Chapter 13 - Financial legislation

Constitutional safeguards: sections 54 and 55 of the Constitution

The Constitution contains two sections which are designed to ensure that the Senate is not unduly inhibited in its consideration of legislation by the conditions imposed upon it by section 53.

Section 54 provides that a proposed law which appropriates money for the ordinary annual services of the government must deal only with such appropriation. This means that appropriations for purposes other than the ordinary annual services of the government, or provisions dealing with appropriations, which the Senate may amend, may not be combined in one bill with provisions which the Senate may not amend. This ensures that the Senate is not prevented from amending provisions which do not appropriate money for the annual services of the government because of such provisions being linked with such appropriations in a single bill. Such a linkage of provisions is usually referred to as “tacking”, and section 54 seeks to prevent “tacking”.

Section 55 of the Constitution provides:

  • laws imposing taxation must deal only with the imposition of taxation and any provision dealing with any other matter is of no effect
  • laws imposing customs duties must deal only with customs duties, and laws imposing excise duties must deal only with excise duties
  • other laws imposing other kinds of taxes must deal only with one subject of taxation.

This section is also designed to prevent the combination in a single bill of matters amendable by the Senate with non-amendable matters, and to ensure that different taxes are not combined in one bill so that the Senate is presented with a choice of agreeing to all taxes or agreeing to none if the House of Representatives will not make amendments.

These sections use the same expressions to distinguish the categories of bills with which they deal as section 53, and interpretation of the three sections is therefore of necessity closely connected.

There is a significant difference, however, between section 55 and the other two sections. Sections 53 and 54 refer to proposed laws, and do not impose any prohibitions on the contents of laws resulting from the enactment of those proposed laws. Nor do they impose any remedies against the two Houses for any breach of the conditions relating to dealings with proposed laws set out in the sections. It is therefore generally agreed that these sections are non-justiciable, that is, the High Court cannot enforce compliance with the sections in relation to either the proceedings followed by the Houses in dealing with bills, or the contents of bills, and in no case has the High Court done so. (The non-justiciable character of the requirements of section 53 was explicitly referred to in the Constitutional Convention Debates: Adelaide, 1897, pp 576-7; and by the High Court in Osborne v Commonwealth 1911 12 CLR 321 at 336, and Western Australia v Commonwealth 1995 183 CLR 373 at 482.)

Section 55, on the contrary, refers to laws, and is therefore justiciable. The High Court may enforce compliance with the provisions relating to the contents of laws, and has done so in numerous cases. The Court therefore has the ability to determine the interpretation of expressions used in section 55, and such interpretations, while not binding on the Houses in relation to section 53, have generally been followed by the Houses in the interpretation of that section. Thus a proposed law would be regarded as imposing taxation for the purposes of section 53 if when enacted it would be a law imposing taxation within the meaning of section 55 as interpreted by the Court. (See also below under Decision as to amendments or requests.) (For examination by the High Court of the application of section 55, see Austin v Commonwealth 2003 195 ALR 321;Permanent Trustee Australia v Commissioner of State Revenue, 2004 211 ALR 18.) The High Court has indicated that laws imposing taxation may include provisions for assessment, collection and recovery of taxation where it is difficult to separate them, contrary to the strict separation of these matters usually observed by the drafters of government bills (see below, under When requests are required: (a) bills imposing taxation).

The interpretation of the expressions contained in sections 53, 54 and 55 is further dealt with below in the context of determining when amendments moved in the Senate should take the form of requests to the House of Representatives. It must be remembered, however, that the interpretation of the expression “imposing taxation”, and the other expressions referring to taxation in section 55, is a question which may be determined by the High Court for the purpose of the application of that section to the validity of laws, whereas the interpretation of the expressions used in sections 53 and 54 is a matter for the two Houses to determine in their dealings with each other.

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