Opinion Number. 1534


inspection fees
fees levied by state for executing inspection fees of state: net produce of charges relating to import and export to be for use of commonwealth: calculation of net produce

Key Legislation

Constitution s 112: Potato Diseases Act 1909 (Tas): Potato Diseases Regulations 1909 (Tas) regs 8, 9: Potato Diseases Regulations 1911(Tas) regs 17

The Secretary, Department of the Treasury

The Secretary, Department of the Treasury, has referred to me for advice the following communication received from the Secretary and Chief Inspector of the Audit Office:

The Auditor-General desires that the enclosed letter from Mr. A. of Cooee, Tasmania, respecting the disposal of amounts collected by the State of Tasmania as fees for the inspection of potatoes, be referred for your consideration.

It will be seen that Mr. A. suggests that, under section 112 of the Constitution, the Commonwealth is entitled to the net produce of the charges levelled. (sic)

The statement by Mr. A. that the amount, plus interest, paid to the Potato Marketing Board by the State is £11,000 odd is borne out by reference to the Annual Report of the Auditor-General for Tasmania for the Year 1931/32 which shows the total payments, including Interest, to have been £11,691.

The Auditor-General will be glad of advice from you in due course, as to any action taken.

The letter from Mr. A. referred to is as follows:

I wish to draw your attention to section 112 of the Constitution which states that a State can levy an inspection fee for executing the inspection laws of the State, but the net produce of all charges levied shall be for the use of the Commonwealth.

The Tasmanian Government created a credit under an Act known as the Potato Diseases Act 1909, out of which the sum of £2,308.13.10, representing fees collected for the inspection of potatoes by the inspectors of the Agricultural Department under the guise of an inspection law, was paid over to the Potato Marketing Board.

This Act was amended authorising the Minister to pay out of monies standing to the credit of the fund further sums at the beginning of each financial year equal to one halfpenny per bag in respect of which an inspection fee has been received by the department.

In 1928–29 grant from levy £1907.18.7

In 1929–30 grant from levy £2722.18.0

In 1930–31 grant from levy £1502.15.8

In 1931–32 grant from levy £2189.19.5

This money belongs to the Commonwealth, and the Tasmanian Government has no legal right to collect money from the potato growers of this State under the guise of an inspection fee, and pay this money, plus interest, amounting to eleven thousand odd pounds over to a Potato Marketing Board–vide page 50 of the Annual Report of the Auditor-General (1932) of Tasmania, for full particulars.

Doubtless you are aware that the Constitution Act governs all of us. The Commonwealth should not permit the Tasmanian Government to filch money from the potato growers of this State under the guise of an inspection fee.

I am an ex-member of the State and Federal Parliaments, and have publicly stated that I would bring this serious matter under your notice.

The High Court has given its ruling that there can be no State Governmental authority exercised over trade and commerce by any governmental authority to whom section 92 is addressed.

Trade to be absolutely free among the States.

The Potato Diseases Act 1909 of Tasmania is entitled ‘An Act to provide for the Eradication of Diseases affecting the Potato, and to Prevent the Spread of such Diseases, and for other purposes’.

Under the Act as amended in 1930 the word ‘Potato’ was defined as including tomato, and the plant of potato is defined as including other vegetables as well as potatoes.

The Act authorises the appointment of inspectors with powers of search and the making of regulations prescribing, inter alia, ‘the matters in respect whereof fees shall be payable under this Act, fixing the amount of such fees, and the mode of the payment and recovery thereof’.

The Act establishes an account called ‘The Potato Diseases Fund Account’ into which are to be paid rates and contributions imposed by the Act upon potato land and such inspection fees as are prescribed by regulations.

Regulations were made on 11 October, 1909, and have been amended from time to time.

Regulation 8 is as follows:

Any person intending to export potatoes to any Australian State shall deliver to an Inspector at the port of shipment, at least eight clear working hours prior to the departure of the vessel in which such potatoes are to be shipped, written notice of such his intention, stating the quantity and brand of such potatoes, the name of the vessel and the State to which it is intended such potatoes shall be shipped. And such potatoes shall be placed upon the wharf or other place of departure of the vessel in which such potatoes are intended to be shipped at least eight clear working hours immediately prior to this shipment for the purpose of inspection. And no potatoes shall be shipped for export as aforesaid until the same have been inspected, and a permit to ship the same obtained from an inspector.

