LAWS IMPOSING TAXATION WHETHER COMMONWEALTH HAS POWER TO REGULATE CONDITIONS OF LABOUR BY IMPOSING ADDITIONAL EXCISE DUTY ON DISTILLERS WHO FAIL TO OBSERVE PRESCRIBED INDUSTRIAL CONDITIONS
CONSTITUTION, s. 55 : EXCISE TARIFF 1906 (No. 20ofl906), s. 2
The Minister for Trade and Customs asks for advice on the question raised in the following memorandum by the Assistant Comptroller-General:
On 14 November 1907 the Minister for Trade and Customs approved of a scale of wages to be regarded as 'fair and reasonable' within the meaning of section 2 of the Excise Tariff 1906 (No. 20 of 1906).
All distillers gave undertakings to observe such scale.
State Collectors were advised of this on 20 December, and instructed to obtain quarterly declarations from distillers that they were fulfilling the conditions also to make periodical verifications to see that the declarations were in accordance with the facts.
These instructions are still in force.
According to press reports, the Acting Attorney-General has expressed the opinion that, in consequence of the High Court judgment in the McKay case, the provision in this Excise Act in regard to wages etc. is invalid.
The Minister will be glad to be favoured with the opinion of the Attorney-General as to the effect of the High Court judgment on the provisions of the Act quoted.
The Act referred to imposes (by section 2) certain duties of excise on spirits.
The section contains a proviso to the effect that if any distiller-
- does not pay his employees a fair and reasonable rate of wages per week of 48 hours, or
- employs more than a due proportion of boys to men engaged in the industry, the Governor-General may, in pursuance of a joint address from both Houses of the Parliament, impose an additional excise duty of Is per gallon on spirits as regards such distillers.
In my opinion the principle of the decision of the High Court in the Harvester Cases (Commonwealth v. McKay and R. v. Barger(1)]) applies to the proviso above mentioned, and any exercise by the Governor-General, in pursuance of a joint address, of the power purported to be thereby given of imposing an additional duty as regards any distiller, would be held to be unconstitutional.
The decision in the Harvester Cases is also an authority for holding that the proviso deals with matters other than 'the imposition of taxation', and is therefore of no effect by virtue of section 55 of the Constitution.
The proviso is however, in my opinion, clearly severable from the other provisions of the Act, and therefore the validity of the rest of the Act is not in any way affected; see Federated Amalgamated Government Railway and Tramway Service Association v. New South Wales Railway Traffic Employees Association 4 C.L.R. 488 at 546.
[Vol. 6, p. 419]
(1) 6 C.L.R. 41.