Opinion Number. 1639



Key Legislation


The Secretary, Department of the Treasury

The Assistant Secretary to the Treasury has forwarded the following memorandum for advice:

  • The Premier of Victoria has requested that the Commonwealth pay the ordinary registration fees on Commonwealth owned motor cars in Victoria.
  1. The Commonwealth has, by arrangement with the Victorian authorities, instituted a system of registration for its own cars, and advises the State Government of the particulars of registrations, so that a check may be kept on cars using numbers outside the Victorian registration serials. This system is understood to be satisfactory to the State Government.
  2. For some years an arrangement has been in operation, by which the Commonwealth and State Governments reimburse each other for inter-governmental services by payment at ‘cost’—or as near cost as can be calculated. Under this arrangement the Commonwealth has claimed that no payment is due to the Victorian Government.
  3. In reply to the suggestion that motor registration fees are a form of taxation and that the Commonwealth is therefore exempt, the Premier states that such fees constitute payment for services and cannot be considered in the light of taxation. A copy of the Premier’s most recent letter is attached hereto.
  4. I shall be glad if you will advise me whether the Commonwealth should resist the payment of motor registration fees on the ground that they represent taxation, or on any other legal ground, and that the Commonwealth should be exempt therefrom.
  5. I might add that no other State Government has claimed payment of corresponding fees.

The letter of the Premier of Victoria is in the following terms:

I am in receipt of your letter of the 15th July, No.A.6/1/6, relative to the subject of the payment of the registration fees of Commonwealth owned motor cars which use Victorian roads.

With reference to the contention that portion of the motor registration fees constitute a State tax and are therefore not payable by the Commonwealth, I wish to point out that the Country Roads Board expends not only the whole of the Motor Registration fees, but an amount in excess thereof in the provision and maintenance of roads and costs of administration, and that no part of the fees so received is used for purposes other than the provision of roads and the administration of the provisions of the Motor Car Act. The fees paid cannot be viewed in the light of ordinary State taxation, but can be properly regarded solely as a charge for direct services given to the motoring community by the State. For this reason, my Government feels that the Commonwealth should be prepared to willingly meet its fair share of the cost involved in providing its departments with these services.

I deprecate the suggestion that the Government proposes to abandon its claim to payment in the event of arrangements for the registration and identification of such vehicles being satisfactorily finalized. Such a course has not at any time been contemplated, and the statement attributed to the Under Secretary in your communication is not in accord with the facts. The report furnished by him immediately at the conclusion of the interview with Mr. Burgess was that the subject of the identification of cars had been discussed, but that Mr. Burgess had stated he was not authorised to discuss any question of payment by the Commonwealth of registration fees, and consequently no progress had been made on this aspect of the matter.

In my letter of 5th January, 1937, I expressed a desire to be furnished with particulars of the Commonwealth cars in question to enable a claim to be presented. The assurance in your communication of the 26th August, 1937, that the Commonwealth is prepared to investigate particular services must surely extend to this matter, and I would respectfully request than an officer be deputed to consult with the Under-Secretary at an early date in order that a basis of adjustment may be arranged.

In Opinion No. 100 of 1938(1) to the Secretary to the Department of the Interior, reference is made to a memorandum in which I stated that Commonwealth motor vehicles, other than those used by the Defence Department, are subject to the requirements of State laws as to registration.

The exemption in the case of motor vehicles used by the Defence Department follows from regulations under the Air Force Act specifically exempting such vehicles from State laws as to registration. Other Commonwealth vehicles could, if thought desirable, be exempted also by an Act or regulation providing for their immunity from State motor laws.

In the absence of Commonwealth or State legislation exempting other Commonwealth motor vehicles from the payment of fees on the registration of those vehicles in Victoria, the only other legal ground upon which the payment of the fees could possibly be resisted is that the payment of the fees would amount to a tax on the property of the Commonwealth—a tax the imposition of which is forbidden by section 114 of the Constitution.

Section 114, so far as material, reads as follows:

114. A State shall not, without the consent of the Parliament of the Commonwealth, … impose any tax on property of any kind belonging to the Commonwealth …

Section 4(1.) of the Motor Car Act 1928 of Victoria requires every motor car to be registered by the Chief Commissioner of Police. Sub-section (2.) provides that a fee as provided for in the Second Schedule shall be paid to the Chief Commissioner on the registration of a motor car. Under sub-section (4.) it is an offence for a motor car to be used on a public highway without being registered.

Section 38(d) of the Country Roads Act 1928 (Victoria) provides that all fees collected under the Motor Car Act 1928 (less the cost of collection) are to be paid to the credit of the Country Roads Board Fund.

The fee payable on the registration or renewal of registration of motor cars is based on the number of power weight units, i.e., the number which is equal to the sum of the horse-power and the weight in hundred-weights of the car.

It is not claimed that the fees are in the nature of charges to cover the cost of registration, but that they are charges for direct services given to the motoring community by the State in the provision and maintenance of roads.

This contention appears to be based on the fact that all fees collected under the Motor Car Act, less the cost of collection, are paid to the credit of the Country Roads Board Fund.

In my opinion, this contention cannot be sustained. The fee payable on the registration of a car has no relation to the extent of use of the roads by the car, nor does the Act impose any fees on other vehicles, e.g., horse-drawn vehicles, which use the public roads.

I can find nothing in the Act to indicate that the fee is intended to be a charge for services rendered, or any reference to any services for which the fee is to be charged.

The fact that the Country Roads Board Act provides for the payment of the fees collected under the Motor Car Act, less the cost of collection, into the Country Roads Board Fund, does not, in my view, alter the nature of those fees, and convert them from taxes into charges for services. If this were so, it might be contended with equal force that that portion of the Customs and Excise duties on petrol which is allocated by the Commonwealth (by the Federal Aid Roads Act 1931) for the purpose of grants to the States to be expended on the construction and maintenance of roads is really not a tax, but a charge on the motoring community for the same service—i.e., the provision and maintenance of roads.

It may be said of all taxes that they are imposed to meet the cost of services provided by the Government, but it cannot be claimed that because the proceeds of a particular tax are appropriated to meet the cost of a particular service, the tax ceases to be a tax and becomes a charge for that service.

In my opinion, the fee payable under the Motor Car Act of the State of Victoria upon the registration of a motor car is, in substance, a tax on that car, and the State is forbidden by section 114 of the Constitution to impose such a tax on motor cars which are the property of the Commonwealth unless the Parliament of the Commonwealth has consented to the imposition of the tax.

[Vol. 32, p. 41]

(1) See Opinion No. 1636.