine whether or not the appropriation is valid. With exceptions that are not relevant to this matter and which need not be stated, the executive may only do that which has been or could be the subject of valid legislation. Consequently, to describe a Commonwealth purpose as a purpose for or in relation to which the Parliament may make a valid law, is both sufficient and accurate. In my opinion, the expression in s. 51 (xxxi.) of the Constitution "for any purpose in respect of which the Parliament has power to make laws;" is a reasonable synonym for the expression "the purposes of the Commonwealth" in s. 81. (at p363)

57. Further, the limitation which such a description places upon the power to appropriate and expend the Consolidated Revenue Fund is both appropriate and necessary to carry out the financial provisions of the Constitution to which I have referred. It accords with the limited powers given to the Commonwealth by the Constitution. In this respect, I agree generally with what Sir Owen Dixon wrote in Attorney-General (Vict.) v. The Commonwealth (1945) 71 CLR, at pp 271-272 . I am unable to agree with the conclusion expressed by Sir John Latham (1945) 71 CLR, at p 254 or by my brother McTiernan (1945) 71 CLR, at pp 273-274 in that case. (at p363)

58. Is the Australian Assistance Plan, as I have outlined it by quotations from the Social Welfare Commission's documents, a purpose of the Commonwealth? Is it something the Commonwealth may lawfully implement? I have no doubt it is not. There is no granted power which either alone, or in combination with other powers, could support a scheme for the rearrangement of the Australian community into regions for deriving financial support directly from the Commonwealth or for integration of social welfare schemes or welfare planning as such. Nor is there power to grant money to or through the Regional Councils. An Act of the Parliament which sought to authorize the carrying out of the Plan, including its financial provisions, would, in my opinion, be beyond the power of the Parliament. (at p363)

59. The statement of defence suggests that the Plan is supportable by reference to a number of powers granted by s. 51. Because, for example, old age pensioners or migrants might be the object of some scheme or co-ordination by a Regional Council, it is said that the Plan may properly be regarded as a provision with respect to old age pensions or immigration. But such a claim is clearly insupportable. See, for example, Sir John Latham's discussion of legislative subject matter in Bank of New South Wales v. The Commonwealth (1948) 76 CLR 1, at pp 182-187 . A statute authorizing the Plan could not, in my opinion, be regarded as a law with respect to old age pensions or immigration or any of the other subject matters to which reference was made in argument. (at p363)

60. It was then suggested that, because social welfare itself and, in particular, the co-ordination of the efforts of a large number of diverse agencies was a national problem, there was power in the national Parliament to deal with it, by appropriation of funds as well as by particular legislation. But, as I have already pointed out, to describe a problem as national, does not attract power. Though some power of a special and limited kind may be attracted to the Commonwealth by the very setting up and existence of the Commonwealth as a polity, no power to deal with matters because they may conveniently and best be dealt with on a national basis is similarly derived. However desirable the exercise by the Commonwealth of power in affairs truly national in nature, the federal distribution of power for which the Constitution provides must be maintained. (at p364)

61. In my opinion, no power resides in the Commonwealth to implement and carry out a social welfare plan such as the Australian Assistance Plan. It follows, in my opinion, that that Plan is not a purpose of the Commonwealth within the meaning of the language of s. 81. Accordingly, in my opinion, there is no power in the Parliament to appropriate and authorize the expenditure of money for that Plan and its purposes. Item 4 in Div. 530 of the Second Schedule to the Act is, in my opinion, void and in respect of the Plan and its purposes, the Act is ineffective to authorize the withdrawal from the Treasury of any money for the support or implementation of the Plan. (at p364)

62. I need lastly to deal with the submission that the question of the validity of the Act is not justiciable and that the plaintiff State has no interest to maintain its suit. I shall deal with both submissions together. (at p364)

63. Section 83 requires that there be a law authorizing the withdrawal of money from the Consolidated Revenue Fund. Section 81, in my opinion, empowers the Parliament to make a law authorizing such withdrawal. If, as I think, there is a limitation imposed by s. 81 on the power of the Parliament to make such a law, an Act which authorizes an expenditure of the Consolidated Revenue Fund for a purpose which is not a purpose of the Commonwealth within the meaning of s. 81, must be beyond the competence of the Parliament. Like any other statute passed by the Parliament which is beyond its competence, such a statute is void. The power of this Court to declare that a statute which is beyond Parliament's competence is void is beyond question. It is an essential feature of the Australian Constitution that the Court, in the exercise of the judicial power of the Commonwealth, not only may declare acts of the Parliament to be void but, when approached by a litigant with an appropriate interest in the statute or its operation, is under a duty to do so. (at p364)

64. As I have pointed out, the Act, in traditional form, both authorizes the expenditure of part of the Consolidated Revenue Fund and, to enable that expenditure, appropriates so much of the Fund as is necessary to do so. It cannot be said that the Act does nothing, merely earmarking part of the Consolidated Revenue Fund which remains as it was before appropriation. The real operation of the Act is to provide an authority for expenditure so as to satisfy the terms of s. 83: and it is in the instant circumstances being so treated. (at p365)

65. I have indicated that the evident purpose of the limitation upon the Commonwealth's use of the Consolidated Revenue Fund is to effect the distribution of the use of that Fund and to ensure, so far as the Fund will extend, that there is a surplus of revenue. Thus, to declare an expenditure of the Commonwealth as unauthorized, and in breach of s. 83, is to take a step towards the existence and availability of surplus revenue. Likewise, an injunction to restrain an unauthorized expenditure is in aid of surplus revenue. To my mind, it is manifest that a State undoubtedly has an interest in the existence and extent of surplus revenue, whether or not it has a right to its distribution. Equally, it must have an interest to prevent expenditure of the Consolidated Revenue Fund which, if allowed, must deplete, or prevent the existence of, surplus revenue. To say that the present suit is not a suit to recover surplus revenue is not, in my opinion, to deny the interest of the State to maintain it. The suit, though not claiming a payment of money, is essentially concerned with the protection of the surplus revenue and of the State's interest in the existence and extent of such surplus revenue. (at p365)

