1. Module 8: Taxation (s 51(ii)) and Excise (s 90) Module 9: Freedom of Interstate Trade, Commerce and Intercourse (s92), Inconsistency (s109) and Intergovernmental Immunities Laura Longmore

2. The taxation power Section 51 (ii)
Legislative powers of the Parliament The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to: (ii) taxation; but so as not to discriminate between States or parts of States;

3. Section 53
the only constitutional restriction on the Senate power regarding money bills.
draws a distinction between laws imposing taxation and other laws.
the term ‘imposition’ in s 53 means a demand by the government to pay money. This imposition (payment) can be either categorised as ‘a tax’ or ‘not a tax’ being to charge a fee or impose a penalty. 

4. What is a tax?
Matthews v The Chicory Marketing Board (1938) 60 CLR 263 “a tax… is a compulsory exaction of money by a public authority for public purposes, enforceable by law, and is not a payment for services rendered”

5. A compulsory extraction
Not normally contentious -public purpose- extractions are compulsorily imposed by parliament to raise revenue that will fund government expenditure
When does an imposition serve a public purpose other than the raising of revenue?
Australian Tape Manufacturers v Commonwealth (1993) 176 CLR 480

6. Section 55
Tax Bill  Laws imposing taxation shall deal only with the imposition of taxation, and any provision therein dealing with any other matter shall be of no effect. Laws imposing taxation, except laws imposing duties of customs or of excise, shall deal with one subject of taxation only; but laws imposing duties of customs shall deal with duties of customs only, and laws imposing duties of excise shall deal with duties of excise only.

7. Section 99
Commonwealth not to give preference  The Commonwealth shall not, by any law or regulation of trade, commerce, or revenue, give preference to one State or any part thereof over another State or any part thereof.

8. Section 51(ii) and s 99
Under s 51(ii) and s 99 the Commonwealth cannot discriminate on geographical grounds when it imposes a tax.
the prohibition in s 51 (ii) covers only taxation whilst s 99 is broader as it covers ‘revenue’ (includes both taxation and bounties)
s 51 (ii) prohibits differential treatment of different states or parts of the same state while s 99 prohibits preference in relation to different states or part of one State as compared to part of another State

9. Commonwealth sources of revenue
Income taxes imposed on individuals;
Tax on corporate earnings; and
Goods and Services Tax (GST).
With regards to GST, the Commonwealth gives the revenue to the States as a general purpose grant under s 96. 

10. Section 90
Exclusive power over customs, excise and bounties On the imposition of uniform duties of customs the power of the Parliament to impose duties of customs and of excise, and to grant bounties on the production or export of goods, shall become exclusive…

11. Does the law impose a tax?
Harper v Victoria (1966) 114 CLR 361 Parton v Milk Board (Vic) (1949) 80 CLR 229 Harper v Minister of Sea Fisheries (1989) 168 CLR 314

12. Is the tax an excise?
Parton v Milk Board (Vic) (1949) 80 CLR 229 for a law to impose an excise the essential elements are:
An inland tax
On goods
Imposed at any stage prior to consumption, which might be at the point of:
Production
Manufacture
Distribution, or
Sale (be it wholesale of retail).  

13. What is not an excise? Land taxes
Taxes on services and activities (e.g. a tax imposed on bus companies per passenger)

14. Section 92
Trade within the Commonwealth to be free On the imposition of uniform duties of customs, trade, commerce, and intercourse among the States, whether by means of internal carriage or ocean navigation, shall be absolutely free…

15. Cole v Whitfield (1988) 165 CLR 360
Landmark High Court decision discussing the interpretation of s 92
The essential test of whether a law infringes s 92 is whether it imposes a discriminatory burden of a protectionist kind.
practical effect test establishes that a law will be found to be discriminate against interstate trade either if it does so on its face, or if its practical effect is to single out interstate trade for different treatment.

16. Castlemaine Tooheys Pty Ltd v South Australia (1990) 169 CLR 436
the court held that a protectionist law will not be invalid if it serves a non-protectionist purpose and passes the proportionality test.
The High Court found that the freedom from discriminatory burdens of a protectionist kind postulated by s 92 does not deny to the legislature of a State power to enact legislation for the well-being of the people of the State unless the legislation is relevantly discriminatory.  

17. Intercourse between the states
The terms of s 92 have been held to protect:
Freedom of movement or activity across State borders
Freedom of carriage goods across state borders
Freedom of modern communications
Nationwide News Pty Ltd v Wills (1992) 177 CLR 1

18. Section 109
Inconsistency of laws      When a law of a State is inconsistent with a law of the Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid.

19. What does the term ‘law’ refer to?
The term ‘law’ has been found to refer to:
Acts;
Regulations; and
Industrial awards (see Ex parte McLean (1930) 43 CLR 472).

20. The tests of inconsistency- test 1 & 2
Direct inconsistency
Inconsistency is present, and the Commonwealth law prevails if:
it is impossible to obey both laws (the reference is to a logical impossibility: one law requires that you must do X, the other that you must not do X).
one law purports to confer a legal right, privilege or entitlement that the other law purports to take away or diminish (one law says that you can do X, the other that you cannot do X). 

21. The tests of inconsistency- test 3
Indirect inconsistency
3. The Commonwealth law evinces a legislative intention to ‘cover the field’, and a State law also operates in that same field. 
There need not be any direct contradiction between the two enactments. 
It may even happen that both require the same conduct, or pursue the same legislative purpose. 
What is imputed to the Commonwealth Parliament is a legislative intention that its law shall be all the law there is on that topic.  In that event, what is ‘inconsistent’ with the Commonwealth law is the existence of any State at all on that topic. 

22. Intergovernmental immunities
the Commonwealth and the States might (impliedly) be wholly or partly immune from each other’s laws. 
consequence of a constitutional requirement that the autonomy and integrity of the two tiers of government be maintained.

23. Intergovernmental immunities
Statutes binding the Crown Bropho v Western Australia (1990) 171 CLR 1 Commonwealth laws binding the states Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (Engineers Case) (1920) 28 CLR 129 Melbourne Corporation v Commonwealth (1947) 74 CLR 31 (the ‘Melbourne Corporation Case’, also known as ‘the State Banking Case’).

24. Victoria v Commonwealth (Payroll Tax Case)(1971) 122 CLR 353
all seven judges reaffirmed the principle of Melbourne Corporation, but none of them was willing to apply it to invalidate the payroll tax
Payroll Tax Case was rejected in Austin v Commonwealth (2003) 215 CLR 185 where the Melbourne Corporation test was further reformulated
Clarke v Federal Commissioner of Taxation (2009) 240 CLR 272

25. State laws binding the Commonwealth
when acting in their employment as servants of the Crown in right of the Commonwealth a person is not exempt from State criminal law
in the absence of any contrary legislation overriding State enactments, the Commonwealth is subject to the common law and the statute law of the States against the background of which it conducted its affairs.
However- the Commonwealth can avoid being bound by State laws by enacting legislation that is inconsistent with the State law- thus making the State law invalid to the extent of the inconsistency under s 109 of the Constitution

26. Other provisions affecting Commonwealth- State immunities
Section 114
Section 52
Section 51 (xiii) and (xiv)