tax on citrus fruit power of commonwealth to tax citrus fruit to create fund to compensate owners of land unsuitable for production: power to prohibit use of unsuitable land for planting or growing of fruit: financial assistance to State for purpose of providing relief or compensation to fruit growers affected
Sales Tax Act (No. 1) 1930: Sales Tax Assessment Act (No. 1) 1930: Constitution s 81
The Secretary, Department of Commerce, has submitted the following to me for advice:
The Commonwealth Citrus Investigation Committee, with which this Department is co-operating in connection with an investigation into the production and marketing of citrus fruits, has referred the following question for advice:
What is the legal position in regard to the compulsory levying of say 1d. per case on sales of citrus fruits with the object of building up a fund that could then be used for the purpose of compensating growers of unsuitable varieties or growers in unsuitable areas, for throwing a portion of their groves out of production. Further, if it could be shown that such a scheme would be legally practicable could any action be taken to prevent areas once thrown out of production from being subsequently replanted with the same type of tree.
It is understood that this question arises because it has been suggested that the position of the citrus industry would be alleviated if production could be confined to suitable varieties and areas. Proposals have been made that compensation should be given to growers to enable this to be done.
I should be glad if you would kindly advise whether it would be legally possible for a levy to be made on growers for this purpose and if so the means which could be adopted and through what authority. Advice would also be appreciated regarding the possibility of preventing areas once thrown out of production from being subsequently replanted with the same type of tree.
The questions upon which my opinion is sought may be summarised as follows:
- Whether a levy or tax may be imposed by the Commonwealth upon the sale of citrus fruits.
- Whether the Commonwealth could enact that land upon which unsuitable varieties of citrus fruits are grown or which is unsuitable for the growth of any citrus fruits shall be thrown out of production and further planting thereon be prohibited.
- Whether the money raised by the levy or tax could be used to compensate the growers upon such unsuitable land.
I am of opinion that, by an Act similar to the Sales Tax Act (No. 1) 1930, the Commonwealth may impose a tax upon the sale of citrus fruits. It would be necessary also to pass an assessment Act similar to the Sales Tax Assessment Act (No. 1) 1930–1933.
The money raised by the tax must be paid to the Consolidated Revenue Fund (Constitution section 81).
It would be possible, if it were proposed to impose a tax upon the export of citrus fruits, to legislate generally on the lines of the Dried Fruits Export Control Act and the Dried Fruits Export Charges Act, in which case the money raised could, after having been paid to revenue, be appropriated and paid into a fund and used for various specified purposes. As to the purposes for which the money could be used, attention is invited to that portion of this Opinion which deals with question 3.
There is no power in the Commonwealth to enact legislation dealing with horticulture in the manner suggested, which is purely a State matter. The answer to this question is therefore: No.
It would appear that the authority responsible for prohibiting the use of land for the production of citrus fruits should be the authority which should pay the compensation contemplated under this question.
The Commonwealth could grant financial assistance to any State for the purpose of providing relief or compensation to the fruit growers affected.
If legislation generally on the lines of the Dried Fruits Export Charges Act and the Dried Fruits Export Control Act were passed, it would be possible to provide for the expenditure of moneys, standing to the credit of the fund, for various purposes with the object of promoting the sale of Australian citrus fruits. I doubt, however, whether payment to people who had been prohibited from using particular lands for growing citrus fruits could be authorised by Commonwealth legislation.
[Vol. 27, p. 56]