66. By confining the Commonwealth's expenditure of the Consolidated Revenue Fund within the proper constitutional bounds, the State takes a step towards the "creation" of surplus revenue: it is endeavouring to ensure the observance of the Constitution in a respect that vitally affects it: it is asking that the federal distribution of the use of the Consolidated Revenue Fund be observed: it is claiming the invalidity of a statute as being beyond the competence of the Parliament, a statute which if acted upon would affect its interest in the existence and extent of surplus revenue. (at p365)

67. I have no doubt that the State has an interest to maintain this suit. Of course, if it were decided that the words "for the purpose of the Commonwealth" were meaningless no order in favour of the litigant State could be made: but even in that case it could not be said, in my opinion, that the State had no litigious interest in a decision as to the meaning of the Constitution in that respect. In any event, the meaning of the expression must first be decided for, if the meaning is as I have suggested, quite clearly, for reasons I have given, the State has enforceable rights. But as I have said, in my opinion, the State has an interest in a suit to determine the meaning of the Constitution in the relevant respect. Nothing in the decided cases would deny that conclusion and much that is said there supports it. Indeed, there is a degree of the ludicrous in the assertion that a State in a federation has no interest to seek from the Supreme Court of the federation an interpretation of the federal constitution in a respect which is vital to its interest and which if its contentions are correct would result in an order confirming the rights it claims. (at p366)

68. I need not decide the standing of the Attorney-General in the suit. But it seems to me that he is an unnecessary party, the State itself being recognized by the Constitution as a litigant; see, for example, 75 (iv.). (at p366)

69. In my opinion, the demurrer by the plaintiffs should be allowed and the competence of the Court and the interests of the plaintiffs to maintain their suit affirmed. There should be a declaration in terms of par. A of the statement of claim. The declaration having been made by the Court there should be no need for the making of an injunction. But to cover eventualities, further consideration of the suit should be reserved. (at p366)

McTIERNAN J. The Appropriation Act (No. 1) 1974-1975 in Divs. 530, 532 and 533 of the Second Schedule includes appropriations for the Department of Social Security. (at p366)

2. One of the services which, s. 4 of the Act says is expressed in the schedule, is "Division 530 ...

4. Australian Assistance Plan 1974-75 Appropriation Expenditure

$ $ $

01. Grants to Regional

Councils for Social Development .. 5,620,000 1,700,000 764,030

02. Development and

evaluation expenses .. 350,000 130,500 108,297 5,970,000 1,830,500 872,327"

(at p366)

3. The Parliament did not make any law under s. 51 of the Constitution relating to the "Plan", "Grants to Regional Councils for Social Development" or "Development and evaluation expenses". (at p366)

4. On the part of the plaintiffs it is contended, as I understand the argument, that the Parliament had no constitutional power to appropriate from the Consolidated Revenue Fund a sum of $5,970,000 or any part of it to be expended by the Minister for Social Security on the grants or the expenses mentioned under the heading Australian Assistance Plan. (at p367)

5. On the part of the defendants it is contended, as I understand the argument, that the appropriation, in question, is for a purpose of the Commonwealth within the meaning of the expression "the purposes of the Commonwealth" in s. 81 of the Constitution. (at p367)

6. The "Departments and Services" mentioned, to which the Second Schedule refers, are "purposes of the Commonwealth". In my opinion there is nothing in the terms of the appropriation, in question, which takes it out of s. 81. (at p367)

7. The legislative power of the Parliament created by s. 81 is elucidated in the reasons of Latham C.J. in the Pharmaceutical Benefits Case (1945) 71 CLR 237, at pp 253-254 :

"What are purposes of the Commonwealth within the meaning of the section? (i.e. s. 81) I approach the consideration of this question with the prima facie opinion that the words 'purposes of the Commonwealth' (which plainly include purposes 'in respect of which the Parliament has power to make laws') are not identical in meaning with the latter words. I have already stated my opinion that each such power includes a power to authorize the expenditure of money. A meaning is given to the words 'to be appropriated for the purposes of the Commonwealth' if they are read as intended to show positively that there may be other Commonwealth purposes than those in respect of which power to make laws is given elsewhere in the Constitution. Otherwise the words have no legal effect whatever.

What then is the authority which can determine what purposes are purposes of the Commonwealth? As the appropriation is to be made by law (s. 83), the natural answer is - the authority which makes Commonwealth laws, that is, the Commonwealth Parliament, not the executive authority which administers laws when made, nor the judicial authority which interprets and applies the laws. Thus, in my opinion, the Commonwealth Parliament has a general, and not a limited, power of appropriation of public moneys. It is general in the sense that it is for the Parliament to determine whether or not a particular purpose shall be adopted as a purpose of the Commonwealth. I take as illustrations some past appropriations for purposes in relation to which the Parliament has approved the expenditure of moneys but where, when the purposes are considered in themselves, there is no power to legislate with respect to the matters to which the expenditure relates. In some cases there is only an appropriation of money for the purpose stated, in other cases there are statutes containing detailed provisions for the establishment of organizations for the purpose of spending the money. I mention appropriations for Antarctic exploration, medical research, literary grants and pensions, subscriptions to international organizations, such as the Agricultural Institute at Rome, public health, assistance to distressed Australians abroad. Among statutes I mention those conveniently to be found under the heading of Research and Science in vol. III of the Commonwealth Acts 1901-1935 - Institute of Anatomy, Economic Research, Forestry Bureau, Geo-physical Survey, Science and Industry, Endowment and Research. (I omit the Act relating to a Solar Observatory at Canberra, because there is no doubt that, in relation to the Territories of the Commonwealth, the Parliament has a quite general power of appropriation for any purpose whatever.) The application of Commonwealth moneys to these objects, so far as it merely involves the expenditure of money, is, in my opinion, authorized by the Constitution. Such expenditures do not interfere with the rights of the States or of any persons, and if the Commonwealth Parliament approves the expenditure there is, in my opinion, full legal justification for the expenditure."

