The High Court has decided two proceedings challenging the legal basis for the Australian Marriage Law Postal Survey, dismissing the first application and answering questions stated in the special case in the second proceeding, holding that the Minister’s determination to fund the Survey was not invalid, and was validly authorised under the most recent appropriations act.
Following the Government’s 7 August 2017 announcement of a ‘voluntary postal plebiscite’ on whether Australian law should be changed to allow same-sex couples to marry, to be run by the Australian Bureau of Statistics, the Finance Minister (and respondent in the second matter) made a determination entitled ‘Advance to the Finance Minister Determination (No 1 of 2017–2018)’ to provide the ABS with $122 million for the plebiscite. That determination was purportedly supported by s 10 of the Appropriation Act (No 1) 2017–2018, which allows the Finance Minister to make a determination to provide for expenditures not exceeding $295 million where the Finance Minister ‘is satisfied that there is an urgent need for expenditure, in the current year, that is not provided for … in Schedule 1 … because the expenditure was unforeseen until after the last on which it was practicable to provide for it [in the original Bill]’. The Finance Minister stated in the instrument and in an affidavit that because the 2017–18 budget was tabled in May 2017, and Government policy on holding the plebiscite and using the ABS to do so was not changed until August, he was satisfied that there was an urgent need for the expenditure (see further at –). Following the determination, the Treasurer made a direction entitled ‘Census and Statistics (Statistical Information) Direction 2017’ (‘the Statistics Direction’), directing the head of the ABS to collect information on the number of electors in favour and against the proposed change in the law to allow same-sex couples to marry (see details at –). The Australian Statistician then sought the assistance of the Electoral Commissioner to carry out the survey (see details at –).
On 10 August, the first proceeding (‘the Wilkie proceeding’) was commenced by an application for an order to show cause, seeking declarations and injunctions against the Commonwealth, the Finance Minister, the Treasurer, the Australian Statistician and the Electoral Commissioner to prevent the postal survey going ahead, on the grounds that (among other things), s 10 was invalid, and alternatively that the Finance Determination was not authorised by s 10 (see further –). The second proceeding (‘the AME proceeding’) was formulated as a special case, contending solely that the Finance Determination was not authorised by s 10 of Appropriation Act (No 1) 2017–18 (Cth) (see –). Following the conclusion of hearings before the Full Court, on 7 September the High Court issued its orders dismissing both challenges. On 28 September it published its unanimous reasons for making those orders.
The Court (Kiefel CJ, Bell, Gageler, Keane, Nettle, Gordon and Edelman JJ) turned to the constitutional challenged in the Wilkie proceeding first. After examining the provisions in the Australian Constitution on appropriations and the Consolidated Revenue Fund (at ff) and the history of appropriations Bills (at ff), the Court emphasised that appropriations, whether special or annual, can only be made for a purpose that has been determined by Parliament (at –). Noting the plaintiffs in the Wilkie proceeding’s argument that s 10 transgressed this constitutional requirement of determination by delegating part of the appropriations power to the Finance Minister (and after examining the historical development of these advances, at ff), the Court rejected that contention as based on a fundamental misconstruction (at ): s 12 operates to appropriate monies from the Consolidated Revenue Fund, and that appropriation occurs not when those monies are paid, but when the Appropriation Act itself commences (at ). Consequently, the amount of $295 million which might be later allocated under s 10 was appropriated in the same way that the rest of the budget was appropriated (at ), and the Finance Minister’s power is one of allocation (at ):
The power of the Finance Minister to make a determination under s 10(2) of Appropriation Act No 1 2017-2018 is not a power to supplement the total amount that has otherwise been appropriated by Parliament. The power is rather a power to allocate the whole or some part of the amount of $295 million that is already appropriated by s 12 operating on s 10(3).
The Court also noted that scepticism about the pre-1999 form of the advance determinations could be reconciled with the constitutional requirement of a legislatively determined purpose lay in ‘recalling that the degree of specificity of the purpose of an appropriation is for Parliament to determine’ (at , and see –).
The Court then turned to the construction of s 10. After detailing the development of that section, its use of the satisfaction requirement and emphasis on covering ‘urgent and unforeseen’ circumstances (see ff), the Court rejected the AME plaintiffs’ contention that a change in the language in the 2008–9 appropriation act made the question of whether an expenditure was ‘unforeseen’ an objective question for determination by a court (at ): that argument was not supported by the statutory text, and the change was not one of substance but rather drafting style (at –). Further, while the Minister’s satisfaction must be based on a number of requirements laid out in the statute, and must be formed reasonably and on a correct understanding of the law, the Minister is not obligated to act ‘apolitically or quasi-judicially’ (at –).
