SUBSIDY TO FARMERSWHETHER COMMONWEALTH HAS POWER TO PAY SUBSIDY TO FARMERS ON PURCHASES OF SUPERPHOSPHATE: WHETHER PROPOSED SUBSIDY IS A BOUNTY: SCOPE OF COMMONWEALTH’S APPROPRIATION POWER: VALIDITY OF PROPOSED MEASURES TO SAFEGUARD EXPENDITURE UNDER APPROPRIATION ACT: SUBSIDY MADE BY WAY OF GRANTS TO STATES: COMMONWEALTH POWER TO REQUIRE MANUFACTURERS AND DISTRIBUTORS TO FURNISH RETURNS: FALSE STATUTORY DECLARATIONS
CONSTITUTION ss 51(iii), 81: PRIMARY PRODUCERS RELIEF ACT 1935 s 8: STATUTORY DECLARATIONS ACT 1911: WHEAT GROWERS RELIEF ACT 1933 s 7
I refer to your memorandum dated 27th August, 1948, concerning a proposal to pay a flat rate subsidy direct to farmers on all superphosphate purchased by them in quantities of one ton or more and asking certain questions in relation thereto. The questions and answers are as follows:
(a) whether an appropriation would be sufficient legislative authority for the proposed scheme:
Answer—The proposed payment is not a payment on the production or manufacture of goods and is therefore not a bounty. I assume there is no suggestion that the payment is in any way related to the defence of the Commonwealth. There is no other legislative power of the Commonwealth to which the proposal could conceivably be related. The question therefore is whether the appropriation, not being related to any legislative purpose of the Commonwealth, would be good. In the Free Medicine Case two Justices of the High Court (Latham C.J. and McTiernan J.) held that the question whether an appropriation was for the purposes of the Commonwealth was for the Parliament and not for the courts to determine.1 Two other Justices (Starke J. and Williams J.) thought that, although the appropriation power should be construed liberally, it did not extend to authorizing an appropriation for any purpose whatever irrespective of whether the object of the expenditure related to a matter belonging to the Federal Government. The remaining two Justices (Rich J. and Dixon J.) did not express any concluded opinion on the matter but it is likely that they would support the narrower view of the appropriation power.
If, therefore, the proposed Act were challenged there would be some likelihood that the High Court would hold it to be beyond power. There are, however, difficulties in the way of attacking an Act which is simply an Appropriation Act and nothing more.
(b) whether legislation placing an obligation upon manufacturers and/or distributors to furnish information and authorizing Commonwealth officers to inspect sales records would be valid.
Answer—The answer to this question depends, in my view, upon the answer to the first question. I think the High Court would undoubtedly hold that provisions intended to safeguard expenditure under a valid Appropriation Act would themselves be valid, as being incidental. I do not think such provisions would be held to be valid if the Appropriation Act were held not to be valid.
(c) whether there would be any constitutional requirement that the rate of subsidy must be uniform throughout all states.
Answer—As I have already mentioned the proposed legislation would not be a bounty and the requirement as to bounties being uniform therefore has no application. There is no other constitutional requirement that the rate of subsidy must be uniform throughout the States.
(d) whether there would be any constitutional barrier in the way of successfully prosecuting a recipient of subsidy who had made a false declaration under the Statutory Declarations Act whereby he received subsidy payment to which he was not entitled.
Answer—If the Appropriation Act were valid, there would be no constitutional barrier to a prosecution for making a false statutory declaration under the Statutory Declarations Act. If, however, the Appropriation Act is invalid the question asked raises a nice point of constitutional law upon which, so far as I am aware, there is no authority and as to which, therefore, it is not possible to give a definite answer. On the whole, however, I think that if a person received money from the Commonwealth there would be no constitutional barrier to prosecuting him for making a false declaration under the Statutory Declarations Act in relation to the payment of that money, notwithstanding that the appropriation were beyond power.
In discussion with Mr. Hibberd, as to the possibility of the subsidy being made by means of grants to the States, a further question arose as to the necessity for State legislation to effect the purposes mentioned in your memorandum regarding the furnishing of information and the prosecution of recipients of bounty who make false declarations. As incidental to the grant to the States, I think Commonwealth legislation could be validly enacted to require an applicant for assistance to lodge with a State authority a Statutory declaration (see Wheat Growers Relief Act 1933–1934, s. 7). I do not feel quite so confident as to the powers of the Commonwealth to enact legislation requiring manufacturers or distributors to furnish returns.