He continued (1945) 71 CLR, at p 256 :

"... in my opinion, the determination whether a particular purpose should be regarded and adopted as a Commonwealth purpose is a political matter. If the proposed limitation to 'legislative purposes' in the sense stated is rejected, no test has been suggested which would enable a court to undertake a judicial review upon any legal basis of the multi-farious expenditure which a Parliament may consider it necessary or desirable to undertake. The words 'purposes of the Commonwealth' should not, in my opinion, be construed as meaning for the governmental purposes of the political organism called the Commonwealth. In the introductory provision of s. 51 (that laws are to be made for the peace, order and good government of the Commonwealth) the word 'Commonwealth' is used to describe the people of the Commonwealth in the area which is the Commonwealth in the geographical sense. The laws of the Commonwealth operate directly upon the people of Australia, and it is the good government of those people with which the Constitution is concerned, not the government of the Government itself. In s. 81 in the phrase 'the purposes of the Commonwealth' the word 'Commonwealth' should, in my opinion, be interpreted in the same sense. The word 'Commonwealth' there plainly does not mean the geographical area known as the Commonwealth. Neither, in my opinion, does it mean the Commonwealth as a political organism. I see no reason for limiting the words 'the purposes of the Commonwealth' to governmental purposes in the sense of the discharge of legislative, judicial or executive functions. The word 'Commonwealth' in this section refers to the people who, by covering clause 3 of the Constitution, are 'united in a Federal Commonwealth under the name of the Commonwealth of Australia'. For these reasons, in my opinion, the provisions of s. 81 can fairly be read as intended to mean that it is the Commonwealth Parliament, and not any court, which is entrusted with the power, duty and responsibility of determining what purposes shall be Commonwealth purposes, as well as of providing for the expenditure of money for such purposes. This conclusion, however, relates only to laws providing for the expenditure of money." (at p369)

8. Moneys and revenue to be appropriated, in pursuance of s. 81, to the purposes of the Commonwealth from the Consolidated Revenue Fund would be, inter alia, tax and social service contributions. By s. 51 (ii.) the Parliament is granted power to make laws for the peace, order and good government of the Commonwealth with respect to taxation. (at p369)

9. In his judgment in the Pharmaceutical Benefits Case Latham C.J. said (1945) 71 CLR, at pp 255-256 :

"The determination whether legislation with respect to any of the subject matters mentioned in s. 51 is for the peace, order and good government of the Commonwealth is entirely a political matter, and not a matter for determination by any court." (at p369)

10. The appropriation in question is not any less an appropriation for the purpose of the Commonwealth than any other appropriation in the Second Schedule of the Act. (at p369)

11. The Constitution does not of course grant power to the Parliament to make laws with respect to the subject matter of the appropriation for the Plan. (at p369)

12. The list of appropriations under "3. Other Services in Division 530" are apparently included on the footing that they fall respectively within the scope of "the purposes of the Commonwealth". These other services are as follows - compassionate allowances and other payments under special circumstances; homes for aged persons - grants to eligible organizations under the Aged Persons Homes Act; sheltered employment assistance - grants to eligible organizations under the Sheltered Employment (Assistance) Act; telephone rental concessions to pensioners and others (for payment to the Post Office Trust Account); annuities and other payments for holders of the George Cross; grant to the Australian Council for Social Service; grant to the Australian Council for Rehabilitation of Disabled; grant to the Australian Council on the Ageing; handicapped children assistance - grants to eligible organizations under the Handicapped Children (Assistance) Act; enquiry into Poverty - grants to universities and other organizations; hostels for aged persons - grants to eligible organizations under the Aged Persons Hostels Act. (at p370)

13. As regards "Regional Councils for Social Development" these are contemplated as merely executive bodies within the Department of Social Security. Their constitution does not involve the performance of functions beyond the province of the federal executive government. (at p370)

14. The plaintiffs having demurred to the defendants' defence must be taken to admit by the demurrer the truth of the facts stated in the defence. In my opinion these facts do not show that the expenditure by the Minister for Social Security of the money appropriated for the Assistance Plan infringes the constitutional powers of the States reserved by ss. 106, 107 or any other provision of the Commonwealth Constitution. The dispute, if any, shown upon the face of the pleadings is, in my opinion, nonjusticiable. It is within the field of politics not of law. I would overrule the demurrer. (at p370)

GIBBS J. These proceedings raise for consideration four questions, viz. (1) Whether the Appropriation Act (No. 1) 1974-1975, in so far as it appropriates from the Consolidated Revenue Fund the sum of $5,970,000 for the Australian Assistance Plan, is beyond the powers of the Parliament of the Commonwealth and void; (2) Whether it would be beyond the powers of the Commonwealth and the Minister for Social Security to expend any of the moneys of the Commonwealth for the purposes of the Australian Assistance Plan; (3) Whether those questions are justiciable; and (4) Whether the State of Victoria, or the Attorney-General for that State, has the standing to raise them. These questions are to some extent interdependent. (at p370)

2. It is provided by s. 81 of the Constitution as follows:

"All revenues or moneys raised or received by the Executive Government of the Commonwealth shall form one Consolidated Revenue Fund, to be appropriated for the purposes of the Commonwealth in the manner and subject to the charges and liabilities imposed by this Constitution."