Turning to the details of the satisfaction required by the section, the Court stated that first, the Minister must be satisfied of a need for expenditure, within the current fiscal year, not provided for or not sufficiently provided for in Sch 1 of the current Appropriation Act (at ); secondly, that the need for the expenditure is urgent, relative to the ordinary sequence of Appropriation Acts, in that it cannot wait for the next act (at ); and finally, that the expenditure is not provided for because it was unforeseen until after the last day on which it was practicable to include it in the Bill for the first Appropriation Act, specifically, whether that expenditure was unforeseen by the Government (and not whether some other expenditure might achieve a similar result, or whether some other body besides the Government might have foreseen it) (at –). The Court rejected each of the plaintiffs’ submissions that there were additional requirements — respectively, that the need must arise from a source external to Government (at ); that the Minister must weigh additional or alternative question of pursuing a special appropriation (at ); that non-statutory guidelines constrain that urgency as ‘within two weeks’ (at ) — as lacking textual or historical basis.
Finally, the Court rejected the AME plaintiffs’ contention that s 10 was limited by the language in the long title of the Appropriation Act No 1 2017–2018, as an Act to appropriate money from the Consolidated Revenue Fund ‘for the ordinary annual services of Government’: that language is drawn from ss 53 and 54 of the Constitution and cannot be read as converting the non-justiciable constitutional concept of ‘ordinary annual services of the Government’ into a justiciable and undefined statutory version of that idea (at –). To the extent that this argument attempted to draw an implication about the scope of appropriations in the Act from parliamentary practice, specifically that ‘new policies’ were beyond ‘ordinary annual services’ (at ), the Court noted that parliamentary practice on the distinction between new and modified policies has been inconsistent since at least 1999 (at  and see ).
Having construed s 10, the Court turned to the factual arguments of the plaintiffs on the validity of the Finance Determination, which focused on the Explanatory Statement and affidavit of the Minister. The Court rejected the plaintiffs’ contention that by stating that the expenditure was ‘urgent because it was unforeseen’ the Minister erred in law by conflating the statutory satisfaction requirements of urgency and unforeseenness (at ): that argument treated the Minister’s statement ‘as if it were a statement of reasons for an administrative decision as distinct from what it is — an explanation of the purpose and operation of a legislative instrument’, which simply identified the relevant part of s 10(1) on which the Minister relied (at ). Moreover the affidavit made it clear that he considered the urgency and unforeseenness questions separately (at ). The Court summarised that reasoning process at :
The Finance Minister identified the expenditure as the $122 million which the ABS needed to spend to conduct the postal survey in accordance with the then anticipated Statistics Direction, which was to give effect to the Cabinet decision of 7 August 2017. He was satisfied that the need for that expenditure was urgent because the results of the survey were to be known no later than 15 November 2017. He was satisfied that the expenditure was not provided for in the relevant Schedule because it was unforeseen as at 5 May 2017, being the last day on which the Bill containing the Schedule could have included that expenditure.
The Court concluded that this reasoning process involved no error of law (at ), rejecting arguments by the plaintiffs that the explanation focused to narrowly on the form of the survey as opposed to the general question of a plebiscite, and that the Minister erred in considering only whether the he had personally foreseen the postal survey expenditure (see at –).
Finally, the Court turned to the challenged to the validity of the Statistics Direction went beyond the Treasurer’s powers and the authority of the AEC, rejecting both as unsupported by the statutory language in each case (see ff and ff).
The Court also considered the question of standing, though in view of the failure of the substantive arguments in both proceedings there was no need to rule on standing in either matter (see –).
|High Court Judgment|| HCA 40||28 September 2017|
|Result||Application dismissed; Advance to the Finance Minister Determination (No 1 of 2017-2018) not invalid; s 10 of the Appropriation Act (No 1) 2017–2018 (Cth) validly authorised the Determination|
|High Court Documents||Wilkie|
|Australian Marriage Equality|
|Pronouncement of Orders|| HCATrans 176||7 September 2017|
|Full Court Hearings|| HCATrans 175||6 September 2017|
| HCATrans 174||5 September 2017|
|Hearings, Kiefel CJ|| HCATrans 158||17 August 2017|
| HCATrans 152||11 August 2017|
Matter No M106/2017
Questions 2, 3 and 5 of the Special Case dated 21 August 2017 be amended and the questions stated in the Special Case (as so amended) be answered as follows:
Do either of the plaintiffs have standing to seek the relief sought in the Amended Statement of Claim?
Inappropriate to answer.
