Opinion No. 1683
POWER TO ENTER INTO LEND-LEASE ARRANGEMENTS: POWER OF EXECUTIVE TO ENTER INTO AGREEMENT: IMPLIED CONDITION THAT AGREEMENT SUBJECT TO PROVISION BY PARLIAMENT OF SUFFICIENT MONEYS FOR ITS PERFORMANCE: APPROPRIATION
CONSTITUTION s 83
03 June 1941
The Secretary, Department of the Treasury
I refer to your memorandum of 14th May, 1941, requesting my advice on certain questions raised in connexion with problems applicable to the Commonwealth arising out of the Lease-Lend Act.
The only matters calling for my comment, I think, are those on page 3 of the statement accompanying your memorandum, which are as follows:
- Will a specific legislative authority be necessary for the Government to undertake commitments of this character; and if so what will be the form of this authority?
- Will the traditional constitutional right of the legislature to control expenditure require something in the nature of special estimates to cover obligations incurred in respect of goods obtained under Lease-Lend.
In my opinion any agreement entered into by the Executive Government would, even without Parliamentary approval of the agreement, be valid. Nevertheless, any such agreement must be read as containing an implied condition that it is subject to the provision by the Parliament of sufficient moneys for its performance (New South Wales v. Bardolph, 52 C.L.R. 455).
The right of the Legislature to control expenditure is, at least so far as the Commonwealth is concerned, something more than a ‘traditional constitutional right’. Section 83 of the Constitution provides that ‘no money shall be drawn from the Treasury of the Commonwealth except under appropriation made by law’.
It may be that in the case of certain goods lent or leased to the Commonwealth, the identical goods could be returned without any expenditure being incurred. Whether this is so or not in certain cases I cannot say, but it appears obvious to me that it would not be so in all, or even a majority of, cases. Consequently, agreements entered into by the Commonwealth will need to be subject to some appropriation. The appropriation need not, of course, specifically refer to the carrying out of the agreement. For example, a wide appropriation for defence purposes might well make money available for the performance of agreements of the nature contemplated which would, undoubtedly, be for defence purposes.
As, however, it appears to me that much of the liability which will be incurred under these agreements will need to be met at some date which might not be in the very near future, I consider that, if there are no political objections, Parliament should be invited to pass a short measure authorizing the Commonwealth to enter into agreements of the nature contemplated and that the measure should contain a provision that all moneys necessary for carrying out any such agreement shall be payable out of the Consolidated Revenue Fund ‘which is hereby appropriated accordingly’.
In addition to making an unlimited sum of money thus available for meeting the obligations incurred under the agreements, such a measure would be of considerable convenience inasmuch as the appropriation would not lapse at the end of each financial year.
If it is desired to adopt this suggestion I shall be happy to draft the necessary bill upon being supplied with a suitable description of the type of agreements for which provision should be made.
[Vol. 34, p. 140]