Section 83 further provides:

"No money shall be drawn from the Treasury of the Commonwealth except under appropriation made by law." (at p371)

3. The word "law" in the latter section must refer to a valid law. Such a law may be contained in the provisions of the Constitution itself or may be made by the Parliament in pursuance of a power derived from the Constitution. It is not essential in the present case to decide whether s. 81 is the only source of the power of the Parliament to pass an Appropriation Act, or whether, as Latham C.J. said in Attorney-General (Vict.); Ex rel. Dale v. The Commonwealth ("the Pharmaceutical Benefits Case") (1945) 71 CLR 237, at p 251 , "each power to make laws with respect to a particular subject matter includes a power to make a law providing for the expenditure of money in relation to that subject matter". If the power of appropriation is conferred only by s. 81, it can be exercised only for the purposes specified in that section, that is, "for the purposes of the Commonwealth". If, on the other hand, the power is granted by other provisions of the Constitution, the words of s. 81, unless they are to be entirely disregarded, impose a limit on its exercise and, in effect, forbid an appropriation to be made except for a purpose of the Commonwealth. On either view, the question is, what is the meaning of the words "for the purposes of the Commonwealth" where they appear in s. 81? (at p371)

4. This question was fully discussed in the Pharmaceutical Benefits Case (1945) 71 CLR 237 . There Latham C.J. and McTiernan J. held that "the purposes of the Commonwealth" within s. 81 are such purposes as the Parliament determines, and that the Courts have no power to declare that an Appropriation Act is invalid on the ground that the appropriation was made for an unauthorized purpose (1945) 71 CLR, at pp 254-256, 273-274 . However, this view, that s. 81 does not impose any effective limitation on the purpose for which an appropriation may be made, and that the Parliament may appropriate moneys for any purpose whatever, was not accepted by Rich, Starke, Dixon, and Williams JJ., the other members of the Court. Both Starke J. and Williams J. were of the opinion that the words referred to the purposes of the Commonwealth as an organized political body (1945) 71 CLR, at pp 266, 282 . Williams J. said that those purposes "must all be found within the four corners of the Constitution" (1945) 71 CLR, at p 282 . Starke J. expressed himself rather more widely. He said (1945) 71 CLR, at p 266 :

"The purposes of the Commonwealth are those of an organised political body, with legislative, executive and judicial functions, whatever is incidental thereto, and the status of the Commonwealth as a Federal Government. And where else but from the Constitution and other acts conferring authority upon the Commonwealth can its purposes or functions be discovered? Those purposes include matters in respect of which it can make laws by virtue of the Constitution or any other Act, and they also include the exercise of executive and judicial functions vested in the Commonwealth by the Constitution or by any other Act. Among other purposes of the Commonwealth must also be included, I think, matters arising from the existence of the Commonwealth and its status as a Federal Government." (at p372)

5. Dixon J. (with whom Rich J. concurred) agreed that if the power of expenditure "is limited to matters to which the Federal legislative power may be addressed, it necessarily includes whatever is incidental to the existence of the Commonwealth as a state and to the exercise of the functions of a national government" (1945) 71 CLR, at p 269 . He said (1945) 71 CLR, at p 269 that he did not find it necessary to choose between the view that the power is so limited and the view that the Parliament is authorized to spend money without any limitation of purpose. But it is apparent that he did not favour the latter view: he expressly declined (1945) 71 CLR, at pp 270-271 to accept the suggestion that the Court should read into s. 81 the words "general welfare" (which appear in Art. 1, s. 8, of the Constitution of the United States) or the conception which those words are understood to embody and he concluded by saying that he adhered to the opinion that "the basal consideration would be found in the distribution of powers and functions between the Commonwealth and the States" (1945) 71 CLR, at pp 271-272 . The Pharmaceutical Benefits Case (1945) 71 CLR 237 cannot be regarded as a decision that an Act which appropriates money for a purpose other than a Commonwealth purpose is invalid, for the statute there challenged went beyond mere appropriation, but the judgments of a majority of the members of the Court strongly support the view that the power of appropriation is effectively limited by s. 81 of the Constitution. Support for that view may also be found in other dicta. In New South Wales v. The Commonwealth ("the Surplus Revenue Case") Isaacs J. said (1908) 7 CLR 179, at p 200 :

"'Appropriation of money to a Commonwealth purpose' means legally segregating it from the general mass of the Consolidated Fund and dedicating it to the execution of some purpose which either the Constitution has itself declared, or Parliament has lawfully determined, shall be carried out."

The use of the word "lawfully" in that passage indicates that Isaacs J. considered that not every determination made by Parliament of a purpose for which money should be expended would be lawful, or in other words that Parliament is not free to make an appropriation for any purpose that it selects. Barton J., who said that if the moneys drawn from the Treasury in that case were to become "surplus revenue", "they must have been either wholly unappropriated for any purpose of the Commonwealth, or appropriated for something which is not such a purpose - that is, illegally" (1908) 7 CLR, at p 193 , was evidently of the same opinion. In Australian Woollen Mills Pty. Ltd. v. The Commonwealth (1954) 92 CLR 424 , the Court (constituted by Dixon C.J. and Williams, Webb, Fullagar and Kitto JJ.) in a joint judgment discussed whether the expenditure of moneys in subsidies to manufacturers on wool purchased and used for local manufacture was authorized by the Constitution. Their Honours said (1954) 92 CLR, at p 454 :

"Section 81 of the Constitution authorizes the appropriation of the revenues and moneys of the Commonwealth for the purposes of the Commonwealth. The payment of 'subsidies' would appear to be a payment of 'bounties' within the meaning of the Constitution, but s. 51(iii.) authorizes only the making of laws with respect to bounties 'on the production or export of goods', and the subsidies in question were not made payable on the production or export of goods - unless indeed we regard the subsidy . . . as a subsidy 'on' goods manufactured, a view which, in the last analysis, would be fatal to the plaintiff. The justification, however, for the appropriation of moneys for paying subsidies would probably, if challenged, be sought in the defence power, which is conferred by s. 51(vi.)....No defence of lack of power having been raised, the matter need not be pursued further."

