I have been asked to advise as to the constitutional power of the Commonwealth to enact legislation to provide for a scheme of child endowment.

I understand that such a scheme might involve:

1. The levying of taxation to raise the whole or part of the moneys needed to pay the endowment;
2. Provisions for the payment of the endowment; and
3. Penal provisions designed to prevent endowment being paid except in respect of persons who are eligible for payment.

As to the first of these points–the raising of the whole or part of the moneys by taxation–I am of opinion that the Commonwealth has ample power for this purpose.

As to the second and third points, the power of the Commonwealth is not so ample.

The Commonwealth has no express power to expend its moneys on the payment of child endowment. The principal powers which might be relied on are–

1. the defence power contained in section 51(vi) of the Constitution; and
2. the power of appropriation contained in section 81 of the Constitution.

Section 51(vi) gives the Commonwealth Parliament power to make laws for the peace, order and good government of the Commonwealth with respect to:

(vi) The naval and military defence of the Commonwealth and of the several States, and the control of the forces to execute and maintain the laws of the Commonwealth:

This power has been interpreted by the High Court as being of wider limits in time of war than in time of peace. Seeing, however, that a scheme of child endowment can hardly be introduced as a wartime measure only, it seems unnecessary to consider the scope of this power in time of war.

The introduction of a scheme of child endowment in time of peace could be justified under the defence power only if it conduced to the defence of the Commonwealth, etc., as, e.g., by increasing the capacity of the youth of Australia to defend their country. The connexion between a child endowment scheme and such a result appears to me to be too tenuous to justify such a scheme under the defence power.

A more solid constitutional basis for the introduction by the Commonwealth of a scheme of child endowment is probably the appropriation power. This is expressed in section 81 of the Constitution in the following terms.

81. All revenues or moneys raised or received by the Executive Government of the Commonwealth shall form one Consolidated Revenue Fund to be appropriated for the purposes of the Commonwealth in the manner and subject to the charges and liabilities imposed by this Constitution.

The wider view, which is the one upon which the Commonwealth Parliament has acted during practically the whole of its existence, is that the Commonwealth Parliament has an unfettered choice of the objects for which it may appropriate money, and that ‘the purposes of the Commonwealth’ in the section are not limited to those legislative powers set forth in sections 51 and 52 of the Constitution. The wider view is the one which has always been held by the late Solicitor-General, Sir Robert Garran, and it has never been successfully challenged in the courts. It is the basis of the Maternity Allowance Act which has continued on the Statute book since 1912, and of a great deal of other Commonwealth legislation.

The narrower view, which is supported by at least two of the present Justices of the High Court, Starke and Dixon, J.J., also by Sir Edward Mitchell, K.C., and Mr Blackburn, M.P., (and which was also supported by the Prime Minister in an opinion given by him to the Treasury in 1934 when he held the office of Attorney-General⁽¹⁾) is that one must look to the terms of the Constitution itself to find the ‘purposes’ for which Commonwealth revenues may be appropriated. Mr Justice Dixon, supported by the Committee of Counsel of the Victorian Bar, thinks that ‘the purposes of the Commonwealth’ are limited to the legislative powers contained in sections 51 and 52. Sir Edward Mitchell, however, considers that the purposes include also everything which the Executive Government can do without express legislative authority.

Both Mr Justice Dixon and Sir Edward Mitchell have pointed out the difficulty of successfully attacking legislation containing provision for the payment of child endowment, though the validity of that portion of the legislation which provided penalties for offences in connexion with the scheme might perhaps be attacked by a person charged with an offence against those provisions.

(It may be, however, that penal provisions designed to protect a scheme of child endowment could be supported as being legislation passed under the census and statistics power (s. 51 (xi)) or under the incidental power (s. 51(xxxix)). It might, for instance, be possible to require returns by persons who have children in respect of whom child endowment is payable, and to penalise the making of false or incorrect returns).

As to the possibility of a direct challenge to the validity of the provisions for the payment of child endowment, it may be that a State opposed to the provision by the Commonwealth of a scheme for child endowment may be able, by reason of its interest in the distribution of the surplus revenue of the Commonwealth, to establish a legal interest sufficient to give it locus standi to attack the legislation by proceedings in the High Court.

It cannot be said, therefore, that the constitutional basis of the proposed legislation is in theory very satisfactory, though, practically, it would seem that there is not much likelihood of the provisions which relate to the actual disbursement of the endowment moneys being successfully attacked.

The only other constitutional provision calling for mention in relation to the subject of child endowment is section 96, which gives the Commonwealth power to grant financial assistance to States. Under this provision the Commonwealth could validly legislate to pay moneys to the States to enable them to establish a scheme of child endowment. This course would probably not prove acceptable to the Commonwealth. It would not enable the Commonwealth to establish and itself administer such a scheme.

If it should be decided to endeavour to strengthen the constitutional position of the Commonwealth before embarking on a scheme, there are two possible courses of action.

The first is an alteration of the Constitution by referendum. This course would occasion delay–the vote could not be taken less than two months after the bill had passed the second House–and would involve an expenditure of upwards of £100,000.

The second course is a reference of the power to the Commonwealth by the State Parliaments. There are some objections also to this course, e.g.,

1. The difficulty, based on past experience, of bringing six States into line;
2. The delay involved;
3. The possibility that the States might require details of the Commonwealth Scheme before agreeing to refer–a request with which the Commonwealth might at the present time be unwilling or unable to comply; and
4. The fact that a request to the States to refer would involve–
1. an admission by the Commonwealth that its powers in this respect were unsatisfactory; and
2. if the reasons for the request were explained in detail–the giving to the States of information which might be of use to the States in some future legal action against the Commonwealth.

[Vol. 34, p. 17]

(1) Opinion No. 1573.