Regulation 9 imposed fees in respect of such inspections. This regulation was on 29th May, 1931, repealed and was superseded by regulation 40 which reads:

  1. There shall be paid by the shipper to the inspector, for every inspection specified in the 1st column of the table to this regulation, the fee set opposite thereto in the second column of that table.
  2. Such inspection fee shall be paid before shipment if required by the inspector and shall in no case be less than one shilling.
For the inspection of Fees payable
Potatoes (Salanum tuberosum) One penny per bag or three bushel case
Carrots, parsnips and turnips Three farthings per bag.

On the 17th March, 1911, regulations 17 to 26, inclusive, were made under the Potato Diseases Act 1909. These regulations required that all potatoes arriving at the yards of the Hobart Railway Station, or arriving in Hobart otherwise than by railway shall be removed by the owner to quarantine and shall be available to the owner upon application to an inspector. If, after examination by the Inspector the potatoes are found not to be diseased they may be delivered to the owner.

Regulation 22 provides for a charge being paid by the owner for supervision in quarantine not exceeding the sum of 2/- per hour, and, in addition, the owner is required by regulation 23 to pay to the inspector for every inspection a fee of 1/3d. per ton and every fraction of a ton of potatoes inspected.

It is considered improbable that among the potatoes to which regulations 17 to 26 apply are any potatoes imported into Hobart from other States or from overseas.

There appears to be nothing in the regulations to provide that potatoes in respect of which inspection fees have been paid under regulation 23 are exempt from the payment of the fees provided by regulation 40 in the event of any such potatoes being exported from Tasmania.

The fees derived under regulations 40 and 23 are paid to the credit of the account above referred to.

Out of the Potato Diseases Fund Account the following amounts are authorised by the Potato Diseases Act 1930 to be paid to the Potato Marketing Board:

The amount to be paid from the Potato Diseases Fund Account to the Potato Marketing Board shall be calculated at the following rates:

In respect of potatoes–One half-penny per bag.

In respect of carrots, parsnips and turnips–Three eighths of one penny per bag.

Provided that where the amount of the inspection fee paid under Regulation 40 of any shipment is one shilling, the amount to be paid to the Potato Marketing Board in respect of the shipment shall be sixpence.

The money paid to the Potato Marketing Board is declared by the Act to be so paid ‘to be applied to the problem of marketing potatoes produced in this State and in furtherance of the object for which the said Board was elected’.

Section 112 of the Constitution reads:

After uniform duties of customs have been imposed, a State may levy on imports or exports, or on goods passing into or out of the State, such charges as may be necessary for executing the inspection laws of the State; but the net produce of all charges so levied shall be for the use of the Commonwealth; and any such inspection laws may be annulled by the Parliament of the Commonwealth.

For the reasons stated above it would appear that the fees received by the State Authorities in pursuance of regulations 17 to 26 need not be taken into account for the purposes of section 112, except in so far as those fees are imposed in respect of potatoes reaching Hobart by importation from other States or from overseas.

The fees imposed by regulation 40, however, appear to be such as are covered by the terms of section 112 of the Constitution. The question whether any amount collected under regulation 40 is payable to the Commonwealth depends upon what amount is the net produce, after all the expenses of inspection have been paid, of all charges levied by the State of Tasmania for executing its inspection laws in respect of imports or exports or on goods passing into or out of the State.

I am not aware whether the State of Tasmania imposes an inspection charge upon the import or export of any goods other than potatoes, but if the State does so, it would appear that the inspection charges in respect of goods must be taken into account in calculating the amount, if any, of the net produce arising from those charges.(2)

[Vol. 26, p. 186]

(1) The opinion is incorrectly dated 1944 in the Opinion Book, but this date is attributed from its position in the Opinion Book.

(2) This opinion was published in Commonwealth of Australia, Parliamentary Papers (General), Vol. II (1932–34), p. 2374.