The fact that the Court regarded it as necessary to seek in specified powers of the Commonwealth a justification for the appropriation clearly shows that it was thought that the power of appropriation was a limited one. (at p373)

6. The balance of judicial opinion is heavily in favour of the view that the power of appropriation is not general and unlimited but may be exercised only for purposes which can in law properly be described as "purposes of the Commonwealth" - purposes which the Commonwealth can lawfully put into effect in the exercise of the powers and functions conferred upon it by the Constitution. Quite apart from authority I consider that view to be correct. It would be contrary to all principles of interpretation to treat the words "for the purposes of the Commonwealth" in s. 81 as adding nothing to the meaning of the section. The words do not in their ordinary sense have the same meaning as "for any purpose whatever" or "for such purposes as the Commonwealth may think fit". They appear in a Constitution by which specific powers of legislation were conferred upon the Commonwealth and the general powers of the colonies which became the States were, with certain exceptions, continued. Throughout the whole of the Constitution, including the chapter in which s. 81 appears, the expressions "the Commonwealth" and "State" are used to refer to the respective bodies politic rather than to the people forming a particular community. In this context the words "the purposes of the Commonwealth" in s. 81 naturally refer to purposes for which the Commonwealth, as a political entity, is empowered by the Constitution to act. This construction is supported by s. 83 - the power can only be exercised by a law validly passed. It derives further support from s. 94, whose practical effect has been greatly weakened by the decision in the Surplus Revenue Case (1908) 7 CLR 179 , but which was apparently intended to secure payment to the States of the surplus revenue of the Commonwealth, for if the power of appropriation were unfettered a surplus could hardly have been expected ever to arise. The construction that I suggest is correct is also supported by the fact that it was thought necessary to give the Commonwealth specific power to make laws with respect to bounties on the production or export of goods (s. 51(iii.)) and to grant financial assistance to any State (s. 96), although it is true that the object of those provisions may have been respectively to ensure that bounties should be uniform throughout the Commonwealth and that the Commonwealth should have power to attach terms and conditions to grants which, even without the enactment of s. 96, it would have had power to make. (at p374)

22. Subject matters of social welfare which fall outside those matters the subject of express power in other placita of s. 51 are not incidental to those matters of express power. If they were, then the Commonwealth would have plenary power to legislate upon them. But it will be a matter incidental to the execution of a power to appropriate and expend moneys of the Commonwealth upon those subject matters to appropriate and expend moneys upon other subjects of social welfare in subordinate conjunction with expenditure upon those subject matters. (at p415)

23. The proposed 1974-1975 expenditure of the Commonwealth, classified in the 1974-1975 Budget papers as expenditures upon welfare, health and social security, but not including education, are the largest expenditures by classification which it makes. The total for the relevant year is $4,673,000,000 out of a total budgeted expenditure of $16,274,000,000. See Hansard, House of Representatives, First Session - First Period, p. 1295. The Executive Government has taken the view that these expenditures are unco-ordinated among themselves and are unco-ordinated with social welfare expenditures made independently by and in the various States. It has also determined that it is desirable to involve people at community level in the devising and planning of welfare services. The claim that planning for co-ordination and rationalization of welfare services and expenditure thereon is beyond power has hardly been pressed. Where it is claimed that the Commonwealth has transgressed the limits of power is in including within the funds made available at community level amounts by way of the so-called "capitation grants" which may be expended on aspects of social welfare other than aspects within the limits of express powers conferred in s. 51. It has not been established that payment of these "capitation grants" is not incidental to the execution of the power to appropriate and expend moneys for the purposes comprehended within the Commonwealth powers contained in s. 51(xxiii.) and (xxiiia.) as well as the powers possessed by the Commonwealth in respect of particular groups and classes of persons in the community for whose social welfare the Commonwealth may generally provide. In my opinion no cause of action is disclosed by the pleadings and I would dismiss the action. (at p415)

MURPHY J. This case concerns the scope and use of the national spending power. (at p415)

2. For the financial year ending 30th June 1975, the total budget outlays were estimated at $16,274 million (1974-1975 Budget Paper No. 1, at p. 3). (at p415)

3. The State of Victoria and its Attorney-General claim that the Appropriation Act (No. 1) 1974-1975, so far as it assigns a sum of almost $6,000,000 of the Consolidated Revenue Fund for purposes described as "the Australian Assistance Plan", is invalid. They seek to restrain the second defendant, who was the Minister for Social Security at the time, from expending any of the sum for that purpose. (at p416)

4. The Appropriation Act (No. 1) 1974-1975 is a general appropriation Act for the ordinary annual services of the Government as contemplated by s. 54 of the Constitution. There are other general annual appropriation Acts, as well as special and permanent appropriation Acts. (at p416)

5. Section 3 of the Act provides:

"The Treasurer may issue out of the Consolidated Revenue Fund and apply for the services specified in Schedule 2, in respect of the year ending on 30th June 1975, the sum of $2,863,510,000."

This authorization is in addition to the sums authorized by s. 3 of the Supply Act (No. 1) 1974-1975, bringing the total of sums authorized to be issued out of the Consolidated Revenue Fund to $4,667,794,000. (at p416)

6. That sum was appropriated and deemed to have been appropriated from 1st July 1974 for the services expressed in the Second Schedule in respect of the financial year commencing on that date (s. 4). (at p416)

7. The Second Schedule of the Act contains the challenged item in the form:

"Department of Social Security ... Division 530 ... 4. - Australian Assistance Plan - 1974-75 1973-74 Appropriation Expenditure

$ $ $

01. Grants to Regional Councils for Social Development 5,620,000 1,700,000 764,030

02. Development and evaluation expenses 350,000 130,500 108,297 5,970,000 1,830,500 872,327" (at p416)

8. I will not trace the history of the pleadings or the details of the Australian Assistance Plan which have been set out in other judgments. (at p416)

9. Briefly, the plaintiffs contend that in regard to the particular appropriation: (1) the Act was not an appropriation for purposes of the Commonwealth within s. 81 of the Constitution; (2) it was not sufficiently specific to amount to an appropriation; (3) it went beyond appropriation; (4) even if the appropriation were valid, the expenditure of the amounts was not lawful without separate validating legislation. (at p417)

10. The defendants opposed these contentions, and also contended that neither the plaintiff State nor its Attorney-General had standing to pursue the matter before this Court. (at p417)

11. If the plaintiffs' contentions were accepted, it would mean that the Parliament's use of its appropriations power has been unconstitutional since federation (see the evidence of Solicitor-General Garran in the Report of the Royal Commission on the Constitution (1929), at pp. 69-70). (at p417)

12. I will deal with the contentions under the headings of The Purposes of the Commonwealth; Specification of the Appropriation; Is the Act Confined to Appropriation? Necessity for Separate Legislation; and Standing. (at p417)

The Purposes of the Commonwealth.

