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High Court decisions since 1908 have supported the trend towards centralisation. The following cases are the landmark judgements which have effectively altered the federal nature of the Constitution. Decisions restricting the control by States over their own revenue raising powers are grouped into the second sub section.
The High Court held valid Commonwealth legislation which directed that money in excess of Commonwealth requirements for the financial year should be paid into trust funds for defraying the costs of services in succeeding years. Therefore such money would not form part of any surplus revenue distributable among the States under Section 94 of the Constitution. As a result, the Commonwealth has ensured that there is no surplus revenue to be distributed to the States as the Constitution envisages in Section 94.
This case established that Commonwealth powers should be interpreted broadly. The effect was that Commonwealth powers were expanded. This has permitted Commonwealth laws to intrude into areas which would otherwise have been subject to State control. In particular, the case held that:
This case held that in making Section 96 grants to States the Commonwealth may attach terms and conditions to the grants of money which are:
One consequence of this is that the Commonwealth can dictate and control State policy.
This case enabled the Commonwealth to become the dominant revenue raiser in the Federation. The States were forced to relinquish income tax as a source of revenue.
This case permitted the Commonwealth to impose a liability to pay income tax and then exempt from tax if specified conditions (normally within State control) were met.
The High Court indicated that the corporations power - in Section 51(xx) of the Constitution - should be given a wide interpretation so that it would apply in relation to intra State matters previously governed by State domestic laws.
Until 1975 it was accepted that the States' territorial boundaries ended three nautical miles from their coastline. In this case the High Court held that:
As a result the States' power with respect to the territorial sea (including minerals, fisheries, navigation) no longer rest upon State legislative power, but upon Commonwealth legislation enacted pursuant to the 1976 Offshore Constitutional Settlement.
Despite State development permission having been granted, this case permitted a Commonwealth Minister to control the mining of mineral sands in Queensland by making the grant of an export permit conditional upon the mining company complying with environmental standards. The case held that:
Not only are Commonwealth powers interpreted broadly (following the Engineers' Case), but also when using those powers, the Commonwealth can attach conditions to regulate matters which go beyond even that broad interpretation of Commonwealth power.
The High Court held that a non-profit organisation - a West Australian football team - incorporated under the Associations Incorporation Act 1895 came within the corporations power - Section 51(xx) - and was therefore validly subject to the Trade Practices Act (Commonwealth).
This case (following Engineers') gave a wide interpretation to the words "external affairs" in Section 51(xxix) of the Constitution. This enabled the Commonwealth, by relying on an international treaty, to make laws governing human rights which had previously been considered to be a matter for State Parliaments and the common law. As a result, Australia is subjected to international standards and criteria without the possibility of local needs and conditions being taken into account by State parliaments and laws. In particular this case held:
This case gave a broad interpretation to Sections 51(xx) - corporations power - 51(xxvi) - race power - 51(xxix) - external affairs power. The High Court:
Because most economic activities in a State are carried out by trading corporations, this case may enable the Commonwealth to regulate those activities and associated activities. Consequently, the Commonwealth may have power over virtually all aspects of business and associated activities (eg trading activities, working conditions, wages and salaries, safety standards). These are matters that have been governed by State laws and policies.
This case indicates that virtually all employment relationships can be governed by Federal awards. For example, school teachers employed by the State in State schools can be bound by a Federal industrial award governing their terms and conditions of employment, including pay scales and hours of work.
This case (following the Franklin Dam case) reinforced the Commonwealth's ability (by international treaties) to legislate on matters within States relating to the environment. The Court held that Section 51(xxix) supported the validity of a Commonwealth Act establishing a commission to inquire into and report on the possible identification, delineation and eligibility of an area of land in Tasmania for World Heritage and to protect that area (4.5% of Tasmania) from any intrusion.
This case expanded the range of environmental matters in which the Commonwealth could override existing State policies and laws. the High Court held Section 51(xxix) supported the validity of a Commonwealth law permitting Commonwealth identification and nomination of Queensland rainforest for world heritage listing. It also supported Commonwealth regulations prohibiting, without Commonwealth Ministerial consent, activities in that area, for example road and forestry work.
For the first time the High Court recognised common law native title to land. Matters concerning title to land and land laws have always been within the jurisdiction of State Parliaments.
This was the first time the High Court examined the Constitution's prohibition on the States imposing excise duty. The High Court adopted a narrow interpretation of excise duty by deciding that license fees imposed by States on breweries were not excise duties. Under the narrow interpretation, excise duty was a tax specifically on the quantity or value of goods produced in the State. States could therefore apply a tax on goods which did not discriminate between goods produced within the State and goods produced outside the State.
The High Court examined the power of the States to impose taxes on Commonwealth activities. The High Court ruled that the Tasmanian Government could not impose stamp duty on a receipt given for the salary of a Commonwealth postal official. It should be noted that a 1904 High Court ruling (Deakin and Lyne v Webb) which held that a State could not impose income tax on the salaries of Commonwealth public servants, was later overruled by the Privy Council.
