Your memorandum dated 5th April, 1950, requests advice as to the necessity for legislation to enable the Commonwealth to pay subsidies to the States, to meet the cost of freight and duty on prefabricated houses imported into Australia.

(2)  I understand that, as the subsidies are to be paid subject to conditions, you would wish a legal course to be adopted which would ensure that there would be no doubt as to the legality of the conditions upon which the money is to be paid.

(3)  On the assumption that it is desired to give full legal binding force and effect to the conditions, it would be necessary, in my view, for statutory authority to be provided for the granting of the subsidy. Constitutional power to enact the necessary legislation is certainly to be found in section 96 providing, as it does, for the granting of financial assistance to the States, on such terms and conditions as the Parliament thinks fit. It may be that there are other sources of power but it is unnecessary to go beyond section 96.

(4)  Section 96 does not, however, in any way require the enactment of anything in the nature of a special States’ Grants Act. The constitutional power would be effectively exercised by a provision in an Appropriation Act enabling the grant of assistance on such terms and conditions as are approved by the Treasurer. Equally, the matter could be provided for in a special Act. The choice of legislative means is, of course, a matter for the consideration of your Department in the first instance.

[Vol. 39, p. 146]