13. I agree with the opinion expressed by Latham C.J. in the Pharmaceutical Benefits Case (Attorney-General (Vict.); Ex rel. Dale v. The Commonwealth (1945) 71 CLR 237, at pp 254-256 ), that Parliament is the authority to determine what purposes are the purposes of the Commonwealth. (at p417)

14. The plaintiffs contend that the "purposes of the Commonwealth" in s. 81 are restricted to those purposes for which the Commonwealth is empowered to make laws under other sections of the Constitution, e.g., ss. 51, 52 and 122. (at p417)

15. A number of considerations lead me to reject this contention. (at p417)

16. Firstly, nothing in the Constitution warrants the limitation on the appropriation power of the Parliament which the plaintiffs contend exists. (at p417)

17. Secondly, when such a limitation was intended, it was expressed as in s. 51(xxxi.) which provides:

"The acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws."

On familiar rules of interpretation, the expression of the limitation in one part of the instrument is a good reason for rejecting its implication in another part. (at p417)

18. Thirdly, it would be quite impossible to conduct the finances of the country if the appropriation power was so limited. This view was put powerfully, persuasively and, in my opinion, irrefutably, by Solicitor-General Garran to the Royal Commission on the Constitution in 1929 (see the Report of the Royal Commission on the Constitution, p. 71). He stated: "in interpreting a Constitutional document, that is one of the weightiest arguments which can be used to show that it was not the intention." (See also his views recorded in the Report of the Royal Commission on Child Endowment and Family Allowances, (1929), p. 10, par. 5.) (at p418)

19. "Purposes of the Commonwealth" as determined by the Parliament over the years in the Appropriation Acts include a wide variety of purposes to be furthered by many programmes and activities. Some of these have been conducted by the Executive Government (under s. 61), some by statutory corporations established by Parliament (under s. 51 including (xxxix.)), some by States, some by other bodies and persons. The expenditure on many of these has been authorized by general Appropriation Acts, others by special or permanent Appropriation Acts. (at p418)

20. From the material supplied to the Court and an examination of the Appropriation Acts, it appears that there were many current programmes (that is, in 1974-1975), some of which had been in operation for many years and which are not clearly referable to any head of legislative power in the Constitution other than s. 81. (at p418)

21. These include substantial appropriations in the Departments of Education, Tourism and Recreation, Science, Health, Housing and Construction, Agriculture, Special Minister of State, Prime Minister, Media, Urban and Regional Development, Environment and Conservation, Labor and Immigration, and Social Security. (at p418)

22. To ascertain whether these appropriations are referable to one of the enumerated powers (other than s. 81) would involve exhaustive inquiry into the boundaries of the enumerated powers. (at p418)

23. The appropriation for those purposes not within the scope of the enumerated powers would, on the plaintiff's contention, be unconstitutional. Hundreds of items of appropriation since federation and many hundreds of millions of dollars would have been unlawfully appropriated and spent. (at p418)

24. The chilling effect that such an interpretation would have on governmental and parliamentary initiatives is obvious. It is not a formula for operating a Constitution. It is one for stultifying government. If the surplus revenue issue is re-opened, the States would be encouraged to challenge items of appropriation in order to enhance the possibility of surplus revenue. (at p418)

25. This would lead to constant conflict, unless Australian Governments and Parliaments retreated to the conservative position of avoiding any appropriation which was at all doubtful. They would suffer from the absence of advisory judicial jurisdiction. (at p419)

26. The observations of Solicitor-General Garran (Report of the Royal Commission on the Constitution (1929), loc. cit.) on the impossibility of financing government would be borne out. (at p419)

27. It follows that Parliament may determine that the purposes of the Commonwealth include promotion of scientific research (in the social as well as the physical sciences), cultural activities, sport, education and health. (at p419)

28. It may determine that the purposes include the general management of the economy or any aspects of it such as levels of employment or the value of the currency. To that end it may appropriate for expenditure where it wishes, and is not restricted to spending in confined areas such as those covered by the legislative powers with respect to banking, insurance, or inter-State trade and commerce. (at p419)

29. It may determine (as it has) that expenditure in areas of social welfare is one of the purposes of the Commonwealth and appropriate for that purpose. (at p419)

30. The purpose of the appropriation to the Department of Social Security for the Australian Assistance Plan includes support of voluntary agencies (Regional Councils for Social Development) to inquire and report and expend moneys for social welfare. Parliament has determined that this is a purpose of the Commonwealth. (at p419)

31. The appropriation is within the powers of the Parliament and the spending is authorized by the Appropriation Act and the consequential executive powers (s. 61). There is no need to justify it by referring to any one or more of the enumerated legislative powers of the Parliament. If it were necessary, I think that support can be found in a number of such powers. (at p419)

32. It is clear that the Australian Government is and will be involved in the expenditure of vast sums of money in various forms of social welfare. (at p419)

33. Legislative power has been exercised to provide invalid and old-age pensions (under s. 51(xxiii.)), maternity allowances, widows' pensions, child endowment, unemployment, pharmaceutical, sickness and hospital benefits, medical and dental services, benefits to students and family allowances (under s. 51(xxiiiA.)). Legislative power has also been exercised to provide social welfare for Aborigines and other peoples (under s. 51(xxvi.)). There are other responsibilities (actual and potential) for social welfare of persons such as members and ex-members of the defence forces and the public service and migrants under other legislative powers. (at p419)

34. Experience has been that there is a bewildering, inefficient and costly proliferation of social welfare services provided by the Australian Government and by State and local government and private agencies and persons. (at p420)