Confirmed that the Commonwealth could impose duty on imports by State Governments, despite the Constitutional prohibition on the Commonwealth taxation of State property.
Commonwealth land tax ruled valid.
The High Court ruled that a Commonwealth order under the War Precautions Act fixing the price of bread was valid. In this case the High Court gave a wide interpretation to the Commonwealth's defence power under the Constitution. The Commonwealth's defence power was used in 1942 to take over the States' income tax administrations.
The High Court discarded the principle of general State immunity from Commonwealth legislation. This case dealt with the power of the Commonwealth Arbitration Court to determine the wages and conditions of employees of State Governments. The High Court ruling extended the scope of Commonwealth power to State industrial activities, but its effects were much wider.
The High Court ruled that a South Australian tax of 2.5 cents per gallon on sellers of petrol came from overseas, some from Victoria and some was produced within South Australia. The tax was ruled invalid under Section 92 (free interstate trade) and Section 90 (prohibition on States levying customs and excise duty) of the Constitution.
The High Court ruled that a New South Wales tax on newspapers published and sold in that State was invalid, on the grounds that it was an excise duty. The Petrol Case and Newspaper case effectively excluded States from levying any tax on commodities.
This High Court ruling widens excise duty definition to cover any tax imposed in substance on production. The case involved State legislation which expropriated flour, paid the former owner of the flour compensation and entitled the former owner to buy back the flour at a higher price. This was held to impose a tax measured by the difference between the compensation and repurchase price.
The High Court ruled that a levy of $2 per half acre on land planted with chicory was invalid. This case established the principle that a tax did not have to be specifically imposed on the quantity or value of goods produced to be an excise. It was sufficient for a tax to be imposed with respect to a commodity to be termed an excise.
In 1942 the Commonwealth introduced legislation which replaced separate State and federal income taxes with one single uniform national income tax. This change was dressed up as an emergency war-time measure. The legislation also provided for grants to be paid to States which abstained from levying income tax. Victoria, Queensland, South Australia and Western Australia unsuccessfully challenged the legislation as unconstitutional.
A levy of 0.1 cents per gallon imposed by the Victorian Milk Board on sellers of milk who were not the original producers was declared to be an excise and thererfore invalid. Hence a tax on a commodity at any point in the course of distribution was held to be an excise duty. However the High Court held that a tax on consumers or consumption cannot be an excise.
The Victorian Government in 1955 took out a writ in the High Court challenging two aspects of the uniform tax legislation (NSW intervened in 1956 to suppport Victoria):
The validity of Victoria's liquor licence fees was challenged when they were increased in 1958. The High Court ruled that:
This case formed the basis for State franchise fees based on sales in a previous period.
The High Court endorsed State taxes on road haulage.
The High Court endorsed State taxes on the provision of credit to finance purchase of goods. The case involved stamp duty on hire purchase and instalment sale agreements.
In 1967 Western Australia introduced a requirement for a receipt to be issued for any payment valued at $10 or more. Receipts were subject to stamp duty at the rate of 0.1%. All States copied this tax. Effectively this was a tax on turnover. The High Court ruled that the stamp duty on receipts of iron ore sales was an excise and therefore invalid under Section 90 of the Constitution.
The High Court ruled that stamp duties on receipts in respect of sales at any stage from manufacture to consumption of goods manufactured in Australia were excise duties. This did not invalidate stamp duty on receipts of wages and salaries (which was deemed to be a tax on services), although the States subsequently abandoned this duty altogether.
The High Court held that the Commonwealth Parliament could legislate to impose a tax on State Governments by reference to the amount of wages paid by each State to its employees. This was later relevant to the Commonwealth's imposition of fringe benefits tax on States.
In 1973 the Tasmanian Government introduced a consumption tax on tabacco collected by tabacco retailers, accompanied by a franchise fee on tabacco. The High Court considered that the collection of the consumption tax by tobacco retailers converted it from a consumption tax to a sales tax and therefore an excise duty. Hence the tax was invalid. However the High Court upheld tobacco franchise fees, as it had upheld liquor franchise fees in the Dennis Hotels case.
The High Court disallowed a "licence fee" tax on the processing of fish.
States were excluded from imposing taxes on livestock used for the production of meat and wool.
The High Court upheld fuel franchise fees, following its earlier decisions on tabacco and liquor licence fees.
The High Court held that an annual licence fee imposed on the operator of pipelines was a tax on the production of the oil and gas carried by the pipelines and therefore an excise duty.
The High Court disallowed an annual licence fee on the operator of an abatoir, as being a tax on the production of meat and therefore an excise duty (invalid under Section 90).
The High Court held that a licence fee imposed by the ACT on the sale of videos by Capital Duplicators was an excise and therefore invalid. The High Court upheld its earlier decisions on the validity of tobacco and liquor licence fees (Dennis Hotels and Dickenson's Arcade) but expressed less support for fuel licence fees (which had previously been endorsed by the HC Sleigh case).
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