Is the Advance to the Finance Minister Determination (No 1 of 2017-2018) (Cth) (“the Determination”) invalid by reason that the criterion in s 10(1)(b) of the Appropriation Act (No 1) 2017-2018 (Cth) (“the 2017-2018 Act”) was not met such that the Finance Minister’s power to issue the Determination was not enlivened?
No, it is not invalid.
(a) Does question 3(b) raise an issue which is justiciable by a court and within the scope of any matter which the Court has authority to decide?
(b) If the answer to question 3(a) is yes, is the Determination invalid by reason that:
(i) on its proper construction, s 10 of the 2017-2018 Act does not authorise the Finance Minister to make a determination, the effect of which is that the 2017-2018 Act takes effect as if Schedule 1 thereto were amended to make provision for expenditure that is outside the ordinary annual services of the Government; and
(ii) the expenditure on the ABS Activity (being the activity described in the Census and Statistics (Statistical Information) Direction 2017 (Cth)) is not within the meaning of “ordinary annual services of the Government”?
(a) The proper construction of s 10 of the 2017-2018 Act is justiciable.
(b) No. Section 10, on its proper construction, did authorise the Finance Minister to make the Determination.
If the answer to question 2 or question 3(b) is yes:
(a) does question 4(b) raise an issue which is justiciable by a court and within the scope of any matter which the Court has authority to decide?
(b) if the answer to question 4(a) is yes, would the drawing of money from the Treasury of the Commonwealth for the ABS Activity in reliance on the appropriation for the departmental item for the [Australian Bureau of Statistics] in the 2017-2018 Act be unauthorised by the 2017-2018 Act on the basis that the expenditure is not within the meaning of “ordinary annual services of the Government”?
The question does not arise.
What, if any, relief sought in the Amended Statement of Claim should the plaintiffs be granted?
Who should pay the costs of this special case?
The plaintiffs should pay the costs of the special case.
A few thoughts on this.
I felt paragraphs - were particularly instructive in clarifying how the operative provisions of the Appropriation Act No 1 are to be read together. In particular, it seems settled now that ss 6 and 12 appropriate not just those amounts listed in Schedule 1, but also those amounts identified elsewhere in the Act (in this case, the $295 million provided for in s 10(3)). To me this seems like a pretty uncontroversial interpretation, especially given that most of the chopping and changing that’s occurred to Appropriation Act No 1 over time seems to be matters of drafting form only (see - for a pretty crisp summary).
However, what I think is more interesting about this case is the seemingly unprecedented use of the “Advance to the Finance Minister” to give effect to novel Government policy in situations where funds weren’t adequately provided for in the Budget or Additional Estimates. At first glance, this looks like a stark departure from the Advance’s traditional and practical use as an appropriation designed to attend to “bookkeeping matter[s]” (at ) or matters “necessary for the smooth running of the Government” (at ). Despite this, the Court seems to regard this gear-shift as a non-issue so long as the other requirements in the Act are met (at ). It would appear then, that it has simply taken up until now for a government to confirm that the Advance can be utilised in this way.
I guess it will be interesting to see what implications, if any, this construction may have for future governments. Provided that the statutory thresholds of “urgency’ and “erroneous” / “unforeseen” are met (s 10(2)), then sitting governments should have an almost blank cheque to the tune of $295 million. Things might get even hairier still if a Government starts trying to adjust this amount upwards (while this $295 million figure has remained unchanged since 2008, chapterIIsportsbet would be smart to put up some odds for whether this amount gets tweaked in next year’s budget). Further still, I query whether there exists some threshold amount ($500 million? $50 billion? 99% of all appropriated moneys?) that places the Advance to the Finance Minister in breach of the constitutional principle that “it is for the Parliament to identify the degree of specificity with which the purpose of an appropriation is identified” (at , citing Combet). One would certainly hope so, especially in instances such as the present where party “majorities” are split somewhat haphazardly in the lower and upper houses.
Anyway, a bit of food for thought. I think the decision has brought in a useful clarification to the interpretation of Appropriation Act No 1, though affirming that the Advance to the Finance Minister can be used in this manner to effect “urgent” and “unforeseen” government policy could raise some questions moving forwards.
One suspects that the Senate cross-bench might look to insist on amendments to section 10 in future appropriations bills.
The Court’s interpretation makes “urgency” and “unforeseen” no real limitation at all, a $295 million blank cheque, and I doubt Parliament (or at least the non-government parts of it) genuinely intended that for a moment.
The cross-bench may well want it but the major parties will pass it, because one day they will be in government and will need it. This clause has been in the budget, in one form or another, for the entirety of Federation.