35. In my view, it would be incidental to the execution of the powers vested by the Constitution in Parliament and in the Australian Government for legislation to be passed authorizing the inquiry and report envisaged by the Australian Assistance Plan (see Lockwood v. The Commonwealth (1954) 90 CLR 177 ). The inquiry and report could be made by an officer of the Australian Government or by a private person engaged by it. It could equally be done by the system of regional councils. If Parliament wished, it could authorize the establishment of a system of regional councils in order to assist it in the discharge of its responsibilities in social welfare, including the expenditure of any moneys appropriated by Parliament (see Jumbunna Coal Mine N.L. v. Victorian Coal Miners' Association (1908) 6 CLR 309 , and s. 14 of the Social Welfare Commission Act 1973, the validity of which is undisputed). (at p420)

36. In the United States of America, Congress has adopted a similar course in using the power under Art. 1, s. 8 of the Constitution "to ... provide for the ... general Welfare of the United States" uninhibited by the restricted scope of its other powers. The famous controversy between Hamilton (who favoured the wide view) and Madison (who favoured the narrow view) over Congressional power, has been resolved in favour of Hamilton's view by the Supreme Court. In United States v. Butler it was said (1936) 297 US 1, at p 66 (80 Law Ed 477, at p 488) : "... the power of Congress to authorize expenditure of public moneys for public purposes is not limited by the direct grants of legislative power found in the Constitution." (at p420)

37. This decision was referred to in Helvering v. Davis (1936) 301 US 619 (81 Law Ed 1307) , which upheld the validity of federal laws providing for old age pensions (see also Cleveland v. United States (1945) 323 US 329 (89 Law Ed 274) and "The Constitution of the United States of America, Analysis and Interpretation", Senate Document No. 92-82, p. 136). (at p420)

38. In Helvering's Case, the Court concluded that Congress had validly attempted to deal with a problem which was truly "national in area and dimensions" (1936) 301 US, at p 644 (81 Law Ed, at p 1316) . The criterion suggested was stated thus (1936) 301 US, at pp 640-641 (81 Law Ed, at p 1315) :

"The line must still be drawn between one welfare and another, between particular and general. Where this shall be placed cannot be known through a formula in advance of the event. There is a middle ground or certainly a penumbra in which discretion is at large. The discretion, however, is not confided to the courts. The discretion belongs to Congress, unless the choice is clearly wrong, a display of arbitrary power, not an exercise of judgment ... Nor is the concept of the general welfare static. Needs that were narrow or parochial a century ago may be interwoven in our day with the well-being of the Nation. What is critical or urgent changes with the times."

(See also Charles C. Steward Machine Co. v. Davis (1937) 301 US 548 (81 Law Ed 1279) .) (at p421)

39. In our Constitution, there is no requirement of generality as distinct from particularity in "the purposes of the Commonwealth". The phrase is equivalent to the national purposes. As Latham C.J. said in the Pharmaceutical Benefits Case (1945) 71 CLR, at p 256 :

"I see no reason for limiting the words 'the purposes of the Commonwealth' to governmental purposes in the sense of the discharge of legislative, judicial or executive functions. The word 'Commonwealth' in this section refers to the people who, by covering cl. 3 of the Constitution, are 'united in a Federal Commonwealth under the name of the Commonwealth of Australia'." (at p421)

40. In my opinion, the only constitutional limitations upon the scope of the spending power are those arising from constitutional prohibitions such as those in ss. 92, 116 and 117. Section 81 would not authorize spending in contravention of any such prohibitions. (at p421)

Specification of the Purpose of the Appropriation.

41. Section 81 of the Constitution provides that all revenue or moneys shall form one Consolidated Revenue Fund and are to be appropriated for the purposes of the Commonwealth "in the manner" imposed by the Constitution. No money is to be drawn from the Treasury except under appropriation by law (s. 83). (at p421)

42. Provisions regarding "the manner" of imposition are in ss. 53, 54, 55 and 56. (at p421)

43. The appropriation is not to be made by a law imposing taxation (s. 55). (at p421)

44. Sections 53, 54 and 56 provide that the form of the proposed law must be such that it can be seen that the appropriation proposed by the law has been recommended by the message of the Governor-General to the House of Representatives, and that if the appropriation is for the ordinary annual services of the Government, it deals only with such appropriation. The provisions are outside the concern of this Court, which is with laws, not proposed laws (Osborne v. The Commonwealth (1911) 12 CLR 321, at p 336 ). (at p422)

45. The subject of specification has been discussed by Professor Campbell in "Parliamentary Appropriations", Adelaide Law Review, vol. 4 (1971-1972), at pp. 154-155. She refers to State v. Moore (1896) 69 NW 373, at p 376 where the Supreme Court of Nebraska stated:

"Having in view the origin and history of appropriations, as well as the general lexicographic meaning of the word, to 'appropriate' is to set apart from the public revenue a certain sum of money for a specified object, in such manner that the executive officers of the Government are authorized to use that money, and no more, for that object and for no other."

The Supreme Court of Arizona made a similar statement in Crane v. Frohmiller (1935) 45 P (2d) 955, at p 959 :

"... in order to constitute a valid appropriation by the Legislature, it must, if the appropriation is to be paid from the general fund, fix at least a maximum amount beyond which such appropriation may not go, although, if the payment is to be made only from a special fund which is itself limited in amount, no limit need be stated in the act authorizing the expenditure and specifying for what purpose the money is to be expended."

In the Pharmaceutical Benefits Case it was the view of Latham C.J. that a statute would not operate as an appropriation Act unless it defined the purpose for which the money might be spent. He said (1945) 71 CLR, at p 253 :

"... there cannot be appropriations in blank, appropriations for no designated purpose, merely authorizing expenditure with no reference to purpose. An Act which merely provided that a minister or some other person could spend a sum of money, no purpose of the expenditure being stated, would not be a valid Appropriation Act." (at p422)

47. In my view, the Constitution does not require any particular degree of specification of the purpose. With purposes such as defence, intelligence gathering or the advance account to the Treasurer it would be highly inconvenient if it did. (at p422)

48. The purpose of any appropriation may be indicated generally. "One-line" appropriations are valid. (at p422)

49. Whether a proposed law for appropriation in such form would be acceptable to the Houses of Parliament is another question. Scrutiny of the estimates and comparison of past expenditure with past appropriations is deeply embedded in parliamentary practice. How that is done is to be resolved by Parliament itself. The Constitution does not restrict Parliament in handling its financial business to observe any precise specification of the purpose. (at p423)

50. In "The Constitution of the United States, Analysis and Interpretation", op. cit., at pp. 376-377, it is said that in the United States, the Supreme Court:

"... has also recognized that Congress has a wide discretion with regard to the extent to which it shall prescribe details of expenditures for which it appropriates funds and has approved the frequent practice of making general appropriations of large amounts to be allotted and expended as directed by designated government agencies. Citing as an example that Act of June 17, 1902 where all moneys received from the sale and disposal of public lands in a large number of States and territories were set aside as a special fund to be expended under the direction of the Secretary of the Interior upon such projects as he determined to be practicable and advisable for the reclamation of arid and semi-arid lands within those States and territories, the Court declared: 'The constitutionality of this delegation of authority has never been seriously questioned'. (Cincinnati Soap Co. v. United States

(1937) 301 US 308, at p 322 (81 Law Ed 1122, at p 1132) )." (at p423)

51. If specification is required, item 530 is sufficiently specific. The degree of specification conforms entirely to legislative practice in regard to appropriations in Australia and elsewhere. (at p423)

Is the Act confined to Appropriation?

52. The Act is simply a general Appropriation Act. It is clearly intended as a law which appropriates revenue or moneys for the ordinary annual services of the Government (Constitution s. 54). (at p423)

53. Section 54 directs that a proposed law for appropriating shall deal only with that appropriation. The item gave legislative recognition to the Australian Assistance Plan and to its scheme of Regional Councils for Social Development. It appropriated the sums mentioned, for expenditure for the purposes mentioned. The Act does not go beyond appropriation as did the Pharmaceutical Benefits Act 1944 that dealt with matters (other than appropriation), which were held to be outside the legislative powers of the Parliament. In this Act there is no attempt to exercise coercive or "police power" even of an incidental nature. (at p423)

Is Separate Legislation Necessary to Validate Expenditure of Appropriated Moneys?

54. Again the contention of the plaintiffs, if correct, means that almost seventy-five years of Federal parliamentary practice has been incorrect. Over the years hundreds of appropriations have been made and expended on a variety of purposes without separate legislation additional to the appropriation. Separate legislation is not necessary. In some cases it may be desirable and the Parliament has enacted such legislation. For example, "the purposes of the Commonwealth" as determined by Parliament include those for which the Commonwealth Scientific and Industrial Research Organization was established under the Science and Industry Research Act 1949-1973. Section 25 of that Act provides:

"... There are payable to the Organisation such moneys as are appropriated by the Parliament for the purposes of expenditure by the Organisation under this Act. ..."

Apart from any other sources of constitutional support, that Act is valid as an exercise of the incidental power s. 51 (xxxix.) in relation to appropriation "for the purposes of the Commonwealth". (at p424)

55. The Australian Institute of Marine Science Act 1972-1973 has similar provisions and is valid on the same basis. (at p424)

56. So also with the numerous programmes, activities and involvement of the Commonwealth directly or through agencies or by assistance to private persons or bodies. (at p424)

57. The incidental power, s. 51(xxxix.), in my opinion, enables legislation to effectuate the expenditure of the moneys, the appropriation of which has been determined by Parliament to be "for the purposes of the Commonwealth" and for which there is no other source of power in the Parliament. Such legislation may be directed to ensuring that the moneys appropriated are spent for the purpose of the appropriation. Such legislation may provide for the expenditure by the Executive Government, or by a corporation or other agency established by the Parliament, or by some other body or person. But such legislation, (not being authorized by a plenary head of legislative power) may not be plenary. Ordinarily it may not impose obligations on persons generally or be coercive (except in a very limited area, for example, to deter misappropriation).

Standing of the Plaintiffs.

58. It is unnecessary in the conclusions which I have reached to decide upon the objection to the plaintiffs' standing to proceed. I am inclined to agree with what has been said by Stephen J. in his reasons in this case that the State of Victoria and its Attorney-General have no standing. (at p424)

59. If it were claimed that the appropriation or the expenditure were in breach of any constitutional prohibition, then the position might be different. (at p425)

60. The tendency to exaggerate the standing of an Attorney-General to challenge legislation or administrative action has been to the detriment of private litigants (see S.M. Thio, Locus Standi and Judicial Review (1971), p. 9). The necessity in many cases of a proceeding by an Attorney-General at the relation of others is not appropriate to the operation of our judicial system, especially as the Attorneys-General of Australia and of the States are Ministers of State. (at p425)

61. If the Attorney-General of a State is not parens patriae in respect of federal legislation (see Massachusetts v. Mellon (1923) 262 US, at p 486 (67 Law Ed, at p 1078) ; Florida v. Mellon (1927) 273 US 12, at p 18 (71 Law Ed 511, at p 515) ) it is inappropriate except in special circumstances for the Attorney-General of Australia to act in this role in view of his function in defending federal legislation. In my opinion, in the adaptation of procedures to modern circumstances, the requirements of standing in individual and representative actions need to be liberalised. (at p425)

62. Whether the State would have sufficient standing to challenge an Act which is, in truth, an appropriation Act and nothing more, is a matter which was reserved in the Pharmaceutical Benefits Case by Latham C.J. (1945) 71 CLR, at p 248 and by McTiernan J. (1945) 71 CLR, at p 276 . I prefer to reserve the question for a case where it is necessary for me to reach a concluded view. (at p425)

63. The disputed appropriation is valid. There is no basis for an injunction to restrain expenditure pursuant to the appropriation. (at p425)

64. The plaintiffs' demurrer should be overruled and the action dismissed with costs. (at p425)

Orders

Plaintiffs' demurrer overruled.

Action dismissed with costs.